Dreyfus Premier State Municipal Bond Fund, Maryland Series
Letter to Shareholders
Dear Shareholder:
We are pleased to report the performance for Dreyfus Premier State
Municipal Bond Fund _ Maryland Series for its fiscal year ended April 30,
1997 as shown in the following table:
TOTAL RETURN* DISTRIBUTION RATE**
_______________ ____________________
Class A............ 6.91% 5.01%
Class B............ 6.34% 4.72%
Class C............ 6.16% 4.47%
ECONOMIC REVIEW
The U.S. economy just kept rolling ahead over the reporting period.
Inflation remained subdued. The unemployment rate fell to
its lowest level in 24 years, and a surge in tax revenues meant good news for
the Administration's budget reduction program. Overall, the economic news has
been stellar.
The economy grew at a robust 5.6% annual rate during the first quarter,
the best quarter in nine years. Aided by falling energy prices, and with no
sign of shortages of raw materials, inflation remained in check. On the
consumer level, the Consumer Price Index (CPI) remained below 3%. Excluding
volatile food and energy prices, the CPI is actually trending downward so far
this year, running at an annual rate of 2.5%. Inflation has been further
restrained by the strong dollar which has moderated the price of imports and
eased potential strains on domestic production capacity.
The strong economy has put an increasing number of people to work. This
tightening of the labor market has been a key factor in the implementation of
monetary policy by the Federal Reserve Board's Open Market Committee (FOMC).
The unemployment rate has been less than 5.5% since June 1996, the lowest
sustained rate since the late 1980s. The rate fell to 4.9% in April of this
year, its lowest level in 24 years. So far, neither strong economic growth
nor wage increases have resulted in any price pressure at the consumer level.
Through the first quarter (the latest available data), total employment costs
(including wages and benefits) rose about the same as inflation.
Renewed confidence, spurred by increasing job security and low inflation,
has resulted in a surge in consumer spending. In the first quarter of the
year, spending rose 6.4%, almost double the rate of the previous year's
fourth quarter. The combined six-month performance was the largest increase
in consumer spending over the past ten years. Retail sales have spurted in
the early part of this year as well; first quarter results were sharply
higher than in the last quarter of 1996. Not surprisingly, industrial
production has been building momentum over the reporting period. The latest
report on capacity utilization indicated the highest level in two years. So
far, while the potential exists for production bottlenecks, prices for raw
materials and worker wage demands have remained modest.
Continued economic growth and the resulting rise in tax revenues have
slashed further the Federal budget deficit. Recent estimates by
Administration officials suggest that the deficit for fiscal 1997 is now
about $75 billion, its lowest level in 23 years. Such good news on the
deficit could make it easier to negotiate the Administration's bipartisan
plan to balance the budget by 2002.
While we seem to be enjoying the best of all possible economic worlds,
the potential for future inflation is what concerns the Fed. Such concern
resulted in the March decision by the FOMC, the policy-making arm of the
Federal Reserve, to raise the Federal Funds rate one quarter of a percentage
point to 5.50%. (The Federal Funds rate is the rate of interest banks charge
each other for overnight loans.) The traditional assumption that strong
economic growth and low unemployment will eventually result in rising
inflation still drives the Fed's monetary policy initiatives. Although there
was little reported evidence of incipient inflation, the Fed executed a
preemptive move of moderate monetary restraint in March, perhaps to avoid
being forced to act more harshly later. There is little reason to suspect
that the Fed will soon change this policy, although with the economy seeming
to enjoy strong growth without surging inflation, the FOMC may be reluctant
to raise rates again in the immediate future.
MARKET ENVIRONMENT
Supply of new issue Maryland paper has been rather moderate for the last
year, and will most likely remain so over the next few months. On the other
hand, demand has been rather strong, hence the Fund has been able to slowly
sell overvalued bonds which had achieved our price goals. Even though the new
issue supply was fairly moderate, the Fund has been able to purchase
undervalued Maryland issues in the secondary markets. These bonds were
purchased from national bond funds, which have a tendency to sell unneeded
Maryland issues when they need to raise cash. These types of opportunities
usually occur when the market is fairly weak. The Fund intends to continue to
purchase both primary and secondary issues that represent value when they
become available.
Municipals have gone from being cheap to currently being fairly valued
when compared to the U.S. Government bond markets, because demand for them
improved when the markets declined. This trend was especially true of the
long maturity end, where the bulk of new supply has traditionally been
issued. During normal market conditions, as interest rates drop, municipal
supply will increase as demand subsides. Municipals may then begin to lag the
Treasury market.
PORTFOLIO OVERVIEW
As interest rates have increased, the Fund has been able to purchase
discounts with short calls and high yields. In the current market
environment, these types of issues represent excellent value because they are
out of favor with many institutional fund managers, and can be purchased at a
substantial discount when compared to the rest of the municipal market. The
Fund has been raising cash by selling slight discounts to the retail market,
which offers a high price for this type of bond, and by selling premiums to
other institutional funds that currently favor this type of issue.
Since interest rates have been rising, the Fund has become more
aggressive and is slowly increasing its maturity and duration. By purchasing
discounts, the Fund is now positioned to capitalize in the event of an
improving market. Since the Fund was positioned defensively going into a
rising interest rate environment, it can take advantage of the current market
conditions while minimizing the risk that is associated with longer maturing
bonds. This risk is minimized because the Fund was selling moderate discounts
and longer maturities when interest rates were substantially lower.
