PREMIER MUNICIPAL BOND FUND
LETTER TO SHAREHOLDERS
Dear Shareholder:
We are pleased to provide you with this report on the Premier Municipal
Bond Fund. For its annual reporting period ended April 30, 1996, your Fund
produced a total return of 6.08% for Class A shares, 5.53% for Class B shares
and, since their inception on July 13, 1995, 1.25% for Class C shares.*
Income dividends exempt from Federal personal income taxes of approximately
$.856 for Class A shares, $.782 for Class B shares and $.597 for Class C
shares were paid.** This amounts to an annualized Federally tax-free
distribution rate per share of 5.89%, 5.63% and 5.36% for Class A, Class B
and Class C shares respectively.***
THE ECONOMY
Concerns that the economy was heading toward recession were eased by the
recent release of brighter-than-expected reports on employment and consumer
spending. Consequently, the Federal Reserve Board refrained from making any
further reductions in the Federal Funds rate; the last easing of this
benchmark interest rate occurred on January 31. In reaction to the more
optimistic economic news (and the related fears of a potential rekindling of
inflation), long-term interest rates as measured by 30-year Treasury bonds
have risen nearly one percentage point since February.
The rosier outlook for the economy was spearheaded by reports of large
gains in employment for two consecutive months (February and March).
Furthermore, personal income and expenditures data indicated that consumers
continued to spend, despite their present high level of installment credit.
Retail sales reports have correspondingly edged higher, confirming a modest
recovery in consumer spending from its year-end slump.
Supporting the growing consensus that the economy has picked up steam
were reports of slow but steady growth in the manufacturing sector. After
adjusting data for the 17-day General Motors strike, industrial output rose
modestly. New orders for durable goods, a closely watched indicator of future
hiring and production, also posted gains.
Despite the economy's apparent recovery from its year-end pause,
inflation has remained under control. Through March of this year, the
Consumer Price Index rose at an annual rate of 2.8%. There appear to be few
signs of inflationary pressure in the economy. Factories are running at a
relatively comfortable rate of capacity (82.5%), markedly below this
expansion's peak of 85.1% reached over a year ago. With major industries
trying to reduce inventories, there is little to suggest that product pricing
will surge upwards. Reflecting this absence of so-called pipeline
inflationary pressure, price increases at both the wholesale and production
levels of the economy remained similarly under control. We believe the
cautionary stance of the Federal Reserve regarding additional reductions in
interest rates combined with the fiscal restraint from reduced government
spending should serve as additional moderating forces against any resurgence
in inflation.
We are mindful, however, of a potential change in what has been a benign
inflation picture. The recent rise in oil prices, along with strength in
other commodity prices such as grain, is not to be dismissed lightly. While
they may be only aberrations of a temporary nature, they also could represent
early warning signs of a fundamental change in inflation which will be seen
later in the year.
MARKET ENVIRONMENT
The bond market has recently risen from its lows and is showing stable to
improving signs. This is in reaction to a favorable Producer Price Index
report and, to some extent, a better-than-expected "beige book" survey from
the Fed which showed "moderate" growth coupled with "generally subdued" price
increases. These reports, in conjunction with recently released declining
retail sales figures, are changing the mood of the market. This change in
market sentiment reflects a shift in the stance of the Federal Reserve. The
Fed, recently viewed as moving from easing to tightening, could be on hold
for a while. It is possible that the Fed might be slow to tighten after being
severely criticized in 1994 when they tightened preemptively, without overt
evidence of an inflation problem.
The municipal market has outperformed Treasuries lately, shaking off the
residual effects of the flat tax proposal. Although not at the level it saw
before the flat tax proposal, which was 81% of Treasuries for long insured
paper in early 1995, the 87% current level is an improvement from recent
readings which had been in the low 90s. The municipal market is also
benefiting from a forward supply calendar that needs a 40-50 basis point drop
in rates for 30% of it to be brought to market. These rate-sensitive issues
are usually refinancings of earlier bonds.
THE PORTFOLIO
The portfolio has stayed fully invested during this choppy time in the
market. We have been trying to improve call features on many holdings through
swap opportunities or new purchases in the primary market. Many of these
issues are insured and carry superior market liquidity should we need to
change our strategy later. At present, however, we remain comfortable with
our security selections. We are encouraged by the positive supply pattern
developing (mentioned above) and the upcoming June and July interest payment
and maturity dates. These are critical dates when investors potentially seek
to reinvest large sums of money into the municipal market.
Included in this report is a series of detailed statements about your
Series' holdings and its financial condition. We hope they are informative.
Please know that we greatly appreciate your continued confidence in the
Series and in The Dreyfus Corporation.
Sincerely,
[Richard J. Moynihan signature logo]
Richard J. Moynihan
Director, Municipal Portfolio Management
The Dreyfus Corporation
May 15, 1996
New York, N.Y.
* Total return includes reinvestment of dividends and any capital gains
paid, without taking into account the maximum initial sales charge in the
case of Class A shares or the applicable contingent deferred sales charge
imposed on redemptions in the case of Class B shares and Class C shares.
**Some income may be subject to the Federal Alternative Minimum Tax (AMT) for
certain shareholders.
*** Annualized distribution rate per share is based upon dividends per
share paid from net investment income during the period, divided by the
maximum offering price, in the case of Class A shares, or the net asset value
per share, in the case of Class B and Class C shares, at the end of the
period.
PREMIER MUNICIPAL BOND FUND APRIL 30, 1996
Exhibit A]
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN PREMIER MUNICIPAL BOND
FUND
CLASS A SHARES AND THE LEHMAN BROTHERS MUNICIPAL BOND INDEX
$19,929
Lehman Brothers
Municipal Bond Index*
Dollars
$18,528
[Exhibit A]
<TABLE>
Premier Municipal Bond Fund (Class A Shares)
*Source: Lehman Brothers
AVERAGE ANNUAL TOTAL RETURNS
CLASS A SHARES CLASS B SHARES
____________________________________________________________________ ______________________________________________________
% Return Reflecting
% Return Applicable Contingent
Reflecting % Return Deferred Sales
% Return Without Maximum Initial Assuming No Charge Upon
PERIOD ENDED 4/30/96 Sales Charge Sales Charge (4.5%) PERIOD ENDED 4/30/96 Redemption Redemption*
____________________ ________ _________________ ____________________ ______ __________
<S> <C> <C> <C> <C> <C>
1 Year 6.08% 1.33% 1 Year 5.53% 2.54%
5 Year 7.82 6.82 From Inception (1/15/93) 5.40 4.86
From Inception (11/26/86) 7.28 6.76
ACTUAL AGGREGATE TOTAL RETURNS
CLASS C SHARES
________________________________________________________________________
% Return Reflecting
Applicable Contingent
% Return Deferred Sales
Assuming No Charge Upon
PERIOD ENDED 4/30/96 Redemption Redemption**
___________________ ________ ____________
From Inception (7/13/95) 1.25% 0.28%
</TABLE>
Past performance is not predictive of future performance.
