<PAGE>
ANNUAL REPORT
---------------------
DREYFUS PREMIER STATE
MUNICIPAL BOND FUND
MINNESOTA SERIES
---------------------
APRIL 30, 1998
(DREYFUS LION LOGO)
<PAGE>
DREYFUS PREMIER STATE MUNICIPAL BOND FUND, MINNESOTA SERIES
- ------------------------------------------------------------------------------
LETTER TO SHAREHOLDERS
Dear Shareholder:
We are pleased to report the performance for the Dreyfus Premier State
Municipal Bond Fund - Minnesota Series for the 12-month period ended April
30, 1998, as shown in the following table:
TOTAL RETURN* DISTRIBUTION RATE**
------------- -------------------
Class A shares.................. 7.36% 5.09%
Class B shares.................. 6.79% 4.81%
Class C shares.................. 6.46% 4.49%
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
<PAGE>
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 troughed 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 12-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 refundings 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
In direct contrast to the municipal market in general, the Minnesota
tax-exempt market saw very little supply during the reporting period. This
lack of volume can best be illustrated by the fact that only two issues over
the last six months have been brought to market in which the issue size was
in excess of $50 million. Due mainly to supply constraints, the portfolio
turnover rate was very low as it was extremely difficult to locate securities
which we felt would improve the performance characteristics of the Fund. We
have maintained a nucleus of large coupon, income generating securities which
should perform well in times of uncertainty. At present, approximately 90% of
the Fund is invested in securities which are rated "A" or better, which
reflects our view that credit spreads are too narrow to justify a high
percentage of lower-rated bonds.
<PAGE>
Looking forward, issuance should increase as the market anticipates large
deals from issuers such as the state of Minnesota, the Minneapolis Airport
Authority, and several hospitals. As these deals come to market, we will look
for opportunities to sell securities with inferior call features and/or
liquidity and replace them with new issues that 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
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 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. Income may
be subject to state and local income taxes for non-Minnesota 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 B 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.
<PAGE>
DREYFUS PREMIER STATE MUNICIPAL BOND FUND, MINNESOTA SERIES APRIL 30, 1998
- --------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN DREYFUS
PREMIER STATE MUNICIPAL BOND FUND, MINNESOTA SERIES CLASS A
SHARES AND THE LEHMAN BROTHERS MUNICIPAL BOND INDEX
$22,016
Lehman Brothers
Municipal Bond Index*
CHART
$20,796
Dreyfus Premier State
Municipal Bond Fund,
Minnesota 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 7.36% 2.51% 1 Year 6.79% 2.79%
5 Year 5.75 4.78 5 Year 5.21 4.88
10 Year 8.09 7.60 From Inception (1/15/93) 5.84 5.69
</TABLE>
<TABLE>
<CAPTION>
CLASS C SHARES
- ------------------------------------------------------------
% Return Reflecting
Applicable Contingent
% Return Deferred Sales
Assuming Charge Upon
Period Ended 4/30/98 No Redemption Redemption**
- -------------------- ------------- ---------------------
<S> <C> <C>
1 Year 6.46% 5.46%
From Inception (8/15/95) 5.72 5.72
<FN>
- ------------------
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, Minnesota 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 Minnesota 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 Minnesota
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.
