DREYFUS PREMIER CALIFORNIA MUNICIPAL BOND FUND
LETTER TO SHAREHOLDERS
Dear Shareholder:
We are pleased to report the performance for Dreyfus Premier California
Municipal Bond Fund for the 12-month period ended January 31, 1998, as shown
in the following table:
<TABLE>
<CAPTION>
TOTAL RETURN* DISTRIBUTION RATE*
___________ _______________
<S> <C>
Class A................................ 9.27% 4.45%
Class B................................ 8.69% 4.15%
Class C................................ 8.42% 3.83%
</TABLE>
The Economy
Throughout the reporting period, the economy manifested remarkable
strength with few signs of upward price pressure. Measures of consumer
optimism remained near record high levels: Consumer spending, which accounts
for about two-thirds of all economic activity, increased 3.3% in 1997, the
largest gain since 1994. A greater percentage of Americans were employed at
the end of the reporting period than at any time since the government began
recording employment numbers in 1948. Plentiful jobs, low inflation, and low
interest rates have proved to be a winning combination. The unemployment rate
averaged only 4.9% for all of 1997, near a 25-year low. It had been widely
anticipated that such healthy employment conditions would ignite a resurgence
in inflation. Yet throughout this period of dramatic gains in new jobs,
inflation was quiescent. Fears that a tight labor market would result in
inflation-inducing wage hikes were not realized: Instead, enormous
investments in new equipment and technology enabled companies to offset
rising costs with gains in productivity. On the inflation front, the Consumer
Price Index rose only 1.7% in 1997, its smallest annual increase in 11 years,
and almost half the rate of 1996. The Producer Price Index, which measures
inflation at the wholesale level actually fell 1.2% last year. In 1997, the
economy expanded by 3.8%, the fastest rate since 1988. Such economic growth
without inflation has caused tax revenues at national, state and local levels
to surge, and has resulted in prospects for the first balanced Federal budget
in almost 30 years!
Bond yields ended the reporting period at their lowest levels in decades.
Low inflation and the prospect of reduced Federal borrowing due to the
improved condition of the budget have been a tonic for U.S. credit markets.
Even the economic crisis in Asia has played a role in helping to reduce
interest rates as foreign capital sought a safer investment haven in U.S.
fixed income securities. Meanwhile, the Federal Reserve Board (the "Fed") has
chosen to keep monetary policy steady during the Asian economic turmoil of
the last several months. Of course, the lack of inflation has also played a
major role in staying the Fed's hand from raising interest rates, despite the
surging economy and tightening labor market. The last increase in short-term
rates came in March 1997 when the Federal Open Market Committee (FOMC), the
policy-making arm of the Fed, hiked the Federal Funds rate by one-quarter of
a percent to 5.5%.
That low interest rates have helped stimulate the economy can be seen in
two interest-rate sensitive economic sectors, housing and automobiles, which
have remained strong. Economists estimate that new home sales for 1997 were
at a 19-year high.
The production side of the economy has also been strong. Through
year-end, industrial production had risen for 14 consecutive months. Many
economists (Fed Chairman Alan Greenspan among them) think that the Asian
crisis may help slow our rate of economic growth. If so, it may allow the Fed
to refrain from any monetary tightening over the near term. The dynamics are
in place for such a slowdown. The dollar has risen sharply versus Asian
currencies, making our exports more expensive. Because of this strength in
the dollar, imports to the U.S. from Asia are likely to become cheaper,
further dampening inflation. As Chairman Greenspan said in his testimony to
the Senate Budget Committee, "The likelihood that we shall be seeing some
lower prices on imported goods as a result of the difficulties in Asia may
afford some breathing room from inflation pressures."
Of course, we are mindful that there are factors that can adversely
affect the current, almost ideal economic climate. Wage pressures, still in
check relative to inflation, began to inch higher at the end of the reporting
period. Asian demand may remain stronger than currently anticipated. It is
clear that the almost relentless strength in the economy has been a
continuing concern of the Fed. Another preemptive hike in interest rates
could occur if the economy does not slow.
Market Environment
During the year, the California market took its cues from the direction
of the economy and continually fine-tuned price levels based on the releases
of financial news and other economic data. Almost daily, it seemed, news
suggested that the economy was strengthening or weakening, or that the
Federal Reserve was about to tighten or ease interest rates, and the market
reacted accordingly. Issuers in the State of California sold their refunding
debt in an attempt to lower their cost of borrowing. Over the past twelve
months, we have seen periods of price volatility, but the persistent trend in
prices has been gradually upward. There were very few instances during the
fiscal year when bids flagged completely; for the most part, retail buyers
and institutional portfolios supported the market throughout the year.
