Dreyfus Premier
High Yield
Securities Fund
ANNUAL REPORT October 31, 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 Fund Performance
8 Statement of Investments
15 Statement of Securities Sold Short
16 Statement of Assets and Liabilities
17 Statement of Operations
18 Statement of Changes in Net Assets
20 Financial Highlights
22 Notes to Financial Statements
28 Report of Independent Auditors
29 Important Tax Information
FOR MORE INFORMATION
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Back Cover
The Fund
Dreyfus Premier
High Yield Securities Fund
LETTER FROM THE PRESIDENT
Dear Shareholder:
This annual report for Dreyfus Premier High Yield Securities Fund covers the
12-month period from November 1, 1999 through October 31, 2000. Inside, you'll
find valuable information about how the fund was managed during the reporting
period, including a discussion with the fund's portfolio manager, Roger King.
Bond prices were mixed over the 12-month reporting period, with prices of U.S.
Treasury securities generally ending the period higher while prices of
investment-grade corporate bonds generally ended the period at modestly lower
levels than where they began. Within the high yield sector, performance
differences were significantly pronounced. The highest quality high yield issues
achieved slightly negative returns while the returns of lower quality high yield
bonds were more sharply negative. In addition, defaults significantly increased
in the lower end of the high yield market. More recently, most sectors of the
U.S. bond market have been affected by slowing economic growth. Also, the
moderating effects of the Federal Reserve Board's interest-rate hikes during the
first half of 2000 helped the Fed to achieve its goal of slowing the U.S.
economy. Other factors such as higher energy prices and a weak euro also served
to slow economic growth.
In general, the overall investment environment that prevailed in the second half
of the 1990s had provided returns well above their historical averages,
establishing unrealistic expectations for some investors. We believe that as the
risks of the stock market have become more apparent recently, the relative
stability and income potential of bonds can make them an attractive investment
as part of a well-balanced portfolio.
For more information about the economy and financial markets, we encourage you
to visit the Market Commentary section of our website at www.dreyfus.com. Or, to
speak with a Dreyfus customer service representative, call us at 1-800-782-6620.
Thank you for investing in Dreyfus Premier High Yield Securities Fund.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
November 15, 2000
DISCUSSION OF FUND PERFORMANCE
Roger King, Portfolio Manager
How did Dreyfus Premier High Yield Securities Fund perform relative to its
benchmark?
For the 12-month period ended October 31, 2000, the fund's Class A shares
produced a total return of -12.19%. The public offering of the fund's Class B, C
and T shares commenced on March 1, 2000. From March 1, 2000 through October 31,
2000, the fund' s Class B, C and T shares produced total returns of -18.77%,
-18.90% and -18.38 %, respectively.(1) This compares to a -1.68% total return
for the fund's benchmark, the Merrill Lynch High Yield Master II Index, for the
12-month reporting period and a -3.36% total return for the nine-month
period.(2)
We attribute the fund' s weak absolute and relative performance to several
factors. First, on an absolute basis returns suffered generally from ongoing
market deterioration as a result of adverse investor sentiment and a subsequent
reduction of investment activities in the high yield bond market. Investors
apparently believed that alternatives other than high yield bonds offered better
opportunities with fewer risks. This factor is reflected in the negative return
for the fund's benchmark. On a relative basis, the fund's investments have been
concentrated in lower quality high yield bonds, a sector of the high yield
market that experienced more severe price declines than did the market as a
whole, or higher quality sectors of the market. To illustrate, the CCC-rated
portion of the Merrill Lynch High Yield Master II Index returned -8.74% for the
12-month and -11.63% for the nine-month reporting periods ended October 31,
2000. Also, the fund was overweighted in telecommunications issues, a sector
that has underperformed the high yield market. Finally, the fund owned several
holdings that defaulted, most notably Heilig Meyer, Poland Telecommunications
and Fine Air.
What is the fund's investment approach?
The fund seeks to maximize total return, consisting of capital appreciation and
current income. To do so, we invest in high yield fixed-income The Fun
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
securities, including convertibles, preferred stocks and warrants. Issuers of
below investment-grade securities may be in early stages of development or may
have highly leveraged balance sheets. To attract buyers and compensate them for
assuming greater risks, the issuer must offer higher interest rates than those
offered by more established companies.
In making our investment decisions, we review the securities issued by a wide
range of firms, including new companies, companies breaking into new industries,
and companies that, while fundamentally sound, have experienced financial
difficulty. Our approach to selecting individual issues is based on intensive
credit analysis -- our projection of each issuer's ability to repay its debt. We
attempt to add balance to our portfolio by purchasing the securities of more
established companies, which generally tend to operate in more stable markets
with relatively predictable consumer demand.
In each case, our emphasis is on uncovering out-of-favor companies that we
believe are undervalued. We search for likely changes in ownership, management,
or corporate strategy -- events that could lead the market to discover the value
we have seen and create the potential for price appreciation. Historically,
seeking out and investing in such out-of-favor companies has increased the
fund's total return potential, but it also has resulted in greater volatility of
returns and is a contributing factor in the fund's relative underperformance
during this reporting period.
What other factors influenced the fund's performance?
The past 12 months have been exceptionally difficult for the high yield bond
market.
In a series of steps dating back to the near collapse of a leading hedge fund in
1998, many institutional investors have reduced their high yield market
activities. With less activity in the market, liquidity -- the ability to buy
and sell securities quickly and easily -- declined substantially. Liquidity has
been an increasingly bigger problem as you move down the credit quality scale of
high yield investments. Periods of market illiquidity typically result in
reduced bond prices market wide.