The above graph compares a $10,000 investment made in Class A shares of
Premier Municipal Bond Fund on 11/26/86 (Inception Date) to a $10,000
investment made in the Lehman Brothers Municipal Bond Index on that date. For
comparative purposes, the value of the Index on 11/30/86 is used as the
beginning value on 11/26/86. All dividends and capital gain distributions are
reinvested. Performance for Class B and Class C shares will vary from the
performance of Class A shares shown above due to differences in charges and
expenses.
The Fund invests primarily in municipal securities and its 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. Unlike the Fund,
the Lehman Brothers Municipal Bond Index is an unmanaged total return
performance benchmark for the long-term, investment-grade tax exempt bond
market, calculated by using municipal bonds selected to be representative of
the municipal market overall. The Index does not take into account charges,
fees and other expenses which can contribute to the Index potentially
outperforming the Fund. 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.
* Maximum contingent deferred sales charge for Class B shares is 3% and is
reduced to 0% after five years.
**Maximum contingent deferred sales charge for Class C shares is 1% within
one year of the date of purchase.
<TABLE>
PREMIER MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS APRIL 30, 1996
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS-99.7% AMOUNT VALUE
_______ _______
<S> <C> <C>
ALABAMA-.5%
Mobile Industrial Development Board, SWDR, Refunding
(Mobile Energy Services Co. Project) 6.95%, 1/1/2020.................... $ 2,500,000 $ 2,594,650
ARIZONA-1.1%
Chandler, Water and Sewer Revenue, Refunding 6.25%, 7/1/2013 (Insured; FGIC) 200,000 208,876
Maricopa County, Hospital District Number 1, Refunding
6.125%, 6/1/2015 (Insured; FGIC)........................................ 200,000 204,822
Maricopa County, School District Number 40 (Glendale Project of 1994)
7.75%, 7/1/2006 (Insured; FGIC)......................................... 1,000,000 1,217,490
Maricopa County Industrial Development Authority, Revenue, Refunding
(Baptist Hospital System) 5.75%, 9/1/2010 (Insured; MBIA)............... 500,000 507,655
Maricopa County Pollution Control Corp., PCR, Refunding
(Public Service Co. - Palo Verde) 6.375%, 8/15/2023..................... 1,000,000 932,260
Phoenix, Street and Highway User Revenue, Refunding
6.25%, 7/1/2011 (Insured; FGIC)......................................... 200,000 209,546
Phoenix Civic Improvement Corp., Wastewater System LR
6.125%, 7/1/2023 (Prerefunded 7/1/2003) (a)............................. 500,000 545,110
Pima County Unified School District Number 1 5.875%, 7/1/2014 (Insured; FGIC) 1,000,000 1,009,050
Tucson, Refunding 6.10%, 7/1/2012 (Insured; FGIC)........................... 250,000 259,325
University of Arizona, COP (Administrative and Parking Facility Project)
6%, 7/15/2023 (Insured; MBIA)........................................... 1,000,000 1,007,100
University of Arizona Medical Center Corp., HR, Refunding
6.25%, 7/1/2010 (Insured; MBIA)......................................... 200,000 207,946
CALIFORNIA-2.3%
Foothill/Eastern Transportation Corridor Agency, Toll Road Revenue 6%, 1/1/2034 9,175,000 8,562,018
Sacramento Cogeneration Authority, Cogeneration Project Revenue
(Procter & Gamble Project) 6.50%, 7/1/2021.............................. 4,200,000 4,237,002
COLORADO-12.1%
Arapahoe County Capital Improvement Trust Fund, Highway Revenue (E-470
Project):
Zero Coupon, 8/31/2005.................................................. 2,530,000 1,382,620
Zero Coupon, 8/31/2007.................................................. 4,000,000 1,889,120
7%, 8/31/2026........................................................... 7,000,000 7,320,180
Colorado, Board of Community Colleges and Occupational Education Revenue
(Red Rocks Community College Project) 6%, 11/1/2019 (Insured; AMBAC).... 300,000 303,570
Colorado Health Facilities Authority, Revenue, Refunding
(Vail Valley Medical Center Project) 6.50%, 1/15/2013................... 200,000 201,816
Dawson Ridge, Metropolitan District Number 1, Refunding:
Zero Coupon, 10/1/2017.................................................. 9,930,000 2,284,099
Zero Coupon, 10/1/2022.................................................. 47,535,000 7,758,663
PREMIER MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS (CONTINUED) APRIL 30, 1996
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
_______ _______
COLORADO (CONTINUED)
Denver City and County, Airport Revenue:
7.25%, 11/15/2023....................................................... $ 10,000,000 $ 10,528,800
7.50%, 11/15/2023....................................................... 11,775,000 12,913,525
5.60%, 11/15/2025 (Insured; MBIA)....................................... 5,000,000 4,656,250
7%, 11/15/2025.......................................................... 18,225,000 18,528,446
Eagle County, Cordillera Metropolitan District 6.65%, 12/1/2015............. 200,000 204,604
CONNECTICUT-.6%
Connecticut Development Authority, First Mortgage Gross Revenue
(Elim Park Baptist Home, Inc. Project) 9%, 12/1/2020.................... 3,000,000 3,189,450
DELAWARE-.7%
Delaware Housing Authority, Multi-Family Mortgage Revenue 7%, 5/1/2025...... 3,725,000 3,793,614
FLORIDA-3.6%
Jacksonville, District Water and Sewer Revenue 5%, 10/1/2020 (Insured; MBIA) 7,000,000 6,227,200
Palm Beach County, Solid Waste IDR:
(Okeelanta Power LP Project) 6.85%, 2/15/2021........................... 6,750,000 6,665,828
(Osceola Power LP) 6.95%, 1/1/2022...................................... 7,500,000 7,415,850
GEORGIA-1.7%
Atlanta, Airport Facilities Revenue 7.25%, 1/1/2017......................... 5,000,000 5,384,850
Georgia Municipal Electric Authority, Power Revenue, Refunding
5.50%, 1/1/2020 (Insured; FGIC)......................................... 4,250,000 4,078,682
