PREMIER MUNICIPAL BOND FUND
485BPOS, 1996-08-14
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                                                              File No. 33-7496
                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

                                   FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933                [X]

     Pre-Effective Amendment No.                                       [  ]
   
     Post-Effective Amendment No. 16                                   [X]
    
                                    and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940        [X]
   
     Amendment No. 16                                                  [X]
    

                       (Check appropriate box or boxes.)

                          PREMIER MUNICIPAL BOND FUND
              (Exact Name of Registrant as Specified in Charter)


           c/o The Dreyfus Corporation
           200 Park Avenue, New York, New York          10166
           (Address of Principal Executive Offices)     (Zip Code)


     Registrant's Telephone Number, including Area Code: (212) 922-6000
   
                             Mark N. Jacobs, Esq.
                                200 Park Avenue
                           New York, New York 10166
                    (Name and Address of Agent for Service)
    

It is proposed that this filing will become effective (check appropriate box)

   
           immediately upon filing pursuant to paragraph (b)
     ----
    
   
      X    on September 3, 1996 pursuant to paragraph (b)
     ----
    
           60 days after filing pursuant to paragraph (a)(i)
     ----
           on     (date)      pursuant to paragraph (a)(i)
     ----
           75 days after filing pursuant to paragraph (a)(ii)
     ----
           on     (date)      pursuant to paragraph (a)(ii) of Rule 485
     ----

If appropriate, check the following box:

           this post-effective amendment designates a new effective date for a
           previously filed post-effective amendment.
     ----
   
     Registrant has registered an indefinite number of shares of its
beneficial interest under the Securities Act of 1933 pursuant to
Section 24(f) of the Investment Company Act of 1940.  Registrant's Rule 24f-2
Notice for the fiscal year ended April 30, 1996 was filed on June 24, 1996.
    

                          PREMIER MUNICIPAL BOND FUND
                 Cross-Reference Sheet Pursuant to Rule 495(a)


Items in
Part A of
Form N-1A      Caption                                       Page
_________      _______                                       ____

   1           Cover Page                                     Cover

   2           Synopsis                                       3

   3           Condensed Financial Information                4
   
   4           General Description of Registrant              7, 27
    
   
   5           Management of the Fund                         10
    
   
   5(a)        Management's Discussion of Fund's Performance  *
    
   
   6           Capital Stock and Other Securities             27
    
   
   7           Purchase of Securities Being Offered           11
    
   
   8           Redemption or Repurchase                       19
    
   9           Pending Legal Proceedings                      *


Items in
Part B of
Form N-1A
- ---------

   10          Cover Page                                     Cover

   11          Table of Contents                              Cover
   
   12          General Information and History                B-29
    
   13          Investment Objectives and Policies             B-2
   
   14          Management of the Fund                         B-11
    
   
   15          Control Persons and Principal                  B-14
               Holders of Securities
    
   
   16          Investment Advisory and Other                  B-15
               Services
    
_____________________________________

NOTE:  * Omitted since answer is negative or inapplicable.

                          PREMIER MUNICIPAL BOND FUND
           Cross-Reference Sheet Pursuant to Rule 495(a) (continued)


Items in
Part B of
Form N-1A      Caption                                        Page
_________      _______                                        _____
   
   17          Brokerage Allocation                           B-26
    
   
   18          Capital Stock and Other Securities             B-29
    
   
   19          Purchase, Redemption and Pricing               B-17, B-20,
               of Securities Being Offered                    B-24
    
   
   20          Tax Status                                     *
    
   
   21          Underwriters                                   Cover, B-17
    
   
   22          Calculations of Performance Data               B-27
    
   
   23          Financial Statements                           B-40
    

Items in
Part C of
Form N-1A
_________

   24          Financial Statements and Exhibits              C-1

   25          Persons Controlled by or Under                 C-3
               Common Control with Registrant

   26          Number of Holders of Securities                C-3

   27          Indemnification                                C-3

   28          Business and Other Connections of              C-4
               Investment Adviser

   29          Principal Underwriters                         C-11

   30          Location of Accounts and Records               C-14

   31          Management Services                            C-14

   32          Undertakings                                   C-14


_____________________________________

NOTE:  * Omitted since answer is negative or inapplicable.





PREMIER MUNICIPAL BOND FUND
   
PROSPECTUS                                                 SEPTEMBER 3, 1996
    
   
        Premier Municipal Bond Fund (the "Fund") is an open-end, diversified,
    management investment company, known as a mutual fund. The Fund's
    investment objective is to maximize current income exempt from Federal
    income tax to the extent consistent with the preservation of capital.
    
   
        By this Prospectus, the Fund is offering three Classes of
    shares-Class A, Class B and Class C-which are described herein. See
    "Alternative Purchase Methods."
    
   
        The Fund provides free redemption checks with respect to
    Class A, which you can use in amounts of $500 or more for cash or to pay
    bills. You continue to earn income on the amount of the check until it
    clears. You can purchase or redeem all Classes of shares by telephone
    using the TELETRANSFER Privilege.
    
        The Dreyfus Corporation professionally manages the Fund's portfolio.
        This Prospectus sets forth concisely information about the Fund that
    you should know before investing. It should be read and retained for
    future reference.
   
        The Statement of Additional Information, dated September 3, 1996,
    which may be revised from time to time, provides a further discussion of
    certain areas in this Prospectus and other matters which may be of
    interest to some investors. It has been filed with the Securities and
    Exchange Commission and is incorporated herein by reference.
    The Securities and Exchange Commission maintains a Web site
    (http://www.sec.gov) that contains the Statement of Additional
    Information, material incorporated by reference, and other information
    regarding the Fund. For a free copy of the Statement of Additional
    Information, write to the Fund at 144 Glenn Curtiss Boulevard, Uniondale,
    New York 11556-0144, or call 1-800-554-4611. When telephoning, ask for
    Operator 144.
    
        MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
    OR ENDORSED BY, ANY BANK, AND ARE NOT FEDERALLY INSURED BY THE FEDERAL
    DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER
    AGENCY. MUTUAL FUND SHARES INVOLVE CERTAIN INVESTMENT RISKS, INCLUDING THE
    POSSIBLE LOSS OF PRINCIPAL.
        THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
    SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
    HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
    COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
    REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.


TABLE OF CONTENTS
   
      Fee Table..........................................        3
      Condensed Financial Information....................        4
      Alternative Purchase Methods.......................        6
      Description of the Fund............................        7
      Management of the Fund.............................        10
      How to Buy Shares..................................        11
      Shareholder Services...............................        15
      How to Redeem Shares...............................        19
      Distribution Plan and Shareholder Services Plan....        24
      Dividends, Distributions and Taxes.................        24
      Performance Information............................        26
      General Information................................        27
      Appendix...........................................        29
    
                                  Page 2

   
<TABLE>
<CAPTION>
FEE TABLE
                                                                            CLASS A           CLASS B         CLASS C
  <S>                                                                       <C>               <C>             <C>
  Shareholder Transaction Expenses
    Maximum Sales Load Imposed on Purchases
      (as a percentage of offering price)............................        4.50%             None            None
    Maximum Deferred Sales Charge Imposed on Redemptions
      (as a percentage of the amount subject to charge)..............        None*             3.00%           1.00%
  Annual Fund Operating Expenses
    (as a percentage of average daily net assets)
    Management Fees.........................                                 .55%              .55%            .55%
    12b-1 Fees..............................                                  None             .50%            .75%
    Other Expenses...........................                                .37%              .38%            .47%
    Total Fund Operating Expenses...........                                 .92%             1.43%           1.77%
  Example
    You would pay the following
    expenses on a $1,000 investment,
    assuming (1) 5% annual return and
    (2) except where noted, redemption
    at the end of each time period:                                         CLASS A           CLASS B         CLASS C
    1 Year...........................                                        $ 54            $45/$15**        $28/$18**
    3 Years..........................                                        $ 73            $65/$45**        $ 56
    5 Years..........................                                        $ 94            $88/$78**        $ 96
    10 Years...........................                                      $153            $145***          $208
    _____________
    
    *   A contingent deferred sales charge of 1% may be assessed on certain
        redemptions of Class A shares purchased without an initial sales
        charge as part of an investment of $1 million or more.
    **  Assuming no redemption of shares.
   
    *** Ten year figure assumes conversion of Class B shares to Class A shares
        at the end of the sixth year following the date of purchase.
</TABLE>
    
    __________________________________________________________________________
        The amounts listed in the example should not be considered as
    representative of past or future expenses and actual expenses may be
    greater or less than those indicated. Moreover, while the
    example assumes a 5% annual return, the Fund's actual performance will
    vary and may result in an actual return greater or less than 5%.
    __________________________________________________________________________
   
        The purpose of the foregoing table is to assist you in
    understanding the costs and expenses borne by the Fund, the payment of
    which will reduce investors' annual return. Long-term investors in Class
    B or Class C shares could pay more in 12b-1 fees than the economic
    equivalent of paying a front-end sales charge. Certain Service Agents (as
    defined below) may charge their clients direct fees for effecting
    transactions in Fund shares; such fees are not reflected in the foregoing
    table. See "Management of the Fund," "How to Buy Shares" and
    "Distribution Plan and Shareholder Services Plan."
    
                                  Page 3

CONDENSED FINANCIAL INFORMATION
   
        The information in the following table has been audited by
    Ernst & Young LLP, the Fund's independent auditors, whose report thereon
    appears in the Statement of Additional Information. Further financial
    data and related notes are included in the Statement of Additional
    Information, available upon request.
    
    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.
    
   
<TABLE>
<CAPTION>
                                                                                   Class A Shares
                                    ---------------------------------------------------------------------------------------------
                                                                                Year Ended April 30,
                                    ---------------------------------------------------------------------------------------------
                                    1987(1)    1988     1989     1990       1991      1992     1993       1994      1995     1996
                                    -------  ------   ------    ------    ------    ------   ------     ------    ------   ------
<S>                                 <C>       <C>     <C>      <C>       <C>       <C>      <C>        <C>       <C>      <C>
Per Share Data:
    Net asset value,
     beginning of year               $14.00  $12.83   $12.30    $12.97    $12.77    $13.28   $13.75     $14.45    $13.81   $13.86
                                    -------- -------  -------   -------   ------    ------   ------     -------   ------   ------
    Investment Operations:
    Investment income-net........       .43     .97     1.01       .99       .98       .94      .92        .89       .84      .86
    Net realized and unrealized
     gain (loss) on investments      (1.17)   (.53)      .67     (.20)       .51       .49      .91      (.59)       .05    (.01)
                                    -------- ------  -------   -------   -------    ------  -------    -------   -------   ------
    Total from Investment Operations  (.74)     .44     1.68       .79      1.49      1.43     1.83        .30       .89     .85
                                    -------- ------  -------   -------   -------    ------  ------     -------   -------   ------
    Distributions:
    Dividends from investment
       income-net                     (.43)   (.97)   (1.01)     (.99)     (.98)     (.94)   (.92)       (.89)    (.84)    (.86)
    Dividends from net realized
     gain on investments                 --      --       --        --        --    (.02)    (.21)       (.05)        --       --
                                    -------  ------   ------   -------    ------    ------   ------    -------   -------   ------
    Total Distributions               (.43)   (.97)   (1.01)    (.99)     (.98)     (.96)    (1.13)      (.94)     (.84)    (.86)
                                    -------  ------   ------   -------    ------    ------   ------    -------   -------   ------
    Net asset value, end of year.    $12.83  $12.30   $12.97   $12.77    $13.28    $13.75    $14.45     $13.81    $13.86   $13.85
                                    ======= =======  =======   =======   =======    ======   ======    =======   =======   ======
TOTAL INVESTMENT RETURN(2)..... (12.87%)(3)  3.64%   14.13%     6.25%    12.13%    11.08%    13.76%      1.84%     6.72%    6.08%
RATIOS/SUPPLEMENTAL DATA:
     Ratio of expenses to
      average net assets                --      --       --        --      .22%    .54%        .74%       .85%      .92%     .92%
     Ratio of net investment income
      to average net assets        6.53%(3)   7.81%    7.72%    7.51%     7.43%    6.90%      6.43%      6.01%     6.16%    5.98%
     Decrease reflected in above
     expense ratios due to
      undertakings by The Dreyfus
      Corporation                  1.50%(3)   1.50%    1.50%    1.15%      .82%      .40%      .20%      .06%         --       --
     Portfolio Turnover Rate....  36.62%(4)  33.25%  143.20%   63.53%    41.30%    50.72%    30.99%    22.15%     38.60%   36.59%
     Net Assets, end of year
     (000's omitted)                $1,290  $5,650  $26,342  $100,784  $247,195  $388,793  $526,606  $546,036  $495,616  $474,044
- -------------------------
(1)From November 26, 1986 (commencement of operations) to April 30, 1987.
(2)Exclusive of sales load.
(3)Annualized.
(4)Not annualized.
</TABLE>
    
                                  Page 4
   
<TABLE>
<CAPTION>

                                                            Class B Shares                               Class C Shares
                                                   ----------------------------------------         -------------------------
                                                         Year Ended April 30,                              Year Ended
                                                   ----------------------------------------
                                                    1993(1)      1994      1995       1996              April 30, 1996(2)
                                                    -------    -------   -------   -------          -------------------------
<S>                                                 <C>       <C>        <C>       <C>                       <C>
PER SHARE DATA:
    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 Dreyfus Corporation...................    .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.
</TABLE>
    
                                  Page 5
   
        Further information about the Fund's performance is contained
    in the Fund's annual report, which may be obtained without charge by
    writing to the address or calling the number set forth on the cover page
    of this Prospectus.
    
ALTERNATIVE PURCHASE METHODS
        The Fund offers you three methods of purchasing Fund shares.
    You may choose the Class of shares that best suits your needs, given the
    amount of your purchase, the length of time you expect to hold your
    shares and any other relevant circumstances. Each Fund share represents
    an identical pro rata interest in the Fund's investment portfolio.
   
        Class A shares are sold at net asset value per share plus a
    maximum initial sales charge of 4.50% of the public offering price
    imposed at the time of purchase. The initial sales charge may be reduced
    or waived for certain purchases. See "How to Buy Shares - Class A
    Shares." These shares are subject to an annual service fee at the rate of
    .25 of 1% of the value of the average daily net assets of Class A. See
    "Distribution Plan and Shareholder Services Plan - Shareholder Services
    Plan."
    
   
        Class B shares are sold at net asset value per share with no
    initial sales charge at the time of purchase; as a result, the entire
    purchase price is immediately invested in the Fund. Class B shares are
    subject to a maximum 3% contingent deferred sales charge ("CDSC"), which
    is assessed only if you redeem Class B shares within the first five years
    of their purchase. See "How to Buy Shares - Class B Shares" and "How to
    Redeem Shares - Contingent Deferred Sales Charge--Class B Shares." These
    shares also are subject to an annual service fee at the rate of .25 of 1%
    of the value of the average daily net assets of Class B. In addition,
    Class B shares are subject to an annual distribution fee at the rate of
    .50 of 1% of the value of the average daily net assets of Class B. See
    "Distribution Plan and Shareholder Services Plan." The distribution fee
    paid by Class B will cause such Class to have a higher expense ratio and
    to pay lower dividends than Class A. Approximately six years after the
    date of purchase, Class B shares automatically will convert to Class A
    shares, based on the relative net asset values for shares of each such
    Class, and will no longer be subject to the distribution fee. Class B
    shares that have been acquired through the reinvestment of dividends and
    distributions will be converted on a pro rata basis together with other
    Class B shares, in the proportion that a shareholder's Class B shares
    converting to Class A shares bears to the total Class B shares not
    acquired through the reinvestment of dividends and distributions.
    
   
        Class C shares are sold at net asset value per share with no
    initial sales charge at the time of purchase; as a result, the entire
    purchase price is immediately invested in the Fund. Class C shares are
    subject to a 1% CDSC, which is assessed only if you redeem Class C shares
    within one year of their purchase. See "How to Buy Shares -- Class C
    Shares" and "How to Redeem Shares -- Contingent Deferred Sales Charge --
    Class C Shares." These shares also are subject to an annual service fee
    at the rate of .25 of 1%, and an annual distribution fee at the rate of
    .75 of 1%, of the value of the average daily net assets of Class C. See
    "Distribution Plan and Shareholder Services Plan." The distribution fee
    paid by Class C will cause such Class to have a higher expense ratio and
    to pay lower dividends than Class A.
    
        The decision as to which Class of shares is more beneficial
    to you depends on the amount and the intended length of your investment.
    You should consider whether, during the anticipated life of your
    investment in the Fund, the accumulated distribution fee and CDSC, if
    any, on Class B or Class C shares would be less than the initial sales
    charge on Class A shares purchased at the same time, and to what extent,
    if any, such differential would be offset by the return of Class A.
    Additionally, investors qualifying for reduced initial sales charges who
    expect to maintain their investment for an extended period of time might
    consider purchasing Class A shares
                                  Page 6

    because the accumulated continuing distribution fees on Class B or
    Class C shares may exceed the initial sales charge on Class A shares
    during the life of the investment.  Finally, you should consider the
    effect of the CDSC period and any conversion rights of the Classes in
    the context of your own investment time frame. For example, while
    Class C shares have a shorter CDSC period than Class B shares, Class C
    shares do not have a conversion feature and, therefore, are subject to
    an ongoing distribution fee. Thus, Class B shares may be more attractive
    than Class C shares to investors with long term investment outlooks.
    Generally, Class A shares may be more appropriate for investors who invest
    $1,000,000 or more in Fund shares, and for investors who invest between
    $250,000 and $999,999 in Fund shares with long term investment outlooks.
    Class A shares will not be appropriate for investors who invest less than
    $50,000 in Fund shares.
DESCRIPTION OF THE FUND
    INVESTMENT OBJECTIVE
   
        The Fund's investment objective is to maximize current income
    exempt from Federal income tax to the extent consistent with the
    preservation of capital. To accomplish its investment objective, the Fund
    invests primarily in Municipal Obligations (described below) rated at
    least Baa by Moody's Investors Service, Inc. ("Moody's ") or BBB by
    Standard & Poor's Ratings Group, a division of The McGraw-Hill Companies,
    Inc. ("S&P"), or Fitch Investors Service, L.P. ("Fitch"). The Fund's
    investment objective cannot be changed without approval by the holders of
    a majority (as defined in the Investment Company Act of 1940, as amended
    (the "1940 Act")) of the Fund's outstanding voting shares. There can be
    no assurance that the Fund's investment objective will be achieved.
    
    MUNICIPAL OBLIGATIONS
        Municipal Obligations are debt securities issued by states,
    territories and possessions of the United States and the District of
    Columbia and their political subdivisions, agencies and
    instrumentalities, or multistate agencies or authorities, the interest
    from which is, in the opinion of bond counsel to the issuer, exempt from
    Federal income tax. Municipal Obligations generally include debt
    obligations issued to obtain funds for various public purposes as well as
    certain industrial development bonds issued by or on behalf of public
    authorities. Municipal Obligations are classified as general obligation
    bonds, revenue bonds and notes. General obligation bonds are secured by
    the issuer's pledge of its faith, credit and taxing power for the payment
    of principal and interest. Revenue bonds are payable from the revenue
    derived from a particular facility or class of facilities or, in some
    cases, from the proceeds of a special excise or other specific revenue
    source, but not from the general taxing power. Tax exempt industrial
    development bonds, in most cases, are revenue bonds that do not carry the
    pledge of the credit of the issuing municipality, but generally are
    guaranteed by the corporate entity on whose behalf they are issued. Notes
    are short-term instruments which are obligations of the issuing
    municipalities or agencies and are sold in anticipation of a bond sale,
    collection of taxes or receipt of other revenues. Municipal Obligations
    include municipal lease/purchase agreements which are similar to
    installment purchase contracts for property or equipment issued by
    municipalities. Municipal Obligations bear fixed, floating or variable
    rates of interest, which are determined in some instances by formulas
    under which the Municipal Obligation's interest rate will change directly
    or inversely to changes in interest rates or an index, or multiples
    thereof, in many cases subject to a maximum and minimum. Certain
    Municipal Obligations are subject to redemption at a date earlier than
    their stated maturity pursuant to call options, which may be separated
    from the related Municipal Obligation and purchased and sold separately.
                                  Page 7

    MANAGEMENT POLICIES
         It is a fundamental policy of the Fund that it will invest at
    least 80% of the value of its net assets (except when maintaining a
    temporary defensive position) in Municipal Obligations. Generally, at
    least 65% of the value of the Fund's net assets (except when maintaining
    a temporary defensive position) will be invested in bonds, debentures and
    other debt instruments.
   
         At least 70% of the value of the Fund's net assets must
    consist of Municipal Obligations which, in the case of bonds, are rated
    no lower than Baa by Moody's or BBB by S&P or Fitch. The Fund may invest
    up to 30% of the value of its net assets in Municipal Obligations which,
    in the case of bonds, are rated lower than Baa by Moody's and BBB by S&P
    and Fitch and as low as the lowest rating assigned by Moody's, S&P or
    Fitch. The Fund may invest in short-term Municipal Obligations which are
    rated in the two highest rating categories by Moody's, S&P or Fitch. See
    "Appendix" in the Statement of Additional Information. Municipal
    Obligations rated Baa by Moody's or BBB by S&P or Fitch are considered
    investment grade obligations; those rated Baa by Moody's are considered
    medium grade obligations which lack outstanding investment
    characteristics and have speculative characteristics, while those rated
    BBB by S&P and Fitch are regarded as having an adequate capacity to pay
    principal and interest. Investments rated Ba or lower by Moody's and BB
    or lower by S&P and Fitch ordinarily provide higher yields but involve
    greater risk because of their speculative characteristics. The Fund may
    invest in Municipal Obligations rated C by Moody's or D by S&P or Fitch,
    which is the lowest rating assigned by such rating organizations and
    indicates that the Municipal Obligation is in default and interest and/or
    repayment of principal is in arrears. See "Investment Considerations and
    Risks - Lower Rated Bonds" below for a further discussion of certain
    risks. The Fund also may invest in securities which, while not rated, are
    determined by The Dreyfus Corporation to be of comparable quality to the
    rated securities in which the Fund may invest; for purposes of the 70%
    requirement described in this paragraph, such unrated securities shall be
    deemed to have the rating so determined. The Fund also may invest in
    Taxable Investments of the quality described under "Appendix-Certain
    Portfolio Securities-Taxable Investments." Under normal market
    conditions, the weighted average maturity of the Fund's portfolio is
    expected to exceed ten years.
    
   
    
   
        From time to time, the Fund may invest more than 25% of the
    value of its total assets in industrial development bonds which, although
    issued by industrial development authorities, may be backed only by the
    assets and revenues of the non-governmental users. Interest on Municipal
    Obligations (including certain industrial development bonds) which are
    specified private activity bonds as defined in the Internal Revenue Code
    of 1986, as amended (the "Code"), issued after August 7, 1986, while
    exempt from Federal income tax, is a preference item for the purpose of
    the alternative minimum tax. Where a regulated investment company
    receives such interest, a proportionate share of any exempt-interest
    dividend paid by the investment company may be treated as such a
    preference item to shareholders. The Fund may invest without limitation
    in such Municipal Obligations if The Dreyfus Corporation determines that
    their purchase is consistent with the Fund's investment objective.
    
   
        The Fund's annual portfolio turnover rate is not expected to
    exceed 100%. The Fund may engage in various investment techniques, such
    as options and futures transactions, lending portfolio securities and
    short-selling. Use of certain of these techniques may give rise to
    taxable income. For a discussion of the investment techniques and related
    risks, see "Investment Considerations and Risks," "Appendix_Investment
    Techniques" and "Dividends, Distributions and Taxes" below and
    "Investment Objective and Management Policies-Management Policies" in the
    Statement of Additional Information.
    
                                  Page 8
   
    INVESTMENT CONSIDERATIONS AND RISKS
    GENERAL -- Even though interest-bearing securities are investments
    which promise a stable stream of income, the prices of such securities
    are inversely affected by changes in interest rates and, therefore, are
    subject to the risk of market price fluctuations. Certain securities that
    may be purchased by the Fund, such as those with interest rates that
    fluctuate directly or indirectly based upon multiples of a stated index,
    are designed to be highly sensitive to changes in interest rates and can
    subject the holders thereof to extreme reductions of yield and possibly
    loss of principal. The values of fixed-income securities also may be
    affected by changes in the credit rating or financial condition of the
    issuing entities. Once the rating of a portfolio security has been
    changed, the Fund will consider all circumstances deemed relevant in
    determining whether to hold the security. The Fund's net asset value
    generally will not be stable and should fluctuate based upon changes in
    the value of the Fund's portfolio securities. Securities in which the
    Fund invests may earn a higher level of current income than certain
    shorter-term or higher quality securities which generally have greater
    liquidity, less market risk and less fluctuation in market value.
    
   
    INVESTING IN MUNICIPAL OBLIGATIONS -- The Fund may invest more than
    25% of the value of its total assets in Municipal Obligations which are
    related in such a way that an economic, business or political development
    or change affecting one such security also would affect the other
    securities; for example, securities the interest upon which is paid from
    revenues of similar types of projects, or securities whose issuers are
    located in the same state. As a result, the Fund may be subject to
    greater risk as compared to a fund that does not follow this practice.
    
   
        Certain municipal lease/purchase obligations in which the
    Fund may invest may contain "non-appropriation" clauses which provide
    that the municipality has no obligation to make lease payments in future
    years unless money is appropriated for such purpose on a yearly basis.
    Although "non-appropriation" lease/purchase obligations are secured by
    the leased property, disposition of the leased property in the event of
    foreclosure might prove difficult. In evaluating the credit quality of a
    municipal lease/purchase obligation that is unrated, The Dreyfus
    Corporation will consider, on an ongoing basis, a number of factors
    including the likelihood that the issuing municipality will discontinue
    appropriating funding for the leased property.
    
   
        Certain provisions in the Code relating to the issuance of
    Municipal Obligations may reduce the volume of Municipal Obligations
    qualifying for Federal tax exemption. One effect of these provisions
    could be to increase the cost of the Municipal Obligations available for
    purchase by the Fund and thus reduce available yield. Shareholders should
    consult their tax advisers concerning the effect of these provisions on
    an investment in the Fund. Proposals that may restrict or eliminate the
    income tax exemption for interest on Municipal Obligations may be
    introduced in the future. If any such proposal were enacted that would
    reduce the availability of Municipal Obligations for investment by the
    Fund so as to adversely affect Fund shareholders, the Fund would
    reevaluate its investment objective and policies and submit possible
    changes in the Fund's structure to shareholders for their consideration.
    If legislation were enacted that would treat a type of Municipal
    Obligation as taxable, the Fund would treat such security as a permissible
    Taxable Investment within the applicable limits set forth herein.
    
   
    ZERO COUPON SECURITIES -- Federal income tax law requires the holder
    of a zero coupon security or of certain pay-in-kind bonds to accrue
    income with respect to these securities prior to the receipt of cash
    payments. To maintain its qualification as a regulated investment company
    and avoid liability for Federal income taxes, the Fund may be required
                                  Page 9

    to distribute such income accrued with respect to these securities and may
    have to dispose of portfolio securities under disadvantageous
    circumstances in order to generate cash to satisfy these distribution
    requirements.
    
   
    LOWER RATED BONDS -- The Fund may invest up to 30% of its net assets
    in higher yielding (and, therefore, higher risk) debt securities, such as
    those rated Ba by Moody's or BB by S&P or Fitch or as low as the lowest
    rating assigned by Moody's, S&P or Fitch (commonly known as junk bonds).
    They generally are not meant for short-term investing and may be subject
    to certain risks with respect to the issuing entity and to greater market
    fluctuations than certain lower yielding, higher rated fixed-income
    securities. The retail secondary market for these securities may be less
    liquid than that of higher rated securities; adverse conditions could
    make it difficult at times for the Fund to sell certain securities or
    could result in lower prices than those used in calculating the Fund's
    net asset value. See "Appendix -- Certain Portfolio Securities --
    Ratings."
    
   
    USE OF DERIVATIVES - The Fund may invest, to a limited extent, in
    derivatives ("Derivatives"). These are financial instruments which derive
    their performance, at least in part, from the performance of an
    underlying asset, index or interest rate. The Derivatives the Fund may
    use include options and futures. While Derivatives can be used
    effectively in furtherance of the Fund's investment objective, under
    certain market conditions, they can increase the volatility of the Fund's
    net asset value, can decrease the liquidity of the Fund's portfolio and
    make more difficult the accurate pricing of the Fund's portfolio. See
    "Appendix-Investment Techniques-Use of Derivatives" below and "Investment
    Objective and Management Policies-Management Policies-Derivatives" in the
    Statement of Additional Information.
    
   
    SIMULTANEOUS INVESTMENTS -- Investment decisions for the Fund are
    made independently from those of other investment companies advised by
    The Dreyfus Corporation. If, however, such other investment companies
    desire to invest in, or dispose of, the same securities as the Fund,
    available investments or opportunities for sales will be allocated
    equitably to each investment company. In some cases, this procedure may
    adversely affect the size of the position obtained for or disposed of by
    the Fund or the price paid or received by the Fund.
    
