Dreyfus
Short-Intermediate
Government
Fund
Annual Report
November 30, 1996
<PAGE>
Dreyfus Short-Intermediate Government Fund
- ------------------------------------------------------------------------------
Letter to Shareholders
Dear Shareholder:
We are pleased to provide you with this report on Dreyfus
Short-Intermediate Government Fund. For its annual reporting period ended
November 30, 1996, your Fund produced a total return of 5.08% per share.* Income
dividends of approximately $.652 per share were paid, which is equivalent to an
annualized distribution rate per share of 5.95%.**
THE ECONOMY
For much of 1996, investors were fearful that inflation would begin to
accelerate. Rising commodity prices and tightening labor markets were the
catalysts that would lead to increasing inflation. The tightening labor market
was of particular concern earlier in the year because of the robust rate of new
job growth at that time. More specifically, the March non-farm payroll release
showing an increase of 705,000 was the first sign. In fact, that increase also
began the bear market for bonds that lasted until approximately mid July.
However, during the summer, the pace of job creation slowed, reducing the
likelihood that the tightening employment market would lead to
inflation-inducing wage increases. About 150,000 jobs per month over the past
three months have been added to the employment rolls compared to an average rate
of over 250,000 during the spring and early summer months. The unemployment rate
has declined all year (the rate is now at 5.2%, near a seven-year low), yet wage
increases have remained under control. The Employment Cost Index, a broad
measure of wage and benefit growth, has risen a modest 2.8% over the past year,
about the same as the year before when the Index increased 2.7%. During the
summer the economy's growth rate also slowed by more than half of its 4.7%
growth rate in the second quarter.
Many investors believe that inflation will remain subdued. Commodity prices
have retreated from their highs. The Consumer Price Index continues to show an
inflation level at an annual rate of 3%, while the Producer Price Index shows
scant evidence of price pressures in the production pipeline. The Federal
Reserve Board (the "Fed") has held short-term interest rates steady since
January, when it reduced its Federal Funds target rate to 5.25% from 5.5%. (The
Federal Funds rate is the rate that banks charge each other for overnight
loans.) However, the market, specifically shorter maturities, continues to price
with the anticipation of tightening by the Fed. In fact, future rates across
most of the developed countries are anticipating the next interest rate move to
be a tightening one.
With both low unemployment and low inflation, measures of consumer confidence
remain high. The Index of Leading Economic Indicators, an index compiled by the
Conference Board (a private economic research group), has reached record high
levels. Retail sales are beginning to show signs of moderate expansion after
having slowed over the summer, when consumers paid off more credit card debt
than they borrowed. On the production side of the economy, output from the
nation's factories has slowed somewhat from its pace earlier in the year. With a
capacity utilization rate of under 83.3% as of November 30, 1996, there appears
to be little indication of any production bottlenecks that could lead to
shortages and higher prices.
MARKET ENVIRONMENT
As we mentioned, the market continues to price with anticipation of higher
interest rates. This can be seen by the spread between two-year Treasury notes
versus the Federal Funds rate. The two-year note retains a 50+ basis-point
spread to Fed Funds. Mr. Greenspan recently spoke about what he believed to be
speculative bubbles, in an apparent attempt to have the market address them. He
has also been helped by foreign demand for Treasuries. As long as foreigners
continue to buy Treasuries in record amounts, the Fed can keep policy tight. If
the supply/demand ratio were to change, with foreigners buying less, the Fed
might have to counteract that. Or at least consider that event in their policy
decisions.
<PAGE>
This type of rational uncertainty could cause the front end of the Treasury
curve (higher demand for shorter maturities) to perform better relative to
longer maturities. The biggest surprise to the market, global and domestic, is
that world growth does not pick up. Currently the Organization for Economic
Cooperation & Development is forecasting rate rises in a number of countries. As
we mentioned before, this outlook can be seen in the forward rate markets. The
Fed (as well as other central banks whose forward markets are pricing with the
prospect of higher interest rates) could surprise everyone and do nothing.
