DREYFUS PREMIER STATE MUNICIPAL BOND FUND, MICHIGAN SERIES
LETTER TO SHAREHOLDERS
Dear Shareholder:
We are pleased to report the performance of the Dreyfus Premier State
Municipal Bond Fund _ Michigan Series for its fiscal year ended April 30,
1997 as shown in the following table:
TOTAL RETURN* DISTRIBUTION RATE**
____________ ____________________
Class A.................. 6.89% 5.07%
Class B.................. 6.27% 4.80%
Class C.................. 5.94% 4.48%
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 increasing numbers 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 year 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
For much of the past year the trading environment for fixed income
securities has been dominated by a measure of volatility one would expect to
find during periods of rapidly shifting perceptions as to the course of
economic growth and the ensuing level of inflationary pressures. Early on, as
attention focused on the tightening of the labor markets as the economy
continued to expand at a quickening pace, investors became convinced of an
imminent tightening of monetary policy by the FOMC. As such, interest rates
were driven to their highest levels in more than a year. As subsequent data
showed an abatement in the pace of the economy's rate of growth and the
absence of any clear signs of inflationary pressures market perceptions
quickly reversed, sending prices up and interest rates back down to more
comfortable levels. These rapid shifts in investors' perceptions of the
economy and the appropriate levels of long-term interest rates occurred
frequently throughout the year, establishing a broad trading range in prices.
In November, as investors became convinced of a significant slowing in the
rate of growth of the economy, this range in prices was redefined to higher
levels. With the turn of the calendar into 1997, however, these higher levels
proved unsustainable as evidence of the resilience of the economy's current
expansion continued to mount. The resulting rise in long-term interest rates
foretold the move by the FOMC to assume a more restrictive posture at its
March meeting.
Throughout 1996 municipal securities were hard pressed to escape the
volatility witnessed by the fixed income markets in general. Ultimately, tax
exempt bonds in general and Michigan municipal bonds in particular were
supported by a formidable technical dynamic of strong demand and limited
supply which enabled them to significantly outperform their taxable
counterparts. A comparison of the movement of 30-year U.S. Treasury Yields
and municipal yields as represented by the Bond Buyer 25 Bond Revenue Index
(the "Revenue Index") clearly illustrates this point. While interest rates
fluctuated significantly over the course of the year ended April 30, 1997,
30-year Treasury yields closed the period 5 basis points higher (.05%) at
6.96%. Over the same time the Revenue Index declined by 19 basis points
(.19%) to close the period at 6.13%.
PORTFOLIO OVERVIEW
In managing your Fund's assets during a period of such volatility a
decidedly conservative posture was maintained. During those periods when
perceptions became more tentative, emphasis was placed on those securities
bearing more muted characteristics of principal volatility and higher levels
of tax free income. At these times higher levels of cash reserves were
established in order to further buffer the Portfolio from the consequences of
a rising interest rate environment. As perceptions became more constructive
and prices advanced, trading activity sought to extend Portfolio duration in
order to capitalize on potential price appreciation inherent in such an
environment. Throughout this process further attention was directed toward
enhancing the liquidity and performance characteristics of the portfolio by
extending the optional redemption characteristics and improving the
underlying creditworthiness of its holdings. In these ways the Fund was able
to closely mirror the relative strong performance of the municipal market in
general.
We appreciate your investment in the Dreyfus Premier State Municipal Bond
Fund_Michigan Series, and we want to assure you that we are, at all times,
working in the Fund's best interest.
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 Miminum Tax (AMT) for certain shareholders.
