Securities Act File No. 33-7172
Investment Company Act File No. 811-4748
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /x/
Pre-Effective Amendment No. __ / /
Post-Effective Amendment No. 12 /x/
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 /x/
Amendment No. 12 /x/
(Check appropriate box or boxes)
DREYFUS STRATEGIC INCOME
(Exact Name of Registrant as Specified in Charter)
c/o The Dreyfus Corporation
200 Park Avenue, New York, New York 10166
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (212) 922-6000
Daniel C. Maclean III, Esq.
200 Park Avenue
New York, New York 10166
(Name and Address of Agent for Service)
copy to:
Lewis G. Cole, Esq.
Stroock & Stroock & Lavan
7 Hanover Square
New York, New York 10004-2696
It is proposed that this filing will become effective (check
appropriate box)
____ immediately upon filing pursuant to paragraph (b)
____ on (date) pursuant to paragraph (b)
____ 60 days after filing pursuant to paragraph (a)(i)
____ on (date) pursuant to paragraph (a)(i)
X 75 days after filing pursuant to paragraph (a)(ii)
____ on (date) pursuant to paragraph (a)(ii) of Rule 485.
If appropriate, check the following box:
____ this post-effective amendment designates a new effective
date for a previously filed post-effective amendment.
<PAGE>
Registrant has registered an indefinite number of its shares of
beneficial interest under the Securities Act of 1933 pursuant to Section
24(f) of the Investment Company Act of 1940. Registrant's Rule 24f-2 Notice
for its fiscal year ended October 31, 1995 will be filed on or about
December 22, 1995.
DREYFUS STRATEGIC INCOME
Cross-Reference Sheet Pursuant to Rule 495(a)
Dreyfus High Dreyfus Equity
Yield Bond Fund Dividend Fund
--------------- --------------
Items in
Part A of
Form N-1A Caption Page Page
1 Cover Cover Cover
2 Synopsis 3 3
3 Condensed Financial
Information * *
4 General Description of
Registrant 4, 24 3, 23
5 Management of the Fund 7 6
5(a) Management's Discussion of
Fund's Performance * *
6 Capital Stock and Other
Securities 24 23
7 Purchase of Securities
Being Offered 9 9
8 Redemption or Repurchase 17 17
9 Pending Legal Proceedings * *
Items in All Funds
Part B of
Form N-1A Caption Page
10 Cover Page B-1
11 Table of Contents B-1
12 General Information and
History *
13 Investment Objectives and
Policies B-2
14 Management of the Fund B-19
15 Control Persons and Principal
Holders of Securities B-23
DREYFUS STRATEGIC INCOME
Cross-Reference Sheet Pursuant To Rule 495(A) (Continued)
Items in All
Part B of Funds
Form N-1A Caption Page
16 Investment Advisory and Other
Services B-24
17 Brokerage Allocation B-38
18 Capital Stock and Other
Securities B-41
19 Purchase, Redemption and
Pricing of Securities Being
Offered B-26,B-28,
B-34
20 Tax Status B-35
21 Underwriters B-1, B-26
22 Calculations of Performance Data B-40
23 Financial Statements B-51
Items in All
Part C of Funds
Form N-1A Caption Page
24 Financial Statements and Exhibits C-1
25 Persons Controlled by or Under
Common Control with Registrant C-2
26 Number of Holders of Securities C-3
27 Indemnification C-3
28 Business and Other Connections
of Investment Adviser C-4
29 Principal Underwriters C-10
Items in All
Part C of Funds
Form N-1A Caption Page
30 Location of Accounts and Records C-13
31 Management Services C-13
32 Undertakings C-13
- ---------
* Omitted since answer is negative or inapplicable.
PROSPECTUS ________ , 199_
DREYFUS HIGH YIELD BOND FUND
Dreyfus High Yield Bond Fund (the "Fund") is a separate
diversified portfolio of Dreyfus Income Funds, an open-end,
management investment company (the "Company"), known as a mutual
fund. The Fund's primary investment objective is high current
income. Capital appreciation is a secondary objective.
THE FUND SEEKS TO ACHIEVE ITS OBJECTIVES BY INVESTING
UP TO ALL OF ITS ASSETS IN LOWER RATED FIXED-INCOME SECURITIES,
COMMONLY KNOWN AS "JUNK BONDS." INVESTMENTS OF THIS TYPE ARE
SUBJECT TO A GREATER RISK OF LOSS OF PRINCIPAL AND NON-PAYMENT OF
INTEREST. INVESTORS SHOULD CAREFULLY ASSESS THE RISKS ASSOCIATED
WITH AN INVESTMENT IN THE FUND. SEE "DESCRIPTION OF THE FUND--
MANAGEMENT POLICIES" AND "INVESTMENT CONSIDERATIONS AND RISKS--
HIGH YIELD-LOWER RATED SECURITIES."
You can purchase or redeem shares by telephone using
Dreyfus TeleTransfer.
In some cases, shareholders will be charged a
redemption fee which will be deducted from redemption proceeds on
shares held less than nine months.
The Dreyfus Corporation will professionally manage the
Fund's portfolio.
This Prospectus sets forth concisely information about
the Fund that you should know before investing. It should be
read and retained for future reference.
The Statement of Additional Information, dated ________
__, 199_, which may be revised from time to time, provides a
further discussion of certain areas in this Prospectus and other
matters which may be of interest to some investors. It has been
filed with the Securities and Exchange Commission and is
incorporated herein by reference. For a free copy, write to the
Fund at 144 Glenn Curtiss Boulevard, Uniondale, New York 11556-
0144, or call 1-800-645-6561. When telephoning, ask for Operator
144.
Mutual fund shares are not deposits or obligations of,
or guaranteed or endorsed by, any bank, and are not federally
insured by the Federal Deposit Insurance Corporation, the Federal
Reserve Board or any other agency. The net asset value of funds
of this type will fluctuate from time to time.
<PAGE>
TABLE OF CONTENTS
Page
Fee Table . . . . . . . . . . . . . . . . . . . .
Description of the Fund . . . . . . . . . . . . .
Management of the Fund. . . . . . . . . . . . . .
How to Buy Shares . . . . . . . . . . . . . . . .
Shareholder Services. . . . . . . . . . . . . . .
How to Redeem Shares . . . . . . . . . . . . . .
Shareholder Services Plan . . . . . . . . . . . .
Dividends, Distributions and Taxes. . . . . . . .
Performance Information . . . . . . . . . . . . .
General Information . . . . . . . . . . . . . . .
Appendix. . . . . . . . . . . . . . . . . . . . .
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<PAGE>
FEE TABLE
SHAREHOLDER TRANSACTION EXPENSES
Redemption Fee (as a percentage of amount
redeemed for shares held less than nine
months) . . . . . . . . . . . . . . . . . . . . . . . . .75%
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average daily net assets)
Management Fees . . . . . . . . . . . . . . . . . . . . .65%
Other Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . __%
Total Fund Operating Expenses . . . . . . . . . . . . . . . . . . __%
EXAMPLE: 1 YEAR 3 YEARS
You would pay the following
expenses on a $1,000 invest-
ment, assuming (1) 5% annual
return and (2) redemption at
the end of each time period: $__ $__
________________________________________________________________
THE AMOUNTS LISTED IN THE EXAMPLE SHOULD NOT BE CONSIDERED
AS REPRESENTATIVE OF FUTURE EXPENSES AND ACTUAL EXPENSES MAY BE
GREATER OR LESS THAN THOSE INDICATED. MOREOVER, WHILE THE
EXAMPLE ASSUMES A 5% ANNUAL RETURN, THE FUND'S ACTUAL PERFORMANCE
WILL VARY AND MAY RESULT IN AN ACTUAL RETURN GREATER OR LESS THAN
5%.
The purpose of the foregoing table is to assist you in
understanding the costs and expenses borne by the Fund and
investors, the payment of which will reduce investors' annual
return. The redemption fee is charged upon certain redemptions
or exchanges of Fund shares occurring within a nine-month period
following the issuance of such shares and is retained by the
Fund. Other Expenses are based on estimated amounts for the
current fiscal year. The information in the foregoing table does
not reflect any fee waivers or expense reimbursement arrangements
that may be in effect. You can purchase Fund shares without
charge directly from the Fund's distributor; you may be charged a
nominal fee if you effect transactions in Fund shares through a
securities dealer, bank or other financial institution. For a
further description of the various costs and expenses incurred in
the operation of the Fund, as well as expense reimbursement or
waiver arrangements, see "Management of the Fund," "How to Buy
Shares," "Shareholder Services Plan" and "How to Redeem Shares."
DESCRIPTION OF THE FUND
INVESTMENT OBJECTIVES
The Fund's primary investment objective is high current
income. Capital appreciation is a secondary objective. The
Fund's investment objectives cannot be changed without approval
by the holders of a majority (as defined in the Investment
Company Act of 1940, as amended (the "1940 Act")) of the Fund's
outstanding voting shares. There can be no assurance that the
Fund's investment objectives will be achieved.
MANAGEMENT POLICIES
Under normal market conditions, the Fund will invest at
least 65% of the value of its net assets in bonds, debentures,
notes and other debt instruments (collectively, "Fixed-Income
Securities") rated below investment grade, or, if unrated,
determined by The Dreyfus Corporation to be of comparable
quality. Fixed-Income Securities also include mortgage-related
securities, asset-backed securities, zero coupon securities,
municipal obligations, convertible debt obligations and
convertible preferred stock. The issuers of Fixed-Income
Securities may include domestic and foreign corporations,
partnerships, trusts or similar entities, and governmental
entities or their political subdivisions, agencies or
instrumentalities. The Fund may invest in companies in, or
governments of, developing countries. The Fund's portfolio will
be invested without regard to maturity.
Securities rated below investment grade are those rated
lower than Baa by Moody's Investors Service, Inc. ("Moody's") and
BBB by Standard & Poor's Ratings Group, a division of The McGraw
Hill Companies, Inc. ("S&P"), Fitch Investors Service, L.P.
("Fitch") or Duff & Phelps Credit Rating Co. ("Duff"). These
securities carry a high degree of risk and are considered
speculative by the credit rating agencies. See "Investment
Considerations and Risks--High Yield-Lower Rated Securities" and
"Appendix--Certain Portfolio Securities--High Yield-Lower Rated
Securities" below for a discussion of certain risks, and
"Appendix" in the Statement of Additional Information. The Fund
may hold investment grade rated Fixed-Income Securities when the
yield differential between lower rated and investment grade rated
securities narrows and the risk of loss may be reduced with only
a relatively small reduction in yield. The Fund also may invest
in investment grade rated Fixed-Income Securities when The
Dreyfus Corporation determines that a defensive investment
position is appropriate in light of market or economic
conditions.
The Fund may invest in money market instruments consisting
of U.S. Government securities, certificates of deposit, time
deposits, bankers' acceptances, short-term investment grade
corporate bonds and other short-term debt instruments, and
repurchase agreements, as set forth under "Appendix--Certain
Portfolio Securities--Money Market Instruments." Under normal
market conditions, the Fund does not expect to have a substantial
portion of its assets invested in money market instruments.
However, when The Dreyfus Corporation determines that adverse
market conditions exist, the Fund may adopt a temporary defensive
posture and invest all of its assets in money market instruments.
The Fund's annual portfolio turnover rate is not expected to
exceed ___%. Higher portfolio turnover rates usually generate
additional brokerage commissions and expenses and the short-term
gains realized from these transactions are taxable to
shareholders as ordinary income. In addition, the Fund currently
intends, to a limited extent, to engage in foreign currency
transactions, options and futures transactions and short-selling.
See also "Investment Considerations and Risks" and "Appendix--
Investment Techniques" below and "Investment Objectives and
Management Policies--Management Policies" in the Statement of
Additional Information.
INVESTMENT CONSIDERATIONS AND RISKS
GENERAL--The Fund's net asset value per share should be expected
to fluctuate. The Fund's investment in high yield Fixed-Income
Securities may cause the Fund's share price to be highly volatile
at times. Investors should consider the Fund as a supplement to
an overall investment program and should invest only if they are
willing to undertake the risks involved. See "Investment
Objectives and Management Policies--Management Policies" in the
Statement of Additional Information for a further discussion of
certain risks.
HIGH YIELD-LOWER RATED SECURITIES--The Fund generally will invest
in Fixed-Income Securities rated below investment grade. These
are securities such as those rated Ba by Moody's and BB by S&P,
Fitch and Duff or as low as the lowest rating assigned by
Moody's, S&P, Fitch or Duff (commonly known as junk bonds). They
generally are not meant for short-term investing and may be
subject to certain risks with respect to the issuing entity and
to greater market fluctuations than certain lower yielding,
higher rated Fixed-Income Securities. The retail secondary
market for these securities may be less liquid than that of
higher rated securities; adverse conditions could make it
difficult at times for the Fund to sell certain securities or
could result in lower prices than those used in calculating the
Fund's net asset value. The value of these securities, as is the
case with the value of higher rated Fixed-Income Securities, will
be inversely affected by changes in interest rates. See
"Appendix--Certain Portfolio Securities--High Yield-Lower Rated
Securities" below and "Appendix" in the Statement of Additional
Information.
FOREIGN SECURITIES--Foreign securities markets generally are not
as developed or efficient as those in the United States.
Securities of some foreign issuers are less liquid and more
volatile than securities of comparable U.S. issuers. Similarly,
volume and liquidity in most foreign securities markets are less
than in the United States and, at times, volatility of price can
be greater than in the United States.
Because evidences of ownership of such securities usually
are held outside the United States, the Fund will be subject to
additional risks which include possible adverse political and
economic developments, possible seizure or nationalization of
foreign deposits and possible adoption of governmental
restrictions which might adversely affect the payment of
principal and interest on the foreign securities or might
restrict the payment of principal and interest to investors
located outside the country of the issuer, whether from currency
blockage or otherwise.
Developing countries have economic structures that are
generally less diverse and mature, and political systems that are
less stable, than those of developed countries. The markets of
developing countries may be more volatile than the markets of
more mature economies; however, such markets may provide higher
rates of return to investors. Many developing countries
providing investment opportunities for the Fund have experienced
substantial, and in some periods extremely high, rates of
inflation for many years. Inflation and rapid fluctuations in
inflation rates have had and may continue to have adverse effects
on the economies and securities markets of certain of these
countries. In an attempt to control inflation, wage and price
controls have been imposed in certain developing countries.
Since foreign securities often are purchased with and
payable in currencies of foreign countries, the value of these
assets as measured in U.S. dollars may be affected favorably or
unfavorably by changes in currency rates and exchange control
regulations.
FOREIGN CURRENCY TRANSACTIONS--Currency exchange rates may
fluctuate significantly over short periods of time. They
generally are determined by the forces of supply and demand in
the foreign exchange markets and the relative merits of
investments in different countries, actual or perceived changes
in interest rates and other complex factors, as seen from an
international perspective. Currency exchange rates also can be
affected unpredictably by intervention by U.S. or foreign
governments or central banks, or the failure to intervene, or by
currency controls or political developments in the United States
or abroad. See "Appendix--Investment Techniques--Foreign
Currency Transactions."
USE OF DERIVATIVES--The Fund may invest, to a limited extent, in
derivatives ("Derivatives"). These are financial instruments
which derive their performance, at least in part, from the
performance of an underlying asset, index or interest rate. The
Derivatives the Fund may use include options and futures,
mortgage-related securities and asset-backed securities. While
Derivatives can be used effectively in furtherance of the Fund's
investment objectives, under certain market conditions, they can
increase the volatility of the Fund's net asset value, can
decrease the liquidity of the Fund's investments and make more
difficult the accurate pricing of the Fund's portfolio. See
"Appendix--Investment Techniques--Use of Derivatives" below and
"Investment Objectives and Management Policies--Management
Policies--Derivatives" in the Statement of Additional
Information.
SIMULTANEOUS INVESTMENTS--Investment decisions for the Fund are
made independently from those of the other investment companies
advised by The Dreyfus Corporation. If, however, such other
investment companies desire to invest in, or dispose of, the same
securities as the Fund, available investments or opportunities
for sales will be allocated equitably to each investment company.
In some cases, this procedure may adversely affect the size of
the position obtained for or disposed of by the Fund or the price
paid or received by the Fund.
MANAGEMENT OF THE FUND
INVESTMENT ADVISER--The Dreyfus Corporation, located at 200 Park
Avenue, New York, New York 10166, was formed in 1947 and serves
as the Fund's investment adviser. The Dreyfus Corporation is a
wholly-owned subsidiary of Mellon Bank, N.A., which is a wholly-
owned subsidiary of Mellon Bank Corporation ("Mellon"). As of
, 1995, The Dreyfus Corporation managed or administered
approximately $ billion in assets for more than million
investor accounts nationwide.
The Dreyfus Corporation supervises and assists in the
overall management of the Fund's affairs under a Management
Agreement with the Company, subject to the authority of the
Company's Board in accordance with Massachusetts law. The Fund's
primary portfolio manager is Kevin McClintock. He has held that
position since inception of the Fund, and has been employed by
The Dreyfus Corporation since November 1995. Prior thereto, [to
be provided]. The Fund's other portfolio managers are identified
in the Statement of Additional Information. The Dreyfus
Corporation also provides research services for the Fund and for
other funds advised by The Dreyfus Corporation through a
professional staff of portfolio managers and securities analysts.
Mellon is a publicly owned multibank holding company
incorporated under Pennsylvania law in 1971 and registered under
the Federal Bank Holding Company Act of 1956, as amended. Mellon
provides a comprehensive range of financial products and services
in domestic and selected international markets. Mellon is among
the twenty-five largest bank holding companies in the United
States based on total assets. Mellon's principal wholly-owned
subsidiaries are Mellon Bank, N.A., Mellon Bank (DE) National
Association, Mellon Bank (MD), The Boston Company, Inc., AFCO
Credit Corporation and a number of companies known as Mellon
Financial Services Corporations. Through its subsidiaries,
including The Dreyfus Corporation, Mellon managed more than $
billion in assets as of , 1995, including approximately
$ billion in proprietary mutual fund assets. As of ,
1995, Mellon, through various subsidiaries, provided non-
investment services, such as custodial or administration
services, for more than $ billion in assets, including
approximately $ billion in mutual fund assets.
Under the terms of the Management Agreement, the Fund has
agreed to pay The Dreyfus Corporation a monthly fee at the annual
rate of .65 of 1% of the value of the Fund's average daily net
assets. From time to time, The Dreyfus Corporation may waive
receipt of its fees and/or voluntarily assume certain expenses of
the Fund, which would have the effect of lowering the expense
ratio of the Fund and increasing yield to investors. The Fund
will not pay The Dreyfus Corporation at a later time for any
amounts it may waive, nor will the Fund reimburse The Dreyfus
Corporation for any amounts it may assume.
EXPENSES--All expenses incurred in the operation of the Company
are borne by the Company, except to the extent specifically
assumed by The Dreyfus Corporation. The expenses borne by the
Company include: organizational costs, taxes, interest, loan
commitment fees, interest and distributions paid on securities
sold short, brokerage fees and commissions, if any, fees of Board
members who are not officers, directors, employees or holders of
5% or more of the outstanding voting securities of The Dreyfus
Corporation or any of its affiliates, Securities and Exchange
Commission fees, state Blue Sky qualification fees, advisory
fees, charges of custodians, transfer and dividend disbursing
agents' fees, certain insurance premiums, industry association
fees, outside auditing and legal expenses, costs of independent
pricing services, costs of maintaining the Company's existence,
costs attributable to investor services (including, without
limitation, telephone and personnel expenses), costs of preparing
and printing prospectuses and statements of additional
information for regulatory purposes and for distribution to
existing shareholders, costs of shareholders' reports and
meetings, and any extraordinary expenses. Expenses attributable
to the Fund are charged against the assets of the Fund; other
expenses of the Company are allocated among the Company's
portfolios on the basis determined by the Company's Board,
including, but not limited to, proportionately in relation to the
net assets of each portfolio.
The Dreyfus Corporation may pay the Fund's distributor for
shareholder services from The Dreyfus Corporation's own assets,
including past profits but not including the management fee paid
by the Fund. The Fund's distributor may use part or all of such
payments to pay Service Agents (as defined below) in respect of
these services.
DISTRIBUTOR--The Fund's distributor is Premier Mutual Fund
Services, Inc. (the "Distributor"), located at One Exchange
Place, Boston, Massachusetts 02109. The Distributor's ultimate
parent is Boston Institutional Group, Inc.
TRANSFER AND DIVIDEND DISBURSING AGENT AND CUSTODIAN--Dreyfus
Transfer, Inc., a wholly-owned subsidiary of The Dreyfus
Corporation, One American Express Plaza, Providence, Rhode Island
02903, is the Fund's Transfer and Dividend Disbursing Agent (the
"Transfer Agent"). The Bank of New York, 90 Washington Street,
New York, New York 10286, is the Fund's Custodian.
HOW TO BUY SHARES
Fund shares are sold without a sales charge. You may be
charged a nominal fee if you effect transactions in Fund shares
through a securities dealer, bank or other financial institution
(collectively, "Service Agents"). Share certificates are issued
only upon your written request. No certificates are issued for
fractional shares. The Fund reserves the right to reject any
purchase order.
The minimum initial investment is $2,500, or $1,000 if you
are a client of a Service Agent which has made an aggregate
minimum initial purchase for its customers of $2,500. Subsequent
investments must be at least $100. However, the minimum initial
investment for Dreyfus-sponsored Keogh Plans, IRAs, SEP-IRAs and
403(b)(7) Plans with only one participant is $750, with no
minimum for subsequent purchases. Individuals who open an IRA
also may open a non-working spousal IRA with a minimum initial
investment of $250. Subsequent investments in a spousal IRA must
be at least $250. The initial investment must be accompanied by
the Account Application. For full-time or part-time employees of
The Dreyfus Corporation or any of its affiliates or subsidiaries,
directors of The Dreyfus Corporation, Board members of a fund
advised by The Dreyfus Corporation, including members of the
Company's Board, or the spouse or minor child of any of the
foregoing, the minimum initial investment is $1,000. For full-
time or part-time employees of The Dreyfus Corporation or any of
its affiliates or subsidiaries who elect to have a portion of
their pay directly deposited into their Fund account, the minimum
initial investment is $50. The Fund reserves the right to offer
Fund shares without regard to minimum purchase requirements to
employees participating in certain qualified or non-qualified
employee benefit plans or other programs where contributions or
account information can be transmitted in a manner and form
acceptable to the Fund. The Fund reserves the right to vary
further the initial and subsequent investment minimum
requirements at any time. Fund shares also are offered without
regard to the minimum initial investment requirements through
Dreyfus-Automatic Asset Builder, Dreyfus Government Direct
Deposit Privilege or Dreyfus Payroll Savings Plan pursuant to the
Dreyfus Step Program described under "Shareholder Services."
These services enable you to make regularly scheduled investments
and may provide you with a convenient way to invest for long-term
financial goals. You should be aware, however, that periodic
investment plans do not guarantee a profit and will not protect
an investor against loss in a declining market.
You may purchase Fund shares by check or wire, or through
the Dreyfus TeleTransfer Privilege described below. Checks
should be made payable to "The Dreyfus Family of Funds," or, if
for Dreyfus retirement plan accounts, to "The Dreyfus Trust
Company, Custodian" and should specify that you are investing in
the Fund. Payments to open new accounts which are mailed should
be sent to The Dreyfus Family of Funds, P.O. Box 9387,
Providence, Rhode Island 02940-9387, together with your Account
Application. For subsequent investments, your Fund account
number should appear on the check and an investment slip should
be enclosed and sent to The Dreyfus Family of Funds, P.O. Box
105, Newark, New Jersey 07101-0105. For Dreyfus retirement plan
accounts, both initial and subsequent investments should be sent
to The Dreyfus Trust Company, Custodian, P.O. Box 6427,
Providence, Rhode Island 02940-6427. Neither initial nor
subsequent investments should be made by third party check.
Purchase orders may be delivered in person only to a Dreyfus
Financial Center. THESE ORDERS WILL BE FORWARDED TO THE FUND AND
WILL BE PROCESSED ONLY UPON RECEIPT THEREBY. For the location of
the nearest Dreyfus Financial Center, please call one of the
telephone numbers listed under "General Information."
Wire payments may be made if your bank account is in a
commercial bank that is a member of the Federal Reserve System or
any other bank having a correspondent bank in New York City.
Immediately available funds may be transmitted by wire to The
Bank of New York, DDA# 8900______/Dreyfus Income Funds/Dreyfus
High Yield Bond Fund, for purchase of Fund shares in your name.
The wire must include your Fund account number (for new accounts,
your Taxpayer Identification Number ("TIN") should be included
instead), account registration and dealer number, if applicable.
If your initial purchase of Fund shares is by wire, you should
call 1-800-645-6561 after completing your wire payment to obtain
your Fund account number. You should include your Fund account
number on the Account Application and promptly mail the Account
Application to the Fund, as no redemptions will be permitted
until the Account Application is received. You may obtain
further information about remitting funds in this manner from
your bank. All payments should be made in U.S. dollars and, to
avoid fees and delays, should be drawn only on U.S. banks. A
charge will be imposed if any check used for investment in your
account does not clear. The Fund makes available to certain
large institutions the ability to issue purchase instructions
through compatible computer facilities.
Subsequent investments also may be made by electronic
transfer of funds from an account maintained in a bank or other
domestic financial institution that is an Automated Clearing
House member. You must direct the institution to transmit
immediately available funds through the Automated Clearing House
to The Bank of New York with instructions to credit your Fund
account. The instructions must specify your Fund account
registration and Fund account number preceded by the digits
"1111."
Fund shares are sold on a continuous basis at the net asset
value per share next determined after an order in proper form is
received by the Transfer Agent or other agent. Net asset value
per share is determined as of the close of trading on the floor
of the New York Stock Exchange (currently 4:00 p.m., New York
time), on each day the New York Stock Exchange is open for
business. For purposes of determining net asset value, options
and futures contracts will be valued 15 minutes after the close
of trading on the floor of the New York Stock Exchange. Net
asset value per share is computed by dividing the value of the
Fund's net assets (i.e., the value of its assets less
liabilities) by the total number of Fund shares outstanding. The
Fund's investments are valued generally at market value or, where
market quotations are not readily available, at fair value as
determined by or under the direction of the Company's Board. For
further information regarding the methods employed in valuing the
Fund's investments, see "Determination of Net Asset Value" in the
Statement of Additional Information.
For certain institutions that have entered into agreements
with the Distributor, payment for the purchase of Fund shares may
be transmitted, and must be received by the Transfer Agent,
within three business days after the order is placed. If such
payment is not received within three business days after the
order is placed, the order may be canceled and the institution
could be held liable for resulting fees and/or losses.
The Distributor may pay dealers a fee of up to .5% of the
amount invested through such dealers in Fund shares by employees
participating in qualified or non-qualified employee benefit
plans or other programs where (i) the employers or affiliated
employers maintaining such plans or programs have a minimum of
250 employees eligible for participation in such plans or
programs or (ii) such plan's or program's aggregate investment in
the Dreyfus Family of Funds or certain other products made
available by the Distributor to such plans or programs exceeds
one million dollars ("Eligible Benefit Plans"). All present
holdings of shares of funds in the Dreyfus Family of Funds by
Eligible Benefit Plans will be aggregated to determine the fee
payable with respect to each purchase of Fund shares. The
Distributor reserves the right to cease paying these fees at any
time. The Distributor will pay such fees from its own funds,
other than amounts received from the Fund, including past profits
or any other source available to it.
Federal regulations require that you provide a certified TIN
upon opening or reopening an account. See "Dividends,
Distributions and Taxes" and the Account Application for further
information concerning this requirement. Failure to furnish a
certified TIN to the Fund could subject you to a $50 penalty
imposed by the Internal Revenue Service (the "IRS").
DREYFUS TELETRANSFER PRIVILEGE--You may purchase shares (minimum
$500, maximum $150,000 per day) by telephone if you have checked
the appropriate box and supplied the necessary information on the
Account Application or have filed a Shareholder Services Form
with the Transfer Agent. The proceeds will be transferred
between the bank account designated in one of these documents and
your Fund account. Only a bank account maintained in a domestic
financial institution which is an Automated Clearing House member
may be so designated. The Fund may modify or terminate this
Privilege at any time or charge a service fee upon notice to
shareholders. No such fee currently is contemplated.
If you have selected the Dreyfus TeleTransfer Privilege, you
may request a Dreyfus TeleTransfer purchase of shares by
telephoning 1-800-645-6561 or, if you are calling from overseas,
call 516-794-5452.
SHAREHOLDER SERVICES
FUND EXCHANGES
You may purchase, in exchange for shares of the Fund, shares
of certain other funds managed or administered by The Dreyfus
Corporation, to the extent such shares are offered for sale in
your state of residence. These funds have different investment
objectives which may be of interest to you. If you desire to use
this service, you should consult your Service Agent or call 1-
800-645-6561 to determine if it is available and whether any
conditions are imposed on its use.
To request an exchange, you must give exchange instructions
to the Transfer Agent in writing or by telephone. Before any
exchange, you must obtain and should review a copy of the current
prospectus of the fund into which the exchange is being made.
Prospectuses may be obtained by calling 1-800-645-6561. Except
in the case of personal retirement plans, the shares being
exchanged must have a current value of at least $500;
furthermore, when establishing a new account by exchange, the
shares being exchanged must have a value of at least the minimum
initial investment required for the fund into which the exchange
is being made. The ability to issue exchange instructions by
telephone is given to all Fund shareholders automatically, unless
you check the applicable "No" box on the Account Application,
indicating that you specifically refuse this Privilege. The
Telephone Exchange Privilege may be established for an existing
account by written request, signed by all shareholders on the
account, or by a separate signed Shareholder Services Form, also
available by calling 1-800-645-6561. If you have established the
Telephone Exchange Privilege, you may telephone exchange
instructions by calling 1-800-645-6561, or, if you are calling
from overseas, call 516-794-5452. See "How to Redeem Shares--
Procedures." Upon an exchange into a new account, the following
shareholder services and privileges, as applicable and where
available, will be automatically carried over to the fund into
which the exchange is made: Telephone Exchange Privilege, Wire
Redemption Privilege, Telephone Redemption Privilege, Dreyfus
TeleTransfer Privilege and the dividend/capital gain distribution
option (except for Dreyfus Dividend Sweep) selected by the
investor.
The Fund will deduct a redemption fee equal to .75% of the
net asset value of Fund shares exchanged where the exchange
occurs within a nine-month period following the issuance of such
shares. See "How to Redeem Shares." Otherwise, shares will be
exchanged at the next determined net asset value; however, a
sales load may be charged with respect to exchanges into funds
sold with a sales load. If you are exchanging into a fund that
charges a sales load, you may qualify for share prices which do
not include the sales load or which reflect a reduced sales load,
if the shares of the fund from which you are exchanging were:
(a) purchased with a sales load, (b) acquired by a previous
exchange from shares purchased with a sales load, or (c) acquired
through reinvestment of dividends or distributions paid with
respect to the foregoing categories of shares. To qualify, at
the time of the exchange you must notify the Transfer Agent or
your Service Agent must notify the Distributor. Any such
qualification is subject to confirmation of your holdings through
a check of appropriate records. See "Shareholder Services" in
the Statement of Additional Information. No fees currently are
charged shareholders directly in connection with exchanges,
although the Fund reserves the right, upon not less than 60 days'
written notice, to charge shareholders a nominal fee in
accordance with rules promulgated by the Securities and Exchange
Commission. The Fund reserves the right to reject any exchange
request in whole or in part. The availability of Fund Exchanges
may be modified or terminated at any time upon notice to
shareholders. See "Dividends, Distributions and Taxes."
DREYFUS AUTO-EXCHANGE PRIVILEGE
Dreyfus Auto-Exchange Privilege enables you to invest
regularly (on a semi-monthly, monthly, quarterly or annual
basis), in exchange for shares of the Fund, in shares of certain
other funds in the Dreyfus Family of Funds of which you are
currently an investor. The amount you designate, which can be
expressed either in terms of a specific dollar or share amount
($100 minimum), will be exchanged automatically on the first
and/or fifteenth day of the month according to the schedule you
have selected. Shares will be exchanged at the then-current net
asset value; however, a sales load may be charged with respect to
exchanges into funds sold with a sales load. See "Shareholder
Services" in the Statement of Additional Information. The right
to exercise this Privilege may be modified or canceled by the
Fund or the Transfer Agent. You may modify or cancel your
exercise of this Privilege at any time by mailing written
notification to The Dreyfus Family of Funds, P.O. Box 9671,
Providence, Rhode Island 02940-9671. The Fund may charge a
service fee for the use of this Privilege. No such fee currently
is contemplated. See "Dividends, Distributions and Taxes." For
more information concerning this Privilege and the funds in the
Dreyfus Family of Funds eligible to participate in this
Privilege, or to obtain a Dreyfus Auto-Exchange Authorization
Form, please call toll free 1-800-645-6561.
