Dreyfus Premier State
Municipal Bond Fund
Connecticut Series
ANNUAL REPORT
April 30, 1999
[DREYFUS LOGO]
<PAGE>
Year 2000 Issues
(Unaudited)
The fund could be adversely affected if the computer systems used by The Dreyfus
Corporation and the fund's other service providers do not properly process and
calculate date-related information from and after January 1, 2000. The Dreyfus
Corporation is working to avoid Year 2000-related problems in its systems and to
obtain assurances from other service providers that they are taking similar
steps. In addition, issuers of securities in which the fund invests may be
adversely affected by Year 2000-related problems. This could have an impact on
the value of the fund's investments and its share price.
<PAGE>
Contents
THE FUND
- --------------------------------------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Fund Performance
8 Statement of Investments
13 Statement of Assets and Liabilities
14 Statement of Operations
15 Statement of Changes in Net Assets
17 Financial Highlights
20 Notes to Financial Statements
25 Report of Independent Auditors
26 Important Tax Information
FOR MORE INFORMATION
- --------------------------------------------------------------------------------
Back Cover
<PAGE>
Dreyfus Premier The Fund
State Municipal Bond Fund,
Connecticut Series
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this annual report for Dreyfus Premier State Municipal
Bond Fund, Connecticut Series, covering the 12-month period from May 1, 1998
through April 30, 1999. Inside, you'll find valuable information about how the
Fund was managed during the period, including a discussion with the Fund's
portfolio manager, Sam Weinstock.
The past year has generally been rewarding for municipal bond investors. Lower
short-term interest rates adopted by the Federal Reserve Board and other central
banks in the fall of 1998 appear to have helped many U.S. businesses withstand
the effects of economic weakness in Japan, Asia and Latin America. At the same
time, the U.S. economy has entered its eighth year of expansion in an
environment characterized by low inflation and high levels of consumer spending.
In the second half of the reporting period, tax-exempt fixed-income securities
provided good results, especially relative to taxable U.S. Treasury securities.
While prices of U.S. Treasury securities declined significantly through the
second half of the reporting period, a lack of new issuance relative to robust
investor demand supported most municipal bond prices, which have remained
relatively unchanged over the past six months. As a result, the differences in
valuations between taxable U.S. Treasury securities and tax-exempt bonds, which
reached historically wide levels last October, have since narrowed to a more
historically normal relationship.
We appreciate your confidence over the past year, and we look forward to your
continued participation in Dreyfus Premier State Municipal Bond Fund,
Connecticut Series.
Sincerely,
/s/ Stephen E. Canter
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
May 13, 1999
2
<PAGE>
DISCUSSION OF FUND PERFORMANCE
Sam Weinstock, Portfolio Manager
How did Dreyfus Premier State Municipal Bond Fund,
Connecticut Series perform?
The Fund's Class A shares produced a total return of 6.70% over the 12-month
period ended April 30, 1999,1 compared to a total return of 6.06% for the
average of the Lipper Connecticut Municipal Debt Funds category.2 The Fund
produced a total return of 6.15% for Class B shares and 5.88% for Class C shares
over the 12-month period ended April 30, 1999.1
What is the Fund's investment approach?
Our goal is to seek a high level of federally and Connecticut state tax-exempt
income from a diversified portfolio of municipal bonds without undue risk. To
achieve this objective, we employ four primary strategies. First, we strive to
identify the maturity range that we believe will provide the most favorable
returns over the next year or two. Second, we evaluate issuers' credit quality
to find bonds that we believe provide the best risk-reward trade off at an
attractive price. Third, we look for bonds with attractively high interest
payments, even if they sell at a premium to face value. Fourth, we assess
individual bonds' early redemption features, focusing on those that cannot be
redeemed soon by their issuers. Typically, the bonds we select for the portfolio
will have several of these qualities.
We also evaluate bonds' likely performance under various market scenarios. When
we find securities that we believe will provide the best expected returns over
an anticipated market range, we select them. Many other securities are held
because they participate in market rallies and provide protection against market
declines.
What other factors influenced the Fund's performance?
When the Asian currency and credit crisis spread to Russia and threatened Latin
America last summer and fall, investors flocked to U.S.
The Fund 3
<PAGE>
DISCUSSION OF FUND PERFORMANCE (continued)
Treasury securities. As a result, yields on taxable Treasuries fell briefly in
October to levels that were roughly equivalent to yields on comparable
tax-exempt bonds.
However, the Federal Reserve Board and other central banks moved quickly to
stimulate global economic growth. Because investors feared that a stronger
economy might reignite inflationary pressures, yields on longer term bonds rose
throughout the first four months of 1999. However, the extent of that rise was
much greater for taxable U.S. Treasury securities than for tax-free municipal
bonds.
In addition, because of strong economic conditions throughout the country,
Connecticut and its municipalities have had little need to borrow. Yet, demand
from investors seeking to minimize their income tax liabilities remained high.
While this imbalance between supply and demand helped keep municipal bond prices
relatively stable compared to U.S. Treasury bonds, it has constrained our
ability to extend the portfolio's average duration because longer term
securities simply have not been available.
What is the Fund's current strategy?
As the period came to a close, we continued to search for bonds with attractive
characteristics. We have found such securities, in our opinion, in
intermediate-maturity bonds. In our view, these bonds have represented better
values than longer term bonds because they provided most of the yield with
substantially less potential volatility. Their returns have been favorable due
to the expected slightly lower yields realized as the maturities of the bonds
shorten over time. Accordingly, at the end of the period, the portfolio was
structured to emphasize bonds with maturities in the 15- to 20-year range, which
we believe can achieve this advantage. We have also found attractive
opportunities in bonds issued by the Commonwealth of Puerto Rico. As a U.S.
territory, interest payments from Puerto Rico bonds are federally and
4
<PAGE>
Connecticut tax-exempt for U.S. residents, giving us an attractive alternative
to scarce Connecticut bonds.
In addition, we have sharpened our focus on high-quality bonds. Because the
differences in yields between the highest quality bonds and lower quality bonds
have been narrow by historical standards, we have seen little reason to assume
unnecessary credit risk.
May 13, 1999
[FN]
1 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 Class A shares, or the applicable contingent deferred sales charge
imposed on redemptions in the case of Class B and Class C shares. Income may
be subject to state and local income taxes for non-Connecticut residents. Some
income may be subject to the Federal Alternative Minimum Tax (AMT) for certain
shareholders.
2 Source: Lipper Analytical Services, Inc.
</FN>
The Fund 5
<PAGE>
FUND PERFORMANCE
- -------------------------------------------------------------------------------
$21,615
Lehman Brothers Municipal
Bond Index*
[CHART]
$19,791
Dreyfus Premier State Municipal
Bond Fund, Connecticut Series
(Class A Shares)
Comparison of change in value of $10,000 investment in the Fund's Class A shares
and the Lehman Brothers Municipal Bond Index
[FN]
* Source: Lehman Brothers.
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, Connecticut Series (the "Fund") on 4/30/89 to
a $10,000 investment made in the Lehman Brothers Municipal Bond Index (the
"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 Fund invests primarily in Connecticut 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. The Index
is not limited to investments principally in Connecticut municipal obligations
and does not take into account charges, fees and other expenses. The Index,
unlike the Fund, 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. These factors can contribute to the Index potentially
outperforming or underperforming the Fund. Further information relating to Fund
performance, including expense reimbursements, if applicable, is contained in
the Financial Highlights section of the Prospectus and elsewhere in this report.
</FN>
6
<PAGE>
- -------------------------------------------------------------------------------
Average Annual Total Returns as of 4/30/99
Inception From
Date 1 Year 5 Years 10 Years Inception
- -------------------------------------------------------------------------------
Class A Shares
with sales charge (4.5%) (5/28/87) 1.86% 6.06% 7.07% --
without sales charge (5/28/87) 6.70% 7.05% 7.56% --
Class B Shares
with redemption* (1/15/93) 2.15% 6.19% -- 6.12%
without redemption (1/15/93) 6.15% 6.51% -- 6.12%
Class C Shares
with redemption** (8/15/95) 4.88% -- -- 6.55%
without redemption (8/15/95) 5.88% -- -- 6.55%
[FN]
Past performance is not predictive of future performance.
* 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>
The Fund 7
<PAGE>
STATEMENT OF INVESTMENTS
April 30, 1999
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
Principal
Long-Term Municipal Investments--102.2% Amount ($) Value ($)
- -------------------------------------------------------------------------------------------
<S> <C> <C>
Connecticut--79.5%
Connecticut:
5%, 3/15/2012 70,000 72,462
6.7945%, 3/15/2012a,b 5,000,000 5,360,400
5%, 8/1/2012 35,000 36,175
6.4493%, 8/1/2012a,b 5,900,000 6,306,038
5.125%, 3/15/2013 6,700,000 6,972,355
5.50%, 5/15/2014 2,000,000 2,119,840
5.50%, 5/15/2015 3,000,000 3,166,800
5.25%, 3/1/2016 5,000,000 5,172,450
Refunding 5%, 12/1/2012 8,000,000 8,275,680
(Clean Water Fund) Revenue:
5.125%, 9/1/2013 2,000,000 2,089,440
5.125%, 9/1/2014 3,500,000 3,640,175
5.125%, 9/1/2016 3,560,000 3,655,194
Special Tax Obligation Revenue
(Transportation Infrastructure):
Refunding 5.375%, 9/1/2008 2,500,000 2,709,725
7.125%, 6/1/2010 3,400,000 4,165,136
6.75%, 6/1/2011 (Prerefunded 6/1/2003)c 8,500,000 9,472,740
Connecticut Development Authority, Revenue:
First Mortgage Gross:
(Elim Park Baptist Home Inc. Project)
9%, 12/1/2020 (Prerefunded 12/1/1999)c 3,565,000 3,785,139
Refunding (Health Care Project,
Church Homes Inc.):
5.70%, 4/1/2012 1,240,000 1,254,917
5.80%, 4/1/2021 3,000,000 3,043,440
Refunding (Health Care Project, Elim Park
Baptist Home) 5.375%, 12/1/2018 2,300,000 2,254,874
Life Care Facilities (Seabury Project):
Refunding 8.75%, 9/1/2006 1,625,000 1,841,856
10%, 9/1/2021 (Prerefunded 9/1/2001)c 11,175,000 12,966,911
Pollution Control, Refunding (Light and Power)
5.85%, 9/1/2028 10,150,000 10,257,692
Water Facilities (Bridgeport Hydraulic)
6.15%, 4/1/2035 2,750,000 2,988,948
Connecticut Health and Educational Facilities
Authority, Revenue:
(Greenwich Academy)
5.75%, 3/1/2026 (Insured; FSA) 3,130,000 3,332,793
(Greenwich Hospital)
5.80%, 7/1/2026 (Insured; MBIA) 9,365,000 9,998,636
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
Principal
Long-Term Municipal Investments (continued) Amount ($) Value ($)
- -------------------------------------------------------------------------------------------
<S> <C> <C>
Connecticut (continued)
Connecticut Health and Educational Facilities
Authority, Revenue (continued):
(Hartford University):
6.75%, 7/1/2012 3,500,000 3,695,265
6.80%, 7/1/2022 8,500,000 8,981,355
(Johnson Evergreen Corp.) 8.50%, 7/1/2022 4,500,000 4,838,085
(Loomis Chaffee School Project)
6%, 7/1/2025 (Insured; MBIA) 1,000,000 1,087,350
(Middlesex Hospital)
6.25%, 7/1/2022 (Insured; MBIA)
(Prerefunded 7/1/2002)c 3,500,000 3,833,900
(New Britian General Hospital)
6.125%, 7/1/2014 (Insured; AMBAC) 1,000,000 1,098,060
(New Britain Memorial Hospital)
7.75%, 7/1/2022 (Prerefunded 7/1/2002)c 16,000,000 18,228,160
(Norwalk Hospital) 6.25%, 7/1/2022
(Insured; MBIA) (Prerefunded 7/1/2002)c 3,860,000 4,228,244
(Refunding-Quinnipiac College)
6%, 7/1/2013 (Prerefunded 7/1/2003)c 4,100,000 4,505,408
6%, 7/1/2013 2,445,000 2,539,719
(Refunding-Connecticut College)
5.50%, 7/1/2027 (Insured; MBIA) 2,500,000 2,619,850
(Refunding-Hospital for Special Care)
5.375%, 7/1/2017 4,430,000 4,346,583
(Refunding-Nursing Home Program - 3030 Park
Fairfield Health Center Project)
6.25%, 11/1/2021 2,500,000 2,773,725
(Sacred Heart University):
6.50%, 7/1/2016 (Prerefunded 7/1/2006)c 1,465,000 1,691,899
6.125%, 7/1/2017 (Prerefunded 7/1/2007)c 1,000,000 1,138,290
6.625%, 7/1/2026 (Prerefunded 7/1/2006)c 2,720,000 3,162,109
(Trinity College) 5.875%, 7/1/2026
(Insured; MBIA) 2,500,000 2,671,250
(University of New Haven):
6.625%, 7/1/2016 4,050,000 4,371,449
6.70%, 7/1/2026 8,605,000 9,272,576
(William W. Backus Hospital)
5.75%, 7/1/2027 (Insured; AMBAC) 2,500,000 2,655,025
(Windham Community Memorial Hospital):
5.75%, 7/1/2011 1,000,000 1,016,970
6%, 7/1/2020 1,000,000 1,029,840
The Fund 9
</TABLE>
<PAGE>
STATEMENT OF INVESTMENTS (continued)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
Principal
Long-Term Municipal Investments (continued) Amount ($) Value ($)
- -------------------------------------------------------------------------------------------
<S> <C> <C>
Connecticut (continued)
Connecticut Health and Educational Facilities
Authority, Revenue (continued):
(Yale, New Haven Hospital) 5.70%, 7/1/2025
(Insured; MBIA) 7,970,000 8,390,736
Connecticut Housing Finance Authority
(Housing Mortgage Finance Program):
6.20%, 5/15/2012 (Insured; MBIA) 1,000,000 1,074,250
6.125%, 5/15/2018 (Insured; MBIA) 1,655,000 1,772,886
6.45%, 5/15/2022 6,000,000 6,390,300
6.70%, 11/15/2022 15,985,000 17,028,341
6.75%, 11/15/2023 5,010,000 5,446,922
5.45%, 11/15/2029 5,805,000 5,910,941
6%, Series G, 11/15/2027 4,000,000 4,213,600
6%, Subseries F-2, 11/15/2027 4,975,000 5,240,665
5.85%, Subseries B-2, 11/15/2028 10,435,088
5.85%, Subseries C-2, 11/15/2028 6,525,000 6,822,540
Eastern Connecticut Resource Recovery Authority,
Solid Waste Revenue
7.1051%, 1/1/2014a 5,000,000 5,040,150
(Wheelabrator Lisbon Project):
5.50%, 1/1/2014 50,000 50,274
5.50%, 1/1/2020 9,380,000 9,320,812
Greenwich Housing Authority, MFHR
(Greenwich Close) 6.25%, 9/1/2017 4,840,000 4,987,668
New Haven 7.40%, 8/15/2011
(Prerefunded 8/15/2001)c 1,500,000 1,654,110
Sprague, Environmental Improvement Revenue
(International Paper Company Project)
5.70%, 10/1/2021 1,350,000 1,374,881
Stamford 6.60%, 1/15/2010 2,750,000 3,281,465
U. S. Related--22.7%
Commonwealth of Puerto Rico
(Public Improvement):
5.5%, 7/1/2012 (Insured; MBIA) 1,000,000 1,094,830
5.25%, 7/1/2013 (Insured; MBIA) 6,000,000 6,424,980
5.25%, 7/1/2014 (Insured; MBIA) 1,000,000 1,070,920
Zero Coupon, 7/1/2017 (Insured; MBIA) 3,800,000 1,579,660
6.80%, 7/1/2021 (Prerefunded 7/1/2002)c 6,000,000 6,658,860
Puerto Rico Aqueduct and Sewer Authority,
Revenue, Refunding
6.25%, 7/1/2013 (Insured; MBIA) 9,000,000 10,568,880
10
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
Principal
Long-Term Municipal Investments (continued) Amount ($) Value ($)
- --------------------------------------------------------------------------------------------
<S> <C> <C>
U. S. Related (continued)
Puerto Rico Electric Power Authority,
Power Revenue:
5%, 7/1/2012 (Insured; MBIA) 50,000 51,839
6.4986%, 7/1/2012a,b 2,000,000 2,150,680
7%, 7/1/2021 (Prerefunded 7/1/2001)c 5,775,000 6,303,644
Puerto Rico Highway and Transportation Authority,
Highway Revenue:
6.8364%, 7/1/2010a 3,200,000 3,568,000
7.4986%, 7/1/2015a 3,990,000 4,721,128
Refunding 5.50%, 7/1/2015 (Insured; MBIA) 20,000 21,832
Refunding 6.25%, 7/1/2015 (Insured, MBIA) 3,650,000 4,292,327
6.625%, 7/1/2018 (Prerefunded 7/1/2002)c 5,000,000 5,523,050
5.50%, 7/1/2026 3,500,000 3,638,950
5.50%, 7/1/2036 5,000,000 5,306,300
Puerto Rico Industrial Development Company,
General Purpose Revenue
5.375%, 7/1/2016 4,250,000 4,343,203
Puerto Rico Industrial Tourist, Educational,
Medical and Environmental Control Facilities
Financing Authority, Industrial Revenue
(Teachers Retirement System)
5.50%, 7/1/2016 1,150,000 1,212,997
5.50%, 7/1/2021 1,800,000 1,859,400
Puerto Rico Ports Authority, Special Facilities
Revenue (American Airlines):
6.30%, 6/1/2023 2,000,000 2,118,060
6.25%, 6/1/2026 3,250,000 3,500,153
University of Puerto Rico, University Revenue
5.50%, 6/1/2015 (Insured; MBIA) 5,000,000 5,280,900
Virgin Islands Public Financing Authority,
Revenue, Refunding Fund Loan Notes
5.50%, 10/1/2014 3,000,000 3,106,709
Virgin Islands Water and Power Authority,
Refunding (Electric Systems)
5.30%, 7/1/2021 2,000,000 2,002,359
- --------------------------------------------------------------------------------------------
Total Investments (cost $364,601,833) 102.2% 389,560,218
Liabilities Less Cash and Receivables (2.2%) (8,251,191)
Net Assets 100.0% 381,309,027
The Fund 11
</TABLE>
<PAGE>
STATEMENT OF INVESTMENTS (continued)
- --------------------------------------------------------------------------------
Summary of Abbreviations
AMBAC American Municipal Bond MBIA Municipal Bond Investors
Assurance Corporation Assurance Insurance Corporation
FSA Financial Security Assurance MFHR Multi-Family Housing Revenue
- --------------------------------------------------------------------------------
Summary of Combined Ratings (Unaudited)
Fitch or Moody's or Standard & Poor's Value (%)
- --------------------------------------------------------------------------------
AAA Aaa AAA 40.1
AA Aa AA 25.7
A A A 2.7
BBB Baa BBB 20.6
BB Ba BB 2.6
Not Rated d Not Rated d Not Rated d 8.3
100.0
[FN]
a Inverse floater security--the interest rate is subject to change periodically.
b Securities exempt from registration under rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from registration,
normally to qualified institutional buyers. At April 30, 1999 these securities
amounted to $13,817,118 or 3.6% of net assets.
c Bonds which are prerefunded are collateralized by U.S. Government securities
which are held in escrow and are used to pay principal and interest on the
municipal issue and to retire the bonds in full at the earliest refunding
date.
d Securities which, while not rated by Fitch, Moody's and Standard &Poor's have
been determined by the Fund's Manager to be of comparable quality to those
rated securities in which the Fund may invest.
See notes to financial statements.
</FN>
12
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
April 30, 1999
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
Cost Value
- ------------------------------------------------------------------------------------------------
<S> <C> <C>
Assets ($):
Investments in securities--See Statement of Investments 364,601,833 389,560,218
Interest receivable 7,340,785
Receivable for shares of Beneficial Interest subscribed 322,718
Prepaid expenses 20,236
397,243,957
- ------------------------------------------------------------------------------------------------
Liabilities ($):
Due to The Dreyfus Corporation and affiliates 173,460
Due to Distributor 105,942
Cash overdraft due to Custodian 5,425,587
Payable for investment securities purchased 9,413,976
Payable for shares of Beneficial Interest redeemed 733,056
Accrued expenses 82,909
15,934,930
- ------------------------------------------------------------------------------------------------
Net Assets ($) 381,309,027
- ------------------------------------------------------------------------------------------------
Composition of Net Assets ($):
Paid-in capital 355,274,429
Accumulated net realized gain (loss) on investments 1,076,213
Accumulated net unrealized appreciation (depreciation)
of investments--Note 4 24,958,385
- ------------------------------------------------------------------------------------------------
Net Assets ($) 381,309,027
- ------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
Net Asset Value Per Share
Class A Class B Class C
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Assets ($) 317,923,235 58,415,724 4,970,068
Shares Outstanding 25,921,924 4,765,436 405,821
- ------------------------------------------------------------------------------------------------
Net Asset Value Per Share ($) 12.26 12.26 12.25
</TABLE>
[FN]
See notes to financial statements.
</FN>
The Fund 13
<PAGE>
STATEMENT OF OPERATIONS
Year Ended April 30, 1999
- -------------------------------------------------------------------------------
Investment Income ($)
- -------------------------------------------------------------------------------
Income
Interest Income 22,176,199
Expenses:
Management fee--Note 3(a) 2,091,086
Shareholder servicing costs--Note 3(c) 1,162,052
Distribution fees--Note 3(b) 335,387
Professional fees 42,365
Custodian fees 38,710
Prospectus and shareholders' reports 19,185
Registration fees 16,859
Trustees' fees and expenses--Note 3(d) 4,602
Loan commitment fees--Note 2 1,352
Miscellaneous 13,005
Total Expenses 3,724,603
Investment Income--Net 18,451,596
- -------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) on Investments--Note 4:
Net realized gain (loss) on investments 4,383,270
Net unrealized appreciation (depreciation) on investments 1,477,323
Net Realized and Unrealized Gain (Loss) on Investments 5,860,593
Net Increase in Net Assets Resulting From Operations 24,312,189
[FN]
See notes to financial statements.
</FN>
14
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
Year Ended April 30,
------------------------
1999 1998
- ------------------------------------------------------------------------------------------
<S> <C> <C>
Operations ($):
Investment income--net 18,451,596 18,823,061
Net realized gain (loss) on investments 4,383,270 3,176,373
Net unrealized appreciation (depreciation)
on investments 1,477,323 11,604,963
Net Increase (Decrease) in Net Assets
Resulting from Operations 24,312,189 33,604,397
- ------------------------------------------------------------------------------------------
Dividends to Shareholders From ($):
Investment income--net:
Class A shares (15,578,898) (16,101,734)
Class B shares (2,715,809) (2,649,172)
Class C shares (156,889) (72,155)
Net realized gain on investments:
Class A shares (4,072,493) (1,321,109)
Class B shares (834,380) (244,976)
Class C shares (50,867) (6,879)
Total Dividends (23,409,336) (20,396,025)
- ------------------------------------------------------------------------------------------
Beneficial Interest Transactions ($):
Net proceeds from shares sold:
Class A shares 43,274,085 21,594,769
Class B shares 11,921,647 8,684,633
Class C shares 2,477,619 1,511,235
Dividends reinvested:
Class A shares 11,453,214 9,814,988
Class B shares 2,410,797 1,966,785
Class C shares 118,461 63,983
Cost of shares redeemed:
Class A shares (47,956,181) (46,147,107)
Class B shares (15,340,812) (7,966,201)
Class C shares (194,500) (321,953)
Increase (Decrease) in Net Assets from
Beneficial Interest Transactions 8,164,330 (10,798,868)
Total Increase (Decrease) in Net Assets 9,067,183 2,409,504
- ------------------------------------------------------------------------------------------
Net Assets ($):
Beginning of Period 372,241,844 369,832,340
End of Period 381,309,027 372,241,844
<FN>
See notes to financial statements.
</FN>
The Fund 15
</TABLE>
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS (continued)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
Year Ended April 30,
------------------------
1999 1998
- ------------------------------------------------------------------------------------------
<S> <C> <C>
Capital Share Transactions:
Class A
Shares sold 3,505,138 1,763,416
Shares issued for dividends reinvested 925,802 803,357
Shares redeemed (3,878,849) (3,782,366)
Net Increase (Decrease) in Shares Outstanding 552,091 (1,215,593)
- ------------------------------------------------------------------------------------------
Class B
Shares sold 963,796 711,405
Shares issued for dividends reinvested 194,981 161,021
Shares redeemed (1,244,687) (653,330)
Net Increase (Decrease) in Shares Outstanding (85,910) 219,096
- ------------------------------------------------------------------------------------------
Class C
Shares sold 200,538 123,431
Shares issued for dividends reinvested 9,591 5,239
Shares redeemed (15,793) (26,584)
Net Increase (Decrease) in Shares Outstanding 194,336 102,086
</TABLE>
[FN]
See notes to financial statements.
</FN>
16
<PAGE>
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the
fiscal periods indicated. Certain information reflects financial results for a
single Fund share. "Total return" shows how much your investment in the Fund
would have increased (or decreased) during each period, assuming you had
reinvested all dividends and distributions. These figures have been derived from
the Fund's financial statements.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
Year Ended April 30,
-----------------------------------------------
Class A Shares 1999 1998 1997 1996 1995
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per Share Data ($)
Net asset value, beginning of period 12.23 11.81 11.90 11.76 11.81
Investment Operations:
Investment income--net .61 .62 .64 .66 .67
Net realized and unrealized gain
(loss) on investments .19 .47 .16 .14 (.05)
Total from investment operations .80 1.09 .80 .80 .62
Distributions:
Dividends from investment
income--net (.61) (.62) (.64) (.66) (.67)
Dividends from net realized gain
on investments (.16) (.05) (.25) -- --
Total Distributions (.77) (.67) (.89) (.66) (.67)
Net asset value, end of period 12.26 12.23 11.81 11.90 11.76
- -----------------------------------------------------------------------------------------
Total Return (%)* 6.70 9.44 6.84 6.85 5.47
- -----------------------------------------------------------------------------------------
Ratios/Supplemental Data (%):
Ratio of expenses to average net assets .89 .90 .93 .92 .89
Ratio of net investment income
to average net assets 4.94 5.12 5.32 5.45 5.77
Decrease reflected in above
expense ratios due to
undertakings by the Manager -- -- -- -- .01
Portfolio Turnover Rate 21.95 33.31 30.66 28.83 10.48
- -----------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 317,923 310,343 313,881 321,559 335,964
The Fund 17
</TABLE>
[FN]
* Exclusive of sales load.
See notes to financial statements.
</FN>
<PAGE>
FINANCIAL HIGHLIGHTS (continued)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
Year Ended April 30,
-----------------------------------------------
Class B Shares 1999 1998 1997 1996 1995
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per Share Data ($)
Net asset value, beginning of period 12.23 11.80 11.89 11.76 11.80
Investment Operations:
Investment income--net .55 .56 .57 .60 .61
Net realized and unrealized gain
(loss) on investments .19 .48 .16 .13 (.04)
Total from investment operations .74 1.04 .73 .73 .57
Distributions:
Dividends from investment
income--net (.55) (.56) (.57) (.60) (.61)
Dividends from net realized gain
on investments (.16) (.05) (.25) -- --
Total Distributions (.71) (.61) (.82) (.60) (.61)
Net asset value, end of period 12.26 12.23 11.80 11.89 11.76
- -----------------------------------------------------------------------------------------
Total Return (%)* 6.15 8.97 6.28 6.20 4.99
- -----------------------------------------------------------------------------------------
Ratios/Supplemental Data (%):
Ratio of expenses to average net assets 1.40 1.42 1.45 1.44 1.41
Ratio of net investment income
to average net assets 4.42 4.59 4.79 4.92 5.21
Decrease reflected in above
expense ratios due to
undertakings by the Manager -- -- -- -- .01
Portfolio Turnover Rate 21.95 33.31 30.66 28.83 10.48
- -----------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 58,416 59,315 54,661 38,838 35,425
- -----------------------------------------------------------------------------------------
</TABLE>
[FN]
* Exclusive of sales load.
See notes to financial statements.
</FN>
18
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
Year Ended April 30,
------------------------------------
Class C Shares 1999 1998 1997 1996a
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per Share Data ($)
Net asset value, beginning of period 12.22 11.79 11.89 11.84
Investment Operations:
Investment income--net .52 .53 .54 .40
Net realized and unrealized gain (loss)
on investments .19 .48 .15 .05
Total from investment operations .71 1.01 .69 .45
Distributions:
Dividends from investment income--net (.52) (.53) (.54) (.40)
Dividends from net realized gain on investments (.16) (.05) (.25) --
Total Distributions (.68) (.58) (.79) (.40)
Net asset value, end of period 12.25 12.22 11.79 11.89
- -----------------------------------------------------------------------------------------
Total Return (%)b 5.88 8.68 5.93 5.31c
- -----------------------------------------------------------------------------------------
Ratios/Supplemental Data (%):
Ratio of expenses to average net assets 1.65 1.68 1.70 1.64c
Ratio of net investment income
to average net assets 4.15 4.29 4.56 4.31c
Portfolio Turnover Rate 21.95 33.31 30.66 28.83
- -----------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 4,970 2,583 1,290 1,007
- -----------------------------------------------------------------------------------------
</TABLE>
[FN]
a From August 15, 1995 (commencement of initial offering) to April 30, 1996.
b Exclusive of sales load.
c Annualized.
See notes to financial statements.
</FN>
The Fund 19
<PAGE>
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, as amended (the "Act") as a non-diversified,
open-end management investment company, and operates as a series company
currently offering thirteen series including the Connecticut 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
20
<PAGE>
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. Under the terms of the custody
agreement, the Fund received net earnings credits of $3,949 during the period
ended April 30, 1999 based on available cash balances left on deposit. Income
earned under this arrangement is included in interest income.
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
The Fund 21
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
ability of issuers within the state to pay interest on, or repay principal of,
municipal obligations held by the Fund.
(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 of 1986, as amended (the
"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 Code, and to make distributions
of income and net realized capital gain sufficient to relieve it from
substantially all Federal income and excise taxes.
NOTE 2--Bank Line of Credit:
The Fund participates with other Dreyfus-managed funds in a $600 million
redemption credit facility ("Facility") to be utilized for temporary or
emergency purposes, including the financing of redemptions. In connection
therewith, the Fund has agreed to pay commitment fees on its pro rata portion of
the Facility. Interest is charged to the Fund at rates based on prevailing
market rates in effect at the time of borrowings. During the period ended April
30, 1999, 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 Funds' average
daily net assets and is payable monthly.
22
<PAGE>
Dreyfus Service Corporation, a wholly-owned subsidiary of the Manager, retained
$7,760 during the period ended April 30, 1999 from commissions earned on sales
of the Fund's shares.
(b) Under the Distribution Plan adopted pursuant to Rule 12b-1 under the Act,
Class B and Class C shares pay 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, 1999,
Class B and Class C shares were charged $307,019 and $28,368, respectively,
pursuant to the Distribution Plan.
(c) Under the Shareholder Services Plan, Class A, Class B and Class C shares pay
the Distributor at an annual rate of .25 of 1% of the value of their average
daily net assets 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, 1999, Class A, Class B and Class C
shares were charged $787,528, $153,509 and $9,456, 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, 1999, the Fund was charged $124,367 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.
The Fund 23
<PAGE>
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, 1999 amounted to
$103,439,711 and $82,165,228, respectively.
At April 30, 1999, accumulated net unrealized appreciation on investments was
$24,958,385, consisting of $25,120,391 gross unrealized appreciation and
$162,006 gross unrealized depreciation.
At April 30, 1999, 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).
24
<PAGE>
REPORT OF INDEPENDENT AUDITORS
Shareholders and Board of Trustees
Dreyfus Premier State Municipal Bond Fund, Connecticut Series
We have audited the accompanying statement of assets and liabilities, including
the statement of investments, of Dreyfus Premier State Municipal Bond Fund,
Connecticut Series (the "Fund") (one of the Funds constituting the Dreyfus
Premier State Municipal Bond Fund) as of April 30, 1999, 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, 1999, 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 the
Fund at April 30, 1999, 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 2, 1999
The Fund 25
<PAGE>
IMPORTANT TAX INFORMATION (Unaudited)
In accordance with Federal tax law, the Fund hereby makes the following
designations regarding its fiscal year ended April 30, 1999:
- -- all the dividends paid from investment income-net are "exempt-interest
dividends" (not subject to regular Federal and, for individuals who are
Connecticut residents, Connecticut personal income taxes), and
- -- the Fund hereby designates $.1534 per share as a long-term capital gain
distribution of the $.1621 per share paid onDecember 8, 1998.
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
gains distributions (if any) paid for the 1999 calendar year on form 1099-DIV
which will be mailed by January 31, 2000.
26
<PAGE>
<PAGE>
NOTES
<PAGE>
<PAGE>
For More Information
Dreyfus Premier State
Municipal Bond Fund,
Connecticut 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
Distributor
Premier Mutual Fund Services, Inc.
60 State Street
Boston, MA 02109
To obtain information:
By telephone
Call your financial
representative or
1-800-554-4611
By mail Write to:
The Dreyfus Premier
Family of Funds
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
Not FDIC-Insured * Not Bank-Guaranteed * May Lose Value
(C) 1999, Dreyfus Service Corporation 064/623AR994
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
DREYFUS PREMIER STATE MUNICIPAL BOND FUND, CONNECTICUT SERIES
CLASS A SHARES AND THE LEHMAN BROTHERS MUNICIPAL BOND INDEX
EXHIBIT A:
DREYFUS
PREMIER STATE
PERIOD LEHMAN BROTHERS MUNICIPAL BOND FUND,
MUNICIPAL CONNECTICUT SERIES
BOND INDEX * (CLASS A SHARES)
4/30/89 10,000 9,551
4/30/90 10,720 10,118
4/30/91 11,952 11,241
4/30/92 13,088 12,156
4/30/93 14,744 13,812
4/30/94 15,063 14,077
4/30/95 16,065 14,847
4/30/96 17,341 15,864
4/30/97 18,492 16,949
4/30/98 20,211 18,549
4/30/99 21,615 19,791
*Source: Lehman Brothers
Dreyfus Premier
State Municipal
Bond Fund,
Florida Series
ANNUAL REPORT
April 30, 1999
[DREYFUS LOGO]
<PAGE>
Year 2000 Issues
(Unaudited)
The fund could be adversely affected if the computer systems used by The Dreyfus
Corporation and the fund's other service providers do not properly process and
calculate date-related information from and after January 1, 2000. The Dreyfus
Corporation is working to avoid Year 2000-related problems in its systems and to
obtain assurances from other service providers that they are taking similar
steps. In addition, issuers of securities in which the fund invests may be
adversely affected by Year 2000-related problems. This could have an impact on
the value of the fund's investments and its share price.
<PAGE>
Contents
THE FUND
- --------------------------------------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Fund Performance
8 Statement of Investments
13 Statement of Assets and Liabilities
14 Statement of Operations
15 Statement of Changes in Net Assets
17 Financial Highlights
20 Notes to Financial Statements
25 Report of Independent Auditors
26 Important Tax Information
FOR MORE INFORMATION
- --------------------------------------------------------------------------------
Back Cover
<PAGE>
Dreyfus Premier The Fund
State Municipal Bond Fund,
Florida Series
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this annual report for Dreyfus Premier State Municipal
Bond Fund, Florida Series, covering the 12-month period from May 1, 1998 through
April 30, 1999. Inside, you'll find valuable information about how the Fund was
managed during the period, including a discussion with the Fund's portfolio
manager, Stephen Kris.
The past year has generally been rewarding for municipal bond investors. Lower
short-term interest rates adopted by the Federal Reserve Board and other central
banks in the fall of 1998 appear to have helped many U.S. businesses withstand
the effects of economic weakness in Japan, Asia and Latin America. At the same
time, the U.S. economy has entered its eighth year of expansion in an
environment characterized by low inflation and high levels of consumer spending.
In the second half of the reporting period, tax-exempt fixed-income securities
provided good results, especially relative to taxable U.S. Treasury securities.
While prices for U.S. Treasury securities declined significantly through the
second half of the reporting period, a lack of new issuance relative to robust
investor demand supported most municipal bond prices, which have remained
relatively unchanged over the past six months. As a result, the differences in
valuations between taxable U.S. Treasury securities and tax-exempt bonds, which
reached historically wide levels last October, have since narrowed to a more
historically normal relationship.
We appreciate your confidence over the past year, and we look forward to your
continued participation in Dreyfus Premier State Municipal Bond Fund, Florida
Series.
Sincerely,
/s/ Stephen E. Canter
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
May 13, 1999
2
<PAGE>
DISCUSSION OF FUND PERFORMANCE
Stephen Kris, Portfolio Manager
How did Dreyfus Premier State Municipal Bond Fund,
Florida Series perform?
The Fund's Class A shares produced a total return of 5.00% over the 12-month
period ended April 30, 1999,1 compared to a total return of 5.79% for the
average of the Lipper Florida Municipal Debt Funds category.2 The Fund produced
a total return of 4.40% for Class B shares and 4.13% for Class C shares over the
12-month period ended April 30, 1999.1
What is the Fund's investment approach?
Our goal is to seek a high level of federally tax-exempt income from a
diversified portfolio of municipal bonds without undue risk. To achieve this
objective, we employ two primary strategies. First, we attempt to add value by
selecting the investment-grade tax-exempt bonds that we believe are most likely
to provide the highest yields. These bonds comprise the portfolio's long-term
core position. We augment the core position with shorter term holdings in bonds
that we believe have the potential to provide both competitive income and
capital appreciation.
Second, we tactically manage the portfolio's average duration -- a measure of
sensitivity to changes in interest rates -- in anticipation of temporary
supply-and-demand changes. If we expect the supply of newly issued bonds to
increase, we may reduce the portfolio's average duration to make cash available
for the purchase of higher yielding securities. Conversely, if we expect demand
for municipal bonds to surge at a time when we anticipate little issuance, we
may increase the portfolio's average duration to maintain current yields for as
long as practical. At other times, we try to maintain a "neutral" average
duration of about seven years, which is consistent with our benchmark index.
What other factors influenced the Fund's performance?
When the Asian currency and credit crisis spread to Russia and threatened Latin
America last summer and fall, investors flocked to
The Fund 3
<PAGE>
DISCUSSION OF FUND PERFORMANCE (continued)
U.S. Treasury securities. As a result, yields on taxable Treasuries fell briefly
in October, just before the six-month reporting period began, to levels that
were roughly equivalent to yields on comparable tax-exempt bonds.
However, the Federal Reserve Board and other central banks moved quickly to
stimulate global economic growth by reducing key short-term interest rates.
Because investors feared that greater economic growth might reignite
inflationary pressures, yields on longer-term bonds rose. However, the extent of
that rise was much greater for taxable U.S. Treasury securities than for
tax-free municipal bonds.
In addition, because the need to build new schools and infrastructure to
accommodate a rapidly growing population, Florida and its municipalities have
issued an ample supply of new bonds over the past year. That supply has been
easily absorbed by investors seeking to minimize their income tax liabilities.
This balance helped keep municipal bond prices relatively stable while U.S.
Treasury bond prices fell sharply.
What is the Fund's current strategy?
As the period came to close, we continued to search for the most attractive
yields in Florida's municipal bond market. This search led us to bonds secured
by Florida's general obligations as well as facilities that provide essential
services such as water and sewer lines. Because these bonds offered higher
yields than some of the pre-refunded bonds in the portfolio, we sold the
pre-refunded bonds to make room. We also sold some of our holdings of
zero-coupon bonds at the end of 1998 in order to realize price gains after
interest rates fell.
As of April 30, the portfolio contained a well-diversified mix of securities.
Utilities comprised the largest single industry concentration, followed by
housing and health care, respectively. We also owned a number of "special tax"
bonds that are backed by revenues generated by specific taxes on such items as
gasoline and cigarettes.
4
<PAGE>
In addition, we have continued to focus on high-quality bonds. Because the
differences in yields between the highest quality bonds and lower quality bonds
are narrow by historical standards, we see little reason to assume additional
credit risk. We expect these strategies to help us continue to maximize
tax-exempt returns for our shareholders.
May 13, 1999
[FN]
1 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 applicable contingent deferred sales charge
imposed on redemptions in the case of Class B and Class C shares. Income may
be subject to state and local income taxes for non-Florida residents. Some
income may be subject to the Federal Alternative Minimum Tax (AMT) for certain
shareholders.
2 Source: Lipper Analytical Services, Inc.
</FN>
The Fund 5
<PAGE>
$21,615
Lehman Brothers Municipal
Bond Index*
[CHART]
$19,421
Dreyfus Premier State Municipal
Bond Fund, Florida Series
(Class A Shares)
Comparison of change in value of $10,000 investment in the Fund's Class A shares
and the Lehman Brothers Municipal Bond Index
[FN]
* Source: Lehman Brothers.
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, Florida Series (the "Fund) on 4/30/89 to a
$10,000 investment made in the Lehman Brothers Municipal Bond Index (the
"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 Fund invests primarily in Florida 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.
The Index is not limited to investments principally in Florida municipal
obligations and does not take into account charges, fees and other expenses. The
Index, unlike the Fund, 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. These factors can contribute to the Index potentially
outperforming or underperforming the Fund. Further information relating to Fund
performance, including expense reimbursements, if applicable, is contained in
the Financial Highlights section of the Prospectus and elsewhere in this report.
</FN>
6
<PAGE>
- -------------------------------------------------------------------------------
Average Annual Total Returns as of 4/30/99
Inception From
Date 1 Year 5 Years 10 Years Inception
- -------------------------------------------------------------------------------
Class A Shares
with sales charge (4.5%)(5/28/87) 0.26% 4.98% 6.86% --
without sales charge (5/28/87) 5.00% 5.95% 7.36% --
Class B Shares
with redemption* (1/15/93) 0.44% 5.10% -- 5.27%
without redemption (1/15/93) 4.40% 5.42% -- 5.27%
Class C Shares
with redemption** (8/15/95) 3.14% -- -- 4.68%
without redemption (8/15/95) 4.13% -- -- 4.68%
[FN]
Past performance is not predictive of future performance.
* 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>
The Fund 7
<PAGE>
STATEMENT OF INVESTMENTS
April 30, 1999
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
Principal
Long-Term Municipal Investments--97.0% Amount ($) Value ($)
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
Florida--95.3%
Brevard County, IDR (Nui Corp. Project)
6.40%, 10/1/2024 (Insured; AMBAC) 1,000,000 1,113,570
Broward County Health Facilities Authority, Revenue,
Refunding (Broward County Nursing Home)
7.50%, 8/15/2020 (LOC; Allied Irish Bank) 1,000,000 1,074,930
Broward County Housing Finance Authority, MFHR
(Bridgewater Place Apartments) 5.40%, 10/1/2029 2,000,000 2,004,980
Charlotte County:
Healthcare Facilities Revenue (Charlotte Community
Mental Health Project) 9.25%, 7/1/2020 1,575,000 1,661,972
Utility Revenue, Refunding 5%, 10/1/2023
(Insured; FGIC) 2,500,000 2,453,225
Clark County, IDR, Refunding (Nevada Power Co. Project)
5.90%, 10/1/2030 2,500,000 2,562,650
Clay County Housing Finance Authority, SFMR
8.20%, 6/1/2021 (Collateralized; GNMA)
(Prerefunded 6/1/1999)a 395,000 408,438
Clearwater, Gas System Revenue
5.30%, 9/1/2027 (Insured; MBIA) 2,405,000 2,455,986
Dade County Health Facilities Authority, HR
(South Shore Hospital and Medical Center)
7.60%, 8/1/2024 (Insured; FHA)
(Prerefunded 2/1/2000)a 1,960,000 2,059,313
Dade County Housing Finance Authority, SFMR
6.70%, 4/1/2028 (Collateralized: FNMA, GNMA) 4,500,000 4,808,070
Duval County Housing Finance Authority, SFMR:
7.85%, 12/1/2022 (Collateralized; GNMA) 2,010,000 2,086,681
7.70%, 9/1/2024 (Collateralized; GNMA,
Insured; FGIC) 1,000,000 1,049,260
Escambia County Housing Finance Authority, SFMR
7.80%, 4/1/2022 (Collateralized; GNMA) 655,000 683,545
Florida Board of Education:
Capital Outlay (Public Education):
4.75%, 6/1/2028 5,735,000 5,386,713
Refunding:
4.50%, 6/1/2019 (Insured; FSA) 7,000,000 6,521,480
4.50%, 6/1/2022 (Insured; FSA) 3,700,000 3,393,603
Lottery Revenue 4.50%, 7/1/2017 (Insured; FGIC) 2,110,000 1,990,911
Florida Department of General Services, Facilities
Management Revenue
6.125%, 9/1/2023 (Insured; AMBAC)
(Prerefunded 9/1/2004)a 1,000,000 1,116,640
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
Principal
Long-Term Municipal Investments (continued) Amount ($) Value ($)
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
Florida (continued)
Florida Department of Juvenile Justice (Juvenile
Residential) 5.20%, 6/15/2019 (Insured; MBIA) 5,984,000 6,077,291
Florida, Housing Finance Agency:
(Brittany Rosemont Apartments) 7%, 2/1/2035
(Insured; AMBAC) 6,000,000 6,594,540
Single Family Mortgage:
6.65%, 7/1/2026 (Insured; MBIA) 1,515,000 1,621,580
Refunding 6.65%, 1/1/2024 (Collateralized: FNMA,
GNMA) 2,375,000 2,555,642
Hillsborough County, Utility Revenue, Refunding:
6.625%, 8/1/2011 4,000,000 4,244,640
7%, 8/1/2014 4,765,000 5,084,684
Hillsborough County Aviation Authority, Revenue,
Refunding (Delta Airlines) 6.80%, 1/1/2024 2,500,000 2,689,350
Hillsborough County Industrial Development Authority,
PCR, Refunding (Tampa Electric Co. Project)
6.25%, 12/1/2034 (Insured; MBIA) 1,000,000 1,106,640
Jacksonville, Sales Tax Revenue, Refunding
(River City Renaissance Project)
5.125%, 10/1/2018 (Insured; FGIC) 2,500,000 2,519,475
Jacksonville Health Facilities Authority, HR, Refunding
(St. Luke's Hospital) 7.125%, 11/15/2020 6,700,000 7,268,696
Lee County Housing Finance Authority SFMR:
6.30%, 3/1/2029 (Collateralized: FNMA, GNMA) 970,000 1,076,583
(Multi-County Program) 7.45%, 9/1/2027
(Collateralized: FNMA, GNMA) 1,230,000 1,387,022
Martin County, Utilities Systems Revenue, Refunding:
5.50%, 10/1/2012 (Insured; FGIC) 1,065,000 1,160,701
5.50%, 10/1/2013 (Insured; FGIC) 1,485,000 1,620,580
Miami-Dade County Housing Finance Authority, MFMR
(Villa Esperanza Apartments Project):
5.25%, 10/1/2019 625,000 626,569
5.35%, 10/1/2028 1,000,000 1,002,500
Miramar, Public Service Tax Revenue 6.15%, 10/1/2024
(Insured; FGIC) 1,000,000 1,078,270
North Miami Health Facilities Authority, Health Facilities
Revenue (Villa Maria Nursing Housing Project)
7.50%, 9/1/2012 2,470,000 2,621,856
Orange County, Tourist Development Tax Revenue, Refunding
4.75%, 10/1/2024 (Insured; AMBAC) 9,160,000 8,674,520
The Fund 9
</TABLE>
<PAGE>
STATEMENT OF INVESTMENTS (continued)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
Principal
Long-Term Municipal Investments (continued) Amount ($) Value ($)
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
Florida (continued)
Orange County Health Facilities Authority, Health Facilities
Revenue (Mental Health Services) 9.25%, 7/1/2020
(Prerefunded 7/1/2000)a 3,635,000 3,938,850
Osceola County Industrial Development Authority,
Revenue (Community Provider Pooled Loan Program)
7.75%, 7/1/2017 5,235,000 5,615,637
Palm Beach County, Solid Waste Industrial Development
Revenue: (Okeelanta Power LP Project)
6.85%, 2/15/2021b 7,500,000 5,737,500
(Osceola Power LP) 6.85%, 1/1/2014b 5,800,000 4,379,000
Palm Beach County Housing Finance Authority
Single Family Mortgage Purchase Revenue
6.55%, 4/1/2027 (Collateralized: FNMA, GNMA) 1,900,000 2,036,591
Pinellas County, PCR, Refunding (Florida Power Corp.)
7.20%, 12/1/2014 3,000,000 3,249,510
Pinellas County Housing Finance Authority, SFMR:
7.70%, 8/1/2022 (Collateralized; GNMA) 1,805,000 1,890,864
(Multi-County Program) 6.70%, 2/1/2028
(Collateralized: FNMA, GNMA) 4,040,000 4,330,880
Polk County Industrial Development Authority, IDR
(IMC Fertilizer) 7.525% 1/1/2015 10,000,000 10,570,900
St. Lucie, SWDR (Florida Power and Light Co. Project)
7.15%, 2/1/2023 4,000,000 4,280,920
Seminole, Water Control District 6.75%, 8/1/2022 2,000,000 2,060,560
Seminole County, Sales Tax Revenue, Refunding
4.625%, 10/1/2022 (Insured; MBIA) 2,015,000 1,881,043
Tampa:
Alleghany Health System Revenue (St. Joseph)
6.50%, 12/1/2023 (Insured; MBIA, Prerefunded
12/1/2004)a 1,000,000 1,142,470
Utility Tax, Zero Coupon, 4/1/2017 (Insured; AMBAC) 2,110,000 857,272
Tampa Bay Water, Utility System Revenue, Refunding:
5.125%, 10/1/2017 (Insured; FGIC) 2,000,000 2,031,220
4.75%, Series A, 10/1/2027 (Insured; FGIC) 5,875,000 5,538,539
4.75%, Series B, 10/1/2027 (Insured; FGIC) 3,500,000 3,299,555
Tampa Sports Authority, Sales Tax Revenue
(Tampa Bay Arena Project)
5.75%, 10/1/2025 (Insured; MBIA) 1,000,000 1,108,480
Tarpon Springs Health Facilities Authority, Hospital
Revenue (Helen Ellis Memorial Hospital Project)
7.625%, 5/1/2021 2,090,000 2,181,438
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
Principal
Long-Term Municipal Investments (continued) Amount ($) Value ($)
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
U.S. Related--1.7%
Puerto Rico Electric Power Authority, Power Revenue
5%, 7/1/2028 3,000,000 2,925,600
Total Long-Term Municipal Investments
(cost $167,191,517) 170,899,935
Principal
Short-Term Municipal Investments--1.8% Amount ($) Value ($)
- ---------------------------------------------------------------------------------------------
Florida--.7%
Pinellas County, Health Facilities Authority, Revenue,
Refunding, VRDN (Pooled Hospital Loan Program) 4.25%
(Insured; AMBAC)c 1,300,000 1,300,000
U.S. Related--1.1%
Puerto Rico Highway and Transportation Authority,
Transportation Revenue, VRDN
3.90% (Insured; AMBAC, SBPA; Bank of Nova Scotia)c 2,000,000 2,000,000
Total Short-Term Municipal Investments
(cost $3,300,000) 3,300,000
- ---------------------------------------------------------------------------------------------
Total Investments (cost $170,491,517) 98.8% 174,199,935
Cash and Receivables (Net) 1.2% 2,072,624
Net Assets 100.0% 176,272,559
The Fund 11
</TABLE>
<PAGE>
STATEMENT OF INVESTMENTS (continued)
- --------------------------------------------------------------------------------
Summary of Abbreviations
AMBAC American Municipal Bond MFHR Multi-Family Housing
Assurance Corporation Revenue
FGIC Financial Guaranty Insurance MFMR Multi-Family Mortgage
Company Revenue
FHA Federal Housing Administration PCR Pollution Control Revenue
FNMA Federal National Mortgage SBPA Standby Bond
Association Purchase Agreement
FSA Financial Security Assurance SFMR Single Family Mortgage
GNMA Government National Mortgage Revenue
Association SWDR Single Waste Disposal
HR Hospital Revenue Revenue
IDR Industrial Development Revenue VRDN Variable Rate Demand
LOC Letter of Credit Notes
MBIA Municipal Bond Investors
Assurance Insurance
Corporation
- --------------------------------------------------------------------------------
Summary of Combined Ratings (Unaudited)
Fitch or Moody's or Standard & Poor's Value (%)
- --------------------------------------------------------------------------------
AAA Aaa AAA 51.1
AA Aa AA 9.7
A A A 7.3
BBB Baa BBB 16.1
BB Ba BB 1.3
F-1+, F-1 MIG1, VMIG1 & P1 SP1, A1 1.1
Not Rated d Not Rated d Not Rated d 13.4
100.0
[FN]
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 Non-income producing security -- interest payment in default.
c Securities payable on demand. Variable interest rate--subject to periodic
change.
d Securities which, while not rated by Fitch, Moody's and Standard & Poor's have
been determined by the Manager to be of comparable quality to those rated
securities in which the Fund may invest.
