DREYFUS PREMIER STATE MUNICIPAL BOND FUND, MASSACHUSETTS SERIES
LETTER TO SHAREHOLDERS
Dear Shareholder:
We are pleased to report performance for the Dreyfus Premier State Municipal
Bond Fund-Massachusetts Series for the 12-month period ended April 30, 1998,
as shown in the following table:
<TABLE>
<CAPTION>
TOTAL RETURN* DISTRIBUTION RATE**
___________ _______________
<S> <C> <C>
Class A shares......................... 9.04% 4.97%
Class B shares......................... 8.49% 4.69%
Class C shares......................... 8.22% 4.44%
</TABLE>
Economic Review
The United States is now in its eighth year of economic expansion.
Inflation continues to rise at the slowest pace since 1964, and the
unemployment rate has fallen to a level not seen in 25 years. Not
surprisingly, consumer confidence has soared. Along with continued evidence
of the robustness of the economy have come heightened expectations that the
Federal Reserve Board (the "Fed") might raise interest rates in a preemptive
move to avoid a reigniting of inflation. The last increase in short-term rates
came in March 1997 when the Federal Open Market Committee (the policy-making
arm of the Fed) hiked the target rates for Federal Funds by one quarter of a
percent to 5.5%. (The Federal Funds rate is the rate of interest that banks
charge one another for overnight loans.)
Inflation has remained benign on all fronts, even in the tight labor
market, an area closely watched by the Fed for signs of incipient inflation.
The Labor Department's Employment Cost Index (ECI), a measure of wage, salary
and benefit costs, suggests that wage inflation so far is not a problem. In
fact, the first quarter increase in the ECI (0.7%) was its smallest quarterly
rise in two years. Another inflation gauge, the broad-based Gross Domestic
Product Price Deflator, rose at an annual rate of only 0.9% in the first
quarter, its lowest rate since 1964. Inflation as measured by the Consumer
Price Index (a measure of a fixed basket of goods bought by a typical
consumer including food, transportation, shelter, utilities, clothing,
medical care, entertainment and other items), has been similarly tame. Prices
at the consumer level have risen at an annual rate of about 1.5% over the
reporting period. The lack of inflation has been more dramatic at the
production level of the economy where prices have fallen: in the 12 months
ended April 30, the Producer Price Index declined 1.8%. Such a generally
tepid price environment has been partly fostered by the economic problems in
Asia which have suppressed worldwide demand for commodities, particularly
oil.
Reflecting a level of confidence not seen in three decades, consumers
increased their spending over the reporting period, the first-quarter rate
rising at the fastest pace in six years. Not surprisingly, the growth rate in
new home construction over the reporting period was the strongest in four
years. Plentiful and well-paying jobs (total wage and salary income is 7%
higher than a year ago), low interest rates, the relative absence of
inflation and investment market gains have resulted in a financially healthy
consumer with a corresponding propensity to spend. Strong domestic demand for
lower-priced imports has contributed further to the quiescent inflation
environment while offsetting the drag on the economy resulting from the Asian
financial crisis. It is still widely expected that the Asian economic
slowdown will have a further
dampening effect on the U.S. economy. Although the surge in domestic spending
has masked the full impact of the fall in Asian demand, our trade deficit has
reached a ten-year high, a dramatic sign of deterioration. Expectation of an
economic slowdown may be a reason why the Fed has been reluctant to raise
short-term interest rates.
The production side of the economy has remained robust. Factory
utilization has been high, production rates strong, and while exports to Asia
have fallen sharply, they are growing in the rest of the world. Such
resilience has been characteristic of one of the longest, most healthy
economic advances in our history. Yet we remain mindful that the concept of
an economic cycle is not dead, nor is inflation, and we are alert for
indications of a resurgence in price pressures.