Dreyfus Premier State Municipal Bond Fund, Michigan Series April 30, 1997
[Exhibit A]
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN DREYFUS PREMIER STATE
MUNICIPAL BOND FUND,
MICHIGAN SERIES CLASS A SHARES AND THE LEHMAN BROTHERS MUNICIPAL BOND INDEX
$22,357
Dreyfus Premier State
Municipal Bond Fund,
Michigan Series
(Class A Shares)
Dollars
$22,014
Lehman Brothers
Municipal Bond Index*
*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 6.89% 2.10% 1 Year 6.27% 2.28%
5 Year 7.40 6.42 From Inception (1/15/93) 6.13 5.75
From Inception (5/28/87) 8.94 8.44
CLASS C SHARES
__________________________________________________________________
% Return Reflecting
Applicable Contingent
% Return Deferred Sales
Assuming Charge Upon
PERIOD ENDED 4/30/97 No Redemption Redemption**
_________ _______________ ____________________
1 Year 5.94% 4.94%
From Inception (8/15/95) 6.05 6.05
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, Michigan 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 Michigan 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 Michigan 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, Michigan Series
Statement of Investments April 30, 1997
Principal
Long-Term Municipal Investments_94.8% Amount Value
_____________ __________
Michigan_93.3%
Armada Area Schools 5.625%, 5/1/2017 (Insured; FSA)......................... $ 2,485,000 $ 2,455,627
Brighton Area School District, Refunding:
Zero Coupon, 5/1/2014 (Insured; AMBAC).................................. 8,000,000 3,011,280
Zero Coupon, 5/1/2020 (Insured; AMBAC).................................. 5,000,000 1,292,100
Capital Region Airport Authority, Airport Revenue
6.70%, 7/1/2021 (Insured; MBIA)......................................... 2,500,000 2,655,000
Chippewa Valley Schools, Refunding 7%, 5/1/2010 (Prerefunded 5/1/2001) (a).. 1,275,000 1,394,455
Clarkston Community School 5.75%, 5/1/2016 (Insured; FGIC).................. 1,340,000 1,343,256
Detroit:
(Development Area No. 1) 7.60%, 7/1/2010 (Prerefunded 7/1/1999) (a)..... 4,150,000 4,490,300
(Unlimited Tax) 6.35%, 4/1/2014......................................... 3,220,000 3,295,123
Water Supply Systems Revenue, Refunding
8.562%, 7/1/2022 (Insured; FGIC) (b).................................. 1,500,000 1,648,125
Ferris State University, Revenue, Refunding 5.25%, 10/1/2020 (Insured; MBIA) 1,200,000 1,115,244
Grand Rapids Housing Finance Authority, Multi-Family Revenue, Refunding
7.625%, 9/1/2023 (Collateralized; FNMA)................................. 1,000,000 1,086,530
Huron Valley School District, Refunding
Zero Coupon, 5/1/2018 (Insured; FGIC)................................... 6,370,000 1,866,856
Iron Mountain City School District, Refunding:
5.125%, 5/1/2016 (Insured; AMBAC)....................................... 2,000,000 1,873,100
5.125%, 5/1/2021 (Insured; AMBAC)....................................... 1,000,000 919,790
Kalamazoo Hospital Finance Authority, Hospital Facilities Revenue, Refunding:
(Borgess Medical Center) 6.25%, 6/1/2014 (Insured; FGIC)................ 2,000,000 2,140,520
(Bronson Methodist Hospital) 5.75%, 5/15/2016 (Insured; MBIA)........... 2,500,000 2,478,525
Kenowa Hills Public Schools 5.875%, 5/1/2021 (Insured; MBIA)................ 3,360,000 3,376,296
Kent County, Airport Facilities Revenue (Kent County International Airport):
5.90%, 1/1/2012......................................................... 1,145,000 1,153,782
5.90%, 1/1/2013......................................................... 1,095,000 1,099,380
6.10%, 1/1/2025......................................................... 3,000,000 3,086,850
Lake Orion Community School District, Refunding 5.80%, 5/1/2015 (Insured; AMBAC) 2,085,000 2,099,657
Lapeer Economic Development Corp., Ltd. Obligation Revenue
(Lapeer Health Services Project) 8.625%, 2/1/2020 (Prerefunded 2/1/2000) (a) 2,000,000 2,233,900
Leslie Public School (Ingham and Jackson Counties School Building and Site)