</FN>
</TABLE>
<PAGE>
DREYFUS PREMIER STATE MUNICIPAL BOND FUND, MINNESOTA SERIES
- -------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS APRIL 30, 1998
<TABLE>
<CAPTION>
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS-97.9% AMOUNT VALUE
- ---------------------------------------------------------------------------- ------------ ------------
<S> <C> <C>
Anoka County:
RRR (Northern States Power Co.) 7.15%, 12/1/2008........................ $ 1,150,000 $ 1,217,482
SWDR (United Power Association Project)
6.95%, 12/1/2008 (Guaranteed; National Rural Utilities Cooperative
Finance Corp.)........................................................ 3,825,000 4,074,925
Brooklyn Park 5.85%, 2/1/2016 (Insured; FSA)................................ 1,425,000 1,502,491
Burnsville, MFHR Refunding (Conventry Court Apartments) 7.50%, 9/1/2027
(Insured; FHA)............................................................ 2,250,000 2,344,995
Dakota County Housing and Redevelopment Authority, South-Saint Paul
Revenue, Refunding
(Single Family-GNMA Program) 8.10%, 9/1/2012............................ 115,000 119,115
Duluth Economic Development Authority, Health Care Facilities Revenue
(Benedictine Health-Saint Mary's Project)
8.375%, 2/15/2020 (Prerefunded 2/15/2000) (a)........................... 2,500,000 2,731,350
Eagan, MFHR Refunding (Forest Ridge Apartments) 7.50%, 9/1/2017
(Insured; FHA)............................................................ 1,000,000 1,041,150
Eden Prairie, MFHR, Refunding:
(Eden Investments Project) 7.40%, 8/1/2025 (Insured; FHA)............... 500,000 524,745
(Welsh Parkway Apartments) 8%, 7/1/2026 (Insured; FHA).................. 2,810,000 2,997,230
Edina:
Hospital Systems Revenue (Fairview Hospital) 7.125%, 7/1/2006........... 1,000,000 1,056,330
Housing Development Revenue, Refunding (Edina Park Plaza Project)
7.70%, 12/1/2028 (Insured; FHA)......................................... 2,500,000 2,602,575
Harmony, MFHR, Refunding (Zedakah Foundation Project) 5.95%, 9/1/2020....... 1,235,000 1,266,628
Hubbard County, SWDR (Potlatch Corp. Project)
7.375%, 8/1/2013.......................................................... 1,000,000 1,052,420
International Falls, PCR, Refunding (Boise Cascade Corp. Project) 5.65%,
12/1/2022................................................................. 1,000,000 1,009,260
Inver Grove Heights Independent School District Number 199 5.75%, 2/1/2017.. 2,225,000 2,312,131
Mahtomedi Independent School District Number 832
Zero Coupon, 2/1/2017 (Insured; MBIA)................................... 1,275,000 475,447
Minneapolis:
Zero Coupon, 12/1/2014.................................................. 1,825,000 772,632
Home Ownership Program 7.10%, 6/1/2021.................................. 655,000 687,383
HR (Lifespan Inc.-Minneapolis Children's Medical Center Project)
7%, 12/1/2020 (Prerefunded 6/1/2001) (a).............................. 5,650,000 6,192,570
MFHR, Refunding (Churchill Apartments Project) 7.05%, 10/1/2022
(Insured; FSA).......................................................... 4,000,000 4,252,560
MFMR (Seward Towers Project) 7.375%, 12/20/2030 (Collateralized; GNMA).. 2,350,000 2,473,093
Refunding (Sports Arena Project) 5.20%, 10/1/2024....................... 3,850,000 3,844,341
Minneapolis Community Development Agency, Ltd. Tax Support
Development Revenue:
8.375%, 6/1/2007...................................................... 2,500,000 2,558,475
8%, 12/1/2009......................................................... 300,000 318,354
7.75%, 12/1/2019...................................................... 2,755,000 3,019,535
7.40%, 12/1/2021...................................................... 2,000,000 2,116,040
Minneapolis-Saint Paul Housing and Redevelopment Authority,
Health Care Systems Revenue:
8%, 8/15/2014 (Prerefunded 8/15/2000) (a)............................. 3,000,000 3,306,990
(Group Health Plan Inc., Project) 6.75%, 12/1/2013.................... 2,750,000 3,000,608
</TABLE>
<PAGE>
DREYFUS PREMIER STATE MUNICIPAL BOND FUND, MINNESOTA SERIES
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) APRIL 30, 1998
<TABLE>
<CAPTION>
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
- ---------------------------------------------------------------------------- ------------ ------------
<S> <C> <C>
Minneapolis-Saint Paul Housing Finance Board, SFMR:
8.875%, 11/1/2018 (Collateralized; GNMA)................................ $ 100,000 $ 103,207
8.30%, 8/1/2021 (Collateralized; GNMA).................................. 300,000 307,968
7.30%, 8/1/2031 (Collateralized; GNMA).................................. 5,490,000 5,786,295