Despite such an illiquid market, the months of June, July and August brought
what we believe would be the beginning of a market rally in high yield bonds
with the strongest credit ratings. However, high yield bonds with lower credit
ratings, which account for a significant portion of the fund's portfolio, did
not participate in this rally and continued to perform poorly.
September and October saw a return to the overall high yield market slump.
Concerns grew as to how the continuing investment needs of newly established,
fast growing companies in the telecommunications and technology industries could
be met in the absence of a vibrant high yield bond market. On a broader scale,
there are widespread concerns that the economy might be in the first stages of a
generalized credit contraction that could lead to continuing difficulties in the
high yield market.
What is the fund's current strategy?
We continue to focus on domestic high yield bonds selling at a deep discount to
their original price. The high yield market, in its current distressed state, is
trading at depressed levels that have not been seen in the past 10 years. As a
result, we believe that at these levels, high yield bonds may well offer
significant value. However, in our view, any recovery will require a strong
trigger event to spark renewed investor interest and confidence -- an event not
yet visible on the horizon. Of course, there is no guarantee if and when such a
recovery might occur.
November 15, 2000
(1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS PAID,
AND DOES NOT TAKE INTO CONSIDERATION THE MAXIMUM INITIAL SALES CHARGES IN THE
CASE OF CLASS A AND CLASS T SHARES, OR THE APPLICABLE CONTINGENT DEFERRED SALES
CHARGES IMPOSED ON REDEMPTIONS IN THE CASE OF CLASS B AND CLASS C SHARES. PAST
PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. SHARE PRICE, YIELD AND INVESTMENT
RETURN FLUCTUATE SUCH THAT UPON REDEMPTION, FUND SHARES MAY BE WORTH MORE OR
LESS THAT THEIR ORIGINAL COST.
(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
FUND PERFORMANCE
Comparison of change in value of $10,000 investment in Dreyfus Premier High
Yield Securities Fund Class A Shares and the Merrill Lynch High Yield Master II
Index
((+)) SOURCE: BLOOMBERG L.P.
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
THE ABOVE GRAPH COMPARES A $10,000 INVESTMENT MADE IN CLASS A SHARES OF DREYFUS
PREMIER HIGH YIELD SECURITIES FUND ON 3/25/96 (INCEPTION DATE) TO A $10,000
INVESTMENT MADE IN THE MERRILL LYNCH HIGH YIELD MASTER II INDEX ON THAT DATE.
FOR COMPARATIVE PURPOSES, THE VALUE OF THE INDEX ON 3/31/96 IS USED AS THE
BEGINNING VALUE ON 3/25/96.
ALL DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS ARE REINVESTED. ON MARCH 1, 2000,
THE FUND IMPLEMENTED A MULTI-CLASS STRUCTURE. SHARES OUTSTANDING ON MARCH 1,
2000 WERE RECLASSIFIED AS CLASS A SHARES. PERFORMANCE FOR CLASS B, CLASS C AND
CLASS T SHARES WILL VARY FROM THE PERFORMANCE OF CLASS A SHARES SHOWN ABOVE DUE
TO DIFFERENCES IN CHARGES AND EXPENSES.
THE FUND SEEKS TO ACHIEVE ITS OBJECTIVE BY INVESTING IN LOWER RATED FIXED-INCOME
SECURITIES, COMMONLY KNOWN AS "JUNK BONDS." THE FUND'S PERFORMANCE SHOWN IN THE
LINE GRAPH TAKES INTO ACCOUNT THE MAXIMUM INITIAL SALES CHARGE ON CLASS A SHARES
AND ALL OTHER APPLICABLE FEES AND EXPENSES. THE MERRILL LYNCH HIGH YIELD MASTER
II INDEX IS A MARKET CAPITALIZATION-WEIGHTED INDEX INCLUDING ALL DOMESTIC AND
YANKEE HIGH-YIELD BONDS WITH AT LEAST $100 MILLION PAR AMOUNT OUTSTANDING AND
GREATER THAN OR EQUAL TO ONE YEAR TO MATURITY. BOTH INTEREST AND PRICE CHANGES
FOR THE INDEX ARE CALCULATED DAILY BASED ON AN ACCRUED SCHEDULE AND TRADER
PRICING. THE INDEX DOES NOT TAKE INTO ACCOUNT CHARGES, FEES AND OTHER EXPENSES.
FURTHER INFORMATION RELATING TO FUND PERFORMANCE, INCLUDING EXPENSE
REIMBURSEMENTS, IF APPLICABLE, IS CONTAINED IN THE FINANCIAL HIGHLIGHTS SECTION
OF THE PROSPECTUS AND ELSEWHERE IN THIS REPORT.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Average Annual Total Returns AS OF 10/31/00
Inception From
Date 1 Year Inception
-----------------------------------------------------------------------------------------------------------------------------------
CLASS A SHARES
WITH MAXIMUM SALES CHARGE (5.75%) 3/25/96 (17.22%) 3.21%
WITHOUT SALES CHARGE 3/25/96 (12.19%) 4.54%
-----------------------------------------------------------------------------------------------------------------------------------
Aggregate Total Returns AS OF 10/31/00
Inception From
Date 1 Year Inception
-----------------------------------------------------------------------------------------------------------------------------------
CLASS B SHARES
WITH APPLICABLE REDEMPTION CHARGE ((+)) 3/1/00 -- (21.68%)
WITHOUT REDEMPTION 3/1/00 -- (18.77%)
CLASS C SHARES
WITH APPLICABLE REDEMPTION CHARGE ((+)(+)) 3/1/00 -- (19.62%)
WITHOUT REDEMPTION 3/1/00 -- (18.90%)
CLASS T SHARES
WITH APPLICABLE SALES CHARGE (4.5%) 3/1/00 -- (22.04%)
WITHOUT SALES CHARGE 3/1/00 -- (18.38%)
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
((+)) THE MAXIMUM CONTINGENT DEFERRED SALES CHARGE FOR CLASS B SHARES IS 4%.
