Dreyfus Premier
State Municipal
Bond Fund,
Connecticut Series
SEMIANNUAL REPORT October 31, 2000
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured * Not Bank-Guaranteed * May Lose Value
Contents
THE FUND
--------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 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
FOR MORE INFORMATION
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Back Cover
The Fund
Dreyfus Premier
State Municipal Bond Fund, Connecticut Series
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Premier State
Municipal Bond Fund, Connecticut Series, covering the six-month period from May
1, 2000 through October 31, 2000. Inside, you'll find valuable information about
how the fund was managed during the reporting period, including a discussion
with the fund's portfolio manager, Samuel Weinstock.
Despite some modest fluctuations because of changing economic conditions,
municipal bond prices generally rose modestly over the six-month reporting
period. Most sectors of the municipal bond market also benefited from slowing
economic growth as well. Additionally, the moderating effects of the Federal
Reserve Board' s (the "Fed") interest-rate hikes during the first half of 2000
helped the Fed to achieve its goal of slowing the U.S. economy. Other factors
such as higher energy prices and a weak euro also served to slow economic
growth.
In general, the overall investment environment that prevailed in the second half
of the 1990s had provided returns well above their long-term averages,
establishing unrealistic expectations for some investors. We believe that as the
risks of the stock market have become more apparent recently, the relative
stability and income potential of municipal bonds can make them an attractive
investment as part of a well-balanced portfolio.
For more information about the economy and financial markets, we encourage you
to visit the Market Commentary section of our website at www.dreyfus.com. Or, to
speak with a Dreyfus customer service representative, call us at 1-800-782-6620.
Thank you for investing in Dreyfus Premier State Municipal Bond Fund,
Connecticut Series.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
November 15, 2000
DISCUSSION OF FUND PERFORMANCE
Samuel Weinstock, Portfolio Manager
How did Dreyfus Premier State Municipal Bond Fund, Connecticut Series perform
during the period?
For the six-month period ended October 31, 2000, the fund's Class A shares
provided a 5.39% total return, its Class B shares provided a 5.12% total return
and its Class C shares provided a 5.00% total return.(1) In comparison, the
Lipper Connecticut Municipal Debt Funds category average provided a 5.10% total
return for the same period.(2)
We attribute the fund' s good absolute performance to a relatively strong
investment environment for municipal bonds, which was driven primarily by signs
of an economic slowdown in the U.S., as well as positive supply-and-demand
factors.
What is the fund's investment approach?
Our goal is to seek as high a level of federal and Connecticut state tax-exempt
income as is practical without undue risk from a diversified portfolio of
municipal bonds. 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 two years. Second, we evaluate issuers'
credit quality to find bonds that we believe provide high yields at attractive
prices. Third, we look for bonds with attractive 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 use computer models to evaluate the likely performance of bonds under
various market scenarios, including a 0.25% rise in interest rates and a 0.50%
decline. When we find securities that we believe will provide participation when
the market rises and some protection against declines, we tend to hold them for
the long term.
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
What other factors influenced the fund's performance?
The fund was positively influenced over the past six months by favorable
economic and market conditions. When the reporting period began on May 1, 2000,
the U.S. and Connecticut economies continued to grow strongly, raising concerns
that long-dormant inflationary pressures might reemerge. In response, the
Federal Reserve Board (the "Fed'') raised short-term interest rates once during
the reporting period for an increase of 0.50 percentage points. However, signs
soon emerged that the Fed's previous rate hikes were having the desired effect
of slowing the economy, suggesting that the Fed's restrictive monetary policies
could be near an end.
In addition, the continuing strength of Connecticut' s economy helped keep
municipal bond yields relatively low compared to taxable bonds. Connecticut and
its municipalities enjoyed higher revenues during the reporting period,
curtailing their need to borrow and resulting in a reduced supply of securities
nationally compared to the same period in 1999. When supply falls and demand
rises or remains steady, prices of existing bonds tend to move higher
In this environment, we sold some of our holdings that were less liquid -- that
is, more difficult to trade -- than we would have liked. We also sold bonds into
a secondary market characterized by very strong demand from individual
investors. As a result, we have generally been able to maximize the prices we
receive.
We redeployed the proceeds of those sales primarily into income-oriented bonds
issued to finance public projects such as housing and parking lots. We also
invested in intermediate-term bonds from Puerto Rico, which are exempt from
state income taxes for U.S. residents, as well as insured bonds issued by
Connecticut hospitals. These purchases helped us modestly extend the fund's
average duration -- a measure of sensitivity to changing interest rates -- to a
point slightly longer than our peer group average.
What is the fund's current strategy?
We have generally maintained the same strategy we employed through much of the
reporting period, but with a more defensive bias in case of a market downturn.
In our efforts to strike a balance between income and risk, we have recently
sold some of our holdings of short-term pre-refunded bonds, replacing them with
high quality bonds in the intermediate-term maturity range.
We also intend to carefully monitor the current economic slowdown to identify
factors that may affect our holdings' credit quality. By conducting intensive
credit analyses, we believe that we can more effectively seek to improve the
fund' s income stream. We also intend to manage risk through broad
diversification.
November 15, 2000
(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.
HAD THESE CHARGES BEEN REFLECTED, RETURNS WOULD HAVE BEEN LOWER. PAST
PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. SHARE PRICE, YIELD AND
INVESTMENT RETURN FLUCTUATE SUCH THAT UPON REDEMPTION, FUND SHARES MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST. INCOME MAY BE SUBJECT TO STATE
AND LOCAL TAXES FOR NON-CONNECTICUT RESIDENTS, AND SOME INCOME MAY BE
SUBJECT TO THE FEDERAL ALTERNATIVE MINIMUM TAX (AMT) FOR CERTAIN INVESTORS.
CAPITAL GAINS, IF ANY, ARE FULLY TAXABLE.
(2) SOURCE: LIPPER INC.
The Fund
STATEMENT OF INVESTMENTS
October 31, 2000 (Unaudited)
STATEMENT OF INVESTMENTS
<TABLE>
<CAPTION>
Principal
LONG-TERM MUNICIPAL INVESTMENTS--100.2% Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
CONNECTICUT--74.5%
Connecticut:
4.973%, 3/15/2012 5,000,000 (a,b) 5,055,200
5%, 3/15/2012 70,000 70,386
5.25%, 3/1/2012 3,000,000 3,067,830
5.125%, 3/15/2013 (Prerefunded 3/15/2008) 25,000 (c) 25,919
5.125%, 3/15/2013 4,425,000 4,457,479
5.25%, 3/1/2016 2,700,000 2,702,511
(Clean Water Fund) Revenue :
5.25%, 7/15/2012 15,000 15,388
5.473%, 7/15/2012 4,850,000 (a) 5,100,988
5.125%, 9/1/2014 3,050,000 3,059,852
Special Tax Obligation Revenue
(Transportation Infrastructure):
5.50%, Series A, 11/1/2007 (Insured; FSA) 4,580,000 4,836,938
5.50%, Series B, 11/1/2007 (Insured; FSA) 5,000,000 5,280,500
7.125%, 6/1/2010 3,400,000 3,960,966
6.75%, 6/1/2011 (Prerefunded 6/1/2003) 8,500,000 (c) 8,981,270
Connecticut Development Authority, Revenue:
First Mortgage Gross:
(Health Care Project, Church Homes Inc.)
5.80%, 4/1/2021 3,000,000 2,539,950
(Health Care Project, Elim Park Baptist Home)
5.375%, 12/1/2018 2,300,000 1,938,509
Life Care Facilities (Seabury Project)
8.75%, 9/1/2006 1,425,000 1,503,446
Pollution Control (Light and Power) 5.85%, 9/1/2028 10,150,000 9,552,977
Water Facilities (Bridgeport Hydraulic),
6.15%, 4/1/2035 (Insured; AMBAC) 2,750,000 2,848,010
Connecticut Health and Educational Facilities
Authority, Revenue:
(Danbury Hospital) 5.75%, 7/1/2029 (Insured; AMBAC) 3,000,000 3,034,320
(Greenwich Academy) 5.75%, 3/1/2026 (Insured; FSA) 3,130,000 3,160,455
(Hartford University) 6.80%, 7/1/2022 8,500,000 8,603,870
(Hospital for Special Care) 5.375%, 7/1/2017 4,430,000 3,716,327
(Johnson Evergreen Corp.) 8.50%, 7/1/2022 4,500,000 4,666,815
(Loomis Chaffee School Project)
6%, 7/1/2025 (Insured; MBIA) 1,000,000 1,030,790
(Middlesex Hospital)
6.25%, 7/1/2022 (Insured; MBIA)
(Prerefunded 7/1/2002) 3,500,000 (c) 3,668,105
(New Britian General Hospital) 6.125%, 7/1/2014
(Insured; AMBAC) 1,000,000 1,057,500
(New Britain Memorial Hospital) 7.75%, 7/1/2022
(Prerefunded 7/1/2002) 11,000,000 (c) 11,794,200
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
-----------------------------------------------------------------------------------------------------------------------------------
CONNECTICUT (CONTINUED)
Connecticut Health and Educational Facilities
Authority, Revenue (continued):
(Norwalk Hospital) 6.25%, 7/1/2022
(Insured; MBIA) (Prerefunded 7/1/2002) 3,860,000 (c) 4,045,396
(Nursing Home Program--3030 Park Fairfield Health
Center Project)
6.25%, 11/1/2021 2,500,000 2,552,775
(Quinnipiac College) 6%, 7/1/2013 (Prerefunded 7/1/2003) 4,100,000 (c) 4,323,860
(Sacred Heart University):
6.50%, 7/1/2016 (Prerefunded 7/1/2006) 1,465,000 (c) 1,626,941
6.125%, 7/1/2017 (Prerefunded 7/1/2007) 1,000,000 (c) 1,094,440
6.625%, 7/1/2026 (Prerefunded 7/1/2006) 2,720,000 (c) 3,037,451
(Trinity College) 5.875%, 7/1/2026 (Insured; MBIA) 2,500,000 2,552,300
(University of New Haven):
6.625%, 7/1/2016 2,050,000 2,099,795
6.70%, 7/1/2026 8,605,000 8,730,977
(William W. Backus Hospital) 5.75%, 7/1/2027
(Insured; AMBAC) 2,500,000 2,516,725
(Windham Community Memorial Hospital) 6%, 7/1/2020 1,000,000 992,490
(Yale, New Haven Hospital) 5.70%, 7/1/2025
(Insured; MBIA) 7,970,000 7,996,301
Connecticut Housing Finance Authority:
5.75%,11/15/2021 4,000,000 3,999,880
5.85%, 5/15/2031 7,500,000 7,513,350
(Housing Mortgage Finance Program):
6.125%, 5/15/2018 (Insured; MBIA) 1,655,000 1,693,810
6.45%, 5/15/2022 (Prerefunded 11/15/2000) 4,535,000 (c) 4,538,492
6.70%, 11/15/2022 5,615,000 5,784,292
6.75%, 11/15/2023 5,010,000 5,232,644
6%, Subseries F-2, 11/15/2027 4,645,000 4,700,926
6%, Series G, 11/15/2027 4,000,000 4,048,160
5.85%, Subseries B-2, 11/15/2028 9,875,000 9,895,343
5.85%, Subseries C-2, 11/15/2028 6,255,000 6,246,243
5.45%, 11/15/2029 5,805,000 5,490,021
Eastern Connecticut Resource Recovery Authority:
Solid Waste Revenue
5.598%, 1/1/2014 4,000,000 (a) 3,027,880
(Wheelabrator Lisbon Project):
5.50%, 1/1/2014 50,000 43,924
5.50%, 1/1/2020 9,080,000 7,603,410
Greenwich Housing Authority, MFHR (Greenwich Close):
6.25%, 9/1/2017 2,840,000 2,689,934
6.35%, 9/1/2027 1,800,000 1,694,160
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
CONNECTICUT (CONTINUED)
Hartford Parking System, Revenue:
6.40%, 7/1/2020 1,000,000 1,009,210
6.50%, 7/1/2025 1,000,000 1,011,320
Sprague, Environmental Improvement Revenue
(International Paper Company Project) 5.70%, 10/1/2021 1,350,000 1,252,044
Stamford 6.60%, 1/15/2010 2,750,000 3,149,190
University of Connecticut:
5.75%, 3/1/2015 (Insured; FGIC) 1,770,000 1,869,386