See notes to financial statements.
</FN>
12
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
April 30, 1999
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
Cost Value
- ------------------------------------------------------------------------------------------
<S> <C> <C>
Assets ($):
Investments in securities--See Statement of Investments 170,491,517 174,199,935
Receivable for investment securities sold 2,931,875
Interest receivable 2,730,081
Prepaid expenses 18,417
179,880,308
- ------------------------------------------------------------------------------------------
Liabilities ($):
Due to The Dreyfus Corporation and affiliates 84,448
Due to Distributor 47,877
Cash overdraft due to Custodian 241,507
Payable for investment securities purchased 2,929,166
Payable for shares of Beneficial Interest redeemed 231,639
Accrued expenses 73,112
3,607,749
- ------------------------------------------------------------------------------------------
Net Assets ($) 176,272,559
- ------------------------------------------------------------------------------------------
Composition of Net Assets ($):
Paid-in capital 172,164,949
Accumulated net realized gain (loss) on investments 399,192
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 3,708,418
- ------------------------------------------------------------------------------------------
Net Assets ($) 176,272,559
</TABLE>
- --------------------------------------------------------------------------------
Net Asset Value Per Share
<TABLE>
<CAPTION>
Class A Class B Class C
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Assets ($) 149,184,688 26,693,403 394,468
Shares Outstanding 10,633,382 1,903,491 28,119
- ------------------------------------------------------------------------------------------
Net Asset Value Per Share ($) 14.03 14.02 14.03
<FN>
See notes to financial statements.
</FN>
The Fund 13
</TABLE>
<PAGE>
STATEMENT OF OPERATIONS
Year Ended April 30, 1999
- --------------------------------------------------------------------------------
Investment Income ($)
- --------------------------------------------------------------------------------
Income
Interest Income 10,365,309
Expenses:
Management fee--Note 3(a) 1,046,222
Shareholder servicing costs--Note 3(c) 593,173
Distribution fees--Note 3(b) 158,403
Professional fees 35,746
Custodian fees 22,282
Registration fees 20,901
Prospectus and shareholders' reports 14,148
Trustees' fees and expenses--Note 3(d) 2,572
Loan commitment fees--Note 2 1,010
Miscellaneous 22,367
Total Expenses 1,916,824
Investment Income--Net 8,448,485
- --------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) on Investments--Note 4:
Net realized gain (loss) on investments 2,468,854
Net unrealized appreciation (depreciation) on investments (1,559,597)
Net Realized and Unrealized Gain (Loss) on Investments 909,257
Net Increase in Net Assets Resulting from Operations 9,357,742
[FN]
See notes to financial statements.
</FN>
14
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
Year Ended April 30,
-----------------------------------
1999 1998
- --------------------------------------------------------------------------------------
<S> <C> <C>
Operations ($):
Investment income--net 8,448,485 10,163,273
Net realized gain (loss) on investments 2,468,854 4,552,743
Net unrealized appreciation (depreciation)
on investments (1,559,597) (30,630)
Net Increase (Decrease) in Net Assets
Resulting from Operations 9,357,742 14,685,386
- --------------------------------------------------------------------------------------
Dividends to Shareholders From ($):
Investment income--net:
Class A shares (7,184,648) (8,708,574)
Class B shares (1,247,785) (1,444,398)
Class C shares (16,052) (10,301)
Net realized gain on investments:
Class A shares (2,111,066) (1,961,831)
Class B shares (426,489) (369,040)
Class C shares (6,465) (4,375)
Total Dividends (10,992,505) (12,498,519)
- --------------------------------------------------------------------------------------
Beneficial Interest Transactions ($):
Net proceeds from shares sold:
Class A shares 6,795,289 4,051,008
Class B shares 1,932,433 2,234,966
Class C shares 289,864 381,095
Dividends reinvested:
Class A shares 3,582,522 3,975,356
Class B shares 564,491 602,999
Class C shares 6,371 5,299
Cost of shares redeemed:
Class A shares (27,626,849) (44,604,777)
Class B shares (8,078,977) (6,415,791)
Class C shares (261,074) (76,688)
Increase (Decrease) in Net Assets from
Beneficial Interest Transactions (22,795,930) (39,846,533)
Total Increase (Decrease) in Net Assets (24,430,693) (37,659,666)
- --------------------------------------------------------------------------------------
Net Assets ($):
Beginning of Period 200,703,252 238,362,918
End of Period 176,272,559 200,703,252
<FN>
See notes to financial statements.
</FN>
The Fund 15
</TABLE>
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS (continued)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
Year Ended April 30,
------------------------------------
1999 1998
- --------------------------------------------------------------------------------------
<S> <C> <C>
Capital Share Transactions:
Class A
Shares sold 477,800 284,437
Shares issued for dividends reinvested 250,751 279,615
Shares redeemed (1,932,468) (3,129,753)
Net Increase (Decrease) in Shares Outstanding (1,203,917) (2,565,701)
- --------------------------------------------------------------------------------------
Class B
Shares sold 134,751 157,058
Shares issued for dividends reinvested 39,521 42,427
Shares redeemed (567,781) (450,109)
Net Increase (Decrease) in Shares Outstanding (393,509) (250,624)
- --------------------------------------------------------------------------------------
Class C
Shares sold 20,218 26,691
Shares issued for dividends reinvested 446 373
Shares redeemed (18,353) (5,372)
Net Increase (Decrease) in Shares Outstanding 2,311 21,692
</TABLE>
[FN]
See notes to financial statements.
</FN>
16
<PAGE>
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the
fiscal periods indicated. Certain information reflects financial results for a
single Fund share. "Total return" shows how much your investment in the Fund
would have increased (or decreased) during each period, assuming you had
reinvested all dividends and distributions. These figures have been derived from
the Fund's financial statements.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
Year Ended April 30,
--------------------------------------------------
Class A Shares 1999 1998 1997 1996 1995
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per Share Data ($):
Net asset value, beginning of period 14.17 14.06 14.48 14.51 14.43
Investment Operations:
Investment income--net .65 .66 .76 .79 .81
Net realized and unrealized gain (loss)
on investments .05 .26 (.08) .17 .12
Total from Investment Operations .70 .92 .68 .96 .93
Distributions:
Dividends from investment income--net (.65) (.66) (.76) (.79) (.81)
Dividends from net realized gain
on investments (.19) (.15) (.34) (.20) (.04)
Total Distributions (.84) (.81) (1.10) (.99) (.85)
Net asset value, end of period 14.03 14.17 14.06 14.48 14.51
- -----------------------------------------------------------------------------------------
Total Return (%)* 5.00 6.73 4.74 6.63 6.71
- -----------------------------------------------------------------------------------------
Ratios/Supplemental Data (%):
Ratio of expenses to average net assets .92 .91 .92 .91 .90
Ratio of net investment income
to average net assets 4.53 4.67 5.27 5.29 5.67
Decrease reflected in above expense ratios
due to undertakings by the Manager -- -- -- -- .01
Portfolio Turnover Rate 88.48 91.18 71.68 54.37 50.62
- -----------------------------------------------------------------------------------------
Net Assets, end of period ($ X 1,000) 149,185 167,793 202,503 227,478 252,406
<FN>
* Exclusive of sales load.
See notes to financial statements.
</FN>
The Fund 17
</TABLE>
<PAGE>
FINANCIAL HIGHLIGHTS (continued)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
Year Ended April 30,
---------------------------------------------------
Class B Shares 1999 1998 1997 1996 1995
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per Share Data ($):
Net asset value, beginning of period 14.17 14.05 14.47 14.51 14.42
Investment Operations:
Investment income--net .57 .59 .69 .71 .73
Net realized and unrealized gain (loss)
on investments .04 .27 (.08) .16 .13
Total from Investment Operations .61 .86 .61 .87 .86
Distributions:
Dividends from investment income--net (.57) (.59) (.69) (.71) (.73)
Dividends from net realized gain
on investments (.19) (.15) (.34) (.20) (.04)
Total Distributions (.76) (.74) (1.03) (.91) (.77)
Net asset value, end of period 14.02 14.17 14.05 14.47 14.51
- -----------------------------------------------------------------------------------------
Total Return (%)* 4.40 6.26 4.21 6.01 6.21
- -----------------------------------------------------------------------------------------
Ratios/Supplemental Data (%):
Ratio of expenses to average net assets 1.42 1.41 1.42 1.41 1.41
Ratio of net investment income
to average net assets 4.02 4.16 4.76 4.77 5.13
Decrease reflected in above expense ratios
due to undertakings by the Manager -- -- -- -- .01
Portfolio Turnover Rate 88.48 91.18 71.68 54.37 50.62
- -----------------------------------------------------------------------------------------
Net Assets, end of period ($ X 1,000) 26,693 32,545 35,802 27,023 25,282
</TABLE>
[FN]
* Exclusive of sales load.
See notes to financial statements.
</FN>
18
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
Year Ended April 30,
-----------------------------------------------
Class C Shares 1999 1998 1997 1996a
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per Share Data ($)
Net asset value, beginning of period 14.17 14.05 14.47 14.65
Investment Operations:
Investment income--net .53 .55 .65 .48
Net realized and unrealized gain (loss)
on investments .05 .27 (.08) .02
Total from Investment Operations .58 .82 .57 .50
Distributions:
Dividends from investment income--net (.53) (.55) (.65) (.48)
Dividends from net realized gain on investments (.19) (.15) (.34) (.20)
Total Distributions (.72) (.70) (.99) (.68)
Net asset value, end of period 14.03 14.17 14.05 14.47
- --------------------------------------------------------------------------------------------
Total Return (%)b 4.13 5.94 3.95 4.69c
- --------------------------------------------------------------------------------------------
Ratios/Supplemental Data (%):
Ratio of expenses to average net assets 1.75 1.71 1.97 1.99c
Ratio of net investment income
to average net assets 3.69 3.69 4.60 4.20c
Portfolio Turnover Rate 88.48 91.18 71.68 54.37
- --------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 394 366 58 35
</FN>
a From August 15, 1995 (commencement of initial offering) to April 30, 1996.
b Exclusive of sales load.
c Annualized.
See notes to financial statements.
</FN>
The Fund 19
</TABLE>
<PAGE>
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, as amended (the "Act"), as a non-diversified
open-end management investment company, and operates as a series company
currently offering thirteen series, including the Florida 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")
20
<PAGE>
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. Under the terms of the custody
agreement, the Fund received net earnings credits of $16,931 during the period
ended April 30, 1999, based on available cash balances left on deposit. Income
earned under this arrangement is included in interest income.
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.
The Fund 21
<PAGE>
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 of 1986, as amended (the
"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 Code, and to make distributions
of income and net realized capital gain sufficient to relieve it from
substantially all Federal income and excise taxes.
NOTE 2--Bank Line of Credit:
The Fund participates with other Dreyfus-managed funds in a $600 million
redemption credit facility ("Facility") to be utilized for temporary or
emergency purposes, including the financing of redemptions. In connection
therewith, the Fund has agreed to pay commitment fees on its pro rata portion of
the Facility. Interest is charged to the Fund at rates based on prevailing
market rates in effect at the time of borrowings. During the period ended April
30, 1999, the Fund did not borrow under the Facility.
NOTE 3--Management Fee and Other Transactions
With Affiliates:
(a) Pursuant to a management agreement with the Manager, the management fee is
computed at the annual rate of .55 of 1% of the value of the Fund's average
daily net assets and is payable monthly.
Dreyfus Service Corporation, a wholly-owned subsidiary of the Manager, retained
$1,287 during the period ended April 30, 1999 from commissions earned on sales
of the Fund's shares.
22
<PAGE>
(b) Under the Distribution Plan adopted pursuant to Rule 12b-1 under the Act,
Class B and Class C shares pay the Distributor for distributing their 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, 1999, Class B and Class C
shares were charged $155,136 and $3,267, respectively, pursuant to the
Distribution Plan.
(c) Under the Shareholder Services Plan, Class A, Class B and Class C shares pay
the Distributor at an annual rate of .25 of 1% of the value of the average daily
net assets 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, 1999, Class A, Class B and Class C shares were
charged $396,899, $77,568 and $1,089, 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, 1999, the Fund was charged $77,876 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.
The Fund 23
<PAGE>
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, 1999, amounted to
$159,666,936 and $184,698,954, respectively.
At April 30, 1999, accumulated net unrealized appreciation on investments was
$3,708,418, consisting of $7,330,887 gross unrealized appreciation and
$3,622,469 gross unrealized depreciation.
At April 30, 1999, 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).
24
<PAGE>
REPORT OF INDEPENDENT AUDITORS
Shareholders and Board of Trustees
Dreyfus Premier State Municipal Bond Fund, Florida Series
We have audited the accompanying statement of assets and liabilities, including
the statement of investments, of Dreyfus Premier State Municipal Bond Fund,
Florida Series (the "Fund") (one of the Funds constituting the Dreyfus Premier
State Municipal Bond Fund) as of April 30, 1999, 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, 1999, 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 the
Fund at April 30, 1999, 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 2, 1999
The Fund 25
<PAGE>
IMPORTANT TAX INFORMATION (Unaudited)
In accordance with Federal tax law, the Fund hereby makes the following
designations regarding its fiscal year ended April 30, 1999:
--all the dividends paid from investment income--net are "exempt-interest
dividends" (not subject to regular Federal income tax, and for
individuals who are Florida residents, not subject to taxation by
Florida), and
--the Fund hereby designates $.1298 per share as a long-term capital gain
distribution of the $.1942 per share paid on December 8, 1998.
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 1999 calendar year on Form 1099-DIV which
will be mailed by January 31, 2000.
26
<PAGE>
<PAGE>
NOTES
<PAGE>
<PAGE>
For More Information
Dreyfus Premier State
Municipal Bond Fund,
Florida 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
Distributor
Premier Mutual Fund Services, Inc.
60 State Street
Boston, MA 02109
To obtain information:
By telephone
Call your financial
representative or
1-800-554-4611
By mail Write to:
The Dreyfus Premier
Family of Funds
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
Not FDIC-Insured * Not Bank-Guaranteed * May Lose Value
(C) 1999 Dreyfus Service Corporation 051/615AR994
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
DREYFUS PREMIER STATE MUNICIPAL BOND FUND, FLORIDA SERIES
CLASS A SHARES AND THE LEHMAN BROTHERS MUNICIPAL BOND INDEX
EXHIBIT A:
DREYFUS
PREMIER STATE
PERIOD LEHMAN BROTHERS MUNICIPAL BOND FUND,
MUNICIPAL FLORIDA SERIES
BOND INDEX * (CLASS A SHARES)
4/30/89 10,000 9,547
4/30/90 10,720 10,199
4/30/91 11,952 11,464
4/30/92 13,088 12,620
4/30/93 14,744 14,241
4/30/94 15,063 14,545
4/30/95 16,065 15,520
4/30/96 17,341 16,548
4/30/97 18,492 17,332
4/30/98 20,211 18,497
4/30/99 21,615 19,421
* Source: Lehman Brothers
Dreyfus Premier State
Municipal Bond Fund
Georgia Series
ANNUAL REPORT
April 30, 1999
[DREYFUS LOGO]
<PAGE>
Year 2000 Issues (Unaudited)
The fund could be adversely affected if the computer systems used by The
Dreyfus Corporation and the fund's other service providers do not properly
process and calculate date-related information from and after January 1,
2000. The Dreyfus Corporation is working to avoid Year 2000-related problems
in its systems and to obtain assurances from other service providers that
they are taking similar steps. In addition, issuers of securities in which
the fund invests may be adversely affected by Year 2000-related problems.
This could have an impact on the value of the fund's investments and its
share price.
<PAGE>
Contents
THE FUND
- ---------------
2 Letter from the President
3 Discussion of Fund Performance
6 Fund Performance
8 Statement of Investments
11 Statement of Assets and Liabilities
12 Statement of Operations
13 Statement of Changes in Net Assets
15 Financial Highlights
18 Notes to Financial Statements
23 Report of Independent Auditors
24 Important Tax Information
FOR MORE INFORMATION
- ----------------------------
Back Cover
<PAGE>
The Fund
Dreyfus Premier
State Municipal Bond Fund,
Georgia Series
Letter From The President
- -------------------------
Dear Shareholder:
We are pleased to present this annual report for Dreyfus Premier State
Municipal Bond Fund, Georgia Series, covering the 12-month period from May 1,
1998 through April 30, 1999. Inside, you'll find valuable information about
how the Fund was managed during the period, including a discussion with the
Fund's portfolio manager, Stephen Kris.
The past year has generally been rewarding for municipal bond investors.
Lower short-term interest rates adopted by the Federal Reserve Board and
other central banks in the fall of 1998 appear to have helped many U.S.
businesses withstand the effects of economic weakness in Japan, Asia and
Latin America. At the same time, the U.S. economy has entered its eighth year
of expansion in an environment characterized by low inflation and high levels
of consumer spending.
In the second half of the reporting period, tax-exempt fixed-income
securities provided good results, especially relative to taxable U.S.
Treasury securities. While prices for U.S. Treasury securities declined
significantly through the second half of the reporting period, a lack of new
issuance relative to robust investor demand supported most municipal bond
prices, which have remained relatively unchanged over the past six months. As
a result, the differences in valuations between taxable U.S. Treasury
securities and tax-exempt bonds, which reached historically wide levels last
October, have since narrowed to a more historically normal relationship.
We appreciate your confidence over the past year, and we look forward to your
continued participation in Dreyfus Premier State Municipal Bond Fund, Georgia
Series.
Sincerely,
/s/Stephen E. Canter
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
May 13, 1999
2
<PAGE>
DISCUSSION OF FUND PERFORMANCE
- ------------------------------
Stephen Kris, Portfolio Manager
How did Dreyfus Premier State Municipal Bond Fund,
Georgia Series perform?
The Fund's Class A shares produced a total return of 5.74% for the 12-month
period ended April 30, 1999,1 compared to a total return of 5.86% for the
average of the Lipper Georgia Municipal Debt Funds category.2 The Fund
produced a total return of 5.29% for Class B shares and 4.59% for Class C
shares over the 12-month period ended April 30, 1999.1
What is the Fund's investment approach?
Our goal is to seek a high level of federally and Georgia tax-exempt income
from a diversified portfolio of municipal bonds. To achieve this objective,
we employ two primary strategies. First, we attempt to add value by selecting
the tax-exempt bonds that we believe are most likely to provide the highest
yields. Using a "bottom up" approach that focuses primarily on individual
securities rather than economic trends, we constantly search for securities
that, in our opinion, represent better values than we currently hold in the
portfolio. When we find securities that we believe will help us enhance the
Fund's yield without sacrificing quality, we buy them and sell less
attractive securities.
Second, we tactically manage the portfolio's average duration -- a measure of
sensitivity to changes in interest rates -- in anticipation of temporary
supply-and-demand changes. If we expect the supply of newly issued bonds to
increase, we may reduce the portfolio's average duration to make cash
available for the purchase of higher yielding securities. Conversely, if we
expect demand for municipal bonds to surge at a time when we anticipate
little issuance, we may increase the portfolio's average duration to maintain
current yields for as long as practical. At other times, we try to maintain a
"neutral" average duration of about seven years, which is consistent with our
benchmark index.
The Fund 3
<PAGE>
DISCUSSION OF FUND PERFORMANCE (continued)
What other factors influenced the Fund's performance?
When the Asian currency and credit crisis spread to Russia and threatened
Latin America last summer and fall, investors flocked to U.S. Treasury
securities. As a result, yields on taxable Treasuries fell briefly in October
to levels that were roughly equivalent to yields on comparable tax-exempt
bonds.
However, the Federal Reserve Board and other central banks moved quickly to
stimulate global economic growth by reducing key short-term interest rates.
Because investors feared that greater economic growth might reignite
inflationary pressures, yields on longer-term bonds rose. However, the extent
of that rise was much greater for taxable U.S. Treasury securities than for
tax-free municipal bonds.
In addition, because of strong economic conditions, Georgia and its
municipalities have had less need to borrow. Yet, demand from investors
seeking to minimize their income tax liabilities remained high. This
imbalance helped keep municipal bond prices relatively stable while U.S.
Treasury bond prices fell sharply.
What is the Fund's current strategy?
As the period came to a close, we continued to search for the most attractive
values in Georgia's municipal bond market. However, the scarcity of new
bonds, has made such values difficult to find. Accordingly, the portfolio
continues to contain bonds that it has held for years. Because these bonds
were issued when interest rates were higher, these older bonds provide more
income than newer issues. In addition, whenever possible, we have strived to
take advantage of opportunities to purchase bonds selling at a discount to
their face values. As of April 30, more than 10% of the portfolio was
composed of discount bonds.
4
<PAGE>
We have continued to focus on high-quality, insured bonds. Because the
differences in yields between the highest quality bonds and lower quality
bonds are narrow by historical standards, we see little reason to assume
additional credit risk. Accordingly, we have focused on issuers that we
believe are extremely creditworthy, including the state's general obligations
as well as essential services bonds financing facilities for education, water
and sewer projects and electricity generation. On the other hand, we have
tended to avoid hospital bonds because of financial and government regulatory
pressures in the health care industry. We expect these strategies to help us
continue to maximize tax-exempt returns for our shareholders.
May 13, 1999
[FN]
1 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 applicable contingent
deferred sales charge imposed on redemptions in the case of Class B and
Class C shares. Income may be subject to state and local income taxes for
non-Georgia residents. Some income may be subject to the Federal
Alternative Minimum Tax (AMT) for certain shareholders.
2 Source: Lipper Analytical Services, Inc.
</FN>
The Fund 5
<PAGE>
FUND PERFORMANCE
$15,739
Lehman Brothers Municipal Bond Index*
[CHART]
$14,752
Dreyfus Premier State Municipal
Bond Fund, Georgia Series
(Class A Shares)
Comparison of change in value of $10,000 investment in the Fund's Class A
shares and the Lehman Brothers Municipal Bond Index
[FN]
* Source: Lehman Brothers.
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, Georgia Series (the "Fund") on
9/3/92 (Inception Date) to a $10,000 investment made in the Lehman Brothers
Municipal Bond Index (the "Index") on that date. For comparative purposes,
the value of the Index on 8/31/92 is used as the beginning value on 9/3/92.
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 Fund invests primarily in Georgia 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.
The Index is not limited to investments principally in Georgia municipal
obligations and does not take into account charges, fees and other expenses.
The Index, unlike the Fund, 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. These factors can contribute
to the Index potentially outperforming or underperforming the Fund. Further
information relating to Fund performance, including expense reimbursements,
if applicable, is contained in the Financial Highlights section of the
Prospectus and elsewhere in this report.
</FN>
6
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
Average Annual Total Returns as of 4/30/99
Inception From
Date 1 Year 5 Years Inception
- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A Shares
with sales charge (4.5%) (9/3/92) 0.99% 5.75% 6.01%
without sales charge (9/3/92) 5.74% 6.73% 6.75%
Class B Shares
with redemption* (1/15/93) 1.29% 5.90% 5.96%
without redemption (1/15/93) 5.29% 6.22% 5.96%
Class C Shares
with redemption** (8/15/95) 3.59% -- 5.66%
without redemption (8/15/95) 4.59% -- 5.66%
<FN>
Past performance is not predictive of future performance.
* 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>
The Fund 7
<PAGE>
STATEMENT OF INVESTMENTS
April 30, 1999
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
Principal
Long-Term Municipal Investments--93.9% Amount ($) Value ($)
- -----------------------------------------------------------------------------
<S> <C> <C>
Atlanta Urban Residential Finance Authority, MFHR
(New Community) 5.50%, 11/20/2027
(Collateralized; GNMA) 1,325,000 1,351,354
Barrow County School District 5.60%, 2/1/2015
(Insured; MBIA) 1,000,000 1,061,460
Brunswick & Glynn County Development Authority,
Revenue, Refunding
(Pacific Corp. Project) 5.55%, 3/1/2026 1,000,000 998,670
Carroll County Water Authority,
Water and Sewer Revenue, Refunding
4.75%, 7/1/2022 (Insured; AMBAC) 1,000,000 950,720
Cherokee County, Water and Sewer Revenue,
4.75%, 8/1/2028 (Insured; FGIC) 1,000,000 941,960
Clayton County and Clayton County Water Authority,
Water and Sewer Revenue, Refunding
5.60%, 5/1/2013 (Insured; AMBAC) 1,200,000 1,286,460
Colquitt County Hospital Authority, Refunding
5.50%, 3/1/2016 (Insured; FSA) 1,000,000 1,039,270
Columbia County, Water and Sewer Revenue,
Refunding 5.40%, 6/1/2011
(Insured; AMBAC) 750,000 801,015
Fayette County School District
6.125%, 3/1/2015 500,000 550,455
Fulton County, Water and Sewer Revenue, Refunding:
6.375%, 1/1/2014 (Insured; FGIC,
Escrowed to Maturity) 260,000 304,054
6.375%, 1/1/2014 (Insured; FGIC) 30,000 34,808
Gainesville, Water and Sewer Revenue,
Refunding 6%, 11/15/2012 (Insured; FGIC) 300,000 341,814
Georgia:
6.65%, 3/1/2009 1,000,000 1,187,240
5.65%, 3/1/2012 1,000,000 1,105,480
Georgia Housing and Finance Authority, SFMR:
7%, 12/1/2015 (Insured; FHA) 620,000 622,691
6.50%, 12/1/2017 (Insured; FHA) 1,000,000 1,065,850
Georgia Municipal Gas Authority,
Gas Revenue (Warner Robins Project)
5.80%, 1/1/2015 (Insured; MBIA) 1,000,000 1,077,730
Glynn-Brunswick Memorial Hospital Authority
(Southeast Georgia Health)
5.25%, 8/1/2013 (Insured; MBIA) 1,000,000 1,038,150
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
Principal
Long-Term Municipal Investments (continued) Amount ($) Value ($)
- -----------------------------------------------------------------------------
<S> <C> <C>
Marietta Development Authority, Revenue,
Refunding (First Mortgage-Life College)
5.75%, 9/1/2014 (Insured; FSA) 850,000 911,753
Marietta School 4.50%, 2/1/2019 1,000,000 925,200
Meriwether County School District
5.50%, 2/1/2016 (Insured; FSA) 1,000,000 1,051,140
Metropolitan Atlanta Rapid Transportation Authority,
Sales Tax Revenue, Refunding
6.25%, 7/1/2020 (Insured; AMBAC) 300,000 349,692
Private Colleges and Universities Authority, Revenue,
Refunding (Spellman College Project)
6.20%, 6/1/2014 (Insured; FGIC) 1,000,000 1,107,130
Total Long-Term Municipal Investments
(cost $18,968,941) 20,104,096
- -----------------------------------------------------------------------------
Short-Term Municipal Investments--4.7%
- -----------------------------------------------------------------------------
Heard County Development Authority, PCR, VRDN
(Georgia Power Co., Plant Wansley)
4.25% (a) (cost $1,000,000) 1,000,000 1,000,000
- -----------------------------------------------------------------------------
Total Investments (cost $19,968,941) 98.6% 21,104,096
Cash and Receivables (Net) 1.4% 303,434
Net Assets 100.0% 21,407,530
</TABLE>
The Fund 9
<PAGE>
<TABLE>
- -----------------------------------------------------------------------------
<CAPTION>
Summary of Abbreviations
<S> <C> <C> <C>
AMBAC American Municipal Bond MBIA Municipal Bond Investors Assurance
Assurance Corporation Insurance Corporation
FGIC Financial Guaranty Insurance Company MFHR Multi-Family Housing Revenue
FHA Federal Housing Administration PCR Pollution Control Revenue
FSA Financial Security Assurance SFMR Single Family Mortgage Revenue
GNMA Government National Mortgage VRDN Variable Rate Demand Notes
Association
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
Summary of Combined Ratings (Unaudited)
Fitch or Moody's or Standard & Poor's Value (%)
- -----------------------------------------------------------------------------
<S> <C> <C> <C>
AAA Aaa AAA 83.6
AA Aa AA 7.0
BBB Baa BBB 4.7
F1+, F-1 MIG1, VMIG1 & P1 SP1, A1 4.7
100.0
<FN>
a Security payable on demand. Variable interest rate subject to periodic
change.
b At April 30, 1999, the fund had $5,738,561 (26.8% of net assets) invested
in securities whose payment of principal and interest is dependent upon
revenues generated from utility-water and sewer projects.
See notes to financial statements.
</FN>
</TABLE>
10
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
April 30, 1999
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
Cost Value
- -----------------------------------------------------------------------------
<S> <C> <C>
Assets ($):
Investments in securities--See Statement of Investments 19,968,941 21,104,096
Interest receivable 354,610
Prepaid expenses 14,626
21,473,332
- -----------------------------------------------------------------------------
Liabilities ($):
Due to The Dreyfus Corporation and affiliates 11,591
Due to Distributor 9,982
Cash overdraft due to Custodian 44,229
65,802
- -----------------------------------------------------------------------------
Net Assets ($): 21,407,530
- -----------------------------------------------------------------------------
Composition of Net Assets ($):
Paid-in capital 20,339,650
Accumulated net realized gain (loss) on investments (67,275)
Accumulated net unrealized appreciation (depreciation)
of investments--Note 4 1,135,155
- -----------------------------------------------------------------------------
Net Assets ($) 21,407,530
</TABLE>
<TABLE>
- ------------------------------------------------------------------------------
Net Asset Value Per Share
Class A Class B Class C
- ------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Assets ($) 8,768,551 12,592,463 46,516
Shares Outstanding 634,941 911,4 89 3,370
- ------------------------------------------------------------------------------
Net Asset Value Per Share ($) 13.81 13.82 13.80
<FN>
See notes to financial statements.
</FN>
</TABLE>
The Fund 11
<PAGE>
STATEMENT OF OPERATIONS
Year Ended April 30, 1999
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------
Investment Income ($)
- ------------------------------------------------------------------------------
<S> <C>
Income:
Interest Income 1,212,087
Expenses:
Management fee--Note 3(a) 126,319
Distribution fees--Note 3(b) 80,905
Shareholder servicing costs--Note 3(c) 70,422
Prospectus and shareholders' reports 10,181
Registration fees 8,297
Professional fees 4,657
Custodian fees 1,741
Trustees' fees and expenses--Note 3(d) 316
Loan commitment fees--Note 2 85
Miscellaneous 5,036
Total Expenses 307,959
Investment Income--Net 904,128
- -----------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) on Investments--Note 4:
Net realized gain (loss) on investments 544,900
Net unrealized appreciation (depreciation) on investments (214,880)
Net Realized and Unrealized Gain (Loss) on Investments 330,020
Net Increase in Net Assets Resulting From Operations 1,234,148
<FN>
See notes to financial statements.
</FN>
</TABLE>
12
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------
Year Ended April 30,
-------------------------------
1999 1998
- ------------------------------------------------------------------------------
<S> <C> <C>
Operations ($):
Investment income--net 904,128 1,014,157
Net realized gain (loss) from investments 544,900 52,283
Net unrealized appreciation (depreciation)
on investments (214,880) 723,425
Net Increase (Decrease) in Net Assets
Resulting from Operations 1,234,148 1,789,865
- -----------------------------------------------------------------------------
Dividends to Shareholders From ($):
Investment income--net:
Class A shares (290,432) (307,129)
Class B shares (612,746) (705,439)
Class C shares (950) (1,589)
Total Dividends (904,128) (1,014,157)
- -----------------------------------------------------------------------------
Beneficial Interest Transactions ($):
Net proceeds from shares sold:
Class A shares 3,073,890 1,034,483
Class B shares 630,199 1,001,862
Class C shares 35,401 14,318
Dividends reinvested:
Class A shares 186,394 210,772
Class B shares 298,894 349,972
Class C shares 409 1,014
Cost of shares redeemed:
Class A shares (784,843) (1,833,199)
Class B shares (6,162,616) (2,556,894)
Class C shares (32,325) (79,498)
Increase (Decrease) in Net Assets from
Beneficial Interest Transactions (2,754,597) (1,857,170)
Total Increase (Decrease) in Net Assets (2,424,577) (1,081,462)
- -----------------------------------------------------------------------------
Net Assets ($):
Beginning of Period 23,832,107 24,913,569
End of Period 21,407,530 23,832,107
<FN>
See notes to financial statements.
</FN>
</TABLE>
The Fund 13
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS (continued)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------
Year Ended April 30,
-------------------------------
1999 1998
- ------------------------------------------------------------------------------
<S> <C> <C>
Capital Share Transactions:
Class A
Shares sold 220,547 76,833
Shares issued for dividends reinvested 13,383 15,405
Shares redeemed (56,295) (134,087)
Net Increase (Decrease) in Shares Outstanding 177,635 (41,849)
- -----------------------------------------------------------------------------
Class B
Shares sold 45,364 72,878
Shares issued for dividends reinvested 21,439 25,567
Shares redeemed (443,237) (187,669)
Net Increase (Decrease) in Shares Outstanding (376,434) (89,224)
- -----------------------------------------------------------------------------
Class C
Shares sold 2,553 1,041
Shares issued for dividends reinvested 29 74
Shares redeemed (2,305) (5,938)
Net Increase (Decrease) in Shares Outstanding 277 (4,823)
<FN>
See notes to financial statements.
</FN>
14
<PAGE>
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the
fiscal periods indicated. Certain information reflects financial results for a
single Fund share. "Total return" shows how much your investment in the Fund
would have increased (or decreased) during each period, assuming you had
reinvested all dividends and distributions. These figures have been derived
from the Fund's financial statements.
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Year Ended April 30,
--------------------------------------
Class A Shares 1999 1998 1997 1996 1995
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per Share Data ($)
Net asset value, beginning of period 13.63 13.22 13.05 12.80 12.69
Investment Operations:
Investment income--net .60 .61 .62 .66 .73
Net realized and unrealized gain
(loss) on investments .18 .41 .17 .25 .11
Total from investment operations .78 1.02 .79 .91 .84
Distributions:
Dividends from investment
income--net (.60) (.61) (.62) (.66) (.73)
Net asset value, end of period 13.81 13.63 13.22 13.05 12.80
- -------------------------------------------------------------------------------
Total Return (%)* 5.74 7.76 6.16 7.14 6.87
- -------------------------------------------------------------------------------
Ratios/Supplemental Data (%):
Ratio of expenses to average net assets .99 .95 .98 .74 .25
Ratio of net investment income
to average net assets 4.27 4.44 4.71 5.00 5.80
Decrease reflected in above
expense ratios due to
undertakings by the Manager -- -- -- .21 .78
Portfolio Turnover Rate 69.13 36.64 50.96 33.09 34.04
- -------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 8,769 6,232 6,598 8,346 8,985
<FN>
* Exclusive of sales load.
See notes to financial statements.
</FN>
</TABLE>
The Fund 15
<PAGE>
FINANCIAL HIGHLIGHTS (continued)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------
Year Ended April 30,
-------------------------------------
Class B Shares 1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per Share Data ($)
Net asset value, beginning of period 13.63 13.22 13.06 12.80 12.69
Investment Operations:
Investment income--net .53 .54 .56 .59 .66
Net realized and unrealized gain
(loss) on investments .19 .41 .16 .26 .11
Total from investment operations .72 .95 .72 .85 .77
Distributions:
Dividends from investment
income--net (.53) (.54) (.56) (.59) (.66)
Net asset value, end of period 13.82 13.63 13.22 13.06 12.80
- -------------------------------------------------------------------------------
Total Return (%)* 5.29 7.24 5.55 6.69 6.33
- -------------------------------------------------------------------------------
Ratios/Supplemental Data (%):
Ratio of expenses to average net assets 1.49 1.44 1.47 1.24 .75
Ratio of net investment income
to average net assets 3.79 3.94 4.20 4.46 5.27
Decrease reflected in above
expense ratios due to
undertakings by the Manager -- -- -- .20 .80
Portfolio Turnover Rate 69.13 36.64 50.96 33.09 34.04
- -------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 12,592 17,558 18,211 20,106 19,249
<FN>
* Exclusive of sales load.
See notes to financial statements.
</FN>
</TABLE>
16
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------
Year Ended April 30,
--------------------------------
Class C Shares 1999 1998 1997 1996 a
- -------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per Share Data ($)
Net asset value, beginning of period 13.62 13.22 13.05 12.85
Investment Operations:
Investment income--net .44 .47 .51 .38
Net realized and unrealized gain
(loss) on investments .18 .40 .17 .20
Total from investment operations .62 .87 .68 .58
Distributions:
Dividends from investment
income--net (.44) (.47) (.51) (.38)
Net asset value, end of period 13.80 13.62 13.22 13.05
- --------------------------------------------------------------------------
Total Return (%) b 4.59 6.61 5.30 6.28 c
- --------------------------------------------------------------------------
Ratios/Supplemental Data (%):
Ratio of expenses to average net assets 1.99 1.91 1.80 1.98 c
Ratio of net investment income
to average net assets 3.28 3.48 3.87 3.73 c
Portfolio Turnover Rate 69.13 36.64 50.96 33.09
- --------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 47 42 105 88
<FN>
a From August 15, 1995 (commencement of initial offering) to April 30, 1996.
b Exclusive of sales load.
c Annualized.
See notes to financial statements.
</FN>
</TABLE>
The Fund 17
<PAGE>
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, as amended (the "Act"), as a non-
diversified, open-end management investment company, and operates as a series
company currently offering thirteen series including the Georgia 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
18
<PAGE>
("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. Under the terms of
the custody agreement, the Fund received net earnings credits of $357 during
the period ended April 30, 1999 based on available cash balances left on
deposit. Income earned under this arrangement is included in interest income.
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 Fund 19
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
the ability of issuers within the state to pay interest on, or repay principal
of, municipal obligations held by the Fund.
(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 of
1986, as amended (the "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 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 $68,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to
April 30, 1999. If not applied, $51,000 of the carryover expires in fiscal
2004 and $17,000 expires in fiscal 2005.
NOTE 2--Bank Line of Credit:
The Fund participates with other Dreyfus-managed funds in a $600 million
redemption credit facility ("Facility") to be utilized for
temporary or emergency purposes, including the financing of re-demptions. 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. During the
period ended April 30, 1999, the Fund did not borrow under the Facility.
20
<PAGE>
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 Funds'
average daily net assets and is payable monthly.
(b) Under the Distribution Plan adopted pursuant to Rule 12b-1 under the Act,
Class B and Class C shares pay the Distributor for distributing their 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, 1999, Class B and Class
C shares were charged $80,687 and $218, respectively, pursuant to the
Distribution Plan.
(c) Under the Shareholder Services Plan, Class A, Class B and Class C shares
pay the Distributor at an annual rate of .25 of 1% of the value of their
average daily net assets 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, 1999, Class A, Class B and Class C
shares were charged $17,002, $40,344 and $72, 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, 1999, the Fund was charged $11,362 pursuant to the
transfer agency agreement.
The Fund 21
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
(d) Each trustee who is not an "affiliated person" as defined in the Act
receives from the Trust an annual fee of $2,500 and an attendance fee of $250
per meeting. The Chairman of the Board receives an additional 25% of such
compensation.
NOTE 4--Securities Transactions:
The aggregate amount of purchases and sales of investment securities,
excluding short-term securities, during the period ended April 30, 1999
amounted to $15,480,260 and $19,204,133, respectively.
At April 30, 1999, accumulated net unrealized appreciation on investments was
$1,135,155, consisting of $1,228,391 gross unrealized appreciation and
$93,236 gross unrealized depreciation.
At April 30, 1999, 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).
22
<PAGE>
REPORT OF INDEPENDENT AUDITORS
Shareholders and Board of Trustees
Dreyfus Premier State Municipal Bond Fund, Georgia Series
We have audited the accompanying statement of assets and liabilities,
including the statement of investments, of Dreyfus Premier State Municipal
Bond Fund, Georgia Series (the "Fund") (one of the Funds constituting the
Dreyfus Premier State Municipal Bond Fund) as of April 30, 1999, 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, 1999, by correspondence with
the custodian. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide
a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Fund at April 30, 1999, 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 2, 1999
The Fund 23
<PAGE>
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, 1999 as "exempt-interest dividends" (not subject to regular Federal and,
for individuals who are Georgia residents, Georgia 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
gains distributions (if any) paid for the 1999 calendar year on form 1099-DIV
which will be mailed by January 31, 2000.
24
<PAGE>
<PAGE>
For More Information
Dreyfus Premier
State Municipal Bond Fund,
Georgia 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
Distributor
Premier Mutual Fund Services, Inc.
60 State Street
Boston, MA 02109
To obtain information:
By telephone
Call your financial representative or
1-800-554-4611
By mail Write to:
The Dreyfus Premier
Family of Funds
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
Not FDIC-Insured * Not Bank-Guaranteed * May Lose Value
(C) 1999, Dreyfus Service Corporation 068AR994
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
DREYFUS PREMIER STATE MUNICIPAL BOND FUND, GEORGIA SERIES
CLASS A SHARES AND THE LEHMAN BROTHERS MUNICIPAL BOND
INDEX
EXHIBIT A:
DREYFUS
PREMIER STATE
PERIOD LEHMAN BROTHERS MUNICIPAL BOND FUND,
MUNICIPAL GEORGIA SERIES
BOND INDEX * (CLASS A SHARES)
9/3/92 10,000 9,549
4/30/93 10,736 10,548
4/30/94 10,968 10,650
4/30/95 11,698 11,382
4/30/96 12,627 12,195
4/30/97 13,465 12,946
4/30/98 14,717 13,951
4/30/99 15,739 14,752
*Source: Lehman Brothers
Dreyfus Premier
State Municipal
Bond Fund
Maryland Series
ANNUAL REPORT
April 30, 1999
[DREYFUS LOGO]
<PAGE>
Year 2000 Issues
(Unaudited)
The fund could be adversely affected if the computer systems used by The
Dreyfus Corporation and the fund's other service providers do not properly
process and calculate date-related information from and after January 1,
2000. The Dreyfus Corporation is working to avoid Year 2000-related problems
in its systems and to obtain assurances from other service providers that
they are taking similar steps. In addition, issuers of securities in which
the fund invests may be adversely affected by Year 2000-related problems.
This could have an impact on the value of the fund's investments and its
share price.
<PAGE>
Contents
THE FUND
- -------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Fund Performance
8 Statement of Investments
13 Statement of Assets and Liabilities
14 Statement of Operations
15 Statement of Changes in Net Assets
17 Financial Highlights
20 Notes to Financial Statements
25 Report of Independent Auditors
26 Important Tax Information
FOR MORE INFORMATION
- -------------------------------
Back Cover
<PAGE>
Dreyfus Premier The Fund
State Municipal Bond Fund,
Maryland Series
LETTER FROM THE PRESIDENT
- -------------------------
Dear Shareholder:
We are pleased to present this annual report for Dreyfus Premier State
Municipal Bond Fund, Maryland Series, covering the 12-month period from May
1, 1998 through April 30, 1999. Inside, you'll find valuable information
about how the Fund was managed during the period, including a discussion with
the Fund's portfolio manager, Douglas Gaylor.
The past year has generally been rewarding for municipal bond investors.
Lower short-term interest rates adopted by the Federal Reserve Board and
other central banks in the fall of 1998 appear to have helped many U.S.
businesses withstand the effects of economic weakness in Japan, Asia and
Latin America. At the same time, the U.S. economy has entered its eighth year
of expansion in an environment characterized by low inflation and high levels
of consumer spending.
In the second half of the reporting period, tax-exempt fixed-income
securities provided good results, especially relative to taxable U.S.
Treasury securities. While prices of U.S. Treasury securities declined
significantly through the second half of the reporting period, a lack of new
issuance relative to robust investor demand supported most municipal bond
prices, which have remained relatively unchanged over the past six months. As
a result, the differences in valuations between taxable U.S. Treasury
securities and tax-exempt bonds, which reached historically wide levels last
October, have since narrowed to a more historically normal relationship.
We appreciate your confidence over the past year, and we look forward to your
continued participation in Dreyfus Premier State Municipal Bond Fund,
Maryland Series.
Sincerely,
/s/Stephen E. Canter
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
May 13, 1999
2
<PAGE>
DISCUSSION OF FUND PERFORMANCE
- ------------------------------
Douglas Gaylor, Portfolio Manager
How did Dreyfus Premier State Municipal Bond Fund, Maryland Series perform?
The Fund's Class A shares produced a 5.76% total return over the 12-month
period ended April 30, 1999,1 compared to a total return of 5.72% for the
average of the Lipper Maryland Municipal Debt Funds category.2 The Fund
produced a total return of 5.20% for Class B shares and 4.93% for Class C
shares over the 12-month period ended April 30, 1999.1
We attribute the Fund's relative performance to its focus on high-quality
municipal bonds issued by Maryland, its municipalities and authorities.
Lower-rated issues have remained fairly expensive compared to insured
securities. The Fund has continued to take advantage of this tight spread
relationship by favoring high-rated securities, which are more liquid. This
strategy should help give the Fund more flexibility to react to a weak
market, which can experience liquidity restraints.
What is the Fund's investment approach?
Our goal is to seek a high level of federally and Maryland tax-exempt income
from a diversified portfolio of longer-term municipal bonds. We also seek to
provide a competitive total return. To achieve these goals, we prefer to
downplay interest rate trends and market forecasts in favor of rigorous
analysis of each individual bond's structure. Within the context of our bond
structure analyses, we strive to maximize both income and total return, which
is the combination of income and price changes.
We try to allocate between one-half and three-quarters of the total portfolio
to Maryland bonds that we expect to provide consistently high yields. We
often find such opportunities in Original Issue Discount bonds in the 15- to
20-year maturity range, for example. We not only look for bonds that we
expect to provide highly competitive
The Fund 3
<PAGE>
DISCUSSION OF FUND PERFORMANCE (continued)
yields, but we try to ensure that we select bonds that are most likely to
obtain attractive prices if and when we decide to sell them into the secondary
market.
For the remainder of the portfolio, we look for bonds that we believe will
offer attractive total returns. We typically look for bonds that are selling
at a discount to face value because they may be temporarily out of favor
among investors. Our expectation is that these bonds' prices will rise as
they return to favor over time.
What other factors influenced the Fund's performance?
When the Asian currency and credit crisis spread to Russia and threatened
Latin America last summer and fall, investors flocked to U.S. Treasury
securities. As a result, yields on taxable Treasuries fell briefly in October
to levels that were roughly equivalent to yields on comparable tax-exempt
bonds.
However, the Federal Reserve Board and other central banks moved quickly to
stimulate global economic growth. They did so last fall by reducing key
short-term interest rates. Because lower short-term interest rates were
expected to stimulate economic growth and potentially reignite inflationary
pressures, yields on longer-term bonds rose throughout the first four months
of 1999. However, the extent of that rise was much greater for taxable U.S.
Treasury securities than for tax-free municipal bonds.
In addition, because of strong economic conditions throughout the country,
Maryland and its municipalities have had less need to borrow. Yet, demand
from investors seeking to minimize their income tax liabilities has remained
high. This balance between supply and demand helped keep municipal bond
prices relatively stable while U.S. Treasury bond prices fell sharply.
What is the Fund's current strategy?
While we have continued to search for bonds with attractive structures in
Maryland's municipal marketplace, the supply of bonds has been
4
<PAGE>
limited amid strong demand. When we have found securities that meet our
criteria, they have tended to be bonds that were selling at a discount to their
face values and that could not be redeemed by their issuers anytime soon. In
addition, we have continued to focus on high-quality issuers whenever possible.
Because the differences in yields between the highest-quality bonds and
lower-quality bonds are narrow by historical standards, we currently see
little reason to assume the added credit risk lower- rated bonds entail.
Over the longer term, we intend to remain vigilant in our efforts to identify
tax-exempt Maryland bonds that we believe are most likely to deliver an
attractive combination of income and total return. We expect our bond
structure analyses to help us continue to maximize tax-exempt returns for our
shareholders.
May 13, 1999
[FN]
1 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 applicable contingent deferred sales charge
imposed on redemptions in the case of Class B and Class C shares. Income may
be subject to state and local income taxes for non-Maryland residents. Some
income may be subject to the Federal Alternative Minimum Tax (AMT) for
certain shareholders.
2 Source: Lipper Analytical Services, Inc.
</FN>
The Fund 5
<PAGE>
FUND PERFORMANCE
$21,615
Lehman Brothers Municipal
Bond Index*
[CHART]
$20,104
Dreyfus Premier State Municipal
Bond Fund, Maryland Series
Comparison of change in value of $10,000 investment in the Fund's Class A
shares and the Lehman Brothers Municipal Bond Index
[FN]
* Source: Lehman Brothers.
Past performance is not predictive of future performance.
The above graph compares a $10,000 investment made in Class A shares of
Dreyfus Premier State Municipal Bond Fund, Maryland Series (the "Fund") on
4/30/89 to a $10,000 investment made in the Lehman Brothers Municipal Bond
Index (the "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 Fund invests primarily in Maryland municipal securities and its
performance shown in the line graph takes into account the maximum initial
sales charge on Class A shares and all other applicable fees and expenses.
The Index is not limited to investments principally in Maryland municipal
obligations and does not take into account charges, fees and other expenses.
The Index, unlike the Fund, 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. These factors can contribute
to the Index potentially outperforming or underperforming the Fund. Further
information relating to Fund performance, including expense reimbursements,
if applicable, is contained in the Financial Highlights section of the
Prospectus and elsewhere in this report.
</FN>
6
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
Average Annual Total Returns as of 4/30/99
Inception From
Date 1 Year 5 Years 10 Years Inception
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Class A Shares
with sales charge (4.5%) (5/28/87) 1.04% 6.17% 7.23% --
without sales charge (5/28/87) 5.76% 7.16% 7.73% --
Class B Shares
with redemption* (1/15/93) 1.24% 6.27% -- 6.08%
without redemption (1/15/93) 5.20% 6.59% -- 6.08%
Class C Shares
with redemption** (8/15/95) 3.94% -- -- 6.36%
without redemption (8/15/95) 4.93% -- -- 6.36%
<FN>
Past performance is not predictive of future performance.