Minneapolis-Saint Paul Metropolitan Apartments Community 7.80%, 1/1/2014.... 3,000,000 3,133,770
Minneapolis Special School District Number 001, COP:
5.375%, 1/1/2014 (Insured; MBIA)........................................ 1,000,000 1,019,140
5.90%, 2/1/2017 (Insured; MBIA)......................................... 4,400,000 4,646,884
5.65%, 2/1/2018 (Insured; MBIA)......................................... 1,300,000 1,350,050
State of Minnesota (Duluth Airport) 6.25%, 8/1/2014......................... 2,500,000 2,695,800
Minnesota Agricultural and Economic Development Board,
Minnesota Small Business Development Loan Revenue:
8.125%, 8/1/2009...................................................... 500,000 507,835
8.20%, 8/1/2009....................................................... 655,000 672,921
8.375%, 8/1/2010...................................................... 1,385,000 1,421,578
Minnesota Higher Education Facilities Authority, College and University
Revenue
(University of Saint Thomas):
5.35%, 4/1/2017....................................................... 1,000,000 1,008,420
5.40%, 4/1/2022....................................................... 2,200,000 2,216,918
Minnesota Housing Finance Agency, Revenue:
Rental Housing 6.10%, 8/1/2009.......................................... 2,065,000 2,089,326
Single Family Mortgage:
7.35%, 7/1/2016....................................................... 1,325,000 1,378,384
7.30%, 1/1/2017....................................................... 715,000 743,500
7.90%, 7/1/2019....................................................... 1,485,000 1,530,946
7.45%, 7/1/2022 (Insured; FHA)........................................ 2,730,000 2,882,307
7.95%, 7/1/2022....................................................... 1,495,000 1,573,996
6.95%, 7/1/2026....................................................... 2,800,000 2,988,272
Minnesota Public Facilities Authority, Water Pollution Control Revenue:
7.10%, 3/1/2012 (Prerefunded 3/1/2000) (a).............................. 2,350,000 2,519,905
6.95%, 3/1/2013 (Prerefunded 3/1/2001) (a).............................. 3,000,000 3,271,440
6.50%, 3/1/2014 (Prerefunded 3/1/2001) (a).............................. 5,200,000 5,690,880
5.00%, 3/1/2018......................................................... 1,320,000 1,295,488
Northern Municipal Power Agency, Electric System Revenue, Refunding:
7.25%, 1/1/2016......................................................... 3,500,000 3,648,505
5.30%, 1/1/2021 (Insured; FSA).......................................... 1,000,000 999,920
City of Red Wing, Health Care Facilities Revenue, Refunding
(River Region Obligation Group) 6.50%, 9/1/2022......................... 3,445,000 3,697,587
Rosemount Independent School District Number 196
Zero Coupon, 4/1/2014 (Insured; MBIA)................................... 3,000,000 1,314,720
Saint Cloud, Hospital Facilities Revenue (The Saint Cloud Hospital)
7%, 7/1/2020 (Insured; AMBAC) (Prerefunded 7/1/2001) (a)................ 1,000,000 1,097,700
</TABLE>
<PAGE>
DREYFUS PREMIER STATE MUNICIPAL BOND FUND, MINNESOTA SERIES
- -------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) APRIL 30, 1998
<TABLE>
<CAPTION>
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
- ---------------------------------------------------------------------------- ------------ ------------
<S> <C> <C>
Saint Paul Housing and Redevelopment Authority, Revenue:
Hospital (HealthEast Project):
5.70%, 11/1/2015 (Insured; ACA)....................................... $ 2,000,000 $ 2,054,020
5.85%, 11/1/2017 (Insured; ACA)....................................... 1,000,000 1,031,260
Single Family Mortgage, Refunding 6.90%, 12/1/2021 (Insured; FNMA)...... 2,490,000 2,637,881
Sartell, PCR, Refunding (Champion International Corp. Project) 6.95%, 10/1/2012 5,000,000 5,420,900
Seeway Port Authority of Duluth, Industrial Development Dock and Wharf
Revenues,
Refunding (Cargill Inc. Project) 6.80%, 5/1/2012........................ 3,000,000 3,294,000
Southern Minnesota Municipal Power Agency, Power Supply System Revenue:
Zero Coupon, 1/1/2025 (Insured; MBIA)................................... 5,255,000 1,273,497
Zero Coupon, 1/1/2026 (Insured; MBIA)................................... 15,530,000 3,555,283
Refunding Zero Coupon, 1/1/2027 (Insured; MBIA)......................... 4,800,000 1,041,840
University of Minnesota, College and University Revenue, Refunding 5.50%,
7/1/2021.................................................................. 5,925,000 6,186,826
Western Minnesota Municipal Power Agency, Electric Power and Light Revenue,