5.75%, 3/1/2016 (Insured; FGIC) 2,500,000 2,628,050
Special Obligation Student Fee Revenue:
6%, 11/15/2016 (Insured; FGIC) 2,425,000 2,617,012
6%, 11/15/2017 (Insured; FGIC) 2,000,000 2,147,840
5.75%, 11/15/2020 (Insured; FGIC) 1,000,000 1,036,800
5.75%, 11/15/2029 (Insured; FGIC) 2,500,000 2,556,325
U. S. RELATED--25.7%
Childrens Trust Fund Tobacco Settlement Revenue,
Asset Backed Bonds
6%, 7/1/2026 5,000,000 (d) 4,970,350
Commonwealth of Puerto Rico:
6.168%, 7/1/2012 2,000,000 (a) 2,271,600
6.168%, 7/1/2013 3,950,000 (a) 4,465,870
6.65%, 7/1/2015 (Insured; MBIA) 6,690,000 7,178,838
(Public Improvement):
5.50%, 7/1/2012 (Insured; MBIA) 50,000 53,395
5.50%, 7/1/2013 (Insured; MBIA) 100,000 106,530
5.25%, 7/1/2014 (Insured; MBIA) 3,925,000 4,066,339
5.25%, 7/1/2015 (Insured; MBIA) 1,000,000 1,029,370
6%, 7/1/2015 (Insured; MBIA) 2,000,000 2,218,100
Zero Coupon, 7/1/2017 (Insured; MBIA) 3,800,000 1,574,720
6.80%, 7/1/2021 (Prerefunded 7/1/2002) 6,000,000 (c) 6,346,380
Puerto Rico Aqueduct and Sewer Authority, Revenue
6.25%, 7/1/2013 (Insured; MBIA) 9,000,000 10,240,920
Puerto Rico Highway and Transportation Authority,
Highway Revenue:
5.941%, 7/1/2010 3,200,000 (a) 3,376,000
5.50%, 7/1/2013 (Insured; MBIA) 10,000 10,653
6.145%, 7/1/2013 2,290,000 (a) 2,589,074
5.50%, 7/1/2026 (Insured; FSA) 2,375,000 2,381,436
5%, 7/1/2036 2,500,000 2,273,600
5.50%, 7/1/2036 5,000,000 4,931,850
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
U. S. RELATED (CONTINUED)
Puerto Rico Industrial Tourist, Educational, Medical and
Environmental Control Facilities
Financing Authority, Revenue:
(Ana G Mendez University System Project)
5.375%, 2/1/2029 2,250,000 2,035,530
(Teachers Retirement System) 5.50% 7/1/2021 800,000 805,648
Puerto Rico Ports Authority, Special Facilities Revenue
(American Airlines):
6.30%, 6/1/2023 1,900,000 1,927,512
6.25%, 6/1/2026 6,155,000 6,269,729
University of Puerto Rico, University Revenue
5.50%, 6/1/2015 (Insured; MBIA) 5,000,000 5,142,800
Virgin Islands Public Finance Authority, Revenue,
Gross Receipts Taxes Loan Note 6.375%, 10/1/2019 5,000,000 5,140,200
Virgin Islands Water and Power Authority,
Refunding (Electric Systems)
5.30%, 7/1/2021 2,000,000 1,785,500
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TOTAL INVESTMENTS (cost $318,780,395) 100.2% 323,971,542
LIABILITIES, LESS CASH AND RECEIVABLES (.2%) (495,126)
NET ASSETS 100.0% 323,476,416
The Fund
</TABLE>
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Summary of Abbreviations
AMBAC American Municipal Bond
Assurance Corporation
FGIC Financial Guaranty Insurance
Company
FSA Financial Security Assurance
MBIA Municipal Bond Investors
Assurance Insurance
Corporation
MFHR Multi-Family Housing Revenue
Summary of Combined Ratings (Unaudited)
<TABLE>
<CAPTION>
Fitch or Moody's or Standard & Poor's Value (%)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
AAA Aaa AAA 43.2
AA Aa AA 24.8
A (a) A 2.5
BBB Baa BBB 21.3
BB Ba BB 2.9
Not Rated (e) Not Rated( e) Not Rated (e) 5.3
100.0
(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 OCTOBER 31, 2000, THIS
SECURITY AMOUNTED TO $5,055,200 OR 1.6% OF NET ASSETS.
(C) BONDS WHICH ARE PREREFUNDED ARE COLLATARALIZED BY U.S. GOVERNMENT
SECURITIES WHICH ARE HELD IN ESCROW AND ARE USED TO PAY PRINCIPAL AND
INTEREST ON THE MUNICIPAL ISSUE AND TO RETIRE THE BONDS IN FULL AT THE
EARLIEST REFUNDING DATE.
(D) PURCHASED ON A DELAYED DELIVERY BASIS.
(E) SECURITIES WHICH, WHILE NOT RATED BY FITCH, MOODY'S AND STANDARD & POOR'S
HAVE BEEN DETERMINED BY THE MANAGER TO BE OF COMPARABLE QUALITY TO THOSE
RATED SECURITIES IN WHICH THE FUND MAY INVEST.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
STATEMENT OF ASSETS AND LIABILITIES
October 31, 2000 (Unaudited)
Cost Value
-------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of
Investments 318,780,395 323,971,542
Interest receivable 6,262,668
Receivable for shares of Benefical Interest subscribed 30,000
Prepaid expenses 7,403
330,271,613
-------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 239,338
Cash overdraft due to Custodian 1,255,856
Payable for investment securities purchased 4,950,000
Payable for shares of Benefical Interest redeemed 260,208
Accrued expenses 89,795
6,795,197
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NET ASSETS ($) 323,476,416
-------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 321,334,912
Accumulated net realized gain (loss) on investments (3,049,643)
Accumulated net unrealized appreciation (depreciation)
on investments-Note 4 5,191,147
--------------------------------------------------------------------------------
NET ASSETS ($) 323,476,416
NET ASSET VALUE PER SHARE
<TABLE>
<CAPTION>
Class A Class B Class C
------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Assets ($) 279,842,350 38,673,031 4,961,035
Shares Outstanding 24,297,050 3,360,841 431,503
------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE ($) 11.52 11.51 11.50
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
STATEMENT OF OPERATIONS
Six Months Ended October 31, 2000 (Unaudited)
-------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INTEREST INCOME 9,614,757
EXPENSES:
Management fee--Note 3(a) 892,908
Shareholder servicing costs--Note 3(c) 491,241
Distribution fees--Note 3(b) 117,380
Professional fees 24,904
Custodian fees 16,473
Prospectus and shareholders' reports 11,152
Registration fees 8,340
Trustees' fees and expenses--Note 3(d) 4,428
Loan commitment fees--Note 2 1,071
Miscellaneous 5,789
TOTAL EXPENSES 1,573,686
INVESTMENT INCOME-NET 8,041,071
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments 178,805
Net unrealized appreciation (depreciation) on investments 8,604,574
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS 8,783,379
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 16,824,450
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
October 31, 2000 Year Ended
(Unaudited) April 30, 2000
--------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 8,041,071 17,421,467
Net realized gain (loss) on investments 178,805 (1,719,512)
Net unrealized appreciation (depreciation)
on investments 8,604,574 (28,371,812)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 16,824,450 (12,669,857)
-------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net:
Class A shares (7,040,133) (15,000,075)
Class B shares (903,239) (2,233,944)
Class C shares (97,699) (187,448)
Net realized gain on investments:
Class A shares -- (2,204,487)
Class B shares -- (348,427)
Class C shares -- (32,235)
TOTAL DIVIDENDS (8,041,071) (20,006,616)
--------------------------------------------------------------------------------
BENEFICAL INTEREST TRANSACTIONS ($):
Net proceeds from shares sold:
Class A shares 16,662,868 39,436,556
Class B shares 3,033,978 8,125,689
Class C shares 790,636 1,173,941
Dividends reinvested:
Class A shares 3,865,485 9,873,750
Class B shares 541,495 1,622,454
Class C shares 59,867 121,987
Cost of shares redeemed:
Class A shares (23,240,422) (64,785,036)
Class B shares (8,256,096) (21,106,153)
Class C shares (409,758) (1,450,758)
INCREASE (DECREASE) IN NET ASSETS FROM
BENEFICIAL INTEREST TRANSACTIONS (6,951,947) (26,987,570)
TOTAL INCREASE (DECREASE) IN NET ASSETS 1,831,432 (59,664,043)
--------------------------------------------------------------------------------
NET ASSETS ($)
Beginning of Period 321,644,984 381,309,027
END OF PERIOD 323,476,416 321,644,984
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF CHANGES IN NET ASSETS (continued)
Six Months Ended
October 31, 2000 Year Ended
(Unaudited) April 30, 2000
--------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
CLASS A (A)
Shares sold 1,471,724 3,412,262
Shares issued for dividends reinvested 339,529 862,286
Shares redeemed (2,047,098) (5,663,577)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (235,845) (1,389,029)
--------------------------------------------------------------------------------
CLASS B (A)
Shares sold 267,485 697,009
Shares issued for dividends reinvested 47,630 141,580
Shares redeemed (730,195) (1,828,104)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (415,080) (989,515)
--------------------------------------------------------------------------------
CLASS C
Shares sold 69,169 102,199
Shares issued for dividends reinvested 5,268 10,718
Shares redeemed (36,244) (125,428)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 38,193 (12,511)
(A) DURING THE PERIOD ENDED OCTOBER 31, 2000, 431,600 CLASS B SHARES
REPRESENTING $4,885,444, WERE AUTOMATICALLY CONVERTED TO 431,349 CLASS A
SHARES AND DURING THE PERIOD ENDED APRIL 30, 2000, 972,594 CLASS B SHARES
REPRESENTING $11,219,924 WERE AUTOMATICALLY CONVERTED TO 972,092 CLASS A
SHARES.
SEE NOTES TO FINANCIAL STATEMENTS.
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the
fiscal periods indicated. All information (except portfolio turnover rate)
reflects financial results for a single fund share. Total return shows how much
your investment in the fund would have increased (or decreased) during each
period, assuming you had reinvested all dividends and distributions. These
figures have been derived from the fund's financial statements.
<TABLE>
<CAPTION>
Six Months Ended
October 31, 2000 Year Ended April 30,
-----------------------------------------
CLASS A SHARES (Unaudited) 2000 1999 1998 1997 1996
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value,
beginning of period 11.21 12.26 12.23 11.81 11.90 11.76
Investment Operations:
Investment income--net .29 .58 .61 .62 .64 .66
Net realized and unrealized
gain (loss) on investments .31 (.96) .19 .47 .16 .14
Total from Investment Operations .60 (.38) .80 1.09 .80 .80
Distributions:
Dividends from investment
income--net (.29) (.58) (.61) (.62) (.64) (.66)
Dividends from net realized gain
on investments -- (.09) (.16) (.05) (.25) --
Total Distributions (.29) (.67) (.77) (.67) (.89) (.66)
Net asset value, end of period 11.52 11.21 12.26 12.23 11.81 11.90
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) (A) 10.69(b) (3.06) 6.70 9.44 6.84 6.85
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average
net assets .89(b) .90 .89 .90 .93 .92
Ratio of net investment income
to average net assets 5.03(b) 5.08 4.94 5.12 5.32 5.45
Portfolio Turnover Rate 14.56(c) 35.12 21.95 33.31 30.66 28.83
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 279,842 274,962 317,923 310,343 313,881 321,559
(A) EXCLUSIVE OF SALES CHARGE.
(B) ANNUALIZED.
(C) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS (CONTINUED)
Six Months Ended
October 31, 2000 Year Ended April 30,
-----------------------------------------
CLASS B SHARES (Unaudited) 2000 1999 1998 1997 1996
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value,
beginning of period 11.20 12.26 12.23 11.80 11.89 11.76
Investment Operations:
Investment income--net .26 .52 .55 .56 .57 .60
Net realized and unrealized
gain (loss) on investments .31 (.97) .19 .48 .16 .13
Total from Investment Operations .57 (.45) .74 1.04 .73 .73
Distributions:
Dividends from investment
income--net (.26) (.52) (.55) (.56) (.57) (.60)
Dividends from net realized
gain on investments -- (.09) (.16) (.05) (.25) --
Total Distributions (.26) (.61) (.71) (.61) (.82) (.60)
Net asset value, end of period 11.51 11.20 12.26 12.23 11.80 11.89
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) (A) 10.16(b) (3.66) 6.15 8.97 6.28 6.20
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average
net assets 1.41(b) 1.42 1.40 1.42 1.45 1.44
Ratio of net investment income
to average net assets 4.51(b) 4.55 4.42 4.59 4.79 4.92
Portfolio Turnover Rate 14.56(c) 35.12 21.95 33.31 30.66 28.83
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 38,673 42,283 58,416 59,315 54,661 38,838
(A) EXCLUSIVE OF SALES CHARGE.
