February 6, 1997
DREYFUS SHORT-INTERMEDIATE GOVERNMENT FUND
SUPPLEMENT TO PROSPECTUS
DATED MARCH 1, 1996
THE FOLLOWING INFORMATION SUPPLEMENTS THE INFORMATION IN THE FUND'S
PROSPECTUS UNDER THE CAPTION "INVESTMENT OBJECTIVES AND MANAGEMENT POLICIES."
U.S Treasury securities include Treasury Inflation-Protection
Securities ("TIPS"), which are newly created securities issued by the U.S.
Treasury designed to protect investors against inflation. The interest rate
paid by TIPS is fixed, while the principal value rises or falls semi-annually
based on changes in a published Consumer Price Index. Thus, if the rate of
inflation increases, the principal and interest payments on the TIPS also
increase, protecting investors from inflationary loss. During a deflationary
period, the principal and interest payments decrease, although the TIPS'
principal will not drop below its face amount at maturity.
In exchange for the inflation protection, TIPS generally pay lower
interest rates than typical Treasury securities. Only if the rate of
inflation rises will TIPS offer a higher real yield than a conventional
Treasury bond of the same maturity. In addition, it is not possible to
predict with assurance how the market for TIPS will develop; initially, the
secondary market for these securities may not be as active or liquid as the
secondary market for conventional Treasury securities. Principal appreciation
and interest payments on TIPS will be taxed annually as ordinary interest
income for federal income tax calculations. As a result, any appreciation in
principal must be counted as interest income in the year the increase occurs,
even though the investor will not receive such amounts until the TIPS are
sold or mature. Principal appreciation and interest payments will be exempt
from state and local income taxes.
THE FOLLOWING INFORMATION SUPERSEDES ANY CONTRARY INFORMATION
CONTAINED IN THE SECTION OF THE FUND'S PROSPECTUS ENTITLED "MANAGEMENT OF THE
FUND-CUSTODIAN AND TRANSFER AND DIVIDEND DISBURSING AGENT."
Mellon Bank, N.A., located at One Mellon Bank Center, Pittsburgh,
Pennsylvania 15258, serves as the Fund's Custodian.
542s020697