THE PORTFOLIO
The portfolio has been positioned with a more positive outlook for interest
rates at the beginning of 1997. The maturity anticipated by January 1, 1997 will
be approximately three years, which would be an increase from November and
December of 1996. The Fund has decreased its U.S. Government Agency exposure. As
in the past, when they become too tight in spread to Treasuries the liquidity
premium is too small to warrant owning them.
The Fund will also be increasing its holdings of current issue Treasuries.
Currently, the Fund will try to hold 5% of assets in current issues (recently
auctioned). Going forward we anticipate an increase to between 10% and 15%. This
will allow the Fund to adjust itself more quickly because it will be readily
able to sell the most liquid Treasuries. In essence, the Fund will become more
nimble in preparation for global events that could impact the market.
Very truly yours,
Gerald E. Thunelius
Portfolio Manager
December 20, 1996
New York, N.Y.
*Total return includes reinvestment of dividends and any capital gains paid.
**Distribution rate per share is based upon dividends per share paid from net
investment income during the period (annualized), divided by the net asset
value per share at the end of the period.
<PAGE>
DREYFUS SHORT-INTERMEDIATE GOVERNMENT FUND NOVEMBER 30, 1996
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN DREYFUS
SHORT-INTERMEDIATE GOVERNMENT FUND AND THE MERRILL LYNCH GOVERNMENTS, U.S.
TREASURY, SHORT-TERM (1-2.99 YEARS) INDEX
[Exhibit A:
$20,044
Dreyfus
Short-Intermediate
Government Fund
Dollars
$19,755
Merrill Lynch
Governments,
U.S. Treasury, Short-Term
(1-2.99 Years) Index*
*Source: Merrill Lynch, Pierce, Fenner and Smith Inc.]
<TABLE>
<CAPTION>
Average Annual Total Returns
One Year Ended Five Years Ended From Inception (4/6/87)
November 30, 1996 November 30, 1996 to November 30, 1996
______________________ ______________________ _________________________
<S> <C> <C>
5.08% 6.47% 7.47%
</TABLE>
Past performance is not predictive of future performance.
The above graph compares a $10,000 investment made in Dreyfus
Short-Intermediate Government Fund on 4/6/87 (Inception Date) to a $10,000
investment made in the Merrill Lynch Governments, U.S. Treasury, Short-Term
(1-2.99 Years) Index on that date. All dividends and capital gain
distributions are reinvested.
The Fund invests in securities issued or guaranteed by the U.S. Government or
its agencies or instrumentalities and repurchase agreements in respect of
such securities. The maximum remaining maturity of any instrument in the
Fund's portfolio will not exceed three and one-half years. The Fund's
performance shown in the line graph takes into account fees and expenses.
Unlike the Fund, the Merrill Lynch Governments, U.S. Treasury, Short-Term
(1-2.99 Years) Index is an unmanaged performance benchmark for Treasury
securities with maturities of 1-2.99 years; issues in the Index must have par
amounts outstanding greater than or equal to $25 million. The Index does not
take into account charges, fees and other expenses. 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.