AFTER SIX YEARS CLASS B SHARES CONVERT TO CLASS A SHARES.
((+)(+)) THE MAXIMUM CONTINGENT DEFERRED SALES CHARGE FOR CLASS C SHARES IS 1%
FOR SHARES REDEEMED WITHIN ONE YEAR OF THE DATE OF THIS PURCHASE.
</TABLE>
The Fund
<TABLE>
<CAPTION>
<S> <C> <C>
October 31, 2000
STATEMENT OF INVESTMENTS
STATEMENT OF INVESTMENTS
Principal
BOND AND NOTES--72.9% Amount ($) Value ($)
-----------------------------------------------------------------------------------------------------------------------------------
AIRCRAFT & AEROSPACE--1.2%
Aircraft Lease Portfolio Securitisation 96-1,
Pass-Through Trust, Ctfs.,
Cl. D, 12.75%, 2006 859,787 791,004
Stellex Industries, Ser. B,
Sr. Sub. Notes, 9.5%, 2007 2,000,000 (a) 230,000
1,021,004
BROADCASTING--4.5%
Acme Intermediate Holdings/Finance, Ser. B,
Sr. Secured Discount Notes, 0/12%, 2005 1,200,000 (b) 810,000
Acme Television/Finance, Ser. B,
Sr. Discount Notes, 10.875%, 2004 1,100,000 1,039,500
CD Radio,
Sr. Discount Notes, 0/15%, 2007 4,000,000 (b) 2,140,000
3,989,500
BUSINESS SERVICES--.3%
U.S. Office Products,
Sr. Notes, 9.75%, 2008 2,000,000 240,000
CABLE TELEVISION--3.6%
Star Choice Communications,
Sr. Secured Notes, 13%, 2005 500,000 537,500
Supercanal Holdings,
Sr. Notes, 11.5%, 2005 2,000,000 (a,c) 812,500
UIH Australia/Pacific:
Ser. B, Sr. Discount Notes, 0/14%, 2006 1,380,000 (b) 1,207,500
Ser. D, Sr. Discount Notes, 0/14%, 2006 670,000 (b) 586,250
3,143,750
CHEMICALS--.1%
Trans-Resources, Ser. B,
Sr. Discount Notes, 0/12%, 2008 2,000,000 (b) 122,500
COMMERCIAL MORTGAGE PASS-THROUGH CTFS.--1.8%
Structured Asset Securities, REMIC:
Ser. Greenpoint 1996-A, Cl. B5, 8.33%, 2027 270,061 (c,d) 200,351
Ser. Greenpoint 1996-A, Cl. B6, 8.33%, 2027 238,345 (c,d) 72,050
Ser. 1996-CFL, Cl. H, 7.75%, 2028 1,750,000 (c) 1,344,870
1,617,271
CONSTRUCTION--3.8%
American Eco, Ser. B,
Sr. Notes, 9.625%, 2008 4,000,000 (a) 100,000
Principal
BOND AND NOTES (CONTINUED) Amount ($) Value ($)
----------------------------------------------------------------------------------------------------------------------------------
CONSTRUCTION (CONTINUED)
ICF Kaiser International,
Sr. Sub. Notes, 13%, 2003 9,023,000 (a) 3,214,444
3,314,444
CONSUMER--4.6%
Packaging Resources,
Sr. Notes, 13%, 2003 2,572,850 (a) 2,241,596
Syratech,
Sr. Notes, 11%, 2007 3,000,000 1,770,000
4,011,596
ENERGY--4.1%
Belden & Blake, Ser. B,
Sr. Sub. Notes, 9.875%, 2007 2,650,000 2,239,250
Petsec Energy, Ser. B,
Sr. Sub. Notes, 9.5%, 2007 2,600,000 (a) 1,378,000
3,617,250
ENTERTAINMENT--3.9%
American Skiing, Ser. B,
Sr. Sub. Notes, 12%, 2006 1,500,000 1,203,750
Booth Creek Ski Holdings, Ser. B,
Sr. Notes, 12.5%, 2007 3,000,000 2,265,000
3,468,750
FINANCIAL--2.2%
Resource America,
Sr. Notes, 12%, 2004 2,150,000 1,978,000
FOOD & BEVERAGES--.5%
CKE Restaurants,
Conv. Sub. Deb., 4.25%, 2004 1,000,000 465,000
GAMING--.4%
Jazz Casino,
Sr. Sub. Notes, 6.103%, 2009 2,059,869 (a,d) 337,102
METALS--1.3%
Metal Management,
Sr. Secured Notes, 12.75%, 2004 1,000,000 725,000
NSM Steel, Ser. B,
Sr. Sub. Mortgage Notes, 12.25%, 2008 (Units) 1,750,000 (a,c,e) 43,750
The Fund
STATEMENT OF INVESTMENTS (CONTINUED)
Principal
BOND AND NOTES (CONTINUED) Amount ($) Value ($)
----------------------------------------------------------------------------------------------------------------------------------
METALS (CONTINUED)
Northwestern Steel & Wire,
Sr. Notes, 9.5%, 2001 812,000 371,490
1,140,240
PUBLISHING--.9%
WAM ! NET,
Sr. Discount Notes, 0/13.25%, 2005 1,750,000 (b) 796,250
REAL ESTATE--1.9%
Meditrust,
