[dreyfus lion "d" logo] (reg.tm)
[dreyfus logo] (reg.tm)
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. 542SA985
Short-Intermediate
Government Fund
Semi-Annual
Report
May 31, 1998
DREYFUS SHORT-INTERMEDIATE GOVERNMENT FUND
- -----------------------------------------------------------------------------
LETTER TO SHAREHOLDERS
Dear Shareholder:
We are pleased to report the performance for Dreyfus Short-Intermediate
Government Fund. For the six-month reporting period ended May 31, 1998, your
Fund produced a total return, including share price changes and dividend
income generated, of 3.33%.* Income dividends paid from net investment income
during the period amounted to approximately $0.376, representing an annualized
distribution rate per share of 6.99%.**
THE ECONOMY
In recent months, economic developments overseas began to assert a more
vigorous influence on the U.S. economy. The first quarter of the 1998 calendar
year saw the U.S. trade deficit rising to a new high. Exports contracted due to
reduced foreign demand for U.S. products, which resulted in a marked rise in
business inventories; that could create a drag on future production as
stockpiles are depleted. At the same time, imports surged. Spurred by a strong
U.S. dollar and robust consumer spending, the increase in cheaper imports
helped dampen domestic inflation since American producers had to restrain their
prices in order to remain competitive. The suppressive effect of the trade
deficit on both domestic production and prices has been fortuitously in concert
with the direction of Federal Reserve Board (the Fed) monetary policy.
The financial difficulties that began in Asia last year have now spread to
Latin America and beyond. That tenuous situation and the continued economic
instability in Russia have contributed to the Fed's status quo policy in
monetary matters since the Fed is concerned that any increase in short-term
interest rates would further unsettle world markets. The last increase in
short-term rates came in March 1997 when the Federal Open Market Committee
(the policy-making arm of the Fed) raised the target rate for Federal Funds by
one quarter of a percent to 5.5%. (The Federal Funds rate is the rate of
interest that banks charge each other for the use of Federal Funds.)
Consumers, spurred by real wage gains and a healthy job market, continued to
spend freely in the retail sector during the reporting period, giving retailers
some of their best months in a decade. The buoyant stock market, low
unemployment rate and absence of inflation encouraged consumers to spend. The
market for so-called "big ticket" items has been strong: the housing market was
solid throughout the reporting period and continues to be, while car and truck
sales are at ten-year highs.
Unemployment (4.3% at the end of the reporting period) is at a 28-year low.
Inflation, at both consumer and producer levels, has been dormant. Workers are
benefiting from having their wages rise faster than inflation. The most
recently reported statistics on hourly wages (through April) revealed that
over the previous 12 months, wages rose 4.4% while the Consumer Price Index
increased but 1.4%. The tight labor market and upward pressure on wages,
because of their potential for rekindling inflation, have been major concerns
of the Fed. The wage rate increase of 4.4% (above), compared to 3.7% and 3.1%
in the two previous years, illustrates the upward creep of wages.
Over the past few years, gains in worker productivity (output per hour of
work) have offset any incipient price pressures from rising wages. Enhanced by
the widespread use of technology, productivity rose 1.7% last year and 1.9% in
1996, compared to an average increase of only 1% for the period 1974-1995.
These gains are a key factor in the continuation of our high-growth, low-
inflation economy. However, productivity gains slowed to 1.1% during the
first quarter, the slowest pace in over a year. So far, our economy has been in
a charmed circle where even international financial crises have proven
supportive of our economic policies. As always, we remain alert for warning
signs that the delicate balance that now prevails in our economy might be
disturbed.
MARKET ENVIRONMENT
The bond market has been very strong from a fundamental point of view.
Everything from reduced supply of U.S. Treasury debt, to the Asian crisis, to
falling commodity prices have worked in the bond market's favor.
