<PAGE>
ANNUAL REPORT
---------------------
DREYFUS
PREMIER MUNICIPAL
BOND FUND
---------------------
APRIL 30, 1998
(DREYFUS LION LOGO)
<PAGE>
DREYFUS PREMIER MUNICIPAL BOND FUND
- ------------------------------------------------------------------------------
LETTER TO SHAREHOLDERS
Dear Shareholder:
We are pleased to report the performance for Dreyfus Premier Municipal
Bond Fund for the 12-month period ended April 30, 1998 as shown in the
following table:
TOTAL RETURN* DISTRIBUTION RATE**
------------- -------------------
Class A shares.................. 10.52% 5.13%
Class B shares.................. 9.95% 4.85%
Class C shares.................. 9.73% 4.59%
ECONOMIC REVIEW
The United States is now in the eighth year of economic expansion.
Inflation continues to rise at the slowest pace since 1964, and the
unemployment rate has fallen to a level not seen in 25 years. Not
surprisingly, consumer confidence has soared. Along with continued evidence of
the robustness of the economy have come heightened expectations that the
Federal Reserve Board (the "Fed") might raise interest rates in a preemptive
move to avoid a reigniting of inflation. The last increase in short-term rates
came in March 1997 when the Federal Open Market Committee (the policy-making
arm of the Fed) hiked the target rates for Federal Funds by one quarter of a
percent to 5.5%. (The Federal Funds rate is the rate of interest that banks
charge one another for overnight loans.)
Inflation has remained benign on all fronts, even in the tight labor
market, an area closely watched by the Fed for signs of incipient inflation.
The Labor Department's Employment Cost Index (ECI), a measure of wage, salary
and benefit costs, suggests that wage inflation so far is not a problem. In
fact, the first quarter increase in the ECI (0.7%) was its smallest quarterly
rise in two years. Another inflation gauge, the broad-based Gross Domestic
Product Price Deflator, rose at an annual rate of only 0.9% in the first
quarter, its lowest rate since 1964. Inflation, as measured by the Consumer
Price Index (a measure of prices of a fixed basket of goods bought by a
typical consumer including food, transportation, shelter, utilities,
clothing, medical care, entertainment and other items) has been similarly
tame. Prices at the consumer level have risen at an annual rate of about 1.5%
over the reporting period. The lack of inflation has been more dramatic at
the production level of the economy where prices have fallen: in the 12
months ended April 30, the Producer Price Index declined 1.8%. Such a
generally tepid price environment has been partly fostered by the economic
problems in Asia, which have suppressed worldwide demand for commodities,
particularly oil.
Reflecting a level of confidence not seen in three decades, consumers
increased their spending over the reporting period, the first-quarter rate
rising at the fastest pace in six years. Not surprisingly, the growth rate in
new home construction over the reporting period was the strongest in four
years. Plentiful and well-paying jobs (total wage and salary income is 7%
higher than a year ago), low interest rates, the absence of inflation and
investment market gains have resulted in a financially healthy consumer with
a corresponding propensity to spend. Strong domestic demand for lower-priced
imports has contributed further to the quiescent inflation environment while
offsetting the drag on the economy resulting from the Asian financial crisis.
It is still widely expected that the Asian economic slowdown will have a
further dampening effect on the U. S. economy. Although the surge in domestic
spending has masked the full impact of the fall in Asian demand, our trade
deficit has reached a ten-year high, a dramatic sign of deterioration.
Expectation of an economic slowdown is another reason why the Fed has been
reluctant to raise short-term interest rates.
The production side of the economy has remained robust. Factory
utilization has been high, production rates strong, and while exports to Asia
have fallen sharply, they are growing in the rest of the world. Such
resilience has been characteristic of one of the longest, most healthy
economic advances in our history. Yet we remain mindful that the concept of
an economic cycle is not dead, nor is inflation, and we are alert for
indications of a resurgence in price pressures.
<PAGE>
MARKET ENVIRONMENT
The crisis in Asia, which centers on various economies and currencies,
has resulted in an international flight to quality by global investors, and
projections of the U.S. economy slowing due to diminished exports. In U.S.
fixed income securities, these consequences have raised prices beyond their
already high price levels, further lowering yields. Some recent economic
indicators, however, especially those related to employment, are showing
signs of potential inflation that could eventually push market prices lower.
These strong opposing forces have generated a potential dilemma for bond
market participants. With only potential evidence of weakness in the
economy, the 30-year Treasury bond's yield has moved up to the 5.90% level.
This is off the mid-January price highs and corresponding yield lows of
5.68%. The question arises whether a new level of interest rates is
sustainable from global currency devaluation and foreign economic weakness,
or does the persistently tight range of 15 basis points to either side of a
5.95% on the 30-year U.S. Treasury Bond remain? Unfolding information from
U.S. government sources relating to wage pressures and retail sales, among
other data, may aid clarification.
THE PORTFOLIO
While global events have greatly influenced the market's direction, new
issuance has reemerged as the dominant technical force in the municipal
arena. Lower yield levels have encouraged many municipal authorities to issue
new debt or refinance older, higher-cost debt. Despite the increase in
supply, most issues are absorbed with relative ease, including the much
awaited $3 billion Long Island Power Authority deal. In the Fund, many
existing holdings have become premium bonds (evaluated above par) due to
price appreciation. They continue to provide income and also exhibit new
defensive price qualities.