MANAGEMENT OF THE FUND
   
    INVESTMENT ADVISER -- The Dreyfus Corporation, located at 200 Park
    Avenue, New York, New York 10166, was formed in 1947 and serves as the
    Fund's investment adviser. The Dreyfus Corporation is a wholly-owned
    subsidiary of Mellon Bank, N.A., which is a wholly-owned subsidiary of
    Mellon Bank Corporation ("Mellon"). As of June 28, 1996, The Dreyfus
    Corporation managed or administered approximately $79 billion in assets
    for more than 1.7 million investor accounts nationwide.
    
   
       The Dreyfus Corporation supervises and assists in the overall
    management of the Fund's affairs under a Management Agreement with the
    Fund, subject to the authority of the Fund's Board in accordance with
    Massachusetts law. The Fund's primary portfolio manager is Samuel J.
    Weinstock. He has held that position since August 1987 and has been
    employed by The Dreyfus Corporation since March 1987. The Fund's other
    portfolio managers are identified in the Statement of Additional
    Information. The Dreyfus Corporation also provides research services for
    the Fund and for other funds advised by The Dreyfus Corporation through a
    professional staff of portfolio managers and securities analysts.
    
   
        Mellon is a publicly owned multibank holding company
    incorporated under Pennsylvania law in 1971 and registered under the
    Federal Bank Holding Company Act of 1956, as amended. Mellon provides a
    comprehensive range of financial products and services in domestic and
                                  Page 10

    selected international markets. Mellon is among the twenty-five largest
    bank holding companies in the United States based on total assets.
    Mellon's principal wholly-owned subsidiaries are Mellon Bank, N.A.,
    Mellon Bank (DE) National Association, Mellon Bank (MD), The Boston
    Company, Inc., AFCO Credit Corporation and a number of companies known as
    Mellon Financial Services Corporations. Through its subsidiaries,
    including The Dreyfus Corporation, Mellon managed more than $237 billion
    in assets as of March 31, 1996, including approximately $83 billion in
    proprietary mutual fund assets. As of March 31, 1996, Mellon, through
    various subsidiaries, provided non-investment services, such as custodial
    or administration services, for more than $886 billion in assets
    including approximately $61 billion in mutual fund assets.
    
   
        For the fiscal year ended April 30, 1996, the Fund paid The
    Dreyfus Corporation a monthly management fee at the annual rate of .55 of
    1% of the value of the Fund's average daily net assets. From time to
    time, The Dreyfus Corporation may waive receipt of its fees and/or
    voluntarily assume certain expenses of the Fund, which would have the
    effect of lowering the overall expense ratio of the Fund and increasing
    yield to investors. The Fund will not pay The Dreyfus Corporation at a
    later time for any amounts it may waive, nor will the Fund reimburse The
    Dreyfus Corporation for any amounts it may assume.
    
   
        In allocating brokerage transactions for the Fund, The
    Dreyfus Corporation seeks to obtain the best execution of orders at the
    most favorable net price. Subject to this determination, The Dreyfus
    Corporation may consider, among other things, the receipt of research
    services and/or the sale of shares of the Fund or other funds managed,
    advised or administered by The Dreyfus Corporation as factors in the
    selection of broker-dealers to execute portfolio transactions for the
    Fund. See "Portfolio Transactions" in the Statement of Additional
    Information.
    
        The Dreyfus Corporation may pay the Fund's distributor for
    shareholder services from The Dreyfus Corporation's own assets, including
    past profits but not including the management fee paid by the Fund. The
    Fund's distributor may use part or all of such payments to pay Service
    Agents in respect of these services.
   
    DISTRIBUTOR -- The Fund's distributor is Premier Mutual Fund
    Services, Inc. (the "Distributor"), located at 60 State Street, Boston,
    Massachusetts 02109. The Distributor's ultimate parent is Boston
    Institutional Group, Inc.
    
   
    TRANSFER AND DIVIDEND DISBURSING AGENT AND CUSTODIAN -- Dreyfus
    Transfer, Inc., a wholly-owned subsidiary of The Dreyfus Corporation,
    P.O. Box 9671, Providence, Rhode Island 02940-9671, is the Fund's
    Transfer and Dividend Disbursing Agent (the "Transfer Agent"). The Bank
    of New York, 90 Washington Street, New York, New York 10286, is the
    Fund's Custodian.
    
HOW TO BUY SHARES
   
    GENERAL -- Fund shares may be purchased only by clients of certain
    financial institutions (which may include banks), securities dealers
    ("Selected Dealers") and other industry professionals (collectively,
    "Service Agents"), except that full-time or part-time employees of The
    Dreyfus Corporation or any of its affiliates or subsidiaries, directors
    of The Dreyfus Corporation, Board members of a fund advised by The
    Dreyfus Corporation, including members of the Fund's Board, or the spouse
    or minor child of any of the foregoing may purchase Class A shares
    directly through the Distributor. Subsequent purchases may be sent
    directly to the Transfer Agent or your Service Agent.
    
       When purchasing Fund shares, you must specify which Class is
    being purchased. Share certificates are issued only upon your written
    request. No certificates are issued for fractional shares. It is not
    recommended that the Fund be used as a vehicle for Keogh, IRA or other
    qualified retirement plans. The Fund reserves the right to reject any
    purchase order.
                                  Page 11

   
       Service Agents may receive different levels of compensation
    for selling different Classes of shares. Management understands that some
    Service Agents may impose certain conditions on their clients which are
    different from those described in this Prospectus, and, to the extent
    permitted by applicable regulatory authority, may charge their clients
    direct fees which would be in addition to any amounts which might be
    received under the Distribution Plan or Shareholder Services Plan. You
    should consult your Service Agent in this regard.
    
   
       The minimum initial investment is $1,000. Subsequent
    investments must be at least $100. The initial investment must be
    accompanied by the Account Application. The Fund reserves the right to
    vary the initial and subsequent investment minimum requirements at any
    time.
    
   
       You may purchase Fund shares by check or wire, or through the
    TELETRANSFER Privilege described below. Checks should be made payable to
    "Premier Municipal Bond Fund." Payments to open new accounts which are
    mailed should be sent to Premier Municipal Bond Fund, P.O. Box 9387,
    Providence, Rhode Island 02940-9387, together with your Account
    Application indicating which Class of shares is being purchased. For
    subsequent investments, your Fund account number should appear on the
    check and an investment slip should be enclosed and sent to Premier
    Municipal Bond Fund, P.O. Box 105, Newark, New Jersey 07101-0105. Neither
    initial nor subsequent investments should be made by third party check.
    Wire payments may be made if your bank account is in a commercial bank
    that is a member of the Federal Reserve System or any other bank having a
    correspondent bank in New York City. Immediately available funds may be
    transmitted by wire to The Bank of New York, DDA#8900119292/Premier
    Municipal Bond Fund-Class A shares, DDA#8900115017/Premier Municipal Bond
    Fund-Class B shares or DDA#8900252030/Premier Municipal Bond Fund-Class C
    shares, as the case may be, for purchase of Fund shares in your name. The
    wire must include your Fund account number (for new accounts, your
    Taxpayer Identification Number ("TIN") should be included instead),
    account registration and dealer number, if applicable. If your initial
    purchase of Fund shares is by wire, please call 1-800-645-6561 after
    completing your wire payment to obtain your Fund account number. Please
    include your Fund account number on the Account Application and promptly
    mail the Account Application to the Fund, as no redemptions will be
    permitted until the Account Application is received. You may obtain
    further information about remitting funds in this manner from your bank.
    All payments should be made in U.S. dollars and, to avoid fees and
    delays, should be drawn only on U.S. banks. A charge will be imposed if
    any check used for investment in your account does not clear. The Fund
    makes available to certain large institutions the ability to issue
    purchase instructions through compatible computer facilities.
    
   
        Fund shares also may be purchased through Dreyfus-AUTOMATIC
    Asset Builder Registration Mark and the Government Direct Deposit
    Privilege described under "Shareholder Services." These services enable
    you to make regularly scheduled investments and may provide you with a
    convenient way to invest for long-term financial goals. You should be
    aware, however, that periodic investment plans do not guarantee a profit
    and will not protect an investor against loss in a declining market.
    
        Subsequent investments also may be made by electronic
    transfer of funds from an account maintained in a bank or other domestic
    financial institution that is an Automated Clearing House member. You
    must direct the institution to transmit immediately available funds
    through the Automated Clearing House to The Bank of New York with
    instructions to credit your Fund account. The instructions must specify
    your Fund account registration and your Fund account number PRECEDED BY
    THE DIGITS "1111."
   
        Fund shares are sold on a continuous basis. Net asset value
    per share is determined as of the close of trading on the floor of the
    New York Stock Exchange (currently 4:00 p.m., New York
                                  Page 12

    time), on each day the New York Stock Exchange is open for business. For
    purposes of determining net asset value, options and futures contracts
    will be valued 15 minutes after the close of trading on the floor of the
    New York Stock Exchange. Net asset value per share of each Class is
    computed by dividing the value of the Fund's net assets represented by
    such Class (i.e., the value of its assets less liabilities) by the total
    number of shares of such Class outstanding. The Fund's investments are
    valued by an independent pricing service approved by the Fund's Board and
    are valued at fair value as determined by the pricing service. The pricing
    service's procedures are reviewed under the general supervision of the
    Fund's Board. For further information regarding the methods employed in
    valuing Fund investments, see "Determination of Net Asset Value" in the
    Statement of Additional Information.
    
   
    
        If an order is received by the Transfer Agent by the close of
    trading on the floor of the New York Stock Exchange (currently 4:00 p.m.,
    New York time) on any business day, Fund shares will be purchased at the
    public offering price determined as of the close of trading on the floor
    of the New York Stock Exchange on that day. Otherwise, Fund shares will
    be purchased at the public offering price determined as of the close of
    trading on the floor of the New York Stock Exchange, on the next business
    day, except where shares are purchased through a dealer as provided
    below.
        Orders for the purchase of Fund shares received by dealers by
    the close of trading on the floor of the New York Stock Exchange on a
    business day and transmitted to the Distributor or its designee by the
    close of its business day (normally 5:15 p.m., New York time) will be
    based on the public offering price per share determined as of the close
    of trading on the floor of the New York Stock Exchange on that day.
    Otherwise, the orders will be based on the next determined public
    offering price. It is the dealers' responsibility to transmit orders so
    that they will be received by the Distributor or its designee before the
    close of its business day.
   
        Federal regulations require that you provide a certified TIN
    upon opening or reopening an account. See "Dividends, Distributions and
    Taxes" and the Account Application for further information concerning
    this requirement. Failure to furnish a certified TIN to the Fund could
    subject you to a $50 penalty imposed by the Internal Revenue Service (the
    "IRS").
    
        CLASS A SHARES -- The public offering price for Class A shares is the
    net asset value per share of that Class plus a sales load as shown below:
<TABLE>
<CAPTION>
                                                                      Total Sales Load
                                                            --------------------------------------
                                                          As a % of             As a % of          Dealers' Reallowance
                                                      offering price           net asset value         as a % of
        Amount of Transaction                            per share                per share           offering price
        --------------------                        ----------------           ----------------    -----------------------
        <S>                                                  <C>                      <C>                <C>
        Less than $50,000.........                           4.50                     4.70               4.25
        $50,000 to less than $100,000                        4.00                     4.20               3.75
        $100,000 to less than $250,000                       3.00                     3.10               2.75
        $250,000 to less than $500,000                       2.50                     2.60               2.25
        $500,000 to less than $1,000,000                     2.00                     2.00               1.75
        $1,000,000 or more........                            -0-                      -0-                -0-
</TABLE>
   
         A CDSC of 1.00% will be assessed at the time of redemption of Class A
    shares purchased without an initial sales charge as part of an investment
    of at least $1,000,000 and redeemed within one year of purchase. The terms
    contained in the section of the Prospectus entitled "How to Redeem
    Shares--Contingent Deferred Sales Charge" (other than the amount of the
    CDSC and time periods) are applicable to the Class A shares subject to a
    CDSC. Letter of Intent and Right of Accumulation apply to such purchases
    of Class A shares.
    
                                  Page 13

   
         Full-time employees of NASD member firms and full-time
    employees of other financial institutions which have entered into an
    agreement with the Distributor pertaining to the sale of Fund shares (or
    which otherwise have a brokerage related or clearing arrangement with an
    NASD member firm or financial institution with respect to sales of Fund
    shares) may purchase Class A shares for themselves directly or pursuant
    to an employee benefit plan or other program, or for their spouses or
    minor children at net asset value, provided that they have furnished the
    Distributor with such information as it may request from time to time in
    order to verify eligibility for this privilege. This privilege also
    applies to full-time employees of financial institutions affiliated with
    NASD member firms whose full-time employees are eligible to purchase
    Class A shares at net asset value. In addition, Class A shares are
    offered at net asset value to full-time or part-time employees of The
    Dreyfus Corporation or any of its affiliates or subsidiaries, directors
    of The Dreyfus Corporation, Board members of a fund advised by The
    Dreyfus Corporation, including members of the Fund's Board, or the spouse
    or minor child of any of the foregoing.
    
   
         Class A shares may be purchased at net asset value through
    certain broker-dealers and other financial institutions which have
    entered into an agreement with the Distributor, which includes a
    requirement that such shares be sold for the benefit of clients
    participating in a "wrap account" or a similar program under which such
    clients pay a fee to such broker-dealer or other financial institution.
    
   
         Class A shares also may be purchased at net asset value,
    subject to appropriate documentation, through a broker-dealer or other
    financial institution with the proceeds from the redemption of shares of
    a registered open-end management investment company not managed by The
    Dreyfus Corporation or its affiliates. The purchase of Class A shares of
    the Fund must be made within 60 days of such redemption and the
    shareholder must have either (i) paid an initial sales charge or a
    contingent deferred sales charge or (ii) been obligated to pay at any
    time during the holding period, but did not actually pay on redemption, a
    deferred sales charge with respect to such redeemed shares.
    
   
         Class A shares also may be purchased at net asset value,
    subject to appropriate documentation, by (i)qualified separate accounts
    maintained by an insurance company pursuant to the laws of any State or
    territory of the United States, (ii) a State, county or city or
    instrumentality thereof, (iii) a charitable organization (as defined in
    Section 501(c)(3) of the Code investing $50,000 or more in Fund shares,
    and (iv) a charitable remainder trust (as defined in Section 501(c)(3) of
    the Code).
    
   
         The dealer reallowance may be changed from time to time but
    will remain the same for all dealers. The Distributor, at its own
    expense, may provide additional promotional incentives to dealers that
    sell shares of funds advised by The Dreyfus Corporation which are sold
    with a sales load, such as Class A shares. In some instances, these
    incentives may be offered only to certain dealers who have sold or may
    sell significant amounts of such shares.
    
   
    CLASS B SHARES -- The public offering price for Class B shares is the
    net asset value per share of that Class. No initial sales charge is
    imposed at the time of purchase. A CDSC is imposed, however, on certain
    redemptions of Class B shares as described under "How to Redeem Shares."
    The Distributor compensates certain Service Agents for selling Class B
    and Class C shares at the time of purchase from the Distributor's own
    assets. The proceeds of the CDSC and the distribution fee, in part, are
    used to defray these expenses.
    
   
    CLASS C SHARES -- The public offering price for Class C shares is the
    net asset value per share of that Class. No initial sales charge is
    imposed at the time of purchase. A CDSC is imposed,
                                  Page 14

    however, on redemptions of Class C shares made within the first year of
    purchase. See "Class B Shares" above and "How to Redeem Shares."
    
   
    RIGHT OF ACCUMULATION -- CLASS A SHARES -- Reduced sales loads apply
    to any purchase of Class A shares, shares of other funds in the Premier
    Family of Funds, shares of certain other funds advised by The Dreyfus
    Corporation which are sold with a sales load and shares acquired by a
    previous exchange of such shares (hereinafter referred to as "Eligible
    Funds"), by you and any related "purchaser" as defined in the Statement
    of Additional Information, where the aggregate investment, including such
    purchase, is $50,000 or more. If, for example, you have previously
    purchased and still hold Class A shares of the Fund, or of any other
    Eligible Fund or combination thereof, with an aggregate current market
    value of $40,000 and subsequently purchase Class A shares of the Fund or
    an Eligible Fund having a current value of $20,000, the sales load
    applicable to the subsequent purchase would be reduced to 4% of the
    offering price. All present holdings of Eligible Funds may be combined to
    determine the current offering price of the aggregate investment in
    ascertaining the sales load applicable to each subsequent purchase.
    
   
        To qualify for reduced sales loads, at the time of purchase
    you or your Service Agent must notify the Distributor if orders are made
    by wire, or the Transfer Agent if orders are made by mail. The reduced
    sales load is subject to confirmation of your holdings through a check of
    appropriate records.
    
   
    TELETRANSFER PRIVILEGE -- You may purchase Fund shares (minimum $500,
    maximum $150,000 per day) by telephone if you have checked the
    appropriate box and supplied the necessary information on the Account
    Application or have filed a Shareholder Services Form with the Transfer
    Agent. The proceeds will be transferred between the bank account
    designated in one of these documents and your Fund account. Only a bank
    account maintained in a domestic financial institution which is an
    Automated Clearing House member may be so designated. The Fund may modify
    or terminate this Privilege at any time or charge a service fee upon
    notice to shareholders. No such fee currently is contemplated.
    
   
         If you have selected the TELETRANSFER Privilege, you may
    request a TELETRANSFER  purchase of shares by calling 1-800-645-6561 or,
    if you are calling from overseas, call 516-794-5452.
    
SHAREHOLDER SERVICES
         The services and privileges described under this heading may
    not be available to clients of certain Service Agents and some Service
    Agents may impose certain conditions on their clients which are different
    from those described in this Prospectus. You should consult your Service
    Agent in this regard.
    FUND EXCHANGES
   
         Clients of certain Service Agents may purchase, in exchange
    for shares of a Class, shares of the same Class of certain other funds
    managed by The Dreyfus Corporation, to the extent such shares are offered
    for sale in your state of residence. These funds have different
    investment objectives which may be of interest to you. You also may
    exchange your Fund shares that are subject to a CDSC for shares of
    Dreyfus Worldwide Dollar Money Market Fund, Inc. The shares so purchased
    will be held in a special account created solely for this purpose
    ("Exchange Account"). Exchanges of shares from an Exchange Account only
    can be made into certain other funds managed or administered by The
    Dreyfus Corporation. No CDSC is charged when an investor exchanges into
    an Exchange Account; however, the applicable CDSC will be imposed when
    shares are redeemed from an Exchange Account or other applicable Fund
    account. Upon redemption, the applicable CDSC will be calculated without
    regard to the time such shares were held in an Exchange Account. See "How
    to Redeem Shares."
                                  Page 15

    Redemption proceeds for Exchange Account shares are paid by Federal wire
    or check only. Exchange Account shares also are eligible for the
    Auto-Exchange Privilege, Dividend Sweep and the Automatic Withdrawal Plan.
    To use this service, you should consult your Service Agent or call
    1-800-645-6561 to determine if it is available and whether any conditions
    are imposed on its use.
    
   
         To request an exchange, you or your Service Agent acting on
    your behalf must give exchange instructions to the Transfer Agent in
    writing or by telephone. Before any exchange, you must obtain and should
    review a copy of the current prospectus of the fund into which the
    exchange is being made. Prospectuses may be obtained by calling
    1-800-645-6561. Except in the case of personal retirement plans, the
    shares being exchanged must have a current value of at least $500;
    furthermore, when establishing a new account by exchange, the shares
    being exchanged must have a value of at least the minimum initial
    investment required for the fund into which the exchange is being made.
    The ability to issue exchange instructions by telephone is given to all
    Fund shareholders automatically, unless you check the applicable "No" box
    on the Account Application, indicating that you specifically refuse this
    Privilege. The Telephone Exchange Privilege may be established for an
    existing account by written request, signed by all shareholders on the
    account, by a separate signed Shareholder Services Form, available by
    calling 1-800-645-6561 or by oral request from any of the authorized
    signatories on the account, also by calling 1800-645-6561. If you have
    established the Telephone Exchange Privilege, you may telephone exchange
    instructions by calling 1-800-645-6561 or, if you are calling from
    overseas, call 516-794-5452. See "How to Redeem Shares _ Procedures."
    Upon an exchange into a new account, the following shareholder services
    and privileges, as applicable and where available, will be automatically
    carried over to the fund into which the exchange is made: Telephone
    Exchange Privilege, Check Redemption Privilege, TELETRANSFER Privilege
    and the dividend/capital gain distribution option (except for Dividend
    Sweep) selected by the investor.
    
   
         Shares will be exchanged at the next determined net asset
    value; however, a sales load may be charged with respect to exchanges of
    Class A shares into funds sold with a sales load. No CDSC will be imposed
    on Class B or Class C shares at the time of an exchange; however, Class B
    or Class C shares acquired through an exchange will be subject on
    redemption to the higher CDSC applicable to the exchanged or acquired
    shares. The CDSC applicable on redemption of the acquired Class B or
    Class C shares will be calculated from the date of the initial purchase
    of the Class B or Class C shares exchanged. If you are exchanging Class A
    shares into a fund that charges a sales load, you may qualify for share
    prices which do not include the sales load or which reflect a reduced
    sales load, if the shares you are exchanging were: (a) purchased with a
    sales load, (b) acquired by a previous exchange from shares purchased
    with a sales load, or (c) acquired through reinvestment of dividends or
    distributions paid with respect to the foregoing categories of shares. To
    qualify, at the time of the exchange your Service Agent must notify the
    Distributor. Any such qualification is subject to confirmation of your
    holdings through a check of appropriate records. See "Shareholder Services"
    in the Statement of Additional Information. No fees currently are charged
    shareholders directly in connection with exchanges, although the Fund
    reserves the right, upon not less than 60 days' written notice, to charge
    shareholders a nominal fee in accordance with the rules promulgated by
    the Securities and Exchange Commission. The Fund reserves the right to
    reject any exchange request in whole or in part. The availability of Fund
    Exchanges may be modified or terminated at any time upon notice to
    shareholders. See "Dividends, Distributions and Taxes."

    
   
    
                                     Page 16

    AUTO-EXCHANGE PRIVILEGE
   
        Auto-Exchange Privilege enables you to invest regularly (on a
    semi-monthly, monthly, quarterly or annual basis), in exchange for shares
    of the Fund, in shares of the same Class of other funds in the Premier
    Family of Funds or certain other funds in the Dreyfus Family of Funds of
    which you are a shareholder. The amount you designate, which can be
    expressed either in terms of a specific dollar or share amount ($100
    minimum), will be exchanged automatically on the first and/or fifteenth
    of the month according to the schedule you have selected. Shares will be
    exchanged at the then-current net asset value; however, a sales load may
    be charged with respect to exchanges of Class A shares into funds sold
    with a sales load. No CDSC will be imposed on Class B or Class C shares
    at the time of an exchange; however, Class B or Class C shares acquired
    through an exchange will be subject on redemption to the higher CDSC
    applicable to the exchanged or acquired shares. The CDSC applicable on
    redemption of the acquired Class B or Class C shares will be calculated
    from the date of the initial purchase of the Class B or Class C shares
    exchanged. See "Shareholder Services" in the Statement of Additional
    Information. The right to exercise this Privilege may be modified or
    cancelled by the Fund or the Transfer Agent. You may modify or cancel
    your exercise of this Privilege at any time by mailing written
    notification to Premier Municipal Bond Fund, P.O. Box 6587, Providence,
    Rhode Island 02940-6587. The Fund may charge a service fee for the use of
    this Privilege. No such fee currently is contemplated. For more
    information concerning this Privilege and the funds in the Premier Family
    of Funds or the Dreyfus Family of Funds eligible to participate in this
    Privilege, or to obtain an Auto-Exchange Authorization Form, please call
    toll free 1-800-645-6561. See "Dividends, Distributions and Taxes."
    
   
    DREYFUS-AUTOMATIC ASSET Builder Registration Mark
    
   
         Dreyfus-AUTOMATIC Asset Builder permits you to purchase Fund
    shares (minimum of $100 and maximum of $150,000 per transaction) at
    regular intervals selected by you. Fund shares are purchased by
    transferring funds from the bank account designated by you. At your
    option, the bank account designated by you will be debited in the
    specified amount, and Fund shares will be purchased, once a month, on
    either the first or fifteenth day, or twice a month, on both days. Only
    an account maintained at a domestic financial institution which is an
    Automated Clearing House member may be so designated. To establish a
    Dreyfus-Automatic Asset Builder account, you must file an authorization
    form with the Transfer Agent. You may obtain the necessary authorization
    form by calling 1-800-645-6561. You may cancel your participation in this
    Privilege or change the amount of purchase at any time by mailing written
    notification to Premier Municipal Bond Fund, P.O. Box 6587, Providence,
    Rhode Island 02940-6587, and the notification will be effective three
    business days following receipt. The Fund may modify or terminate this
    Privilege at any time or charge a service fee. No such fee currently is
    contemplated.
    
    GOVERNMENT DIRECT DEPOSIT PRIVILEGE
         Government Direct Deposit Privilege enables you to purchase
    Fund shares (minimum of $100 and maximum of $50,000 per transaction) by
    having Federal salary, Social Security, or certain veterans', military or
    other payments from the Federal government automatically deposited into
    your Fund account. You may deposit as much of such payments as you elect.
    To enroll in Government Direct Deposit, you must file with the Transfer
    Agent a completed Direct Deposit Sign-Up Form for each type of payment
    that you desire to include in this Privilege. The
                                  Page 17

    appropriate form may be obtained from your Service Agent or by calling
    1-800-645-6561. Death or legal incapacity will terminate your
    participation in this Privilege. You may elect at any time to terminate
    your participation by notifying in writing the appropriate Federal agency.
    Further, the Fund may terminate your participation upon 30 days' notice to
    you.
    DIVIDEND OPTIONS
       Dividend Sweep enables you to invest automatically dividends
    or dividends and capital gain distributions, if any, paid by the Fund in
    shares of the same Class of another fund in the Premier Family of Funds
    or the Dreyfus Family of Funds of which you are a shareholder. Shares of
    the other fund will be purchased at the then-current net asset value;
    however, a sales load may be charged with respect to investments in
    shares of a fund sold with a sales load. If you are investing in a fund
    that charges a sales load, you may qualify for share prices which do not
    include the sales load or which reflect a reduced sales load. If you are
    investing in a fund that charges a CDSC, the shares purchased will be
    subject on redemption to the CDSC, if any, applicable to the purchased
    shares. See "Shareholder Services" in the Statement of Additional
    Information. Dividend ACH permits you to transfer electronically dividends
    or dividends and capital gain distributions, if any, from the Fund to a
    designated bank account. Only an account maintained at a domestic
    financial institution which is an Automated Clearing House member may be
    so designated. Banks may charge a fee for this service.
        For more information concerning these privileges, or to
    request a Dividend Options Form, please call toll free 1-800-645-6561.
    You may cancel these privileges by mailing written notification to
    Premier Municipal Bond Fund, P.O. Box 6587, Providence, Rhode Island
    02940-6587. To select a new fund after cancellation, you must submit a
    new Dividend Options Form. Enrollment in or cancellation of these
    privileges is effective three business days following receipt. These
    privileges are available only for existing accounts and may not be used
    to open new accounts. Minimum subsequent investments do not apply for
    Dividend Sweep. The Fund may modify or terminate these privileges at any
    time or charge a service fee. No such fee currently is contemplated.
    AUTOMATIC WITHDRAWAL PLAN
   
        The Automatic Withdrawal Plan permits you to request
    withdrawal of a specified dollar amount (minimum of $50) on either a
    monthly or quarterly basis if you have a $5,000 minimum account. An
    application for the Automatic Withdrawal Plan can be obtained by calling
    1-800-645-6561. The Automatic Withdrawal Plan may be ended at any time by
    you, the Fund or the Transfer Agent. Shares for which certificates have
    been issued may not be redeemed through the Automatic Withdrawal Plan.
    
        Class B or Class C shares withdrawn pursuant to the Automatic
    Withdrawal Plan will be subject to any applicable CDSC. Purchases of
    additional Class A shares where the sales load is imposed concurrently
    with withdrawals of Class A shares generally are undesirable.
    LETTER OF INTENT -- CLASS A SHARES
   
        By signing a Letter of Intent form, which can be obtained by
    calling 1-800-645-6561, you become eligible for the reduced sales load
    applicable to the total number of Eligible Fund shares purchased in a
    13-month period pursuant to the terms and conditions set forth in the
    Letter of Intent. A minimum initial purchase of $5,000 is required. To
    compute the applicable sales load, the offering price of shares you hold
    (on the date of submission of the Letter of Intent) in any Eligible Fund
    that may be used toward "Right of Accumulation" benefits described above
    may be used as a credit toward completion of the Letter of Intent.
    However, the reduced sales load will be applied only to new purchases.
    