Lower rated issues remain very expensive when compared to higher rated
securities. The Fund continues to take advantage of this tight spread
relationship by favoring higher rated securities which are traditionally more
liquid. This strategy will give the Fund more flexibility to react to a weak
market which can experience liquidity constraints.
The Fund's Class A shares had a one year total return on April 30, 1997
of 6.91%, which compares favorably to the Lipper Maryland Municipal Bond
average of 5.71% and to the Lehman Brothers Municipal Bond average of
6.63%.*** Because the Fund positioned itself defensively in late 1996 when
interest rates were low, it was able to take advantage of the declining
market that occurred in 1997 by purchasing issues which were undervalued. The
Fund also implemented this strategy earlier in 1996 when interest rates were
fluctuating.
Included in this report is a series of detailed statements about your
Fund's holdings and its financial condition. We hope they are informative.
Please know that we appreciate greatly your continued confidence in the Fund
and in The Dreyfus Corporation.
Very truly yours,
[Richard J. Moynihan signature logo]
Richard J. Moynihan
Director, Municipal Portfolio Management
The Dreyfus Corporation
May 16, 1997
New York, N.Y.
* Total return includes reinvestment of dividends and any capital gains paid,
and does not take into consideration the maximum initial sales charge in the
case of Class A shares or the contingent deferred sales charge imposed on
redemptions in the case of Class B and Class C shares.
** Distribution rate per share is based upon dividends per share paid
from net investment income during the period, divided by the maximum offering
price at the end of the period in the case of Class A shares, or the net
asset value per share in the case of Class B and Class C shares, adjusted for
capital gain distributions. Some income may be subject to the Federal
Alternative Minimum Tax (AMT) for certain shareholders.
*** The Lehman Brothers Municipal Bond Index is an unmanaged total return
performance benchmark for the long-term, investment-grade, geographically
unrestricted tax exempt bond market. The Index does not take into account
charges, fees and other expenses and is not limited to investments
principally in Maryland municipal obligations. These factors can contribute
to the Index potentially outperforming the Series. The Lipper Maryland
Municipal Bond average reflects the reinvestment of dividends and capital
gains distributions.
Dreyfus Premier State Municipal Bond Fund, Maryland Series April 30, 1997
[Exhibit A]
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN DREYFUS PREMIER STATE
MUNICIPAL BOND FUND,
MARYLAND SERIES CLASS A SHARES AND THE LEHMAN BROTHERS MUNICIPAL BOND INDEX
$22,014
Lehman Brothers
Municipal Bond Index*
Dollars
$18,842
Dreyfus Premier State
Municipal Bond Fund,
Maryland Series
(Class A Shares)
*Source: Lehman Brothers
[Exhibit A]
<TABLE>
<CAPTION>
Average Annual Total Returns
CLASS A SHARES CLASS B SHARES
__________________________________________________________________ __________________________________________________________
% Return Reflecting
% Return Applicable Contingent
Reflecting % Return Deferred Sales
% Return Without Maximum Initial Assuming No Charge Upon
PERIOD ENDED 4/30/97 Sales Charge Sales Charge (4.5%) PERIOD ENDED 4/30/97 Redemption Redemption*
__________ ________________ ____________________ _____________________ ____________ __________________
<S> <C> <C> <C> <C> <C>
1 Year 6.91% 2.08% 1 Year 6.34% 2.34%
5 Year 6.73 5.75 From Inception (1/15/93) 5.65 5.26
From Inception (5/28/87) 7.08 6.59
CLASS C SHARES
__________________________________________________________________
% Return Reflecting
Applicable Contingent
% Return Deferred Sales
Assuming Charge Upon
PERIOD ENDED 4/30/97 No Redemption Redemption**
_________ _______________ ____________________
1 Year 6.16% 5.16%
From Inception (8/15/95) 5.94 5.94
________________________
Past performance is not predictive of future performance.
The above graph compares a $10,000 investment made in Class A shares of
Dreyfus Premier State Municipal Bond Fund, Maryland Series on 5/28/87
(Inception Date) to a $10,000 investment made in the Lehman Brothers
Municipal Bond Index on that date. For comparative purposes, the value of the
Index on 5/31/87 is used as the beginning value on 5/28/87. All dividends and
capital gain distributions are reinvested. Performance for Class B and Class
C shares will vary from the performance of Class A shares shown above due to
differences in charges and expenses.
The Series invests primarily in Maryland municipal securities and its
performance shown in the line graph takes into account the maximum initial
sales charge on Class A shares and all other applicable fees and expenses.
Unlike the Series, the Lehman Brothers Municipal Bond Index is an unmanaged
total return performance benchmark for the long-term, investment-grade,
geographically unrestricted tax exempt bond market, calculated by using
municipal bonds selected to be representative of the municipal market
overall. The Index does not take into account charges, fees and other
expenses and is not limited to investments principally in Maryland municipal
obligations. These factors can contribute to the Index potentially
outperforming the Series. Further information relating to Series
performance, including expense reimbursements, if applicable, is contained in
the Financial Highlights section of the Prospectus and elsewhere in this
report.
* The maximum contingent deferred sales charge for Class B shares is 4% and
is reduced to 0% after six years.
**The maximum contingent deferred sales charge for Class C shares is 1% for
shares redeemed within one year of the date of purchase.