Refunding 5.50%, 1/1/2012 (Insured; AMBAC).............................. 1,000,000 1,039,450
White Bear Lake Independent School District Number 624 5.75%, 2/1/2017...... 1,265,000 1,317,826
------------
TOTAL LONG-TERM MUNICIPAL INVESTMENTS
(cost $140,191,819)..................................................... $149,317,300
============
SHORT-TERM MUNICIPAL INVESTMENTS-2.1%
- ----------------------------------------------------------------------------
Cohasset, Refunding, VRDN (Minnesota Power and Light Company Project)
4.25% (LOC; ABN Amro Bank N.V.) (b,c)
(cost $3,200,000)....................................................... $ 3,200,000 $ 3,200,000
============
TOTAL INVESTMENTS-100.0%
(cost $143,391,819)....................................................... $152,517,300
============
</TABLE>
<PAGE>
DREYFUS PREMIER STATE MUNICIPAL BOND FUND, MINNESOTA SERIES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SUMMARY OF ABBREVIATIONS
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ACA American Capital Assurance MBIA Municipal Bond Investors Assurance
AMBAC American Municipal Bond Assurance Corporation Insurance Corporation
COP Certificate of Participation MFHR Multi-Family Housing Revenue
FHA Federal Housing Administration MFMR Multi-Family Mortgage Revenue
FNMA Federal National Mortgage Association PCR Pollution Control Revenue
FSA Financial Security Assurance RRR Resources Recovery Revenue
GNMA Government National Mortgage Association SFMR Single Family Mortgage Revenue
HR Hospital Revenue SWDR Solid Waste Disposal Revenue
LOC Letter of Credit VRDN Variable Rate Demand Notes
</TABLE>
<TABLE>
<CAPTION>
SUMMARY OF COMBINED RATINGS (UNAUDITED)
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
FITCH (d) OR MOODY'S OR STANDARD & POOR'S PERCENTAGE OF VALUE
- --------- ------- ----------------- -------------------
AAA Aaa AAA 50.9%
AA Aa AA 22.7
A A A 16.0
BBB Bbb BBB 6.6
F1 MIG1 SP1 2.1
Not Rated (e) Not Rated (e) Not Rated (e) 1.7
------
100.0%
======
<FN>
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) Security payable on demand. The interest rate, which is subject to change,
is based upon bank prime rates or an index of market interest rates.
(c) Secured by letters of credit.
(d) Fitch currently provides creditworthiness information for a limited number
of investments.
(e) 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.
(f) At April 30, 1998, the Fund had $39,644,173 (25.5% of net assets) invested
in securities whose payment of principal and interest is dependent upon
revenues generated from housing projects.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
DREYFUS PREMIER STATE MUNICIPAL BOND FUND, MINNESOTA SERIES
- -------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES APRIL 30, 1998
<TABLE>
<CAPTION>
Cost Value
------------ ------------
<S> <C> <C> <C>
ASSETS: Investments in securities-See Statement of Investments...... $143,391,819 $152,517,300
Cash........................................................ 118,811
Interest receivable......................................... 2,580,174
Receivable for shares of Beneficial Interest subscribed..... 265,607
Receivable for investment securities sold................... 98,375
Prepaid expenses............................................ 2,729
------------
155,582,996
------------
LIABILITIES: Due to The Dreyfus Corporation and affiliates............... 70,433
Due to Distributor.......................................... 44,113
Payable for shares of Beneficial Interest redeemed.......... 94,576
Accrued expenses............................................ 24,354
------------
233,476
------------
NET ASSETS............................................................................. $155,349,520
============
REPRESENTED BY: Paid-in capital............................................. $146,521,986
Accumulated net realized gain (loss) on investments......... (297,947)
Accumulated net unrealized appreciation (depreciation)
on investments-Note 4................................... 9,125,481
------------
NET ASSETS............................................................................. $155,349,520
============
</TABLE>
NET ASSET VALUE PER SHARE
-------------------------
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
------------ ------------ ------------
<S> <C> <C> <C>
Net Assets................................................ $126,114,723 $ 28,567,854 $ 666,943
Shares Outstanding........................................ 8,240,323 1,863,549 43,515
NET ASSET VALUE PER SHARE................................. $15.30 $15.33 $15.33
====== ====== ======
</TABLE>
See notes to financial statements.