Over the past year, the yield, and therefore price range, for
longer-maturity securities has been somewhat narrower than in more volatile
years. In addition to this more narrow range, the market has demonstrated a
willingness to tolerate periods of stability between market moves. This has
caused us to focus our investment approach on higher income oriented
securities. Over the past year, the balance of securities dedicated to higher
income production has shifted to 80% to 90% of the Fund from the 60% to 70%
range. While some bonds with price appreciation potential remain, our most
recent trading has emphasized the higher income approach. We are selecting
these securities, in general, from the longer-intermediate maturity sector or
choosing bonds that are expected to display the same volatility
characteristics as that sector. If rates stabilize in their current ranges,
this type of holding should perform well and be more defensive than discount
alternatives in down markets.
<PAGE>
Included in this report is information relating to your Fund's holdings
and its financial status. We hope that you find it informative.
Very truly yours,
Richard J. Moynihan
Director, Municipal Portfolio Management
The Dreyfus Corporation
May 18, 1998
New York, N.Y.
* Total return includes reinvestment of dividends and any capital gains paid
and does not take into consideration the maximum initial sales charge in
the case of Class A shares, or the contingent deferred sales charge imposed
on redemptions in the case of Class B shares and Class C shares.
** Distribution rate per share is based upon dividends per share paid from net
investment income during the period, divided by the maximum offering price
per share at the end of the period in the case of Class A shares, or the
net asset value per share in the case of Class B shares and Class C shares,
adjusted for capital gain distributions. Some income may be subject to the
Federal Alternative Minimum Tax (AMT) for certain shareholders.
<PAGE>
DREYFUS PREMIER MUNICIPAL BOND FUND APRIL 30, 1998
- -------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN DREYFUS PREMIER
MUNICIPAL BOND FUND CLASS A SHARES
AND THE LEHMAN BROTHERS MUNICIPAL BOND INDEX
$22,588
Dreyfus Premier Municipal Bond Fund
(Class A Shares)
CHART
$22,016
Lehman Brothers
Municipal Bond Index*
*Source: Lehman Brothers
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
- ------------------------------------------------------------------------------------------------------------------------
CLASS A SHARES CLASS B SHARES
- --------------------------------------------------------- ---------------------------------------------------------
% Return Reflecting
% Return Applicable Contingent
Reflecting % Return Deferred Sales
% Return Without Maximum Initial Assuming No Charge Upon
Period Ended 4/30/98 Sales Charge Sales Charge (4.5%) Period Ended 4/30/98 Redemption Redemption*
- -------------------- ------------------ --------------- -------------------- ----------- ---------------------
<S> <C> <C> <C> <C> <C>
1 Year 10.52% 5.58% 1 Year 9.95% 5.95%
5 Year 6.60 5.63 5 Year 6.04 5.72
10 Year 8.99 8.49 From Inception (1/15/93) 6.64 6.49
</TABLE>
CLASS C SHARES
- ---------------------------------------------------------
% Return Reflecting
Applicable Contingent
% Return Deferred Sales
Assuming Charge Upon
Period Ended 4/30/98 No Redemption Redemption**
- -------------------- ------------- ---------------------
1 Year 9.73% 8.73%
From Inception (7/13/95) 6.43 6.43
[FN]
- ------------------
Past performance is not predictive of future performance.
The above graph compares a $10,000 investment made in Class A shares of
Dreyfus Premier Municipal Bond Fund on 4/30/88 to a $10,000 investment made
in the Lehman Brothers Municipal Bond Index on that date. All dividends and
capital gain distributions are reinvested. Performance for Class B and Class
C shares will vary from the performance of Class A shares shown above due to
differences in charges and expenses.
The Fund invests primarily in municipal securities and its performance
shown in the line graph takes into account the maximum initial sales charge
on Class A shares and all other applicable fees and expenses. Unlike the
Fund, the Lehman Brothers Municipal Bond Index is an unmanaged total return
performance benchmark for the long-term, investment-grade tax exempt bond
market, calculated by using municipal bonds selected to be representative of
the municipal market overall. The Index does not take into account charges,
fees and other expenses which can contribute to the Index potentially
outperforming the Fund. Further information relating to Fund performance,
including expense reimbursements, if applicable, is contained in the
Financial Highlights section of the Prospectus and elsewhere in this report.
* The maximum contingent deferred sales charge for Class B shares is 4%
and is reduced to 0% after six years.
** The maximum contingent deferred sales charge for Class C shares is
1% for shares redeemed within one year of the date of purchase.