Dreyfus Premier State Municipal Bond Fund, Maryland Series
Statement of Investments April 30, 1997
Principal
Long-Term Municipal Investments_99.9% Amount Value
_____________ _____________
Maryland_78.3%
Baltimore:
7%, 10/15/2007 (Insured; MBIA).......................................... $ 1,500,000 $ 1,721,535
7.15%, 10/15/2008....................................................... 1,275,000 1,469,782
Mortgage Revenue, Refunding (Tindeco Wharf Project)
6.60%, 12/20/2024 (Collateralized; GNMA).............................. 4,250,000 4,446,393
Port Facilities Revenue (Consolidated Coal Sales) 6.50%, 12/1/2010...... 9,740,000 10,467,188
Baltimore City Housing Corp., MFHR, Refunding
7.25%, 7/1/2023 (Collateralized; FNMA).................................. 3,200,000 3,315,392
Baltimore County:
Mortgage Revenue (First Mortgage-Pickersgill)
7.70%, 1/1/2021 (Prerefunded 1/1/2002) (a)............................ 3,000,000 3,389,670
PCR, Refunding (Bethlehem Steel Corp. Project):
7.50%, 6/1/2015....................................................... 5,750,000 6,072,402
7.55%, 6/1/2017....................................................... 2,540,000 2,690,978
Gaithersburg, Hospital Facilities Improvement Revenue, Refunding (Shady
Grove)
6.50%, 9/1/2012 (Insured; FSA).......................................... 10,000,000 11,086,500
Howard County:
COP 8.15%, 2/15/2020.................................................... 605,000 792,913
EDR, Refunding (M.O.R. XIV Associates Project) 7.75%, 6/1/2012.......... 2,500,000 2,610,050
Howard County Metropolitan District 6.125%, 5/15/2023....................... 2,000,000 2,104,840
Kent County, College Revenue, Refunding (Washington College Project)
7.70%, 7/1/2018......................................................... 1,750,000 1,883,472
Maryland Community Development Administration,
Department of Housing and Community Development:
MFHR:
6.50%, 5/15/2013.................................................. 3,000,000 3,115,770
8.875%, 5/15/2021................................................. 15,000 15,083
7.30%, 5/15/2023.................................................. 2,205,000 2,308,679
6.85%, 5/15/2033.................................................. 5,000,000 5,171,500
6.70%, 5/15/2036 (Insured; FHA)................................... 7,710,000 7,977,229
Single Family Program:
7.40%, 4/1/2009................................................... 1,000,000 1,046,040
6.95%, 4/1/2011................................................... 5,810,000 6,098,350
7.70%, 4/1/2015................................................... 3,365,000 3,500,778
6.55%, 4/1/2026................................................... 7,420,000 7,637,480
6.75%, 4/1/2026................................................... 3,645,000 3,788,103
7.375%, 4/1/2026.................................................. 2,000,000 2,062,320
Zero Coupon, 4/1/2029............................................. 85,075,000 6,830,672
7.625%, 4/1/2029.................................................. 7,240,000 7,510,921
7.45%, 4/1/2032................................................... 5,915,000 6,195,903
Maryland Economic Development Corp., Revenue
(Health and Mental Hygiene Providers Facilities Acquisition Program):
8.375%, 3/1/2013...................................................... 4,300,000 4,556,495
8.75%, 3/1/2017....................................................... 5,050,000 5,423,649
Dreyfus Premier State Municipal Bond Fund, Maryland Series
Statement of Investments (continued) April 30, 1997
Principal
Long-Term Municipal Investments (continued) Amount Value
__________ __________
U.S. Related (continued)
Maryland Health and Higher Educational Facilities Authority, Revenue:
(Frederick Memorial Hospital) 5%, 7/1/2023 (Insured; FGIC).............. $ 2,870,000 $ 2,574,993
(Refunding_Doctors Community Hospital) 5.50%, 7/1/2024.................. 4,735,000 4,291,946
(Refunding_Francis Scott Key Medical Center) 5%, 7/1/2023 (Insured; FGIC) 1,500,000 1,345,815
(Refunding_Howard County General Hospital) 5.50%, 7/1/2025.............. 2,000,000 1,805,380
(Refunding_John Hopkins) 5%, 7/1/2023................................... 11,895,000 10,628,182
(Refunding_Memorial Hospital of Cumberland) 6.50%, 7/1/2017 (Insured; MBIA) 2,000,000 2,122,460
(Refunding_Roland Park Project) 7.75%, 7/1/2012......................... 2,230,000 2,343,797
(Refunding_Suburban Hospital) 5.125%, 7/1/2021.......................... 2,250,000 2,052,360
(Refunding_University of Maryland Medical Systems) 5%, 7/1/2020 (Insured; FGIC) 17,450,000 15,753,511
(Union Hospital of Cecil County) 6.70%, 7/1/2009........................ 2,320,000 2,468,503
(University of Maryland Medical Systems) 7%, 7/1/2022 (Insured; FGIC)... 4,500,000 5,306,805
Maryland Industrial Development Financing Authority, EDR
(Medical Waste Association) 8.75%, 11/15/2010........................... 740,000 743,175
Maryland Local Government Insurance Trust, Capitalization Program, COP
7.125%, 8/1/2009........................................................ 3,250,000 3,534,050
Maryland Stadium Authority, Sports Facility LR 7.60%, 12/15/2019............ 5,250,000 5,712,368
Montgomery County Housing Opportunities Commission, Revenue:
Multi-Family Mortgage:
7.05%, 7/1/2032....................................................... 2,485,000 2,593,793
7.375%, 7/1/2032...................................................... 2,140,000 2,206,297
Single Family Mortgage:
7.375%, 7/1/2017...................................................... 1,835,000 1,924,181
6.625%, 7/1/2026...................................................... 1,015,000 1,049,388
Northeast Waste Disposal Authority, Solid Waste Revenue
(Montgomery County Resource Recovery Project):
6%, 7/1/2008.......................................................... 2,690,000 2,737,936
6.20%, 7/1/2010....................................................... 12,385,000 12,561,858
6.30%, 7/1/2016....................................................... 12,080,000 12,290,554
Prince Georges County:
Consolidated Public Improvement, Refunding
6.75%, 7/1/2010 (Prerefunded 7/1/2001) (a)............................ 1,170,000 1,278,810
Revenue, Refunding (Dimensions Health Corp.) 5.30%, 7/1/2024............ 4,000,000 3,629,080
Prince Georges County Housing Authority:
Mortgage Revenue, Refunding:
(New Keystone Apartment Project) 6.80%, 7/1/2025 (Insured: FHA & MBIA) 4,300,000 4,469,592
(Riverview Terrace) 6.70%, 6/20/2020 (Collateralized; GNMA)........... 2,000,000 2,108,640
(Stevenson Apartments Project) 6.35%, 7/20/2020 (Collateralized; GNMA) 3,000,000 3,063,780
SFMR 6.60%, 12/1/2025 (Collateralized: FNMA & GNMA)..................... 4,660,000 4,807,256
U. S. Related_21.6%
Guam Airport Authority, Revenue 6.70%, 10/1/2023............................ 10,000,000 10,234,700
Puerto Rico Commonwealth:
5.85%, 7/1/2009......................................................... 5,000,000 5,139,350
6.50%, 7/1/2023......................................................... 1,000,000 1,057,980
Dreyfus Premier State Municipal Bond Fund, Maryland Series
Statement of Investments (continued) April 30, 1997
Principal
Long-Term Municipal Investments (continued) Amount Value
__________ __________
Maryland (continued)
Puerto Rico Commonwealth Aqueduct and Sewer Authority, Revenue, Refunding
5%, 7/1/2019............................................................ $ 15,870,000 $ 14,177,941
Puerto Rico Commonwealth Highway and Transportation Authority, Highway
Revenue:
5.40%, 7/1/2006 (Insured; FSA).......................................... 4,000,000 4,073,600
5.50%, 7/1/2026......................................................... 16,500,000 15,552,240
Refunding 5%, 7/1/2022 (Insured; MBIA).................................. 5,080,000 4,635,805
Puerto Rico Electric Power Authority, Power Revenue:
5.50%, 7/1/2020......................................................... 3,000,000 2,836,560
6.375%, 7/1/2024........................................................ 8,275,000 8,695,949
___________
TOTAL LONG-TERM MUNICIPAL INVESTMENTS (cost $298,420,324)................... $307,098,722
===============
Short-Term Municipal Investments_.1%
Maryland:
Northeast Waste Disposal Authority, RRR, Refunding, VRDN
(Harford County Resource) 4.40% (Insured; AMBAC) (b) (cost $425,000).... $ 425,000 $ 425,000
===============
TOTAL INVESTMENTS_100.0% (cost $298,845,324)................................ $307,523,722
===============
SEE NOTES TO FINANCIAL STATEMENTS
Dreyfus Premier State Municipal Bond Fund, Maryland Series
Summary of Abbreviations
AMBAC American Municipal Bond Assurance Corporation LR Lease Revenue
COP Certificate of Participation MBIA Municipal Bond Investors Assurance
EDR Economic Development Revenue Insurance Corporation
FGIC Financial Guaranty Insurance Company MFHR Multi-Family Housing Revenue
FHA Federal Housing Administration PCR Pollution Control Revenue
FNMA Federal National Mortgage Association RRR Resources Recovery Revenue
FSA Financial Security Assurance SFMR Single Family Mortgage Revenue
GNMA Government National Mortgage Association VRDN Variable Rate Demand Notes
Summary of Combined Ratings (Unaudited)
Fitch (c) or Moody's or Standard & Poor's Percentage of Value
____ ______ ________________ ____________________
AAA Aaa AAA 23.0%
AA Aa AA 30.9
A A A 26.4
BBB Baa BBB 10.5
F1+ & F1 MIG1, VMIG1 & P1 SP1 & A1 .1
Not Rated (d) Not Rated (d) Not Rated (d) 9.1
______
100.0%
=======
Notes to Statement of Investments:
(a) Bonds which are prerefunded are collateralized by U.S. Government
securities which are held in escrow and are used to pay principal and
interest on the municipal issue and to retire the bonds in full at the
earliest refunding date.
(b) Securities payable on demand. The interest rate, which is subject to
change, is based upon bank prime rates or an index of market interest
rates.
(c) Fitch currently provides creditworthiness information for a limited
number of investments.
(d) Securities which, while not rated by Fitch, Moody's and Standard &
Poor's have been determined by the Manager to be of comparable quality to
those rated securities in which the Fund may invest.
(e) At April 30, 1997, the Fund had $78,779,146 (25.2% of net assets)
and $93,243,539 (29.9% of net assets) invested in securities whose payment
of principal and interest is dependent upon revenues generated from health
care projects and housing projects, respectively.
SEE NOTES TO FINANCIAL STATEMENTS.