DREYFUS-AUTOMATIC ASSET BUILDER-registered
Dreyfus-Automatic Asset Builder permits you to purchase Fund
shares (minimum of $100 and maximum of $150,000 per transaction)
at regular intervals selected by you. Fund shares are purchased
by transferring funds from the bank account designated by you.
At your option, the account designated by you will be debited in
the specified amount, and Fund shares will be purchased, once a
month, on either the first or fifteenth day, or twice a month, on
both days. Only an account maintained at a domestic financial
institution which is an Automated Clearing House member may be so
designated. To establish a Dreyfus-Automatic Asset Builder
account, you must file an authorization form with the Transfer
Agent. You may obtain the necessary authorization form by
calling 1-800-645-6561. You may cancel your participation in
this Privilege or change the amount of purchase at any time by
mailing written notification to The Dreyfus Family of Funds, P.O.
Box 9671, Providence, Rhode Island 02940-9671, or, if for Dreyfus
retirement plan accounts, to The Dreyfus Trust Company,
Custodian, P.O. Box 6427, Providence, Rhode Island 02940-6427,
and the notification will be effective three business days
following receipt. The Fund may modify or terminate this
Privilege at any time or charge a service fee. No such fee
currently is contemplated.
DREYFUS GOVERNMENT DIRECT DEPOSIT PRIVILEGE
Dreyfus Government Direct Deposit Privilege enables you to
purchase Fund shares (minimum of $100 and maximum of $50,000 per
transaction) by having Federal salary, Social Security, or cer-
tain veterans', military or other payments from the Federal
government automatically deposited into your Fund account. You
may deposit as much of such payments as you elect. To enroll in
Dreyfus Government Direct Deposit, you must file with the
Transfer Agent a completed Direct Deposit Sign-Up Form for each
type of payment that you desire to include in this Privilege.
The appropriate form may be obtained by calling 1-800-645-6561.
Death or legal incapacity will terminate your participation in
this Privilege. You may elect at any time to terminate your
participation by notifying in writing the appropriate Federal
agency. The Fund may terminate your participation upon 30 days'
notice to you.
DREYFUS PAYROLL SAVINGS PLAN
Dreyfus Payroll Savings Plan permits you to purchase Fund
shares (minimum of $100 per transaction) automatically on a
regular basis. Depending upon your employer's direct deposit
program, you may have part or all of your paycheck transferred to
your existing Dreyfus account electronically through the
Automated Clearing House system at each pay period. To establish
a Dreyfus Payroll Savings Plan account, you must file an
authorization form with your employer's payroll department. Your
employer must complete the reverse side of the form and return it
to The Dreyfus Family of Funds, P.O. Box 9671, Providence, Rhode
Island 02940-9671. You may obtain the necessary authorization
form by calling 1-800-645-6561. You may change the amount of
purchase or cancel the authorization only by written notification
to your employer. It is the sole responsibility of your
employer, not the Distributor, The Dreyfus Corporation, the Fund,
the Transfer Agent or any other person, to arrange for
transactions under the Dreyfus Payroll Savings Plan. The Fund
may modify or terminate this Privilege at any time or charge a
service fee. No such fee currently is contemplated.
DREYFUS STEP PROGRAM
Dreyfus Step Program enables you to purchase Fund shares
without regard to the Fund's minimum initial investment
requirements through Dreyfus-Automatic Asset Builder, Dreyfus
Government Direct Deposit Privilege or Dreyfus Payroll Savings
Plan. To establish a Dreyfus Step Program account, you must
supply the necessary information on the Account Application and
file the required authorization form(s) with the Transfer Agent.
For more information concerning this Program, or to request the
necessary authorization form(s), please call toll free 1-800-782-
6620. You may terminate your participation in this Program at
any time by discontinuing your participation in Dreyfus-Automatic
Asset Builder, Dreyfus Government Direct Deposit Privilege or
Dreyfus Payroll Savings Plan, as the case may be, as provided
under the terms of such Privilege(s). The Fund may modify or
terminate this Program at any time. Investors who wish to
purchase Fund shares through the Dreyfus Step Program in
conjunction with a Dreyfus-sponsored retirement plan may do so
only for IRAs, SEP-IRAs and IRA "Rollover Accounts."
DREYFUS DIVIDEND OPTIONS
Dreyfus Dividend Sweep enables you to invest automatically
dividends or dividends and capital gain distributions, if any,
paid by the Fund in shares of another fund in the Dreyfus Family
of Funds of which you are a shareholder. Shares of the other
fund will be purchased at the then-current net asset value;
however, a sales load may be charged with respect to investments
in shares of a fund sold with a sales load. If you are investing
in a fund that charges a sales load, you may qualify for share
prices which do not include the sales load or which reflect a
reduced sales load. If you are investing in a fund that charges
a contingent deferred sales charge, the shares purchased will be
subject on redemption to the contingent deferred sales charge, if
any, applicable to the purchased shares. See "Shareholder
Services" in the Statement of Additional Information. Dreyfus
Dividend ACH permits you to transfer electronically dividends or
dividends and capital gain distributions, if any, from the Fund
to a designated bank account. Only an account maintained at a
domestic financial institution which is an Automated Clearing
House member may be so designated. Banks may charge a fee for
this service.
For more information concerning these privileges or to
request a Dividend Options Form, please call toll free 1-800-645-
6561. You may cancel these privileges by mailing written
notification to The Dreyfus Family of Funds, P.O. Box 9671,
Providence, Rhode Island 02940-9671. To select a new fund after
cancellation, you must submit a new Dividend Options Form.
Enrollment in or cancellation of these privileges is effective
three business days following receipt. These privileges are
available only for existing accounts and may not be used to open
new accounts. Minimum subsequent investments do not apply for
Dreyfus Dividend Sweep. The Fund may modify or terminate these
privileges at any time or charge a service fee. No such fee
currently is contemplated. Shares held under Keogh Plans, IRAs
or other retirement plans are not eligible for Dreyfus Dividend
Sweep.
AUTOMATIC WITHDRAWAL PLAN
The Automatic Withdrawal Plan permits you to request
withdrawal of a specified dollar amount (minimum of $50) on
either a monthly or quarterly basis if you have a $5,000 minimum
account. An application for the Automatic Withdrawal Plan can be
obtained by calling 1-800-645-6561. There is a service charge of
50 cents for each withdrawal check. The Automatic Withdrawal Plan may
be ended at any time by you, the Fund or the Transfer Agent.
Shares for which certificates have been issued may not be
redeemed through the Automatic Withdrawal Plan.
RETIREMENT PLANS
The Fund offers a variety of pension and profit-sharing
plans, including Keogh Plans, IRAs, SEP-IRAs and IRA "Rollover
Accounts," 401(k) Salary Reduction Plans and 403(b)(7) Plans.
Plan support services also are available. You can obtain details
on the various plans by calling the following numbers toll free:
for Keogh Plans, please call 1-800-358-5566; for IRAs and IRA
"Rollover Accounts," please call 1-800-645-6561; for SEP-IRAs,
401(k) Salary Reduction Plans and 403(b)(7) Plans, please call 1-
800-322-7880.
HOW TO REDEEM SHARES
GENERAL
You may request redemption of your shares at any time.
Redemption requests should be transmitted to the Transfer Agent
as described below. When a request is received in proper form,
the Fund will redeem the shares at the next determined net asset
value.
The Fund will deduct a redemption fee equal to .75% of the
net asset value of Fund shares redeemed (including redemptions
through use of the Fund Exchanges service) where the redemption
or exchange occurs within a nine-month period following the
issuance of such shares. The purpose of the redemption fee is to
discourage short-term trading. The fee will be retained by the
Fund and used primarily to offset the transaction costs that
short-term trading imposes on the Fund and its shareholders. For
purposes of computing the nine-month period, any issuance of Fund
shares during a month will be deemed to occur on the first day of
such month. No redemption fee will be charged upon the
redemption of shares through the Fund's Automatic Withdrawal Plan
or Dreyfus Auto-Exchange Privilege, or through omnibus accounts
for various retirement plans. Furthermore, no redemption fee
will be charged upon the redemption of Fund shares acquired
through reinvestment of dividends or distributions, nor will the
redemption fee be used to pay fees imposed for various Fund
services or shares. The redemption fee may be waived, modified
or discontinued at any time or from time to time. In addition,
Service Agents may charge their clients a nominal fee for
effecting redemptions of Fund shares. Any certificates
representing Fund shares being redeemed must be submitted with
the redemption request. The value of the shares redeemed may be
more or less than their original cost, depending upon the Fund's
then-current net asset value.
The Fund ordinarily will make payment for all shares
redeemed within seven days after receipt by the Transfer Agent of
a redemption request in proper form, except as provided by the
rules of the Securities and Exchange Commission. HOWEVER, IF YOU
HAVE PURCHASED FUND SHARES BY CHECK, BY DREYFUS TELETRANSFER
PRIVILEGE OR THROUGH DREYFUS-AUTOMATIC ASSET BUILDER AND SUBSE-
QUENTLY SUBMIT A WRITTEN REDEMPTION REQUEST TO THE TRANSFER
AGENT, THE REDEMPTION PROCEEDS WILL BE TRANSMITTED TO YOU PROMPT-
LY UPON BANK CLEARANCE OF YOUR PURCHASE CHECK, DREYFUS TELETRANS-
FER PURCHASE OR DREYFUS-AUTOMATIC ASSET BUILDER ORDER, WHICH MAY
TAKE UP TO EIGHT BUSINESS DAYS OR MORE. IN ADDITION, THE FUND
WILL REJECT REQUESTS TO REDEEM SHARES BY WIRE OR TELEPHONE OR
PURSUANT TO THE DREYFUS TELETRANSFER PRIVILEGE FOR A PERIOD OF
EIGHT BUSINESS DAYS AFTER RECEIPT BY THE TRANSFER AGENT OF THE
PURCHASE CHECK, THE DREYFUS TELETRANSFER PURCHASE OR THE DREYFUS-
AUTOMATIC ASSET BUILDER ORDER AGAINST WHICH SUCH REDEMPTION IS
REQUESTED. THESE PROCEDURES WILL NOT APPLY IF YOUR SHARES WERE
PURCHASED BY WIRE PAYMENT, OR IF YOU OTHERWISE HAVE A SUFFICIENT
COLLECTED BALANCE IN YOUR ACCOUNT TO COVER THE REDEMPTION
REQUEST. PRIOR TO THE TIME ANY REDEMPTION IS EFFECTIVE,
DIVIDENDS ON SUCH SHARES WILL ACCRUE AND BE PAYABLE, AND YOU WILL
BE ENTITLED TO EXERCISE ALL OTHER RIGHTS OF BENEFICIAL OWNERSHIP.
Fund shares will not be redeemed until the Transfer Agent has
received your Account Application.
The Fund reserves the right to redeem your account at its
option upon not less than 30 days' written notice if your
account's net asset value is $500 or less and remains so during
the notice period.
PROCEDURES
You may redeem shares by using the regular redemption
procedure through the Transfer Agent, or, if you have checked the
appropriate box and supplied the necessary information on the
Account Application or have filed a Shareholder Services Form
with the Transfer Agent, through the Wire Redemption Privilege,
the Telephone Redemption Privilege or the Dreyfus TeleTransfer
Privilege. Other redemption procedures may be in effect for
clients of certain Service Agents. The Fund makes available to
certain large institutions the ability to issue redemption
instructions through compatible computer facilities. The Fund
reserves the right to refuse any request made by wire or
telephone, including requests made shortly after a change of
address, and may limit the amount involved or the number of such
requests. The Fund may modify or terminate any redemption
Privilege at any time or charge a service fee upon notice to
shareholders. No such fee currently is contemplated.
You may redeem shares by telephone if you have checked the
appropriate box on the Account Application or have filed a
Shareholder Services Form with the Transfer Agent. If you select
a telephone redemption privilege or telephone exchange privilege
(which is granted automatically unless you refuse it), you
authorize the Transfer Agent to act on telephone instructions
from any person representing himself or herself to be you, and
reasonably believed by the Transfer Agent to be genuine. The
Fund will require the Transfer Agent to employ reasonable
procedures, such as requiring a form of personal identification,
to confirm that instructions are genuine and, if it does not
follow such procedures, the Fund or the Transfer Agent may be
liable for any losses due to unauthorized or fraudulent
instructions. Neither the Fund nor the Transfer Agent will be
liable for following telephone instructions reasonably believed
to be genuine.
During times of drastic economic or market conditions, you
may experience difficulty in contacting the Transfer Agent by
telephone to request a redemption or exchange of Fund shares. In
such cases, you should consider using the other redemption pro-
cedures described herein. Use of these other redemption
procedures may result in your redemption request being processed
at a later time than it would have been if telephone redemption
had been used. During the delay, the Fund's net asset value may
fluctuate.
REGULAR REDEMPTION--Under the regular redemption procedure, you
may redeem shares by written request mailed to The Dreyfus Family
of Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671.
Redemption requests may be delivered in person only to a Dreyfus
Financial Center. THESE REQUESTS WILL BE FORWARDED TO THE FUND
AND WILL BE PROCESSED ONLY UPON RECEIPT THEREBY. For the
location of the nearest Dreyfus Financial Center, please call one
of the telephone numbers listed under "General Information."
Redemption requests must be signed by each shareholder, including
each owner of a joint account, and each signature must be guar-
anteed. The Transfer Agent has adopted standards and procedures
pursuant to which signature-guarantees in proper form generally
will be accepted from domestic banks, brokers, dealers, credit
unions, national securities exchanges, registered securities
associations, clearing agencies and savings associations, as well
as from participants in the New York Stock Exchange Medallion
Signature Program, the Securities Transfer Agents Medallion
Program ("STAMP") and the Stock Exchanges Medallion Program. If
you have any questions with respect to signature-guarantees,
please call one of the telephone numbers listed under "General
Information."
Redemption proceeds of at least $1,000 will be wired to any
member bank of the Federal Reserve System in accordance with a
written signature-guaranteed request.
WIRE REDEMPTION PRIVILEGE--You may request by wire or telephone
that redemption proceeds (minimum $1,000) be wired to your
account at a bank which is a member of the Federal Reserve
System, or a correspondent bank if your bank is not a member.
You also may direct that redemption proceeds be paid by check
(maximum $150,000 per day) made out to the owners of record and
mailed to your address. Redemption proceeds of less than $1,000
will be paid automatically by check. Holders of jointly
registered Fund or bank accounts may have redemption proceeds of
not more than $250,000 wired within any 30-day period. You may
telephone redemption requests by calling 1-800-645-6561 or, if
you are calling from overseas, call 516-794-5452. The Statement
of Additional Information sets forth instructions for
transmitting redemption requests by wire. Shares held under
Keogh Plans, IRAs or other retirement plans, and shares for which
certificates have been issued, are not eligible for this
Privilege.
TELEPHONE REDEMPTION PRIVILEGE--You may request by telephone that
redemption proceeds (maximum $150,000 per day) be paid by check
and mailed to your address. You may telephone redemption
instructions by calling 1-800-645-6561 or, if you are calling
from overseas, call 516-794-5452. Shares held under Keogh Plans,
IRAs or other retirement plans, and shares for which certificates
have been issued, are not eligible for this Privilege.
DREYFUS TELETRANSFER PRIVILEGE--You may request by telephone that
redemption proceeds (minimum $500 per day) be transferred between
your Fund account and your bank account. Only a bank account
maintained in a domestic financial institution which is an
Automated Clearing House member may be designated. Redemption
proceeds will be on deposit in your account at an Automated
Clearing House member bank ordinarily two days after receipt of
the redemption request or, at your request, paid by check
(maximum $150,000 per day) and mailed to your address. Holders
of jointly registered Fund or bank accounts may redeem through
the Dreyfus TeleTransfer Privilege for transfer to their bank
account not more than $250,000 within any 30-day period.
If you have selected the Dreyfus TeleTransfer Privilege, you
may request a Dreyfus TeleTransfer redemption of shares by
telephoning 1-800-645-6561 or, if you are calling from overseas,
call 516-794-5452. Shares held under Keogh Plans, IRAs or other
retirement plans, and shares issued in certificate form, are not
eligible for this Privilege.
SHAREHOLDER SERVICES PLAN
The Fund has adopted a Shareholder Services Plan, pursuant
to which it pays the Distributor for the provision of certain
services to Fund shareholders a fee at the annual rate of .25 of
1% of the value of the Fund's average daily net assets. 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.
The Distributor may make payments to Service Agents in respect of
these services. The Distributor determines the amounts to be
paid to Service Agents.
DIVIDENDS, DISTRIBUTIONS AND TAXES
Under the Internal Revenue Code of 1986, as amended (the
"Code"), the Fund is treated as a separate entity for purposes of
qualification and taxation as a regulated investment company.
The Fund ordinarily declares dividends from its net investment
income on each day the New York Stock Exchange is open for
business. Dividends usually are paid on the last business day of
each month. The Fund's earnings for Saturdays, Sundays and
holidays are declared as dividends on the next business day. If
you redeem all shares in your account at any time during the
month, all dividends to which you are entitled will be paid to
you along with the proceeds of the redemption. If you are an
omnibus accountholder and indicate in a partial redemption
request that a portion of any accrued dividends to which such
account is entitled belongs to an underlying accountholder who
has redeemed all shares in his or her account, such portion of
the accrued dividends will be paid to you along with the proceeds
of the redemption. Distributions from net realized securities
gains, if any, generally are declared and paid once a year, but
the Fund may make distributions on a more frequent basis to
comply with the distribution requirements of the Code, in all
events in a manner consistent with the provisions of the 1940
Act. The Fund will not make distributions from net realized
securities gains unless capital loss carryovers, if any, have
been utilized or have expired. You may choose whether to receive
dividends and distributions in cash or to reinvest in additional
shares at net asset value. All expenses are accrued daily and
deducted before declaration of dividends to investors.
Dividends derived from net investment income, together with
distributions from net realized short-term securities gains and
all or a portion of any gains realized from the sale or other
disposition of certain market discount bonds, paid by the Fund
will be taxable to U.S. shareholders as ordinary income whether
received in cash or reinvested in additional shares. No dividend
paid by the Fund will qualify for the dividends received
deduction allowable to certain U.S. corporations. Distributions
from net realized long-term securities gains of the Fund will be
taxable to U.S. shareholders as long-term capital gains for
Federal income tax purposes, regardless of how long shareholders
have held their Fund shares and whether such distributions are
received in cash or reinvested in Fund shares. The Code provides
that the net capital gain of an individual generally will not be
subject to Federal income tax at a rate in excess of 28%.
Dividends and distributions may be subject to state and local
taxes.
Dividends derived from net investment income, together with
distributions from net realized short-term securities gains and
all or a portion of any gains realized from the sale or other
disposition of certain market discount bonds, paid by the Fund to
a foreign investor generally are subject to U.S. nonresident
withholding taxes at the rate of 30%, unless the foreign investor
claims the benefit of a lower rate specified in a tax treaty.
Distributions from net realized long-term securities gains paid
by the Fund to a foreign investor as well as the proceeds of any
redemptions from a foreign investor's account, regardless of the
extent to which gain or loss may be realized, generally will not
be subject to U.S. nonresident withholding tax. However, such
distributions may be subject to backup withholding, as described
below, unless the foreign investor certifies his non-U.S.
residency status.
The exchange of shares of one fund for shares of another is
treated for Federal income tax purposes as a sale of the shares
given in exchange by the shareholder and, therefore, an
exchanging shareholder may realize a taxable gain or loss.
Notice as to the tax status of your dividends and
distributions will be mailed to you annually. You also will
receive periodic summaries of your account which will include
information as to dividends and distributions from securities
gains, if any, paid during the year.
Federal regulations generally require the Fund to withhold
("backup withholding") and remit to the U.S. Treasury 31% of
dividends, distributions from net realized securities gains and
the proceeds of any redemption, regardless of the extent to which
gain or loss may be realized, paid to a shareholder if such
shareholder fails to certify either that the TIN furnished in
connection with opening an account is correct or that such
shareholder has not received notice from the IRS of being subject
to backup withholding as a result of a failure to properly report
taxable dividend or interest income on a Federal income tax
return. Furthermore, the IRS may notify the Fund to institute
backup withholding if the IRS determines a shareholder's TIN is
incorrect or if a shareholder has failed to properly report
taxable dividend and interest income on a Federal income tax
return.
A TIN is either the Social Security number or employer
identification number of the record owner of the account. Any
tax withheld as a result of backup withholding does not consti-
tute an additional tax imposed on the record owner of the
account, and may be claimed as a credit on the record owner's
Federal income tax return.
It is expected that the Fund will qualify as a "regulated
investment company" under the Code so long as such qualification
is in the best interests of its shareholders. Such qualification
relieves the Fund of any liability for Federal income tax to the
extent its earnings are distributed in accordance with applicable
provisions of the Code. The Fund is subject to a non-deductible
4% excise tax, measured with respect to certain undistributed
amounts of taxable investment income and capital gains.
You should consult your tax adviser regarding specific
questions as to Federal, state or local taxes.
PERFORMANCE INFORMATION
For purposes of advertising, performance may be calculated
on several bases, including current yield, average annual total
return and/or total return.
Current yield refers to the Fund's annualized net investment
income per share over a 30-day period, expressed as a percentage
of the net asset value per share at the end of the period. For
purposes of calculating current yield, the amount of net
investment income per share during that 30-day period, computed
in accordance with regulatory requirements, is compounded by
assuming that it is reinvested at a constant rate over a six-
month period. An identical result is then assumed to have
occurred during a second six-month period which, when added to
the result for the first six months, provides an "annualized"
yield for an entire one-year period. Calculations of current
yield may reflect absorbed expenses pursuant to any undertaking
that may be in effect. See "Management of the Fund."
Average annual total return is calculated pursuant to a
standardized formula which assumes that an investment was
purchased with an initial payment of $1,000 and that the
investment was redeemed at the end of a stated period of time,
after giving effect to the reinvestment of dividends and
distributions during the period. The return is expressed as a
percentage rate which, if applied on a compounded annual basis,
would result in the redeemable value of the investment at the end
of the period. Advertisements of the Fund's performance will
include the Fund's average annual total return for one, five and
ten year periods, or for shorter periods depending upon the
length of time during which the Fund has operated.
Total return is computed on a per share basis and assumes
the reinvestment of dividends and distributions. Total return
generally is expressed as a percentage rate which is calculated
by combining the income and principal changes for a specified
period and dividing by the net asset value per share at the
beginning of the period. Advertisements may include the
percentage rate of total return or may include the value of a
hypothetical investment at the end of the period which assumes
the application of the percentage rate of total return.
Performance will vary from time to time and past results are
not necessarily representative of future results. You should
remember that performance is a function of portfolio management
in selecting the type and quality of portfolio securities and is
affected by operating expenses. Performance information, such as
that described above, may not provide a basis for comparison with
other investments or other investment companies using a different
method of calculating performance.
Comparative performance information may be used from time to
time in advertising or marketing the Fund's shares, including
data from Lipper Analytical Services, Inc., Moody's Bond Survey
Bond Index, Bond Buyer's 20-Bond Index, Morningstar, Inc. and
other industry publications.
GENERAL INFORMATION
The Company was organized as an unincorporated business
trust under the laws of the Commonwealth of Massachusetts
pursuant to an Agreement and Declaration of Trust (the "Trust
Agreement") dated July 24, 1985, and commenced operations on
October 1, 1986. Before _____________, 199_, the Company's name
was Dreyfus Strategic Income. The Company is authorized to issue
an unlimited number of shares of beneficial interest, par value
$.001 per share. Each share has one vote.
Under Massachusetts law, shareholders could, under certain
circumstances, be held personally liable for the obligations of a
Massachusetts business trust. However, the Trust Agreement
disclaims shareholder liability for acts or obligations of the
Company and requires that notice of such disclaimer be given in
each agreement, obligation or instrument entered into or executed
by the Company or a Trustee. The Trust Agreement provides for
indemnification from the Fund's property for all losses and
expenses of any shareholder held personally liable for the
obligations of the Fund. Thus, the risk of a shareholder's
incurring financial loss on account of shareholder liability is
limited to circumstances in which the Fund itself would be unable
to meet its obligations, a possibility which management believes
is remote. Upon payment of any liability incurred by the Fund,
the shareholder paying such liability will be entitled to
reimbursement from the general assets of the Fund. The Company
intends to conduct its operations in such a way so as to avoid,
as far as possible, ultimate liability of the shareholders for
liabilities of the Fund.
Unless otherwise required by the 1940 Act, ordinarily it
will not be necessary for the Fund to hold annual meetings of
shareholders. As a result, Fund shareholders may not consider
each year the election of Board members or the appointment of
auditors. However, pursuant to the Company's By-Laws, the
holders of at least 10% of the shares outstanding and entitled to
vote may require the Company to hold a special meeting of
shareholders for purposes of removing a Board member from office
or for any other purpose. Shareholders may remove a Board member
by the affirmative vote of not less than two-thirds of the
Company's outstanding voting shares. In addition, the Board will
call a meeting of shareholders for the purpose of electing Board
members if, at any time, less than a majority of the Board
members then holding office have been elected by shareholders.
The Company is a "series fund," which is a mutual fund
divided into separate portfolios, each of which is treated as a
separate entity for certain matters under the 1940 Act and for
other purposes. A shareholder of one portfolio is not deemed to
be a shareholder of any other portfolio. For certain matters
shareholders vote together as a group; as to others they vote
separately by portfolio. By this Prospectus, shares of the Fund
are being offered. Other portfolios are sold pursuant to other
offering documents.
To date, the Board has authorized the creation of three
series of shares. All consideration received by the Company for
shares of one of the series and all assets in which such
consideration is invested will belong to that series (subject
only to the rights of creditors of the Company) and will be
subject to the liabilities related thereto. The income
attributable to, and the expenses of, one series are treated
separately from those of the other series. The Company has the
ability to create, from time to time, new series without
shareholder approval.
The Transfer Agent maintains a record of your ownership and
sends you confirmations and statements of account.
Shareholder inquiries may be made by writing to the Fund at
144 Glenn Curtiss Boulevard, Uniondale, New York 11556-0144, or
by calling toll free 1-800-645-6561. In New York City, call 1-
718-895-1206; outside the U.S. and Canada, call 516-794-5452.
<PAGE>
APPENDIX
INVESTMENT TECHNIQUES
FOREIGN CURRENCY TRANSACTIONS--Foreign currency transactions may
be entered into for a variety of purposes, including: to fix in
U.S. dollars, between trade and settlement date, the value of a
security the Fund has agreed to buy or sell; or to hedge the U.S.
dollar value of securities the Fund already owns, particularly if
it expects a decrease in the value of the currency in which the
foreign security is denominated; or to gain exposure to the
foreign currency in an attempt to realize gains.
Foreign currency transactions may involve, for example, the
Fund's purchase of foreign currencies for U.S. dollars or the
maintenance of short positions in foreign currencies, which would
involve the Fund agreeing to exchange an amount of a currency it
did not currently own for another currency at a future date in
anticipation of a decline in the value of the currency sold
relative to the currency the Fund contracted to receive in the
exchange. The Fund's success in these transactions will depend
principally on The Dreyfus Corporation's ability to predict
accurately the future exchange rates between foreign currencies
and the U.S. dollar.
SHORT-SELLING--In these transactions, the Fund sells a security
it does not own in anticipation of a decline in the market value
of the security. To complete the transaction, the Fund must
borrow the security to make delivery to the buyer. The Fund is
obligated to replace the security borrowed by purchasing it
subsequently at the market price at the time of replacement. The
price at such time may be more or less than the price at which
the security was sold by the Fund. The Fund will incur a loss if
the price of the security increases between the date of the short
sale and the date on which the Fund replaces the borrowed
security; it will realize a gain if the security declines in
price between those dates.
Securities will not be sold short if, after effect is given
to any such short sale, the total market value of all securities
sold short would exceed 25% of the value of the Fund's net
assets. The Fund may not sell short the securities of any single
issuer listed on a national securities exchange to the extent of
more than 5% of the value of the Fund's net assets. The Fund may
not sell short the securities of any class of an issuer if, as a
result of such sale, the Fund would have sold short in the
aggregate more than 5% of the outstanding securities of that
class.
The Fund also may make short sales "against the box," in
which the Fund enters into a short sale of a security it owns in
order to hedge an unrealized gain on the security. At no time
will more than 15% of the value of the Fund's net assets be in
deposits on short sales against the box.
BORROWING MONEY--The Fund is permitted to borrow to the extent
permitted under the 1940 Act, which permits an investment company
to borrow in an amount up to 33-1/3% of the value of such
company's total assets. The Fund currently intends to borrow
money only for temporary or emergency (not leveraging) purposes,
in an amount up to 15% of the value of its 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.
USE OF DERIVATIVES--Although the Fund will not be a commodity
pool, Derivatives subject the Fund to the rules of the Commodity
Futures Trading Commission which limit the extent to which the
Fund can invest in certain Derivatives. The Fund may invest in
futures contracts and options with respect thereto for hedging
purposes without limit. However, the Fund may not invest in such
contracts and options for other purposes if the sum of the amount
of initial margin deposits and premiums paid for unexpired
options with respect to such contracts,other than for bona fide
hedging purposes, exceed 5% of the liquidation value of the
Fund's assets, after taking into account unrealized profits and
unrealized losses on such contracts and options; provided,
however, that in the case of an option that is in-the-money at
the time of purchase, the in-the-money amount may be excluded in
calculating the 5% limitation.
Derivatives may entail investment exposures that are greater
than their cost would suggest, meaning that a small investment in
Derivatives could have a large potential impact on the Fund's
performance.
If the Fund invests in Derivatives at inappropriate times or
judges market conditions incorrectly, such investments may lower
the Fund's return or result in a loss. The Fund also could
experience losses if it were unable to liquidate its position
because of an illiquid secondary market. The market for many
Derivatives is, or suddenly can become, illiquid. Changes in
liquidity may result in significant, rapid and unpredictable
changes in the prices for Derivatives.
FORWARD COMMITMENTS--The Fund may purchase securities on a
forward commitment or when-issued basis, which means that
delivery and payment take place a number of days after the date
of the commitment to purchase. The payment obligation and the
interest rate that will be received on a forward commitment or
when-issued security are fixed at the time the Fund enters into
the commitment. However, the Fund does not make a payment until
it receives delivery from the other party to the transaction.
The Fund will make commitments to purchase such securities only
with the intention of actually acquiring the securities, but the
Fund may sell these securities before the settlement date if it
is deemed advisable. A segregated account of the Fund consisting
of cash, cash equivalents or U.S. Government securities or other
high quality liquid debt securities at least equal at all times
to the amount of the commitments will be established and
maintained at the Fund's custodian bank.
CERTAIN PORTFOLIO SECURITIES
HIGH YIELD-LOWER RATED SECURITIES--Securities rated Ba by Moody's
are judged to have speculative elements; their future cannot be
considered as well assured and often the protection of interest
and principal payments may be very moderate. Securities rated BB
by S&P, Fitch or Duff are regarded as having predominantly
speculative characteristics and, while such obligations have less
near-term vulnerability to default than other speculative grade
debt, they face major ongoing uncertainties or exposure to
adverse business, financial or economic conditions which could
lead to inadequate capacity to meet timely interest and principal
payments. Securities rated C by Moody's are regarded as having
extremely poor prospects of ever attaining any real investment
standing. Securities rated D by S&P, Fitch and Duff are in
default and the payment of interest and/or repayment of principal
is in arrears. Such securities, though high yielding, are
characterized by great risk. See "Appendix" in the Statement of
Additional Information for a general description of securities
ratings.
These securities may be particularly susceptible to economic
downturns. It is likely that an economic recession could disrupt
severely the market for such securities and may have an adverse
impact on the value of such securities. In addition, it is
likely that any such economic downturn could adversely affect the
ability of the issuers of such securities to repay principal and
pay interest thereon and increase the incidence of default for
such securities.