                                  Page 18

        The Transfer Agent will hold in escrow 5% of the amount
    indicated in the Letter of Intent for payment of a higher sales load if
    you do not purchase the full amount indicated in the Letter of Intent.
    The escrow will be released when you fulfill the terms of the Letter of
    Intent by purchasing the specified amount. If your purchases qualify for
    a further sales load reduction, the sales load will be adjusted to
    reflect your total purchase at the end of 13 months. If total purchases
    are less than the amount specified, you will be requested to remit an
    amount equal to the difference between the sales load actually paid and
    the sales load applicable to the aggregate purchases actually made. If
    such remittance is not received within 20 days, the Transfer Agent, as
    attorney-in-fact pursuant to the terms of the Letter of Intent, will
    redeem an appropriate number of Class A shares held in escrow to realize
    the difference. Signing a Letter of Intent does not bind you to purchase,
    or the Fund to sell, the full amount indicated at the sales load in
    effect at the time of signing, but you must complete the intended
    purchase to obtain the reduced sales load. At the time you purchase Class
    A shares, you must indicate your intention to do so under a Letter of
    Intent. Purchases pursuant to a Letter of Intent will be made at the
    then-current net asset value plus the applicable sales load in effect at
    the time such Letter of Intent was executed.
   
HOW TO REDEEM SHARES
    
    GENERAL
        You may request redemption of your shares at any time.
    Redemption requests should be transmitted to the Transfer Agent as
    described below. When a request is received in proper form, the Fund will
    redeem the shares at the next determined net asset value as described
    below. If you hold Fund shares of more than one Class, any request for
    redemption must specify the Class of shares being redeemed. If you fail
    to specify the Class of shares to be redeemed or if you own fewer shares
    of the Class than specified to be redeemed, the redemption request may be
    delayed until the Transfer Agent receives further instructions from you
    or your Service Agent.
   
         The Fund imposes no charges (other than any applicable CDSC)
    when shares are redeemed. Service Agents may charge their clients a
    nominal fee for effecting redemptions of Fund shares. Any certificates
    representing Fund shares being redeemed must be submitted with the
    redemption request. The value of the shares redeemed may be more or less
    than their original cost, depending upon the Fund's then-current net
    asset value.
    
   
         The Fund ordinarily will make payment for all shares redeemed
    within seven days after receipt by the Transfer Agent of a redemption
    request in proper form, except as provided by the rules of the Securities
    and Exchange Commission. HOWEVER, IF YOU HAVE PURCHASED FUND SHARES BY
    CHECK, BY THE TELETRANSFER PRIVILEGE OR THROUGH DREYFUS-AUTOMATIC ASSET
    BUILDER AND SUBSEQUENTLY SUBMIT A WRITTEN REDEMPTION REQUEST TO THE
    TRANSFER AGENT, THE REDEMPTION PROCEEDS WILL BE TRANSMITTED TO YOU
    PROMPTLY UPON BANK CLEARANCE OF YOUR PURCHASE CHECK, TELETRANSFER
    PURCHASE OR DREYFUS-AUTOMATIC ASSET BUILDER ORDER, WHICH MAY TAKE UP TO
    EIGHT BUSINESS DAYS OR MORE. IN ADDITION, THE FUND WILL NOT HONOR
    REDEMPTION CHECKS UNDER THE CHECK REDEMPTION PRIVILEGE, AND WILL REJECT
    REQUESTS TO REDEEM SHARES PURSUANT TO THE TELETRANSFER PRIVILEGE, FOR A
    PERIOD OF EIGHT BUSINESS DAYS AFTER RECEIPT BY THE TRANSFER AGENT OF THE
    PURCHASE CHECK, THE TELETRANSFER PURCHASE OR THE DREYFUS-AUTOMATIC ASSET
    BUILDER ORDER AGAINST WHICH SUCH REDEMPTION IS REQUESTED. THESE
    PROCEDURES WILL NOT APPLY IF YOUR SHARES WERE PURCHASED BY WIRE PAYMENT,
    OR IF YOU OTHERWISE HAVE A SUFFICIENT COLLECTED BALANCE IN YOUR ACCOUNT
    TO COVER THE REDEMPTION REQUEST. PRIOR TO THE TIME ANY REDEMPTION IS
    EFFECTIVE, DIVIDENDS ON SUCH SHARES WILL ACCRUE AND BE PAYABLE, AND YOU
    WILL BE ENTITLED TO EXERCISE ALL OTHER RIGHTS OF BENEFICIAL OWNERSHIP.
    Fund
                                  Page 19

    shares will not be redeemed until the Transfer Agent has received
    your Account Application.
    
        The Fund reserves the right to redeem your account at its
    option upon not less than 30 days' written notice if your account's net
    asset value is $500 or less and remains so during the notice period.
    CONTINGENT DEFERRED SALES CHARGE
    CLASS B SHARES -- A CDSC payable to the Distributor is imposed on any
    redemption of Class B shares which reduces the current net asset value of
    your Class B shares to an amount which is lower than the dollar amount of
    all payments by you for the purchase of Class B shares of the Fund held
    by you at the time of redemption. No CDSC will be imposed to the extent
    that the net asset value of the Class B shares redeemed does not exceed
    (i) the current net asset value of Class B shares acquired through
    reinvestment of dividends or capital gain distributions, plus (ii)
    increases in the net asset value of Class B shares above the dollar
    amount of all your payments for the purchase of Class B shares of the
    Fund held by you at the time of redemption.
         If the aggregate value of the Class B shares redeemed has
    declined below their original cost as a result of the Fund's performance,
    a CDSC may be applied to the then-current net asset value rather than the
    purchase price.
         In circumstances where the CDSC is imposed, the amount of the
    charge will depend on the number of years from the time you purchased the
    Class B shares until the time of redemption of such shares. Solely for
    purposes of determining the number of years from the time of any payment
    for the purchase of Class B shares, all payments during a month will be
    aggregated and deemed to have been made on the first day of the month.
    The following table sets forth the rates of the CDSC:
    Year Since                                           CDSC as a % of Amount
    Purchase Payment                                    Invested or Redemption
    Was Made                                                    Proceeds
    -----------------                                  -----------------------
    First....................................................          3.00
    Second...................................................          3.00
    Third....................................................          2.00
    Fourth...................................................          2.00
    Fifth....................................................          1.00
    Sixth....................................................          0.00
         In determining whether a CDSC is applicable to a redemption, the
    calculation will be made in a manner that results in the lowest possible
    rate. It will be assumed that the redemption is made first of amounts
    representing shares acquired pursuant to the reinvestment of dividends and
    distributions; then of amounts representing the increase in net asset
    value of Class B shares above the total amount of payments for the
    purchase of Class B shares made during the preceding five years; then of
    amounts representing the cost of shares purchased five years prior to the
    redemption; and finally, of amounts representing the cost of shares held
    for the longest period of time within the applicable five-year period.
        For example, assume an investor purchased 100 shares at $10
    per share for a cost of $1,000. Subsequently, the shareholder acquired
    five additional shares through dividend reinvestment. During the second
    year after the purchase the investor decided to redeem $500 of his or her
    investment. Assuming at the time of the redemption the net asset value
    has appreciated to $12 per share, the value of the investor's shares
    would be $1,260 (105 shares at $12 per share). The CDSC would not be
    applied to the value of the reinvested dividend shares and the amount
    which represents appreciation ($260). Therefore, $240 of the $500
    redemption proceeds ($500
                                  Page 20

    minus $260) would be charged at a rate of 3%
    (the applicable rate in the second year after purchase) for a total CDSC
    of $7.20.
   
    CLASS C SHARES -- A CDSC of 1% payable to the Distributor is imposed
    on any redemption of Class C shares within one year of the  date of
    purchase. The basis for calculating the payment of any such CDSC will be
    the method used in calculating the CDSC for Class B shares. See
    "Contingent Deferred Sales Charge -- Class B Shares" above.
    
   
    WAIVER OF CDSC -- The CDSC will be waived in connection with (a)
    redemptions made within one year after the death or disability, as
    defined in Section 72(m)(7) of the Code, of the shareholder, (b)
    redemptions by employees participating in qualified or non-qualified
    employee benefit plans or other programs where (i) the employers or
    affiliated employers maintaining such plans or programs have a minimum of
    250 employees eligible for participation in such plans or programs, or
    (ii) such plan's or program's aggregate investment in the Dreyfus Family
    of Funds or certain other products made available by the Distributor
    exceeds one million dollars, (c) redemptions as a result of a combination
    of any investment company with the Fund by merger, acquisition of assets
    or otherwise, and (d) a distribution following retirement under a
    tax-deferred retirement plan or upon attaining age 701/2 in the case of
    an IRA or Keogh plan or custodial account pursuant to Section 403(b) of
    the Code. If the Fund's Board determines to discontinue the waiver of the
    CDSC, the disclosure in the Prospectus will be revised appropriately. Any
    Fund shares subject to a CDSC which were purchased prior to the
    termination of such waiver will have the CDSC waived as provided in the
    Prospectus at the time of the purchase of such shares.
    
       To qualify for a waiver of the CDSC, at the time of redemption you must
    notify the Transfer Agent or your Service Agent must notify the
    Distributor. Any such qualification is subject to confirmation of your
    entitlement.
    PROCEDURES
   
        You may redeem shares by using the regular redemption
    procedure through the Transfer Agent, or, if you have checked the
    appropriate box and supplied the necessary information on the Account
    Application or have filed a Shareholder Services Form with the Transfer
    Agent, through the Check Redemption Privilege with respect to Class A
    shares only, or the TELETRANSFER Privilege. If you are a client of a
    Selected Dealer, you may redeem shares through the Selected Dealer. If
    you have given your Service Agent authority to instruct the Transfer
    Agent to redeem shares and to credit the proceeds of such redemptions to
    a designated account at your Service Agent, you may redeem shares only in
    this manner and in accordance with the regular redemption procedure
    described below. If you wish to use the other redemption methods
    described below, you must arrange with your Service Agent for delivery of
    the required application(s) to the Transfer Agent. Other redemption
    procedures may be in effect for clients of certain Service Agents. The
    Fund makes available to certain large institutions the ability to issue
    redemption instructions through compatible computer facilities. The Fund
    reserves the right to refuse any request made by telephone, including
    requests made shortly after a change of address, and may limit the amount
    involved or the number of such requests. The Fund may modify or terminate
    any redemption Privilege at any time or charge a service fee upon notice
    to shareholders. No such fee currently is contemplated. Shares for which
    certificates have been issued are not eligible for the Check Redemption
    or TELETRANSFER Privilege.
    
                                  Page 21

         Your redemption request may direct that the redemption
    proceeds be used to purchase shares of other funds advised or
    administered by The Dreyfus Corporation that are not available through
    the Exchange Privilege. The applicable CDSC will be charged upon the
    redemption of Class B or Class C shares. Your redemption proceeds will be
    invested in shares of the other fund on the next business day. Before you
    make such a request, you must obtain and should review a copy of the
    current prospectus of the fund being purchased. Prospectuses may be
    obtained by calling 1-800-645-6561. The prospectus will contain
    information concerning minimum investment requirements and other
    conditions that may apply to your purchase.
   
         You may redeem shares by telephone if you have checked the
    appropriate box on the Account Application or have filed a Shareholder
    Services Form with the Transfer Agent. If you select the TELETRANSFER
    redemption privilege or telephone exchange privilege (which is granted
    automatically unless you refuse it), you authorize the Transfer Agent to
    act on telephone instructions from any person representing himself or
    herself to be you, or a representative of your Service Agent, and
    reasonably believed by the Transfer Agent to be genuine. The Fund will
    require the Transfer Agent to employ reasonable procedures, such as
    requiring a form of personal identification, to confirm that instructions
    are genuine and, if it does not follow such procedures, the Fund or the
    Transfer Agent may be liable for any losses due to unauthorized or
    fraudulent instructions. Neither the Fund nor the Transfer Agent will be
    liable for following telephone instructions reasonably believed to be
    genuine.
    
   
        During times of drastic economic or market conditions, you
    may experience difficulty in contacting the Transfer Agent by telephone
    to request a redemption or exchange of Fund shares. In such cases, you
    should consider using the other redemption procedures described herein.
    Use of these other redemption procedures may result in your redemption
    request being processed at a later time than it would have been if
    telephone redemption had been used. During the delay, the Fund's net
    asset value may fluctuate.
    
   
    REGULAR REDEMPTION -- Under the regular redemption procedure, you may
    redeem shares by written request mailed to Premier Municipal Bond Fund,
    P.O. Box 6587, Providence, Rhode Island 02940-6587. Redemption requests
    must be signed by each shareholder, including each owner of a joint
    account, and each signature must be guaranteed. The Transfer Agent has
    adopted standards and procedures pursuant to which signature-guarantees
    in proper form generally will be accepted from domestic banks, brokers,
    dealers, credit unions, national securities exchanges, registered
    securities associations, clearing agencies and savings associations, as
    well as from participants in the New York Stock Exchange Medallion
    Signature Program, the Securities Transfer Agents Medallion Program
    ("STAMP") and the Stock Exchanges Medallion Program. If you have any
    questions with respect to signature-guarantees, please contact your
    Service Agent or call the telephone number listed on the cover of this
    Prospectus.
    
        Redemption proceeds of at least $1,000 will be wired to any
    member bank of the Federal Reserve System in accordance with a written
    signature-guaranteed request.
   
    CHECK REDEMPTION PRIVILEGE -- CLASS A SHARES -- You may write
    Redemption Checks drawn on your Fund account. Redemption Checks may be
    made payable to the order of any person in the amount of $500 or more.
    Potential fluctuations in the net asset value of Class A shares should be
    considered in determining the amount of the check. Redemption Checks
    should not be used to close your account. Redemption Checks are free, but
    the Transfer Agent will impose a fee for stopping payment of a Redemption
    Check upon your request or if the Transfer Agent
                                  Page 22

    cannot honor the Redemption Check due to insufficient funds or other valid
    reason. You should date your Redemption Checks with the current date when
    you write them. Please do not postdate your Redemption Checks. If you do,
    the Transfer Agent will honor, upon presentment, even if presented before
    the date of the check, all postdated Redemption Checks which are dated
    within six months of presentment for payment, if they are otherwise in
    good order. This Privilege will be terminated immediately, without notice,
    with respect to any account which is, or becomes, subject to backup
    withholding on redemptions (see "Dividends, Distributions and Taxes").
    Any Redemption Check written on an account which has become subject to
    backup withholding on redemptions will not be honored by the Transfer
    Agent.
    
   
    TELETRANSFER PRIVILEGE -- You may request by telephone that
    redemption proceeds (minimum $500 per day) be transferred between your
    Fund account and your bank account. Only a bank account maintained in a
    domestic financial institution which is an Automated Clearing House
    member may be designated. Redemption proceeds will be on deposit in your
    account at an Automated Clearing House member bank ordinarily two days
    after receipt of the redemption request or, at your request, paid by
    check (maximum $150,000 per day) and mailed to your address. Holders of
    jointly registered Fund or bank accounts may redeem through the
    TELETRANSFER Privilege for transfer to their bank account not more than
    $250,000 within any 30-day period.
    
   
         If you have selected the TELETRANSFER Privilege, you may
    request a TELETRANSFER redemption of shares by calling 1-800-645-6561 or,
    if you are calling from overseas, call 516-794-5452.
    
   
    REDEMPTION THROUGH A SELECTED DEALER -- If you are a customer of a
    Selected Dealer, you may make redemption requests to your Selected
    Dealer. If the Selected Dealer transmits the redemption request so that
    it is received by the Transfer Agent prior to the close of trading on the
    floor of the New York Stock Exchange (currently 4:00 p.m., New York
    time), the redemption request will be effective on that day. If a
    redemption request is received by the Transfer Agent after the close of
    trading on the floor of the New York Stock Exchange, the redemption
    request will be effective on the next business day. It is the
    responsibility of the Selected Dealer to transmit a request so that it is
    received in a timely manner. The proceeds of the redemption are credited
    to your account with the Selected Dealer. See "How to Buy Shares" for a
    discussion of additional conditions or fees that may be imposed upon
    redemption.
    
         In addition, the Distributor or its designee will accept
    orders from Selected Dealers with which the Distributor has sales
    agreements for the repurchase of shares held by shareholders. Repurchase
    orders received by the dealer by the close of trading on the floor of the
    New York Stock Exchange on any business day and transmitted to the
    Distributor or its designee prior to the close of its business day
    (normally 5:15 p.m., New York time) are effected at the price determined
    as of the close of trading on the floor of the New York Stock Exchange on
    that day. Otherwise, the shares will be redeemed at the next determined
    net asset value. It is the responsibility of the Selected Dealer to
    transmit orders on a timely basis. The Selected Dealer may charge the
    shareholder a fee for executing the order. This repurchase arrangement is
    discretionary and may be withdrawn at any time.
    REINVESTMENT PRIVILEGE -- CLASS A SHARES
        Upon written request, you may reinvest up to the number of
    Class A shares you have redeemed, within 30 days of redemption, at the
    then-prevailing net asset value without a sales load, or reinstate your
    account for the purpose of exercising the Exchange Privilege. The
    Reinvestment Privilege may be exercised only once.
                                  Page 23

    DISTRIBUTION PLAN AND SHAREHOLDER SERVICES PLAN
   
        Class B and Class C shares are subject to a Distribution Plan
    and Class A, Class B and Class C shares are subject to a Shareholder
    Services Plan.
    
   
    DISTRIBUTION PLAN -- Under the Distribution Plan, adopted pursuant to
    Rule 12b-1 under the 1940 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 and .75
    of 1% of the value of the average daily net assets of Class C.
    
   
    SHAREHOLDER SERVICES PLAN -- Under the Shareholder Services Plan, the
    Fund pays the Distributor for the provision of certain services to the
    holders of Class A, Class B and Class C shares a fee at the annual rate
    of .25 of 1% of the value of the average daily net assets of each such
    Class. The services provided may include personal services relating to
    shareholder accounts, such as answering shareholder inquiries regarding
    the Fund and providing reports and other information, and services
    related to the maintenance of shareholder accounts. The Distributor may
    make payments to Service Agents in respect of these services. The
    Distributor determines the amounts to be paid to Service Agents.
    
DIVIDENDS, DISTRIBUTIONS AND TAXES
        The Fund ordinarily declares dividends from its net
    investment income on each day the New York Stock Exchange is open for
    business. Fund shares begin earning income dividends on the day
    immediately available funds ("Federal Funds" (monies of member banks
    within the Federal Reserve System which are held on deposit at a Federal
    Reserve Bank)) are received by the Transfer Agent in written or
    telegraphic form. If a purchase order is not accompanied by remittance in
    Federal Funds, there may be a delay between the time the purchase order
    becomes effective and the time the shares purchased start earning
    dividends. If your payment is not made in Federal Funds, it must be
    converted into Federal Funds. This usually occurs within one business day
    of receipt of a bank wire and within two business days of receipt of a
    check drawn on a member bank of the Federal Reserve System. Checks drawn
    on banks which are not members of the Federal Reserve System may take
    considerably longer to convert into Federal Funds.
   
        Dividends usually are paid on the last calendar day of each
    month and are automatically reinvested in additional shares of the same
    Class from which they were paid at net asset value without a sales load
    or, at your option, paid in cash. The Fund's earnings for Saturdays,
    Sundays and holidays are declared as dividends on the preceding business
    day. If you redeem all shares in your account at any time during the
    month, all dividends to which you are entitled will be paid to you along
    with the proceeds of the redemption. If you are an omnibus accountholder
    and indicate in a partial redemption request that a portion of any
    accrued dividends to which such account is entitled belongs to an
    underlying accountholder who has redeemed all shares in his or her account
    , such portion of the accrued dividends will be paid to you along with the
    proceeds of the redemption. Distributions from net realized securities
    gains, if any, generally are declared and paid once a year, but the Fund
    may make distributions on a more frequent basis to comply with the
    distribution requirements of the Code, in all events in a manner
    consistent with the provisions of the 1940 Act. The Fund will not make
    distributions from net realized securities gains unless capital loss
    carryovers, if any, have been utilized or have expired. You may choose
    whether to receive dividends and distributions in cash or to reinvest in
    additional shares of the same Class from which they were paid at net
    asset value. All expenses are accrued daily and deducted before
    declaration of dividends to investors. Dividends paid by each Class will
    be calculated at the same time and in the same manner and will be of the
    same amount, except that the expenses attributable solely to a par-
                                  Page 24

    ticular Class will be borne exclusively by such Class. Class B and Class C
    shares will receive lower per share dividends than Class A shares because
    of the higher expenses borne by the relevant Class . See "Fee Table."
    
   
         Except for dividends from Taxable Investments, the Fund
    anticipates that substantially all dividends paid by the Fund will not be
    subject to Federal income tax. No dividend paid by the Fund will qualify
    for the dividends received deduction allowable to certain U.S.
    corporations. Dividends derived from Taxable Investments, together with
    distributions from any net realized short-term securities gains and all
    or a portion of any gains realized from the sale or other disposition of
    certain market discount bonds, paid by the Fund are subject to Federal
    income tax as ordinary income whether received in cash or reinvested in
    additional shares. Distributions from net realized long-term securities
    gains of the Fund generally are subject to Federal income tax as
    long-term capital gains, if you are a citizen or resident of the United
    States. The Code provides that the net capital gain of an individual
    generally will not be subject to Federal income tax at a rate in excess
    of 28%. Under the Code, interest on indebtedness incurred or continued to
    purchase or carry Fund shares which is deemed to relate to
    exempt-interest dividends is not deductible. Dividends and distributions
    may be subject to state and local taxes.
    
   
    
   
         Although all or a substantial portion of the dividends paid
    by the Fund may be excluded by shareholders of the Fund from their gross
    income for Federal income tax purposes, the Fund may purchase specified
    private activity bonds, the interest from which may be (i) a preference
    item for purposes of the alternative minimum tax, (ii) a component of the
    "adjusted current earnings" preference item for purposes of the corporate
    alternative minimum tax as well as a component in computing the corporate
    environmental tax or (iii) a factor in determining the extent to which a
    shareholder's Social Security benefits are taxable. If the Fund purchases
    such securities, the portion of the Fund's dividends related thereto will
    not necessarily be tax exempt to an investor who is subject to the
    alternative minimum tax and/or tax on Social Security benefits and may
    cause an investor to be subject to such taxes.

    
   
         The exchange of shares of one fund for shares of another is
    treated for Federal income tax purposes as a sale of the shares given in
    exchange by the shareholder and, therefore, an exchanging shareholder may
    realize a taxable gain or loss.
    
   
         The Code provides for the "carryover" of some or all of the
    sales load imposed on Class A shares if you exchange your Class A shares
    for shares of another fund advised or administered by The Dreyfus
    Corporation within 91 days of purchase and such other fund reduces or
    eliminates its otherwise applicable sales load for the purpose of the
    exchange. In this case, the amount of the sales load charge for Class A
    shares, up to the amount of the reduction of the sales load charge on the
    exchange, is not included in the basis of your Class A shares for
    purposes of computing gain or loss on the exchange, and instead is added
    to the basis of the fund shares received on the exchange.
    
         Notice as to the tax status of your dividends and distributions will
    be mailed to you annually. You also will receive periodic summaries of
    your account which will include information as to dividends and
    distributions from securities gains, if any, paid during the year.
    These statements set forth the dollar amount of income exempt
    from Federal tax and the dollar amount, if any, subject to Federal tax.
    These dollar amounts will vary depending on the size and length of time
    of your investment in the Fund. If the Fund pays dividends derived from
    taxable income, it intends to designate as taxable the same percentage of
    the day's dividends as the actual taxable income earned on that day bears
    to total income earned on that day. Thus, the percentage of the dividend
    designated as taxable, if any, may vary from day to day.
                                  Page 25

          Federal regulations generally require the Fund to withhold
    ("backup withholding") and remit to the U.S. Treasury 31% of taxable
    dividends, distributions from net realized securities gains and the
    proceeds of any redemption, regardless of the extent to which gain or
    loss may be realized, paid to a shareholder if such shareholder fails to
    certify either that the TIN furnished in connection with opening an
    account is correct or that such shareholder has not received notice from
    the IRS of being subject to backup withholding as a result of a failure
    to properly report taxable dividend or interest income on a Federal
    income tax return. Furthermore, the IRS may notify the Fund to institute
    backup withholding if the IRS determines a shareholder's TIN is incorrect
    or if a shareholder has failed to properly report taxable dividend and
    interest income on a Federal income tax return.
         A TIN is either the Social Security number or employer
    identification number of the record owner of the account. Any tax
    withheld as a result of backup withholding does not constitute an
    additional tax imposed on the record owner of the account, and may be
    claimed as a credit on the record owner's Federal income tax return.
   
         Management of the Fund believes that the Fund has qualified
    for the fiscal year ended April 30, 1996 as a "regulated investment
    company" under the Code. The Fund intends to continue to so qualify, if
    such qualification is in the best interests of its shareholders. Such
    qualification relieves the Fund of any liability for Federal income taxes
    to the extent its earnings are distributed in accordance with applicable
    provisions of the Code. The Fund is subject to a non-deductible 4% excise
    tax, measured with respect to certain undistributed amounts of taxable
    investment income and capital gains.
    
         You should consult your tax adviser regarding specific questions as
    to Federal, state or local income taxes.
PERFORMANCE INFORMATION
         For purposes of advertising, performance for each Class of
    shares may be calculated on several bases, including current yield, tax
    equivalent yield, average annual total return and/or total return. These
    total return figures reflect changes in the price of the shares and
    assume that any income dividends and/or capital gains distributions made
    by the Fund during the measuring period were reinvested in shares of the
    same Class. Class A total return figures include the maximum initial
    sales charge and Class B and Class C total return figures include any
    applicable CDSC. These figures also take into account any applicable
    service and distribution fees. As a result, at any given time, the
    performance of Class B or Class C should be expected to be lower than
    that of Class A. Performance for each Class will be calculated
    separately.
   
         Current yield refers to the Fund's annualized net investment
    income per share over a 30-day period, expressed as a percentage of the
    net asset value (or maximum offering price in the case of Class A) per
    share at the end of the period. For purposes of calculating current
    yield, the amount of net investment income per share during that 30-day
    period, computed in accordance with regulatory requirements, is
    compounded by assuming that it is reinvested at a constant rate over a
    six-month period. An identical result is then assumed to have occurred
    during a second six-month period which, when added to the result for the
    first six months, provides an "annualized" yield for an entire one-year
    period. Calculations of the Fund's current yield may reflect absorbed
    expenses pursuant to any undertaking that may be in effect. See
    "Management of the Fund."
    
          Tax equivalent yield is calculated by determining the pre-tax
    yield which, after being taxed at a stated rate, would be equivalent to a
    stated current yield calculated as described above.
                                  Page 26

   
          Average annual total return is calculated pursuant to a
    standardized formula which assumes that an investment in the Fund was
    purchased with an initial payment of $1,000 and that the investment was
    redeemed at the end of a stated period of time, after giving effect to
    the reinvestment of dividends and distributions during the period. The
    return is expressed as a percentage rate which, if applied on a
    compounded annual basis, would result in the redeemable value of the
    investment at the end of the period. Advertisements of the Fund's
    performance will include the Fund's average annual total return for one,
    five and ten year periods, or for shorter periods depending upon the
    length of time during which the Fund has operated.
    
   
          Total return is computed on a per share basis and assumes the
    reinvestment of dividends and distributions. Total return generally is
    expressed as a percentage rate which is calculated by combining the
    income and principal changes for a specified period and dividing by the
    net asset value (or maximum offering price in the case of Class A) per
    share at the beginning of the period. Advertisements may include the
    percentage rate of total return or may include the value of a
    hypothetical investment at the end of the period which assumes the
    application of the percentage rate of total return. Total return also may
    be calculated by using the net asset value per share at the beginning of
    the period instead of the maximum offering price per share at the
    beginning of the period for Class A shares or without giving effect to any
    applicable CDSC at the end of the period for Class B or Class C shares.
    Calculations based on the net asset value per share do not reflect the
    deduction of the applicable sales charge on Class A shares which, if
    reflected, would reduce the performance quoted.
    
          Performance will vary from time to time and past results are
    not necessarily representative of future results. Investors should
    remember that performance is a function of portfolio management in
    selecting the type and quality of portfolio securities and is affected by
    operating expenses. Performance information, such as that described
    above, may not provide a basis for comparison with other investments or
    other investment companies using a different method of calculating
    performance.
          Comparative performance information may be used from time to
    time in advertising the Fund's shares, including data from Lipper
    Analytical Services, Inc., Moody's Bond Survey Bond Index, Lehman
    Brothers Municipal Bond Index, Morningstar, Inc. and other industry
    publications.
GENERAL INFORMATION
   
          The Fund was organized as an unincorporated business trust
    under the laws of the Commonwealth of Massachusetts pursuant to an
    Agreement and Declaration of Trust (the "Trust Agreement") dated June 4,
    1986, and commenced operations on November 26, 1986. Prior to July 2,
    1990, the Fund's name was Premier Tax Exempt Bond Fund. The Fund is
    authorized to issue an unlimited number of shares of beneficial interest,
    par value $.001 per share. The Fund's shares are classified into three
    classes - Class A, Class B and Class C. Each share has one vote and
    shareholders will vote in the aggregate and not by class except as
    otherwise required by law. Only holders of Class B or Class C shares, as
    the case may be, will be entitled to vote on matters submitted to
    shareholders pertaining to the Distribution Plan.
    