Notes, 7.82%, 2003 2,000,000 (f) 1,650,000
RESIDENTIAL MORTGAGE PASS-THROUGH CTFS.--4.1%
Chase Mortgage Finance,
Ser. 1994-E, Cl. B6, 6.25%, 2010 322,999 (c) 108,878
Citicorp Mortgage Services,
REMIC, Ser. 1994-9, Cl. B2, 5.75%, 2009 363,395 (c) 119,993
GE Capital Mortgage Services, REMIC:
Ser. 1993-13, Cl. B5, 6%, 2008 354,059 (c) 119,789
Ser. 1994-15, Cl. B5, 6%, 2009 572,776 (c) 190,806
Ser. 1994-21, Cl. B5, 6.5%, 2009 595,384 (c) 203,051
Ser. 1996-10, Cl. B5, 6.75%, 2011 297,963 (c) 96,280
Ser. 1996-12, Cl. B5, 7.25%, 2011 349,987 (c) 115,496
Ser. 1996-14, Cl. 2B5, 7.25%, 2011 205,118 (c) 67,262
Ser. 1997-11, Cl. B4, 7%, 2027 728,394 (c) 609,842
MORSERV,
Ser. 1996-1, Cl. B5, 7%, 2011 395,235 (c) 141,626
Norwest Asset Securities:
Ser. 1996-8, Cl. B4, 7.5%, 2026 121,167 (c) 101,297
Ser. 1996-8, Cl. B5, 7.5%, 2026 180,581 (c) 60,645
Ser. 1997-11, Cl. B4, 7%, 2027 241,578 (c) 188,782
Ser. 1997-11, Cl. B5, 7%, 2027 364,203 (c) 113,814
Ser. 1997-15, Cl. B4, 6.75%, 2012 368,788 (c) 303,134
Ser. 1997-15, Cl. B5, 6.75%, 2012 221,068 (c) 67,518
Ser. 1997-16, Cl. B5, 6.75%, 2027 291,324 (c) 88,672
Prudential Home Mortgage Securities,
REMIC, Ser. 1996-7, Cl. B5, 6.75%, 2011 730,740 (c) 235,359
Residential Accredit Loans, REMIC:
Ser. 1997-QS6, Cl. B2, 7.5%, 2012 137,033 (c) 116,754
Ser. 1997-QS6, Cl. B3, 7.5%, 2012 275,779 (c) 91,180
Residential Funding Mortgage Securities I,
Ser. 1997-S15, Cl. B2, 7%, 2027 760,419 (c) 477,099
3,617,277
Principal
BOND AND NOTES (CONTINUED) Amount ($) Value ($)
-----------------------------------------------------------------------------------------------------------------------------------
SHIPPING--3.6%
American President Lines,
Sr. Notes, 7.125%, 2003 3,335,000 2,554,863
Holt Group,
Sr. Notes, 9.75%, 2006 4,500,000 613,125
3,167,988
TELECOMMUNICATION/CARRIERS--13.0%
Bestel,
Sr. Discount Notes, 0/12.75%, 2005 5,000,000 (b) 2,962,500
DTI Holdings, Ser. B,
Sr. Discount Notes, 0/12.5%, 2008 4,750,000 (b) 1,543,750
E. Spire Communications,
Sr. Discount Notes, 0/12.75%, 2006 3,550,000 (b) 1,437,750
FirstWorld Communications,
Sr. Discount Notes, 0/13%, 2008 4,500,000 (b) 900,000
MGC Communications, Ser. B,
Sr. Secured Notes, 13%, 2004 4,000,000 3,020,000
Northeast Optic Network,
Sr. Notes, 12.75%, 2008 2,000,000 1,470,000
Poland Telecom Finance, Ser. B,
Sr. Notes, 14%, 2007 6,750,000 (a) 101,250
11,435,250
TRANSPORTATION--8.5%
Fine Air Services,
Sr. Notes, 9.875%, 2008 5,246,875 (a) 2,012,500
Terminal Railroad Association,
First Mortgage, 4%, 2019 545,000 400,325
Union Pacific,
Sub. Deb, 5.5%, 2033 387,000 337,814
ValuJet,
Sr. Notes, 10.25%, 2001 5,050,000 4,721,750
7,472,389
WIRELESS COMMUNICATIONS--8.6%
American Mobile Satellite/AMSC Acquisition, Ser. B,
Sr. Notes, 12.25%, 2008 500,000 360,000
Comunicacion Celular,
Sr. Discount Notes, 14.125%, 2005 2,750,000 (c) 2,096,875
The Fund
STATEMENT OF INVESTMENTS (CONTINUED)
Principal
BOND AND NOTES (CONTINUED) Amount ($) Value ($)
-----------------------------------------------------------------------------------------------------------------------------------
WIRELESS COMMUNICATIONS (CONTINUED)
Ionica ,
Sr. Discount Notes, 0/15%, 2007 2,000,000 (a,b) 40,000
Occidente y Caribe Celular, Ser. B,
Sr. Discount Notes, 0/14%, 2004 3,910,000 (b) 2,746,775
OrbCommunications Global/Capital,
Sr. Notes, 14%, 2004 1,000,000 (a) 155,000
Telesystem International Wireless:
Ser. B, Sr. Discount Notes, 0/13.25%, 2007 1,400,000 (b) 833,000
Ser. C, Sr. Discount Notes, 0/10.5%, 2007 2,500,000 (b) 1,287,500
7,519,150
TOTAL BONDS AND NOTES