Refunding 6%, 5/1/2015 (Insured; AMBAC)................................. 1,000,000 1,027,620
Michigan Building Authority, Lease Revenue 6.75%, 10/1/2007 (Insured; AMBAC) 1,600,000 1,743,760
Michigan Higher Education Student Loan Authority, Student Loan Revenue:
6.875%, 10/1/2007 (Insured; AMBAC)...................................... 2,250,000 2,300,400
7.55%, 10/1/2008 (Insured; MBIA)........................................ 1,150,000 1,183,016
6.125%, 9/1/2010........................................................ 1,520,000 1,530,549
Michigan Hospital Finance Authority, HR:
(Crittenton Hospital) 6.70%, 3/1/2007................................... 2,250,000 2,373,255
(Daughters of Charity National Health Systems_Providence Hospital) 7%, 11/1/2021 2,700,000 2,915,946
Dreyfus Premier State Municipal Bond Fund, Michigan Series
Statement of Investments (continued) April 30, 1997
Principal
Long-Term Municipal Investments (continued) Amount Value
__________ __________
Michigan (continued)
Michigan Hospital Finance Authority, HR (continued):
Refunding:
(Daughters of Charity National Health Systems-Providence Hospital)
5.25%, 11/1/2015.................................................. $ 2,200,000 $ 2,088,922
(Detroit Medical Center) 8.125%, 8/15/2012............................ 220,000 233,156
(Genesys Health Systems) 8.125%, 10/1/2021............................ 5,000,000 5,696,150
(Henry Ford Health System) 5.25%, 11/15/2025.......................... 2,000,000 1,848,680
(Middle Michigan Obligation Group) 6.625%, 6/1/2010................... 2,000,000 2,046,160
(Saint John Hospital and Medical Center) 5.25%, 5/15/2026 (Insured; AMBAC) 3,000,000 2,763,600
(Sinai Hospital of Greater Detroit) 6.70%, 1/1/2026................... 2,500,000 2,588,325
(Sisters of Mercy Health Corp.):
6.25%, 2/15/2009 (Insured; FSA)................................... 1,065,000 1,117,952
5.375%, 8/15/2014 (Insured; MBIA)................................. 1,340,000 1,303,150
Michigan Housing Development Authority:
(Home Improvement Program) 7.65%, 12/1/2012............................. 1,755,000 1,824,656
MFHR 8.375%, 7/1/2019 (Insured; FGIC) (Prerefunded 7/1/1997) (a)........ 1,305,000 1,353,794
Rental Housing Revenue:
6.50%, 4/1/2006....................................................... 2,000,000 2,109,180
7.70%, 4/1/2023 (Insured; FSA)........................................ 4,185,000 4,484,186
SFMR:
7.55%, 12/1/2014...................................................... 105,000 105,488
7.50%, 6/1/2015....................................................... 2,355,000 2,471,855
5.95%, 12/1/2016...................................................... 2,365,000 2,366,821
7.75%, 12/1/2019...................................................... 1,090,000 1,095,603
6.95%, 12/1/2020...................................................... 1,640,000 1,718,540
Michigan Municipal Bond Authority, Revenue (State Revolving Fund):
6.50%, 10/1/2014 (Prerefunded 10/1/2004) (a)............................ 2,500,000 2,768,725
6.50%, 10/1/2017 (Prerefunded 10/1/2004) (a)............................ 3,500,000 3,876,215
5.625%, 10/1/2019....................................................... 5,450,000 5,294,293
Michigan Strategic Fund:
Ltd. Obligation Revenue:
(Northeastern Community Mental Health Foundation) 8.25%, 1/1/2009..... 1,425,000 1,487,600
Refunding (Ledyard Association Ltd. Partnership Project)
6.25%, 10/1/2011 (Insured; ITT Lyndon Property Insurance Co.)..... 3,075,000 3,209,101
SWDR, Refunding (Genesee Power Station Project) 7.50%, 1/1/2021......... 3,000,000 3,070,440
Monroe County:
PCR (Detroit Edison Project):
7.50%, 12/1/2019 (Insured; AMBAC)..................................... 4,650,000 5,055,387
7.875%, 12/1/2019..................................................... 2,720,000 2,934,717
7.65%, 9/1/2020 (Insured; FGIC)....................................... 2,250,000 2,453,445
6.55%, 6/1/2024 (Insured; MBIA)....................................... 1,700,000 1,782,943