Market Environment
Long-term taxable interest rates continued to trend lower through
mid-January due to a mix of economic turmoil in Asia and good domestic
inflation news. The 30-year benchmark Treasury bond yield "roughed on January
12, at 5.69%, boosted by non-traditional buyers in a flight to quality out of
Asian markets and into U.S. Government securities. Since then, however, Asian
markets have stabilized somewhat and shifted the focus of the bond market
back to U.S. economic fundamentals. Of particular concern to bond market
participants is the increasing tightness of the labor market and the
potential for future wage inflation. This concern effectively capped the bond
rally and pushed long Treasury yields up to 5.95% on April 30, down from
6.96% at the start of the 1 2-month period.
Long municipal bonds slightly underperformed their taxable counterparts
during the reporting period as the tax-exempt arena saw a surge in volume as
rates trended lower. The new issue volume included both advance refunding of
already existing debt, and municipalities and agencies taking on new debt at
attractive rates. This increase in supply more than offset strong demand for
municipals as the municipal/Treasury yield ratio (as measured by the Bond
Buyer Revenue Bond Index /30-year Treasury yield) increased from 91% to
nearly 93% by April 30. From an historic perspective, municipals are very
attractive at these percentages relative to Treasuries. In addition,
tax-exempt supply traditionally decreases as the summer months approach, thus
offering the prospect for municipal outperformance in the months ahead.
The Portfolio
The supply of Massachusetts tax-exempt paper (which includes Puerto Rico
issues) increased dramatically during the reporting period. Deals of note
include a total of $720 million issued by Massachusetts Water Resource
Authority, a total of $505 million issued by Massachusetts Bay Transportation
Authority, and $500 million issued by the Commonwealth of Massachusetts. Also
of major importance were four large Puerto Rico issues that were between $500
million and $1.2 billion. With the direction of long-term interest rates
uncertain at best, we attempted to reposition the portfolio with securities
that offer greater potential for price appreciation without increasing the
risk profile of the Fund. This was done by selling less desirable structures
and purchasing several of the new issues at attractive levels. We have
maintained a nucleus of large coupon, income generating securities which
should perform well in times of uncertainty. At present, approximately 73% of
the Fund is invested in securities which are rated "A" or better, which is a
reflection of our view that credit spreads are too narrow to justify a higher
percentage of lower rated bonds.
Looking forward, issuance should decrease as the summer months approach.
However, we will continue to look for opportunities to sell securities with
inferior call features and/or liquidity and replace them with new issues that
we believe offer greater potential for price appreciation. In conclusion, the
tug of war between foreign economic crises and unusually tame U.S. inflation
indicators that has left long-term interest rates range-bound since January
cannot go on indefinitely. We will remain alert for signals of the next trend
for long-term rates and stand ready to adjust the portfolio accordingly.
Sincerely,
[Richard J. Moynihan.signature.logo]
Richard J. Moynihan
Director, Municipal Portfolio Management
The Dreyfus Corporation
May 18, 1998
New York, N.Y.
* Total return includes reinvestment of dividends and any capital gains paid
and does nor 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. Income may be
subject to state and local income taxes for non-Massachusetts residents.
**Distribution rate per share is based upon dividends per share paid from net
investment income during the period, divided by the maximum offering price
per share 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 8 shares and Class C shares,
adjusted for capital gain distributions. Some income may be subject to the
Federal Alternative Minimum Tax (AMT) for certain shareholders.
Dreyfus Premier State Municipal Bond Fund, Massachusetts Series April 30, 1998
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN DREYFUS PREMIER STATE
MUNICIPAL BOND FUND, MASSACHUSETTS SERIES CLASS A SHARES AND THE LEHMAN
BROTHERS MUNICIPAL BOND INDEX
$22,016
Lehman Brothers
Municipal Bond Index*
Dollars
$20,837
Dreyfus Premier State Municipal Bond Fund, Massachusetts Series
(Class A Shares)
*Source: Lehman Brothers
<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 4/30/98 Sales Charge Sales Charge (4.5%) Period Ended 4/30/98 Redemption Redemption*
____________________ ________________ __________________ ______________________ _____________ _________________
<S> <C> <C> <C> <C> <C>
1 Year 9.04% 4.11% 1 Year 8.49% 4.49%
5 Year 5.90 4.93 5 Year 5.34 5.03
10 Year 8.12 7.62 From Inception (1/15/93) 5.92 5.78
</TABLE>
Class C Shares
________________________________________________________________________________
% Return Reflecting
Applicable Contingent
% Return Deferred Sales
Assuming Charge Upon
Period Ended 4/30/98 No Redemption Redemption**
____________________ ________________ __________________
1 Year 8.22% 7.22%
From Inception (8/15/95) 6.43 6.43
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, Massachusetts Series on 4/30/88 to
a $10,000 investment made in the Lehman Brothers Municipal Bond Index on that
date. 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 Massachusetts 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 Massachusetts
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.