The ratings of Moody's, S&P, Fitch or Duff represent their
opinions as to the quality of the obligations which they
undertake to rate. Ratings are relative and subjective and,
although ratings may be useful in evaluating the safety or
interest and principal payments, they do not evaluate the market
value risk of such obligations. Although these ratings may be an
initial criterion for selection of portfolio investments, The
Dreyfus Corporation also will evaluate these securities and the
ability of the issuers of such securities to pay interest and
principal. The Fund's ability to achieve its investment
objective may be more dependent on The Dreyfus Corporation's
credit analysis than might be the case for a fund that invested
in higher rated securities.
CONVERTIBLE SECURITIES--Convertible securities are fixed-income
securities that may be converted at either a stated price or
stated rate into underlying shares of common stock. Convertible
securities have characteristics similar to both fixed-income and
equity securities. Convertible securities generally are
subordinated to other similar but non-convertible securities of
the same issuer, although convertible bonds, as corporate debt
obligations, enjoy seniority in right of payment to all equity
securities, and convertible preferred stock is senior to common
stock, of the same issuer. Because of the subordination feature,
however, convertible securities typically have lower ratings than
similar non-convertible securities.
MORTGAGE-RELATED SECURITIES--Mortgage-related securities are a
form of Derivative collateralized by pools of mortgages assembled
for sale to investors by various governmental agencies, such as
the Government National Mortgage Association and government-
related organizations such as the Federal National Mortgage
Association and the Federal Home Loan Mortgage Corporation, as
well as by private issuers such as commercial banks, savings and
loan institutions, mortgage banks and private mortgage insurance
companies, and similar foreign entities. The mortgage-related
securities which may be purchased include those with fixed,
floating and variable interest rates, those with interest rates
that change based on multiples of changes in interest rates and
those with interest rates that change inversely to changes in
interest rates, as well as stripped mortgage-backed securities.
Stripped mortgage-backed securities usually are structured with
two classes that receive different proportions of interest and
principal distributions on a pool of mortgage-backed securities
or whole loans. A common type of stripped mortgage-backed
security will have one class receiving some of the interest and
most of the principal from the mortgage collateral, while the
other class will receive most of the interest and the remainder
of the principal. Although certain mortgage-related securities
are guaranteed by a third party or otherwise similarly secured,
the market value of the security, which may fluctuate, is not
secured. If a mortgage-related security is purchased at a
premium, all or part of the premium may be lost if there is a
decline in the market value of the security, whether resulting
from changes in interest rates or prepayments on the underlying
mortgage collateral. As with other interest-bearing securities,
the prices of certain of these securities are inversely affected
by changes in interest rates. However, although the value of a
mortgage-related security may decline when interest rates rise,
the converse is not necessarily true, since in periods of
declining interest rates the mortgages underlying the security
are more likely to be prepaid. For this and other reasons, a
mortgage-related security's stated maturity may be shortened by
unscheduled prepayments on the underlying mortgages, and,
therefore, it is not possible to predict accurately the
security's return to the Fund. Moreover, with respect to
stripped mortgage-backed securities, if the underlying mortgage
securities experience greater than anticipated prepayments of
principal, the Fund may fail to fully recoup its initial
investment even if the securities are rated in the highest rating
category by a nationally recognized statistical rating
organization. For further discussion concerning the investment
considerations involved, see "Description of the Fund--Investment
Considerations and Risks--Fixed-Income Securities" and "Illiquid
Securities" below.
ASSET-BACKED SECURITIES--Asset-backed securities are a form of
Derivative. The securitization techniques used for asset-backed
securities are similar to those used for mortgage-related
securities. The collateral for these securities has included
home equity loans, automobile and credit card receivables, boat
loans, computer leases, airplane leases, mobile home loans,
recreational vehicle loans and hospital account receivables. The
Fund may invest in these and other types of asset-backed
securities that may be developed in the future.
Asset-backed securities present certain risks that are not
presented by mortgage-backed securities. Primarily, these
securities may provide the Fund with a less effective security
interest in the related collateral than do mortgage-backed
securities. Therefore, there is the possibility that recoveries
on the underlying collateral may not, in some cases, be available
to support payments on these securities.
MUNICIPAL OBLIGATIONS--Municipal obligations are debt obligations
issued by states, territories and possessions of the United
States and the District of Columbia and their political
subdivisions, agencies and instrumentalities, or multistate
agencies or authorities. Municipal obligations bear fixed,
floating or variable rates of interest. Certain municipal
obligations are subject to redemption at a date earlier than
their stated maturity pursuant to call options, which may be
separated from the related municipal obligations and purchased
and sold separately. The Fund also may acquire call options on
specific municipal obligations. The Fund generally would
purchase these call options to protect the Fund from the issuer
of the related municipal obligation redeeming, or other holder of
the call option from calling away, the municipal obligation
before maturity.
While, in general, municipal obligations are tax exempt
securities having relatively low yields as compared to taxable,
non-municipal obligations of similar quality, certain municipal
obligations are taxable obligations, offering yields comparable
to, and in some cases greater than, the yields available on other
permissible Fund investments. Dividends received by shareholders
on Fund shares which are attributable to interest income received
by the Fund from municipal obligations generally will be subject
to Federal income tax. The Fund will invest in municipal
obligations, the ratings of which correspond with the ratings of
other permissible Fund investments. The Fund currently intends
to invest no more than 25% of its assets in municipal
obligations. However, this percentage may be varied from time to
time without shareholder approval.
ZERO COUPON SECURITIES--The Fund may invest in zero coupon U.S.
Treasury securities, which are Treasury Notes and Bonds that have
been stripped of their unmatured interest coupons, the coupons
themselves and receipts or certificates representing interests in
such stripped debt obligations and coupons. Zero coupon
securities also are issued by corporations and financial
institutions which constitute a proportionate ownership of the
issuer's pool of underlying U.S. Treasury securities. A zero
coupon security pays no interest to its holder during its life
and is sold at a discount to its face value at maturity. The
amount of the discount fluctuates with the market price of the
security. The market prices of zero coupon securities generally
are more volatile than the market prices of securities that pay
interest periodically and are likely to respond to a greater
degree to changes in interest rates than non-zero coupon
securities having similar maturities and credit qualities.
FOREIGN GOVERNMENT OBLIGATIONS; SECURITIES OF SUPRANATIONAL
ENTITIES--The Fund may invest in obligations issued or guaranteed
by one or more foreign governments or any of their political
subdivisions, agencies or instrumentalities that are determined
by The Dreyfus Corporation to be of comparable quality to the
other obligations in which the Fund may invest. Supranational
entities include international organizations designated or
supported by governmental entities to promote economic
reconstruction or development and international banking
institutions and related government agencies. Examples include
the International Bank for Reconstruction and Development (the
World Bank), the European Coal and Steel Community, the Asian
Development Bank and the InterAmerican Development Bank.
MONEY MARKET INSTRUMENTS--The Fund may invest in the following
types of money market instruments.
U.S. GOVERNMENT SECURITIES. Securities issued or guaranteed
by the U.S. Government or its agencies or instrumentalities
include U.S. Treasury securities that differ in their interest
rates, maturities and times of issuance. Some obligations issued
or guaranteed by U.S. Government agencies and instrumentalities
are supported by the full faith and credit of the U.S. Treasury;
others, by the right of the issuer to borrow from the Treasury;
others, by discretionary authority of the U.S. Government to
purchase certain obligations of the agency or instrumentality;
and others, only by the credit of the agency or instrumentality.
These securities bear fixed, floating or variable rates of
interest. While the U.S. Government provides financial support
to such U.S. Government-sponsored agencies and instrumentalities,
no assurance can be given that it will always do so since it is
not so obligated by law.
REPURCHASE AGREEMENTS. In a repurchase agreement, the Fund
buys, and the seller agrees to repurchase, a security at a
mutually agreed upon time and price (usually within seven days).
The repurchase agreement thereby determines the yield during the
purchaser's holding period, while the seller's obligation to
repurchase is secured by the value of the underlying security.
Repurchase agreements could involve risks in the event of a
default or insolvency of the other party to the agreement,
including possible delays or restrictions upon the Fund's ability
to dispose of the underlying securities. The Fund may enter into
repurchase agreements with certain banks or non-bank dealers.
BANK OBLIGATIONS. The Fund may purchase certificates of
deposit, time deposits, bankers' acceptances and other short-term
obligations issued by domestic banks, foreign subsidiaries or
foreign branches of domestic banks, domestic and foreign branches
of foreign banks, domestic savings and loan associations and
other banking institutions. With respect to such securities
issued by foreign subsidiaries or foreign branches of domestic
banks, and domestic and foreign branches of foreign banks, the
Fund may be subject to additional investment risks that are
different in some respects from those incurred by a fund which
invests only in debt obligations of U.S. domestic issuers.
Certificates of deposit are negotiable certificates
evidencing the obligation of a bank to repay funds deposited with
it for a specified period of time.
Time deposits are non-negotiable deposits maintained in a
banking institution for a specified period of time (in no event
longer than seven days) at a stated interest rate.
Bankers' acceptances are credit instruments evidencing the
obligation of a bank to pay a draft drawn on it by a customer.
These instruments reflect the obligation both of the bank and the
drawer to pay the face amount of the instrument upon maturity.
The other short-term obligations may include uninsured, direct
obligations bearing fixed, floating or variable interest rates.
COMMERCIAL PAPER. Commercial paper consists of short-term,
unsecured promissory notes issued to finance short-term credit
needs. The commercial paper purchased by the Fund will consist
only of direct obligations which, at the time of their purchase,
are (a) rated not lower than Prime-1 by Moody's, A-1 by S&P, F-1
by Fitch or Duff-1 by Duff, (b) issued by companies having an
outstanding unsecured debt issue currently rated at least A3 by
Moody's or A- by S&P, Fitch or Duff, or (c) if unrated,
determined by The Dreyfus Corporation to be of comparable quality
to those rated obligations which may be purchased by the Fund.
ILLIQUID SECURITIES--The Fund may invest up to 15% 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, repurchase agreements providing for
settlement in more than seven days after notice, and certain
privately negotiated, non-exchange traded options and securities
used to cover such options. 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 represen-
tative of their value, the value of the Fund's net assets could
be adversely affected.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO
MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS AND IN THE FUND'S OFFICIAL SALES LITERATURE IN CONNEC-
TION WITH THE OFFER OF THE FUND'S SHARES, AND, IF GIVEN OR MADE,
SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON
AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER IN ANY STATE IN WHICH, OR TO ANY PERSON TO
WHOM, SUCH OFFERING MAY NOT LAWFULLY BE MADE.
PROSPECTUS ________ , 199_
DREYFUS EQUITY DIVIDEND FUND
Dreyfus Equity Dividend Fund (the "Fund") is a separate
diversified portfolio of Dreyfus Income Funds, an open-end,
management investment company (the "Company"), known as a mutual
fund. The Fund's primary investment objective is current income.
Capital appreciation is a secondary objective.
You can purchase or redeem shares by telephone using
Dreyfus TeleTransfer.
The Dreyfus Corporation will professionally manage the
Fund's portfolio.
This Prospectus sets forth concisely information about the
Fund that you should know before investing. It should be read
and retained for future reference.
The Statement of Additional Information, dated ________ __,
199_, which may be revised from time to time, provides a further
discussion of certain areas in this Prospectus and other matters
which may be of interest to some investors. It has been filed
with the Securities and Exchange Commission and is incorporated
herein by reference. For a free copy, write to the Fund at 144
Glenn Curtiss Boulevard, Uniondale, New York 11556-0144, or call
1-800-645-6561. When telephoning, ask for Operator 144.
Mutual fund shares are not deposits or obligations of, or
guaranteed or endorsed by, any bank, and are not federally
insured by the Federal Deposit Insurance Corporation, the Federal
Reserve Board or any other agency. The net asset value of funds
of this type will fluctuate from time to time.
<PAGE>
TABLE OF CONTENTS
Page
Annual Fund Operating Expenses. . . . . . . . . .
Description of the Fund . . . . . . . . . . . . .
Management of the Fund. . . . . . . . . . . . . .
How to Buy Shares . . . . . . . . . . . . . . . .
Shareholder Services. . . . . . . . . . . . . . .
How to Redeem Shares . . . . . . . . . . . . . .
Shareholder Services Plan . . . . . . . . . . . .
Dividends, Distributions and Taxes. . . . . . . .
Performance Information . . . . . . . . . . . . .
General Information . . . . . . . . . . . . . . .
Appendix. . . . . . . . . . . . . . . . . . . . .
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<PAGE>
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average daily net assets)
Management Fees . . . . . . . . . . . . . . . . . . . . . . . . . .75%
Other Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . __%
Total Fund Operating Expenses . . . . . . . . . . . . . . . . . . __%
EXAMPLE: 1 YEAR 3 YEARS
You would pay the following
expenses on a $1,000 invest-
ment, assuming (1) 5% annual
return and (2) redemption at
the end of each time period: $__ $__
________________________________________________________________
THE AMOUNTS LISTED IN THE EXAMPLE SHOULD NOT BE CONSIDERED
AS REPRESENTATIVE OF FUTURE EXPENSES AND ACTUAL EXPENSES MAY BE
GREATER OR LESS THAN THOSE INDICATED. MOREOVER, WHILE THE
EXAMPLE ASSUMES A 5% ANNUAL RETURN, THE FUND'S ACTUAL PERFORMANCE
WILL VARY AND MAY RESULT IN AN ACTUAL RETURN GREATER OR LESS THAN
5%.
________________________________________________________________
The purpose of the foregoing table is to assist you in
understanding the costs and expenses borne by the Fund, the
payment of which will reduce investors' annual return. Other
Expenses are based on estimated amounts for the current fiscal
year. The information in the foregoing table does not reflect
any fee waivers or expense reimbursement arrangements that may be
in effect. You can purchase Fund shares without charge directly
from the Fund's distributor; you may be charged a nominal fee if
you effect transactions in Fund shares through a securities
dealer, bank or other financial institution. For a further
description of the various costs and expenses incurred in the
operation of the Fund, as well as expense reimbursement or waiver
arrangements, see "Management of the Fund," "How to Buy Shares"
and "Shareholder Services Plan."
DESCRIPTION OF THE FUND
INVESTMENT OBJECTIVES
The Fund's primary investment objective is current income.
Capital appreciation is a secondary objective. The Fund's
investment objectives cannot be changed without approval by the
holders of a majority (as defined in the Investment Company Act
of 1940, as amended (the "1940 Act")) of the Fund's outstanding
voting shares. There can be no assurance that the Fund's
investment objectives will be achieved.
MANAGEMENT POLICIES
Under normal market conditions, the Fund will invest at
least 65% of the value of its net assets in equity securities,
including dividend-paying common stocks, preferred stocks and
securities that are convertible into common stocks (collectively,
"Equity Securities") of domestic and foreign issuers. The Fund
also may invest in Equity Securities in the form of American
Depository Receipts, and in warrants to purchase Equity
Securities. The Dreyfus Corporation will be particularly alert
to investing in Equity Securities of companies which pay above-
average dividends and which it believes have the capacity to
raise dividends in the future and the potential for capital
appreciation.
In addition, the Fund may invest up to 35% of the value of
its total assets in non-dividend-paying Equity Securities and in
debt securities of domestic and foreign issuers. The debt
securities in which the Fund may invest must be rated investment
grade by Moody's Investors Service, Inc. ("Moody's"), Standard &
Poor's Ratings Group, a division of The McGraw Hill Companies,
Inc. ("S&P"), Fitch Investors Service, L.P. ("Fitch") or Duff &
Phelps Credit Rating Co. ("Duff"), or, if unrated, deemed to be
of comparable quality by The Dreyfus Corporation. Investment
grade debt securities are those rated at least Baa by Moody's or
at least BBB by S&P, Fitch and Duff. Debt securities rated Baa
by Moody's and BBB by S&P, Fitch and Duff are considered
investment grade obligations which lack outstanding investment
characteristics and may have speculative characteristics as well.
While seeking other desirable investments, the Fund may
invest in money market instruments consisting of U.S. Government
securities, certificates of deposit, time deposits, bankers'
acceptances, short-term investment grade corporate bonds and
other short-term debt instruments, and repurchase agreements, as
set forth under "Appendix--Certain Portfolio Securities--Money
Market Instruments." Under normal market conditions, the Fund
does not expect to have a substantial portion of its assets
invested in money market instruments. However, when The Dreyfus
Corporation determines that adverse market conditions exist, the
Fund may adopt a temporary defensive posture and invest all of
its assets in money market instruments.
The Fund's annual portfolio turnover rate is not expected to
exceed 100%. Higher portfolio turnover rates usually generate
additional brokerage commissions and expenses and the short-term
gains realized from these transactions are taxable to
shareholders as ordinary income. In addition, the Fund currently
intends, to a limited extent, to engage in options and futures
transactions, foreign currency transactions and short-selling.
See also "Investment Considerations and Risks" and "Appendix--
Investment Techniques" below and "Investment Objectives and
Management Policies--Management Policies" in the Statement of
Additional Information.
INVESTMENT CONSIDERATIONS AND RISKS
GENERAL--The Fund's net asset value per share should be expected
to fluctuate. Investors should consider the Fund as a supplement
to an overall investment program and should invest only if they
are willing to undertake the risks involved. See "Investment
Objectives and Management Policies--Management Policies" in the
Statement of Additional Information for a further discussion of
certain risks.
EQUITY SECURITIES--Equity securities fluctuate in value, often
based on factors unrelated to the value of the issuer of the
securities, and such fluctuations can be pronounced. Changes in
the value of the Fund's investments will result in changes in the
value of its shares and thus the Fund's total return to
investors.
FIXED-INCOME SECURITIES--Even though interest-bearing securities
are investments which promise a stable stream of income, the
prices of such securities generally are inversely affected by
changes in interest rates and, therefore, are subject to the risk
of market price fluctuations. The values of fixed-income
securities also may be affected by changes in the credit rating
or financial condition of the issuer. Certain securities
purchased by the Fund, such as those rated Baa by Moody's and BBB
by S&P, Fitch and Duff, may be subject to such risk with respect
to the issuing entity and to greater market fluctuations than
certain lower yielding, higher rated fixed-income securities.
Once the rating of a portfolio security has been changed, the
Fund will consider all circumstances deemed relevant in
determining whether to continue to hold the security. See
"Appendix" in the Statement of Additional Information.
FOREIGN SECURITIES--Foreign securities markets generally are not
as developed or efficient as those in the United States.
Securities of some foreign issuers are less liquid and more
volatile than securities of comparable U.S. issuers. Similarly,
volume and liquidity in most foreign securities markets are less
than in the United States and, at times, volatility of price can
be greater than in the United States.
Because evidences of ownership of such securities usually
are held outside the United States, the Fund will be subject to
additional risks which include possible adverse political and
economic developments, possible seizure or nationalization of
foreign deposits and possible adoption of governmental
restrictions which might adversely affect the payment of
principal and interest on the foreign securities or might
restrict the payment of principal and interest to investors
located outside the country of the issuer, whether from currency
blockage or otherwise.
Since foreign securities often are purchased with and
payable in currencies of foreign countries, the value of these
assets as measured in U.S. dollars may be affected favorably or
unfavorably by changes in currency rates and exchange control
regulations.
FOREIGN CURRENCY TRANSACTIONS--Currency exchange rates may
fluctuate significantly over short periods of time. They
generally are determined by the forces of supply and demand in
the foreign exchange markets and the relative merits of
investments in different countries, actual or perceived changes
in interest rates and other complex factors, as seen from an
international perspective. Currency exchange rates also can be
affected unpredictably by intervention by U.S. or foreign
governments or central banks, or the failure to intervene, or by
currency controls or political developments in the United States
or abroad. See "Appendix--Investment Techniques--Foreign
Currency Transactions."
USE OF DERIVATIVES--The Fund may invest, to a limited extent, in
derivatives ("Derivatives"). These are financial instruments
which derive their performance, at least in part, from the
performance of an underlying asset, index or interest rate. The
Derivatives the Fund may use include options and futures. While
Derivatives can be used effectively in furtherance of the Fund's
investment objectives, under certain market conditions, they can
increase the volatility of the Fund's net asset value, can
decrease the liquidity of the Fund's investments and make more
difficult the accurate pricing of the Fund's portfolio. See
"Appendix--Investment Techniques--Use of Derivatives" below and
"Investment Objectives and Management Policies--Management
Policies--Derivatives" in the Statement of Additional
Information.
SIMULTANEOUS INVESTMENTS--Investment decisions for the Fund are
made independently from those of the other investment companies
advised by The Dreyfus Corporation. If, however, such other
investment companies desire to invest in, or dispose of, the same
securities as the Fund, available investments or opportunities
for sales will be allocated equitably to each investment company.
In some cases, this procedure may adversely affect the size of
the position obtained for or disposed of by the Fund or the price
paid or received by the Fund.
MANAGEMENT OF THE FUND
INVESTMENT ADVISER--The Dreyfus Corporation, located at 200 Park
Avenue, New York, New York 10166, was formed in 1947 and serves
as the Fund's investment adviser. The Dreyfus Corporation is a
wholly-owned subsidiary of Mellon Bank, N.A., which is a wholly-
owned subsidiary of Mellon Bank Corporation ("Mellon"). As of
, 1995, The Dreyfus Corporation managed or administered
approximately $ billion in assets for more than million
investor accounts nationwide.
The Dreyfus Corporation supervises and assists in the
overall management of the Fund's affairs under a Management
Agreement with the Company, subject to the authority of the
Company's Board in accordance with Massachusetts law. The Fund's
primary portfolio manager is Timothy M. Ghriskey. He has been
employed by The Dreyfus Corporation since July 1995. Prior to
joining The Dreyfus Corporation, Mr. Ghriskey was a Vice
President and Associate Managing Partner at Loomis, Sayles & Co.
since 1985. The Fund's other portfolio managers are identified
in the Statement of Additional Information. The Dreyfus
Corporation also provides research services for the Fund and for
other funds advised by The Dreyfus Corporation through a
professional staff of portfolio managers and securities analysts.
Mellon is a publicly owned multibank holding company
incorporated under Pennsylvania law in 1971 and registered under
the Federal Bank Holding Company Act of 1956, as amended. Mellon
provides a comprehensive range of financial products and services
in domestic and selected international markets. Mellon is among
the twenty-five largest bank holding companies in the United
States based on total assets. Mellon's principal wholly-owned
subsidiaries are Mellon Bank, N.A., Mellon Bank (DE) National
Association, Mellon Bank (MD), The Boston Company, Inc., AFCO
Credit Corporation and a number of companies known as Mellon
Financial Services Corporations. Through its subsidiaries,
including The Dreyfus Corporation, Mellon managed more than $
billion in assets as of , 1995, including approximately
$ billion in proprietary mutual fund assets. As of ,
1995, Mellon, through various subsidiaries, provided non-
investment services, such as custodial or administration
services, for more than $ billion in assets, including
approximately $ billion in mutual fund assets.
Under the terms of the Management Agreement, the Fund has
agreed to pay The Dreyfus Corporation a monthly fee at the annual
rate of .75 of 1% of the value of the Fund's average daily net
assets. The management fee is higher than that paid by most
other investment companies. From time to time, The Dreyfus
Corporation may waive receipt of its fees and/or voluntarily
assume certain expenses of the Fund, which would have the effect
of lowering the expense ratio of the Fund and increasing yield to
investors. The Fund will not pay The Dreyfus Corporation at a
later time for any amounts it may waive, nor will the Fund
reimburse The Dreyfus Corporation for any amounts it may assume.
EXPENSES--All expenses incurred in the operation of the Company
are borne by the Company, except to the extent specifically
assumed by The Dreyfus Corporation. The expenses borne by the
Company include: organizational costs, taxes, interest, loan
commitment fees, interest and distributions paid on securities
sold short, brokerage fees and commissions, if any, fees of Board
members who are not officers, directors, employees or holders of
5% or more of the outstanding voting securities of The Dreyfus
Corporation or any of its affiliates, Securities and Exchange
Commission fees, state Blue Sky qualification fees, advisory
fees, charges of custodians, transfer and dividend disbursing
agents' fees, certain insurance premiums, industry association
fees, outside auditing and legal expenses, costs of independent
pricing services, costs of maintaining the Company's existence,
costs attributable to investor services (including, without
limitation, telephone and personnel expenses), costs of preparing
and printing prospectuses and statements of additional
information for regulatory purposes and for distribution to
existing shareholders, costs of shareholders' reports and
meetings, and any extraordinary expenses. Expenses attributable
to the Fund are charged against the assets of the Fund; other
expenses of the Company are allocated among the Company's
portfolios on the basis determined by the Board, including, but
not limited to, proportionately in relation to the net assets of
each portfolio.
The Dreyfus Corporation may pay the Fund's distributor for
shareholder services from The Dreyfus Corporation's own assets,
including past profits but not including the management fee paid
by the Fund. The Fund's distributor may use part or all of such
payments to pay Service Agents (as defined below) in respect of
these services.
DISTRIBUTOR--The Fund's distributor is Premier Mutual Fund
Services, Inc. (the "Distributor"), located at One Exchange
Place, Boston, Massachusetts 02109. The Distributor's ultimate
parent is Boston Institutional Group, Inc.
TRANSFER AND DIVIDEND DISBURSING AGENT AND CUSTODIAN--Dreyfus
Transfer, Inc., a wholly-owned subsidiary of The Dreyfus
Corporation, One American Express Plaza, Providence, Rhode Island
02903, is the Fund's Transfer and Dividend Disbursing Agent (the
"Transfer Agent"). The Bank of New York, 90 Washington Street,
New York, New York 10286, is the Fund's Custodian.
HOW TO BUY SHARES
Fund shares are sold without a sales charge. You may be
charged a nominal fee if you effect transactions in Fund shares
through a securities dealer, bank or other financial institution
(collectively, "Service Agents"). Share certificates are issued
only upon your written request. No certificates are issued for
fractional shares. The Fund reserves the right to reject any
purchase order.
The minimum initial investment is $2,500, or $1,000 if you
are a client of a Service Agent which has made an aggregate
minimum initial purchase for its customers of $2,500. Subsequent
investments must be at least $100. However, the minimum initial
investment for Dreyfus-sponsored Keogh Plans, IRAs, SEP-IRAs and
403(b)(7) Plans with only one participant is $750, with no
minimum for subsequent purchases. Individuals who open an IRA
also may open a non-working spousal IRA with a minimum initial
investment of $250. Subsequent investments in a spousal IRA must
be at least $250. The initial investment must be accompanied by
the Account Application. For full-time or part-time employees of
The Dreyfus Corporation or any of its affiliates or subsidiaries,
directors of The Dreyfus Corporation, Board members of a fund
advised by The Dreyfus Corporation, including members of the
Company's Board, or the spouse or minor child of any of the
foregoing, the minimum initial investment is $1,000. For full-
time or part-time employees of The Dreyfus Corporation or any of
its affiliates or subsidiaries who elect to have a portion of
their pay directly deposited into their Fund account, the minimum
initial investment is $50. The Fund reserves the right to offer
Fund shares without regard to minimum purchase requirements to
employees participating in certain qualified or non-qualified
employee benefit plans or other programs where contributions or
account information can be transmitted in a manner and form
acceptable to the Fund. The Fund reserves the right to vary
further the initial and subsequent investment minimum
requirements at any time. Fund shares also are offered without
regard to the minimum initial investment requirements through
Dreyfus-Automatic Asset Builder, Dreyfus Government Direct
Deposit Privilege or Dreyfus Payroll Savings Plan pursuant to the
Dreyfus Step Program described under "Shareholder Services."
These services enable you to make regularly scheduled investments
and may provide you with a convenient way to invest for long-term
financial goals. You should be aware, however, that periodic
investment plans do not guarantee a profit and will not protect
an investor against loss in a declining market.
You may purchase Fund shares by check or wire, or through
the Dreyfus TeleTransfer Privilege described below. Checks
should be made payable to "The Dreyfus Family of Funds," or, if
for Dreyfus retirement plan accounts, to "The Dreyfus Trust
Company, Custodian" and should specify that you are investing in
the Fund. Payments to open new accounts which are mailed should
be sent to The Dreyfus Family of Funds, P.O. Box 9387,
Providence, Rhode Island 02940-9387, together with your Account
Application. For subsequent investments, your Fund account
number should appear on the check and an investment slip should
be enclosed and sent to The Dreyfus Family of Funds, P.O. Box
105, Newark, New Jersey 07101-0105. For Dreyfus retirement plan
accounts, both initial and subsequent investments should be sent
to The Dreyfus Trust Company, Custodian, P.O. Box 6427,
Providence, Rhode Island 02940-6427. Neither initial nor
subsequent investments should be made by third party check.
Purchase orders may be delivered in person only to a Dreyfus
Financial Center. THESE ORDERS WILL BE FORWARDED TO THE FUND AND
WILL BE PROCESSED ONLY UPON RECEIPT THEREBY. For the location of
the nearest Dreyfus Financial Center, please call one of the
telephone numbers listed under "General Information."
Wire payments may be made if your bank account is in a
commercial bank that is a member of the Federal Reserve System or
any other bank having a correspondent bank in New York City.
Immediately available funds may be transmitted by wire to The
Bank of New York, DDA #8900______/Dreyfus Income Funds/Dreyfus
Equity Dividend Fund, for purchase of Fund shares in your name.
The wire must include your Fund account number (for new accounts,
your Taxpayer Identification Number ("TIN") should be included
instead), account registration and dealer number, if applicable.
If your initial purchase of Fund shares is by wire, you should
call 1-800-645-6561 after completing your wire payment to obtain
your Fund account number. You should include your Fund account
number on the Account Application and promptly mail the Account
Application to the Fund, as no redemptions will be permitted
until the Account Application is received. You may obtain
further information about remitting funds in this manner from
your bank. All payments should be made in U.S. dollars and, to
avoid fees and delays, should be drawn only on U.S. banks. A
charge will be imposed if any check used for investment in your
account does not clear. The Fund makes available to certain
large institutions the ability to issue purchase instructions
through compatible computer facilities.
Subsequent investments also may be made by electronic
transfer of funds from an account maintained in a bank or other
domestic financial institution that is an Automated Clearing
House member. You must direct the institution to transmit
immediately available funds through the Automated Clearing House
to The Bank of New York with instructions to credit your Fund
account. The instructions must specify your Fund account
registration and Fund account number preceded by the digits
"1111."
Fund shares are sold on a continuous basis at the net asset
value per share next determined after an order in proper form is
received by the Transfer Agent or other agent. Net asset value
per share is determined as of the close of trading on the floor
of the New York Stock Exchange (currently 4:00 p.m., New York
time), on each day the New York Stock Exchange is open for
business. For purposes of determining net asset value, options
and futures contracts will be valued 15 minutes after the close
of trading on the floor of the New York Stock Exchange. Net
asset value per share is computed by dividing the value of the
Fund's net assets (i.e., the value of its assets less
liabilities) by the total number of Fund shares outstanding. The
Fund's investments are valued generally at market value or, where
market quotations are not readily available, at fair value as
determined by or under the direction of the Company's Board. For
further information regarding the methods employed in valuing the
Fund's investments, see "Determination of Net Asset Value" in the
Statement of Additional Information.
For certain institutions that have entered into agreements
with the Distributor, payment for the purchase of Fund shares may
be transmitted, and must be received by the Transfer Agent,
within three business days after the order is placed. If such
payment is not received within three business days after the
order is placed, the order may be canceled and the institution
could be held liable for resulting fees and/or losses.
The Distributor may pay dealers a fee of up to .5% of the
amount invested through such dealers in Fund shares by employees
participating in qualified or non-qualified employee benefit
plans or other programs where (i) the employers or affiliated
employers maintaining such plans or programs have a minimum of
250 employees eligible for participation in such plans or
programs or (ii) such plan's or program's aggregate investment in
the Dreyfus Family of Funds or certain other products made
available by the Distributor to such plans or programs exceeds
one million dollars ("Eligible Benefit Plans"). All present
holdings of shares of funds in the Dreyfus Family of Funds by
Eligible Benefit Plans will be aggregated to determine the fee
payable with respect to each purchase of Fund shares. The
Distributor reserves the right to cease paying these fees at any
time. The Distributor will pay such fees from its own funds,
other than amounts received from the Fund, including past profits
or any other source available to it.
Federal regulations require that you provide a certified TIN
upon opening or reopening an account. See "Dividends,
Distributions and Taxes" and the Account Application for further
information concerning this requirement. Failure to furnish a
certified TIN to the Fund could subject you to a $50 penalty
imposed by the Internal Revenue Service (the "IRS").