At the time of this letter, it is very hard to find any sentiment regarding
the bond market that is not bullish. There are several popular themes which
have produced this optimism in the bond market. The first is that Japan will
never put forth a credible financial package, which is a key element to ending
the Asian crisis. Second, OPEC members will never actually adhere to any agreed
upon cutbacks in oil production, which will keep oil prices from rising. Also,
yields remain too high on a global basis. On the domestic front, inflation is
viewed as nonexistent, and most forecasters are signalling it might never
reappear. The manufacturing sector of the U.S. economy has been signaling much
slower growth ahead. Investors are extrapolating from this signal that the
rest of the economy will be slowing shortly.
The 30-year Treasury bond has been trading in a range of 5.5% to 5.85%.
Currently, the yield is in the lower end of that range. The above-mentioned
themes are some of the major causes that have caused bonds to remain at the
lower end of the range. In recognition that the above themes are priced in, we
have begun to question whether the bond market has become too euphoric
When viewing the above bond market themes, you can see that they are somewhat
intertwined. If one of them were to change, the others would be impacted as
well. The Japanese fiscal reform or policy change could have the biggest
impact on the direction of the others. While it will take years for recoveries
to be in place for Asia, the direction is important. If the fiscal package
from Japan is credible and sizable, the financial markets will begin to assume
that the worst is behind. This should in turn lift commodity prices as people
anticipate a greater need in the future. The "zero inflation" scenario could be
hindered by any rise in commodity prices. In fact, core inflation in the U.S.
has been moving up. If it were not for the Asian crisis' impacting commodity
prices, fewer people would be proclaiming inflation is dead.
While only time will tell, the external pressure being exerted on Japan to
reform is great by any historical standards. It is our opinion that Japan will
reform sooner than the markets are anticipating, but we are less enthusiastic
about the prediction that rates will fall precipitously further without more
defining news on the bond market themes discussed above.
PORTFOLIO OVERVIEW
In light of our apprehension for a continued bond market rally, we believe
that a neutral stance in duration is warranted. At this time, going forward, we
anticipate that the effective target duration will be in the area of 2.5
years. Over the last six months, the effective duration of the Fund has been
at three years, which has worked out well as rates have declined over that
time.
During the reporting period, we positioned the Fund in an effort to take
advantage of a flatter yield curve, which worked well. However, we believe
that positioning the Fund for a steepening yield curve might be warranted in
the future. The reasons for this are twofold. First, if inflation picks up,
even minimally, we expect 30-year Treasury bonds to underperform shorter
maturity Treasuries (inflation will eat away at longer maturities). Or, if
the economy really does slow down, we believe that the Fed will remove their
tightening bias which could help shorter maturities to outperform
longer-term Treasuries. Second, in economic slowdowns banks could tend to
invest capital because loan demand slows. This could mean increased interest
in purchasing shorter maturity securities.
We purchased GNMA ARMs 5.5% for the Fund. Our view was that because of
decreased supply, these securities could be in greater demand. The demand
could come from mortgage investors who are looking for less prepayment
exposure (ARMs tend not to prepay because of the lower coupon and incentives).
We do not anticipate an increase in the supply of GNMA ARMs until October. The
Fund will continue to hold these securities until we get closer in time to the
anticipated new supply, at which point we will review our strategy.
The Fund is also investing in the Treasury Inflation Protected Securities
market (TIPS). We believe these securities currently represent relative value
versus regular Treasury securities. Currently, the 5-year Treasury note is
yielding 5.80% and a conservative inflation assumption is 2%. The 5.80% yield
minus 2% inflation leaves a real return of 3.8%. Compare this to 5-year TIPS
which are yielding 3.93%, which is 13 basis points cheaper.
We appreciate your business and look forward to continuing to help serve your
financial needs.
Very truly yours,
[Gerald E. Thunelius signature logo]
Gerald E. Thunelius
Portfolio Manager
June 18, 1998
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.
