DREYFUS PREMIER STATE MUNICIPAL BOND FUND, MASSACHUSETTS SERIES
LETTER TO SHAREHOLDERS
Dear Shareholder:
We are pleased to report the performance for Dreyfus Premier State
Municipal Bond Fund-Massachusetts Series for the six-month period ended
October 31, 1997 as shown in the following table:
<TABLE>
<CAPTION>
Annualized
Total Return* Distribution Rate**
___________ ________________
<S> <C> <C>
Class A Shares......................... 6.02% 4.99%
Class B Shares......................... 5.66% 4.72%
Class C Shares......................... 5.52% 4.47%
</TABLE>
Economic Review
With the level of inflation as low as it has been seen since 1964 and
unemployment still near a 23-year low, the economy continued its solid growth
over the reporting period. Gross Domestic Product (the "GDP")-the dollar
total of all goods and services produced in the United States-has grown in
excess of 3% for each of the past four quarters, a level and consistency of
gain unmatched since 1984. This extraordinary economic performance has been
fueled by huge business investment in new plant and equipment as well as a
renewed surge in consumer spending over the summer. Consumers play a
substantial role in determining the course of the economy, since their
spending accounts for two thirds of all economic activity. Retail sales rose
through the summer and into September, although there was some sign of
deceleration as the third quarter progressed.
The big economic story continued to be the lack of inflation in an
economy now in its seventh year of expansion. This remarkable price
stability, at a time in the business cycle when inflationary pressures would
usually be apparent, has enabled the Federal Reserve Board (the "Fed") to
refrain from tightening monetary policy. The Federal Open Market Committee
(the "FOMC"), the policy-making arm of the Fed, has raised interest rates
just once in over two years, a period roughly coinciding with the surge of
growth in the economy. The last increase in short-term interest rates came on
March 25, 1997, when the FOMC increased the Federal Funds rate by a modest
one quarter of a percentage point to 5.50%. (The Federal Funds rate is the
rate of interest that banks charge one another for overnight loans.)
Of course, the recent financial market turbulence arising from currency
devaluations in some of the economically weaker Southeast Asian countries has
added a cautionary note to any Fed monetary actions that might further roil
investment markets. The Southeast Asian economies have been cooling or in
outright recession for some time and represent a large share of the global
economy and the U.S. import/export market. The recent crisis has boosted the
value of the U.S. dollar and could further dampen the demand for U.S. exports
to this region. This bodes well for continued low inflation in the U.S. and
weakens the argument that we are on the brink of price acceleration.
In fact, inflation remains in check. The Implicit Price Deflator, an
indicator of inflation that measures the prices of all goods and services in
the U.S., has risen at an annual rate of less than 2% for the past two
quarters. This favorable trend in prices has been mirrored by both the
Consumer Price Index (a measure of the average change in the prices paid by
urban consumers for a fixed market basket of goods and services) and the
Producer Price Index (a measure of the average change in the prices of all
commodities at all stages of processing, produced for sale in primary markets
in the U.S.). The Labor Department's Employment Cost Index, a broad measure
of changes in wages and benefits, has indicated relatively modest increases
in labor costs. Still, the labor market remains tight, with the unemployment
rate at a low level unmatched in 23 years.
Whether the economy will slow without further monetary restraint by the
Fed remains an open question. Industrial production has been strong and
operating rates, an indicator of possible future price pressures, have edged
to their highest level in two years. Of paramount concern to Fed Chairman
Alan Greenspan is the possibility of continuing economic growth so strong
that the unemployment rate is driven even lower, and a subsequent
corresponding upsurge in wage rates reignites inflation. The performance
of the economy over the coming months appears crucial in determining
whether the Fed will actively restrain the economy. We remain alert to
changes in economic trends that would increase the risk of rising
inflation and, consequently, the prospect of higher interest rates.
Market Environment
Since our last letter at the end of April 1997, long-term taxable
interest rates have declined dramatically. As measured by the 30-year U.S.
Treasury bond, yields ended the period at 6.15%, down from roughly 7.00% just
six months earlier. In the municipal market the drop in rates was less
pronounced as the Bond Buyer Revenue Bond Index closed the period yielding
5.60% versus 6.01% on April 30. Initially, long interest rates were driven
lower by expectations that economic growth would slow during the summer. When
the summer slowdown did not materialize, however, disappointed bond market
participants pushed yields higher from the beginning of August through
mid-September as tight labor markets in the U.S. again became a source of
concern. The implications of a tight labor market were overshadowed during
October by the development of economic crises in various Asian countries
which precipitated a significant correction in the U.S. equity market. The
subsequent flight-to-quality rally in Treasuries left taxable yields at their
lows for the six months ended October 31, 1997.
