<PAGE>
Dreyfus
Short-Intermediate
Government
Fund
Annual Report
November 30, 1997
<PAGE>
Dreyfus Short-Intermediate Government Fund
- ------------------------------------------------------------------------------
Letter to Shareholders
Dear Shareholder:
We are pleased to provide you with this report on the Dreyfus
Short-Intermediate Government Fund. For the 12-month reporting period ended
November 30, 1997, your Fund produced a total return of 4.93% per share.*
Income dividends paid from net investment income during the period amounted to
approximately $0.661, representing a distribution rate per share of 6.13%.**
The Economy
Virtually ideal economic conditions have prevailed over the reporting
period. Robust growth in the first half of 1997, the lowest unemployment rate
since the early 1970s and measures of inflation at 30-year lows combined to
spur consumer confidence to record high ground. Businesses were similarly
optimistic: government reports show that business investment in new equipment
during the reporting period was at its fastest pace in 14 years. The question
is, given the problems emanating from Asia, how long this economic nirvana can
continue.
Federal Reserve Board (the "Fed") Chairman Alan Greenspan has talked
publicly about our tight labor markets and the chance that they could cause
inflation. This expectation should wane as world events put it to rest.
Conventional thinking views the low unemployment rate as a sign that employers
will eventually raise wages to attract workers, resulting in higher prices as
increased labor costs are passed along to consumers. So far, there has been a
remarkable absence of wage and price pressures. The gradual squeeze on profit
margins generated by cheaper imports could keep these pressures in check for a
long time.
The inflation indicators have also been well behaved and are on their way to
getting better. The Producer Price Index had an unprecedented series of seven
straight monthly declines over 1997. In 1998 this trend could continue: given
what is happening to commodity prices this may be highly likely. The Consumer
Price Index rose at an annual rate of 1.7% for the first eleven months of the
year, compared to a 3.1% rise for the comparable period in 1996. Assuming that
asset prices are likely to decline, this figure could also get better in 1998.
Given what is occurring in Asia, one could ask if the problem won't be
deflation rather than inflation.
Countries in crisis tend to put money into solving problems in ways that
exacerbate the very problems that cause the crisis. In Asia, the first problem
appears to be overcapacity. The response has been to ease monetary policy to
stimulate growth, but the result may only be to stimulate more capacity. Japan
is a perfect example of this strategy. Japanese short-term interest rates are
down to less than half a percentage point. The Japanese economy looks no better
now than it did six months ago. In fact, since a large percentage of Japanese
exports go to other Asian countries embroiled in problems, the prognosis looks
dire. It is not unrealistic to assume that world growth, pricing power, and
inflation will all turn down.
Market Environment
The most underallocated sector in fixed income is the Treasury market.
Recently, domestic bond market participants have favored spread products over
Treasuries, but our belief is that people are likely to shift their credit risk
exposure back to Treasuries. Some of the positive technicals we have mentioned
before for Treasuries continue to remain, and grow. To list a few: a lower
domestic budget deficit, reduced supply, higher yields than most other
developed countries, a strong dollar, and the Asian crisis.
The Asian factor should not be underestimated. Asia represents about
one-third of the world's GDP. Their share of world GDP is now severely
hampered. The Asian countries will need to export their goods rapidly, putting
extreme downward pressure on both commodity and asset prices. For example, U.S.
Treasury securities already yield approximately 4.1% more than their Japanese
counterparts with comparable maturities. Realizing that the Fed will not want
to tighten in a declining asset price environment, the market will start, in
our opinion to price in an ease.
<PAGE>
Portfolio Overview
We continue to be optimistic on the direction of interest rates here in the
U.S. We also believe the Fed is likely to become less restrictive in 1998. Our
portfolio structure reflects our optimism. We intend to continue to keep the
Fund close to the upper end of its effective duration band of three years. We
have been near the top end of the band since the end of the summer, when we
became very bullish on the rate outlook in the U.S. Of course, we will adjust
the Fund's portfolio as we believe changes in market conditions warrant.
Our security selection falls into three categories: Treasuries, mortgages,
and government agencies. With the Treasury component we were focused on a
flatter yield curve for most of the year, but we are currently focusing on a
steeper yield curve. The mortgage component was 17.3% at the end of the
reporting period. In the government agencies market we have found premium
callable securities to be quite attractive. Callable agency securities trade at
a greater discount than noncallable agencies. The premium callable pays 24
basis points above a 2-year Treasury note and because of the coupon it will be
called. (The issue we own has an 8.5% coupon.) This has already worked out
well, as other investors have started to recognize the value.