ILLINOIS-7.4%
Chicago O'Hare International Airport, Special Facility Revenue
(American Airlines, Inc. Project) 7.875%, 11/1/2025..................... 6,000,000 6,461,880
Illinois Development Finance Authority, Revenue
(Community Rehabilitation Providers Facility):
8.75%, 3/1/2010....................................................... 6,800,000 7,277,360
8.50%, 9/1/2010....................................................... 4,535,000 4,796,443
8.25%, 8/1/2012....................................................... 4,180,000 4,344,985
Illinois Health Facilities Authority, Revenue
(Beverly Farm Foundation) 9.125%, 12/15/2015............................ 2,000,000 2,160,080
Robbins, RRR (Robbins Resource Recovery Partners):
9.25%, 10/15/2014....................................................... 13,500,000 9,450,000
9.25%, 10/15/2016....................................................... 10,000,000 7,000,000
INDIANA-5.3%
East Chicago, PCR, Refunding:
(Inland Steel Co., Project Number 10) 6.80%, 6/1/2013................... 10,000,000 10,018,000
(Inland Steel Co., Project Number 11) 7.125%, 6/1/2007.................. 3,000,000 3,059,820
Indiana Development Finance Authority, PCR, Refunding
(Inland Steel Co., Project Number 12) 6.85%, 12/1/2012.................. 4,000,000 3,939,040
PREMIER MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS (CONTINUED) APRIL 30, 1996
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
_______ _______
INDIANA (CONTINUED)
Indianapolis Airport Authority, Special Facilities Revenue:
(Federal Express Corp. Project) 7.10%, 1/15/2017........................ $ 7,500,000 $ 7,915,725
(United Airlines, Inc. Project) 6.50%, 11/15/2031....................... 5,250,000 5,157,705
KENTUCKY-1.9%
Louisville and Jefferson County Regional Airport Authority, Airport System Revenue
(Louisville International Airport):
5.50%, 7/1/2016 (Insured; MBIA) (b)................................... 4,000,000 3,747,480
5.625%, 7/1/2025 (Insured; MBIA)...................................... 4,000,000 3,744,720
Perry County, SWDR (TJ International Project) 7%, 6/1/2024.................. 3,500,000 3,545,115
LOUISIANA-4.5%
Louisiana Housing Finance Agency, MFHR, Refunding
(LaBelle Projects) 9.75%, 10/1/2020..................................... 4,300,000 4,339,517
Louisiana Public Facilities Authority, Revenue
(Student Loan) 7%, 9/1/2006............................................. 3,000,000 3,151,080
Parish of West Feliciana, PCR:
(Gulf States Utilities - II) 7.70%, 12/1/2014........................... 10,000,000 10,753,900
(Gulf States Utilities - III) 7.70%, 12/1/2014.......................... 6,500,000 6,990,035
MASSACHUSETTS-2.0%
Massachusetts Industrial Finance Agency, Water Treatment Revenue
(American Hingham) 6.95%, 12/1/2035..................................... 2,640,000 2,650,190
Massachusetts Water Resource Authority:
5%, 12/1/2016 (Insured; MBIA)........................................... 5,000,000 4,503,200
5%, 12/1/2025 (Insured; MBIA)........................................... 5,000,000 4,351,650
MICHIGAN-1.2%
Wayne Charter County, Special Airport Facilities Revenue, Refunding
(Northwest Airlines, Inc.) 6.75%, 12/1/2015............................. 5,000,000 4,995,850
Wayne County Building Authority 8%, 3/1/2017 (Prerefunded 3/1/2002) (a)..... 1,500,000 1,754,760
NEVADA-2.4%
Clark County, IDR (Southwest Gas Corp.) 7.50%, 9/1/2032..................... 13,000,000 13,780,260
NEW JERSEY-7.3%
Camden County Pollution Control Financing Authority, Solid Waste RRR
7.50%, 12/1/2010........................................................ 2,000,000 2,015,400
New Jersey Economic Development Authority, First Mortgage Gross Revenue
(The Evergreens) 9.25%, 10/1/2022....................................... 15,000,000 16,240,350
New Jersey Sports and Exposition Authority, Revenue, Refunding
(Monmouth Park) 8%, 1/1/2025............................................ 4,000,000 4,288,800
New Jersey Transportation Trust Fund Authority, Refunding
(Transportation System) 5%, 6/15/2015 (Insured; MBIA)................... 10,000,000 9,152,400
PREMIER MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS (CONTINUED) APRIL 30, 1996
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
_______ _______
NEW JERSEY (CONTINUED)
Union County Utilities Authority, Solid Waste Revenue 7.20%, 6/15/2014...... $ 9,500,000 $ 9,662,735
NEW MEXICO-.7%
Las Cruces, Revenue 5.50%, 12/1/2015 (Insured; MBIA)........................ 4,250,000 4,004,520
NEW YORK-12.9%
New York City:
8%, 6/1/2000............................................................ 2,200,000 2,481,020
7.50%, 2/1/2001......................................................... 5,000,000 5,444,200
7.10%, 2/1/2009......................................................... 5,000,000 5,278,250
7%, 2/1/2020............................................................ 10,000,000 10,394,900
6.625%, 2/15/2025....................................................... 7,000,000 7,031,220
New York State Dormitory Authority, Revenue:
Department of Health 5.50%, 7/1/2025.................................... 6,000,000 5,336,820
Mental Health Services Facilities Improvement 5.125%, 8/15/2021 (Insured; MBIA) 4,750,000 4,260,417
New York State Energy Research and Development Authority,
Electric Facilities Revenue (Long Island Lighting Co.):
7.15%, 9/1/2019....................................................... 3,650,000 3,713,327
7.15%, 6/1/2020....................................................... 4,000,000 4,069,400
7.15%, 12/1/2020...................................................... 5,000,000 5,086,750
7.15%, 2/1/2022....................................................... 7,500,000 7,630,125
New York State Housing Finance Agency, Service Contract Obligation Revenue
7.30%, 3/15/2021 (Prerefunded 9/15/2001) (a)............................ 5,000,000 5,700,750
New York State Local Government Assistance Corp.