Occasionally, buyers would absent themselves from the market, but most often
the causes were a lack of supply or declining yield levels, rather than
declining credit-quality or economic conditions. When yields declined, the
Fund was among the absentees. It seemed much more prudent to retain a solid
level of income rather than replace higher yielding holdings with lower
yielding new issues.
Not to be overlooked is the improvement in the municipal universe's
financial condition, which was aided by our national economic expansion: the
creditworthiness of municipalities, at both the state and local levels, has
risen to record levels. Increased tax receipts, along with improved financial
management practices and better fiscal discipline, should be credited with
bettering the municipalities' financial picture, and helping to maintain a
positive municipal market environment. Financial results for the State of
California were favorable during the year but remained narrowly balanced. The
State's financial flexibility continues to be limited by structural problems,
such as restrictions imposed by initiatives, including strict property tax
limits and a mandated share of the budget that must be devoted to education.
Portfolio Overview
Throughout 1997, we held steadfast in our decision to maintain a
relatively aggressive position with the portfolio despite the tone of the
municipal market which was, at times, wrought with uncertainty. We felt that
attempting to predict market changes would be difficult at best. Instead, we
focused our efforts on finding the value within the secondary market. This
was accomplished by buying slightly longer maturities in the 20- to 25-year
range with a focus on purchasing discount bonds to counterbalance the
income-producing premium bonds already owned. This was difficult to
accomplish at times, given the limited availability of longer-maturity,
liquid, discount bonds with good structural characteristics. When desirable
bonds were found which met our criteria, the portfolio sold current coupon
bonds with short call features at a profit, which provided funds for the
reinvestment.
We will continue to manage the portfolio utilizing a similar strategy as
we enter 1998. The Fund is well balanced across the coupon range. The market
had a very positive tone until late in the fourth quarter and slowed down
further as we got into the latter part of January. Going forward, the market
may again see periods of volatility, although presently we are without any
concrete signs of its direction. We expect that California securities will
continue to be well sought after by national funds, as well as other
California bond funds.
Our primary tasks, which will guide our portfolio management decisions,
are to earn a high level of current income to the extent it is consistent
with the preservation of capital, while at the same time maintaining the
Fund's high credit quality. Included in this report is a series of detailed
statements outlining the portfolio's holdings and financial condition.
We hope you find them to be informative. Please know that we greatly
appreciate your continued confidence in the Fund and the Dreyfus Corporation.
Very truly yours,
[Richard J. Moynihan signature logo]
Richard J. Moynihan
Director, Municipal Portfolio Management
The Dreyfus Corporation
February 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 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 and Class C shares, adjusted for
capital gain distributions. Some income may be subject to the Federal
Alternative Minimum Tax (AMT) for certain shareholders.
DREYFUS PREMIER CALIFORNIA MUNICIPAL BOND FUND JANUARY 31, 1998
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN DREYFUS PREMIER
CALIFORNIA MUNICIPAL BOND FUND CLASS A SHARES AND THE LEHMAN BROTHERS
MUNICIPAL BOND INDEX
[Exhibit A:
$22,230
Lehman Brothers
Municipal Bond Index*
Dollars
$20,873
Dreyfus Premier
California Municipal
Bond Fund
(Class A Shares)
*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 1/31/98 Sales Charge Sales Charge (4.5%) Period Ended 1/31/98 Redemption Redemption*
___________________ ____________ ________________ ________________ __________ _________________
<S> <C> <C> <C> <C> <C>
1 Year 9.27% 4.38% 1 Year 8.69% 4.69%
5 Years 6.97 5.99 5 Years 6.40 6.09
10 Years 8.13 7.64 From Inception (1/15/93) 6.59 6.44
Class C Shares
_______________________________________________________
% Return Reflecting
Applicable Contingent
% Return Deferred Sales
Assuming Charge Upon
Period Ended 1/31/98 No Redemption Redemption**
___________________ ____________ __________________
1 Year 8.42% 7.42%
From Inception (6/2/95) 6.12 6.12
</TABLE>
Past performance is not predictive of future performance.
The above graph compares a $10,000 investment made in Class A shares of
Dreyfus Premier California Municipal Bond Fund on 1/31/88 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 California 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,
geographically unrestricted 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 and is
not limited to investments principally in California municipal obligations.
These factors 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.