* 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>
The Fund 7
<PAGE>
STATEMENT OF INVESTMENTS
April 30, 1999
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal
Long-Term Municipal Investments--98.8% Amount ($) Value ($)
- --------------------------------------------------------------------------------
<S> <C> <C>
Maryland--92.9%
Anne Arundel County:
General Improvement 4.50%, 8/1/2018 870,000 817,069
Water and Sewer:
4.50%, 8/1/2018 515,000 483,667
4.50%, 8/1/2019 1,495,000 1,397,676
4.50%, 8/1/2020 1,455,000 1,355,827
Baltimore:
7%, 10/15/2007 (Insured; MBIA) 1,500,000 1,785,195
7.15%, 10/15/2008 1,275,000 1,538,479
(Tindeco Wharf Project) 6.60%, 12/20/2024
(Collateralized; GNMA) 4,250,000 4,534,112
Port Facilities Revenue (Consolidated Coal Sales)
6.50%, 12/1/2010 9,740,000 10,701,533
Baltimore City Housing Corp., MFHR, Refunding
7.25%, 7/1/2023 (Collateralized; FNMA) 3,130,000 3,200,895
Baltimore County:
Mortgage Revenue, Refunding:
Zero coupon, 9/1/2024 2,280,000 561,245
(Burnam Woods) 5.20%, 9/1/2018 (Insured; FHA) 1,000,000 1,010,290
Nursing Facility Mortgage Revenue
(Eastpoint Rehabilitation & Nursing Centers):
6.75%, 4/1/2015 1,000,000 1,000,590
6.75%, 4/1/2028 1,500,000 1,475,550
PCR, Refunding (Bethlehem Steel Corp. Project):
7.50%, 6/1/2015 5,785,000 6,291,188
7.55%, 6/1/2017 2,690,000 2,911,925
Frederick County, Retirement Community Revenue,
(Buckinghams Choice, Inc. Facility):
5.90%, 1/1/2017 1,000,000 996,650
6%, 1/1/2024 750,000 752,655
Gaithersburg, Hospital Facilities Improvement Revenue,
Refunding (Shady Grove)
6.50%, 9/1/2012 (Insured; FSA) 10,000,000 11,905,100
Howard County, COP 8.15%, 2/15/2020 605,000 852,046
Maryland, COP (Aviation Administration Facilities
Project):
4.75%, 5/1/2017 1,650,000 1,604,262
4.75%, 5/1/2018 1,730,000 1,670,142
Maryland Community Development Administration,
Department of Housing and Community Development:
Housing Revenue:
5.65%, 7/1/2039 5,405,000 5,547,530
5.75%, 7/1/2039 (Collateralized; GNMA) 1,220,000 1,261,663
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal
Long-Term Municipal Investments (continued) Amount ($) Value ($)
- --------------------------------------------------------------------------------
<S> <C> <C>
Maryland (continued)
Maryland Community Development Administration,
Department of Housing and Community
Development (continued):
Multi-Family Development (Auburn Manor Project)
5.30%, 10/1/2028 1,000,000 1,012,780
MFHR:
6.50%, 5/15/2013 3,000,000 3,208,470
7.30%, 5/15/2023 2,205,000 2,319,197
6.85%, 5/15/2033 5,000,000 5,323,450
6.70%, 5/15/2036 (Insured; FHA) 7,710,000 8,369,822
Single Family Program:
6.95%, 4/1/2011 5,330,000 5,635,356
7.70%, 4/1/2015 3,195,000 3,289,125
6.55%, 4/1/2026 7,420,000 7,959,211
6.75%, 4/1/2026 3,895,000 4,172,246
Zero Coupon, 4/1/2029 85,075,000 7,992,796
7.45%, 4/1/2032 5,910,000 6,181,446
Maryland Economic Development Corp., Revenue:
(Health and Mental Hygiene Providers Facilities
Acquisition Program):
8.375%, 3/1/2013 4,045,000 4,391,050
8.75%, 3/1/2017 4,810,000 4,995,955
Health Care Facility (Crescent Cities Project)
5.40%, 12/20/2027 1,345,000 1,369,936
Maryland Health and Higher Educational Facilities
Authority, Revenue:
(Calvert Memorial Hospital) 5%, 7/1/2028 2,000,000 1,916,980
(Johns Hopkins Hospital):
4.75%, 5/15/2033 7,100,000 6,640,630
4.50%, 5/15/2035 2,395,000 2,117,922
(Johns Hopkins Medicine - Howard County General
Hospital Acquisition) 5%, 7/1/2029 4,750,000 4,702,167
(Refunding - Doctors Community Hospital)
5.50%, 7/1/2024 9,890,000 9,781,507
(Refunding - Helix Health Issue) 5%, 7/1/2027
(Insured; AMBAC) 5,500,000 5,511,220
(Refunding - Medlantic Helix Issue)
4.75%, 8/15/2028 (Insured; FSA) 34,835,000 32,963,315
(Refunding - Howard County General Hospital)
5.50%, 7/1/2025 2,105,000 2,221,154
(Refunding - Roland Park Project) 7.75%, 7/1/2012 2,230,000 2,281,981
(Refunding - Upper Chesapeake Hospitals):
5.50%, 1/1/2020 (Insured; FSA) 2,000,000 2,082,800
5.375%, 1/1/2028 (Insured; FSA) 1,500,000 1,543,185
</TABLE>
The Fund 9
<PAGE>
STATEMENT OF INVESTMENTS (continued)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal
Long-Term Municipal Investments (continued) Amount ($) Value ($)
- --------------------------------------------------------------------------------
<S> <C> <C>
Maryland (continued)
Maryland Health and Higher Educational Facilities
Authority, Revenue (continued):
(Union Hospital of Cecil County) :
6.70%, 7/1/2009 2,320,000 2,613,457
4.75%, 7/1/2013 1,840,000 1,787,210
5.10%, 7/1/2022 2,500,000 2,396,550
(University of Maryland Medical Systems)
7%, 7/1/2022 (Insured; FGIC) 4,500,000 5,700,870
Maryland Industrial Development Financing Authority,
EDR(Medical Waste Association) 8.75%, 11/15/2010 700,000 706,979
Maryland Local Government Insurance Trust,
Capitalization Program, COP
7.125%, 8/1/2009 3,250,000 3,449,485
Maryland Stadium Authority, Sports Facility LR:
7.60%, 12/15/2019 5,250,000 5,485,148
5.80%, 3/1/2026 (Insured; AMBAC) 3,500,000 3,751,265
Montgomery County Housing Opportunities Commission,
Revenue: Multi-Family Mortgage:
7.05%, 7/1/2032 2,485,000 2,617,152
7.375%, 7/1/2032 1,805,000 1,876,965
Single Family Mortgage:
7.375%, 7/1/2017 1,760,000 1,807,854
6.625%, 7/1/2026 1,015,000 1,091,805
Zero Coupon, 7/1/2028 41,975,000 8,602,776
Northeast Waste Disposal Authority, Solid Waste
Revenue (Montgomery County Resource
Recovery Project):
6%, 7/1/2008 2,690,000 2,961,556
6.20%, 7/1/2010 13,130,000 14,111,730
6.30%, 7/1/2016 14,205,000 15,174,917
Prince Georges County, Refunding:
Consolidated Public Improvement
6.75%, 7/1/2010 1,170,000 1,262,711
Revenue (Dimensions Health Corp.)
5.30%, 7/1/2024 6,500,000 6,067,945
Prince Georges County Housing Authority:
Mortgage Revenue:
(Langley Gardens Apartment Project)
5.75%, 8/20/2029 (Collateralized; GNMA) 1,000,000 1,046,480
(Refunding - New Keystone Apartment Project)
6.80%, 7/1/2025 (Insured: FHA & MBIA) 4,300,000 4,561,741
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal
Long-Term Municipal Investments (continued) Amount ($) Value ($)
- --------------------------------------------------------------------------------
<S> <C> <C>
Maryland (continued)
Prince Georges County Housing Authority (continued):
Mortgage Revenue (continued):
(Refunding - Riverview Terrace) 6.70%, 6/20/2020
(Collateralized; GNMA) 2,000,000 2,167,620
(Refunding - Stevenson Apartments Project)
6.35%, 7/20/2020 (Collateralized; GNMA) 3,000,000 3,159,450
SFMR:
6.60%, 12/1/2025 (Collateralized: FNMA & GNMA) 4,430,000 4,726,899
5.75%, 8/1/2026 (Collateralized: FNMA & GNMA) 4,960,000 5,134,344
U. S. Related--5.9%
Guam Airport Authority, Revenue 6.70%, 10/1/2023 10,000,000 10,988,000
Puerto Rico Commonwealth Highway and
Transportation Authority, Highway Revenue:
5.40%, 7/1/2006 (Insured; FSA) 4,000,000 4,227,920
5.50%, 7/1/2026 (Insured; MBIA) 1,000,000 1,044,950
Puerto Rico Electric Power Authority, Power Revenue:
5.50%, 7/1/2025 (Insured; MBIA) 3,000,000 3,106,740
Total Long-Term Municipal Investments
(cost $309,454,836) 323,269,509
</TABLE>
<TABLE>
<CAPTION>
Short-Term Municipal Investments--.8%
- --------------------------------------------------------------------------------
<S> <C> <C>
Maryland;
Northeast Waste Disposal Authority, RRR, Refunding,
VRDN (Harford County Resource)
3.75% (Insured; AMBAC)a
(cost $2,600,000) 2,600,000 2,600,000
- --------------------------------------------------------------------------------
Total Investments (cost $312,054,836) 99.6% 325,869,509
Cash and Receivables (Net) .4% 1,426,528
Net Assets 100.0% 327,296,037
The Fund 11
</TABLE>
<PAGE>
STATEMENT OF INVESTMENTS (continued)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Summary of Abbreviations
<S> <C> <C> <C>
AMBAC American Municipal Bond MBIA Municipal Bond
Assurance Corporation Investors Assurance
COP Certificate of Participation Insurance Corporation
EDR Economic Development Revenue MFHR Multi-Family Housing
FGIC Financial Guaranty Insurance Company Revenue
FHA Federal Housing Administration PCR Pollution Control Revenue
FNMA Federal National Mortgage Association RRR Resources Recovery Revenue
FSA Financial Security Assurance SFMR Single Family Mortgage
GNMA Government National Mortgage Revenue
Association VRDN Variable Rate
LR Lease Revenue Demand Notes
</TABLE>
<TABLE>
<CAPTION>
Summary of Combined Ratings (Unaudited)
Fitch or Moody's or Standard & Poor's Value (%)
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
AAA Aaa AAA 35.0
AA Aa AA 32.6
A A A 17.3
BBB Baa BBB 6.4
F1+ & F1 MIG1, VMIG1 & P1 SP1 & A1 .8
Not Rated (b) Not Rated (b) Not Rated (b) 7.9
100.0
<FN>
a Securities payable on demand. Variable interest rate--subject to periodic
change.
b 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.
c At April 30, 1999, the Fund had $112,846,020 (34.5% of net assets) and
$98,144,841 (30.0% of net assets) invested in securities whose payment of
principal and interest is dependent upon revenues generated from health care
and housing projects, respectively.
See notes to financial statements.
</FN>
</TABLE>
12
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
April 30, 1999
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------
Cost Value
- ---------------------------------------------------------------------------------
<S> <C> <C>
Assets ($):
Investments in securities--See Statement of Investments 312,054,836 325,869,509
Interest receivable 5,251,521
Receivable for shares of Beneficial Interest subscribed 510,876
Prepaid expenses 21,971
331,653,877
- ---------------------------------------------------------------------------------
Liabilities ($):
Due to The Dreyfus Corporation and affiliates 164,943
Due to Distributor 93,621
Cash overdraft due to Custodian 392,920
Payable for investment securities purchased 3,265,230
Payable for shares of Beneficial Interest redeemed 386,925
Accrued expenses 54,201
4,357,840
- ---------------------------------------------------------------------------------
Net Assets ($) 327,296,037
- ---------------------------------------------------------------------------------
Composition of Net Assets ($):
Paid-in capital 310,887,219
Accumulated net realized gain (loss) on investments 2,594,145
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 13,814,673
Net Assets ($) 327,296,037
</TABLE>
<TABLE>
<CAPTION>
Net Asset Value Per Share
- --------------------------------------------------------------------------------
Class A Class B Class C
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Assets ($) 264,254,985 59,805,962 3,235,090
Shares Outstanding 20,419,270 4,620,741 249,782
- --------------------------------------------------------------------------------
Net Asset Value Per Share ($) 12.94 12.94 12.95
<FN>
See notes to financial statements.
</FN>
</TABLE>
The Fund 13
<PAGE>
STATEMENT OF OPERATIONS
Year Ended April 30, 1999
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------
Investment Income ($)
- ------------------------------------------------------------------------------
<S> <C>
Income:
Interest Income 18,936,487
Expenses:
Management fee--Note 3(a) 1,774,160
Shareholder servicing costs--Note 3(c) 1,005,551
Distribution fees--Note 3(b) 298,294
Professional fees 42,874
Custodian fees 30,144
Prospectus and shareholders' reports 17,638
Registration fees 23,428
Trustees' fees and expenses--Note 3(d) 3,904
Loan commitment fees--Note 2 1,030
Miscellaneous 15,860
Total Expenses 3,212,883
Investment Income--Net 15,723,604
- ------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) on Investments--Note 4:
Net realized gain (loss) on investments 4,875,643
Net unrealized appreciation (depreciation) on investments (2,906,514)
Net Realized and Unrealized Gain (Loss) on Investments 1,969,129
Net Increase in Net Assets Resulting from Operations 17,692,733
<FN>
See notes to financial statements.
</FN>
</TABLE>
14
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
- -------------------------------------------------------------------------------
<CAPTION>
Year Ended April 30,
---------------------------
1999 1998
- -------------------------------------------------------------------------------
<S> <C> <C>
Operations ($):
Investment income--net 15,723,604 15,888,933
Net realized gain (loss) on investments 4,875,643 4,073,024
Net unrealized appreciation (depreciation)
on investments (2,906,514) 8,042,789
Net Increase (Decrease) in Net Assets
Resulting from Operations 17,692,733 28,004,746
- -------------------------------------------------------------------------------
Dividends to Shareholders From ($):
Investment income--net:
Class A shares (13,142,319) (13,655,457)
Class B shares (2,475,248) (2,196,616)
Class C shares (106,037) (36,860)
Net realized gain on investments:
Class A shares (3,920,985) (3,083,888)
Class B shares (858,010) (552,806)
Class C shares (41,411) (9,259)
Total Dividends (20,544,010) (19,534,886)
- -------------------------------------------------------------------------------
Beneficial Interest Transactions ($):
Net proceeds from shares sold:
Class A shares 19,034,333 8,758,816
Class B shares 16,708,364 7,395,511
Class C shares 1,950,257 1,433,134
Dividends reinvested:
Class A shares 10,945,576 10,820,042
Class B shares 2,138,858 1,800,125
Class C shares 93,797 31,396
Cost of shares redeemed:
Class A shares (26,068,594) (30,922,294)
Class B shares (8,588,073) (5,603,825)
Class C shares (385,542) (54,184)
Increase (Decrease) in Net Assets from
Beneficial Interest Transactions 15,828,976 (6,341,279)
Total Increase (Decrease) in Net Assets 12,977,699 2,128,581
- -------------------------------------------------------------------------------
Net Assets ($):
Beginning of Period 314,318,338 312,189,757
End of Period 327,296,037 314,318,338
<FN>
See notes to financial statements.
</FN>
</TABLE>
The Fund 15
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS (continued)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------
Year Ended April 30,
-----------------------------
1999 1998
- ---------------------------------------------------------------------------------
<S> <C> <C>
Capital Share Transactions:
Class A
Shares sold 1,451,972 669,128
Shares issued for dividends reinvested 834,341 825,979
Shares redeemed (1,987,044) (2,367,974)
Net Increase (Decrease) in Shares Outstanding 299,269 (872,867)
- ---------------------------------------------------------------------------------
Class B
Shares sold 1,273,167 564,406
Shares issued for dividends reinvested 163,084 137,404
Shares redeemed (657,332) (428,097)
Net Increase (Decrease) in Shares Outstanding 778,919 273,713
- ---------------------------------------------------------------------------------
Class C
Shares sold 148,387 109,671
Shares issued for dividends reinvested 7,148 2,391
Shares redeemed (29,616) (4,128)
Net Increase (Decrease) in Shares Outstanding 125,919 107,934
<FN>
See notes to financial statements.
</FN>
</TABLE>
16
<PAGE>
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the
fiscal periods indicated. Certain information reflects financial results for
a single Fund share. "Total return" shows how much your investment in the
Fund would have increased (or decreased) during each period, assuming you had
reinvested all dividends and distributions. These figures have been derived
from the Fund's financial statements.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Year Ended April 30,
----------------------------------------------
Class A Shares 1999 1998 1997 1996 1995
- ---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per Share Data ($):
Net asset value, beginning of period 13.05 12.70 12.69 12.54 12.46
Investment Operations:
Investment income--net .65 .67 .68 .67 .70
Net realized and unrealized gain (loss)
on investments .09 .50 .18 .23 .08
Total from Investment Operations .74 1.17 .86 .90 .78
Distributions:
Dividends from investment income--net (.65) (.67) (.68) (.67) (.70)
Dividends from net realized gain
on investments (.20) (.15) (.17) (.08) --
Total Distributions (.85) (.82) (.85) (.75) (.70)
Net asset value, end of period 12.94 13.05 12.70 12.69 12.54
- ---------------------------------------------------------------------------------
Total Return (%)* 5.76 9.40 6.91 7.24 6.52
- ---------------------------------------------------------------------------------
Ratios/Supplemental Data (%):
Ratio of expenses to average net assets .90 .90 .90 .90 .90
Ratio of net investment income
to average net assets 4.97 5.12 5.29 5.23 5.69
Decrease reflected in above expense
ratios due to undertakings by
the Manager -- -- -- -- .01
Portfolio Turnover Rate 29.30 18.12 43.63 41.65 35.39
- ---------------------------------------------------------------------------------
Net Assets, end of period ($ X 1,000) 264,255 262,560 266,658 283,878 301,834
<FN>
* Exclusive of sales load.
See notes to financial statements.
</FN>
</TABLE>
The Fund 17
<PAGE>
FINANCIAL HIGHLIGHTS (continued)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Year Ended April 30,
----------------------------------------------
Class B Shares 1999 1998 1997 1996 1995
- ---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per Share Data ($):
Net asset value, beginning of period 13.05 12.70 12.69 12.54 12.46
Investment Operations:
Investment income--net .58 .60 .61 .61 .63
Net realized and unrealized gain (loss)
on investments .09 .50 .18 .23 .08
Total from Investment Operations .67 1.10 .79 .84 .71
Distributions:
Dividends from investment income--net (.58) (.60) (.61) (.61) (.63)
Dividends from net realized gain
on investments (.20) (.15) (.17) (.08) --
Total Distributions (.78) (.75) (.78) (.69) (.63)
Net asset value, end of period 12.94 13.05 12.70 12.69 12.54
- ---------------------------------------------------------------------------------
Total Return (%)* 5.20 8.83 6.34 6.66 5.94
- ---------------------------------------------------------------------------------
Ratios/Supplemental Data (%):
Ratio of expenses to average net assets 1.42 1.42 1.43 1.43 1.44
Ratio of net investment income
to average net assets 4.44 4.59 4.75 4.68 5.13
Decrease reflected in above expense
ratios due to undertakings by
the Manager -- -- -- -- .01
Portfolio Turnover Rate 29.30 18.12 43.63 41.65 35.39
- ---------------------------------------------------------------------------------
Net Assets, end of period ($ X 1,000) 59,806 50,141 45,329 41,179 35,090
<FN>
* Exclusive of sales load.
See notes to financial statements.
</FN>
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Year Ended April 30,
-----------------------------------
Class C Shares 1999 1998 1997 1996a
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per Share Data ($):
Net asset value, beginning of period 13.06 12.71 12.69 12.67
Investment Operations:
Investment income--net .55 .57 .58 .41
Net realized and unrealized gain (loss)
on investments .09 .50 .19 .10
Total from Investment Operations .64 1.07 .77 .51
Distributions:
Dividends from investment income--net (.55) (.57) (.58) (.41)
Dividends from net realized gain
on investments (.20) (.15) (.17) (.08)
Total Distributions (.75) (.72) (.75) (.49)
Net asset value, end of period 12.95 13.06 12.71 12.69
- --------------------------------------------------------------------------------
Total Return (%)b 4.93 8.55 6.16 5.57c
- --------------------------------------------------------------------------------
Ratios/Supplemental Data (%):
Ratio of expenses to average net assets 1.66 1.67 1.64 1.80c
Ratio of net investment income
to average net assets 4.15 4.29 4.47 4.59c
Portfolio Turnover Rate 29.30 18.12 43.63 41.65
- --------------------------------------------------------------------------------
Net Assets, end of period ($ X 1,000) 3,235 1,618 202 27
<FN>
a From August 15, 1995 (commencement of initial offering) to April 30, 1996.
b Exclusive of sales load.
c Annualized.
See notes to financial statements.
</FN>
</TABLE>
The Fund 19
<PAGE>
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, as amended (the "Act"), as a non-
diversified open-end management investment company and operates as a series
company currently offering thirteen series including the Maryland Series (the
"Fund"). The Fund's investment objective is to maximize current income exempt
from Federal and, where applicable, from State income taxes, without undue
risk. The Dreyfus Corporation (the "Manager") serves as the Fund's investment
adviser. The Manager is a direct subsidiary of Mellon Bank, N.A.
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")
20
<PAGE>
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. Under the terms of
the custody agreement, the Fund received net earnings credits of $18,972
during the period ended April 30, 1999 based on available cash balances left
on deposit. Income earned under this arrangement is included in interest
income.
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.
The Fund 21
<PAGE>
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 of
1986, as amended (the "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 Code, and to make
distributions of income and net realized capital gain sufficient to relieve
it from substantially all Federal income and excise taxes.
NOTE 2--Bank Line of Credit:
The Fund participates with other Dreyfus-managed funds in a $600 million
redemption credit facility ("Facility") to be utilized for temporary or
emergency purposes, including the financing of redemptions. In connection
therewith, the Fund has agreed to pay commitment fees on its pro rata portion
of the Facility. Interest is charged to the Fund at rates based on prevailing
market rates in effect at the time of the borrowings. During the period ended
April 30, 1999, 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 $4,888 during the period ended April 30, 1999, from commissions
earned on sales of the Fund's shares.
22
<PAGE>
(b) Under the Distribution Plan adopted pursuant to Rule 12b-1 under the Act,
Class B and Class C shares pay the Distributor for distributing their 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, 1999, Class B and Class
C shares were charged $279,128 and $19,166, respectively, pursuant to the
Distribution Plan.
(c) Under the Shareholder Services Plan, Class A, Class B and Class C shares
pay the Distributor at an annual rate of .25 of 1% of the value of their
average daily net assets 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, 1999, Class A, Class B and Class C
shares were charged $660,483, $139,564 and $6,389, 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, 1999, the Fund was charged $129,152 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.
The Fund 23
<PAGE>
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, 1999
amounted to $104,202,066 and $92,563,258, respectively.
At April 30, 1999, accumulated net unrealized appreciation on investments was
$13,814,673, consisting of $15,572,483 gross unrealized appreciation and
$1,757,810 gross unrealized depreciation.
At April 30, 1999, 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).
24
<PAGE>
REPORT OF INDEPENDENT AUDITORS
Shareholders and Board of Trustees
Dreyfus Premier State Municipal Bond Fund, Maryland Series
We have audited the accompanying statement of assets and liabilities,
including the statement of investments, of Dreyfus Premier State Municipal
Bond Fund, Maryland Series (the "Fund") (one of the Funds constituting the
Dreyfus Premier State Municipal Bond Fund) as of April 30, 1999 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, 1999 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 the
Fund at April 30, 1999, 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 2, 1999
The Fund 25
<PAGE>
IMPORTANT TAX INFORMATION (Unaudited)
In accordance with Federal tax law, the Fund hereby makes the following
designations regarding its fiscal year ended April 30, 1999:
-all the dividends paid from investment income--net are "exempt-interest
dividends" (not subject to regular Federal and, for individuals who
are Maryland residents, Maryland personal income taxes), and
-the Fund hereby designates $.0892 per share as a long-term capital gain
distribution of the $.1956 per share paid on December 8, 1998.
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 1999 calendar year on Form
1099-DIV which will be mailed by January 31, 2000.
26
<PAGE>
For More Information
Dreyfus Premier
State Municipal Bond Fund
Maryland Series
200 Park Avenue
New York, NY 10166
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Custodian
The Bank of New York
90 Washington Street
New York, NY 10286
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Distributor
Premier Mutual Fund Services, Inc.
60 State Street
Boston, MA 02109
To obtain information:
By telephone
Call your financial representative or
1-800-554-4611
By mail Write to:
The Dreyfus Premier
Family of Funds
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
Not FDIC-Insured * Not Bank-Guaranteed * May Lose Value
(C) 1999 Dreyfus Service Corporation 052/616AR994
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
DREYFUS PREMIER STATE MUNICIPAL BOND FUND, MARYLAND SERIES
CLASS A SHARES AND THE LEHMAN BROTHERS MUNICIPAL BOND INDEX
EXHIBIT A:
DREYFUS
PREMIER STATE
PERIOD LEHMAN BROTHERS MUNICIPAL BOND FUND,
MUNICIPAL MARYLAND SERIES
BOND INDEX * (CLASS A SHARES)
4/30/89 10,000 9,552
4/30/90 10,720 10,191
4/30/91 11,952 11,437
4/30/92 13,088 12,545
4/30/93 14,744 14,042
4/30/94 15,063 14,229
4/30/95 16,065 15,157
4/30/96 17,341 16,254
4/30/97 18,492 17,376
4/30/98 20,211 19,009
4/30/99 21,615 20,104
*Source: Lehman Brothers
Dreyfus Premier State
Municipal Bond Fund
Massachusetts Series
ANNUAL REPORT
April 30, 1999
[DREYFUS LOGO]
<PAGE>
Year 2000 Issues
(Unaudited)
The fund could be adversely affected if the computer systems used by The Dreyfus
Corporation and the fund's other service providers do not properly process and
calculate date-related information from and after January 1, 2000. The Dreyfus
Corporation is working to avoid Year 2000-related problems in its systems and to
obtain assurances from other service providers that they are taking similar
steps. In addition, issuers of securities in which the fund invests may be
adversely affected by Year 2000-related problems. This could have an impact on
the value of the fund's investments and its share price.
<PAGE>
Contents
The Fund
- ------------------------------------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Fund Performance
8 Statement of Investments
11 Statement of Assets and Liabilities
12 Statement of Operations
13 Statement of Changes in Net Assets
15 Financial Highlights
18 Notes to Financial Statements
23 Report of Independent Auditors
24 Important Tax Information
For More Information
- ------------------------------------------------------------------------------
Back Cover
<PAGE>
The Fund
Dreyfus Premier
State Municipal Bond Fund,
Massachusetts Series
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this annual report for Dreyfus Premier State Municipal
Bond Fund, Massachusetts Series, covering the 12-month period from May 1, 1998
through April 30, 1999. Inside, you'll find valuable information about how the
Fund was managed during the period, including a discussion with the Fund's
portfolio manager, William M. Petty.
The past year has generally been rewarding for municipal bond investors. Lower
short-term interest rates adopted by the Federal Reserve Board and other central
banks in the fall for 1998 appear to have helped many U.S. businesses withstand
the effects of economic weakness in Japan, Asia and Latin America. At the same
time, the U.S. economy has entered its eighth year of expansion in an
environment characterized by low inflation and high levels of consumer spending.
In the second half of the reporting period, tax-exempt fixed-income securities
provided good results, especially relative to taxable U.S. Treasury securities.
While prices for U.S. Treasury securities declined significantly through the
second half of the reporting period, a lack of new issuance relative to robust
investor demand supported most municipal bond prices, which have remained
relatively unchanged over the past six months. As a result, the differences in
valuations between taxable U.S. Treasury securities and tax-exempt bonds, which
reached historically wide levels last October, have since narrowed to a more
historically normal relationship.
We appreciate your confidence over the past year, and we look forward to your
continued participation in Dreyfus Premier State Municipal Bond Fund,
Massachusetts Series.
Sincerely,
/s/Stephen E. Canter
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
May 13, 1999
2
<PAGE>
DISCUSSION OF FUND PERFORMANCE
William M. Petty, Portfolio Manager
How did Dreyfus Premier State Municipal Bond Fund,
Massachusetts Series perform?
The Fund's Class A shares produced a total return of 6.08% over the 12-month
period ended April 30, 1999,1 compared to a total return of 5.76% for the
average of the Lipper Massachusetts Municipal Debt Funds category.2 The Fund
produced a total return of 5.46% for Class B shares and 5.28% for Class C shares
over the 12-month period ended April 30, 1999.1
What is the Fund's investment approach?
Our goal is to seek a high level of federally and Massachusetts tax-exempt
income from a diversified portfolio of longer term municipal bonds without undue
risk. To achieve this objective, we employ two primary strategies. Because
Massachusetts issues relatively few municipal bonds, we begin by evaluating
supply-and-demand factors. Based on that assessment, we select the individual
tax-exempt bonds that we believe are most likely to provide the highest returns
with the least risk. We look at such criteria as the bond's yield, price, age,
the credit-worthiness of its issuer, insurance, and any provisions for early
redemption. Under most circumstances, we look for high-yielding bonds that
cannot be redeemed by their issuers anytime soon and that are selling at a
discount to their face values.
While we do not attempt to predict changes in interest rates, we may tactically
manage the portfolio's average duration -- a measure of sensitivity to changes
in interest rates -- in anticipation of temporary supply-and-demand changes. If
we expect the supply of newly issued bonds to increase, we may reduce the
portfolio's average duration to make cash available for the purchase of higher
yielding securities. Conversely, if we expect demand for municipal bonds to
surge at a time when we anticipate little issuance, we may increase the
portfolio's
The Fund 3
<PAGE>
DISCUSSION OF FUND PERFORMANCE (continued)
average duration to maintain current yields for as long as practical. At other
times, we try to maintain a "neutral" average duration consistent with other
Massachusetts municipal bond funds.
What other factors influenced the Fund's performance?
When the Asian currency and credit crisis spread to Russia and threatened Latin
America last summer and fall, investors flocked to U.S. Treasury securities. As
a result, yields on taxable Treasuries fell briefly in October to levels that
were roughly equivalent to yields on comparable tax-exempt bonds.
However, the Federal Reserve Board and other central banks moved quickly to
stimulate global economic growth. They did so last fall by reducing key
short-term interest rates. Because lower short-term interest rates were expected
to stimulate economic growth and potentially reignite inflationary pressures,
yields on longer term bonds rose throughout the first four months of 1999.
However, the extent of that rise was much greater for taxable U.S. Treasury
securities than for tax-free municipal bonds.
In addition, because of strong economic conditions throughout the country,
Massachusetts and its municipalities have had little need to borrow. Yet, demand
from investors seeking to minimize their income tax liabilities remained high.
This balance between supply and demand helped keep municipal bond prices
relatively stable while U.S. Treasury bond prices fell sharply.
What is the Fund's current strategy?
As the period came to a close, we continued to search for the most attractive
values in Massachusetts's municipal bond market. Primarily, we have
continued to focus on high-quality bonds because the
differences in yields between the highest quality bonds and lower quality bonds
are narrow by historical standards. However, we have continually
4
<PAGE>
evaluated lower quality issues in order to identify bonds which we believed
would offer the Fund an attractive yield as compensation for additional
credit risk.
As of April 30, the portfolio's 7.4-year average duration was positioned at the
long end of the neutral range, which we believed was appropriate in a
low-issuance environment. We intend to remain vigilant in our efforts to
identify tactical opportunities to change our average duration in anticipation
of any supply-and-demand imbalances. We expect these strategies to help us
continue to maximize tax-exempt returns for our shareholders.
May 13, 1999
[FN]
1 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 applicable contingent deferred sales charge
imposed on redemptions in the case of Class B and Class C shares. Income may
be subject to state and local income taxes for non-Massachusetts residents.
Some income may be subject to the Federal Alternative Minimum Tax (AMT) for
certain shareholders.
2 Source: Lipper Analytical Services, Inc.
</FN>
The Fund 5
<PAGE>
FUND PERFORMANCE
$21,615
Lehman Brothers Municipal Bond Index*
[CHART]
$19,766
Dreyfus Premier State Municipal
Bond Fund, Massachusetts Series
(Class A Shares)
Comparison of change in value of $10,000 investment in the Fund's Class A shares
and the Lehman Brothers Municipal Bond Index
[FN]
* Source: Lehman Brothers.
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 (the "Fund") on 4/30/89
to a $10,000 investment made in the Lehman Brothers Municipal Bond Index (the
"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 Fund 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. The
Index is not limited to investments principally in Massachusetts municipal
obligations and does not take into account charges, fees and other expenses. The
Index, unlike the Fund, 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. These factors can contribute to the Index potentially
outperforming or underperforming the Fund. Further information relating to Fund
performance, including expense reimbursements, if applicable, is contained in
the Financial Highlights section of the Prospectus and elsewhere in this report.
</FN>
6
<PAGE>
- --------------------------------------------------------------------------------
Average Annual Total Returns as of 4/30/99
Inception From
Date 1 Year 5 Years 10 Years Inception
- --------------------------------------------------------------------------------
Class A Shares
with sales charge (4.5%) (5/28/87) 1.34% 5.73% 7.05% --
without sales charge (5/28/87) 6.08% 6.71% 7.54% --
Class B Shares
with redemption* (1/15/93) 1.48% 5.85% -- 5.85%
without redemption (1/15/93) 5.46% 6.16% -- 5.85%
Class C Shares
with redemption** (8/15/95) 4.28% -- -- 6.12%
without redemption (8/15/95) 5.28% -- -- 6.12%
[FN]
Past performance is not predictive of future performance.
* 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>
The Fund 7
<PAGE>
STATEMENT OF INVESTMENTS
April 30, 1999
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
Principal
Long-Term Municipal Investments--100.3% Amount ($) Value ($)
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
Massachusetts--84.1%
Boston Industrial Development Financing Authority,
Sewer Facility Revenue
(Harbor Electric Energy Co. Project) 7.375%, 5/15/2015 2,500,000 2,675,150
Leominster 7.50%, 4/1/2009
(Insured; MBIA, Prerefunded 4/1/2000)a 1,275,000 1,348,580
Lynn Water and Sewer Commission, General Revenue
7.25%, 12/1/2010 (Insured; MBIA, Prerefunded 12/1/2000)a 1,000,000 1,076,580
Massachusetts Bay Transportation Authority:
7.702%, 3/1/2021 (Insured; MBIA)b,c 2,300,000 2,388,389
7%, 3/1/2021 1,000,000 1,243,670
Massachusetts Commonwealth:
7%, 8/1/2012 (Prerefunded 8/1/2001)a 1,850,000 2,019,571
Special Obligation Revenue, Refunding 5.50%, 6/1/2013 5,000,000 5,438,150
Massachusetts Education Loan Authority,
Education Loan Revenue
7.75%, 1/1/2008 (Insured; MBIA) 910,000 950,850
Massachusetts Health and Educational
Facilities Authority, Revenue:
(Baystate Medical Center) 6%, 7/1/2026 (Insured; FSA) 2,000,000 2,157,880
(Boston Universtiy) 6%, 5/15/2059 2,500,000 2,728,475
(Brandeis University) 4.75%, 10/1/2028 (Insured; MBIA) 2,450,000 2,286,438
(Medical Center of Central Massachusetts) 7.10%, 7/1/2021 1,000,000 1,089,910
(Refunding-Boston College) 4.75%, 6/1/2031 4,500,000 4,175,460
(Refunding-Milton Hospital) 7%, 7/1/2016 (Insured; MBIA) 2,050,000 2,166,174
(Refunding-Partners Healthcare System) 5.125%, 7/1/2019 2,750,000 2,682,295
(University Hospital) 7.25%, 7/1/2019
(Insured; MBIA, Prerefunded 7/1/2000)a 2,750,000 2,922,590
(Vinfen Corporation) 5.30%, 11/15/2028 1,670,000 1,634,579
Massachusetts Industrial Finance Agency, Revenue:
(Babson College) 5.25%, 10/1/2027 4,000,000 4,020,560
(Provider Lease Program) 8.75%, 7/15/2009 645,000 648,522
(Water Treatment-American Hingham) 6.95%, 12/1/2035 3,000,000 3,290,250
(Wentworth Institute Technology) 5.75%, 10/1/2028 1,650,000 1,688,065
Health Care Facility (Health Foundation, Inc. Project)
6.75%, 12/1/2027 1,000,000 1,062,770
Package Facility (Avon Associates LLC)
5.375%, 4/1/2020 (Insured; MBIA) 2,950,000 2,999,147
Resource Recovery, Refunding (Ogden Haverhill Project)
5.60%, 12/1/2019 1,000,000 1,002,060
Massachusetts Port Authority, Revenue
Special Project (Harborside Hyatt) 10%, 3/1/2026 3,000,000 3,276,660
Massachusetts Water Pollution Abatement Trust
(Pool Loan Program) 5.40%, 2/1/2011 175,000 185,955
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
Principal
Long-Term Municipal Investments (continuted) Amount ($) Value ($)
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
Massachusetts (continued)
Massachusetts Water Resource Authority
4%, 12/1/2018 (Insured; MBIA) 2,000,000 1,739,520
U.S. Related--16.2%
Guam Airport Authority, Revenue 6.70%, 10/1/2023 1,500,000 1,648,200
Puerto Rico Commonwealth, Refunding 6%, 7/1/2014 1,000,000 1,067,050
Puerto Rico Commonwealth Highway and
Transportation Authority, Highway Revenue:
6.936%, 7/1/2009b 1,000,000 1,113,750
6.836%, 7/1/2010b 1,000,000 1,115,000
5%, 7/1/2036 2,000,000 1,984,820
Puerto Rico Public Buildings Authority,
Guaranteed Government Facilities Revenue
6.25%, 7/1/2015 (Insured; AMBAC) 1,100,000 1,293,578
Virgin Islands Public Finance Authority, Revenue, Refunding
7.25%, 10/1/2018 (Prerefunded 10/1/2002) 2,750,000 3,115,475
Total Long-Term Municipal Investments (cost $66,610,858) 70,236,123
- -------------------------------------------------------------------------------------------------
Principal
Short-Term Municipal Investments--2.4% Amount ($) Value ($)
- -------------------------------------------------------------------------------------------------
Massachusetts Health and Educational
Facilities Authority, Revenue, VRDN:
(Capital Assets Program) 4.20%d 890,000 890,000
(Wellesley College) 4.15%d 800,000 800,000
Total Short-Term Municipal Investments (cost $1,690,000) 1,690,000
- -------------------------------------------------------------------------------------------------
Total Investments (cost $68,300,858) 102.7% 71,926,123
Liabilities, Less Cash and Receivables (2.7%) (1,889,965)
Net Assets 100.0% 70,036,158
The Fund 9
</TABLE>
<PAGE>
STATEMENT OF INVESTMENTS (continued)
- -------------------------------------------------------------------------------
Summary of Abbreviations
<TABLE>
<S> <C> <C> <C>
AMBAC American Municipal Bond MBIA Municipal Bond Investors
Assurance Corporation Assurance Insurance
Corporation
FSA Financial Security Assurance VRDN Variable Rate Demand Notes
</TABLE>
- -------------------------------------------------------------------------------
Summary of Combined Ratings (Unaudited)
<TABLE>
Fitch or Moody's or Standard & Poor's Value (%)
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
AAA Aaa AAA 35.8
AA Aa AA 21.6
A A A 15.9
BBB Baa BBB 17.4
F-1+/F-1 MIG1, VMIG1 & P1 SP1 & A1 2.4
Not Ratede Not Ratede Not Ratede 6.9
100.0
<FN>
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,
amounted to $2,388,389 or 3.4% of net assets.
d Securities payable on demand. Variable interest rate--subject to periodic
change.
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, 1999, 25.5% of the Fund's net assets are insured by
MBIA.
g At April 30, 1999, the Fund had $17,931,126 (25.6% of net assets)
invested in securities whose payment of principal and interest is
dependent upon revenues generated from transportation projects.
See notes to financial statements.
</FN>
</TABLE>
10
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
April 30, 1999
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
Cost Value
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
Assets ($):
Investments in securities--See Statement of Investments 68,300,858 71,926,123
Interest receivable 1,095,163
Prepaid expenses 12,828
73,034,114
- ---------------------------------------------------------------------------------------------
Liabilities ($):
Due to The Dreyfus Corporation and affiliates 34,265
Due to Distributor 17,434
Cash overdraft due to Custodian 175,119
Payable for investment securities purchased 2,738,000
Payable for shares of Beneficial Interest redeemed 17,535
Accrued expenses 15,603
2,997,956
- ---------------------------------------------------------------------------------------------
Net Assets ($) 70,036,158
- ---------------------------------------------------------------------------------------------
Composition of Net Assets ($):
Paid-in capital 66,332,471
Accumulated net realized gain (loss) on investments 78,422
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 3,625,265
- ---------------------------------------------------------------------------------------------
Net Assets ($) 70,036,158
- ---------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Net Asset Value Per Share
Class A Class B Class C
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Assets ($) 62,958,296 6,733,143 344,719
Shares Outstanding 5,391,210 576,931 29,489
- ---------------------------------------------------------------------------------------------
Net Asset Value Per Share ($) 11.68 11.67 11.69
<FN>
See notes to financial statements.
</FN>
The Fund 11
</TABLE>
<PAGE>
STATEMENT OF OPERATIONS
Year Ended April 30, 1999
<TABLE>
- ---------------------------------------------------------------------------------------------
Investment Income ($)
- ---------------------------------------------------------------------------------------------
<S> <C>
Income
Interest Income 4,079,943
Expenses:
Management fee--Note 3(a) 380,345
Shareholder servicing costs--Note 3(c) 215,220
Distribution fees--Note 3(b) 35,881
Professional fees 11,682
Registration fees 9,970
Prospectus and shareholders' reports 8,554
Custodian fees 7,887
Trustees' fees and expenses--Note 3(d) 862
Loan commitment fees--Note 2 398
Miscellaneous 6,644
Total Expenses 677,443
Investment Income--Net 3,402,500
- ---------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) on Investments--Note 4:
Net realized gain (loss) on investments 569,381
Net unrealized appreciation (depreciation) on investments (43,907)
Net Realized and Unrealized Gain (Loss) on Investments 525,474
Net Increase in Net Assets Resulting from Operations 3,927,974
</TABLE>
[FN]
See notes to financial statements.
</FN>
12
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
Year Ended April 30,
-------------------------------------
1999 1998
- -----------------------------------------------------------------------------------------
<S> <C> <C>
Operations ($):
Investment income--net 3,402,500 3,608,186
Net realized gain (loss) on investments 569,381 881,735
Net unrealized appreciation (depreciation)
on investments (43,907) 1,589,834
Net Increase (Decrease) in Net Assets Resulting
from Operations 3,927,974 6,079,755
- -----------------------------------------------------------------------------------------
Dividends to Shareholders From ($):
Investment income--net:
Class A shares (3,085,284) (3,315,280)
Class B shares (312,675) (292,854)
Class C shares (4,541) (52)
Net realized gain on investments:
Class A shares (981,213) (259,927)
Class B shares (112,114) (25,975)
Class C shares (3,099) (5)
Total Dividends (4,498,926) (3,894,093)
- -----------------------------------------------------------------------------------------
Beneficial Interest Transactions ($):
Net proceeds from shares sold:
Class A shares 7,581,389 2,030,256
Class B shares 1,829,019 734,207
Class C shares 341,132 --
Dividends reinvested:
Class A shares 2,550,054 2,065,722
Class B shares 263,046 187,055
Class C shares 7,326 26
Cost of shares redeemed:
Class A shares (7,190,547) (11,381,019)
Class B shares (1,888,781) (581,316)
Increase (Decrease) in Net Assets from
Beneficial Interest Transactions 3,492,638 (6,945,069)
Total Increase (Decrease) in Net Assets 2,921,686 (4,759,407)
- -----------------------------------------------------------------------------------------
Net Assets ($):
Beginning of Period 67,114,472 71,873,879
End of Period 70,036,158 67,114,472
<FN>
See notes to financial statements.
</FN>
The Fund 13
</TABLE>
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS (continued)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
Year Ended April 30,
----------------------------------
1999 1998
- --------------------------------------------------------------------------------------
<S> <C> <C>
Capital Share Transactions:
Class A
Shares sold 632,649 173,993
Shares issued for dividends reinvested 215,156 175,718
Shares redeemed (607,023) (970,437)
Net Increase (Decrease) in Shares Outstanding 240,782 (620,726)
- --------------------------------------------------------------------------------------
Class B
Shares sold 154,844 62,301
Shares issued for dividends reinvested 22,203 15,921
Shares redeemed (160,697) (49,787)
Net Increase (Decrease) in Shares Outstanding 16,350 28,435
- --------------------------------------------------------------------------------------
Class C
Shares sold 28,770 --
Shares issued for dividends reinvested 621 2
Net Increase (Decrease) in Shares Outstanding 29,391 2
<FN>
See notes to financial statements.
</FN>
</TABLE>
14
<PAGE>
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the
fiscal periods indicated. Certain information reflects financial results for a
single Fund share. Total return shows how much your investment in the Fund would
have increased (or decreased) during each period, assuming you had reinvested
all dividends and distributions. These figures have been derived from the Fund's
financial statements.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
Year Ended April 30,
----------------------------------------------
Class A Shares 1999 1998 1997 1996 1995
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per Share Data ($):
Net asset value, beginning of period 11.75 11.40 11.50 11.53 11.64
Investment Operations:
Investment income--net .59 .61 .63 .66 .69
Net realized and unrealized gain (loss)
on investments .11 .40 .17 -- (.06)
Total from Investment Operations .70 1.01 .80 .66 .63
Distributions:
Dividends from investment income--net (.59) (.61) (.63) (.66) (.69)
Dividends from net realized gain
on investments (.18) (.05) (.27) (.03) --
Dividends in excess of net realized gain
on investments -- -- -- -- (.05)
Total Distributions (.77) (.66) (.90) (.69) (.74)
Net asset value, end of period 11.68 11.75 11.40 11.50 11.53
- ---------------------------------------------------------------------------------------
Total Return (%)* 6.08 9.04 7.08 5.69 5.72
- ---------------------------------------------------------------------------------------
Ratios/Supplemental Data (%):
Ratio of expenses to average net assets .93 .91 .92 .92 .94
Ratio of net investment income
to average net assets 4.97 5.23 5.46 5.57 6.04
Decrease reflected in above expense ratios
due to undertakings by the Manager -- -- -- -- .01
Portfolio Turnover Rate 47.11 48.69 24.45 34.86 13.62
- ---------------------------------------------------------------------------------------
Net Assets, end of period ($ X 1,000) 62,958 60,529 65,809 68,812 72,731
<FN>
* Exclusive of sales load.
See notes to financial statements.
</FN>
The Fund 15
</TABLE>
<PAGE>
FINANCIAL HIGHLIGHTS (continued)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
Year Ended April 30,
----------------------------------------------
Class B Shares 1999 1998 1997 1996 1995
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------
Per Share Data ($):
Net asset value, beginning of period 11.75 11.40 11.49 11.52 11.63
Investment Operations:
Investment income--net .53 .55 .57 .60 .63
Net realized and unrealized gain (loss)
on investments .10 .40 .18 -- (.06)
Total from Investment Operations .63 .95 .75 .60 .57
Distributions:
Dividends from investment income--net (.53) (.55) (.57) (.60) (.63)
Dividends from net realized gain
on investments (.18) (.05) (.27) (.03) --
Dividends in excess of net realized gain
on investments -- -- -- -- (.05)
Total Distributions (.71) (.60) (.84) (.63) (.68)
Net asset value, end of period 11.67 11.75 11.40 11.49 11.52
- ---------------------------------------------------------------------------------------
Total Return (%)* 5.46 8.49 6.63 5.15 5.15
- ---------------------------------------------------------------------------------------
Ratios/Supplemental Data (%):
Ratio of expenses to average net assets 1.43 1.42 1.43 1.43 1.45
Ratio of net investment income
to average net assets 4.46 4.71 4.94 5.03 5.47
Decrease reflected in above expense ratios
due to undertakings by the Manager -- -- -- -- .01
Portfolio Turnover Rate 47.11 48.69 24.45 34.86 13.62
- ---------------------------------------------------------------------------------------
Net Assets, end of period ($ X 1,000) 6,733 6,584 6,064 5,255 4,220
<FN>
* Exclusive of sales load.
See notes to financial statements.
</FN>
</TABLE>
16
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
Year Ended April 30,
---------------------------------------------
Class C Shares 1999 1998 1997 1996a
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per Share Data ($):
Net asset value, beginning of period 11.76 11.41 11.48 11.59
Investment Operations:
Investment income--net .50 .52 .54 .40
Net realized and unrealized gain (loss)
on investments .11 .40 .20 (.08)
Total from Investment Operations .61 .92 .74 .32
Distributions:
Dividends from investment income--net (.50) (.52) (.54) (.40)
Dividends from net realized gain
on investments (.18) (.05) (.27) (.03)
Total Distributions (.68) (.57) (.81) (.43)
Net asset value, end of period 11.69 11.76 11.41 11.48
- ---------------------------------------------------------------------------------------
Total Return (%)b 5.28 8.22 6.55 3.76c
- ---------------------------------------------------------------------------------------
Ratios/Supplemental Data (%):
Ratio of expenses to average net assets 1.70 1.64 1.65 1.69c
Ratio of net investment income
to average net assets 4.06 4.51 4.64 4.72c
Portfolio Turnover Rate 47.11 48.69 24.45 34.86
- ---------------------------------------------------------------------------------------
Net Assets, end of period ($ X 1,000) 345 1 1 1
<FN>
a From August 15, 1995 (commencement of initial offering) to April 30, 1996.
b Exclusive of sales load.
c Annualized.
See notes to financial statements.
</FN>
The Fund 17
</TABLE>
<PAGE>
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, as amended (the "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")
18
<PAGE>
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. Under the terms of the custody
agreement, the Fund received net earnings credits of $5,126 during the period
ended April 30, 1999 based on available cash balances left on deposit. Income
earned under this arrangement is included in interest income.
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.
The Fund 19
<PAGE>
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 of 1986, as amended (the
"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 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 (the "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. During the period ended April
30, 1999, the Fund did not borrow under the Facility.
NOTE 3--Management Fee and Other Transactions With Affiliates:
(a) Pursuant to a management agreement with the Manager, the management fee is
computed at the annual rate of .55 of 1% of the value of the Fund's average
daily net assets and is payable monthly.
Dreyfus Service Corporation, a wholly-owned subsidiary of the Manager, retained
$1,563 during the period ended April 30, 1999, from commissions earned on sales
of the Fund's shares.
20
<PAGE>
(b) Under the Distribution Plan adopted pursuant to Rule 12b-1 under the Act,
Class B and Class C shares pay the Distributor for distributing their 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, 1999, Class B and Class C
shares were charged $35,042 and $839, respectively, pursuant to the Distribution
Plan.
(c) Under the Shareholder Services Plan, Class A, Class B and Class C shares pay
the Distributor at an annual rate of .25 of 1% of the value of their average
daily net assets 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, 1999, Class A, Class B and Class C
shares were charged $155,084, $17,520 and $280, 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, 1999, the Fund was charged $28,610 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 ended April 30, 1999, amounted to
$37,256,368 and $31,491,872, respectively.
The Fund 21
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
At April 30, 1999, accumulated net unrealized appreciation on investment was
$3,625,265, consisting of $3,810,487 gross unrealized appreciation and $185,222
gross unrealized depreciation.
At April 30, 1999, 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).
22
<PAGE>
REPORT OF 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 (the "Fund") (one of the Funds constituting the Dreyfus
Premier State Municipal Bond Fund) as of April 30, 1999, 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, 1999 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 the
Fund at April 30, 1999, 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.
/s/ Ernst & Young LLP
New York, New York
June 2, 1999
The Fund 23
<PAGE>
IMPORTANT TAX INFORMATION (Unaudited)
In accordance with Federal tax law, the Fund hereby makes the following
designations regarding its fiscal year ended April 30, 1999:
-- 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 $.1225 per share as a long-term capital gain
distribution of the $.1831 per share paid on December 8, 1998. In addition,
73.40% 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 1999 calendar year on Form 1099-DIV which
will be mailed by January 31, 2000.
24
<PAGE>
<PAGE>
For More Information
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
Distributor
Premier Mutual Fund Services, Inc.
60 State Street
Boston, MA 02109
To obtain information:
By telephone
Call your financial representative or@
1-800-554-4611@
By mail Write to:
The Dreyfus Premier
Family of Funds
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
Not FDIC-Insured * Not Bank-Guaranteed * May Lose Value
(C) 1999 Dreyfus Service Corporation 063/622AR994
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)
4/30/89 10,000 9,554
4/30/90 10,720 10,078
4/30/91 11,952 11,210
4/30/92 13,088 12,367
4/30/93 14,744 13,992
4/30/94 15,063 14,282
4/30/95 16,065 15,100
4/30/96 17,341 15,959
4/30/97 18,492 17,089
4/30/98 20,211 18,634
4/30/99 21,615 19,766
*Source: Lehman Brothers
Dreyfus Premier
State Municipal
Bond Fund,
Michigan Series
ANNUAL REPORT
April 30, 1999
[DREYFUS LOGO]
<PAGE>
Year 2000 Issues
(Unaudited)
The fund could be adversely affected if the computer systems used by The Dreyfus
Corporation and the fund's other service providers do not properly process and
calculate date-related information from and after January 1, 2000. The Dreyfus
Corporation is working to avoid Year 2000-related problems in its systems and to
obtain assurances from other service providers that they are taking similar
steps. In addition, issuers of securities in which the fund invests may be
adversely affected by Year 2000-related problems. This could have an impact on
the value of the fund's investments and its share price.
<PAGE>
Contents
THE FUND
- -------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Fund Performance
8 Statement of Investments
13 Statement of Assets and Liabilities
14 Statement of Operations
15 Statement of Changes in Net Assets
17 Financial Highlights
20 Notes to Financial Statements
25 Report of Independent Auditors
26 Important Tax Information
FOR MORE INFORMATION
- --------------------------------------------------------
Back Cover
<PAGE>
The Fund
Dreyfus Premier
State Municipal Bond Fund,
Michigan Series
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this annual report for Dreyfus Premier State Municipal
Bond Fund, Michigan Series, covering the 12-month period from May 1, 1998
through April 30, 1999. Inside, you'll find valuable information about how the
Fund was managed during the period, including a discussion with the Fund's
portfolio manager, William M. Petty.
The past year has generally been rewarding for municipal bond investors. Lower
short-term interest rates adopted by the Federal Reserve Board and other central
banks in the fall of 1998 appear to have helped many U.S. businesses withstand
the effects of economic weakness in Japan, Asia and Latin America. At the same
time, the U.S. economy has entered its eighth year of expansion in an
environment characterized by low inflation and high levels of consumer spending.
In the second half of the reporting period, tax-exempt fixed-income securities
provided good results, especially relative to taxable U.S. Treasury securities.
While prices for U.S. Treasury securities declined significantly through the
second half of the reporting period, a lack of new issuance relative to robust
investor demand supported most municipal bond prices, which have remained
relatively unchanged over the past six months. As a result, the differences in
valuations between taxable U.S. Treasury securities and tax-exempt bonds, which
reached historically wide levels last October, have since narrowed to a more
historically normal relationship.
We appreciate your confidence over the past year, and we look forward to your
continued participation in Dreyfus Premier State Municipal Bond Fund, Michigan
Series.