(cost $106,529,392) 64,124,711
------------------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS--1.7% Shares Value ($)
------------------------------------------------------------------------------------------------------------------------------------
AUTOMOTIVE--.0%
Glasstech (warrants) 2,000 (g) 1,000
BROADCASTING--.7%
Spanish Broadcasting System, Cl. A 64,200 (c,g) 597,863
CONSTRUCTION--.0%
FWT, Cl. A 93,333 (g) 18,667
OIL--.1%
Key Energy Services (warrants) 2,000 (g) 113,750
PAPER & PACKAGING--.0%
SF Holdings Group, Cl. C 370 (c,g) 1,850
PUBLISHING--.1%
WAM ! NET (warrants) 5,250 (c,g) 61,031
SUPERMARKETS--.0%
Electronic Retailing Systems International (warrants) 1,250 (g) 13
TELECOMMUNICATION/CARRIERS--.6%
Adelphia Business Solutions 6,060 (g) 37,875
Bestel (warrants) 5,000 (c,g) 55,000
DTI Holdings (warrants) 23,750 (c,g) 2,850
FirstWorld Communications (warrants) 5,500 (c,g) 82,500
MGC Communications 48,528 (c,g) 315,432
Poland Telecom Finance (warrants) 6,750 (c,g) 68
493,725
TRANSPORTATION--.0%
@Track Communications (warrants) 4,000 (c,g) 10,000
COMMON STOCKS (CONTINUED) Shares Value ($)
------------------------------------------------------------------------------------------------------------------------------------
WIRELESS COMMUNICATIONS--.2%
Comunicacion Celular (warrants) 1,000 c,g 15,125
Motient 7,660 g 92,877
Occidente y Caribe Celular (warrants) 7,640 c,g 115,555
223,557
TOTAL COMMON STOCKS
(cost $678,338) 1,521,456
------------------------------------------------------------------------------------------------------------------------------------
PREFERRED STOCKS--29.8
------------------------------------------------------------------------------------------------------------------------------------
BROADCASTING--13.1%
Granite Broadcasting,
Cum., $127.50 2,559 2,021,610
Paxson Communications:
Cum., $1,325 737 7,185,750
Cum. Conv., $975 246 (c) 2,324,700
11,532,060
CONSTRUCTION--.5%
FWT, Ser. A,
Cum., $.10 933,333 419,999
ENERGY--2.0%
Premcor USA,
Cum., $115 3,493 733,530
TNP Enterprises,
Cum., $145 (Units) 1,042 (c,e) 1,042,000
1,775,530
PAPER & PACKAGING--.9%
SF Holdings Group:
Cum., $1,375 37 (c) 203,500
Ser. B, Cum., $1,375 100 550,000
753,500
PUBLISHING--3.4%
Day International Group,
Cum., $122.50 4,213 2,949,100
TELECOMMUNICATION/CARRIERS--7.1%
Adelphia Business Solutions, Ser. B,
Cum., $128.75 1,464 592,920
The Fund
STATEMENT OF INVESTMENTS (CONTINUED)
PREFERRED STOCKS (CONTINUED) Shares Value ($)
------------------------------------------------------------------------------------------------------------------------------------
TELECOMMUNICATION/CARRIERS (CONTINUED)
XO Communications, Ser. B,
Cum., $135 7,517 5,675,335
6,268,255
WIRELESS COMMUNICATIONS--2.8%
Crown Castle International,
Cum., $127.50 2,489 2,487,755
TOTAL PREFERRED STOCKS
(cost $32,048,289) 26,186,199
------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $139,256,019) 104.4% 91,832,366
LIABILITIES, LESS CASH AND RECEIVABLES (4.4%) (3,910,424)
NET ASSETS 100.0% 87,921,942
(A) NON-INCOME PRODUCING--SECURITY IN DEFAULT.
(B) ZERO COUPON UNTIL A SPECIFIED DATE AT WHICH TIME THE STATED COUPON RATE BECOMES EFFECTIVE UNTIL MATURITY.
(C) 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 OCTOBER 31, 2000,
THESE SECURITIES AMOUNTED TO $13,015,147 OR 14.8% OF NET ASSETS.
(D) VARIABLE RATE SECURITY--INTEREST RATE SUBJECT TO PERIODIC CHANGE.
(E) WITH WARRANTS TO PURCHASE COMMON STOCK.
(F) REFLECTS DATE SECURITY CAN BE REDEEMED AT HOLDER'S OPTION; THE STATED
MATURITY IS 9/10/2026.