Dreyfus Premier State Municipal Bond Fund, Maryland Series
Statement of Assets and Liabilities April 30, 1997
Cost Value
______________ ______________
ASSETS: Investments in securities_See Statement of Investments $298,845,324 $307,523,722
Cash....................................... 434,793
Receivable for investment securities sold.. 5,946,059
Interest receivable........................ 5,497,943
Receivable for shares of Beneficial Interest subscribed 165,654
Prepaid expenses........................... 7,900
______________
319,576,071
______________
LIABILITIES: Due to The Dreyfus Corporation and affiliates 146,097
Due to Distributor......................... 82,318
Payable for investment securities purchased 6,739,990
Payable for shares of Beneficial Interest redeemed 370,049
Accrued expenses........................... 47,860
______________
7,386,314
______________
NET ASSETS.................................................................. $312,189,757
===============
REPRESENTED BY: Paid-in capital............................ $301,399,522
Accumulated net realized gain (loss) on investments 2,111,837
Accumulated net unrealized appreciation (depreciation)
on investments_Note 4...................... 8,678,398
______________
NET ASSETS.................................................................. $312,189,757
===============
NET ASSET VALUE PER SHARE
_________________________________
Class A Class B Class C
_______________ _______________ _______________
Net Assets........................................... $266,658,110 $45,329,176 $202,471
Shares Outstanding..................................... 20,992,868 3,568,109 15,929
NET ASSET VALUE PER SHARE.................................. $12.70 $12.70 $12.71
====== ======= =======
SEE NOTES TO FINANCIAL STATEMENTS.
Dreyfus Premier State Municipal Bond Fund, Maryland Series
Statement of Operations Year Ended April 30, 1997
INVESTMENT INCOME
INCOME Interest Income............................ $19,738,047
EXPENSES: Management fee_Note 3(a)................... $ 1,755,487
Shareholder servicing costs _Note 3(c)..... 998,016
Distribution fees_Note 3(b)................ 217,369
Professional fees.......................... 48,692
Custodian fees............................. 33,000
Prospectus and shareholders' reports....... 16,530
Registration fees.......................... 7,814
Trustees' fees and expenses_Note 3(d)...... 4,238
Loan commitment fees_Note 2................ 1,784
Miscellaneous.............................. 19,950
_______________
Total Expenses....................... 3,102,880
_______________
INVESTMENT INCOME_NET....................................................... 16,635,167
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS_Note 4:
Net realized gain (loss) on investments.... $ 3,361,910
Net unrealized appreciation (depreciation)
on investments 1,226,032
_______________
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS...................... 4,587,942
_______________
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $21,223,109
================
SEE NOTES TO FINANCIAL STATEMENTS.
Dreyfus Premier State Municipal Bond Fund, Maryland Series
Statement of Changes in Net Assets
Year Ended Year Ended
April 30, 1997 April 30, 1996
_________________ ________________
OPERATIONS:
Investment income_net............................................... $ 16,635,167 $ 17,434,321
Net realized gain (loss) on investments......................... 3,361,910 4,318,992
Net unrealized appreciation (depreciation) on investments.................... 1,226,032 1,867,438
_________________ ________________
Net Increase (Decrease) in Net Assets Resulting from Operations..... 21,223,109 23,620,751
_________________ ________________
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income_net:
Class A shares............................................................. (14,573,442) (15,612,512)
Class B shares............................................................. (2,057,437) (1,821,592)
Class C shares............................................................. (4,288) (217)
Net realized gain on investments:
Class A shares............................................................. (3,655,383) (1,739,958)
Class B shares............................................................. (581,957) (229,505)
Class C shares............................................................. (584) (6)
_________________ ________________
Total Dividends........................................................ (20,873,091) (19,403,790)
_________________ ________________
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold:
Class A shares.......................................................... 9,339,601 11,106,487
Class B shares......................................................... 7,677,403 7,992,863
Class C shares............................................................. 172,500 27,000
Dividends reinvested:
Class A shares...................................................... 11,942,183 11,154,241
Class B shares............................................................. 1,775,213 1,358,026
Class C shares.......................................................... 4,210 219
Cost of shares redeemed:
Class A shares............................................................. (38,844,650) (44,093,946)
Class B shares............................................................. (5,310,474) (3,601,826)
_________________ ________________
Increase (Decrease) in Net Assets from Beneficial Interest Transactions (13,244,014) (16,056,936)
_________________ ________________
Total Increase (Decrease) in Net Assets.............................. (12,893,996) (11,839,975)
NET ASSETS:
Beginning of Period......................................................... 325,083,753 336,923,728
_________________ ________________
End of Period.................................................. $312,189,757 $325,083,753
================ ==================
SEE NOTES TO FINANCIAL STATEMENTS.
Dreyfus Premier State Municipal Bond Fund, Maryland Series
Statement of Changes in Net Assets (continued)
Shares
________________________________________
Year Ended Year Ended
April 30, 1997 April 30, 1996
_________________ __________________
CAPITAL SHARE TRANSACTIONS:
Class A
______
Shares sold............................................................ 728,876 860,692
Shares issued for dividends reinvested................................. 932,487 863,509
Shares redeemed........................................................ (3,035,640) (3,429,459)
_________________ _________________
Net Increase (Decrease) in Shares Outstanding.............. (1,374,277) (1,705,258)
================= =================
Class B
________
Shares sold............................................................ 601,011 620,596
Shares issued for dividends reinvested................................. 138,596 105,093
Shares redeemed........................................................ (415,927) (279,793)
_________________ _________________
Net Increase (Decrease) in Shares Outstanding............... 323,680 445,896
================= =================
Class C*
_________
Shares sold............................................................ 13,506 2,077
Shares issued for dividends reinvested................................. 329 17
_________________ _________________
Net Increase (Decrease) in Shares Outstanding............... 13,835 2,094
================= =================
_________________________
* From August 15, 1995 (commencement of initial offering) to April 30, 1996.
