Dreyfus
Premier High Yield
Debt Plus Equity Fund
SEMIANNUAL REPORT April 30, 2000
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured * Not Bank-Guaranteed * May Lose Value
Contents
THE FUND
--------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Statement of Investments
11 Statement of Assets and Liabilities
12 Statement of Operations
13 Statement of Changes in Net Assets
16 Financial Highlights
20 Notes to Financial Statements
FOR MORE INFORMATION
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Back Cover
The Fund
Dreyfus Premier
High Yield Debt Plus Equity Fund
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Premier High Yield
Debt Plus Equity Fund, covering the six-month period from November 1, 1999
through April 30, 2000. Inside, you'll find valuable information about how the
fund was managed during the reporting period, including a discussion with Roger
King and John Koerber, portfolio managers and members of the Dreyfus Taxable
Fixed Income Team.
Tighter monetary policy adversely affected most -- but not all -- sectors of the
bond market over the past six months. This was primarily a result of efforts by
the Federal Reserve Board (the "Fed") to forestall a potential reemergence of
inflationary pressures. The Fed raised short-term interest rates three times
during the reporting period, following two interest-rate hikes implemented in
the months before the reporting period began. Since June 1999, the Federal
Reserve Board has raised short-term interest rates a total of 1.25 percentage
points.
Higher interest rates led to some additional erosion of bond prices, especially
during the last two months of 1999. During the first four months of 2000,
however, some bonds began to rally, led higher by long-term U.S. Treasury
securities which rose primarily because of reduced supply amid robust demand
from domestic and foreign investors.
We appreciate your confidence over the past six months, and we look forward to
your continued participation in Dreyfus Premier High Yield Debt Plus Equity
Fund.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
May 15, 2000
DISCUSSION OF FUND PERFORMANCE
Roger King and John Koerber, Portfolio Managers Dreyfus Taxable Fixed Income
Team
How did Dreyfus Premier High Yield Debt Plus Equity Fund perform relative to its
benchmark?
For the six-month period ended April 30, 2000, the fund achieved a total return
of -10.72% for Class A shares, -11.09% for Class B shares, -11.04% for Class C
shares and -10.84% for Class T shares.(1) This compares to a 0.25% total return
for the fund's benchmark, the Merrill Lynch High Yield Master II Index, for the
same period.(2)
We attribute the fund' s underperformance to two factors. In the late part of
1999, the fixed-income portion of the portfolio was repositioned to emphasize
lower quality bonds. This change was designed to take advantage of the "January
effect," in which price differences between investment-grade bonds and below
investment-grade bonds tend to narrow. However, this annual event was noticeably
absent this year. In fact, because assets flowed out of high yield instruments,
the differences widened as prices of lower quality instruments, including the
fund' s holdings, fell. The stock portion of the fund also suffered because of
its focus on small-capitalization value stocks in a market that generally
rewarded growth.
What is the fund's investment approach?
The fund seeks to maximize total return. We invest in fixed-income securities
issued by companies with credit ratings below investment grade. Second, we
purchase stock in companies that issue below investment-grade debt. Issuers of
below investment-grade debt are perceived by the marketplace as carrying a
higher element of risk than do more established companies, and therefore issuers
must offer a higher yield to compensate for that risk.
Our approach to the selection of individual bonds is based on careful credit
analysis -- our projection of an issuer's ability to meet its obliga The Fun
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
tions. Our emphasis is on uncovering out-of-favor companies that we believe are
undervalued. We search for likely changes in ownership, management or business
strategy -- events that could lead the market to discover the value we see and
create the potential for price appreciation.
Of the approximately 2,000 companies issuing high yield bonds, about one-third
also issue common stock. We review these companies to find about one dozen
stocks that we believe have the greatest potential for growth. When evaluating
stocks, we look at factors that are similar to those we consider when purchasing
high yield bonds. Because stocks have greater return potential, and because we
believe the common stock of all high yield issuers is underfollowed, we believe
that purchasing a select portfolio of this asset class can potentially enhance
returns. Of course, equities also can increase share price and investment return
volatility as well as the potential for losses.
What other factors influenced the fund's performance?
The high yield market' s general decline continued through the end of 1999,
driven largely by concerns over potential Y2K-related market disruptions. In
anticipation of problems that proved unfounded, investors sold high yield mutual
funds, and fund managers sold bonds to meet redemptions. At the same time,
professional traders largely withdrew from the market. A large supply of high
yield bonds was met by weak demand, and prices declined.