(G) NON-INCOME PRODUCING SECURITY.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
STATEMENT OF SECURITIES SOLD SHORT
October 31, 2000
COMMON STOCKS Shares Value ($)
--------------------------------------------------------------------------------
MGC Communications 36,000 234,000
(proceeds $1,537,500)
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF ASSETS AND LIABILITIES
October 31, 2000
Cost Value
--------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of Investments 139,256,019 91,832,36
Cash 64,035
Receivable from brokers for proceeds on securities sold short 1,537,500
Interest receivable 1,037,363
Receivable for investment securities sold 567,600
Receivable for shares of Beneficial Interest subscribed 5,800
Prepaid expenses and other assets 68,950
95,113,614
--------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 89,678
Bank loan payable--Note 2 6,300,000
Payable for shares of Beneficial Interest redeemed 440,168
Securities sold short, at value
(proceeds $1,537,500)--See Statement of Securities Sold Short 234,000
Interest payable--Note 2 71,577
Accrued expenses 56,249
7,191,672
--------------------------------------------------------------------------------
NET ASSETS ($) 87,921,942
--------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 159,679,235
Accumulated undistributed investment income--net 898,808
Accumulated net realized gain (loss) on investments (26,535,948)
Accumulated net unrealized appreciation (depreciation) on investments
and securities sold short--Note 4(b) (46,120,153)
--------------------------------------------------------------------------------
NET ASSETS ($) 87,921,942
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
NET ASSET VALUE PER SHARE
Class A Class B Class C Class T
------------------------------------------------------------------------------------------------------------------------------------
Net Assets ($) 82,488,450 4,723,770 584,633 125,089
Shares Outstanding 9,463,215 544,970 67,534 14,378
------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE ($) 8.72 8.67 8.66 8.70
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
STATEMENT OF OPERATIONS
Year Ended October 31, 2000
--------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INCOME:
Interest 14,050,513
Cash dividends 4,486,837
TOTAL INCOME 18,537,350
EXPENSES:
Management fee--Note 3(a) 818,539
Shareholder servicing costs--Note 3(c) 409,065
Interest expense--Note 2 165,531
Registration fees 52,197
Professional fees 29,452
Custodian fees--Note 3(c) 18,762
Distribution fees--Note 3(b) 15,037
Prospectus and shareholders' reports 13,889
Trustees' fees and expenses--Note 3(d) 10,525
Miscellaneous 14,481
TOTAL EXPENSES 1,547,478
INVESTMENT INCOME--NET 16,989,872
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments:
Long transactons (16,772,162)
Short sale transactions 1,765,768
NET REALIZED GAIN (LOSS) (15,006,394)
Net unrealized appreciation (depreciation) on investments
and securities sold short (14,844,593)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (29,850,987)
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (12,861,115)
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF CHANGES IN NET ASSETS
Year Ended October 31,
----------------------------------
2000(a,b) 1999
--------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 16,989,872 20,746,595
Net realized gain (loss) on investments (15,006,394) (4,228,924)
Net unrealized appreciation (depreciation)
on investments (14,844,593) 10,890,278
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS (12,861,115) 27,407,949
--------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net:
Class A shares (18,374,288) (20,916,521)
Class B shares (240,348) --
Class C shares (47,309) --
Class T shares (9,894) --
TOTAL DIVIDENDS (18,671,839) (20,916,521)
--------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS ($):
Net proceeds from shares sold:
Class A shares 44,120,477 92,722,277
Class B shares 6,238,850 --
Class C shares 1,170,867 --
Class T shares 158,984 --
Dividends reinvested:
Class A shares 10,589,264 14,009,373
Class B shares 120,441 --
Class C shares 15,926 --
Class T shares 2,808 --
Cost of shares redeemed:
Class A shares (84,077,533) (101,278,631)
Class B shares (691,340) --
Class C shares (450,611) --
Redemption fee 3,421 84,838
INCREASE (DECREASE) IN NET ASSETS FROM
BENEFICIAL INTEREST TRANSACTIONS (22,798,446) 5,537,857
TOTAL INCREASE (DECREASE) IN NET ASSETS (54,331,400) 12,029,285
-------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 142,253,342 130,224,057
END OF PERIOD 87,921,942 142,253,342
Undistributed investment income--net 898,808 2,492,516
(A) FROM MARCH 1, 2000 (COMMENCEMENT OF INITIAL OFFERING) TO OCTOBER 31, 2000,
FOR CLASS B, CLASS C AND CLASS T SHARES.
(B) ON MARCH 1, 2000, OUTSTANDING SHARES WERE RECLASSIFIED AS CLASS A SHARES.
SEE NOTES TO FINANCIAL STATEMENTS.
Year Ended October 31,
----------------------------------
2000(a,b) 1999
-------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
CLASS A
Shares sold 3,860,943 8,142,569
Shares issued for dividends reinvested 989,036 1,251,388
Shares redeemed (7,735,870) (8,814,025)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (2,885,891) 579,932
--------------------------------------------------------------------------------
CLASS B
Shares sold 605,966 --
Shares issued for dividends reinvested 12,506 --
Shares redeemed (73,502) --
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 544,970 --
--------------------------------------------------------------------------------
CLASS C
Shares sold 116,120 --
Shares issued for dividends reinvested 1,569 --
Shares redeemed (50,155) --
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 67,534 --
--------------------------------------------------------------------------------
CLASS T
Shares sold 14,125 --
Shares issued for dividends reinvested 253 --
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 14,378 --
(A) FROM MARCH 1, 2000 (COMMENCEMENT OF INITIAL OFFERING) TO OCTOBER 31, 2000,
FOR CLASS B, CLASS C AND CLASS T SHARES.