We want to thank you for choosing Dreyfus as your investment provider, and
for choosing the Dreyfus Short-Intermediate Government Fund. We want to assure
you that we will continue to strive to provide you an attractive investment
vehicle.
Very truly yours,
/s/ Gerald E. Thunelius
Gerald E. Thunelius
Portfolio Manager
December 15, 1997 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, divided by the net asset value per
share at the end of the period.
<PAGE>
Dreyfus Short-Intermediate Government Fund November 30, 1997
- ------------------------------------------------------------------------------
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:
Dollars
[CHART]
$20,784
Dreyfus
Short-Intermediate Government Fund
$20,202
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 Ten Years Ended
November 30, 1997 November 30, 1997 November 30, 1997
___________________ ____________________ ___________________
<S> <C> <C> <C>
4.93% 5.85% 7.59%
<FN>
- ----------------
Past performance is not predictive of future performance.
The above graph compares a $10,000 investment made in Dreyfus
Short-Intermediate Government Fund on 11/30/87 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.
</TABLE>
<PAGE>
Dreyfus Short-Intermediate Government Fund
- ------------------------------------------------------------------------------
Statement of Investments November 30, 1997
<TABLE>
<CAPTION>
Principal
Bonds and Notes--97.9% Amount Value
- ------------------------------------------------------------------------------- ----------- -------------
<S> <C> <C>
U.S. Government Agency--15.4%
Federal Home Loan Banks,
Notes, 5.975%, 11/6/2002..................................................... $12,500,000 $ 12,423,911
Federal National Mortgage Association,
Notes, 8-1/2%, 2/1/2005....................................................... 59,690,000 62,559,895
-------------
74,983,806
-------------
U.S. Government Agency/Mortgage-Backed--17.3%
Federal Home Loan Mortgage, REMIC,
Multiclass Mortgage Participation Ctfs.,
Ser. 1978, Cl. PH, 7%, 1/15/2024
(Interest only obligation)................................................... 5,878,907 (a) 1,170,270
Federal National Mortgage Association:
9%, 7/1/2024................................................................. 9,069,351 9,707,018
REMIC Trust, Gtd. Pass-Through Ctfs.:
Ser. 1997-56, Cl. PM, 7%, 8/29/2027
(Interest only obligation)............................................... 3,000,000 (a) 975,000
Ser. 1992-103, Cl. G, 7-1/2%, 8/25/2018..................................... 10,834,057 10,896,692
Government National Mortgage Association II,
Adjustable Rate Mortgage:
5-1/2%, 12/20/2027 - 1/20/2028.............................................. 37,000,000 (b) 36,869,190
6%, 1/20/2028.............................................................. 25,000,000 (b) 25,125,000
-------------
84,743,170
-------------
U.S. Treasury Bonds--14.0%
11-3/4%, 2/15/2001............................................................ 7,000,000 8,222,812
13-1/8%, 5/15/2001............................................................ 18,600,000 22,822,782
13-3/8%, 8/15/2001............................................................ 9,000,000 11,245,782
15-3/4%, 11/15/2001........................................................... 10,000,000 13,464,063
11-5/8%, 11/15/2002........................................................... 10,000,000 12,437,500
-------------
68,192,939
-------------
U.S. Treasury Notes--51.2%
5-3/4%, 9/30/1999............................................................. 54,500,000 54,474,456
8-3/4%, 8/15/2000............................................................. 8,700,000 9,333,469
5-3/4%, 11/15/2000............................................................ 40,000,000 39,959,376
8-1/2%, 11/15/2000............................................................ 50,000,000 53,609,375
6-1/4%, 4/30/2001............................................................. 30,000,000 30,370,314
8%, 5/15/2001................................................................ 20,000,000 21,331,250
6-5/8%, 7/31/2001............................................................. 40,000,000 41,006,252
-------------
250,084,492
-------------
TOTAL BONDS AND NOTES
(cost $478,644,597)........................................................ $478,004,407
=============
</TABLE>
<PAGE>
Dreyfus Short-Intermediate Government Fund
- ------------------------------------------------------------------------------
Statement of Investments (continued) November 30, 1997
<TABLE>
<CAPTION>
Principal
Short-Term Investments--11.2% Amount Value
- ------------------------------------------------------------------------------- ----------- -------------
<S> <C> <C>
Repurchase Agreements;
SBCWarburg Dillon Read Inc., 5-5/8%,
dated 11/28/1997, due 12/1/1997 in the amount of
$54,686,622 (fully collateralized by $56,063,000
U.S. Treasury Bills, 1/2/1998, value $55,754,654)
(cost $54,661,000)........................................................... $54,661,000 $ 54,661,000
============
TOTAL INVESTMENTS (cost $533,305,597).......................................... 109.1% $532,665,407
====== ============
LIABILITIES, LESS CASH AND RECEIVABLES......................................... (9.1%) $(44,493,207)
====== ============
NET ASSETS..................................................................... 100.0% $488,172,200
====== ============
</TABLE>
Notes to Statement of Investments:
- ------------------------------------------------------------------------------
(a) Notional face amount shown.