<PAGE>
DREYFUS PREMIER MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS
<TABLE>
<CAPTION>
APRIL 30, 1998
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS--100% 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 $ 2,774,700
ARIZONA-1.9%
Maricopa County Pollution Control Corporation, PCR, Refunding
(Public Service Co.-New Mexico Project) 6.30%, 12/1/2026................ 5,000,000 5,350,650
Pima County Industrial Development Authority, Industrial Revenue
(Tucson Electric Power Company) 6.10%, 9/1/2025......................... 5,000,000 5,118,000
CALIFORNIA-3.3%
Foothill/Eastern Transportation Corridor Agency, Toll Road Revenue:
6%, 1/1/2034............................................................ 5,000,000 5,173,600
5%, 1/1/2035............................................................ 8,000,000 7,359,840
San Joaquin Hills Transportation Corridor Agency, Toll Road Revenue
(Senior Lien) 5%, 1/1/2033.............................................. 6,500,000 6,017,505
COLORADO-9.2%
Arapahoe County Capital Improvement Trust Fund, Highway Revenue (E-470
Project):
Zero Coupon, 8/31/2005.................................................. 2,530,000 1,804,067
Zero Coupon, 8/31/2007 (Prerefunded 8/31/2005) (a)...................... 4,000,000 2,545,400
7%, 8/31/2026 (Prerefunded 8/31/2005) (a)............................... 11,000,000 12,957,780
Dawson Ridge, Metropolitan District Number 1, Refunding:
Zero Coupon, 10/1/2017.................................................. 9,930,000 3,449,186
Zero Coupon, 10/1/2022.................................................. 47,535,000 12,575,860
Denver City and County, Airport Revenue:
7.50%, 11/15/2023 (Prerefunded 11/15/2004) (a).......................... 2,060,000 2,434,364
7.50%, 11/15/2023....................................................... 9,715,000 11,108,325
7%, 11/15/2025 (Prerefunded 11/15/2001) (a)............................. 820,000 892,135
7%, 11/15/2025.......................................................... 3,405,000 3,634,803
CONNECTICUT-1.2%
Connecticut Development Authority, First Mortgage Gross Revenue
(Elim Park Baptist Home, Inc. Project) 9%, 12/1/2020.................... 3,000,000 3,218,760
Mashantucket Western Pequot Tribe, Special Revenue 5.75%, 9/1/2018.......... 3,700,000 3,733,411
DELAWARE-.7%
Delaware Housing Authority, MFMR 7%, 5/1/2025............................... 3,725,000 3,925,629
FLORIDA-4.7%
Lee County Industrial Development Authority, Health Care Facilities Revenue
(Cypress Cove Health Park):
5.625%, 10/1/2002..................................................... 2,000,000 2,015,820
5.875%, 10/1/2004..................................................... 2,000,000 2,022,760
6.25%, 10/1/2017...................................................... 3,000,000 3,106,350
6.375%, 10/1/2025..................................................... 4,500,000 4,702,140
</TABLE>
<PAGE>
DREYFUS PREMIER MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
APRIL 30, 1998
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
- ---------------------------------------------------------------------------- ------------ ------------
<S> <C> <C>
FLORIDA (CONTINUED)
Palm Beach County, Solid Waste IDR:
(Okeelanta Power LP Project) 6.85%, 2/15/2021 (b)....................... $ 6,750,000 $ 5,400,000
(Osceola Power LP) 6.95%, 1/1/2022 (b).................................. 7,500,000 5,925,000
Santa Rosa Bay Bridge Authority, Revenue 6.25%, 7/1/2028.................... 3,000,000 3,221,580
ILLINOIS-6.6%
Carol Stream, First Mortgage Revenue, Refunding
(Windsor Park Manor Project) 6.50%, 12/1/2007........................... 2,000,000 2,113,620
Chicago O'Hare International Airport, Special Facility Revenue
(American Airlines, Inc. Project) 7.875%, 11/1/2025..................... 6,000,000 6,530,880
Illinois Development Finance Authority, Revenue
(Community Rehabilitation Providers Facility):
8.75%, 3/1/2010 (Prerefunded 3/1/1999) (a)............................ 5,873,000 6,217,040
8.75%, 3/1/2010....................................................... 337,000 353,553
8.50%, 9/1/2010 (Prerefunded 9/1/2000) (a)............................ 2,985,000 3,319,917
8.50%, 9/1/2010....................................................... 1,550,000 1,661,848
8.25%, 8/1/2012....................................................... 3,935,000 3,925,044
Illinois Health Facilities Authority, Revenue (Beverly Farm Foundation)
9.125%, 12/15/2015 (Prerefunded 12/15/2000) (a)......................... 2,000,000 2,293,540
Robbins, RRR (Robbins Resource Recovery Partners) 8.375%, 10/15/2016........ 10,000,000 10,391,400
INDIANA-7.2%
East Chicago, PCR, Refunding:
(Inland Steel Co., Project Number 10) 6.80%, 6/1/2013................... 7,000,000 7,568,050
(Inland Steel Co., Project Number 11) 7.125%, 6/1/2007.................. 3,000,000 3,407,970
Indiana Development Finance Authority:
Environmental Improvement Revenue, Refunding (USX Corp. Project)
6.15%, 7/15/2022...................................................... 4,000,000 4,237,800
Exempt Facilities Revenue, Refunding (Inland Steel) 5.75%, 10/1/2011.... 11,500,000 11,935,850
PCR, Refunding (Inland Steel Co., Project Number 12) 6.85%, 12/1/2012... 4,000,000 4,416,040
Indianapolis Airport Authority, Special Facilities Revenue
(Federal Express Corp. Project) 7.10%, 1/15/2017........................ 7,500,000 8,398,575
KENTUCKY-2.3%
Kentucky Economic Development Finance Authority,
Hospital System Improvement Revenue, Refunding
(Appalachian Regional Health Center) 5.85%, 10/1/2017................... 6,000,000 6,105,360
Perry County, SWDR (TJ International Project):
7%, 6/1/2024............................................................ 3,500,000 3,861,585