<PAGE>
<TABLE>
<CAPTION>
Dreyfus Short-Intermediate Government Fund
- ------------------------------------------------------------------------------
Statement of Investments November 30, 1996
Principal
Bonds and Notes--98.7% Amount Value
- ----------------------------------------------------------------------------- ----------- --------------
<S> <C> <C>
U.S. Government Agencies--10.6%
Federal Home Loan Mortgage,
Deb.:
8.20%, 1/16/1998........................................................ $ 20,000,000 $ 20,066,812
5.18%, 11/18/1998....................................................... 20,000,000 19,761,460
Global Notes,
6.07%, 11/20/1998....................................................... 10,000,000 9,996,270
Federal National Mortgage Association,
Deb.,
8.65%, 2/10/1998........................................................ 10,000,000 10,348,130
------------
60,172,672
------------
U.S. Treasury Notes--79.3%
6 1/4%, 6/30/1998......................................................... 6,000,000 6,065,614
6%, 9/30/1998............................................................. 155,000,000 156,142,707
5 7/8%, 11/15/1999........................................................ 105,000,000 105,504,714
7 3/4%, 1/31/2000......................................................... 23,000,000 24,336,997
7 1/8%, 2/29/2000......................................................... 31,000,000 32,271,102
6 7/8%, 3/31/2000......................................................... 98,000,000 101,355,177
6 3/4%, 4/30/2000......................................................... 25,000,000 25,783,622
------------
451,459,933
------------
U.S. Treasury Principal Strips--8.8%
Zero Coupon, 2/15/2000................................................... 50,000,000 41,735,885
Zero Coupon, 5/15/2000................................................... 10,000,000 8,226,989
------------
49,962,874
------------
TOTAL BONDS AND NOTES
(cost $559,148,636)....................................................... $561,595,479
------------
------------
Short-Term Investments--2.4%
- -----------------------------------------------------------------------------
Repurchase Agreements;
Aubrey G. Lanston & Co., 5 1/2%
dated 11/29/1996, due 12/2/1996 in the amount of $13,802,323
(fully collateralized by $13,615,000 U.S. Treasury Notes,
6 1/8%, 12/31/1996, value $13,955,375)
(cost $13,796,000)........................................................ $ 13,796,000 $ 13,796,000
------------
------------
TOTAL INVESTMENTS
(cost $572,944,636)...................................................... 101.1% $575,391,479
------ ------------
------ ------------
LIABILITIES, LESS CASH AND RECEIVABLES....................................... (1.1%) $ (6,072,015)
------ ------------
------ ------------
NET ASSETS................................................................... 100.0% $569,319,464
------ ------------
------ ------------
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
<PAGE>
Dreyfus Short-Intermediate Government Fund
- ------------------------------------------------------------------------------
Statement of Assets and Liabilities November 30, 1996
Cost Value
------------- -------------
<S> <C> <C> <C>
ASSETS: Investments in securities--See Statement of Investments $572,944,636 $575,391,479
Cash............................................. 604,829
Receivable for investment securities sold........ 70,507,172
Interest receivable.............................. 5,401,865
Receivable for shares of Beneficial Interest subscribed 187,711
Prepaid expenses................................. 128,476
-------------
652,221,532
-------------
LIABILITIES: Due to The Dreyfus Corporation and affiliates.... 281,568
Payable for investment securities purchased...... 70,385,594
Payable for shares of Beneficial Interest redeemed 12,137,430
Accrued expenses................................. 97,476
-------------
82,902,068
-------------
NET ASSETS..................................................................... $569,319,464
=============
REPRESENTED BY: Paid-in capital.................................. $599,064,978
Accumulated undistributed investment income--net.. 87,830
Accumulated net realized gain (loss) on investments (32,280,187)
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4.......................... 2,446,843
-------------
NET ASSETS..................................................................... $569,319,464
=============
SHARES OUTSTANDING
(unlimited number of $.001 par value shares of Beneficial Interest authorized). 51,982,963
NET ASSET VALUE, offering and redemption price per share....................... $10.95
=======
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
<PAGE>
Dreyfus Short-Intermediate Government Fund
- ------------------------------------------------------------------------------
Statement of Operations Year Ended November 30, 1996
INVESTMENT INCOME
<S> <C> <C> <C>
INCOME Interest Income................................. $38,376,541
EXPENSES: Management fee--Note 3(a)......................... $ 2,850,020
Shareholder servicing costs--Note 3(b)............ 1,139,548
Professional fees................................ 66,018
Trustees' fees and expenses--Note 3(c)........... 56,107
Custodian fees--Note 3(b)......................... 52,838
Prospectus and shareholders' reports............. 37,958
Registration fees................................ 32,318
Miscellaneous.................................... 11,068
-----------
Total Expenses.............................. 4,245,875
------------
INVESTMENT INCOME--NET.......................................................... 34,130,666
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--Note 4:
Net realized gain (loss) on investments:
Long transactions.............................. $(1,280,728)