(B) ANNUALIZED.
(C) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended
October 31, 2000 Year Ended April 30,
-----------------------------------------
CLASS C SHARES (Unaudited) 2000 1999 1998 1997 1996(a)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value,
beginning of period 11.19 12.25 12.22 11.79 11.89 11.84
Investment Operations:
Investment income--net .24 .50 .52 .53 .54 .40
Net realized and unrealized
gain (loss) on investments .31 (.97) .19 .48 .15 .05
Total from Investment Operations .55 (.47) .71 1.01 .69 .45
Distributions:
Dividends from investment
income-net (.24) (.50) (.52) (.53) (.54) (.40)
Dividends from net realized
gain on investments -- (.09) (.16) (.05) (.25) --
Total Distributions (.24) (.59) (.68) (.58) (.79) (.40)
Net asset value, end of period 11.50 11.19 12.25 12.22 11.79 11.89
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)( B) 9.92(c) (3.89) 5.88 8.68 5.93 5.31(c)
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average
net assets 1.65(c) 1.66 1.65 1.68 1.70 1.64(c)
Ratio of net investment income
to average net assets 4.26(c) 4.31 4.15 4.29 4.56 4.31(c)
Portfolio Turnover Rate 14.56(d) 35.12 21.95 33.31 30.66 28.83
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 4,961 4,400 4,970 2,583 1,290 1,007
(A) FROM AUGUST 15, 1995 (COMMENCEMENT OF INITIAL OFFERING) TO APRIL 30, 1996.
(B) EXCLUSIVE OF SALES CHARGE.
(C) ANNUALIZED.
(D) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus Premier State Municipal Bond Fund (the "Trust") is registered under the
Investment Company Act of 1940, 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., which is a wholly-owned
subsidiary of Mellon Financial Corporation.
Dreyfus Service Corporation (the "Distributor"), a wholly-owned subsidiary of
the Manager, is the distributor of the fund's shares. The fund is authorized to
issue an unlimited number of $.001 par value shares of Beneficial Interest 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. Class B shares automatically convert to Class A shares after
six years. 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
series. Expenses directly attributable to each series are charged to that
series' operations; expenses which are applicable to all series are allocated
among them on a pro rata basis.
The fund' s financial statements are prepared in accordance with accounting
principles generally accepted in the United States, which may require the use of
management estimates and assumptions. Actual results could differ from those
estimates.
(a) Portfolio valuation: Investments in securities (excluding options and
financial futures on municipal and U.S. treasury securities) are valued each
business day by an independent pricing service ("Service") approved by the Board
of Trustees. Investments for which quoted bid prices are readily available and
are representative of the bid side of the market in the judgment of the Service
are valued at the mean between the quoted bid prices (as obtained by the Service
from dealers in such securities) and asked prices (as calculated by the Service
based upon its evaluation of the market for such securities). Other investments
(which constitute a majority of the portfolio securities) are carried at fair
value as determined by the Service, based on methods which include consideration
of: yields or prices of municipal securities of comparable quality, coupon,
maturity and type; indications as to values from dealers; and general market
conditions. Options and financial futures on municipal and U.S. treasury
securities are valued at the last sales price on the securities exchange on
which such securities are primarily traded or at the last sales price on the
national securities market on each business day. Investments not listed on an
exchange or the national securities market, or securities for which there were
no transactions, are valued at the average of the most recent bid and asked
prices. Bid price is used when no asked price is available.
(b) Securities transactions and investment income: Securities transactions are
recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Interest income,
adjusted for amortization of premiums and original issue discounts on
investments, is earned from settlement date and recognized on the accrual basis.
Securities purchased or sold on a when-issued or delayed-delivery basis may be
settled a month or more after the trade date. 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
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (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 $500 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
October 31, 2000, 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 Distributor retained $846 during the period ended October 31, 2000, from
commissions earned on sales of the fund's shares.
(b) Under the Distribution Plan (the "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 October 31, 2000, Class B and
Class C shares were charged $100,166 and $17,214, respectively, pursuant to the
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 October 31, 2000, Class A, Class B and Class C
shares were charged $350,046, $50,083 and $5,738, respectively, pursuant to the
Shareholder Services Plan.
The fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of the
Manager, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the fund. During the period
ended October 31, 2000, the fund was charged $73,527 pursuant to the transfer
agency agreement.
(d) Each Board member also serves as a Board member of other funds within the
Dreyfus complex (collectively, the "Fund Group"). Each Board member who is not
an "affiliated person" as defined in the Act receives an annual fee of $50,000
and an attendance fee of $6,500 for each meeting attended and $500 for telephone
meetings. These fees are allocated among the funds in the Fund Group. The
Chairman of the Board receives an additional 25% of such compensation. Subject
to the fund's Emeritus Program Guidelines, Emeritus Board members, if
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
any, receive 50% of the Trust's annual retainer fee and per meeting fee paid at
the time the Board member achieves emeritus status.
NOTE 4--Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding
short-term securities, during the period ended October 31, 2000, amounted to
$46,373,779 and $49,690,455, respectively.
At October 31, 2000, accumulated net unrealized appreciation on investment was
$5,191,147, consisting of $10,845,854 gross unrealized appreciation and
$5,654,707 gross unrealized depreciation.
At October 31, 2000, 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).
NOTES
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
100 Church Street
New York, NY 10286
Transfer Agent & Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166
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
(c) 2000 Dreyfus Service Corporation 064SA0010
Dreyfus Premier
State Municipal
Bond Fund,
Florida Series
SEMIANNUAL REPORT October 31, 2000
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured * Not Bank-Guaranteed * May Lose Value
Contents
THE FUND
--------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Statement of Investments
10 Statement of Assets and Liabilities
11 Statement of Operations
12 Statement of Changes in Net Assets
14 Financial Highlights
17 Notes to Financial Statements
FOR MORE INFORMATION
---------------------------------------------------------------------------
Back Cover
The Fund
Dreyfus Premier
State Municipal Bond Fund,
Florida Series
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Premier State
Municipal Bond Fund, Florida Series, covering the six-month period from May 1,
2000 through October 31, 2000. Inside, you'll find valuable information about
how the fund was managed during the reporting period, including a discussion
with the fund's portfolio manager, Douglas Gaylor.
Despite some modest fluctuations because of changing economic conditions,
municipal bond prices generally rose modestly over the six-month reporting
period. Most sectors of the municipal bond market also benefited from slowing
economic growth as well. Additionally, the moderating effects of the Federal
Reserve Board' s (the "Fed") interest-rate hikes during the first half of 2000
helped the Fed to achieve its goal of slowing the U.S. economy. Other factors
such as higher energy prices and a weak euro also served to slow economic
growth.
In general, the overall investment environment that prevailed in the second half
of the 1990s had provided returns well above their long-term averages,
establishing unrealistic expectations for some investors. We believe that as the
risks of the stock market have become more apparent recently, the relative
stability and income potential of municipal bonds can make them an attractive
investment as part of a well-balanced portfolio.
For more information about the economy and financial markets, we encourage you
to visit the Market Commentary section of our website at www.dreyfus.com. Or, to
speak with a Dreyfus customer service representative, call us at 1-800-782-6620.
Thank you for investing in Dreyfus Premier State Municipal Bond Fund, Florida
Series.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
November 15, 2000
DISCUSSION OF FUND PERFORMANCE
Douglas Gaylor, Portfolio Manager
How did Dreyfus Premier State Municipal Bond Fund, Florida Series perform during
the period?
For the six-month period ended October 31, 2000, the fund's Class A shares
provided a 5.75% total return, its Class B shares provided a 5.57% total return
and its Class C shares provided a 5.35% total return.(1) In comparison, the
Lipper Florida Municipal Debt Funds category average provided a 5.13% total
return for the same period.(2)
We attribute the fund' s good absolute performance to a relatively strong
investment environment for municipal bonds over the past six months, which was
driven primarily by signs of an economic slowdown in the U.S., as well as
positive supply-and-demand factors affecting municipal bonds throughout the
nation. The fund' s good relative performance is largely the result of our
security selection strategy. The fund' s holdings of previously out-of-favor
bonds provided particularly attractive gains.
What is the fund's investment approach?
Our goal is to seek as high a level of federal and Florida state tax-exempt
income as is practical without undue risk from a diversified portfolio of
municipal bonds. To achieve this objective, we employ two primary strategies.
First, for between one-half and three-quarters of the total fund, we look for
bonds that can potentially offer attractive current income. We typically look
for bonds that can provide consistently high current yields. We also try to
ensure that we select bonds that are most likely to obtain attractive prices if
and when we decide to sell them in the secondary market.
Second, for the remainder of the fund, we try to look for bonds that we believe
have the potential to 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 belief is that these bonds' prices
will rise as they return to favor over time.
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
What other factors influenced the fund's performance?
The fund was positively influenced over the past six months by favorable
economic and market conditions. When the reporting period began on May 1, 2000,
the U.S. and Florida economies continued to grow strongly, raising concerns that
long-dormant inflationary pressures might reemerge. In response, the Federal
Reserve Board (the "Fed" ) raised short-term interest rates once during the
reporting period for an increase of 0.50 percentage points. However, signs soon
emerged that the Fed' s previous rate hikes were having the desired effect of
slowing the economy. Fewer housing starts, moderating growth and little change
in the core inflation rate may suggest that the Fed's restrictive monetary
policies could be near an end.
In addition, the continuing strength of the Florida economy helped keep
municipal bond yields relatively low compared to bonds from other states.
Florida and its municipalities enjoyed higher tax revenues, curtailing their
need to borrow and resulting in a reduced supply of securities compared to the
same period in 1999. At the same time, demand for municipal bonds has been
strong from Florida residents seeking to protect their wealth in a volatile
stock market. When demand rises and supply falls, prices of existing bonds tend
to move higher.
In this environment, we received particularly strong returns from some of the
out-of-favor bonds -- including bonds selling at deep discounts to their face
values -- that we had purchased during the 1999 market decline. As these
discount securities returned to favor among investors as their prices rose, we
gradually sold them into a market characterized by steady demand from individual
investors. We redeployed the proceeds of those sales primarily to relatively
defensive, income-oriented bonds with attractive yields and modest price
premiums.
What is the fund's current strategy?
Because we expect that slower economic growth, fewer inflation concerns and
potentially lower interest rates may benefit the municipal bond market, we are
currently on the lookout for out-of-favor bonds that, in our opinion, are likely
to return to favor in the future. We have found a limited number of such
opportunities in bonds issued by Florida hospitals. Although hospitals are
currently under financial pressure nationwide because of the effects of health
care reform, we have focused on bonds with high credit ratings or third-party
insurance, which helps minimize the likelihood of default.
In addition, a relatively large number of municipal bonds are scheduled to
mature shortly after the new year begins, which may set the stage for strong
market performance as investors reinvest their principal. In our opinion, this
should maintain demand for high quality, tax-exempt, fixed-income securities
even if the supply of new municipal bonds changes directions and starts to rise
November 15, 2000
(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.
HAD THESE CHARGES BEEN REFLECTED, RETURNS WOULD HAVE BEEN LOWER. PAST
PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. SHARE PRICE, YIELD AND
INVESTMENT RETURN FLUCTUATE SUCH THAT UPON REDEMPTION, FUND SHARES MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST. SOME INCOME MAY BE SUBJECT TO
THE FEDERAL ALTERNATIVE MINIMUM TAX (AMT) FOR CERTAIN INVESTORS. CAPITAL
GAINS, IF ANY, ARE FULLY TAXABLE. RETURN FIGURES PROVIDED REFLECT THE
ABSORPTION OF FUND EXPENSES BY THE DREYFUS CORPORATION PURSUANT TO AN
AGREEMENT IN EFFECT THROUGH APRIL 30, 2001, AT WHICH TIME IT MAY BE
EXTENDED, TERMINATED OR MODIFIED. HAD THESE EXPENSES NOT BEEN ABSORBED, THE
FUND'S RETURNS WOULD HAVE BEEN LOWER.