The underperformance of municipal bonds during the reporting period was
driven by a combination of lack of retail demand at lower yields and a large
increase in issuance as many bond refundings became economically feasible.
This weakening technical dynamic is illustrated by the municipal/Treasury
yield ratio (as measured by the Bond Buyer Revenue Bond Index/30-year
Treasury yield) cheapening from 86% on April 30, 1997, to 91% six months
later.
The Portfolio
In managing your Fund's assets during a period of such uncertainty with
respect to the future direction of long-term interest rates, a decidedly
conservative posture was maintained. By holding a core of high coupon bonds
which provided the Fund with much of its income stream, we remained committed
to providing shareholders with the maximum amount of current tax-free income
possible. These large coupon securities also provided stability to the Fund's
net asset value throughout a period during which we experienced extreme
market volatility. Many of the trades that were executed during the period
sought to capitalize on the extremely flat yield curve. Other swaps sought to
reposition the portfolio with securities that provide greater potential for
price appreciation without extending the duration of the portfolio.
Throughout the reporting period, further emphasis was placed on extending the
optional redemption characteristics of the holdings in order to improve the
liquidity of the portfolio. In conclusion, we will continue to monitor the
constantly changing financial and political landscapes and adjust our
portfolio strategy accordingly.
Very truly yours,
[Richard J. Moynihan signature logo]
Richard J. Moynihan
Director, Municipal Portfolio Management
The Dreyfus Corporation
November 18, 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 shares and Class C shares.
**Distribution rate per share is based upon dividends per share paid from net
investment income during the period (annualized), 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 shares and Class C shares.
Some income may be subject to the Federal Alternative Minimum Tax (AMT) for
certain shareholders.
<TABLE>
<CAPTION>
DREYFUS PREMIER STATE MUNICIPAL BOND FUND, MASSACHUSETTS SERIES
STATEMENT OF INVESTMENTS OCTOBER 31, 1997 (UNAUDITED)
Principal
Long-Term Municipal Investments-96.2% Amount Value
____________ ____________
<S> <C> <C>
Massachusetts-73.9%
Boston Industrial Development Financing Authority, Sewer Facility Revenue
(Harbor Electric Energy Co. Project) 7.375%, 5/15/2015.................... $ 2,500,000 $ 2,726,775
Haverhill 5%, 6/15/2017 (Insured; FGIC)..................................... 1,000,000 970,740
Leominster 7.50%, 4/1/2009 (Insured; MBIA, Prerefunded 4/1/2000) (a)........ 1,275,000 1,398,854
Lynn Water and Sewer Commission, General Revenue
7.25%, 12/1/2010 (Insured; MBIA, Prerefunded 12/1/2000) (a)............... 1,000,000 1,107,200
Massachusetts Bay Transportation Authority:
7%, 3/1/2021.............................................................. 1,000,000 1,230,650
7.022%, 3/1/2021 (Insured; MBIA) (b,c).................................... 2,300,000 2,320,125
5%, 3/1/2024.............................................................. 4,250,000 4,040,900
Massachusetts Commonwealth 7%, 8/1/2012 (Prerefunded 8/1/2001) (a).......... 1,850,000 2,058,476
Massachusetts Education Loan Authority, Education Loan Revenue
7.75%, 1/1/2008 (Insured; MBIA)........................................... 1,070,000 1,106,979
Massachusetts Health and Educational Facilities Authority, Revenue:
(Baystate Medical Center) 6%, 7/1/2026 (Insured; FSA)..................... 2,000,000 2,116,120
(Cooley Dickinson Hospital) 5.50%, 11/15/2018 (Insured; AMBAC)............ 3,500,000 3,526,775
(Medical Center of Central Massachusetts) 7.10%, 7/1/2021................. 1,000,000 1,081,600
(New England Deaconess Hospital) 6.875%, 4/1/2022......................... 4,000,000 4,354,720
(Refunding-Berklee College of Music) 5.10%, 10/1/2027 (Insured; MBIA)..... 3,125,000 3,036,156
(Refunding-Milton Hospital) 7%, 7/1/2016 (Insured; MBIA).................. 2,050,000 2,215,824