Once Y2K had passed, a post-Y2K recovery of the high yield market never
materialized. The Federal Reserve Board continued raising interest rates into
2000, depressing bond prices across the board. We had been steady purchasers of
lower rated bonds through the fourth quarter of 1999. Our expectation was that
we would profit from a "January effect" -- that is, the market's historical
tendency to rally in January amplified this January by relief over minimal Y2K
disruption. In fact, when rates rose, the spread between investment-grade and
high yield bonds widened, resulting in a greater relative decline in high yield
bond prices overall, and the fund's performance suffered accordingly.
There appears to have been a marked shift in investor sentiment. In the past,
investors seeking high returns found high yield bonds attractive. Currently,
however, investors apparently believe that the stock market -- particularly
technology stocks -- offer better opportunities. Unfortunately, our equity
investments were not well positioned to take advantage of this change in
investor preference. While investors preferred larger growth stocks, our equity
investments were concentrated in smaller, value-oriented companies, which are
the types of companies that typically issue high yield debt.
What is the fund's current strategy?
The high yield market, in its current distressed state, is trading at depressed
levels not seen in the past 10 years. We believe that at such levels, it may
well offer significant value. However, in our view, any recovery will require a
strong trigger event to spark renewed investor interest and confidence. We have
attempted, in this climate, to reduce our equity exposure, with a greater
emphasis on high yield bond investments. In a time when the high yield market is
out of favor, the income offered can be quite attractive.
May 15, 2000
(1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS PAID,
AND DOES NOT TAKE INTO CONSIDERATION THE MAXIMUM INITIAL SALES CHARGE IN THE
CASE OF CLASS A AND CLASS T SHARES, OR THE APPLICABLE CONTINGENT DEFERRED SALES
CHARGE IMPOSED ON REDEMPTIONS IN THE CASE OF CLASS B AND CLASS C SHARES. HAD
THESE CHARGES BEEN REFLECTED, RETURNS WOULD HAVE BEEN LOWER. PAST PERFORMANCE IS
NO GUARANTEE OF FUTURE RESULTS. SHARE PRICE, YIELD AND INVESTMENT RETURN
FLUCTUATE SUCH THAT UPON REDEMPTION, SHARES MAY BE WORTH MORE OR LESS THAN THEIR
ORIGINAL COST. RETURN FIGURES PROVIDED REFLECT THE ABSORPTION OF FUND EXPENSES
BY THE DREYFUS CORPORATION PURSUANT TO AN AGREEMENT IN EFFECT THROUGH OCTOBER
31, 2000, AT WHICH TIME IT MAY BE EXTENDED, TERMINATED OR MODIFIED. HAD THESE
EXPENSES NOT BEEN ABSORBED, THE FUND'S RETURNS WOULD HAVE BEEN LOWER.
(2) SOURCE: BLOOMBERG L.P. -- REFLECTS THE REINVESTMENT OF DIVIDENDS AND, WHERE
APPLICABLE, CAPITAL GAIN DISTRIBUTIONS. THE MERRILL LYNCH HIGH YIELD MASTER II
INDEX IS AN UNMANAGED PERFORMANCE BENCHMARK COMPOSED OF U.S. DOMESTIC AND YANKEE
BONDS RATED BELOW INVESTMENT GRADE WITH AT LEAST $100 MILLION PAR AMOUNT
OUTSTANDING AND GREATER THAN OR EQUAL TO ONE YEAR TO MATURITY.