Sincerely,
/s/ Stephen E. Canter
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
May 13, 1999
2
<PAGE>
DISCUSSION OF FUND PERFORMANCE
William M. Petty, Portfolio Manager
How did Dreyfus Premier State Municipal Bond Fund,
Michigan Series perform?
The Fund's Class A shares produced a total return of 5.89% over the
12-month period ended April 30, 1999,1 compared to a total return of 5.70% for
the average of the Lipper Michigan Municipal Debt Funds category. 2 The Fund
produced a total return of 5.29% for Class B shares and 5.08% for Class C shares
over the 12-month period ended April 30, 1999. 1
What is the Fund's investment approach?
Our goal is to seek a high level of federally and Michigan tax-exempt income
from a diversified portfolio of longer-term municipal bonds without undue risk.
To achieve this objective, we employ two primary strategies. Because Michigan
issues relatively few municipal bonds, we begin by evaluating supply-and-demand
factors. Based on that assessment, we select the individual tax-exempt bonds
that we believe are most likely to provide the highest returns with the least
risk. We look at such criteria as the bond's yield, price, age, the
creditworthiness of its issuer, insurance, and any provisions for early
redemption. Under most circumstances, we look for high-yielding bonds that
cannot be redeemed by their issuers anytime soon and that are selling at a
discount to their face values.
While we do not attempt to predict changes in interest rates, we may tactically
manage the portfolio's average duration -- a measure of sensitivity to changes
in interest rates -- in anticipation of temporary supply-and-demand changes. If
we expect the supply of newly issued bonds to increase, we may reduce the
portfolio's average duration to make cash available for the purchase of higher
yielding securities. Conversely, if we expect demand for municipal bonds to
surge at a time when we anticipate little issuance, we may increase the
portfolio's average duration to
The Fund 3
<PAGE>
DISCUSSION OF FUND PERFORMANCE (continued)
maintain current yields for as long as practical. At other times, we try to
maintain a "neutral" average duration consistent with other Michigan municipal
bond funds.
What other factors influenced the Fund's performance?
When the Asian currency and credit crisis spread to Russia and threatened Latin
America last summer and fall, investors flocked to U.S. Treasury securities. As
a result, yields on taxable Treasuries fell briefly in October to levels that
were roughly equivalent to yields on comparable tax-exempt bonds.
However, the Federal Reserve Board and other central banks moved quickly to
stimulate global economic growth. They did so last fall by reducing key
short-term interest rates. Because lower short-term interest rates were expected
to stimulate economic growth and potentially reignite inflationary pressures,
yields on longer-term bonds rose throughout the first four months of 1999.
However, the extent of that rise was much greater for taxable U.S. Treasury
securities than for tax-free municipal bonds.
In addition, because of strong economic conditions throughout the country,
Michigan and its municipalities have had little need to borrow. Yet, demand from
investors seeking to minimize their income tax liabilities remained high. This
balance between supply and demand helped keep municipal bond prices relatively
stable while U.S. Treasury bond prices fell sharply.
What is the Fund's current strategy?
As the period came to a close, we continued to search for the most attractive
values in Michigan's municipal bond market. Primarily, we have continued to
focus on high-quality bonds because the differences in yields between the
highest quality bonds and lower quality bonds are narrow by historical
standards. However, we have continually evaluated lower quality
issues in order to identify bonds which we believed would offer the Fund an
attractive yield as compensation for additional credit risk.
4
<PAGE>
As of April 30, the portfolio's 7.2-year average duration was positioned at the
long end of the neutral range, which we believed was appropriate in a
low-issuance environment. We intend to remain vigilant in our efforts to
identify tactical opportunities to change our average duration in anticipation
of any supply-and-demand imbalances. We expect these strategies to help us
continue to maximize tax-exempt returns for our shareholders.
May 13, 1999
[FN]
1 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 applicable contingent deferred sales charge
imposed on redemptions in the case of Class B and Class C shares. Income may
be subject to state and local income taxes for non-Michigan residents. Some
income may be subject to the Federal Alternative Minimum Tax (AMT) for certain
shareholders.
2 Source: Lipper Analytical Services, Inc.
</FN>
The Fund 5
<PAGE>
FUND PERFORMANCE
$21,615
Lehman Brothers Municipal
Bond Index*
[CHART]
$20,364
Dreyfus Premier State Municipal
Bond Fund, Michigan Series
(Class A Shares)
Comparison of change in value of $10,000 investment in the Fund's Class A shares
and the Lehman Brothers Municipal Bond Index
[FN]
* Source: Lehman Brothers. Past performance is not predictive of future
performance. The above graph compares a $10,000 investment made in Class A
shares of Dreyfus Premier State Municipal Bond Fund, Michigan Series (the
"Fund") on 4/30/89 to a $10,000 investment made in the Lehman Brothers Municipal
Bond Index (the "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 Fund invests primarily in Michigan municipal securities and its performance
shown in the line graph takes into account the maximum initial sales charge on
Class A shares and all other applicable fees and expenses. The Index is not
limited to investments principally in Michigan municipal obligations and does
not take into account charges, fees and other expenses. The Index, unlike the
Fund, 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. These factors can contribute to the Index potentially outperforming or
underperforming the Fund. Further information relating to Fund performance,
including expense reimbursements, if applicable, is contained in the Financial
Highlights section of the Prospectus and elsewhere in this report.
</FN>
6
<PAGE>
- --------------------------------------------------------------------------------
Average Annual Total Returns as of 4/30/99
Inception From
Date 1 Year 5 Years 10 Years Inception
- --------------------------------------------------------------------------------
Class A Shares
with sales charge (4.5%)(5/28/87) 1.10% 5.97% 7.37% --
without sales charge (5/28/87) 5.89% 6.95% 7.86% --
Class B Shares
with redemption* (1/15/93) 1.30% 6.08% -- 6.30%
without redemption (1/15/93) 5.29% 6.39% -- 6.30%
Class C Shares
with redemption** (8/15/95) 4.08% -- -- 6.23%
without redemption (8/15/95) 5.08% -- -- 6.23%
[FN]
Past performance is not predictive of future performance.
* 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>
The Fund 7
<PAGE>
STATEMENT OF INVESTMENTS
April 30, 1999
- --------------------------------------------------------------------------------
Principal
Long Term Municipal Investments--96.2% Amount($) Value ($)
- --------------------------------------------------------------------------------
Anchor Bay School District, Refunding
4.75%, 5/1/2026 (Insured; FGIC) 2,250,000 2,114,820
Big Rapids Public School District, Refunding
4.75%, 5/1/2025 (Insured; FSA). 1,500,000 1,411,485
Brighton Area School District, Refunding:
Zero Coupon, 5/1/2014 (Insured: AMBAC) 8,000,000 3,819,040
Zero Coupon, 5/1/2020 (Insured: AMBAC) 5,000,000 1,690,650
Capital Region Airport Authority, Airport Revenue
6.70%, 7/1/2021 (Insured; MBIA) 2,500,000 2,730,050
Chippewa County Hospital Finance Authority,
Revenue, Refunding 5.625%, 11/1/2014 1,625,000 1,631,516
Chippewa Valley Schools, Refunding
7%, 5/1/2010 (Prerefunded 5/1/2001) a 1,275,000 1,379,066
Clarkston Community School 5.75%, 5/1/2016
(Insured; FGIC) (Prerefunded 5/1/2005) a 1,340,000 1,474,228
Detroit:
(Unlimited Tax) 6.35%, 4/1/2014 2,995,000 3,249,575
Water Supply Systems Revenue, Refunding
9.272%, 7/1/2022 (Insured; FGIC) b 1,500,000 1,756,875
Detroit Downtown Development Authority,
Tax Increment Revenue, Refunding
(Development Area Number 1 Projects)
4.75%, 7/1/2025 (Insured; MBIA). 6,705,000 6,307,662
Detroit City School District, School Building and
Site Improvement
4.75%, 5/1/2028 (Insured; FGIC). 4,250,000 3,986,330
Fowlerville Community Schools School District
5.60%, 5/1/2016 (Insured; MBIA)
(Prerefunded 5/1/2007) a 2,995,000 3,280,693
Grand Rapids, Sanitary Sewer System Revenue,
Refunding and Improvement
4.75%, 1/1/2028 (Insured; FGIC) 1,000,000 938,210
Grand Rapids Charter Township,
Revenue (Porter Hills Obligation Group)
5.45%, 7/1/2029 1,000,000 984,630
Grand Rapids Housing Finance Authority,
Multi-Family Revenue, Refunding
7.625%, 9/1/2023 (Collateralized; FNMA) 1,000,000 1,099,330
Grand Valley State University,
College and University Revenue
5.50%, 2/1/2018 (Insured; FGIC) 2,570,000 2,755,888
Huron Valley School District, Refunding
Zero Coupon, 5/1/2018 (Insured; FGIC) 6,370,000 2,405,949
8
<PAGE>
- --------------------------------------------------------------------------------
Principal
Long Term Municipal Investments (continued) Amount($) Value ($)
- --------------------------------------------------------------------------------
Kalamazoo Hospital Finance Authority,
Hospital Facilities Revenue, Refunding:
(Borgess Medical Center) 6.25%,
6/1/2014 (Insured; FGIC) 2,000,000 2,331,020
(Bronson Methodist Hospital)
5.75%, 5/15/2016 (Insured; MBIA) 2,500,000 2,637,775
Kenowa Hills Public Schools
5.875%, 5/1/2021 (Insured; MBIA) 3,360,000 3,582,331
Kent County, Airport Facilities Revenue
(Kent County International Airport):
5.90%, 1/1/2012 1,145,000 1,266,130
5.90%, 1/1/2013 1,095,000 1,210,840
6.10%, 1/1/2025 3,000,000 3,363,660
Lake Orion Community School District, Refunding
5.80%, 5/1/2015 (Insured; AMBAC) 2,085,000 2,227,760
Leslie Public School (Ingham and
Jackson Counties School Building and Site)
Refunding 6%, 5/1/2015 (Insured; AMBAC)
(Prerefunded 5/1/2005) a 1,000,000 1,113,400
Michigan Building Authority, Lease Revenue:
6.75%, 10/1/2007 (Insured; AMBAC) 1,600,000 1,746,448
4.75%, 10/15/2021 3,300,000 3,119,127
Michigan Higher Education Student Loan Authority,
Student Loan Revenue:
6.875%, 10/1/2007 (Insured; AMBAC) 2,250,000 2,367,045
7.55%, 10/1/2008 (Insured; MBIA) 1,150,000 1,219,195
6.125%, 9/1/2010 1,520,000 1,613,054
Michigan Hospital Finance Authority, HR:
(Crittenton Hospital) 6.70%, 3/1/2007 2,250,000 2,454,120
(Daughters of Charity National Health Systems--
Providence Hospital)
7%, 11/1/2021 (Prerefunded 11/1/2001) a 2,700,000 2,963,466
Refunding:
(Detroit Medical Center) 8.125%, 8/15/2012 220,000 224,710
(Genesys Health Systems) 8.125%, 10/1/2021
(Prerefunded 10/1/2005) a 5,000,000 6,209,050
(Middle Michigan Obligated Group) 6.625%, 6/1/2010
(Prerefunded 6/1/2000) a 2,000,000 2,068,580
(Sisters of Mercy Health Corp.)
6.25%, 2/15/2009 (Insured; FSA) 1,065,000 1,146,259
Michigan Housing Development Authority:
(Home Improvement Program) 7.65%, 12/1/2012 1,435,000 1,477,562
Rental Housing Revenue:
6.50%, 4/1/2006 2,000,000 2,149,160
7.70%, 4/1/2023 (Insured; FSA) 4,185,000 4,454,137
The Fund 9
<PAGE>
STATEMENT OF INVESTMENTS (continued)
- --------------------------------------------------------------------------------
Principal
Long Term Municipal Investments (continued) Amount($) Value ($)
- --------------------------------------------------------------------------------
Michigan Housing Representatives, COP:
Zero Coupon, 8/15/2022 (Insured; AMBAC) 7,325,000 2,177,869
Zero Coupon, 8/15/2023 (Insured; AMBAC) 2,615,000 736,306
Michigan Municipal Bond Authority, Revenue
(State Revolving Fund):
6.50%, 10/1/2014 (Prerefunded 10/1/2004) a 2,500,000 2,850,600
6.50%, 10/1/2017 (Prerefunded 10/1/2004) a 3,500,000 3,990,840
Michigan Strategic Fund, Limited Obligation Revenue:
(Northeastern Community Mental Health Foundation)
8.25%, 1/1/2009 1,270,000 1,297,572
(NSF International Project) 5.75%, 8/1/2019
(LOC; First of America Bank) 3,000,000 3,136,140
Refunding (Ledyard Association Ltd. Partnership
Project)
6.25%, 10/1/2011
(Insured; ITT Lyndon Property Insurance Co.) 3,075,000 3,364,604
SWDR, Refunding (Genesee Power Station Project)
7.50%, 1/1/2021 3,000,000 3,220,230
Monroe County:
PCR (Detroit Edison Project):
7.50%, 12/1/2019 (Insured; AMBAC) 4,650,000 4,891,521
7.875%, 12/1/2019 2,720,000 2,850,533
7.65%, 9/1/2020 (Insured; FGIC) 2,250,000 2,403,383
6.55%, 6/1/2024 (Insured; MBIA) 1,700,000 1,869,422
Water Supply Systems
(Frenchtown Charter Township Water Treatment
and Distribution Systems) 6.50%, 5/1/2013
(Prerefunded 5/1/2000) a 2,500,000 2,625,875
Monroe County Economic Development Corp., Ltd.
Obligation Refunding, Revenue
(Detroit Edison Co. Project) 6.95%, 9/1/2022
(Insured; FGIC) 2,000,000 2,518,900
Northville, Special Assessment (Wayne County)
7.875%, 1/1/2006 1,685,000 1,724,429
Northwestern Michigan College,
Community College Improvement Revenue, Refunding
7%, 7/1/2011 1,800,000 1,936,800
Oakland County Economic Development Corp., Ltd.
Obligation Revenue
(Pontiac Osteopathic Hospital Project)
9.625%, 1/1/2020 (Prerefunded 1/1/2000) a 1,575,000 1,669,484
Plymouth-Canton Community School District
4.75%, 5/1/2023 (Insured; FSA). 3,000,000 2,837,730
Redford Unified School District, Refunding:
5.25%, 5/1/2011 (Insured; AMBAC) 1,990,000 2,111,111
5.50%, 5/1/2015 (Insured; AMBAC) 1,260,000 1,367,302
10
<PAGE>
- --------------------------------------------------------------------------------
Principal
Long Term Municipal Investments (continued) Amount($) Value ($)
- --------------------------------------------------------------------------------
Romulus Community Schools, Refunding
Zero Coupon 5/1/2020 (Insured; FGIC) 1,385,000 468,310
Romulus Economic Development Corp., Ltd.
Obligation EDR
Refunding (Romulus Hir Ltd. Partnership Project)
7%, 11/1/2015 (Insured; ITT Lyndon Property
Insurance Co.) 3,700,000 4,113,105
South Lyon Community Schools:
4.75%, 5/1/2023 (Insured; FGIC) 2,000,000 1,891,820
(School Building) 6.375%, 5/1/2018
(Prerefunded 5/1/2002) a 1,500,000 1,640,595
Saint John's Public Schools, Refunding
5.10%, 5/1/2025 (Insured; FGIC) 1,790,000 1,804,177
Wayne Charter County, Airport Revenue:
(Detroit Metropolitan Wayne County Airport)
4.875%, 12/1/2023 4,080,000 3,927,122
Special Facilities (Northwest Airlines Inc.)
6.75%, 12/1/2015 5,730,000 6,217,680
Total Long-Term Municipal Investments
(cost $152,175,976) 163,604,286
- --------------------------------------------------------------------------------
Short-Term Municipal Investments--2.2%
Midland County Economic Development Corp.,
Economic Development Limited
Obligation Revenue, VRDN (Dow Chemical Co. Project):
4.30% c 1,400,000 1,400,000
4.35% c 900,000 900,000
Michigan Strategic Fund, Limited Obligation
Revenue, VRDN
4.25% (LOC; Barclays Bank PLC) c 1,400,000 1,400,000
Total Short-Term Municipal Investments
(cost $3,700,000) 3,700,000
- --------------------------------------------------------------------------------
Total Investments (cost $155,875,976) 98.4% 167,304,286
Cash and Receivables (Net) 1.6% 2,674,806
Net Assets 100.0% 169,979,092
The Fund 11
<PAGE>
- --------------------------------------------------------------------------------
Summary of Abbreviations
AMBAC American Municipal Bond LOC Letter of Credit
Assurance Corporation MBIA Municipal Bond
COP Certificate of Participation Investors Assurance
EDR Economic Development Revenue Insurance Corporation
FGIC Financial Guaranty PCR Pollution Control Revenue
Insurance Company SWDR Solid Waste
FNMA Federal National Disposal Revenue
Mortgage Association VRDN Variable Rate
FSA Financial Security Assurance Demand Notes
HR Hospital Revenue
- --------------------------------------------------------------------------------
Summary of Combined Ratings (Unaudited)
Fitch or Moody's or Standard & Poor's Value (%)
- --------------------------------------------------------------------------------
AAA Aaa AAA 58.1
AA Aa AA 13.6
A A A 10.6
BBB Baa BBB 2.8
F1 Mig1 SP1 2.2
Not Rated (d) Not Rated (d) Not Rated (d) 12.7
100.0
[FN]
a Bonds which are prerefunded are collateralized by U.S. Government securities
which are held in escrow and are used to pay principal and interest on the
municipal issue and to retire the bonds in full at the earliest refunding
date.
b Inverse floater security-the interest rate is subject to change periodically.
c Securities payable on demand. Variable rate interest- subject to periodic
change.
d Securities which, while not rated by Fitch, Moody's and Standard & Poor's have
been determined by the Manager to be of comparable quality to those rated
securities in which the Fund may invest.
See notes to financial statments.
</FN>
12
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
April 30, 1999
- --------------------------------------------------------------------------------
Cost Value
- --------------------------------------------------------------------------------
Assets ($):
Investments in securities
--See Statement of Investments 155,875,976 167,304,286
Interest receivable 2,734,916
Receivable for investment securities sold 98,586
Receivable for shares of Beneficial
Interest subscribed 30
Prepaid expenses 20,027
170,157,845
- --------------------------------------------------------------------------------
Liabilities ($):
Due to The Dreyfus Corporation and affiliates 76,680
Due to Distributor 45,147
Cash overdraft due to Custodian 2,830
Payable for shares of Beneficial Interest redeemed 12,305
Accrued expenses 41,791
178,753
- --------------------------------------------------------------------------------
Net Assets ($) 169,979,092
- --------------------------------------------------------------------------------
Composition of Net Assets ($):
Paid-in capital 157,662,603
Accumulated net realized gain (loss) on investments 888,179
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 11,428,310
- --------------------------------------------------------------------------------
Net Assets ($) 169,979,092
- --------------------------------------------------------------------------------
Net Asset Value Per Share
Class A Class B Class C
- --------------------------------------------------------------------------------
Net Assets ($) 145,763,855 22,338,052 1,877,185
Shares Outstanding 9,363,817 1,435,277 120,569
- --------------------------------------------------------------------------------
Net Asset Value Per Share ($) 15.57 15.56 15.57
[FN]
See notes to financial statements.
</FN>
The Fund 13
<PAGE>
STATEMENT OF OPERATIONS
Year Ended April 30, 1999
- --------------------------------------------------------------------------------
Investment Income ($)
- --------------------------------------------------------------------------------
Income
Interest Income 10,078,391
Expenses:
Management fee--Note 3(a) 943,868
Shareholder servicing costs--Note 3(c) 548,216
Distribution fees--Note 3(b) 123,209
Registration fees 17,256
Custodian fees 17,187
Professional fees 15,402
Prospectus and shareholders' reports 14,426
Trustees' fees and expenses--Note 3(d) 2,112
Loan commitment fees--Note 2 832
Miscellaneous 18,048
Total Expenses 1,700,556
Investment Income (Net) 8,377,835
- --------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) on Investments--Note 4:
Net realized gain (loss) on investments 1,678,968
Net unrealized appreciation (depreciation) on investments (357,792)
Net Realized and Unrealized Gain (Loss) on Investments 1,321,176
Net Increase in Net Assets Resulting From Operations 9,699,011
[FN]
See notes to financial statements.
</FN>
14
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
Year Ended April 30
--------------------------------
1999 1998
- --------------------------------------------------------------------------------
Operations ($):
Investment income--net 8,377,835 8,911,505
Net realized gain (loss) on investments 1,678,968 1,713,224
Net unrealized appreciation (depreciation)
on investments (357,792) 3,824,470
Net Increase (Decrease) in Net Assets
Resulting from Operations 9,699,011 14,449,199
- --------------------------------------------------------------------------------
Dividends to Shareholders From ($):
Investment income--net:
Class A shares (7,320,520) (7,955,561)
Class B shares (996,364) (937,724)
Class C shares (60,951) (18,220)
Net realized gain on investments:
Class A shares (1,532,800) (75,069)
Class B shares (242,336) (9,870)
Class C shares (19,667) (252)
Total Dividends (10,172,638) (8,996,696)
- --------------------------------------------------------------------------------
Beneficial Interest Transactions ($):
Net proceeds from shares sold:
Class A shares 10,496,366 4,897,519
Class B shares 6,039,658 3,020,561
Class C shares 1,596,045 385,397
Dividends reinvested:
Class A shares 5,128,473 4,509,960
Class B shares 750,794 559,930
Class C shares 33,463 10,205
Cost of shares redeemed:
Class A shares (18,726,345) (20,589,778)
Class B shares (5,296,289) (2,589,595)
Class C shares (368,225) (4,831)
Increase (Decrease) in Net Assets from
Beneficial Interest Transactions (346,060) (9,800,632)
Total Increase (Decrease) in Net Assets (819,687) (4,348,129)
- --------------------------------------------------------------------------------
Net Assets ($):
Beginning of Period 170,798,779 175,146,908
End of Period 169,979,092 170,798,779
[FN]
See notes to financial statements.
</FN>
The Fund 15
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS (continued)
- --------------------------------------------------------------------------------
Year Ended April 30
-----------------------------
1999 1998
- --------------------------------------------------------------------------------
Capital Share Transactions:
Class A
Shares sold 668,141 313,349
Shares issued for dividends reinvested 324,921 288,987
Shares redeemed (1,188,891) (1,320,623)
Net Increase (Decrease) in Shares Outstanding (195,829) (718,287)
- --------------------------------------------------------------------------------
Class B
Shares sold 382,748 193,841
Shares issued for dividends reinvested 47,574 35,883
Shares redeemed (336,686) (165,925)
Net Increase (Decrease) in Shares Outstanding 93,636 63,799
- --------------------------------------------------------------------------------
Class C
Shares sold 100,814 24,716
Shares issued for dividends reinvested 2,120 651
Shares redeemed (23,362) (306)
Net Increase (Decrease) in Shares Outstanding 79,572 25,061
[FN]
See notes to financial statements.
</FN>
16
<PAGE>
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the
fiscal periods indicated. Certain information reflects financial results for a
single fund share. "Total return" shows how much your investment in the Fund
would have increased (or decreased) during each period, assuming you had
reinvested all dividends and distributions. These figures have been derived from
the Fund's financial statements.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
Year Ended April 30,
-----------------------------------------------
Class A Shares 1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per Share Data ($):
Net asset value, beginning of period 15.61 15.14 15.15 15.14 15.27
Investment Operations:
Investment income--net .78 .80 .81 .83 .85
Net realized and unrealized gain (loss)
on investments .12 .48 .21 .20 .11
Total from Investment Operations .90 1.28 1.02 1.03 .96
Distributions:
Dividends from investment income--net (.78) (.80) (.81) (.83) (.85)
Dividends from net realized gain
on investments (.16) (.01) (.22) (.19) (.24)
Total Distributions (.94) (.81) (1.03) (1.02) (1.09)
Net asset value, end of period 15.57 15.61 15.14 15.15 15.14
- ------------------------------------------------------------------------------------------
Total Return (%)* 5.89 8.55 6.89 6.81 6.65
- ------------------------------------------------------------------------------------------
Ratios/Supplemental Data (%):
Ratio of expenses to average net assets .92 .92 .91 .93 .92
Ratio of net investment income
to average net assets 4.96 5.12 5.34 5.35 5.66
Decrease reflected in above expense ratios
due to undertakings by the Manager -- -- -- -- .01
Portfolio Turnover Rate 36.17 41.46 22.32 56.88 48.30
- ------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 145,764 149,221 155,568 166,538 176,604
<FN>
* Exclusive of sales load.
See notes to financial statements.
</FN>
</TABLE>
The Fund 17
<PAGE>
FINANCIAL HIGHLIGHTS (continued)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
Year Ended April 30,
-----------------------------------------------
Class B Shares 1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per Share Data ($):
Net asset value, beginning of period 15.61 15.13 15.15 15.13 15.27
Investment Operations:
Investment income--net .70 .72 .74 .75 .77
Net realized and unrealized gain (loss)
on investments .11 .49 .20 .21 .10
Total from Investment Operations .81 1.21 .94 .96 .87
Distributions:
Dividends from investment income--net (.70) (.72) (.74) (.75) (.77)
Dividends from net realized gain
on investments (.16) (.01) (.22) (.19) (.24)
Total Distributions (.86) (.73) (.96) (.94) (1.01)
Net asset value, end of period 15.56 15.61 15.13 15.15 15.13
- ------------------------------------------------------------------------------------------
Total Return (%)* 5.29 8.08 6.27 6.33 6.01
- ------------------------------------------------------------------------------------------
Ratios/Supplemental Data (%):
Ratio of expenses to average net assets 1.42 1.42 1.42 1.44 1.44
Ratio of net investment income
to average net assets 4.44 4.61 4.82 4.82 5.10
Decrease reflected in above expense ratios
due to undertakings by the Manager -- -- -- -- .01
Portfolio Turnover Rate 36.17 41.46 22.32 56.88 48.30
- ------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 22,338 20,938 19,338 19,031 16,471
<FN>
* Exclusive of sales load.
See notes to financial statements.
</FN>
</TABLE>
18
<PAGE>
- --------------------------------------------------------------------------------
Year Ended April 30,
----------------------------------------
Class C Shares 1999 1998 1997 1996 a
- --------------------------------------------------------------------------------
Per Share Data ($):
Net asset value, beginning of period 15.61 15.14 15.16 15.18
Investment Operations:
Investment income--net .66 .67 .69 .50
Net realized and unrealized gain (loss)
on investments .12 .48 .20 .17
Total from Investment Operations .78 1.15 .89 .67
Distributions:
Dividends from investment income--net (.66) (.67) (.69) (.50)
Dividends from net realized gain
on investments (.16) (.01) (.22) (.19)
Total Distributions (.82) (.68) (.91) (.69)
Net asset value, end of period 15.57 15.61 15.14 15.16
- --------------------------------------------------------------------------------
Total Return (%)b 5.08 7.70 5.94 6.12 c
- --------------------------------------------------------------------------------
Ratios/Supplemental Data (%):
Ratio of expenses to average net assets 1.67 1.69 1.72 1.70 c
Ratio of net investment income
to average net assets 4.16 4.26 4.47 4.47 c
Portfolio Turnover Rate 36.17 41.46 22.32 56.88
- --------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 1,877 640 241 133
[FN]
a From August 15, 1995 (commencement of initial offering) to April 30, 1996.
b Exclusive of sales load.
c Annualized.
See notes to financial statements.
</FN>
The Fund 19
<PAGE>
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, as amended (the "Act"), as a non-diversified
open-end management investment company, and operates as a series company
currently offering thirteen series, including the Michigan Series (the "Fund").
The Fund's investment objective is to maximize current income exempt from
Federal and, where applicable, from State income taxes, without undue risk. The
Dreyfus Corporation (the "Manager") serves as the Fund's investment adviser. The
Manager is a direct subsidiary of Mellon Bank, N.A.
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")
20
<PAGE>
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. Under the terms of the custody
agreement, the Fund received net earnings credits of $10,722 during the period
ended April 30, 1999 based on available cash balances left on deposit. Income
earned under this arrangement is included in interest income.
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.
The Fund 21
<PAGE>
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 of 1986, as amended (the
"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 (the "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. During the period ended April
30, 1999, the Fund did not borrow under the Facility.
NOTE 3--Management Fee and Other Transactions With Affiliates:
(a) Pursuant to a management agreement with the Manager, the management fee is
computed at the annual rate of .55 of 1% of the value of the Fund's average
daily net assets and is payable monthly.
Dreyfus Service Corporation, a wholly-owned subsidiary of the Manager, retained
$1,236 during the period ended April 30, 1999, from commissions earned on sales
of the Fund's shares.
22
<PAGE>
(b) Under the Distribution Plan adopted pursuant to Rule 12b-1 under the Act,
Class B and Class C shares pay the Distributor for distributing their 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, 1999, Class B and Class C
shares were charged $112,209 and $11,000, respectively, pursuant to the
Distribution Plan.
(c) Under the Shareholder Services Plan, Class A, Class B and Class C shares pay
the Distributor at an annual rate of .25 of 1% of the value of their average
daily net assets 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, 1999, Class A, Class B and Class C
shares were charged $369,259, $56,105 and $3,667, 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, 1999, the Fund was charged $87,511 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 ended April 30, 1999 amounted to
$60,585,252 and $66,528,746 respectively.
The Fund 23
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
At April 30, 1999, accumulated net unrealized appreciation on investments was
$11,428,310, consisting of $11,746,894 gross unrealized appreciation and
$318,584 gross unrealized depreciation.
At April 30, 1999, 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).
24
<PAGE>
REPORT OF INDEPENDENT AUDITORS
Shareholders and Board of Trustees
Dreyfus Premier State Municipal Bond Fund, Michigan Series
We have audited the accompanying statement of assets and liabilities, including
the statement of investments, of Dreyfus Premier State Municipal Bond Fund,
Michigan Series (the "Fund") (one of the Funds constituting the Dreyfus Premier
State Municipal Bond Fund) as of April 30, 1999, 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, 1999 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 the
Fund at April 30, 1999, 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 2, 1999
The Fund 25
<PAGE>
IMPORTANT TAX INFORMATION (Unaudited)
In accordance with Federal tax law, the Fund hereby makes the following
designations regarding its fiscal year ended April 30, 1999:
--all the dividends paid from investment income-net are "exempt-interest
dividends" (not subject to regular Federal and, for individuals who are
Michigan residents, Michigan personal income taxes), and
--the Fund hereby designates $.1019 per share as a long-term capital gain
distribution of the $.1646 per share paid on December 8, 1998.
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 1999 calendar year on Form 1099-DIV which
will be mailed by January 31, 2000.
26
<PAGE>
<PAGE>
NOTES
<PAGE>
<PAGE>
FOR MORE INFORMATION
Dreyfus Premier State
Municipal Bond Fund, Michigan Series
200 Park Avenue
New York, NY 10166
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Custodian
The Bank of New York
90 Washington Street
New York, NY 10286
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Distributor
Premier Mutual Fund Services, Inc.
60 State Street
Boston, MA 02109
To obtain information:
By telephone
Call your financial representative or
1-800-554-4611
By mail Write to:
The Dreyfus Premier
Family of Funds
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
Not FDIC-Insured * Not Bank-Guaranteed * May Lose Value
(C) 1999 Dreyfus Service Corporation 053/693AR994
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
DREYFUS PREMIER STATE MUNICIPAL BOND FUND, MICHIGAN SERIES
CLASS A SHARES AND THE LEHMAN BROTHERS MUNICIPAL BOND
INDEX
EXHIBIT A:
DREYFUS
PREMIER STATE
LEHMAN BROTHERS MUNICIPAL BOND FUND,
PERIOD MUNICIPAL MICHIGAN SERIES
BOND INDEX * (CLASS A SHARES)
4/30/89 10,000 9,553
4/30/90 10,720 10,087
4/30/91 11,952 11,258
4/30/92 13,088 12,396
4/30/93 14,744 14,038
4/30/94 15,063 14,551
4/30/95 16,065 15,518
4/30/96 17,341 16,575
4/30/97 18,492 17,716
4/30/98 20,211 19,231
4/30/99 21,615 20,364
*Source: Lehman Brothers
Dreyfus Premier
State Municipal
Bond Fund,
Minnesota Series
ANNUAL REPORT
April 30, 1999
[DREYFUS LOGO]
<PAGE>
Year 2000 Issues (Unaudited)
The fund could be adversely affected if the computer systems used by The
Dreyfus Corporation and the fund's other service providers do not properly
process and calculate date-related information from and after January 1,
2000. The Dreyfus Corporation is working to avoid Year 2000-related
problems in its systems and to obtain assurances from other service
providers that they are taking similar steps. In addition, issuers of
securities in which the fund invests may be adversely affected by Year
2000-related problems. This could have an impact on the value of the fund's
investments and its share price.
<PAGE>
Contents
THE FUND
- --------------
2 Letter from the President
3 Discussion of Fund Performance
6 Fund Performance
8 Statement of Investments
13 Statement of Assets and Liabilities
14 Statement of Operations
15 Statement of Changes in Net Assets
17 Financial Highlights
20 Notes to Financial Statements
25 Report of Independent Auditors
26 Important Tax Information
FOR MORE INFORMATION
- ----------------------
Back Cover
<PAGE>
Dreyfus Premier The Fund
State Municipal Bond Fund,
Minnesota Series
LETTER FROM THE PRESIDENT
- -------------------------
Dear Shareholder:
We are pleased to present this annual report for Dreyfus Premier State
Municipal Bond Fund, Minnesota Series, covering the 12-month period from
May 1, 1998 through April 30, 1999. Inside, youll find valuable
information about how the Fund was managed during the period, including a
discussion with the Fund's portfolio manager, William M. Petty.
The past year has generally been rewarding for municipal bond investors.
Lower short-term interest rates adopted by the Federal Reserve Board and
other central banks in the fall of 1998 appear to have helped many U.S.
businesses withstand the effects of economic weakness in Japan, Asia and
Latin America. At the same time, the U.S. economy has entered its eighth
year of expansion in an environment characterized by low inflation and high
levels of consumer spending.
In the second half of the reporting period, tax-exempt fixed-income
securities provided good results, especially relative to taxable U.S.
Treasury securities. While prices for U.S. Treasury securities declined
significantly through the second half of the reporting period, a lack of
new issuance relative to robust investor demand supported most municipal
bond prices, which have remained relatively unchanged over the past six
months. As a result, the differences in valuations between taxable U.S.
Treasury securities and tax-exempt bonds, which reached historically wide
levels last October, have since narrowed to a more historically normal
relationship.
We appreciate your confidence over the past year, and we look forward to
your continued participation in Dreyfus Premier State Municipal Bond Fund,
Minnesota Series.
Sincerely,
/s/Stephen E. Canter
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
May 13, 1999
2
<PAGE>
DISCUSSION OF FUND PERFORMANCE
- ------------------------------
William M. Petty, Portfolio Manager
How did Dreyfus Premier State Municipal Bond Fund,
Minnesota Series perform?
The Fund's Class A shares produced a total return of 5.41% over the 12-
month period ended April 30, 1999,1 compared to a total return of 5.76% for
the average of the Lipper Minnesota Municipal Debt Funds category.2 The
Fund produced a total return of 4.86% for Class B shares and 4.53% for
Class C shares over the 12-month period ended April 30, 1999.1
What is the Fund's investment approach?
Our goal is to seek a high level of federally and Minnesota tax-exempt
income from a diversified portfolio of longer-term municipal bonds without
undue risk. To achieve this objective, we employ two primary strategies.
Because Minnesota issues relatively few municipal bonds, we begin by
evaluating supply-and-demand factors. Based on that assessment, we select
the individual tax-exempt bonds that we believe are most likely to provide
the highest returns with the least risk. We look at such criteria as the
bond's yield, price, age, the creditworthiness of its issuer, insurance,
and any provisions for early redemption. Under most circumstances, we look
for high-yielding bonds that cannot be redeemed by their issuers anytime
soon and that are selling at a discount to their face values.
While we do not attempt to predict changes in interest rates, we may
tactically manage the portfolio's average duration -- a measure of
sensitivity to changes in interest rates -- in anticipation of temporary
supply-and-demand changes. If we expect the supply of newly issued bonds to
increase, we may reduce the portfolio's average duration to make cash
available for the purchase of higher yielding securities. Conversely, if we
expect demand for municipal bonds to surge at a time when we anticipate
little issuance, we may increase the portfolio's average duration to
maintain current yields for as long as practical. At other
The Fund 3
<PAGE>
DISCUSSION OF FUND PERFORMANCE (continued)
times, we try to maintain a neutral average duration consistent with other
Minnesota municipal bond funds.
What other factors influenced the Fund's performance?
When the Asian currency and credit crisis spread to Russia and threatened
Latin America last summer and fall, investors flocked to U.S. Treasury
securities. As a result, yields on taxable Treasuries fell briefly in
October to levels that were roughly equivalent to yields on comparable tax-
exempt bonds.
However, the Federal Reserve Board and other central banks moved quickly to
stimulate global economic growth. They did so last fall by reducing key
short-term interest rates. Because lower short-term interest rates were
expected to stimulate economic growth and potentially reignite inflationary
pressures, yields on longer-term bonds rose throughout the first four
months of 1999. However, the extent of that rise was much greater for
taxable U.S. Treasury securities than for tax-free municipal bonds.
In addition, because of strong economic conditions throughout the country,
Minnesota and its municipalities have had little need to borrow. Yet,
demand from investors seeking to minimize their income tax liabilities
remained high. This balance between supply and demand helped keep municipal
bond prices relatively stable while U.S. Treasury bond prices fell sharply.
What is the Funds current strategy?
At the close of the period, we continued to search for the most attractive
values in Minnesota's municipal bond market. Primarily, we have continued
to focus on high-quality bonds because the differences in yields between
the highest quality bonds and lower quality bonds are narrow by historical
standards. However, we have continually evaluated lower quality issues in
order to identify bonds which we believed
4
<PAGE>
would offer the Fund an attractive yield as compensation for additional
credit risk.
As of April 30, the portfolio's 7.1-year average duration was positioned at
the neutral range, which we believed was appropriate in a low-issuance
environment. We intend to remain vigilant in our efforts to identify
tactical opportunities to change our average duration in anticipation of
any supply-and-demand imbalances. We expect these strategies to help us
continue to maximize tax-exempt returns for our shareholders.
May 13, 1999
[FN]
1 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 applicable contingent deferred sales
charge imposed on redemptions in the case of Class B and Class C shares.
Income may be subject to state and local income taxes for non-Minnesota
residents. Some income may be subject to the Federal Alternative Minimum
Tax (AMT) for certain shareholders.
2 Source: Lipper Analytical Services, Inc.
</FN>
The Fund 5
<PAGE>
FUND PERFORMANCE
$21,615
Lehman Brothers Municipal
Bond Index*
[CHART]
$19,467
Dreyfus Premier State Municipal
Bond Fund, Minnesota Series
(Class A Shares)
Comparison of change in value of $10,000 investment in the Fund's Class A
shares and the Lehman Brothers Municipal Bond Index
[FN]
* Source: Lehman Brothers.
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 (the "Fund") on
4/30/89 to a $10,000 investment made in the Lehman Brothers Municipal Bond
Index (the "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 Fund 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.
The Index is not limited to investments principally in Minnesota municipal
obligations and does not take into account charges, fees and other
expenses. The Index, unlike the Fund, 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. These
factors can contribute to the Index potentially outperforming or
underperforming the Fund. Further information relating to Fund performance,
including expense reimbursements, if applicable, is contained in the
Financial Highlights section of the Prospectus and elsewhere in this
report.
</FN>
6
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Average Annual Total Returns as of 4/30/99
Inception From
Date 1 Year 5 Years 10 Years Inception
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Class A Shares
with sales charge (4.5%) (5/28/87) 0.67% 5.46% 6.89% --
without sales charge (5/28/87) 5.41% 6.43% 7.38% --
Class B Shares
with redemption* (1/15/93) 0.86% 5.57% -- 5.68%
without redemption (1/15/93) 4.86% 5.89% -- 5.68%
Class C Shares
with redemption** (8/15/95) 3.53% -- -- 5.39%
without redemption (8/15/95) 4.53% -- -- 5.39%
<FN>
Past performance is not predictive of future performance.
* 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>
The Fund 7
<PAGE>
STATEMENT OF INVESTMENTS
April 30, 1999
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Principal
Long-Term Municipal Investments--101.5% Amount ($) Value ($)
- -------------------------------------------------------------------------------
<S> <C> <C>
Anoka County:
RRR (Northern States Power Co.):
4.50%, 12/1/2007a 1,500,000 1,487,250
7.15%, 12/1/2008 1,150,000 1,190,135
SWDR (United Power Association Project)
6.95%, 12/1/2008 (Guaranteed; National Rural
Utilities Cooperative Finance Corp.) 3,825,000 4,024,550
Brooklyn Park 5.85%, 2/1/2016 (Insured; FSA) 1,425,000 1,520,375
Burnsville, MFHR Refunding (Conventry Court
Apartments) 7.50%, 9/1/2027 (Insured; FHA) 2,250,000 2,318,670
Dakota County Housing and Redevelopment Authority,
South-Saint Paul Revenue, Refunding
(Single Family-GNMA Program) 8.10%, 9/1/2012 65,000 67,057
Eagan, MFHR Refunding (Forest Ridge Apartments)
7.50%, 9/1/2017 (Insured; FHA) 1,000,000 1,026,840
Eden Prairie, MFHR, Refunding:
(Eden Investments Project) 7.40%, 8/1/2025
(Insured; FHA) 500,000 521,190
(Welsh Parkway Apartments) 8%, 7/1/2026
(Insured; FHA) 2,770,000 2,933,402
Edina, Housing Development Revenue, Refunding
(Edina Park Plaza Project)
7.70%, 12/1/2028 (Insured; FHA) 2,500,000 2,576,025
Grand Rapids Housing and Redevelopment Authority,
Revenue, Refunding
(Governmental Housing-Lakeshore Project)
5.30%, 10/1/2029 1,000,000 1,001,650
Harmony, MFHR, Refunding (Zedakah Foundation
Project) 5.95%, 9/1/2020 1,235,000 1,284,190
Hastings, Health Care Facility Revenue (Regina Medical
Center) 5.30%, 9/15/2028 (Insured; ACA) 2,000,000 1,960,480
Hibbing Economic Development Authority,
Housing Development Revenue,
Refunding 4.70%, 10/1/2028 (Insured; MBIA) 715,000 681,052
Hubbard County, SWDR (Potlatch Corp. Project)
7.375%, 8/1/2013 1,000,000 1,026,660
Inver Grove Heights Independent School District
Number 199 5.75%, 2/1/2017 2,225,000 2,365,932
Mahtomedi Independent School District Number 832
Zero Coupon, 2/1/2017 (Insured; MBIA) 1,275,000 526,919
Minneapolis:
Zero Coupon, 12/1/2014 1,825,000 863,426
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Principal
Long-Term Municipal Investments (continued) Amount ($) Value ($)
- -------------------------------------------------------------------------------
<S> <C> <C>
Minneapolis (continued):
Health Care Facilities Revenue (Shelter Care Foundation):
6%, 4/1/2010a 1,000,000 1,002,320
6.50%, 4/1/2029a 1,000,000 1,000,750
Home Ownership Program 7.10%, 6/1/2021 520,000 546,915
HR (Lifespan Inc.-Minneapolis Childrens Medical Center
Project) 7%, 12/1/2020 (Prerefunded 6/1/2001)b 5,650,000 6,139,177
MFHR, Refunding (Churchill Apartments Project)
7.05%, 10/1/2022 (Insured; FSA) 4,000,000 4,278,000
MFMR (Seward Towers Project) 7.375%, 12/20/2030
(Collateralized; GNMA) 2,350,000 2,456,408
Minneapolis Community Development Agency, Ltd. Tax
Support Development Revenue:
8%, 12/1/2009 300,000 310,767
7.75%, 12/1/2019 2,705,000 2,895,513
7.40%, 12/1/2021 2,000,000 2,185,780
Minneapolis-Saint Paul Housing and Redevelopment
Authority, Health Care Systems Revenue:
8%, 8/15/2014 (Prerefunded 8/15/2000)b 3,000,000 3,226,890
(Group Health Plan Inc., Project) 6.75%, 12/1/2013 2,750,000 2,940,878
Minneapolis-Saint Paul Housing Finance Board, SFMR:
8.875%, 11/1/2018 (Collateralized; GNMA) 70,000 71,561
8.30%, 8/1/2021 (Collateralized; GNMA) 235,000 240,238
7.30%, 8/1/2031 (Collateralized; GNMA) 4,895,000 5,132,359
Minneapolis-Saint Paul Metropolitan Airports
Commission, Airport Revenue 5%, 1/1/2019 8,000,000 7,984,560
Minneapolis Special School District Number 001, COP:
5.375%, 2/1/2014 (Insured; MBIA) 1,000,000 1,044,350
5.90%, 2/1/2017 (Insured; MBIA) 4,400,000 4,698,188
5.65%, 2/1/2018 (Insured; MBIA) 1,300,000 1,367,717
State of Minnesota (Duluth Airport) 6.25%, 8/1/2014 2,500,000 2,739,500
Minnesota Agricultural and Economic Development
Board: Health Care Revenue (Benedictine Health)
5%, 2/15/2023 (Insured; MBIA)a 2,750,000 2,706,550
Minnesota Small Business Development Loan
Revenue 8.125%, 8/1/2009 500,000 502,885
Minnesota Higher Education Facilities Authority:
Adjustable Demand Revenue (Bethel College and Seminary)
5.10%, 4/1/2019 (LOC; Allied Irish Bank PLC) 4,100,000 4,087,126
College and University Revenue:
(College at Saint Benedict) 5.35%, 3/1/2020 1,000,000 993,220
</TABLE>
The Fund 9
<PAGE>
STATEMENT OF INVESTMENTS (continued)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Principal
Long-Term Municipal Investments (continued) Amount ($) Value ($)
- -------------------------------------------------------------------------------
<S> <C> <C>
Minnesota Higher Education Facilities Authority (continued):
(University of Saint Thomas):
5.35%, 4/1/2017 1,000,000 1,028,210
5.40%, 4/1/2022 2,200,000 2,261,930
Mortgage Revenue (Augsburg College)
5.30%, 10/1/2027 2,395,000 2,336,514
Minnesota Housing Finance Agency, Revenue:
Rental Housing 6.10%, 8/1/2009 1,975,000 1,998,601
Single Family Mortgage:
7.45%, 7/1/2022 (Insured; FHA) 2,625,000 2,738,715
6.95%, 7/1/2026 2,660,000 2,839,789
Minnesota Public Facilities Authority,
Water Pollution Control Revenue:
6.95%, 3/1/2013 (Prerefunded 3/1/2001)b 3,000,000 3,236,250
6.50%, 3/1/2014 (Prerefunded 3/1/2001)b 5,200,000 5,694,572
New Hope, Housing and Health Care Facilities Revenue
(Masonic Home - North Ridge):
5.90, 3/1/2019 1,000,000 1,000,750
5.875%, 3/1/2029 3,000,000 2,951,610
Northern Municipal Power Agency, Electric System
Revenue, Refunding:
5.30%, 1/1/2021 (Insured; FSA) 1,000,000 1,019,940
Refunding, Residual Certificates 6.925%, 1/1/2016
(Insured; FSA )c 6,765,000 7,405,916
City of Red Wing, Health Care Facilities Revenue,
Refunding (River Region Obligation Group)
6.50%, 9/1/2022 3,445,000 3,667,547
Rosemount Independent School District Number 196
Zero Coupon, 4/1/2014 (Insured; MBIA) 3,000,000 1,456,980
Saint Cloud, Hospital Facilities Revenue (The Saint
Cloud Hospital) 7%, 7/1/2020 (Insured; AMBAC)
(Prerefunded 7/1/2001)b 1,000,000 1,089,120
Saint Paul Housing and Redevelopment Authority,
Revenue: Hospital (HealthEast Project):
5.70%, 11/1/2015 (Insured; ACA) 2,000,000 2,097,800
5.85%, 11/1/2017 (Insured; ACA) 1,000,000 1,040,190
Single Family Mortgage, Refunding
6.90%, 12/1/2021 (Insured; FNMA) 2,295,000 2,418,609
Sartell, PCR, Refunding (Champion International Corp.
Project) 6.95%, 10/1/2012 5,000,000 5,415,850
Seaway Port Authority of Duluth,
Industrial Development Dock and Wharf Revenues,
Refunding (Cargill Inc. Project) 6.80%, 5/1/2012 3,000,000 3,252,660
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Principal
Long-Term Municipal Investments (continued) Amount ($) Value ($)
- -------------------------------------------------------------------------------
<S> <C> <C>
Southern Municipal Power Agency,
Power Supply System Revenue:
Zero Coupon, 1/1/2025 (Insured; MBIA) 5,255,000 1,403,453
Zero Coupon, 1/1/2026 (Insured; MBIA) 15,530,000 3,909,056
Refunding:
5%, 1/1/2016 (Insured; MBIA) 1,500,000 1,499,985
Zero Coupon, 1/1/2021 (Insured; MBIA) 8,000,000 2,646,800
Zero Coupon, 1/1/2027 (Insured; MBIA) 4,800,000 1,146,672
University of Minnesota, College and University
Revenue, Refunding 5.50%, 7/1/2021 5,925,000 6,364,398
Washington County Housing and Redevelopment Authority,
Hospital Facility Revenue (Healtheast Project):
5.375%, 11/15/2018 (Insured; ACA) 5,000,000 4,987,900
5.50%, 11/15/2027 (Insured; ACA) 2,455,000 2,464,304
Western Minnesota Municipal Power Agency,
Electric Power and Light Revenue,
Refunding 5.50%, 1/1/2012 (Insured; AMBAC) 1,000,000 1,065,520
White Bear Lake Independent School District
Number 624 5.75%, 2/1/2017 1,265,000 1,356,485
Total Long-Term Municipal Investments
(cost $159,598,999) 167,723,581
- -------------------------------------------------------------------------------
Principal
Short-Term Municipal Investments--.7% Amount ($) Value ($)
- -------------------------------------------------------------------------------
<S> <C> <C>
Cohasset, Revenue, Refunding, VRDN
(Minnesota Power and Light Co. Project) 4.25%
(LOC; ABN Amro Bank N.V.)
(cost $1,200,000)d 1,200,000 1,200,000
Total Investments (cost $160,798,999) 102.2% 168,923,581
Liabilities, Less Cash and Receivables (2.2%) (3,625,015)
Net Assets 100.0% 165,298,566
</TABLE>
The Fund 11
<PAGE>
STATEMENT OF INVESTMENTS (continued)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Summary of Abbreviations
ACA American Capital Access MBIA Municipal Bond Investors Assurance
AMBAC American Municipal Bond Insurance Corporation
Assurance Corporation MFHR Multi-Family Housing Revenue
COP Certificate of Participation MFMR Multi-Family Mortgage Revenue
FHA Federal Housing Administration PCR Pollution Control Revenue
FNMA Federal National Mortgage Association RRR Resource Recovery Revenue
FSA Financial Security Assurance SFMR Single Family Mortgage Revenue
GNMA Government National Mortgage Association SWDR Solid Waste Disposal
Revenue VRDN Variable Rate Demand Notes
HR Hospital Revenue
LOC Letter of Credit
</TABLE>
- -------------------------------------------------------------------------------
Summary of Combined Ratings (Unaudited)
<TABLE>
<CAPTION>
Fitch or Moodys or Standard & Poors Value (%)
- -------------------------------------------------------------------
<S> <C> <C> <C>
AAA Aaa AAA 51.3
AA Aa AA 17.8
A A A 16.7
BBB Baa BBB 9.7
F-1+, F-1 MIG1, VMIG1&P1 SP1, A1 .7
Not Rated e Not Rated e Not Rated e 3.8
100.0
<FN>
a Purchased on a delayed-delivery basis.
b 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.
c Inverse floater security-the interest rate is subject to change periodically.
d Securities payable on demand. Variable interest rate-subject to periodic change.
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.
See notes to financial statements.
</FN>
</TABLE>
12
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
April 30, 1999
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------
Cost Value
- ------------------------------------------------------------------------------------
<S> <C> <C>
Assets ($):
Investments in securities--See Statement of Investments 160,798,999 168,923,581
Interest receivable 2,644,112
Receivable for shares of Beneficial Interest subscribed 239,554
Receivable for investment securities sold 102,319
Prepaid expenses 17,362
171,926,928
- ------------------------------------------------------------------------------------
Liabilities ($):
Due to The Dreyfus Corporation and affiliates 79,752
Due to Distributor 47,085
Cash overdraft due to Custodian 213,780
Payable for investment securities purchased 6,223,482
Payable for shares of Beneficial Interest redeemed 29,943
Accrued expenses 34,320
6,628,362
- ------------------------------------------------------------------------------------
Net Assets ($) 165,298,566
- ------------------------------------------------------------------------------------
Composition of Net Assets ($):
Paid-in capital 156,585,229
Accumulated net realized gain (loss) on investments 588,755
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 8,124,582
- ------------------------------------------------------------------------------------
Net Assets ($) 165,298,566
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------
Net Asset Value Per Share
Class A Class B Class C
- -----------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Assets ($) 134,314,496 29,561,838 1,422,232
Shares Outstanding 8,776,666 1,928,501 92,801
Net Asset Value Per Share ($) 15.30 15.33 15.33
</TABLE>
[FN]
See notes to financial statements.