DREYFUS TELETRANSFER PRIVILEGE--You may purchase shares (minimum
$500, maximum $150,000 per day) by telephone if you have checked
the appropriate box and supplied the necessary information on the
Account Application or have filed a Shareholder Services Form
with the Transfer Agent. The proceeds will be transferred
between the bank account designated in one of these documents and
your Fund account. Only a bank account maintained in a domestic
financial institution which is an Automated Clearing House member
may be so designated. The Fund may modify or terminate this
Privilege at any time or charge a service fee upon notice to
shareholders. No such fee currently is contemplated.
If you have selected the Dreyfus TeleTransfer Privilege, you
may request a Dreyfus TeleTransfer purchase of shares by
telephoning 1-800-645-6561 or, if you are calling from overseas,
call 516-794-5452.
SHAREHOLDER SERVICES
FUND EXCHANGES
You may purchase, in exchange for shares of the Fund, shares
of certain other funds managed or administered by The Dreyfus
Corporation, to the extent such shares are offered for sale in
your state of residence. These funds have different investment
objectives which may be of interest to you. If you desire to use
this service, you should consult your Service Agent or call 1-
800-645-6561 to determine if it is available and whether any
conditions are imposed on its use.
To request an exchange, you must give exchange instructions
to the Transfer Agent in writing or by telephone. Before any
exchange, you must obtain and should review a copy of the current
prospectus of the fund into which the exchange is being made.
Prospectuses may be obtained by calling 1-800-645-6561. Except
in the case of personal retirement plans, the shares being
exchanged must have a current value of at least $500;
furthermore, when establishing a new account by exchange, the
shares being exchanged must have a value of at least the minimum
initial investment required for the fund into which the exchange
is being made. The ability to issue exchange instructions by
telephone is given to all Fund shareholders automatically, unless
you check the applicable "No" box on the Account Application,
indicating that you specifically refuse this Privilege. The
Telephone Exchange Privilege may be established for an existing
account by written request, signed by all shareholders on the
account, or by a separate signed Shareholder Services Form, also
available by calling 1-800-645-6561. If you have established the
Telephone Exchange Privilege, you may telephone exchange
instructions by calling 1-800-645-6561 or, if you are calling
from overseas, call 516-794-5452. See "How to Redeem Shares--
Procedures." Upon an exchange into a new account, the following
shareholder services and privileges, as applicable and where
available, will be automatically carried over to the fund into
which the exchange is made: Telephone Exchange Privilege, Wire
Redemption Privilege, Telephone Redemption Privilege, Dreyfus
TeleTransfer Privilege and the dividend/capital gain distribution
option (except for Dreyfus Dividend Sweep) selected by the
investor.
Shares will be exchanged at the next determined net asset
value; however, a sales load may be charged with respect to
exchanges into funds sold with a sales load. If you are
exchanging into a fund that charges a sales load, you may qualify
for share prices which do not include the sales load or which
reflect a reduced sales load, if the shares of the fund from
which you are exchanging were: (a) purchased with a sales load,
(b) acquired by a previous exchange from shares purchased with a
sales load, or (c) acquired through reinvestment of dividends or
distributions paid with respect to the foregoing categories of
shares. To qualify, at the time of the exchange you must notify
the Transfer Agent or your Service Agent must notify the
Distributor. Any such qualification is subject to confirmation
of your holdings through a check of appropriate records. See
"Shareholder Services" in the Statement of Additional
Information. No fees currently are charged shareholders directly
in connection with exchanges, although the Fund reserves the
right, upon not less than 60 days' written notice, to charge
shareholders a nominal fee in accordance with rules promulgated
by the Securities and Exchange Commission. The Fund reserves the
right to reject any exchange request in whole or in part. The
availability of Fund Exchanges may be modified or terminated at
any time upon notice to shareholders. See "Dividends,
Distributions and Taxes."
DREYFUS AUTO-EXCHANGE PRIVILEGE
Dreyfus Auto-Exchange Privilege enables you to invest
regularly (on a semi-monthly, monthly, quarterly or annual
basis), in exchange for shares of the Fund, in shares of certain
other funds in the Dreyfus Family of Funds of which you are
currently an investor. The amount you designate, which can be
expressed either in terms of a specific dollar or share amount
($100 minimum), will be exchanged automatically on the first
and/or fifteenth day of the month according to the schedule you
have selected. Shares will be exchanged at the then-current net
asset value; however, a sales load may be charged with respect to
exchanges into funds sold with a sales load. See "Shareholder
Services" in the Statement of Additional Information. The right
to exercise this Privilege may be modified or canceled by the
Fund or the Transfer Agent. You may modify or cancel your
exercise of this Privilege at any time by mailing written
notification to The Dreyfus Family of Funds, P.O. Box 9671,
Providence, Rhode Island 02940-9671. The Fund may charge a
service fee for the use of this Privilege. No such fee currently
is contemplated. See "Dividends, Distributions and Taxes." For
more information concerning this Privilege and the funds in the
Dreyfus Family of Funds eligible to participate in this
Privilege, or to obtain a Dreyfus Auto-Exchange Authorization
Form, please call toll free 1-800-645-6561.
DREYFUS-AUTOMATIC ASSET BUILDER-registered
Dreyfus-Automatic Asset Builder permits you to purchase Fund
shares (minimum of $100 and maximum of $150,000 per transaction)
at regular intervals selected by you. Fund shares are purchased
by transferring funds from the bank account designated by you.
At your option, the account designated by you will be debited in
the specified amount, and Fund shares will be purchased, once a
month, on either the first or fifteenth day, or twice a month, on
both days. Only an account maintained at a domestic financial
institution which is an Automated Clearing House member may be so
designated. To establish a Dreyfus-Automatic Asset Builder
account, you must file an authorization form with the Transfer
Agent. You may obtain the necessary authorization form by
calling 1-800-645-6561. You may cancel your participation in
this Privilege or change the amount of purchase at any time by
mailing written notification to The Dreyfus Family of Funds, P.O.
Box 9671, Providence, Rhode Island 02940-9671, or, if for Dreyfus
retirement plan accounts, to The Dreyfus Trust Company,
Custodian, P.O. Box 6427, Providence, Rhode Island 02940-6427,
and the notification will be effective three business days
following receipt. The Fund may modify or terminate this
Privilege at any time or charge a service fee. No such fee
currently is contemplated.
DREYFUS GOVERNMENT DIRECT DEPOSIT PRIVILEGE
Dreyfus Government Direct Deposit Privilege enables you to
purchase Fund shares (minimum of $100 and maximum of $50,000 per
transaction) by having Federal salary, Social Security, or cer-
tain veterans', military or other payments from the Federal
government automatically deposited into your Fund account. You
may deposit as much of such payments as you elect. To enroll in
Dreyfus Government Direct Deposit, you must file with the
Transfer Agent a completed Direct Deposit Sign-Up Form for each
type of payment that you desire to include in this Privilege.
The appropriate form may be obtained by calling 1-800-645-6561.
Death or legal incapacity will terminate your participation in
this Privilege. You may elect at any time to terminate your
participation by notifying in writing the appropriate Federal
agency. The Fund may terminate your participation upon 30 days'
notice to you.
DREYFUS PAYROLL SAVINGS PLAN
Dreyfus Payroll Savings Plan permits you to purchase Fund
shares (minimum of $100 per transaction) automatically on a
regular basis. Depending upon your employer's direct deposit
program, you may have part or all of your paycheck transferred to
your existing Dreyfus account electronically through the
Automated Clearing House system at each pay period. To establish
a Dreyfus Payroll Savings Plan account, you must file an
authorization form with your employer's payroll department. Your
employer must complete the reverse side of the form and return it
to The Dreyfus Family of Funds, P.O. Box 9671, Providence, Rhode
Island 02940-9671. You may obtain the necessary authorization
form by calling 1-800-645-6561. You may change the amount of
purchase or cancel the authorization only by written notification
to your employer. It is the sole responsibility of your
employer, not the Distributor, The Dreyfus Corporation, the Fund,
the Transfer Agent or any other person, to arrange for
transactions under the Dreyfus Payroll Savings Plan. The Fund
may modify or terminate this Privilege at any time or charge a
service fee. No such fee currently is contemplated.
DREYFUS STEP PROGRAM
Dreyfus Step Program enables you to purchase Fund shares
without regard to the Fund's minimum initial investment
requirements through Dreyfus-Automatic Asset Builder, Dreyfus
Government Direct Deposit Privilege or Dreyfus Payroll Savings
Plan. To establish a Dreyfus Step Program account, you must
supply the necessary information on the Account Application and
file the required authorization form(s) with the Transfer Agent.
For more information concerning this Program, or to request the
necessary authorization form(s), please call toll free 1-800-782-
6620. You may terminate your participation in this Program at
any time by discontinuing your participation in Dreyfus-Automatic
Asset Builder, Dreyfus Government Direct Deposit Privilege or
Dreyfus Payroll Savings Plan, as the case may be, as provided
under the terms of such Privilege(s). The Fund may modify or
terminate this Program at any time. Investors who wish to
purchase Fund shares through the Dreyfus Step Program in
conjunction with a Dreyfus-sponsored retirement plan may do so
only for IRAs, SEP-IRAs and IRA "Rollover Accounts."
DREYFUS DIVIDEND OPTIONS
Dreyfus Dividend Sweep enables you to invest automatically
dividends or dividends and capital gain distributions, if any,
paid by the Fund in shares of another fund in the Dreyfus Family
of Funds of which you are a shareholder. Shares of the other
fund will be purchased at the then-current net asset value;
however, a sales load may be charged with respect to investments
in shares of a fund sold with a sales load. If you are investing
in a fund that charges a sales load, you may qualify for share
prices which do not include the sales load or which reflect a
reduced sales load. If you are investing in a fund that charges
a contingent deferred sales charge, the shares purchased will be
subject on redemption to the contingent deferred sales charge, if
any, applicable to the purchased shares. See "Shareholder
Services" in the Statement of Additional Information. Dreyfus
Dividend ACH permits you to transfer electronically dividends or
dividends and capital gain distributions, if any, from the Fund
to a designated bank account. Only an account maintained at a
domestic financial institution which is an Automated Clearing
House member may be so designated. Banks may charge a fee for
this service.
For more information concerning these privileges or to
request a Dividend Options Form, please call toll free 1-800-645-
6561. You may cancel these privileges by mailing written
notification to The Dreyfus Family of Funds, P.O. Box 9671,
Providence, Rhode Island 02940-9671. To select a new fund after
cancellation, you must submit a new Dividend Options Form.
Enrollment in or cancellation of these privileges is effective
three business days following receipt. These privileges are
available only for existing accounts and may not be used to open
new accounts. Minimum subsequent investments do not apply for
Dreyfus Dividend Sweep. The Fund may modify or terminate these
privileges at any time or charge a service fee. No such fee
currently is contemplated. Shares held under Keogh Plans, IRAs
or other retirement plans are not eligible for Dreyfus Dividend
Sweep.
AUTOMATIC WITHDRAWAL PLAN
The Automatic Withdrawal Plan permits you to request
withdrawal of a specified dollar amount (minimum of $50) on
either a monthly or quarterly basis if you have a $5,000 minimum
account. An application for the Automatic Withdrawal Plan can be
obtained by calling 1-800-645-6561. There is a service charge of
50 cents for each withdrawal check. The Automatic Withdrawal Plan may
be ended at any time by you, the Fund or the Transfer Agent.
Shares for which certificates have been issued may not be
redeemed through the Automatic Withdrawal Plan.
RETIREMENT PLANS
The Fund offers a variety of pension and profit-sharing
plans, including Keogh Plans, IRAs, SEP-IRAs and IRA "Rollover
Accounts," 401(k) Salary Reduction Plans and 403(b)(7) Plans.
Plan support services also are available. You can obtain details
on the various plans by calling the following numbers toll free:
for Keogh Plans, please call 1-800-358-5566; for IRAs and IRA
"Rollover Accounts," please call 1-800-645-6561; for SEP-IRAs,
401(k) Salary Reduction Plans and 403(b)(7) Plans, please call 1-
800-322-7880.
HOW TO REDEEM SHARES
GENERAL
You may request redemption of your shares at any time.
Redemption requests should be transmitted to the Transfer Agent
as described below. When a request is received in proper form,
the Fund will redeem the shares at the next determined net asset
value.
The Fund imposes no charges when shares are redeemed.
Service Agents may charge their clients a nominal fee for
effecting redemptions of Fund shares. Any certificates
representing Fund shares being redeemed must be submitted with
the redemption request. The value of the shares redeemed may be
more or less than their original cost, depending upon the Fund's
then-current net asset value.
The Fund ordinarily will make payment for all shares
redeemed within seven days after receipt by the Transfer Agent of
a redemption request in proper form, except as provided by the
rules of the Securities and Exchange Commission. HOWEVER, IF YOU
HAVE PURCHASED FUND SHARES BY CHECK, BY DREYFUS TELETRANSFER
PRIVILEGE OR THROUGH DREYFUS-AUTOMATIC ASSET BUILDER AND SUBSE-
QUENTLY SUBMIT A WRITTEN REDEMPTION REQUEST TO THE TRANSFER
AGENT, THE REDEMPTION PROCEEDS WILL BE TRANSMITTED TO YOU PROMPT-
LY UPON BANK CLEARANCE OF YOUR PURCHASE CHECK, DREYFUS TELETRANS-
FER PURCHASE OR DREYFUS-AUTOMATIC ASSET BUILDER ORDER, WHICH MAY
TAKE UP TO EIGHT BUSINESS DAYS OR MORE. IN ADDITION, THE FUND
WILL REJECT REQUESTS TO REDEEM SHARES BY WIRE OR TELEPHONE OR
PURSUANT TO THE DREYFUS TELETRANSFER PRIVILEGE FOR A PERIOD OF
EIGHT BUSINESS DAYS AFTER RECEIPT BY THE TRANSFER AGENT OF THE
PURCHASE CHECK, THE DREYFUS TELETRANSFER PURCHASE OR THE DREYFUS-
AUTOMATIC ASSET BUILDER ORDER AGAINST WHICH SUCH REDEMPTION IS
REQUESTED. THESE PROCEDURES WILL NOT APPLY IF YOUR SHARES WERE
PURCHASED BY WIRE PAYMENT, OR IF YOU OTHERWISE HAVE A SUFFICIENT
COLLECTED BALANCE IN YOUR ACCOUNT TO COVER THE REDEMPTION
REQUEST. PRIOR TO THE TIME ANY REDEMPTION IS EFFECTIVE,
DIVIDENDS ON SUCH SHARES WILL ACCRUE AND BE PAYABLE, AND YOU WILL
BE ENTITLED TO EXERCISE ALL OTHER RIGHTS OF BENEFICIAL OWNERSHIP.
Fund shares will not be redeemed until the Transfer Agent has
received your Account Application.
The Fund reserves the right to redeem your account at its
option upon not less than 30 days' written notice if your
account's net asset value is $500 or less and remains so during
the notice period.
PROCEDURES
You may redeem shares by using the regular redemption
procedure through the Transfer Agent, or, if you have checked the
appropriate box and supplied the necessary information on the
Account Application or have filed a Shareholder Services Form
with the Transfer Agent, through the Wire Redemption Privilege,
the Telephone Redemption Privilege or the Dreyfus TeleTransfer
Privilege. Other redemption procedures may be in effect for
clients of certain Service Agents. The Fund makes available to
certain large institutions the ability to issue redemption
instructions through compatible computer facilities. The Fund
reserves the right to refuse any request made by wire or
telephone, including requests made shortly after a change of
address, and may limit the amount involved or the number of such
requests. The Fund may modify or terminate any redemption
Privilege at any time or charge a service fee upon notice to
shareholders. No such fee currently is contemplated.
You may redeem shares by telephone if you have checked the
appropriate box on the Account Application or have filed a
Shareholder Services Form with the Transfer Agent. If you select
a telephone redemption privilege or telephone exchange privilege
(which is granted automatically unless you refuse it), you
authorize the Transfer Agent to act on telephone instructions
from any person representing himself or herself to be you, and
reasonably believed by the Transfer Agent to be genuine. The
Fund will require the Transfer Agent to employ reasonable
procedures, such as requiring a form of personal identification,
to confirm that instructions are genuine and, if it does not
follow such procedures, the Fund or the Transfer Agent may be
liable for any losses due to unauthorized or fraudulent
instructions. Neither the Fund nor the Transfer Agent will be
liable for following telephone instructions reasonably believed
to be genuine.
During times of drastic economic or market conditions, you
may experience difficulty in contacting the Transfer Agent by
telephone to request a redemption or exchange of Fund shares. In
such cases, you should consider using the other redemption pro-
cedures described herein. Use of these other redemption pro-
cedures may result in your redemption request being processed at
a later time than it would have been if telephone redemption had
been used. During the delay, the Fund's net asset value may
fluctuate.
REGULAR REDEMPTION--Under the regular redemption procedure, you
may redeem shares by written request mailed to The Dreyfus Family
of Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671.
Redemption requests may be delivered in person only to a Dreyfus
Financial Center. THESE REQUESTS WILL BE FORWARDED TO THE FUND
AND WILL BE PROCESSED ONLY UPON RECEIPT THEREBY. For the
location of the nearest Dreyfus Financial Center, please call one
of the telephone numbers listed under "General Information."
Redemption requests must be signed by each shareholder, including
each owner of a joint account, and each signature must be guar-
anteed. The Transfer Agent has adopted standards and procedures
pursuant to which signature-guarantees in proper form generally
will be accepted from domestic banks, brokers, dealers, credit
unions, national securities exchanges, registered securities
associations, clearing agencies and savings associations, as well
as from participants in the New York Stock Exchange Medallion
Signature Program, the Securities Transfer Agents Medallion
Program ("STAMP") and the Stock Exchanges Medallion Program. If
you have any questions with respect to signature-guarantees,
please call one of the telephone numbers listed under "General
Information."
Redemption proceeds of at least $1,000 will be wired to any
member bank of the Federal Reserve System in accordance with a
written signature-guaranteed request.
WIRE REDEMPTION PRIVILEGE--You may request by wire or telephone
that redemption proceeds (minimum $1,000) be wired to your
account at a bank which is a member of the Federal Reserve
System, or a correspondent bank if your bank is not a member.
You also may direct that redemption proceeds be paid by check
(maximum $150,000 per day) made out to the owners of record and
mailed to your address. Redemption proceeds of less than $1,000
will be paid automatically by check. Holders of jointly
registered Fund or bank accounts may have redemption proceeds of
not more than $250,000 wired within any 30-day period. You may
telephone redemption requests by calling 1-800-645-6561 or, if
you are calling from overseas, call 516-794-5452. The Statement
of Additional Information sets forth instructions for
transmitting redemption requests by wire. Shares held under
Keogh Plans, IRAs or other retirement plans, and shares for which
certificates have been issued, are not eligible for this
Privilege.
TELEPHONE REDEMPTION PRIVILEGE--You may request by telephone that
redemption proceeds (maximum $150,000 per day) be paid by check
and mailed to your address. You may telephone redemption
instructions by calling 1-800-645-6561 or, if you are calling
from overseas, call 516-794-5452. Shares held under Keogh Plans,
IRAs or other retirement plans, and shares for which certificates
have been issued, are not eligible for this Privilege.
DREYFUS TELETRANSFER PRIVILEGE--You may request by telephone that
redemption proceeds (minimum $500 per day) be transferred between
your Fund account and your bank account. Only a bank account
maintained in a domestic financial institution which is an
Automated Clearing House member may be designated. Redemption
proceeds will be on deposit in your account at an Automated
Clearing House member bank ordinarily two days after receipt of
the redemption request or, at your request, paid by check
(maximum $150,000 per day) and mailed to your address. Holders
of jointly registered Fund or bank accounts may redeem through
the Dreyfus TeleTransfer Privilege for transfer to their bank
account not more than $250,000 within any 30-day period.
If you have selected the Dreyfus TeleTransfer Privilege, you
may request a Dreyfus TeleTransfer redemption of shares by
telephoning 1-800-645-6561 or, if you are calling from overseas,
call 516-794-5452. Shares held under Keogh Plans, IRAs or other
retirement plans, and shares issued in certificate form, are not
eligible for this Privilege.
SHAREHOLDER SERVICES PLAN
The Fund has adopted a Shareholder Services Plan, pursuant
to which it pays the Distributor for the provision of certain
services to Fund shareholders a fee at the annual rate of .25 of
1% of the value of the Fund's average daily net assets. 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.
The Distributor may make payments to Service Agents in respect of
these services. The Distributor determines the amounts to be
paid to Service Agents.
DIVIDENDS, DISTRIBUTIONS AND TAXES
Under the Internal Revenue Code of 1986, as amended (the
"Code"), the Fund is treated as a separate entity for purposes of
qualification and taxation as a regulated investment company.
The Fund ordinarily pays dividends from its net investment income
and distributes net realized securities gains, if any, once a
year, but it may make distributions on a more frequent basis to
comply with the distribution requirements of the Code, in all
events in a manner consistent with the provisions of the 1940
Act. The Fund will not make distributions from net realized
securities gains unless capital loss carryovers, if any, have
been utilized or have expired. You may choose whether to receive
dividends and distributions in cash or to reinvest in additional
shares at net asset value. All expenses are accrued daily and
deducted before declaration of dividends to investors.
Dividends derived from net investment income, together with
distributions from net realized short-term securities gains and
all or a portion of any gains realized from the sale or other
disposition of certain market discount bonds, paid by the Fund
will be taxable to U.S. shareholders as ordinary income whether
received in cash or reinvested in additional shares. Depending
upon the composition of the Fund's income, all or a portion of
the dividends derived from net investment income may qualify for
the dividends received deduction allowable to certain U.S.
corporations. Distributions from net realized long-term
securities gains of the Fund will be taxable to U.S. shareholders
as long-term capital gains for Federal income tax purposes,
regardless of how long shareholders have held their Fund shares
and whether such distributions are received in cash or reinvested
in Fund shares. The Code provides that the net capital gain of
an individual generally will not be subject to Federal income tax
at a rate in excess of 28%. Dividends and distributions may be
subject to state and local taxes.
Dividends derived from net investment income, together with
distributions from net realized short-term securities gains and
all or a portion of any gains realized from the sale or other
disposition of certain market discount bonds, paid by the Fund to
a foreign investor generally are subject to U.S. nonresident
withholding taxes at the rate of 30%, unless the foreign investor
claims the benefit of a lower rate specified in a tax treaty.
Distributions from net realized long-term securities gains paid
by the Fund to a foreign investor as well as the proceeds of any
redemptions from a foreign investor's account, regardless of the
extent to which gain or loss may be realized, generally will not
be subject to U.S. nonresident withholding tax. However, such
distributions may be subject to backup withholding, as described
below, unless the foreign investor certifies his non-U.S.
residency status.
The exchange of shares of one fund for shares of another is
treated for Federal income tax purposes as a sale of the shares
given in exchange by the shareholder and, therefore, an
exchanging shareholder may realize a taxable gain or loss.
Notice as to the tax status of your dividends and
distributions will be mailed to you annually. You also will
receive periodic summaries of your account which will include
information as to dividends and distributions from securities
gains, if any, paid during the year.
Federal regulations generally require the Fund to withhold
("backup withholding") and remit to the U.S. Treasury 31% of
dividends, distributions from net realized securities gains and
the proceeds of any redemption, regardless of the extent to which
gain or loss may be realized, paid to a shareholder if such
shareholder fails to certify either that the TIN furnished in
connection with opening an account is correct or that such
shareholder has not received notice from the IRS of being subject
to backup withholding as a result of a failure to properly report
taxable dividend or interest income on a Federal income tax
return. Furthermore, the IRS may notify the Fund to institute
backup withholding if the IRS determines a shareholder's TIN is
incorrect or if a shareholder has failed to properly report
taxable dividend and interest income on a Federal income tax
return.
A TIN is either the Social Security number or employer
identification number of the record owner of the account. Any
tax withheld as a result of backup withholding does not consti-
tute an additional tax imposed on the record owner of the
account, and may be claimed as a credit on the record owner's
Federal income tax return.
It is expected that the Fund will qualify as a "regulated
investment company" under the Code so long as such qualification
is in the best interests of its shareholders. Such qualification
relieves the Fund of any liability for Federal income tax to the
extent its earnings are distributed in accordance with applicable
provisions of the Code. The Fund is subject to a non-deductible
4% excise tax, measured with respect to certain undistributed
amounts of taxable investment income and capital gains.
You should consult your tax adviser regarding specific
questions as to Federal, state or local taxes.
PERFORMANCE INFORMATION
For purposes of advertising, performance may be calculated
on several bases, including current yield, average annual total
return and/or total return.
Current yield refers to the Fund's annualized net investment
income per share over a 30-day period, expressed as a percentage
of the net asset value per share at the end of the period. For
purposes of calculating current yield, the amount of net
investment income per share during that 30-day period, computed
in accordance with regulatory requirements, is compounded by
assuming that it is reinvested at a constant rate over a six-
month period. An identical result is then assumed to have
occurred during a second six-month period which, when added to
the result for the first six months, provides an "annualized"
yield for an entire one-year period. Calculations of current
yield may reflect absorbed expenses pursuant to any undertaking
that may be in effect. See "Management of the Fund."
Average annual total return is calculated pursuant to a
standardized formula which assumes that an investment was
purchased with an initial payment of $1,000 and that the
investment was redeemed at the end of a stated period of time,
after giving effect to the reinvestment of dividends and
distributions during the period. The return is expressed as a
percentage rate which, if applied on a compounded annual basis,
would result in the redeemable value of the investment at the end
of the period. Advertisements of the Fund's performance will
include the Fund's average annual total return for one, five and
ten year periods, or for shorter periods depending upon the
length of time during which the Fund has operated.
Total return is computed on a per share basis and assumes
the reinvestment of dividends and distributions. Total return
generally is expressed as a percentage rate which is calculated
by combining the income and principal changes for a specified
period and dividing by the net asset value per share at the
beginning of the period. Advertisements may include the
percentage rate of total return or may include the value of a
hypothetical investment at the end of the period which assumes
the application of the percentage rate of total return.
Performance will vary from time to time and past results are
not necessarily representative of future results. You should
remember that performance is a function of portfolio management
in selecting the type and quality of portfolio securities and is
affected by operating expenses. Performance information, such as
that described above, may not provide a basis for comparison with
other investments or other investment companies using a different
method of calculating performance.
Comparative performance information may be used from time to
time in advertising or marketing the Fund's shares, including
data from Lipper Analytical Services, Inc., Standard & Poor's 500
Stock Index, The Dow Jones Industrial Average, Morningstar, Inc.
and other industry publications.
GENERAL INFORMATION
The Company was organized as an unincorporated business
trust under the laws of the Commonwealth of Massachusetts
pursuant to an Agreement and Declaration of Trust (the "Trust
Agreement") dated July 24, 1985, and commenced operations on
October 1, 1986. Before _____________, 199_, the Company's name
was Dreyfus Strategic Income. The Company is authorized to issue
an unlimited number of shares of beneficial interest, par value
$.001 per share. Each share has one vote.
Under Massachusetts law, shareholders could, under certain
circumstances, be held personally liable for the obligations of a
Massachusetts business trust. However, the Trust Agreement
disclaims shareholder liability for acts or obligations of the
Company and requires that notice of such disclaimer be given in
each agreement, obligation or instrument entered into or executed
by the Company or a Trustee. The Trust Agreement provides for
indemnification from the Fund's property for all losses and
expenses of any shareholder held personally liable for the
obligations of the Fund. Thus, the risk of a shareholder's
incurring financial loss on account of shareholder liability is
limited to circumstances in which the Fund itself would be unable
to meet its obligations, a possibility which management believes
is remote. Upon payment of any liability incurred by the Fund,
the shareholder paying such liability will be entitled to
reimbursement from the general assets of the Fund. The Company
intends to conduct its operations in such a way so as to avoid,
as far as possible, ultimate liability of the shareholders for
liabilities of the Fund.
Unless otherwise required by the 1940 Act, ordinarily it
will not be necessary for the Fund to hold annual meetings of
shareholders. As a result, Fund shareholders may not consider
each year the election of Board members or the appointment of
auditors. However, pursuant to the Company's By-Laws, the
holders of at least 10% of the shares outstanding and entitled to
vote may require the Company to hold a special meeting of
shareholders for purposes of removing a Board member from office
or for any other purpose. Shareholders may remove a Board member
by the affirmative vote of not less than two-thirds of the
Company's outstanding voting shares. In addition, the Board will
call a meeting of shareholders for the purpose of electing Board
members if, at any time, less than a majority of the Board
members then holding office have been elected by shareholders.
The Company is a "series fund," which is a mutual fund
divided into separate portfolios, each of which is treated as a
separate entity for certain matters under the 1940 Act and for
other purposes. A shareholder of one portfolio is not deemed to
be a shareholder of any other portfolio. For certain matters
shareholders vote together as a group; as to others they vote
separately by portfolio. By this Prospectus, shares of the Fund
are being offered. Other portfolios are sold pursuant to other
offering documents.
To date, the Board has authorized the creation of three
series of shares. All consideration received by the Company for
shares of one of the series and all assets in which such
consideration is invested will belong to that series (subject
only to the rights of creditors of the Company) and will be
subject to the liabilities related thereto. The income
attributable to, and the expenses of, one series are treated
separately from those of the other series. The Company has the
ability to create, from time to time, new series without
shareholder approval.
The Transfer Agent maintains a record of your ownership and
sends you confirmations and statements of account.
Shareholder inquiries may be made by writing to the Fund at
144 Glenn Curtiss Boulevard, Uniondale, New York 11556-0144, or
by calling toll free 1-800-645-6561. In New York City, call 1-
718-895-1206; outside the U.S. and Canada, call 516-794-5452.
<PAGE>
APPENDIX
INVESTMENT TECHNIQUES
BORROWING MONEY--The Fund is permitted to borrow to the extent
permitted under the 1940 Act, which permits an investment company
to borrow in an amount up to 33-1/3% of the value of such
company's total assets. The Fund currently intends to borrow
money only for temporary or emergency (not leveraging) purposes,
in an amount up to 15% of the value of its 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.
SHORT-SELLING--In these transactions, the Fund sells a security
it does not own in anticipation of a decline in the market value
of the security. To complete the transaction, the Fund must
borrow the security to make delivery to the buyer. The Fund is
obligated to replace the security borrowed by purchasing it
subsequently at the market price at the time of replacement. The
price at such time may be more or less than the price at which
the security was sold by the Fund. The Fund will incur a loss if
the price of the security increases between the date of the short
sale and the date on which the Fund replaces the borrowed
security; it will realize a gain if the security declines in
price between those dates.
Securities will not be sold short if, after effect is given
to any such short sale, the total market value of all securities
sold short would exceed 25% of the value of the Fund's net
assets. The Fund may not sell short the securities of any single
issuer listed on a national securities exchange to the extent of
more than 5% of the value of the Fund's net assets. The Fund may
not sell short the securities of any class of an issuer if, as a
result of such sale, the Fund would have sold short in the
aggregate more than 5% of the outstanding securities of that
class.
The Fund also may make short sales "against the box," in
which the Fund enters into a short sale of a security it owns in
order to hedge an unrealized gain on the security. At no time
will more than 15% of the value of the Fund's net assets be in
deposits on short sales against the box.
FOREIGN CURRENCY TRANSACTIONS--Foreign currency transactions may
be entered into for a variety of purposes, including: to fix in
U.S. dollars, between trade and settlement date, the value of a
security the Fund has agreed to buy or sell; or to hedge the U.S.
dollar value of securities the Fund already owns, particularly if
it expects a decrease in the value of the currency in which the
foreign security is denominated; or to gain exposure to the
foreign currency in an attempt to realize gains.
Foreign currency transactions may involve, for example, the
Fund's purchase of foreign currencies for U.S. dollars or the
maintenance of short positions in foreign currencies, which would
involve the Fund agreeing to exchange an amount of a currency it
did not currently own for another currency at a future date in
anticipation of a decline in the value of the currency sold
relative to the currency the Fund contracted to receive in the
exchange. The Fund's success in these transactions will depend
principally on The Dreyfus Corporation's ability to predict
accurately the future exchange rates between foreign currencies
and the U.S. dollar.