Water Supply Systems (Frenchtown Charter Township Water Treatment
and Distribution Systems) 6.50%, 5/1/2013 (Prerefunded 5/1/2000) (a).. 2,500,000 2,670,700
Monroe County Economic Development Corp., Ltd. Obligation Refunding, Revenue
(Detroit Edison Co. Project) 6.95%, 9/1/2022 (Insured; FGIC)............ 2,000,000 2,346,300
Dreyfus Premier State Municipal Bond Fund, Michigan Series
Statement of Investments (continued) April 30, 1997
Principal
Long-Term Municipal Investments (continued) Amount Value
__________ __________
Michigan (continued)
Northville, Special Assessment (Wayne County) 7.875%, 1/1/2006.............. $ 1,685,000 $ 1,800,254
Northwestern Michigan College, Community College Improvement Revenue, Refunding
7%, 7/1/2011............................................................ 1,800,000 1,939,446
Oakland County Economic Development Corp., Ltd. Obligation Revenue
(Pontiac Osteopathic Hospital Project)
9.625%, 1/1/2020 (Prerefunded 1/1/2000) (a)............................. 1,575,000 1,791,783
Oxford Area Community School District, Building and Site
5.40%, 5/1/2025 (Insured; FGIC)......................................... 1,000,000 950,910
Rockford Public Schools, Refunding (Kent County School Building and Site)
7.375%, 5/1/2019 (Prerefunded 5/1/2000) (a)............................. 2,000,000 2,162,400
Romulus Community Schools, Refunding
5.125%, 5/1/2017 (Insured; FGIC)........................................ 4,650,000 4,346,448
Romulus Economic Development Corp., Ltd. Obligation EDR
Refunding (Romulus Hir Ltd. Partnership Project)
7%, 11/1/2015 (Insured; ITT Lyndon Property Insurance Co.).............. 3,700,000 3,985,714
South Lyon Community Schools (School Building) 6.375%, 5/1/2018............. 1,500,000 1,577,910
Thornapple Kellogg School District 5.375%, 5/1/2022 (Insured; FGIC)......... 2,500,000 2,365,400
Wayne Charter County, Special Airport Facilities Revenue, Refunding
(Northwest Airlines Inc.) 6.75%, 12/1/2015.............................. 5,750,000 5,927,157
U.S. Related_1.5%
Puerto Rico Housing Finance Corp., MFMR
7.50%, 4/1/2022 (LOC; Government Development Bank) (c).................. 2,510,000 2,641,173
__________
TOTAL LONG-TERM MUNICIPAL INVESTMENTS
(cost $154,883,289)..................................................... $162,844,921
=============
Short-Term Municipal Investments_5.2%
Michigan:
Michigan Strategic Fund, Limited Obligation Revenue, Refunding, VRDN
(Detroit Edison Co.) 4.30% (LOC; Barclays Bank) (c,d)................... $ 5,000,000 $ 5,000,000
Monroe County Economic Development Corp., Limited Obligation Revenue,
Refunding, VRDN (Detroit Edison Co.) 4.50% (LOC; Barclays Bank) (c,d)....... 4,000,000 4,000,000
__________
TOTAL SHORT-TERM MUNICIPAL INVESTMENTS
(cost $9,000,000)....................................................... $ 9,000,000
=============
TOTAL INVESTMENTS_100.0%
(cost $163,883,289)..................................................... $171,844,921
=============
Dreyfus Premier State Municipal Bond Fund, Michigan Series
Summary of Abbreviations
AMBAC American Municipal Bond Assurance Corporation MFHR Multi-Family Housing Revenue
EDR Economic Development Revenue MFMR Multi-Family Mortgage Revenue
FGIC Financial Guaranty Insurance Company PCR Pollution Control Revenue
FNMA Federal National Mortgage Association SFMR Single Family Mortgage Revenue
FSA Financial Security Assurance SWDR Solid Waste Disposal Revenue
HR Hospital Revenue VRDN Variable Rate Demand Notes
LOC Letter of Credit
MBIA Municipal Bond Investors Assurance
Insurance Corporation
Summary of Combined Ratings (Unaudited)
Fitch (e) or Moody's or Standard & Poor's Percentage of Value
____ ________ _________________ ______________________
AAA Aaa AAA 38.9%
AA Aa AA 17.9
A A A 14.8
BBB Baa BBB 9.8
F1 Mig1 SP1 5.2
Not Rated (f) Not Rated (f) Not Rated (f) 13.4
________
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) Inverse floater security_the interest is subject to change
periodically.