The Fund
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF INVESTMENTS
April 30, 2000 (Unaudited)
STATEMENT OF INVESTMENTS
Principal
BONDS AND NOTES--64.0% Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
AIRCRAFT & AEROSPACE--2.0%
Stellex Industries, Ser. B,
Sr. Sub. Notes, 9.5%, 2007 300,000 166,500
BROADCASTING--3.3%
CD Radio,
Sr. Discount Notes, 0/15%, 2007 500,000 (a) 277,500
BUILDING MATERIALS--2.2%
American Eco, Ser. B,
Sr. Notes, 9.625%, 2008 750,000 191,250
BUSINESS SERVICES--3.4%
Employee Solutions, Ser. B,
Sr. Notes, 10%, 2004 500,000 (b) 102,500
U.S. Office Products,
Sr. Notes, 9.75%, 2008 500,000 182,500
285,000
CHEMICALS--1.2%
Trans-Resources, Ser. B,
Sr. Discount Notes, 0/12%, 2008 500,000 (a) 97,500
CONSUMER--4.1%
Revlon Consumer Products,
Sr. Sub. Notes, 8.625%, 2008 700,000 350,000
ENERGY--1.2%
Petsec Energy, Ser. B,
Sr. Sub. Notes, 9.5%, 2007 200,000 (b) 100,500
FINANCIAL--5.9%
Macsaver Financial Services,
Notes (Gtd, by Heilig-Meyers):
7.4%, 2002 100,000 79,500
7.875%, 2003 200,000 147,000
Reliance Group Holdings,
Sr. Notes, 9%, 2000 300,000 271,500
498,000
FOOD & BEVERAGES--5.1%
CKE Restaurants,
Conv. Sub. Deb., 4.25%, 2004 300,000 126,375
Chiquita Brands International,
Conv. Sub. Deb., 7%, 2001 300,000 252,000
Envirodyne Industries,
Sr. Notes, 10.25%, 2001 100,000 53,500
431,875
Principal
BONDS AND NOTES (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
FOREST PRODUCTS--5.8%
Maxxam Group Holdings,
Sr. Secured Notes, 12%, 2003 250,000 226,250
SF Holdings, Ser. B,
Sr. Secured Discount Notes, 0/12.75%, 2008 500,000 (a) 268,750
495,000
GAMING--5.7%
Jazz Casino,
Sr. Notes, 5.987%, 2009 411,854 (c) 119,184
Venetian Casino/Las Vegas Sands,
Notes, 14.25%, 2005 400,000 364,000
483,184
INDUSTRIAL SERVICES--4.8%
ICF Kaiser International,
Sr. Sub. Notes, 13%, 2003 825,000 (b) 405,281
METALS--1.9%
Renco Metals,
Sr. Notes, 11.5%, 2003 300,000 157,500
RESTAURANTS--1.5%
Avado Brands,
Sr. Sub. Notes, 11.75%, 2009 250,000 126,250
RETAIL--2.3%
J. Crew Group, Ser. B,
Sr. Discount Notes, 0/13.125%, 2008 350,000 (a) 194,250
SHIPPING--2.1%
Holt Group,
Sr. Notes, 9.75%, 2006 400,000 182,000
STEEL--.1%
Recycling Industries,
Sr. Sub. Notes, 13%, 2005 200,000 (b) 9,000
SUPERMARKETS--1.5%
Pathmark Stores,
Sub. Notes, 11.625%, 2002 440,000 124,300
TELECOMMUNICATIONS--1.7%
E. Spire Communications,
Sr. Secured Discount Notes, 0/10.625%, 2008 500,000 (a) 147,500
TELECOMMUNICATION/CARRIERS--3.2%
FirstWorld Communications,
Sr. Discount Notes, 0/13%, 2008 600,000 (a) 273,000
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Principal
BONDS AND NOTES (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
TEXTILES--1.4%
Sassco Fashions,
Sr. Notes, 12.75%, 2004 200,000 113,000
Texfi Industries,
Sr. Sub. Deb., 8.75%, 1999 244,000 (b) 4,880
117,880
WIRELESS COMMUNICATIONS--3.6%
Comunicacion Celular,
Sr. Discount Notes, 0/14.125%, 2005 250,000 (a,d) 165,000
Globalstar/Capital,
Sr. Notes, 10.75%, 2004 400,000 143,000
308,000
TOTAL BONDS AND NOTES
(cost $7,200,320) 5,421,270
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COMMON STOCKS--20.6% Shares Value ($)
------------------------------------------------------------------------------------------------------------------------------------
AUTO RELATED--1.5%
United Auto Group 15,000 (e) 130,312
BROADCASTING--6.1%
Cumulus Media, Cl. A 10,000 (e) 131,250
Radio Unica Communications 20,000 (e) 192,500
Sinclar Broadcast Group, Cl. A 25,000 (e) 195,313
519,063
CHEMICALS--2.6%
American Pacific 19,900 (e) 139,300
Sterling Chemicals Holdings 15,000 (e) 78,750
218,050
FOREST PRODUCTS--.0%
SF Holdings Group, Cl. C 100 (d,e) 1
INDUSTRIAL SERVICES--5.3%
Associated Materials 20,000 340,000
Emcor Group 5,000 (e) 111,875
451,875
REAL ESTATE INVESTMENT TRUST--1.0%
Meditrust 40,000 (e) 80,000
RECREATION--.8%
American Skiing 35,000 (e) 70,000
RESTAURANTS--1.1%
Advantica Restaurant Group (warrants) 369,000 (e) 92,250
COMMON STOCKS (CONTINUED) Shares Value ($)
------------------------------------------------------------------------------------------------------------------------------------