7%, 4/1/2016 (Prerefunded 4/1/2001) (a)................................. 5,500,000 6,164,235
NORTH CAROLINA-1.7%
Martin County Industrial Facilities and Pollution Control Financing Authority,
SWDR (Weyerhaeuser Co.) 6.80%, 5/1/2024................................. 2,000,000 2,117,180
North Carolina Eastern Municipal Power Agency, Power System Revenue, Refunding
7%, 1/1/2013............................................................ 3,500,000 3,810,940
North Carolina Municipal Power Agency Number 1, Catawba Electric Revenue,
Refunding 5.375%, 1/1/2020 (Insured; AMBAC)............................. 4,000,000 3,721,560
OREGON-.2%
Clackamas County, School District Number 115 6.15%, 6/1/2014 (Insured; AMBAC) 200,000 208,142
Oregon, Department of Transportation Revenue
(Regional Light Rail Fund - Westside Project) 6.25%, 6/1/2009 (Insured; MBIA) 200,000 213,798
Oregon Health Housing Educational and Cultural Facilities Authority,
Refunding
(Lewis and Clark College Project) 6.125%, 10/1/2024 (Insured; MBIA)..... 200,000 205,570
Oregon Housing and Community Services Department, Mortgage Revenue
(Single Family Mortgage Program) 6.20%, 7/1/2015........................ 200,000 200,618
PREMIER MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS (CONTINUED) APRIL 30, 1996
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
_______ _______
OREGON (CONTINUED)
Portland, Sewer System Revenue 6.25%, 6/1/2015.............................. $ 300,000 $ 307,077
Tualatin Valley Water District, Water Revenue 6%, 6/1/2013.................. 200,000 206,634
PENNSYLVANIA-7.9%
Beaver County Industrial Development Authority, PCR, Refunding 7.75%, 7/15/2025 6,000,000 6,193,980
Blair County Hospital Authority, Revenue (Altoona Hospital)
7.81%, 7/1/2013 (Insured; AMBAC) (c).................................... 5,000,000 5,354,650
Lancaster County Hospital Authority, Revenue (Health Center - United Church
Homes Project) 9.125%, 10/1/2014 (Prerefunded 10/1/1999) (a)............ 1,465,000 1,696,675
Lehigh County General Purpose Authority, Revenue (Wiley House):
8.75%, 11/1/2014........................................................ 2,000,000 2,062,140
9.50%, 11/1/2016........................................................ 3,000,000 3,207,150
Montgomery County Higher Education and Health Authority, First Mortgage Revenue
(AHF/Montgomery, Inc. Project) 10.50%, 9/1/2020......................... 3,500,000 3,788,715
Pennsylvania Convention Center Authority, Revenue, Refunding 6.70%, 9/1/2014 8,125,000 8,535,150
Pennsylvania Intergovernmental Cooperative Authority, Special Tax Revenue
(Philadelphia Funding Program) 6.80%, 6/15/2022 (Prerefunded 6/15/2002) (a) 5,500,000 6,093,065
Philadelphia, Water and Sewer Revenue 7.35%, 9/1/2004....................... 4,950,000 5,486,135
Philadelphia Hospital and Higher Education Facility Authority, HR
(Graduate Health Systems) 7.25%, 7/1/2018............................... 1,850,000 1,862,173
RHODE ISLAND-.5%
Providence, Special Obligation Tax Increment 6.65%, 6/1/2016 (d)............ 3,000,000 2,985,300
SOUTH CAROLINA-.7%
Darlington County, IDR (Sunoco Products Co. Project) 6%, 4/1/2026........... 4,000,000 3,881,440
TEXAS-9.4%
Alliance Airport Authority, Special Facilities Revenue:
(American Airlines, Inc. Project) 7%, 12/1/2011......................... 10,700,000 11,527,859
(Federal Express Corp. Project) 6.375%, 4/1/2021........................ 5,000,000 4,932,150
Dallas - Fort Worth International Airport Facility Improvement Corp., Revenue:
(American Airlines, Inc.) 7.50%, 11/1/2025.............................. 8,000,000 8,502,960
(Delta Airlines, Inc.) 7.125%, 11/1/2026................................ 4,200,000 4,344,858
Gulf Coast Waste Disposal Authority, Revenue
(Champion International Corp.) 7.45%, 5/1/2026.......................... 7,000,000 7,515,480
Rio Grande City Consolidated Independent School District, Public Facilities Corp., LR
6.75%, 7/15/2010........................................................ 6,000,000 6,054,000
Texas Public Property Finance Corp., Revenue (Mental Health and Retardation Center)
8.20%, 10/1/2012 (Prerefunded 10/1/2002) (a)............................ 8,585,000 9,980,578
PREMIER MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS (CONTINUED) APRIL 30, 1996
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
_______ _______
UTAH-3.7%
Carbon County, SWDR, Refunding:
(East Carbon Development Corp.) 9%, 7/1/2012............................ $ 4,000,000 $ 4,187,760
(Laidlaw Inc./ECDC Project) 7.50, 2/1/2010.............................. 3,300,000 3,608,220
(Sunnyside Cogeneration) 9.25%, 7/1/2018................................ 15,000,000 13,358,850
VIRGINIA-1.5%
Chesapeake Bay Bridge and Tunnel Commission, District Revenue, Refunding
(General Resolution) 5%, 7/1/2022 (Insured; MBIA)....................... 3,355,000 2,956,728
Upper Occoquan Sewer Authority, Regional Sewer Revenue
5.15%, 7/1/2020 (Insured; MBIA)......................................... 6,000,000 5,456,100
WEST VIRGINIA-1.8%
Upshur County, SWDR (TJ International Project) 7%, 7/15/2025................ 7,000,000 7,096,600
West Virginia Parkways Economic Development and Tourism Authority
5.831%, 5/16/2019 (Insured; FGIC)....................................... 3,000,000 2,900,760
WYOMING-.3%
Sweetwater County, SWDR (FMC Corp. Project) 7%, 6/1/2024.................... 1,825,000 1,896,795
U.S. RELATED-3.8%
Puerto Rico Commonwealth:
5.40%, 7/1/2025......................................................... 5,000,000 4,528,350
Refunding:
6.25%, 7/1/2013 (Insured; MBIA)....................................... 3,000,000 3,238,950
6%, 7/1/2014.......................................................... 400,000 394,524
Puerto Rico Commonwealth Aqueduct and Sewer Authority, Revenue, Refunding
6.25%, 7/1/2013......................................................... 8,000,000 8,347,360
Puerto Rico Commonwealth Highway and Transportation Authority, Highway
Revenue
5%, 7/1/2036............................................................ 5,000,000 4,188,300
Puerto Rico Electric Power Authority, Power Revenue 6.25%, 7/1/2017......... 520,000 523,411