(c) Secured by letters of credit.
(d) 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.
(e) Fitch currently provides creditworthiness information for a limited
number of investments.
(f) 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.
SEE NOTES TO FINANCIAL STATEMENTS.
Dreyfus Premier State Municipal Bond Fund, Michigan Series
Statement of Assets and Liabilities April 30, 1997
Cost Value
____________ ____________
ASSETS: Investments in securities_See Statement of Investments $163,883,289 $171,844,921
Cash....................................... 365,364
Interest receivable........................ 3,171,863
Receivable for shares of Beneficial Interest subscribed 27,352
Prepaid expenses........................... 6,889
_______________
175,416,389
_______________
LIABILITIES: Due to The Dreyfus Corporation and affiliates 78,950
Due to Distributor......................... 43,939
Payable for shares of Beneficial Interest redeemed 114,091
Accrued expenses........................... 32,501
_______________
269,481
_______________
NET ASSETS.................................................................. $175,146,908
===============
REPRESENTED BY: Paid-in capital............................ $167,809,295
Accumulated net realized gain (loss) on investments (624,019)
Accumulated net unrealized appreciation (depreciation)
....................... on investments_Note 4 7,961,632
_______________
NET ASSETS.................................................................. $175,146,908
===============
NET ASSET VALUE PER SHARE
_________________________________
Class A Class B Class C
_______________ _______________ _______________
Net Assets........................................ $155,567,938 $19,337,678 $241,292
Shares Outstanding................................ 10,277,933 1,277,842 15,936
NET ASSET VALUE PER SHARE................................ $15.14 $15.13 $15.14
====== ======= =======
SEE NOTES TO FINANCIAL STATEMENTS.
Dreyfus Premier State Municipal Bond Fund, Michigan Series
Statement of Operations Year Ended April 30, 1997
INVESTMENT INCOME
INCOME Interest Income............................ $11,405,927
EXPENSES: Management fee_Note 3(a)................... $ 1,003,722
Shareholder servicing costs _Note 3(c)..... 588,405
Distribution fees_Note 3(b)................ 98,558
Professional fees.......................... 24,318
Custodian fees............................. 19,068
Prospectus and shareholders' reports....... 9,885
Registration fees.......................... 4,589
Trustees' fees and expenses_Note 3(d)...... 2,433
Loan commitment fees_Note 2................ 1,019
Miscellaneous.............................. 17,743
_____________
Total Expenses....................... 1,769,740
_____________
INVESTMENT INCOME_NET....................................................... 9,636,187
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS_Note 4:
Net realized gain (loss) on investments.... $ (627,210)
Net unrealized appreciation (depreciation)
on investments 3,129,851
_____________
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS...................... 2,502,641
_____________
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $12,138,828
==============
SEE NOTES TO FINANCIAL STATEMENTS.
Dreyfus Premier State Municipal Bond Fund, Michigan Series
Statement of Changes in Net Assets
Year Ended Year Ended
April 30, 1997 April 30, 1996
________________ ________________
OPERATIONS:
Investment income_net............................................ $ 9,636,187 $ 10,289,932
Net realized gain (loss) on investments................................ (627,210) 4,253,950
Net unrealized appreciation (depreciation) on investments............ 3,129,851 (1,629,095)
________________ ________________
Net Increase (Decrease) in Net Assets Resulting from Operations.. 12,138,828 12,914,787
________________ ________________
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income_net:
Class A shares....................................................... (8,691,679) (9,401,220)
Class B shares....................................................... (934,756) (886,953)
Class C shares....................................................... (9,752) (1,759)
Net realized gain on investments:
Class A shares....................................................... (2,310,672) (2,113,095)
Class B shares....................................................... (280,992) (230,061)
Class C shares....................................................... (3,342) (13)
________________ ________________
Total Dividends.................................................. (12,231,193) (12,633,101)
________________ ________________
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold:
Class A shares....................................................... 5,737,268 6,590,274
Class B shares................................................. 2,530,630 4,290,323
Class C shares.................................................. 202,082 135,546
Dividends reinvested:
Class A shares....................................................... 6,502,642 6,818,746
Class B shares....................................................... 755,630 688,066
Class C shares....................................................... 6,387 1,816
Cost of shares redeemed:
Class A shares....................................................... (23,142,080) (23,824,458)
Class B shares....................................................... (2,955,952) (2,354,777)
Class C shares....................................................... (99,257) __
________________ ________________
Increase (Decrease) in Net Assets from Beneficial Interest Transactions (10,462,650) (7,654,464)
________________ ________________
Total Increase (Decrease) in Net Assets........................ (10,555,015) (7,372,778)
NET ASSETS:
Beginning of Period.................................................... 185,701,923 193,074,701
________________ ________________
End of Period......................................................... $175,146,908 $185,701,923
=============== =================
SEE NOTES TO FINANCIAL STATEMENTS.