TELECOMMUNICATION/CARRIERS--2.2%
FirstWorld Communications (warrants) 600 (d,e) 81,000
GST Telecommunications 30,000 (e) 101,250
182,250
TOTAL COMMON STOCKS
(cost $2,029,763 ) 1,743,801
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PREFERRED STOCKS--6.1%
------------------------------------------------------------------------------------------------------------------------------------
BROADCASTING--5.5%
Paxson Communications,
Cum. Conv., $975.00 52 (d) 468,000
ENERGY--.4%
Contour Energy,
Cum. Conv., $2.625 10,000 (e) 34,375
FOOD & BEVERAGES--.2%
Nebco Evans Holdings,
Cum., $11.25 33,043 (e) 12,391
SUPERMARKETS--.0%
Supermarkets General,
Cum., $3.52 4,000 (e) 1,040
TOTAL PREFERRED STOCKS
(cost $1,221,897) 515,806
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Principal
SHORT-TERM INVESTMENTS--8.4% Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
COMMERCIAL PAPER:
Dow Chemical,
6.03%, 5/1/2000 350,000 350,000
UBS Finance,
6.04%, 5/1/2000 365,000 365,000
TOTAL SHORT-TERM INVESTMENTS
(cost $715,000) 715,000
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TOTAL INVESTMENTS (cost $11,166,980) 99.1% 8,395,877
CASH AND RECEIVABLES (NET) .9% 74,451
NET ASSETS 100.0% 8,470,328
(A) ZERO COUPON UNTIL A SPECIFIED DATE AT WHICH TIME THE STATED COUPON RATE BECOMES EFFECTIVE UNTIL MATURITY.
(B) NON-INCOME PRODUCING--SECURITY IN DEFAULT.
(C) VARIABLE RATE SECURITY--INTEREST RATE SUBJECT TO PERIODIC CHANGE.
(D) SECURITIES EXEMPT FROM REGISTRATION UNDER RULE 144A OF THE SECURITIES ACT
OF 1933. THESE SECURITIES MAY BE RESOLD IN TRANSACTIONS EXEMPT FROM
REGISTRATION, NORMALLY TO QUALIFIED INSTITUTIONAL BUYERS. AT APRIL 30, 2000,
THESE SECURITIES AMOUNTED TO $714,001 OR 8.4% OF NET ASSETS.
(E) NON-INCOME PRODUCING SECURITY.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2000 (Unaudited)
Cost Value
--------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of Investments 11,166,980 8,395,877
Cash 26,345
Interest and dividends receivable 218,276
Receivable for investment securities sold 172,312
Receivable for shares of Beneficial Interest subscribed 37,059
Prepaid expenses and other assets 13,428
8,863,297
--------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation 5,176
Payable for shares of Beneficial Interest redeemed 200,000
Payable for investment securities purchased 167,608
Accrued expenses 20,185
392,969
--------------------------------------------------------------------------------
NET ASSETS ($) 8,470,328
--------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 10,222,055
Accumulated undistributed investment income--net 95,964
Accumulated net realized gain (loss) on investments 923,412
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 (2,771,103)
--------------------------------------------------------------------------------
NET ASSETS ($) 8,470,328
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
NET ASSET VALUE PER SHARE
Class A Class B Class C Class T
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Net Assets ($) 1,921,265 4,745,108 1,456,041 347,914
Shares Outstanding 189,403 467,389 143,569 34,267
------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE ($) 10.14 10.15 10.14 10.15
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
STATEMENT OF OPERATIONS
Six Months Ended April 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INCOME:
Interest 805,586
Cash dividends 57,381
TOTAL INCOME 862,967
EXPENSES:
Management fee--Note 3(a) 38,840
Distribution fees--Note 3(b) 27,228
Registration fees 24,440
Shareholder servicing costs--Note 3(c) 13,990
Custodian fees--Note 3(c) 4,777
Prospectus and shareholders' reports 4,300
Professional fees 2,205
Trustees' fees and expenses--Note 3(d) 498
Miscellaneous 2,531
TOTAL EXPENSES 118,809
Less--expense reimbursement from The Dreyfus Corporation due to
undertaking--Note 3(a) (39,793)
NET EXPENSES 79,016
INVESTMENT INCOME--NET 783,951
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments 960,651