(b) Purchased on a forward commitment basis.
See notes to financial statements.
<PAGE>
Dreyfus Short-Intermediate Government Fund
- ------------------------------------------------------------------------------
Statement of Assets and Liabilities November 30, 1997
<TABLE>
<CAPTION>
Cost Value
------------- -------------
<S> <C> <C> <C>
ASSETS: Investments in securities--See Statement of Investments
(including Repurchase Agreements of
$54,661,000)--Note 1(b)........................ $533,305,597 $532,665,407
Cash............................................. 420,167
Receivable for investment securities sold........ 128,048,033
Interest receivable.............................. 5,178,660
Receivable for shares of Beneficial Interest subscribed 20,943
Prepaid expenses................................. 122,129
------------
666,455,339
------------
LIABILITIES: Due to The Dreyfus Corporation and affiliates.... 180,867
Payable for investment securities purchased...... 177,257,478
Payable for shares of Beneficial Interest redeemed 744,530
Accrued expenses................................. 100,264
------------
178,283,139
------------
NET ASSETS..................................................................... $488,172,200
============
REPRESENTED BY: Paid-in capital.................................. $525,168,936
Accumulated undistributed investment income--net. 196,622
Accumulated net realized gain (loss) on investments (36,553,168)
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4(b)...................... (640,190)
------------
NET ASSETS..................................................................... $488,172,200
============
SHARES OUTSTANDING
(unlimited number of $.001 par value shares of Beneficial Interest authorized). 45,134,384
NET ASSET VALUE, offering and redemption price per share....................... $10.82
======
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Short-Intermediate Government Fund
- ------------------------------------------------------------------------------
Statement of Operations Year Ended November 30, 1997
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME
INCOME Interest Income............................ $36,126,548
EXPENSES: Management fee--Note 3(a).................. $ 2,627,588
Shareholder servicing costs--Note 3(b)..... 1,036,922
Registration fees.......................... 74,574
Trustees' fees and expenses--Note 3(c)..... 56,712
Prospectus and shareholders' reports....... 53,934
Professional fees.......................... 52,274
Custodian fees--Note 3(b).................. 40,802
Loan commitment fees--Note 2............... 5,620
Miscellaneous.............................. 10,299
-----------
Total Expenses........................ 3,958,725
Less--reduction in management fee due to
undertaking--Note 3(a)................... (58,909)
-----------
Net Expenses.......................... 3,899,816
-----------
INVESTMENT INCOME--NET................................................... 32,226,732
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--Note 4:
Net realized gain (loss) on investments:
Long transactions........................ $(4,542,376)
Short sale transactions.................. 269,395
-----------
Net Realized Gain (Loss).............. (4,272,981)
Net unrealized appreciation (depreciation) on
investments.............................. (3,087,033)
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS................... (7,360,014)
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS..................... $24,866,718
===========
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Short-Intermediate Government Fund
- ------------------------------------------------------------------------------
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended Year Ended
November 30, 1997 November 30, 1996
------------------ ------------------
<S> <C> <C>
OPERATIONS:
Investment income--net................................................. $ 32,226,732 $ 34,130,666
Net realized gain (loss) on investments................................ (4,272,981) (1,219,661)
Net unrealized appreciation (depreciation) on investments.............. (3,087,033) (4,555,506)
------------ ------------
Net Increase (Decrease) in Net Assets Resulting from Operations..... 24,866,718 28,355,499
------------ ------------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net................................................. (32,117,940) (34,042,836)
------------ ------------
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold.......................................... 257,592,878 220,320,537
Dividends reinvested................................................... 25,557,245 27,170,603
Cost of shares redeemed................................................ (357,046,165) (246,164,984)
------------ ------------
Increase (Decrease) in Net Assets from Beneficial Interest Transactions (73,896,042) 1,326,156
------------ ------------
Total Increase (Decrease) in Net Assets.......................... (81,147,264) (4,361,181)
NET ASSETS:
Beginning of Period.................................................... 569,319,464 573,680,645
------------ ------------
End of Period.......................................................... $488,172,200 $569,319,464
============ ============
Undistributed investment income--net...................................... $ 196,622 $ 87,830
------------ ------------
Shares Shares
------------ ------------
CAPITAL SHARE TRANSACTIONS:
Shares sold............................................................ 23,825,894 20,156,773
Shares issued for dividends reinvested................................. 2,366,805 2,490,316
Shares redeemed........................................................ (33,041,278) (22,544,889)
------------ ------------
Net Increase (Decrease) in Shares Outstanding....................... (6,848,579) 102,200
============ =============
</TABLE>
See notes to financial statements.