6.55%, 4/15/2027........................................................ 2,500,000 2,739,575
LOUISIANA-1.1%
Louisiana Housing Finance Agency, MFHR, Refunding
(LaBelle Projects) 9.75%, 10/1/2020..................................... 4,180,000 4,304,480
Louisiana Public Facilities Authority, Student Loan Revenue
7%, 9/1/2006............................................................ 1,900,000 2,018,769
</TABLE>
<PAGE>
DREYFUS PREMIER MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
APRIL 30, 1998
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
- ---------------------------------------------------------------------------- ------------ ------------
<S> <C> <C>
MARYLAND-.6%
Maryland Energy Financing Administration, SWDR
(Wheelabrator Water Projects) 6.45%, 12/1/2016.......................... $ 3,000,000 $ 3,275,820
MASSACHUSETTS-2.0%
Massachusetts Industrial Finance Agency:
Health Care Facility Revenue (Metro Health Foundation, Inc. Project)
6.75%, 12/1/2027...................................................... 8,000,000 8,053,280
Water Treatment Revenue (American Hingham) 6.95%, 12/1/2035............. 2,640,000 2,897,031
MICHIGAN-2.6%
Michigan Hospital Finance Authority, HR, Refunding (Genesys Regional
Medical-A):
5.375%, 10/1/2013....................................................... 4,000,000 3,956,480
5.50%, 10/1/2018........................................................ 3,500,000 3,428,390
Wayne Charter County, Special Airport Facilities Revenue, Refunding
(Northwest Airlines, Inc.) 6.75%, 12/1/2015............................. 4,995,000 5,482,462
Wayne County Building Authority 8%, 3/1/2017 (Prerefunded 3/1/2002) (a)..... 1,500,000 1,712,925
NEVADA-4.4%
Clark County, IDR:
Refunding (Nevada Power Company Project) 5.90%, 10/1/2030............... 10,000,000 10,115,900
(Southwest Gas Corp.) 7.50%, 9/1/2032................................... 13,000,000 14,456,130
NEW JERSEY-6.1%
Camden County Pollution Control Financing Authority, Solid Waste RRR
7.50%, 12/1/2010........................................................ 2,000,000 1,988,880
New Jersey Economic Development Authority, First Mortgage Gross Revenue
(The Evergreens) 9.25%, 10/1/2022 (Prerefunded 10/1/2002) (a)........... 15,000,000 18,080,400
New Jersey Sports and Exposition Authority, Revenue, Refunding
(Monmouth Park) 8%, 1/1/2025............................................ 4,000,000 4,550,680
Union County Utilities Authority, Solid Waste Revenue 7.20%, 6/15/2014...... 9,500,000 9,437,205
NEW MEXICO-1.6%
Farmington, PCR:
Refunding (Public Service Co.-San Juan Project) 6.375%, 4/1/2022........ 5,000,000 5,365,950
(Tucson Electric Power Company of San Juan) 6.95%, 10/1/2020............ 3,000,000 3,409,440
NEW YORK-5.8%
New York City:
7.10%, 2/1/2009 (Prerefunded 2/1/2002) (a).............................. 4,440,000 4,914,503
7.10%, 2/1/2009......................................................... 560,000 612,142
New York State Energy Research and Development Authority,
Electric Facilities Revenue (Long Island Lighting Co.):
7.15%, 9/1/2019....................................................... 3,650,000 3,995,655
7.15%, 6/1/2020....................................................... 4,000,000 4,378,800
7.15%, 12/1/2020...................................................... 5,000,000 5,473,500
7.15%, 2/1/2022....................................................... 7,500,000 8,210,250
</TABLE>
<PAGE>
DREYFUS PREMIER MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
APRIL 30, 1998
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
- ---------------------------------------------------------------------------- ------------ ------------
<S> <C> <C>
NEW YORK (CONTINUED)
New York State Thruway Authority, Service Contract Revenue
6.45%, 4/1/2010 (c)..................................................... $ 5,000,000 $ 5,068,750
NORTH CAROLINA-2.8%
Charlotte, Special Facilities Revenue, Refunding
(Charlotte/Douglas International Airport) 5.60%, 7/1/2027............... 5,000,000 4,889,950
North Carolina Eastern Municipal Power Agency, Power System Revenue,
Refunding:
7%, 1/1/2013............................................................ 3,500,000 4,023,530
6%, 1/1/2014............................................................ 6,750,000 6,985,170
OHIO-1.6%
Ohio Water Development Authority, Pollution Control Facilites Revenue,
Refunding
(Cleveland Electric) 6.10%, 8/1/2020.................................... 8,500,000 8,814,415
OKLAHOMA-1.4%
Holdenville Industrial Authority, Correctional Facility Revenue:
6.60%, 7/1/2010......................................................... 2,045,000 2,360,339
6.70%, 7/1/2015......................................................... 4,625,000 5,369,440
OREGON-.9%
Oregon, Economic Development Revenue, Refunding
(Georgia Pacific Corp. Project) 5.70%, 12/1/2025........................ 5,000,000 5,099,300
PENNSYLVANIA-6.5%
Beaver County Industrial Development Authority, PCR, Refunding 7.75%, 7/15/2025 6,000,000 6,894,300
Blair County Hospital Authority, Revenue (Altoona Hospital)
7.405%, 7/1/2013 (Insured; AMBAC) (d)................................... 5,000,000 5,719,350
Delaware County Industrial Development Authority, Revenue, Refunding
(Resource Recovery Facility) 6.20%, 7/1/2019............................ 5,000,000 5,382,950
Lancaster County Hospital Authority, Revenue (Health Center-United Church
Homes Project) 9.125%, 10/1/2014 (Prerefunded 10/1/1999) (a)............ 1,465,000 1,595,839
Lehigh County General Purpose Authority, Revenue (Wiley House):
8.75%, 11/1/2014........................................................ 2,000,000 2,089,540
9.50%, 11/1/2016........................................................ 3,000,000 3,282,450