<PAGE>
DREYFUS PREMIER STATE MUNICIPAL BOND FUND, MINNESOTA SERIES
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS YEAR ENDED APRIL 30, 1998
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME
INCOME Interest Income............................ $ 9,747,475
EXPENSES: Management fee-Note 3(a)................... $ 861,736
Shareholding servicing costs-Note 3(c)..... 486,849
Distribution fees-Note 3(b)................ 142,697
Professional fees.......................... 22,578
Custodian fees............................. 16,199
Prospectus and shareholders' reports....... 13,887
Registration fees.......................... 3,961
Trustees' fees and expenses-Note 3(d)...... 3,328
Loan commitment fees-Note 2................ 1,682
Miscellaneous.............................. 7,857
----------
TOTAL EXPENSES......................... 1,560,774
-----------
INVESTMENT INCOME-NET....................................................... 8,186,701
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS-Note 4:
Net realized gain (loss) on investments.... $ 363,867
Net unrealized appreciation (depreciation)
on investments......................... 2,446,953
----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS...................... 2,810,820
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $10,997,521
===========
</TABLE>
See notes to financial statements.
<PAGE>
DREYFUS PREMIER STATE MUNICIPAL BOND FUND, MINNESOTA SERIES
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
APRIL 30, 1998 APRIL 30, 1997
-------------- --------------
<S> <C> <C>
OPERATIONS:
Investment income-net............................................. $ 8,186,701 $ 8,482,213
Net realized gain (loss) on investments........................... 363,867 (646,676)
Net unrealized appreciation (depreciation) on investments......... 2,446,953 1,631,040
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS. 10,997,521 9,466,577
------------ ------------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income-net:
Class A shares.................................................. (6,834,721) (7,188,410)
Class B shares.................................................. (1,326,960) (1,273,471)
Class C shares.................................................. (25,020) (20,332)
Net realized gain on investments:
Class A shares.................................................. (16,629) (301,648)
Class B shares.................................................. (3,601) (60,551)
Class C shares.................................................. (94) (1,243)
------------ ------------
TOTAL DIVIDENDS............................................. (8,207,025) (8,845,655)
------------ ------------
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold:
Class A shares.................................................. 5,462,533 7,615,027
Class B shares.................................................. 3,686,719 2,280,709
Class C shares.................................................. 622,715 232,695
Dividends reinvested:
Class A shares.................................................. 4,245,838 4,853,932
Class B shares.................................................. 836,985 874,682
Class C shares.................................................. 18,241 18,406
Cost of shares redeemed:
Class A shares.................................................. (14,941,030) (22,037,210)
Class B shares.................................................. (2,427,267) (2,851,658)
Class C shares.................................................. (287,817) (312,743)
------------ ------------
INCREASE (DECREASE) IN NET ASSETS FROM BENEFICIAL INTEREST
TRANSACTIONS.................................................... (2,783,083) (9,326,160)
------------ ------------
TOTAL INCREASE (DECREASE) IN NET ASSETS..................... 7,413 (8,705,238)
NET ASSETS:
Beginning of Period............................................... 155,342,107 164,047,345
------------ ------------
End of Period..................................................... $155,349,520 $155,342,107
============ ============
</TABLE>
See notes to financial statements.
<PAGE>
DREYFUS PREMIER STATE MUNICIPAL BOND FUND, MINNESOTA SERIES
- -------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
SHARES
---------------------------------
YEAR ENDED YEAR ENDED
APRIL 30, 1998 APRIL 30, 1997
-------------- --------------
<S> <C> <C>
CAPITAL SHARE TRANSACTIONS:
CLASS A
-------
Shares sold............................................................ 356,989 503,203
Shares issued for dividends reinvested................................. 276,670 321,163
Shares redeemed........................................................ (975,447) (1,455,677)
-------- ----------
NET INCREASE (DECREASE) IN SHARES OUTSTANDING..... (341,788) (631,311)
======== ==========
CLASS B
-------
Shares sold............................................................ 240,321 150,960
Shares issued for dividends reinvested................................. 54,439 57,774
Shares redeemed........................................................ (157,971) (188,834)
-------- ----------
NET INCREASE (DECREASE) IN SHARES OUTSTANDING..... 136,789 19,900
======== ==========
CLASS C
-------
Shares sold............................................................ 40,658 15,195
Shares issued for dividends reinvested................................. 1,185 1,215
Shares redeemed........................................................ (18,723) (20,849)
-------- ----------
NET INCREASE (DECREASE) IN SHARES OUTSTANDING..... 23,120 (4,439)
======== ==========
</TABLE>
See notes to financial statements.