   
         Under Massachusetts law, shareholders could, under certain
    circumstances, be held personally liable for the obligations of the Fund.
    However, the Trust Agreement disclaims shareholder liability for acts or
    obligations of the Fund and requires that notice of such disclaimer be
    given in each agreement, obligation or instrument entered into or
    executed by the Fund or a Trustee. The Trust Agreement provides for
    indemnification from the Fund's property for all losses and expenses of
    any shareholder held personally liable for the obligations of the Fund.
                                  Page 27

    Thus, the risk of a shareholder incurring financial loss on account of
    shareholder liability is limited to circumstances in which the Fund
    itself would be unable to meet its obligations, a possibility which
    management believes is remote. Upon payment of any liability incurred by
    the Fund, the shareholder paying such liability will be entitled to
    reimbursement from the general assets of the Fund. The Fund intends to
    conduct its operations in such a way so as to avoid, as far as possible,
    ultimate liability of the shareholders for liabilities of the Fund. As
    discussed under "Management of the Fund" in the Statement of Additional
    Information, the Fund ordinarily will not hold shareholder meetings;
    however, shareholders under certain circumstances may have the right to
    call a meeting of shareholders for the purpose of voting to remove
    Trustees.
    
        The Transfer Agent maintains a record of your ownership and
    sends you confirmations and statements of account.
        Shareholder inquiries may be made to your Service Agent or by
    writing to the Fund at 144 Glenn Curtiss Boulevard, Uniondale, New York
    11556-0144.
   
    
                                  Page 28
   
APPENDIX
    INVESTMENT TECHNIQUES
    
   
    BORROWING MONEY -- The Fund is permitted to borrow to the extent
    permitted under the 1940 Act, which permits an investment company to
    borrow in an amount up to 331/3% of the value of its total assets. The
    Fund currently intends to borrow money only for temporary or emergency
    (not leveraging) purposes in an amount up to 15% of the value of the
    Fund's total assets (including the amount borrowed) valued at the lesser
    of cost or market, less liabilities (not including the amount borrowed)
    at the time the borrowing is made. While borrowings exceed 5% of the
    value of the Fund's total assets, the Fund will not make any additional
    investments.
    
   
    SHORT-SELLING -- In these transactions, the Fund sells a security it
    does not own in anticipation of a decline in the market value of that
    security. To complete the transaction, the Fund must borrow the security
    to make delivery to the buyer. The Fund is obligated to replace the
    security borrowed by purchasing it at the market price at the time of
    replacement. The price at such time may be more or less than the price at
    which the security was sold by the Fund, which would result in a loss or
    gain, respectively.
    
   
        Securities will not be sold short if, after effect is given
    to any such short sale, the total market value of all securities sold
    short would exceed 25% of the value of the Fund's net assets. The Fund
    may not sell short the securities of any single issuer listed on a
    national securities exchange to the extent of more than 5% of the value
    of the Fund's net assets. The Fund may not make a short sale which
    results in the Fund having sold short in the aggregate more than 5% of
    the outstanding securities of any class of an issuer.
    
   
        The Fund also may make short sales "against the box," in
    which the Fund enters into a short sale of a security it owns in order to
    hedge an unrealized gain on the security. At no time will the Fund have
    more than 15% of the value of its net assets in deposits on short sales
    against the box.
    
   
    USE OF DERIVATIVES -- The Fund may invest in the types of Derivatives
    enumerated under "Description of the Fund -- Investment Considerations
    and Risks -- Use of Derivatives." These instruments and certain related
    risks are described more specifically under "Investment Objective and
    Management Policies -- Management Policies -- Derivatives" in the
    Statement of Additional Information.
    
   
        Derivatives may entail investment exposures that are greater
    than their cost would suggest, meaning that a small investment in
    Derivatives could have a large potential impact on the Fund's
    performance.
    
   
        If the Fund invests in Derivatives at inappropriate times or
    judges the market conditions incorrectly, such investments may lower the
    Fund's return or result in a loss. The Fund also could experience losses
    if it were unable to liquidate its position because of an illiquid
    secondary market. The market for many Derivatives is, or suddenly can
    become, illiquid. Changes in liquidity may result in significant, rapid
    and unpredictable changes in the prices for Derivatives.
    
   
         Although the Fund is not a commodity pool, Derivatives
    subject the Fund to the rules of the Commodity Futures Trading Commission
    which limit the extent to which the Fund can invest in certain
    Derivatives. The Fund may invest in futures contracts and options with
    respect thereto for hedging purposes without limit. However, the Fund may
    invest in such contracts and options for other purposes if the sum of the
    amount of initial margin deposits and premiums paid for unexpired options
    with respect to such
                                  Page 29

    contracts, other than bona fide hedging purposes, exceed 5% of the
    liquidation value of the Fund's assets, after taking into account
    unrealized profits and unrealized losses on such contracts and options;
    provided, however, that in the case of an option that is in-the-money at
    the time of purchase, the in-the-money amount may be excluded in
    calculating the 5% limitation.
    
   
         The Fund may invest up to 5% of its assets, represented by the
    premium paid, in the purchase of call and put options. The Fund may write
    (i.e., sell) covered call and put option contracts to the extent of 20%
    of the value of its net assets at the time such option contracts are
    written. When required by the Securities and Exchange Commission, the Fund
    will set aside permissible liquid assets in a segregated account to cover
    its obligations relating to its transactions in Derivatives. To maintain
    this required cover, the Fund may have to sell portfolio securities at
    disadvantageous prices or times since it may not be possible to liquidate
    a Derivative position at a reasonable price.
    
   
    LENDING PORTFOLIO SECURITIES -- The Fund may lend securities from its
    portfolio to brokers, dealers and other financial institutions needing to
    borrow securities to complete certain transactions. The Fund continues to
    be entitled to payments in amounts equal to the interest or other
    distributions payable on the loaned securities which affords the Fund an
    opportunity to earn interest on the amount of the loan and on the loaned
    securities' collateral. Loans of portfolio securities may not exceed
    33-1/3 % of the value of the Fund's total assets, and the Fund will receive
    collateral consisting of cash, U. S. Government securities or irrevocable
    letters of credit which will be maintained at all times in an amount equal
    to at least 100% of the current market value of the loaned securities. Such
    loans are terminable at any time upon specified notice. The Fund might
    experience risk of loss if the institution with which it has engaged in a
    portfolio loan transaction breaches its agreement with the Fund.
    
   
    FORWARD COMMITMENTS -- The Fund may purchase Municipal Obligations
    and other securities on a forward commitment or when-issued basis, which
    means delivery and payment take place a number of days after the date of
    the commitment to purchase. The payment obligation and the interest rate
    receivable on a forward commitment or when-issued security are fixed when
    the Fund enters into the commitment, but the Fund does not make payment
    until it receives delivery from the counterparty. The Fund will commit to
    purchase such securities only with the intention of actually acquiring
    the securities, but the Fund may sell these securities before the
    settlement date if it is deemed advisable. A segregated account of the
    Fund consisting of cash, cash equivalents or U.S. Government securities
    or other high quality liquid debt securities at least equal at all times
    to the amount of the commitments will be established and maintained at
    the Fund's custodian bank.
    
   
    CERTAIN PORTFOLIO SECURITIES
    CERTAIN TAX EXEMPT OBLIGATIONS -- The Fund may purchase floating and
    variable rate demand notes and bonds, which are tax exempt obligations
    ordinarily having stated maturities in excess of one year, but which
    permit the holder to demand payment of principal at any time or at
    specified intervals. Variable rate demand notes include master demand
    notes which are obligations that permit the Fund to invest fluctuating
    amounts at varying rates of interest, pursuant to direct arrangements
    between the Fund, as lender, and the borrower. These obligations permit
    daily changes in the amount borrowed. Because these obligations are
    direct lending arrangements between the lender and borrower, it is not
    contemplated that such instruments generally will be traded, and there
    generally is no established secondary market for these obligations,
    although they are redeemable
                                  Page 30

    at face value, plus accrued interest. Accordingly, where these obligations
    are not secured by letters of credit or other credit support arrangements,
    the Fund's right to redeem is dependent on the ability of the borrower to
    pay principal and interest on demand. Each obligation purchased by the
    Fund will meet the quality criteria established for the purchase of
    Municipal Obligations.
    
   
    TAX EXEMPT PARTICIPATION INTERESTS -- The Fund may purchase from
    financial institutions participation interests in Municipal Obligations
    (such as industrial development bonds and municipal lease/purchase
    agreements). A participation interest gives the Fund an undivided
    interest in the Municipal Obligation in the proportion that the Fund's
    participation interest bears to the total principal amount of the
    Municipal Obligation. These instruments may have fixed, floating or
    variable rates of interest. If the participation interest is unrated, it
    will be backed by an irrevocable letter of credit or guarantee of a bank
    that the Fund's Board has determined meets the prescribed quality
    standards for banks set forth below, or the payment obligation otherwise
    will be collateralized by U.S. Government securities. For certain
    participation interests, the Fund will have the right to demand payment,
    on not more than seven days' notice, for all or any part of the Fund's
    participation interest in the Municipal Obligation, plus accrued
    interest. As to these instruments, the Fund intends to exercise its right
    to demand payment only upon a default under the terms of the Municipal
    Obligation, as needed to provide liquidity to meet redemptions, or to
    maintain or improve the quality of its investment portfolio.
    
   
    TENDER OPTION BONDS -- The Fund may purchase tender option bonds. A
    tender option bond is a Municipal Obligation (generally held pursuant to
    a custodial arrangement) having a relatively long maturity and bearing
    interest at a fixed rate substantially higher than prevailing short-term
    tax exempt rates, that has been coupled with the agreement of a third
    party, such as a bank, broker-dealer or other financial institution,
    pursuant to which such institution grants the security holders the
    option, at periodic intervals, to tender their securities to the
    institution and receive the face value thereof. As consideration for
    providing the option, the financial institution receives periodic fees
    equal to the difference between the Municipal Obligation's fixed coupon
    rate and the rate, as determined by a remarketing or similar agent at or
    near the commencement of such period, that would cause the securities,
    coupled with the tender option, to trade at par on the date of such
    determination. Thus, after payment of this fee, the security holder
    effectively holds a demand obligation that bears interest at the
    prevailing short-term tax exempt rate. The Dreyfus Corporation, on behalf
    of the Fund, will consider on an ongoing basis the creditworthiness of
    the issuer of the underlying Municipal Obligations, of any custodian and
    of the third party provider of the tender option. In certain instances
    and for certain tender option bonds, the option may be terminable in the
    event of a default in payment of principal or interest on the underlying
    Municipal Obligations and for other reasons.
    
   
    CUSTODIAL RECEIPTS -- The Fund may purchase custodial receipts
    representing the right to receive certain future principal and interest
    payments on Municipal Obligations which underlie the custodial receipts.
    A number of different arrangements are possible. In a typical custodial
    receipt arrangement, an issuer or a third party owner of Municipal
    Obligations deposits such obligations with a custodian in exchange for
    two classes of custodial receipts. The two classes have different
    characteristics, but, in each case, payments on the two classes are based
    on payments received on the underlying Municipal Obligations. One class
    has the characteristics of a typical auction rate security, where at
    specified intervals its interest rate is adjusted,
                                  Page 31

    and ownership changes, based on an auction mechanism. This class's interest
    rate generally is expected to be below the coupon rate of the underlying
    Municipal Obligations and generally is at a level comparable to that of a
    Municipal Obligation of similar quality and having a maturity equal to the
    period between interest rate adjustments. The second class bears interest
    at a rate that exceeds the interest rate typically borne by a security of
    comparable quality and maturity; this rate also is adjusted, but in this
    case inversely to changes in the rate of interest of the first class. If
    the interest rate on the first class exceeds the coupon rate of the
    underlying Municipal Obligations, its interest rate will exceed the rate
    paid on the second class. In no event will the aggregate interest paid
    with respect to the two classes exceed the interest paid by the
    underlying Municipal Obligations. The value of the second class and
    similar securities should be expected to fluctuate more than the value of
    a Municipal Obligation of comparable quality and maturity and their
    purchase by the Fund should increase the volatility of its net asset
    value and, thus, its price per share. These custodial receipts are sold
    in private placements. The Fund also may purchase directly from issuers,
    and not in a private placement, Municipal Obligations having
    characteristics similar to custodial receipts. These securities may be
    issued as part of a multi-class offering and the interest rate on certain
    classes may be subject to a cap or floor.
    
   
    STAND-BY COMMITMENTS -- The Fund may acquire "stand-by commitments"
    with respect to Municipal Obligations held in its portfolio. Under a
    stand-by commitment, the Fund obligates a broker, dealer or bank to
    repurchase, at the Fund's option, specified securities at a specified
    price and, in this respect, stand-by commitments are comparable to put
    options. The exercise of a stand-by commitment, therefore, is subject to
    the ability of the seller to make payment on demand. The Fund will
    acquire stand-by commitments solely to facilitate portfolio liquidity and
    does not intend to exercise its rights thereunder for trading purposes.
    The Fund may pay for stand-by commitments if such action is deemed
    necessary, thus increasing to a degree the cost of the underlying
    Municipal Obligation and similarly decreasing such security's yield to
    investors. Gains realized in connection with stand-by commitments will be
    taxable. The Fund also may acquire call options on specific Municipal
    Obligations. The Fund generally would purchase these call options to
    protect the Fund from the issuer of the related Municipal Obligation
    redeeming, or other holder of the call option from calling away, the
    Municipal Obligation before maturity. The sale by the Fund of a call
    option that it owns on a specific Municipal Obligation could result in
    the receipt of taxable income by the Fund.
    
   
    ZERO COUPON SECURITIES -- The Fund may invest in zero coupon
    securities which are debt securities issued or sold at a discount from
    their face value which do not entitle the holder to any periodic payment
    of interest prior to maturity or a specified redemption date (or cash
    payment date). The amount of the discount varies depending on the time
    remaining until maturity or cash payment date, prevailing interest rates,
    liquidity of the security and perceived credit quality of the issuer.
    Zero coupon securities also may take the form of debt securities that
    have been stripped of their unmatured interest coupons, the coupons
    themselves and receipts or certificates representing interests in such
    stripped debt obligations and coupons. The market prices of zero coupon
    securities generally are more volatile than the market prices of
    securities that pay interest periodically and are likely to respond to a
    greater degree to changes in interest rates than non-zero coupon
    securities having similar maturities and credit qualities.
    
                                  Page 32

   
    ILLIQUID SECURITIES -- The Fund may invest up to 15% of the value of
    its net assets in securities as to which a liquid trading market does not
    exist, provided such investments are consistent with the Fund's
    investment objective. Such securities may include securities that are not
    readily marketable, such as certain securities that are subject to legal
    or contractual restrictions on resale, and repurchase agreements
    providing for settlement in more than seven days after notice. As to
    these securities, the Fund is subject to a risk that should the Fund
    desire to sell them when a ready buyer is not available at a price the
    Fund deems representative of their value, the value of the Fund's net
    assets could be adversely affected.
    
   
    TAXABLE INVESTMENTS -- From time to time, on a temporary basis other
    than for temporary defensive purposes (but not to exceed 20% of the value
    of the Fund's net assets) or for temporary defensive purposes, the Fund
    may invest in taxable short-term investments ("Taxable Investments")
    consisting of: notes of issuers having, at the time of purchase, a
    quality rating within the two highest grades of Moody's, S&P or Fitch;
    obligations of the U.S. Government, its agencies or instrumentalities;
    commercial paper rated not lower than P-1 by Moody's, A-1 by S&P or F-1
    by Fitch; certificates of deposit of U.S. domestic banks, including
    foreign branches of domestic banks, with assets of one billion dollars or
    more; time deposits; bankers' acceptances and other short-term bank
    obligations; and repurchase agreements in respect of any of the
    foregoing. Dividends paid by the Fund that are attributable to income
    earned by the Fund from Taxable Investments will be taxable to investors.
    See "Dividends, Distributions and Taxes." Except for temporary defensive
    purposes, at no time will more than 20% of the value of the Fund's net
    assets be invested in Taxable Investments. Under normal market
    conditions, the Fund anticipates that not more than 5% of the value of
    its total assets will be invested in any one category of Taxable
    Investments. Taxable Investments are more fully described in the
   Statement of Additional Information, to which reference hereby is made.
    
   
    RATINGS -- Bonds rated Ba by Moody's are judged to have speculative
    elements; their future cannot be considered as well assured and often the
    protection of interest and principal payments may be very moderate. Bonds
    rated BB by S&P are regarded as having predominantly speculative
    characteristics and, while such obligations have less near-term
    vulnerability to default than other speculative grade debt, they face
    major ongoing uncertainties or exposure to adverse business, financial or
    economic conditions which could lead to inadequate capacity to meet
    timely interest and principal payments. Bonds rated BB by Fitch are
    considered speculative and the payment of principal and interest may be
    affected at any time by adverse economic changes. Bonds rated C by Moody's
    are regarded as having extremely poor prospects of ever attaining any real
    investment standing. Bonds rated D by S&P are in default and the payment
    of interest and/or repayment of principal is in arrears. Bonds rated DDD,
    DD or D by Fitch are in actual or imminent default, are extremely
    speculative and should be valued on the basis of their ultimate recovery
    value in liquidation or reorganization of the issuer; DDD represents the
    highest potential for recovery of such bonds; and D represents the lowest
    potential for recovery. Such bonds, though high yielding, are
    characterized by great risk. See "Appendix B" in the Statement of
    Additional Information for a general description of Moody's, S&P and
    Fitch ratings of Municipal Obligations.
    
   
        The ratings of Moody's, S&P and Fitch represent their
    opinions as to the quality of the Municipal Obligations which they
    undertake to rate. It should be emphasized, however, that ratings are
    relative and subjective and, although ratings may be useful in evaluating
    the safety of interest and principal payments, they do not evaluate the
    market
                                  Page 33

    value risk of these bonds. Although these ratings may be an
    initial criterion for selection of portfolio investments, The Dreyfus
    Corporation also will evaluate these securities and the ability of the
    issuers of such securities to pay interest and principal. The Fund's
    ability to achieve its investment objective may be more dependent on The
    Dreyfus Corporation's credit analysis than might be the case for a fund
    that invested in higher rated securities.
    
   
        The average distribution of investments (at value) in Municipal
    Obligations by ratings for the fiscal year ended April 30, 1996, computed
    on a monthly basis, was as follows:
    
   
<TABLE>
<CAPTION>

                                                                              PERCENTAGE
    FITCH                     MOODY'S                 S&P                     OF VALUE
    ----------------          -----------------      --------------------  ----------------
    <S>                       <C>                     <C>                       <C>
    AAA                       Aaa                     AAA                       15.5%
    AA                        Aa                      AA                         1.7
    A                         A                       A                         12.1
    BBB                       Baa                     BBB                       37.8
    BB                        Ba                      BB                        10.5
    F-1                       VMIG1, MIG, P-1         SP-1, A-1                   .3
    Not Rated                 Not Rated               Not Rated                 22.1*
                                                                              ---------
                                                                               100.0%
                                                                              =========
    
   
    ---------------
         *  Included in the Not Rated category are securities comprising 22.1%
    of the Fund's market value which, while not rated, have been determined by
    The Dreyfus Corporation to be of comparable quality to securities in the
    following rating categories: A/A (3.1%); Baa/BBB (14.7%); and Ba/BB (4.3%).
</TABLE>
    
   
         The actual distribution of the Fund's investments in
    Municipal Obligations by ratings on any given date will vary. In
    addition, the distribution of the Fund's investments by ratings as set
    forth above should not be considered as representative of the Fund's
    future portfolio composition.
    
   
         NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO
    MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS
    AND IN THE FUND'S OFFICIAL SALES LITERATURE IN CONNECTION WITH THE OFFER
    OF THE FUND'S SHARES, AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR
    REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
    FUND. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER IN ANY STATE IN WHICH,
    OR TO ANY PERSON TO WHOM, SUCH OFFERING MAY NOT LAWFULLY BE MADE.
    
                                                                    022P090196
                                  Page 34




_____________________________________________________________________________
   
                         PREMIER MUNICIPAL BOND FUND
                     CLASS A, CLASS B AND CLASS C SHARES
                    (STATEMENT OF ADDITIONAL INFORMATION)
                              SEPTEMBER 3, 1996
    
_____________________________________________________________________________

   
     This Statement of Additional Information, which is not a prospectus,
supplements and should be read in conjunction with the current Prospectus
of Premier Municipal Bond Fund (the "Fund"), dated September 3, 1996, as
it may be revised from time to time.  To obtain a copy of the Fund's
Prospectus, please write to the Fund at 144 Glenn Curtiss Boulevard,
Uniondale, New York 11556-0144.
    
     The Dreyfus Corporation (the "Manager") serves as the Fund's
investment adviser.

     Premier Mutual Fund Services, Inc. (the "Distributor") is the
distributor of the Fund's shares.


                       TABLE OF CONTENTS
                                                             Page
   
Investment Objective and Management Policies . . . . . . .  B-2
Management of the Fund . . . . . . . . . . . . . . . . . .  B-11
Management Agreement . . . . . . . . . . . . . . . . . . .  B-15
Purchase of Shares . . . . . . . . . . . . . . . . . . . .  B-17
Distribution Plan and Shareholder Services Plan. . . . . .  B-19
Redemption of Shares . . . . . . . . . . . . . . . . . . .  B-20
Shareholder Services . . . . . . . . . . . . . . . . . . .  B-21
Determination of Net Asset Value . . . . . . . . . . . . .  B-24
Dividends, Distributions and Taxes . . . . . . . . . . . .  B-25
Portfolio Transactions . . . . . . . . . . . . . . . . . .  B-26
Performance Information. . . . . . . . . . . . . . . . . .  B-27
Information About the Fund . . . . . . . . . . . . . . . .  B-29
Transfer and Dividend Disbursing Agent, Custodian,
  Counsel and Independent Auditors . . . . . . . . . . . .  B-29
Appendix . . . . . . . . . . . . . . . . . . . . . . . . .  B-31
Financial Statements . . . . . . . . . . . . . . . . . . .  B-40
Report of Independent Auditors . . . . . . . . . . . . . .  B-54
    

                INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES

   
     The following information supplements and should be read in
conjunction with the sections in the Fund's Prospectus entitled
"Description of the Fund" and "Appendix."
    
   
Portfolio Securities
    
   
    
     Municipal Obligations.  The term "Municipal Obligations" generally
includes debt obligations issued to obtain funds for various public
purposes, including the construction of a wide range of public facilities
such as airports, bridges, highways, housing, hospitals, mass
transportation, schools, streets and water and sewer works.  Other public
purposes for which Municipal Obligations may be issued include refunding
outstanding obligations, obtaining funds for general operating expenses
and lending such funds to other public institutions and facilities.  In
addition, certain types of industrial development bonds are issued by or
on behalf of public authorities to obtain funds to provide for the
construction, equipment, repair or improvement of privately operated
housing facilities, sports facilities, convention or trade show
facilities, airport, mass transit, industrial, port or parking facilities,
air or water pollution control facilities and certain local facilities for
water supply, gas, electricity or sewage or solid waste disposal; the
interest paid on such obligations may be exempt from Federal income tax,
although current tax laws place substantial limitations on the size of
such issues.  Such obligations are considered to be Municipal Obligations
if the interest paid thereon qualifies as exempt from Federal income tax
in the opinion of bond counsel to the issuer.  There are, of course,
variations in the security of Municipal Obligations both within a
particular classification and between classifications.
   
    
     Floating and variable rate demand obligations are tax exempt
obligations ordinarily having stated maturities in excess of one year, but
which permit the holder to demand payment of principal at any time, or at
specified intervals.  The issuer of such obligations ordinarily has a
corresponding right, after a given period, to prepay in its discretion the
outstanding principal amount of the obligations plus accrued interest upon
a specified number of days' notice to the holders thereof.  The interest
rate on a floating rate demand obligation is based on a known lending
rate, such as a bank's prime rate, and is adjusted automatically each time
such rate is adjusted.  The interest rate on a variable rate demand
obligation is adjusted automatically at specified intervals.
   
     For the purpose of diversification under the Investment Company Act
of 1940, as amended (the "1940 Act"), the identification of the issuer of
Municipal Obligations depends on the terms and conditions of the security.
When the assets and revenues of an agency, authority, instrumentality or
other political subdivision are separate from those of the government
creating the subdivision and the security is backed only by the assets and
revenues of the subdivision, such subdivision would be deemed to be the
sole issuer.  Similarly, in the case of an industrial development bond, if
that bond is backed only by the assets and revenues of the
non-governmental user, then such non-governmental user would be deemed to
be the sole issuer.  If, however, in either case, the creating government
or some other entity guarantees a security, such a guaranty would be
considered a separate security and will be treated as an issue of such
government or other entity.
    
     The yields on Municipal Obligations are dependent on a variety of
factors, including general economic and monetary conditions, money market
factors, conditions in the Municipal Obligations market, size of a
particular offering, maturity of the obligation, and rating of the issue.
The imposition of the Fund's management fee, as well as other operating
expenses, including fees paid under the Fund's Shareholder Services Plan,
with respect to Class A, Class B and Class C shares, and the Distribution
Plan, with respect to Class B and Class C shares only, will have the
effect of reducing the yield to investors.
   
     Municipal lease obligations or installment purchase contract
obligations (collectively, "lease obligations") have special risks not
ordinarily associated with Municipal Obligations.  Although lease
obligations do not constitute general obligations of the municipality for
which the municipality's taxing power is pledged, a lease obligation
ordinarily is backed by the municipality's covenant to budget for,
appropriate and make the payments due under the lease obligation.
However, certain lease obligations contain "non-appropriation" clauses
which provide that the municipality has no obligation to make lease or
installment purchase payments in future years unless money is appropriated
for such purpose on a yearly basis.  Although "non-appropriation" lease
obligations are secured by the leased property, disposition of the
property in the event of foreclosure might prove difficult.  The staff of
the Securities and Exchange Commission currently considers certain lease
obligations to be illiquid.  Determination as to the liquidity of such
securities is made in accordance with guidelines established by the Fund's
Board.  Pursuant to such guidelines, the Board has directed the Manager to
monitor carefully the Fund's investment in such securities with particular
regard to (1) the frequency of trades and quotes for the lease obligation;
(2) the number of dealers willing to purchase or sell the lease obligation
and the number of other potential buyers; (3) the willingness of dealers
to undertake to make a market in the lease obligation; (4) the nature of
the marketplace trades including the time needed to dispose of the lease
obligation, the method of soliciting offers and the mechanics of transfer;
and (5) such other factors concerning the trading market for the lease
obligation as the Manager may deem relevant.  In addition, in evaluating
the liquidity and credit quality of a lease obligation that is unrated,
the Fund's Board has directed the Manager to consider (a) whether the
lease can be cancelled; (b) what assurance there is that the assets
represented by the lease can be sold; (c) the strength of the lessee's
general credit (its debt, administrative, economic, and financial
characteristics); (d) the likelihood that the municipality will
discontinue appropriating funding for the leased property because the
property is no longer deemed essential to the operations of the
municipality (e.g., the potential for an "event of nonappropriation"); (e)
the legal recourse in the event of failure to appropriate; and (f) such
other factors concerning credit quality as the Manager may deem relevant.
The Fund will not invest more than 15% of the value of its net assets in
lease obligations that are illiquid and in other illiquid securities.
    
     The Fund will purchase tender option bonds only when it is satisfied
that the custodial and tender option arrangements, including the fee
payment arrangements, will not adversely affect the tax exempt status of
the underlying Municipal Obligations and that payment of any tender fees
will not have the effect of creating taxable income for the Fund.  Based
on the tender option bond agreement, the Fund expects to be able to value
the tender option bond at par; however, the value of the instrument will
be monitored to assure that it is valued at fair value.
   
     Ratings of Municipal Obligations.  Subsequent to its purchase by the
Fund, an issue of rated Municipal Obligations may cease to be rated or its
rating may be reduced below the minimum required for purchase by the Fund.
Neither event will require the sale of such Municipal Obligations by the
Fund, but the Manager will consider such event in determining whether the
Fund should continue to hold the Municipal Obligations.  To the extent
that the ratings given by Moody's, S&P or Fitch for Municipal Obligations
may change as a result of changes in such organizations or their rating
systems, the Fund will attempt to use comparable ratings as standards for
its investments in accordance with its investment policies contained in
the Fund's Prospectus and this Statement of Additional Information.  The
ratings of Moody's, S&P and Fitch represent their opinions as to the qual-
ity of the Municipal Obligations which they undertake to rate.  It should
be emphasized, however, that ratings are relative and subjective and are
not absolute standards of quality.  Although these ratings may be an
initial criterion for selection of portfolio investments, the Manager also
will evaluate these securities and the creditworthiness of the issuers of
such securities.  See "Appendix."
    