(B) ON MARCH 1, 2000, OUTSTANDING SHARES WERE RECLASSIFIED AS CLASS A SHARES.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
<TABLE>
<CAPTION>
<S> <C> <C> <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.
Year Ended October 31,
------------------------------------------------------------------
CLASS A SHARES 2000 1999 1998 1997 1996(a)
-----------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 11.52 11.06 14.76 13.83 12.50
Investment Operations:
Investment income--net 1.50 1.55 1.55 1.58 .69
Net realized and unrealized gain (loss)
on investments (2.69) .48 (3.69) 1.05 1.19
Total from Investment Operations (1.19) 2.03 (2.14) 2.63 1.88
Distributions:
Dividends from investment income--net (1.61) (1.58) (1.57) (1.56) (.55)
Dividends from net realized gain
on investments -- -- (.02) (.23) --
Total Distributions (1.61) (1.58) (1.59) (1.79) (.55)
Redemption fees added to paid-in capital .00(b,c) .01(c) .03(c) .09(c) --
Net asset value, end of period 8.72 11.52 11.06 14.76 13.83
-----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) (12.19)(d) 19.61 (16.28) 21.13 25.14(e)
-----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of operating expenses to
average net assets 1.08 1.08 1.06 .71 .02(e)
Ratio of interest expense to
average net assets .13 .14 .15 .34 .27(e)
Ratio of net investment income
to average net assets 13.48 13.50 10.87 11.72 11.33(e)
Decrease reflected in above
expense ratios due to undertakings
by The Dreyfus Corporation -- -- -- .43 1.55(e)
Portfolio Turnover Rate 21.89 41.72 117.34 252.50 233.62(f)
-----------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 82,488 142,253 130,224 120,818 24,857
(A) FROM MARCH 25, 1996 (COMMENCEMENT OF OPERATIONS) TO OCTOBER 31, 1996.
(B) AMOUNT REPRESENTS LESS THAN $.01 PER SHARE.
(C) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(D) EXCLUSIVE OF SALES CHARGE.
(E) ANNUALIZED.
(F) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Period Ended October 31, 2000 (a)
------------------------------------------
Class B Class C Class T
-----------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 11.94 11.94 11.94
Investment Operations:
Investment income--net 1.12 .98 1.20
Net realized and unrealized gain (loss)
on investments (3.19) (3.07) (3.23)
Total from Investment Operations (2.07) (2.09) (2.03)
Distributions:
Dividends from investment income--net (1.20) (1.19) (1.21)
Net asset value, end of period 8.67 8.66 8.70
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) (B,C) (27.96) (28.16) (27.38)
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of operating expenses to average net assets (c) 1.86 1.93 1.33
Ratio of interest expense to average net assets (c) .32 .28 .22
Ratio of net investment income
to average net assets (c) 11.79 11.79 12.25
Portfolio Turnover Rate 21.89 21.89 21.89
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 4,724 585 125
(A) FROM MARCH 1, 2000 (COMMENCEMENT OF INITIAL OFFERING) TO OCTOBER 31, 2000.
(B) EXCLUSIVE OF SALES CHARGE.
(C) ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
NOTES TO FINANCIAL STATEMENTS
NOTE 1--Significant Accounting Policies:
Dreyfus Premier High Yield Securities Fund (the "fund" ) is a separate
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 two 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.
On February 9, 2000, the Company's Board of Tustees approved, effective March 1,
2000, a change of the fund's name from "Dreyfus High Yield Securities Fund" to
" Dreyfus Premier High Yield Securities Fund" , coinciding with the fund
implementing a multiple class structure. Shares outstanding on March 1, 2000,
were reclassified as Class A shares and the fund added Class B, Class C and
Class T shares.
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 of
Beneficial Interest 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. 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.
The fund' s financial statements are prepared in accordance with accounting
principles generally accepted in the United States, 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 $250 during the period ended October 31, 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 (CONTINUED)
In November 2000 the American Institute of Certified Public Accountants (AICPA)
issued a revised version of the AICPA Audit and Accounting Guide for Investment
Companies (the Guide) . The revised version of the Guide is effective for
financial statements issued for fiscal years beginning after December 15, 2000.
One of the new provisions in the Guide requires investment companies to amortize
premiums on fixed income securities which the fund does not currently do. Upon
adoption, the fund will be required to record a cumulative effect adjustment to
conform with accounting principles generally accepted in the United States. The
effect of this adjustment will be to decrease net investment income with an
offsetting increase to unrealized appreciation (depreciation) on securities.
This adjustment will therefore, have no effect on the net assets of the fund. At
this time, the fund has not completed its analysis of the impact of this
accounting change.
(C) DIVIDENDS TO SHAREHOLDERS: It is the policy of the fund to declare and pay
dividends quarterly from investment income-net. Dividends from net realized
capital gain, if any, are normally declared and paid annually, but the fund may
make distributions on a more frequent basis to comply with the distribution
requirements of the Internal Revenue Code of 1986, as amended (the "Code"). To
the extent that net realized capital gain can be offset by capital loss
carryovers, it is the policy of the fund not to distribute such gain.
(D) FEDERAL INCOME TAXES: It is the policy of the fund to continue to qualify as
a regulated investment company, 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.
The fund has an unused capital loss carryover of approximately $26,532,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to October 31, 2000. If not
applied, $7,297,000 of the carryover expires in fiscal 2006, $4,229,000 expires
in fiscal 2007 and $15,006,000 expires in 2008.