Montgomery County Higher Education and Health Authority, First Mortgage
Revenue
(AHF/Montgomery, Inc. Project) 10.50%, 9/1/2020......................... 3,445,000 3,766,556
Pennsylvania Intergovernmental Cooperative Authority, Special Tax Revenue
(Philadelphia Funding Program) 6.80%, 6/15/2022 (Prerefunded 6/15/2002) (a) 2,000,000 2,185,840
Philadelphia, Water and Sewer Revenue 7.35%, 9/1/2004....................... 4,920,000 5,521,372
RHODE ISLAND-.6%
Providence, Special Obligation Tax Increment 6.65%, 6/1/2016................ 3,000,000 3,251,010
SOUTH DAKOTA-.9%
Education Loans Incorporated, Student Loan Revenue 5.60%, 6/1/2020.......... 5,000,000 4,901,050
</TABLE>
<PAGE>
DREYFUS PREMIER MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
APRIL 30, 1998
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
- ---------------------------------------------------------------------------- ------------ ------------
<S> <C> <C>
TENNESSEE-1.1%
Shelby County Health Educational and Housing Facilities,
Multi-Family Housing Board Revenue (Cameron Kirby):
5.90%, 7/1/2018....................................................... $ 3,000,000 $ 3,137,130
7.25%, 7/1/2023....................................................... 3,100,000 3,166,154
TEXAS-11.5%
Alliance Airport Authority, Special Facilities Revenue:
(American Airlines, Inc. Project) 7%, 12/1/2011......................... 10,700,000 12,428,157
(Federal Express Corp. Project) 6.375%, 4/1/2021........................ 5,000,000 5,338,650
Dallas-Fort Worth International Airport Facility, Improvement Revenue
(Delta Airlines, Inc.) 7.125%, 11/1/2026................................ 4,200,000 4,487,700
Gulf Coast Waste Disposal Authority, Revenue
(Champion International Corp.) 7.45%, 5/1/2026.......................... 7,000,000 7,705,950
Houston Airport System, Special Facilities Improvement Revenue
(Continental Airlines Terminal):
6.125%, 7/15/2017 (Guaranteed; Continental Airline, Inc.)............. 8,375,000 8,742,244
6.125%, 7/15/2027 (Guaranteed; Continental Airline, Inc.)............. 6,800,000 7,098,180
Rio Grande City Consolidated Independent School District, Public Facilities
Corp., LR
6.75%, 7/15/2010........................................................ 6,000,000 6,525,660
Texas Public Property Finance Corp., Revenue (Mental Health and Retardation
Center)
8.20%, 10/1/2012 (Prerefunded 10/1/2002) (a)............................ 8,005,000 9,282,438
Tyler Health Facilities Development Corporation, HR, Refunding
(Mother Frances Hospital) 5.625%, 7/1/2013.............................. 2,680,000 2,686,673
UTAH-3.1%
Carbon County, SWDR, Refunding:
(East Carbon Development Corp.) 9%, 7/1/2012............................ 4,000,000 4,370,240
(Laidlaw Inc./ECDC Project) 7.50%, 2/1/2010............................. 3,300,000 3,805,131
(Sunnyside Cogeneration) 9.25%, 7/1/2018 (b)............................ 15,000,000 9,003,000
WEST VIRGINIA-1.4%
Upshur County, SWDR (TJ International Project) 7%, 7/15/2025................ 7,000,000 7,811,720
U.S. RELATED-6.4%
Puerto Rico Commonwealth:
Public Improvement:
5.50%, 7/1/2013....................................................... 5,000,000 5,225,250
6.50%, 7/1/2014 (Insured; MBIA)....................................... 5,000,000 5,836,750
Zero Coupon, 7/1/2015................................................. 2,400,000 984,144
Refunding:
6.25%, 7/1/2013 (Insured; MBIA)....................................... 3,000,000 3,419,280
6%, 7/1/2014.......................................................... 400,000 422,060
Puerto Rico Commonwealth Aqueduct and Sewer Authority, Revenue, Refunding
6.25%, 7/1/2013......................................................... 9,000,000 10,113,750
</TABLE>
<PAGE>
DREYFUS PREMIER MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
APRIL 30, 1998
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
- ---------------------------------------------------------------------------- ------------ ------------
<S> <C> <C>
U.S. RELATED (CONTINUED)
Puerto Rico Commonwealth Highway and Transportation Authority, Highway
Revenue
5%, 7/1/2036............................................................ $ 5,000,000 $ 4,778,650
Puerto Rico Electric Power Authority, Power Revenue 6.25%, 7/1/2017......... 520,000 563,061
Puerto Rico Telephone Authority, Revenue, Refunding
6.441%, 1/25/2007 (Insured; MBIA) (d)................................... 3,950,000 4,246,250
------------
TOTAL INVESTMENTS-100.0% (cost $524,360,892)................................ $558,443,757
============
</TABLE>
<TABLE>
<CAPTION>
SUMMARY OF ABBREVIATIONS
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
AMBAC American Municipal Bond Assurance Corporation MFHR Multi-Family Housing Revenue
HR Hospital Revenue MFMR Multi-Family Mortgage Revenue
IDR Industrial Development Revenue PCR Pollution Control Revenue
LR Lease Revenue RRR Resources Recovery Revenue
MBIA Municipal Bond Investors Assurance SWDR Solid Waste Disposal Revenue
Insurance Corporation
</TABLE>
<TABLE>
<CAPTION>
SUMMARY OF COMBINED RATINGS (UNAUDITED)
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
FITCH (E) OR MOODY'S OR STANDARD & POOR'S PERCENTAGE OF VALUE
- --------- ------- ----------------- -------------------
AAA Aaa AAA 10.5%
A A A 12.8
BBB Baa BBB 31.9
BB Ba BB 16.4
B B B 1.5
Not Rated (f) Not Rated (f) Not Rated (f) 26.9
------
100.0%
======
<FN>
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) Non-income producing security; interest payments in default.
(c) Purchased on a delayed-delivery basis.
(d) Inverse floater security-the interest rate is subject to change
periodically.
(e) Fitch currently provides creditworthiness information for a limited
number of investments.