USE OF DERIVATIVES--Although the Fund will not be a commodity
pool, Derivatives subject the Fund to the rules of the Commodity
Futures Trading Commission which limit the extent to which the
Fund can invest in certain Derivatives. The Fund may invest in
futures contracts and options with respect thereto for hedging
purposes without limit. However, the Fund may not invest in such
contracts and options for other purposes if the sum of the amount
of initial margin deposits and premiums paid for unexpired
options with respect to such contracts, other than for bona fide
hedging purposes, exceed 5% of the liquidation value of the
Fund's assets, after taking into account unrealized profits and
unrealized losses on such contracts and options; provided,
however, that in the case of an option that is in-the-money at
the time of purchase, the in-the-money amount may be excluded in
calculating the 5% limitation.
FORWARD COMMITMENTS--The Fund may purchase securities on a
forward commitment or when-issued basis, which means that
delivery and payment take place a number of days after the date
of the commitment to purchase. The payment obligation and the
interest rate that will be received on a forward commitment or
when-issued security are fixed at the time the Fund enters into
the commitment. However, the Fund does not make a payment until
it receives delivery from the other party to the transaction.
The Fund will make commitments to purchase such securities only
with the intention of actually acquiring the securities, but the
Fund may sell these securities before the settlement date if it
is deemed advisable. A segregated account of the Fund consisting
of cash, cash equivalents or U.S. Government securities or other
high quality liquid debt securities at least equal at all times
to the amount of the commitments will be established and
maintained at the Fund's custodian bank.
CERTAIN PORTFOLIO SECURITIES
CONVERTIBLE SECURITIES--Convertible securities are fixed-income
securities that may be converted at either a stated price or
stated rate into underlying shares of common stock and,
therefore, are deemed to be Equity Securities for purposes of the
Fund's management policies. Convertible securities have
characteristics similar to both fixed-income and equity
securities. Convertible securities generally are subordinated to
other similar but non-convertible securities of the same issuer,
although convertible bonds, as corporate debt obligations, enjoy
seniority in right of payment to all equity securities, and
convertible preferred stock is senior to common stock, of the
same issuer. Because of the subordination feature, however,
convertible securities typically have lower ratings than similar
non-convertible securities.
AMERICAN DEPOSITARY RECEIPTS--The Fund may invest in the
securities of foreign issuers in the form of American Depositary
Receipts ("ADRs"). These securities may not necessarily be
denominated in the same currency as the securities into which
they may be converted. ADRs are receipts typically issued by a
United States bank or trust company which evidence ownership of
underlying securities issued by a foreign corporation.
WARRANTS--A warrant is an instrument issued by a corporation
which gives the holder the right to subscribe to a specified
amount of the corporation's capital stock at a set price for a
specified period of time. The Fund may invest up to 5% of its
net assets in warrants, except that this limitation does not
apply to warrants purchased by the Fund that are sold in units
with, or attached to, other securities.
MONEY MARKET INSTRUMENTS--The Fund may invest in the following
types of money market instruments.
U.S. GOVERNMENT SECURITIES. Securities issued or guaranteed
by the U.S. Government or its agencies or instrumentalities
include U.S. Treasury securities that differ in their interest
rates, maturities and times of issuance. Some obligations issued
or guaranteed by U.S. Government agencies and instrumentalities
are supported by the full faith and credit of the U.S. Treasury;
others, by the right of the issuer to borrow from the Treasury;
others, by discretionary authority of the U.S. Government to
purchase certain obligations of the agency or instrumentality;
and others, only by the credit of the agency or instrumentality.
These securities bear fixed, floating or variable rates of
interest. While the U.S. Government provides financial support
to such U.S. Government-sponsored agencies and instrumentalities,
no assurance can be given that it will always do so since it is
not so obligated by law.
REPURCHASE AGREEMENTS. In a repurchase agreement, the Fund
buys, and the seller agrees to repurchase, a security at a
mutually agreed upon time and price (usually within seven days).
The repurchase agreement thereby determines the yield during the
purchaser's holding period, while the seller's obligation to
repurchase is secured by the value of the underlying security.
Repurchase agreements could involve risks in the event of a
default or insolvency of the other party to the agreement,
including possible delays or restrictions upon the Fund's ability
to dispose of the underlying securities. The Fund may enter into
repurchase agreements with certain banks or non-bank dealers.
BANK OBLIGATIONS. The Fund may purchase certificates of
deposit, time deposits, bankers' acceptances and other short-term
obligations issued by domestic banks, foreign subsidiaries or
foreign branches of domestic banks, domestic and foreign branches
of foreign banks, domestic savings and loan associations and
other banking institutions. With respect to such securities
issued by foreign subsidiaries or foreign branches of domestic
banks, and domestic and foreign branches of foreign banks, the
Fund may be subject to additional investment risks that are
different in some respects from those incurred by a fund which
invests only in debt obligations of U.S. domestic issuers.
Certificates of deposit are negotiable certificates
evidencing the obligation of a bank to repay funds deposited with
it for a specified period of time.
Time deposits are non-negotiable deposits maintained in a
banking institution for a specified period of time (in no event
longer than seven days) at a stated interest rate.
Bankers' acceptances are credit instruments evidencing the
obligation of a bank to pay a draft drawn on it by a customer.
These instruments reflect the obligation both of the bank and the
drawer to pay the face amount of the instrument upon maturity.
The other short-term obligations may include uninsured, direct
obligations bearing fixed, floating or variable interest rates.
COMMERCIAL PAPER. Commercial paper consists of short-term,
unsecured promissory notes issued to finance short-term credit
needs. The commercial paper purchased by the Fund will consist
only of direct obligations which, at the time of their purchase,
are (a) rated not lower than Prime-1 by Moody's, A-1 by S&P, F-1
by Fitch or Duff-1 by Duff, (b) issued by companies having an
outstanding unsecured debt issue currently rated at least A3 by
Moody's or A- by S&P, Fitch or Duff, or (c) if unrated,
determined by The Dreyfus Corporation to be of comparable quality
to those rated obligations which may be purchased by the Fund.
ILLIQUID SECURITIES--The Fund may invest up to 15% 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, repurchase agreements providing for
settlement in more than seven days after notice, and certain
privately negotiated, non-exchange traded options and securities
used to cover such options. 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 represen-
tative of their value, the value of the Fund's net assets could
be adversely affected.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO
MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS AND IN THE FUND'S OFFICIAL SALES LITERATURE IN CONNEC-
TION WITH THE OFFER OF THE FUND'S SHARES, AND, IF GIVEN OR MADE,
SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON
AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER IN ANY STATE IN WHICH, OR TO ANY PERSON TO
WHOM, SUCH OFFERING MAY NOT LAWFULLY BE MADE.
DREYFUS INCOME FUNDS
DREYFUS EQUITY DIVIDEND FUND
DREYFUS HIGH YIELD BOND FUND
DREYFUS STRATEGIC INCOME FUND
PART B
(STATEMENT OF ADDITIONAL INFORMATION)
___________, 199_
This Statement of Additional Information, which is not a prospectus,
supplements and should be read in conjunction with the current Prospectus of
the series named above (each, a "Fund") of Dreyfus Income Funds (the
"Company"), dated _________, 199_, as each may be revised from time to time.
To obtain a copy of the relevant Fund's Prospectus, please write to a Fund
at 144 Glenn Curtiss Boulevard, Uniondale, New York 11556-0144, or call the
following numbers:
Call Toll Free 1-800-645-6561
In New York City -- Call 1-718-895-1206
Outside the U.S. and Canada -- Call 516-794-5452
The Dreyfus Corporation (the "Manager") serves as each Fund's
investment adviser.
Premier Mutual Fund Services, Inc. (the "Distributor") is the
distributor of each Fund's shares.
TABLE OF CONTENTS
Page
Investment Objectives and Management Policies . . . . B-2
Management of the Company . . . . . . . . . . . . . . B-20
Management Agreement. . . . . . . . . . . . . . . . . B-24
Purchase of Shares . . . . . . . . . . . . . . . . . B-27
Shareholder Services Plan . . . . . . . . . . . . . . B-28
Redemption of Shares. . . . . . . . . . . . . . . . . B-29
Shareholder Services. . . . . . . . . . . . . . . . . B-31
Determination of Net Asset Value. . . . . . . . . . . B-35
Dividends, Distributions and Taxes. . . . . . . . . . B-36
Portfolio Transactions. . . . . . . . . . . . . . . . B-39
Performance Information . . . . . . . . . . . . . . . B-40
Information About the Funds . . . . . . . . . . . . . B-42
Transfer and Dividend Disbursing Agent,
Custodian, Counsel and Independent Auditors . . . . B-42
Appendix. . . . . . . . . . . . . . . . . . . . . . . B-43
Financial Statements. . . . . . . . . . . . . . . . . B-53
Report of Independent Auditors. . . . . . . . . . . . B-
INVESTMENT OBJECTIVES AND MANAGEMENT POLICIES
The following information supplements and should be read in conjunction
with the sections in each Fund's Prospectus entitled "Description of the
Fund" and "Appendix."
Portfolio Securities
American Depositary Receipts. (Dreyfus Equity Dividend Fund only) The
Fund may invest in American Depositary Receipts, through "sponsored" or
"unsponsored" facilities. A sponsored facility is established jointly by
the issuer of the underlying security and a depositary, whereas a depositary
may establish an unsponsored facility without participation by the issuer of
the deposited security. Holders of unsponsored depositary receipts
generally bear all the costs of such facilities and the depositary of an
unsponsored facility frequently is under no obligation to distribute
shareholder communications received from the issuer of the deposited
security or to pass through voting rights to the holders of such receipts
in respect of the deposited securities.
Repurchase Agreements. (All Funds) The Fund's custodian orsub-custodian
will have custody of, and will hold in a segregated account, securities
acquired by a Fund under a repurchase agreement. Repurchase agreements are
considered by the staff of the Securities and Exchange Commission to be
loans by the Fund. In an attempt to reduce the risk of incurring a loss on
a repurchase agreement, each Fund will enter into repurchase agreements only
with domestic banks with total assets in excess of $1 billion, or primary
government securities dealers reporting to the Federal Reserve Bank of New
York, with respect to securities of
the type in which the Fund may invest, and will require that additional
securities be deposited with it if the value of the securities purchased
should decrease below the resale price.
Commercial Paper and Other Short-Term Corporate Obligations. (All
Funds) These instruments include variable amount master demand notes, which
are obligations that permit a Fund to invest fluctuating amounts at varying
rates of interest pursuant to direct arrangements between the Fund, as
lender, and the borrower. These notes permit daily changes in the amounts
borrowed. Because these obligations are direct lending arrangements between
the lender and borrower, it is not contemplated that such instruments
generally will be traded, and there generally is no established secondary
market for these obligations, although they are redeemable at face value,
plus accrued interest, at any time.
Accordingly, where these obligations are not secured by letters of credit or
other credit support arrangements, the Fund's right to redeem is dependent
on the ability of the borrower to pay principal and interest on demand.
Such obligations frequently are not rated by credit rating agencies, and a
Fund may invest in them only if at the time of an investment the borrower
meets the criteria set forth in the Fund's Prospectus for other commercial
paper issuers.
Convertible Securities. (All Funds) Convertible securities are fixed-
income securities that may be converted at either a stated price or stated
rate into underlying shares of common stock. Convertible securities have
characteristics similar to both fixed-income and equity securities.
Convertible securities generally are subordinated to other similar but
non-convertible securities of the same issuer, although convertible bonds,
as corporate debt obligations, enjoy seniority in right of payment to all
equity securities, and convertible preferred stock is senior to common
stock, of the same issuer.
Because of the subordination feature, however, convertible securities
typically have lower ratings than similar non-convertible securities.
Although to a lesser extent than with fixed-income securities
generally, the market value of convertible securities tends to decline as
interest rates increase and, conversely, tends to increase as interest rates
decline. In addition, because of the conversion feature, the market value
of convertible securities tends to vary with fluctuations in the market
value of the underlying common stock. A unique feature of convertible
securities is that as the market price of the underlying common stock
declines, convertible securities tend to trade increasingly on a yield
basis, and so may not experience market value
declines to the same extent as the underlying common stock. When the
market price of the underlying common stock increases, the prices of the
convertible securities tend to rise as a reflection of the value of the
underlying common stock. While no securities investments are without risk,
investments in convertible securities generally entail less risk than
investments in common stock of the same issuer.
As fixed-income securities, convertible securities are investments that
provide for a stable stream of income with generally higher yields than
common stocks. As with all fixed-income securities, there can be no
assurance of current income because the issuers of the convertible
securities may default on their obligations. Convertible securities,
however, generally offer lower interest or dividend yields than
non-convertible securities of similar quality
because of the potential for capital appreciation. A convertible security,
in addition to providing fixed income, offers the potential for capital
appreciation through the conversion feature, which enables the holder to
benefit from increases in the market price of the underlying common stock.
There can be no assurance of capital appreciation, however, because
securities prices fluctuate.
Illiquid Securities. (All Funds) When purchasing securities that have not
been registered under the Securities Act of 1933, as amended, and are not
readily marketable, each Fund will endeavor, to the extent practicable, 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, where a substantial market of qualified
institutional buyers has developed for certain unregistered securities
purchased by the Fund pursuant to Rule 144A under the Securities Act of
1933, as amended, the Fund intends to treat such securities as liquid
securities in accordance with procedures approved by the Company's Board.
Because it is not possible to predict with assurance how
the market for specific restricted securities sold pursuant to Rule 144A
will develop, the Company's Board has directed the Manager to monitor
carefully the relevant 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, a Fund's investing in such securities may have the
effect of increasing the level of illiquidity in its investment portfolio
during such period.
Municipal Obligations. (Dreyfus High Yield Bond Fund and Dreyfus Strategic
Income Fund only) Municipal obligations generally include debt obligations
issued to obtain funds for various public purposes as well as certain
industrial development bonds issued by or on behalf of public authorities.
Municipal obligations are classified as general obligation bonds, revenue
bonds and notes.
General obligation bonds are secured by the issuer's pledge of its faith,
credit and taxing power for the payment of principal and interest. Revenue
bonds are payable from the revenue derived from a particular facility or
class of facilities or, in some cases, from the proceeds of a special excise
or other specific revenue source, but not from the general taxing power.
Industrial development bonds, in most cases, are revenue bonds that
generally do not carry the pledge of the credit of the issuing municipality,
but generally are guaranteed by the corporate entity on whose behalf they
are issued. Notes are short-term instruments which are obligations of the
issuing municipalities or agencies and are sold in anticipation of a bond
sale, collection of taxes or receipt of other revenues. Municipal
obligations include municipal lease/purchase agreements which are similar
to installment purchase contracts for property or equipment issued by
municipalities.
Mortgage-Related Securities. (Dreyfus High Yield Bond Fund and Dreyfus
Strategic Income Fund only).
Government-Agency Securities--Mortgage-related securities issued by the
Government National Mortgage Association ("GNMA") include GNMA Mortgage
Pass-Through Certificates (also known as "Ginnie Maes") which are guaranteed
as to the timely payment of principal and interest by GNMA and such
guarantee is backed by the full faith and credit of the United States. GNMA
is a wholly-owned U.S. Government corporation within the Department of
Housing and Urban Development. GNMA certificates also are supported by the
authority of GNMA to borrow funds from the U.S. Treasury to make payments
under its guarantee.
Government-Related Securities--Mortgage-related securities issued by the
Federal National Mortgage Association ("FNMA") include FNMA Guaranteed
Mortgage Pass-Through Certificates (also known as "Fannie Maes") which are
solely the obligations of FNMA and are not backed by or entitled to the full
faith and credit of the United States. FNMA is a government-sponsored
organization owned entirely by private stockholders. Fannie Maes are
guaranteed as to timely payment of principal and interest by FNMA.
Mortgage-related securities issued by the Federal Home Loan Mortgage
Corporation ("FHLMC") include FHLMC Mortgage Participation Certificates
(also known as "Freddie Macs" or "PCs"). FHLMC is a corporate
instrumentality of the United States created pursuant to an Act of Congress,
which is owned entirely by Federal Home Loan Banks. Freddie Macs are not
guaranteed by the United States or by any Federal Home Loan Bank and do not
constitute a debt or obligation of the United States or of any Federal Home
Loan Bank. Freddie Macs entitle the holder to timely payment of interest,
which is guaranteed by FHLMC.
FHLMC guarantees either ultimate collection or timely payment of all
principal payments on the underlying mortgage loans. When FHLMC does not
guarantee timely payment of principal, FHLMC may remit the amount due on
account of its guarantee of ultimate payment of principal at any time after
default on an underlying mortgage, but in no event later than one year after
it becomes payable.
Foreign Government Obligations; Securities of Supranational Entities.
(Dreyfus High Yield Bond Fund only) The Fund may invest in obligations
issued or guaranteed by one or more foreign governments or any of their
political subdivisions, agencies or instrumentalities that are determined by
the Manager to be of comparable quality to the other obligations in which
the Fund may invest. Such securities also include debt obligations of
supranational entities. Supranational entities include international
organizations designated
or supported by governmental entities to promote economic reconstruction or
development and international banking institutions and related government
agencies. Examples include the International Bank for Reconstruction and
Development (the World Bank), the European Coal and Steel Community, the
Asian Development Bank and the InterAmerican Development Bank.
Zero Coupon Securities. (Dreyfus High Yield Bond Fund and Dreyfus
Strategic Income Fund only) The Fund may invest in zero coupon U.S.
Treasury securities, which are Treasury Notes and Bonds that have been
stripped of their unmatured interest coupons, the coupons themselves and
receipts or certificates representing interests in such stripped debt
obligations and coupons. Zero coupon securities also are issued by
corporations and financial institutions which constitute a proportionate
ownership of the issuer's pool of underlying U.S. Treasury securities. A
zero coupon security pays no interest to its holder during its life and is
sold at a discount to its face value at maturity.
The amount of the discount fluctuates with the market price of the security.
The market prices of zero coupon securities generally are more volatile than
the market prices of securities that pay interest periodically and are
likely to respond to a greater degree to changes in interest rates than
non-zero coupon securities having similar maturities and credit qualities.
Management Policies
Leverage. (Dreyfus Strategic Income Fund only) For borrowings for
investment purposes, the Investment Company Act of 1940, as amended (the
"1940 Act"), requires the Fund to maintain continuous asset coverage (that
is, total assets including borrowings, less liabilities exclusive of
borrowings) of 300% of the amount borrowed. If the required coverage should
decline as a result of market fluctuations or other reasons, the Fund may be
required to sell some of its portfolio securities within three days to
reduce the amount of its borrowings and restore the 300% asset coverage,
even though it may be disadvantageous from an investment standpoint to sell
securities at that time. The Fund also may be required to maintain minimum
average balances in connection with such borrowing or pay a commitment or
other fee to maintain a line of credit; either of these requirements would
increase the cost of borrowing over the stated interest rate. To the extent
the Fund enters into a reverse repurchase agreement, the Fund will maintain
in a segregated custodial account cash or U.S. Government securities or
other high quality liquid debt securities at least equal to the aggregate
amount of its reverse repurchase obligations, plus accrued interest, in
certain cases, in accordance with releases promulgated by the Securities and
Exchange Commission. The Securities and Exchange
Commission views reverse repurchase transactions as collateralized
borrowings by the Fund.
Short-Selling. (All Funds) In these transactions, a Fund sells a
security it does not own in anticipation of a decline in the market value of
the security. To complete the transaction, the Fund must borrow the
security to make delivery to the buyer. The Fund is obligated to replace
the security borrowed by purchasing it subsequently at the market price at
the time of replacement. A Fund will incur a loss if the price of the
security increases between the date of the short sale and the date on which
the Fund replaces the borrowed security; it will realize a gain if the
security declines in price between those dates.
Securities will not be sold short if, after effect is given to any such
short sale, the total market value of all securities sold short would exceed
25% of the value of a Fund's net assets. A Fund may not sell short the
securities of any single issuer listed on a national securities exchange to
the extent of more than 5% of the value of a Fund's net assets. A Fund may
not sell short the securities of any class of an issuer if, as a result of
such sale, the Fund would have sold short in the aggregate more than 5% of
the outstanding securities of that class.
A Fund also may make short sales "against the box," in which the Fund
enters into a short sale of a security it owns in order to hedge an
unrealized gain on the security. At no time will more than 15% of the value
of the Fund's net assets be in deposits on short sales against the box.
Until a Fund closes its short position or replaces the borrowed security,
it will: (a) maintain a segregated account, containing cash or U.S.
Government securities, at such a level that the amount deposited in the
account plus the amount deposited with the broker as collateral will equal
the current value of the security sold short; or (b) otherwise cover its
short position.
Lending Portfolio Securities. (Dreyfus Strategic Fund only) The Fund may
lend securities from its portfolio to brokers, dealers and other financial
institutions needing to borrow securities to complete certain transactions.
In connection with such loans, the Fund continues to be entitled to payments
in amounts equal to the interest, dividends or other distributions payable
on the loaned securities. Loans of portfolio securities afford the Fund an
opportunity to earn interest on the amount of the loan and at the same time
to earn income on the loaned securities' collateral. Loans of portfolio
securities may not exceed 33-1/3% of the value of the Fund's total assets.
In connection with such loans, the Fund will receive collateral consisting
of cash, U.S. Government securities or irrevocable letters of credit which
will be maintained at all times in an amount equal to at least 100% of the
current market value of the loaned securities. Such loans are terminable by
the Fund at any time upon specified notice. The Fund might experience risk
of loss if the institution with which it has engaged in a portfolio loan
transaction breaches its agreement with the Fund. In connection with its
securities lending transactions, the Fund may return to the borrower or a
third party which is unaffiliated with the Fund, and which is acting as a
"placing broker," a part of the interest earned from the investment of
collateral received for securities loaned.
The Securities and Exchange Commission currently requires that the
following conditions must be met whenever portfolio securities are loaned:
(1) the Fund must receive at least 100% cash collateral from the borrower;
(2) the borrower must increase such collateral whenever the market value of
the securities rises above the level of such collateral; (3) the Fund must
be able to terminate the loan at any time; (4) the Fund must receive
reasonable interest on the loan, as well as any dividends, interest or other
distributions payable on the loaned securities, and any increase in market
value; (5) the Fund may pay only reasonable custodian fees in connection
with the loan; and (6) while voting rights on the loaned securities may pass
to the borrower, the Company's Board must terminate the loan and regain the
right to vote the securities if a material event adversely affecting the
investment occurs.
Derivatives. (All Funds) A Fund may invest in Derivatives (as defined in
the relevant Fund's Prospectus) for a variety of reasons, including to hedge
certain market risks, to provide a substitute for purchasing or selling
particular securities or to increase potential income gain. Derivatives may
provide a cheaper, quicker or more specifically focused way for the Fund to
invest than "traditional" securities would.
Derivatives can be volatile and involve various types and degrees of risk,
depending upon the characteristics of the particular Derivative and the
portfolio as a whole. Derivatives permit a Fund to increase, decrease or
change the level of risk to which its portfolio is exposed in much the same
way as the Fund can increase, decrease or change the risk of its portfolio
by making investments in specific securities.
In addition, Derivatives may entail investment exposures that are greater
than their cost would suggest, meaning that a small investment in
Derivatives could have a large potential impact on a Fund's performance.
If a Fund invests in Derivatives at inappropriate times or judges market
conditions incorrectly, such investments may lower the Fund's return or
result in a loss. A Fund also could experience losses if its Derivatives
were poorly correlated with its other investments, or if the Fund were
unable to liquidate
its position because of an illiquid secondary market. The market for many
Derivatives is, or suddenly can become, illiquid. Changes in liquidity may
result in significant, rapid and unpredictable changes in the prices for
Derivatives.
Dreyfus Strategic Income Fund may invest up to 5% of its assets,
represented by the premium paid, in the purchase of call and put options.
The Fund may write (i.e., sell) covered call and put option contracts to the
extent of 20% of the value of its net assets at the time such option
contracts are written. When required by the Securities and Exchange
Commission, the Fund will set aside permissible liquid assets in a
segregated account to cover its obligations relating to its purchase of
Derivatives. To maintain this required cover, the Fund may have to sell
portfolio securities at disadvantageous prices or times since it may not be
possible to liquidate a Derivative position at
a reasonable price. Derivatives may be purchased on established exchanges
or through privately negotiated transactions referred to as over-the-counter
Derivatives. Exchange-traded Derivatives generally are guaranteed by the
clearing agency which is the issuer or counterparty to such Derivatives.
This guarantee usually is supported by a daily payment system (i.e., margin
requirements) operated by the clearing agency in order to reduce overall
credit risk. As a result, unless the clearing agency defaults, there is
relatively little counterparty credit risk associated with Derivatives
purchased on an exchange. By contrast, no clearing agency guarantees
over-the-counter Derivatives. Therefore, each party to an over-the-counter
Derivative bears the risk that the counterparty will default. Accordingly,
the Manager will consider the creditworthiness of counterparties to
over-the-counter Derivatives in the same manner as it would review the
credit quality of a security to be purchased by the Fund. Over-the-counter
Derivatives are less liquid than exchange-traded Derivatives since the other
party to the transaction may be the only investor with sufficient
understanding of the Derivative to be interested in bidding for it.
Futures Transactions--In General. (All Funds) A Fund may enter into
futures contracts in U.S. domestic markets, such as the Chicago Board of
Trade and the International Monetary Market of the Chicago Mercantile
Exchange, or, if permitted in its Prospectus, on exchanges located outside
the United States, such as the London International Financial Futures
Exchange and the Sydney Futures Exchange Limited. Foreign markets may offer
advantages such as trading opportunities or arbitrage possibilities not
available in the United States. Foreign markets, however, may have greater
risk potential than domestic markets.
For example, some foreign exchanges are principal markets so that no common
clearing facility exists and an investor may look only to the broker for
performance of the contract. In addition, any profits that a Fund might
realize in trading could be eliminated by adverse changes in the exchange
rate, or the Fund could incur losses as a result of those changes.
Transactions on foreign exchanges may include both commodities which are
traded on domestic exchanges and those which are not. Unlike trading on
domestic commodity exchanges, trading on foreign commodity exchanges is not
regulated by the Commodity Futures Trading Commission.
Engaging in these transactions involves risk of loss to a Fund which
could adversely affect the value of the Fund's net assets. Although each
Fund intends to purchase or sell futures contracts only if there is an
active market for such contracts, no assurance can be given that a liquid
market will exist for any particular contract at any particular time. Many
futures exchanges and boards of trade limit the amount of fluctuation
permitted in futures contract prices during a single trading day. Once the
daily limit has been reached in a particular contract, no trades may be made
that day at a price beyond that limit or trading may be suspended for
specified periods during the trading day. Futures contract prices could
move to the limit for several consecutive trading days with little or no
trading, thereby preventing prompt liquidation of futures
positions and potentially subjecting the Fund to substantial losses.
Successful use of futures by a Fund also is subject to the ability of the
Manager to predict correctly movements in the direction of the relevant
market and, to the extent the transaction is entered into for hedging
purposes, to ascertain the appropriate correlation between the transaction
being hedged and the price movements of the futures contract. For example,
if a Fund uses futures to hedge against the possibility of a decline in the
market value of securities held in its portfolio and the prices of such
securities instead increase, the Fund will lose part or all of the benefit
of the increased value of securities which it has hedged because it will
have offsetting losses in its futures positions. Furthermore, if in such
circumstances the Fund has insufficient cash, it may have to sell securities
to meet daily variation margin requirements. A Fund may have to sell such
securities at a time when it may be disadvantageous to do so.
Pursuant to regulations and/or published positions of the Securities and
Exchange Commission, a Fund may be required to segregate cash or high
quality money market instruments in connection with its commodities
transactions in an amount generally equal to the value of the underlying
commodity. The segregation of such assets will have the effect of limiting
a Fund's ability otherwise to invest those assets.
Specific Futures Transactions. A Fund may purchase and sell interest rate
futures contracts. An interest rate future obligates the Fund to purchase
or sell an amount of a specific debt security at a future date at a specific
price.
A Fund may purchase and sell currency futures. A foreign currency future
obligates the Fund to purchase or sell an amount of a specific currency at a
future date at a specific price.
Dreyfus Equity Dividend Fund may purchase and sell stock index futures
contracts. A stock index future obligates the Fund to pay or receive an
amount of cash equal to a fixed dollar amount specified in the futures
contract multiplied by the difference between the settlement price of the
contract on the contract's last trading day and the value of the index based
on the stock prices of the securities that comprise it at the opening of
trading in such securities on the next business day.
Options--In General. (All Funds) A Fund may purchase and write (i.e.,
sell) call or put options with respect to specific securities. A call
option gives the purchaser of the option the right to buy, and obligates the
writer to sell, the underlying security or securities at the exercise price
at any time during the option period, or at a specific date. Conversely, a
put option gives the purchaser of the option the right to sell, and
obligates the writer to buy, the underlying security or securities at the
exercise price at any time during the option period.
A covered call option written by a Fund is a call option with respect to
which a Fund owns the underlying security or otherwise covers the
transaction by segregating cash or other securities. A put option written
by a Fund is covered when, among other things, cash or liquid securities
having a value equal to or greater than the exercise price of the option are
placed in a segregated account with the Fund's custodian to fulfill the
obligation undertaken. The principal reason for writing covered call and
put options is to realize, through the receipt of premiums, a greater return
than would be realized on the underlying securities alone. A Fund receives
a premium from writing covered call or put options which it retains whether
or not the option is exercised.
There is no assurance that sufficient trading interest to create a
liquid secondary market on a securities exchange will exist for any
particular option or at any particular time, and for some options no such
secondary market may exist. A liquid secondary market in an option may
cease to exist for a variety of reasons. In the past, for example, higher
than anticipated trading activity or order flow, or other unforeseen events,
at times have rendered certain of the clearing facilities inadequate and
resulted in the institution of special procedures, such as trading
rotations, restrictions on certain types of orders
or trading halts or suspensions in one or more options. There can be no
assurance that similar events, or events that may otherwise interfere with
the timely execution of customers' orders, will not recur. In such event,
it might not be possible to effect closing transactions in particular
options. If, as a covered call option writer, the Fund is unable to effect
a closing purchase transaction in a secondary market, it will not be able to
sell the underlying security until the option expires or it delivers the
underlying security upon exercise or it otherwise covers its position.
Specific Options Transactions. A Fund may purchase and sell call and put
options on foreign currency. These options convey the right to buy or sell
the underlying currency at a price which is expected to be lower or higher
than the spot price of the currency at the time the option is exercised or
expires.
Dreyfus Equity Dividend Fund may purchase and sell call and put options in
respect of specific securities (or groups or "baskets" of specific
securities) or stock indices listed on national securities exchanges or
traded in the over-the-counter market. An option on a stock index is
similar to an option in respect of specific securities, except that
settlement does not occur by delivery of the securities comprising the
index. Instead, the option holder receives an amount of cash if the closing
level of the stock index upon which the option is based is greater than, in
the case of a call, or less than, in the case of a put, the exercise price
of the option. Thus, the effectiveness of purchasing or writing stock index
options will depend upon price movements in the level of the index rather
than the price of a particular stock.
Dreyfus Equity Dividend Fund also may purchase cash-settled options on
equity index swaps in pursuit of its investment objective. Equity index
swaps involve the exchange by the Fund with another party of cash flows
based upon the performance of an index or a portion of an index of
securities which usually includes dividends. A cash-settled option on a
swap gives the purchaser the right, but not the obligation, in return for
the premium paid, to receive an amount of cash equal to the value of the
underlying swap as of the exercise date. These options typically are
purchased in privately negotiated transactions from financial institutions,
including securities brokerage firms.
Successful use by a Fund of options will be subject to the ability of the
Manager to predict correctly movements in the prices of individual stocks or
the stock market generally. To the extent such predictions are incorrect, a
Fund may incur losses.
Future Developments. A Fund may take advantage of opportunities in the
area of options and futures contracts and options on futures contracts and
any other Derivatives which are not presently contemplated for use by the
Fund or which are not currently available but which may be developed, to the
extent such opportunities are both consistent with the Fund's investment
objective and legally permissible for the Fund. Before entering into such
transactions or making any such investment, the Fund will provide
appropriate disclosure in its Prospectus or Statement of Additional
Information.
Forward Commitments. (All Funds) A Fund may purchase securities on a
forward commitment or when-issued basis, which means that delivery and
payment take place a number of days after the date of the commitment to
purchase. The payment obligation and the interest rate that will be
received on a forward commitment or when-issued security are fixed at the
time the Fund enters into the commitment. However, a Fund does not make a
payment until it receives delivery from the other party to the transaction.