<TABLE>
<CAPTION>
DREYFUS PREMIER CALIFORNIA MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS JANUARY 31, 1998
Principal
Long-Term Municipal Investments-99.0% Amount Value
______________ ______________
<S> <C> <C>
California-91.0%
Alameda County, COP (Refunding and Capital Projects)
5%, 6/1/2022 (Insured; AMBAC)............................................. $ 2,000,000 $ 1,966,680
Anaheim Public Financing Authority, Tax Allocation Revenue
(Redevelopment Project Alpha) 6.45%, 12/28/2018 (Insured; MBIA)........... 4,000,000 4,531,640
California 6.125%, 10/1/2011 (Insured; FGIC)................................ 2,875,000 3,346,299
California Department of Water Resources, Water System Revenue, Refunding
(Central Valley Project) 5%, 12/1/2022.................................... 6,000,000 5,907,300
California Educational Facilities Authority, Revenue (Stanford University)
5.20%, 12/1/2027.......................................................... 5,000,000 5,095,100
California Health Facilities Financing Authority, Revenue
(Saint Francis Memorial Hospital) 5.875%, 11/1/2023....................... 4,500,000 4,984,740
California Housing Finance Agency, Home Mortgage Revenue:
6.15%, 8/1/2016........................................................... 3,000,000 3,198,390
6.70%, 8/1/2025........................................................... 1,825,000 1,960,105
7.50%, 8/1/2029........................................................... 825,000 859,196
8%, 8/1/2029.............................................................. 405,000 422,419
7.60%, 8/1/2030........................................................... 1,355,000 1,432,276
California Pollution Control Financing Authority:
Exempt Facilities Revenue (Mobil Oil Corp. Project) 5.50%, 12/1/2029...... 2,890,000 2,970,573
SWDR (North County Recycling Center) 6.75%, 7/1/2011...................... 2,500,000 2,907,825
California Public Works Board, LR:
(Secretary of State):
6.50%, 12/1/2008 (Insured; AMBAC)....................................... 1,400,000 1,657,110
6.75%, 12/1/2012 (Prerefunded 12/1/2012) (a)............................ 3,475,000 3,960,944
(State University) 5.40%, 10/1/2022....................................... 4,250,000 4,372,060
Contra Costa County Water District, Water Revenue:
6%, 10/1/2011 (Insured; MBIA)............................................. 1,475,000 1,623,075
5%, 10/1/2024 (Insured; MBIA)............................................. 2,250,000 2,207,588
Refunding 5%, 10/1/2018................................................... 1,940,000 1,927,506
El Dorado Unified High School District 5%, 8/1/2022 (Insured; FGIC)......... 3,320,000 3,273,852
Eureka Public Financing Authority, Tax Allocation Revenue, Refunding
(Eureka Redevelopment Projects) 6.25%, 11/1/2011 (Insured; CGIC).......... 2,000,000 2,229,140
Fontana Public Financing Authority, Tax Allocation Revenue, Refunding
(North Fontana Redevelopment Project) 7.25%, 9/1/2020..................... 4,250,000 4,497,435
Fresno, Sewer Revenue 5%, 9/1/2023 (Insured; MBIA).......................... 2,000,000 1,971,500
Madera County, COP (Valley Children's Hospital):
6.25%, 3/15/2006 (Insured; MBIA).......................................... 2,250,000 2,549,722
6.50%, 3/15/2009 (Insured; MBIA).......................................... 3,370,000 4,005,110
Metropolitan Water District, Southern California Waterworks Revenue 5%, 7/1/2026 8,600,000 8,471,344
Monrovia Redevelopment Agency, Tax Allocation, Refunding
(Central Redevelopment Project) 6.70%, 5/1/2021 (Insured; AMBAC).......... 2,000,000 2,222,920
DREYFUS PREMIER CALIFORNIA MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS (CONTINUED) JANUARY 31, 1998
Principal
Long-Term Municipal Investments (continued) Amount Value
______________ ______________
California (continued)
Mount Shasta, HR, COP (Mercy Medical Center)
7.25%, 7/1/2019 (Prerefunded 7/1/1999) (a)................................ $ 1,770,000 $ 1,889,263
Nevada County, COP (Western Nevada Co. Solid Waste-McCourtney Road Landfill)
7.50%, 6/1/2021........................................................... 2,200,000 2,353,274
Northern California Power Agency, Public Power Revenue, Refunding
(Hydroelectric Project No. 1) 6.30%, 7/1/2018 (Insured; MBIA)............. 6,000,000 7,064,820
Orange County, Special Tax (Community Facilities District No. 87):
7.75%, 8/15/2014.......................................................... 2,375,000 2,484,155
7.80%, 8/15/2015 (Prerefunded 8/15/2000) (a).............................. 2,000,000 2,226,060
Orange Cove, Irrigation District Revenue, COP (Rehabilitation Project)