<TABLE>
<CAPTION>
DREYFUS PREMIER STATE MUNICIPAL BOND FUND, MASSACHUSETTS SERIES
STATEMENT OF INVESTMENTS APRIL 30, 1998
Principal
Long-Term Municipal Investments-93.2% Amount Value
____________ ____________
<S> <C> <C>
Massachusetts-68.7%
Boston Industrial Development Financing Authority, Sewer Facility Revenue
(Harbor Electric Energy Co. Project) 7.375%, 5/15/2015.................... $ 2,500,000 $ 2,711,900
Haverhill 5%, 6/15/2017 (Insured; FGIC)..................................... 800,000 777,880
Leominster 7.50%, 4/1/2009 (Insured; MBIA, Prerefunded 4/1/2000) (a)........ 1,275,000 1,379,117
Lynn Water and Sewer Commission, General Revenue
7.25%, 12/1/2010 (Insured; MBIA, Prerefunded 12/1/2000) (a)............... 1,000,000 1,093,210
Massachusetts Bay Transportation Authority:
6.804%, 3/1/2021 (Insured; MBIA) (b,c).................................... 2,300,000 2,325,875
7%, 3/1/2021.............................................................. 1,000,000 1,231,160
5%, 3/1/2024.............................................................. 2,250,000 2,131,222
Massachusetts Commonwealth:
7%, 8/1/2012 (Prerefunded 8/1/2001) (a)................................... 1,850,000 2,034,260
Special Obligation Revenue, Refunding 5.50%, 6/1/2013..................... 5,000,000 5,284,150
Massachusetts Education Loan Authority, Education Loan Revenue
7.75%, 1/1/2008 (Insured; MBIA)........................................... 1,015,000 1,079,656
Massachusetts Health and Educational Facilities Authority, Revenue:
(Baystate Medical Center) 6%, 7/1/2026 (Insured; FSA)..................... 2,000,000 2,118,480
(Medical Center of Central Massachusetts) 7.10%, 7/1/2021................. 1,000,000 1,079,080
(Refunding-Milton Hospital) 7%, 7/1/2016 (Insured; MBIA).................. 2,050,000 2,192,741
(South Shore Hospital) 7.50%, 7/1/2020
(Insured; MBIA, Prerefunded 7/1/2000) (a)............................... 2,000,000 2,176,460
(University Hospital) 7.25%, 7/1/2019 (Insured; MBIA)..................... 2,750,000 2,952,565
Massachusetts Industrial Finance Agency, Revenue:
(Babson College) 5.25%, 10/1/2027......................................... 4,000,000 3,958,400
(Provider Lease Program) 8.75%, 7/15/2009................................. 660,000 681,219
(Refunding-Merrimack College) 5%, 7/1/2027 (Insured; MBIA)................ 1,000,000 952,780
(Water Treatment-American Hingham) 6.95%, 12/1/2035....................... 3,000,000 3,292,080
Health Care Facility (Health Foundation, Inc. Project) 6.75%, 12/1/2027... 1,000,000 1,006,660
Package Facility (Avon Associates LLC) 5.375%, 4/1/2020 (Insured; MBIA) (d) 3,150,000 3,135,793
Massachusetts Port Authority, Special Project Revenue
(Harborside Hyatt) 10%, 3/1/2026.......................................... 3,000,000 3,361,890
Massachusetts Water Pollution Abatement Trust
(Pool Loan Program) 5.40%, 2/1/2011....................................... 175,000 182,173
U.S. Related-24.5%
Guam Airport Authority, Revenue 6.70%, 10/1/2023............................ 1,500,000 1,635,900
Puerto Rico Commonwealth, Refunding 6%, 7/1/2014............................ 2,000,000 2,110,300
Puerto Rico Commonwealth Highway and Transportation Authority,
Highway Revenue:
6.361%, 7/1/2009 (b).................................................... 1,000,000 1,076,250
6.461%, 7/1/2010 (b).................................................... 1,000,000 1,070,000
5%, 7/1/2036............................................................ 2,000,000 1,911,460
5%, 7/1/2038............................................................ 1,680,000 1,575,286
Dreyfus Premier State Municipal Bond Fund, Massachusetts Series
Statement of Investments (continued) April 30, 1998
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).................... $ 2,895,000 $ 3,066,355
Puerto Rico Public Buildings Authority,
Guaranteed Government Facilities Revenue 6.25%, 7/1/2015 (Insured; AMBAC). 1,100,000 1,255,749
Virgin Islands Public Finance Authority, Revenue, Refunding
7.25%, 10/1/2018.......................................................... 2,750,000 3,109,288