<TABLE>
<CAPTION>
DREYFUS SHORT-INTERMEDIATE GOVERNMENT FUND
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STATEMENT OF INVESTMENTS MAY 31, 1998 (UNAUDITED)
Principal
Bonds and Notes--88.0% Amount Value
- --------------------------------------------------
_____________ ___________
<S> <C> <C>
U.S. Government Agency--21.1%
Federal National Mortgage Association:
Medium-Term Notes,
6.10%, 5/21/2003 $ 15,075,000 $ 15,029,775
Notes,
8.50%, 2/1/2005 80,230,000 83,743,272
_____________
98,773,047
_____________
U.S. Government Agency/Mortgage-Backed--14.9%
Federal Home Loan Mortgage, REMIC,
Multiclass Mortgage Participation Ctfs.,
Ser. 1978, Cl. PH, 7%, 1/15/2024
(Interest Only Obligation) 5,878,907 (a) 1,019,285
Federal National Mortgage Association:
9%, 7/1/2024 7,383,810 7,886,796
REMIC Trust, Gtd. Pass-Through Ctfs.:
Ser. 1997-56, Cl. PM, 7%, 6/18/2026
(Interest Only Obligation) 3,000,000 (a) 858,270
Ser. 1992-103, Cl. G, 7.50%, 8/25/2018 4,496,933 4,515,326
Government National Mortgage Association ll,
Adjustable Rate Mortgage,
5%, 4/20/2028 55,902,197 55,692,564
_____________
69,972,241
_____________
U. S. Treasury Bonds--33.1%
11.75%, 2/15/2001 7,000,000 8,094,170
13.125%, 5/15/2001 18,600,000 22,430,298
13.375%, 8/15/2001 9,000,000 11,040,300
15.75%, 11/15/2001 16,400,000 21,611,592
11.875%, 11/15/2003 30,000,000 38,677,500
11.625%, 11/15/2004 18,000,000 23,772,060
11.75%, 2/15/2010 5,000,000 6,655,400
6.125%, 11/15/2027 22,000,000 23,002,760
_____________
155,284,080
_____________
U.S. Treasury Inflation Protection Securities--2.8%
3.635%, 7/15/2002 10,000,000 (b) 10,007,433
3.625%, 4/15/2028 3,000,000 (b) 2,992,067
_____________
12,999,500
_____________
U.S. Treasury Notes--16.1%
8.50%, 11/15/2000 50,000,000 53,364,000
5.625%, 5/15/2001 1,000,000 1,002,520
8%, 5/15/2001 20,000,000 21,312,400
_____________
75,678,920
_____________
TOTAL BONDS AND NOTES
(cost $414,925,186) $412,707,788
=============
DREYFUS SHORT-INTERMEDIATE GOVERNMENT FUND
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) MAY 31, 1998 (UNAUDITED)
Principal
Short-Term Investments--11.3% Amount Value
- -------------------------------------------------------
_____________ ____________
Repurchase Agreements;
Barclays De Zoette, 5.50%,
dated 5/29/1998, due 6/1/1998 in the amount of
$53,122,337 (fully collateralized by $53,015,000
U.S. Treasury Notes, 5.875%, 2/28/1999,
value $53,900,351)
(cost $53,098,000) $ 53,098,000 $ 53,098,000
=============
TOTAL INVESTMENTS
(cost $468,023,186) 99.3% $465,805,788
======= =============
CASH AND RECEIVABLES (NET) .7% $ 3,318,728
======= =============
NET ASSETS 100.0% $469,124,516
======= =============
Notes to Statement of Investments:
- -----------------------------------------------------------------------------
(a) Notional face amount shown.