7.25%, 2/1/2012 (Prerefunded 2/1/2001) (a)................................ 3,000,000 3,329,730
Redwood City Elementary School District, Capital Appreciation:
Zero Coupon, 8/1/2019 (Insured; FGIC)..................................... 5,075,000 1,704,134
Zero Coupon, 8/1/2021 (Insured; FGIC)..................................... 5,725,000 1,736,850
Zero Coupon, 8/1/2022 (Insured; FGIC)..................................... 6,025,000 1,737,369
Richmond Joint Powers Financing Authority, Revenue
7.25%, 5/15/2013 (Prerefunded 5/15/2000) (a).............................. 1,500,000 1,639,425
Riverside County:
Asset Leasing Corp., Leasehold Revenue (Riverside County Hospital Project)
5%, 6/1/2019 (Insured; MBIA)............................................ 5,000,000 4,915,950
SFMR 7.80%, 5/1/2021 (Collateralized; GNMA)............................... 1,250,000 1,706,438
Sacramento County, Special Tax (Community Facilities District No. 1):
8.20%, 12/1/2010 (Prerefunded 12/1/2000) (a).............................. 2,250,000 2,548,508
8.25%, 12/1/2020 (Prerefunded 12/1/2000) (a).............................. 2,000,000 2,268,000
Salida Area Public Facilities Financing Agency, Community Facilities
District, Refunding
Special Tax 5.25%, 9/1/2028 (Insured; FSA)................................ 5,800,000 5,859,972
San Francisco City and County Airports Commission, International Airport
Revenue
(Special Facilities Lease) 5.25%, 1/1/2023 (Insured; AMBAC)............... 5,830,000 5,848,714
San Joaquin Hills Transportation Corridor Agency, Highway Revenue, Refunding
5.25%, 1/15/2030 (Insured; MBIA).......................................... 5,000,000 5,037,200
Santa Clara County Transit District, Sales Tax Revenue, Refunding 5%, 6/1/2013 1,100,000 1,122,858
Saratoga Unified School District, Capital Appreciation:
Zero Coupon, 9/1/2018 (Insured; FGIC)..................................... 2,150,000 760,885
Zero Coupon, 9/1/2019 (Insured; FGIC)..................................... 3,410,000 1,140,202
Zero Coupon, 9/1/2020 (Insured; FGIC)..................................... 2,500,000 794,550
Zero Coupon, 9/1/2021 (Insured; FGIC)..................................... 3,850,000 1,163,085
Zero Coupon, 9/1/2022 (Insured; FGIC)..................................... 3,820,000 1,096,913
Simi Valley:
Single Family Residential Mortgage Revenue 7.625%, 8/1/2022 (b)........... 665,244 113,091
Unified School District, COP (Refunding and Capital Improvement Projects):
5.25%, 8/1/2017 (Insured; AMBAC)........................................ 575,000 600,829
5.25%, 8/1/2022 (Insured; AMBAC)........................................ 1,000,000 1,039,420
DREYFUS PREMIER CALIFORNIA MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS (CONTINUED) JANUARY 31, 1998
Principal
Long-Term Municipal Investments (continued) Amount Value
______________ ______________
California (continued)
Southern California Rapid Transit District, COP (Worker's Compensation Fund)
6%, 7/1/2010 (Insured; MBIA).............................................. $ 2,045,000 $ 2,182,751
University of California, Revenues, Refunding (Multiple Purpose Projects)
5%, 9/1/2009 (Insured; MBIA).............................................. 4,000,000 4,196,240
Victor Elementary School District Zero Coupon, 6/1/2015 (Insured; MBIA)..... 1,000,000 424,080
Vista, MFHR, Refunding (Vista Hacienda Project) 6.95%, 4/1/2017............. 3,000,000 3,181,140
West Covina Redevelopment Agency, Community Facilities District, Refunding,
Special Tax
6%, 9/1/2022.............................................................. 3,000,000 3,344,160
U.S. Related-8.0%
Puerto Rico Commonwealth Highway and Transportation Authority, Highway
Revenue
5.50%, 7/1/2013 (Insured; MBIA)........................................... 7,250,000 7,947,813
Puerto Rico Electric Power Authority, Power Revenue, Refunding 7.125%, 7/1/2014 2,000,000 2,114,820
Virgin Islands Public Finance Authority, Revenue 7.30%, 10/1/2018........... 3,100,000 3,989,142
_____________
TOTAL LONG-TERM MUNICIPAL INVESTMENTS (cost $163,081,267)................... $174,113,690
=============
Short-Term Municipal Investments-1.0%
California:
California Pollution Control Financing Authority, SWDR
(Shell Oil Co. Martinez Project) VRDN 3.60% (c)
(cost $1,800,000)......................................................... $ 1,800,000 $ 1,800,000
=============
TOTAL INVESTMENTS-100.0% (cost $164,881,267)................................ $175,913,690
=============
</TABLE>
<TABLE>
<CAPTION>
DREYFUS PREMIER CALIFORNIA MUNICIPAL BOND FUND
Summary of Abbreviations
<S> <C> <S> <C>