Net unrealized appreciation (depreciation) on investments (2,799,456)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (1,838,805)
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (1,054,854)
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
April 30, 2000 Year Ended
(Unaudited) October 31, 1999
--------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 783,951 1,308,976
Net realized gain (loss) on investments 960,651 548,020
Net unrealized appreciation (depreciation)
on investments (2,799,456) 1,865,042
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS (1,054,854) 3,722,038
--------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net:
Class A shares (168,201) (549,069)
Class B shares (350,557) (604,075)
Class C shares (91,193) (136,995)
Class T shares (33,766) (130,308)
Net realized gain on investments:
Class A shares (158,393) --
Class B shares (279,051) --
Class C shares (57,570) --
Class T shares (36,825) --
TOTAL DIVIDENDS (1,175,556) (1,420,447)
--------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS ($):
Net proceeds from shares sold:
Class A shares 438,424 150,176
Class B shares 3,052,986 1,767,475
Class C shares 1,010,779 436,285
Dividends reinvested:
Class A shares 27,633 544,522
Class B shares 113,718 550,326
Class C shares 29,991 126,521
Class T shares -- 130,308
The Fund
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
Six Months Ended
April 30, 2000 Year Ended
(Unaudited) October 31, 1999
--------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS ($) (CONTINUED):
Cost of shares redeemed:
Class A shares (1,633,389) (1,323,577)
Class B shares (2,386,559) (1,575,348)
Class C shares (524,876) (352,652)
Class T shares (400,000) (330,000)
INCREASE (DECREASE) IN NET ASSETS FROM
BENEFICIAL INTEREST TRANSACTIONS (271,293) 124,036
TOTAL INCREASE (DECREASE) IN NET ASSETS (2,501,703) 2,425,627
--------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 10,972,031 8,546,404
END OF PERIOD 8,470,328 10,972,031
Undistributed investment income (Distributions
in excess of investment income)--net 95,964 (44,270)
SEE NOTES TO FINANCIAL STATEMENTS.
Six Months Ended
April 30, 2000 Year Ended
CAPITAL SHARE TRANSACTIONS: (Unaudited) October 31, 1999
--------------------------------------------------------------------------------
CLASS A(A)
Shares sold 37,358 11,739
Shares issued for dividends reinvested 2,440 44,101
Shares redeemed (135,599) (98,343)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (95,801) (42,503)
--------------------------------------------------------------------------------
CLASS B(A)
Shares sold 250,863 139,973
Shares issued for dividends reinvested 9,734 44,405
Shares redeemed (199,677) (119,265)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 60,920 65,113
--------------------------------------------------------------------------------
CLASS C
Shares sold 85,935 33,035
Shares issued for dividends reinvested 2,718 10,213
Shares redeemed (44,398) (26,305)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 44,255 16,943
--------------------------------------------------------------------------------
CLASS T
Shares issued for dividends reinvested -- 10,544
Shares redeemed (33,135) (24,510)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (33,135) (13,966)
(A) DURING THE PERIOD ENDED APRIL 30, 2000, 6,638 CLASS B SHARES REPRESENTING
$66,907 WERE AUTOMATICALLY CONVERTED TO 6,638 CLASS A SHARES AND DURING THE
PERIOD ENDED OCTOBER 31, 1999, 4,592 CLASS B SHARES REPRESENTING $57,015 WERE
AUTOMATICALLY CONVERTED TO 4,599 CLASS A SHARES.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
<TABLE>
<CAPTION>
<S> <C> <C> <C>
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the
fiscal periods indicated. All information (except portfolio turnover rate)
reflects financial results for a single fund share.Total return shows how much
your investment in the fund would have increased (or decreased) during each
period, assuming you had reinvested all dividends and distributions. These
figures have been derived from the fund's financial statements.