(b)Interest rate changes based on principal adjustments linked to changes in
the Consumer Price Index.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS SHORT-INTERMEDIATE GOVERNMENT FUND
- -----------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES MAY 31, 1998 (UNAUDITED)
Cost Value
_____________ _____________
<S> <C> <C>
ASSETS: Investments in securities--See Statement of Investments
(including Repurchase Agreements of
$53,098,000)--Note 1(b) $468,023,186 $465,805,788
Cash 460,439
Interest receivable 4,432,691
Receivable for shares of Beneficial Interest subscribed 629,363
Prepaid expenses and other assets 107,395
_____________
471,435,676
_____________
LIABILITIES: Due to The Dreyfus Corporation and affiliates 256,605
Payable for shares of Beneficial Interest redeemed 1,943,908
Accrued expenses 110,647
____________
2,311,160
_____________
NET ASSETS $469,124,516
=============
REPRESENTED BY: Paid-in capital $507,041,392
Accumulated undistributed investment income--net 264,380
Accumulated net realized gain (loss) on investments (35,963,858)
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4(b) (2,217,398)
_____________
NET ASSETS $469,124,516
=============
SHARES OUTSTANDING
(UNLIMITED NUMBER OF $.001 PAR VALUE SHARES OF BENEFICIAL INTEREST AUTHORIZED) 43,459,259
NET ASSET VALUE, offering and redemption price per share $10.79
========
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS SHORT-INTERMEDIATE GOVERNMENT FUND
- -----------------------------------------------------------------------------
STATEMENT OF OPERATIONS SIX MONTHS ENDED MAY 31, 1998 (UNAUDITED)
INVESTMENT INCOME
<S> <C> <C> <C>
INCOME Interest Income $18,232,955
EXPENSES: Management fee--Note 3(a) $ 1,185,856
Shareholder servicing costs--Note 3(b) 310,527
Custodian fees--Note 3(b) 36,747
Registration fees 32,493
Prospectus and shareholders' reports 29,820
Trustees' fees and expenses--Note 3(c) 26,097
Professional fees 14,581
Loan commitment fees--Note 2 3,564
Miscellaneous 8,762
____________
Total Expenses 1,648,447
____________
INVESTMENT INCOME--NET 16,584,508
____________
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--Note 4:
Net realized gain (loss) on investments:
Long transactions $ 1,876,302
Short sale transactions (1,286,992)
____________
Net Realized Gain (Loss) 589,310
Net unrealized appreciation (depreciation) on investments (1,577,208)
____________
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (987,898)
____________
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $15,596,610
============
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS SHORT-INTERMEDIATE GOVERNMENT FUND
- -----------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
May 31, 1998 Year Ended
(Unaudited) November 30, 1997
__________________ __________________
<S> <C> <C>
OPERATIONS:
Investment income--net $ 16,584,508 $ 32,226,732
Net realized gain (loss) on investments 589,310 (4,272,981)
Net unrealized appreciation (depreciation) on investments (1,577,208) (3,087,033)
_____________ _____________
Net Increase (Decrease) in Net Assets Resulting from Operations 15,596,610 24,866,718
_____________ _____________
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net (16,516,750) (32,117,940)
_____________ _____________
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold 79,745,940 257,592,878
Dividends reinvested 13,293,019 25,557,245
Cost of shares redeemed (111,166,503) (357,046,165)
_____________ _____________
Increase (Decrease) in Net Assets from Beneficial Interest Transactions (18,127,544) (73,896,042)
_____________ _____________
Total Increase (Decrease) in Net Assets (19,047,684) (81,147,264)
NET ASSETS:
Beginning of Period 488,172,200 569,319,464
_____________ _____________
End of Period $469,124,516 $488,172,200
============= =============
UNDISTRIBUTED INVESTMENT INCOME--NET $ 264,380 $ 196,622
_____________ _____________
Shares Shares
_____________ _____________
CAPITAL SHARE TRANSACTIONS:
Shares sold 7,356,610 23,825,894
Shares issued for dividends reinvested 1,228,285 2,366,805
Shares redeemed (10,260,020) (33,041,278)
_____________ _____________
Net Increase (Decrease) in Shares Outstanding (1,675,125) (6,848,579)
============== =============
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
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.