AMBAC American Municipal Bond Assurance Corporation LR Lease Revenue
CGIC Capital Guaranty Insurance Company MBIA Municipal Bond Investors Assurance
COP Certificate of Participation Insurance Corporation
FGIC Financial Guaranty Insurance Company MFHR Multi-Family Housing Revenue
FSA Financial Security Assurance SFMR Single Family Mortgage Revenue
GNMA Government National Mortgage Association SWDR Solid Waste Disposal Revenue
HR Hospital Revenue VRDN Variable Rate Demand Notes
</TABLE>
<TABLE>
<CAPTION>
Summary of Combined Ratings (Unaudited)
Fitch (d) or Moody's or Standard & Poor's Percentage of Value
_______ _________ ___________________ _____________________
<S> <C> <C> <C>
AAA Aaa AAA 61.2%
AA Aa AA 16.1
A A A 9.2
BBB Baa BBB 7.0
DDD D D .1
F1 MIG1, VMIG1 & P1 SP1, A1 1.0
Not Rated (e) Not Rated (e) Not Rated (e) 5.4
_______
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) Non-income producing security; interest payments in default.
(c) Securities payable on demand. The interest rate, which is subject to
change, is based upon bank prime rates or an index of market interest
rates.
(d) Fitch currently provides creditworthiness information for a limited
number of investments.
(e) Securities which, while not rated by Fitch, Moody's and 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>
<CAPTION>
DREYFUS PREMIER CALIFORNIA MUNICIPAL BOND FUND
STATEMENT OF ASSETS AND LIABILITIES JANUARY 31, 1998
Cost Value
_____________ _____________
<S> <C> <C> <C>
ASSETS: Investments in securities-See Statement of Investments $164,881,267 $175,913,690
Cash....................................... 243,337
Interest receivable........................ 2,349,315
Receivable for investment securities sold.. 247,555
Receivable for shares of Beneficial Interest subscribed 14,382
Prepaid expenses........................... 20,116
_____________
178,788,395
_____________
LIABILITIES: Due to The Dreyfus Corporation and affiliates 84,020
Due to Distributor......................... 49,462
Payable for shares of Beneficial Interest redeemed 94,907
Accrued expenses and other liabilities..... 67,613
_____________
296,002
_____________
NET ASSETS.................................................................. $178,492,393
=============
REPRESENTED BY: Paid-in capital............................ $166,147,135
Accumulated net realized gain (loss) on investments 1,312,835
Accumulated net unrealized appreciation
(depreciation) on investments-Note 4....... 11,032,423
_____________
NET ASSETS.................................................................. $178,492,393
=============
</TABLE>
<TABLE>
<CAPTION>
NET ASSET VALUE PER SHARE
_____________________________
Class A Class B Class C
____________ ____________ ____________
<S> <C> <C> <C>
Net Assets.................................................... $152,415,694 $24,941,991 $1,134,708
Shares Outstanding............................................ 11,719,885 1,916,750 86,989
NET ASSET VALUE PER SHARE..................................... $13.00 $13.01 $13.04
======= ======= =======
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS PREMIER CALIFORNIA MUNICIPAL BOND FUND
STATEMENT OF OPERATIONS YEAR ENDED JANUARY 31, 1998
INVESTMENT INCOME
<S> <C> <C> <C>
INCOME Interest Income............................ $10,287,726
EXPENSES: Management fee-Note 3(a)................... $ 1,000,358
Shareholder servicing costs-Note 3(c)...... 534,601
Distribution fees-Note 3(b)................ 125,293
Professional fees.......................... 58,078
Trustees' fees and expenses-Note 3(d)...... 34,845
Registration fees.......................... 30,631
Custodian fees............................. 20,575
Prospectus and shareholders' reports....... 19,992
Loan commitment fees-Note 2................ 1,941
Miscellaneous.............................. 30,728
____________
Total Expenses....................... 1,857,042
____________
INVESTMENT INCOME-NET....................................................... 8,430,684
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS-Note 4:
Net realized gain (loss) on investments.... $ 3,280,416
Net unrealized appreciation (depreciation)
on investments 4,512,474
____________
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS...................... 7,792,890
____________
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $16,223,574
============
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS PREMIER CALIFORNIA MUNICIPAL BOND FUND
STATEMENT OF CHANGES IN NET ASSETS
Year Ended Year Ended
January 31, 1998 January 31, 1997
_________________ _________________
<S> <C> <C>
OPERATIONS:
Investment income-net................................................. $ 8,430,684 $ 9,832,483
Net realized gain (loss) on investments............................... 3,280,416 (566,869)
Net unrealized appreciation (depreciation) on investments............. 4,512,474 (3,558,911)
_____________ _____________
Net Increase (Decrease) in Net Assets Resulting from Operations. 16,223,574 5,706,703
_____________ _____________
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income-net:
Class A shares...................................................... (7,570,235) (8,690,991)
Class B shares...................................................... (1,000,094) (946,983)
Class C shares...................................................... (42,303) (12,561)
Net realized gain on investments:
Class A shares...................................................... (1,206,503) (2,095,781)
Class B shares...................................................... (190,234) (255,409)
Class C shares...................................................... (8,840) (6,301)
_____________ _____________
Total Dividends................................................. (10,018,209) (12,008,026)
_____________ _____________
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold:
Class A shares...................................................... 6,052,942 8,651,433
Class B shares...................................................... 2,973,938 1,280,059
Class C shares...................................................... 56,833 1,027,540
Dividends reinvested:
Class A shares...................................................... 4,163,733 5,153,147
Class B shares...................................................... 801,848 814,039
Class C shares...................................................... 25,641 18,682
Cost of shares redeemed:
Class A shares...................................................... (29,276,730) (30,300,379)
Class B shares...................................................... (4,175,648) (2,638,241)
Class C shares...................................................... (15,301) (22,854)
Net assets received in connection with reorganization-Note 1.......... 7,279,683 ----
_____________ _____________
Increase (Decrease) in Net Assets from Beneficial Interest Transactions (12,113,061) (16,016,574)
_____________ _____________
Total Increase (Decrease) in Net Assets....................... (5,907,696) (22,317,897)
NET ASSETS:
Beginning of Period................................................... 184,400,089 206,717,986
_____________ _____________
End of Period......................................................... $178,492,393 $184,400,089
============= =============
UNDISTRIBUTED INVESTMENT INCOME-NET....................................... ---- $181,948
_____________ _____________
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS PREMIER CALIFORNIA MUNICIPAL BOND FUND
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
Shares
__________________________________
Year Ended Year Ended
January 31, 1998 January 31, 1997
_________________ _________________
CAPITAL SHARE TRANSACTIONS:
Class A
________
Shares sold........................................................... 481,610 683,893
Shares issued in connection with reorganization-Note 1................ 254,624 ----
Shares issued for dividends reinvested................................ 326,898 410,136
Shares redeemed....................................................... (2,301,642) (2,413,048)
__________ __________
Net Increase (Decrease) in Shares Outstanding (1,238,510) (1,319,019)
========== ==========
Class B
________
Shares sold........................................................... 235,183 101,503
Shares issued in connection with reorganization-Note 1................ 332,365 ----
Shares issued for dividends reinvested................................ 62,876 64,758
Shares redeemed....................................................... (329,709) (209,533)
__________ __________
Net Increase (Decrease) in Shares Outstanding 300,715 (43,272)
========== ==========
Class C
________
Shares sold........................................................... 4,444 81,879
Shares issued in connection with reorganization-Note 1................ 82 ----
Shares issued for dividends reinvested................................ 2,007 1,482
Shares redeemed....................................................... (1,165) (1,821)
__________ __________
Net Increase (Decrease) in Shares Outstanding 5,368 81,540
========== ==========
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS PREMIER CALIFORNIA 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.