     Illiquid Securities.  Where a substantial market of qualified
institutional buyers develops for certain restricted securities purchased
by the Fund pursuant to Rule 144A under the Securities Act of 1933, as
amended, the Fund intends to treat such securities as liquid securities in
accordance with procedures approved by the Fund's Board.  Because it is
not possible to predict with assurance how the market for restricted
securities pursuant to Rule 144A will develop, the Fund's Board has
directed the Manager to monitor carefully the Fund's investments in such
securities with particular regard to trading activity, availability of
reliable price information and other relevant information.  To the extent
that, for a period of time, qualified institutional buyers cease
purchasing restricted securities pursuant to Rule 144A, the Fund's
investing in such securities may have the effect of increasing the level
of illiquidity in its portfolio during such period.
   
     Taxable Investments.  Securities issued or guaranteed by the U.S.
Government or its agencies or instrumentalities include U.S. Treasury
securities, which differ in their interest rates, maturities and times of
issuance.  Some obligations issued or guaranteed by U.S. Government
agencies and instrumentalities are supported by the full faith and credit
of the U.S. Treasury; others by the right of the issuer to borrow from the
U.S. Treasury; others by discretionary authority of the U.S. Government to
purchase certain obligations of the agency or instrumentality; and others
only by the credit of the agency or instrumentality.  These securities
bear fixed, floating or variable rates of interest.  While the U.S.
Government provides financial support to such U.S. Government sponsored
agencies or instrumentalities, no assurance can be given that it will
always do so, since it is not so obligated by law.
    
     Commercial paper consists of short-term, unsecured promissory notes
issued to finance short-term credit needs.

     Certificates of deposit are negotiable certificates representing the
obligation of a bank to repay funds deposited with it for a specified
period of time.
   
     Time deposits are non-negotiable deposits maintained in a banking
institution for a specified period of time (in no event longer than seven
days) at a stated interest rate.  Investments in time deposits generally
are limited to London branches of domestic banks that have total assets in
excess of one billion dollars.  Time deposits which may be held by the
Fund will not benefit from insurance from the Bank Insurance Fund or the
Savings Association Insurance Fund administered by the Federal Deposit
Insurance Corporation.
    
     Bankers' acceptances are credit instruments evidencing the obligation
of a bank to pay a draft drawn on it by a customer.  These instruments
reflect the obligation both of the bank and of the drawer to pay the face
amount of the instrument upon maturity.  Other short-term bank obligations
may include uninsured, direct obligations bearing fixed, floating or
variable interest rates.
   
     In a repurchase agreement, the Fund buys, and the seller agrees to
repurchase, a security at a mutually agreed upon time and price (usually
within seven days).  The repurchase agreement thereby determines the yield
during the purchaser's holding period, while the seller's obligation to
repurchase is secured by the value of the underlying security.  The Fund's
custodian or subcustodian will have custody of, and will hold in a
segregated account, securities acquired by the Fund under a repurchase
agreement.  Repurchase agreements are considered by the staff of the
Securities and Exchange Commission to be loans by the Fund.  In an attempt
to reduce the risk of incurring a loss on a repurchase agreement, the Fund
will enter into repurchase agreements only with domestic banks with total
assets in excess of $1 billion, or primary government securities dealers
reporting to the Federal Reserve Bank of New York, with respect to
securities of the type in which the Fund may invest, and will require that
additional securities be deposited with it if the value of the securities
purchased should decrease below resale price.  Repurchase agreements could
involve risks in the event of a default or insolvency of the other party
to the agreement, including possible delays or restrictions upon the
Fund's ability to dispose of the underlying securities.
    
Management Policies
   
     Short-Selling.  Until the Fund replaces the borrowed security, it
will (a) maintain a segregated account, containing cash or U.S. Government
securities, at such a level that the amount deposited in the account plus
the amount deposited with the broker as collateral always equals the
current value of the securities sold short; or (b) otherwise cover its
short position.
    
   
     Lending Portfolio Securities.  In connection with its securities
lending transactions,  the Fund may return to the borrower or a third
party which is unaffiliated with the Fund, and which is acting as a
"placing broker," a part of the interest earned from the investment of
collateral received for securities loaned.
    
   
     The Securities and Exchange Commission currently requires that the
following conditions must be met whenever portfolio securities are loaned:
(1) the Fund must receive at least 100% cash collateral from the borrower;
(2) the borrower must increase such collateral whenever the market value
of the securities rises above the level of such collateral; (3) the Fund
must be able to terminate the loan at any time; (4) the Fund must receive
reasonable interest on the loan, as well as any interest or other
distributions payable on the loaned securities, and any increase in market
value; and (5) the Fund may pay only reasonable custodian fees in
connection with the loan.
    
   
     Derivatives.  The Fund may invest in Derivatives (as defined in the
Prospectus) for a variety of reasons, including to hedge certain market
risks, to provide a substitute for purchasing or selling particular
securities or to increase potential income gain.  Derivatives may provide
a cheaper, quicker or more specifically focused way for the Fund to invest
than "traditional" securities would.
    
   
     Derivatives can be volatile and involve various types and degrees of
risk, depending upon the characteristics of the particular Derivative and
the portfolio as a whole.  Derivatives permit the Fund to increase or
decrease the level of risk, or change the character of the risk, to which
its portfolio is exposed in much the same way as the Fund can increase or
decrease the level of risk, or change the character of the risk, of its
portfolio by making investments in specific securities.
    
   
     Derivatives may be purchased on established exchanges or through
privately negotiated transactions referred to as over-the-counter
Derivatives.  Exchange-traded Derivatives generally are guaranteed by the
clearing agency which is the issuer or counterparty to such Derivatives.
This guarantee usually is supported by a daily payment system (i.e.,
variation margin requirements) operated by the clearing agency in order to
reduce overall credit risk.  As a result, unless the clearing agency
defaults, there is relatively little counterparty credit risk associated
with Derivatives purchased on an exchange.  By contrast, no clearing
agency guarantees over-the-counter Derivatives.  Therefore, each party to
an over-the-counter Derivative bears the risk that the counterparty will
default.  Accordingly, the Manager will consider the creditworthiness of
counterparties to over-the-counter Derivatives in the same manner as it
would review the credit quality of a security to be purchased by the Fund.
Over-the-counter Derivatives are less liquid than exchange-traded
Derivatives since the other party to the transaction may be the only
investor with sufficient understanding of the Derivative to be interested
in bidding for it.
    
   
Futures Transactions--In General.  The Fund may enter into futures
contracts in U.S. domestic markets, such as the Chicago Board of Trade.
Engaging in these transactions involves risk of loss to the Fund which
could adversely affect the value of the Fund's net assets.  Although the
Fund intends to purchase or sell futures contracts only if there is an
active market for such contracts, no assurance can be given that a liquid
market will exist for any particular contract at any particular time.
Many futures exchanges and boards of trade limit the amount of fluctuation
permitted in futures contract prices during a single trading day.  Once
the daily limit has been reached in a particular contract, no trades may
be made that day at a price beyond that limit or trading may be suspended
for specified periods during the trading day.  Futures contract prices
could move to the limit for several consecutive trading days with little
or no trading, thereby preventing prompt liquidation of futures positions
and potentially subjecting the Fund to substantial losses.
    
   
     Successful use of futures by the Fund also is subject to the
Manager's ability to predict correctly movements in the direction of the
relevant market, and, to the extent the transaction is entered into for
hedging purposes, to ascertain the appropriate correlation between the
transaction being hedged and the price movements of the futures contract.
For example, if the Fund uses futures to hedge against the possibility of
a decline in the market value of securities held in its portfolio and the
prices of such securities instead increase, the Fund will lose part or all
of the benefit of the increased value of securities which it has hedged
because it will have offsetting losses in its futures positions.
Furthermore, if in such circumstances the Fund has insufficient cash, it
may have to sell securities to meet daily variation margin requirements.
The Fund may have to sell such securities at a time when it may be
disadvantageous to do so.
    
   
     Pursuant to regulations and/or published positions of the Securities
and Exchange Commission, the Fund may be required to segregate cash or
high quality money market instruments in connection with its commodities
transactions in an amount generally equal to the value of the underlying
commodity.  The segregation of such assets will have the effect of
limiting the Fund's ability otherwise to invest those assets.
    
   
Specific Futures Transactions.  The Fund may purchase and sell interest
rate futures contracts.  An interest rate future obligates the Fund to
purchase or sell an amount of a specific debt security at a future date at
a specific price.
    
   
Options--In General.  The Fund may purchase and write (i.e., sell) call or
put options with respect to interest rate futures contracts.  A call
option gives the purchaser of the option the right to buy, and obligates
the writer to sell, the underlying security or securities at the exercise
price at any time during the option period, or at a specific date.
Conversely, a put option gives the purchaser of the option the right to
sell, and obligates the writer to buy, the underlying security or
securities at the exercise price at any time during the option period, or
at a specific date.
    
   
     There is no assurance that sufficient trading interest to create a
liquid secondary market on a securities exchange will exist for any
particular option or at any particular time, and for some options no such
secondary market may exist.  A liquid secondary market in an option may
cease to exist for a variety of reasons.  In the past, for example, higher
than anticipated trading activity or order flow, or other unforeseen
events, at times have rendered certain of the clearing facilities
inadequate and resulted in the institution of special procedures, such as
trading rotations, restrictions on certain types of orders or trading
halts or suspensions in one or more options.  There can be no assurance
that similar events, or events that may otherwise interfere with the
timely execution of customers' orders, will not recur.  In such event, it
might not be possible to effect closing transactions in particular
options.
    
   
     Successful use by the Fund of options will be subject to the
Manager's ability to predict correctly movements in interest rates.  To
the extent the Manager's predictions are incorrect, the Fund may incur
losses.
    
   
     Futures Developments.  The Fund may take advantage of opportunities
in the area of options and futures contracts and options on futures
contracts and any other Derivatives which are not presently contemplated
for use by the Fund or which are not currently available but which may be
developed, to the extent such opportunities are both consistent with the
Fund's investment objective and legally permissible for the Fund.  Before
entering into such transactions or making any such investment, the Fund
will provide appropriate disclosure in its Prospectus or Statement of
Additional Information.
    
   
     Forward Commitments.  Municipal Obligations and other securities
purchased on a forward commitment or when-issued basis are subject to
changes in value (generally changing in the same way, i.e., appreciating
when interest rates decline and depreciating when interest rates rise)
based upon the public's perception of the creditworthiness of the issuer
and changes, real or anticipated, in the level of interest rates.
Securities purchased on a forward commitment or when-issued basis may
expose the Fund to risks because they may experience such fluctuations
prior to their actual delivery.  Purchasing securities on a when-issued
basis can involve the additional risk that the yield available in the
market when the delivery takes place actually may be higher than that
obtained in the transaction itself.  Purchasing securities on a forward
commitment or when-issued basis when the Fund is fully or almost fully
invested may result in greater potential fluctuation in the value of the
Fund's net assets and its net asset value per share.
    
   
Investment Considerations and Risks
    
   
     Lower Rated Bonds.  The Fund is permitted to invest in securities
rated Ba by Moody's or BB by S&P and Fitch and as low as the lowest rating
assigned by Moody's, S&P or Fitch.  Such bonds, though higher yielding,
are characterized by risk.  See "Description of the Fund--Investment
Considerations and Risks--Lower Rated Bonds" in the Prospectus for a
discussion of certain risks and "Appendix" for a general description of
Moody's, S&P and Fitch ratings of Municipal Obligations.  Although ratings
may be useful in evaluating the safety of interest and principal payments,
they do not evaluate the market value risk of these bonds.  The Fund will
rely on the Manager's judgment, analysis and experience in evaluating the
creditworthiness of an issuer.
    
     Investors should be aware that the market values of many of these
bonds tend to be more sensitive to economic conditions than are higher
rated securities.  These bonds generally are considered by Moody's, S&P
and Fitch to be predominantly speculative with respect to capacity to pay
interest and repay principal in accordance with the terms of the
obligation and generally will involve more credit risk than securities in
the higher rating categories.

     Because there is no established retail secondary market for many of
these securities, the Fund anticipates that such securities could be sold
only to a limited number of dealers or institutional investors.  To the
extent a secondary trading market for these bonds does exist, it generally
is not as liquid as the secondary market for higher rated securities.  The
lack of a liquid secondary market may have an adverse impact on market
price and yield and the Fund's ability to dispose of particular issues
when necessary to meet the Fund's liquidity needs or in response to a
specific economic event such as a deterioration in the creditworthiness of
the issuer.  The lack of a liquid secondary market for certain securities
also may make it more difficult for the Fund to obtain accurate market
quotations for purposes of valuing the Fund's portfolio and calculating
its net asset value.  Adverse publicity and investor perceptions, whether
or not based on fundamental analysis, may decrease the values and
liquidity of these securities.  In such cases, judgment may play a greater
role in valuation because less reliable objective data may be available.

     These bonds may be particularly susceptible to economic downturns.
It is likely that any economic recession could disrupt severely the market
for such securities and may have an adverse impact on the value of such
securities.  In addition, it is likely that any such economic downturn
could adversely affect the ability of the issuers of such securities to
repay principal and pay interest thereon and increase the incidence of
default for such securities.

     The Fund may acquire these bonds during an initial offering.  Such
securities may involve special risks because they are new issues.  The
Fund has no arrangement with any persons concerning the acquisition of
such securities, and the Manager will review carefully the credit and
other characteristics pertinent to such new issues.
   
     The credit risk factors pertaining to lower rated securities also
apply to lower rated zero coupon bonds and pay-in-kind bonds, in which the
Fund may invest up to 5% of its net assets.  Zero coupon securities and
pay-in-kind or delayed interest bonds carry an additional risk in that,
unlike bonds which pay interest throughout the period to maturity, the
Fund will realize no cash until the cash payment date unless a portion of
such securities are sold and, if the issuer defaults, the Fund may obtain
no return at all on its investment.  See "Dividends, Distributions and
Taxes."
    
   
Investment Restrictions
    
   
     The Fund has adopted investment restrictions numbered 1 through 10 as
fundamental policies, which cannot be changed without approval by the
holders of a majority (as defined in the 1940 Act of the Fund's
outstanding voting shares.  Investment restrictions numbered 11 and 12 are
not fundamental policies and may be changed by vote of a majority of the
Fund's Board members at any time.  The Fund may not:
    
     1.         Purchase securities other than Municipal Obligations and
Taxable Investments as those terms are defined above and in the Prospectus
and those arising out of transactions in futures and options.
   
     2.         Borrow money, except to the extent permitted under the 1940
Act (which currently limits borrowing to no more than 33-1/3% of the value
of the Fund's total assets).  Transactions in futures and options and the
entry into short sales transactions do not involve any borrowing for
purposes of this restriction.
    
     3.         Purchase securities on margin, but the Fund may make margin
deposits in connection with transactions in futures, including those
related to indices, and options on futures or indices.

     4.         Underwrite the securities of other issuers, except that the
Fund may bid separately or as part of a group for the purchase of
Municipal Obligations directly from an issuer for its own portfolio to
take advantage of the lower purchase price available, and except to the
extent the Fund may be deemed an underwriter under the Securities Act of
1933, as amended, by virtue of disposing of portfolio securities.

     5.         Purchase or sell real estate, real estate investment trust
securities, commodities or commodity contracts, or oil and gas interests,
but this shall not prevent the Fund from investing in Municipal
Obligations secured by real estate or interests therein or prevent the
Fund from purchasing and selling futures contracts, including those
related to indices, and options on futures contracts or indices.
   
     6.         Make loans to others except through the purchase of
qualified debt obligations and the entry into repurchase agreements
referred to above and in the Fund's Prospectus; however, the Fund may lend
its portfolio securities in an amount not to exceed 33-1/3% of the value
of its total assets.  Any loans of portfolio securities will be made
according to guidelines established by the Securities and Exchange
Commission and the Fund's Board members.
    
     7.         Invest more than 15% of its assets in the obligations of
any one bank for temporary defensive purposes, or invest more than 5% of
its assets in the obligations of any other issuer, except that up to 25%
of the value of the Fund's total assets may be invested, and securities
issued or guaranteed by the U.S. Government or its agencies or
instrumentalities may be purchased, without regard to any such
limitations.  Notwithstanding the foregoing, to the extent required by the
rules of the Securities and Exchange Commission, the Fund will not invest
more than 5% of its assets in the obligations of any one bank, except that
up to 25% of the value of the Fund's total assets may be invested without
regard to such limitation.

     8.    Invest more than 25% of its total assets in the securities of
issuers in any single industry; provided that there shall be no such
limitation on the purchase of Municipal Obligations and, for temporary
defensive purposes, obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities.

     9.    Invest in companies for the purpose of exercising control.

     10.   Invest in securities of other investment companies, except as
they may be acquired as part of a merger, consolidation or acquisition of
assets.

     11.   Pledge, hypothecate, mortgage or otherwise encumber its assets,
except to the extent necessary to secure permitted borrowings.  The
deposit of assets in escrow in connection with the writing of covered put
and call options and the purchase of securities on a when-issued or
delayed-delivery basis and collateral arrangements with respect to initial
or variation margin for futures contracts and options on futures contracts
or indices will not be deemed to be pledges of the Fund's assets.

     12.    Enter into repurchase agreements providing for settlement in
more than seven days after notice or purchase securities which are
illiquid (which securities could include participation interests that are
not subject to the demand feature described in the Fund's Prospectus and
floating and variable rate demand obligations as to which no secondary
market exists and the Fund cannot exercise the demand feature described in
the Fund's Prospectus on less than seven days' notice), if, in the
aggregate, more than 15% of the value of its net assets would be so
invested.

     For purposes of Investment Restriction No. 8, industrial development
bonds, where the payment of principal and interest is the ultimate
responsibility of companies within the same industry, are grouped together
as an "industry."

     If a percentage restriction is adhered to at the time of investment,
a later increase in percentage resulting from a change in values or assets
will not constitute a violation of such restriction.

     The Fund may make commitments more restrictive than the restrictions
listed above so as to permit the sale of Fund shares in certain states.
Should the Fund determine that a commitment is no longer in the best
interests of the Fund and its shareholders, the Fund reserves the right to
revoke the commitment by terminating the sale of Fund shares in the state
involved.


                           MANAGEMENT OF THE FUND
   
     Board members and officers of the Fund, together with information as
to their principal business occupations during at least the last five
years, are shown below.  Each Board member who is deemed to be an
"interested person" of the Fund (as defined in the 1940 Act) is indicated
by an asterisk.
    
Board Members of the Fund
   
CLIFFORD L. ALEXANDER, JR., Board Member.  President of Alexander &
     Associates, Inc., a management consulting firm.  From 1977 to 1981,
     Mr. Alexander served as Secretary of the Army and Chairman of the
     Board of the Panama Canal Company, and from 1975 to 1977, he was a
     member of the Washington, D.C. law firm of Verner, Liipfert,
     Bernhard, McPherson and Alexander.  He is a director of American Home
     Products Corporation, The Dun & Bradstreet Corporation, MCI
     Communications Corporation and Mutual of America Life Insurance
     Company.  He is 62 years old and his address is 400 C Street, N.E.,
     Washington, D.C. 20002.
    
   
PEGGY C. DAVIS, Board Member.  Shad Professor of Law, New York University
     School of Law.  Professor Davis has been a member of the New York
     University law faculty since 1983.  Prior to that time, she served
     for three years as a judge in the courts of New York State; was
     engaged for eight years in the practice of law, working in both
     corporate and non-profit sectors; and served for two years as a
     criminal justice administrator in the government of the City of New
     York.  She writes and teaches in the fields of evidence,
     constitutional theory, family law, social sciences and the law, legal
     process and professional methodology and training.  She is 53 years
     old and her address is c/o New York University School of Law, 249
     Sullivan Street, New York, New York 10011.
    
   
*JOSEPH S. DiMARTINO, Chairman of the Board.  Since January 1995, Chairman
     of the Board of various funds in the Dreyfus Family of Funds.  He is
     Chairman of the Board of Directors of Noel Group, Inc., a venture
     capital company; and a director of the Muscular Dystrophy
     Association, HealthPlan Services Corporation, Belding Heminway, Inc.,
     a manufacturer and marketer of industrial threads, specialty yarns,
     home furnishings and fabrics, Curtis Industries, Inc., a national
     distributor of security products, chemicals, and automotive and other
     hardware, and Staffing Resources, Inc.  For more than five years
     prior to January 1995, he was President, a director and, until August
     1994, Chief Operating Officer of the Manager and Executive Vice
     President and a director of Dreyfus Service Corporation, a wholly-
     owned subsidiary of the Manager and, until August 24, 1994, the
     Fund's distributor.  From August 1994 to December 31, 1994, he was a
     director of Mellon Bank Corporation.  He is 52 years old and his
     address is 200 Park Avenue, New York, New york 10166.
    
   
ERNEST KAFKA, Board Member.  A physician engaged in private practice
     specializing in the psychoanalysis of adults and adolescents.  Since
     1981, he has served as an Instructor at the New York Psychoanalytic
     Institute and, prior thereto, held other teaching positions.  He is
     Associate Clinical Professor of Psychiatry at Cornell Medical School.
     For more than the past five years, Dr. Kafka has held numerous
     administrative positions, including President of The New York
     Psychoanalytic Society, and has published many articles on subjects
     in the field of psychoanalysis.  He is 63 years old and his address
     is 23 East 92nd Street, New York, New York 10128.
    
   
SAUL B. KLAMAN, Board Member.  Chairman and Chief Executive Officer of SBK
     Associates, which provides research and consulting services to
     financial institutions.  Dr. Klaman was President of the National
     Association of Mutual Savings Banks until November 1983, President of
     the National Council of Savings Institutions until June 1985, Vice
     Chairman of Golembe Associates and BEI Golembe, Inc. until 1989 and
     Chairman Emeritus of BEI Golembe, Inc. until November, 1992.  He also
     served as an Economist to the Board of Governors of the Federal
     Reserve System and on several Presidential Commissions and has held
     numerous consulting and advisory positions in the fields of economics
     and housing finance.  He is 76 years old and his address is 431-B
     Dedham Street, The Gables, Newton Center, Massachusetts 02159.
    
   
NATHAN LEVENTHAL, Board Member.  President of Lincoln Center for the
     Performing Arts, Inc.  Mr. Leventhal was Deputy Mayor for Operations
     of New York City from September 1979 to March 1984 and Commissioner
     of the Department of Housing Preservation and Development of New York
     City from February 1978 to September 1979.  Mr. Leventhal was an
     associate and then a member of the New York law firm of Poletti
     Freidin Prashker Feldman and Gartner from 1974 to 1978. He was
     Commissioner of Rent and Housing Maintenance for New York City from
     1972 to 1973.  Mr. Leventhal also serves as Chairman of Citizens
     Union, an organization which strives to reform and modernize city and
     state governments.  He is 53 years old and his address is 70 Lincoln
     Center Plaza, New York, New York 10023-6583.
    
   
     For so long as the Fund's plans described in the section captioned
"Distribution Plan and Shareholder Services Plan" remain in effect, the
Board members of the Fund who are not "interested persons" of the Fund, as
defined in the 1940 Act, will be selected and nominated by the Board
members who are not "interested persons" of the Fund.
    
   
     There ordinarily will be no meeting of shareholders for the purpose
of electing Board members unless and until such time as less than a
majority of the Board members holding office have been elected by
shareholders, at which time the Board members then in office will call a
shareholders' meeting for the election of Board members.  Under the 1940
Act, shareholders of record of not less than two-thirds of the outstanding
shares of the Fund may remove a Board member through a declaration in
writing or by vote cast in person or by proxy at a meeting called for that
purpose.  The Board members are required to call a meeting of shareholders
for the purpose of voting upon the question of removal of any such Board
member when requested in writing to do so by the shareholders of record of
not less than 10% of the Fund's outstanding shares.
    
   
     The Fund typically pays its Board members an annual retainer and a
per meeting fee and reimburses them for their expenses.  The Chairman of
the Board receives an additional 25% of such compensation.  Emeritus Board
members are entitled to receive an annual retainer and a per meeting fee
of one-half the amount paid to them as Board members.  The aggregate
amount of compensation paid to each Board member by the Fund for the
fiscal year ended April 30, 1996, and by all other funds in the Dreyfus
Family of Funds for which such person is a Board member (the number of
which is set forth in parenthesis next to each Board member's total
compensation) for the year ended December 31, 1995, were as follows:
    
   
                                                             Total
                                                        Compensation from
                                   Aggregate              Fund and Fund
    Name of Board               Compensation from        Complex Paid to
      Member                         Fund*                Board Member
- ----------------------          ------------------      -----------------

Clifford L. Alexander, Jr.          $3,750                $ 94,386(17)

Peggy C. Davis                      $3,750                $ 81,636 (15)

Joseph S. DiMartino                 $4,688                $448,618 (94)

Ernest Kafka                        $3,750                $ 81,136 (15)

Saul B. Klaman                      $3,750                $ 81,886 (15)

Nathan Leventhal                    $3,750                $ 81,636 (15)

    
   
*  Amount does not include reimbursed expenses for attending Board meetings,
   which amounted to $1,759 for all Board members as a group.
    
Officers of the Fund
   
MARIE E. CONNOLLY, President and Treasurer.  President, Chief Executive
     Officer and a director of the Distributor and an officer of other
     investment companies advised or administered by the Manager.  From
     December 1991 to July 1994, she was President and Chief Compliance
     Officer of Funds Distributor, Inc., the ultimate parent of which is
     Boston Institutional Group, Inc.  Prior to December 1991, she served
     as Vice President and Controller, and later as Senior Vice President,
     of The Boston Company Advisors, Inc.  She is 39 years old.
    
   
JOHN E. PELLETIER, Vice President and Secretary.  Senior Vice President
     and General Counsel of the Distributor and an officer of other
     investment companies advised or administered by the Manager.  From
     February 1992 to July 1994, he served as Counsel for The Boston
     Company Advisors, Inc.  From August 1990 to February 1992, he was
     employed as an Associate at Ropes & Gray.  He is 32 years old.
    
   
ELIZABETH A. BACHMAN, Vice President and Assistant Secretary.  Assistant
     Vice President of the Distributor and an officer of other investment
     companies advised or administered by the Manager.  She is 26 years
     old.
    
   
DOUGLAS C. CONROY, Vice President and Assistant Secretary.  Supervisor of
     Treasury Services and Administration of the Distributor and an
     officer of other investment companies advised or administered by the
     Manager.  From April 1993 to January 1995, Mr. Conroy was a Senior
     Fund Accountant for Investors Bank & Trust Company.  From December
     1991 to March 1993, Mr. Conroy was employed as a Fund Accountant at
     The Boston Company.  He is 27 years old.
    
   
RICHARD W. INGRAM, Vice President and Assistant Treasurer.  Senior Vice
     President and Director of Client Services and Treasury Operations of
     the Distributor and an officer of other investment companies advised
     or administered by the Manager.  From March 1994 to November 1995,
     Mr. Ingram was Vice President and Division Manager for First Data
     Investor Services Group.  From 1989 to 1994, Mr. Ingram was Vice
     President, Assistant Treasurer and Tax Director-Mutual Funds of The
     Boston Company.  He is 40 years old.
    
   
MARY A. NELSON, Vice President and Assistant Treasurer.  Vice President
     and Manager of Treasury Services and Administration of the
     Distributor and an officer of other investment companies advised or
     administered by the Manager.  From September 1989 to July 1994, Ms.
     Nelson was an Assistant Vice President and Client Manager for The
     Boston Company.  She is 32 year old.
    
   
JOSEPH F. TOWER, III, Vice President and Assistant Treasurer.  Senior Vice
     President, Treasurer and Chief Financial Officer of the Distributor
     and an officer of other investment companies advised or administered
     by the Manager.  From July 1988 to November 1993, he was employed by
     The Boston Company, Inc. where he held various management positions
     in the Corporate Finance and Treasury areas.  He is 34 years old.
    
     The address of each officer of the Fund is 200 Park Avenue, New York,
New York 10166.
   
     The Fund's Board members and officers, as a group, owned less than 1%
of the Fund's shares outstanding on July 15, 1996.
    