Six Months Ended
May 31, 1998 Year Ended November 30,
___________________________________________________
PER SHARE DATA: (Unaudited) 1997 1996 1995 1994 1993
__________ ______ ______ ______ ______ ______
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $10.82 $10.95 $11.06 $10.57 $11.45 $11.58
______ ______ ______ ______ ______ ______
Investment Operations:
Investment income--net .38 .66 .65 .73 .76 .78
Net realized and unrealized gain (loss)
on investments (.03) (.13) (.11) .49 (.82) .14
______ ______ ______ ______ ______ ______
Total from Investment Operations .35 .53 .54 1.22 (.06) .92
______ ______ ______ ______ ______ ______
Distributions:
Dividends from investment income--net (.38) (.66) (.65) (.73) (.76) (.78)
Dividends from net realized gain on investments -- -- -- -- (.06) (.27)
______ ______ ______ ______ ______ ______
Total Distributions (.38) (.66) (.65) (.73) (.82) (1.05)
______ ______ ______ ______ ______ ______
Net asset value, end of period $10.79 $10.82 $10.95 $11.06 $10.57 $11.45
====== ====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN 6.68%(1) 4.93% 5.08% 11.91% (.57%) 8.29%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets .70%(1) .74% .74% .66% .47% .40%
Ratio of net investment income
to average net assets 6.99%(1) 6.13% 5.99% 6.73% 6.91% 6.75%
Decrease reflected in above expense ratios
due to undertakings by the Manager -- .01% -- .09% .30% .35%
Portfolio Turnover Rate 457.60%(2) 818.39% 594.44% 387.60% 695.60% 317.00%
Net Assets, end of period (000's Omitted) $469,125 $488,172 $569,319 $573,681 $496,513 $551,543
- -----------------------------
(1) Annualized.
(2) Not annualized
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
DREYFUS SHORT-INTERMEDIATE GOVERNMENT FUND
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
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. is 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: Investments in securities (excluding short-term
investments other than U.S. Treasury Bills) 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. Short-term investments, excluding U.S. Treasury
Bills, 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. Under the terms of the custodian agreement,
the Fund receives net earnings credits based on available cash balances left on
deposit.
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 Revenue Code, and to make distributions of taxable income
sufficient to relieve it from substantially all Federal income and excise taxes
DREYFUS SHORT-INTERMEDIATE GOVERNMENT FUND
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
The Fund has an unused capital loss carryover of approximately $36,573,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to November 30, 1997. If not
applied, $26,610,000 of the carryover expires in fiscal 2002, $4,470,000
expires in fiscal 2003, $1,220,000 expires in fiscal 2004 and $4,273,000
expires in fiscal 2005.
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 the prevailing
market rates in effect at the time of borrowings. During the period ended May
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 ("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, commitment fees and extraordinary
expenses, exceed 11-2% of the value of the Fund's average daily net assets, the
Fund may deduct from payments to be made to the Manager, or the Manager will
bear the amount of such excess expense. No expense reimbursement was
required for the period ended May 31, 1998.
(b) Under the 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 May 31, 1998, the Fund was charged $121,791 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 May 31, 1998, the Fund was charged $103,469 pursuant to the transfer
agency agreement.
The Fund compensates Mellon under a custody agreement to provide custodial
services for the Fund. During the period ended May 31, 1998, the Fund was
charged $36,747 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.
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 May 31, 1998:
<TABLE>
<CAPTION>
Purchases Sales
________________ ________________
<S> <C> <C>
Long transactions ..................................................... $2,200,017,827 $2,265,621,737
Short sale transactions .............................................. 354,533,984 353,246,992
________________ ________________
Total ............................................................... $2,554,551,811 $2,618,868,729
================ ================
</TABLE>
DREYFUS SHORT-INTERMEDIATE GOVERNMENT FUND
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
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
May 31, 1998, there were no securities sold short outstanding.
(b) At May 31, 1998, accumulated net unrealized depreciation on investments
was $2,217,398 consisting of $446,739 gross unrealized appreciation and
$2,664,137 gross unrealized depreciation.
At May 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).