(2) SOURCE: LIPPER INC.
The Fund
STATEMENT OF INVESTMENTS
October 31, 2000 (Unaudited)
STATEMENT OF INVESTMENTS
<TABLE>
<CAPTION>
Principal
LONG-TERM MUNICIPAL INVESTMENTS--98.5% Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
FLORIDA--91.3%
Bay County, Sales Tax Revenue
4.75%, 9/1/2023 (Insured; FSA) 3,160,000 2,797,833
Brevard County, IDR (Nui Corp. Project)
6.40%, 10/1/2024 (Insured; AMBAC) 1,000,000 1,054,070
Broward County Health Facilities Authority, Revenue
(Broward County Nursing Home)
7.50%, 8/15/2020 (LOC; Allied Irish Bank) 1,000,000 1,043,010
Broward County Housing Finance Authority, MFHR
(Bridgewater Place Apartments) 5.40%, 10/1/2029 2,000,000 1,795,820
Charlotte County:
Healthcare Facilities Revenue (Charlotte Community
Mental Health Project) 9.25%, 7/1/2020 1,525,000 1,576,027
Utility Revenue 5%, 10/1/2023 (Insured; FGIC) 2,500,000 2,329,525
Dade County, Aviation Revenue
6.60%, 10/1/2022 (Insured; MBIA) 1,000,000 1,046,190
Dade County Housing Finance Authority, SFMR
6.70%, 4/1/2028 (Collateralized: FNMA, GNMA) 4,500,000 4,736,250
Duval County Housing Finance Authority, SFMR
7.70%, 9/1/2024
(Collateralized; GNMA, Insured; FGIC) 660,000 679,265
Florida Board of Education:
Capital Outlay (Public Education):
4.50%, 6/1/2019 (Insured; FSA) 7,000,000 6,094,690
4.50%, 6/1/2022 (Insured; FSA) 3,700,000 3,154,509
4.75%, 6/1/2023 (Insured; MBIA) 3,000,000 2,647,680
Lottery Revenue 4.50%, 7/1/2017 (Insured; FGIC) 2,110,000 1,878,343
Florida, Housing Finance Agency:
(Brittany Rosemont Apartments)
7%, 2/1/2035 (Insured; AMBAC) 6,000,000 6,358,800
Single Family Mortgage:
6.65%, 1/1/2024 (Collateralized: FNMA, GNMA) 2,325,000 2,445,644
6.65%, 7/1/2026 (Insured; MBIA) 1,280,000 1,324,288
Hillsborough County, Utility Revenue
6.625%, 8/1/2011 4,000,000 4,118,400
Hillsborough County Aviation Authority, Revenue
(Delta Airlines) 6.80%, 1/1/2024 2,500,000 2,521,175
Jacksonville Electric Authority, Revenue
(Saint John's River) 5.50%, 10/1/2013 1,770,000 1,792,691
Lee County Housing Finance Authority SFMR:
6.30%, 3/1/2029 (Collateralized: FNMA, GNMA) 970,000 997,567
(Multi-County Program)
7.45%, 9/1/2027 (Collateralized: FNMA, GNMA) 910,000 1,011,865
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
-----------------------------------------------------------------------------------------------------------------------------------
FLORIDA (CONTINUED)
Marion County, Hospital District Improvement Revenue,
(Munroe Regional Hospital) 5.625%, 10/1/2024 1,750,000 1,622,198
Miami-Dade County Housing Finance Authority,
MFMR (Villa Esperanza Apartments Project)
5.35%, 10/1/2028 1,000,000 888,990
Orange County, Tourist Development Tax Revenue
4.75%, 10/1/2024 (Insured; AMBAC) 9,160,000 8,053,747
Orange County Housing Finance Authority, MFHR
(Seminole Pointe) 5.75%, 12/1/2023 2,840,000 2,677,410
Osceola County Industrial Development Authority,
Revenue (Community Provider Pooled Loan
Program) 7.75%, 7/1/2017 5,235,000 5,344,569
Palm Beach County, Solid Waste IDR:
(Okeelanta Power LP Project) 6.85%, 2/15/2021 7,500,000 (b) 4,425,000
(Osceola Power LP) 6.85%, 1/1/2014 5,800,000 (b) 3,422,000
Palm Beach County Housing Finance Authority,
Single Family Mortgage Purchase Revenue
6.55%, 4/1/2027 (Collateralized: FNMA, GNMA) 1,900,000 1,983,429
Pinellas County Housing Finance Authority, SFMR
(Multi-County Program)
6.70%, 2/1/2028 (Collateralized: FNMA, GNMA) 4,040,000 4,208,549
Polk County Industrial Development Authority, IDR
(IMC Fertilizer) 7.525% 1/1/2015 7,000,000 7,150,500
Seminole County, Sales Tax Revenue
4.625%, 10/1/2022 (Insured; MBIA) 2,015,000 1,742,592
Seminole Water Control District 6.75%, 8/1/2022 2,000,000 1,994,080
Tampa:
Alleghany Health System Revenue (St. Joseph)
6.50%, 12/1/2023
(Insured; MBIA, Prerefunded 12/1/2004) 1,000,000 (a) 1,089,500
Utility Tax Zero Coupon, 4/1/2017 (Insured; AMBAC) 2,110,000 856,913
Tampa Bay, Water Utility System Revenue:
4.75%, Series A, 10/1/2027 (Insured; FGIC) 5,875,000 5,129,463
4.75%, Series B, 10/1/2027 (Insured; FGIC) 3,500,000 3,055,850
Tarpon Springs Health Facilities Authority, HR
(Helen Ellis Memorial Hospital Project)
7.625%, 5/1/2021 3,990,000 4,123,266
Village Center Community Development District,
Recreational Revenue:
5%, 11/1/2021 (Insured; MBIA) 5,000,000 4,632,850
5%, 11/1/2023 (Insured; MBIA) 2,000,000 1,870,140
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
-----------------------------------------------------------------------------------------------------------------------------------
U.S. RELATED--7.2%
Guam Power Authority, Revenue
5%, 10/1/2024 (Insured; AMBAC) 1,000,000 934,510
Puerto Rico Commonwealth, Public Improvement
4.50%, 7/1/2023 (Insured; FSA) 2,920,000 2,525,391
Puerto Rico Electric Power Authority, Power Revenue
5%, 7/1/2028 (Insured; FSA) 6,000,000 5,620,920
TOTAL LONG--TERM MUNICIPAL INVESTMENTS
(cost $130,090,233) 124,755,509
------------------------------------------------------------------------------------------------------------------------------------
SHORT--TERM MUNICIPAL INVESTMENTS--1.5%
--------------------------------------------------------------------------------
Martin County, SWDR, VRDN
(Florida Power & Light Co.) 4.70%
(cost $1,950,000) 1,950,000 (c) 1,950,000
------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $132,040,233) 100.0% 126,705,509
CASH AND RECEIVABLES (NET) .0% 20,777
NET ASSETS 100.0% 126,726,286
</TABLE>
Summary of Abbreviations
AMBAC American Municipal Bond Assurance
Corporation
FGIC Financial Guaranty Insurance
Company
FNMA Federal National Mortgage Association
FSA Financial Security Assurance
GNMA Government National Mortgage
Association
HR Hospital Revenue
IDR Industrial Development Revenue
LOC Letter of Credit
MBIA Municipal Bond Investors Assurance
Insurance Corporation
MFHR Multi-Family Housing Revenue
MFMR Multi-Family Mortgage Revenue
SFMR Single Family Mortgage Revenue
SWDR Solid Waste Disposal Revenue
VRDN Variable Rate Demand Notes
Summary of Combined Ratings (Unaudited)
<TABLE>
<CAPTION>
Fitch or Moody's or Standard & Poor's Value (%)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
AAA Aaa AAA 63.3
A A A 1.4
BBB Baa BBB 9.6
BB Ba BB 7.6
B B B 3.3
F1+, F-1 VMIG1, MIG1, P1 SP1, A1 1.6
Not Rated (d) Not Rated (d) Not Rated (d) 13.2
100.0
(A) BONDS WHICH ARE PREREFUNDED ARE COLLATERALIZED BY U.S. GOVERNMENT
SECURITIES WHICH ARE HELD IN ESCROW AND ARE USED TO PAY PRINCIPAL AND
INTEREST ON THE MUNICIPAL ISSUE AND TO RETIRE THE BONDS IN FULL AT THE
EARLIEST REFUNDING DATE.
(B) NON-INCOME PRODUCING SECURITY; INTEREST PAYMENTS IN DEFAULT.
(C) SECURITIES PAYABLE ON DEMAND. VARIABLE RATE INTEREST--SUBJECT TO PERIODIC
CHANGE.
(D) SECURITIES WHICH, WHILE NOT RATED BY FITCH, MOODY'S AND STANDARD & POOR'S
HAVE BEEN DETERMINED BY THE MANAGER TO BE OF COMPARABLE QUALITY TO THOSE
RATED SECURITIES IN WHICH THE FUND MAY INVEST.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
STATEMENT OF ASSETS AND LIABLITIES
October 31, 2000 (Unaudited)
Cost Value
--------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of
Investments 132,040,233 126,705,509
Cash 214,083
Interest receivable 1,882,812
Receivable for investment securities sold 187,000
Receivable for shares of Beneficial Interest subscribed 34,008
Prepaid expenses 10,211
129,033,623
--------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 63,537
Payable for investment securities purchased 2,091,003
Payable for shares of Beneficial Interest redeemed 100,684
Accrued expenses 52,113
2,307,337
--------------------------------------------------------------------------------
NET ASSETS ($) 126,726,286
--------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 132,239,510
Accumulated net realized gain (loss) on investments (178,500)
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 (5,334,724)
--------------------------------------------------------------------------------
NET ASSETS ($) 126,726,286
NET ASSET VALUE PER SHARE
<TABLE>
<CAPTION>
Class A Class B Class C
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Assets 116,194,315 9,978,359 553,612
Shares Outstanding 8,734,145 750,393 41,620
------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE ($) 13.30 13.30 13.30
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
STATEMENT OF OPERATIONS
Six Months Ended October 31, 2000 (Unaudited)
--------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INTEREST INCOME 3,685,025
EXPENSES:
Management fee--Note 3(a) 357,781
Shareholder servicing costs--Note 3(c) 214,710
Legal fees 123,969
Distribution fees--Note 3(b) 30,955
Registration fees 8,569
Prospectus and shareholders' reports 8,381
Auditing fees 7,741
Custodian fees 6,588
Trustees' fees and expenses--Note 3(d) 1,823
Loan commitment fees--Note 2 456
Miscellaneous 5,353
TOTAL EXPENSES 766,326
Less-reduction in management fee due to
undertaking by The Dreyfus Corporation--Note 3(a) (136,106)
NET EXPENSES 630,220
INVESTMENT INCOME-NET 3,054,805
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS-NOTE 4 ($):
Net realized gain (loss) on investments (190,594)
Net unrealized appreciation (depreciation) on investments 4,363,746
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS 4,173,152
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 7,227,957
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
October 31, 2000 Year Ended
(Unaudited) April 30, 2000
--------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 3,054,805 7,363,067
Net realized gain (loss) on investments (190,594) 179,407
Net unrealized appreciation (depreciation)
on investments 4,363,746 (13,406,888)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 7,227,957 (5,864,414)
--------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net:
Class A shares (2,797,410) (6,493,321)
Class B shares (246,084) (853,129)
Class C shares (11,311) (16,617)
Net realized gain on investments:
Class A shares -- (497,191)
Class B shares -- (67,970)
Class C shares -- (1,344)
TOTAL DIVIDENDS (3,054,805) (7,929,572)
--------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS ($):
Net proceeds from shares sold:
Class A shares 5,769,830 10,538,667
Class B shares 552,930 2,058,808
Class C shares 822,118 255,886
Dividends reinvested:
Class A shares 990,984 2,582,873
Class B shares 73,077 252,506
Class C shares 2,966 5,682
Cost of shares redeemed:
Class A shares (12,719,627) (32,055,233)
Class B shares (5,358,423) (12,789,483)
Class C shares (741,922) (167,078)
INCREASE (DECREASE) IN NET ASSETS FROM
BENEFICIAL INTEREST TRANSACTIONS (10,608,067) (29,317,372)
TOTAL INCREASE (DECREASE) IN NET ASSETS (6,434,915) (43,111,358)
--------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 133,161,201 176,272,559
END OF PERIOD 126,726,286 133,161,201
SEE NOTES TO FINANCIAL STATEMENTS.