<PAGE>
DREYFUS PREMIER STATE MUNICIPAL BOND FUND, MINNESOTA 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.
<TABLE>
<CAPTION>
CLASS A SHARES
-------------------------------------------------------
YEAR ENDED APRIL 30,
-------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA: 1998 1997 1996 1995 1994
------ ------ ------ ------ ------
Net asset value, beginning of period.................. $15.03 $14.98 $14.90 $14.72 $15.31
------ ------ ------ ------ ------
INVESTMENT OPERATIONS:
Investment income-net................................. .82 .82 .82 .83 .87
Net realized and unrealized gain (loss) on investments .27 .09 .08 .18 (.53)
------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS...................... 1.09 .91 .90 1.01 .34
------ ------ ------ ------ ------
DISTRIBUTIONS:
Dividends from investment income-net.................. (.82) (.82) (.82) (.83) (.87)
Dividends from net realized gain on investments....... -- (.04) -- -- (.06)
------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS................................... (.82) (.86) (.82) (.83) (.93)
------ ------ ------ ------ ------
Net asset value, end of period........................ $15.30 $15.03 $14.98 $14.90 $14.72
====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN*.................................. 7.36% 6.16% 6.11% 7.14% 2.08%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets............... .90% .91% .90% .90% .80%
Ratio of net investment income to average net assets.. 5.32% 5.42% 5.41% 5.68% 5.61%
Decrease reflected in above expense ratios due to
undertakings by the Manager......................... -- -- -- .01% .11%
Portfolio Turnover Rate............................... 13.37% 25.82% 35.47% 51.95% 12.21%
Net Assets, end of period (000's Omitted)............. $126,115 $129,031 $138,058 $145,444 $155,657
<FN>
- --------------------------
* Exclusive of sales load.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
DREYFUS PREMIER STATE MUNICIPAL BOND FUND, MINNESOTA 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.
<TABLE>
<CAPTION>
CLASS B SHARES
-------------------------------------------------------
YEAR ENDED APRIL 30,
-------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA: 1998 1997 1996 1995 1994
------ ------ ------ ------ ------
Net asset value, beginning of period.................. $15.06 $15.01 $14.92 $14.74 $15.32
------ ------ ------ ------ ------
INVESTMENT OPERATIONS:
Investment income-net................................. .74 .74 .74 .75 .78
Net realized and unrealized gain (loss) on investments .27 .09 .09 .18 (.52)
------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS...................... 1.01 .83 .83 .93 .26
------ ------ ------ ------ ------
DISTRIBUTIONS:
Dividends from investment income-net.................. (.74) (.74) (.74) (.75) (.78)
Dividends from net realized gain on investments....... -- (.04) -- -- (.06)
------ ------ ------ ------ ------
TOTAL DIVIDENDS....................................... (.74) (.78) (.74) (.75) (.84)
------ ------ ------ ------ ------
Net asset value, end of period........................ $15.33 $15.06 $15.01 $14.92 $14.74
====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN*.................................. 6.79% 5.60% 5.62% 6.57% 1.55%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets............... 1.42% 1.44% 1.43% 1.44% 1.38%
Ratio of net investment income to average net assets.. 4.79% 4.90% 4.87% 5.13% 4.91%
Decrease reflected in above expense ratios due to
undertakings by the Manager......................... -- -- -- .01% .09%
Portfolio Turnover Rate............................... 13.37% 25.82% 35.47% 51.95% 12.21%
Net Assets, end of period (000's Omitted)............. $28,568 $26,004 $25,617 $23,217 $21,004
<FN>
- --------------------------
* Exclusive of sales load.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
DREYFUS PREMIER STATE MUNICIPAL BOND FUND, MINNESOTA 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.