</FN>
The Fund 13
<PAGE>
STATEMENT OF OPERATIONS
Year Ended April 30, 1999
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Investment Income ($)
- -------------------------------------------------------------------------------
<S> <C>
Income
Interest Income 9,639,754
Expenses:
Management fee--Note 3(a) 890,399
Shareholder servicing costs--Note 3(c) 506,794
Distribution fees--Note 3(b) 159,494
Professional fees 25,421
Custodian fees 17,313
Prospectus and shareholders reports 12,426
Registration fees 9,766
Trustees fees and expenses--Note 3(d) 3,212
Loan commitment fees--Note 2 764
Miscellaneous 11,959
Total Expenses 1,637,548
Investment Income--Net 8,002,206
- -------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) on Investments--Note 4:
Net realized gain (loss) on investments 1,265,513
Net unrealized appreciation (depreciation) on investments (1,000,899)
Net Realized and Unrealized Gain (Loss) on Investments 264,614
Net Increase in Net Assets Resulting From Operations 8,266,820
</TABLE>
[FN]
See notes to financial statements.
</FN>
14
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Year Ended April 30,
-------------------------
1999 1998
- -------------------------------------------------------------------------------
<S> <C> <C>
Operations ($):
Investment income--net 8,002,206 8,186,701
Net realized gain (loss) from investments 1,265,513 363,867
Net unrealized appreciation (depreciation)
on investments (1,000,899) 2,446,953
Net Increase (Decrease) in Net Assets
Resulting from Operations 8,266,820 10,997,521
- -------------------------------------------------------------------------------
Dividends to Shareholders From ($):
Investment income--net:
Class A shares (6,587,991) (6,834,721)
Class B shares (1,370,327) (1,326,960)
Class C shares (43,888) (25,020)
Net realized gain on investments:
Class A shares (303,409) (16,629)
Class B shares (72,456) (3,601)
Class C shares (2,946) (94)
Total Dividends (8,381,017) (8,207,025)
- -------------------------------------------------------------------------------
Beneficial Interest Transactions ($):
Net proceeds from shares sold:
Class A shares 15,840,640 5,462,533
Class B shares 6,424,682 3,686,719
Class C shares 759,136 622,715
Dividends reinvested:
Class A shares 4,269,607 4,245,838
Class B shares 925,393 836,985
Class C shares 38,489 18,241
Cost of shares redeemed:
Class A shares (11,847,645) (14,941,030)
Class B shares (6,315,442) (2,427,267)
Class C shares (31,617) (287,817)
Increase (Decrease) in Net Assets from
Capital Stock Transactions 10,063,243 (2,783,083)
Total Increase (Decrease) in Net Assets 9,949,046 7,413
- -------------------------------------------------------------------------------
Net Assets ($):
Beginning of Period 155,349,520 155,342,107
End of Period 165,298,566 155,349,520
</TABLE>
[FN]
See notes to financial statements.
</FN>
The Fund 15
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS (continued)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Year Ended April 30,
-------------------------
1999 1998
- -------------------------------------------------------------------------------
<S> <C> <C>
Capital Share Transactions:
Class A
Shares sold 1,027,749 356,989
Shares issued for dividends reinvested 276,384 276,670
Shares redeemed (767,790) (975,447)
Net Increase (Decrease) in Shares Outstanding 536,343 (341,788)
- -------------------------------------------------------------------------------
Class B
Shares sold 414,987 240,321
Shares issued for dividends reinvested 59,803 54,439
Shares redeemed (409,838) (157,971)
Net Increase (Decrease) in Shares Outstanding 64,952 136,789
- -------------------------------------------------------------------------------
Class C
Shares sold 48,848 40,658
Shares issued for dividends reinvested 2,489 1,185
Shares redeemed (2,051) (18,723)
Net Increase (Decrease) in Shares Outstanding 49,286 23,120
</TABLE>
[FN]
See notes to financial statements.
</FN>
16
<PAGE>
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the
fiscal periods indicated. Certain information reflects financial results for a
single Fund share. "Total return" shows how much your investment in the
Fund would have increased (or decreased) during each period, assuming you had
reinvested all dividends and distributions. These figures have been derived
from the Fund's financial statements.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------
Year Ended April 30,
--------------------------------------------
Class A Shares 1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per Share Data ($):
Net asset value, beginning of period 15.30 15.03 14.98 14.90 14.72
Investment Operations:
Investment income--net .78 .82 .82 .82 .83
Net realized and unrealized gain
(loss) on investments .04 .27 .09 .08 .18
Total from investment operations .82 1.09 .91 .90 1.01
Distributions:
Dividends from investment
income--net (.78) (.82) (.82) (.82) (.83)
Dividends from net realized
gain on investments (.04) -- (.04) -- --
Total Distributions (.82) (.82) (.86) (.82) (.83)
Net asset value, end of period 15.30 15.30 15.03 14.98 14.90
- ------------------------------------------------------------------------------------
Total Return (%)* 5.41 7.36 6.16 6.11 7.14
- ------------------------------------------------------------------------------------
Ratios/Supplemental Data (%):
Ratio of expenses to average net assets .91 .90 .91 .90 .90
Ratio of net investment income
to average net assets 5.05 5.32 5.42 5.41 5.68
Decrease reflected in above
expense ratios due to
undertakings by the Manager -- -- -- -- .01
Portfolio Turnover Rate 41.27 13.37 25.82 35.47 51.95
- ------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 134,314 126,115 129,031 138,058 145,444
<FN>
* Exclusive of sales load.
See notes to financial statements.
</FN>
</TABLE>
The Fund 17
<PAGE>
FINANCIAL HIGHLIGHTS (continued)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------
Year Ended April 30,
---------------------------------------------
Class B Shares 1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per Share Data ($):
Net asset value, beginning of period 15.33 15.06 15.01 14.92 14.74
Investment Operations:
Investment income--net .70 .74 .74 .74 .75
Net realized and unrealized gain
(loss) on investments .04 .27 .09 .09 .18
Total from investment operations .74 1.01 .83 .83 .93
Distributions:
Dividends from investment
income--net (.70) (.74) (.74) (.74) (.75)
Dividends from net realized
gain on investments (.04) -- (.04) -- --
Total Distributions (.74) (.74) (.78) (.74) (.75)
Net asset value, end of period 15.33 15.33 15.06 15.01 14.92
- ------------------------------------------------------------------------------------
Total Return (%)* 4.86 6.79 5.60 5.62 6.57
- ------------------------------------------------------------------------------------
Ratios/Supplemental Data (%):
Ratio of expenses to average net assets 1.43 1.42 1.44 1.43 1.44
Ratio of net investment income
to average net assets 4.52 4.79 4.90 4.87 5.13
Decrease reflected in above
expense ratios due to
undertakings by the Manager -- -- -- -- .01
Portfolio Turnover Rate 41.27 13.37 25.82 35.47 51.95
- ------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 29,562 28,568 26,004 25,617 23,217
<FN>
* Exclusive of sales load.
See notes to financial statements.
</FN>
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------
Year Ended April 30,
-------------------------------------------
Class C Shares 1999 1998 1997 1996*
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per Share Data ($):
Net asset value, beginning of period 15.33 15.06 15.01 14.96
Investment Operations:
Investment income--net .65 .69 .70 .50
Net realized and unrealized gain (loss)
on investments .04 .27 .09 .05
Total from investment operations .69 .96 .79 .55
Distributions:
Dividends from investment income--net (.65) (.69) (.70) (.50)
Dividends from net realized gain
on investments (.04) -- (.04) --
Total Distributions (.69) (.69) (.74) (.50)
Net asset value, end of period 15.33 15.33 15.06 15.01
- ------------------------------------------------------------------------------------
Total Return (%)b 4.53 6.46 5.34 5.15c
- ------------------------------------------------------------------------------------
Ratios/Supplemental Data (%):
Ratio of expenses to average net assets 1.74 1.73 1.67 1.42c
Ratio of net investment income
to average net assets 4.16 4.40 4.62 4.00c
Portfolio Turnover Rate 41.27 13.37 25.82 35.47
- ------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 1,422 667 307 373
<FN>
a From August 15, 1995 (commencement of initial offering) to April 30, 1996.
b Exclusive of sales load.
c Annualized.
See notes to financial statements.
</FN>
</TABLE>
The Fund 19
<PAGE>
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")
20
<PAGE>
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. Under the terms
of the custody agreement, the Fund received net earnings credits of $3,947
during the period ended April 30, 1999 based on available cash balances
left on deposit. Income earned under this arrangement is included in
interest income.
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.
The Fund 21
<PAGE>
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 of 1986, as amended (the "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 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 (the "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. During the
period ended April 30, 1999, the Fund did not borrow under the Facility.
NOTE 3--Management Fee and Other Transactions
With Affiliates:
(a) Pursuant to a management agreement with the Manager, the management fee
is computed at the annual rate of .55 of 1% of the value of the Fund's
average daily net assets and is payable monthly.
Dreyfus Service Corporation, a wholly-owned subsidiary of the Manager,
retained $1,703 during the period ended April 30, 1999, from commissions
earned on sales of the Fund's shares.
22
<PAGE>
(b) Under the Distribution Plan adopted pursuant to Rule 12b-1 under the
Act, Class B and Class C shares pay the Distributor for distributing their
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, 1999, Class
B and Class C shares were charged $151,580 and $7,914, respectively,
pursuant to the Distribution Plan.
(c) Under the Shareholder Services Plan, Class A, Class B and Class C
shares pay the Distributor at an annual rate of .25 of 1% of the value of
their average daily net assets 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, 1999, Class A, Class B and Class C shares were charged
$326,299, $75,790 and $2,638, 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, 1999, the Fund was charged $69,884 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.
The Fund 23
<PAGE>
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, 1999
amounted to $83,216,815 and $65,499,800, respectively.
At April 30, 1999, accumulated net unrealized appreciation on investments
was $8,124,582, consisting of $8,395,715 gross unrealized appreciation and
$271,133 gross unrealized depreciation.
At April 30, 1999, 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).
24
<PAGE>
REPORT TO 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 (the "Fund") (one of the Funds constituting the
Dreyfus Premier State Municipal Bond Fund) as of April 30, 1999, 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, 1999 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 the Fund at April 30, 1999, 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 2, 1999
The Fund 25
<PAGE>
IMPORTANT TAX INFORMATION (Unaudited)
In accordance with Federal tax law, the Fund hereby makes the following
designations regarding its fiscal year ended April 30, 1999:
- --all the dividends paid from investment income--net are exempt-interest
dividends (not subject to regular Federal and, for individuals who are
Minnesota residents, Minnesota personal income taxes), and
- --the Fund hereby designates $.0353 per share as a long-term capital gain
distribution of the $.0360 per share paid on December 8, 1998.
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 1999 calendar
year on Form 1099-DIV which will be mailed by January 31, 2000.
26
<PAGE>
<PAGE>
NOTES
<PAGE>
<PAGE>
For More Information
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
Distributor
Premier Mutual Fund Services, Inc.
60 State Street
Boston, MA 02109
To obtain information:
By telephone
Call your financial representative or
1-800-554-4611
By mail Write to:
The Dreyfus Premier
Family of Funds
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
Not FDIC-Insured Not Bank-Guaranteed May Lose Value
(c) 1999, Dreyfus Service Corporation 055/618AR994
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
PERIOD LEHMAN BROTHERS MUNICIPAL BOND FUND,
MUNICIPAL MINNESOTA SERIES
BOND INDEX * (CLASS A SHARES)
4/30/89 10,000 9,547
4/30/90 10,720 10,184
4/30/91 11,952 11,395
4/30/92 13,088 12,472
4/30/93 14,744 13,963
4/30/94 15,063 14,254
4/30/95 16,065 15,272
4/30/96 17,341 16,205
4/30/97 18,492 17,203
4/30/98 20,211 18,468
4/30/99 21,615 19,467
*Source: Lehman Brothers
Dreyfus Premier State
Municipal Bond Fund,
New Jersey Series
ANNUAL REPORT
April 30, 1999
[DREYFUS LOGO]
<PAGE>
Year 2000 Issues (Unaudited)
The fund could be adversely affected if the computer systems used by The
Dreyfus Corporation and the fund's other service providers do not properly
process and calculate date-related information from and after January 1, 2000.
The Dreyfus Corporation is working to avoid Year 2000-related problems in its
systems and to obtain assurances from other service providers that they are
taking similar steps. In addition, issuers of securities in which the fund
invests may be adversely affected by Year 2000-related problems. This could
have an impact on the value of the fund's investments and its share price.
<PAGE>
Contents
THE FUND
- --------------
2 Letter from the President
3 Discussion of Fund Performance
6 Fund Performance
8 Statement of Investments
12 Statement of Assets and Liabilities
13 Statement of Operations
14 Statement of Changes in Net Assets
16 Financial Highlights
19 Notes to Financial Statements
24 Report of Independent Auditors
25 Important Tax Information
FOR MORE INFORMATION
- --------------------------
Back Cover
<PAGE>
Dreyfus Premier The Fund
State Municipal Bond Fund,
New Jersey Series
LETTER FROM THE PRESIDENT
- -------------------------
Dear Shareholder:
We are pleased to present this annual report for Dreyfus Premier State
Municipal Bond Fund, New Jersey Series, covering the 12-month period from May
1, 1998 through April 30, 1999. Inside, you'll find valuable information about
how the Fund was managed during the period, including a discussion with the
Fund's portfolio manager, William M. Petty.
The past year has generally been rewarding for municipal bond investors. Lower
short-term interest rates adopted by the Federal Reserve Board and other
central banks in the fall of 1998 appear to have helped many U.S. businesses
withstand the effects of economic weakness in Japan, Asia and Latin America.
At the same time, the U.S. economy has entered its eighth year of expansion in
an environment characterized by low inflation and high levels of consumer
spending.
In the second half of the reporting period, tax-exempt fixed-income securities
provided good results, especially relative to taxable U.S. Treasury
securities. While prices for U.S. Treasury securities declined significantly
through the second half of the reporting period, a lack of new issuance
relative to robust investor demand supported most municipal bond prices, which
have remained relatively unchanged over the past six months. As a result, the
differences in valuations between taxable U.S. Treasury securities and tax-
exempt bonds, which reached historically wide levels last October, have since
narrowed to a more historically normal relationship.
We appreciate your confidence over the past year, and we look forward to your
continued participation in Dreyfus Premier State Municipal Bond Fund, New
Jersey Series.
Sincerely,
/s/Stephen E. Canter
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
May 13, 1999
2
<PAGE>
DISCUSSION OF FUND PERFORMANCE
- ------------------------------
William M. Petty, Portfolio Manager
How did Dreyfus Premier State Municipal Bond Fund,
New Jersey Series perform?
The Fund's Class A shares produced a total return of 5.52% over the 12-month
period ended April 30, 1999,1 compared to a total return of 6.05% for the
average of the Lipper New Jersey Municipal Debt Funds category.2 The Fund
produced a total return of 5.08% for Class B shares and 4.67% for Class C
shares over the 12-month period ended April 30, 1999.1
What is the Fund's investment approach?
Our goal is to seek a high level of federally and New Jersey tax-exempt income
from a diversified portfolio of longer-term municipal bonds without undue
risk. To achieve this objective, we employ two primary strategies. Because New
Jersey issues relatively few municipal bonds, we begin by evaluating supply-
and-demand factors. Based on that assessment, we select the individual tax-
exempt bonds that we believe are most likely to provide the highest returns
with the least risk. We look at such criteria as the bond's yield, price, age,
the creditworthiness of its issuer, insurance, and any provisions for early
redemption. Under most circumstances, we look for high-yielding bonds that
cannot be redeemed by their issuers anytime soon and that are selling at a
discount to their face values.
While we do not attempt to predict changes in interest rates, we may
tactically manage the portfolio's average duration -- a measure of sensitivity
to changes in interest rates -- in anticipation of temporary supply-and-demand
changes. If we expect the supply of newly issued bonds to increase, we may
reduce the portfolio's average duration to make cash available for the
purchase of higher yielding securities. Conversely, if we expect demand for
municipal bonds to surge at a time when we anticipate little issuance, we may
increase the portfolio's average duration to maintain current yields for as
long as practical. At other times, we try to maintain a "neutral" average
duration consistent with other New Jersey municipal bond funds.
The Fund 3
<PAGE>
DISCUSSION OF FUND PERFORMANCE (continued)
What other factors influenced the Fund's performance?
When the Asian currency and credit crisis spread to Russia and threatened
Latin America last summer and fall, investors flocked to U.S. Treasury
securities. As a result, yields on taxable Treasuries fell briefly in October
to levels that were roughly equivalent to yields on comparable tax-exempt
bonds.
However, the Federal Reserve Board and other central banks moved quickly to
stimulate global economic growth. They did so last fall by reducing key short-
term interest rates. Because lower short-term interest rates were expected to
stimulate economic growth and potentially reignite inflationary pressures,
yields on longer-term bonds rose throughout the first four months of 1999.
However, the extent of that rise was much greater for taxable U.S. Treasury
securities than for tax-free municipal bonds.
In addition, because of strong economic conditions throughout the country, New
Jersey and its municipalities have had little need to borrow. Yet, demand from
investors seeking to minimize their income tax liabilities remained high. This
balance between supply and demand helped keep municipal bond prices relatively
stable while U.S. Treasury bond prices fell sharply.
What is the Fund's current strategy?
As the period came to a close, we continued to search for the most attractive
values in New Jersey's municipal bond market. Primarily, we have continued to
focus on high-quality bonds because the differences in yields between the
highest quality bonds and lower quality bonds are narrow by historical
standards. However, we have continually evaluated lower quality issues in
order to identify bonds which we believed would offer the Fund an attractive
yield as compensation for additional credit risk.
4
<PAGE>
As of April 30, the portfolio's 8.8-year average duration was positioned at
the long end of the neutral range, which we believed was appropriate in a low-
issuance environment. We intend to remain vigilant in our efforts to identify
tactical opportunities to change our average duration in anticipation of any
supply-and-demand imbalances. We expect these strategies to help us continue
to maximize tax-exempt returns for our shareholders.
May 13, 1999
[FN]
1 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 applicable contingent deferred sales
charge imposed on redemptions in the case of Class B and Class C shares.
Income may be subject to state and local income taxes for non-New Jersey
residents. Some income may be subject to the Federal Alternative Minimum
Tax (AMT) for certain shareholders.
2 Source: Lipper Analytical Services, Inc.
</FN>
The Fund 5
<PAGE>
FUND PERFORMANCE
$14,350
Lehman Brothers Municipal
Bond Index*
$13,175
Dreyfus Premier State Municipal
[CHART] Bond Fund, New Jersey Series
(Class B Shares)
$13,092
Dreyfus Premier State Municipal
Bond Fund, New Jersey Series
(Class A Shares)
Comparison of change in value of $10,000 investment in the Fund's Class A
shares and Class B shares and the Lehman Brothers Municipal Bond Index.
[FN]
* Source: Lehman Brothers.
Past performance is not predictive of future performance.
On March 31, 1997,the New Jersey Series commenced operations through a
transfer of assets from the New Jersey Series of Premier Insured Municipal
Bond Fund. The financial data provided above prior to such date is for the New
Jersey Series of Premier Insured Municipal Bond Fund.
The above graph compares a $10,000 investment made in each of the Class A
shares and Class B shares of Dreyfus Premier State Municipal Bond Fund, New
Jersey Series (the "Fund") on 5/4/94 (Inception Date) to a $10,000 investment
made in the Lehman Brothers Municipal Bond Index (the "Index") on that date.
For comparative purposes, the value of the Index on 4/30/94 is used as the
beginning value on 5/4/94. All dividends and capital gain distributions are
reinvested. Performance for Class C shares will vary from the performance of
both Class A and Class B shares shown above due to differences in charges and
expenses.
The Fund invests primarily in New Jersey municipal securities and its
performance shown in the line graph takes into account the maximum initial
sales charge on Class A shares and the maximum contingent deferred sales
charge on Class B shares and all other applicable fees and expenses. The Index
is not limited to investments principally in New Jersey municipal obligations
and does not take into account charges, fees and other expenses. The Index,
unlike the Fund, 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. These factors can contribute to the Index
potentially outperforming or underperforming the Fund. Further information
relating to Fund performance, including expense reimbursements, if applicable,
is contained in the Financial Highlights section of the Prospectus and
elsewhere in this report.
</FN>
6
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------
Average Annual Total Returns as of 4/30/99
Inception From
Date* 1 Year Inception
- ------------------------------------------------------------------------------
<S> <C> <C> <C>
Class A Shares
with sales charge (4.5%) (5/4/94) 0.74% 5.55%
without sales charge (5/4/94) 5.52% 6.53%
Class B Shares
with redemption** (5/4/94) 1.08% 5.68%
without redemption (5/4/94) 5.08% 6.00%
Class C Shares
with redemption*** (12/4/95) 3.67% 4.41%
without redemption (12/4/95) 4.67% 4.41%
<FN>
Past performance is not predictive of future performance.
* On March 31, 1997,the New Jersey Series commenced operations through a
transfer of assets from the New Jersey Series of Premier Insured Municipal
Bond Fund. The financial data provided above prior to such date is for the
New Jersey Series of Premier Insured Municipal Bond Fund.
** 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>
The Fund 7
<PAGE>
STATEMENT OF INVESTMENTS
April 30, 1999
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------
Principal
Long-Term Municipal Investments--97.4% Amount ($) Value ($)
- ------------------------------------------------------------------------------
<S> <C> <C>
New Jersey--86.3%
Camden County Improvement Authority, Revenue
(Health Care Redevelopment Project - Cooper Health
System Obligation Group) 5.875%, 2/15/2015 100,000 83,553
East Orange Board of Education COP
(AGH Leasing Inc) Zero Coupon, 8/1/2017 (Insured; FSA) 1,420,000 570,386
Elizabeth Sewer Utility, Refunding 5%, 7/15/2016
(Insured; AMBAC) 150,000 153,387
Essex County Improvement Authority:
Guaranteed LR:
County Social Services Facilities 5.20%, 10/1/2027 100,000 97,717
(Sportsplex Project) 5.625%, 10/1/2023
(Insured; AMBAC) 345,000 361,156
Utility System Revenue (Orange Franchise
Acquisition Project)
5.75%, 7/1/2027 (Insured; MBIA) 500,000 539,895
Mercer County Improvement Authority, Revenue
(County Courthouse Project) 5.75%, 11/1/2017 500,000 544,035
Middlesex County Improvement Authority,
Utility System Revenue (Perth Amboy Project)
Zero Coupon, 9/1/2021 1,000,000 317,220
New Brunswick Housing Authority, LR Refunding
(Rutgers University) 4.625%, 7/1/2024 (Insured; FGIC) 250,000 235,450
New Jersey GO, 6.725%, 2/1/2014a,b 850,000 887,417
New Jersey Economic Development Authority, Revenue
First Mortgage:
(Cadbury Corp. Project) 5.50%, 7/1/2018 (Insured; ACA) 250,000 254,260
Refunding:
(The Evergreens):
6%, 10/1/2017 650,000 674,440
6%, 10/1/2022 700,000 723,513
(Fellowship Village) 5.50%, 1/1/2018 450,000 445,613
Water Facilities (New Jersey American
Water Co. Inc. Project)
6.50%, 4/1/2022 (Insured; FGIC) 500,000 541,345
New Jersey Educational Facilities Authority, Revenue:
(Monmouth University) 5.80%, 7/1/2022 395,000 411,444
(New Jersey City University) 4.75%, 7/1/2022
(Insured; AMBAC) 70,000 67,656
Refunding:
(Trenton State College) 6%, 7/1/2019 (Insured; AMBAC) 500,000 538,825
(Georgian Court College Project) 5.20%, 7/1/2015 250,000 247,718
New Jersey Health Care Facilities Financing Authority,
Revenue:
(General Hospital Center at Passaic) 6.75%, 7/1/2019
(Insured; FSA) 550,000 667,612
(Palisades Medical Center Obligation Group)
5.25%, 7/1/2028c 1,000,000 983,060
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------
Principal
Long-Term Municipal Investments (continued) Amount ($) Value ($)
- ----------------------------------------------------------------------------------
<S> <C> <C>
New Jersey (continued)
New Jersey Health Care Facilities Financing Authority,
Revenue (continued):
Refunding:
(Holy Name Hospital Issue) 6%, 7/1/2025 500,000 519,035
(Saint Elizabeth Hospital Obligation Group) 6%,
7/1/2020 225,000 234,009
(Virtua Health Issue) 4.50%, 7/1/2028 (Insured; FSA) 250,000 227,165
New Jersey Highway Authority, Garden State Parkway General
Revenue 6%, 1/1/2019 640,000 725,990
New Jersey Housing and Mortgage Finance Agency, Home Buyer
Revenue
6.05%, 10/1/2028 (Insured; MBIA) 500,000 531,600
New Jersey Transportation Trust Fund Authority
(Transportation System)
5%, 6/15/2018 (Insured; FSA) 395,000 395,695
New Jersey Turnpike Authority, Turnpike Revenue, Refunding
6.50%, 1/1/2016 220,000 257,635
Newark Housing Finance Corp., Mortgage Revenue, Refunding
(Avon Hills) 5.125%, 1/1/2024 (Insured; FHA) 550,000 546,150
Port Authority of New York and New Jersey:
Refunding 4.25%, 10/1/2026 (Insured FGIC) 1,000,000 873,190
Special Obligation Revenue
Special Project
(JFK International Air Terminal)
5.75%, 12/1/2022 (Insured; MBIA) 585,000 626,412
South Jersey Transportation Authority, LR
(Raytheon Aircraft Service Inc. Project) 6.15%, 1/1/2022 500,000 526,450
U.S. Related--11.1%
Puerto Rico Housing Bank and Finance Agency, SFMR
6.25%, 4/1/2029 300,000 315,825
Puerto Rico Ports Authority, Special Facility Revenue
(American Airlines) 6.30%, 6/1/2023 1,500,000 1,588,545
Total Long-Term Municipal Investments
(cost $16,211,940) 16,713,403
</TABLE>
The Fund 9
<PAGE>
STATEMENT OF INVESTMENTS (continued)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------
Principal
Short-Term Municipal Investments--4.7% Amount ($) Value ($)
- ------------------------------------------------------------------------------
<S> <C> <C>
New Jersey
New Jersey Economic Development Authority, EDR, Refunding, VRDN
(Dow Chemical--El Dorado Terminal) 4%d 100,000 100,000
Port Authority of New York and New Jersey,
Special Obligation Revenue, VRDN:
4.20%, Series 3d 500,000 500,000
4.20%, Series 5d 200,000 200,000
Total Short-Term Municipal Investments
(cost $800,000) 800,000
- ------------------------------------------------------------------------------
Total Investments (cost $17,011,940) 102.1% 17,513,403
Liabilities, Less Cash and Receivables (2.1%) (358,196)
Net Assets 100.0% 17,155,207
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------
Summary of Abbreviations
<S> <C> <C> <C>
ACA American Capital Access LR Lease Revenue
AMBAC American Municipal Bond Assurance MBIA Municipal Bond Investors
Corporation Assurance Insurance
COP Certificate of Participation Corporation
EDR Economic Development Revenue SFMR Single Family Mortgage
FGIC Financial Guaranty Insurance Company Revenue
FHA Federal Housing Administration VRDN Variable Rate Demand
FSA Financial Security Assurance Notes
GO General Obligation
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------
Summary of Combined Ratings (Unaudited)
Fitch or Moody's or Standard & Poor's Value (%)
- ------------------------------------------------------------------------------
<S> <C> <C> <C>
AAA Aaa AAA 47.0
AA Aa AA 8.2
A A A 8.5
BBB Baa BBB 22.7
B B B .5
F1 MIG1/P1 SP1/A1 4.6
Not Ratede Not Ratede Not Ratede 8.5
100.0
<FN>
a Inverse floater security--the interest rate is subject to change
periodically.
b 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,
1999, this security amounted to $887,417 or 5.2% of net assets.
c Purchased on a delayed delivery basis.
d Securities payable on demand. Variable interest rate--subject to
periodic change.
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, 1999, the Fund had $4,812,259 (28.1% of net assets) invested
in securities whose payment of principal and interest is dependent upon
revenues generated from health care projects and $5,493,918 (32% of net
assets) invested in securities whose payment of principal and interest is
dependent upon revenues generated from transportation projects.
See notes to financial statements.
</FN>
</TABLE>
The Fund 11
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
April 30, 1999
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------
Cost Value
- ------------------------------------------------------------------------------
<S> <C> <C>
Assets ($):
Investments in securities--See Statement of Investments 17,011,940 17,513,403
Cash 70
Receivable for investment securities sold 343,880
Interest receivable 232,687
Receivable for shares of Beneficial Interest subscribed 54,697
Prepaid expenses 12,711
18,157,448
- ------------------------------------------------------------------------------
Liabilities ($):
Due to The Dreyfus Corporation and affiliates 2,679
Due to Distributor 8,479
Payable for investment securities purchased 991,083
1,002,241
- ------------------------------------------------------------------------------
Net Assets ($) 17,155,207
- ------------------------------------------------------------------------------
Composition of Net Assets ($):
Paid-in capital 16,451,170
Accumulated net realized gain (loss) on investments 202,574
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 501,463
Net Assets ($) 17,155,207
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------
Net Asset Value Per Share
Class A Class B Class C
- ------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Assets ($) 5,178,645 11,627,947 348,615
Shares Outstanding 394,012 885,038 26,502
- ------------------------------------------------------------------------------
Net Asset Value Per Share ($) 13.14 13.14 13.15
<FN>
See notes to financial statements.
</FN>
</TABLE>
12
<PAGE>
STATEMENT OF OPERATIONS
Year Ended April 30, 1999
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------
Investment Income ($)
- ------------------------------------------------------------------------------
<S> <C>
Income
Interest Income 876,477
Expenses:
Management fee--Note 3(a) 89,899
Distribution fees--Note 3(b) 57,379
Shareholder servicing costs--Note 3(c) 52,953
Registration fees 13,150
Prospectus and shareholders' reports 8,370
Professional fees 4,638
Custodian fees 2,371
Trustees' fees and expenses--Note 3(d) 243
Loan commitment fees--Note 2 55
Miscellaneous 4,534
Total Expenses 233,592
Investment Income--Net 642,885
- ------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) on Investments--Note 4:
Net realized gain (loss) on investments 231,591
Net unrealized appreciation (depreciation) on investments (73,816)
Net Realized and Unrealized Gain (Loss) on Investments 157,775
Net Increase in Net Assets Resulting from Operations 800,660
<FN>
See notes to financial statements.
</FN>
</TABLE>
The Fund 13
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------
Year Ended April 30,
------------------------
1999 1998
- ------------------------------------------------------------------------------
<S> <C> <C>
Operations ($):
Investment income--net 642,885 648,891
Net realized gain (loss) on investments 231,591 173,353
Net unrealized appreciation (depreciation)
on investments (73,816) 451,390
Net Increase (Decrease) in Net Assets
Resulting from Operations 800,660 1,273,634
- ------------------------------------------------------------------------------
Dividends to Shareholders From ($):
Investment income--net:
Class A shares (212,301) (232,360)
Class B shares (424,424) (413,730)
Class C shares (6,160) (2,801)
Net realized gain on investments:
Class A shares (32,649) (42,097)
Class B shares (72,679) (86,582)
Class C shares (1,052) (960)
Total Dividends (749,265) (778,530)
- ------------------------------------------------------------------------------
Beneficial Interest Transactions ($):
Net proceeds from shares sold:
Class A shares 1,206,947 1,041,919
Class B shares 2,694,789 3,248,633
Class C shares 254,987 122,271
Dividends reinvested:
Class A shares 155,326 168,831
Class B shares 318,957 317,071
Class C shares 5,677 3,459
Cost of shares redeemed:
Class A shares (648,145) (1,770,440)
Class B shares (1,962,099) (2,029,142)
Class C shares (28,097) (10,307)
Increase (Decrease) in Net Assets from
Beneficial Interest Transactions 1,998,342 1,092,295
Total Increase (Decrease) in Net Assets 2,049,737 1,587,399
- ------------------------------------------------------------------------------
Net Assets ($):
Beginning of Period 15,105,470 13,518,071
End of Period 17,155,207 15,105,470
<FN>
See notes to financial statements.
</FN>
</TABLE>
14
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------
Year Ended April 30,
------------------------
1999 1998
- ------------------------------------------------------------------------------
<S> <C> <C>
Capital Share Transactions:
Class A
Shares sold 90,729 80,858
Shares issued for dividends reinvested 11,685 12,944
Shares redeemed (49,056) (136,071)
Net Increase (Decrease) in Shares Outstanding 53,358 (42,269)
- ------------------------------------------------------------------------------
Class B
Shares sold 203,083 250,509
Shares issued for dividends reinvested 24,002 24,297
Shares redeemed (147,804) (156,284)
Net Increase (Decrease) in Shares Outstanding 79,281 118,522
- ------------------------------------------------------------------------------
Class C
Shares sold 19,197 9,427
Shares issued for dividends reinvested 428 263
Shares redeemed (2,111) (792)
Net Increase (Decrease) in Shares Outstanding 17,514 8,898
<FN>
See notes to financial statements.
</FN>
</TABLE>
The Fund 15
<PAGE>
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the
fiscal periods indicated. Certain information reflects financial results for a
single Fund share. "Total return" shows how much your investment in the Fund
would have increased (or decreased) during each period, assuming you had
reinvested all dividends and distributions. These figures have been derived
from the Fund's financial statements.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------
Nine Months
Ended
Year Ended April 30, April 30, Year Ended July 31,
-------------------- --------------------
Class A Shares 1999 1998 1997a 1996 1995 1994b
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Per Share Data ($):
Net asset value,
beginning of period $13.08 12.63 12.79 12.71 12.58 12.50
Investment Operations:
Investment income--net .57 .61 .42 .59 .71 .18
Net realized and unrealized gain
(loss) on investments .15 .56 (.02) .08 .13 .08
Total from Investment Operations .72 1.17 .40 .67 .84 .26
Distributions:
Dividends from investment
income--net (.57) (.61) (.42) (.59) (.71) (.18)
Dividends from net realized
gain on investments (.09) (.11) (.14) -- -- --
Total Distributions (.66) (.72) (.56) (.59) (.71) (.18)
Net asset value, end of period 13.14 13.08 12.63 12.79 12.71 12.58
- ------------------------------------------------------------------------------
Total Return (%)c 5.52 9.48 4.25d 5.31 7.01 2.07e
- ------------------------------------------------------------------------------
Ratios/Supplemental Data (%):
Ratio of expenses to
average net assets 1.08 1.02 1.20d 1.14 .10 --
Ratio of net investment income
to average net assets 4.28 4.73 4.39d 4.55 5.60 5.25d
Decrease reflected in above
expense ratios due to
undertakings by the Manager
(limited to the expense
limitation provision of the
management agreement) -- .03 .10d .08 1.35 2.50d
Portfolio Turnover Rate 64.40 50.78 110.12e 28.14 43.48 --
- ------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 5,179 4,454 4,837 5,212 4,981 2,318
<FN>
a The Fund changed its fiscal year end from July 31 to April 30.
b From May 4, 1994 (commencement of operations) to July 31, 1994.
c Exclusive of sales load.
d Annualized.
e Not annualized.
See notes to financial statements.
</FN>
</TABLE>
16
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------
Nine Months
Ended
Year Ended April 30, April 30, Year Ended July 31,
-------------------- -------------------
Class B Shares 1999 1998 1997a 1996 1995 1994b
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Per Share Data ($):
Net asset value,
beginning of period 13.07 12.63 12.79 $12.71 12.58 12.50
Investment Operations:
Investment income--net .50 .55 .37 .52 .65 .16
Net realized and unrealized gain
(loss) on investments .16 .55 (.02) .08 .13 .08
Total from Investment Operations .66 1.10 .35 .60 .78 .24
Distributions:
Dividends from investment
income--net (.50) (.55) (.37) (.52) (.65) (.16)
Dividends from net realized
gain on investments (.09) (.11) (.14) -- -- --
Total Distributions (.59) (.66) (.51) (.52) (.65) (.16)
Net asset value, end of period 13.14 13.07 12.63 12.79 12.71 12.58
- ------------------------------------------------------------------------------
Total Return (%)c 5.08 8.85 3.74d 4.79 6.48 1.94e
- ------------------------------------------------------------------------------
Ratios/Supplemental Data (%):
Ratio of expenses to
average net assets 1.58 1.53 1.69d 1.63 .61 .50d
Ratio of net investment income
to average net assets 3.78 4.20 3.88d 4.04 5.00 4.69d
Decrease reflected in above
expense ratios due to
undertakings by the Manager
(limited to the expense
limitation provision of the
management agreement) -- .03 .09d .08 1.29 2.50d
Portfolio Turnover Rate 64.40 50.78 110.12e 28.14 43.48 --
- ------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 11,628 10,533 8,680 8,910 6,852 2,373
<FN>
a The Fund changed its fiscal year end from July 31 to April 30.
b From May 4, 1994 (commencement of operations) to July 31, 1994.
c Exclusive of sales load.
d Annualized.
e Not annualized.
See notes to financial statements.
</FN>
</TABLE>
The Fund 17
<PAGE>
FINANCIAL HIGHLIGHTS (continued)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------
Nine Months Year
Ended Ended
Year Ended April 30, April 30, July 31,
-------------------
Class C Shares 1999 1998 1997a 1996b
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per Share Data ($):
Net asset value, beginning of period 13.09 12.64 12.78 13.21
Investment Operations:
Investment income--net .46 .50 .35 .32
Net realized and unrealized gain (loss)
on investments .15 .56 -- (.43)
Total from Investment Operations .61 1.06 .35 (.11)
Distributions:
Dividends from investment income--net (.46) (.50) (.35) (.32)
Dividends from net realized gain on investments (.09) (.11) (.14) --
Total Distributions (.55) (.61) (.49) (.32)
Net asset value, end of period 13.15 13.09 12.64 12.78
- ------------------------------------------------------------------------------
Total Investment Return (%)c 4.67 8.55 3.72d (1.21)d
- ------------------------------------------------------------------------------
Ratios/Supplemental Data (%):
Ratio of expenses to average net assets 1.88 1.91 1.97d 1.95d
Ratio of net investment income
to average net assets 3.42 3.65 3.62d 3.68d
Decrease reflected in above expense ratios
due to undertakings by the Manager
(limited to the expense limitation provision
of the management agreement) -- .06 .76d .02d
Portfolio Turnover Rate 64.40 50.78 110.12e 28.14
- ------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 349 118 1 6
<FN>
a The Fund changed its fiscal year end from July 31 to April 30.
b From December 4, 1995 (commencement of initial offering) to July 31, 1996.
c Exclusive of sales load.
d Annualized.
e Not annualized.
See notes to financial statements.
</FN>
</TABLE>
18
<PAGE>
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, as amended (the "Act"), as a non-
diversified, open-end management investment company, and operates as a series
company currently offering thirteen series, including the New Jersey 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.
The Fund 19
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
(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. Under the terms of the
custody agreement, the Fund received net earnings credits of $2,460 based on
available cash balances left on deposit. Income earned under this arrangement
is included in interest income.
The Fund follows an investment policy of investing primarily in municipal
obligations of one state. Economic changes affecting the
20
<PAGE>
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.
(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 Series may make distributions on a more frequent basis to
comply with the distribution requirements of the Internal Revenue Code of
1986, as amended (the "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 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 (the "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. During the period ended
April 30, 1999, 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.
The Fund 21
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
(b) Under the Distribution Plan adopted pursuant to Rule 12b-1 under the Act,
Class B and Class C shares pay the Distributor for distributing their 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, 1999, Class B and Class C
shares were charged $56,028 and $1,351, respectively, pursuant to the
Distribution Plan.
(c) Under the Shareholder Services Plan, Class A, Class B and Class C shares
pay the Distributor at an annual rate of .25 of 1% of the value of their
average daily net assets 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, 1999, Class A, Class B and Class C
shares were charged $12,399, $28,014 and $450, 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, 1999, the Fund was charged $7,125 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.
22
<PAGE>
NOTE 4--Securities Transactions:
The aggregate amount of purchases and sales of investment securities,
excluding short-term securities, during the period ended April 30, 1999,
amounted to $12,080,216 and $10,267,528, respectively.
At April 30, 1999, accumulated net unrealized appreciation on
investments was $501,463, consisting of $613,096 gross unrealized appreciation
and $111,633 gross unrealized depreciation.
At April 30, 1999, 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).
The Fund 23
<PAGE>
REPORT OF INDEPENDENT AUDITORS
Shareholders and Board of Trustees
Dreyfus Premier State Municipal Bond Fund,
New Jersey Series
We have audited the accompanying statement of assets and liabilities,
including the statement of investments, of Dreyfus Premier State Municipal
Bond Fund, New Jersey Series (the "Fund") (one of the Funds constituting the
Dreyfus Premier State Municipal Bond Fund) as of April 30, 1999 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 periods 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, 1999 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 the
Fund at April 30, 1999, 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 periods, in
conformity with generally accepted accounting principles.
Ernst & Young LLP
New York, New York
June 2, 1999
24
<PAGE>
IMPORTANT TAX INFORMATION (Unaudited)
In accordance with Federal tax law, the Fund hereby makes the following
designations regarding its fiscal year ended April 30, 1999:
--all the dividends paid from investment income--net are "exempt -interest
dividends" (not subject to regular Federal and, for individuals who are
New Jersey residents, New Jersey personal income taxes), and
--the Fund hereby designates $.0241 per share as a long-term capital gain
distribution of the $.0855 per share paid on December 8, 1998.
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 1999 calendar year on Form 1099-DIV
which will be mailed by January 31, 2000.
The Fund 25
<PAGE>
For More Information
Dreyfus Premier State
Municipal Bond Fund,
New Jersey 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
Distributor
Premier Mutual Fund Services, Inc.
60 State Street
Boston, MA 02109
To obtain information:
By telephone
Call your financial
representative or
1-800-554-4611
By mail Write to:
The Dreyfus Premier
Family of Funds
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
Not FDIC-Insured * Not Bank-Guaranteed * May Lose Value
(c) 1999 Dreyfus Service Corporation 380/381AR994
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
DREYFUS PREMIER STATE MUNICIPAL BOND FUND, NEW JERSEY
SERIES CLASS A SHARES AND CLASS B SHARES AND THE LEHMAN
BROTHERS MUNICIPAL BOND INDEX
EXHIBIT A:
DREYFUS DREYFUS
PREMIER STATE PREMIER STATE
LEHMAN MUNICIPAL MUNICIPAL
PERIOD BROTHERS BOND FUND, BOND FUND,
MUNICIPAL NEW JERSEY SERIES NEW JERSEY SERIES
BOND INDEX (CLASS A SHARES (CLASS B SHARES)
5/3/94 10,000 9,549 10,000
4/30/95 10,665 10,142 10,569
4/30/96 11,513 10,706 11,101
4/30/97 12,276 11,333 11,694
4/30/98 13,418 12,407 12,728
4/30/99 14,350 13,092 13,175
*Source: Lehman Brothers
Dreyfus Premier State
Municipal Bond Fund,
North Carolina Series
ANNUAL REPORT
April 30, 1999
[DREYFUS LOGO]
<PAGE>
Year 2000 Issues (Unaudited)
The fund could be adversely affected if the computer systems used by The Dreyfus
Corporation and the fund's other service providers do not properly process and
calculate date-related information from and after January 1, 2000. The Dreyfus
Corporation is working to avoid Year 2000-related problems in its systems and to
obtain assurances from other service providers that they are taking similar
steps. In addition, issuers of securities in which the fund invests may be
adversely affected by Year 2000-related problems. This could have an impact on
the value of the fund's investments and its share price.
<PAGE>
Contents
The Fund
- -------------------------------------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Fund Performance
8 Statement of Investments
12 Statement of Assets and Liabilities
13 Statement of Operations
14 Statement of Changes in Net Assets
16 Financial Highlights
19 Notes to Financial Statements
24 Report of Independent Auditors
25 Important Tax Information
For More Information
- -------------------------------------------------------------------------------
Back Cover
<PAGE>
The Fund
Dreyfus Premier
State Municipal Bond Fund,
North Carolina Series
Letter From The President
Dear Shareholder:
We are pleased to present this annual report for Dreyfus Premier State Municipal
Bond Fund, North Carolina Series, covering the 12-month period from May 1, 1998
through April 30, 1999. Inside, you'll find valuable information about how the
Fund was managed during the period, including a discussion with the Fund's
portfolio manager, William M. Petty.
The past year has generally been rewarding for municipal bond investors. Lower
short-term interest rates adopted by the Federal Reserve Board and other central
banks in the fall of 1998 appear to have helped many U.S. businesses withstand
the effects of economic weakness in Japan, Asia and Latin America. At the same
time, the U.S. economy has entered its eighth year of expansion in an
environment characterized by low inflation and high levels of consumer spending.
In the second half of the reporting period, tax-exempt fixed-income securities
provided good results, especially relative to taxable U.S. Treasury securities.
While prices for U.S. Treasury securities declined significantly through the
second half of the reporting period, a lack of new issuance relative to robust
investor demand supported most municipal bond prices, which have remained
relatively unchanged over the past six months. As a result, the differences in
valuations between taxable U.S. Treasury securities and tax-exempt bonds, which
reached historically wide levels last October, have since narrowed to a more
historically normal relationship.
We appreciate your confidence over the past year, and we look forward to your
continued participation in Dreyfus Premier State Municipal Bond Fund, North
Carolina Series.
Sincerely,
/s/ Stephen E. Canter
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
May 13, 1999
2
<PAGE>
DISCUSSION OF FUND PERFORMANCE
William M. Petty, Portfolio Manager
How did Dreyfus Premier State Municipal Bond Fund,
North Carolina Series perform?
The Fund's Class A shares produced a total return of 5.63% over the 12-month
period ended April 30, 1999,1 compared to a total return of 5.81% for the
average of the Lipper North Carolina Municipal Debt Funds category.2 The Fund
produced a total return of 5.10% for Class B shares and 5.02% for Class C shares
over the 12-month period ended April 30, 1999.1
What is the Fund's investment approach?
Our goal is to seek a high level of federally and North Carolina tax-exempt
income from a diversified portfolio of longer term municipal bonds without undue
risk. To achieve this objective, we employ two primary strategies. Because North
Carolina issues relatively few municipal bonds, we begin by evaluating
supply-and-demand factors. Based on that assessment, we select the individual
tax-exempt bonds that we believe are most likely to provide the highest returns
with the least risk. We look at such criteria as the bond's yield, price, age,
the creditworthiness of its issuer, insurance, and any provisions for early
redemption. Under most circumstances, we look for high-yielding bonds that
cannot be redeemed by their issuers anytime soon and that are selling at a
discount to their face values.
While we do not attempt to predict changes in interest rates, we may tactically
manage the portfolio's average duration -- a measure of sensitivity to changes
in interest rates -- in anticipation of temporary supply-and-demand changes. If
we expect the supply of newly issued bonds to increase, we may reduce the
portfolio's average duration to make cash available for the purchase of higher
yielding securities. Conversely, if we expect demand for municipal bonds to
surge at a time when we anticipate little issuance, we may increase the
portfolio's
The Fund 3
<PAGE>
DISCUSSION OF FUND PERFORMANCE (continued)
average duration to maintain current yields for as long as practical. At other
times, we try to maintain a "neutral" average duration consistent with other
North Carolina municipal bond funds.
What other factors influenced the Fund's performance?
When the Asian currency and credit crisis spread to Russia and threatened Latin
America last summer and fall, investors flocked to U.S. Treasury securities. As
a result, yields on taxable Treasuries fell briefly in October to levels that
were roughly equivalent to yields on comparable tax-exempt bonds.
However, the Federal Reserve Board and other central banks moved quickly to
stimulate global economic growth. They did so last fall by reducing key
short-term interest rates. Because lower short-term interest rates were expected
to stimulate economic growth and potentially reignite inflationary pressures,
yields on longer-term bonds rose throughout the first four months of 1999.
However, the extent of that rise was much greater for taxable U.S. Treasury
securities than for tax-free municipal bonds.
In addition, because of strong economic conditions throughout the country, North
Carolina and its municipalities have had little need to borrow. Yet, demand from
investors seeking to minimize their income tax liabilities remained high. This
balance between supply and demand helped keep municipal bond prices relatively
stable while U.S. Treasury bond prices fell sharply.
What is the Fund's current strategy?
As the period came to a close, we continued to search for the most attractive
values in North Carolina's municipal bond market. Primarily, we have continued
to focus on high-quality bonds because the differences in yields between the
highest quality bonds and lower quality bonds are narrow by historical
standards. However, we have continually evaluated lower quality issues in
order to identify bonds which we believed would offer the Fund an attractive
yield as compensation for additional credit risk.
4
<PAGE>
As of April 30, the portfolio's 7.6-year average duration was positioned at the
long end of the neutral range, which we believed was appropriate in a
low-issuance environment. We intend to remain vigilant in our efforts to
identify tactical opportunities to change our average duration in anticipation
of any supply-and-demand imbalances. We expect these strategies to help us
continue to maximize tax-exempt returns for our shareholders.
May 13, 1999
[FN]
1 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 applicable contingent deferred sales charge
imposed on redemptions in the case of Class B and Class C shares. Income
may be subject to state and local income taxes for non-North Carolina
residents. Some income may be subject to the Federal Alternative Minimum
Tax (AMT) for certain shareholders.
2 Source: Lipper Analytical Services, Inc.
</FN>
The Fund 5
<PAGE>
FUND PERFORMANCE
$17,727
Lehman Brothers
Municipal Bond Index*
[CHART]
$16,950
Dreyfus Premier State Municipal
Bond Fund, North Carolina Series
(Class A Shares)
Comparison of change in value of $10,000 investment in the Fund's Class A shares
and the Lehman Brothers Municipal Bond Index
[FN]
* Source: Lehman Brothers.
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, North Carolina Series (the "Fund") on 8/1/91
(Inception Date) to a $10,000 investment made in the Lehman Brothers Municipal
Bond Index (the "Index") on that date. For comparative purposes, the value of
the Index on 7/31/91 is used as the beginning value on 8/1/91. 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 Fund invests primarily in North
Carolina 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. The Index is not limited to investments
principally in North Carolina municipal obligations and does not take into
account charges, fees and other expenses. The Index, unlike the Fund, 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. These factors can contribute to the Index potentially outperforming or
underperforming the Fund. Further information relating to Fund performance,
including expense reimbursements, if applicable, is contained in the Financial
Highlights section of the Prospectus and elsewhere in this report.
</FN>
6
<PAGE>
- ------------------------------------------------------------------------
Average Annual Total Returns as of 4/30/99
Inception From
Date 1 Year 5 Years Inception
- ------------------------------------------------------------------------
Class A Shares
with sales charge (4.5%) (8/1/91) 0.84% 6.27% 7.05%
without sales charge (8/1/91) 5.63% 7.25% 7.69%
Class B Shares
with redemption* (1/15/93) 1.10% 6.39% 6.13%
without redemption (1/15/93) 5.10% 6.70% 6.13%
Class C Shares
with redemption** (8/15/95) 4.02% -- 6.96%
without redemption (8/15/95) 5.02% -- 6.96%
[FN]
Past performance is not predictive of future performance.