Six Months Ended
October 31, 2000 Year Ended
(Unaudited) April 30, 2000
--------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
CLASS A(A)
Shares sold 443,772 787,995
Shares issued for dividends reinvested 75,599 196,289
Shares redeemed (976,289) (2,426,603)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (456,918) (1,442,319)
--------------------------------------------------------------------------------
CLASS B(A)
Shares sold 42,105 154,959
Shares issued for dividends reinvested 5,583 19,156
Shares redeemed (412,415) (962,486)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (364,727) (788,371)
--------------------------------------------------------------------------------
CLASS C
Shares sold 62,121 19,716
Shares issued for dividends reinvested 225 435
Shares redeemed (56,160) (12,836)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 6,186 7,315
(A) DURING THE PERIOD ENDED OCTOBER 31, 2000, 295,128 CLASS B SHARES
REPRESENTING $3,853,591 WERE AUTOMATICALLY CONVERTED TO 295,145 CLASS A
SHARES AND DURING THE PERIOD ENDED APRIL 30, 2000, 451,916 CLASS B SHARES
REPRESENTING $6,002,921 WERE AUTOMATICALLY CONVERTED TO 451,819 CLASS A
SHARES.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the
fiscal periods indicated. All information (except portfolio turnover rate)
reflects financial results for a single fund share. Total return shows how much
your investment in the fund would have increased (or decreased) during each
period, assuming you had reinvested all dividends and distributions. These
figures have been derived from the fund's financial statements.
<TABLE>
<CAPTION>
Six Months Ended
October 31, 2000 Year Ended April 30,
--------------------------------------------------------------
CLASS A SHARES (Unaudited) 2000 1999 1998 1997 1996
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value,
beginning of period 12.88 14.03 14.17 14.06 14.48 14.51
Investment Operations:
Investment income--net .31 .65 .65 .66 .76 .79
Net realized and unrealized
gain (loss) on investments .42 (1.10) .05 .26 (.08) .17
Total from Investment Operations .73 (.45) .70 .92 .68 .96
Distributions:
Dividends from investment
income-net (.31) (.65) (.65) (.66) (.76) (.79)
Dividends from net realized gain
on investments -- (.05) (.19) (.15) (.34) (.20)
Total Distributions (.31) (.70) (.84) (.81) (1.10) (.99)
Net asset value, end of period 13.30 12.88 14.03 14.17 14.06 14.48
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) (A) 11.41(b) (3.19) 5.00 6.73 4.74 6.63
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average
net assets .92(b) .92 .92 .91 .92 .91
Ratio of net investment income
to average net assets 4.74(b) 4.92 4.53 4.67 5.27 5.29
Decrease reflected in above
expense ratios due to undertaking
by The Dreyfus Corporation .21(b) .06 -- -- -- --
Portfolio Turnover Rate 3.08(c) 29.04 88.48 91.18 71.68 54.37
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 116,194 118,352 149,185 167,793 202,503 227,478
(A) EXCLUSIVE OF SALES CHARGE.
(B) ANNUALIZED.
(C) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended
October 31, 2000 Year Ended April 30,
-------------------------------------------------------------
CLASS B SHARES (Unaudited) 2000 1999 1998 1997 1996
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value,
beginning of period 12.87 14.02 14.17 14.05 14.47 14.51
Investment Operations:
Investment income--net .28 .58 .57 .59 .69 .71
Net realized and unrealized
gain (loss) on investments .43 (1.10) .04 .27 (.08) .16
Total from Investment Operations .71 (.52) .61 .86 .61 .87
Distributions:
Dividends from investment
income-net (.28) (.58) (.57) (.59) (.69) (.71)
Dividends from net realized
gain on investments -- (.05) (.19) (.15) (.34) (.20)
Total Distributions (.28) (.63) (.76) (.74) (1.03) (.91)
Net asset value, end of period 13.30 12.87 14.02 14.17 14.05 14.47
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) (A) 11.05(b) (3.68) 4.40 6.26 4.21 6.01
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average
net assets 1.42(b) 1.43 1.42 1.41 1.42 1.41
Ratio of net investment income
to average net assets 4.27(b) 4.41 4.02 4.16 4.76 4.77
Decrease reflected in above
expense ratios due to undertaking
by The Dreyfus Corporation .23(b) .06 -- -- -- --
Portfolio Turnover Rate 3.08(c) 29.04 88.48 91.18 71.68 54.37
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 9,978 14,353 26,693 32,545 35,802 27,023
(A) EXCLUSIVE OF SALES CHARGE.
(B) ANNUALIZED.
(C) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS (CONTINUED)
Six Months Ended
October 31, 2000 Year Ended April 30,
-----------------------------------------------------------
CLASS C SHARES (Unaudited) 2000 1999 1998 1997 1996(a)
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value,
beginning of period 12.88 14.03 14.17 14.05 14.47 14.65
Investment Operations:
Investment income--net .26 .54 .53 .55 .65 .48
Net realized and unrealized
gain (loss) on investments .42 (1.10) .05 .27 (.08) .02
Total from Investment Operations .68 (.56) .58 .82 .57 .50
Distributions:
Dividends from investment
income-net (.26) (.54) (.53) (.55) (.65) (.48)
Dividends from net realized
gain on investments -- (.05) (.19) (.15) (.34) (.20)
Total Distributions (.26) (.59) (.72) (.70) (.99) (.68)
Net asset value, end of period 13.30 12.88 14.03 14.17 14.05 14.47
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)( B) 10.61(c) (3.97) 4.13 5.94 3.95 4.69(c)
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average
net assets 1.67(c) 1.73 1.75 1.71 1.97 1.99(c)
Ratio of net investment income
to average net assets 3.97(c) 4.11 3.69 3.69 4.60 4.20(c)
Decrease reflected in above expense
ratios due to undertaking by
The Dreyfus Corporation .29(c) .10 -- -- -- --
Portfolio Turnover Rate 3.08(d) 29.04 88.48 91.18 71.68 54.37
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 554 456 394 366 58 35
(A) FROM AUGUST 15, 1995 (COMMENCEMENT OF INITIAL OFFERING) TO APRIL 30, 1996.
(B) EXCLUSIVE OF SALES CHARGE.
(C) ANNUALIZED.
(D) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus Premier State Municipal Bond Fund (the "Trust") is registered under the
Investment Company Act of 1940, 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., which is a wholly-owned
subsidiary of Mellon Financial Corporation.
Dreyfus Service Corporation (the "Distributor"), a wholly-owned subsidiary of
the Manager, is the distributor of the fund's shares. The fund is authorized to
issue an unlimited number of $.001 par value shares of Beneficial Interest 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. Class B shares automatically convert to Class A shares after
six years. 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
series. Expenses directly attributable to each series are charged to that
series' operations; expenses which are applicable to all series are allocated
among them on a pro rata basis.
The fund' s financial statements are prepared in accordance with accounting
principles generally accepted in the United States, which may require the use of
management estimates and assumptions. Actual results could differ from those
estimates.
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (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 $3,283 during the period
ended October 31, 2000, 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.
(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 $500 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
October 31, 2000, the fund did not borrow under the Facility.
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
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,
2000 through April 30, 2001, to reduce the management fee paid by the fund to
the extent that the fund's aggregate annual expenses, exclusive of Rule 12b-1
Distribution Plan fees, taxes, brokerage fees, interest on borrowings and
extraordinary expenses, but including litigation expenses related to the fund's
holdings of (a) Palm Beach County, Florida Solid Waste Industrial Development
Revenue Bonds (Okleelanta Power Limited Partnership Project) Series 1993A; and
(b) Palm Beach County, Florida Solid Waste Industrial Development Revenue Bonds
(Osceola Power Limited Partnership Project) Series 1994A and 1994B, exceed an
annual rate of .92 of 1% of the value of the fund's average daily net assets.
The reduction in management fee, pursuant to the undertaking, amounted to
$136,106 during the period ended October 31, 2000.
The Distributor retained $4,772 during the period ended October 31, 2000 from
commissions earned on sales of the fund's shares.
(B) Under the Distribution Plan (the "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 October 31, 2000, Class B and
Class C shares were charged $28,816 and $2,139, respectively, pursuant to the
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 October 31, 2000, Class A, Class B and Class C shares
were charged $147,507, $14,408 and $713, respectively, pursuant to the
Shareholder Services Plan.
The fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of the
Manager, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the fund. During the period
ended October 31, 2000, the fund was charged $40,828 pursuant to the transfer
agency agreement.
(D) Each Board member also serves as a Board member of other funds within the
Dreyfus complex (collectively, the "Fund Group"). Each Board member receives an
annual fee of $50,000 and an attendance fee of $6,500 for each meeting attended
and $500 for each telephone meetings. These fees are allocated among the funds
in the Fund group. The Chairman of the Board receives an additional 25% of such
compensation. Subject to the fund's Emeritus Program Guidelines, Emeritus Board
members, if any, receive 50% of the Trust's annual retainer fee and per meeting
fee paid at the time the Board member achieves emeritus status.
NOTE 4--Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding
short-term securities, during the period ended October 31, 2000, amounted to
$3,826,373 and $9,835,060, respectively.
At October 31, 2000, accumulated net unrealized depreciation on investments was
$5,334,724, consisting of $3,412,278 gross unrealized appreciation and
$8,747,002 gross unrealized depreciation.
At October 31, 2000, 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
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
100 Church Street
New York, NY 10286
Transfer Agent & Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166
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
(c) 2000 Dreyfus Service Corporation 051SA0010
Dreyfus Premier State
Municipal Bond Fund,
Georgia Series
SEMIANNUAL REPORT October 31, 2000
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured * Not Bank-Guaranteed * May Lose Value
Contents
THE FUND
--------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Statement of Investments
9 Statement of Assets and Liabilities
10 Statement of Operations
11 Statement of Changes in Net Assets
13 Financial Highlights
16 Notes to Financial Statements
FOR MORE INFORMATION
---------------------------------------------------------------------------
Back Cover
The Fund
Dreyfus Premier
State Municipal Bond Fund,
Georgia Series
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Premier State
Municipal Bond Fund, Georgia Series, covering the six-month period from May 1,
2000 through October 31, 2000. Inside, you'll find valuable information about
how the fund was managed during the reporting period, including a discussion
with the fund's portfolio manager, Paul Disdier.
Despite some modest fluctuations because of changing economic conditions,
municipal bond prices generally rose modestly over the six-month reporting
period. Most sectors of the municipal bond market also benefited from slowing
economic growth as well. Additionally, the moderating effects of the Federal
Reserve Board' s (the "Fed") interest-rate hikes during the first half of 2000
helped the Fed to achieve its goal of slowing the U.S. economy. Other factors
such as higher energy prices and a weak euro also served to slow economic
growth.
In general, the overall investment environment that prevailed in the second half
of the 1990s had provided returns well above their historical averages,
establishing unrealistic expectations for some investors. We believe that as the
risks of the stock market have become more apparent recently, the relative
stability and income potential of municipal bonds can make them an attractive
investment as part of a well-balanced portfolio.
For more information about the economy and financial markets, we encourage you
to visit the Market Commentary section of our website at www.dreyfus.com. Or, to
speak with a Dreyfus customer service representative, call us at 1-800-782-6620.
Thank you for investing in Dreyfus Premier State Municipal Bond Fund, Georgia
Series.
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
November 15, 2000
DISCUSSION OF FUND PERFORMANCE
Paul Disdier, Portfolio Manager
How did Dreyfus Premier State Municipal Bond Fund, Georgia Series perform during
the period?
For the six-month period ended October 31, 2000, the fund's Class A shares
provided a 5.33% total return, its Class B shares provided a 5.09% total return
and its Class C shares provided a 4.81% total return.(1) In comparison, the
Lipper Georgia Municipal Debt Funds category average provided a 5.36% total
return for the same period.(2)
We attribute the fund's absolute performance to a relatively strong investment
environment for municipal bonds over the past six months. The market rally was
driven primarily by signs of an economic slowdown in the U.S., as well as
positive supply-and-demand factors affecting municipal bonds throughout the
nation. The fund' s relative performance is largely indicative of the overall
good performance of Georgia municipal bonds during the reporting period. Given
the recent lackluster performance of the stock market in general, many investors
have shifted their attention and investment allocations to tax-exempt bond
funds.