SEE NOTES TO FINANCIAL STATEMENTS.
Dreyfus Premier State Municipal Bond Fund, Maryland Series
Financial Highlights
Contained below is per share operating performance data for a share of
Beneficial Interest outstanding, total investment return, ratios to average
net assets and other supplemental data for each period indicated. This
information has been derived from the Fund's financial statements.
Class A Shares
_______________________________________________________
Year Ended April 30,
_______________________________________________________
PER SHARE DATA: 1997 1996 1995 1994 1993
_______ _______ _______ _______ _______
Net asset value, beginning of period......... $12.69 $12.54 $12.46 $13.02 $12.43
_______ _______ _______ _______ _______
Investment Operations:
Investment income_net........................ .68 .67 .70 .73 .76
Net realized and unrealized gain (loss)
on investments............................. .18 .23 .08 (.53) .68
_______ _______ _______ _______ _______
Total from Investment Operations............. .86 .90 .78 .20 1.44
_______ _______ _______ _______ _______
Distributions:
Dividends from investment income_net......... (.68) (.67) (.70) (.73) (.76)
Dividends from net realized gain on investments (.17) (.08) __ (.03) (.09)
_______ _______ _______ _______ _______
Total Distributions.......................... (.85) (.75) (.70) (.76) (.85)
_______ _______ _______ _______ _______
Net asset value, end of period............... $12.70 $12.69 $12.54 $12.46 $13.02
======= ======= ======= ======= ========
TOTAL INVESTMENT RETURN*......................... 6.91% 7.24% 6.52% 1.33% 11.93%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets...... .90% .90% .90% .80% .69%
Ratio of net investment income
to average net assets...................... 5.29% 5.23% 5.69% 5.51% 5.93%
Decrease reflected in above expense ratios
due to undertakings by the Manager......... __ __ .01% .10% .22%
Portfolio Turnover Rate...................... 43.63% 41.65% 35.39% 10.27% 17.92%
Net Assets, end of period (000's Omitted).... $266,658 $283,878 $301,834 $335,518 $337,307
____________________________
* Exclusive of sales load.
SEE NOTES TO FINANCIAL STATEMENTS.
Dreyfus Premier State Municipal Bond Fund, Maryland Series
Financial Highlights (continued)
Contained below is per share operating performance data for a share of
Beneficial Interest outstanding, total investment return, ratios to average
net assets and other supplemental data for each period indicated. This
information has been derived from the Fund's financial statements.
Class B Shares
_______________________________________________________
Year Ended April 30,
_______________________________________________________
PER SHARE DATA: 1997 1996 1995 1994 1993(1)
_______ _______ _______ _______ _______
Net asset value, beginning of period......... $12.69 $12.54 $12.46 $13.02 $12.64
_______ _______ _______ _______ _______
Investment Operations:
Investment income_net........................ .61 .61 .63 .65 .20
Net realized and unrealized gain (loss)
on investments............................. .18 .23 .08 (.53) .38
_______ _______ _______ _______ _______
Total from Investment Operations............. .79 .84 .71 .12 .58
_______ _______ _______ _______ _______
Distributions:
Dividends from investment income_net......... (.61) (.61) (.63) (.65) (.20)
Dividends from net realized gain on investments (.17) (.08) __ (.03) __
_______ _______ _______ _______ _______
Total Distributions.......................... (.78) (.69) (.63) (.68) (.20)
_______ _______ _______ _______ _______
Net asset value, end of period............... $12.70 $12.69 $12.54 $12.46 $13.02
======= ======= ======= ======= ========
TOTAL INVESTMENT RETURN(2)....................... 6.34% 6.66% 5.94% .75% 15.74%(3)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets...... 1.43% 1.43% 1.44% 1.37% 1.09%(3)
Ratio of net investment income
to average net assets...................... 4.75% 4.68% 5.13% 4.82% 4.55%(3)
Decrease reflected in above expense ratios
due to undertakings by the Manager......... __ __ .01% .08% .12%(3)
Portfolio Turnover Rate...................... 43.63% 41.65% 35.39% 10.27% 17.92%
Net Assets, end of period (000's Omitted).... $45,329 $41,179 $35,090 $30,527 $5,931
__________________________-
(1) From January 15, 1993 (commencement of initial offering) to April 30, 1993.
(2) Exclusive of sales load.
(3) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS.
Dreyfus Premier State Municipal Bond Fund, Maryland Series
Financial Highlights (continued)
Contained below is per share operating performance data for a share of
Beneficial Interest outstanding, total investment return, ratios to average
net assets and other supplemental data for each period indicated. This
information has been derived from the Fund's financial statements.