Six Months Ended
April 30, 2000 Year Ended October 31
-------------------------
CLASS A SHARES (Unaudited) 1999 1998(a)
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 12.77 10.27 12.50
Investment Operations:
Investment income--net 1.01 1.65 .27
Net realized and unrealized gain (loss)
on investments (2.24) 2.59 (2.31)
Total from Investment Operations (1.23) 4.24 (2.04)
Distributions:
Dividends from investment income--net (.80) (1.74) (.19)
Dividends from net realized gain on investments (.60) -- --
Total Distributions (1.40) (1.74) (.19)
Net asset value, end of period 10.14 12.77 10.27
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(B) (21.50)(c) 42.76 (16.38)(d)
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RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets 1.00(c) 1.00 1.00(c)
Ratio of net investment income
to average net assets 15.38(c) 12.71 7.07(c)
Decrease reflected in above expense ratios
due to undertakings by The Dreyfus Corporation .77(c) 1.26 2.26(c)
Portfolio Turnover Rate 52.73(d) 135.77 42.54(d)
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 1,921 3,643 3,364
(A) FROM JUNE 29, 1998 (COMMENCEMENT OF OPERATIONS) TO OCTOBER 31, 1998.
(B) EXCLUSIVE OF SALES CHARGE.
(C) ANNUALIZED.
(D) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
Six Months Ended
April 30, 2000 Year Ended October 31
---------------------
CLASS B SHARES (Unaudited) 1999 1998(a)
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 12.79 10.26 12.50
Investment Operations:
Investment income--net .93 1.47 .24
Net realized and unrealized gain (loss)
on investments (2.21) 2.69 (2.32)
Total from Investment Operations (1.28) 4.16 (2.08)
Distributions:
Dividends from investment income--net (.76) (1.63) (.16)
Dividends from net realized gain on investments (.60) -- --
Total Distributions (1.36) (1.63) (.16)
Net asset value, end of period 10.15 12.79 10.26
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(B) (22.24)(c) 41.82 (16.64)(d)
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RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets 1.75(c) 1.75 1.75(c)
Ratio of net investment income
to average net assets 14.99(c) 11.63 6.32(c)
Decrease reflected in above expense ratios
due to undertakings by The Dreyfus Corporation .77(c) 1.26 2.26(c)
Portfolio Turnover Rate 52.73(d) 135.77 42.54(d)
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 4,745 5,199 3,503
(A) FROM JUNE 29, 1998 (COMMENCEMENT OF OPERATIONS) TO OCTOBER 31, 1998.
(B) EXCLUSIVE OF SALES CHARGE.
(C) ANNUALIZED.
(D) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS (CONTINUED)
Six Months Ended
April 30, 2000 Year Ended October 31
--------------------------
CLASS C SHARES (Unaudited) 1999 1998(a)
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 12.77 10.25 12.50
Investment Operations:
Investment income--net .89 1.48 .25
Net realized and unrealized gain (loss)
on investments (2.16) 2.67 (2.33)
Total from Investment Operations (1.27) 4.15 (2.08)
Distributions:
Dividends from investment income--net (.76) (1.63) (.17)
Dividends from net realized gain on investments (.60) -- --
Total Distributions (1.36) (1.63) (.17)
Net asset value, end of period 10.14 12.77 10.25
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(B) (22.14)(c) 41.70 (16.64)(d)
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets 1.75(c) 1.75 1.75(c)
Ratio of net investment income
to average net assets 14.92(c) 11.56 6.29(c)
Decrease reflected in above expense ratios
due to undertakings by The Dreyfus Corporation .77(c) 1.26 2.26(c)
Portfolio Turnover Rate 52.73(d) 135.77 42.54(d)
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Net Assets, end of period ($ x 1,000) 1,456 1,269 844
(A) FROM JUNE 29, 1998 (COMMENCEMENT OF OPERATIONS) TO OCTOBER 31, 1998.
(B) EXCLUSIVE OF SALES CHARGE.
(C) ANNUALIZED.