What is the fund's investment approach?
Our goal is to seek as high a level of federal and Georgia state tax-exempt
income as is practical without undue risk from a diversified portfolio of
municipal bonds. To achieve this objective, we look for bonds that we expect to
provide consistently high income streams. We strive to find such opportunities
through rigorous analyses of individual bonds' structures. Within the context of
our bond structure analysis, we pay particularly close attention to each bond's
maturity and early redemption features. In addition, we conduct extensive credit
analyses of our holdings in an attempt to avoid potential defaults on interest
and principal payments.
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
What other factors influenced the fund's performance?
The fund was positively influenced over the past six months by favorable
economic and market conditions. When the reporting period began on May 1, 2000,
the U.S. and Georgia economies continued to grow strongly. Low levels of
unemployment and rising energy prices raised widespread concerns that
long-dormant inflationary pressures might reemerge. In response, the Federal
Reserve Board (the "Fed" ) raised short-term interest rates once during the
reporting period for a total increase of 0.50 percentage points. However, signs
soon emerged that the Fed's previous rate hikes were having the desired effect
of slowing the economy. Fewer housing starts, moderating growth and little
change in the core inflation rate suggested that the Fed's restrictive monetary
policies could be near an end.
In addition, the continuing strength of the Georgia economy helped keep
municipal bond yields relatively low compared to taxable bonds. Georgia and its
municipalities enjoyed higher revenues during the reporting period. The
resulting budget surpluses curtailed their need to borrow, and resulted in a
reduced supply of newly issued securities compared to the same period in 1999.
At the same time, demand for tax-exempt securities rose sharply in the wake of a
highly volatile and generally declining stock market. When supply falls and
demand rises, prices of existing municipal bonds generally tend to move higher.
In this environment, we maintained the fund's average duration -- a measure of
sensitivity to changing interest rates -- near the long end of the neutral
range. This position was designed to balance the flexibility we needed to take
advantage of timely opportunities for higher total returns with the need to lock
in the prevailing income stream for as long as practical. In addition, although
there was relatively little buying and selling activity during the six-month
reporting period, we raised some cash by selling intermediate-term bonds at
attractive prices. Intermediate-term bonds were the focus of strong demand from
individual investors seeking to protect assets from heightened volatility in the
stock market.
What is the fund's current strategy?
Because we expect that slower economic growth, fewer inflation concerns and
potentially lower interest rates may benefit the municipal bond market, we have
raised the fund' s cash reserves to approximately 8% of the portfolio as of
October 31, 2000. We have continued to emphasize investments in the
intermediate-term maturity range in order to take advantage of strong demand for
these bonds from individual investors when the times comes to sell.
In addition, we are carefully monitoring the current economic slowdown. If we
come to believe that slower economic growth will persist or accelerate, we may
modestly extend the fund' s average duration to lock in yields before they
decline much further.
November 15, 2000
(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.
HAD THESE CHARGES BEEN REFLECTED, RETURNS WOULD HAVE BEEN LOWER. PAST
PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. SHARE PRICE, YIELD AND
INVESTMENT RETURN FLUCTUATE SUCH THAT UPON REDEMPTION, FUND SHARES MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST. INCOME MAY BE SUBJECT TO STATE
AND LOCAL TAXES FOR NON-GEORGIA RESIDENTS AND SOME INCOME MAY BE SUBJECT TO
THE FEDERAL ALTERNATIVE MINIMUM TAX (AMT) FOR CERTAIN INVESTORS. CAPITAL
GAINS, IF ANY, ARE FULLY TAXABLE.
(2) SOURCE: LIPPER INC.
The Fund
STATEMENT OF INVESTMENTS
October 31, 2000 (Unaudited)
STATEMENT OF INVESTMENTS
<TABLE>
<CAPTION>
Principal
LONG-TERM MUNICIPAL INVESTMENTS--93.1% Amount ($) Value ($)
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Atlanta, Airport Revenue 5.50%, 1/1/2022 (Insured; FGIC) 750,000 747,615
Clayton County and Clayton County Water Authority,
Water and Sewer Revenue
5.10%, 5/1/2016 500,000 492,270
Columbia County, Water and Sewer Revenue
5.40%, 6/1/2011 (Insured; AMBAC) 750,000 778,913
Fayette County Public Facilities Authority, Revenue
(Criminal Justice Center) 6%, 6/1/2030 500,000 521,835
Fayette County School District 6.125%, 3/1/2015 500,000 533,075
Fulton County, Water and Sewer Revenue:
5.25%, 1/1/2013 (Insured; FGIC) 500,000 507,730
6.375%, 1/1/2014 (Insured; FGIC, Escrowed to Maturity) 200,000 225,040
Fulton County Development Authority, Special Facility Revenue
(Delta Airlines, Inc. Project) 5.45%, 5/1/2023 1,000,000 879,970
Fulton County Facilities Corporation, COP
(Fulton County Public Purpose Project)
5.50%, 11/1/2018 (Insured; AMBAC) 500,000 501,525
Georgia:
5.65%, 3/1/2012 1,000,000 1,067,340
5.80%, 11/1/2015 710,000 756,186
5.75%, 8/1/2016 500,000 534,010
Georgia Housing and Finance Authority, SFMR
6.50%, 12/1/2017 (Insured; FHA) 1,000,000 1,023,840
Georgia Municipal Gas Authority, Gas Revenue
(Warner Robins Project)
5.80%, 1/1/2015 (Insured; MBIA) 1,000,000 1,036,220
Marietta Development Authority, Revenue
(First Mortgage-Life College)
5.75%, 9/1/2014 (Insured; FSA) 850,000 880,234
Marietta School 4.50%, 2/1/2019 1,000,000 866,620
Meriwether County School District
5.50%, 2/1/2016 (Insured; FSA) 750,000 760,103
Metropolitan Atlanta Rapid Transportation Authority,
Sales Tax Revenue
6.25%, 7/1/2020 (Insured; AMBAC) 300,000 332,766
Private Colleges and Universities Authority, Revenue
(Emory University Project):
5.50%, 11/1/2019 750,000 754,297
5.50%, 11/1/2020 2,000,000 2,005,740
(Spellman College Project) 6.20%, 6/1/2014 (Insured; FGIC) 1,000,000 1,062,580
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
-----------------------------------------------------------------------------------------------------------------------------------
Royston Hospital Authority, HR
(Ty Cobb Healthcare System, Inc.) 6.50%, 7/1/2027 700,000 655,501
TOTAL LONG-TERM MUNICIPAL INVESTMENTS (cost $16,371,387) 16,923,410
------------------------------------------------------------------------------------------------------------------------------------
SHORT-TERM MUNICIPAL INVESTMENTS--4.4%
--------------------------------------------------------------------------------
GEORGIA--1.7%
Burke County Development Authority, PCR, VRDN
(Power Company Plant Vogtle) 4.70% 300,000 (a) 300,000
U. S. RELATED--2.7%
Puerto Rico Commonwealth Highway and
Transportation Authority, Transportation Revenue, VRDN
3.90% (Insured; AMBAC) 500,000 (a) 500,000
TOTAL SHORT--TERM MUNICIPAL INVESTMENTS (cost $800,000) 800,000
------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $17,171,387) 97.5% 17,723,410
CASH AND RECEIVABLES (NET) 2.5% 455,810
NET ASSETS 100.0% 18,179,220
The Fund
</TABLE>
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Summary of Abbreviations
AMBAC American Municipal Bond
Assurance Corporation
COP Certificate of Participation
FGIC Financial Guaranty Insurance
Company
FHA Federal Housing Administration
FSA Financial Security Assurance
HR Hospital Revenue
MBIA Municipal Bond Investors
Assurance Insurance
Corporation
PCR Pollution Control Revenue
SFMR Single Family Mortgage Revenue
VRDN Variable Rate Demand Notes
Summary of Combined Ratings (Unaudited)
<TABLE>
<CAPTION>
Fitch or Moody's or Standard & Poor's Value (%)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
AAA Aaa AAA 57.6
AA Aa AA 29.2
BBB Baa BBB 8.7
F1+, F-1 MIG1, VMIG1 & P1 SP1, A1 4.5
100.0
(A) SECURITY PAYABLE ON DEMAND. VARIABLE INTEREST RATE--SUBJECT TO PERIODIC
CHANGE.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
STATEMENT OF ASSETS AND LIABILITIES
October 31, 2000 (Unaudited)
Cost Value
-------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of Investments 17,171,387 17,723,410
Cash 814
Interest receivable 331,936
Receivable for shares of Beneficial Interest subscribed 140,000
18,196,160
--------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 15,505
Accrued expenses 1,435
16,940
--------------------------------------------------------------------------------
NET ASSETS ($) 18,179,220
--------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 18,025,282
Accumulated net realized gain (loss) on investments (398,085)
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 552,023
--------------------------------------------------------------------------------
NET ASSETS ($) 18,179,220
NET ASSET VALUE PER SHARE
<TABLE>
<CAPTION>
Class A Class B Class C
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Assets ($) 12,081,844 6,085,854 11,522
Shares Outstanding 913,977 460,242 873
------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE ($) 13.22 13.22 13.20
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF OPERATIONS
Six Months Ended October 31, 2000 (Unaudited)
--------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INTEREST INCOME 520,705
EXPENSES:
Management fee--Note 3(a) 51,229
Shareholder servicing costs--Note 3(c) 31,104
Distribution fees--Note 3(b) 15,855
Registration fees 13,193
Prospectus and shareholders' reports 6,360
Professional fees 3,741
Custodian fees 1,028
Trustees' fees and expenses--Note 3(d) 393
Loan commitment fees--Note 2 59
Miscellaneous 3,914
TOTAL EXPENSES 126,876
INVESTMENT INCOME-NET 393,829
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments (160,853)
Net unrealized appreciation (depreciation) on investments 717,959
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS 557,106
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 950,935
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
October 31, 2000 Year Ended
(Unaudited) April 30, 2000
-------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 393,829 836,373
Net realized gain (loss) on investments (160,853) (169,957)
Net unrealized appreciation (depreciation) on investments 717,959 (1,301,091)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 950,935 (634,675)
-------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net:
Class A shares (270,102) (489,538)
Class B shares (122,721) (344,586)
Class C shares (1,006) (2,249)
TOTAL DIVIDENDS (393,829) (836,373)
-------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS ($):
Net proceeds from shares sold:
Class A shares 1,147,699 5,413,341
Class B shares 566,388 2,217,910
Class C shares 204 109,675
Dividends reinvested:
Class A shares 166,908 299,966
Class B shares 75,002 199,528
Class C shares 122 639
Cost of shares redeemed:
Class A shares (1,445,957) (1,924,109)
Class B shares (1,416,445) (7,580,619)
Class C shares (79,353) (65,267)
INCREASE (DECREASE) IN NET ASSETS FROM
BENEFICIAL INTEREST TRANSACTIONS (985,432) (1,328,936)
TOTAL INCREASE (DECREASE) IN NET ASSETS (428,326) (2,799,984)
--------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 18,607,546 21,407,530
END OF PERIOD 18,179,220 18,607,546
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
Six Months Ended
October 31, 2000 Year Ended
(Unaudited) April 30, 2000
--------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
CLASS A (A)
Shares sold 88,868 408,892
Shares issued for dividends reinvested 12,790 23,161
Shares redeemed (110,444) (144,231)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (8,786) 287,822
--------------------------------------------------------------------------------
CLASS B (A)
Shares sold 43,365 164,950
Shares issued for dividends reinvested 5,747 15,350
Shares redeemed (109,454) (571,205)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (60,342) (390,905)
--------------------------------------------------------------------------------
CLASS C
Shares sold 15 8,400
Shares issued for dividends reinvested 10 49
Shares redeemed (6,030) (4,941)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (6,005) 3,508
(A) DURING THE PERIOD ENDED OCTOBER 31, 2000, 71,924 CLASS B SHARES
REPRESENTING $931,305 WERE AUTOMATICALLY CONVERTED TO 71,944 CLASS A SHARES
AND DURING THE PERIOD ENDED APRIL 30, 2000, 271,943 CLASS B SHARES
REPRESENTING $3,559,075 WERE AUTOMATICALLY CONVERTED TO 272,136 CLASS A
SHARES.