<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.
<TABLE>
<CAPTION>
Year Ended November 30,
-----------------------------------------------------
PER SHARE DATA: 1997 1996 1995 1994 1993
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period.............. $10.95 $11.06 $10.57 $11.45 $11.58
------ ------ ------ ------ ------
Investment Operations:
Investment income--net............................ .66 .65 .73 .76 .78
Net realized and unrealized gain (loss) on investments (.13) (.11) .49 (.82) .14
------ ------ ------ ------ ------
Total from Investment Operations.................. .53 .54 1.22 (.06) .92
------ ------ ------ ------ ------
Distributions:
Dividends from investment income--net............. (.66) (.65) (.73) (.76) (.78)
Dividends from net realized gain on investments... -- -- -- (.06) (.27)
------ ------ ------ ------ ------
Total Distributions............................... (.66) (.65) (.73) (.82) (1.05)
------ ------ ------ ------ ------
Net asset value, end of period.................... $10.82 $10.95 $11.06 $10.57 $11.45
====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN.............................. 4.93% 5.08% 11.91% (.57%) 8.29%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets........... .74% .74% .66% .47% .40%
Ratio of net investment income to average net assets 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........................... 818.39% 594.44% 387.60% 695.60% 317.00%
Net Assets, end of period (000's Omitted)......... $488,172 $569,319 $573,681 $496,513 $551,543
</TABLE>
See notes to financial statements.
<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. 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 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, if any, 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.
<PAGE>
Dreyfus Short-Intermediate Government Fund
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (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 November 30, 1997, 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 1-1/2% 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 to the extent required by state
law. The Manager had 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. The
reduction in management fee, pursuant to the undertaking, amounted to $58,909
during the period ended November 30, 1997.
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) 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 November 30, 1997, the Fund was charged $622,168 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 November 30, 1997, the Fund was charged $213,094 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 November 30, 1997, the Fund was
charged $40,802 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>
Dreyfus Short-Intermediate Government Fund
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
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, 1997:
Purchases Sales
-------------- --------------
Long transactions.............. $4,433,628,409 $4,510,448,270
Short sale transactions........ 657,657,228 657,926,623
-------------- --------------
Total....................... $5,091,285,637 $5,168,374,893
============== ==============
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, 1997, there were no securities sold short outstanding.
(b) At November 30, 1997, accumulated net unrealized depreciation on
investments was $640,190, consisting of $359,732 gross unrealized appreciation
and $999,922 gross unrealized depreciation.
At November 30, 1997, 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, 1997, 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 financial highlights. Our procedures included verification by
examination of securities held by the custodian as of November 30, 1997 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, 1997, 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 12, 1998
<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
MellonBank, N.A.
One MellonBank Center
Pittsburgh, PA 15258
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Printed in U.S.A. 542AR9711
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
GOVERNMENTS, DREYFUS
U.S. TREASURY, SHORT-
SHORT-TERM INTERMEDIATE
PERIOD (1-2.99 YEARS) GOVERNMENT
INDEX* FUND
11/30/87 10,000 10,000
11/30/88 10,665 10,640
11/30/89 11,805 11,810
11/30/90 12,848 12,897
11/30/91 14,305 14,477
11/30/92 15,293 15,642
11/30/93 16,214 16,939
11/30/94 16,329 16,842
11/30/95 18,028 18,849
11/30/96 19,071 19,807
11/30/97 20,202 20,784
*Source: Merrill Lynch, Pierce, Fenner and Smith Inc.