Short sale transactions........................ 61,067
-----------
Net Realized Gain (Loss).................... (1,219,661)
Net unrealized appreciation (depreciation) on investments (4,555,506)
------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS........................ (5,775,167)
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.......................... $28,355,499
============
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
<PAGE>
Dreyfus Short-Intermediate Government Fund
- ------------------------------------------------------------------------------
Statement of Changes in Net Assets
Year Ended Year Ended
November 30, 1996 November 30, 1995
-------------------- --------------------
<S> <C> <C>
OPERATIONS:
Investment income--net................................................ $ 34,130,666 $ 35,190,729
Net realized gain (loss) on investments.............................. (1,219,661) 1,471,596
Net unrealized appreciation (depreciation) on investments............ (4,555,506) 21,397,751
-------------- --------------
Net Increase (Decrease) in Net Assets Resulting from Operations.. 28,355,499 58,060,076
-------------- --------------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net................................................ (34,042,836) (35,190,729)
-------------- --------------
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold........................................ 220,320,537 239,557,933
Dividends reinvested................................................. 27,170,603 28,338,016
Cost of shares redeemed.............................................. (246,164,984) (213,597,841)
-------------- --------------
Increase (Decrease) in Net Assets from Beneficial Interest Transactions 1,326,156 54,298,108
-------------- --------------
Total Increase (Decrease) in Net Assets........................ (4,361,181) 77,167,455
NET ASSETS:
Beginning of Period.................................................. 573,680,645 496,513,190
-------------- --------------
End of Period........................................................ $569,319,464 $573,680,645
============== ==============
Undistributed investment income--net.................................... $ 87,830 --
-------------- --------------
CAPITAL SHARE TRANSACTIONS:
Shares Shares
-------------- --------------
Shares sold.......................................................... 20,156,773 22,083,238
Shares issued for dividends reinvested............................... 2,490,316 2,610,421
Shares redeemed...................................................... (22,544,889) (19,779,792)
-------------- --------------
Net Increase (Decrease) in Shares Outstanding.................... 102,200 4,913,867
============== ==============
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
<PAGE>
Dreyfus Short-Intermediate Government 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.
Year Ended November 30,
------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA: 1996 1995 1994 1993 1992
------ ------ ------ ------ ------
Net asset value, beginning of period............... $11.06 $10.57 $11.45 $11.58 $11.71
------ ------ ------ ------ ------
Investment Operations:
Investment income--net.............................. .65 .73 .76 .78 .82
Net realized and unrealized gain (loss)
on investments.................................. (.11) .49 (.82) .14 .09
------ ------ ------ ------ ------
Total from Investment Operations............. .54 1.22 (.06) .92 .91
------ ------ ------ ------ ------
Distributions:
Dividends from investment income--net............... (.65) (.73) (.76) (.78) (.83)
Dividends from net realized gain on investments.... -- -- (.06) (.27) (.21)
------ ------ ------ ------ ------
Total Distributions.......................... (.65) (.73) (.82) (1.05) (1.04)
------ ------ ------ ------ ------
Net asset value, end of period..................... $10.95 $11.06 $10.57 $11.45 $11.58
====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN............................... 5.08% 11.91% (.57%) 8.29% 8.05%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets............ .74% .66% .47% .40% .35%
Ratio of net investment income
to average net assets........................... 5.99% 6.73% 6.91% 6.75% 7.00%
Decrease reflected in above expense ratios
due to undertakings by the Manager.............. -- .09% .30% .35% .42%
Portfolio Turnover Rate............................ 594.44% 387.60% 695.60% 317.00% 225.52%
Net Assets, end of period (000's Omitted).......... $569,319 $573,681 $496,513 $551,543 $333,646
See notes to financial statements.
</TABLE>
<PAGE>
Dreyfus Short-Intermediate Government Fund
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
NOTE 1--Significant Accounting Policies:
Dreyfus Short-Intermediate Government 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 provide investors with
as high a level of current income as is 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. ("Mellon").
Premier Mutual Fund Services, Inc. acts as the distributor of the Fund's shares,
which are sold to the public without a sales charge.
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: The Fund's investments (excluding short-term
investments and U.S. Government obligations) 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 securities of comparable quality, coupon, maturity and
type; indications as to values from dealers; and general market conditions.
Investments in U.S. Government obligations are valued at the mean between quoted
bid and asked prices. Short-term investments are carried at amortized cost,
which approximates value.
(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,
including, where applicable, amortization of discount on investments is
recognized on the accrual basis.