SEE NOTES TO FINANCIAL STATEMENTS.
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the
fiscal periods indicated. All information (except portfolio turnover rate)
reflects financial results for a single fund share. Total Return shows how much
your investment in the fund would have increased (or decreased) during each
period, assuming you had reinvested all dividends and distributions. These
figures have been derived from the fund's financial statements.
<TABLE>
<CAPTION>
Six Months Ended
October 31, 2000 Year Ended April 30,
------------------------------------------------------------
CLASS A SHARES (Unaudited) 2000 1999 1998 1997 1996
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value,
beginning of period 12.83 13.81 13.63 13.22 13.05 12.80
Investment Operations:
Investment income--net .29 .59 .60 .61 .62 .66
Net realized and unrealized
gain (loss) on investments .39 (.98) .18 .41 .17 .25
Total from Investment Operations .68 (.39) .78 1.02 .79 .91
Distributions:
Dividends from investment
income-net (.29) (.59) (.60) (.61) (.62) (.66)
Net asset value, end of period 13.22 12.83 13.81 13.63 13.22 13.05
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) (A) 10.57(b) (2.76) 5.74 7.76 6.16 7.14
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to
average net assets 1.20(b) .94 .99 .95 .98 .74
Ratio of net investment income
to average net assets 4.39(b) 4.57 4.27 4.44 4.71 5.00
Decrease reflected in above
expense ratios due to
undertakings by
The Dreyfus Corporation -- .32 -- -- -- .21
Portfolio Turnover Rate 17.28(c) 54.72 69.13 36.64 50.96 33.09
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 12,082 11,839 8,769 6,232 6,598 8,346
(A) EXCLUSIVE OF SALES CHARGE.
(B) ANNUALIZED.
(C) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS (CONTINUED)
Six Months Ended
October 31, 2000 Year Ended April 30,
-----------------------------------------------------------
CLASS B SHARES (Unaudited) 2000 1999 1998 1997 1996
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value,
beginning of period 12.83 13.82 13.63 13.22 13.06 12.80
Investment Operations:
Investment income--net .26 .53 .53 .54 .56 .59
Net realized and unrealized
gain (loss) on investments .39 (.99) .19 .41 .16 .26
Total from Investment Operations .65 (.46) .72 .95 .72 .85
Distributions:
Dividends from investment
income-net (.26) (.53) (.53) (.54) (.56) (.59)
Net asset value, end of period 13.22 12.83 13.82 13.63 13.22 13.06
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) (A) 10.10(b) (3.31) 5.29 7.24 5.55 6.69
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to
average net assets 1.68(b) 1.45 1.49 1.44 1.47 1.24
Ratio of net investment income
to average net assets 3.92(b) 4.02 3.79 3.94 4.20 4.46
Decrease reflected in above
expense ratios due to
undertakings by
The Dreyfus Corporation -- .28 -- -- -- .20
Portfolio Turnover Rate 17.28(c) 54.72 69.13 36.64 50.96 33.09
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 6,086 6,681 12,592 17,558 18,211 20,106
(A) EXCLUSIVE OF SALES CHARGE.
(B) ANNUALIZED.
(C) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended
October 31, 2000 Year Ended April 30,
------------------------------------------------------------
CLASS C SHARES (Unaudited) 2000 1999 1998 1997 1996(a)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value,
beginning of period 12.82 13.80 13.62 13.22 13.05 12.85
Investment Operations:
Investment income--net .23 .49 .44 .47 .51 .38
Net realized and unrealized
gain (loss) on investments .38 (.98) .18 .40 .17 .20
Total from Investment Operations .61 (.49) .62 .87 .68 .58
Distributions:
Dividends from investment
income-net (.23) (.49) (.44) (.47) (.51) (.38)
Net asset value, end of period 13.20 12.82 13.80 13.62 13.22 13.05
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) (B) 9.54(c) (3.51) 4.59 6.61 5.30 6.28(c)
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to
average net assets 2.19(c) 1.65 1.99 1.91 1.80 1.98(c)
Ratio of net investment income
to average net assets 3.77(c) 3.82 3.28 3.48 3.87 3.73(c)
Decrease reflected in above
expense ratios due to
undertakings by
The Dreyfus Corporation -- .30 -- -- -- --
Portfolio Turnover Rate 17.28(d) 54.72 69.13 36.64 50.96 33.09
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 12 88 47 42 105 88
(A) FROM AUGUST 15, 1995 (COMMENCEMENT OF INITIAL OFFERING) TO APRIL 30, 1996.
(B) EXCLUSIVE OF SALES CHARGE.
(C) ANNUALIZED.
(D) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus Premier State Municipal Bond Fund (the "Trust") is registered under the
Investment Company Act of 1940, 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., which is a wholly-owned
subsidiary of Mellon Financial Corporation.
Dreyfus Service Corporation (the "Distributor"), a wholly-owned subsidiary of
the Manager, is the distributor of the fund's shares. The fund is authorized to
issue an unlimited number of $.001 par value shares of Beneficial Interest 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. Class B shares automatically convert to Class A shares after
six years. 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
series. Expenses directly attributable to each series are charged to that
series' operations; expenses which are applicable to all series are allocated
among them on a pro rata basis.
The fund' s financial statements are prepared in accordance with accounting
principles generally accepted in the United States, which may require the use of
management estimates and assumptions. Actual results could differ from those
estimates.
(a) Portfolio valuation: Investments in securities (excluding options and
financial futures on municipal and U.S. treasury securities) are valued each
business day by an independent pricing service ("Service") approved by the Board
of Trustees. Investments for which quoted bid prices are readily available and
are representative of the bid side of the market in the judgment of the Service
are valued at the mean between the quoted bid prices (as obtained by the Service
from dealers in such securities) and asked prices (as calculated by the Service
based upon its evaluation of the market for such securities). Other investments
(which constitute a majority of the portfolio securities) are carried at fair
value as determined by the Service, based on methods which include consideration
of: yields or prices of municipal securities of comparable quality, coupon,
maturity and type; indications as to values from dealers; and general market
conditions. Options and financial futures on municipal and U.S. treasury
securities are valued at the last sales price on the securities exchange on
which such securities are primarily traded or at the last sales price on the
national securities market on each business day. Investments not listed on an
exchange or the national securities market, or securities for which there were
no transactions, are valued at the average of the most recent bid and asked
prices. Bid price is used when no asked price is available.
(b) Securities transactions and investment income: Securities transactions are
recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Interest income,
adjusted for amortization of premiums and original issue discounts on
investments, is earned from settlement date and recognized on the accrual basis.
Securities purchased or sold on a when-issued or delayed-delivery basis may be
settled a month or more after the trade date. Under the terms of the custody
agreement, the fund received net earnings credits of $1,127 during the period
ended October 31, 2000 based on available cash balances left on deposit. Income
earned under this arrangement is included in interest income.
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
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.
(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 $42,000 available
for Federal income tax purposes to be applied against future net securities
profits, if any, realized subsequent to April 30, 2000. This amount is
calculated based on Federal income tax regulations which may differ from
financial reporting in accordance with generally accepted accounting principles.
If not applied, $25,000 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 $500 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
October 31, 2000, 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
(b) Under the Distribution Plan (the "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 October 31, 2000, Class B and
Class C shares were charged $15,655 and $200, respectively, pursuant to the
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 October 31, 2000, Class A, Class B and Class C
shares were charged $15,392, $7,827 and $67, respectively, pursuant to the
Shareholder Services Plan.
The fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of the
Manager, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the fund. During the period
ended October 31, 2000, the fund was charged $5,619 pursuant to the transfer
agency agreement.
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
(d) Each Board member also serves as a Board member of other funds within the
Dreyfus complex (collectively, the "Fund Group"). Each Board member who is not
an "affiliated person" as defined in the Act receives an annual fee of $50,000
and an attendance fee of $6,500 for each meeting attended and $500 for telephone
meetings. These fees are allocated among the funds in the Fund Group. The
chairman of the Board receives an additional 25% of such compensation. Subject
to the fund' s Emeritus Program Guidelines, Emeritus Board Members, if any,
receive 50% of the Trust's annual retainer fee and per meeting fee paid at the
time the Board member achieves emeritus status.
NOTE 4--Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding
short-term securities, during the period ended October 31, 2000, amounted to
$2,952,585 and $3,409,420, respectively.
At October 31, 2000, accumulated net unrealized appreciation on investments was
$552,023, consisting of $666,702 gross unrealized appreciation and $114,679
gross unrealized depreciation.
At October 31, 2000, 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).
NOTE 5--Subsequent Event:
Effective November 6, 2000, the Board approved a proposal to liquidate the fund
and distribute its assets pro rata to fund shareholders. The anticipated date of
liquidation of the fund is January 11, 2001.
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
100 Church Street
New York, NY 10286
Transfer Agent & Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166
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
(c) 2000 Dreyfus Service Corporation 068SA0010
Dreyfus Premier
State Municipal
Bond Fund,
Maryland Series
SEMIANNUAL REPORT October 31, 2000
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured * Not Bank-Guaranteed * May Lose Value
Contents
THE FUND
--------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Statement of Investments
10 Statement of Assets and Liabilities
11 Statement of Operations
12 Statement of Changes in Net Assets
14 Financial Highlights
17 Notes to Financial Statements
FOR MORE INFORMATION
---------------------------------------------------------------------------
Back Cover
The Fund
Dreyfus Premier
State Municipal Bond Fund,
Maryland Series
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Premier State
Municipal Bond Fund, Maryland Series, covering the six-month period from May 1,
2000 through October 31, 2000. Inside, you'll find valuable information about
how the fund was managed during the reporting period, including a discussion
with the fund's portfolio manager, Douglas Gaylor.
Despite some modest fluctuations because of changing economic conditions,
municipal bond prices generally rose modestly over the six-month reporting
period. Most sectors of the municipal bond market also benefited from slowing
economic growth as well. Additionally, the moderating effects of the Federal
Reserve Board' s (the "Fed") interest-rate hikes during the first half of 2000
helped the Fed to achieve its goal of slowing the U.S. economy. Other factors
such as higher energy prices and a weak euro also served to slow economic
growth.
In general, the overall investment environment that prevailed in the second half
of the 1990s had provided returns well above their long-term averages,
establishing unrealistic expectations for some investors. We believe that as the
risks of the stock market have become more apparent recently, the relative
stability and income potential of municipal bonds can make them an attractive
investment as part of a well-balanced portfolio.
For more information about the economy and financial markets, we encourage you
to visit the Market Commentary section of our website at www.dreyfus.com. Or, to
speak with a Dreyfus customer service representative, call us at 1-800-782-6620.
Thank you for investing in Dreyfus Premier State Municipal Bond Fund, Maryland
Series.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
November 15, 2000
DISCUSSION OF FUND PERFORMANCE
Douglas Gaylor, Portfolio Manager
How did Dreyfus Premier State Municipal Bond Fund, Maryland Series perform
during the period?
For the six-month period ended October 31, 2000, the fund's Class A shares
provided a 4.58% total return, its Class B shares provided a 4.32% total return
and its Class C shares provided a 4.18% total return.(1) In comparison, the
Lipper Maryland Municipal Debt Funds category average provided a 4.83% total
return for the same period.(2)
We attribute the fund' s good absolute performance to a relatively strong
investment environment for municipal bonds over the past six months, which was
driven primarily by signs of an economic slowdown in the U.S., as well as
positive supply-and-demand factors affecting municipal bonds throughout the
nation. However, our lagging performance relative to our peer group is primarily
the result of credit concerns surrounding a few of the fund's holdings, which
constrained the fund's returns.
What is the fund's investment approach?
Our goal is to seek as high a level of federal and Maryland state tax-exempt
income as is practical without undue risk from a diversified portfolio of
municipal bonds. To achieve this objective, we employ two primary strategies.
First, for between one-half and three-quarters of the total fund, we look for
bonds that can potentially offer attractive current income. We typically look
for bonds that can provide consistently high current yields. We also try to
ensure that we select bonds that are most likely to obtain attractive prices if
and when we decide to sell them in the secondary market.
Second, for the remainder of the fund, we try to look for bonds that we believe
have the potential to 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 belief is that these bonds' prices
will rise as they return to favor over time.
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
What other factors influenced the fund's performance?