   
     The following entities held of record or beneficially 5% or more of
the Fund's shares outstanding on July 15, 1996:  Class B - Merrill Lynch
Pierce Fenner & Smith, 4800 Deer Lake Dr. E. Fl 3, Jacksonville, FL 32246-
6484 - owned of record 7.9%: Class C - BWO Acquisition Corporation, 4615
Bee Caves Road, Austin, TX 78746 - owned of record 23.4%; Donaldson Lufkin
Jenrette Securities Corporation Inc., P.O. Box 2052, Jersey City, NJ 07303
- - owned of record 13.9%; US Clearing Corp, FBO 952-12998-19, 26 Broadway,
New York, NY 10004 - owned of record 13.8%; Billy Hoover, Bruceville, Tx
76630 - owned beneficially 11.1%; Elizabeth U. Lamb, Hartford, Ct 06106 -
owned beneficially 6.4%; Benjamin Eisner & Memie B. Eisner, Dallas, Tx
75231 - owned beneficially 5.6%; Dorothy M. Fuller, East Hartford, Ct
06118 - 5.3%.
    

                            MANAGEMENT AGREEMENT

     The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Management
of the Fund."
   
     The Manager provides management services pursuant to the Management
Agreement (the "Agreement") dated August 24, 1994 with the Fund, which is
subject to annual approval by (i) the Fund's Board or (ii) vote of a
majority (as defined in the 1940 Act) of the outstanding voting securities
of the Fund, provided that in either event the continuance also is
approved by a majority of the Board members who are not "interested
persons" (as defined in the 1940 Act) of the Fund or the Manager, by vote
cast in person at a meeting called for the purpose of voting on such
approval.  The Agreement was approved by shareholders on August 3, 1994
and was last approved by the Fund's Board, including a majority of the
Board members who are not "interested persons" of any party to the
Agreement, at a meeting held on July 17, 1996.  The Agreement is
terminable without penalty, on 60 days' notice, by the Fund's Board or by
vote of the holders of a majority of the Fund's shares, or, on not less
than 90 days' notice, by the Manager.  The Agreement will terminate
automatically in the event of its assignment (as defined in the 1940 Act).
    
   
     The following persons are officers and/or directors of the Manager:
Howard Stein, Chairman of the Board and Chief Executive Officer; W. Keith
Smith, Vice Chairman of the Board; Christopher M. Condron, President,
Chief Operating Officer and a director; Stephen E. Canter, Vice Chairman,
Chief Investment Officer and a director; Lawrence S. Kash, Vice Chairman-
Distribution and a director; Philip L. Toia, Vice Chairman-Operations and
Administration and a director; William T. Sandalls, Jr., Senior Vice
President and Chief Financial Officer; Elie M. Genadry, Vice President-
Institutional Sales; William F. Glavin, Jr., Vice President-Corporate
Development; Mark N. Jacobs, Vice President, General Counsel and
Secretary; Patrice M. Kozlowski, Vice President-Corporate Communications,
Mary Beth Leibig, Vice President-Human Resources; Jeffrey N. Nachman, Vice
President-Mutual Fund Accounting; Andrew S. Wasser, Vice President-
Information Systems; Elvira Oslapas, Assistant Secretary; and Mandell L.
Berman, Frank V. Cahouet, Alvin E. Friedman, Lawrence M. Greene and Julian
M. Smerling, directors.
    
   
     The Manager manages the Fund's portfolio of investments in accordance
with the stated policies of the Fund, subject to the approval of the
Fund's Board.  The Manager is responsible for investment decisions, and
provides the Fund with portfolio managers who are authorized by the Fund's
Board to execute purchases and sales of securities.  The Fund's portfolio
managers are Joseph P. Darcy, A. Paul Disdier, Douglas J. Gaylor, Karen M.
Hand, Stephen C. Kris, Richard J. Moynihan, Jill C. Shaffro, L. Lawrence
Troutman, Samuel J. Weinstock and Monica S. Wieboldt.  The Manager also
maintains a research department with a professional staff of portfolio
managers and securities analysts who provide research services for the
Fund as well as for other funds advised by the Manager.  All purchases and
sales are reported for the Board's review at the meeting subsequent to
such transactions.
    
   
     The Manager maintains office facilities on behalf of the Fund, and
furnishes statistical and research data, clerical help, accounting, data
processing, bookkeeping and internal auditing and certain other required
services to the Fund.  The Manager also may make such advertising and
promotional expenditures, using its own resources, as it from time to time
deems appropriate.
    
   
     All expenses incurred in the operation of the Fund are borne by the
Fund, except to the extent specifically assumed by the Manager.  The
expenses borne by the Fund include, without limitation, the following:
taxes, interest, loan commitment fees, interest and distributions paid on
securities sold short, brokerage fees and commissions, if any, fees of
Board members who are not officers, directors, employees or holders of 5%
or more of the outstanding voting securities of the Manager, Securities
and Exchange Commission fees and state Blue Sky qualification fees,
advisory fees, charges of custodians, transfer and dividend disbursing
agents' fees, certain insurance premiums, industry association fees,
outside auditing and legal expenses, costs of independent pricing
services, costs of maintaining the Fund's existence, costs attributable to
investor services (including, without limitation, telephone and personnel
expenses), costs of preparing and printing prospectuses and statements of
additional information for regulatory purposes and for distribution to
existing shareholders, costs of shareholders' reports and meetings, and
any extraordinary expenses.  In addition, shares of each Class are subject
to an annual service fee and Class B and Class C shares are subject to an
annual distribution fee.  See "Distribution Plan and Shareholder Services
Plan."
    
   
    
   
     As compensation for the Manager's services, the Fund has agreed to
pay the Manager a monthly management fee at the annual rate of .55 of 1%
of the value of the Fund's average daily net assets.  For the fiscal years
ended April 30, 1994, 1995 and 1996, the management fees payable amounted
to $3,526,429, $3,361,698 and $3,302,301, respectively, which fees were
reduced in 1994 by $399,146 pursuant to undertakings then in effect,
resulting in net fees paid to the Manager of $3,127,283 in fiscal 1994,
$3,361,698 in fiscal 1995 and $3,302,301 in fiscal 1996.
    
     The Manager has agreed that if in any fiscal year the aggregate
expenses of the Fund, exclusive of taxes, brokerage, interest on
borrowings and (with the prior written consent of the necessary state
securities commissions) extraordinary expenses, but including the
management fee, exceed the expense limitation of any state having
jurisdiction over the Fund, the Fund may deduct from the payment to be
made to the Manager under the Agreement, or the Manager will bear, such
excess expense to the extent required by state law.  Such deduction or
payment, if any, will be estimated daily, and reconciled and effected or
paid, as the case may be, on a monthly basis.

     The aggregate of the fees payable to the Manager is not subject to
reduction as the value of the Fund's net assets increases.

   
                             PURCHASE OF SHARES
    
   
     The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "How to Buy
Shares."
    
   
     The Distributor.  The Distributor serves as the Fund's distributor on
a best efforts basis pursuant to an agreement dated August 24, 1994.  The
Distributor also acts as distributor for the other funds in the Premier
Family of Funds, for funds in the Dreyfus Family of Funds and for certain
other investment companies.  In some states, certain financial
institutions effecting transactions in Fund shares may be required to
register as dealers pursuant to state law.
    
   
     For the fiscal year ended April 30, 1996, the Distributor retained
$42,724 from sales loads on Class A shares and $207,759 from contingent
deferred sales charges ("CDSC") on Class B shares.  For the period from
July 13, 1995 (commencement of initial offering of Class C shares) to
April 30, 1996, the Distributor retained $101 from CDSCs on Class C
shares.  For the period from August 24, 1994 through April 30, 1995, the
Distributor retained $21,848 from the sales loads on Class A shares and
$199,265 from the CDSC on Class B shares.  For the period from May 1, 1994
through August 23, 1994 and for the fiscal year ended April 30, 1994,
Dreyfus Service Corporation, as the Fund's distributor during such
periods, retained $17,249 and $213,752, respectively, from sales loads on
Class A shares, and $63,511 and $91,986, respectively, from CDSCs on Class
B shares.
    
     Sales Loads -- Class A.  The scale of sales loads applies to
purchases of Class A shares made by any "purchaser," which term includes
an individual and/or spouse purchasing securities for his, her or their
own account or for the account of any minor children, or a trustee or
other fiduciary purchasing securities for a single trust estate or a
single fiduciary account (including a pension, profit-sharing or other
employee benefit trust created pursuant to a plan qualified under Section
401 of the Internal Revenue Code of 1986, as amended (the "Code"))
although more than one beneficiary is involved; or a group of accounts
established by or on behalf of the employees of an employer or affiliated
employers pursuant to an employee benefit plan or other program (including
accounts established pursuant to Sections 403(b), 408(k) and 457 of the
Code); or an organized group which has been in existence for more than six
months, provided that it is not organized for the purpose of buying
redeemable securities of a registered investment company and provided that
the purchases are made through a central administration or a single
dealer, or by other means which result in economy of sales effort or
expense.
   
     Set forth below is an example of the method of computing the offering
price of the Fund's Class A shares.  The example assumes a purchase of
Class A shares of the Fund aggregating less than $50,000 subject to the
schedule of sales charges set forth in the Fund's Prospectus at a price
based upon the net asset value of the Class A shares on April 30, 1996:
    
   
     Net Asset Value per share . . . . . . . . . . . . .   $13.85

     Per Shares Sales Charge - 4.5% of offering price
       (4.7% of net asset value per share) . . . . . . .   $  .65
                                                           ------
     Per Share Offering Price to Public. . . . . . . . .   $14.50
                                                           ======
    
   
     Using Federal Funds.  Dreyfus Transfer, Inc., the Fund's transfer and
dividend disbursing agent (the "Transfer Agent"), or the Fund may attempt
to notify the investor upon receipt of checks drawn on banks that are not
members of the Federal Reserve System as to the possible delay in
conversion into Federal Funds and may attempt to arrange for a better
means of transmitting the money.  If the investor is a customer of a
securities  dealer ("Selected Dealer") and his order to purchase Fund
shares is paid for other than in Federal Funds, the Selected Dealer,
acting on behalf of its customer, will complete the conversion into, or
itself advance, Federal Funds generally on the business day following
receipt of the customer's order.  The order is effective only when so
converted and received by the Transfer Agent.  An order for the purchase
of Fund shares placed by an investor with sufficient Federal Funds or a
cash balance in his brokerage account with a Selected Dealer will become
effective on the day that the order, including Federal Funds, is received
by the Transfer Agent.
    
   
     TeleTransfer Privilege.  TeleTransfer purchase orders may be made at
any time.  Purchase orders received by 4:00 p.m., New York time, on any
business day the Transfer Agent and the New York Stock Exchange are open
for business will be credited to the shareholder's Fund account on the
next bank business day following such purchase order.  Purchase orders
made after 4:00 p.m., New York time, on any business day the Transfer
Agent and the New York Stock Exchange are open for business, or orders
made on Saturday, Sunday or any Fund Holiday (e.g., when the New York
Stock Exchange is not open for business), will be credited to the
shareholder's Fund account on the second bank business day following such
purchase order.  To qualify to use the TeleTransfer Privilege, the initial
payment for purchase of Fund shares must be drawn on, and redemption
proceeds paid to, the same bank and account as are designated on the
Account Application or Shareholder Services Form on file.  If the proceeds
of a particular redemption are to be wired to an account at any other
bank, the request must be in writing and signature guaranteed.  See
"Redemption of Shares--TeleTransfer Privilege."
    
     Reopening an Account.  An investor may reopen an account with a
minimum investment of $100 without filing a new Account Application during
the calendar year the account is closed or during the following calendar
year, provided the information on the old Account Application is still
applicable.


               DISTRIBUTION PLAN AND SHAREHOLDER SERVICES PLAN

     The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"Distribution Plan and Shareholder Services Plan."
   
     Class B and Class C shares are subject to a Distribution Plan and
Class A, Class B and Class C shares are subject to a Shareholder Services
Plan.
    
   
     Distribution Plan.  Rule 12b-1 (the "Rule"), adopted by the
Securities and Exchange Commission under the 1940 Act, provides, among
other things, that an investment company may bear expenses of distributing
its shares only pursuant to a plan adopted in accordance with the Rule.
The Fund's Board has adopted such a plan (the "Distribution Plan") with
respect to Class B and Class C shares pursuant to which the Fund pays the
Distributor for distributing Class B and Class C shares.  The Fund's Board
believes that there is a reasonable likelihood that the Distribution Plan
will benefit the Fund and holders of Class B and Class C shares.
    
   
     A quarterly report of the amounts expended under the Distribution
Plan, and the purposes for which such expenditures were incurred, must be
made to the Board for its review.  In addition, the Distribution Plan
provides that it may not be amended to increase materially the costs which
holders of Class B or Class C shares may bear for distribution pursuant to
the Distribution Plan without the approval of such shareholders and that
other material amendments of the Distribution Plan must be approved by the
Board, and by the Board members who are not "interested persons" (as
defined in the 1940 Act) of the Fund or the Manager and have no direct or
indirect financial interest in the operation of the Distribution Plan, or
in any agreements entered into in connection with the Distribution Plan,
by vote cast in person at a meeting called for the purpose of considering
such amendments.  The Distribution Plan is subject to annual approval by
such vote of the Board members cast in person at a meeting called for the
purpose of voting on the Distribution Plan.  The Distribution Plan was
last so approved at a meeting held on July 17, 1996.  As to each such
Class, the Distribution Plan may be terminated at any time by vote of a
majority of the Board members who are not "interested persons" and have no
direct or indirect financial interest in the operation of the Distribution
Plan or by vote of the holders of a majority of such Class.
    
   
     For the fiscal year ended April 30, 1996, the Fund paid the
Distributor $520,864, with respect to Class B, and $477, with respect to
Class C, under the Distribution Plan.
    
   
     Shareholder Services Plan.  The Fund has adopted a Shareholder
Services Plan, pursuant to which the Fund pays the Distributor for the
provision of certain services to the holders of Class A, Class B and Class
C shares.  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 such shareholder accounts.  Under the Shareholder
Services Plan, the Distributor may make payments to certain financial
institutions (which may include banks), Selected Dealers and other
financial industry professionals (collectively, "Service Agents") in
respect of these services.
    
   
     A quarterly report of the amounts expended under the Shareholder
Services Plan, and the purposes for which such expenditures were incurred,
must be made to the Board for its review.  In addition, the Shareholder
Services Plan provides that material amendments must be approved by the
Fund's Board, and by the Board members who are not "interested persons"
(as defined in the 1940 Act) of the Fund and have no direct or indirect
financial interest in the operation of the Shareholder Services Plan, by
vote cast in person at a meeting called for the purpose of considering
such amendments.  The Shareholder Services Plan is subject to annual
approval by such vote of the Board members cast in person at a meeting
called for the purpose of voting on the Shareholder Services Plan.  The
Shareholder Services Plan was last so approved on July 17, 1996.  As to
each Class of shares, the Shareholder Services Plan is terminable at any
time by vote of a majority of the Board members who are not "interested
persons" and who have no direct or indirect financial interest in the
operation of the Shareholder Services Plan, or in any agreements entered
into in connection with the Shareholder Services Plan.
    
   
     For the fiscal year ended April 30, 1996, the Fund paid the
Distributor $1,240,455 with respect to Class A, $260,432 with respect to
Class B, and $159 with respect to Class C, under the Shareholder Services
Plan.
    
   
                            REDEMPTION OF SHARES
    
   
     The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "How to
Redeem Shares."
    
   
     Check Redemption Privilege - Class A.  An investor may indicate on
the Account Application, Shareholder Services Form or by later written
request that the Fund provide Redemption Checks ("Checks") drawn on the
investor's Fund account.  Checks will be sent only to the registered
owner(s) of the account and only to the address of record.  The Account
Application, Shareholder Services Form or later written request must be
manually signed by the registered owner(s).  Checks may be made payable to
the order of any person in an amount of $500 or more.  When a Check is
presented to the Transfer Agent for payment, the Transfer Agent, as the
investor's agent, will cause the Fund to redeem a sufficient number of
full and fractional Class A shares in the investor's account to cover the
amount of the Check.  Dividends are earned until the Check clears.  After
clearance, a copy of the Check will be returned to the investor.
Investors generally will be subject to the same rules and regulations that
apply to checking accounts, although election of this Privilege creates
only a shareholder-transfer agent relationship with the Transfer Agent.
    
     If the amount of the Check is greater than the value of the shares in
an investor's account, the Check will be returned marked insufficient
funds.  Checks should not be used to close an account.
   
     TeleTransfer Privilege.  Investors should be aware that if they have
selected the TeleTransfer Privilege, any request for a TeleTransfer
transaction will be effected through the Automated Clearing House ("ACH")
system unless more prompt transmittal specifically is requested.
Redemption proceeds will be on deposit in the investor's account at an ACH
member bank ordinarily two business days after receipt of the redemption
request.  See "Purchase of Shares--TeleTransfer Privilege."
    
     Share Certificates; Signatures.  Any certificates representing Fund
shares to be redeemed must be submitted with the redemption request.
Written redemption requests must be signed by each shareholder, including
each owner of a joint account, and each signature must be guaranteed.
Signatures on endorsed certificates submitted for redemption also must be
guaranteed.  The Transfer Agent has adopted standards and procedures
pursuant to which signature-guarantees in proper form generally will be
accepted from domestic banks, brokers, dealers, credit unions, national
securities exchanges, registered securities associations, clearing
agencies and savings associations, as well as from participants in the New
York Stock Exchange Medallion Signature Program, the Securities Transfer
Agents Medallion Program ("STAMP") and the Stock Exchanges Medallion
Program.  Guarantees must be signed by an authorized signatory of the
guarantor and "Signature-Guaranteed" must appear with the signature.  The
Transfer Agent may request additional documentation from corporations,
executors, administrators, trustees or guardians, and may accept other
suitable verification arrangements from foreign investors, such as
consular verification.
   
     Redemption Commitment.  The Fund has committed itself to pay in cash
all redemption requests by any shareholder of record, limited in amount
during any 90-day period to the lesser of $250,000 or 1% of the value of
the Fund's net assets at the beginning of such period.  Such commitment is
irrevocable without the prior approval of the Securities and Exchange
Commission.  In the case of requests for redemption in excess of such
amount, the Fund's Board reserves the right to make payments in whole or
in part in securities (which may include non-marketable securities) or
other assets in case of an emergency or any time a cash distribution would
impair the liquidity of the Fund to the detriment of the existing
shareholders.  In such event, the securities would be valued in the same
manner as the Fund's portfolio is valued.  If the recipient sold such
securities, brokerage charges might be incurred.
    
     Suspension of Redemption.  The right of redemption may be suspended
or the date of payment postponed (a) during any period when the New York
Stock Exchange is closed (other than customary weekend and holiday
closings), (b) when trading in the markets the Fund ordinarily utilizes is
restricted, or when an emergency exists as determined by the Securities
and Exchange Commission so that disposal of the Fund's investments or
determination of its net asset value is not reasonably practicable, or
(c) for such other periods as the Securities and Exchange Commission by
order may permit to protect the Fund's shareholders.


                            SHAREHOLDER SERVICES

     The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"Shareholder Services."
   
     Fund Exchanges.  Class A, Class B and Class C shares of the Fund may
be exchanged for shares of the respective Class of certain other funds
advised or administered by the Manager.  Shares of the same Class of such
funds purchased by exchange will be purchased on the basis of relative net
asset value per share as follows:
    
     A.    Class A shares of funds purchased without a sales load may be
           exchanged for Class A shares of other funds sold with a sales
           load, and the applicable sales load will be deducted.

     B.    Class A shares of funds purchased with or without a sales load
           may be exchanged without a sales load for Class A shares of
           other funds sold without a sales load.

     C.    Class A shares of funds purchased with a sales load, Class A
           shares of funds acquired by a previous exchange from Class A
           shares purchased with a sales load, and additional Class A
           shares acquired through reinvestment of dividends or
           distributions of any such funds (collectively referred to herein
           as "Purchased Shares") may be exchanged for Class A shares of
           other funds sold with a sales load (referred to herein as
           "Offered Shares"), provided that, if the sales load applicable
           to the Offered Shares exceeds the maximum sales load that could
           have been imposed in connection with the Purchased Shares (at
           the time the Purchased Shares were acquired), without giving
           effect to any reduced loads, the difference will be deducted.
   
     D.    Class B or Class C shares of any fund may be exchanged for the
           same Class of shares of other funds without a sales load.  Class
           B or Class C shares of any fund exchanged for the same Class of
           shares of another fund will be subject to the higher applicable
           CDSC of the two exchanged funds and, for purposes of calculating
           CDSC rates and conversion periods, will be deemed to have been
           held since the date the Class B or Class C shares being
           exchanged were initially purchased.
    

     To accomplish an exchange under item C above, an investor's Service
Agent must notify the Transfer Agent of the investor's prior ownership of
such Class A shares and the investor's account number.

     To request an exchange, the investor's Service Agent acting on the
investor's behalf must give exchange instructions to the Transfer Agent in
writing or by telephone.  The ability to issue exchange instructions by
telephone is given to all Fund shareholders automatically unless the
investor checks the applicable "No" box on the Account Application,
indicating that the investor specifically refuses this privilege.  By
using the Telephone Exchange Privilege, the investor authorizes the
Transfer Agent to act on telephonic exchange instructions from any person
representing himself or herself to be the investor or a representative of
the investor's Service Agent, and reasonably believed by the Transfer
Agent to be genuine.  Telephone exchanges may be subject to limitations as
to the amount involved or the number of telephone exchanges permitted.
Shares issued in certificate form are not eligible for telephone exchange.

     To establish a personal retirement plan by exchange, shares of the
fund being exchanged must have a value of at least the minimum initial
investment being required for the shares of the same Class of the fund
into which the exchange is being made.  For Dreyfus-sponsored Keogh Plans,
IRAs and IRAs set up under a Simplified Employee Pension Plan ("SEP-IRAs")
with only one participant, the minimum initial investment is $750.  To
exchange shares held in corporate plans, 403(b)(7) Plans and SEP-IRAs with
more than one participant, the minimum initial investment is $100 if the
plan has at least $2,500 invested among shares of the same Class of the
funds in the Dreyfus Family of Funds.  To exchange shares held in personal
retirement plans, the shares exchanged must have a current value of at
least $100.

     Auto-Exchange Privilege.  The Auto-Exchange Privilege permits an
investor to purchase, in exchange for Class A, Class B or Class C shares
of the Fund, shares of the same Class of another fund in the Premier
Family of Funds or the Dreyfus Family of Funds.  This Privilege is
available only for existing accounts.  Shares will be exchanged on the
basis of relative net asset value as described above under "Fund
Exchanges."  Enrollment in or modification or cancellation of this
Privilege is effective three business days following notification by the
investor.  An investor will be notified if his account falls below the
amount designated to be exchanged under this Privilege.  In this case, an
investor's account will fall to zero unless additional investments are
made in excess of the designated amount prior to the next Auto-Exchange
transaction.  Shares held under IRA and other retirement plans are
eligible for this Privilege.  Exchanges of IRA shares may be made between
IRA accounts and from regular accounts to IRA accounts, but not from IRA
accounts to regular accounts.  With respect to all other retirement
accounts, exchanges may be made only among those accounts.

     Fund Exchanges and the Auto-Exchange Privilege are available to
shareholders resident in any state in which shares of the fund being
acquired may legally be sold.  Shares may be exchanged only between
accounts having identical names and other identifying designations.

     Shareholder Services Forms and prospectuses of the other funds may be
obtained by calling 1-800-645-6561.  The Fund reserves the right to reject
any exchange request in whole or in part.  The Fund Exchange service or
the Auto-Exchange Privilege may be modified or terminated at any time upon
notice to shareholders.
   
     Automatic Withdrawal Plan.  The Automatic Withdrawal Plan permits an
investor with a $5,000 minimum account to request withdrawal of a
specified dollar amount (minimum of $50) on either a monthly or quarterly
basis.  Withdrawal payments are the proceeds from sales of Fund shares,
not the yield on the shares.  If withdrawal payments exceed reinvested
dividends and distributions, the investor's shares will be reduced and
eventually may be depleted.  Automatic Withdrawal may be terminated at any
time by the investor, the Fund or the Transfer Agent.  Shares for which
certificates have been issued may not be redeemed through the Automatic
Withdrawal Plan.  Class B or Class C shares withdrawn pursuant to the
Automatic Withdrawal Plan will be subject to any applicable CDSC.
    
   
     Dividend Sweep.  Dividend Sweep allows investors to invest
automatically dividends or dividends and capital gain distributions, if
any, from the Fund in shares of the same Class of another fund in the
Premier Family of Funds or the Dreyfus Family of Funds of which the
investor is a shareholder.  Shares of the same Class of other funds
purchased pursuant to this Privilege will be purchased on the basis of
relative net asset value per share as follows:
    
     A.    Dividends and distributions paid with respect to Class A shares
           by a fund may be invested without imposition of a sales load in
           Class A shares of other funds that are offered without a sales
           load.

     B.    Dividends and distributions paid with respect to Class A shares
           by a fund which does not charge a sales load may be invested in
           Class A shares of other funds sold with a sales load, and the
           applicable sales load will be deducted.

     C.    Dividends and distributions paid with respect to Class A shares
           by a fund which charges a sales load may be invested in Class A
           shares of other funds sold with a sales load (referred to herein
           as "Offered Shares"), provided that, if the sales load
           applicable to the Offered Shares exceeds the maximum sales load
           charged by the fund from which dividends or distributions are
           being swept, without giving effect to any reduced loads, the
           difference will be deducted.

     D.    Dividends and distributions paid with respect to Class B or
           Class C shares by a fund may be invested without imposition of
           any applicable CDSC in the same Class of shares of other funds
           and the relevant Class of shares of such other funds will be
           subject on redemption to any applicable CDSC.


                      DETERMINATION OF NET ASSET VALUE
   
     The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "How to Buy
Shares."
    
   
     Valuation of Portfolio Securities.  The Fund's investments are valued
each business day by an independent pricing service (the "Service")
approved by the Fund's Board.  When, in the judgment of the Service,
quoted bid prices for investments are readily available and are
representative of the bid side of the market, these investments 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 bonds of
comparable quality, coupon, maturity and type; indications as to values
from dealers; and general market conditions.  The Service may employ
electronic data processing techniques and/or a matrix system to determine
valuations.  The Service's procedures are reviewed by the Fund's officers
under the general supervision of the Fund's Board.  Expenses and fees,
including the management fee (reduced by the expense limitation, if any)
and fees pursuant to the Shareholder Services Plan, with respect to Class
A, Class B and Class C shares, and fees pursuant to the Distribution Plan,
with respect to Class B and Class C shares only, are accrued daily and are
taken into account for the purpose of determining the net asset value of
the relevant Class of shares.  Because of the difference in operating
expenses incurred by each Class, the per share net asset value of each
Class will differ.
    
     New York Stock Exchange Closings.  The holidays (as observed) on
which the New York Stock Exchange is closed currently are:  New Year's
Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Thanksgiving and Christmas.


                     DIVIDENDS, DISTRIBUTIONS AND TAXES

     The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Dividends,
Distributions and Taxes."
   
     Management believes that the Fund qualified as a "regulated
investment company" under the Code for the fiscal year ended April 30,
1996, and the Fund intends to continue to so qualify so long as such
qualification is in the best interests of its shareholders.  As a
regulated investment company, the Fund will pay no Federal income tax on
net investment income and net realized capital gains to the extent that
such income and gains are distributed to shareholders in accordance with
applicable provisions of the Code.  To qualify as a regulated investment
company, the Fund must pay out to its shareholders at least 90% of its net
income (consisting of net investment income from tax exempt obligations
and taxable obligations, if any, and net short-term capital gains), must
derive less than 30% of its annual gross income from gain on the sale of
securities held for less than three months, and must meet certain asset
diversification and other requirements.  The term "regulated investment
company" does not imply the supervision of management or investment
practices or policies by any government agency.
    
   
     Any dividend or distribution paid shortly after an investor's
purchase may have the effect of reducing the net asset value of his shares
below the cost of his investment.  Such a distribution would be a return
on investment in an economic sense although taxable as stated in the
Prospectus.  In addition, the Code provides that if a shareholder has not
held his shares for more than six months (or such shorter period as the
Internal Revenue Service may prescribe by regulation) and has received an
exempt-interest dividend with respect to such shares, any loss incurred on
the sale of such shares will be disallowed to the extent of the
exempt-interest dividend received.  Exempt-interest dividends received
with respect to Fund shares may be partially exempt from certain state or
local taxes for the residents of such state or locality.
    
     Ordinarily, gains and losses realized from portfolio transactions
will be treated as capital gain or loss.  However, all or a portion of any
gains realized from the sale or other  disposition of certain market
discount bonds will be treated as ordinary income under Section 1276 of
the Code.  In addition, all or a portion of the gain realized from
engaging in "conversion transactions" may be treated as ordinary income
under Section 1258 of the Code.  "Conversion transactions" are defined to
include certain forward, futures, option and "straddle" transactions
marketed or sold to produce capital gains, or transactions described in
Treasury regulations to be issued in the future.
   