A Fund will make commitments to purchase such securities only with the
intention of actually acquiring the securities, but the Fund may sell these
securities before the settlement date if it is deemed advisable. A
segregated account of the Fund consisting of cash, cash equivalents or U.S.
Government securities or other high quality liquid debt securities at least
equal at all times to the amount of the commitments will
be established and maintained at the Fund's custodian bank.
Securities purchased on a forward commitment or when-issued basis are
subject to changes in value (generally changing in the same way, i.e.,
appreciating when interest rates decline and depreciating when interest
rates rise) based upon the public's perception of the creditworthiness of
the issuer and changes, real or anticipated, in the level of interest rates.
Securities purchased on a forward commitment or when-issued basis may expose
a Fund to risks because they may experience such fluctuations prior to their
actual delivery. Purchasing securities on a when-issued basis can involve
the additional risk that the yield available in the market when the delivery
takes place actually may be higher than that obtained in the transaction
itself. Purchasing securities on a forward commitment or when-issued basis
when a Fund is fully or almost fully invested may result in greater
potential fluctuation in the value of the Fund's net assets and its net
asset value per share.
Investment Considerations and Risks
Lower Rated Securities. (Dreyfus High Yield Bond Fund and Dreyfus
Strategic Income Fund only) Dreyfus High Yield Bond Fund is permitted to
invest in securities rated Ba or lower by Moody's Investors Service, Inc.
("Moody's") or BB or lower by Standard & Poor's Ratings Group, a division of
The McGraw Hill Companies, Inc. ("S&P"), Fitch Investors Service, L.P.
("Fitch") and Duff & Phelps Credit Rating Co. ("Duff" and with Moody's, S&P
and Fitch, the "Rating Agencies"), or as low as the lowest rating assigned
by the Rating Agencies. Dreyfus Strategic Income Fund is permitted to
invest in securities rated no lower than Caa by Moody's or CCC by S&P. Such
securities, though higher yielding, are characterized by risk. See in
Dreyfus High Yield Bond Fund's Prospectus "Description of the
Fund--Investment Considerations and Risks--High Yield-Lower Rated
Securities" and in Dreyfus Strategic Income Fund's Prospectus
"Description of the Fund--Risk Factors--Lower Rated Securities" for a
discussion of certain risks and the Appendix for a general description of
the Rating Agencies' ratings. Although ratings may be useful in evaluating
the safety of interest and principal payments, they do not evaluate the
market value risk of these securities. The Fund will rely on the Manager's
judgment, analysis and experience in evaluating the creditworthiness of an
issuer.
Investors should be aware that the market values of many of these
securities tend to be more sensitive to economic conditions than are higher
rated securities. These securities generally are considered by the Rating
Agencies to be, on balance, predominantly speculative with respect to
capacity
to pay interest and repay principal in accordance with the terms of the
obligation and generally will involve more credit risk than securities in
the higher rating categories.
Companies that issue certain of these securities often are highly
leveraged and may not have available to them more traditional methods of
financing. Therefore, the risk associated with acquiring the securities of
such issuers generally is greater than is the case with the higher rated
securities. For example, during an economic downturn or a sustained period
of rising interest rates, highly leveraged issuers of these securities may
not have sufficient revenues to meet their interest payment obligations.
The issuer's ability to service its debt obligations also may be affected
adversely by specific corporate developments, forecasts, or the
unavailability of additional financing. The risk of loss because of default
by the issuer is significantly greater for the holders of these securities
because such securities generally are unsecured and often are subordinated
to other creditors of the issuer.
Because there is no established retail secondary market for many of
these securities, the Fund anticipates that such securities could be sold
only to a limited number of dealers or institutional investors. To the
extent a secondary trading market for these securities does exist, it
generally is not as liquid as the secondary market for higher rated
securities. The lack of a liquid secondary market may have an adverse
impact on market price and yield and the Fund's ability to dispose of
particular issues when necessary to meet the Fund's liquidity needs or in
response to a specific economic event such as a deterioration in the
creditworthiness of the issuer. The lack of a liquid
secondary market for certain securities also may make it more difficult for
the Fund to obtain accurate market quotations for purposes of valuing the
Fund's portfolio and calculating its net asset value. Adverse publicity and
investor perceptions, whether or not based on fundamental analysis, may
decrease the values and liquidity of these securities. In such cases,
judgment may play a greater role in valuation because less reliable,
objective data may be available.
These securities may be particularly susceptible to economic downturns.
It is likely that an economic recession could disrupt severely the market
for such securities and may have an adverse impact on the value of such
securities.
In addition, it is likely that any such economic downturn could adversely
affect the ability of the issuers of such securities to repay principal and
pay interest thereon and increase the incidence of default for such
securities.
A Fund may acquire these securities during an initial offering. Such
securities may involve special risks because they are new issues. The Fund
has no arrangement with any persons concerning the acquisition of such
securities, and the Manager will review carefully the credit and other
characteristics pertinent to such new issues.
Investment Restrictions
Dreyfus Equity Dividend Fund and Dreyfus High Yield Bond Fund only.
Each Fund has adopted investment restrictions numbered 1 through 10 as
fundamental policies, which cannot be changed without approval by the
holders of a majority
(as defined in the 1940 Act) of a Fund's outstanding voting shares.
Investment restrictions numbered 11 through 16 are not fundamental policies
and may be changed by vote of a majority of the Company's Board members at
any time.
None of these Funds may:
1. Invest more than 5% of its assets in the obligations of any single
issuer, except that up to 25% of the value of the Fund's total assets may be
invested, and securities issued or guaranteed by the U.S. Government, or its
agencies or instrumentalities may be purchased, without regard to any such
limitation.
2. Hold more than 10% of the outstanding voting securities of any
single issuer. This Investment Restriction applies only with respect to 75%
of the Fund's total assets.
3. Invest more than 25% of the value of its total assets in the
securities of issuers in any single industry, provided that there shall be
no limitation on the purchase of obligations issued or guaranteed by the
U.S. Government, its agencies or instrumentalities.
4. Invest in commodities, except that the Fund may purchase and sell
options, forward contracts, futures contracts, including those related to
indices, and options on futures contracts or indices.
5. Purchase, hold or deal in real estate, or oil, gas or other mineral
leases or exploration or development programs, but the Fund may purchase and
sell securities that are secured by real estate or issued by companies that
invest or deal in real estate or real estate investment trusts.
6. Borrow money, except to the extent permitted under the 1940 Act
(which currently limits borrowing to no more than 33-1/3% of the value of
the Fund's total assets). For purposes of this Investment Restriction, the
entry into options, forward contracts, futures contracts, including those
relating to indices, and options on futures contracts or indices shall not
constitute borrowing.
7. Make loans to others, except through the purchase of debt
obligations and the entry into repurchase agreements. However, the Fund may
lend its portfolio securities in an amount not to exceed 33-1/3% of the
value of its total assets. Any loans of portfolio securities will be made
according to guidelines established by the Securities and Exchange
Commission and the Company's Board.
8. Act as an underwriter of securities of other issuers, except to the
extent the Fund may be deemed an underwriter under the Securities Act of
1933, as amended, by virtue of disposing of portfolio securities.
9. Issue any senior security (as such term is defined in Section 18(f) of
the 1940 Act), except to the extent the activities permitted in Investment
Restriction Nos. 4, 6, 13 and 14 may be deemed to give rise to a senior
security.
10. Purchase securities on margin, but the Fund may make margin
deposits in connection with transactions in options, forward contracts,
futures contracts, and options on futures contracts.
11. Purchase securities of any company having less than three years'
continuous operations (including operations of any predecessor) if such
purchase would cause the value of the Fund's investments in all such
companies to exceed 5% of the value of its total assets.
12. Invest in the securities of a company for the purpose of
exercising management or control, but the Fund will vote the securities it
owns in its portfolio as a shareholder in accordance with its views.
13. Pledge, mortgage or hypothecate its assets, except to the extent
necessary to secure permitted borrowings and to the extent related to the
purchase of securities on a when-issued or forward commitment basis and the
deposit of assets in escrow in connection with writing covered put and call
options and collateral and initial or variation margin arrangements with
respect to options, forward contracts, futures contracts, and options on
futures contracts.
14. Purchase, sell or write puts, calls or combinations thereof,
except as described in the relevant Fund's Prospectus and Statement of
Additional Information.
15. 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 15% of the value of the Fund's net assets would
be so invested.
16. Purchase securities of other investment companies, except to the
extent permitted under the 1940 Act.
Dreyfus Strategic Income Fund only. The Fund has adopted investment
restrictions numbered 1 through 14 as fundamental policies, which cannot be
changed without approval by the holders of a majority (as defined in the
1940 Act) of the Fund's outstanding voting shares. Investment restriction
number 15 is not a fundamental policy and may be changed by vote of a
majority of the Company's Board members at any time. The Fund may not:
1. Purchase the securities of any issuer (other than a bank) if such
purchase would cause more than 5% of the value of its total assets to be
invested in securities of such issuer, or invest more than 15% of its assets
in the obligations of any one bank, except that up to 25% of the value of
the Fund's total assets may be invested, and securities issued or guaranteed
by the U.S. Government or its agencies or instrumentalities may be
purchased, without regard to such limitations. Notwithstanding the
foregoing, based on rules of the Securities and Exchange Commission, the
Fund will not invest more than 5% of its assets in the obligations of any
one bank, except as otherwise provided in such rules.
2.Purchase the securities of any issuer if such purchase would cause the
Fund to hold more than 10% of the outstanding voting securities of such
issuer. This restriction applies only with respect to 75% of the Fund's
assets.
3. Purchase securities of any company having less than three years'
continuous operations (including operations of any predecessors) if such
purchase would cause the value of the Fund's investments in all such
companies to exceed 5% of the value of its total assets.
4. Purchase securities of closed-end investment companies except (a) in
the open market where no commission except the ordinary broker's commission
is paid, which purchases are limited to a maximum of (i) 3% of the total
voting stock of any one closed-end investment company, (ii) 5% of its net
assets with respect to any one closed-end investment company and (iii) 10%
of its net assets in the aggregate, or (b) those received as part of a
merger or consolidation. The Fund may not purchase the securities of
open-end investment companies other than itself.
5. Purchase or retain the securities of any issuer if the officers,
Trustees or Directors of the Fund or the Manager individually own
beneficially more than 1/2 of 1% of the securities of such issuer or
together own beneficially more than 5% of the securities of such issuer.
6. Purchase, hold or deal in real estate, or oil and gas interests, but
the Fund may purchase and sell securities that are secured by real estate
and may purchase and sell securities issued by companies that invest or deal
in real estate.
7. Invest in commodities, except that the Fund may purchase and sell
futures contracts, including those relating to indices, and options on
futures contracts or indices.
8. Borrow money, except to the extent permitted under the 1940 Act
(which currently limits borrowing to no more than 33-1/3% of the value of
the Fund's total assets). For purposes of this investment restriction, the
entry into options, futures contracts, including those relating to indices,
and options on futures contracts or indices shall not constitute borrowing.
9. Pledge, mortgage or hypothecate its assets, except to the extent
necessary to secure permitted borrowings and to the extent related to the
deposit of assets in escrow in connection with writing covered put and call
options and the purchase of securities on a when-issued or delayed-delivery
basis and collateral and initial or variation margin arrangements with
respect to options, futures contracts, including those relating to indices
and options on futures contracts or indices.
10. Make loans to others except through the purchase of debt
obligations or the entry into repurchase agreements. However, the Fund may
lend its portfolio securities in an amount not to exceed 33-1/3% of the
value of its total assets. Any loans of portfolio securities will be made
according to guidelines established by the Securities and Exchange
Commission and the Fund's Trustees.
11. Act as an underwriter of securities of other issuers except to the
extent the Fund may be deemed an underwriter under the Securities Act of
1933, as amended, by virtue of disposing of portfolio securities.
12. Invest in the securities of a company for the purpose of
exercising management or control, but the Fund will vote the securities it
owns in its portfolio as a shareholder in accordance with its views.
13. Purchase, sell or write puts, calls or combinations thereof,
except as described in the Fund's Prospectus and this Statement of
Additional Information.
14. Invest more than 25% of its assets in investments in any
particular industry or industries (including banking), provided that, when
the Fund has adopted a temporary defensive posture, there shall be no
limitation on the purchase of obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities.
15. 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 15% of the value of the Fund's net assets would
be so invested.
While not fundamental policies, Dreyfus Strategic Income Fund has
undertaken, so as to permit the sale of Fund shares in certain states, not
to invest in oil, gas and other mineral leases or in real estate limited
partnerships, and to treat securities of foreign issuers which are not
listed on a recognized domestic or foreign exchange and for which a bona
fide market does not exist at the time of purchase or subsequent valuation
as not readily marketable.
If a percentage restriction is adhered to at the time of investment, a
later change in percentage resulting from a change in values or assets will
not constitute a violation of such restriction.
Each Fund may invest, notwithstanding any other investment restriction
(whether or not fundamental), all of its assets in the securities of a
single open-end management investment company with substantially the same
fundamental investment objective, policies and restrictions as the Fund.
The Company may make commitments more restrictive than the restrictions
listed above so as to permit the sale of Fund shares in certain states.
Should the Company determine that a commitment is no longer in the best
interest of the Fund and its shareholders, the Company reserves the right to
revoke the commitment by terminating the sale of such Fund's shares in the
state involved.
MANAGEMENT OF THE COMPANY
Trustees and officers of the Company, together with information as to their
principal business occupations during at least the last five years, are
shown below. Each Trustee who is deemed to be an "interested person" of the
Company, as defined in the 1940 Act, is indicated by an asterisk.
Trustees of the Company
*JOSEPH S. DiMARTINO, Chairman of the Board. Since January 1995, Chairman
of the Board of various funds in the Dreyfus Family of Funds. For more than
five years prior thereto, he was President, a director and, until August
1994, Chief Operating Officer of the Manager and Executive Vice President
and a director of Dreyfus Service Corporation, a wholly-owned subsidiary of
the Manager and, until August 24, 1994, the Company's distributor. From
August 1994 until December 31, 1994, he was a director of Mellon Bank
Corporation. He is also Chairman of the Board of Directors of Noel Group,
Inc., a venture capital company; a trustee of Bucknell University; and a
director of The Muscular Dystrophy Association, HealthPlan Services
Corporation, Belding Heminway Company, Inc., a manufacturer and marketer of
industrial threads, specialty yarns, home furnishings and fabrics, Curtis
Industries, Inc., a national distributor of security products, chemicals
and automotive and other hardware, Simmons Outdoor Corporation and Staffing
Resources, Inc. He is 52 years old and his address is 200 Park Avenue, New
York, New York 10166.
*DAVID W. BURKE, Trustee. Since August 1994, Consultant to the Manager.
From October 1990 to August 1994, Vice President and Chief Administrative
Officer of the Manager. From 1977 to 1990, Mr. Burke was involved in the
management of national television news, as Vice President and Executive
Vice President of ABC News, and subsequently as President of CBS News. He
is 59 years old and his address is 200 Park Avenue, New York, New York
10166.
ROSALIND GERSTEN JACOBS, Trustee. Director of Merchandise and Marketing for
Corporate Property Investors, a real estate investment company. From 1974
to 1976, she was owner and manager of a merchandise and marketing
consulting firm. Prior to 1974, she was a Vice President of Macy's, New
York. Mrs. Jacobs is 70 years old and her address is c/o Corporate
Property Investors, 305 East 47th Street, New York, New York 10017.
DIANE DUNST, Trustee. Since January 1992, President of Diane
Dunst Promotion, Inc., a full service promotion agency. From January 1989
to January 1992, Director of Promotion Services, Lear's Magazine. From
1985 to January 1989, she was Sales Promotion Manager of Elle Magazine.
Ms. Dunst is 55 years old and her address is 120 East 87th Street,
New York, New York 10128.
JAY I. MELTZER, Trustee. Physician engaged in private practice specializing
in internal medicine. He is also a member of the Advisory Board of the
Section of Society and Medicine, College of Physicians and Surgeons,
Columbia University and a Clinical Professor of Medicine, Department of
Medicine, Columbia University College of Physicians and Surgeons. He is 67
years old and his address is 903 Park Avenue, New York, New York 10021.
DANIEL ROSE, Trustee. President and Chief Executive Officer of Rose
Associates, Inc., a New York based real estate development and management
firm. In July 1994, Mr. Rose received a Presidential appointment to serve
as a Director of the Baltic-American Enterprise Fund, which will make equity
investments and loans and provide technical business assistance to new
business concerns in the Baltic states. He is also Chairman of the Housing
Committee of the Real Estate Board of New York, Inc., and a Trustee of
Corporate Property Investors, a real estate investment company. He is 66
years old and his address is c/o Rose Associates, Inc., 380 Madison Avenue,
New York, New York 10017.
WARREN B. RUDMAN, Trustee. Since January 1993, Partner in the law firm
Paul, Weiss, Rifkin, Wharton & Garrison. From January 1981 to January 1993,
Mr. Rudman served as a United States Senator from the State of New
Hampshire. Since May 1995, Mr. Rudman has served as director of Collins &
Aikman Corporation. Also, since January 1993, Mr. Rudman has served as a
director of Chubb Corporation and of the Raytheon Company. He has served as
Vice Chairman of the President's Foreign Intelligence Advisory Board since
January 1993. From January 1993 to December 1994, Mr. Rudman served as
Chairman of the Federal Reserve Bank of Boston. Since 1988, Mr. Rudman has
served as a trustee of Boston College and since 1986 as a member of the
Senior Advisory Board of the Institute of Politics of the Kennedy School of
Government at Harvard University. He is 65 years old and his address is
c/o Paul, Weiss, Rifkind, Wharton & Garrison, 1615 L Street, N.W., Suite
1300, Washington, D.C. 20036.
SANDER VANOCUR, Trustee. Since January 1994, Mr. Vanocur has served as
Visiting Professional Scholar at the Freedom Forum First Amendment Center at
Vanderbilt University. Since January 1992, Mr. Vanocur has been the
President of Old Owl Communications, a full-service communications firm
and, since November 1989, he has served as a Director of the Damon Runyon-
Walter Winchell Cancer Research Fund. From June 1986 to December 1991, he
was a Senior Correspondent of ABC News and, from October 1986 to December
1991, he was Anchor of the ABC News program "Business World," a weekly
business program on the ABC television network. Mr. Vanocur joined ABC
News in 1977. He is 67 years old and his address is 2928 P Street, N.W.,
Washington, D.C. 20007.
For so long as the Company's plan described in the section captioned
"Shareholder Services Plan" remains in effect, the Board members who are not
"interested persons" of the Company, as defined in the 1940 Act, will be
selected and nominated by the Board members who are not "interested persons"
of the Company.
The Company typically pays its Board members an annual retainer and a per
meeting fee and reimburses them for their expenses. The Chairman of the
Board receives an additional 25% of such compensation. Emeritus Board
members are entitled to receive an annual retainer and a per meeting fee of
one-half the amount paid to them as Board members. The aggregate amount of
compensation paid to each Board member by the Company for the fiscal year
ended October 31, 1995, and by all other funds in the Dreyfus Family of
Funds for which such person is a Board member (the number of which is set
forth in parenthesis next to each Board member's total compensation) for the
year ended December 31, 1995, were as follows:
<TABLE>
<CAPTION>
(5)
(3) Total Compensation
(2) Pension or (4) From Company and
(1) Aggregate Retirement Benefits Estimated Annual Fund Complex
Name of Board Compensation Accrued as Part of Benefits Upon Paid to Board
Member From Company* Company's Expenses Retirement Member
<S> <C> <C> <C> <C>
Joseph S. DiMartino $_____** none none $__________(94)
David W. Burke $_____ none none $______(52)
Rosalind Gersten
Jacobs $_____ none none $______(20)
Diane Dunst $_____ none none $______(9)
Jay I. Meltzer $_____ none none $______(9)
Daniel Rose $_____ none none $______(22)
Warren B. Rudman $_____ none none $______(17)
Sander Vanocur $_____ none none $______(22)
* Amount does not include reimbursed expenses for attending Board meetings, which amounted to $____ for all Board members
as a group.
** Amount for the period from April __, 1995 (date Mr. DiMartino was elected to the Board) to October 31, 1995.
</TABLE>
Officers of the Company
MARIE E. CONNOLLY, President and Treasurer. President and Chief
Operating Officer of the Distributor and an officer of other
investment companies advised or administered by the Manager.
From December 1991 to July 1994, she was President and Chief
Compliance Officer of Funds Distributor, Inc., the ultimate
parent of which is Boston Institutional Group, Inc. Prior to
December 1991, she served as Vice President and Controller, and
later as Senior Vice President, of The Boston Company
Advisors, Inc. She is 37 years old.
JOHN E. PELLETIER, Vice President and Secretary. Senior Vice
President and General Counsel of the Distributor and an officer
of other investment companies advised or administered by the
Manager. From February 1992 to July 1994, he served as Counsel
for The Boston Company Advisors, Inc. From August 1990 to
February 1992, he was employed as an Associate at Ropes & Gray.
He is 31 years old.
ELIZABETH BACHMAN, Vice President and Assistant Secretary.
Staff Attorney for the Distributor and an officer of other
investment companies advised or administered by the Manager.
She is 26 years old.
FREDERICK C. DEY, Vice President and Assistant Treasurer.
Senior Vice President of the Distributor and an officer of other
investment companies advised or administered by the Manager.
From 1988 to August 1994, he was manager of the High Performance
Fabric Division of Springs Industries Inc. He is 33 years old.
ERIC B. FISCHMAN, Vice President and Assistant Secretary.
Associate General Counsel of the Distributor and an officer of
other investment companies advised or administered by the
Manager. From September 1992 to August 1994, he was an attorney
with the Board of Governors of the Federal Reserve System. He
is 30 years old.
JOSEPH S. TOWER, III, Assistant Treasurer. Senior Vice
President, Treasurer and Chief Financial Officer of the
Distributor and an officer of other investment companies advised
or administered by the Manager. From July 1988 to August 1994,
he was employed by The Boston Company, Inc. where he held
various management positions in the Corporate
Finance and Treasury areas. He is 33 years old.
JOHN J. PYBURN, Assistant Treasurer. Assistant Treasurer
of the Distributor and an officer of other investment companies
advised or administered by the Manager. From 1984 to July 1994,
he was Assistant Vice President in the Mutual Fund Accounting
Department of the Manager. He is 59 years old.
The address of each officer of the Company is 200 Park
Avenue, New York, New York 10166.
The Company's Board members and officers, as a group, owned
less than 1% of each Fund's voting securities outstanding on
_____________, 1995.
MANAGEMENT AGREEMENT
The following information supplements and should be read in
conjunction with the section in each Fund's Prospectus entitled
"Management of the Fund."
Management Agreement. The Manager provides management
services pursuant to the Management Agreement (the "Agreement")
dated August 24, 1994, as amended December __, 1995, with the
Company. As to each Fund, the Agreement is subject
to annual approval by (i) the Company's Board or (ii) vote of a
majority (as defined in the 1940 Act) of the outstanding voting
securities of such Fund, provided that in either event the
continuance also is approved by a majority of
the Board members who are not "interested persons" (as defined
in the 1940 Act) of the Company or the Manager, by vote cast in
person at a meeting called for the purpose of voting on such
approval. The Agreement was approved by
shareholders on August 3, 1994 in respect of Dreyfus Strategic
Income Fund, and was last approved by the Company's Board,
including a majority of the Board
members who are not "interested persons" of any party to the
Agreement, at a meeting held on December __, 1995. As to each
Fund, the Agreement is terminable
without penalty, on 60 days' notice, by the Company's Board or
by vote of the holders of a majority of such Fund's shares, or,
on not less than 90 days' notice, by the Manager. The Agreement
will terminate automatically, as to the
relevant Fund, in the event of its assignment (as defined in the
1940 Act).
The following persons are officers and/or directors of the
Manager: Howard Stein, Chairman of the Board and Chief
Executive Officer; W. Keith Smith, Vice
Chairman of the Board; Christopher M. Condron, President, Chief
Operating Officer and a director; Stephen E. Canter, Vice
Chairman, Chief Investment Officer and a director; Lawrence S.
Kash, Vice Chairman --Distribution and a
director; Philip L. Toia, Vice Chairman --Operations and
Administration and a director; Barbara E. Casey, Vice
President--Dreyfus Retirement Services; Diane
M. Coffey, Vice President--Corporate Communications; Elie M.
Genadry, Vice President--Institutional Sales; William F. Glavin,
Jr., Vice President--Corporate Development; Henry D. Gottmann,
Vice President--Retail Sales and
Services; Mark N. Jacobs, Vice President--Legal and Secretary;
Daniel C. Maclean, Vice President and General Counsel; Jeffrey
N. Nachman, Vice President--Mutual Fund Accounting; Andrew S.
Wasser, Vice President--Information Services;
Katherine C. Wickham, Vice President--Human Resources; Maurice
Bendrihem, Controller; Elvira Oslapas, Assistant Secretary; and
Mandell L. Berman, Frank V. Cahouet, Alvin E. Friedman, Lawrence
M. Greene, Julian M. Smerling and David B. Truman, directors.
The Manager manages each Fund's investments in accordance
with the stated policies of such Fund, subject to the approval
of the Company's Board. The Manager is responsible for
investment decisions, and provides a Funds with portfolio
managers who are authorized by the Board to execute purchases
and sales of securities. Dreyfus Equity Dividend Fund's
portfolio managers are Timothy M. Ghriskey and ___________.
Dreyfus High Yield Bond Fund's portfolio managers are Kevin
McClintock and ________________. Dreyfus Strategic Income
Fund's portfolio managers are Garitt Kono, Gerald Thunelius and
Wolodymyr Wronskyj. The Manager also maintains a research
department with a professional
staff of portfolio managers and securities analysts who provide
research services for a Fund as well as for other funds advised
by the Manager. All purchases and sales are reported for the
Board's review at the meeting subsequent to such transactions.
The Manager maintains office facilities on behalf of the
Funds, and furnishes statistical and research data, clerical
help, accounting, data processing, bookkeeping and internal
auditing and certain other required services to the Funds. The
Manager also may make such advertising and promotional
expenditures, using its own resources, as it from time to time
deems appropriate.
Expenses. All expenses incurred in the operation of the
Company are borne by the Company, except to the extent
specifically assumed by the Manager. The expenses borne by the
Company include: organizational costs, taxes, interest,
loan commitment fees, interest and distributions paid on
securities sold short, brokerage fees and commissions, if any,
fees of Board members who are not officers, directors, employees
or holders of 5% or more of the outstanding voting securities of
the Manager or any of its affiliates, Securities and
Exchange Commission fees, state Blue Sky qualification fees,
advisory fees, charges of custodians, transfer and dividend
disbursing agents' fees, certain insurance premiums, industry
association fees, outside auditing and legal
expenses, costs of maintaining the Company's existence, costs of
independent pricing services, costs attributable to investor
services (including, without limitation, telephone and personnel
expenses), costs of preparing and printing prospectuses and
statements of additional information for regulatory purposes and
for distribution to existing shareholders, costs of
shareholders' reports and meetings, and any extraordinary
expenses. Expenses attributable to a particular Fund are
charged against the assets of that Fund; other expenses of
the Company are allocated among the Funds on the basis
determined by the Board, including, but not limited to,
proportionately in relation to the net assets of each Fund.
As compensation for the Manager's services to the Company,
the Company has agreed to pay the Manager a monthly management
fee at the annual rate of .75 of 1% of the value of Dreyfus
Equity Dividend Fund's average daily net assets, .65
of 1% of the value of Dreyfus High Yield Bond Fund's average
daily net assets and .60 of 1% of the value of Dreyfus Strategic
Income Fund's average daily net assets. For the fiscal years
ended October 31, 1993, 1994 and 1995, the management fees paid
by the Company for Dreyfus Strategic Income Fund were
$1,536,141, $2,157,631 and $__________, respectively; however,
the fees for fiscal 1993 were reduced by $213,144, resulting in
a net fee paid for Dreyfus Strategic Income Fund of $1,322,997
in fiscal 1993, pursuant to various undertakings in effect.
As to each Fund, the Manager has agreed that if in any
fiscal year the aggregate expenses of the Fund, exclusive of
taxes, brokerage, interest on borrowings and (with the prior
written consent of the necessary state securities commissions)
extraordinary expenses, but including the management fee, exceed
the expense limitation of any state having jurisdiction over the
Fund, the Fund may deduct from the payment to be made to the
Manager under the Agreement, or the Manager will bear, such
excess expense. Such deduction or payment, if any, will be
estimated daily, and reconciled and effected or paid, as the
case may be, on a monthly basis.
The aggregate of the fees payable to the Manager is not
subject to reduction as the value of a Fund's net assets
increases.
PURCHASE OF SHARES
The following information supplements and should be read in
conjunction with the section in each Fund's Prospectus entitled
"How to Buy Shares."
The Distributor. The Distributor serves as each Fund's
distributor on a best efforts basis pursuant to an agreement
which is renewable annually. The Distributor also acts as
distributor for the other funds in the Dreyfus Family
of Funds and for certain other investment companies. In some
states, certain financial institutions effecting transactions in
Fund shares may be required to register as dealers pursuant to
state law.
Dreyfus TeleTransfer Privilege. Dreyfus TeleTransfer
purchase orders may be made between the hours of 8:00 a.m. and
4:00 p.m., New York time, on any business day that Dreyfus
Transfer, Inc., each Fund's transfer and dividend
disbursing agent (the "Transfer Agent"), and the New York Stock
Exchange are open. Such purchases will be credited to the
shareholder's Fund account on the next bank business day. To
qualify to use the Dreyfus TeleTransfer Privilege,
the initial payment for purchase of shares must be drawn on, and
redemption proceeds paid to, the same bank and account as are
designated on the Account Application or Shareholder Services
Form on file. If the proceeds of a
particular redemption are to be wired to an account at any other
bank, the request must be in writing and signature-guaranteed.
See "Redemption of Shares--Dreyfus TeleTransfer Privilege."
Reopening an Account. An investor may reopen an account
with a minimum investment of $100 without filing a new Account
Application during the calendar year the account is closed or
during the following calendar year, provided the
information on the old Account Application is still applicable.
SHAREHOLDER SERVICES PLAN
The following information supplements and should be read in
conjunction with the section in each Fund's Prospectus entitled
"Shareholder Services Plan."
The Company has adopted a Shareholder Services Plan,
pursuant to which the Company pays the Distributor for the
provision of certain services to each Fund's shareholders. The
services provided may include personal services relating to
shareholder accounts, such as answering shareholder inquiries
regarding the Company and providing reports and other
information, and services related to the maintenance of such
shareholder accounts. Under the Shareholder Services Plan, the
Distributor may make payments to certain securities dealers,
financial institutions and other financial industry
professionals (collectively, "Service Agents") in respect of
these services.
A quarterly report of the amounts expended under the
Shareholder Services Plan, and the purposes for which such
expenditures were incurred, must be made
to the Board members for their review. In addition, the
Shareholder Services Plan provides that it may be amended only
with the approval of the Board members, and by the Board members
who are neither "interested persons" (as
defined in the 1940 Act) of the Company nor have any direct or
indirect financial interest in the operation of the Shareholder
Services Plan or in any agreements entered into in connection
with the Shareholder Services Plan, by
vote cast in person at a meeting called for the purpose of
considering such amendments. As to each Fund, the Shareholder
Services Plan is subject to annual approval by such vote of the
Board members cast in person at a meeting called
for the purpose of voting on the Shareholder Services Plan. The
Shareholder Services Plan is terminable with respect to each
Fund at any time by vote of a majority of the Board members who
are not "interested persons" and who have no
direct or indirect financial interest in the operation of the
Shareholder Services Plan or in any agreements entered into in
connection with the Shareholder Services Plan.
For the period from July 19, 1995 (effective date of
Shareholder Services Plan) through October 31, 1995, $________
was charged the Company with respect to Dreyfus Strategic Income
Fund pursuant to the Shareholder Services Plan.
Prior Service Plan. As of July 19, 1995, the Company
terminated its then-existing Service Plan with respect to
Dreyfus Strategic Income Fund. That Service Plan, adopted
pursuant to Rule 12b-1 under the 1940 Act, provided that
the Company (a) reimburse the Distributor for payments to
certain Service Agents for distributing Dreyfus Strategic Income
Fund shares and servicing shareholder accounts ("Servicing") and
(b) pay the Manager, Dreyfus Service Corporation and
any affiliate of either of them for advertising or marketing
relating to Dreyfus Strategic Income Fund and for Servicing at
the aggregate annual rate of .25% of
the value of the Fund's average daily net assets. For the
period from November 1, 1994 through July 19, 1995, $_________
was charged to the Company with respect to Dreyfus Strategic
Income Fund pursuant to such plan, of which [to be provided].