During the period ended October 31, 2000, as a result of permanent book to tax
differences, the fund increased accumulated undistributed investment income-net
by $88,259 and decreased paid-in capital by the same amount. Net assets were not
effected by this reclassification.
NOTE 2--Bank Lines of Credit:
The fund may borrow up to $10 million for leveraging purposes under a short-term
unsecured line of credit and participates with other Dreyfus-managed funds in a
separate $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.
The average daily amount of borrowings outstanding under the leveraging
arrangement during the period ended October 31, 2000 was approximately
$2,451,500, with a related weighted average annualized interest rate of 6.75%.
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 .65 of 1% of the value of the fund's average
daily net assets and is payable monthly.
DSC retained $24,255 during the period ended October 31, 2000, from commissions
earned on sales of the fund's shares.
(B) Under the Distribution Plan (the "Plan") adopted pursuant to Rule 12b-1
under the Act, Class B, Class C and Class T shares pay the distributor for
distributing their shares at an annual rate of .75 of 1% of the value of the
average daily net assets of Class B and Class C shares and .25 of 1% of the
value of the average daily net assets of Class T shares. During the period ended
October 31, 2000, Class B, Class C and Class T shares were charged $12,735,
$2,106 and $196, respectively, pursuant to the Plan, all of which was paid to
DSC.
The Fund
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(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 October 31, 2000, Class A, Class B, Class C and
Class T shares was charged $309,679, $4,245, $702 and $197, respectively,
pursuant to the Shareholder Services Plan, of which $196,188, $4,245, $702 and
$197, 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 October 31, 2000, the fund was charged $69,373 pursuant to the transfer
agency agreement.
The fund compensates Mellon under a custody agreement for providing custodial
services for the fund. During the period ended October 31, 2000, the fund was
charged $18,762 pursuant to the custody agreement.
(D) Each Board member also serves as a Board member of other funds within the
Dreyfus complex (collectively, the "Fund Group"). Effective August 2, 2000, each
Board member who is not an "affiliated person" as defined in the Act receives an
annual fee of $45,000 and an attendance fee of $4,000 for each meeting attended
and $500 for telephone meetings. These fees are allocated among the funds in the
Fund Group. The Chairman of the Board receives an additional 25% of such
compensation. Prior to August 2, 2000, each Board member who was not an
" affiliated person" as defined in the Act received from the fund an annual fee
of $2,500 and an attendance fee of $500 per meeting. The Chairman of the Board
received an additional 25% of such compensation. Subject to the fund's Emeritus
Program Guidelines, Emeritus Board members, if any, receive 50% of the Company's
annual retainer fee and per meeting fee paid at the time the Board member
achieves emeritus status.
(E) Prior to March 1, 2000, a 1% redemption fee was charged and retained by the
fund on shares redeemed within six months following the date of issuance,
including redemptions through the use of the fund's exchange privilege. The plan
was terminated on March 1, 2000, when the fund added three additional classes of
shares.
NOTE 4--Securities Transactions:
(A) The following summarizes the aggregate amount of purchases and sales
(including paydowns) of investment securities and securities sold short,
excluding short-term securities, during the period ended October 31, 2000:
Purchases ($) Sales ($)
--------------------------------------------------------------------------------
Long transactions 27,099,898 44,508,237
Short sale transactions 147,420 3,450,688
TOTAL 27,247,318 47,958,925
The fund is engaged in short-selling which obligates the fund to replace the
security borrowed by purchasing the security at current market value. The fund
would 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.
The fund would realize a gain if the price of the security declines between
those dates. The fund's long security positions serve as collateral for the open
short positions. Securities sold short at October 31, 2000, and their related
market values and proceeds are set forth in the Statement of Securities Sold
Short.
(B) At October 31, 2000, accumulated net unrealized depreciation on investments
and securities sold short was $46,120,153, consisting of $3,379,674 gross
unrealized appreciation and $49,499,827 gross unrealized depreciation.
At October 31, 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).
The Fund
REPORT OF INDEPENDENT AUDITORS
Shareholders and Board of Trustees
Dreyfus Premier High Yield Securities Fund
We have audited the accompanying statement of assets and liabilities, including
the statements of investments and securities sold short, of Dreyfus Premier High
Yield Securities Fund (one of the funds constituting Dreyfus Debt and Equity
Funds) as of October 31, 2000 and the related statement of operations for the
year then ended, the statement of changes in net assets for each of the two
years in the period then ended, and financial highlights for each of the years
indicated therein. These financial statements and financial highlights are the
responsibility of the Fund' s management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights. Our procedures included
verification by examination of securities held by the custodian as of October
31, 2000 and confirmation of securities not held by the custodian by
correspondence with others. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Dreyfus Premier High Yield Securities Fund at October 31, 2000, the results of
its operations for the year then ended, the changes in its net assets for each
of the two years in the period then ended, and the financial highlights for each
of the indicated years, in conformity with accounting principles generally
accepted in the United States.
/s/Ernst & Young, LLP
New York, New York
December 12, 2000
IMPORTANT TAX INFORMATION (Unaudited)
In accordance with Federal tax law, the fund hereby designates 24.52% of the
ordinary dividends paid during the fiscal year ended October 31, 2000 as
qualifying for the corporate dividends received deduction. Shareholders will
receive notification in January 2001 of the percentage applicable to the
preparation of their 2000 income tax returns.
The Fund
For More Information
Dreyfus Premier High Yield Securities 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 043AR0010