__________
TOTAL LONG-TERM MUNICIPAL INVESTMENTS (cost $551,307,254)................... $561,953,116
============
SHORT-TERM MUNICIPAL INVESTMENT-.3%
CONNECTICUT;
Connecticut Development Authority, Health Care Revenue, VRDN
(Corp. Independent Living Project) 4.05% (LOC; Credit Commercial De
France) (e,f)
(cost $1,500,000)....................................................... $ 1,500,000 $ 1,500,000
============
TOTAL INVESTMENTS-100.0% (cost $552,807,254)................................ $563,453,116
============
</TABLE>
<TABLE>
PREMIER MUNICIPAL BOND FUND
SUMMARY OF ABBREVIATIONS
<S> <C> <C> <C>
AMBAC American Municipal Bond Assurance Corporation MBIA Municipal Bond Investors Assurance
COP Certificate of Participation Insurance Corporation
FGIC Financial Guaranty Insurance Company MFHR Multi-Family Housing Revenue
HR Hospital Revenue PCR Pollution Control Revenue
IDR Industrial Development Revenue RRR Resources Recovery Revenue
LOC Letter of Credit SWDR Solid Waste Disposal Revenue
LR Lease Revenue VRDN Variable Rate Demand Notes
</TABLE>
<TABLE>
SUMMARY OF COMBINED RATINGS (UNAUDITED)
FITCH (G) OR MOODY'S OR STANDARD & POOR'S PERCENTAGE OF VALUE
_____ _____ ___________________ ____________________
<S> <C> <C> <C>
AAA Aaa AAA 20.4%
A A A 11.5
BBB Baa BBB 33.5
BB Ba BB 11.8
F-1+ & F-1 MIGI, VMIG1 & P1 SP1 & A1 .3
Not Rated (h) Not Rated (h) Not Rated (h) 22.5
______
100.0%
========
</TABLE>
NOTES TO STATEMENT OF INVESTMENTS:
(a) Bonds which are prerefunded are collateralized by U.S. Government
securities which are held in escrow and are used to pay principal and
interest on the municipal issue and to retire the bonds in full at the
earliest refunding date.
(b) Wholly held by the custodian in a segregated account as collateral
for a delayed - delivery security.
(c) Inverse floater security - the interest rate is subject to change
periodically.
(d) Purchased on a delayed - delivery basis.
(e) Securities payable on demand. The interest rate, which is subject to
change, is based on bank prime rates or an index of market interest
rates.
(f) Secured by letters of credit.
(g) Fitch currently provides creditworthiness information for a limited
number of investments.
(h) Securities which, while not rated by Fitch, Moody's or Standard &
Poor's, have been determined by the Manager to be of comparable quality
to those rated securities in which the Fund may invest.
See notes to financial statements.
<TABLE>
PREMIER MUNICIPAL BOND FUND
STATEMENT OF ASSETS AND LIABILITIES APRIL 30, 1996
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $552,807,254)-see statement..................................... $563,453,116
Cash.................................................................... 9,318,606
Interest receivable..................................................... 11,694,467
Receivable for shares of Beneficial Interest subscribed................. 731,877
Prepaid expenses........................................................ 33,824
__________
585,231,890
LIABILITIES:
Due to The Dreyfus Corporation.......................................... $ 264,307
Due to Distributor...................................................... 164,314
Payable for investment securities purchased............................. 3,023,829
Payable for shares of Beneficial Interest redeemed...................... 420,163
Accrued expenses........................................................ 44,071 3,916,684
__________ __________
NET ASSETS.................................................................. $581,315,206
============
REPRESENTED BY:
Paid-in capital......................................................... $575,557,814
Accumulated net realized (loss) on investments.......................... (4,888,470)
Accumulated net unrealized appreciation on investments-Note 3........... 10,645,862
__________
NET ASSETS at value......................................................... $581,315,206
============
Shares of Beneficial Interest outstanding:
Class A Shares
(unlimited number of $.001 par value shares authorized)............... 34,222,662
==========
Class B Shares
(unlimited number of $.001 par value shares authorized)............... 7,718,454
=========
Class C Shares
(unlimited number of $.001 par value shares authorized)............... 24,567
==========
NET ASSET VALUE per share:
Class A Shares
($474,043,699 / 34,222,662 shares).................................... $13.85
======
Class B Shares
($106,930,854 / 7,718,454 shares)..................................... $13.85
======
Class C Shares
($340,653 / 24,567 shares)............................................ $13.87
======
See note to financial statements.
</TABLE>
<TABLE>
PREMIER MUNICIPAL BOND FUND
STATEMENT OF OPERATIONS YEAR ENDED APRIL 30, 1996
<S> <C> <C>
INVESTMENT INCOME:
INTEREST INCOME......................................................... $41,522,938
EXPENSES:
Management fee-Note 2(a).............................................. $ 3,302,301
Shareholder servicing costs-Note 2(c)................................. 1,887,523
Distribution fees-Note 2(b)........................................... 521,341
Professional fees..................................................... 137,865
Custodian fees........................................................ 64,051
Registration fees..................................................... 47,158
Prospectus and shareholders' reports.................................. 38,434
Trustees' fees and expenses-Note 2(d)................................. 36,137
Miscellaneous......................................................... 36,062
____________
TOTAL EXPENSES.................................................. 6,070,872
_________
INVESTMENT INCOME-NET........................................... 35,452,066
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments-Note 3................................. $ 13,702,073
Net unrealized (depreciation) on investments............................ (13,168,792)
____________
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS................. 533,281
___________
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $35,985,347
============
See notes to financial statements.