REDEMPTION OF SHARES
The following information supplements and should be read in
conjunction with the section in each Fund's Prospectus entitled
"How to Redeem Shares."
Redemption Fee. (Dreyfus High Yield Bond Fund only) The
Fund will deduct a redemption fee equal to .75% of the net asset
value of Fund shares redeemed (including redemptions through use
of the Fund Exchanges service) where the redemption or exchange
occurs within a nine-month period following the issuance
of such shares. For purposes of computing the nine-month
period, any issuance
of Fund shares during a month will be deemed to occur on the
first day of such month. The redemption fee will be deducted
from redemption proceeds and retained by Dreyfus High Yield Bond
Fund.
No redemption fee will be charged upon the redemption of
shares through the Fund's Automatic Withdrawal Plan or Dreyfus
Auto-Exchange Privilege or through omnibus accounts for various
retirement plans. Further, no redemption fee will
be charged upon the redemption of Fund shares acquired through
reinvestment of dividends or distributions, nor will a
redemption fee be charged to pay fees imposed for various Fund
services. This redemption fee may be waived, modified or
discontinued at any time or from time to time.
Wire Redemption Privilege. By using this Privilege, the
investor authorizes the Transfer Agent to act on wire or
telephone redemption instructions from any person representing
himself or herself to be the investor and reasonably believed by
the Transfer Agent to be genuine. Ordinarily, the
Company will initiate payment for shares redeemed pursuant to
this Privilege on the next business day after receipt by the
Transfer Agent of the redemption
request in proper form. Redemption proceeds ($1,000 minimum)
will be transferred by Federal Reserve wire only to the
commercial bank account specified by the investor on the Account
Application or Shareholder Services
Form, or to a correspondent bank if the investor's bank is not a
member of the Federal Reserve System. Fees ordinarily are
imposed by such bank and usually are borne by the investor.
Immediate notification by the correspondent bank to
the investor's bank is necessary to avoid a delay in crediting
the funds to the investor's bank account.
Investors with access to telegraphic equipment may wire
redemption requests to the Transfer Agent by employing the
following transmittal code which may be used for domestic or
overseas transmissions:
Transfer Agent's
Transmittal Code Answer Back Sign
144295 144295 TSSG PREP
Investors who do not have direct access to telegraphic
equipment may have the wire transmitted by contacting a TRT
Cables operator at 1-800-654-7171, toll
free. Investors should advise the operator that the above
transmittal code must be used and should also inform the
operator of the Transfer Agent's answer back sign.
To change the commercial bank or account designated to
receive redemption proceeds, a written request must be sent to
the Transfer Agent. This request must be signed by each
shareholder, with each signature guaranteed as described
below under "Share Certificates; Signatures."
Dreyfus TeleTransfer Privilege. Investors should be aware
that if they have selected the Dreyfus TeleTransfer Privilege,
any request for a wire redemption will be effected as a Dreyfus
TeleTransfer transaction through the
Automated Clearing House ("ACH") system unless more prompt
transmittal specifically is requested. Redemption proceeds will
be on deposit in the investor's account at an ACH member bank
ordinarily two business days after receipt of the redemption
request. See "Purchase of Shares--Dreyfus TeleTransfer
Privilege."
Share Certificates; Signatures. Any certificates
representing Fund shares to be redeemed must be submitted with
the redemption request. Written redemption requests must be
signed by each shareholder, including each holder of
a joint account, and each signature must be guaranteed.
Signatures on endorsed certificates submitted for redemption
also must be guaranteed. The Transfer Agent has adopted
standards and procedures pursuant to which
signature-guarantees in proper form generally will be accepted
from domestic banks, brokers, dealers, credit unions, national
securities exchanges, registered securities associations,
clearing agencies and savings associations,
as well as from participants in the New York Stock Exchange
Medallion Signature Program, the Securities Transfer Agents
Medallion Program ("STAMP") and the Stock Exchanges Medallion
Program. Guarantees must be signed by an authorized
signatory of the guarantor and "Signature-Guaranteed" must
appear with the signature. The Transfer Agent may request
additional documentation from corporations, executors,
administrators, trustees or guardians, and may accept
other suitable verification arrangements from foreign investors,
such as consular verification. For more information with
respect to signature-guarantees, please call one of the
telephone numbers listed on the cover.
Redemption Commitment. The Company has committed itself to
pay in cash all redemption requests by any shareholder of record
of a Fund, limited in amount during any 90-day period to the
lesser of $250,000 or 1% of the value of such
Fund's net assets at the beginning of such period. Such
commitment is irrevocable without the prior approval of the
Securities and Exchange Commission. In the case of requests for
redemption in excess of such amount,
the Board reserves the right to make payments in whole or in
part in securities or other assets in case of an emergency or
any time a cash distribution would impair the liquidity of the
Fund to the detriment of the existing shareholders.
In such event, the securities would be valued in the same manner
as the Fund's securities are valued. If the recipient sold such
securities, brokerage charges would be incurred.
Suspension of Redemptions. The right of redemption may be
suspended or the date of payment postponed (a) during any period
when the New York Stock Exchange is closed (other than customary
weekend and holiday closings), (b) when trading in the markets
the relevant Fund ordinarily utilizes is restricted, or when an
emergency exists as determined by the Securities and Exchange
Commission so that disposal of the Fund's investments or
determination of its net asset value is not reasonably
practicable, or (c) for such other periods as the Securities and
Exchange Commission by order may permit to protect the Fund's
shareholders.
SHAREHOLDER SERVICES
The following information supplements and should be read in
conjunction with the section in each Fund's Prospectus entitled
"Shareholder Services."
Fund Exchanges. Dreyfus High Yield Bond Fund will deduct a
redemption fee equal to .75% of the net asset value of Fund
shares exchanged where the exchange occurs within a nine-month
period following the issuance of such shares. Shares
of other funds purchased by exchange will be purchased on the
basis of relative net asset value per share as follows:
A. Exchanges for shares of funds that are offered
without a sales load will be made without a sales load.
B. Shares of funds purchased without a sales load may be
exchanged for shares of other funds sold with a sales load, and
the applicable sales load will be deducted.
C. Shares of funds purchased with a sales load may be
exchanged without a sales load for shares of other funds sold
without a sales load.
D. Shares of funds purchased with a sales load, shares
of funds acquired by a previous exchange from shares purchased
with a sales load and additional shares acquired through
reinvestment of dividends or distributions of any such funds
(collectively referred to herein as "Purchased Shares") may be
exchanged for shares of other funds sold with a sales load
(referred to herein as "Offered Shares"), provided
that, if the sales load applicable to the Offered Shares exceeds
the maximum sales load that could have been imposed in
connection with the Purchased Shares (at the time the Purchased
Shares were acquired), without giving effect to any reduced
loads, the difference will be deducted.
To accomplish an exchange under item D above, share-holders
must notify the Transfer Agent of their prior ownership of fund
shares and their account number.
To request an exchange, shareholders must give exchange
instructions to the Transfer Agent in writing or by telephone.
The ability to issue exchange instructions by telephone is given
to all Fund shareholders automatically, unless the investor
checks the applicable "No" box on the Account Application,
indicating that the investor specifically refuses this
Privilege. By using the Telephone Exchange Privilege, the
investor authorizes the Transfer Agent to act on telephonic
instructions from any person representing himself or herself to
be the investor, and reasonably believed by the Transfer Agent
to be genuine. Telephone exchanges may be subject to
limitations as to the amount involved or the number of telephone
exchanges permitted. Shares issued in certificate form
are not eligible for telephone exchange.
To establish a personal retirement plan by exchange, shares
of the fund being exchanged must have a value of at least the
minimum initial investment required for the fund into which the
exchange is being made. For Dreyfus-sponsored Keogh Plans, IRAs
and IRAs set up under a Simplified Employee
Pension Plan ("SEP-IRAs") with only one participant, the minimum
initial investment is $750. To exchange shares held in
corporate plans, 403(b)(7) Plans and SEP-IRAs with more than one
participant, the minimum initial investment is
$100 if the plan has at least $2,500 invested among the funds in
the Dreyfus Family of Funds. To exchange shares held in a
personal retirement plan account, the shares exchanged must have
a current value of at least $100.
Dreyfus Auto-Exchange Privilege. Dreyfus Auto-Exchange
Privilege permits an investor to purchase, in exchange for
shares of a Fund, shares of another fund in the Dreyfus Family
of Funds. This Privilege is available only for
existing accounts. Shares will be exchanged on the basis of
relative net asset value as described above under "Fund
Exchanges." Enrollment in or modification or cancellation of
this Privilege is effective three business days following
notification by the investor. An investor will be notified if
the investor's account falls below the amount designated to be
exchanged under this Privilege. In this case, an investor's
account will fall to zero unless additional
investments are made in excess of the designated amount prior to
the next Auto-Exchange transaction. Shares held under IRA and
other retirement plans are eligible for this Privilege.
Exchanges of IRA shares may be made between IRA
accounts and from regular accounts to IRA accounts, but not from
IRA accounts to regular accounts. With respect to all other
retirement accounts, exchanges may be made only among those
accounts.
Fund Exchanges and the Dreyfus Auto-Exchange Privilege are
available to shareholders resident in any state in which shares
of the fund being acquired may legally be sold. Shares may be
exchanged only between accounts having identical names and other
identifying designations.
Shareholder Services Forms and prospectuses of the other
funds may be obtained by calling 1-800-645-6561. The Company
reserves the right to reject any exchange request in whole or in
part. The Fund Exchanges service or the Dreyfus Auto-Exchange
Privilege may be modified or terminated at any time upon
notice to shareholders.
Automatic Withdrawal Plan. The Automatic Withdrawal Plan
permits an investor with a $5,000 minimum account to request
withdrawal of a specified dollar amount (minimum of $50) on
either a monthly or quarterly basis. Withdrawal payments are
the proceeds from sales of Fund shares, not the yield on
the shares. If withdrawal payments exceed reinvested dividends
and distributions, the investor's shares will be reduced and
eventually may be depleted. There is a service charge of $.50
for each withdrawal check. Automatic Withdrawal may be
terminated at any time by the investor, the Company
or the Transfer Agent. Shares for which certificates have been
issued may not be redeemed through the Automatic Withdrawal
Plan.
Dreyfus Dividend Sweep. Dreyfus Dividend Sweep allows
investors to invest on the payment date their dividends or
dividends and capital gain distributions,
if any, from a Fund in shares of another fund in the Dreyfus
Family of Funds of which the investor is a shareholder. Shares
of other funds purchased pursuant to this privilege will be
purchased on the basis of relative net asset value per
share as follows:
A. Dividends and distributions paid by a fund may be
invested without imposition of a sales load in shares of other
funds that are offered without a sales load.
B. Dividends and distributions paid by a fund which does
not charge a sales load may be invested in shares of other funds
sold with a sales load, and the applicable sales load will be
deducted.
C. Dividends and distributions paid by a fund which
charges a sales load may be invested in shares of other funds
sold with a sales load (referred to herein as "Offered Shares"),
provided that, if the sales load applicable to the Offered
Shares exceeds the maximum sales load charged by the fund from
which dividends or distributions are being swept, without giving
effect to any reduced loads, the difference will be deducted.
D. Dividends and distributions paid by a fund may be
invested in shares of other funds that impose a contingent
deferred sales charge ("CDSC") and the applicable CDSC, if any,
will be imposed upon redemption of such shares.
Corporate Pension/Profit-Sharing and Retirement Plans. The
Company makes available to corporations a variety of prototype
pension and profit-sharing plans including a 401(k) Salary
Reduction Plan. In addition, the Company makes
available Keogh Plans, IRAs, including SEP-IRAs and IRA
"Rollover Accounts," and 403(b)(7) Plans. Plan support services
also are available.
Investors who wish to purchase Fund shares in conjunction
with a Keogh Plan, a 403(b)(7) Plan or an IRA, including a
SEP-IRA, may request from the Distributor forms for adoption of
such plans.
The entity acting as custodian for Keogh Plans, 403(b)(7)
Plans or IRAs may charge a fee, payment of which could require
the liquidation of shares. All fees charged are described in
the appropriate form.
Shares may be purchased in connection with these plans only
by direct remittance to the entity acting as custodian.
Purchases for these plans may not be made in advance of receipt
of funds.
The minimum initial investment for corporate plans, Salary
Reduction Plans, 403(b)(7) Plans and SEP-IRAs with more than one
participant, is $2,500 with no minimum for subsequent purchases.
The minimum initial investment for
Dreyfus-sponsored Keogh Plans, IRAs, SEP-IRAs and 403(b)(7)
Plans with only one participant, is ordinarily $750, with no
minimum for subsequent purchases.
Individuals who open an IRA also may open a non-working spousal
IRA with a minimum investment of $250.
Each investor should read the prototype retirement plan and
the appropriate form of custodial agreement for further details
on eligibility, service fees and tax implications, and should
consult a tax adviser.
DETERMINATION OF NET ASSET VALUE
The following information supplements and should be read in
conjunction with the section in each Fund's Prospectus entitled
"How to Buy Shares."
Valuation of Portfolio Securities. Substantially all of
each Fund's fixed-income investments (excluding short-term
investments) are valued each business day by one or more
independent pricing services (the "Service") approved by the
Board. Securities valued by the Service for which quoted bid
prices in the judgment of the Service are readily available and
are representative of the bid side of the market 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 valued by the Service are
carried at fair value as determined by the Service, based on
methods which include consideration of:
yields or prices of securities of comparable quality, coupon,
maturity and type;
indications as to values from dealers; and general market
conditions. Short-term investments are not valued by the
Service and are valued at the mean price
or yield equivalent for such securities or for securities of
comparable maturity, quality and type as obtained from market
makers. Other investments that are not valued by the Service
(including the Equity Securities (as defined
in the Prospectus) purchased by Dreyfus Equity Dividend Fund)
are valued at the last sales price for securities traded
primarily on an exchange or the national
securities market or otherwise at the average of the most recent
bid and asked prices. Bid price is used when no asked price is
available. Any assets or liabilities initially expressed in
terms of foreign currency will be translated
into U.S. dollars at the midpoint of the New York interbank
market spot exchange rate as quoted on the day of such
translation by the Federal Reserve Bank of New
York or, if no such rate is quoted on such date, at the exchange
rate previously quoted by the Federal Reserve Bank of New York
or at such other quoted market exchange rate as may be
determined to be appropriate by the Manager. Expenses
and fees, including the management fee (reduced by the expense
limitation, if any), are accrued daily and taken into account
for the purpose of determining the net asset value of a Fund's
shares.
Restricted securities, as well as securities or other
assets for which recent market quotations are not readily
available, or are not valued by the
Service, are valued at fair value as determined in good faith by
the Board. The Board will review the method of valuation on a
current basis. In making their good faith valuation of
restricted securities, the Board members generally will
take the following factors into consideration: restricted
securities which are, or are convertible into, securities of the
same class of securities for which a
public market exists usually will be valued at market value less
the same percentage discount at which purchased. This discount
will be revised periodically by the Board if it believes that
the discount no longer reflects the value of the restricted
securities. Restricted securities not of the same
class as securities for which a public market exists usually
will be valued initially at cost. Any subsequent adjustment
from cost will be based upon considerations deemed relevant by
the Board.
New York Stock Exchange Closings. The holidays (as
observed) on which the New York Stock Exchange is closed
currently are: New Year's Day, Presidents'
Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving and Christmas.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The following information supplements and should be read in
conjunction with the section in each Fund's Prospectus entitled
"Dividends, Distributions and Taxes."
Management of the Company believes that Dreyfus Strategic
Income Fund has qualified for the fiscal year ended October 31,
1995 as a "regulated investment company" under the Internal
Revenue Code of 1986, as amended (the "Code"). It
is expected that each of Dreyfus Equity Dividend Fund and
Dreyfus High Yield Bond Fund will qualify as a regulated
investment company under the Code. Each
Fund intends to continue to so qualify if such qualification is
in the best interests of its shareholders. As a regulated
investment company, each Fund will pay no Federal income tax on
net investment income and net realized
securities gains to the extent that such income and gains are
distributed to shareholders in accordance with applicable
provisions of the Code. The term "regulated investment company"
does not imply the supervision of management or
investment practices or policies by any government agency.
Any dividend or distribution paid shortly after an
investor's purchase may have the effect of reducing the net
asset value of the shares below the cost of
the investment. Such a dividend or distribution would be a
return of investment in an economic sense, although taxable as
stated above. In addition, the Code
provides that if a shareholder holds shares of a Fund for six
months or less and has received a capital gain distribution with
respect to such shares, any loss incurred on the sale of such
shares will be treated as long-term capital loss to
the extent of the capital gain distribution received.
Depending upon the composition of a Fund's income, the
entire amount or a portion of the dividends paid by such Fund
from net investment income may qualify for the dividends
received deduction allowable to qualifying U.S.
corporate shareholders ("dividends received deduction"). In
general, dividend income of a Fund distributed to qualifying
corporate shareholders will be eligible for the dividends
received deduction only to the extent that such
Fund's income consists of dividends paid by U.S. corporations.
However, Section 246(c) of the Code provides that if a
qualifying corporate shareholder has
disposed of Fund shares not held for more than 46 days and has
received a dividend from net investment income with respect to
such shares, the portion
designated by the Fund as qualifying for the dividends received
deduction will not be eligible for such shareholder's dividends
received deduction. In addition, the Code provides other
limitations with respect to the ability of a qualifying
corporate shareholder to claim the dividends received deduction
in connection with holding Fund shares. The Company anticipates
that no dividend paid by Dreyfus High Yield Bond Fund or Dreyfus
Strategic Income Fund will qualify for the dividends-received
deduction.
A Fund may qualify for and may make an election permitted
under Section 853 of the Code so that shareholders may be
eligible to claim a credit or deduction on their Federal income
tax returns for, and will be required to treat as part
of the amounts distributed to them, their pro rata portion of
qualified taxes paid or incurred by the Fund to foreign
countries (which taxes relate primarily to investment income).
A Fund may make an election under Section 853, provided
that more than 50% of the value of the Fund's total assets at
the close of the taxable year consists of securities in foreign
corporations, and the Fund satisfies the applicable distribution
provisions of the Code. The foreign tax
credit available to shareholders is subject to certain
limitations imposed by the Code.
Ordinarily, gains and losses realized from portfolio
transactions will be treated as capital gains and losses.
However, a portion of the gain or loss realized from the
disposition of foreign currencies (including foreign currency
denominated bank deposits) and non-U.S. dollar denominated
securities (including debt instruments and certain forward
contracts and options) may be treated as ordinary income or loss
under Section 988 of the Code. In addition, all or a
portion of any gains realized from the sale or other disposition
of certain market discount bonds will be treated as ordinary
income under Section 1276. Finally, all or a portion of the
gain realized from engaging in "conversion
transactions" may be treated as ordinary income under Section
1258. "Conversion transactions" are defined to include certain
forward, futures, option and straddle transactions, transactions
marketed or sold to produce capital gains,
or transactions described in Treasury regulations to be issued
in the future.
Under Section 1256 of the Code, any gain or loss realized
by a Fund from certain forward contracts and options
transactions will be treated as 60% long-term capital gain or
loss and 40% short-term capital gain or loss. Gain or
loss will arise upon exercise or lapse of such contracts and
options as well as from closing transactions. In addition, any
such contracts or options remaining unexercised at the end of a
Fund's taxable year will be treated as sold for
their then fair market value, resulting in additional gain or
loss to such Fund characterized in the manner described above.
Offsetting positions held by a Fund involving certain
foreign currency forward contracts or options may constitute
"straddles." "Straddles" are defined to include "offsetting
positions" in actively traded personal property.
The tax treatment of "straddles" is governed by Sections 1092
and 1258 of the Code, which, in certain circumstances, overrides
or modifies the provisions of Sections 1256 and 988 of the Code.
As such, all or a portion of any short or
long-term capital gain from certain "straddle" transactions may
be recharacterized to ordinary income.
If a Fund were treated as entering into "straddles" by
reason of its engaging in certain forward contracts or options
transactions, such "straddles" would be characterized as "mixed
straddles" if the forward contracts or options
transactions comprising a part of such "straddles" were governed
by Section 1256 of the Code. A Fund may make one or more
elections with respect to "mixed straddles." Depending on which
election is made, if any, the results to a Fund
may differ. If no election is made, to the extent the
"straddle" and conversion transaction rules apply to positions
established by a Fund, losses realized by a Fund will be
deferred to the extent of unrealized gain in the offsetting
position. Moreover, as a result of the "straddle" and
conversion transaction rules, short-term capital loss on
"straddle" positions may be recharacterized as
long-term capital loss, and long-term capital gains may be
treated as short-term capital gains or ordinary income.
Investment by a Fund in securities issued or acquired at a
discount, or providing for deferred interest or for payment of
interest in the form of additional obligations could under
special tax rules affect the amount, timing
and character of distributions to shareholders by causing a Fund
to recognize income prior to the receipt of cash payments. For
example, a Fund could be required to accrue a portion of the
discount (or deemed discount) at which the
securities were issued each year and to distribute such income
in order to maintain its qualification as a regulated investment
company. In such case, a Fund may have to dispose of securities
which it might otherwise have continued
to hold in order to generate cash to satisfy these distribution
requirements.
PORTFOLIO TRANSACTIONS
The Manager assumes general supervision over placing orders
on behalf of the Company for the purchase or sale of portfolio
securities. Allocation of brokerage transactions, including
their frequency, is made in the best judgment
of the Manager and in a manner deemed fair and reasonable to
shareholders. The primary consideration is prompt execution of
orders at the most favorable net
price. Subject to this consideration, the brokers selected will
include those that supplement the Manager's research facilities
with statistical data, investment information, economic facts
and opinions. Information so received is
in addition to and not in lieu of services required to be
performed by the Manager and the Manager's fees are not reduced
as a consequence of the receipt of such supplemental
information. Such information may be useful to the Manager
in serving both the Company and other funds which it advises
and, conversely, supplemental information obtained by the
placement of business of other clients may be useful to the
Manager in carrying out its obligations to the Company.
Sales of Fund shares by a broker may be taken into
consideration, and brokers also will be selected because of
their ability to handle special executions such as are involved
in large block trades or broad distributions,
provided the primary consideration is met. Large block trades
may, in certain cases, result from two or more funds advised or
administered by the Manager
being engaged simultaneously in the purchase or sale of the same
security. Certain of a Fund's transactions in securities of
foreign issuers may not benefit from the negotiated commission
rates available to a Fund for
transactions in securities of domestic issuers. When
transactions are executed in the over-the-counter market, each
Fund will deal with the primary market makers unless a more
favorable price or execution otherwise is obtainable.
Foreign exchange transactions are made with banks or
institutions in the interbank market at prices reflecting a
mark-up or mark-down and/or commission.
Portfolio turnover may vary from year to year as well as
within a year. It is anticipated that in any fiscal year the
turnover rate of Dreyfus Equity Dividend Fund will be less than
100% and the turnover rate of each of Dreyfus
High Yield Bond Fund and Dreyfus Strategic Income Fund may
approach the ___% level. In periods in which extraordinary
market conditions prevail, the Manager
will not be deterred from changing a Fund's investment strategy
as rapidly as needed, in which case higher turnover rates can be
anticipated which would result in greater brokerage expenses.
The overall reasonableness of brokerage
commissions paid is evaluated by the Manager based upon its
knowledge of available information as to the general level of
commissions paid by other institutional investors for comparable
services.
For the fiscal year ended October 31, 1993, no brokerage
commissions were paid by Dreyfus Strategic Income Fund. For the
fiscal years ended October 31, 1994 and 1995, Dreyfus Strategic
Income Fund paid $25,618 and $______, respectively, in brokerage
commissions. Gross spreads and concessions on
principal transactions, where determinable, amounted to
$629,615, $664,750 and $________ for the fiscal years ended
October 31, 1993, 1994 and 1995,
respectively, none of which was paid to the Distributor.
PERFORMANCE INFORMATION
The following information supplements and should be read in
conjunction with the section in each Fund's Prospectus entitled
"Performance Information."
Dreyfus Equity Dividend Fund and Dreyfus High Yield Bond
Fund had not commenced operations as of the date hereof.
Accordingly, no performance information is available for such
Funds.
Dreyfus Strategic Income Fund's current yield for the
30-day period ended October 31, 1995 was ___%. Current yield
for a Fund is computed pursuant to a
formula which operates as follows: the amount of the Fund's
expenses accrued for the 30-day period (net of reimbursements)
is subtracted from the amount of
the dividends and interest earned (computed in accordance with
regulatory requirements) by the Fund during the period. That
result is then divided by the product of: (a) the average daily
number of shares outstanding during the period
that were entitled to receive dividends, and (b) the net asset
value per share on the last day of the period less any
undistributed earned income per share
reasonably expected to be declared as a dividend shortly
thereafter. The quotient is then added to 1, and that sum is
raised to the 6th power, after which 1 is subtracted. The
current yield is then arrived at by multiplying the
result by 2.
Dreyfus Strategic Income Fund's average annual return for
the one, five and ____ year periods ended October 31, 1995 was
___%, ____% and ____%, respectively. Average annual total
return is calculated by determining the
ending redeemable value of an investment purchased with a
hypothetical $1,000 payment made at the beginning of the period
(assuming the reinvestment of dividends and distributions),
dividing by the amount of the initial investment,
taking the "n"th root of the quotient (where "n" is the number
of years in the period) and subtracting 1 from the result.
Dreyfus Strategic Income Fund's total return for the period
October 1, 1986 (commencement of operations) through October 31,
1995 was ______%. Total return for a Fund is calculated by
subtracting the amount of the Fund's net asset value
per share at the beginning of a stated period from the net asset
value per share at the end of the period (after giving effect to
the reinvestment of dividends
and distributions during the period), and dividing the result by
the net asset value per share at the beginning of the period.
From time to time, advertising materials for each Fund may
include biographical information relating to its portfolio
manager, and may refer to or include commentary by the Fund's
portfolio manager relating to investment
strategy, asset growth, current or past business, political,
economic or financial conditions and other matters of general
interest to investors. In addition, from time to time,
advertising materials for each Fund may include
information concerning retirement and investing for retirement,
may refer to the approximate number of then-current Fund
shareholders and may refer to Lipper or Morningstar ratings and
related analysis supporting the ratings.
From time to time, the Company may compare Dreyfus
Strategic Income Fund's performance against inflation with the
performance of other instruments against
inflation, such as short-term Treasury Bills (which are direct
obligations of the U.S. Government) and FDIC-insured bank money
market accounts.
INFORMATION ABOUT THE FUNDS
The following information supplements and should be read in
conjunction with the section in each Fund's Prospectus entitled
"General Information."
Each Fund share has one vote and, when issued and paid for
in accordance with the terms of the offering, is fully paid and
non-assessable. Fund shares are of one class and have equal
rights as to dividends and in liquidation.
Shares have no preemptive, subscription or conversion rights and
are freely transferable.
Rule 18f-2 under the 1940 Act provides that any matter
required to be submitted under the provisions of the 1940 Act or
applicable state law or otherwise to the holders of the
outstanding voting securities of an investment
company, such as the Company, will not be deemed to have been
effectively acted upon unless approved by the holders of a
majority of the outstanding shares of each series affected by
such matter. Rule 18f-2 further provides that a series
shall be deemed to be affected by a matter unless it is clear
that the interests of each series in the matter are identical or
that the matter does not affect any interest of such series.
However, the Rule exempts the selection of
independent accountants and the election of Board members from
the separate voting requirements of the Rule.
Each Fund will send annual and semi-annual financial
statements to all its shareholders.
TRANSFER AND DIVIDEND DISBURSING AGENT, CUSTODIAN, COUNSEL
AND INDEPENDENT AUDITORS
Dreyfus Transfer, Inc., a wholly-owned subsidiary of the
Manager, One American Express Plaza, Providence, Rhode Island
02903, is the Company's transfer and dividend disbursing agent.
The Bank of New York, 90 Washington
Street, New York, New York 10286, is the Company's custodian.
Neither Dreyfus Transfer, Inc. nor The Bank of New York has any
part in determining the investment policies of each Fund or
which securities are to be purchased or sold
by a Fund.
Stroock & Stroock & Lavan, 7 Hanover Square, New York, New
York 10004-2696, as counsel for the Company, has rendered its
opinion as to certain legal matters regarding the due
authorization and valid issuance of the shares being sold
pursuant to each Fund's Prospectus.
Ernst & Young LLP, 787 Seventh Avenue, New York, New York
10019, independent auditors, have been selected as auditors of
the Company.
APPENDIX
Description of S&P, Moody's, Fitch and Duff ratings:
S&P
Bond Ratings
AAA
Bonds rated AAA have the highest rating assigned by S&P.
Capacity to pay interest and repay principal is extremely
strong.
AA
Bonds rated AA have a very strong capacity to pay interest
and repay principal and differ from the highest rated issues
only in small degree.
A
Bonds rated A have a strong capacity to pay interest and
repay principal although they are somewhat more susceptible to
the adverse effects of changes in circumstances and economic
conditions than obligations in higher rated categories.
BBB
Bonds rated BBB are regarded as having an adequate capacity
to pay interest and repay principal. Whereas they normally
exhibit adequate protection parameters, adverse economic
conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay
principal for bonds in this category than for bonds in higher
rated categories.
BB
Bonds rated BB have less near-term vulnerability to default
than other speculative grade debt. However, they face major
ongoing uncertainties or exposure to adverse business, financial
or economic conditions which could lead
to inadequate capacity to meet timely interest and principal
payments.
B
Bonds rated B have a greater vulnerability to default but
presently have the capacity to meet interest payments and
principal repayments. Adverse business, financial or economic
conditions would likely impair capacity or willingness to pay
interest and repay principal.
CCC
Bonds rated CCC have a current identifiable vulnerability
to default and are dependent upon favorable business, financial
and economic conditions to meet timely payments of interest and
repayment of principal. In the event of adverse
business, financial or economic conditions, they are not likely
to have the capacity to pay interest and repay principal.
CC
The rating CC is typically applied to debt subordinated to
senior debt which is assigned an actual or implied CCC rating.
C
The rating C is typically applied to debt subordinated to
senior debt which is assigned an actual or implied CCC- debt
rating.
D
Bonds rated D are in default, and payment of interest
and/or repayment of principal is in arrears.
S&P's letter ratings may be modified by the addition of a
plus (+) or a minus (-) sign designation, which is used to show
relative standing within the major rating categories, except in
the AAA (Prime Grade) category.
Commercial Paper Rating
An S&P commercial paper rating is a current assessment of
the likelihood of timely payment of debt having an original
maturity of no more than 365 days.
Issues assigned an A rating are regarded as having the greatest
capacity for timely payment. Issues in this category are
delineated with the numbers 1, 2 and 3 to indicate the relative
degree of safety.
A-1
This designation indicates that the degree of safety
regarding timely payment is either overwhelming or very strong.
Those issues determined to possess overwhelming safety
characteristics are denoted with a plus (+) designation.
A-2
Capacity for timely payment on issues with this designation
is strong. However, the relative degree of safety is not as
high as for issues designated A-1.
A-3
Issues carrying this designation have a satisfactory
capacity for timely payment. They are, however, somewhat more
vulnerable to the adverse effects of changes in circumstances
than obligations carrying the higher designations.
B
Issues carrying this designation are regarded as having
only speculative capacity for timely payment.
C
This designation is assigned to short-term obligations with
doubtful capacity for payment.
D
Issues carrying this designation are in default, and
payment of interest and/or repayment of principal is in arrears.
Moody's
Bond Ratings
Aaa
Bonds which are rated Aaa are judged to be of the best
quality. They carry the smallest degree of investment risk and
generally are referred to as "gilt edge." Interest payments are
protected by a large or by an exceptionally stable
margin and principal is secure. While the various protective
elements are likely to change, such changes as can be visualized
are most unlikely to impair the fundamentally strong position of
such issues.
Aa
Bonds which are rated Aa are judged to be of high quality
by all standards.
Together with the Aaa group they comprise what generally are
known as high grade bonds. They are rated lower than the best
bonds because margins of protection
may not be as large as in Aaa securities or fluctuation of
protective elements may be of greater amplitude or there may be
other elements present which make the long-term risks appear
somewhat larger than in Aaa securities.