____________
TOTAL LONG-TERM MUNICIPAL INVESTMENTS (cost $60,280,167).................... $63,949,339
____________
____________
Short-Term Municipal Investments-6.8%
Massachusetts;
Massachusetts Health and Educational Facilities Authority, Revenue
(Saint Elizabeth's Hospital) 3.60% (Insured; FSA) (b) (cost $4,700,000)... $ 4,700,000 $ 4,700,000
____________
____________
TOTAL INVESTMENTS-100.0% (cost $64,980,167)................................. $68,649,339
____________
____________
</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
</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 38.3%
AA Aa AA 13.9
A A A 21.6
BBB Baa BBB 14.3
Not Rated (g) Not Rated (g) Not Rated (g) 11.9
_______
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 April 30,
1998, this security amounted to $2,325,875 or 3.5% 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 or 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 April 30, 1998, 25.8% of the Fund's net assets are insured by
MBIA.
(i) At April 30, 1998, the Fund had $19,245,874 (28.7% of net assets)
invested in securities whose payment of principal and interest is
dependent upon revenues generated from transportation projects.
SEE NOTES TO FINANCIAL STATEMENTS.
<TABLE>
<CAPTION>
DREYFUS PREMIER STATE MUNICIPAL BOND FUND, MASSACHUSETTS SERIES
STATEMENT OF ASSETS AND LIABILITIES APRIL 30, 1998
Cost Value
____________ ____________
<S> <C> <C> <C>
ASSETS: Investments in securities-See Statement of Investments $ 64,980,167 $ 68,649,339
Cash....................................... 612,497
Receivable for investment securities sold.. 247,500
Interest receivable........................ 1,083,290
Prepaid expenses........................... 1,256
____________
70,593,882
____________
LIABILITIES: Due to The Dreyfus Corporation and affiliates 31,205
Due to Distributor......................... 16,594
Payable for investment securities purchased 3,388,950
Payable for shares of Beneficial Interest redeemed 23,285
Accrued expenses........................... 19,376
____________
3,479,410
____________
NET ASSETS.................................................................. $ 67,114,472
____________
____________
REPRESENTED BY: Paid-in capital............................ $ 62,839,833
Accumulated net realized gain (loss) on investments 605,467
Accumulated net unrealized appreciation (depreciation)
on investments-Note 4 3,669,172
____________
NET ASSETS.................................................................. $ 67,114,472
____________
____________
</TABLE>
<TABLE>
<CAPTION>
NET ASSET VALUE PER SHARE
_____________________________
Class A Class B Class C
____________ ____________ ____________
<S> <C> <C> <C>
Net Assets.................................................... $ 60,529,158 $ 6,584,160 $ 1,154
Shares Outstanding............................................ 5,150,428 560,581 98.118
NET ASSET VALUE PER SHARE..................................... $11.75 $11.75 $11.76
_______ _______ _______
_______ _______ _______
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS PREMIER STATE MUNICIPAL BOND FUND, MASSACHUSETTS SERIES
STATEMENT OF OPERATIONS YEAR ENDED APRIL 30, 1998
INVESTMENT INCOME
<S> <C> <C> <C>
INCOME Interest Income............................ $4,274,109
EXPENSES: Management fee-Note 3(a)................... $ 382,683
Shareholder servicing costs -Note 3(c)..... 208,280
Distribution fees-Note 3(b)................ 31,066
Professional fees.......................... 13,298
Custodian fees............................. 7,527
Registration fees.......................... 6,680
Prospectus and shareholders' reports....... 5,112
Loan commitment fees-Note 2................ 908
Trustees' fees and expenses-Note 3(d)...... 763
Miscellaneous.............................. 9,606
___________
Total Expenses......................... 665,923
___________
INVESTMENT INCOME-NET....................................................... 3,608,186
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS-Note 4:
Net realized gain (loss) on investments.... $ 881,735