</TABLE>
<TABLE>
PREMIER MUNICIPAL BOND FUND
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED APRIL 30,
__________________________________
1995 1996
_____________ _____________
<S> <C> <C>
OPERATIONS:
Investment income-net.................................................. $ 37,110,138 $ 35,452,066
Net realized gain (loss) on investments................................. (17,077,147) 13,702,073
Net unrealized appreciation (depreciation) on investments for the year.. 17,971,750 (13,168,792)
____________ ____________
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.............. 38,004,741 35,985,347
____________ ____________
DIVIDENDS TO SHAREHOLDERS FROM;
Investment income-net:
Class A shares........................................................ (31,608,832) (29,748,887)
Class B shares........................................................ (5,501,306) (5,700,103)
Class C shares........................................................ -- (3,076)
____________ ____________
TOTAL DIVIDENDS................................................... (37,110,138) (35,452,066)
____________ ____________
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold:
Class A shares........................................................ 30,432,598 40,674,840
Class B shares........................................................ 14,763,131 19,195,766
Class C shares........................................................ -- 359,668
Dividends reinvested:
Class A shares........................................................ 18,464,043 17,177,404
Class B shares........................................................ 3,214,657 3,289,792
Class C shares........................................................ -- 2,003
Cost of shares redeemed:
Class A shares........................................................ (99,967,298) (80,027,504)
Class B shares........................................................ (14,454,418) (14,906,844)
Class C shares........................................................ -- (10,150)
____________ ____________
(DECREASE) IN NET ASSETS FROM BENEFICIAL INTEREST TRANSACTIONS.... (47,547,287) (14,245,025)
____________ ____________
TOTAL (DECREASE) IN NET ASSETS.................................. (46,652,684) (13,711,744)
NET ASSETS:
Beginning of year....................................................... 641,679,634 595,026,950
____________ ____________
End of year............................................................. $595,026,950 $581,315,206
============ ==============
</TABLE>
<TABLE>
SHARES
________________________________________________________________________________________
CLASS A CLASS B CLASS C
______________________________ __________________________________ _______
YEAR ENDED APRIL 30, YEAR ENDED APRIL 30, YEAR ENDED
______________________________ __________________________________
APRIL 30,
1995 1996 1995 1996 1996*
____________ ___________ ___________ __________ _________
<S> <C> <C> <C> <C> <C>
CAPITAL SHARE TRANSACTIONS:
Shares sold............ 2,241,162 2,877,435 1,080,646 1,363,135 25,139
Shares issued for
dividends reinvested. 1,354,808 1,202,513 235,883 230,256 141
Shares redeemed........ (7,383,625) (5,613,780) (1,070,587) (1,045,329) (713)
____________ ___________ ___________ __________ _________
NET INCREASE
(DECREASE) IN
SHARES OUTSTANDING (3,787,655) (1,533,832) 245,942 548,062 24,567
=========== =========== =========== =========== ===========
* From July 13, 1995 (commencement of initial offering) to April 30, 1996.
See notes to financial statements.
</TABLE>
<TABLE>
PREMIER MUNICIPAL BOND FUND
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share of
Beneficial Interest outstanding, total investment return, ratios to average
net assets and other supplemental data for each year indicated. This
information has been derived from the Fund's financial statements.
CLASS A SHARES
____________________________________________________________________
YEAR ENDED APRIL 30,
____________________________________________________________________
PER SHARE DATA: 1992 1993 1994 1995 1996
________ ________ ________ ________ ________
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year........... $13.28 $13.75 $14.45 $13.81 $13.86
________ ________ ________ ________ ________
INVESTMENT OPERATIONS:
Investment income-net........................ .94 .92 .89 .84 .86
Net realized and unrealized gain (loss)
on investments............................. .49 .91 (.59) .05 (.01)
_______ _______ _______ _______ _______
TOTAL FROM INVESTMENT OPERATIONS........... 1.43 1.83 .30 .89 .85
_______ _______ _______ _______ _______
DISTRIBUTIONS:
Dividends from investment income-net......... (.94) (.92) (.89) (.84) (.86)
Dividends from net realized gain on investments (.02) (.21) (.05) - -
________ ________ ________ ________ ________
TOTAL DISTRIBUTIONS........................ (.96) (1.13) (.94) (.84) (.86)
________ ________ ________ ________ ________
Net asset value, end of year................. $13.75 $14.45 $13.81 $13.86 $13.85
======== ======= ======== ======== =========
TOTAL INVESTMENT RETURN*......................... 11.08% 13.76% 1.84% 6.72% 6.08%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets...... .54% .74% .85% .92% .92%
Ratio of net investment income to average net asset 6.90% 6.43% 6.01% 6.16% 5.98%
Decrease reflected in above expense ratios due to
undertakings by the Manager................ .40% .20% .06% - -
Portfolio Turnover Rate...................... 50.72% 30.99% 22.15% 38.60% 36.59%
Net Assets, end of year (000's Omitted)...... $388,793 $526,606 $546,036 $495,616 $474,044
* Exclusive of sales load.
</TABLE>
See notes to financial statements.
PREMIER MUNICIPAL BOND FUND
FINANCIAL HIGHLIGHTS (CONTINUED)
Contained below is per share operating performance data for a share of
Beneficial Interest outstanding, total investment return, ratios to average
net assets and other supplemental data for each year indicated. This
information has been derived from the Fund's financial statements.