Dreyfus Premier State Municipal Bond Fund, Michigan 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...................................................... 376,125 424,521
Shares issued for dividends reinvested............................ 424,804 437,436
Shares redeemed........................................................ (1,515,387) (1,537,548)
_________________ _________________
Net Increase (Decrease) in Shares Outstanding (714,458) (675,591)
================= =================
Class B
________
Shares sold......................................................... 165,789 276,378
Shares issued for dividends reinvested........................ 49,375 44,106
Shares redeemed................................................... (193,563) (152,659)
_________________ _________________
Net Increase (Decrease) in Shares Outstanding 21,601 167,825
================= =================
Class C*
_____
Shares sold.................................................. 13,302 8,647
Shares issued for dividends reinvested........................ 418 117
Shares redeemed................................................... (6,548) ___
_________________ _________________
Net Increase (Decrease) in Shares Outstanding 7,172 8,764
================= =================
* From August 15, 1995 (commencement of initial offering) to April 30, 1996.
SEE NOTES TO FINANCIAL STATEMENTS.
Dreyfus Premier State Municipal Bond Fund, Michigan 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......... $15.15 $15.14 $15.27 $15.65 $14.80
_______ _______ _______ _______ _______
Investment Operations:
Investment income_net........................ .81 .83 .85 .89 .92
Net realized and unrealized gain (loss)
on investments............................. .21 .20 .11 (.30) .98
_______ _______ _______ _______ _______
Total from Investment Operations............. 1.02 1.03 .96 .59 1.90
_______ _______ _______ _______ _______
Distributions:
Dividends from investment income_net......... (.81) (.83) (.85) (.89) (.92)
Dividends from net realized gain on investments (.22) (.19) (.24) (.08) (.13)
_______ _______ _______ _______ _______
Total Distributions.......................... (1.03) (1.02) (1.09) (.97) (1.05)
_______ _______ _______ _______ _______
Net asset value, end of period............... $15.14 $15.15 $15.14 $15.27 $15.65
======= ======= ======= ======= ========
TOTAL INVESTMENT RETURN*......................... 6.89% 6.81% 6.65% 3.65% 13.25%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets...... .91% .93% .92% .81% .69%
Ratio of net investment income
to average net assets...................... 5.34% 5.35% 5.66% 5.56% 6.01%
Decrease reflected in above expense ratios
due to undertakings by the Manager......... __ __ .01% .11% .25%
Portfolio Turnover Rate...................... 22.32% 56.88% 48.30% 19.96% 14.99%
Net Assets, end of period (000's Omitted).... $155,568 $166,538 $176,604 $187,405 $184,138
* Exclusive of sales load.
SEE NOTES TO FINANCIAL STATEMENTS.