The Fund may enter into repurchase agreements with financial institutions,
deemed to be creditworthy by the Fund's Manager, subject to the seller's
agreement to repurchase and the Fund's agreement to resell such securities at a
mutually agreed upon price. Securities purchased subject to repurchase
agreements are deposited with the Fund's custodian and, pursuant to the terms of
the repurchase agreement, must have an aggregate market value greater than or
equal to the repurchase price plus accrued interest at all times. If the value
of the underlying securities falls below the value of the repurchase price plus
accrued interest, the Fund will require the seller to deposit additional
collateral by the next business day. If the request for additional collateral is
not met, or the seller defaults on its repurchase obligation, the Fund maintains
the right to sell the underlying securities at market value and may claim any
resulting loss against the seller.
(C) DIVIDENDS TO SHAREHOLDERS: It is the policy of the Fund to declare
dividends daily from investment income-net. Such dividends are paid monthly.
Dividends from net realized capital gain are normally declared and paid
annually, but the Fund may make distributions on a more frequent basis to comply
with the distribution requirements of the Internal Revenue Code. To the extent
that net realized capital gain can be offset by capital loss carryovers, it is
the policy of the Fund not to distribute such gain.
(D) FEDERAL INCOME TAXES: It is the policy of the Fund to continue to
qualify as a regulated investment company, if such qualification is in the
best interests of its shareholders, by complying with the applicable
provisions of the Internal
<PAGE>
Revenue Code, and to make distributions of taxable income sufficient to relieve
it from substantially all Federal income and excise taxes.
The Fund has an unused capital loss carryover of approximately $32,300,000
available for Federal income tax purposes to be applied against future net
securities profit, if any, realized subsequent to November 30, 1996. If not
applied, $26,610,000 of the carryover expires in fiscal 2002, $4,470,000
expires in fiscal 2003 and $1,220,000 expires in fiscal 2004.
NOTE 2--Bank Line of Credit:
The Fund participates with other Dreyfus-managed funds in a $100 million
unsecured line of credit primarily to be utilized for temporary or emergency
purposes, including the financing of redemptions. Interest is charged to the
Fund at rates which are related to the Federal Funds rate in effect at the time
of borrowings. For the period ended November 30, 1996, the Fund did not borrow
under the line of credit.
NOTE 3--Management Fee and Other Transactions With Affiliates:
(A) Pursuant to a management agreement ("Agreement") with the Manager, the
management fee is computed at the annual rate of .50 of 1% of the value of the
Fund's average daily net assets and is payable monthly. The Agreement provides
that if in any full fiscal year the aggregate expenses of the Fund, exclusive of
taxes, brokerage, interest on borrowings and extraordinary expenses, exceed
11/2% of the value of the Fund's average net assets, the Fund may deduct from
payments to be made to the Manager, or the Manager will bear the amount of such
excess to the extent required by state law. The Manager has undertaken through
November 30, 1997, to reduce the management fee paid by the Fund, to the extent
that the Fund's aggregate annual expenses (exclusive of certain expenses as
described above) exceed an annual rate of .75 of 1% of the value of the Fund's
average daily net assets.
There was no reimbursement for the period ended November 30, 1996.
The undertaking may be extended, modified or terminated by the Manager,
provided that the resulting expense reimbursement would not be less than the
amount required pursuant to the Agreement.
(B) Pursuant to the Fund's Shareholder Services Plan, the Fund reimburses
Dreyfus Service Corporation, a wholly-owned subsidiary of the Manager, an amount
not to exceed an annual rate of .25 of 1% of the value of the Fund's average
daily net assets for certain allocated expenses of providing personal services
and/or maintaining shareholder accounts. 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.
During the period ended November 30, 1996, the Fund was charged an aggregate of
$673,688 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. Such compensation
amounted to $227,876 for the period ended November 30, 1996.
Effective May 10, 1996, the Fund entered into a custody agreement with Mellon
to provide custodial services for the Fund. For the period ended November 30,
1996, $24,291 was charged by Mellon pursuant to the custody agreement.
(C) Each trustee who is not an "affiliated person" as defined in the Act
receives from the Fund an annual fee of $4,000 and an attendance fee of $500 per
meeting. The Chairman of the Board receives an additional 25% of such
compensation.