Net unrealized appreciation (depreciation) on investments 1,589,834
___________
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS...................... 2,471,569
___________
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $6,079,755
___________
___________
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS PREMIER STATE MUNICIPAL BOND FUND, MASSACHUSETTS SERIES
STATEMENT OF CHANGES IN NET ASSETS
Year Ended Year Ended
April 30, 1998 April 30, 1997
______________ ______________
OPERATIONS:
Investment income-net................................................... $ 3,608,186 $ 3,982,440
Net realized gain (loss) on investments................................. 881,735 6,502
Net unrealized appreciation (depreciation) on investments............... 1,589,834 1,082,966
______________ ______________
Net Increase (Decrease) in Net Assets Resulting from Operations... 6,079,755 5,071,908
______________ ______________
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income-net:
Class A shares........................................................ (3,315,280) (3,696,455)
Class B shares........................................................ (292,854) (285,931)
Class C shares........................................................ (52) (54)
Net realized gain on investments:
Class A shares........................................................ (259,927) (1,546,112)
Class B shares........................................................ (25,975) (134,987)
Class C shares........................................................ (5) (24)
______________ ______________
Total Dividends................................................... (3,894,093) (5,663,563)
______________ ______________
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold:
Class A shares........................................................ 2,030,256 3,547,855
Class B shares........................................................ 734,207 1,371,567
Dividends reinvested:
Class A shares........................................................ 2,065,722 3,020,218
Class B shares........................................................ 187,055 264,120
Class C shares........................................................ 26 75
Cost of shares redeemed:
Class A shares........................................................ (11,381,019) (9,033,997)
Class B shares........................................................ (581,316) (771,968)
______________ ______________
Increase (Decrease) in Net Assets from Beneficial Interest Transactions (6,945,069) (1,602,130)
______________ ______________
Total Increase (Decrease) in Net Assets......................... (4,759,407) (2,193,785)
NET ASSETS:
Beginning of Period..................................................... 71,873,879 74,067,664
______________ ______________
End of Period........................................................... $ 67,114,472 $ 71,873,879
______________ ______________
______________ ______________
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS PREMIER STATE MUNICIPAL BOND FUND, MASSACHUSETTS SERIES
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
Shares
______________________________
Year Ended Year Ended
April 30, 1998 April 30, 1997
______________ ______________
CAPITAL SHARE TRANSACTIONS:
Class A
________
Shares sold............................................................. 173,993 306,570
Shares issued for dividends reinvested.................................. 175,718 260,724
Shares redeemed......................................................... (970,437) (781,555)
________ ________
Net Increase (Decrease) in Shares Outstanding (620,726) (214,261)
________ ________
________ ________
Class B
________
Shares sold............................................................. 62,301 118,977
Shares issued for dividends reinvested.................................. 15,921 22,810
Shares redeemed......................................................... (49,787) (66,988)
________ ________
Net Increase (Decrease) in Shares Outstanding 28,435 74,799