Dreyfus Premier State Municipal Bond Fund, Michigan 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......... $15.15 $15.13 $15.27 $15.64 $15.20
_______ _______ _______ _______ _______
Investment Operations:
Investment income_net........................ .74 .75 .77 .80 .24
Net realized and unrealized gain (loss)
on investments............................. .20 .21 .10 (.29) .44
_______ _______ _______ _______ _______
Total from Investment Operations............. .94 .96 .87 .51 .68
_______ _______ _______ _______ _______
Distributions:
Dividends from investment income_net......... (.74) (.75) (.77) (.80) (.24)
Dividends from net realized gain on investments (.22) (.19) (.24) (.08) __
_______ _______ _______ _______ _______
Total Distributions.......................... (.96) (.94) (1.01) (.88) (.24)
_______ _______ _______ _______ _______
Net asset value, end of period............... $15.13 $15.15 $15.13 $15.27 $15.64
======= ======= ======= ======= ========
TOTAL INVESTMENT RETURN(2)....................... 6.27% 6.33% 6.01% 3.11% 15.50%(3)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets...... 1.42% 1.44% 1.44% 1.38% 1.18%(3)
Ratio of net investment income
to average net assets...................... 4.82% 4.82% 5.10% 4.88% 4.85%(3)
Decrease reflected in above expense ratios
due to undertakings by the Manager......... __ __ .01% .09% .14%(3)
Portfolio Turnover Rate...................... 22.32% 56.88% 48.30% 19.96% 14.99%
Net Assets, end of period (000's Omitted).... $19,338 $19,031 $16,471 $13,861 $3,581
(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, Michigan 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............................................. $15.16 $15.18
________ ________
Investment Operations:
Investment income_net.......................................................... .69 .50
Net realized and unrealized gain (loss)
on investments.............................................................. .20 .17
________ ________
Total from Investment Operations.............................................. .89 .67
________ ________
Distributions:
Dividends from investment income_net........................................... (.69) (.50)
Dividends from net realized gain on investments.................................. (.22) (.19)
________ ________
Total Distributions.............................................................. (.91) (.69)
________ ________
Net asset value, end of period................................................... $15.14 $15.16
======= ========
TOTAL INVESTMENT RETURN(2)........................................................... 5.94% 6.12%(3)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets.......................................... 1.72% 1.70%(3)
Ratio of net investment income
to average net assets....................................................... 4.47% 4.47%(3)
Portfolio Turnover Rate........................................................ 22.32% 56.88%
Net Assets, end of period (000's Omitted).................................... $241 $133
(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, Michigan 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 Michigan 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, Michigan 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, 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.
The Fund has an unused capital loss carryover of approximately $461,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to April 30, 1997. The
carryover does not include net realized securities losses from November 1,
1996 through April 30, 1997 which are treated, for Federal income tax
purposes, as arising in fiscal 1998. If not applied, the carryover 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 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 $1,387 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,
$96,920 was charged to the Fund for the Class B shares and $1,638 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,
$407,231, $48,460 and $546 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 $96,075 during the period ended April 30, 1997.
Dreyfus Premier State Municipal Bond Fund, Michigan Series
NOTES TO FINANCIAL STATEMENTS (continued)
(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.
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 $39,320,428 and $59,703,721, respectively.
At April 30, 1997, accumulated net unrealized appreciation on investments
was $7,961,632, consisting of $8,512,793 gross unrealized appreciation and
$551,161 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, Michigan Series
Report of Ernst & Young LLP, Independent Auditors
SHAREHOLDERS AND BOARD OF TRUSTEES
DREYFUS PREMIER STATE MUNICIPAL BOND FUND, MICHIGAN SERIES
We have audited the accompanying statement of assets and liabilities,
including the statement of investments, of Dreyfus Premier State Municipal
Bond Fund, Michigan 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. 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, Michigan 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
Michigan residents, Michigan personal income taxes), and
_ the Fund hereby designates $.1229 per share as a long-term capital gain
distribution of the $.2179 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, MICHIGAN 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. 053/617AR974
Annual Report
Dreyfus Premier State
Municipal Bond Fund
Michigan 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, MICHIGAN
SERIES CLASS A SHARES AND THE LEHMAN BROTHERS MUNICIPAL
BOND INDEX
EXHIBIT A:
DREYFUS PREMIER STATE
LEHMAN BROTHERS MUNICIPAL BOND FUND,
PERIOD MUNICIPAL MICHIGAN SERIES
BOND INDEX * (CLASS A SHARES)
5/28/87 10,000 9,552
4/30/88 10,929 10,644
4/30/89 11,905 12,055
4/30/90 12,762 12,729
4/30/91 14,229 14,207
4/30/92 15,581 15,644
4/30/93 17,553 17,716
4/30/94 17,932 18,362
4/30/95 19,124 19,583
4/30/96 20,644 20,916
4/30/97 22,014 22,357
*Source: Lehman Brothers