<PAGE>
NOTE 4--Securities Transactions:
(A) The following summarizes the aggregate amount of purchases and sales of
investment securities and securities sold short, excluding short-term
securities, during the period ended November 30, 1996:
<TABLE>
<CAPTION>
PURCHASES SALES
---------------- ----------------
<S> <C> <C>
Long transactions.......... $3,072,349,650 $3,076,625,341
Short sale transactions.... 259,690,388 259,751,455
---------------- ----------------
Total................... $3,332,040,038 $3,336,376,796
================ ================
</TABLE>
The Fund is engaged in short-selling which obligates the Fund to replace the
security borrowed by purchasing the security at current market value. The Fund
would incur a loss if the price of the security increases between the date of
the short sale and the date on which the Fund replaces the borrowed security.
The Fund would realize a gain if the price of the security declines between
those dates. Until the Fund replaces the borrowed security, the Fund will
maintain daily, a segregated account with a broker and custodian, of cash and/or
U.S. Government securities sufficient to cover the short position. At November
30, 1996, there were no securities sold short outstanding.
(B) At November 30, 1996, accumulated net unrealized appreciation on
investments was $2,446,843, consisting of $2,703,431 gross unrealized
appreciation and $256,588 gross unrealized depreciation.
At November 30, 1996, the cost of investments for Federal income tax purposes
was substantially the same as the cost for financial reporting purposes (see the
Statement of Investments).
<PAGE>
Dreyfus Short-Intermediate Government Fund
- ------------------------------------------------------------------------------
Report of Ernst & Young LLP, Independent Auditors
Shareholders and Board of Trustees
Dreyfus Short-Intermediate Government Fund
We have audited the accompanying statement of assets and liabilities of
Dreyfus Short-Intermediate Government Fund, including the statement of
investments, as of November 30, 1996, and the related statement of operations
for the year then ended, the statement of changes in net assets for each of the
two years in the period then ended, and financial highlights for each of the
years indicated therein. These financial statements and financial highlights are
the responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included verification by examination of securities
held by the custodian as of November 30, 1996 and confirmation of securities not
held by the custodian by correspondence with others. 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 Short-Intermediate Government Fund at November 30, 1996, the results of
its operations for the year then ended, the changes in its net assets for each
of the two years in the period then ended, and the financial highlights for each
of the indicated years, in conformity with generally accepted accounting
principles.
Ernst & Young LLP
New York, New York
January 2, 1997
<PAGE>
Dreyfus Short-Intermediate Government Fund
- ------------------------------------------------------------------------------
Important Tax Information (Unaudited)
For State individual income tax purposes, the Fund hereby designates 84.08%
of the ordinary income dividends paid during its fiscal year ended November 30,
1996 as attributable to interest income from direct obligations of the United
States. Such dividends are currently exempt from taxation for individual income
tax purposes in most states, including New York, California and the District of
Columbia.
<PAGE>
Dreyfus Short-Intermediate
Government Fund
200 Park Avenue
New York, NY 10166
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Custodian
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Printed in U.S.A. 542AR9611
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
IN DREYFUS SHORT-INTERMEDIATE GOVERNMENT FUND
AND THE MERRILL LYNCH GOVERNMENTS, U.S. TREASURY,
SHORT-TERM (1-2.99 YEARS) INDEX
EXHIBIT A:
MERRILL LYNCH DREYFUS
GOVERNMENTS, U.S. SHORT-INTERMEDIATE
PERIOD TREASURY, SHORT-TERM GOVERNMENT
(1-2.99 YEARS) INDEX* FUND
4/06/87 10,000 10,000
11/30/87 10,359 10,120
11/30/88 11,047 10,768
11/30/89 12,228 11,951
11/30/90 13,310 13,051
11/30/91 14,819 14,650
11/30/92 15,842 15,830
11/30/93 16,796 17,142
11/30/94 16,915 17,044
11/30/95 18,675 19,075
11/30/96 19,755 20,044
*Source: Merrill Lynch, Pierce, Fenner and Smith Inc.