* 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>
The Fund 7
<PAGE>
STATEMENT OF INVESTMENTS
April 30, 1999
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
Principal
Long-Term Municipal Investments--97.7% Amount ($) Value ($)
- --------------------------------------------------------------------------------------------
<S> <C> <C>
North Carolina--75.8%
Asheville, Water System Revenue
5.70%, 8/1/2025 (Insured; FGIC) 1,000,000 1,065,520
Buncombe County Metropolitan Sewage District,
Sewage System Revenue:
6.75%, 7/1/2022 (Prerefunded 7/1/2002)a 500,000 555,280
5%, 7/1/2029 (Insured; FSA)b 1,000,000 982,350
Charlotte, Special Facilities Revenue, Refunding
(Charlotte-Douglas International Airport)
5.60%, 7/1/2027 4,000,000 3,996,840
Charlotte-Mecklenberg Hospital Authority,
Health Care System Revenue
5.75%, 1/15/2021 3,000,000 3,175,500
Dare County, Utility System Revenue
4.75%, 6/1/2024 (Insured; MBIA) 750,000 710,512
Monroe, Combined Enterprise System Revenue
4.50%, 3/1/2023 1,130,000 1,033,374
New Hanover County, HR (New Hanover Regional
Medical Center Project)
5.75%, 10/1/2026 (Insured; AMBAC) 5,000,000 5,327,100
New Hanover County Industrial Facilities and
Pollution Control Financing Authority,
SWDR (Occidental Petroleum) 6.50%, 8/1/2014 1,000,000 1,077,610
North Carolina Eastern Municipal Power Agency,
Power System Revenue, Refunding:
5.875%, 1/1/2013 3,000,000 3,103,290
6%, 1/1/2013 2,500,000 2,655,150
6%, 1/1/2022 1,000,000 1,064,920
Refunding 5.375%, 1/1/2024 (Insured; MBIA) 1,300,000 1,329,575
North Carolina Educational Assistance Authority,
Guaranteed Student Loan Revenue
6.35%, 7/1/2016 3,875,000 4,122,264
North Carolina Housing Finance Agency,
Single Family Revenue:
5.75%, 3/1/2017 (Insured; FHA) 3,000,000 3,113,850
6.10%, 9/1/2025 (Insured; FHA) 880,000 899,087
6.50%, 9/1/2026 4,195,000 4,475,268
North Carolina Medical Care Commission, Health,
Hospital and Nursing Home Revenue:
(Deerfield Episcopal Hospital):
6%, 11/1/2019 1,670,000 1,687,502
6%, 11/1/2027 1,330,000 1,334,628
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
Principal
Long-Term Municipal Investments (continued) Amount ($) Value ($)
- --------------------------------------------------------------------------------------------
<S> <C> <C>
North Carolina (continued)
North Carolina Medical Care Commission, Health,
Hospital and Nursing Home Revenue (continued):
(Firsthealth of the Carolinas) 4.75%, 10/1/2026 1,600,000 1,472,368
(Pitt County Memorial Hospital) 4.75%, 12/1/2028
(Insured; MBIA) 1,950,000 1,822,295
Refunding:
(Annie Penn Memorial Hospital Project)
7.50%, 8/15/2021 3,750,000 4,181,963
(Gaston Memorial Hospital Project)
5.50%, 2/15/2019 1,000,000 1,031,190
(Halifax Regional Medical Center) 5%, 8/15/2024 800,000 752,928
(Wilson Memorial Hospital Project) Zero Coupon,
11/1/2016 (Insured; AMBAC) 3,055,000 1,276,165
North Carolina Municipal Power Agency Number 1,
Catawba Electric Revenue:
5.50%, 1/1/2015 (Insured; MBIA) 4,000,000 4,330,920
5.75%, 1/1/2015 (Insured; MBIA) 2,750,000 2,892,890
Sampson Area Development Corp., Installment
Payment Revenue
4.75%, 6/1/2024 (Insured; MBIA) 1,000,000 947,350
Shelby, Combined Enterprise System Revenue,
Refunding 5.625%, 5/1/2014 1,000,000 1,053,270
University of North Carolina, Multiple Utility Revenues,
Refunding:
Zero Coupon, 8/1/2018 2,500,000 953,450
4.50%, 10/1/2018 1,500,000 1,403,010
4.50%, 10/1/2023 1,580,000 1,443,251
Wake County, Hospital System Revenue, Refunding
Zero Coupon, 10/1/2010 (Insured; MBIA) 2,200,000 1,307,350
U.S. Related--21.9%
Guam Airport Authority, Airport and Marina Revenue
6.70%, 10/1/2023 2,000,000 2,197,600
Guam Power Authority, Electric Power and
Light Revenues 6.30%, 10/1/2022 2,000,000 2,146,200
Commonwealth of Puerto Rico
6.80%, 7/1/2021 (Prerefunded 7/1/2002)a 600,000 665,886
Commonwealth of Puerto Rico Infrastructure
Financing Authority
6.37%, 7/1/2015 (Insured; AMBAC)c 1,940,000 2,008,831
</TABLE>
The Fund 9
<PAGE>
STATEMENT OF INVESTMENTS (continued)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
Principal
Long-Term Municipal Investments (continued) Amount ($) Value ($)
- --------------------------------------------------------------------------------------------
<S> <C> <C>
U.S. Related (continued)
Puerto Rico Ports Authority, Special Facilities
Revenue (American Airlines):
6.30%, 6/1/2023 (Guaranteed; AMR Corp.) 1,000,000 1,059,030
6.25%, 6/1/2026 (Guaranteed; AMR Corp.) 2,950,000 3,177,061
Virgin Islands Territory, Hugo Insurance
Claims Fund Program
7.75%, 7/1/2011 1,315,000 1,436,151
Virgin Islands Public Finance Authority,
Revenues, Refunding,
Matching Fund Loan Notes 7.25%, 10/1/2018 4,000,000 4,531,600
Virgin Islands Water and Power Authority,
Electric System Revenue, Refunding
7.40%, 7/1/2011 1,815,000 1,972,506
Total Long-Term Municipal Investments
(cost $81,470,293) 85,772,885
- --------------------------------------------------------------------------------------------
Principal
Short-Term Municipal Investments--1.5% Amount ($) Value ($)
- --------------------------------------------------------------------------------------------
North Carolina:
Craven County Industrial Facilities and Pollution Control
Financing Authority, Revenue,
VRDN (Craven Wood Energy) 4.35%
(LOC; ABN-Amro Bank N.V.)d 500,000 500,000
North Carolina Medical Care Commission,
Health, Hospital and Nursing Home Revenue, VRDN
4.30%d 800,000 800,000
Total Short-Term Municipal Investments
(cost $1,300,000) 1,300,000
- --------------------------------------------------------------------------------------------
Total Investments (cost $82,770,293) 99.2% 87,072,885
Cash and Receivables (Net) .8% 689,731
Net Assets 100.0% 87,762,616
</TABLE>
10
<PAGE>
- -------------------------------------------------------------------------------
Summary of Abbreviations
<TABLE>
<S> <C> <C> <C>
AMBAC American Municipal Bond LOC Letter of Credit
Assurance Corporation MBIA Municipal Bond Investors
FGIC Financial Guaranty Assurance Insurance
Insurance Company Corporation
FHA Federal Housing Administration SWDR Solid Waste Disposal Revenue
FSA Financial Security Assurance VRDN Variable Rate Demand Notes
HR Hospital Revenue
</TABLE>
- -------------------------------------------------------------------------------
Summary of Combined Ratings (Unaudited)
Fitch or Moody's or Standard & Poor's Value (%)
- -------------------------------------------------------------------------------
AAA Aaa AAA 38.6
AA Aa AA 16.2
A A A 8.0
BBB Baa BBB 26.0
F1 MIG1 SP1 1.5
Not Rated e Not Rated e Not Rated e 9.7
100.0
[FN]
a Bonds which are prerefunded are collateralized by U.S. Government securities
which are held in escrow and are used to pay principal and interest on the
municipal issue and to retire the bonds in full at the earliest
refunding date.
b Purchased on a delayed-delivery basis.
c Inverse floater security--the interest rate is subject to change periodically.
d Securities payable on demand. Variable interest rate--subject to periodic
change.
e Securities which, while not rated by Fitch, Moody's and Standard & Poor's have
been determined by the Manager to be of comparable quality to those rated
securities in which the Fund may invest.
See notes to financial statements.
</FN>
The Fund 11
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
April 30, 1999
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
Cost Value
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
Assets ($):
Investments in securities--See Statement of Investments 82,770,293 87,072,885
Interest receivable 1,186,073
Receivable for investment securities sold 558,849
Receivable for shares of Beneficial Interest subscribed 37,200
Prepaid expenses 14,419
88,869,426
- -----------------------------------------------------------------------------------------------
Liabilities ($):
Due to The Dreyfus Corporation and affiliates 41,085
Due to Distributor 34,726
Cash overdraft due to Custodian 23,017
Payable for investment securities purchased 986,763
Payable for shares of Beneficial Interest redeemed 1,819
Accrued expenses 19,400
1,106,810
- ----------------------------------------------------------------------------------------------
Net Assets ($) 87,762,616
- ----------------------------------------------------------------------------------------------
Composition of Net Assets ($):
Paid--in capital 83,288,643
Accumulated net realized gain (loss) on investments 171,381
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 4,302,592
- ----------------------------------------------------------------------------------------------
Net Assets ($) 87,762,616
- ----------------------------------------------------------------------------------------------
</TABLE>
Net Asset Value Per Share
<TABLE>
<CAPTION>
Class A Class B Class C
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
Net Assets ($) 47,793,854 39,535,015 433,747
Shares Outstanding 3,425,070 2,835,595 31,080
- ----------------------------------------------------------------------------------------------
Net Asset Value Per Share ($) 13.95 13.94 13.96
</TABLE>
[FN]
See notes to financial statements.
</FN>
12
<PAGE>
STATEMENT OF OPERATIONS
Year Ended April 30, 1999
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
Investment Income ($)
- --------------------------------------------------------------------------------------------
<S> <C>
Income
Interest Income 4,923,578
Expenses:
Management fee--Note 3(a) 482,759
Shareholder servicing costs--Note 3(c) 274,402
Distribution fees--Note 3(b) 228,629
Registration fees 19,741
Professional fees 14,747
Prospectus and shareholders' reports 10,862
Custodian fees 9,670
Trustees' fees and expenses--Note 3(d) 1,173
Loan commitment fees--Note 2 421
Miscellaneous 11,340
Total Expenses 1,053,744
Investment Income--Net 3,869,834
- --------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) on Investments--Note 4:
Net realized gain (loss) on investments 908,096
Net unrealized appreciation (depreciation) on investments (152,616)
Net Realized and Unrealized Gain (Loss) on Investments 755,480
Net Increase in Net Assets Resulting from Operations 4,625,314
</TABLE>
[FN]
See notes to financial statements.
</FN>
The Fund 13
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
Year Ended April 30,
----------------------------------
1999 1998
- --------------------------------------------------------------------------------------------
<S> <C> <C>
Operations ($):
Investment income--net 3,869,834 4,058,691
Net realized gain (loss) on investments 908,096 965,511
Net unrealized appreciation (depreciation)
on investments (152,616) 3,410,572
Net Increase (Decrease) in Net Assets Resulting
from Operations 4,625,314 8,434,774
- --------------------------------------------------------------------------------------------
Dividends to Shareholders From ($):
Investment income--net:
Class A shares (1,969,580) (2,067,631)
Class B shares (1,894,185) (1,989,685)
Class C shares (6,069) (1,375)
Net realized gain on investments:
Class A shares (212,660) --
Class B shares (248,449) --
Class C shares (540) --
Total Dividends (4,331,483) (4,058,691)
- --------------------------------------------------------------------------------------------
Beneficial Interest Transactions ($):
Net proceeds from shares sold:
Class A shares 9,826,910 2,200,410
Class B shares 6,026,320 3,285,195
Class C shares 415,737 89,123
Dividends reinvested:
Class A shares 1,147,257 1,054,623
Class B shares 1,337,827 1,212,413
Class C shares 2,035 709
Cost of shares redeemed:
Class A shares (4,905,844) (5,917,391)
Class B shares (13,287,728) (5,431,246)
Class C shares (25,569) (58,239)
Increase (Decrease) in Net Assets from
Beneficial Interest Transactions 536,945 (3,564,403)
Total Increase (Decrease) in Net Assets 830,776 811,680
- --------------------------------------------------------------------------------------------
Net Assets ($):
Beginning of Period 86,931,840 86,120,160
End of Period 87,762,616 86,931,840
</TABLE>
[FN]
See notes to financial statements.
</FN>
14
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
Year Ended April 30,
--------------------------------
1999 1998
- ------------------------------------------------------------------------------------------
<S> <C> <C>
Capital Share Transactions:
Class A
Shares sold 701,323 158,763
Shares issued for dividends reinvested 81,450 76,366
Shares redeemed (348,339) (429,507)
Net Increase (Decrease) in Shares Outstanding 434,434 (194,378)
- ------------------------------------------------------------------------------------------
Class B
Shares sold 428,998 238,951
Shares issued for dividends reinvested 95,019 87,846
Shares redeemed (947,962) (394,562)
Net Increase (Decrease) in Shares Outstanding (423,945) (67,765)
- ------------------------------------------------------------------------------------------
Class C
Shares sold 29,569 6,508
Shares issued for dividends reinvested 145 51
Shares redeemed (1,805) (4,251)
Net Increase (Decrease) in Shares Outstanding 27,909 2,308
</TABLE>
[FN]
See notes to financial statements.
</FN>
The Fund 15
<PAGE>
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the
fiscal periods indicated. Certain information reflects financial results for a
single Fund share. Total return shows how much your investment in the Fund would
have increased (or decreased) during each period, assuming you had reinvested
all dividends and distributions. These figures have been derived from the Fund's
financial statements.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
Year Ended April 30,
--------------------------------------------
Class A Shares 1999 1998 1997 1996 1995
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per Share Data ($):
Net asset value, beginning of period 13.91 13.23 12.91 12.72 12.73
Investment Operations:
Investment income--net .66 .67 .67 .67 .70
Net realized and unrealized gain (loss)
on investments .11 .68 .32 .19 (.01)
Total from Investment Operations .77 1.35 .99 .86 .69
Distributions:
Dividends from investment income--net (.66) (.67) (.67) (.67) (.70)
Dividends from net realized gain
on investments (.07) -- -- -- --
Total Distributions (.73) (.67) (.67) (.67) (.70)
Net asset value, end of period 13.95 13.91 13.23 12.91 12.72
- ---------------------------------------------------------------------------------------
Total Return (%)* 5.63 10.39 7.81 6.79 5.70
- ---------------------------------------------------------------------------------------
Ratios/Supplemental Data (%):
Ratio of expenses to average net assets .94 .87 1.04 .98 .65
Ratio of net investment income
to average net assets 4.68 4.89 5.10 5.11 5.63
Decrease reflected in above expense ratios
due to undertakings by the Manager -- -- -- .02 .31
Portfolio Turnover Rate 41.15 32.28 44.91 47.15 12.02
- ---------------------------------------------------------------------------------------
Net Assets, end of period ($ X 1,000) 47,794 41,592 42,130 47,042 50,205
</TABLE>
[FN]
* Exclusive of sales load.
See notes to financial statements.
</FN>
16
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
Year Ended April 30,
--------------------------------------------
Class B Shares 1999 1998 1997 1996 1995
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per Share Data ($):
Net asset value, beginning of period 13.90 13.22 12.90 12.71 12.72
Investment Operations:
Investment income--net .59 .60 .60 .60 .64
Net realized and unrealized gain (loss)
on investments .11 .68 .32 .19 (.01)
Total from Investment Operations .70 1.28 .92 .79 .63
Distributions:
Dividends from investment income--net (.59) (.60) (.60) (.60) (.64)
Dividends from net realized gain
on investments (.07) -- -- -- --
Total Distributions (.66) (.60) (.60) (.60) (.64)
Net asset value, end of period 13.94 13.90 13.22 12.90 12.71
- ---------------------------------------------------------------------------------------
Total Return (%)* 5.10 9.84 7.27 6.25 5.12
- ---------------------------------------------------------------------------------------
Ratios/Supplemental Data (%):
Ratio of expenses to average net assets 1.44 1.38 1.54 1.49 1.18
Ratio of net investment income
to average net assets 4.16 4.39 4.59 4.59 5.08
Decrease reflected in above expense ratios
due to undertakings by the Manager -- -- -- .02 .30
Portfolio Turnover Rate 41.15 32.28 44.91 47.15 12.02
- ---------------------------------------------------------------------------------------
Net Assets, end of period ($ X 1,000) 39,535 45,296 43,979 42,668 42,310
</TABLE>
[FN]
* Exclusive of sales load.
See notes to financial statements.
</FN>
The Fund 17
<PAGE>
FINANCIAL HIGHLIGHTS (continued)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
Year Ended April 30,
- ---------------------------------------------------------------------------------------
Class C Shares 1999 1998 1997 1996a
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per Share Data ($):
Net asset value, beginning of period 13.90 13.22 12.90 12.76
Investment Operations:
Investment income--net .56 .57 .57 .40
Net realized and unrealized gain (loss)
on investments .13 .68 .32 .14
Total from Investment Operations .69 1.25 .89 .54
Distributions:
Dividends from investment income--net (.56) (.57) (.57) (.40)
Dividends from net realized gain
on investments (.07) -- -- --
Total Distributions (.63) (.57) (.57) (.40)
Net asset value, end of period 13.96 13.90 13.22 12.90
- ---------------------------------------------------------------------------------------
Total Return (%)b 5.02 9.58 7.00 5.92 c
- ---------------------------------------------------------------------------------------
Ratios/Supplemental Data (%):
Ratio of expenses to average net assets 1.63 1.62 1.77 1.73 c
Ratio of net investment income
to average net assets 3.83 4.08 4.31 4.31 c
Portfolio Turnover Rate 41.15 32.28 44.91 47.15
- ---------------------------------------------------------------------------------------
Net Assets, end of period ($ X 1,000) 434 44 11 1
</TABLE>
[FN]
a From August 15, 1995 (commencement of initial offering) to April 30, 1996.
b Exclusive of sales load.
c Annualized.
See notes to financial statements.
</FN>
18
<PAGE>
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, as amended (the "Act"), as a non-diversified
open-end management investment company, and operates as a series company
currently offering thirteen series including the North Carolina 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")
The Fund 19
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
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. Under the terms of the custody
agreement, the Fund received net earnings credits of $8,421 during the period
ended April 30, 1999 based on available cash balances left on deposit. Income
earned under this arrangement is included in interest income.
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.
20
<PAGE>
(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 of 1986, as amended (the
"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 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 (the "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. During the period ended April
30, 1999, the Fund did not borrow under the Facility.
NOTE 3--Management Fee and Other Transactions With Affiliates:
(a) Pursuant to a management agreement with the Manager, the management fee is
computed at the annual rate of .55 of 1% of the value of the Fund's average
daily net assets and is payable monthly.
Dreyfus Service Corporation, a wholly-owned subsidiary of the Manager, retained
$1,099 during the period ended April 30, 1999, from commissions earned on sales
of the Fund's shares.
The Fund 21
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
(b) Under the Distribution Plan adopted pursuant to Rule 12b-1 under the Act,
Class B and Class C shares pay 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, 1999,
Class B and Class C shares were charged $227,439 and $1,190, respectively,
pursuant to the Distribution Plan.
(c) Under the Shareholder Services Plan, Class A, Class B and Class C shares pay
the Distributor at an annual rate of .25 of 1% of the value of their average
daily net assets 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, 1999, Class A, Class B and Class C
shares were charged $105,320, $113,720 and $396 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, 1999, the Fund was charged $41,871 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.
22
<PAGE>
NOTE 4--Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding
short-term securities, during the period ended April 30, 1999 amounted to
$35,585,485 and $36,075,413, respectively.
At April 30, 1999, accumulated net unrealized appreciation on investments was
$4,302,592, consisting of $4,527,274 gross unrealized appreciation and
$224,682 gross unrealized depreciation.
At April 30, 1999, 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).
The Fund 23
<PAGE>
REPORT OF INDEPENDENT AUDITORS
Shareholders and Board of Trustees
Dreyfus Premier State Municipal Bond Fund,
North Carolina Series
We have audited the accompanying statement of assets and liabilities, including
the statement of investments, of Dreyfus Premier State Municipal Bond Fund,
North Carolina Series (the "Fund") (one of the Funds constituting the Dreyfus
Premier State Municipal Bond Fund) as of April 30, 1999, 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, 1999 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 the
Fund at April 30, 1999, 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 2, 1999
24
<PAGE>
IMPORTANT TAX INFORMATION (Unaudited)
In accordance with Federal tax law, the Fund hereby makes the following
designations regarding its fiscal year ended April 30, 1999:
-- all the dividends paid from investment income-net are
"exempt-interest dividends" (not subject to regular Federal and,
for individuals who are North Carolina residents, North Carolina
personal income taxes), and
-- the Fund hereby designates $.0747 per share as a long-term
capital gain distribution paid on December 9, 1998.
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 1999 calendar year on Form 1099-DIV which
will be mailed by January 31, 2000.
The Fund 25
<PAGE>
For More Information
Dreyfus Premier State Municipal
Bond Fund, North Carolina 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
Distributor
Premier Mutual Fund Services, Inc.
60 State Street
Boston, MA 02109
To obtain information:
By telephone
Call your financial representative or
1-800-554-4611
By mail Write to:
The Dreyfus Premier
Family of Funds
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
Not FDIC-Insured * Not Bank-Guaranteed * May Lose Value
(C) 1999 Dreyfus Service Corporation 065/624AR994
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN DREYFUS
PREMIER STATE MUNICIPAL BOND FUND, NORTH CAROLINA SERIES
CLASS A SHARES AND THE LEHMAN BROTHERS MUNICIPAL BOND INDEX
EXHIBIT A:
DREYFUS
PREMIER STATE
LEHMAN BROTHERS MUNICIPAL BOND FUND,
PERIOD MUNICIPAL NORTH CAROLINA SERIES
BOND INDEX * (CLASS A SHARES)
8/1/91 10,000 9,547
4/30/92 10,734 10,360
4/30/93 12,092 11,911
4/30/94 12,353 11,945
4/30/95 13,175 12,626
4/30/96 14,222 13,483
4/30/97 15,166 14,536
4/30/98 16,576 16,047
4/30/99 17,727 16,950
*Source: Lehman Brothers
Dreyfus Premier
State Municipal
Bond Fund,
Ohio Series
ANNUAL REPORT
April 30, 1999
[DREYFUS LOGO]
<PAGE>
Year 2000 Issues
(Unaudited)
The fund could be adversely affected if the computer systems used by The
Dreyfus Corporation and the fund's other service providers do not properly
process and calculate date-related information from and after January 1,
2000. The Dreyfus Corporation is working to avoid Year 2000-related
problems in its systems and to obtain assurances from other service
providers that they are taking similar steps. In addition, issuers of
securities in which the fund invests may be adversely affected by Year
2000-related problems. This could have an impact on the value of the fund's
investments and its share price.
<PAGE>
Contents
THE FUND
- ---------------
2 Letter from the President
3 Discussion of Fund Performance
6 Fund Performance
8 Statement of Investments
15 Statement of Assets and Liabilities
16 Statement of Operations
17 Statement of Changes in Net Assets
19 Financial Highlights
22 Notes to Financial Statements
27 Report of Independent Auditors
28 Important Tax Information
FOR MORE INFORMATION
- -----------------------
Back Cover
<PAGE>
Dreyfus Premier The Fund
State Municipal Bond Fund,
Ohio Series
LETTER FROM THE PRESIDENT
- -------------------------
Dear Shareholder:
We are pleased to present this annual report for Dreyfus Premier State
Municipal Bond Fund, Ohio Series, covering the 12-month period from May 1,
1998 through April 30, 1999. Inside, you'll find valuable information about
how the Fund was managed during the period, including a discussion with the
Fund's portfolio manager, William M. Petty.
The past year has generally been rewarding for municipal bond investors.
Lower short-term interest rates adopted by the Federal Reserve Board and
other central banks in the fall of 1998 appear to have helped many U.S.
businesses withstand the effects of economic weakness in Japan, Asia and
Latin America. At the same time, the U.S. economy has entered its eighth
year of expansion in an environment characterized by low inflation and high
levels of consumer spending.
In the second half of the reporting period, tax-exempt fixed-income
securities provided good results, especially relative to taxable U.S.
Treasury securities. While prices for U.S. Treasury securities declined
significantly through the second half of the reporting period, a lack of
new issuance relative to robust investor demand supported most municipal
bond prices, which have remained relatively unchanged over the past six
months. As a result, the differences in valuations between taxable U.S.
Treasury securities and tax-exempt bonds, which reached historically wide
levels last October, have since narrowed to a more historically normal
relationship.
We appreciate your confidence over the past year, and we look forward to
your continued participation in Dreyfus Premier State Municipal Bond Fund,
Ohio Series.
Sincerely,
/s/Stephen E. Canter
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
May 13, 1999
2
<PAGE>
DISCUSSION OF FUND PERFORMANCE
- ------------------------------
William M. Petty, Portfolio Manager
How did Dreyfus Premier State Municipal Bond Fund,
Ohio Series perform?
The Fund's Class A shares produced a total return of 5.72% over the 12-
month period ended April 30, 1999,1 compared to a total return of 5.79% for
the average of the Lipper Ohio Municipal Debt Funds category.2 The Fund
produced a total return of 5.17% for Class B shares and 4.92% for Class C
shares over the 12-month period ended April 30, 1999.1
What is the Fund's investment approach?
Our goal is to seek a high level of federally and Ohio tax-exempt income
from a diversified portfolio of longer-term municipal bonds without undue
risk. To achieve this objective, we employ two primary strategies. Because
Ohio issues relatively few municipal bonds, we begin by evaluating supply-
and-demand factors. Based on that assessment, we select the individual tax-
exempt bonds that we believe are most likely to provide the highest returns
with the least risk. We look at such criteria as the bond's yield, price,
age, the creditworthiness of its issuer, insurance, and any provisions for
early redemption. Under most circumstances, we look for high-yielding bonds
that cannot be redeemed by their issuers anytime soon and that are selling
at a discount to their face values.
While we do not attempt to predict changes in interest rates, we may
tactically manage the portfolio's average duration -- a measure of
sensitivity to changes in interest rates -- in anticipation of temporary
supply-and-demand changes. If we expect the supply of newly issued bonds to
increase, we may reduce the portfolio's average duration to make cash
available for the purchase of higher yielding securities. Conversely, if we
expect demand for municipal bonds to surge at a time when we anticipate
little issuance, we may increase the portfolio's average duration to
maintain current yields for as long as practical. At other times, we try to
maintain a "neutral" average duration consistent with other Ohio municipal
bond funds.
The Fund 3
<PAGE>
DISCUSSION OF FUND PERFORMANCE (continued)
What other factors influenced the Fund's performance?
When the Asian currency and credit crisis spread to Russia and threatened
Latin America last summer and fall, investors flocked to U.S. Treasury
securities. As a result, yields on taxable Treasuries fell briefly in
October to levels that were roughly equivalent to yields on comparable tax-
exempt bonds.
However, the Federal Reserve Board and other central banks moved quickly to
stimulate global economic growth. They did so last fall by reducing key
short-term interest rates. Because lower short-term interest rates were
expected to stimulate economic growth and potentially reignite inflationary
pressures, yields on longer-term bonds rose throughout the first four
months of 1999. However, the extent of that rise was much greater for
taxable U.S. Treasury securities than for tax-free municipal bonds.
In addition, because of strong economic conditions throughout the country,
Ohio and its municipalities have had little need to borrow. Yet, demand
from investors seeking to minimize their income tax liabilities remained
high. This balance between supply and demand helped keep municipal bond
prices relatively stable while U.S. Treasury bond prices fell sharply.
What is the Fund's current strategy?
As the period came to a close, we continued to search for the most
attractive values in Ohio's municipal bond market. Primarily, we have
continued to focus on high-quality bonds because the differences in yields
between the highest quality bonds and lower quality bonds are narrow by
historical standards. However, we have continually evaluated lower quality
issues in order to identify bonds which we believed would offer the Fund an
attractive yield as compensation for additional credit risk.
4
<PAGE>
As of April 30, the portfolio's 6.5-year average duration was positioned at
the short end of the neutral range.We intend to remain vigilant in our
efforts to identify tactical opportunities to manage the portfolio in
anticipation of any changes in supply-and-demand. We expect these
strategies to help us continue to maximize tax-exempt returns for our
shareholders.
May 13, 1999
[FN]
1 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 applicable contingent
deferred sales charge imposed on redemptions in the case of Class B and
Class C shares. Income may be subject to state and local income taxes for
non-Ohio residents. Some income may be subject to the Federal Alternative
Minimum Tax (AMT) for certain shareholders.
2 Source: Lipper Analytical Services, Inc.
</FN>
The Fund 5
<PAGE>
FUND PERFORMANCE
$21,615
Lehman Brothers Municipal
Bond Index*
[CHART]
$20,143
Dreyfus Premier State Municipal
Bond Fund, Ohio Series
(Class A Shares)
Comparison of change in value of $10,000 investment in the Fund's Class A
shares and the Lehman Brothers Municipal Bond Index
[FN]
* Source: Lehman Brothers.
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, Ohio Series (the "Fund") on
4/30/89 to a $10,000 investment made in the Lehman Brothers Municipal Bond
Index (the "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 Fund invests primarily in Ohio 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. The Index is
not limited to investments principally in Ohio municipal obligations and
does not take into account charges, fees and other expenses. The Index,
unlike the Fund, 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. These factors can contribute to the Index
potentially outperforming or underperforming the Fund. Further information
relating to Fund performance, including expense reimbursements, if
applicable, is contained in the Financial Highlights section of the
Prospectus and elsewhere in this report.
</FN>
6
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Average Annual Total Returns as of 4/30/99
Inception From
Date 1 Year 5 Years 10 Years Inception
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Class A Shares
with sales charge (4.5%) (5/28/87) 0.93% 5.64% 7.25% --
without sales charge (5/28/87) 5.72% 6.62% 7.75% --
Class B Shares
with redemption* (1/15/93) 1.19% 5.74% -- 5.94%
without redemption (1/15/93) 5.17% 6.06% -- 5.94%
Class C Shares
with redemption** (8/15/95) 3.93% -- -- 6.03%
without redemption (8/15/95) 4.92% -- -- 6.03%
<FN>
Past performance is not predictive of future performance.
* 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>
The Fund 7
<PAGE>
STATEMENT OF INVESTMENTS
April 30, 1999
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Principal
Long-Term Municipal Investments--99.9% Amount ($) Value ($)
- -------------------------------------------------------------------------------
<S> <C> <C>
Ohio--97.4%
Akron:
6%, 12/1/2012 1,380,000 1,568,273
Pension Revenue, Refunding 4.75%, 12/1/2023
(Insured; AMBAC) 3,080,000 2,919,440
Sewer Systems Revenue 5.875%, 12/1/2016
(Insured; MBIA) 1,200,000 1,295,484
Akron-Wilbeth Housing Development Corp.,
First Mortgage Revenue
7.90%, 8/1/2003 (Insured; FHA) 1,560,000 1,793,423
Allen County, Industrial First Mortgage Revenue,
Refunding 6.75%, 11/15/2008
(Guaranteed; Kmart Corp.) 1,280,000 1,363,789
City of Barberton, Hospital Facilities Revenue
(The Barberton Citizens Hospital Co. Project)
7.25%, 1/1/2012 (Prerefunded 1/1/2002)a 2,400,000 2,651,208
Board of Education of the Cleveland City
School District 8%, 12/1/2001 1,080,000 1,156,162
Butler County, Hospital Facilities Revenue,
Refunding and Improvement
(Fort Hamilton Hughes Group) 7.25%, 1/1/2001 1,775,000 1,808,885
City of Cambridge, HR, Refunding (Guernsey
Memorial Hospital Project) 8%, 12/1/2006 2,000,000 2,171,820
Clermont County, Hospital Facilities Revenue,
Refunding (Mercy Health Systems):
5.625%, 9/1/2016 (Insured; AMBAC) 4,250,000 4,470,830
7.50%, 9/1/2019 (Prerefunded 9/1/2001)
(Insured; AMBAC)a 180,000 195,518
City of Cleveland:
Airport Special Revenue (Continental Airlines Inc.
Project) 5.375%, 9/15/2027 5,000,000 4,861,450
COP:
(Cleveland Stadium Project) 6.752%,
11/15/2022 (Insured; AMBAC)b 5,500,000 5,659,830
(Motor Vehicle, Motorized and Communication
Equipment) 7.10%, 7/1/2002 1,475,000 1,533,823
Parking Facility Improvement Revenue 8%,
9/15/2012 (Prerefunded 9/15/2002)a 5,000,000 5,746,200
Waterworks Revenue, Refunding 5.50%,
1/1/2021 (Insured; MBIA) 8,000,000 8,563,600
Cleveland-Cuyahoga County Port Authority, Revenue:
(Capital Improvements Project) 5.375%,
5/15/2019c 1,000,000 998,120
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Principal
Long-Term Municipal Investments (continued) Amount ($) Value ($)
- -------------------------------------------------------------------------------
<S> <C> <C>
Ohio (continued)
Cleveland-Cuyahoga County Port Authority,
Revenue (continued):
Refunding:
(Port of Cleveland) 5.375%, 5/15/2018 2,860,000 2,841,410
(Rock & Roll Hall of Fame) 5.40%, 12/1/2015
(Insured; AMBAC) 2,540,000 2,654,503
Cleveland Public Power System, Revenue 6.564%,
11/15/2018b 5,000,000 5,083,200
Cuyahoga County:
HR:
(Meridia Health Systems)
7%, 8/15/2023 (Prerefunded 8/15/2001)a 1,750,000 1,913,712
Refunding:
(Cleveland Clinic for Health) 5%, 1/1/2031 1,000,000 951,910
Improvement (University Hospitals Health)
5.625%, 1/15/2015 (Insured; MBIA) 3,695,000 3,881,413
Jail Facilities 7%, 10/1/2013
(Prerefunded 10/1/2001)a 6,125,000 6,708,774
MFHR (National Terminal Apartments Project)
6.40%, 7/1/2016 (Collateralized; FNMA) 2,000,000 2,045,680
Dublin, Refunding and Improvement
4.625%, 12/1/2018 1,635,000 1,555,980
Eaton, IDR, Refunding (Baxter International Inc.
Project) 6.50%, 12/1/2012 1,500,000 1,615,800
Euclid City School District, Improvement 7.10%,
12/1/2011 (Prerefunded 12/1/2001)a 1,000,000 1,103,810
Village of Evendale, IDR, Refunding
(Ashland Oil Inc. Project)
6.90%, 11/1/2010 2,000,000 2,140,380
Fairfield City School District,
School Improvement Unlimited Tax:
7.20%, 12/1/2011 (Insured; FGIC) 1,000,000 1,185,510
7.20%, 12/1/2012 (Insured; FGIC) 1,250,000 1,486,275
6.10%, 12/1/2015 (Insured; FGIC) 2,000,000 2,195,480
6%, 12/1/2020 (Insured; FGIC) 2,000,000 2,171,040
Fairlawn, Health Care Facilities Revenue
(Village at Saint Edward
Project) 8.75%, 10/1/2019 2,420,000 2,520,261
Findlay 5.875%, 7/1/2017 2,000,000 2,164,420
Franklin, Water System Revenue
5.75%, 12/1/2016 (Insured; MBIA) 1,000,000 1,073,670
</TABLE>
The Fund 9
<PAGE>
STATEMENT OF INVESTMENTS (continued)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Principal
Long-Term Municipal Investments (continued) Amount ($) Value ($)
- -------------------------------------------------------------------------------
<S> <C> <C>
Ohio (continued)
Franklin County:
Health Care Facilities Revenue, Refunding and
Improvement (Friendship Village of Columbus)
5.375%, 8/15/2028 (Insured; ACA) 5,000,000 4,970,350
HR:
(Children's Hospital Project) 5%, 5/1/2018c 3,500,000 3,414,075
Holy Cross Health Systems Corp.:
(Mount Carmel Health) 6.75%,
6/1/2019 (Insured; MBIA)
(Prerefunded 6/1/2002)a 2,500,000 2,766,950
Refunding and Improvement 5.80%, 6/1/2016 2,000,000 2,122,640
Refunding and Improvement:
(The Children's Hospital Project)
6.60%, 5/1/2013 4,000,000 4,411,280
(Worthington Christian Village
Congregate Care Project):
10.25%, 8/1/2015 680,000 749,312
7.80%, 2/1/2017 (Insured; FHA) 5,690,000 6,103,151
Gallia County Local School District
7.375%, 12/1/2004 570,000 662,671
Greater Cleveland Gateway Economic
Development Corp.:
Senior Lien Excise Tax Revenue 6.875%,
9/1/2005 (Insured; FSA) 1,500,000 1,615,680
Stadium Revenue 7.50%, 9/1/2005 5,675,000 6,160,269
Greater Cleveland Regional Transit Authority
5.65%, 12/1/2016 (Insured; FGIC) 5,445,000 6,043,460
Greene County, Sewer System Revenue, Refunding
5.25%, 12/1/2025 (Insured; MBIA) 2,000,000 2,040,840
Hamilton County:
Hospital Facilities Improvement Revenue
Refunding and Improvement
(Deaconess Hospital) 7%, 1/1/2012 2,570,000 2,786,728
Mortgage Revenue (Judson Care Center)
7.80%, 8/1/2019 (Prerefunded 8/1/2000)
(Insured; FHA, LOC; Citibank)a 3,970,000 4,225,668
Hilliard School District, School Improvement:
Zero Coupon, 12/1/2013 (Insured; FGIC) 1,655,000 815,683
Zero Coupon, 12/1/2014 (Insured; FGIC) 1,655,000 771,180
5.75%, 12/1/2019 (Insured; FGIC) 2,500,000 2,681,225
Jefferson County, Refunding (County Jail Construction)
5.75%, 12/1/2019 (Insured; FSA) 6,655,000 7,369,148
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Principal
Long-Term Municipal Investments (continued) Amount ($) Value ($)
- -------------------------------------------------------------------------------
<S> <C> <C>
Ohio (continued)
Kent State University, University Revenue
5.50%, 5/1/2017 (Insured; MBIA) 1,000,000 1,047,080
Kirtland Local School District 7.50%, 12/1/2009 760,000 791,137
Knox County, IDR (Weyerhaeuser Co. Project)
9%, 10/1/2007 1,000,000 1,285,610
Lakota Local School District 6.125%, 12/1/2017
(Insured; AMBAC) (Prerefunded 12/1/2005)a 1,075,000 1,207,064
Lorain County, HR, Refunding
(Catholic Healthcare Partners):
5.625%, 9/1/2016 (Insured; MBIA) 2,625,000 2,776,620
5.625%, 9/1/2017 (Insured; MBIA) 3,750,000 3,957,262
Lowellville, Sanitary Sewer Systems Revenue
(Browning-Ferris Industries Inc.)
7.25%, 6/1/2006 1,100,000 1,150,072
Mahoning County, Health Care Facilities Revenue
(Youngstown Osteopathic Hospital Project)
7.60%, 8/1/2010 (LOC; Marine Midland Bank) 3,775,000 3,936,721
Marion County, Health Care Facilities Revenue,
Refunding and Improvement (United Church
Homes Inc.) 6.375%, 11/15/2010 3,000,000 3,147,540
Montgomery County, Limited General Obligation
and Sewer Revenue 5.60%, 12/1/2016 1,380,000 1,465,822
Moraine, SWDR (General Motors Corp. Project)
6.75%, 7/1/2014 5,000,000 5,901,600
Middleburg Heights, Refunding 4.375%, 12/1/2018 5,725,000 5,257,668
North Royalton City School District
6.10%, 12/1/2019 (Insured; MBIA) 2,500,000 2,756,700
State of Ohio:
Economic Development Revenue:
Ohio Enterprise Bond Fund (VSM Corp. Project)
7.375%, 12/1/2011 885,000 953,614
(Sponge Inc. Project) 8.375%, 6/1/2014 1,515,000 1,602,325
PCR (Standard Oil Co. Project) 6.75%, 12/1/2015
(Guaranteed; British Petroleum Co. P.L.C.) 2,700,000 3,292,029
Ohio Air Quality Development Authority, Revenue,
Refunding: (Ohio Power Co. Project) 7.40%, 8/1/2009 1,500,000 1,544,265
Pollution Control:
(Cleveland Electric Illuminating Co. Project):
4.60%, 10/1/2003 9,000,000 8,893,530
6.85%, 7/1/2023 5,250,000 5,543,002
(Ohio Edison) 7.45%, 3/1/2016 (Insured; FGIC) 3,500,000 3,677,835
</TABLE>
The Fund 11
<PAGE>
STATEMENT OF INVESTMENTS (continued)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Principal
Long-Term Municipal Investments (continued) Amount ($) Value ($)
- -------------------------------------------------------------------------------
<S> <C> <C>
Ohio (continued)
Ohio Building Authority, State Facilities
(Juvenile Correctional Projects)
6.60%, 10/1/2014 (Insured; AMBAC) 1,660,000 1,905,232
Ohio Higher Educational Facility Commission,
Revenue (Denison University Project)
5.30%, 11/1/2021 2,000,000 2,032,140
Ohio Housing Finance Agency, Mortgage Revenue:
(Saint Francis Court Apartment Project)
8%, 10/1/2026 (Insured; FHA) 695,000 745,360
Single Family (GNMA Mortgage Backed Securities
Program) Zero Coupon, 9/1/2021 9,580,000 1,726,029
Ohio Turnpike Commission, Turnpike Revenue,
Highway Improvements:
4.50%, 2/15/2024 (Insured; FGIC) 6,250,000 5,704,750
5.75%, 2/15/2024 (Prerefunded 2/15/2004)a 6,100,000 6,694,079
Ohio Water Development Authority, Revenue:
(Fresh Water) 5.90%, 12/1/2015 (Insured; AMBAC) 4,650,000 5,025,906
Pollution Control Facilities:
(Cleveland Electric Illuminating Project)
8%, 10/1/2023 5,800,000 5,996,968
(Ohio Edison) 8.10%, 10/1/2023 3,700,000 3,844,966
Refunding:
(Toledo Edison Project):
7.55%, 6/1/2023 2,000,000 2,067,940
8%, 10/1/2023 3,635,000 3,758,445
Ottawa County, Sanitary Sewer Systems Special
Assessment (Portage-Catawba Island Sewer Project)
7%, 9/1/2011 (Insured; AMBAC)
(Prerefunded 9/1/2001)a 1,000,000 1,095,640
Parma, Hospital Improvement Revenue, Refunding
(Parma Community General Hospital Association)
5.375%, 11/1/2029 4,000,000 3,988,080
Rocky River City School District, School Improvement
5.375%, 12/1/2017 2,265,000 2,376,755
Shelby County, Hospital Facilities Revenue,
Refunding and Improvement (The Shelby County
Memorial Hospital Association) 7.70%, 9/1/2018 2,500,000 2,837,825
South Euclid, Recreation Facilities 7%, 12/1/2011
(Prerefunded 12/1/2001)a 2,285,000 2,521,292
South-Western City School District (Franklin and
Pickway Counties) School Building Construction
4.75%, 12/1/2026 (Insured; AMBAC) 2,980,000 2,811,600
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Principal
Long-Term Municipal Investments (continued) Amount ($) Value ($)
- -------------------------------------------------------------------------------
<S> <C> <C>
Ohio (continued)
Southwest Regional Water District, Water Revenue:
6%, 12/1/2015 (Insured; MBIA) 1,600,000 1,759,344
6%, 12/1/2020 (Insured; MBIA) 1,250,000 1,368,488
Student Loan Funding Corp.,
Student Loan Revenue, Refunding
7.20%, 8/1/2003 615,000 630,473
Toledo:
5.625%, 12/1/2011 (Insured; AMBAC) 1,000,000 1,086,190
(Sewer System Revenue, Refunding and
Improvement 5.25%, 11/15/2013
(Insured; MBIA) 2,000,000 2,108,160
University of Cincinnati, University and
College Revenue, COP 6.75%, 12/1/2009
(Prerefunded 12/1/2001) (Insured; MBIA)a 750,000 822,375
Warren:
7.75%, 11/1/2010 (Prerefunded 11/1/2000)a 2,785,000 3,013,342
Waterworks Revenue, Refunding
5.50%, 11/1/2015 (Insured; FGIC) 1,450,000 1,574,308
Wauseon Exempted Village School District,
Refunding and School Improvement
5.50%, 12/1/2022 (Insured; MBIA) 2,500,000 2,616,800
West Holmes Local School District
5.375%, 12/1/2023 (Insured; MBIA) 1,860,000 1,913,903
U.S. Related--2.5%
Commonwealth of Puerto Rico
5.375%, 7/1/2025 (Insured; MBIA) 2,255,000 2,313,269
Commonwealth of Puerto Rico Aqueduct and
Sewer Authority, Water and Sewer Revenue,
Refunding 5%, 7/1/2019
(Guaranteed; Commonwealth of Puerto Rico) 5,175,000 5,087,491
Total Long-Term Municipal Investments
(cost $277,646,491) 293,376,039
- -------------------------------------------------------------------------------
Short-Term Municipal Investments--1.0%
- ---------------------------------------------------------------------------------
Ohio;
State of Ohio, Solid Waste Revenue, VRDN
(British Petroleum Exploration and Oil Project)
4.30% (cost $3,000,000)d 3,000,000 3,000,000
- ---------------------------------------------------------------------------------
Total Investments (cost $280,646,491) 100.9% 296,376,039
Liabilities, Less Cash and Receivables (.9%) (2,626,403)
Net Assets 100.0% 293,749,636
</TABLE>
The Fund 13
<PAGE>
- -------------------------------------------------------------------------------
Summary of Abbreviations
ACA American Capital Access IDR Industrial Development
AMBAC American Municipal Bond Assurance Revenue
Corporation LOC Letter of Credit
COP Certificate of Participation MBIA Municipal Bond Investors
FGIC Financial Guaranty Insurance Company Assurance Insurance
FHA Federal Housing Administration Corporation
FNMA Federal National Mortgage Association MFHR Multi-Family Housing
FSA Financial Security Assurance Revenue
GNMA Government National Mortgage PCR Pollution Control Revenue
Association SWDR Solid Waste Disposal Revenue
HR Hospital Revenue VRDN Variable Rate Demand Notes
- -------------------------------------------------------------------------------
Summary of Combined Ratings (Unaudited)
Fitch or Moody's or Standard & Poor's Value (%)
- -------------------------------------------------------------------------------
AAA Aaa AAA 41.8
AA Aa AA 11.5
A A A 14.5
BBB Baa BBB 9.9
BB Ba BB 11.0
F1 MIG1 SP1 1.0
Not Rated e Not Rated e Not Rated e 10.3
100.0
[FN]
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 Purchased on a delayed-delivery basis.
d Securities payable on demand. Variable interest rate--subject to
periodic change.
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.
See notes to financial statements.
</FN>
14
<PAGE>
STATEMENT OF ASSETS AND LIABLITIES
April 30, 1999
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------
Cost Value
- ---------------------------------------------------------------------------------
<S> <C> <C>
Assets ($):
Investments in securities--See Statement of Investments 280,646,491 296,376,039
Interest receivable 5,157,456
Receivable for shares of Beneficial Interest subscribed 90,096
Prepaid expenses 21,060
301,644,651
- ---------------------------------------------------------------------------------
Liabilities ($):
Due to The Dreyfus Corporation and affiliates 133,664
Due to Distributor 84,507
Cash overdraft due to Custodian 147,533
Payable for investment securities purchased 7,388,295
Payable for shares of Beneficial Interest redeemed 64,589
Accrued expenses 76,427
7,895,015
- ---------------------------------------------------------------------------------
Net Assets ($) 293,749,636
- ---------------------------------------------------------------------------------
Composition of Net Assets ($):
Paid-in capital 277,619,367
Accumulated net realized gain (loss) on investments 400,721
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 15,729,548
- ---------------------------------------------------------------------------------
Net Assets ($) 293,749,636
</TABLE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------
Net Asset Value Per Share
Class A Class B Class C
- ---------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Assets ($) 237,027,248 54,929,274 1,793,114
Shares Outstanding 18,516,534 4,289,509 139,910
- ---------------------------------------------------------------------------------
Net Asset Value Per Share ($) 12.80 12.81 12.82
</TABLE>
[FN]
See notes to financial statements.
</FN>
The Fund 15
<PAGE>
STATEMENT OF OPERATIONS
Year Ended April 30, 1999
- -------------------------------------------------------------------------------
Investment Income ($)
- -------------------------------------------------------------------------------
Income
Interest Income 17,375,449
Expenses:
Management fee--Note 3(a) 1,619,028
Shareholder servicing costs--Note 3(c) 913,720
Distribution fees--Note 3(b) 282,269
Professional fees 37,343
Custodian fees 31,969
Registration fees 27,421
Prospectus and shareholders' reports 22,806
Trustees' fees and expenses--Note 3(d) 3,781
Loan commitment fees--Note 2 1,398
Miscellaneous 21,652
Total Expenses 2,961,387
Investment Income--Net 14,414,062
- -------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) on Investments--Note 4:
Net realized gain (loss) on investments 2,281,303
Net unrealized appreciation (depreciation) on investments (767,158)
Net Realized and Unrealized Gain (Loss) on Investments 1,514,145
Net Increase in Net Assets Resulting from Operations 15,928,207
[FN]
See notes to financial statements.
</FN>
16
<PAGE>
STATEMENT OF CHANGES IN NET ASSESTS
- -------------------------------------------------------------------------------
Year Ended April 30,
-------------------------
1999 1998
- -------------------------------------------------------------------------------
Operations ($):
Investment income--net 14,414,062 14,777,849
Net realized gain (loss) on investments 2,281,303 2,235,917
Net unrealized appreciation (depreciation)
on investments (767,158) 5,571,976
Net Increase (Decrease) in Net Assets
Resulting from Operations 15,928,207 22,585,742
- -------------------------------------------------------------------------------
Dividends to Shareholders From ($):
Investment income--net:
Class A shares (11,917,210) (12,500,637)
Class B shares (2,449,931) (2,239,844)
Class C shares (46,921) (37,368)
Net realized gain on investments:
Class A shares (2,494,992) (2,351,160)
Class B shares (594,108) (478,538)
Class C shares (11,846) (9,214)
Total Dividends (17,515,008) (17,616,761)
- -------------------------------------------------------------------------------
Beneficial Interest Transactions ($):
Net proceeds from shares sold:
Class A shares 17,942,916 10,666,412
Class B shares 12,817,223 9,479,918
Class C shares 1,297,795 397,388
Dividends reinvested:
Class A shares 9,379,044 9,470,425
Class B shares 2,144,631 1,897,891
Class C shares 49,513 42,365
Cost of shares redeemed:
Class A shares (26,701,239) (29,311,483)
Class B shares (10,126,784) (6,412,779)
Class C shares (115,318) (562,080)
Increase (Decrease) in Net Assets from
Beneficial Interest Transactions 6,687,781 (4,331,943)
Total Increase (Decrease) in Net Assets 5,100,980 637,038
- -------------------------------------------------------------------------------
Net Assets ($):
Beginning of Period 288,648,656 288,011,618
End of Period 293,749,636 288,648,656
[FN]
See notes to financial statements.
</FN>
The Fund 17
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS (Unaudited)
- -------------------------------------------------------------------------------
Year Ended April 30,
-------------------------
1999 1998
- -------------------------------------------------------------------------------
Capital Share Transactions:
Class A
Shares sold 1,387,167 824,378
Shares issued for dividends reinvested 723,830 731,376
Shares redeemed (2,065,623) (2,266,154)
Net Increase (Decrease) in Shares Outstanding 45,374 (710,400)
- -------------------------------------------------------------------------------
Class B
Shares sold 988,648 732,404
Shares issued for dividends reinvested 165,437 146,494
Shares redeemed (785,050) (495,475)
Net Increase (Decrease) in Shares Outstanding 369,035 383,423
- -------------------------------------------------------------------------------
Class C
Shares sold 100,043 30,611
Shares issued for dividends reinvested 3,821 3,267
Shares redeemed (8,879) (43,810)
Net Increase (Decrease) in Shares Outstanding 94,985 (9,932)
[FN]
See notes to financial statements.
</FN>
18
<PAGE>
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the
fiscal periods indicated. Certain information reflects financial results for a
single Fund share. "Total return" shows how much your investment in the
Fund would have increased (or decreased) during each period, assuming you
had reinvested all dividends and distributions. These figures have been derived
from the Fund's financial statements.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
Year Ended April 30,
-----------------------------------------------
Class A Shares 1999 1998 1997 1996 1995
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per Share Data ($):
Net asset value, beginning of period 12.86 12.65 12.58 12.62 12.70
Investment Operations:
Investment income--net .65 .67 .69 .71 .73
Net realized and unrealized gain (loss)
on investments .08 .34 .17 .14 (.05)
Total from Investment Operations .73 1.01 .86 .85 .68
Distributions:
Dividends from investment income--net (.65) (.67) (.69) (.71) (.73)
Dividends from net realized gain
on investments (.14) (.13) (.10) (.18) (.03)
Total Distributions (.79) (.80) (.79) (.89) (.76)
Net asset value, end of period 12.80 12.86 12.65 12.58 12.62
- -------------------------------------------------------------------------------------------
Total Return (%)* 5.72 8.09 6.91 6.77 5.63
- -------------------------------------------------------------------------------------------
Ratios/Supplemental Data (%):
Ratio of expenses to average net assets .91 .90 .91 .89 .92
Ratio of net investment income
to average net assets 5.00 5.17 5.40 5.49 5.84
Decrease reflected in above expense ratios
due to undertakings by the Manager -- -- -- -- .01
Portfolio Turnover Rate 40.36 24.73 29.65 43.90 39.53
- -------------------------------------------------------------------------------------------
Net Assets, end of period ($ X 1,000) 237,027 237,618 242,572 257,639 273,225
<FN>
* Exclusive of sales load.
See notes to financial statements.