<TABLE>
<CAPTION>
CLASS C SHARES
---------------------------------
YEAR ENDED APRIL 30,
---------------------------------
<S> <C> <C> <C>
PER SHARE DATA: 1998 1997 1996(1)
------ ------ --------
Net asset value, beginning of period.................... $15.06 $15.01 $14.96
------ ------ ------
INVESTMENT OPERATIONS:
Investment income-net................................... .69 .70 .50
Net realized and unrealized gain (loss) on investments.. .27 .09 .05
------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS........................ .96 .79 .55
------ ------ ------
DISTRIBUTIONS:
Dividends from investment income-net.................... (.69) (.70) (.50)
Dividends from net realized gain on investments......... -- (.04) --
------ ------ ------
TOTAL DISTRIBUTIONS..................................... (.69) (.74) (.50)
------ ------ ------
Net asset value, end of period.......................... $15.33 $15.06 $15.01
====== ====== ======
TOTAL INVESTMENT RETURN(2).................................. 6.46% 5.34% 5.15%(3)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets................. 1.73% 1.67% 1.42%(3)
Ratio of net investment income to average net assets.... 4.40% 4.62% 4.00%(3)
Portfolio Turnover Rate................................. 13.37% 25.82% 35.47%
Net Assets, end of period (000's Omitted)............... $667 $307 $373
<FN>
- ------------------------
(1) From August 15, 1995 (commencement of initial offering) to April 30,
1996.
(2) Exclusive of sales load.
(3) Annualized.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
DREYFUS PREMIER STATE MUNICIPAL BOND FUND, MINNESOTA 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 Minnesota 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.
<PAGE>
DREYFUS PREMIER STATE MUNICIPAL BOND FUND, MINNESOTA 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 $315,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to April 30, 1998. If not
applied, the carryover expires in fiscal 2006.
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, 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 $29 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 $138,437 and $4,260, 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 was charged $321,060, $69,218 and
$1,420, respectively, pursuant to the Shareholder Services Plan.
<PAGE>
DREYFUS PREMIER STATE MUNICIPAL BOND FUND, MINNESOTA SERIES
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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 $71,954 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.
NOTE 4-SECURITIES TRANSACTIONS:
The aggregate amount of purchases and sales of investment securities,
excluding short-term securities, during the period April 30, 1998 amounted
to $20,347,469 and $23,748,938, respectively.
At April 30, 1998, accumulated net unrealized appreciation on investments
was $9,125,481, consisting of $9,125,670 gross unrealized appreciation and
$189 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).
<PAGE>
DREYFUS PREMIER STATE MUNICIPAL BOND FUND, MINNESOTA SERIES
- ------------------------------------------------------------------------------
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF TRUSTEES
DREYFUS PREMIER STATE MUNICIPAL BOND FUND, MINNESOTA SERIES
We have audited the accompanying statement of assets and liabilities,
including the statement of investments, of Dreyfus Premier State Municipal
Bond Fund, Minnesota 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 the financial highlights. Our procedures
included confirmation of securities owned as of April 30, 1998 by correspondence
with the custodian and broker. 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, Minnesota 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
New York, New York
June 3, 1998
IMPORTANT TAX INFORMATION (UNAUDITED)
In accordance with Federal tax law, the Fund hereby designates all the
dividends paid from investment income-net during its fiscal year ended April
30, 1998 as "exempt-interest dividends" (not subject to regular Federal and,
for individuals who are Minnesota residents, Minnesota 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.
<PAGE>
DREYFUS PREMIER STATE MUNICIPAL
BOND FUND, MINNESOTA 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. 055/618AR984
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
DREYFUS PREMIER STATE MUNICIPAL BOND FUND, MINNESOTA
SERIES CLASS A SHARES AND THE LEHMAN BROTHERS MUNICIPAL
BOND INDEX
EXHIBIT A:
DREYFUS
PREMIER STATE
MUNICIPAL
PERIOD LEHMAN BROTHERS BOND FUND,
MUNICIPAL MINNESOTA SERIES
BOND INDEX * (CLASS A SHARES)
4/30/88 10,000 9,550
4/30/89 10,893 10,751
4/30/90 11,678 11,467
4/30/91 13,019 12,831
4/30/92 14,257 14,044
4/30/93 16,061 15,723
4/30/94 16,407 16,050
4/30/95 17,499 17,197
4/30/96 18,889 18,247
4/30/97 20,142 19,371
4/30/98 22,016 20,796
*Source: Lehman Brothers