(D) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
Six Months Ended
April 30, 2000 Year Ended October 31
--------------------------
CLASS T SHARES (Unaudited) 1999 1998(a)
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PER SHARE DATA ($):
Net asset value, beginning of period 12.78 10.26 12.50
Investment Operations:
Investment income--net 1.09 1.63 .26
Net realized and unrealized gain (loss)
on investments (2.34) 2.59 (2.32)
Total from Investment Operations (1.25) 4.22 (2.06)
Distributions:
Dividends from investment income--net (.78) (1.70) (.18)
Dividends from net realized gain on investments (.60) -- --
Total Distributions (1.38) (1.70) (.18)
Net asset value, end of period 10.15 12.78 10.26
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TOTAL RETURN (%)(B) (21.74)(c) 42.40 (16.44)(d)
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RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets 1.25(c) 1.25 1.25(c)
Ratio of net investment income
to average net assets 15.13(c) 12.49 6.82(c)
Decrease reflected in above expense ratios
due to undertakings by The Dreyfus Corporation .77(c) 1.26 2.26(c)
Portfolio Turnover Rate 52.73(d) 135.77 42.54(d)
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 348 862 835
(A) FROM JUNE 29, 1998 (COMMENCEMENT OF OPERATIONS) TO OCTOBER 31, 1998.
(B) EXCLUSIVE OF SALES CHARGE.
(C) ANNUALIZED.
(D) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus Premier High Yield Debt Plus Equity Fund (the "fund") is a separate
non-diversified series of Dreyfus Debt and Equity Funds (the "Company") which is
registered under the Investment Company Act of 1940, as amended (the "Act"), as
an open-end management investment company and operates as a series company
currently offering six series, including the fund. The fund's investment
objective is to maximize total return, consisting of capital appreciation and
current income. The Dreyfus Corporation (the "Manager") serves as the fund's
investment adviser. The Manager is a direct subsidiary of Mellon Bank, N.A.
("Mellon"), which is a wholly-owned subsidiary of Mellon Financial Corporation.
Effective March 22, 2000, Dreyfus Service Corporation ("DSC"), a wholly-owned
subsidiary of the Manager, became the distributor of the fund's shares. Prior to
March 22, 2000, Premier Mutual Fund Services, Inc. was the distributor. The fund
is authorized to issue an unlimited number of $.001 par value shares in the
following classes of shares: Class A, Class B, Class C and Class T shares. Class
A and Class T shares are subject to a sales charge imposed at the time of
purchase, Class B shares are subject to a contingent deferred sales charge
(" CDSC") imposed on Class B share redemptions made within six years of purchase
and Class C shares are subject to a CDSC imposed on Class C shares redeemed
within one year of purchase. Class B shares automatically convert to Class A
shares after six years. Other differences between the classes include the
services offered to and the expenses borne by each class and certain voting
rights.
The Company accounts separately for the assets, liabilities and operations of
each series. Expenses directly attributable to each series are charged to that
series' operations; expenses which are applicable to all series are allocated
among them on a pro rata basis.
As of April 30, 2000, MBC Investments Corp., an indirect subsidiary of Mellon
Financial Corporation, held the following shares:
Class A.....138,294 Class C......33,656
Class B.....134,554 Class T......34,267
The fund' s financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management estimates
and assumptions. Actual results could differ from those estimates.
(A) PORTFOLIO VALUATION: Investments in securities (excluding short-term
investments, other than U.S. Treasury Bills) are valued each business day by an
independent pricing service (" Service" ) approved by the Board of Trustees.
Investments for which quoted bid prices are readily available and are
representative of the bid side of the market in the judgment of the Service 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
(which constitute a majority of the portfolio securities) 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.
Securities for which there are no such valuations are valued at fair value as
determined in good faith under the direction of the Board of Trustees.
Short-term investments, excluding U.S. Treasury Bills, are carried at amortized
cost, which approximates value.
(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Dividend income is
recognized on the ex-dividend date and interest income, including, where
applicable, amortization of discount on investments, is recognized on the
accrual basis. Under the terms of the custody agreement, the fund received net
earnings credits of $2,491 during the period ended April 30, 2000 based on
available cash balances left on deposit. Income earned under this arrangement is
included in interest income.
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
(C) DIVIDENDS TO SHAREHOLDERS: It is the policy of the fund to declare and pay
dividends from investment income-net quarterly. Dividends from net realized
capital gain are normally declared and paid annually, but the fund may make
distributions on a more frequent basis to comply with the distribution
requirements of the Internal Revenue Code of 1986, as amended (the "Code"). To
the extent that net realized capital gain can be offset by capital loss
carryovers, if any, it is the policy of the fund not to distribute such gain.