CLASS C SHARES
______________________________
YEAR ENDED APRIL 30,
______________________________
PER SHARE DATA: 1997 1996(1)
________ ________
Net asset value, beginning of period.................................... $12.69 $12.67
________ ________
Investment Operations:
Investment income_net................................................... .58 .41
Net realized and unrealized gain (loss)
on investments........................................................ .19 .10
________ ________
Total from Investment Operations........................................ .77 .51
________ ________
Distributions:
Dividends from investment income_net.................................... (.58) (.41)
Dividends from net realized gain on investments......................... (.17) (.08)
________ ________
Total Distributions..................................................... (.75) (.49)
________ ________
Net asset value, end of period.......................................... $12.71 $12.69
========= =========
TOTAL INVESTMENT RETURN(2).................................................. 6.16% 5.57%(3)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets................................. 1.64% 1.80%(3)
Ratio of net investment income
to average net assets................................................. 4.47% 4.59%(3)
Portfolio Turnover Rate................................................. 43.63% 41.65%
Net Assets, end of period (000's Omitted)............................... $202 $27
(1) From August 15, 1995 (commencement of initial offering) to April 30, 1996.
(2) Exclusive of sales load.
(3) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
Dreyfus Premier State Municipal Bond Fund, Maryland Series
NOTES TO FINANCIAL STATEMENTS
NOTE 1_SIGNIFICANT ACCOUNTING POLICIES:
Dreyfus Premier State Municipal Bond Fund (the "Trust") is registered
under the Investment Company Act of 1940 ("Act") as a non-diversified
open-end management investment company, and operates as a series company
currently offering thirteen series including the Maryland Series (the
"Fund"). The Fund's investment objective is to maximize current income exempt
from Federal and, where applicable, from State income taxes, without undue
risk. The Dreyfus Corporation (the "Manager") serves as the Fund's investment
adviser. The Manager is a direct subsidiary of Mellon Bank, N.A.
On January 8, 1997, the Trust's Trustees approved a change to the Trust's
name from "Premier State Municipal Bond Fund" to "Dreyfus Premier State
Municipal Bond Fund" which change became effective March 31, 1997.
Premier Mutual Fund Services, Inc. (the "Distributor") is the distributor
of the Fund's shares. The Fund is authorized to issue an unlimited number of
$.001 par value shares in the following classes of shares: Class A, Class B
and Class C shares. Class A shares are subject to a sales charge imposed at
the time of purchase, Class B shares are subject to a contingent deferred
sales charge ("CDSC") imposed on Class B share redemptions made within six
years of purchase (five years for shareholders beneficially owning Class B
shares on November 30, 1996) and Class C shares are subject to a CDSC imposed
on Class C shares redeemed within one year of purchase. Other differences
between the classes include the services offered to and the expenses borne by
each class and certain voting rights.
The Trust accounts separately for the assets, liabilities and operations
of each fund. Expenses directly attributable to each fund are charged to that
fund's operations; expenses which are applicable to all funds are allocated
among them on a pro rata basis.
The Fund's financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management
estimates and assumptions. Actual results could differ from those estimates.
(A) PORTFOLIO VALUATION: Investments in securities (excluding options and
financial futures on municipal and U.S. treasury securities) are valued each
business day by an independent pricing service ("Service") approved by the
Board of Trustees. Investments for which quoted bid prices are readily
available and are representative of the bid side of the market in the
judgment of the Service are valued at the mean between the quoted bid prices
(as obtained by the Service from dealers in such securities) and asked prices
(as calculated by the Service based upon its evaluation of the market for
such securities). Other investments (which constitute a majority of the
portfolio securities) are carried at fair value as determined by the Service,
based on methods which include consideration of: yields or prices of
municipal securities of comparable quality, coupon, maturity and type;
indications as to values from dealers; and general market conditions. Options
and financial futures on municipal and U.S. treasury securities are valued at
the last sales price on the securities exchange on which such securities are
primarily traded or at the last sales price on the national securities market
on each business day. Investments not listed on an exchange or the national
securities market, or securities for which there were no transactions, are
valued at the average of the most recent bid and asked prices. Bid price is
used when no asked price is available.
(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities
transactions are recorded on a trade date basis. Realized gain and loss from
securities transactions are recorded on the identified cost basis. Interest
income, adjusted for amortization of premiums and original issue discounts on
investments, is earned from settlement date and recognized on the accrual
basis. Securities purchased or sold on a when-issued or delayed-delivery
basis may be settled a month or more after the trade date.
The Fund follows an investment policy of investing primarily in municipal
obligations of one state. Economic changes affecting the state and certain of
its public bodies and municipalities may affect the ability of issuers within
the state to pay interest on, or repay principal of, municipal obligations
held by the Fund.
Dreyfus Premier State Municipal Bond Fund, Maryland Series
NOTES TO FINANCIAL STATEMENTS (continued)
(C) DIVIDENDS TO SHAREHOLDERS: It is the policy of the Fund to declare
dividends daily from investment income-net. Such dividends are paid monthly.
Dividends from net realized capital gain are normally declared and paid
annually, but the Fund may make distributions on a more frequent basis to
comply with the distribution requirements of the Internal Revenue Code.
To the extent that net realized capital gain can be offset by capital loss
carryovers, if any, it is the policy of the Fund not to distribute such gain.
(D) FEDERAL INCOME TAXES: It is the policy of the Fund to continue to
qualify as a regulated investment company, which can distribute tax exempt
dividends, by complying with the applicable provisions of the Internal
Revenue Code, and to make distributions of income and net realized capital
gain sufficient to relieve it from substantially all Federal income and
excise taxes.