(f) 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.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
DREYFUS PREMIER MUNICIPAL BOND FUND
- -------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES APRIL 30, 1998
<TABLE>
<CAPTION>
Cost Value
------------ ------------
<S> <C> <C> <C>
ASSETS: Investments in securities-See Statement of Investments...... $524,360,892 $558,443,757
Cash........................................................ 8,789,825
Interest receivable......................................... 9,232,820
Receivable for shares of Beneficial Interest subscribed..... 243,000
Prepaid expenses............................................ 14,814
------------
576,724,216
------------
LIABILITIES: Due to The Dreyfus Corporation and affiliates............... 263,105
Due to Distributor.......................................... 168,945
Payable for investment securities purchased................. 5,182,500
Payable for shares of Beneficial Interest redeemed.......... 655,055
Accrued expenses and other liabilities...................... 110,340
------------
6,379,945
------------
NET ASSETS............................................................................. $570,344,271
============
REPRESENTED BY: Paid-in capital............................................. $530,667,331
Accumulated net realized gain (loss) on investments......... 5,594,075
Accumulated net unrealized appreciation (depreciation)
on investments-Note 4..................................... 34,082,865
------------
NET ASSETS............................................................................. $570,344,271
============
</TABLE>
NET ASSET VALUE PER SHARE
-------------------------
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
------------ ------------ ------------
<S> <C> <C> <C>
Net Assets................................................ $447,868,704 $119,456,597 $ 3,018,970
Shares Outstanding........................................ 30,498,019 8,132,424 205,290
NET ASSET VALUE PER SHARE................................. $14.69 $14.69 $14.71
====== ====== ======
</TABLE>
See notes to financial statements.
<PAGE>
DREYFUS PREMIER MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS YEAR ENDED APRIL 30, 1998
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME
INCOME Interest Income.............................. $36,306,834
EXPENSES: Management fee-Note 3(a)..................... $ 3,155,724
Shareholding servicing costs-Note 3(c)....... 1,788,308
Distribution fees-Note 3(b).................. 597,565
Professional fees............................ 75,826
Registration fees............................ 58,241
Custodian fees............................... 55,228
Trustees' fees and expenses-Note 3(d)........ 37,838
Prospectus and shareholders' reports......... 34,276
Loan commitment fees-Note 2.................. 6,660
Miscellaneous................................ 28,016
-----------
TOTAL EXPENSES........................... 5,837,682
-----------
INVESTMENT INCOME-NET......................................................... 30,469,152
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS-Note 4:
Net realized gain (loss) on investments...... $10,610,253
Net unrealized appreciation (depreciation)
on investments........................... 15,681,076
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS........................ 26,291,329
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.......................... $56,760,481
===========
</TABLE>
See notes to financial statements.
<PAGE>
DREYFUS PREMIER MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
APRIL 30, 1998 APRIL 30, 1997
-------------- --------------
<S> <C> <C>
OPERATIONS:
Investment income-net............................................. $ 30,469,152 $ 33,213,769
Net realized gain (loss) on investments........................... 10,610,253 3,461,461
Net unrealized appreciation (depreciation) on investments......... 15,681,076 7,755,927
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS....... 56,760,481 44,431,157
------------ ------------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income-net:
Class A shares.................................................. (24,679,815) (27,382,313)
Class B shares.................................................. (5,696,047) (5,784,609)
Class C shares.................................................. (93,290) (46,847)
Net realized gain on investments:
Class A shares.................................................. (2,600,891) (246,714)
Class B shares.................................................. (670,463) (57,569)
Class C shares.................................................. (13,085) (447)
------------ ------------
TOTAL DIVIDENDS............................................. (33,753,591) (33,518,499)
------------ ------------
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold:
Class A shares.................................................. 113,213,669 97,168,956
Class B shares.................................................. 17,652,592 13,717,368
Class C shares.................................................. 1,951,053 1,639,929
Dividends reinvested:
Class A shares.................................................. 15,608,787 15,604,972
Class B shares.................................................. 3,578,795 3,291,903
Class C shares.................................................. 41,919 30,755
Cost of shares redeemed:
Class A shares.................................................. (156,745,426) (138,425,542)
Class B shares.................................................. (15,746,393) (16,411,365)
Class C shares.................................................. (79,409) (983,046)
------------ ------------
INCREASE (DECREASE) IN NET ASSETS FROM BENEFICIAL INTEREST
TRANSACTIONS.................................................. (20,524,413) (24,366,070)
------------ ------------
TOTAL INCREASE (DECREASE) IN NET ASSETS................... 2,482,477 (13,453,412)
NET ASSETS:
Beginning of Period............................................... 567,861,794 581,315,206
------------ ------------
End of Period..................................................... $570,344,271 $567,861,794
============ ============
</TABLE>
See notes to financial statements.
<PAGE>
DREYFUS PREMIER MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
SHARES
---------------------------------
YEAR ENDED YEAR ENDED
APRIL 30, 1998 APRIL 30, 1997
-------------- --------------
<S> <C> <C>
CAPITAL SHARE TRANSACTIONS:
CLASS A
-------
Shares sold............................................................ 7,726,113 6,879,873
Shares issued for dividends reinvested................................. 1,065,410 1,104,332
Shares redeemed........................................................ (10,709,000) (9,791,371)
----------- ----------
NET INCREASE (DECREASE) IN SHARES OUTSTANDING......... (1,917,477) (1,807,166)
=========== ==========
CLASS B
-------
Shares sold............................................................ 1,206,389 971,997
Shares issued for dividends reinvested................................. 244,184 232,925
Shares redeemed........................................................ (1,077,080) (1,164,445)
----------- ----------
NET INCREASE (DECREASE) IN SHARES OUTSTANDING......... 373,493 40,477
=========== ==========
CLASS C
-------
Shares sold............................................................ 133,508 117,036
Shares issued for dividends reinvested................................. 2,854 2,175
Shares redeemed........................................................ (5,369) (69,481)
----------- ----------
NET INCREASE (DECREASE) IN SHARES OUTSTANDING......... 130,993 49,730
=========== ==========
</TABLE>
See notes to financial statements.