________ ________
________ ________
Class C
________
Shares issued for dividends reinvested.................................. 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
_________________________________________________________
Year Ended April 30,
_________________________________________________________
PER SHARE DATA: 1998 1997 1996 1995 1994
________ ________ ________ ________ ________
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period......... $ 11.40 $ 11.50 $ 11.53 $ 11.64 $ 12.13
________ ________ ________ ________ ________
Investment Operations:
Investment income-net........................ .61 .63 .66 .69 .71
Net realized and unrealized gain (loss)
on investments............................. .40 .17 .- (.06) (.44)
________ ________ ________ ________ ________
Total from Investment Operations............. 1.01 .80 .66 .63 .27
________ ________ ________ ________ ________
Distributions:
Dividends from investment income-net......... (.61) (.63) (.66) (.69) (.71)
Dividends from net realized gain on investments (.05) (.27) (.03) .- (.05)
Dividends in excess of net realized gain
on investments............................. .- .- .- (.05) .-
________ ________ ________ ________ ________
Total Distributions.......................... (.66) (.90) (.69) (.74) (.76)
________ ________ ________ ________ ________
Net asset value, end of period............... $ 11.75 $ 11.40 $ 11.50 $ 11.53 $ 11.64
________ ________ ________ ________ ________
________ ________ ________ ________ ________
TOTAL INVESTMENT RETURN*......................... 9.04% 7.08% 5.69% 5.72% 2.08%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets...... .91% .92% .92% .94% .82%
Ratio of net investment income
to average net assets...................... 5.23% 5.46% 5.57% 6.04% 5.80%
Decrease reflected in above expense ratios
due to undertakings by the Manager......... - - - .01% .11%
Portfolio Turnover Rate...................... 48.69% 24.45% 34.86% 13.62% 12.04%
Net Assets, end of period (000's Omitted).... $ 60,529 $ 65,809 $ 68,812 $ 72,731 $ 76,865
* Exclusive of sales load.
SEE NOTES TO FINANCIAL STATEMENTS.
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
_________________________________________________________
Year Ended April 30,
_________________________________________________________
PER SHARE DATA: 1998 1997 1996 1995 1994
________ ________ ________ ________ ________
Net asset value, beginning of period......... $ 11.40 $ 11.49 $ 11.52 $ 11.63 $ 12.13
________ ________ ________ ________ ________
Investment Operations:
Investment income-net........................ .55 .57 .60 .63 .64
Net realized and unrealized gain (loss)
on investments............................. .40 .18 .- (.06) (.45)
________ ________ ________ ________ ________
Total from Investment Operations............. .95 .75 .60 .57 .19
________ ________ ________ ________ ________
Distributions:
Dividends from investment income-net......... (.55) (.57) (.60) (.63) (.64)
Dividends from net realized gain on investments (.05) (.27) (.03) .- (.05)
Dividends in excess of net realized gain
on investments............................. .- .- .- (.05) .-
________ ________ ________ ________ ________
Total Distributions.......................... (.60) (.84) (.63) (.68) (.69)
________ ________ ________ ________ ________
Net asset value, end of period............... $ 11.75 $ 11.40 $ 11.49 $ 11.52 $ 11.63
________ ________ ________ ________ ________
________ ________ ________ ________ ________
TOTAL INVESTMENT RETURN*......................... 8.49% 6.63% 5.15% 5.15% 1.44%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets...... 1.42% 1.43% 1.43% 1.45% 1.36%
Ratio of net investment income
to average net assets...................... 4.71% 4.94% 5.03% 5.47% 5.18%
Decrease reflected in above expense ratios
due to undertakings by the Manager......... - - - .01% .10%
Portfolio Turnover Rate...................... 48.69% 24.45% 34.86% 13.62% 12.04%
Net Assets, end of period (000's Omitted).... $ 6,584 $ 6,064 $ 5,255 $ 4,220 $ 3,702
* Exclusive of sales load.