A
Bonds which are rated A possess many favorable investment
attributes and are to be considered as upper medium grade
obligations. Factors giving security to principal and interest
are considered adequate, but elements may be present
which suggest a susceptibility to impairment sometime in the
future.
Baa
Bonds which are rated Baa are considered as medium grade
obligations, i.e., they are neither highly protected nor poorly
secured. Interest payments and principal security appear
adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable
over any great length of time. Such bonds lack outstanding
investment characteristics and in fact have speculative
characteristics as well.
Ba
Bonds which are rated Ba are judged to have speculative
elements; their future cannot be considered as well assured.
Often the protection of interest and principal payments may be
very moderate and, therefore, not well safeguarded
during both good and bad times over the future. Uncertainty of
position characterizes bonds in this class.
B
Bonds which are rated B generally lack characteristics of
the desirable investment. Assurance of interest and principal
payments or of maintenance of other terms of the contract over
any long period of time may be small.
Caa
Bonds which are rated Caa are of poor standing. Such
issues may be in default or there may be present elements of
danger with respect to principal or interest.
Ca
Bonds which are rated Ca present obligations which are
speculative in a high degree. Such issues are often in default
or have other marked shortcomings.
C
Bonds which are rated C are the lowest rated class of
bonds, and issues so rated can be regarded as having extremely
poor prospects of ever attaining any real investment standing.
Moody's applies the numerical modifiers 1, 2 and 3 to show
relative standing within the major rating categories, except in
the Aaa category and in the categories below B. The modifier 1
indicates a ranking for the security in
the higher end of a rating category; the modifier 2 indicates a
mid-range ranking; and the modifier 3 indicates a ranking in the
lower end of a rating category.
Commercial Paper Rating
The rating Prime-1 (P-1) is the highest commercial paper
rating assigned by Moody's. Issuers of P-1 paper must have a
superior capacity for repayment of short-term promissory
obligations, and ordinarily will be evidenced by leading
market positions in well established industries, high rates of
return on funds employed, conservative capitalization structures
with moderate reliance on debt
and ample asset protection, broad margins in earnings coverage
of fixed financial charges and high internal cash generation,
and well established access to a range of financial markets and
assured sources of alternate liquidity.
Issuers (or related supporting institutions) rated Prime-2
(P-2) have a strong capacity for repayment of short-term
promissory obligations. This ordinarily will be evidenced by
many of the characteristics cited above but to a
lesser degree. Earnings trends and coverage ratios, while
sound, will be more subject to variation. Capitalization
characteristics, while still appropriate,
may be more affected by external conditions. Ample alternate
liquidity is maintained.
Issuers (or related supporting institutions) rated Prime-3
(P-3) have an acceptable capacity for repayment of short-term
promissory obligations. The effect of industry characteristics
and market composition may be more
pronounced. Variability in earnings and profitability may
result in changes in the level of debt protection measurements
and the requirements for relatively high financial leverage.
Adequate alternate liquidity is maintained.
Issuers (or related supporting institutions) rated Not
Prime do not fall within any of the Prime rating categories.
Fitch
Bond Ratings
The ratings represent Fitch's assessment of the issuer's
ability to meet the obligations of a specific debt issue or
class of debt. The ratings take into consideration special
features of the issue, its relationship to other
obligations of the issuer, the current financial condition and
operative performance of the issuer and of any guarantor, as
well as the political and economic environment that might affect
the issuer's future financial strength and credit quality.
AAA
Bonds rated AAA are considered to be investment grade and
of the highest credit quality. The obligor has an exceptionally
strong ability to pay interest and repay principal, which is
unlikely to be affected by reasonably foreseeable events.
AA
Bonds rated AA are considered to be investment grade and of
very high credit quality. The obligor's ability to pay interest
and repay principal is very strong, although not quite as strong
as bonds rated AAA. Because bonds rated in the AAA and AA
categories are not significantly vulnerable to
foreseeable future developments, short-term debt of these
issuers is generally rated F-1+.
A
Bonds rated A are considered to be investment grade and of
high credit quality. The obligor's ability to pay interest and
repay principal is considered to be strong, but may be more
vulnerable to adverse changes in economic conditions and
circumstances than bonds with higher ratings.
BBB
Bonds rated BBB are considered to be investment grade and
of satisfactory credit quality. The obligor's ability to pay
interest and repay principal is considered to be adequate.
Adverse changes in economic conditions and
circumstances, however, are more likely to have an adverse
impact on these bonds and, therefore, impair timely payment.
The likelihood that the ratings of these
bonds will fall below investment grade is higher than for bonds
with higher ratings.
BB
Bonds rated BB are considered speculative. The obligor's
ability to pay interest and repay principal may be affected over
time by adverse economic changes. However, business and
financial alternatives can be identified which
could assist the obligor in satisfying its debt service
requirements.
B
Bonds rated B are considered highly speculative. While
bonds in this class are currently meeting debt service
requirements, the probability of continued
timely payment of principal and interest reflects the obligor's
limited margin of safety and the need for reasonable business
and economic activity throughout the life of the issue.
CCC
Bonds rated CCC have certain identifiable characteristics,
which, if not remedied, may lead to default. The ability to
meet obligations requires an advantageous business and economic
environment.
CC
Bonds rated CC are minimally protected. Default in payment
of interest and/or principal seems probable over time.
C
Bonds rated C are in imminent default in payment of
interest or principal.
DDD, DD and D
Bonds rated DDD, DD and D are in actual default of interest
and/or principal payments. Such bonds are extremely speculative
and should be valued on the basis of their ultimate recovery
value in liquidation or reorganization of the obligor. DDD
represents the highest potential for recovery on these bonds
and D represents the lowest potential for recovery.
Plus (+) and minus (-) signs are used with a rating symbol
to indicate the relative position of a credit within the rating
category. Plus and minus signs, however, are not used in the
AAA category covering 12-36 months.
Short-Term Ratings
Fitch's short-term ratings apply to debt obligations that
are payable on demand or have original maturities of up to three
years, including commercial paper, certificates of deposit,
medium-term notes, and municipal and investment notes.
Although the credit analysis is similar to Fitch's bond
rating analysis, the short-term rating places greater emphasis
than bond ratings on the existence of liquidity necessary to
meet the issuer's obligations in a timely manner.
F-1+
Exceptionally Strong Credit Quality. Issues assigned this
rating are regarded as having the strongest degree of assurance
for timely payment.
F-1
Very Strong Credit Quality. Issues assigned this rating
reflect an assurance of timely payment only slightly less in
degree than issues rated F-1+.
F-2
Good Credit Quality. Issues carrying this rating have a
satisfactory degree of assurance for timely payments, but the
margin of safety is not as great as the F-1+ and F-1 categories.
F-3
Fair Credit Quality. Issues assigned this rating have
characteristics suggesting that the degree of assurance for
timely payment is adequate; however, near-term adverse changes
could cause these securities to be rated below investment grade.
F-S
Weak Credit Quality. Issues assigned this rating have
characteristics suggesting a minimal degree of assurance for
timely payment and are vulnerable to near-term adverse changes
in financial and economic conditions.
D
Default. Issues assigned this rating are in actual or
imminent payment default.
Duff
Bond Ratings
AAA
Bonds rated AAA are considered highest credit quality. The
risk factors are negligible, being only slightly more than for
risk-free U.S. Treasury debt.
AA
Bonds rated AA are considered high credit quality.
Protection factors are strong. Risk is modest but may vary
slightly from time to time because of economic conditions.
A
Bonds rated A have protection factors which are average but
adequate. However, risk factors are more variable and greater
in periods of economic stress.
BBB
Bonds rated BBB are considered to have below average
protection factors but still considered sufficient for prudent
investment. There may be considerable variability in risk for
bonds in this category during economic cycles.
BB
Bonds rated BB are below investment grade but are deemed by
Duff as likely to meet obligations when due. Present or
prospective financial protection factors fluctuate according to
industry conditions or company fortunes. Overall
quality may move up or down frequently within the category.
B
Bonds rated B are below investment grade and possess the
risk that obligations will not be met when due. Financial
protection factors will fluctuate widely according to economic
cycles, industry conditions and/or company fortunes. Potential
exists for frequent changes in quality rating within this
category or into a higher or lower quality rating grade.
CCC
Bonds rated CCC are well below investment grade securities.
Such bonds may be in default or have considerable uncertainty as
to timely payment of interest, preferred dividends and/or
principal. Protection factors are narrow and risk can be
substantial with unfavorable economic or industry conditions
and/or with unfavorable company developments.
DD
Defaulted debt obligations. Issuer has failed to meet
scheduled principal and/or interest payments.
Plus (+) and minus (-) signs are used with a rating symbol
(except AAA) to indicate the relative position of a credit
within the rating category.
Commercial Paper Rating
The rating Duff-1 is the highest commercial paper rating
assigned by Duff. Paper rated Duff-1 is regarded as having very
high certainty of timely payment with excellent liquidity
factors which are supported by ample asset protection.
Risk factors are minor. Paper rated Duff-2 is regarded as
having good certainty of timely payment, good access to capital
markets and sound liquidity factors and company fundamentals.
Risk factors are small. Paper rated Duff 3 is
regarded as having satisfactory liquidity and other protection
factors. Risk factors are larger and subject to more variation.
Nevertheless, timely payment is expected. Paper rated Duff 4 is
regarded as having speculative investment characteristics.
Liquidity is not sufficient to insure against disruption in
debt service. Operating factors and market access may be
subject to a high degree of variation. Paper rated Duff 5 is in
default. The issuer has failed to meet scheduled principal
and/or interest payments.
DREYFUS STRATEGIC INCOME
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements*:
Included in Part A of the Registration Statement (in
respect of Dreyfus Strategic Income Fund only):
Condensed Financial Information for the period from
October 1, 1986 (commencement of operations) through October 31,
1986 and for each of the nine years ended October 31, 1995.
Included in Part B of the Registration Statement (in
respect of Dreyfus Strategic Income Fund only):
Statement of Investments -- October 31, 1995.
Statement of Assets and Liabilities -- October 31, 1995.
Statement of Operations -- year ended October 31, 1995.
Statement of Changes in Net Assets -- for each of the
two years ended October 31, 1995.
Notes to Financial Statements.
Report of Ernst & Young LLP, Independent Auditors,
dated _______________, 1995.
All Schedules and other financial statement information,
for which provision is made in the applicable accounting
regulations of the Securities and Exchange Commission, are
either omitted because they are not required under the
related instructions, they are inapplicable, or the required
information is presented in the financial statements or
notes thereto which are included in Part B of the
Registration Statement.
__________________
* To be filed by Amendment.
(b) Exhibits:
(1) Registrant's Amended and Restated Declaration
of Trust.*
(2) Registrant's By-Laws, as amended.*
(4) Specimen certificate for the Registrant's
securities is incorporated by reference to
Exhibit (4) of Pre-Effective Amendment No. 1
to the Registration Statement on Form N-1A,
filed on October 2, 1986.
(5) Management Agreement.*
(6)(a) Distribution Agreement.*
(6)(b) Forms of Service Agreements are incorporated
by reference to Exhibit (6)(b) of Post-
Effective Amendment No. 10 to the
Registration Statement on Form N-1A, filed on
December 30, 1994.
(8) Amended and Restated Custody Agreement.*
(9) Shareholder Services Plan.*
(10) Opinion and consent Registrant's counsel is
incorporated by reference to Exhibit (10) of
Pre-Effective Amendment No. 1 to the
Registration Statement on Form N-1A, filed on
October 2, 1986.
(11) Consent of Independent Auditors.*
(16) Schedules of Computation of Performance Data
are incorporated by reference to Exhibit (16)
of Post-Effective Amendment No. 9 to the
Registration Statement on Form N-1A, filed on
January 20, 1994.
(17) Financial Data Schedule.*
Other Exhibits:
(a) Powers of Attorney of Board members and
officers are incorporated by reference to
"Other Exhibits" of Post-Effective Amendments
Nos. 7 and 9 to the Registration Statement on
Form N-1A, filed on December 31, 1991 and
January 20, 1994, respectively.
(b) Assistant Secretary's Certificate is
incorporated by reference to "Other Exhibits"
of Post-Effective Amendment No. 10 to the
Registration Statement on Form N-1A, filed on
December 30, 1994.
______________
* To be filed by Amendment.
Item 25. Persons Controlled by or Under Common Control with
Registrant
Not applicable.
Item 26. Number of Holders of Securities
(2)
Number of Record
(1) Holders as of
Title of Class October 31, 1995
Beneficial Interest
(par value $.001)
Dreyfus Strategic Income Fund 13,973
Item 27. Indemnification
Reference is made to Article EIGHTH of the Registrant's
Agreement and Declaration of Trust to be filed as Exhibit 1
hereto. The application of these provisions is limited by
Article 10 of the Registrant's By-Laws to be filed as Exhibit 2
hereto and by the following undertaking set forth in the rules
promulgated by the Securities and Exchange Commission:
Insofar as indemnification for liabilities arising under
the Securities Act of 1933 may be permitted to trustees,
officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification
is against public policy as expressed in such Act and
is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than
the payment by the registrant of expenses incurred or
paid by a trustee, officer or controlling person of the
registrant in the successful defense of any action, suit
or proceeding) is asserted by such trustee, officer or
controlling person in connection with the securities
being registered, the registrant will, unless in the
opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification
by it is against public policy as expressed in such Act
and will be governed by the final adjudication of such
issue.
Reference also is made to the Distribution Agreement to be
filed as Exhibit 6 hereto.
Item 28. Business and Other Connections of Investment Adviser
The Dreyfus Corporation ("Dreyfus") and its subsidiary
companies comprise a financial service organization whose
business consists primarily of providing investment management
services as the investment adviser and manager for investment
companies registered under the Investment Company Act of 1940
and as an investment adviser to institutional and individual
accounts. Dreyfus also serves as subinvestment adviser to
and/or administrator of other investment companies. Dreyfus
Management, Inc., another wholly-owned subsidiary, provides
investment management services to various pension plans,
institutions and individuals.
Officers and Directors of Dreyfus
Name and Position with
Dreyfus Other Businesses
MANDELL L. BERMAN Real estate consultant and private
Director investor
29100 Northwestern Highway--Suite 370
Southfield, Michigan 48034;
Past Chairman of the Board of Trustees of
Skillman Foundation;
Member of the Board of Vintners
International
FRANK V. CAHOUET Chairman of the Board, President and
Director Chief Executive Officer:
Mellon Bank Corporation****
Mellon Bank, N.A.****
Director:
Avery Dennison Corporation
150 North Orange Grove Boulevard
Pasadena, California 91103;
Saint-Gobain Corporation
750 East Swedesford Road
Valley Forge, Pennsylvania 19482;
Teledyne, Inc.
1901 Avenue of the Stars
Los Angeles, California 90067
ALVIN E. FRIEDMAN Senior Adviser to Dillon, Read & Co. Inc.
Director 535 Madison Avenue
New York, New York 10022;
Director and member of the Executive
Committee of Avnet, Inc.**
DAVID B. TRUMAN Educational consultant;
Director Past President of the Russell Sage
Foundation
230 Park Avenue
New York, New York 10017;
Past President of Mount Holyoke College
South Hadley, Massachusetts 01075;
Former Director:
Student Loan Marketing Association
1055 Thomas Jefferson Street, N.W.
Washington, D.C. 20006;
Former Trustee:
College Retirement Equities Fund
730 Third Avenue
New York, New York 10017
HOWARD STEIN Chairman of the Board:
Chairman of the Board Dreyfus Acquisition Corporation*;
and Chief Executive The Dreyfus Consumer Credit
Officer Corporation*;
Dreyfus Management, Inc.*;
Dreyfus Service Corporation*;
Chairman of the Board and Chief Executive
Officer:
Major Trading Corporation*;
Director:
Avnet, Inc.**;
Dreyfus America Fund++++;
The Dreyfus Fund International
Limited+++++;
Dreyfus Partnership Management, Inc.*;
Dreyfus Personal Management, Inc.*;
Dreyfus Precious Metals, Inc.*;
Dreyfus Service Organization, Inc.***;
Seven Six Seven Agency, Inc.*;
World Balanced Fund+++;
Trustee:
Corporate Property Investors
New York, New York
W. KEITH SMITH Chairman and Chief Executive Officer:
Vice Chairman of the Board The Boston Company*****;
Vice Chairman of the Board:
Mellon Bank Corporation****;
Mellon Bank, N.A.****;
Director:
Dentsply International, Inc.
570 West College Avenue
York, Pennsylvania 17405
ROBERT E. RILEY Director:
President, Chief Dreyfus Service Corporation*;
Operating Officer and Former Executive Vice President:
a Director Prudential Investment Corporation
751 Board Street
Newark, New Jersey 07102
STEPHEN E. CANTER Former Chairman and Chief Executive
Vice Chairman, Chief Officer:
Investment Officer and Kleinwort Benson Investment Management
a Director Americas Inc.*;
Director:
The Dreyfus Trust Company++
LAWRENCE S. KASH Chairman, President and Chief
Vice Chairman--Distribution Executive Officer:
and a Director The Boston Company Advisors, Inc.
53 State Street
Exchange Place
Boston, Massachusetts 02109;
Executive Vice President and Director:
Dreyfus Service Organization, Inc.***;
Director:
The Dreyfus Consumer Credit
Corporation*;
The Dreyfus Trust Company++;
Dreyfus Service Corporation*;
President:
The Boston Company*****;
Laurel Capital Advisors****;
Boston Group Holdings, Inc.;
Executive Vice President:
Mellon Bank, N.A.****;
Boston Safe Deposit & Trust*****
LAWRENCE M. GREENE Director:
Director Dreyfus America Fund++++
JULIAN M. SMERLING None
Director
PHILIP L. TOIA Chairman of the Board and Trust
Vice Chairman-- Investment Officer:
Operations and The Dreyfus Trust Company++;
Administration Chairman of the Board and Chief
and a Director Operating Officer:
Major Trading Corporation*;
Director:
Dreyfus Precious Metals, Inc.*;
Dreyfus Service Corporation*;
Seven Six Seven Agency, Inc.*;
President and Director:
Dreyfus Acquisition Corporation*;
The Dreyfus Consumer Credit
Corporation*;
Dreyfus-Lincoln, Inc.*;
Dreyfus Management, Inc.*;
Dreyfus Personal Management, Inc.*;
Dreyfus Partnership Management, Inc.+;
Dreyfus Service Organization, Inc.***;
The Truepenny Corporation*;
Formerly, Senior Vice President:
The Chase Manhattan Bank, N.A. and
The Chase Manhattan Capital Markets
Corporation
One Chase Manhattan Plaza
New York, New York 10081
BARBARA E. CASEY President:
Vice President-- Dreyfus Retirement Services Division;
Dreyfus Retirement Executive Vice President:
Services Boston Safe Deposit & Trust Co.*****;
Dreyfus Service Corporation*
DIANE M. COFFEY None
Vice President--
Corporate Communications
ELIE M. GENADRY President:
Vice President-- Institutional Services Division of
Institutional Sales Dreyfus Service Corporation*;
Broker-Dealer Division of Dreyfus
Service Corporation*;
Group Retirement Plans Division of
Dreyfus Service Corporation*;
Executive Vice President:
Dreyfus Service Corporation*;
Dreyfus Service Organization, Inc.***;
Vice President:
The Dreyfus Trust Company++
HENRY D. GOTTMANN Executive Vice President:
Vice President--Retail Dreyfus Service Corporation*;
Sales and Service Vice President:
Dreyfus Precious Metals, Inc.*
DANIEL C. MACLEAN Director, Vice President and Secretary:
Vice President and Dreyfus Precious Metals, Inc.*;
General Counsel Director and Vice President:
The Dreyfus Consumer Credit
Corporation*;
Director and Secretary:
Dreyfus Acquisition Corporation*;
Dreyfus Partnership Management, Inc.*;
Major Trading Corporation*;
The Truepenny Corporation+;
Director, Vice President and Treasurer:
Lion Management, Inc.*;
Director:
The Dreyfus Trust Company++;
Secretary:
Dreyfus Service Corporation*;
Dreyfus Service Organization, Inc.***;
Seven Six Seven Agency, Inc.*
JEFFREY N. NACHMAN None
Vice President--Mutual
Fund Accounting
KATHERINE C. WICKHAM Formerly, Assistant Commissioner:
Vice President-- Department of Parks and Recreation of
Human Resources the City of New York
830 Fifth Avenue
New York, New York 10022
WILLIAM F. GLAVIN, JR. Executive Vice President:
Vice President--Corporate Dreyfus Service Corporation*;
Development Senior Vice President:
The Boston Company Advisors, Inc.
53 State Street
Exchange Place
Boston, Massachusetts 02109
ANDREW S. WASSER Vice President:
Vice President--Information Mellon Bank Corporation
Services One Mellon Bank Center
Pittsburgh, Pennsylvania 15258
MAURICE BENDRIHEM Treasurer:
Controller Dreyfus Partnership Management, Inc.*;
Dreyfus Precious Metals, Inc.*;
Dreyfus Service Organization, Inc.***;
Seven Six Seven Agency, Inc.*;
The Truepenny Corporation*;
Controller:
Dreyfus Acquisition Corporation*;
Dreyfus Service Corporation*;
The Dreyfus Trust Company++;
The Dreyfus Consumer Credit
Corporation*;
Formerly, Vice President-Financial
Planning, Administration and Tax:
Showtime/The Movie Channel, Inc.
1633 Broadway
New York, New York 10019
MARK N. JACOBS Vice President, Secretary and Director:
Vice President-- Lion Management, Inc.*;
Legal and Secretary Secretary:
The Dreyfus Consumer Credit
Corporation*;
Dreyfus Management, Inc.*;
Assistant Secretary:
Dreyfus Service Organization, Inc.***;
Major Trading Corporation*;
The Truepenny Corporation*
ELVIRA OSLAPAS Assistant Secretary:
Assistant Secretary Dreyfus Service Corporation*;
Dreyfus Management, Inc.*;
Dreyfus Acquisition Corporation, Inc.*;
The Truepenny Corporation*
* The address of the business so indicated is 200 Park
Avenue, New York, New York 10166.
** The address of the business so indicated is 80 Cutter Mill
Road, Great Neck, New York 11021.
*** The address of the business so indicated is 131 Second
Street, Lewes, Delaware 19958.
**** The address of the business so indicated is One Mellon Bank
Center, Pittsburgh, Pennsylvania.
***** The address of the business so indicated is One Boston
Plaza, Boston, Massachusetts 02108.
+ The address of the business so indicated is Atrium
Building, 80 Route 4 East, Paramus, New Jersey 07652.
++ The address of the business so indicated is 144 Glenn
Curtiss Boulevard, Uniondale, New York 11556-0144.
+++ The address of the business so indicated is One
Rockefeller Plaza, New York, New York 10020.
++++ The address of the business so indicated is 2
Boulevard Royal, Luxembourg.
+++++ The address of the business so indicated is Nassau,
Bahama Islands.
Item 29. Principal Underwriters
(a) Other investment companies for which
Registrant's principal underwriter (exclusive distributor) acts
as principal underwriter or exclusive distributor:
1. Comstock Partners Strategy Fund, Inc.
2. Dreyfus A Bonds Plus, Inc.
3. Dreyfus Appreciation Fund, Inc.
4. Dreyfus Asset Allocation Fund, Inc.
5. Dreyfus Balanced Fund, Inc.
6. Dreyfus BASIC Money Market Fund, Inc.
7. Dreyfus BASIC Municipal Fund, Inc.
8. Dreyfus BASIC U.S. Government Money Market Fund
9. Dreyfus California Intermediate Municipal Bond Fund
10. Dreyfus California Tax Exempt Bond Fund, Inc.
11. Dreyfus California Tax Exempt Money Market Fund
12. Dreyfus Capital Value Fund, Inc.
13. Dreyfus Cash Management
14. Dreyfus Cash Management Plus, Inc.
15. Dreyfus Connecticut Intermediate Municipal Bond Fund
16. Dreyfus Connecticut Municipal Money Market Fund, Inc.
17. Dreyfus Edison Electric Index Fund, Inc.
18. Dreyfus Florida Intermediate Municipal Bond Fund
19. Dreyfus Florida Municipal Money Market Fund
20. The Dreyfus Fund Incorporated
21. Dreyfus Global Bond Fund, Inc.
22. Dreyfus Global Growth, L.P. (A Strategic Fund)
23. Dreyfus GNMA Fund, Inc.
24. Dreyfus Government Cash Management
25. Dreyfus Growth and Income Fund, Inc.
26. Dreyfus Growth and Value Funds, Inc.
27. Dreyfus Growth Opportunity Fund, Inc.
28. Dreyfus Institutional Money Market Fund
29. Dreyfus Institutional Short Term Treasury Fund
30. Dreyfus Insured Municipal Bond Fund, Inc.
31. Dreyfus Intermediate Municipal Bond Fund, Inc.
32. Dreyfus International Equity Fund, Inc.
33. Dreyfus International Recovery Fund, Inc.
34. Dreyfus Investors GNMA Fund
35. The Dreyfus/Laurel Funds, Inc.
36. The Dreyfus/Laurel Funds Trust
37. The Dreyfus/Laurel Tax-Free Municipal Funds
38. The Dreyfus/Laurel Investment Series
39. Dreyfus Life and Annuity Index Fund, Inc.
40. Dreyfus LifeTime Portfolios, Inc.
41. Dreyfus Liquid Assets, Inc.
42. Dreyfus Massachusetts Intermediate Municipal Bond
Fund
43. Dreyfus Massachusetts Municipal Money Market Fund
44. Dreyfus Massachusetts Tax Exempt Bond Fund
45. Dreyfus Michigan Municipal Money Market Fund, Inc.
46. Dreyfus Money Market Instruments, Inc.
47. Dreyfus Municipal Bond Fund, Inc.
48. Dreyfus Municipal Cash Management Plus
49. Dreyfus Municipal Money Market Fund, Inc.
50. Dreyfus New Jersey Intermediate Municipal Bond Fund
51. Dreyfus New Jersey Municipal Bond Fund, Inc.
52. Dreyfus New Jersey Municipal Money Market Fund, Inc.
53. Dreyfus New Leaders Fund, Inc.
54. Dreyfus New York Insured Tax Exempt Bond Fund
55. Dreyfus New York Municipal Cash Management
56. Dreyfus New York Tax Exempt Bond Fund, Inc.
57. Dreyfus New York Tax Exempt Intermediate Bond Fund
58. Dreyfus New York Tax Exempt Money Market Fund
59. Dreyfus Ohio Municipal Money Market Fund, Inc.
60. Dreyfus 100% U.S. Treasury Intermediate Term Fund
61. Dreyfus 100% U.S. Treasury Long Term Fund
62. Dreyfus 100% U.S. Treasury Money Market Fund
63. Dreyfus 100% U.S. Treasury Short Term Fund
64. Dreyfus Pennsylvania Intermediate Municipal
Bond Fund
65. Dreyfus Pennsylvania Municipal Money Market Fund
66. Dreyfus Short-Intermediate Government Fund
67. Dreyfus Short-Intermediate Municipal Bond Fund
68. Dreyfus Short-Term Income Fund, Inc.
69. The Dreyfus Socially Responsible Growth Fund, Inc.
70. Dreyfus Strategic Growth, L.P.
71. Dreyfus Strategic Income
72. Dreyfus Strategic Investing
73. Dreyfus Tax Exempt Cash Management
74. The Dreyfus Third Century Fund, Inc.
75. Dreyfus Treasury Cash Management
76. Dreyfus Treasury Prime Cash Management
77. Dreyfus Variable Investment Fund
78. Dreyfus-Wilshire Target Funds, Inc.
79. Dreyfus Worldwide Dollar Money Market Fund, Inc.
80. General California Municipal Bond Fund, Inc.
81. General California Municipal Money Market Fund
82. General Government Securities Money Market
Fund, Inc.
83. General Money Market Fund, Inc.
84. General Municipal Bond Fund, Inc.
85. General Municipal Money Market Fund, Inc.
86. General New York Municipal Bond Fund, Inc.
87. General New York Municipal Money Market Fund
88. Pacifica Funds Trust--Pacifica Prime Money Market Fund
Pacifica Treasury Money Market Fund
89. Peoples Index Fund, Inc.
90. Peoples S&P MidCap Index Fund, Inc.
91. Premier California Municipal Bond Fund
92. Premier Capital Growth Fund, Inc.
93. Premier Global Investing, Inc.
94. Premier GNMA Fund
95. Premier Growth Fund, Inc.
96. Premier Insured Municipal Bond Fund
97. Premier Municipal Bond Fund
98. Premier New York Municipal Bond Fund
99. Premier State Municipal Bond Fund
(b) Positions and offices with Positions and
Name and Principal Premier Mutual offices with
business address Fund Services, Inc. Registrant
Marie E. Connolly+ Director, President, Chief President
Operating Officer and and Treasurer
Compliance Officer
Joseph F. Tower, III+ Senior Vice President Assistant
Treasurer and Chief Treasurer
Financial Officer
John E. Pelletier+ Senior Vice President, Vice President
General Counsel, Secretary and Secretary
and Clerk
Frederick C. Dey++ Senior Vice President Vice President
and Assistant
Treasurer
Eric B. Fischman++ Vice President and Vice President
Associate General Counsel and Assistant
Secretary
Elizabeth Bachman++ Attorney Vice President
and Assistant
Secretary
Lynn H. Johnson+ Vice President None
Paul Prescott+ Assistant Vice President None
Leslie M. Gaynor+ Assistant Treasurer None
Mary Nelson+ Assistant Treasurer None
John J. Pyburn++ Assistant Treasurer Assistant
Treasurer
Jean M. O'Leary+ Assistant Secretary and None
Assistant Clerk
John W. Gomez+ Director None
William J. Nutt+ Director None
___________________________
+ Principal business address is One Exchange Place, Boston,
Massachusetts 02109.
++ Principal business address is 200 Park Avenue, New York,
New York 10166.
Item 30. Location of Accounts and Records
1. Dreyfus Transfer, Inc.
One American Express Plaza
Providence, Rhode Island 02903
2. The Bank of New York
90 Washington Street
New York, New York 10286
3. The Dreyfus Corporation
200 Park Avenue
New York, New York 10166
Item 31. Management Services
Not Applicable.
Item 32. Undertakings
Registrant hereby undertakes
(1) to file a post-effective amendment, using financial
statements which need not be certified, within four to six
months from the effective date of Registrant's 1933 Act
Registration Statement pertaining to its Dreyfus Equity
Dividend Fund and Dreyfus High Yield Bond Fund.
(2) to call a meeting of shareholders for the purpose of
voting upon the question of removal of a trustee or trustees
when requested in writing to do so by the holders of at least
10% of the Registrant's outstanding shares of beneficial
interest and in connection with such meeting to comply with
the provisions of Section 16(c) of the Investment Company
Act of 1940 relating to shareholder communications.
(3) to furnish each person to whom a prospectus is delivered
with a copy of the Fund's latest Annual Report to
Shareholders, upon request and without charge.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and
the Investment Company Act of 1940, the Registrant has duly
caused this Amendment to the Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in
the City of New York, and State of New York, on the 16th day of
November, 1995.
DREYFUS STRATEGIC INCOME
(Registrant)
By:/s/Marie E. Connolly*
Marie E. Connolly, President
Pursuant to the requirements of the Securities Act of 1933,
this Amendment to the Registration Statement has been signed
below by the following persons in the capacities and on the
dates indicated.
/s/Marie E. Connolly* President and Treasurer November 16, 1995
Marie E. Connolly (Principal Executive,
Financial and Accounting
Officer)
/s/David W. Burke* Trustee November 16, 1995
David W. Burke
/s/Joseph S. DiMartino* Trustee November 16, 1995
Joseph S. DiMartino
/s/Diane Dunst* Trustee November 16, 1995
Diane Dunst
/s/Rosalind Gersten Jacobs* Trustee November 16, 1995
Rosalind Gersten Jacobs
/s/Jay I. Meltzer* Trustee November 16, 1995
Jay I. Meltzer
/s/Daniel Rose* Trustee November 16, 1995
Daniel Rose
/s/Warren B. Rudman* Trustee November 16, 1995
Warren B. Rudman
/s/Sander Vanocur* Trustee November 16, 1995
Sander Vanocur
*By: /s/Eric B. Fischman
Eric B. Fischman,
Attorney-in-Fact