<TABLE>
CLASS B SHARES CLASS C SHARES
______________________________________________________ _______
YEAR ENDED
YEAR ENDED APRIL 30, APRIL 30,
______________________________________________________ ________
PER SHARE DATA: 1993(1) 1994 1995 1996 1996(2)
_______ _______ _______ ______ _________
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year................ $14.02 $14.45 $13.81 $13.86 $14.28
_______ _______ _______ ______ ______
INVESTMENT OPERATIONS:
Investment income-net............................. .24 .80 .77 .78 .60
Net realized and unrealized gain
(loss) on investments........................... .43 (.59) .05 (.01) (.41)
________ ________ _______ ______ ______
TOTAL FROM INVESTMENT OPERATIONS................ .67 .21 .82 .77 .19
________ ________ _______ ______ ______
DISTRIBUTIONS:
Dividends from investment income-net.............. (.24) (.80) (.77) (.78) (.60)
Dividends from net realized
gain on investments............................. - (.05) - - -
________ ________ ________ _______ ______
TOTAL DISTRIBUTIONS............................. (.24) (.85) (.77) (.78) (.60)
________ ________ ________ _______ ______
Net asset value, end of year...................... $14.45 $13.81 $13.86 $13.85 $13.87
========== ======== ======== ======== ========
TOTAL INVESTMENT RETURN(3)............................ 16.80%(4) 1.26% 6.15% 5.53% 1.56%(4)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets........... 1.15%(4) 1.40% 1.44% 1.43% 1.77%(4)
Ratio of net investment income to
average net assets.............................. 5.13%(4) 5.33% 5.62% 5.46% 4.84%(4)
Decrease reflected in above expense ratios
due to undertakings by the Manager.............. .10%(4) .05% - - -
Portfolio Turnover Rate........................... 30.99% 22.15% 38.60% 36.59% 36.59%
Net Assets, end of year (000's Omitted)........... $19,855 $95,643 $99,411 $106,931 $340
(1) From January 15, 1993 (commencement of initial offering) to April 30, 1993.
(2) From July 13, 1995 (commencement of initial offering) to April 30, 1996.
(3) Exclusive of sales load.
(4) Annualized.
See notes to financial statements.
</TABLE>
PREMIER MUNICIPAL BOND FUND
NOTES TO FINANCIAL STATEMENTS
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES:
Premier Municipal Bond Fund (the "Fund") is registered under the
Investment Company Act of 1940 ("Act") as a diversified open-end management
investment company. The Fund's investment objective is to maximize current
income exempt from Federal income tax to the extent consistent with the
preservation of capital. The Dreyfus Corporation ("Manager") serves as the
Fund's investment adviser. The Manager is a direct subsidiary of Mellon Bank,
N.A.
On July 19, 1995, the Board of Trustees approved, subject to approval by
the shareholders of each of the Arizona Series, Colorado Series and Oregon
Series (each, the "Series") of Premier State Municipal Bond Fund, an
Agreement and Plan of Reorganization providing for the transfer of all or
substantially all of each Series' assets and liabilities to the Fund in a tax
free exchange for shares of beneficial interest of the Fund at net asset
value and the assumption of stated liabilities (the "Exchange"). The Exchange
was approved by the shareholders of each of the Colorado and Oregon Series of
Premier State Municipal Bond Fund on November 15, 1995, and became effective
after the close of business on December 1, 1995 at which time the Fund issued
252,423.217 Class A shares valued at $14.57 per share and 199,893.780 Class B
shares valued at $14.57 per share to the respective Class A and Class B
shareholders of the Colorado Series and Oregon Series of Premier State
Municipal Bond Fund. With respect to the Arizona Series, the Exchange was
approved by the shareholders of the Arizona Series of Premier State Municipal
Bond Fund on February 12, 1996, and became effective after the close of
business on February 14, 1996 at which time the Fund issued 488,240.051 Class
A shares valued at $14.72 per share and 279,890.373 Class B shares valued at
$14.72 per share to the respective Class A and Class B shareholders of the
Arizona Series of Premier State Municipal Bond Fund.
With respect to the Arizona Series 527,672.068 Class A shares valued at
$13.62 per share and 302,051.781 Class B shares valued at $13.64 per share
representing combined net assets of $11,304,770, were exchanged for the
respective Class A and Class B shares of the Fund.
With respect to the Colorado Series 88,330.767 Class A shares valued at
$12.65 per share and 125,855.321 Class B shares valued at $12.66 per share
representing combined net assets of $2,709,921, were exchanged for the
respective Class A and Class B shares of the Fund.
With respect to the Oregon Series 190,507.592 Class A shares valued at
$13.44 per share and 98,076.137 Class B shares valued at $13.45 per share
representing combined net assets of $3,879,458, were exchanged for the
respective Class A and Class B shares of the Fund.
Premier Mutual Fund Services, Inc. (the "Distributor") acts as the
distributor of the Fund's shares. The Fund offers Class A, Class B and Class
C shares. Class A shares are subject to a sales charge imposed at the time of
purchase, Class B shares are subject to a contingent deferred sales charge
imposed at the time of redemption on redemptions made within five years of
purchase and Class C shares are subject to a contingent deferred sales charge
imposed at the time of redemption on redemptions made within one year of
purchase. Other differences between the three Classes include the services
offered to and the expenses borne by each Class and certain voting rights.
(A) PORTFOLIO VALUATION: The Fund's investments (excluding options and
financial futures on municipal and U.S. treasury securities) are valued each
business day by an independent pricing service
PREMIER MUNICIPAL BOND FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
("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 municipal securities of comparable quality, coupon,
maturity and type; indications as to values from dealers; and general market
conditions. Options and financial futures on municipal and U.S. treasury
securities are valued at the last sales price on the securities exchange on
which such securities are primarily traded or at the last sales price on the
national securities market on each business day. Investments not listed on an
exchange or the national securities market, or securities for which there
were no transactions, are valued at the average of the most recent bid and
asked prices. Bid price is used when no asked price is available.
(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. Interest
income, adjusted for amortization of premiums and original issue discounts on
investments, is earned from settlement date and recognized on the accrual
basis. Securities purchased or sold on a when-issued or delayed-delivery
basis may be settled a month or more after the trade date.
(C) DIVIDENDS TO SHAREHOLDERS: It is the policy of the Fund to declare
dividends daily from investment income-net. Such dividends are paid monthly.