</FN>
</TABLE>
The Fund 19
<PAGE>
FINANCIAL HIGHLIGHTS (continued)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
Year Ended April 30,
----------------------------------------------
Class B Shares 1999 1998 1997 1996 1995
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per Share Data ($):
Net asset value, beginning of period 12.87 12.65 12.59 12.63 12.71
Investment Operations:
Investment income--net .58 .60 .62 .64 .66
Net realized and unrealized gain (loss)
on investments .08 .35 .16 .14 (.05)
Total from Investment Operations .66 .95 .78 .78 .61
Distributions:
Dividends from investment income--net (.58) (.60) (.62) (.64) (.66)
Dividends from net realized gain
on investments (.14) (.13) (.10) (.18) (.03)
Total Distributions (.72) (.73) (.72) (.82) (.69)
Net asset value, end of period 12.81 12.87 12.65 12.59 12.63
- -------------------------------------------------------------------------------------------
Total Return (%)* 5.17 7.62 6.27 6.19 5.06
- -------------------------------------------------------------------------------------------
Ratios/Supplemental Data (%):
Ratio of expenses to average net assets 1.42 1.41 1.42 1.42 1.44
Ratio of net investment income
to average net assets 4.47 4.65 4.87 4.94 5.29
Decrease reflected in above expense ratios
due to undertakings by the Manager -- -- -- -- .01
Portfolio Turnover Rate 40.36 24.73 29.65 43.90 39.53
- -------------------------------------------------------------------------------------------
Net Assets, end of period ($ X 1,000) 54,929 50,453 44,746 40,476 32,797
<FN>
* Exclusive of sales load.
See notes to financial statements.
</FN>
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
Year Ended April 30,
--------------------------------------------
Class C Shares 1999 1998 1997 1996a
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per Share Data ($):
Net asset value, beginning of period 12.88 12.66 12.59 12.68
Investment Operations:
Investment income--net .55 .57 .59 .43
Net realized and unrealized gain (loss)
on investments .08 .35 .17 .09
Total from Investment Operations .63 .92 .76 .52
Distributions:
Dividends from investment income--net (.55) (.57) (.59) (.43)
Dividends from net realized gain on investments (.14) (.13) (.10) (.18)
Total Distributions (.69) (.70) (.69) (.61)
Net asset value, end of period 12.82 12.88 12.66 12.59
- -------------------------------------------------------------------------------------------
Total Return (%)b 4.92 7.35 6.07 5.66c
- -------------------------------------------------------------------------------------------
Ratios/Supplemental Data (%):
Ratio of expenses to average net assets 1.66 1.66 1.64 1.63c
Ratio of net investment income
to average net assets 4.20 4.38 4.44 4.66c
Portfolio Turnover Rate 40.36 24.73 29.65 43.90
- -------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 1,793 579 694 1
<FN>
a From August 15, 1995 (commencement of initial offering) to April 30, 1996.
b Exclusive of sales load.
c Annualized.
See notes to financial statements.
</FN>
</TABLE>
The Fund 21
<PAGE>
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, as amended (the "Act"), as a non-
diversified open-end management investment company, and operates as a
series company currently offering thirteen series including the Ohio 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")
22
<PAGE>
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. Under the terms
of the custody agreement, the Fund received net earnings credits of $11,771
during the period ended April 30, 1999 based on available cash balances
left on deposit. Income earned under this arrangement is included in
interest income.
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.
The Fund 23
<PAGE>
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
of 1986, as amended (the "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 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 (the "Facility") to be utilized for temporary
and 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.
During the period ended April 30, 1999, 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 $4,841 during the period ended April 30, 1999, from commissions
earned on sales of the Fund's shares.
24
<PAGE>
(b) Under the Distribution Plan adopted pursuant to Rule 12b-1 under the
Act, Class B and Class C shares pay the Distributor for distributing their
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, 1999, Class
B and Class C shares were charged $273,891 and $8,378, respectively,
pursuant to the Distribution Plan.
(c) Under the Shareholder Services Plan, Class A, Class B and Class C
shares pay the Distributor at an annual rate of .25 of 1% of the value of
their average daily net assets 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, 1999, Class A, Class B and Class C shares were charged
$596,184, $136,945 and $2,793, 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, 1999, the Fund was charged $124,835 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.
The Fund 25
<PAGE>
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, 1999,
amounted to $125,976,805 and $116,124,578, respectively.
At April 30, 1999, accumulated net unrealized appreciation on investments
was $15,729,548, consisting of $16,245,789 gross unrealized appreciation
and $516,241 gross unrealized depreciation.
At April 30, 1999, 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).
26
<PAGE>
REPORT OF INDEPENDENT AUDITORS
Shareholders and Board of Trustees
Dreyfus Premier State Municipal Bond Fund, Ohio Series
We have audited the accompanying statement of assets and liabilities,
including the statement of investments, of Dreyfus Premier State Municipal
Bond Fund, Ohio Series (the "Fund") (one of the Funds constituting the
Dreyfus Premier State Municipal Bond Fund) as of April 30, 1999, 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, 1999 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 the Fund at April 30, 1999, 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, NY
June 2, 1999
The Fund 27
<PAGE>
IMPORTANT TAX INFORMATION (Unaudited)
In accordance with Federal tax law, the Fund hereby makes the following
designations regarding its fiscal year ended April 30, 1999.
- --all the dividends paid from investment income-net are "exempt-interest
dividends" (not subject to regular Federal and, for individuals who ae
Ohio residents, Ohio personal incomes taxes), and
- --the fund hereby designates $.0860 per share as a long-term capital gain
of the $.1358 per share paid on December 8, 1998.
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 1999 calendar year on Form
1099-DIV which will be mailed by January 31, 2000.
28
<PAGE>
<PAGE>
For More Information
Dreyfus Premier
State Municipal Bond Fund,
Ohio 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
Distributor
Premier Mutual Fund Services, Inc.
60 State Street
Boston, MA 02109
To obtain information:
By telephone
Call your financial representative or
1-800-554-4611
By mail Write to:
The Dreyfus Premier
Family of Funds
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
Not FDIC-Insured * Not Bank-Guaranteed * May Lose Value
(c) 1999 Dreyfus Service Corporation 057/619AR994
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
DREYFUS PREMIER STATE MUNICIPAL BOND FUND, OHIO SERIES
CLASS A SHARES AND THE LEHMAN BROTHERS MUNICIPAL
BOND INDEX
EXHIBIT A:
DREYFUS
PREMIER STATE
PERIOD LEHMAN BROTHERS MUNICIPAL BOND FUND,
MUNICIPAL OHIO SERIES
BOND INDEX * (CLASS A SHARES)
4/30/89 10,000 9,550
4/30/90 10,720 10,214
4/30/91 11,952 11,423
4/30/92 13,088 12,562
4/30/93 14,744 14,225
4/30/94 15,063 14,620
4/30/95 16,065 15,443
4/30/96 17,341 16,487
4/30/97 18,492 17,627
4/30/98 20,211 19,054
4/30/99 21,615 20,143
*Source: Lehman Brothers
Dreyfus Premier
State Municipal
Bond Fund,
Pennsylvania Series
ANNUAL REPORT
April 30, 1999
[DREYFUS LOGO]
<PAGE>
Year 2000 Issues (Unaudited)
The fund could be adversely affected if the computer systems used by The
Dreyfus Corporation and the fund's other service providers do not properly
process and calculate date-related information from and after January 1,
2000. The Dreyfus Corporation is working to avoid Year 2000-related
problems in its systems and to obtain assurances from other service
providers that they are taking similar steps. In addition, issuers of
securities in which the fund invests may be adversely affected by Year
2000-related problems. This could have an impact on the value of the fund's
investments and its share price.
<PAGE>
Contents
The Fund
- ---------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Fund Performance
8 Statement of Investments
14 Statement of Assets and Liabilities
15 Statement of Operations
16 Statement of Changes in Net Assets
18 Financial Highlights
21 Notes to Financial Statements
26 Report of Independent Auditors
27 Important Tax Information
For More Information
- ---------------------------------------
Back Cover
<PAGE>
Dreyfus Premier
State Municipal Bond Fund,
Pennsylvania Series
The Fund
Letter From The President
- -------------------------
Dear Shareholder:
We are pleased to present this annual report for Dreyfus Premier State Municipal
Bond Fund, Pennsylvania Series, covering the 12-month period from May 1, 1998
through April 30, 1999. Inside, you'll find valuable information about how the
Fund was managed during the period, including a discussion with the Fund's
portfolio manager, Douglas Gaylor.
The past year has generally been rewarding for municipal bond investors. Lower
short-term interest rates adopted by the Federal Reserve Board and other central
banks in the fall of 1998 appear to have helped many U.S. businesses withstand
the effects of economic weakness in Japan, Asia and Latin America. At the same
time, the U.S. economy has entered its eighth year of expansion in an
environment characterized by low inflation and high levels of consumer spending.
In the second half of the reporting period, tax-exempt fixed-income securities
provided good results, especially relative to taxable U.S. Treasury securities.
While prices of U.S. Treasury securities declined significantly through the
second half of the reporting period, a lack of new issuance relative to robust
investor demand supported most municipal bond prices, which have remained
relatively unchanged over the past six months. As a result, the differences in
valuations between taxable U.S. Treasury securities and tax-exempt bonds, which
reached historically wide levels last October, have since narrowed to a more
historically normal relationship.
We appreciate your confidence over the past year, and we look forward to your
continued participation in Dreyfus Premier State Municipal Bond Fund,
Pennsylvania Series.
Sincerely,
/s/Stephen E. Canter
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
May 13, 1999
2
<PAGE>
DISCUSSION OF FUND PERFORMANCE
- ------------------------------
Douglas Gaylor, Portfolio Manager
How did Dreyfus Premier State Municipal Bond Fund, Pennsylvania Series
perform?
The Fund's Class A shares produced a total return of 5.97% over the 12- month
period ended April 30, 1999,1 compared to a total return of 5.49% for the
average of the Lipper Pennsylvania Municipal Debt Funds category.2 The Fund
produced a total return of 5.43% for Class B shares and 5.16% for Class C shares
over the 12-month period ended April 30, 1999.1
We attribute the Fund's relative performance to its focus on high- quality
municipal bonds issued by Pennsylvania, its municipalities and authorities.
Lower-rated issues have remained fairly expensive compared to insured
securities. The Fund has continued to take advantage of this tight spread
relationship by favoring high-rated securities, which are more liquid. This
strategy should help give the Fund more flexibility to react to a weak market,
which can experience liquidity restraints.
What is the Fund's investment approach?
Our goal is to seek a high level of federally and Pennsylvania tax-exempt income
from a diversified portfolio of longer-term municipal bonds. We also seek to
provide a competitive total return. To achieve these goals, we prefer to
downplay interest rate trends and market forecasts in favor of rigorous analysis
of each individual bond's structure. Within the context of our bond structure
analyses, we strive to maximize both income and total return, which is the
combination of income and price changes.
We try to allocate between one-half and three-quarters of the total portfolio to
Pennsylvania bonds that we expect to provide consistently high yields. We often
find such opportunities in Original Issue Discount bonds in the 15- to 20-year
maturity range, for example. We not only look for bonds that we expect to
provide highly competitive
The Fund 3
<PAGE>
DISCUSSION OF FUND PERFORMANCE (continued)
yields, but we try to ensure that we select bonds that are most likely to obtain
attractive prices if and when we decide to sell them into the secondary market.
For the remainder of the portfolio, we look for bonds that we believe will offer
attractive total returns. We typically look for bonds that are selling at a
discount to face value because they may be temporarily out of favor among
investors. Our expectation is that these bonds' prices will rise as they return
to favor over time.
What other factors influenced the Fund's performance?
When the Asian currency and credit crisis spread to Russia and threatened Latin
America last summer and fall, investors flocked to U.S. Treasury securities. As
a result, yields on taxable Treasuries fell briefly in October to levels that
were roughly equivalent to yields on comparable tax- exempt bonds.
However, the Federal Reserve Board and other central banks moved quickly to
stimulate global economic growth. They did so last fall by reducing key
short-term interest rates. Because lower short-term interest rates were expected
to stimulate economic growth and potentially reignite inflationary pressures,
yields on longer-term bonds rose throughout the first four months of 1999.
However, the extent of that rise was much greater for taxable U.S. Treasury
securities than for tax-free municipal bonds.
In addition, because of strong economic conditions throughout the country,
Pennsylvania and its municipalities have had less need to borrow. Yet, demand
from investors seeking to minimize their income tax liabilities has remained
high. This balance between supply and demand helped keep municipal bond prices
relatively stable while U.S. Treasury bond prices fell sharply.
4
<PAGE>
What is the Fund's current strategy?
We have continued to search for bonds with attractive structures in
Pennsylvania's municipal bond market. We have found such values, in our opinion,
in bonds that were selling at a discount to their face values and that cannot be
redeemed by their issuers anytime soon. In addition, we have continued to focus
on high-quality issuers. Because the differences in yields between the
highest-quality bonds and lower-quality bonds are narrow by historical
standards, we currently see little reason to assume the added credit risk
lower-rated bonds entail.
Over the longer term, we intend to remain vigilant in our efforts to identify
tax-exempt Pennsylvania bonds that we believe are most likely to deliver an
attractive combination of income and total return. We expect our bond structure
analyses to help us continue to maximize tax-exempt returns for our
shareholders.
May 13, 1999
[FN]
1 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 applicable contingent deferred sales
charge imposed on redemptions in the case of Class B and Class C shares.
Income may be subject to state and local income taxes for non-Pennsylvania
residents. Some income may be subject to the Federal Alternative Minimum
Tax (AMT) for certain shareholders.
2 Source: Lipper Analytical Services, Inc.
</FN>
The Fund 5
<PAGE>
FUND PERFORMANCE
$21,615
Lehman Brothers Municipal Bond Index*
[CHART]
$20,925
Dreyfus Premier State Municipal
Bond Fund, Pennsylvania Series
(Class A Shares)
Comparison of change in value of $10,000 investment in the Fund's Class A
shares and the Lehman Brothers Municipal Bond Index
[FN]
* Source: Lehman Brothers.
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, Pennsylvania Series (the "Fund")
on 4/30/89 to a $10,000 investment made in the Lehman Brothers Municipal
Bond Index (the "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 Fund invests primarily in Pennsylvania 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.
The Index is not limited to investments principally in Pennsylvania
municipal obligations and does not take into account charges, fees and
other expenses. The Index, unlike the Fund, 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. These
factors can contribute to the Index potentially outperforming or
underperforming the Fund. Further information relating to Fund performance,
including expense reimbursements, if applicable, is contained in the
Financial Highlights section of the Prospectus and elsewhere in this
report.
</FN>
6
<PAGE>
Average Annual Total Returns as of 4/30/99
<TABLE>
<CAPTION>
Inception From
Date 1 Year 5 Years 10 Years Inception
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Class A Shares
with sales charge (4.5%) (7/30/87) 1.18% 6.37% 7.66% --
without sales charge (7/30/87) 5.97% 7.35% 8.16% --
Class B Shares
with redemption* (1/15/93) 1.46% 6.48% -- 6.42%
without redemption (1/15/93) 5.43% 6.79% -- 6.42%
Class C Shares
with redemption** (8/15/95) 4.16% -- -- 6.68%
without redemption (8/15/95) 5.16% -- -- 6.68%
<FN>
Past performance is not predictive of future performance.
* 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>
The Fund 7
<PAGE>
STATEMENT OF INVESTMENTS
APRIL 30, 1999
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
Principal
Long-Term Municipal Investments--98.5% Amount ($) Value ($)
- -----------------------------------------------------------------------------------------
<S> <C> <C>
Pennsylvania--97.7%
Allegheny County Hospital Development Authority,
Revenue, Refunding:
(Health Center - UPMC Health System):
4.50%, 8/1/2015 (Insured; MBIA) 2,000,000 1,877,820
4.625%, 12/15/2015 (Insured; AMBAC) 3,415,000 3,271,365
4.75%, 12/15/2016 (Insured; AMBAC) 2,645,000 2,545,495
(Hospital - South Hills Health) 5.125%, 5/1/2029 3,000,000 2,825,130
(Health Center, University of Pittsburgh) 5.625%,
4/1/2027 (Insured; MBIA) 1,300,000 1,361,321
Allegheny County Industrial Development Authority,
Medical Center Revenue Refunding (Presbyterian
Medical Center of Oakmont Pennsylvania, Inc.)
6.75%, 2/1/2026 (Insured; FHA) 1,815,000 2,004,432
Allegheny County Residential Finance Authority, SFMR:
7.40%, 12/1/2022 1,550,000 1,626,725
7.95%, 6/1/2023 1,025,000 1,068,173
Bangor Area School District, Refunding:
4.50%, 3/15/2016 (Insured; FSA) 2,040,000 1,932,349
4.50%, Series B 3/15/2017 (Insured; FSA) 1,205,000 1,132,242
4.50%, Series C 3/15/2017 (Insured; FSA) 2,130,000 2,001,391
Beaver County Industrial Development Authority,
Exempt Facilities Revenue (Shippingport Project)
5.375%, 6/1/2028 (Insured; AMBAC) 2,500,000 2,512,325
Beaver County Industrial Development Authority, PCR,
Refunding: (Ohio Edison Project) 7.75%, 9/1/2024 3,150,000 3,243,398
(Pennsylvania Power Company Mansfield Project)
7.15%, 9/1/2021 3,000,000 3,195,090
Berks County Municipal Authority, Revenue
Refunding (Phoebe - Devitt Homes Project)
5.50%, 5/15/2015 2,280,000 2,195,321
Blair County Hospital Authority, Revenue (Altoona
Hospital Project) 6.375%, 7/1/2013 (Insured; AMBAC) 5,000,000 5,424,000
Bradford County Industrial Development Authority,
SWDR (International Paper Company Projects)
6.60%, 3/1/2019 4,250,000 4,615,543
Butler Area School District, Refunding
4.75%, 10/1/2022 (Insured; FGIC) 1,000,000 946,550
Coatesville Area School District 4.50%, 10/1/2016
(Insured; FSA) 7,355,000 6,967,244
Dauphin County General Authority, Revenue
(Office and Parking, Riverfront Office)
6%, 1/1/2025 3,000,000 3,002,850
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
Principal
Long-Term Municipal Investments (continued) Amount ($) Value ($)
- -----------------------------------------------------------------------------------------
<S> <C> <C>
Pennsylvania (continued)
Downingtown Area School District 5.55%, 4/1/2018 1,540,000 1,601,400
Erie, Refunding:
Zero Coupon, 11/15/2019 (Insured; FSA) 1,685,000 584,644
Zero Coupon, 11/15/2020 (Insured; FSA) 2,110,000 692,418
Erie County Higher Education Building Authority,
College Revenue, Refunding (Mercyhurst College
Project) 5.75%, 3/15/2020 2,000,000 2,049,420
Erie School District, Refunding, Zero Coupon, 9/1/2015
(Insured; FSA) 1,135,000 502,533
Gettysburg Municipal Authority, College Revenue
(Gettysburg College)
4.75%, 8/15/2023 (Insured; AMBAC) 2,000,000 1,891,000
Girtys Run Joint Sewer Authority, Sewer Revenue
4.50%, 11/1/2020 (Insured; FSA) 4,580,000 4,203,982
Harrisburg, Refunding:
Zero Coupon, Series D, 9/15/2010 (Insured; AMBAC) 1,510,000 885,253
Zero Coupon, Series F, 9/15/2010 (Insured; AMBAC) 1,350,000 791,451
Harrisburg Authority, Office and Parking Revenue:
5.75%, 5/1/2008 1,000,000 1,004,530
6%, 5/1/2019 2,000,000 2,008,960
Revenue (Pooled Bond Program)
5.625%, 9/15/2022 (Insured; MBIA) 1,000,000 1,048,200
Harrisburg Redevelopment Authority, Revenue:
Zero Coupon, 5/1/2018 (Insured; FSA) 2,750,000 1,031,003
Zero Coupon, 11/1/2018 (Insured; FSA) 2,750,000 1,004,713
Zero Coupon, 11/1/2019 (Insured; FSA) 2,750,000 950,373
Zero Coupon, 5/1/2020 (Insured; FSA) 2,750,000 924,165
Zero Coupon, 11/1/2020 (Insured; FSA) 2,750,000 894,850
Lancaster Area Sewer Authority, Revenue
4.50%, 4/1/2018 (Insured; MBIA) 2,730,000 2,534,150
Luzerne County Industrial Development Authority,
Exempt Facilities Revenue, Refunding
(Pennsylvania Gas and Water Company Project)
7.125%, 12/1/2022 4,000,000 4,417,080
Montgomery County Higher Educational and Health
Authority, Revenue First Mortgage (Montgomery
Income Project) 10.50%, 9/1/2020 2,895,000 3,090,384
Montgomery County Industrial Development Authority,
RRR 7.50%, 1/1/2012 (LOC; Banque Paribas) 14,715,000 15,517,115
Montour School District, Refunding, Notes:
Zero Coupon, 1/1/2024 (Insured; FGIC) 1,155,000 310,245
Zero Coupon, 1/1/2025 (Insured; FGIC) 2,015,000 511,891
</TABLE>
The Fund 9
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
Principal
Long-Term Municipal Investments (continued) Amount ($) Value ($)
- -----------------------------------------------------------------------------------------
<S> <C> <C>
Pennsylvania (continued)
Norristown Municipal Waste Authority, Sewer Revenue
5.125%, 11/15/2023 (Insured; FGIC) 4,250,000 4,214,725
Norristown, Refunding (Asset Guaranty)
Zero Coupon, 12/15/2014 1,465,000 650,900
Northampton County Industrial Development Authority,
PCR, Refunding (Bethlehem Steel) 7.55%, 6/1/2017 5,700,000 6,178,059
Pennsylvania, COP, Refunding 5%, 7/1/2015
(Insured; AMBAC) 11,885,000 11,799,547
Pennsylvania Economic Development Financing
Authority: RRR (Northampton Generating Project):
6.40%, 1/1/2009 2,500,000 2,639,650
6.50%, 1/1/2013 6,500,000 6,880,445
Wastewater Treatment Revenue (Sun Co. Inc. -
R and M Project) 7.60%, 12/1/2024 4,240,000 4,796,754
Pennsylvania Higher Education Assistance Agency,
Student Loan Revenue
7.05%, 10/1/2016 (Insured; AMBAC) 2,500,000 2,768,275
Pennsylvania Housing Finance Agency:
6.50%, 7/1/2023 2,750,000 2,932,188
Single Family Mortgage:
6.75%, 4/1/2016 3,000,000 3,170,850
6.85%, 4/1/2016 (Insured; FHA) 3,700,000 3,881,633
6.90%, 4/1/2025 6,250,000 6,743,313
Pennsylvania State Higher Educational Facilities
Authorities, Revenue (UPMC Health System)
4.875%, 8/1/2019 (Insured; FSA) 2,700,000 2,566,377
Philadelphia:
Gas Works Revenue:
5.25%, 8/1/2024 (Insured; FSA) 5,000,000 5,031,050
6.375%, 7/1/2026 (Insured; CMAC) 6,885,000 7,605,309
Water and Wastewater Revenue, Refunding:
5.75%, 6/15/2013 (Insured; MBIA) 8,000,000 8,588,480
5.25%, 6/15/2023 (Insured; MBIA) 15,755,000 15,839,920
Philadelphia, Refunding 4.75%, 5/15/2020
(Insured; FGIC) 9,100,000 8,629,803
Philadelphia Authority for Industrial Development,
Industrial and Commercial Revenue (Girard Estate
Coal Mining Project) 5.50%, 11/15/2016 1,000,000 1,039,020
Philadelphia Hospital and Higher Education Facilities
Authority, HR (Refunding - Temple University
Hospital) 6.625%, 11/15/2023 16,240,000 17,205,306
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
Principal
Long-Term Municipal Investments (continued) Amount ($) Value ($)
- -----------------------------------------------------------------------------------------
<S> <C> <C>
Philadelphia (continued):
Philadelphia School District 4.50%, 4/1/2023
(Insured; MBIA) 4,000,000 3,647,160
Pittsburgh Urban Redevelopment Authority:
Mortgage Revenue:
7.05%, 4/1/2023 1,785,000 1,872,679
(Refunding - Sidney Square Project)
6.65%, 9/1/2028 3,350,000 3,547,751
Single Family Mortgage 7.40%, 4/1/2024 860,000 899,526
Pottstown School District 4.75%, 6/1/2022
(Insured; MBIA) 3,760,000 3,560,531
Schuylkill County Industrial Development Authority,
Refunding First Mortgage Revenue (Valley Health
Concerns) 8.75%, 3/1/2012 2,500,000 2,519,399
Southeastern Transportation Authority, Special Revenue
4.75%, 3/1/2024 (Insured; FGIC) 2,775,000 2,618,378
Spring-Ford Area School District 4.75%, 3/1/2022
(Insured; FGIC) 6,835,000 6,474,316
Washington County Industrial Development Authority,
PCR (West Pennsylvania Power Company Mitchell)
6.05%, 4/1/2014 (Insured; AMBAC) 3,000,000 3,264,809
Washington County Industrial Development Authority,
Revenue, Refunding (Presbyterian Medical Center)
6.75%, 1/15/2023 (Insured; FHA) 3,000,000 3,278,219
West Shore Area Hospital Authority, HR, Refunding
(Holy Spirit Hospital Project) 5.65%, 1/1/2017
(Insured; MBIA) 2,200,000 2,294,335
U.S. Related--.8%
Guam Airport Authority, Revenue, Refunding
6.50%, 10/1/2023 2,000,000 2,183,459
Total Long-Term Municipal Investments
(cost $251,255,666) 261,520,690
</TABLE>
The Fund 11
<PAGE>
<TABLE>
<CAPTION>
Principal
Short-Term Municipal Investments--2.1% Amount ($) Value ($)
- -----------------------------------------------------------------------------------------
<S> <C> <C>
Pennsylvania--2.1%
Philadelphia Authority, IDR, VRDN (Fox Chase Cancer
Center Project 4.30%a 1,200,000 1,200,000
Philadelphia Hospitals and Higher Education Facilities
Authority, HR, VRDN (Children's Hospital of
Philadelphia Project) 4.25%a 2,300,000 2,300,000
Schuylkill County Industrial Development Authority, RRR
VRDN, Refunding (Northeastern Power Company)
4.35% (LOC: Credit Local De France)a 2,000,000 2,000,000
Total Short-Term Municipal Investments
(cost $5,500,000) 5,500,000
- -----------------------------------------------------------------------------------------
Total Investments (cost $256,755,666) 100.6% 267,020,690
Liabilities, Less Cash and Receivables (.6%) (1,525,489)
Net Assets 100.0% 265,495,201
</TABLE>
12
<PAGE>
- --------------------------------------------------------------------------------
Summary of Abbreviations
AMBAC American Municipal Bond LOC Letter of Credit
Assurance Corporation MBIA Municial Bond Investors
COP Certificate of Participation Assurance Insurance
FGIC Financial Guaranty Corporation
Insurance Company PCR Pollution Control Revenue
FHA Federal Housing Administration RRR Resources Recovery Revenue
FSA Financial Security Assurance SFMR Single Family Mortgage
HR Hospital Revenue Revenue
IDR Industrial Development Revenue SWDR Solid Waste Disposal Revenue
CMAC Capital Market VRDN Variable Rate Demand Notes
Assurance Corporation
- --------------------------------------------------------------------------------
Summary of Combined Ratings (Unaudited)
Fitch or Moody's or Standard & Poor's Value (%)
- --------------------------------------------------------------------------------
AAA Aaa AAA 58.0
AA Aa AA 6.4
A A A 10.2
BBB Baa BBB 15.8
F1 MIG1/P1 SP1/A1 2.1
Not Rated b Not Ratedb Not Ratedb 7.5
100.0
[FN]
a Securities payable on demand. Variable interest rate--subject to
periodic change.
b Securities which, while not rated by Fitch, Moody's and Standard &
Poor's have been determined by the Manager to be of comparable quality to
those rated securities in which the Fund may invest.
See notes to financial statements.
</FN>
The Fund 13
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
April 30, 1999
<TABLE>
<CAPTION>
Cost Value
- -----------------------------------------------------------------------------------------
<S> <C> <C>
Assets ($):
Investments in securities--See Statement of Investments 256,755,666 267,020,690
Interest receivable 4,246,703
Receivable for investment securities sold 540,393
Receivable for shares of Beneficial Interest subscribed 246,910
Prepaid expenses 18,008
272,072,704
Liabilities ($):
Due to The Dreyfus Corporation and affiliates 120,434
Due to Distributor 83,830
Cash overdraft due to Custodian 306,062
Receivable for investment securities purchased 5,819,959
Payable for shares of Beneficial Interest redeemed 193,062
Accrued expenses 54,156
6,577,503
Net Assets ($) 265,495,201
Composition of Net Assets ($):
Paid-in capital 251,787,078
Accumulated net realized gain (loss) on investments 3,443,099
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 10,265,024
Net Assets ($) 265,495,201
</TABLE>
<TABLE>
<CAPTION>
Net Asset Value Per Share
Class A Class B Class C
<S> <C> <C> <C>
Net Assets ($) 195,728,239 68,869,140 897,822
Shares Outstanding 11,820,802 4,160,797 54,187
Net Asset Value Per Share ($) 16.56 16.55 16.57
</TABLE>
[FN]
See notes to financial statements.
</FN>
14
<PAGE>
STATEMENT OF OPERATIONS
Year Ended April 30, 1999
<TABLE>
<CAPTION>
Investment Income ($)
- -----------------------------------------------------------------------------------------
<S> <C>
Income
Interest Income 15,704,737
Expenses:
Management fee--Note 3(a) 1,484,169
Shareholder servicing costs--Note 3(c) 877,709
Distribution fees--Note 3(b) 377,263
Professional fees 32,378
Custodian fees 29,689
Registration fees 20,926
Prospectus and shareholders' reports 18,619
Trustees' fees and expenses--Note 3(d) 3,492
Loan commitment fees--Note 2 982
Miscellaneous 15,756
Total Expenses 2,860,983
Investment Income--Net 12,843,754
- -----------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) on Investments--Note 4:
Net realized gain (loss) on investments 5,906,216
Net unrealized appreciation (depreciation) on investments (3,365,196)
Net Realized and Unrealized Gain (Loss) on Investments 2,541,020
Net Increase in Net Assets Resulting from Operations 15,384,774
</TABLE>
[FN]
See notes to financial statements.
</FN>
The Fund 15
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended April 30,
--------------------------
1999 1998
- -----------------------------------------------------------------------------------------
Operations ($):
<S> <C> <C>
Investment income--net 12,843,754 13,622,614
Net realized gain (loss) on investments 5,906,216 4,306,524
Net unrealized appreciation (depreciation)
on investments (3,365,196) 7,422,966
Net Increase (Decrease) in Net Assets
Resulting from Operations 15,384,774 25,352,104
- -----------------------------------------------------------------------------------------
Dividends to Shareholders From ($):
Investment income--net:
Class A shares (9,548,326) (10,251,754)
Class B shares (3,269,922) (3,365,617)
Class C shares (25,507) (5,243)
Net realized gain on investments:
Class A shares (3,137,642) (3,140,732)
Class B shares (1,225,935) (1,153,373)
Class C shares (9,155) (1,463)
Total Dividends (17,216,487) (17,918,182)
- -----------------------------------------------------------------------------------------
Beneficial Interest Transactions ($):
Net proceeds from shares sold:
Class A shares 15,324,595 6,668,660
Class B shares 9,317,671 6,213,872
Class C shares 888,826 430,820
Dividends reinvested:
Class A shares 6,692,004 7,117,723
Class B shares 2,958,657 2,937,128
Class C shares 12,609 4,659
Cost of shares redeemed:
Class A shares (21,037,691) (24,469,890)
Class B shares (17,742,150) (7,890,851)
Class C shares (460,642) (4,646)
Increase (Decrease) in Net Assets from
Beneficial Interest Transactions (4,046,121) (8,992,525)
Total Increase (Decrease) in Net Assets (5,877,834) (1,558,603)
- -----------------------------------------------------------------------------------------
Net Assets ($):
Beginning of Period 271,373,035 272,931,638
End of Period 265,495,201 271,373,035
</TABLE>
[FN]
See notes to financial statements.
</FN>
16
<PAGE>
<TABLE>
<CAPTION>
Year Ended April 30,
-------------------------
1999 1998
- ----------------------------------------------------------------------------------------
<S> <C> <C>
Capital Share Transactions:
Class A
Shares sold 918,902 398,013
Shares issued for dividends reinvested 398,920 424,787
Shares redeemed (1,253,979) (1,461,282)
Net Increase (Decrease) in Shares Outstanding 63,843 (638,482)
- ----------------------------------------------------------------------------------------
Class B
Shares sold 556,572 370,499
Shares issued for dividends reinvested 176,403 175,370
Shares redeemed (1,062,694) (471,922)
Net Increase (Decrease) in Shares Outstanding (329,719) 73,947
- ----------------------------------------------------------------------------------------
Class C
Shares sold 53,260 25,755
Shares issued for dividends reinvested 752 277
Shares redeemed (27,571) (275)
Net Increase (Decrease) in Shares Outstanding 26,441 25,757
</TABLE>
[FN]
See notes to financial statements.
</FN>
The Fund 17
<PAGE>
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the
fiscal periods indicated. Certain information reflects financial results for a
single fund share. "Total return" shows how much your investment in the
Fund would have increased (or decreased) during each period, assuming you
had reinvested all dividends and distributions. These figures have been derived
from the Fund's financial statements.
<TABLE>
<CAPTION>
Year Ended April 30,
---------------------------------------------------
Class A Shares 1999 1998 1997 1996 1995
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per Share Data ($):
Net asset value, beginning of period 16.68 16.23 16.17 16.12 16.01
Investment Operations:
Investment income--net .82 .85 .85 .87 .91
Net realized and unrealized gain (loss)
on investments .16 .71 .24 .32 .11
Total from Investment Operations .98 1.56 1.09 1.19 1.02
Distributions:
Dividends from investment income--net (.82) (.85) (.85) (.87) (.91)
Dividends from net realized gain
on investments (.28) (.26) (.18) (.27) --
Total Distributions (1.10) (1.11) (1.03) (1.14) (.91)
Net asset value, end of period 16.56 16.68 16.23 16.17 16.12
Total Return (%)* 5.97 9.83 6.89 7.46 6.65
Ratios/Supplemental Data (%):
Ratio of expenses to average net assets .92 .92 .92 .92 .92
Ratio of net investment income
to average net assets 4.90 5.09 5.22 5.28 5.77
Decrease reflected in above expense ratios
due to undertakings by the Manager -- -- -- -- .01
Portfolio Turnover Rate 48.14 34.82 60.57 52.69 55.19
Net Assets, end of period ($ X 1,000) 195,728 196,055 201,229 216,802 219,949
<FN>
* Exclusive of sales load.
See notes to financial statements.
</FN>
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
Year Ended April 30,
---------------------------------------------------
Class B Shares 1999 1998 1997 1996 1995
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per Share Data ($):
Net asset value, beginning of period 16.67 16.23 16.16 16.11 16.01
Investment Operations:
Investment income--net .74 .77 .77 .79 .83
Net realized and unrealized gain (loss)
on investments .16 .70 .25 .32 .10
Total from Investment Operations .90 1.47 1.02 1.11 .93
Distributions:
Dividends from investment income--net (.74) (.77) (.77) (.79) (.83)
Dividends from net realized gain
on investments (.28) (.26) (.18) (.27) --
Total Distributions (1.02) (1.03) (.95) (1.06) (.83)
Net asset value, end of period 16.55 16.67 16.23 16.16 16.11
- -----------------------------------------------------------------------------------------------
Total Return (%)* 5.43 9.20 6.41 6.92 6.02
- -----------------------------------------------------------------------------------------------
Ratios/Supplemental Data (%):
Ratio of expenses to average net assets 1.43 1.43 1.43 1.43 1.44
Ratio of net investment income
to average net assets 4.39 4.57 4.71 4.76 5.22
Decrease reflected in above expense ratios
due to undertakings by the Manager -- -- -- -- .01
Portfolio Turnover Rate 48.14 34.82 60.57 52.69 55.19
Net Assets, end of period ($ X 1,000) 68,869 74,855 71,671 72,610 70,062
<FN>
* Exclusive of sales load.
See notes to financial statements.
</FN>
</TABLE>
The Fund 19
<PAGE>
Financial Highlights (continued)
<TABLE>
<CAPTION>
Year Ended April 30,
-------------------------------------------
Class C Shares 1999 1998 1997 1996a
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per Share Data ($):
Net asset value, beginning of period 16.69 16.23 16.16 16.18
Investment Operations:
Investment income--net .69 .70 .69 .53
Net realized and unrealized gain (loss)
on investments .16 .72 .25 .25
Total from Investment Operations .85 1.42 .94 .78
Distributions:
Dividends from investment income--net (.69) (.70) (.69) (.53)
Dividends from net realized gain on investments (.28) (.26) (.18) (.27)
Total Distributions (.97) (.96) (.87) (.80)
Net asset value, end of period 16.57 16.69 16.23 16.16
Total Return (%)b 5.16 8.91 5.92 6.71c
Ratios/Supplemental Data (%):
Ratio of expenses to average net assets 1.69 1.69 1.83 1.70c
Ratio of net investment income
to average net assets 4.07 3.98 4.28 4.46c
Portfolio Turnover Rate 48.14 34.82 60.57 52.69
Net Assets, end of period ($ x 1,000) 898 463 32 21
<FN>
a From August 15, 1995 (commencement of initial offering) to April 30, 1996.
b Exclusive of sales load.
c Annualized.
See notes to financial statements.
</FN>
</TABLE>
20
<PAGE>
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, as amended (the "Act"), as a non- diversified
open-end management investment company and operates as a series company
currently offering thirteen series, including the Pennsylvania 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
The Fund 21
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
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. Under the terms of the custody
agreement, the Fund received net earnings credits of $21,223 during the period
ended April 30, 1999 based on available cash balances left on deposit. Income
earned under this arrangement is included in interest income.
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
22
<PAGE>
ability of issuers within the state to pay interest on, or repay principal of,
municipal obligations held by the Fund.
(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 of 1986, as amended (the
"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 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 and
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. During the period ended April
30, 1999, 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.
The Fund 23
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
Dreyfus Service Corporation, a wholly-owned subsidiary of the Manager, retained
$7,777 during the period ended April 30, 1999, from commissions earned on sales
of the Fund's shares.
(b) Under the Distribution Plan adopted pursuant to Rule 12b-1 under the Act,
Class B and Class C shares pay the Distributor for distributing their 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, 1999, Class B and Class C
shares were charged $372,567 and $4,696, respectively, pursuant to the
Distribution Plan.
(c) Under the Shareholder Services Plan, Class A, Class B and Class C shares pay
the Distributor at an annual rate of .25 of 1% of the value of their average
daily net assets 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, 1999 Class A, Class B and Class C
shares were charged $486,774, $186,283 and $1,565, 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, 1999, the Fund was charged $128,265 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.
24
<PAGE>
NOTE 4--Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding
short-term securities, during the period ended April 30, 1999 amounted to
$128,967,774 and $135,746,679 respectively.
At April 30, 1999, accumulated net unrealized appreciation on investments was
$10,265,024, consisting of $10,793,770 gross unrealized appreciation and
$528,746 gross unrealized depreciation.
At April 30, 1999, 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).
The Fund 25
<PAGE>
REPORT OF INDEPENDENT AUDITORS
Shareholders and Board of Trustees
Dreyfus Premier State Municipal Bond Fund, Pennsylvania Series
We have audited the accompanying statement of assets and liabilities, including
the statement of investments, of Dreyfus Premier State Municipal Bond Fund,
Pennsylvania Series (the "Fund") (one of the Funds constituting the Dreyfus
Premier State Municipal Bond Fund) as of April 30, 1999, 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, 1999 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 the
Fund at April 30, 1999, 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, NY
June 2, 1999
26
<PAGE>
IMPORTANT TAX INFORMATION (Unaudited)
In accordance with Federal tax law, the Fund hereby makes the following
designations regarding its fiscal year ended April 30, 1999:
-- all the dividends paid from investment income--net are "exempt -interest
dividends" (not subject to regular Federal and, for individuals who are
Pennsylvania residents, Pennsylvania personal income taxes), and
-- the Fund hereby designates $.2003 per share as a long-term capital gain
distribution of the $.2751 per share paid on December 8, 1998.
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 1999 calendar year on Form 1099-DIV which
will be mailed by January 31, 2000.
The Fund 27
<PAGE>
NOTES
<PAGE>
<PAGE>
For More Information
Dreyfus
State Municipal Bond Fund,
Pennsylvania 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
Distributor
Premier Mutual Fund Services, Inc.
60 State Street
Boston, MA 02109
To obtain information:
By telephone
Call your financial representative or
1-800-554-4611
By mail Write to:
The Dreyfus Premier
Family of Funds
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
Not FDIC-Insured * Not Bank-Guaranteed * May Lose Value
(c) 1999 Dreyfus Service Corporation 058/620AR994
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
DREYFUS PREMIER STATE MUNICIPAL BOND FUND, PENNSYLVANIA
SERIES CLASS A SHARES AND THE LEHMAN BROTHERS MUNICIPAL
BOND INDEX
EXHIBIT A:
DREYFUS
PREMIER STATE
PERIOD LEHMAN BROTHERS MUNICIPAL BOND FUND,
MUNICIPAL PENNSYLVANIA SERIES
BOND INDEX * (CLASS A SHARES)
4/30/89 10,000 9,548
4/30/90 10,720 10,235
4/30/91 11,952 11,437
4/30/92 13,088 12,692
4/30/93 14,744 14,365
4/30/94 15,063 14,676
4/30/95 16,065 15,652
4/30/96 17,341 16,820
4/30/97 18,492 17,979
4/30/98 20,211 19,746
4/30/99 21,615 20,925
*Source: Lehman Brothers
Dreyfus Premier
State Municipal
Bond Fund,
Texas Series
ANNUAL REPORT
April 30, 1999
[DREYFUS LOGO]
<PAGE>
Year 2000 Issues (Unaudited)
The fund could be adversely affected if the computer systems used by The
Dreyfus Corporation and the fund's other service providers do not properly
process and calculate date-related information from and after January 1,
2000. The Dreyfus Corporation is working to avoid Year 2000-related
problems in its systems and to obtain assurances from other service
providers that they are taking similar steps. In addition, issuers of
securities in which the fund invests may be adversely affected by Year
2000-related problems. This could have an impact on the value of the fund's
investments and its share price.
<PAGE>
Contents
THE FUND
- ------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Fund Performance
8 Statement of Investments
13 Statement of Assets and Liabilities
14 Statement of Operations
15 Statement of Changes in Net Assets
17 Financial Highlights
20 Notes to Financial Statements
25 Report of Independent Auditors
26 Important Tax Information
FOR MORE INFORMATION
- -----------------------------
Back Cover
<PAGE>
Dreyfus Premier The Fund
State Municipal Bond Fund,
Texas Series
LETTER FROM THE PRESIDENT
- -------------------------
Dear Shareholder:
We are pleased to present this annual report for Dreyfus Premier State
Municipal Bond Fund, Texas Series, covering the 12-month period from May 1,
1998 through April 30, 1999. Inside, you'll find valuable information about
how the Fund was managed during the period, including a discussion with the
Fund's portfolio manager, Douglas Gaylor.
The past year has generally been rewarding for municipal bond investors.
Lower short-term interest rates adopted by the Federal Reserve Board and
other central banks in the fall of 1998 appear to have helped many U.S.
businesses withstand the effects of economic weakness in Japan, Asia and
Latin America. At the same time, the U.S. economy has entered its eighth
year of expansion in an environment characterized by low inflation and high
levels of consumer spending.
In the second half of the reporting period, tax-exempt fixed-income
securities provided good results, especially relative to taxable U.S.
Treasury securities. While prices of U.S. Treasury securities declined
significantly through the second half of the reporting period, a lack of
new issuance relative to robust investor demand supported most municipal
bond prices, which have remained relatively unchanged over the past six
months. As a result, the differences in valuations between taxable U.S.
Treasury securities and tax-exempt bonds, which reached historically wide
levels last October, have since narrowed to a more historically normal
relationship.
We appreciate your confidence over the past year, and we look forward to
your continued participation in Dreyfus Premier State Municipal Bond Fund,
Texas Series.
Sincerely,
/s/Stephen E. Canter
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
May 13, 1999
2
<PAGE>
DISCUSSION OF FUND PERFORMANCE
- ------------------------------
Douglas Gaylor, Portfolio Manager
How did Dreyfus Premier State Municipal Bond Fund, Texas Series perform?
The Fund's Class A shares produced a total return of 5.66% over the 12-
month period ended April 30, 1999,1 compared to a total return of 5.56% for
the average of the Lipper Texas Municipal Debt Funds category.2 The Fund
produced a total return of 5.13% for Class B shares and 4.86% for Class C
shares over the 12-month period ended April 30, 1999.1
We attribute the Fund's relative performance to its focus on high-quality
municipal bonds issued by Texas, its municipalities and authorities. Lower-
rated issues have remained fairly expensive when compared to insured
securities. The Fund has continued to take advantage of this tight spread
relationship by favoring higher-rated securities, which are more liquid. It
is our belief that this strategy may give the Fund more flexibility to
react to a weak market, which can experience liquidity constraints.
What is the Fund's investment approach?
Our goal is to seek a high level of federally and Texas tax-exempt income
from a diversified portfolio of longer-term municipal bonds. We also seek
to provide a competitive total return. To achieve these goals, we prefer to
downplay interest rate trends and market forecasts in favor of rigorous
analysis of each individual bond's structure. Within the context of our
bond structure analyses, we strive to maximize both income and total
return, which is the combination of income and price changes.
We try to allocate between one-half and three-quarters of the total
portfolio to Texas bonds that we expect to provide consistently high
yields. We often find such opportunities in Original Issue Discount bonds
in the 15- to 20-year maturity range, for example. We not only look for
bonds that we expect to provide highly competitive yields, but we try to
ensure that we select bonds that are most likely to obtain attractive
prices if and when we decide to sell them into the secondary market.
The Fund 3
<PAGE>
DISCUSSION OF FUND PERFORMANCE (continued)
For the remainder of the portfolio, we look for bonds that we believe will offer
attractive total returns. We typically look for bonds that are selling at a
discount to face value because they may be temporarily out of favor among
investors. Our expectation is that these bonds' prices will rise as they return
to favor over time.
What other factors influenced the Fund's performance?
When the Asian currency and credit crisis spread to Russia and threatened
Latin America last summer and fall, investors flocked to U.S. Treasury
securities. As a result, yields on taxable Treasuries fell briefly in
October to levels that were roughly equivalent to yields on comparable tax-
exempt bonds.
However, the Federal Reserve Board and other central banks moved quickly to
stimulate global economic growth. They did so last fall by reducing key
short-term interest rates. Because lower short-term interest rates were
expected to stimulate economic growth and potentially reignite inflationary
pressures, yields on longer-term bonds rose throughout the first four
months of 1999. However, the extent of that rise was much greater for
taxable U.S. Treasury securities than for tax-free municipal bonds.
In addition, because of strong economic conditions throughout the country,
many Texas municipalities have had less need to borrow. Yet, demand from
investors seeking to minimize their income tax liabilities has remained
high. This balance between supply and demand helped keep municipal bond
prices relatively stable while U.S. Treasury bond prices fell sharply.
What is the Fund's current strategy?
We have continued to search for bonds with attractive structures in Texas's
municipal bond market. We have found such values, in our opinion, in bonds
that were selling at a discount to their face values
4
<PAGE>
that cannot be redeemed by their issuers anytime soon. In addition, we have
continued to focus on high-quality issuers. Because the differences in yields
between the highest-quality bonds and lower-quality bonds are narrow by
historical standards, we currently see little reason to assume the added credit
risk lower-rated bonds entail.
Over the longer term, we intend to remain vigilant in our efforts to
identify tax-exempt Texas bonds that we believe are most likely to deliver
an attractive combination of income and total return. We expect our bond
structure analyses to help us continue to maximize tax-exempt returns for
our shareholders.
May 13, 1999
[FN]
1 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 applicable contingent deferred sales charge
imposed on redemptions in the case of Class B and Class C shares. Income may
be subject to state and local income taxes for non-Texas residents. Some
income may be subject to the Federal Alternative Minimum Tax (AMT) for
certain shareholders.
2 Source: Lipper Analytical Services, Inc.
</FN>
The Fund 5
<PAGE>
FUND PERFORMANCE
$21,625
Dreyfus Premier State Municipal
Bond Fund, Texas Series
(Class A Shares)
[CHART]
$21,615
Lehman Brothers Municipal Bond Index*
Comparison of change in value of $10,000 investment in the Fund's Class A
shares and the Lehman Brothers Municipal Bond Index
[FN]
* Source: Lehman Brothers.
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, Texas Series (the "Fund") on
4/30/89 to a $10,000 investment made in the Lehman Brothers Municipal Bond
Index (the "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 Fund invests primarily in Texas 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.
The Index is not limited to investments principally in Texas municipal
obligations and does not take into account charges, fees and other
expenses. The Index, unlike the Fund, 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. These
factors can contribute to the Index potentially outperforming or
underperforming the Fund. Further information relating to Fund performance,
including expense reimbursements, if applicable, is contained in the
Financial Highlights section of the Prospectus and elsewhere in this
report.
</FN>
6
<PAGE>
<TABLE>
<CAPTION>
Average Annual Total Returns as of 4/30/99
- ------------------------------------------------------------------------------------
Inception From
Date 1 Year 5 Years 10 Years Inception
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Class A Shares
with sales charge (4.5%) (5/28/87) 0.91% 6.83% 8.02% -
without sales charge (5/28/87) 5.66% 7.82% 8.52% -
Class B Shares
with redemption* (1/15/93) 1.19% 6.96% - 6.92%
without redemption (1/15/93) 5.13% 7.26% - 6.92%
Class C Shares
with redemption** (8/15/95) 3.87% - - 7.03%
without redemption (8/15/95) 4.86% - - 7.03%
<FN>
Past performance is not predictive of future performance.