Class A Shares
______________________________________________________
Year Ended January 31,
______________________________________________________
PER SHARE DATA: 1998 1997 1996 1995 1994
______ ______ ______ ______ ______
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period......... $12.58 $12.97 $12.24 $13.64 $12.80
______ ______ ______ ______ ______
Investment Operations:
Investment income-net........................ .60 .65 .67 .72 .77
Net realized and unrealized gain (loss)
on investments............................. .53 (.24) 1.02 (.80) .94
______ ______ ______ ______ ______
Total from Investment Operations............. 1.13 .41 1.69 (.08) 1.71
______ ______ ______ ______ ______
Distributions:
Dividends from investment income-net......... (.61) (.64) (.67) (.72) (.77)
Dividends from net realized gain on investments (.10) (.16) (.29) (.60) (.10)
______ ______ ______ ______ ______
Total Distributions.......................... (.71) (.80) (.96) (1.32) (.87)
______ ______ ______ ______ ______
Net asset value, end of period............... $13.00 $12.58 $12.97 $12.24 $13.64
====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN*......................... 9.27% 3.31% 14.15% (4.34%) 13.62%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets...... .95% .92% .93% .90% .78%
Ratio of net investment income
to average net assets...................... 4.71% 5.18% 5.22% 5.72% 5.71%
Decrease reflected in above expense ratios
due to undertakings by the Manager......... - - - .02% .15%
Portfolio Turnover Rate...................... 103.75% 39.76% 92.42% 37.39% 26.69%
Net Assets, end of period (000's Omitted).... $152,416 $163,030 $185,187 $191,939 $245,435
* Exclusive of sales load.
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS PREMIER CALIFORNIA 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.
Class B Shares
______________________________________________________
Year Ended January 31,
______________________________________________________
PER SHARE DATA: 1998 1997 1996 1995 1994
______ ______ ______ ______ ______
Net asset value, beginning of period......... $12.59 $12.98 $12.25 $13.64 $12.81
______ ______ ______ ______ ______
Investment Operations:
Investment income-net........................ .53 .59 .60 .65 .69
Net realized and unrealized gain (loss)
on investments............................. .53 (.25) 1.02 (.79) .93
______ ______ ______ ______ ______
Total from Investment Operations............. 1.06 .34 1.62 (.14) 1.62
______ ______ ______ ______ ______
Distributions:
Dividends from investment income-net......... (.54) (.57) (.60) (.65) (.69)
Dividends from net realized gain on investments (.10) (.16) (.29) (.60) (.10)
______ ______ ______ ______ ______
Total Distributions.......................... (.64) (.73) (.89) (1.25) (.79)
______ ______ ______ ______ ______
Net asset value, end of period............... $13.01 $12.59 $12.98 $12.25 $13.64
====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN*......................... 8.69% 2.79% 13.55% (4.77%) 12.91%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets...... 1.46% 1.44% 1.45% 1.42% 1.31%
Ratio of net investment income
to average net assets...................... 4.18% 4.66% 4.69% 5.17% 4.90%
Decrease reflected in above expense ratios
due to undertakings by the Manager......... - - - .02% .13%
Portfolio Turnover Rate...................... 103.75% 39.76% 92.42% 37.39% 26.69%
Net Assets, end of period (000's Omitted).... $24,942 $20,341 $21,530 $18,981 $16,906
* Exclusive of sales load.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS PREMIER CALIFORNIA 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.
Class C Shares
______________________________
Year Ended January 31,
______________________________
PER SHARE DATA: 1998 1997 1996(1)
______ ______ ______
<S> <C> <C> <C>
Net asset value, beginning of period.................................. $12.61 $12.98 $12.98
______ ______ ______
Investment Operations:
Investment income-net................................................. .50 .54 .37
Net realized and unrealized gain (loss)
on investments...................................................... .53 (.21) .29
______ ______ ______
Total from Investment Operations...................................... 1.03 .33 .66
______ ______ ______
Distributions:
Dividends from investment income-net.................................. (.50) (.54) (.37)
Dividends from net realized gain on investments....................... (.10) (.16) (.29)
______ ______ ______
Total Distributions................................................... (.60) (.70) (.66)
______ ______ ______
Net asset value, end of period........................................ $13.04 $12.61 $12.98
====== ====== ======
TOTAL INVESTMENT RETURN(2)................................................ 8.42% 2.67% 7.90%(3)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets............................... 1.68% 1.77% 4.42%(3)
Ratio of net investment income
to average net assets............................................... 3.92% 4.33% 4.31%(3)
Portfolio Turnover Rate............................................... 103.75% 39.76% 92.42%
Net Assets, end of period (000's Omitted)............................. $1,135 $1,029 $1
(1) From June 2, 1995 (commencement of initial offering) to January 31, 1996.
(2) Exclusive of sales load.