Dividends from net realized capital gain are normally declared and paid
annually, but the Fund may make distributions on a more frequent basis to
comply with the distribution requirements of the Internal Revenue Code. To
the extent that net realized capital gain can be offset by capital loss
carryovers, it is the policy of the Fund not to distribute such gain.
(D) FEDERAL INCOME TAXES: It is the policy of the Fund to continue to
qualify as a regulated investment company, which can distribute tax exempt
dividends, by complying with the applicable provisions of the Internal
Revenue Code, and to make distributions of income and net realized capital
gain sufficient to relieve it from substantially all Federal income and
excise taxes.
The Fund has an unused capital loss carryover of approximately $5,239,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to April 30, 1996. If not
applied, the carryover expires in fiscal 2003.
NOTE 2-MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
(A) Pursuant to a management agreement ("Agreement") with the Manager,
the management fee is computed at the annual rate of .55 of 1% of the value
of the Fund's average daily net assets and is payable monthly. The Agreement
provides for an expense reimbursement from the Manager should the Fund's
aggregate expenses, exclusive of taxes, brokerage, interest on borrowings and
extraordinary expenses, exceed the expense limitation of any state having
jurisdiction over the Fund for any full fiscal year. The most stringent state
expense limitation applicable to the Fund presently requires reimbursement
PREMIER MUNICIPAL BOND FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
of expenses in any full fiscal year that such expenses (excluding
distribution expenses and certain expenses as described above) exceed 21\2%
of the first $30 million, 2% of the next $70 million and 11\2% of the excess
over $100 million of the average value of the Fund's net assets in accordance
with California "blue sky" regulations. There was no expense reimbursement
for the year ended April 30, 1996.
Dreyfus Service Corporation, a wholly-owned subsidiary of the Manager,
retained $5,902 during the year ended April 30, 1996 from commissions earned
on sales of the Fund's shares.
(B) Under the Distribution Plan adopted pursuant to Rule 12b-1 under the
Act, the Fund pays the Distributor for distributing the Fund's Class B and
Class C shares at an annual rate of .50 of 1% of the value of the average
daily net assets of Class B shares and .75 of 1% of the value of the average
daily net assets of Class C shares. During the year ended April 30, 1996,
$520,864 was charged to the Fund for the Class B shares and $477 was charged
to the Fund for the Class C shares.
(C) Under the Shareholder Services Plan, the Fund pays the Distributor at
an annual rate of .25 of 1% of the value of the average daily net assets of
Class A, Class B and Class C shares 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 year ended April 30, 1996,
$1,240,455, $260,432 and $159 were charged to Class A, Class B and Class C
shares, respectively, by the Distributor pursuant to the Shareholder Services
Plan.
Effective December 1, 1995, 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. Such compensation amounted to $112,291, for the period from
December 1, 1995 through April 30, 1996.
(D) Each trustee who is not an "affiliated person" as defined in the Act
receives from the Fund an annual fee of $2,500 and an attendance fee of $250
per meeting. The Chairman of the Board receives an additional 25% of such
compensation.
NOTE 3-SECURITIES TRANSACTIONS:
The aggregate amount of purchases and sales of investment securities,
excluding short-term securities, during the year ended April 30, 1996
amounted to $218,139,904 and $242,621,754, respectively.
At April 30, 1996, accumulated net unrealized appreciation on investments
was $10,645,862, consisting of $25,239,419 gross unrealized appreciation and
$14,593,557 gross unrealized depreciation.
At April 30, 1996, 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).
PREMIER MUNICIPAL BOND FUND
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF TRUSTEES
PREMIER MUNICIPAL BOND FUND
We have audited the accompanying statement of assets and liabilities of
Premier Municipal Bond Fund, including the statement of investments, as of
April 30, 1996 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 generally accepted auditing
standards. 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. Our procedures included confirmation of
securities owned as of April 30, 1996 by correspondence with the custodian
and brokers. 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 Premier Municipal Bond Fund at April 30, 1996, 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 generally accepted accounting
principles.
[Ernst & Young LLP signature logo]
New York, New York
May 31, 1996
IMPORTANT TAX INFORMATION (UNAUDITED)
In accordance with Federal tax law, the Fund hereby designates all the
dividends paid from investment income-net during its fiscal year ended April
30, 1996 as "exempt-interest dividends" (not generally subject to regular
Federal income tax).
As required by Federal tax law rules, shareholders will receive
notification of their portion of the Fund's taxable ordinary dividends (if
any) and capital gain distributions (if any) paid for the 1996 calendar year
on Form 1099-DIV which will be mailed by January 31, 1997.
PREMIER MUNICIPAL
BOND FUND
200 Park Avenue
New York, NY 10166
MANAGER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
CUSTODIAN
The Bank of New York
90 Washington Street
New York, NY 10286
TRANSFER AGENT &
DIVIDEND DISBURSING AGENT
Dreyfus Transfer, Inc.
One American Express Plaza
Providence, RI 02903
Further information is contained
in the Prospectus, which must
precede or accompany this report.
Printed in U.S.A. 022/612AR964
Annual Report
Premier Municipal
Bond Fund
April 30, 1996
[Dreyfus lion logo]
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
IN PREMIER MUNICIPAL BOND FUND CLASS A SHARES
AND THE LEHMAN BROTHERS MUNICIPAL BOND INDEX
EXHIBIT A:
__________________________________________________________________
| | | |
| | | PREMIER |
| PERIOD | LEHMAN BROTHERS | MUNICIPAL |
| | MUNICIPAL | BOND FUND |
| | BOND INDEX * | (CLASS A SHARES)|
|--------------------------|-----------------|--------------------|
| 11/26/86 | 10,000 | 9,550 |
| 4/30/87 | 9,701 | 9,025 |
| 4/30/88 | 10,550 | 9,353 |
| 4/30/89 | 11,492 | 10,674 |
| 4/30/90 | 12,320 | 11,341 |
| 4/30/91 | 13,736 | 12,716 |
| 4/30/92 | 15,041 | 14,126 |
| 4/30/93 | 16,944 | 16,070 |
| 4/30/94 | 17,310 | 16,366 |
| 4/30/95 | 18,461 | 17,466 |
| 4/30/96 | 19,929 | 18,528 |
|--------------------------|-----------------|--------------------|
* Source: Lehman Brothers