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 C Shares
_______________________________
Year Ended April 30,
_______________________________
PER SHARE DATA: 1998 1997 1996(1)
______ ______ ______
<S> <C> <C> <C>
Net asset value, beginning of period................................. $11.41 $11.48 $11.59
______ ______ ______
Investment Operations:
Investment income-net................................................ .52 .54 .40
Net realized and unrealized gain (loss)
on investments..................................................... .40 .20 (.08)
______ ______ ______
Total from Investment Operations..................................... .92 .74 .32
______ ______ ______
Distributions:
Dividends from investment income-net................................. (.52) (.54) (.40)
Dividends from net realized gain on investments...................... (.05) (.27) (.03)
______ ______ ______
Total Distributions.................................................. (.57) (.81) (.43)
______ ______ ______
Net asset value, end of period....................................... $11.76 $11.41 $11.48
______ ______ ______
______ ______ ______
TOTAL INVESTMENT RETURN(2)............................................... 8.22% 6.55% 3.76%(3)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets.............................. 1.64% 1 .65% 1.69%(3)
Ratio of net investment income
to average net assets.............................................. 4.51% 4.64% 4.72%(3)
Portfolio Turnover Rate.............................................. 48.69% 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.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
DREYFUS PREMIER STATE MUNICIPAL BOND FUND, MASSACHUSETTS 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 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 (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. During the period ended
April 30, 1998, 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 $106 during the period ended April 30, 1998, 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, 1998,
Class B and Class C shares were charged $31,057 and $9, 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 April 30, 1998,
Class A, Class B and Class C shares were charged $158,415, $15,529 and $3,
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 April 30, 1998, the Fund was charged $30,426 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 (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, 1998
amounted to $32,556,970 and $40,845,333, respectively.
At April 30, 1998, accumulated net unrealized appreciation on investment
was $3,669,172, consisting of $3,686,263 gross unrealized appreciation and
$17,091 gross unrealized depreciation.
At April 30, 1998, the cost of investments for Federal income tax
purposes was substantially the same as the cost for financial reporting
purposes (see the Statement of Investments).
DREYFUS PREMIER STATE MUNICIPAL BOND FUND, MASSACHUSETTS SERIES
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
Shareholders and Board of Trustees
Dreyfus Premier State Municipal Bond Fund, Massachusetts Series
We have audited the accompanying statement of assets and liabilities,
including the statement of investments, of Dreyfus Premier State Municipal
Bond Fund, Massachusetts Series (one of the Funds constituting the Dreyfus
Premier State Municipal Bond Fund) as of April 30, 1998, 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, 1998 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, Massachusetts Series
at April 30, 1998, 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 3, 1998
DREYFUS PREMIER STATE MUNICIPAL BOND FUND, MASSACHUSETTS SERIES
IMPORTANT TAX INFORMATION (UNAUDITED)
In accordance with Federal tax law, the Fund hereby makes the following
designations regarding its fiscal year ended April 30, 1998:
-all the dividends paid from investment income-net are "exempt -interest
dividends" (not subject to regular Federal and, for individuals who are
Massachusetts residents, Massachusetts personal income taxes), and
-the Fund hereby designates $.0055 per share as a long-term capital gain
distribution (of which none is subject to the 20% maximum Federal tax rate)
of the $.0500 per share paid on December 4, 1997. In addition, 91.25% of the
long-term capital gain distribution is not subject to Massachusetts personal
income taxes.
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 1998 calendar year
on Form 1099-DIV which will be mailed by January 31, 1999.
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. 063/622AR984
Annual Report
DREYFUS PREMIER STATE
MUNICIPAL BOND FUND
MASSACHUSETTS SERIES
April 30, 1998
[Registration Mark]
[Dreyfus lion/2hres logo]
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN DREYFUS
PREMIER STATE MUNICIPAL BOND FUND, MASSACHUSETTS SERIES CLASS
A SHARES AND THE LEHMAN BROTHERS MUNICIPAL BOND INDEX
EXHIBIT A:
DREYFUS
PREMIER STATE
PERIOD LEHMAN BROTHERS MUNICIPAL BOND FUND,
MUNICIPAL MASSACHUSETTS SERIES
BOND INDEX * (CLASS A SHARES)
4/30/88 10,000 9,547
4/30/89 10,893 10,684
4/30/90 11,678 11,270
4/30/91 13,019 12,535
4/30/92 14,257 13,829
4/30/93 16,061 15,647
4/30/94 16,407 15,971
4/30/95 17,499 16,885
4/30/96 18,889 17,846
4/30/97 20,142 19,109
4/30/98 22,016 20,837
*Source: Lehman Brothers