     Under Section 1256 of the Code, gain or loss realized by the Fund
from certain financial futures and options transactions will be treated as
60% long-term capital gain or loss and 40% short-term capital gain or
loss.  Gain or loss will arise upon exercise or lapse of such futures and
options as well as from closing transactions.  In addition, any such
futures or options remaining unexercised at the end of the Fund's taxable
year will be treated as sold for their then fair market value, resulting
in additional gain or loss to the Fund characterized in the manner
described above.
    
   
     Offsetting positions held by the Fund involving certain futures
contracts or options transactions may be considered, for tax purposes, to
constitute "straddles."  "Straddles" are defined to include "offsetting
positions" in actively traded personal property.  The tax treatment of
"straddles" is governed by Sections 1092 and 1258 of the Code, which, in
certain circumstances, overrides or modifies the provisions of Section
1256 of the Code. As such, all or a portion of any short- or long-term
capital gain from certain "straddle" and/or conversion transactions may be
recharacterized to ordinary income.
    
   
     If the Fund were treated as entering into "straddles" by reason of
its engaging in certain futures contracts or options transactions, such
"straddles" would be characterized as "mixed straddles" if the futures or
options transactions comprising a part of such "straddles" were governed
by Section 1256 of the Code.  The Fund may make one or more elections with
respect to "mixed straddles."  Depending on which election is made, if
any, the results to the Fund may differ.  If no election is made, to the
extent the "straddle" rules apply to positions established by the Fund,
losses realized by the Fund will be deferred to the extent of unrealized
gain in the offsetting position.  Moreover, as a result of the "straddle"
and the conversion transaction rules, short-term capital losses on
"straddle" positions may be recharacterized as long-term capital losses,
and long-term capital gains may be treated as short-term capital gains or
ordinary income.
    
     Investment by the Fund in securities issued at a discount or
providing for deferred interest or for payment of interest in the form of
additional obligations could, under special tax rules, affect the amount,
timing and character of distributions to shareholders.  For example, the
Fund could be required to take into account annually a portion of the
discount (or deemed discount) at which such securities were issued and to
distribute such portion in order to maintain its qualification as a
regulated investment company.  In such case, the Fund may have to dispose
of securities which it might otherwise have continued to hold in order to
generate cash to satisfy these distribution requirements.


                           PORTFOLIO TRANSACTIONS

     Portfolio securities ordinarily are purchased from and sold to
parties acting as either principal or agent.  Newly-issued securities
ordinarily are purchased directly from the issuer or from an underwriter;
other purchases and sales usually are placed with those dealers from which
it appears that the best price or execution will be obtained.  Usually no
brokerage commissions, as such, are paid by the Fund for such purchases
and sales, although the price paid usually includes an undisclosed
compensation to the dealer acting as agent.  The prices paid to
underwriters of newly-issued securities usually include a concession paid
by the issuer to the underwriter, and purchases of after-market securities
from dealers ordinarily are executed at a price between the bid and asked
price.  No brokerage commissions have been paid by the Fund to date.

     Transactions are allocated to various dealers by the Fund's portfolio
managers in their best judgment.  The primary consideration is prompt and
effective execution of orders at the most favorable price.  Subject to
that primary consideration, dealers may be selected for research,
statistical or other services to enable the Manager to supplement its own
research and analysis with the views and information of other securities
firms.

     Research services furnished by brokers through which the Fund effects
securities transactions may be used by the Manager in advising other funds
it advises and, conversely, research services furnished to the Manager by
brokers in connection with other funds the Manager advises may be used by
the Manager in advising the Fund.  Although it is not possible to place a
dollar value on these services, it is the opinion of the Manager that the
receipt and study of such services should not reduce the overall expenses
of its research department.
   
     The Fund's portfolio turnover rate for the fiscal years ended
April 30, 1995 and 1996 was 38.60% and 36.59%, respectively.  The Fund
anticipates that its annual portfolio turnover rate generally will not
exceed 100%, but the turnover rate will not be a limiting factor when the
Fund deems it desirable to sell or purchase securities.  Therefore,
depending upon market conditions, the Fund's annual portfolio turnover
rate may exceed 100% in particular years.
    

                           PERFORMANCE INFORMATION

     The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"Performance Information."
   
    
   
     Current yield for the 30-day period ended April 30, 1996 for Class A
was 5.66%, for Class B was 5.39% and for Class C was 5.14%.  Current yield
is computed pursuant to a formula which operates as follows:  The amount
of the Fund's expenses accrued for the 30-day period (net of
reimbursements) is subtracted from the amount of the dividends and
interest earned (computed in accordance with regulatory requirements)
during the period.  That result is then divided by the product of:  (a)
the average daily number of shares outstanding during the period that were
entitled to receive dividends, and (b) the maximum offering price per
share in the case of Class A or the net asset value per share in the case
of Class B or Class C on the last day of the period less any undistributed
earned income per share reasonably expected to be declared as a dividend
shortly thereafter.  The quotient is then added to 1, and that sum is
raised to the 6th power, after which 1 is subtracted.  The current yield
is then arrived at by multiplying the result by 2.
    
   
     Based upon a 1996 Federal tax rate of 39.6%, the tax equivalent yield
for the 30-day period ended April 30, 1996 for Class A was 9.37%, for
Class B was 8.92% and for Class C was 8.51%.  Tax equivalent yield is
computed by dividing that portion of the current yield (calculated as
described above) which is tax exempt by 1 minus a stated tax rate and
adding the quotient to that portion, if any, of the yield that is not tax
exempt.
    
     The tax equivalent yield noted above represents the application of
the highest Federal marginal personal income tax rate presently in effect.
The tax equivalent yield figure, however, does not reflect the potential
effect of any state or local (including, but not limited to, county,
district or city) taxes, including applicable surcharges.  In addition,
there may be pending legislation which could affect such stated tax rate
or yield.  Each investor should consult its tax adviser, and consider its
own factual circumstances and applicable tax laws, in order to ascertain
the relevant tax equivalent yield.
   
     The average annual total return for the 1, 5 and 9.427 year periods
ended April 30, 1996 for Class A was 1.33%, 6.82% and 6.76%, respectively.
The average annual total return for the 1 and 3.290 year periods ended
April 30, 1996 for Class B was 2.54% and 4.86%, respectively.  The average
annual total return for the period from July 13, 1995 (commencement of
initial offering of Class C) through April 30, 1996 for Class C was 0.35%.
Average annual total return is calculated by determining the ending
redeemable value of an investment purchased at net asset value (maximum
offering price in the case of Class A) per share with a hypothetical
$1,000 payment made at the beginning of the period (assuming the
reinvestment of dividends and distributions), dividing by the amount of
the initial investment, taking the "n"th root of the quotient (where "n"
is the number of years in the period) and subtracting 1 from the result.
A Class' average annual total return figures calculated in accordance with
such formula provides that in the case of Class A the maximum sales load
has been deducted from the hypothetical initial investment at the time of
purchase or in the case of Class B or Class C the maximum applicable CDSC
has been paid upon redemption at the end of the period.
    
   
     The total return for the period November 26, 1986 (commencement of
operations) through April 30, 1996 for Class A was 85.29%.  Based on net
asset value per share, the total return for Class A was 94.03% for this
period.  The total return for the period January 15, 1993 (commencement of
initial offering of Class B shares) through April 30, 1996 for Class B was
16.91%.  Without giving effect to the applicable CDSC, the total return
for Class B was 18.89% for this period.  The total return for Class C for
the period from July 13, 1995 (commencement of initial offering of Class
C) through April 30, 1996 was 0.28%.  Without giving effect to the
applicable CDSC, the total return for Class C was 1.25% for this period.
Total return is calculated by subtracting the amount of the Fund's net
asset value (maximum offering price in the case of Class A) per share at
the beginning of a stated period from the net asset value per share at the
end of the period (after giving effect to the reinvestment of dividends
and distributions during the period) and dividing the result by the
maximum offering price per share at the beginning of the period.  Total
return also may be calculated based on the net asset value per share at
the beginning of the period instead of the maximum offering price per
share at the beginning of the period for Class A shares or without giving
effect to any applicable CDSC at the end of the period for Class B or
Class C shares.  In such cases, the calculation would not reflect the
deduction of the sales charge, which, if reflected, would reduce the
performance quoted.
    
     From time to time, the Fund may use hypothetical tax equivalent
yields or charts in its advertising.  These hypothetical yields or charts
will be used for illustrative purposes only and not as representative of
the Fund's past or future performance.

     From time to time, advertising materials for the Fund may refer to or
discuss then-current or past economic conditions, developments and/or
events, including those relating to or arising from actual or proposed tax
legislation.  From time to time, advertising materials for the Fund may
also refer to statistical or other information concerning trends relating
to investment companies, as compiled by industry associations such as the
Investment Company Institute.  From time to time, advertising materials
for the Fund also may refer to Morningstar ratings and related analysis
supporting such ratings.
   
     From time to time, advertising materials for the Fund may include
biographical information relating to its portfolio managers and may refer
to, or include commentary by, a portfolio manager relating to investment
strategy, asset growth, current or past business, political, economic or
financial conditions and other matters of general interest to investors.
    

                         INFORMATION ABOUT THE FUND

     The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "General
Information."

     Each Fund share has one vote and, when issued and paid for in
accordance with the terms of the offering, is fully paid and
non-assessable.  Shares have no preemptive or subscription rights and are
freely transferable.

     The Fund sends annual and semi-annual financial statements to all its
shareholders.

     The Manager's legislative efforts led to the 1976 Congressional
amendment to the Code permitting an incorporated mutual fund to pass
through tax exempt income to its shareholders.  The Manager offered to the
public the first incorporated tax exempt fund and currently manages or
administers over $25 billion in tax exempt assets.

   
             TRANSFER AND DIVIDEND DISBURSING AGENT, CUSTODIAN,
                      COUNSEL AND INDEPENDENT AUDITORS
    
   
     Dreyfus Transfer, Inc., a wholly-owned subsidiary of the Manager,
P.O. Box 9671, Providence, Rhode Island 02940-9671, is the Fund's transfer
and dividend disbursing agent.  Under a transfer agency agreement with the
Fund, the Transfer Agent arranges for the maintenance of shareholder
account records for the Fund, the handling of certain communications
between shareholders and the Fund and the payment of dividends and
distributions payable by the Fund.  For these services, the Transfer Agent
receives a monthly fee computed on the basis of the number of shareholder
accounts it maintains for the Fund during the month, and is reimbursed for
certain out-of-pocket expenses.  For the period December 1, 1995
(effective date of the transfer agency agreement) through April 30, 1996,
the Fund paid the Transfer Agent $112,291.
    
   
     The Bank of New York, 90 Washington Street, New York, New York 10286,
is the Fund's custodian.  Neither the Transfer Agent nor The Bank of New
York has any part in determining the investment policies of the Fund or
which securities are to be purchased or sold by the Fund.
    
   
     Stroock & Stroock & Lavan, 7 Hanover Square, New York, New York
10004-2696, as counsel for the Fund, has rendered its opinion as to
certain legal matters regarding the due authorization and valid issuance
of the shares being sold pursuant to the Fund's Prospectus.
    
     Ernst & Young LLP, 787 Seventh Avenue, New York, New York 10019,
independent auditors, has been selected as auditors of the Fund.



                                  APPENDIX

     Description of S&P, Moody's and Fitch ratings:

S&P

Municipal Bond Ratings

     An S&P municipal bond rating is a current assessment of the
creditworthiness of an obligor with respect to a specific obligation.

     The ratings are based on current information furnished by the issuer
or obtained by S&P from other sources it considers reliable, and will
include:  (1) likelihood of default--capacity and willingness of the
obligor as to the timely payment of interest and repayment of principal in
accordance with the terms of the obligation; (2) nature and provisions of
the obligation; and (3) protection afforded by, and relative position of,
the obligation in the event of bankruptcy, reorganization or other
arrangement under the laws of bankruptcy and other laws affecting
creditors' rights.

                                     AAA

     Debt rated AAA has the highest rating assigned by S&P.  Capacity to
pay interest and repay principal is extremely strong.

                                     AA

     Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the highest rated issues only in a small
degree.

                                      A

     Principal and interest payments on bonds in this category are
regarded as safe.  This rating describes the third strongest capacity for
payment of debt service.  It differs from the two higher ratings because:

     General Obligation Bonds -- There is some weakness in the local
economic base, in debt burden, in the balance between revenues and
expenditures, or in quality of management.  Under certain adverse
circumstances, any one such weakness might impair the ability of the
issuer to meet debt obligations at some future date.

     Revenue Bonds -- Debt service coverage is good, but not exceptional.
Stability of the pledged revenues could show some variations because of
increased competition or economic influences on revenues.  Basic security
provisions, while satisfactory, are less stringent.  Management
performance appears adequate.

                                     BBB

     Of the investment grade, this is the lowest.

     General Obligation Bonds -- Under certain adverse conditions, several
of the above factors could contribute to a lesser capacity for payment of
debt service.  The difference between an A and BBB rating is that the
latter shows more than one fundamental weakness, or one very substantial
fundamental weakness, whereas the former shows only one deficiency among
the factors considered.

     Revenue Bonds -- Debt coverage is only fair.  Stability of the
pledged revenues could show substantial variations, with the revenue flow
possibly being subject to erosion over time.  Basic security provisions
are no more than adequate.  Management performance could be stronger.

                             BB, B, CCC, CC, C

     Debt rated BB, B, CCC, CC or C is regarded as having predominantly
speculative characteristics with respect to capacity to pay interest and
repay principal.  BB indicates the least degree of speculation and C the
highest degree of speculation.  While such debt will likely have some
quality and protective characteristics, these are outweighed by large
uncertainties or major risk exposures to adverse conditions.

                                     BB

     Debt rated BB has less near-term vulnerability to default than other
speculative grade debt.  However, it faces major ongoing uncertainties or
exposure to adverse business, financial or economic conditions which could
lead to inadequate capacity to meet timely interest and principal payment.

                                      B

     Debt rated B has a greater vulnerability to default but presently has
the capacity to meet interest payments and principal repayments.  Adverse
business, financial or economic conditions would likely impair capacity or
willingness to pay interest and repay principal.

                                     CCC

     Debt rated CCC has a current identifiable vulnerability to default,
and is dependent upon favorable business, financial and economic
conditions to meet timely payments of interest and repayment of principal.
In the event of adverse business, financial or economic conditions, it is
not likely to have the capacity to pay interest and repay principal.

                                     CC

     The rating CC is typically applied to debt subordinated to senior
debt which is assigned an actual or implied CCC rating.

                                      C

     The rating C is typically applied to debt subordinated to senior debt
which is assigned an actual or implied CCC- debt rating.

                                      D

     Bonds rated D are in default, and payment of interest and/or payment
of principal is in arrears.

     Plus (+) or minus (-):  The ratings from AA to CCC may be modified by
the addition of a plus or minus designation to show relative standing
within the major rating categories.

Municipal Note Ratings

                                    SP-1

     The issuers of these municipal notes exhibit very strong or strong
capacity to pay principal and interest.  Those issues determined to
possess overwhelming safety characteristics are given a plus (+)
designation.

                                    SP-2

     The issuers of these municipal notes exhibit satisfactory capacity to
pay principal and interest.

                                    SP-3

     The issuers of these municipal notes exhibit speculative capacity to
pay principal and interest.

Commercial Paper Ratings

     An S&P commercial paper rating is a current assessment of the
likelihood of timely payment of debt having an original maturity of no
more than 365 days.  Issues assigned an A rating are regarded as having
the greatest capacity for timely payment.  Issues in this category are
delineated with the numbers 1, 2 and 3 to indicate the relative degree of
safety.

                                     A-1

     This designation indicates that the degree of safety regarding timely
payment is either overwhelming or very strong.  Those issues determined to
possess overwhelming safety characteristics are denoted with a plus (+)
designation.

                                     A-2

     Capacity for timely payment on issues with this designation is
strong.  However, the relative degree of safety is not as high as for
issues designated A-1.

                                     A-3

     Issues carrying this designation have a satisfactory capacity for
timely payment.  They are, however, somewhat more vulnerable to the
adverse effects of changes in circumstances than obligations carrying the
higher designations.

                                      B

     Issues rated B are regarded as having only an adequate capacity for
timely payment; such capacity may be damaged by changing conditions or
short-term adversities.

                                      C

     This rating is assigned to short-term debt obligations with a
doubtful capacity for payment.

Moody's

Municipal Bond Ratings

                                     Aaa

     Bonds which are rated Aaa are judged to be of the best quality.  They
carry the smallest degree of investment risk and are generally referred to
as "gilt edge."  Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure.  While the various
protective elements are likely to change, such changes as can be
visualized are most unlikely to impair the fundamentally strong position
of such issues.

                                     Aa

     Bonds which are rated Aa are judged to be of high quality by all
standards.  Together with the Aaa group they comprise what generally are
known as high-grade bonds.  They are rated lower than the best bonds
because margins of protection may not be as large as in Aaa securities or
fluctuation of protective elements may be of greater amplitude or there
may be other elements present which make the long-term risks appear
somewhat larger than in Aaa securities.


                                      A

     Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper medium-grade obligations.  Factors
giving security to principal and interest are considered adequate, but
elements may be present which suggest a susceptibility to impairment
sometime in the future.

                                     Baa

     Bonds which are rated Baa are considered as medium-grade obligations,
i.e., they are neither highly protected nor poorly secured.  Interest
payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time.  Such bonds lack outstanding
investment characteristics and in fact have speculative characteristics as
well.

                                     Ba

     Bonds which are rated Ba are judged to have speculative elements;
their future cannot be considered as well assured.  Often the protection
of interest and principal payments may be very moderate, and therefore not
well safeguarded during both good and bad times over the future.
Uncertainty of position characterizes bonds in this class.

                                      B

     Bonds which are rated B generally lack characteristics of the
desirable investment.  Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of time
may be small.

                                     Caa

     Bonds which are rated Caa are of poor standing.  Such issues may be
in default or there may be present elements of danger with respect to
principal or interest.

                                     Ca

     Bonds which are rated Ca present obligations which are speculative in
a high degree.  Such issues are often in default or have other marked
shortcomings.

                                      C

     Bonds which are rated C are the lowest rated class of bonds, and
issues so rated can be regarded as having extremely poor prospects of ever
attaining any real investment standing.

     Moody's applies the numerical modifiers 1, 2 and 3 to show relative
standing within the major rating categories, except in the Aaa category
and in the categories below B.  The modifier 1 indicates a ranking for the
security in the higher end of a rating category; the modifier 2 indicates
a mid-range ranking; and the modifier 3 indicates a ranking in the lower
end of a rating category.

Municipal Note Ratings

     Moody's ratings for state and municipal notes and other short-term
loans are designated Moody's Investment Grade (MIG).  Such ratings
recognize the difference between short-term credit risk and long-term
risk.  Factors affecting the liquidity of the borrower and short-term
cyclical elements are critical in short-term ratings, while other factors
of major importance in bond risk, long-term secular trends for example,
may be less important over the short run.

     A short-term rating may also be assigned on an issue having a demand
feature.  Such ratings will be designated as VMIG or, if the demand
feature is not rated, as NR.  Short-term ratings on issues with demand
features are differentiated by the use of the VMIG symbol to reflect such
characteristics as payment upon periodic demand rather than fixed maturity
dates and payment relying on external liquidity.  Additionally, investors
should be alert to the fact that the source of payment may be limited to
the external liquidity with no or limited legal recourse to the issuer in
the event the demand is not met.

     Moody's short-term ratings are designated Moody's Investment Grade as
MIG 1 or VMIG 1 through MIG 4 or VMIG 4.  As the name implies, when
Moody's assigns a MIG or VMIG rating, all categories define an investment
grade situation.

                                MIG 1/VMIG 1

     This designation denotes best quality.  There is present strong
protection by established cash flows, superior liquidity support or
demonstrated broad-based access to the market for refinancing.

                                MIG 2/VMIG 2

     This designation denotes high quality.  Margins of protection are
ample although not so large as in the preceding group.

                                MIG 3/VMIG 3

     This designation denotes favorable quality.  All security elements
are accounted for but there is lacking the undeniable strength of the
preceding grades.  Liquidity and cash flow protection may be narrow and
market access for refinancing is likely to be less well established.

                                MIG 4/VMIG 4

     This designation denotes adequate quality.  Protection commonly
regarded as required of an investment security is present and although not
distinctly or predominantly speculative, there is specific risk.

Commercial Paper Ratings

     The rating Prime-1 (P-1) is the highest commercial paper rating
assigned by Moody's.  Issuers of P-1 paper must have a superior capacity
for repayment of short-term promissory obligations, and ordinarily will be
evidenced by leading market positions in well established industries, high
rates of return on funds employed, conservative capitalization structures
with moderate reliance on debt and ample asset protection, broad margins
in earnings coverage of fixed financial charges and high internal cash
generation, and well established access to a range of financial markets
and assured sources of alternate liquidity.

     Issuers (or related supporting institutions) rated Prime-2 (P-2) have
a strong capacity for repayment of short-term promissory obligations.
This ordinarily will be evidenced by many of the characteristics cited
above but to a lesser degree.  Earnings trends and coverage ratios, while
sound, will be more subject to variation.  Capitalization characteristics,
while still appropriate, may be more affected by external conditions.
Ample alternate liquidity is maintained.

     Issuers (or related supporting institutions) rated Prime-3 (P-3) have
an acceptable capacity for repayment of short-term promissory obligations.
The effect of industry characteristics and market composition may be more
pronounced.  Variability in earnings and profitability may result in
changes in the level of debt protection measurements and the requirements
for relatively high financial leverage.  Adequate alternate liquidity is
maintained.

Fitch

Municipal Bond Ratings

     The ratings represent Fitch's assessment of the issuer's ability to
meet the obligations of a specific debt issue or class of debt.  The
ratings take into consideration special features of the issue, its
relationship to other obligations of the issuer, the current financial
condition and operative performance of the issuer and of any guarantor, as
well as the political and economic environment that might affect the
issuer's future financial strength and credit quality.

                                     AAA

     Bonds rated AAA are considered to be investment grade and of the
highest credit quality.  The obligor has an exceptionally strong ability
to pay interest and repay principal, which is unlikely to be affected by
reasonably foreseeable events.

                                     AA

     Bonds rated AA are considered to be investment grade and of very high
credit quality.  The obligor's ability to pay interest and repay principal
is very strong, although not quite as strong as bonds rated AAA.  Because
bonds rated in the AAA and AA categories are not significantly vulnerable
to foreseeable future developments, short-term debt of these issuers is
generally rated F-1+.

                                      A

     Bonds rated A are considered to be investment grade and of high
credit quality.  The obligor's ability to pay interest and repay principal
is considered to be strong, but may be more vulnerable to adverse changes
in economic conditions and circumstances than bonds with higher ratings.

                                     BBB

     Bonds rated BBB are considered to be investment grade and of
satisfactory credit quality.  The obligor's ability to pay interest and
repay principal is considered to be adequate.  Adverse changes in economic
conditions and circumstances, however, are more likely to have an adverse
impact on these bonds and, therefore, impair timely payment.  The
likelihood that the ratings of these bonds will fall below investment
grade is higher than for bonds with higher ratings.

                                     BB

     Bonds rated BB are considered speculative.  The obligor's ability to
pay interest and repay principal may be affected over time by adverse
economic changes.  However, business and financial alternatives can be
identified which could assist the obligor in satisfying its debt service
requirements.

                                      B

     Bonds rated B are considered highly speculative.  While bonds in this
class are currently meeting debt service requirements, the probability of
continued timely payment of principal and interest reflects the obligor's
limited margin of safety and the need for reasonable business and economic
activity throughout the life of the issue.

                                     CCC

     Bonds rated CCC have certain identifiable characteristics, which, if
not remedied, may lead to default.  The ability to meet obligations
requires an advantageous business and economic environment.

                                     CC

     Bonds rated CC are minimally protected.  Default payment of interest
and/or principal seems probable over time.

                                      C

     Bonds rated C are in imminent default in payment of interest or
principal.

                                DDD, DD and D

     Bonds rated DDD, DD and D are in actual or imminent default of
interest and/or principal payments.  Such bonds are extremely speculative
and should be valued on the basis of their ultimate recovery value in
liquidation or reorganization of the obligor.  DDD represents the highest
potential for recovery on these bonds and D represents the lowest
potential for recovery.

     Plus (+) and minus (-) signs are used with a rating symbol to
indicate the relative position of a credit within the rating category.
Plus and minus signs, however, are not used in the AAA category covering
12-36 months or the DDD, DD or D categories.

Short-Term Ratings

     Fitch's short-term ratings apply to debt obligations that are payable
on demand or have original maturities of up to three years, including
commercial paper, certificates of deposit, medium-term notes, and
municipal and investment notes.

     Although the credit analysis is similar to Fitch's bond rating
analysis, the short-term rating places greater emphasis than bond ratings
on the existence of liquidity necessary to meet the issuer's obligations
in a timely manner.

                                    F-1+

     Exceptionally Strong Credit Quality.  Issues assigned this rating are
regarded as having the strongest degree of assurance for timely payment.

                                     F-1

     Very Strong Credit Quality.  Issues assigned this rating reflect an
assurance of timely payment only slightly less in degree than issues rated
F-1+.

                                     F-2

     Good Credit Quality.  Issues carrying this rating have a satisfactory
degree of assurance for timely payments, but the margin of safety is not
as great as the F-1+ and F-1 categories.

Demand Bond or Notes Ratings

     Certain demand securities empower the holder at his option to require
the issuer, usually through a remarketing agent, to repurchase the
security upon notice at par with accrued interest.  This is also referred
to as a put option.  The ratings of the demand provision may be changed or
withdrawn at any time if, in Fitch's judgment, changing circumstances
warrant such action.

     Fitch demand provision ratings carry the same symbols and related
definitions as its short-term ratings.


<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>

PREMIER MUNICIPAL BOND FUND
FINANCIAL HIGHLIGHTS
    Reference is made to page 4 of the Fund's Prospectus dated
September 3, 1996.


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





                          PREMIER MUNICIPAL BOND FUND


                           PART C. OTHER INFORMATION
                           _________________________


Item 24.   Financial Statements and Exhibits. - List
_______    _________________________________________

     (a)   Financial Statements:

                Included in Part A of the Registration Statement
   
                Condensed Financial Information for the period from November
                26, 1986 (commencement of operations) to April 30, 1987 and
                for each of the nine years in the period ended April 30,
                1996.
    
                Included in Part B of the Registration Statement:
   
                     Statement of Investments-- April 30, 1996
    
   
                     Statement of Assets and Liabilities-- April 30, 1996
    
   
                     Statement of Operations--year ended April 30, 1996
    
   
                     Statement of Changes in Net Assets--for each of the
                     years ended April 30, 1995 and 1996
    
                     Notes to Financial Statements
   
                     Report of Ernst & Young LLP, Independent Auditors, dated
                     May 31, 1996
    

All Schedules and other financial statement information, for which provision
is made in the applicable accounting regulations of the Securities and
Exchange Commission, are either omitted because they are not required under
the related instructions, they are inapplicable, or the required information
is presented in the financial statements or notes thereto which are included
in Part B of the Registration Statement.


Item 24.   Financial Statements and Exhibits. - List (continued)
_______    _____________________________________________________

  (b)      Exhibits:
   
  (1)      Registrant's Amended and Restated Agreement and Declaration of
           Trust is incorporated by reference to Exhibit (1) of Post-
           Effective Amendment No. 13 to the Registration Statement on Form
           N-1A, filed on July 12, 1995.
    
  (2)      Registrant's By-Laws, as amended, are incorporated by reference to
           Exhibit (2) of Post-Effective Amendment No. 12 to the Registration
           Statement on Form N-1A, filed on June 22, 1994.
   
  (5)      Management Agreement is incorporated by reference to Exhibit (5)
           of Post-Effective Amendment No. 13 to the Registration Statement
           on Form N-1A, filed on July 12, 1995.
    
   
  (6)(a)   Distribution Agreement is incorporated by reference to Exhibit
           (6)(a) of Post-Effective Amendment No. 13 to the Registration
           Statement on Form N-1A, filed on July 12, 1995.
    
   
  (6)(b)   Forms of Shareholder Services Plan Agreements are incorporated by
           reference to Exhibit (6)(b) of Post-Effective Amendment No. 13 to
           the Registration Statement on Form N-1A, filed on July 12, 1995.
    
   
  (6)(c)   Forms of Distribution Plan Agreements are incorporated by
           reference to Exhibit (6)(c) of Post-Effective Amendment No. 13 to
           the Registration Statement on Form N-1A, filed on July 12, 1995.
    
   
  (8)(a)   Amended and Restated Custody Agreement is incorporated by
           reference to Exhibit (8)(a) of Post-Effective Amendment No. 13 to
           the Registration Statement on Form N-1A, filed on July 12, 1995.
    
  (8)(b)   Sub-Custodian Agreements are incorporated by reference to Exhibit
           (8)(b) of Post-Effective Amendment No. 12 to the Registration
           Statement on Form N-1A, filed on June 22, 1994.
   
  (9)      Shareholder Services Plan is incorporated by reference to Exhibit
           (9) of Post-Effective Amendment No. 13 to the Registration
           Statement on Form N-1A, filed on July 12, 1995.
    