(D) FEDERAL INCOME TAXES: It is the policy of the fund to continue to qualify as
a regulated investment company, if such qualification is in the best interests
of its shareholders, by complying with the applicable provisions of the Code,
and to make distributions of taxable income sufficient to relieve it from
substantially all Federal income and excise taxes.
NOTE 2--Bank Line of Credit:
The fund participates with other Dreyfus-managed funds in a $100 million
unsecured line of credit primarily to be utilized for temporary or emergency
purposes, including the financing of redemptions. Interest is charged to the
fund at rates which are related to the Federal Funds rate in effect at the time
of borrowings. During the period ended April 30, 2000, the fund did not borrow
under the line of credit.
NOTE 3--Management Fee and Other Transactions With Affiliates:
(A) Pursuant to a management agreement with the Manager, the management fee is
computed at the annual rate of .75 of 1% of the value of the fund's average
daily net assets and is payable monthly. The Manager has undertaken from
November 1, 1999 through October 31, 2000 to reduce the management fee paid by,
or reimburse such excess expenses of the fund, to the extent that the fund's
aggregate annual expenses, exclusive of taxes, brokerage, interest on
borrowings, Rule 12b-1 distribution fees and expenses, shareholder services fee
and extraordinary expenses, exceed an annual rate of .75 of 1% of the value of
the fund's average daily net assets. The expense reimburse
ment, pursuant to the undertaking, amounted to $39,793 during the period ended
April 30, 2000.
(B) Under the Distribution Plan (the "Plan") adopted pursuant to Rule 12b-1
under the Act, Class B and Class C shares pay the distributor for distributing
their shares at an annual rate of .75 of 1% of the value of their average daily
net assets and Class T shares pay the distributor at the annual rate of .25 of
1% of the value of the average daily net assets of Class T shares. During the
period ended April 30, 2000, Class B, Class C and Class T shares were charged
$21,164, $5,337 and $727, respectively, pursuant to the Plan, of which $4,133,
$1,212 and $106 for Class B, Class C and Class T shares, respectively, were paid
to DSC.
(C) Under the Shareholder Services Plan, Class A, Class B, Class C and Class T
shares pay the distributor at an annual rate of .25 of 1% of the value of their
average daily net assets for the provision of certain services. 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 (a securities
dealer, financial institution or other industry professional) in respect of
these services. The distributor determines the amounts to be paid to Service
Agents. During the period ended April 30, 2000, Class A, Class B, Class C and
Class T shares were charged $3,386, $7,055, $1,779 and $727, respectively,
pursuant to the Shareholder Services Plan, of which $563, $1,378, $404 and $106
for Class A, Class B, Class C and Class T shares, respectively, were paid to
DSC.
The fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of the
Manager, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the fund. During the period
ended April 30, 2000, the fund was charged $666 pursuant to the transfer agency
agreement.
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
The fund compensates Mellon under a custody agreement for providing custodial
services for the fund. During the period ended April 30, 2000, the fund was
charged $4,777 pursuant to the custody agreement.
(D) Each trustee who is not an "affiliated person" as defined in the Act
receives from the Company an annual fee of $2,500 and an attendance fee of $500
per meeting. The Chairman of the Board receives an additional 25% of such
compensation.
NOTE 4--Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding
short-term securities, during the period ended April 30, 2000, amounted to
$4,851,467 and $5,158,637, respectively.
At April 30, 2000, accumulated net unrealized depreciation on investments was
$2,771,103, consisting of $499,024 gross unrealized appreciation and $3,270,127
gross unrealized depreciation.
At April 30, 2000, the cost of investments for Federal income tax purposes was
substantially the same as the cost for financial reporting purposes (see the
Statement of Investments).
For More Information
Dreyfus Premier High Yield Debt Plus Equity Fund
200 Park Avenue
New York, NY 10166
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Custodian
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
Transfer Agent & Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166
To obtain information:
BY TELEPHONE Call your financial representative or 1-800-554-4611
BY MAIL Write to: The Dreyfus Premier Family of Funds 144 Glenn Curtiss
Boulevard Uniondale, NY 11556-0144
(c) 2000 Dreyfus Service Corporation 046SA004