NOTE 2_BANK LINE OF CREDIT:
The Fund participates with other Dreyfus-managed funds in a $600 million
redemption credit facility ("Facility") to be utilized for temporary or
emergency purposes, including the financing of redemptions. In connection
therewith, the Fund has agreed to pay commitment fees on its pro rata portion
of the Facility. Interest is charged to the Fund at rates based on prevailing
market rates in effect at the time of borrowings. For the period ended April
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 with the Manager, the management
fee is computed at the annual rate of .55 of 1% of the value of the Fund's
average daily net assets and is payable monthly.
Dreyfus Service Corporation, a wholly-owned subsidiary of the Manager,
retained $1,539 during the period ended April 30, 1997, from commissions
earned on sales of the Fund's shares.
(B) Under the Distribution Plan adopted pursuant to Rule 12b-1 under the
Act, the Fund pays the Distributor for distributing the Fund's Class B and
Class C shares at an annual rate of .50 of 1% of the value of the average
daily net assets of Class B shares and .75 of 1% of the value of the average
daily net assets of Class C shares. During the period ended April 30, 1997,
$216,650 was charged to the Fund for the Class B shares and $719 was charged
to the Fund for the Class C shares.
(C) Under the Shareholder Services Plan, the Fund pays the Distributor at
an annual rate of .25 of 1% of the value of the average daily net assets of
Class A, Class B and Class C shares for the provision of certain services.
The services provided may include personal services relating to shareholder
accounts, such as answering shareholder inquiries regarding the Fund and
providing reports and other information, and services related to the
maintenance of shareholder accounts. The Distributor may make payments to
Service Agents (a securities dealer, financial institution or other industry
professional) in respect of these services. The Distributor determines the
amounts to be paid to Service Agents. During the period ended April 30, 1997,
$689,384, $108,325 and $240 were charged to Class A, Class B and Class C
shares, respectively, by the Distributor 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 $147,810 during the period ended April 30, 1997.
(D) Each trustee who is not an "affiliated person" as defined in the Act
receives from the Trust an annual fee of $2,500 and an attendance fee of $250
per meeting. The Chairman of the Board receives an additional 25% of such
compensation.
Dreyfus Premier State Municipal Bond Fund, Maryland Series
NOTES TO FINANCIAL STATEMENTS (continued)
NOTE 4_SECURITIES TRANSACTIONS:
The aggregate amount of purchases and sales of investment securities,
excluding short-term securities, during the period ended April 30, 1997
amounted to $135,629,075 and $148,131,328, respectively.
At April 30, 1997, accumulated net unrealized appreciation on investments
was $8,678,398, consisting of $10,021,384 gross unrealized appreciation and
$1,342,986 gross unrealized depreciation.
At April 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).
Dreyfus Premier State Municipal Bond Fund, Maryland Series
Report of Ernst & Young LLP, Independent Auditors
SHAREHOLDERS AND BOARD OF TRUSTEES
DREYFUS PREMIER STATE MUNICIPAL BOND FUND, MARYLAND SERIES
We have audited the accompanying statement of assets and liabilities,
including the statement of investments, of Dreyfus Premier State Municipal
Bond Fund, Maryland Series (one of the Funds constituting the Dreyfus Premier
State Municipal Bond Fund) as of April 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
confirmation of securities owned as of April 30, 1997 by correspondence with
the custodian and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of Dreyfus Premier State Municipal Bond Fund, Maryland Series at
April 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 signature logo]
New York, New York
June 5, 1997
Important Tax Information (Unaudited)
In accordance with Federal tax law, the Fund hereby makes the following
designations regarding its fiscal year ended April 30, 1997:
_ all the dividends paid from investment income_net are "exempt-interest
dividends" (not subject to regular Federal and, for individuals who are
Maryland residents, Maryland personal income taxes), and
_ the Fund hereby designates $.0634 per share as a long-term capital gain
distribution of the $.1718 per share paid on December 5, 1996.
As required by Federal tax law rules, shareholders will receive
notification of their portion of the Fund's taxable ordinary dividends (if
any) and capital gain distributions (if any) paid for the 1997 calendar year
on Form 1099-DIV which will be mailed by January 31, 1998.
DREYFUS PREMIER STATE MUNICIPAL
BOND FUND, MARYLAND SERIES
200 Park Avenue
New York, NY 10166
MANAGER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
CUSTODIAN
The Bank of New York
90 Washington Street
New York, NY 10286
TRANSFER AGENT &
DIVIDEND DISBURSING AGENT
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Printed in U.S.A. 052/616AR974
Annual Report
Dreyfus Premier State
Municipal Bond Fund
Maryland Series
April 30, 1997
[lion2 hres logo]
Registration Mark
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
IN DREYFUS PREMIER STATE MUNICIPAL BOND FUND, MARYLAND
SERIES CLASS A SHARES AND THE LEHMAN BROTHERS MUNICIPAL
BOND INDEX
EXHIBIT A:
LEHMAN DREYFUS PREMIER STATE
PERIOD BROTHERS MUNICIPAL BOND FUND,
MUNICIPAL MARYLAND SERIES
BOND INDEX * (CLASS A SHARES)
5/28/87 10,000 9,549
4/30/88 10,929 9,327
4/30/89 11,905 10,358
4/30/90 12,762 11,050
4/30/91 14,229 12,402
4/30/92 15,581 13,604
4/30/93 17,553 15,227
4/30/94 17,932 15,430
4/30/95 19,124 16,436
4/30/96 20,644 17,626
4/30/97 22,014 18,842
*Source: Lehman Brothers