<PAGE>
DREYFUS PREMIER MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share of
Beneficial Interest outstanding, total investment return, ratios to average
net assets and other supplemental data for each period indicated. This
information has been derived from the Fund's financial statements.
<TABLE>
<CAPTION>
CLASS A SHARES
-------------------------------------------------------
YEAR ENDED APRIL 30,
-------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA: 1998 1997 1996 1995 1994
------ ------ ------ ------ ------
Net asset value, beginning of period.................. $14.11 $13.85 $13.86 $13.81 $14.45
------ ------ ------ ------ ------
INVESTMENT OPERATIONS:
Investment income-net................................. .79 .82 .86 .84 .89
Net realized and unrealized gain (loss) on investments .66 .27 (.01) .05 (.59)
------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS...................... 1.45 1.09 .85 .89 .30
------ ------ ------ ------ ------
DISTRIBUTIONS:
Dividends from investment income-net.................. (.79) (.82) (.86) (.84) (.89)
Dividends from net realized gain on investments....... (.08) (.01) -- -- (.05)
------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS................................... (.87) (.83) (.86) (.84) (.94)
------ ------ ------ ------ ------
Net asset value, end of period........................ $14.69 $14.11 $13.85 $13.86 $13.81
====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN*.................................. 10.52% 8.03% 6.08% 6.72% 1.84%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets............... .91% .91% .92% .92% .85%
Ratio of net investment income to average net assets.. 5.42% 5.84% 5.98% 6.16% 6.01%
Decrease reflected in above expense ratios due to
undertakings by the Manager......................... -- -- -- -- .06%
Portfolio Turnover Rate............................... 26.33% 28.17% 36.59% 38.60% 22.15%
Net Assets, end of period (000's Omitted)............. $447,869 $457,327 $474,044 $495,616 $546,036
<FN>
- --------------------------
* Exclusive of sales load.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
DREYFUS PREMIER MUNICIPAL BOND FUND
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
Contained below is per share operating performance data for a share of
Beneficial Interest outstanding, total investment return, ratios to average
net assets and other supplemental data for each period indicated. This
information has been derived from the Fund's financial statements.
<TABLE>
<CAPTION>
CLASS B SHARES
-------------------------------------------------------
YEAR ENDED APRIL 30,
-------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA: 1998 1997 1996 1995 1994
------ ------ ------ ------ ------
Net asset value, beginning of period.................. $14.11 $13.85 $13.86 $13.81 $14.45
------ ------ ------ ------ ------
INVESTMENT OPERATIONS:
Investment income-net................................. .72 .75 .78 .77 .80
Net realized and unrealized gain (loss) on investments .66 .27 (.01) .05 (.59)
------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS...................... 1.38 1.02 .77 .82 .21
------ ------ ------ ------ ------
DISTRIBUTIONS:
Dividends from investment income-net.................. (.72) (.75) (.78) (.77) (.80)
Dividends from net realized gain on investments....... (.08) (.01) -- -- (.05)
------ ------ ------ ------ ------
TOTAL DIVIDENDS....................................... (.80) (.76) (.78) (.77) (.85)
------ ------ ------ ------ ------
Net asset value, end of period........................ $14.69 $14.11 $13.85 $13.86 $13.81
====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN*.................................. 9.95% 7.49% 5.53% 6.15% 1.26%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets............... 1.42% 1.43% 1.43% 1.44% 1.40%
Ratio of net investment income to average net assets.. 4.89% 5.33% 5.46% 5.62% 5.33%
Decrease reflected in above expense ratios due to
undertakings by the Manager......................... -- -- -- -- .05%
Portfolio Turnover Rate............................... 26.33% 28.17% 36.59% 38.60% 22.15%
Net Assets, end of period (000's Omitted)............. $119,457 $109,485 $106,931 $99,411 $95,643
<FN>
- --------------------------
* Exclusive of sales load.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
DREYFUS PREMIER MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
Contained below is per share operating performance data for a share of
Beneficial Interest outstanding, total investment return, ratios to average
net assets and other supplemental data for each period indicated. This
information has been derived from the Fund's financial statements.
<TABLE>
<CAPTION>
CLASS C SHARES
---------------------------------
YEAR ENDED APRIL 30,
---------------------------------
<S> <C> <C> <C>
PER SHARE DATA: 1998 1997 1996(1)
------ ------ --------
Net asset value, beginning of period.................... $14.12 $13.87 $14.28
------ ------ ------
INVESTMENT OPERATIONS:
Investment income-net................................... .68 .72 .60
Net realized and unrealized gain (loss) on investments.. .67 .26 (.41)
------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS........................ 1.35 .98 .19
------ ------ ------
DISTRIBUTIONS:
Dividends from investment income-net.................... (.68) (.72) (.60)
Dividends from net realized gain on investments......... (.08) (.01) --
------ ------ ------
TOTAL DISTRIBUTIONS..................................... (.76) (.73) (.60)
------ ------ ------
Net asset value, end of period.......................... $14.71 $14.12 $13.87
====== ====== ======
TOTAL INVESTMENT RETURN(2).................................. 9.73% 7.16% 1.56%(3)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets................. 1.69% 1.64% 1.77%(3)
Ratio of net investment income to average net assets.... 4.55% 5.01% 4.84%(3)
Portfolio Turnover Rate................................. 26.33% 28.17% 36.59%
Net Assets, end of period (000's Omitted)............... $3,019 $1,049 $340
<FN>
- ------------------------
(1) From July 13, 1995 (commencement of initial offering) to April 30, 1996.
(2) Exclusive of sales load.
(3) Annualized.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
DREYFUS PREMIER MUNICIPAL BOND FUND
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES:
Dreyfus 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.