* 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>
The Fund 7
<PAGE>
STATEMENT OF INVESTMENTS
April 30, 1999
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
Principal
Long-Term Municipal Investments-96.9% Amount ($) Value ($)
- -------------------------------------------------------------------------------------
<S> <C> <C>
Aledo Independent School District,
Unlimited Tax School Building and Refunding
(Permanent School Fund Guaranteed)
Zero Coupon, 2/15/2014 1,225,000 590,046
Brazos County Housing Finance Corp., SFMR,
Refunding 5.75%, 3/1/2017 15,000 15,575
Brazos Higher Education Authority Inc.,
Student Loan Revenue, Refunding
6.80%, 12/1/2004 700,000 773,983
Clear Creek Independent School District
(Permanent School Fund Guaranteed)
4.25%, 2/1/2013 1,475,000 1,410,395
Coastal Water Authority,
Water Conveyance System, Refunding
6.25%, 12/15/2017 (Insured; AMBAC) 5,885,000 6,279,707
Dallas-Fort Worth Regional Airport, Joint Revenue
6.625%, 11/1/2021 (Insured; FGIC) 1,250,000 1,323,212
Denison Hospital Authority, HR
(Texoma Medical Center Project) 6.125%, 8/15/2017 750,000 774,727
Eanes Independent School District, Refunding
(Permanent School Fund Guaranteed)
4.50%, 8/1/2017a 1,400,000 1,307,992
El Paso, Certificate of Obligation 5%, 8/15/2018
(Insured; FGIC) 1,685,000 1,675,598
El Paso Housing Authority, Multi-Family Revenue
(Section 8 Projects) 6.25%, 12/1/2009 2,510,000 2,658,818
El Paso Independent School District, Refunding
(Permanent School Fund Guaranteed)
Zero Coupon, 8/15/2013 1,000,000 473,170
Grape Creek-Pulliam Independent School District
Public Facility Corp., School Facility LR
7.25%, 5/15/2021 2,200,000 2,486,022
Grapevine-Colleyville Independent School District,
Unlimited Tax School Building and Refunding
(Permanent School Fund Guaranteed):
Zero Coupon, 8/15/2017 2,590,000 1,021,807
Zero Coupon, 8/15/2018 2,390,000 887,765
Gulf Coast Waste Disposal Authority, SWDR
(Champion International Corp. Project):
7.25%, 4/1/2017 (Prerefunded 4/1/2002)b 440,000 488,598
7.25%, 4/1/2017 560,000 606,844
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
Principal
Long-Term Municipal Investments (continued) Amount ($) Value ($)
- -------------------------------------------------------------------------------------
<S> <C> <C>
Gunter Independent School District, Refunding
(Permanent School Fund Guaranteed)
6.05%, 8/15/2026 1,020,000 1,108,883
Hillsboro Independent School District, Refunding
(Permanent School Fund Guaranteed)
5.25%, 8/15/2026 1,750,000 1,757,437
Houston
Airport System Special Facilities Revenue
(Automated People Mover Project)
5.375%, 7/15/2009 (Insured; FSA) 2,000,000 2,109,720
Water and Sewer System Revenue, Refunding
(Junior Lien)
5.25%, 12/1/2025 (Insured; FGIC) 2,625,000 2,643,559
Houston Independent School District
(Permanent School Fund Guaranteed):
Zero Coupon, 8/15/2015 3,000,000 1,331,220
4.75%, 2/15/2022 2,500,000 2,364,975
Irving Independent School District
(Permanent School Fund Guaranteed):
Zero Coupon, 2/15/2010 1,985,000 1,201,084
Refunding, Zero Coupon, 2/15/2016 1,000,000 429,280
Katy Independent School District,
Limited Tax Refunding and School Building
(Permanent School Fund Guaranteed)
4.75%, 2/15/2021 1,295,000 1,226,728
La Porte Independent School District
(Permanent School Fund Guaranteed)
4.50%, 2/15/2017a 1,000,000 935,310
Lakeway Municipal Utility District, Refunding
Zero Coupon, 9/1/2013 (Insured; FGIC) 1,850,000 917,767
Leon County, PCR, Refunding (Nucor Corp. Project)
7.375%, 8/1/2009 750,000 814,943
Misson Consolidated Independent School District
(Permanent School Fund Guaranteed) 5%, 2/15/2016 2,485,000 2,490,939
Montgomery County Health Facilities
Development Corp., Hospital Mortgage Revenue
(Woodlands Medical Center Project)
8.85%, 8/15/2014 (Prerefunded 8/15/1999)b 545,000 564,805
North Texas Higher Education Authority, Inc.,
Student Loan Revenue
7.25%, 4/1/2003 (Insured; AMBAC) 1,000,000 1,049,290
</TABLE>
The Fund 9
<PAGE>
STATEMENT OF INVESTMENTS (continued)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
Principal
Long-Term Municipal Investments (continued) Amount ($) Value ($)
- -------------------------------------------------------------------------------------
<S> <C> <C>
Port of Bay City Authority, Matagorda County Revenue
(Hoechst Celanese Corp. Project) 6.50%, 5/1/2026 3,500,000 3,809,855
Round Rock Independent School District
(Permanent School Fund Guaranteed)
4.50%, 8/1/2016 1,950,000 1,845,597
Texas (Veterans Housing Assistance) 6.80%, 12/1/2023 2,405,000 2,579,723
Texas Department Housing and
Community Affairs, MFHR
(Harbors and Plumtree) 6.35%, 7/1/2016 1,300,000 1,375,738
Texas Higher Education Coordinating Board,
College Student Loan Revenue
7.30%, 10/1/2003 465,000 504,255
Texas National Research Laboratory Commission
Financing Corp., LR
(Superconducting Super Collider) 6.95%, 12/1/2012 700,000 835,051
Texas Public Finance Authority, Building Revenue
(State Preservation Board Project)
4.50%, 2/1/2018 (Insured; AMBAC) 2,805,000 2,614,372
Texas Public Property Finance Corp., Revenue
(Mental Health and Retardation)
8.875%, 9/1/2011 (Prerefunded 9/1/2001)b 455,000 514,623
Texas Southern University, Revenue
5.75%, 8/1/2018 (Insured; MBIA)
(Prerefunded 8/1/2003)b 3,490,000 3,790,594
Texas, University System Revenue Financing System
4.75%, 3/15/2016 (Insured; FSA) 1,595,000 1,557,812
Texoma Housing Finance Corp., SFMR, Refunding
5.75%, 9/1/2017 235,000 241,079
Tomball Hospital Authority, Revenue,
Refunding 6%, 7/1/2013 5,000,000 5,110,500
Tomball Independent School District, Refunding
(Permanent School Fund Guaranteed)
4.75%, 2/15/2020 2,515,000 2,395,060
Tyler Health Facility Development Corp., HR
(East Texas Medical Center Regional Health)
6.625%, 11/1/2011 1,605,000 1,555,389
Victoria, Utility System Revenue 4.75%, 12/1/2022 1,105,000 1,044,269
Waller Consolidated Independent School District
(Permanent School Fund Guaranteed)
5.25%, 2/15/2021 1,000,000 1,006,570
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
Principal
Long-Term Municipal Investments (continued) Amount ($) Value ($)
- -------------------------------------------------------------------------------------
<S> <C> <C>
Waxahachie Community Development Corp.,
Sales Tax Revenue:
Zero Coupon, 8/1/2020 (Insured; MBIA) 1,430,000 447,204
Zero Coupon, 8/1/2023 (Insured; MBIA) 1,000,000 262,130
West Side Calhoun County Navigation District, SWDR
(Union Carbide Chemical and Plastics)
8.20%, 3/15/2021 500,000 540,370
Total Long-Term Municipal Investments
(cost $72,374,076) 75,750,390
Principal
Short-Term Municipal Investments-2.8% Amount ($) Value ($)
- -------------------------------------------------------------------------------------
Brazos River Authority, PCR, Refunding,
VRDN (Utility Electric Co.)
4.30%, (Insured; AMBAC)c 1,200,000 1,200,000
West Side Calhoun County Navigation District,
Sewer and SWDR, VRDN
(BP Chemicals Inc. Project) 4.30%c 1,000,000 1,000,000
Total Short-Term Municipal Investments
(cost $2,200,000) 2,200,000
- -------------------------------------------------------------------------------------
Total Investments (cost $74,574,076) 99.7% 77,950,390
Cash and Receivables (Net) .3% 217,122
Net Assets 100.0% 78,167,512
</TABLE>
The Fund 11
<PAGE>
STATEMENT OF INVESTMENTS (continued)
<TABLE>
<CAPTION>
Summary of Abbreviations
<S> <C> <C> <C>
AMBAC American Municipal Bond MBIA Municipal Bond
Assurance Corporation Investors Assurance
FGIC Financial Guaranty Insurance Corporation
Insurance Company MFHR Multi-Family
FSA Financial Security Housing Revenue
Assurance PCR Pollution Control Revenue
HR Hospital Revenue SFMR Single Family
LR Lease Revenue Mortgage Revenue
SWDR Solid Waste Disposal Revenue
VRDN Variable Rate Demand Notes
</TABLE>
<TABLE>
<CAPTION>
Summary of Combined Ratings (Unaudited)
Fitch or Moody's or Standard & Poor's Value(%)
- ----------------------------------------------------------------------------
<S> <C> <C> <C>
AAA Aaa AAA 65.2
AA Aa AA 4.3
A A A 11.6
BBB Baa BBB 12.7
B B B 2.0
F1 MIG1/P1 SP1/A1 2.8
Not Rated (d) Not Rated (d) Not Rated (d) 1.4
100.0
<FN>
a Purchased on a delayed delivery basis.
b 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.
c Securities payable on demand. Variable interest rate-subject to
periodic change.
d Securities which, while not rated by Fitch, Moody's and Standard &
Poor's have been determined by the manager to be of comparable quality
to those rated securities in which the Fund may invest.
e At April 30, 1999, the Fund had $22,323,555 (28.6%) of net assets
invested in securities whose payment of principal and interest is
dependant upon revenues generated from city-municipal go projects.
f At April 30, 1999, 30.4% of the Fund's net assets are guaranteed by
Permanent School Fund.
See notes to financial statements.
</FN>
</TABLE>
12
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
April 30, 1999
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
Cost Value
- -------------------------------------------------------------------------------------
<S> <C> <C>
Assets ($):
Investments in securities-See Statement of Investments 74,574,076 77,950,390
Receivable for investment securities sold 1,505,651
Interest receivable 1,210,462
Receivable for shares of Beneficial Interest subscribed 31,342
Prepaid expenses 24,251
80,722,096
- -------------------------------------------------------------------------------------
Liabilities ($):
Due to The Dreyfus Corporation and affiliates 27,880
Due to Distributor 23,673
Cash overdraft due to Custodian 224,505
Payable for investment securities purchased 2,268,960
Payable for shares of Beneficial Interest redeemed 2,500
Accrued expenses 7,066
2,554,584
- -------------------------------------------------------------------------------------
Net Assets ($) 78,167,512
- -------------------------------------------------------------------------------------
Composition of Net Assets ($):
Paid-in capital 74,195,402
Accumulated net realized gain (loss) on investments 595,796
Accumulated net unrealized appreciation (depreciation)
on investments-Note 4 3,376,314
Net Assets ($) 78,167,512
</TABLE>
- --------------------------------------------------------------------------------
Net Asset Value Per Share
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
Class A Class B Class C
- ----------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Assets ($) 60,515,899 17,031,319 620,294
Shares Outstanding 2,831,295 797,016 29,037
Net Asset Value Per Share ($) 21.37 21.37 21.36
<FN>
See notes to financial statements.
</FN>
</TABLE>
The Fund 13
<PAGE>
STATEMENT OF OPERATIONS
Year Ended April 30, 1999
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
Investment Income ($)
- -------------------------------------------------------------------------------------
<S> <C>
Income
Interest Income 4,365,180
Expenses:
Management fee-Note 3(a) 441,230
Shareholder servicing costs-Note 3(c) 236,338
Distribution fees-Note 3(b) 102,669
Registration fees 17,978
Professional fees 12,744
Prospectus and shareholders' reports 9,775
Custodian fees 9,254
Trustees' fees and expenses-Note 3(d) 1,002
Loan commitment fees-Note 2 387
Miscellaneous 9,725
Total Expenses 841,102
Less-reduction in management fee due to
undertaking-Note 3(a) (56,145)
Net Expenses 784,957
Investment Income-Net 3,580,223
- -------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) on Investments-Note 4:
Net realized gain (loss) on investments 1,655,520
Net unrealized appreciation (depreciation) on investments (902,285)
Net Realized and Unrealized Gain (Loss) on Investments 753,235
Net Increase in Net Assets Resulting From Operations 4,333,458
<FN>
See notes to financial statements.
</FN>
</TABLE>
14
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
Year Ended April 30,
--------------------------------
1999 1998
- -------------------------------------------------------------------------------------
<S> <C> <C>
Operations ($):
Investment income-net 3,580,223 3,894,454
Net realized gain (loss) on investments 1,655,520 1,306,332
Net unrealized appreciation (depreciation)
on investments (902,285) 2,405,268
Net Increase (Decrease) in Net Assets
Resulting from Operations 4,333,458 7,606,054
- -------------------------------------------------------------------------------------
Dividends to Shareholders From ($):
Investment income-net:
Class A shares (2,750,126) (3,051,372)
Class B shares (815,258) (835,063)
Class C shares (14,839) (8,019)
Net realized gain on investments:
Class A shares (1,392,005) (847,695)
Class B shares (491,551) (260,030)
Class C shares (9,650) (2,729)
Total Dividends (5,473,429) (5,004,908)
- -------------------------------------------------------------------------------------
Beneficial Interest Transactions ($):
Net proceeds from shares sold:
Class A shares 6,902,174 2,175,343
Class B shares 3,131,814 3,816,097
Class C shares 472,618 126,463
Dividends reinvested:
Class A shares 2,017,842 1,873,726
Class B shares 874,269 650,003
Class C shares 10,434 1,286
Cost of shares redeemed:
Class A shares (7,312,717) (7,168,993)
Class B shares (7,146,330) (1,976,539)
Class C shares (115,404) (41)
Increase (Decrease) in Net Assets from
Beneficial Interest Transactions (1,165,300) (502,655)
Total Increase (Decrease) in Net Assets (2,305,271) 2,098,491
- -------------------------------------------------------------------------------------
Net Assets ($):
Beginning of Period 80,472,783 78,374,292
End of Period 78,167,512 80,472,783
<FN>
See notes to financial statements.
</FN>
</TABLE>
The Fund 15
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS (continued)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
Year Ended April 30,
--------------------------------
1999 1998
- -------------------------------------------------------------------------------------
<S> <C> <C>
Capital Share Transactions:
Class A
Shares sold 318,580 100,070
Shares issued for dividends reinvested 92,816 86,362
Shares redeemed (335,978) (329,855)
Net Increase (Decrease) in Shares Outstanding 75,418 (143,423)
- -------------------------------------------------------------------------------------
Class B
Shares sold 143,855 175,410
Shares issued for dividends reinvested 40,204 29,952
Shares redeemed (330,498) (90,921)
Net Increase (Decrease) in Shares Outstanding (146,439) 114,441
- -------------------------------------------------------------------------------------
Class C
Shares sold 21,872 5,845
Shares issued for dividends reinvested 482 59
Shares redeemed (5,370) (2)
Net Increase (Decrease) in Shares Outstanding 16,984 5,902
<FN>
See notes to financial statements.
</FN>
</TABLE>
16
<PAGE>
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the
fiscal periods indicated. Certain information reflects financial results for a
single fund share. "Total return" shows how much your investment in the Fund
would have increased (or decreased) during each period, assuming you had
reinvested all dividends and distributions. These figures have been derived from
the Fund's financial statements.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
Year Ended April 30,
------------------------------------------
Class A Shares 1999 1998 1997 1996 1995
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per Share Data ($):
Net asset value, beginning of period 21.68 20.99 20.84 20.69 20.41
Investment Operations:
Investment income-net 1.00 1.08 1.17 1.20 1.22
Net realized and unrealized gain (loss)
on investments .21 .99 .41 .45 .28
Total from Investment Operations 1.21 2.07 1.58 1.65 1.50
Distributions:
Dividends from investment income-net (1.00) (1.08) (1.17) (1.20) (1.22)
Dividends from net realized gain
on investments (.52) (.30) (.26) (.30) -
Total Distributions (1.52) (1.38) (1.43) 1.50) (1.22)
Net asset value, end of period 21.37 21.68 20.99 20.84 20.69
- -------------------------------------------------------------------------------------
Total Return (%)* 5.66 10.03 7.74 8.06 7.63
- -------------------------------------------------------------------------------------
Ratios/Supplemental Data (%):
Ratio of expenses to average net assets .85 .72 .37 .37 .37
Ratio of net investment income
to average net assets 4.59 4.96 5.54 5.64 6.01
Decrease reflected in above expense ratios
due to undertakings by the Manager .07 .18 .55 .55 .55
Portfolio Turnover Rate 49.67 27.18 61.22 49.24 38.68
Net Assets, end of period ($X1000) 60,516 59,758 60,849 62,864 68,103
<FN>
* Exclusive of sales load.
See notes to financial statements.
</FN>
</TABLE>
The Fund 17
<PAGE>
FINANCIAL HIGHLIGHTS (continued)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
Year Ended April 30,
-----------------------------------------
Class B Shares 1999 1998 1997 1996 1995
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per Share Data ($):
Net asset value, beginning of period 21.68 20.98 20.84 20.69 20.41
Investment Operations:
Investment income-net .89 .97 1.06 1.09 1.10
Net realized and unrealized gain (loss)
on investments .21 1.00 .40 .45 .28
Total from Investment Operations 1.10 1.97 1.46 1.54 1.38
Distributions:
Dividends from investment income-net (.89) (.97) (1.06) (1.09) (1.10)
Dividends from net realized gain
on investments (.52) (.30) (.26) (.30) -
Total Distributions (1.41) (1.27) (1.32) (1.39) (1.10)
Net asset value, end of period 21.37 21.68 20.98 20.84 20.69
- -------------------------------------------------------------------------------------
Total Return (%)* 5.13 9.53 7.15 7.51 7.05
- -------------------------------------------------------------------------------------
Ratios/Supplemental Data (%):
Ratio of expenses to average net assets 1.35 1.23 .88 .88 .89
Ratio of net investment income
to average net assets 4.09 4.44 5.03 5.13 5.46
Decrease reflected in above expense ratios
due to undertakings by the Manager .08 .18 .55 .55 .55
Portfolio Turnover Rate 49.67 27.18 61.22 49.24 38.68
Net Assets, end of period ($X1,000) 17,031 20,454 17,396 17,461 16,818
<FN>
* Exclusive of sales load.
See notes to financial statements.
</FN>
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
Year Ended April 30,
-----------------------------------------
Class C Shares 1999 1998 1997 1996a
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per Share Data ($):
Net asset value, beginning of period 21.67 20.97 20.83 20.78
Investment Operations:
Investment income-net .83 .91 .99 .73
Net realized and unrealized gain (loss)
on investments .21 1.00 .40 .35
Total from Investment Operations 1.04 1.91 1.39 1.08
Distributions:
Dividends from investment income-net (.83) (.91) (.99) (.73)
Dividends from net realized gain
on investments (.52) (.30) (.26) (.30)
Total Distributions (1.35) (1.21) (1.25) (1.03)
Net asset value, end of period 21.36 21.67 20.97 20.83
- -------------------------------------------------------------------------------------
Total Return (%)b 4.86 9.24 6.79 7.29c
- -------------------------------------------------------------------------------------
Ratios/Supplemental Data (%):
Ratio of expenses to average net assets 1.60 1.52 1.19 1.18c
Ratio of net investment income
to average net assets 3.79 4.10 4.57 4.77c
Decrease reflected in above expense ratios
due to undertakings by the Manager .11 .15 .54 .58c
Portfolio Turnover Rate 49.67 27.18 61.22 49.24
Net Assets, end of period ($X1,000) 620 261 129 1
<FN>
a From August 15, 1995 (commencement of initial offering) to April 30, 1996.
b Exclusive of sales load.
c Annualized.
See notes to financial statements.
</FN>
</TABLE>
The Fund 19
<PAGE>
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, as amended (the "Act"), as a non-
diversified open-end management investment company, and operates as a
series company currently offering thirteen series including the Texas
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 assumption. 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")
20
<PAGE>
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. Under the terms
of the custody agreement, the Fund received net earnings credits of $9,160
during the period ended April 30, 1999 based on available cash balances
left on deposit. Income earned under this arrangement is included in
interest income.
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.
The Fund 21
<PAGE>
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
of 1986, as amended (the "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 Code, and to
make distributions of income and net realized capital gain sufficient to
relieve it from substantially all Federal income and excise taxes.
NOTE 2-Bank Line of Credit:
The Fund participates with other Dreyfus-managed funds in a $600 million
redemption credit facility ("Facility") to be utilized for temporary or
emergency purposes, including the financing of redemptions. In connection
therewith, the Fund has agreed to pay commitment fees on its pro rata
portion of the Facility. Interest is charged to the Fund at rates based on
prevailing market rates in effect at the time of borrowings. During the
period ended April 30, 1999, 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.The Manager has undertaken
from May 1, 1998 to April 30, 1999 to reduce the management fee paid by the
Fund, to the extent that the Fund's aggregate expenses, excluding 12b-1
distribution fees, taxes, brokerage, commitment fees, interest on
borrowings and extraordinary expenses, exceed an annual rate of .85 of 1%
of the value of the
22
<PAGE>
Fund's average daily net assets. The reduction in management fee, pursuant to
the undertaking, amounted to $56,145 during the period ended April 30, 1999.
(b) Under the Distribution Plan adopted pursuant to Rule 12b-1 under the
Act, Class B and Class C shares pay the Distributor for distributing their
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, 1999, Class
B and Class C shares were charged $99,734 and $2,935, respectively,
pursuant to the Distribution Plan.
(c) Under the Shareholder Services Plan, Class A, Class B and Class C
shares pay the Distributor at an annual rate of .25 of 1% of the value of
their average daily net assets 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, 1999, Class A, Class B and Class C shares were charged
$149,714, $49,867 and $978 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, 1999, the Fund was charged $25,055 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.
The Fund 23
<PAGE>
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, 1999
amounted to $39,351,544 and $45,704,085, respectively.
At April 30, 1999, accumulated net unrealized appreciation on investments
was $3,376,314, consisting of $3,512,326 gross unrealized appreciation and
$136,012 gross unrealized depreciation.
At April 30, 1999, 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).
24
<PAGE>
REPORT OF INDEPENDENT AUDITORS
Shareholders and Board of Trustees
Dreyfus Premier State Municipal Bond Fund, Texas Series
We have audited the accompanying statement of assets and liabilities,
including the statement of investments, of Dreyfus Premier State Municipal
Bond Fund, Texas Series (the "Fund") (one of the Funds constituting the
Dreyfus Premier State Municipal Bond Fund) as of April 30, 1999, 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, 1999 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 the Fund at April 30, 1999, 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 2, 1999
The Fund 25
<PAGE>
IMPORTANT TAX INFORMATION (Unaudited)
In accordance with Federal tax law, the Fund hereby makes the following
designations regarding its fiscal year ended 1999:
--all the dividends paid from investment income-net are "exempt-interest
dividends" (not subject to regular Federal income tax, and for
individuals who are Texas residents, not subject to taxation by Texas), and
--the Fund hereby designates $.4483 per share as a long-term capital gain
distribution of the $.5174 per share paid on December 8, 1998.
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 1999 calendar
year on Form 1099-DIV which will be mailed by January 31, 2000.
26
<PAGE>
NOTES
<PAGE>
NOTES
<PAGE>
For More Information
Dreyfus Premier State
Municipal Bond Fund,
Texas 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
Distributor
Premier Mutual Fund Services, Inc.
60 State Street
Boston, MA 02109
To obtain information:
By telephone
Call your financial representative or
1-800-554-4611
By mail Write to:
The Dreyfus Premier
Family of Funds
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
Not FDIC-Insured * Not Bank-Guaranteed * May Lose Value
(c) 1999 Dreyfus Service Corporation 061/621AR994
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
DREYFUS PREMIER STATE MUNICIPAL BOND FUND, TEXAS SERIES
CLASS A SHARES AND THE LEHMAN BROTHERS MUNICIPAL BOND
INDEX
EXHIBIT A:
DREYFUS
PREMIER STATE
PERIOD LEHMAN BROTHERS MUNICIPAL BOND FUND,
MUNICIPAL TEXAS SERIES
BOND INDEX * (CLASS A SHARES)
4/30/89 10,000 9,549
4/30/90 10,720 10,270
4/30/91 11,952 11,454
4/30/92 13,088 12,710
4/30/93 14,744 14,464
4/30/94 15,063 14,843
4/30/95 16,065 15,976
4/30/96 17,341 17,264
4/30/97 18,492 18,601
4/30/98 20,211 20,467
4/30/99 21,615 21,625
*Source: Lehman Brothers
Dreyfus Premier
State Municipal
Bond Fund,
Virginia Series
ANNUAL REPORT
April 30, 1999
[DREYFUS LOGO]
<PAGE>
Year 2000 Issues
(Unaudited)
The fund could be adversely affected if the computer systems used by The Dreyfus
Corporation and the fund's other service providers do not properly process and
calculate date-related information from and after January 1, 2000. The Dreyfus
Corporation is working to avoid Year 2000-related problems in its systems and to
obtain assurances from other service providers that they are taking similar
steps. In addition, issuers of securities in which the fund invests may be
adversely affected by Year 2000-related problems. This could have an impact on
the value of the fund's investments and its share price.
<PAGE>
Contents
THE FUND
- --------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Fund Performance
8 Statement of Investments
12 Statement of Assets and Liabilities
13 Statement of Operations
14 Statement of Changes in Net Assets
16 Financial Highlights
19 Notes to Financial Statements
24 Report of Independent Auditors
25 Important Tax Information
FOR MORE INFORMATION
- -------------------------------
Back Cover
<PAGE>
Dreyfus Premier The Fund
State Municipal Bond Fund,
Virginia Series
LETTER FROM THE PRESIDENT
- -------------------------
Dear Shareholder:
We are pleased to present this annual report for Dreyfus Premier State Municipal
Bond Fund, Virginia Series, covering the 12-month period from May 1, 1998
through April 30, 1999. Inside, you'll find valuable information about how the
Fund was managed during the period, including a discussion with the Fund's
portfolio manager, Sam Weinstock.
The past year has generally been rewarding for municipal bond investors. Lower
short-term interest rates adopted by the Federal Reserve Board and other central
banks in the fall of 1998 appear to have helped many U.S. businesses withstand
the effects of economic weakness in Japan, Asia and Latin America. At the same
time, the U.S. economy has entered its eighth year of expansion in an
environment characterized by low inflation and high levels of consumer spending.
In the second half of the reporting period, tax-exempt fixed-income securities
provided good results, especially relative to taxable U.S. Treasury securities.
While prices for U.S. Treasury securities declined significantly through the
second half of the reporting period, a lack of new issuance relative to robust
investor demand supported most municipal bond prices, which have remained
relatively unchanged over the past six months. As a result, the differences in
valuations between taxable U.S. Treasury securities and tax-exempt bonds, which
reached historically wide levels last October, have since narrowed to a more
historically normal relationship.
We appreciate your confidence over the past year, and we look forward to your
continued participation in Dreyfus Premier State Municipal Bond Fund, Virginia
Series.
Sincerely,
/s/Stephen E. Canter
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
May 13, 1999
2
<PAGE>
DISCUSSION OF FUND PERFORMANCE
- ------------------------------
Sam Weinstock, Portfolio Manager
How did Dreyfus Premier State Municipal Bond Fund, Virginia Series perform?
The Fund's Class A shares produced a total return of 5.98% over the 12-month
period ended April 30, 1999,1 compared to a total return of 5.80% for the
average of the Lipper Virginia Municipal Debt Funds category.2 The Fund produced
a total return of 5.44% for Class B shares and 5.19% for Class C shares over the
12-month period ended April 30, 1999.1
What is the Fund's investment approach?
Our goal is to seek a high level of federally and Virginia state tax-exempt
income from a diversified portfolio of municipal bonds without undue risk. To
achieve this objective, we employ four primary strategies. First, we strive to
identify the maturity range that we believe will provide the most favorable
returns over the next year or two. Second, we evaluate issuers' credit quality
to find bonds that we believe provide the best risk-reward trade off at an
attractive price. Third, we look for bonds with attractively high interest
payments, even if they sell at a premium to face value. Fourth, we assess
individual bonds' early redemption features, focusing on those that cannot be
redeemed soon by their issuers. Typically, the bonds we select for the portfolio
will have several of these qualities.
We also evaluate the bonds' likely performance under various market scenarios.
When we find securities that we believe will provide the best expected returns
over an anticipated market range, we select them. Many other securities are held
because they participate in market rallies and provide protection against market
declines.
What other factors influenced the Fund's performance?
When the Asian currency and credit crisis spread to Russia and threatened Latin
America last summer and fall, investors flocked to U.S.
The Fund 3
<PAGE>
DISCUSSION OF FUND PERFORMANCE (continued)
Treasury securities. As a result, yields on taxable Treasuries fell briefly in
October to levels that were roughly equivalent to yields on comparable
tax-exempt bonds.
However, the Federal Reserve Board and other central banks moved quickly to
stimulate global economic growth. Because investors feared that a stronger
economy might reignite inflationary pressures, yields on longer-term bonds rose
throughout the first four months of 1999. However, the extent of that rise was
much greater for taxable U.S. Treasury securities than for tax-free municipal
bonds.
In addition, because of strong economic conditions throughout the country, many
states and municipalities have had less need to borrow. Yet, demand from
investors seeking to minimize their income tax liabilities has remained high.
This balance between supply and demand helped keep municipal bond prices
relatively stable while U.S. Treasury bond prices fell sharply.
What is the Fund's current strategy?
As the period came to a close, we continued to search for bonds with attractive
characteristics. We have found such securities, in our opinion, in intermediate-
maturity bonds. In our view, these bonds have represented better values than
longer term bonds because they provided most of the yield with substantially
less potential volatility. Their returns have been favorable due to the expected
slightly lower yields realized as the maturities of the bonds shorten over time.
Accordingly, at the end of the period, the portfolio was structured to emphasize
bonds with maturities in the 15 to 20 year range, which we believe can achieve
this advantage.
4
<PAGE>
In addition, we have sharpened our focus on high-quality bonds. Because the
differences in yields between the highest quality bonds and lower quality bonds
have been narrow by historical standards, we have seen little reason to assume
unnecessary credit risk.
May 13, 1999
[FN]
1 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 applicable contingent deferred sales charge
imposed on redemptions in the case of Class B and Class C shares. Income may
be subject to state and local income taxes for non-Virginia residents. Some
income may be subject to the Federal Alternative Minimum Tax (AMT) for
certain shareholders.
2 Source: Lipper Analytical Services, Inc.
</FN>
The Fund 5
<PAGE>
FUND PERFORMANCE
Comparison of change in value of $10,000 investment in the Fund's Class A shares
and the Lehman Brothers Municipal Bond Index
$17,727
Lehman Brothers Municipal
Bond Index*
[CHART]
$17,398
Dreyfus Premier State Municipal
Bond Fund, Virginia Series
(Class A Shares)
[FN]
* Source: Lehman Brothers.
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, Virginia Series (the "Fund") on 8/1/91
(Inception Date) to a $10,000 investment made in the Lehman Brothers Municipal
Bond Index (the "Index") on that date. For comparative purposes, the value of
the Index on 7/31/91 is used as the beginning value on 8/1/91. 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 Fund invests primarily in Virginia 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. The Index is not
limited to investments principally in Virginia municipal obligations and does
not take into account charges, fees and other expenses. The Index, unlike the
Fund, 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. These factors can contribute to the Index potentially
outperforming or underperforming the Fund. Further information relating to Fund
performance, including expense reimbursements, if applicable, is contained in
the Financial Highlights section of the Prospectus and elsewhere in this report.
</FN>
6
<PAGE>
Average Annual Total Returns as of 4/30/99
Inception From
Date 1 Year 5 Years Inception
- -----------------------------------------------------------------------
Class A Shares
with sales charge (4.5%) (8/1/91) 1.20% 6.56% 7.41%
without sales charge (8/1/91) 5.98% 7.54% 8.05%
Class B Shares
with redemption* (1/15/93) 1.46% 6.69% 6.43%
without redemption (1/15/93) 5.44% 6.99% 6.43%
Class C Shares
with redemption** (8/15/95) 4.20% -- 6.90%
without redemption (8/15/95) 5.19% -- 6.90%
[FN]
Past performance is not predictive of future performance.
* 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>
The Fund 7
<PAGE>
STATEMENT OF INVESTMENTS
April 30, 1999
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------
Principal
Long-Term Municipal Investments--99.4% Amount ($) Value ($)
- ----------------------------------------------------------------------------------
<S> <C> <C>
Virginia--71.6%
Alexandria Redevelopment and Housing Authority,
Multi-Family Housing Mortgage Revenue
(Buckingham Village Apartments)
6.125%, 7/1/2021 3,000,000 3,144,510
Beford County Industrial Development Authority,
IDR, Refunding (Nekossa Packaging Corp. Project)
5.60%, 12/1/2025 4,500,000 4,548,465
Chesapeake Bay Bridge and Tunnel Commission District,
Revenue, Refunding
General Resolution 5.50%, 7/1/2025 (Insured; MBIA) 2,500,000 2,679,250
Covington-Alleghany County Industrial Development Authority,
Hospital Facility Revenue (Alleghany Regional Hospital)
6.875%, 4/1/2022 (Prerefunded 4/1/2002)a 1,000,000 1,102,530
Dinwiddie County Industrial Development Authority, LR
(Dinwiddie County School Facilities Project) 6%, 2/1/2018 500,000 521,120
Dulles Town Center Community Development Authority,
Special Assessment Tax (Dulles Town Center Project)
6.25%, 3/1/2026 3,000,000 3,072,030
Fairfax County, Public Improvement and Refunding
4.75%, 6/1/2019 3,250,000 3,137,647
Fairfax County Park Authority, Park Facilities Revenue
6.625%, 7/15/2020 2,665,000 2,854,268
Fairfax County Redevelopment and Housing Authority, MFHR,
Refunding (Paul Spring Retirement Center):
5.90%, 6/15/2017 (Insured; FHA) 200,000 212,786
6%, 12/15/2028 (Insured; FHA) 600,000 638,166
Fairfax County Water Authority, Water Revenue
8.04%, 4/1/2029b,c 2,000,000 2,174,200
Hampton Redevelopment and Housing Authority, First Mortgage
Revenue, Refunding
(Olde Hampton Hotel Associates Project) 6.50%, 7/1/2016 2,640,000 2,670,202
Industrial Development Authority of the City of Hopewell,
Health Care Facility Refunding Revenue:
(Colonial Heights Convalescent Center Project)
5.60%, 10/1/2003 205,000 210,746
(Forest Hill Convalescent Center Project):
6%, 10/1/2006 260,000 273,523
6.15%, 10/1/2007 280,000 296,030
6.25%, 10/1/2008 115,000 122,066
(Westport Convalescent Center Project):
5.90%, 10/1/2005 315,000 329,562
6.15%, 10/1/2007 175,000 185,019
6.25%, 10/1/2008 410,000 435,190
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------
Principal
Long-Term Municipal Investments (continued) Amount ($) Value ($)
- ----------------------------------------------------------------------------------
<S> <C> <C>
Virginia (continued)
Industrial Development Authority of Giles County,
Exempt Facility Revenue (Hoechst Celanese Corp. Project)
5.95%, 12/1/2025 3,000,000 3,093,300
Industrial Development Authority of the County of Henrico,
SWDR (Browning-Ferris Industries of
South Atlantic, Inc. Project) 5.45%, 1/1/2014 3,500,000 3,458,315
Industrial Development Authority of the County of
Prince William,
Revenue:
Hospital Facility (Potomac Hospital Corp. of
Prince William)
6.85%, 10/1/2025 (Prerefunded 10/1/2005)a 1,000,000 1,175,730
Refunding (Potomac Place) 6.25%, 12/20/2027 700,000 771,918
Residential Care Facility (First Mortgage-Westminster
Lake Ridge) 6.625%, 1/1/2026 3,500,000 3,732,925
Industrial Development Authority of the City of Winchester,
Residential Care Facility First Mortgage Revenue
(Westminster-- Canterbury):
5.75%, 1/1/2018 1,000,000 999,910
5.75%, 1/1/2027 2,750,000 2,719,695
Industrial Development Authority of the Town of West Point,
SWDR (Chesapeake Corp. Project) 6.375%, 3/1/2019 2,500,000 2,647,825
Isle Wight County Industrial Development Authority,
Solid Waste Disposal Facilities Revenue
(Union Camp Corp. Project) 6.10%, 5/1/2027 3,500,000 3,688,825
Metropolitan Washington Airports Authority,
Airport System Revenue
5.50%, 10/1/2023 2,000,000 2,037,220
Prince William County Park Authority, Revenue
6.875%, 10/15/2016 3,000,000 3,370,560
Richmond Metropolitan Authority, Expressway Revenue,
Refunding 5.25%, 7/15/2017 (Insured; FGIC) 3,100,000 3,246,661
Staunton Industrial Development Authority,
Educational Facilities Revenue, Refunding
(Mary Baldwin College) 6.75%, 11/1/2021 3,145,000 3,395,405
University of Virginia, University Revenue
5.75%, 5/1/2021 2,325,000 2,485,797
Upper Occoquan Sewer Authority, Regional Sewer Revenue
5.15%, 7/1/2020 (Insured; MBIA) 2,000,000 2,053,300
Virginia Beach Development Authority, Revenue:
Industrial Development Mortgage Refunding
(Ramada Oceanside Resort) 8%, 8/1/2010 310,000 339,196
Nursing Home (Sentara Life Care Corp.) 7.75%, 11/1/2021 1,000,000 1,093,640
</TABLE>
The Fund 9
<PAGE>
STATEMENT OF INVESTMENTS (continued)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------
Principal
Long-Term Municipal Investments (continued) Amount ($) Value ($)
- ----------------------------------------------------------------------------------
<S> <C> <C>
Virginia (continued)
Virginia Housing Development Authority,
Commonwealth Mortgage:
6.60%, 7/1/2020 1,915,000 2,002,401
5.50%, 1/1/2022 7,500,000 7,675,725
U. S. Related--27.8%
Commonwealth of Puerto Rico (Public Improvement):
6.80%, 7/1/2021 (Prerefunded 7/1/2002)a 1,000,000 1,109,810
6%, 7/1/2026 (Prerefunded 7/1/2007)a 1,500,000 1,708,275
Guam Airport Authority, Revenue 6.70%, 10/1/2023 2,000,000 2,197,600
Puerto Rico Electric Power Authority, Power Revenue:
5%, 7/1/2012 (Insured; MBIA) 50,000 51,839
6.005%, 7/1/2012b,c 3,000,000 3,226,020
Puerto Rico Highway and Transportation Authority,
Highway Revenue:
5.50%, 7/1/2013 (Insured; MBIA) 10,000 10,967
7.005%, 7/1/2013b 2,290,000 2,732,932
6.625%, 7/1/2018 (Prerefunded 7/1/2002)a 2,000,000 2,209,220
5.50%, 7/1/2026 3,500,000 3,638,950
Refunding 6.25%, 7/1/2015 (Insured; MBIA) 2,000,000 2,351,960
Puerto Rico Ports Authority, Special Facilities Revenue
(American Airlines) 6.25%, 6/1/2026 3,000,000 3,230,910
Virgin Islands Public Finance Authority, Revenue, Refunding,
Matching Fund Loan Notes
7.25%, 10/1/2018 (Prerefunded 10/1/2002)a 4,000,000 4,531,600
Virgin Islands Territory (Hugo Insurance Claims Fund Program)
7.75%, 10/1/2006 (Prerefunded 10/1/2001)a 1,335,000 1,457,993
Virgin Islands Water and Power Authority, Electric System
7.40%, 7/1/2011 (Prerefunded 7/1/2001)a 1,855,000 2,015,977
- ----------------------------------------------------------------------------------
Total Investments (cost $103,744,462) 99.4% 109,069,711
Cash and Receivables (Net) .6% 642,574
Net Assets 100.0% 109,712,285
</TABLE>
10
<PAGE>
- --------------------------------------------------------------------------------
Summary of Abbreviations
FGIC Financial Guaranty Insurance MBIA Municial Bond Investors
Company Assurance Insurance
FHA Federal Housing Administration Corporation
IDR Industrial Development MFHR Multi-Family Housing
Revenue Revenue
LR Lease Revenue SWDR Solid Waste Disposal Revenue
Summary of Combined Ratings (Unaudited)
Fitch or Moody's or Standard & Poor's Value (%)
- ------------------------------------------------------------------
AAA Aaa AAA 26.3
AA Aa AA 16.0
A A A 18.7
BBB Baa BBB 16.0
Not Rated d Not Rated d Not Rated d 23.0
100.0
[FN]
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. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At April 30, 1999,
these securities amounted to $5,400,220 or 4.9% of net assets.
d Securities which, while not rated by Fitch, Moody's or Standard & Poor's
have been determined by the Manager to be of comparable quality to those
rated securities in which the Fund may invest.
See notes to financial statements.
</FN>
The Fund 11
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
April 30, 1999
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------
Cost Value
- ----------------------------------------------------------------------------------
<S> <C> <C>
Assets ($):
Investments in securities--See Statement of Investments 103,744,462 109,069,711
Interest receivable 1,820,945
Receivable for shares of Beneficial Interest subscribed 98,375
Prepaid expenses 19,334
111,008,365
- ----------------------------------------------------------------------------------
Liabilities ($):
Due to The Dreyfus Corporation and affiliates 49,162
Due to Distributor 38,491
Cash overdraft due to Custodian 1,121,338
Payable for shares of Beneficial Interest redeemed 65,837
Accrued expenses 21,252
1,296,080
- ----------------------------------------------------------------------------------
Net Assets ($) 109,712,285
- ----------------------------------------------------------------------------------
Composition of Net Assets ($):
Paid-in capital 104,369,915
Accumulated net realized gain (loss) on investments 17,121
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 5,325,249
- ----------------------------------------------------------------------------------
Net Assets ($) 109,712,285
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Net Asset Value Per Share
Class A Class B Class C
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Assets ($) 71,611,678 34,912,132 3,188,475
Shares Outstanding 4,137,746 2,017,358 184,307
- --------------------------------------------------------------------------------
Net Asset Value Per Share ($) 17.31 17.31 17.30
</TABLE>
[FN]
See notes to financial statements.
</FN>
12
<PAGE>
STATEMENT OF OPERATIONS
Year Ended April 30, 1999
- ---------------------------------------------------------------------
Investment Income ($)
- ---------------------------------------------------------------------
Income
Interest Income 6,237,543
Expenses:
Management fee--Note 3(a) 596,668
Shareholder servicing costs--Note 3(c) 337,463
Distribution fees--Note 3(b) 215,468
Registration fees 19,257
Professional fees 11,708
Custodian fees 11,301
Prospectus and shareholders' reports 10,105
Trustees' fees and expenses--Note 3(d) 1,342
Loan commitment fees--Note 2 518
Miscellaneous 10,091
Total Expenses 1,213,921
Investment Income--Net 5,023,622
- ---------------------------------------------------------------------
Realized and Unrealized Gain (Loss) on Investments--Note 4:
Net realized gain (loss) on investments 1,384,592
Net unrealized appreciation (depreciation) on investments (350,457)
Net Realized and Unrealized Gain (Loss) on Investments 1,034,135
Net Increase in Net Assets Resulting from Operations 6,057,757
[FN]
See notes to financial statements.
</FN>
The Fund 13
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
- -----------------------------------------------------------------------
Year Ended April 30,
----------------------------
1999 1998
- -----------------------------------------------------------------------
Operations ($):
Investment income--net 5,023,622 5,109,173
Net realized gain (loss) on investments 1,384,592 716,552
Net unrealized appreciation (depreciation)
on investments (350,457) 3,846,818
Net Increase (Decrease) in Net Assets
Resulting from Operations 6,057,757 9,672,543
- -----------------------------------------------------------------------
Dividends to Shareholders From ($):
Investment income--net:
Class A shares (3,225,635) (3,257,087)
Class B shares (1,688,611) (1,798,219)
Class C shares (109,376) (53,867)
Net realized gain on investments:
Class A shares (884,913) (11,050)
Class B shares (533,711) (6,895)
Class C shares (37,805) (231)
Total Dividends (6,480,051) (5,127,349)
- -----------------------------------------------------------------------
Beneficial Interest Transactions ($):
Net proceeds from shares sold:
Class A shares 12,134,539 5,997,540
Class B shares 4,716,025 5,831,012
Class C shares 1,520,409 1,286,247
Dividends reinvested:
Class A shares 2,193,747 1,642,346
Class B shares 1,198,045 888,868
Class C shares 21,422 11,545
Cost of shares redeemed:
Class A shares (7,521,104) (6,456,984)
Class B shares (10,983,245) (4,112,867)
Class C shares (326,419) (11,835)
Increase (Decrease) in Net Assets from
Beneficial Interest Transactions 2,953,419 5,075,872
Total Increase (Decrease) in Net Assets 2,531,125 9,621,066
- -----------------------------------------------------------------------
Net Assets ($):
Beginning of Period 107,181,160 97,560,094
End of Period 109,712,285 107,181,160
[FN]
See notes to financial statements.
</FN>
14
<PAGE>
- -----------------------------------------------------------------------
Year Ended April 30,
--------------------------
1999 1998
- -----------------------------------------------------------------------
Capital Share Transactions:
Class A
Shares sold 694,996 346,087
Shares issued for dividends reinvested 125,125 94,990
Shares redeemed (429,470) (373,556)
Net Increase (Decrease) in Shares Outstanding 390,651 67,521
- -----------------------------------------------------------------------
Class B
Shares sold 269,387 339,021
Shares issued for dividends reinvested 68,334 51,407
Shares redeemed (629,062) (236,978)
Net Increase (Decrease) in Shares Outstanding (291,341) 153,450
- -----------------------------------------------------------------------
Class C
Shares sold 86,730 74,375
Shares issued for dividends reinvested 1,224 668
Shares redeemed (18,602) (682)
Net Increase (Decrease) in Shares Outstanding 69,352 74,361
[FN]
See notes to financial statements.
</FN>
The Fund 15
<PAGE>
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the
fiscal periods indicated. Certain information reflects financial results for a
single Fund share. "Total return" shows how much your investment in the Fund
would have increased (or decreased) during each period, assuming you had
reinvested all dividends and distributions. These figures have been derived from
the Fund's financial statements.
- --------------------------------------------------------------------------------
Year Ended April 30,
--------------------------------------
Class A Shares 1999 1998 1997 1996 1995
- --------------------------------------------------------------------------------
Per Share Data ($):
Net asset value, beginning of period 17.37 16.61 16.27 16.03 16.02
Investment Operations:
Investment income--net .85 .88 .94 .93 .94
Net realized and unrealized gain (loss)
on investments .17 .76 .34 .24 .04
Total from Investment Operations 1.02 1.64 1.28 1.17 .98
Distributions:
Dividends from investment income--net (.85) (.88) (.94) (.93) (.94)
Dividends from net realized gain
on investments (.23) (.00)a -- -- --
Dividends in excess of net realized gain
on investments -- -- -- -- (.03)
Total Distributions (1.08) (.88) (.94) (.93) (.97)
Net asset value, end of period 17.31 17.37 16.61 16.27 16.03
- --------------------------------------------------------------------------------
Total Return (%)b 5.98 10.05 8.02 7.32 6.39
- --------------------------------------------------------------------------------
Ratios/Supplemental Data ($):
Ratio of expenses to average net assets .92 .75 .39 .50 .39
Ratio of net investment income
to average net assets 4.83 5.10 5.67 5.58 5.93
Decrease reflected in above expense ratios
due to undertakings by the Manager -- .14 .55 .55 .55
Portfolio Turnover Rate 30.19 21.25 45.29 50.06 21.60
Net Assets, end of period ($ X 1,000) 71,612 65,086 61,099 61,149 62,428
[FN]
a Amount represents less than $.01 per share.
b Exclusive of sales load.
See notes to financial statements.
</FN>
16
<PAGE>
- --------------------------------------------------------------------------------
Year Ended April 30,
--------------------------------------
Class B Shares 1999 1998 1997 1996 1995
- --------------------------------------------------------------------------------
Per Share Data ($):
Net asset value, beginning of period 17.37 16.60 16.27 16.03 16.02
Investment Operations:
Investment income--net .76 .79 .86 .84 .85
Net realized and unrealized gain (loss)
on investments .17 .77 .33 .24 .04
Total from Investment Operations .93 1.56 1.19 1.08 .89
Distributions:
Dividends from investment income--net (.76) (.79) (.86) (.84) (.85)
Dividends from net realized gain
on investments (.23) (.00)a -- -- --
Dividends in excess of net realized gain
on investments -- -- -- -- (.03)
Total Distributions (.99) (.79) (.86) (.84) (.88)
Net asset value, end of period 17.31 17.37 16.60 16.27 16.03
- --------------------------------------------------------------------------------
Total Return (%)b 5.44 9.56 7.41 6.77 5.83
- --------------------------------------------------------------------------------
Ratios/Supplemental Data (%):
Ratio of expenses to average net assets 1.43 1.26 .90 1.01 .90
Ratio of net investment income
to average net assets 4.32 4.58 5.15 5.06 5.40
Decrease reflected in above expense ratios
due to undertakings by the Manager -- .14 .55 .55 .55
Portfolio Turnover Rate 30.19 21.25 45.29 50.06 21.60
Net Assets, end of period ($ X 1,000) 34,912 40,100 35,787 33,120 28,813
[FN]
a Amount represents less than $.01 per share.
b Exclusive of sales load.
See notes to financial statements.
</FN>
The Fund 17
<PAGE>
FINANCIAL HIGHLIGHTS (continued)
- --------------------------------------------------------------------------------
Year Ended April 30,
---------------------------------
Class C Shares 1999 1998 1997 1996a
- --------------------------------------------------------------------------------
Per Share Data ($):
Net asset value, beginning of period 17.36 16.60 16.26 16.17
Investment Operations:
Investment income--net .72 .75 .81 .57
Net realized and unrealized gain (loss)
on investments .17 .76 .34 .09
Total from Investment Operations .89 1.51 1.15 .66
Distributions:
Dividends from investment income--net (.72) (.75) (.81) (.57)
Dividends from net realized gain on investments (.23) -- -- --
Total Distributions (.95) (.75) (.81) (.57)
Net asset value, end of period 17.30 17.36 16.60 16.26
- --------------------------------------------------------------------------------
Total Return ($)b 5.19 9.22 7.18 5.64c
- --------------------------------------------------------------------------------
Ratios/Supplemental Data (%):
Ratio of expenses to average net assets 1.66 1.54 1.17 1.21c
Ratio of net investment income
to average net assets 4.06 4.24 4.83 4.55c
Decrease reflected in above expense ratios
due to undertakings by the Manager -- .11 .54 .52c
Portfolio Turnover Rate 30.19 21.25 45.29 50.06
Net Assets, end of period ($ x 1,000) 3,188 1,996 674 166
[FN]
a From August 15, 1995 (commencement of initial offering) to April 30, 1996.
b Exclusive of sales load.
c Annualized.
See notes to financial statements.
</FN>
18
<PAGE>
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, as amended (the "Act"), as a non-diversified
open- end management investment company, and operates as a series company
currently offering thirteen series including the Virginia 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 assumption. 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")
The Fund 19
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
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. Under the terms of the custody
agreement, the Fund receives net earnings credits based on available cash
balances left on deposit.
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.
20
<PAGE>
(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 of 1986, as amended (the
"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 Code, and to make distributions
of income and net realized capital gain sufficient to relieve it from
substantially all Federal income and excise taxes.
NOTE 2--Bank Line of Credit:
The Fund participates with other Dreyfus-managed funds in a $600 million
redemption credit facility ("Facility") to be utilized for temporary or
emergency purposes, including the financing of redemptions. In connection
therewith, the Fund has agreed to pay commitment fees on its pro rata portion of
the Facility. Interest is charged to the Fund at rates based on prevailing
market rates in effect at the time of borrowings. During period ended April 30,
1999, 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. The Manager had undertaken from May 1,
1998 to April 30, 1999 to reduce the management fee paid by the Fund, to the
extent that the Fund's aggregate expenses, exclusive of taxes, brokerage,
interest on
The Fund 21
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
borrowings, commitment fees and extraordinary expenses, exceed an annual rate
of 1% of the value of the Fund's average daily net assets.
(b) Under the Distribution Plan adopted pursuant to Rule 12b-1 under the Act,
Class B and Class C shares pay the Distributor for distributing their 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, 1999, Class B and Class C
shares were charged $195,297 and $20,171, respectively, pursuant to the
Distribution Plan.
(c) Under the Shareholder Services Plan, Class A, Class B and Class C shares pay
the Distributor at an annual rate of .25 of 1% of the value of their average
daily net assets 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, 1999, Class A, Class B and Class C
shares were charged $166,840, $97,648 and $6,724 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, 1999, the Fund was charged $44,772 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.
22
<PAGE>
NOTE 4--Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding
short-term securities, during the period ended April 30, 1999 amounted to
$32,438,563 and $33,026,256, respectively.
At April 30, 1999, accumulated net unrealized appreciation on investments was
$5,325,249, consisting of $5,499,036 gross unrealized appreciation and $173,787
gross unrealized depreciation.
At April 30, 1999, 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).
The Fund 23
<PAGE>
REPORT OF INDEPENDENT AUDITORS
Shareholders and Board of Trustees
Dreyfus Premier State Municipal Bond Fund, Virginia Series
We have audited the accompanying statement of assets and liabilities, including
the statement of investments, of Dreyfus Premier State Municipal Bond Fund,
Virginia Series (the "Fund") (one of the Funds constituting the Dreyfus Premier
State Municipal Bond Fund) as of April 30, 1999 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, 1999 by correspondence with the custodian. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Fund at April 30, 1999, 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 2, 1999
24
<PAGE>
IMPORTANT TAX INFORMATION (Unaudited)
In accordance with Federal tax law, the Fund hereby makes the following
designations regarding its fiscal year ended April 30, 1999:
--all the dividends paid from investment income--net are "exempt-interest
dividends" (not subject to regular Federal and, for individuals who are
Virginia residents, Virginia personal income taxes), and
--the Fund hereby designates $.2243 per share as a long-term capital gain
distributions of the $.2346 per share paid on December 8, 1998.
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 1999 calendar year on Form 1099-DIV
which will be mailed by January 31, 2000.
The Fund 25
<PAGE>
For More Information
Dreyfus Premier
State Municipal Bond Fund,
Virginia 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
Distributor
Premier Mutual Fund Services, Inc.
60 State Street
Boston, MA 02109
To obtain information:
By telephone
Call your financial representative or
1-800-554-4611
By mail Write to:
The Dreyfus Premier
Family of Funds
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
Not FDIC-Insured * Not Bank-Guaranteed * May Lose Value
(c) 1999 Dreyfus Service Corporation 066/625AR994
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
DREYFUS PREMIER STATE MUNICIPAL BOND FUND, VIRGINIA SERIES
CLASS A SHARES AND THE LEHMAN BROTHERS MUNICIPAL BOND
INDEX
EXHIBIT A:
DREYFUS
PREMIER STATE
LEHMAN BROTHERS MUNICIPAL BOND FUND,
PERIOD MUNICIPAL VIRGINIA SERIES
BOND INDEX * (CLASS A SHARES)
8/1/91 10,000 9,548
4/30/92 10,734 10,375
4/30/93 12,092 11,965
4/30/94 12,353 12,097
4/30/95 13,175 12,869
4/30/96 14,222 13,810
4/30/97 15,166 14,918
4/30/98 16,576 16,417
4/30/99 17,727 17,398
*Source: Lehman Brothers