(South Shore Hospital) 7.50%, 7/1/2020
(Insured; MBIA, Prerefunded 7/1/2000) (a)............................... 2,000,000 2,205,580
(University Hospital) 7.25%, 7/1/2019 (Insured; MBIA)..................... 2,750,000 2,989,552
Massachusetts Housing Finance Agency, SFHR 7.95%, 6/1/2023.................. 1,675,000 1,772,050
Massachusetts Industrial Finance Agency, Revenue:
(Babson College) 5.25%, 10/1/2027 (d)..................................... 2,000,000 1,944,080
(Provider Lease Program) 8.75%, 7/15/2009................................. 660,000 684,427
(Refunding-Merrimack College) 5%, 7/1/2027 (Insured; MBIA)................ 1,300,000 1,243,775
(Refunding-Worcester Polytechnic) 5.125%, 9/1/2027 (Insured; MBIA)........ 1,000,000 973,840
(Water Treatment-American Hingham) 6.95%, 12/1/2035....................... 3,000,000 3,268,920
Massachusetts Port Authority, Special Project Revenue
(Harborside Hyatt) 10%, 3/1/2026.......................................... 3,000,000 3,353,430
Massachusetts Water Pollution Abatement Trust
(Pool Loan Program) 5.40%, 2/1/2011....................................... 175,000 181,916
U.S. Related-22.3% _________
Guam Airport Authority, Revenue 6.70%, 10/1/2023............................ 1,500,000 1,628,190
Puerto Rico Commonwealth, Refunding 6%, 7/1/2014............................ 2,000,000 2,110,280
Puerto Rico Commonwealth Highway and Transportation Authority,
Highway Revenue:
6.435%, 7/1/2009 (b).................................................... 1,000,000 1,060,000
6.535%, 7/1/2010 (b).................................................... 1,000,000 1,053,750
5%, 7/1/2036............................................................ 2,000,000 1,889,100
DREYFUS PREMIER STATE MUNICIPAL BOND FUND, MASSACHUSETTS SERIES
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1997 (UNAUDITED)
Principal
Long-Term Municipal Investments (continued) Amount Value
____________ ____________
U.S. Related (continued)
Puerto Rico Housing Finance Corporation, MFMR
7.50%, 4/1/2022 (LOC; Government Development Bank) (e).................... $ 3,355,000 $ 3,568,412
Puerto Rico Public Buildings Authority,
Guaranteed Government Facilities Revenue 6.25%, 7/1/2015 (Insured; AMBAC). 1,100,000 1,250,909
Virgin Islands Public Finance Authority, Revenue, Refunding
7.25%, 10/1/2018.......................................................... 2,750,000 3,072,520
____________
TOTAL LONG-TERM MUNICIPAL INVESTMENTS (cost $63,458,875).................... $67,542,625
============
Short-Term Municipal Investment-3.8%
Massachusetts:
Massachusetts Health and Educational Facilities Authority, Revenue
(Saint Elizabeth's Hospital) 3.40% (Insured; FSA) (b) (cost $2,650,000)... $ 2,650,000 $ 2,650,000
____________
TOTAL INVESTMENTS-100.0% (cost $66,108,875)................................. $70,192,625
============
</TABLE>
<TABLE>
<CAPTION>
DREYFUS PREMIER STATE MUNICIPAL BOND FUND, MASSACHUSETTS SERIES
Summary of Abbreviations
<S> <C> <S> <C>
AMBAC American Municipal Bond Assurance Corporation MBIA Municipal Bond Investors Assurance
FGIC Financial Guaranty Insurance Company Insurance Corporation
FSA Financial Security Assurance MFMR Multi-Family Mortgage Revenue
LOC Letter of Credit SFHR Single Family Housing Revenue
</TABLE>
<TABLE>
<CAPTION>
Summary of Combined Ratings (Unaudited)
Fitch (f) or Moody's or Standard & Poor's Percentage of Value
______ ________ _________________ ___________________
<S> <C> <C> <C>
AAA Aaa AAA 41.7%
AA Aa AA 7.6
A A A 26.7
BBB Baa BBB 13.9
Not Rated (g) Not Rated (g) Not Rated (g) 10.1
_______
100.0%
=======
</TABLE>
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 rate is subject to change
periodically.
(c)Security exempt from registration under Rule 144A of the Securities Act of
1933. This security may be resold in transactions exempt from registration,
normally to qualified institutional buyers. At October 31, 1997, this
security amounted to $2,320,125 or 3.3% of net assets.
(d)Purchased on a delayed-delivery basis.
(e)Secured by letters of credit.
(f)Fitch currently provides creditworthiness information for a limited number
of investments.