   
  (10)     Opinion and consent of Registrant's counsel is incorporated by
           reference to Exhibit (10) of Post-Effective Amendment No. 13 to
           the Registration Statement on Form N-1A, filed on July 12, 1995.
    
  (11)     Consent of Independent Auditors.
   
  (15)     Distribution Plan is incorporated by reference to Exhibit (15) of
           Post-Effective Amendment No. 13 to the Registration Statement on
           Form N-1A, filed on July 12, 1995.
    
  (16)     Schedules of Computation of Performance Data are incorporated by
           reference to Exhibit (16) of Post-Effective Amendment No. 12 to
           the Registration Statement on Form N-1A, filed on June 22, 1994.





Item 24.   Financial Statements and Exhibits. - List (continued)
_______    _____________________________________________________
   
  (18)     Registrant's Rule 18f-3 Plan is incorporated by reference to
           Exhibit (18) of Post-Effective Amendment No. 15 to the
           Registration Statement on Form N-1A, filed on July 18, 1996.
    
           Other Exhibits
           ______________
   
                (a)  Powers of Attorney of the Trustees and officers.
    
   
                (b)  Certificate of Assistant Secretary.
    
Item 25.   Persons Controlled by or under Common Control with Registrant.
_______    ______________________________________________________________

           Not Applicable

Item 26.   Number of Holders of Securities.
_______    ________________________________
   
            (1)                              (2)

                                                Number of Record
         Title of Class                  Holders as of July 15, 1996
         ______________                  _____________________________

         Beneficial Interest
         (Par value $.001)
            Class A                                4,975
            Class B                                6,549
            Class C                                4,641
    
Item 27.    Indemnification
_______     _______________

   
         Reference is made to Article VIII of the Registrant's Amended and
         Restated Declaration of Trust incorporated by reference to Exhibit
         (1) of Post-Effective Amendment  No. 13 to the Registration
         Statement on Form N-1A, filed on July 12, 1995.  The application of
         these provisions is limited by Article 10 of the Registrant's
         By-Laws, as amended, incorporated by reference to Exhibit (2) of
         Post-Effective Amendment No. 12 to the Registration Statement on
         Form N-1A, filed on June 22, 1994, and by the following undertaking
         set forth in the rules promulgated by the Securities and Exchange
         Commission:
    
   
            Insofar as indemnification for liabilities arising under the
            Securities Act of 1933 may be permitted to trustees, officers
            and controlling persons of the registrant pursuant to the
            foregoing provisions, or otherwise, the registrant has been
            advised that in the opinion of the Securities and Exchange
            Commission such indemnification is against public policy as
            expressed in such Act and is, therefore, unenforceable.  In the
            event that a claim for indemnification is against such
            liabilities (other than the payment by the registrant of
            expenses incurred or paid by a trustee, officer or controlling
            person of the registrant in the successful defense of any such
            action, suit or proceeding) is asserted by such trustee, officer
            or controlling person in connection with the securities being
            registered, the registrant will, unless in the opinion  of its
            counsel the matter has been settled by controlling precedent,
            submit to a court of appropriate jurisdiction the question
            whether such indemnification by it is against public policy as
            expressed in such Act and will be governed by the final
            adjudication of such issue.
    
   
         Reference is also made to the Distribution Agreement attached as
         Exhibit (6)(a) of Post-Effective Amendment No. 13 to the
         Registration Statement on From N-1A, filed on July 12, 1995.
    
Item 28.    Business and Other Connections of Investment Adviser.
_______     ____________________________________________________

            The Dreyfus Corporation ("Dreyfus") and subsidiary companies
            comprise a financial service organization whose business
            consists primarily of providing investment management services
            as the investment adviser and manager for sponsored investment
            companies registered under the Investment Company Act of 1940
            and as an investment adviser to institutional and individual
            accounts.  Dreyfus also serves as sub-investment adviser to
            and/or administrator of other investment companies. Dreyfus
            Service Corporation, a wholly-owned subsidiary of Dreyfus,
            serves primarily as a registered broker-dealer of shares of
            investment companies sponsored by Dreyfus and of other
            investment companies  for which Dreyfus acts as investment
            adviser, sub-investment adviser or administrator.  Dreyfus
            Management, Inc., another wholly-owned subsidiary, provides
            investment management services to various pension plans,
            institutions and individuals.


Item 28.  Business and Other Connections of Investment Adviser (continued)
________  ________________________________________________________________

          Officers and Directors of Investment Adviser
          ____________________________________________


Name and Position
with Dreyfus                  Other Businesses
_________________             ________________

MANDELL L. BERMAN             Real estate consultant and private investor
Director                           29100 Northwestern Highway, Suite 370
                                   Southfield, Michigan 48034;
                              Past Chairman of the Board of Trustees:
                                   Skillman Foundation;
                              Member of The Board of Vintners Intl.

FRANK V. CAHOUET              Chairman of the Board, President and
Director                      Chief Executive Officer:
                                   Mellon Bank Corporation****;
                                   Mellon Bank, N.A.****
                              Director:
                                   Avery Dennison Corporation
                                   150 North Orange Grove Boulevard
                                   Pasadena, California 91103;
                                   Saint-Gobain Corporation
                                   750 East Swedesford Road
                                   Valley Forge, Pennsylvania 19482;
                                   Teledyne, Inc.
                                   1901 Avenue of the Stars
                                   Los Angeles, California 90067

ALVIN E. FRIEDMAN             Senior Adviser to Dillon, Read & Co. Inc.
Director                           535 Madison Avenue
                                   New York, New York 10022;
                              Director and Member of the Executive
                                   Committee of Avnet, Inc.**

LAWRENCE M. GREENE            Director:
Director                           Dreyfus America Fund

JULIAN M. SMERLING            None
Director

HOWARD STEIN                  Chairman of the Board:
Chairman of the Board and          Dreyfus Acquisition Corporation*;
Chief Executive Officer            The Dreyfus Consumer Credit
                                   Corporation*;
                                   Dreyfus Management, Inc.*;
                                   Dreyfus Service Corporation*;
                              Chairman of the Board and Chief Executive
                              Officer:
                                   Major Trading Corporation*;
                              Director:
                                   Avnet, Inc.**;
                                   Dreyfus America Fund++++;
                                   The Dreyfus Fund International
                                   Limited+++++;
                                   World Balanced Fund+++;
                                   Dreyfus Partnership Management,
                                        Inc.*;
                                   Dreyfus Personal Management, Inc.*;
                                   Dreyfus Precious Metals, Inc.*;
                                   Dreyfus Service Organization, Inc.***;
                                   Seven Six Seven Agency, Inc.*;
                              Trustee:
                                   Corporate Property Investors
                                   New York, New York

W. KEITH SMITH                Chairman and Chief Executive Officer:
Vice Chairman of the Board         The Boston Company*****;
                              Vice Chairman of the Board:
                                   Mellon Bank Corporation****;
                                   Mellon Bank, N.A.****;
                              Director:
                                   Dentsply International, Inc.
                                   570 West College Avenue
                                   York, Pennsylvania 17405

CHRISTOPHER M. CONDRON        Vice Chairman:
President, Chief                   Mellon Bank Corporation****;
Operating Officer                  The Boston Company*****;
and a Director                Deputy Director:
                                   Mellon Trust****;
                              Chief Executive Officer:
                                   The Boston Company Asset Management,
                                   Inc.*****;
                              President:
                                   Boston Safe Deposit and Trust
                                   Company*****

STEPHEN E. CANTER             Director:
Vice Chairman and                  The Dreyfus Trust Company++;
Chief Investment Officer,     Formerly, Chairman and Chief Executive
and a Director                     Officer:
                                   Kleinwort Benson Investment Management
                                        Americas Inc.*

LAWRENCE S. KASH              Chairman, President and Chief
Vice Chairman-Distribution    Executive Officer:
and a Director                     The Boston Company Advisors, Inc.
                                   53 State Street
                                   Exchange Place
                                   Boston, Massachusetts 02109
                              Executive Vice President and Director:
                                   Dreyfus Service Organization, Inc.***;
                              Director:
                                   The Dreyfus Consumer Credit
                                   Corporation*;
                                   The Dreyfus Trust Company++;
                                   Dreyfus Service Corporation*;
                              President:
                                   The Boston Company*****;
                                   Laurel Capital Advisors****;
                                   Boston Group Holdings, Inc.;
                              Executive Vice President:
                                   Mellon Bank, N.A.****;
                                   Boston Safe Deposit and Trust
                                   Company*****;

PHILIP L. TOIA                Chairman of the Board and Trust Investment
Vice Chairman-Operations      Officer:
and Administration                 The Dreyfus Trust Company++;
and a Director                Chairman of the Board and Chief Operating
                              Officer:
                                   Major Trading Corporation*;
                              Chairman and Director:
                                   Dreyfus Transfer, Inc.
                                   One American Express Plaza
                                   Providence, Rhode Island 02903
                              Director:
                                   Dreyfus Precious Metals, Inc.*;
                                   Dreyfus Service Corporation*;
                                   Seven Six Seven Agency, Inc.*;
                              President and Director:
                                   Dreyfus Acquisition Corporation*;
                                   The Dreyfus Consumer Credit
                                   Corporation*;
                                   Dreyfus-Lincoln, Inc.*;
                                   Dreyfus Management, Inc.*;
                                   Dreyfus Personal Management, Inc.*;
                                   Dreyfus Partnership Management, Inc.+;
                                   Dreyfus Service Organization, Inc.***;
                                   The Truepenny Corporation*;
                              Formerly, Senior Vice President:
                                   The Chase Manhattan Bank, N.A. and
                                   The Chase Manhattan Capital Markets
                                   Corporation
                                   One Chase Manhattan Plaza
                                   New York, New York 10081

WILLIAM T. SANDALLS, JR.      Director:
Senior Vice President and          Dreyfus Partnership Management, Inc.*;
Chief Financial Officer            Seven Six Seven Agency, Inc.*;
                              President and Director:
                                   Lion Management, Inc.*;
                              Executive Vice President and Director:
                                   Dreyfus Service Organization, Inc.*;
                              Vice President, Chief Financial Officer and
                              Director:
                                   Dreyfus Acquisition Corporation*;
                              Vice President and Director:
                                   The Dreyfus Consumer Credit
                                   Corporation*;
                                   The Truepenny Corporation*;
                              Treasurer, Financial Officer and Director:
                                   The Dreyfus Trust Company++;
                              Treasurer and Director:
                                   Dreyfus Management, Inc.*;
                                   Dreyfus Personal Management, Inc.*;
                                   Dreyfus Service Corporation*;
                                   Major Trading Corporation*;
                              Formerly, President and Director:
                                   Sandalls & Co., Inc.

ELIE M. GENADRY               President:
Vice President-                    Institutional Services Division of
Institutional Sales                Dreyfus Service Corporation*;
                                   Broker-Dealer Division of Dreyfus
                                   Service Corporation*;
                                   Group Retirement Plans Division of
                                   Dreyfus Service Corporation;
                              Executive Vice President:
                                   Dreyfus Service Corporation*;
                                   Dreyfus Service Organization, Inc.***;
                              Vice President:
                                   The Dreyfus Trust Company++

WILLIAM F. GLAVIN, JR.        Executive Vice President:
Vice President-Corporate           Dreyfus Service Corporation*;
Development                   Senior Vice President:
                                   The Boston Company Advisors, Inc.
                                   53 State Street
                                   Exchange Place
                                   Boston, Massachusetts 02109

MARK N. JACOBS                Vice President, Secretary and Director:
Vice President-                    Lion Management, Inc.*;
General Counsel               Secretary:
and Secretary                      The Dreyfus Consumer Credit
                                   Corporation*;
                                   Dreyfus Management, Inc.*;
                              Assistant Secretary:
                                   Dreyfus Service Organization, Inc.***;
                                   Major Trading Corporation*;
                                   The Truepenny Corporation*

PATRICE M. KOZLOWSKI          None
Vice President-
Corporate Communications

MARY BETH LEIBIG              None
Vice President-
Human Resources


JEFFREY N. NACHMAN            President and Director:
Vice President-Mutual Fund         Dreyfus Transfer, Inc.
Accounting                         One American Express Plaza
                                   Providence, Rhode Island 02903

ANDREW S. WASSER              Vice President:
Vice President-Information         Mellon Bank Corporation****
Services

ELVIRA OSLAPAS                Assistant Secretary:
Assistant Secretary                Dreyfus Service Corporation*;
                                   Dreyfus Management, Inc.*;
                                   Dreyfus Acquisition Corporation, Inc.*;
                                   The Truepenny Corporation+





______________________________________

*       The address of the business so indicated is 200 Park Avenue, New
        York, New York 10166.
**      The address of the business so indicated is 80 Cutter Mill Road,
        Great Neck, New York 11021.
***     The address of the business so indicated is 131 Second Street,
        Lewes, Delaware 19958.
****    The address of the business so indicated is One Mellon Bank Center,
        Pittsburgh, Pennsylvania 15258.
*****   The address of the business so indicated is One Boston Place,
        Boston, Massachusetts 02108.
+       The address of the business so indicated is Atrium Building,
        80 Route 4 East, Paramus, New Jersey 07652.
++      The address of the business so indicated is 144 Glenn Curtiss
        Boulevard, Uniondale, New York 11556-0144.
+++     The address of the business so indicated is One Rockefeller Plaza,
        New York, New York 10020.
++++    The address of the business so indicated is 2 Boulevard Royal,
        Luxembourg.
+++++   The address of the business so indicated is Nassau, Bahama Islands.



Item 29.  Principal Underwriters
________  ______________________

     (a)  Other investment companies for which Registrant's principal
underwriter (exclusive distributor) acts as principal underwriter or
exclusive distributor:

           1)  Comstock Partners Strategy Fund, Inc.
           2)  Dreyfus A Bonds Plus, Inc.
           3)  Dreyfus Appreciation Fund, Inc.
           4)  Dreyfus Asset Allocation Fund, Inc.
           5)  Dreyfus Balanced Fund, Inc.
           6)  Dreyfus BASIC GNMA Fund
           7)  Dreyfus BASIC Money Market Fund, Inc.
           8)  Dreyfus BASIC Municipal Fund, Inc.
           9)  Dreyfus BASIC U.S. Government Money Market Fund
          10)  Dreyfus California Intermediate Municipal Bond Fund
          11)  Dreyfus California Tax Exempt Bond Fund, Inc.
          12)  Dreyfus California Tax Exempt Money Market Fund
          13)  Dreyfus Capital Value Fund, Inc.
          14)  Dreyfus Cash Management
          15)  Dreyfus Cash Management Plus, Inc.
          16)  Dreyfus Connecticut Intermediate Municipal Bond Fund
          17)  Dreyfus Connecticut Municipal Money Market Fund, Inc.
          18)  Dreyfus Florida Intermediate Municipal Bond Fund
          19)  Dreyfus Florida Municipal Money Market Fund
          20)  The Dreyfus Fund Incorporated
          21)  Dreyfus Global Bond Fund, Inc.
          22)  Dreyfus Global Growth Fund
          23)  Dreyfus GNMA Fund, Inc.
          24)  Dreyfus Government Cash Management
          25)  Dreyfus Growth and Income Fund, Inc.
          26)  Dreyfus Growth and Value Funds, Inc.
          27)  Dreyfus Growth Opportunity Fund, Inc.
          28)  Dreyfus Income Funds
          29)  Dreyfus Institutional Money Market Fund
          30)  Dreyfus Institutional Short Term Treasury Fund
          31)  Dreyfus Insured Municipal Bond Fund, Inc.
          32)  Dreyfus Intermediate Municipal Bond Fund, Inc.
          33)  Dreyfus International Equity Fund, Inc.
          34)  The Dreyfus/Laurel Funds, Inc.
          35)  The Dreyfus/Laurel Funds Trust
          36)  The Dreyfus/Laurel Tax-Free Municipal Funds
          37)  Dreyfus Stock Index Fund, Inc.
          38)  Dreyfus LifeTime Portfolios, Inc.
          39)  Dreyfus Liquid Assets, Inc.
          40)  Dreyfus Massachusetts Intermediate Municipal Bond Fund
          41)  Dreyfus Massachusetts Municipal Money Market Fund
          42)  Dreyfus Massachusetts Tax Exempt Bond Fund
          43)  Dreyfus Michigan Municipal Money Market Fund, Inc.
          44)  Dreyfus Money Market Instruments, Inc.
          45)  Dreyfus Municipal Bond Fund, Inc.
          46)  Dreyfus Municipal Cash Management Plus
          47)  Dreyfus Municipal Money Market Fund, Inc.
          48)  Dreyfus New Jersey Intermediate Municipal Bond Fund
          49)  Dreyfus New Jersey Municipal Bond Fund, Inc.
          50)  Dreyfus New Jersey Municipal Money Market Fund, Inc.
          51)  Dreyfus New Leaders Fund, Inc.
          52)  Dreyfus New York Insured Tax Exempt Bond Fund
          53)  Dreyfus New York Municipal Cash Management
          54)  Dreyfus New York Tax Exempt Bond Fund, Inc.
          55)  Dreyfus New York Tax Exempt Intermediate Bond Fund
          56)  Dreyfus New York Tax Exempt Money Market Fund
          57)  Dreyfus Ohio Municipal Money Market Fund, Inc.
          58)  Dreyfus 100% U.S. Treasury Intermediate Term Fund
          59)  Dreyfus 100% U.S. Treasury Long Term Fund
          60)  Dreyfus 100% U.S. Treasury Money Market Fund
          61)  Dreyfus 100% U.S. Treasury Short Term Fund
          62)  Dreyfus Pennsylvania Intermediate Municipal Bond Fund
          63)  Dreyfus Pennsylvania Municipal Money Market Fund
          64)  Dreyfus Short-Intermediate Government Fund
          65)  Dreyfus Short-Intermediate Municipal Bond Fund
          66)  Dreyfus Investment Grade Bond Funds, Inc.
          67)  The Dreyfus Socially Responsible Growth Fund, Inc.
          68)  Premier Strategic Investing
          69)  Dreyfus Tax Exempt Cash Management
          70)  The Dreyfus Third Century Fund, Inc.
          71)  Dreyfus Treasury Cash Management
          72)  Dreyfus Treasury Prime Cash Management
          73)  Dreyfus Variable Investment Fund
          74)  Dreyfus Worldwide Dollar Money Market Fund, Inc.
          75)  General California Municipal Bond Fund, Inc.
          76)  General California Municipal Money Market Fund
          77)  General Government Securities Money Market Fund, Inc.
          78)  General Money Market Fund, Inc.
          79)  General Municipal Bond Fund, Inc.
          80)  General Municipal Money Market Fund, Inc.
          81)  General New York Municipal Bond Fund, Inc.
          82)  General New York Municipal Money Market Fund
          83)  Dreyfus S&P 500 Index Fund
          84)  Dreyfus MidCap Index Fund
          85)  Premier Insured Municipal Bond Fund
          86)  Premier California Municipal Bond Fund
          87)  Premier Equity Funds, Inc.
          88)  Premier Global Investing, Inc.
          89)  Premier GNMA Fund
          90)  Premier Growth Fund, Inc.
          91)  Premier Municipal Bond Fund
          92)  Premier New York Municipal Bond Fund
          93)  Premier State Municipal Bond Fund
          94)  Premier Strategic Growth Fund



(b)
                                                             Positions and
Name and principal        Positions and offices with         offices with
business address          the Distributor                    Registrant
__________________        ___________________________        _____________

Marie E. Connolly+        Director, President, Chief         President and
                          Executive Officer and Compliance   Treasurer
                          Officer

Joseph F. Tower, III+     Senior Vice President, Treasurer   Vice President
                          and Chief Financial Officer        and Assistant
                                                             Treasurer

John E. Pelletier+        Senior Vice President, General     Vice President
                          Counsel, Secretary and Clerk       and Secretary

Roy M. Moura+             First Vice President               None

Dale F. Lampe+            Vice President                     None

Mary Nelson+              Vice President                     Vice President
                                                             and Assistant
                                                             Treasurer

Paul Prescott+            Vice President                     None

Elizabeth Bachman++       Assistant Vice President           Vice President
                                                             and Assistant
                                                             Secretary

Jean M. O'Leary+          Assistant Secretary and            None
                          Assistant Clerk

John W. Gomez+            Director                           None

William J. Nutt+          Director                           None




________________________________
 +   Principal business address is 60 State Street, Boston, Massachusetts
     02109.
++   Principal business address is 200 Park Avenue, New York, New York 10166.



Item 30.    Location of Accounts and Records
            ________________________________

            1.  First Data Investor Services Group, Inc.,
                a subsidiary of First Data Corporation
                P.O. Box 9671
                Providence, Rhode Island 02940-9671

            2.  The Bank of New York
                90 Washington Street
                New York, New York 10286

            3.  Dreyfus Transfer, Inc.
                P.O. Box 9671
                Providence, Rhode Island 02940-9671

            4.  The Dreyfus Corporation
                200 Park Avenue
                New York, New York 10166

Item 31.    Management Services
_______     ___________________

            Not Applicable

Item 32.    Undertakings
________    ____________

  (1)       To call a meeting of shareholders for the purpose of voting upon
            the question of removal of a trustee or trustees when requested
            in writing to do so by the holders of at least 10% of the
            Registrant's outstanding shares of beneficial interest and in
            connection with such meeting to comply with the provisions of
            Section 16(c) of the Investment Company Act of 1940 relating to
            shareholder communications.

  (2)       To furnish each person to whom a prospectus is delivered with a
            copy of the Fund's latest Annual Report to Shareholders, upon
            request and without charge.


                                  SIGNATURES
                                ---------------

     Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this Amendment to the Registration
Statement pursuant to Rule 485(b) under the Securities Act of 1933 and has
duly caused this Amendment to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of New
York, and State of New York on the 14th day of August, 1996.

                    PREMIER MUNICIPAL BOND FUND

            BY:     /s/Marie E. Connolly*
                    ___________________________________________
                    MARIE E. CONNOLLY, PRESIDENT

          Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, this Amendment to the Registration Statement
has been signed below by the following persons in the capacities and on the
dates indicated.

        Signatures                      Title                          Date
__________________________       _______________________________     ________

/s/Marie E. Connolly*            President (Principal Executive      8/14/96
______________________________   Officer) and Treasurer
Marie E. Connolly

/s/Joseph F. Tower*              Vice President and Assistant        8/14/96
______________________________   Treasurer (Principal Accounting
Joseph F. Tower                  and Financial Officer)

/s/Clifford L. Alexander, Jr.*   Trustee                             8/14/96
______________________________
Clifford L. Alexander, Jr.

/s/Peggy C. Davis*               Trustee                             8/14/96
______________________________
Peggy C. Davis

/s/Joseph D. DiMartino*          Chairman of the Board of Trustees   8/14/96
______________________________
Joseph D. DiMartino

/s/Ernest Kafka*                 Trustee                             8/14/96
______________________________
Ernest Kafka

/s/Saul B. Klaman*               Trustee                             8/14/96
______________________________
Saul B. Klaman

/s/Nathan Leventhal*             Trustee                             8/14/96
______________________________
Nathan Leventhal


*BY:      __________________________
          Elizabeth A. Bachman,
          Attorney-in-Fact




                               INDEX OF EXHIBITS
                              __________________


     ITEM                                                        PAGE
     ____                                                        ____

     (b)       Exhibits:

     (11)      Consent of Independent Auditors

     (17)      Financial Data Schedule

               Other Exhibits:

     (a)       Powers of Attorney of the Trustees and Officers

     (b)       Certificate of Assistant Secretary










                    CONSENT OF INDEPENDENT AUDITORS


We consent to the reference to our firm under the captions "Condensed
Financial Information" and "Transfer and Dividend Disbursing Agent,
Custodian, Counsel and Independent Auditors" and to the use of our report
dated May 31, 1996, in this Registration Statement (Form N-1A No. 33-7496)
of Premier Municipal Bond Fund.




                                      ERNST & YOUNG LLP

New York, New York
August 9, 1996


<TABLE> <S> <C>

<ARTICLE> 6
<CIK> 0000797923
<NAME> PREMIER MUNICIPAL BOND FUND
<SERIES>
   <NUMBER> 001
   <NAME> CLASS A
<MULTIPLIER> 1000
       
<S>                             <C>
<PERIOD-TYPE>                   YEAR
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<PER-SHARE-NAV-BEGIN>                            13.86
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</TABLE>

<TABLE> <S> <C>

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<CIK> 0000797923
<NAME> PREMIER MUNICIPAL BOND FUND
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   <NUMBER> 002
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</TABLE>

<TABLE> <S> <C>

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<CIK> 0000797923
<NAME> PREMIER MUNICIPAL BOND FUND
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</TABLE>




                                   POWER OF ATTORNEY


      The undersigned hereby constitute and appoint Elizabeth A. Bachman,
Richard W. Ingram and John E. Pelletier and each of them, with full power
to act without the other, his or her true and lawful attorney-in-fact and
agent, with full power of substitution and resubstitution, for him or her
and in his or her name, place and stead, in any and all capacities (until
revoked in writing) to sign any and all amendments to the Registration
Statement of Premier Municipal Bond Fund (including post-effective
amendments and amendments thereto), and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact
and agents, and each of them, full power and authority to do and perform
each and every act and thing ratifying and confirming all that said
attorneys-in-fact and agents or any of them, or their or his or her
substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.



                                              August 2, 1996


_________________________________
Marie E. Connolly, President




                                   POWER OF ATTORNEY

      The undersigned hereby constitute and appoint Elizabeth A. Bachman,
Marie E. Connolly, Richard W. Ingram and John E. Pelletier, and each of
them, with full power to act without the other, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and
resubstitution, for him or her and in his or her name, place and stead, in
any and all capacities (until revoked in writing) to sign any and all
amendments to the Registration Statement of each Fund enumerated on
Exhibit A hereto (including post-effective amendments and amendments
thereto), and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of
them, full power and authority to do and perform each and every act and
thing ratifying and confirming all that said attorneys-in-fact and agents
or any of them, or their or his or her substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.



_________________________________                        July 31, 1996
Clifford L. Alexander, Jr.



_________________________________                        July 31, 1996
Peggy C. Davis



_________________________________                        July 31, 1996
Joseph S. DiMartino



_________________________________                        July 31, 1996
Ernest Kafka



_________________________________                        July 31, 1996
Saul B. Klaman



_________________________________                        July 31, 1996
Nathan Leventhal



                                       EXHIBIT A

                            DREYFUS APPRECIATION FUND, INC.
                     GENERAL CALIFORNIA MUNICIPAL BOND FUND, INC.
                    GENERAL CALIFORNIA MUNICIPAL MONEY MARKET FUND
                 GENERAL GOVERNMENT SECURITIES MONEY MARKET FUND, INC.
                            GENERAL MONEY MARKET FUND, INC.
                           GENERAL MUNICIPAL BOND FUND, INC.
                       GENERAL MUNICIPAL MONEY MARKET FUND, INC.
                      GENERAL NEW YORK MUNICIPAL BOND FUND, INC.
                     GENERAL NEW YORK MUNICIPAL MONEY MARKET FUND
                        PREMIER CALIFORNIA MUNICIPAL BOND FUND
                                   PREMIER GNMA FUND
                               PREMIER GROWTH FUND, INC.
                          PREMIER INSURED MUNICIPAL BOND FUND
                              PREMIER MUNICIPAL BOND FUND
                         PREMIER NEW YORK MUNICIPAL BOND FUND
                           PREMIER STATE MUNICIPAL BOND FUND







                              PREMIER MUNICIPAL BOND FUND

                          Certificate of Assistant Secretary


      The undersigned, Elizabeth A. Bachman, Assistant Secretary of Premier
Municipal Bond Fund (the "Fund"), hereby certifies that set forth below is
a copy of the resolution adopted by the Fund's Board authorizing the signing
by Elizabeth A. Bachman, Marie E. Connolly, Richard W. Ingram and John E.
Pelletier on behalf of the proper officers of the Fund pursuant to a power
of attorney.

            RESOLVED, that the Registration Statement and any and
            all amendments and supplements thereto, may be signed
            by any one of Elizabeth A. Bachman, Marie E. Connolly,
            Richard W. Ingram and John E. Pelletier as the
            attorney-in-fact for the proper officers of the Fund,
            with full power of substitution and resubstitution;
            and that the appointment of each of such persons as
            such attorney-in-fact hereby is authorized and
            approved; and that such attorneys-in-fact, and each of
            them, shall have full power and authority to do and
            perform each and every act and thing requisite and
            necessary to be done in connection with such
            Registration Statement and any and all amendments and
            supplements thereto, as fully to all intents and
            purposes as the officer, for whom he or she is acting
            as attorney-in-fact, might or could do in person.

            IN WITNESS WHEREOF, I have hereunto signed by name and affixed
the Seal of the Fund on August 2, 1996.





                                        _________________________________
                                        Elizabeth A. Bachman
                                        Assistant Secretary


(SEAL)




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