Premier Mutual Fund Services, Inc. (the "Distributor") is the distributor
of the Fund's shares. The Fund is authorized to issue an unlimited number of
$.001 par value shares in each of the following classes of shares: Class A,
Class B and Class C. 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 ("CDSC") imposed on Class B share redemptions made within six
years of purchase (five years for shareholders beneficially owning Class B
shares on November 30, 1996) and Class C shares are subject to a CDSC imposed
on Class C shares redeemed within one year of purchase. Other differences
between the classes include the services offered to and the expenses borne by
each class and certain voting rights.
The Fund's financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management
estimates and assumptions. Actual results could differ from those estimates.
(A) PORTFOLIO VALUATION: Investments in securities (excluding options and
financial futures on municipal and U.S. treasury securities) are valued each
business day by an independent pricing service ("Service") approved by the
Board of Trustees. Investments for which quoted bid prices are readily
available and are representative of the bid side of the market in the
judgment of the Service are valued at the mean between the quoted bid prices
(as obtained by the Service from dealers in such securities) and asked prices
(as calculated by the Service based upon its evaluation of the market for
such securities). Other investments (which constitute a majority of the
portfolio securities) are carried at fair value as determined by the Service
based on methods which include consideration of: yields or prices of
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.
<PAGE>
DREYFUS PREMIER MUNICIPAL BOND FUND
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(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.
NOTE 2-BANK LINE OF CREDIT:
The Fund participates with other Dreyfus-managed Funds in a $600 million
redemption credit facility ("Facility") to be utilized for temporary or
emergency purposes, including the financing of redemptions. In connection
therewith, the Fund has agreed to pay commitment fees on its pro rata portion
of the Facility. Interest is charged to the Fund at rates based on
prevailing market rates in effect at the time of borrowings.
The average daily amount of borrowings outstanding during the period
ended April 30, 1998 was approximately $17,800, with a related weighted
average annualized interest rate of 6.08%.
NOTE 3-MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
(A) Pursuant to a management agreement with the Manager, the management
fee is computed at the annual rate of .55 of 1% of the value of the Fund's
average daily net assets and is payable monthly.
Dreyfus Service Corporation, a wholly-owned subsidiary of the Manager,
retained $9,091 during the period ended April 30, 1998 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 period ended April 30, 1998,
Class B and Class C shares were charged $582,174 and $15,391, respectively,
pursuant to the Distribution Plan.
(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 period ended April 30, 1998,
Class A, Class B and Class C shares were charged $1,138,203, $291,087 and
$5,130, respectively, pursuant to the Shareholder Services Plan.
The Fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of
the Manager, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the Fund. During the
period ended April 30, 1998, the Fund was charged $255,336 pursuant to the
transfer agency agreement.
(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.
<PAGE>
DREYFUS PREMIER MUNICIPAL BOND FUND
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 4-SECURITIES TRANSACTIONS:
The aggregate amount of purchases and sales of investment securities,
excluding short-term securities, during the period ended April 30, 1998
amounted to $149,009,455 and $173,108,549, respectively.
At April 30, 1998, accumulated net unrealized appreciation on investments
was $34,082,865, consisting of $44,050,784 gross unrealized appreciation and
$9,967,919 gross unrealized depreciation.
At April 30, 1998, 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).
<PAGE>
DREYFUS PREMIER MUNICIPAL BOND FUND
- ------------------------------------------------------------------------------
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF TRUSTEES
DREYFUS PREMIER MUNICIPAL BOND FUND
We have audited the accompanying statement of assets and liabilities of
Dreyfus Premier Municipal Bond Fund, including the statement of investments,
as of April 30, 1998 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, 1998 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 Dreyfus Premier Municipal Bond Fund at April 30, 1998, 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
New York, New York
June 4, 1998
<PAGE>
DREYFUS PREMIER MUNICIPAL BOND FUND
- ------------------------------------------------------------------------------
IMPORTANT TAX INFORMATION (UNAUDITED)
In accordance with Federal tax law, the Fund hereby makes the following
designations regarding its fiscal year ended April 30, 1998:
-- all the dividends paid from investment income-net are "exempt-interest
dividends" (not generally subject to regular Federal income tax), and
-- the Fund hereby designates $.0841 per share as a long-term capital gain
distribution (of which 100% is subject to the 20% maximum Federal tax
rate) paid on December 4, 1997.
As required by Federal tax law rules, shareholders will receive
notification of their portion of the Fund's taxable ordinary dividends (if
any) and capital gain distributions (if any) paid for the 1998 calendar year
on Form 1099-DIV which will be mailed by January 31, 1999.
<PAGE>
DREYFUS PREMIER
MUNICIPAL BOND FUND
200 Park Avenue
New York, NY 10166
MANAGER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
CUSTODIAN
The Bank of New York
90 Washington Street
New York, NY 10286
TRANSFER AGENT &
DIVIDEND DISBURSING AGENT
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Printed in U.S.A. 022/612AR984
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
DREYFUS PREMIER MUNICIPAL BOND FUND CLASS A SHARES AND
THE LEHMAN BROTHERS MUNICIPAL BOND INDEX
EXHIBIT A:
DREYFUS PREMIER
PERIOD LEHMAN BROTHERS MUNICIPAL
MUNICIPAL BOND FUND
BOND INDEX * (CLASS A SHARES)
4/30/88 10,000 9,550
4/30/89 10,893 10,899
4/30/90 11,678 11,579
4/30/91 13,019 12,984
4/30/92 14,257 14,423
4/30/93 16,061 16,408
4/30/94 16,407 16,711
4/30/95 17,499 17,834
4/30/96 18,889 18,918
4/30/97 20,142 20,438
4/30/98 22,016 22,588
* Source: Lehman Brothers