(g)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.
(h)At October 31, 1997, 26.8% of the Fund's net assets are insured by MBIA.
(i)At October 31, 1997, the Fund had $17,408,572 (25.0% of net assets)
invested in securities whose payment of principal and interest is dependent
upon revenues generated from health care projects.
SEE NOTES TO FINANCIAL STATEMENTS.
<TABLE>
<CAPTION>
DREYFUS PREMIER STATE MUNICIPAL BOND FUND, MASSACHUSETTS SERIES
STATEMENT OF ASSETS AND LIABILITIES OCTOBER 31, 1997 (UNAUDITED)
Cost Value
____________ ____________
<S> <C> <C> <C>
ASSETS: Investments in securities-See Statement of Investments $66,108,875 $70,192,625
Cash....................................... 296,001
Interest receivable........................ 1,090,435
Prepaid expenses........................... 3,400
____________
71,582,461
____________
LIABILITIES: Due to The Dreyfus Corporation and affiliates 34,528
Due to Distributor......................... 17,363
Payable for investment securities purchased 1,920,133
Payable for shares of Beneficial Interest redeemed 81,402
Accrued expenses and other liabilities..... 17,231
____________
2,070,657
____________
NET ASSETS.................................................................. $69,511,804
============
REPRESENTED BY: Paid-in capital............................ $65,142,034
Accumulated net realized gain (loss) on investments 286,020
Accumulated gross unrealized appreciation
on investments.............................. 4,083,750
____________
NET ASSETS.................................................................. $69,511,804
============
</TABLE>
<TABLE>
<CAPTION>
NET ASSET VALUE PER SHARE
_____________________________
Class A Class B Class C
_____________ _____________ ____________
<S> <C> <C> <C>
Net Assets.................................................. $63,340,341 $ 6,170,313 $ 1,150
Shares Outstanding.......................................... 5,381,489 524,556 97.703
NET ASSET VALUE PER SHARE................................... $11.77 $11.76 $11.77
======= ======= =======
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS PREMIER STATE MUNICIPAL BOND FUND, MASSACHUSETTS SERIES
STATEMENT OF OPERATIONS SIX MONTHS ENDED OCTOBER 31, 1997 (UNAUDITED)
INVESTMENT INCOME
<S> <C> <C> <C>
INCOME Interest Income............................ $2,224,454
EXPENSES: Management fee-Note 3(a)................... $ 197,524
Shareholder servicing costs-Note 3(c)...... 106,144
Distribution fees-Note 3(b)................ 15,381
Professional fees.......................... 6,926
Custodian fees............................. 3,824
Registration fees.......................... 3,485
Prospectus and shareholders' reports....... 2,500
Loan commitment fees-Note 2................ 615
Trustees' fees and expenses-Note 3(d)...... 289
Miscellaneous.............................. 5,506
___________
Total Expenses....................... 342,194
___________
INVESTMENT INCOME-NET....................................................... 1,882,260
___________
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS-Note 4:
Net realized gain (loss) on investments.... $ 276,381
Net unrealized appreciation (depreciation) on investments 2,004,412
___________
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS...................... 2,280,793
___________
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $4,163,053
===========
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS PREMIER STATE MUNICIPAL BOND FUND, MASSACHUSETTS SERIES
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
October 31, 1997 Year Ended
(Unaudited) April 30, 1997
________________ ______________
<S> <C> <C>
OPERATIONS:
Investment income-net................................................... $ 1,882,260 $ 3,982,440
Net realized gain (loss) on investments................................. 276,381 6,502
Net unrealized appreciation (depreciation) on investments............... 2,004,412 1,082,966
____________ ____________
Net Increase (Decrease) in Net Assets Resulting from Operations..... 4,163,053 5,071,908
____________ ____________
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income-net:
Class A shares........................................................ (1,735,485) (3,696,455)
Class B shares........................................................ (146,749) (285,931)
Class C shares........................................................ (26) (54)
Net realized gain on investments:
Class A shares........................................................ ---- (1,546,112)
Class B shares........................................................ ---- (134,987)
Class C shares........................................................ ---- (24)