(3) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
DREYFUS PREMIER CALIFORNIA MUNICIPAL BOND FUND
NOTES TO FINANCIAL STATEMENTS
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES:
Dreyfus Premier California 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 and State of California personal income
taxes 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 October 31, 1996, the Board of Trustees approved, subject to approval
by the shareholders of the California Series of Dreyfus Premier Insured
Municipal Bond Fund ("DPIMBF-California Series"), an Agreement and Plan of
Reorganization providing for the transfer of all or substantially all of the
DPIMBF-California 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 DPIMBF-California Series on March 10, 1997,
and was consummated after the close of business on April 1, 1997 at which
time 264,212 Class A shares valued at $11.95 per share, 344,304 Class B
shares valued at $11.97 per share and 1,020 Class C shares valued at $11.96
per share, representing combined net assets of $7,279,683 (including $86,206
net unrealized appreciation on investments) were exchanged by
DPIMBF-California Series for the respective number of Class A, Class B and
Class C shares of the Fund.
On January 8, 1997, the Fund's Trustees approved a change to the Fund's
name from "Premier California Municipal Bond Fund" to "Dreyfus Premier
California Municipal Bond Fund," which became effective March 31, 1997.
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 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 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 contingent deferred sales
charge ("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
DREYFUS PREMIER CALIFORNIA MUNICIPAL BOND FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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.
The Fund follows an investment policy of investing primarily in municipal
obligations of one state. Economic changes affecting the state and certain of
its public bodies and municipalities may affect the ability of issuers within
the state to pay interest on, or repay principal of, municipal obligations
held by the Fund.
(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, if any, it is the policy of the Fund not to distribute such gain.
(d) Federal income taxes: It is the policy of the Fund to continue to
qualify as a regulated investment company, 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. During the period ended
January 31, 1998, the Fund did not borrow under the Facility.
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.
(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 January 31, 1998,
the Fund was charged $117,214 and $8,079 for Class B and Class C shares,
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 January 31,
1998, the Fund was charged $393,408, $58,607 and $2,693 for Class A, Class B
and Class C shares, 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 January 31, 1998, the Fund was charged $64,396 pursuant to the
transfer agency agreement.
DREYFUS PREMIER CALIFORNIA MUNICIPAL BOND FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(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 $500 per meeting. The Chairman of the Board receives an
additional 25% of such compensation.
NOTE 4-SECURITIES TRANSACTIONS:
The aggregate amount of purchases and sales of investment securities,
excluding short-term securities, during the period ended January 31, 1998
amounted to $172,233,902 and $182,211,669, respectively.
At January 31, 1998, accumulated net unrealized appreciation on
investments was $11,032,423, consisting of $11,700,720 gross unrealized
appreciation and $668,297 gross unrealized depreciation.
At January 31, 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).
DREYFUS PREMIER CALIFORNIA MUNICIPAL BOND FUND
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
Shareholders and Board of Trustees
Dreyfus Premier California Municipal Bond Fund
We have audited the accompanying statement of assets and liabilities of
Dreyfus Premier California Municipal Bond Fund, including the statement of
investments, as of January 31, 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 and the financial highlights. Our procedures
included confirmation of securities owned as of January 31, 1998 by correspond
ence with the custodian. 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 California Municipal Bond Fund at January 31,
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 signature logo]
New York, New York
March 4, 1998
IMPORTANT TAX INFORMATION (UNAUDITED)
In accordance with Federal tax law, the Fund hereby makes the following
designations regarding its fiscal year ended January 31, 1998:
-all the dividends paid from investment income-net are "exempt-interest
dividends" (not subject to regular Federal and, for individuals who are
California residents, California personal income taxes), and
-the Fund hereby designates $.0975 per share as a long-term capital gain
distribution (of which 100% is subject to the 20% maximum Federal tax rate)
of the $.1017 per share 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 and
capital gains distributions paid for the 1998 calendar year on Form 1099-DIV
which will be mailed by January 31, 1999.
DREYFUS PREMIER CALIFORNIA
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. PCCAR981
Annual Report
Dreyfus Premier
California Municipal
Bond Fund
January 31, 1998
Registration Mark
[Dreyfus lion 2/hres logo]
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
IN DREYFUS PREMIER CALIFORNIA MUNICIPAL BOND FUND CLASS
A SHARES AND THE LEHMAN BROTHERS MUNICIPAL BOND INDEX
EXHIBIT A:
DREYFUS
PREMIER
LEHMAN CALIFORNIA
PERIOD BROTHERS MUNICIPAL
MUNICIPAL BOND FUND
BOND INDEX * (CLASS A SHARES)
1/31/88 10,000 9,548
1/31/89 10,857 10,457
1/31/90 11,729 11,274
1/31/91 12,814 12,340
1/31/92 14,211 13,576
1/31/93 15,608 14,903
1/31/94 17,522 16,933
1/31/95 16,898 16,198
1/31/96 19,442 18,489
1/31/97 20,189 19,102
1/31/98 22,230 20,873
* Source: Lehman Brothers