____________ ____________
Total Dividends..................................................... (1,882,260) (5,663,563)
____________ ____________
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold:
Class A shares........................................................ 1,340,533 3,547,855
Class B shares........................................................ 156,809 1,371,567
Dividends reinvested:
Class A shares........................................................ 969,554 3,020,218
Class B shares........................................................ 85,981 264,120
Class C shares........................................................ 21 75
Cost of shares redeemed:
Class A shares........................................................ (6,865,349) (9,033,997)
Class B shares........................................................ (330,417) (771,968)
____________ ____________
Increase (Decrease) in Net Assets from Beneficial Interest Transactions (4,642,868) (1,602,130)
____________ ____________
Total Increase (Decrease) in Net Assets........................... (2,362,075) (2,193,785)
____________ ____________
NET ASSETS:
Beginning of Period..................................................... 71,873,879 74,067,664
____________ ____________
End of Period........................................................... $69,511,804 $71,873,879
============ ============
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS PREMIER STATE MUNICIPAL BOND FUND, MASSACHUSETTS SERIES
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
Shares
_________________________________
Six Months Ended
October 31, 1997 Year Ended
CAPITAL SHARE TRANSACTIONS: (Unaudited) April 30, 1997
________________ ______________
Class A
________
Shares sold............................................................ 115,807 306,570
Shares issued for dividends reinvested................................. 83,089 260,724
Shares redeemed........................................................ (588,561) (781,555)
________ ________
Net Increase (Decrease) in Shares Outstanding (389,665) (214,261)
________ ________
________ ________
Class B
________
Shares sold............................................................ 13,570 118,977
Shares issued for dividends reinvested................................. 7,374 22,810
Shares redeemed........................................................ (28,534) (66,988)
________ ________
Net Increase (Decrease) in Shares Outstanding (7,590) 74,799
________ ________
________ ________
Class C
________
Shares issued for dividends reinvested................................. 2 7
________ ________
Net Increase (Decrease) in Shares Outstanding 2 7
________ ________
________ ________
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS PREMIER STATE MUNICIPAL BOND FUND, MASSACHUSETTS 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
____________________________________________________________________
Six Months Ended
October 31, 1997 Year Ended April 30,
___________________________________________________
PER SHARE DATA: (Unaudited) 1997 1996 1995 1994 1993
__________ _______ _______ _______ _______ _______
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period.. $11.40 $11.50 $11.53 $11.64 $12.13 $11.41
_______ _______ _______ _______ _______ _______
Investment Operations:
Investment income-net................. .31 .63 .66 .69 .71 .73
Net realized and unrealized gain (loss)
on investments...................... .37 .17 - (.06) (.44) .73
_______ _______ _______ _______ _______ _______
Total from Investment Operations...... .68 .80 .66 .63 .27 1.46
_______ _______ _______ _______ _______ _______
Distributions:
Dividends from investment income-net.. (.31) (.63) (.66) (.69) (.71) (.73)
Dividends from net realized gain on investments - (.27) (.03) - (.05) (.01)
Dividends in excess of net realized gain
on investments...................... - - - (.05) - -
_______ _______ _______ _______ _______ _______
Total Distributions................... (.31) (.90) (.69) (.74) (.76) (.74)
_______ _______ _______ _______ _______ _______
Net asset value, end of period........ $11.77 $11.40 $11.50 $11.53 $11.64 $12.13
======= ======= ======= ======= ======= =======
TOTAL INVESTMENT RETURN(1)................ 11.94%(2) 7.08% 5.69% 5.72% 2.08% 13.14%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets .91%(2) .92% .92% .94% .82% .69%
Ratio of net investment income
to average net assets............... 5.28%(2) 5.46% 5.57% 6.04% 5.80% 6.16%
Decrease reflected in above expense ratios
due to undertakings by the Manager.. - - - .01% .11% .24%
Portfolio Turnover Rate............... 28.48%(3) 24.45% 34.86% 13.62% 12.04% 11.36%
Net Assets, end of period (000's Omitted) $63,340 $65,809 $68,812 $72,731 $76,865 $79,701
(1) Exclusive of sales load.
(2) Annualized.
(3) Not annualized.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS PREMIER STATE MUNICIPAL BOND FUND, MASSACHUSETTS 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
__________________________________________________________________
Six Months Ended
October 31, 1997 Year Ended April 30,
______________________________________________
PER SHARE DATA: (Unaudited) 1997 1996 1995 1994 1993(1)
__________ _______ _______ _______ _______ _______
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period.. $11.40 $11.49 $11.52 $11.63 $12.13 $11.79
_______ _______ _______ _______ _______ _______
Investment Operations:
Investment income-net................. .28 .57 .60 .63 .64 .19
Net realized and unrealized gain (loss)
on investments...................... .36 .18 - (.06) (.45) .34
_______ _______ _______ _______ _______ _______
Total from Investment Operations...... .64 .75 .60 .57 .19 .53
_______ _______ _______ _______ _______ _______
Distributions:
Dividends from investment income-net.. (.28) (.57) (.60) (.63) (.64) (.19)
Dividends from net realized gain on investments - (.27) (.03) - (.05) -
Dividends in excess of net realized gain
on investments...................... - - - (.05) - -
_______ _______ _______ _______ _______ _______
Total Distributions................... (.28) (.84) (.63) (.68) (.69) (.19)
_______ _______ _______ _______ _______ _______
Net asset value, end of period........ $11.76 $11.40 $11.49 $11.52 $11.63 $12.13
======= ======= ======= ======= ======= =======
TOTAL INVESTMENT RETURN(2)................ 11.23%(3) 6.63% 5.15% 5.15% 1.44% 15.56%(3)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets 1.42%(3) 1.43% 1.43% 1.45% 1.36% 1.15%(3)
Ratio of net investment income
to average net assets............... 4.77%(3) 4.94% 5.03% 5.47% 5.18% 4.92%(3)
Decrease reflected in above expense ratios
due to undertakings by the Manager.. - - - .01% .10% .13%(3)
Portfolio Turnover Rate............... 28.48%(4) 24.45% 34.86% 13.62% 12.04% 11.36%
Net Assets, end of period (000's Omitted) $6,170 $6,064 $5,255 $4,220 $3,702 $1,066
(1) From January 15, 1993 (commencement of initial offering) to April 30, 1993.
(2) Exclusive of sales load.
(3) Annualized.
(4) Not annualized.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS PREMIER STATE MUNICIPAL BOND FUND, MASSACHUSETTS 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.
Six Months Ended Class C Shares
_____________________
October 31, 1997 Year Ended April 30,
_____________________
PER SHARE DATA: (Unaudited) 1997 1996(1)
__________ _______ _______
<S> <C> <C> <C>
Net asset value, beginning of period....................... $11.41 $11.48 $11.59
_______ _______ _______
Investment Operations:
Investment income-net...................................... .27 .54 .40
Net realized and unrealized gain (loss)
on investments........................................... .36 .20 (.08)
_______ _______ _______
Total from Investment Operations........................... .63 .74 .32
_______ _______ _______
Distributions:
Dividends from investment income-net....................... (.27) (.54) (.40)
Dividends from net realized gain on investments............ - (.27) (.03)
_______ _______ _______
Total Distributions........................................ (.27) (.81) (.43)
_______ _______ _______
Net asset value, end of period............................. $11.77 $11.41 $11.48
_______ _______ _______
_______ _______ _______
TOTAL INVESTMENT RETURN(2)..................................... 10.95%(3) 6.55% 3.76%(3)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets.................... 1.64%(3) 1.65% 1.69%(3)
Ratio of net investment income
to average net assets.................................... 4.54%(3) 4.64% 4.72%(3)
Portfolio Turnover Rate.................................... 28.48%(4) 24.45% 34.86%
Net Assets, end of period (000's Omitted).................. $1 $1 $1
(1) From August 15, 1995 (commencement of initial offering) to April 30, 1996.
(2) Exclusive of sales load.
(3) Annualized.
(4) Not annualized.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
DREYFUS PREMIER STATE MUNICIPAL BOND FUND, MASSACHUSETTS SERIES
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
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 Massachusetts 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.
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, MASSACHUSETTS SERIES
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (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 a 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
October 31, 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 $38 during the period ended October 31, 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 October 31, 1997,
the Fund was charged $15,377 and $4 for Class B and Class C shares,
respectively, pursuant to the Distribution Plan.
(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 October 31,
1997, the Fund was charged $82,094, $7,688 and $2 for Class A, Class B and
Class C shares, respectively, pursuant to the Shareholder Services Plan.
The Fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of
the Manager, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the Fund. During the
period ended October 31, 1997, the Fund was charged $15,370 pursuant to the
transfer agency agreement.
(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, MASSACHUSETTS SERIES
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
NOTE 4-SECURITIES TRANSACTIONS:
The aggregate amount of purchases and sales of investment securities,
excluding short-term securities, during the period ended October 31, 1997
amounted to $19,390,714 and $23,908,438, respectively.
At October 31, 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, MASSACHUSETTS 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. 063SA9710
Semi-Annual Report
Dreyfus Premier State
Municipal Bond Fund
Massachusetts Series
October 31, 1997
[Dreyfus lion/2hres logo]
Registration Mark