The fund was positively influenced over the past six months by favorable
economic and market conditions. When the reporting period began on May 1, 2000,
the U.S. and Maryland economies continued to grow strongly, raising concerns
that long-dormant inflationary pressures might reemerge. In response, the
Federal Reserve Board (the "Fed") raised short-term interest rates once during
the reporting period for a total increase of 0.50 percentage points. However,
signs soon emerged that the Fed's previous rate hikes were having the desired
effect of slowing the economy. Fewer housing starts, moderating growth and
little change in the core inflation rate may suggest that the Fed's restrictive
monetary policies could be near an end.
In addition, the continuing strength of the Maryland economy helped keep
municipal bond yields relatively low compared to taxable bonds. Maryland and its
municipalities enjoyed higher revenues during the reporting period, curtailing
their need to borrow and resulting in a reduced supply of securities compared to
the same period in 1999. When supply falls and demand rises or remains steady,
prices of existing bonds tend to move higher.
In this environment, we received particularly strong returns from some of the
out-of-favor bonds -- including bonds selling at deep discounts to their face
values -- that we had purchased during the 1999 market decline. As these
discount securities returned to favor among investors and their prices rose, we
gradually sold them. We redeployed the proceeds of those sales primarily to
relatively defensive, income-oriented bonds with attractive yields and modest
price premiums.
However, some out-of-favor bonds remained out of favor because of persistent
concerns regarding the fiscal health of certain issuers, particularly Maryland
hospitals. Although we remain confident that these bonds should recover, they
have not yet done so.
What is the fund's current strategy?
Because we expect that slower economic growth, fewer inflation concerns and
potentially lower interest rates may benefit the municipal bond market, we are
currently on the lookout for out-of-favor Maryland bonds that, in our opinion,
are likely to return to favor in the future. However, with little new supply in
the Maryland marketplace, such opportunities have been few.
In addition, a relatively large number of municipal bonds are scheduled to
mature shortly after the new year begins, which may set the stage for strong
market performance as investors reinvest their principal. In our opinion, this
should maintain demand for high quality, tax-exempt, fixed-income securities
even if the supply of new municipal bonds changes directions and starts to rise.
November 15, 2000
(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. HAD THESE
CHARGES BEEN REFLECTED, RETURNS WOULD HAVE BEEN LOWER. PAST PERFORMANCE IS NO
GUARANTEE OF FUTURE RESULTS. SHARE PRICE, YIELD AND INVESTMENT RETURN FLUCTUATE
SUCH THAT UPON REDEMPTION, FUND SHARES MAY BE WORTH MORE OR LESS THAN THEIR
ORIGINAL COST. INCOME MAY BE SUBJECT TO STATE AND LOCAL TAXES FOR NON-MARYLAND
RESIDENTS AND SOME INCOME MAY BE SUBJECT TO THE FEDERAL ALTERNATIVE MINIMUM TAX
(AMT) FOR CERTAIN INVESTORS. CAPITAL GAINS, IF ANY, ARE FULLY TAXABLE.
(2) SOURCE: LIPPER INC.
The Fund
STATEMENT OF INVESTMENTS
October 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
Principal
LONG-TERM MUNICIPAL INVESTMENTS--99.1% Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
MARYLAND--87.0%
Anne Arundel County:
General Improvement 4.50%, 8/1/2018 870,000 770,237
Water and Sewer:
4.50%, 8/1/2018 265,000 234,613
4.50%, 8/1/2019 1,495,000 1,313,537
4.50%, 8/1/2020 1,455,000 1,268,716
Baltimore:
(Tindeco Wharf Project)
6.60%, 12/20/2024 (Collateralized; GNMA) 4,250,000 4,376,183
Port Facilities Revenue (Consolidated Coal Sales)
6.50%, 12/1/2010 4,090,000 4,309,715
Baltimore City Housing Corp., MFHR
7.25%, 7/1/2023 (Collateralized; FNMA) 3,070,000 3,084,890
Baltimore County:
Mortgage Revenue, Zero coupon, 9/1/2024 2,280,000 543,210
Nursing Facility Mortgage Revenue
(Eastpoint Rehabilitation & Nursing Centers):
6.75%, 4/1/2015 1,000,000 732,600
6.75%, 4/1/2028 1,500,000 1,054,215
PCR (Bethlehem Steel Corp. Project):
7.50%, 6/1/2015 8,130,000 7,870,978
7.55%, 6/1/2017 4,945,000 4,799,320
Gaithersburg, Hospital Facilities Improvement Revenue
(Shady Grove)
6.50%, 9/1/2012 (Insured; FSA) 10,000,000 11,302,900
Howard County, COP 8.15%, 2/15/2020 605,000 799,453
Maryland, Allegany College 6%, 9/1/2032 2,000,000 1,974,060
Maryland, COP (Aviation Administration Facilities Project):
4.75%, 5/1/2015 565,000 525,653
4.75%, 5/1/2016 750,000 693,825
4.75%, 5/1/2017 1,650,000 1,514,403
4.75%, 5/1/2018 1,730,000 1,572,155
Maryland Community Development Administration,
Department of Housing and Community Development:
Housing Revenue,
5.95%, 7/1/2023 4,985,000 5,065,657
MFHR:
6.50%, 5/15/2013 3,000,000 3,109,230
6.85%, 5/15/2033 3,075,000 3,156,149
6.70%, 5/15/2036 (Insured; FHA) 7,710,000 8,010,767
Residential 5.25%, 9/1/2029 3,600,000 3,281,868
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------
MARYLAND (CONTINUED)
Maryland Community Development Administration,
Department of Housing and Community Development (continued):
Single Family Program:
6.95%, 4/1/2011 2,480,000 2,518,217
5.15%, 4/1/2018 1,950,000 1,828,749
6.55%, 4/1/2026 6,715,000 6,926,858
6.75%, 4/1/2026 3,880,000 3,964,157
5.25%, 4/1/2029 6,785,000 6,189,074
Maryland Economic Development Corp., Revenue (Health and
Mental Hygiene Providers Facilities Acquisition Program):
8.375%, 3/1/2013 3,900,000 4,043,247
8.75%, 3/1/2017 4,670,000 4,614,800
Maryland Health and Higher Educational Facilities
Authority, Revenue:
(Calvert Memorial Hospital) 5%, 7/1/2028 1,410,000 1,218,973
(Doctors Community Hospital) 5.50%, 7/1/2024 9,890,000 7,897,165
(Helix Health Issue) 5%, 7/1/2027 (Insured; AMBAC) 5,580,000 5,204,968
(Johns Hopkins Hospital):
4.75%, 5/15/2033 7,100,000 6,146,825
4.50%, 5/15/2035 2,395,000 1,951,757
(Loyola College) 5%, 10/1/2039 1,325,000 1,198,555
(Medlantic Helix Issue)
4.75%, 8/15/2028 (Insured; FSA) 32,385,000 26,785,310
(Union Hospital of Cecil County) :
6.70%, 7/1/2009 2,320,000 2,455,720
4.75%, 7/1/2013 1,840,000 1,614,729
5.10%, 7/1/2022 1,120,000 974,478
(University of Maryland Medical Systems)
7%, 7/1/2022 (Insured; FGIC) 4,500,000 5,357,610
Maryland Industrial Development Financing Authority, EDR
(Medical Waste Association) 8.75%, 11/15/2010 700,000 514,500
Maryland Local Government Insurance Trust, COP
7.125%, 8/1/2009 3,250,000 3,334,468
Montgomery County Housing Opportunities Commission,
Revenue:
Multi-Family Mortgage:
7.05%, 7/1/2032 2,485,000 2,557,140
7.375%, 7/1/2032 1,805,000 1,845,522
Single Family Mortgage:
7.375%, 7/1/2017 250,000 252,493
6.625%, 7/1/2026 1,000,000 1,027,750
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
-------------------------------------------------------------------------------------------------------------------------------
MARYLAND (CONTINUED)
Montgomery County Housing Opportunities Commission,
Revenue (continued):
Single Family Mortgage (continued):
Zero Coupon, 7/1/2027 12,165,000 2,443,340
Zero Coupon, 7/1/2028 41,975,000 8,266,557
Northeast Waste Disposal Authority:
RRR (Baltimore Resco Retrofit Project)
5%, 1/1/2012 4,235,000 3,683,899
Solid Waste Revenue
(Montgomery County Resource Recovery Project):
6%, 7/1/2008 2,690,000 2,856,726
6.20%, 7/1/2010 10,000,000 10,438,700
6.30%, 7/1/2016 14,205,000 14,618,224
Prince Georges County, Revenue
(Dimensions Health Corp.)
5.30%, 7/1/2024 12,585,000 7,075,413
Prince Georges County Housing Authority:
Mortgage Revenue:
(New Keystone Apartment Project)
6.80%, 7/1/2025 (Insured: FHA & MBIA) 4,300,000 4,424,829
(Parkway Terrace Apartments)
5.90%, 1/20/2020 (Collateralized; GNMA) 2,195,000 2,209,970
(Riverview Terrace)
6.70%, 6/20/2020 (Collateralized; GNMA) 2,000,000 2,090,600
(Stevenson Apartments Project)
6.35%, 7/20/2020 (Collateralized; GNMA) 3,000,000 3,060,630
SFMR
6.60%, 12/1/2025 (Collateralized: FNMA & GNMA) 3,700,000 3,787,949
U.S. RELATED--12.1%
Guam Airport Authority, Revenue 6.70%, 10/1/2023 10,000,000 10,369,700
Puerto Rico Commonwealth, Public Improvement:
4.50%, 7/1/2023 (Insured; AMBAC) 5,000,000 4,324,300
5%, 7/1/2026 (Insured; FSA) 1,795,000 1,674,789
Puerto Rico Electric Power Authority, Power Revenue:
4.50%, 7/1/2019 (Insured; FSA) 2,970,000 2,654,972
4.75%, 7/1/2024 1,245,000 1,128,418
5%, 7/1/2028 930,000 853,126
5%, 7/1/2028 8,885,000 8,323,646
Puerto Rico Public Buildings Authority, Revenue
5%, 7/1/2027 (Insured; AMBAC) 4,000,000 3,768,520
TOTAL LONG-TERM MUNICIPAL INVESTMENTS (cost $278,152,440) 269,841,707
</TABLE>
<TABLE>
<CAPTION>
Principal
SHORT-TERM MUNICIPAL INVESTMENTS--.6% Amount ($) Value ($)
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Maryland Energy Financing Administration, SWDR, VRDN
(Cimenteries) 4.80% (cost $1,700,000) 1,700,000 (a) 1,700,000
-----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $279,852,440) 99.7% 271,541,707
CASH AND RECEIVABLES (NET) .3% 699,383
NET ASSETS 100.0% 272,241,090
</TABLE>
Summary of Abbreviations
AMBAC American Municipal Bond
Assurance Corporation
COP Certificate of Participation
EDR Economic Development Revenue
FGIC Financial Guaranty Insurance
Company
FHA Federal Housing Administration
FNMA Federal National
Mortgage Association
FSA Financial Security Assurance
GNMA Government National
Mortgage Association
LR Lease Revenue
MBIA Municipal Bond
Investors Assurance
Insurance Corporation
MFHR Multi-Family Housing Revenue
PCR Pollution Control Revenue
RRR Resources Recovery Revenue
SFMR Single Family Mortgage Revenue
SWDR Solid Waste Disposal Revenue
VRDN Variable Rate Demand Notes
Summary of Combined Ratings (Unaudited)
<TABLE>
<CAPTION>
Fitch or Moody's or Standard & Poor's Value (%)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
AAA Aaa AAA 35.0
AA Aa AA 28.1
A A A 16.9
BBB Baa BBB 10.7
F-1+, F-1 VMIG1, MIG1, P1 SP1, A1 .6
Not Rated (b) Not Rated (b) Not Rated (b) 8.7
100.0
(A) SECURITIES PAYABLE ON DEMAND. VARIABLE INTEREST RATE--SUBJECT TO PERIODIC
CHANGE.
(B) SECURITIES WHICH, WHILE NOT RATED BY FITCH, MOODY'S AND STANDARD & POORS
HAVE BEEN DETERMINED BY THE MANAGER TO BE OF COMPARABLE QUALITY TO THOSE
RATED SECURITIES IN WHICH THE FUND MAY INVEST.
(C) AT OCTOBER 31, 2000, THE FUND HAD $88,430,711 (32.5% OF NET ASSETS) AND
$84,021,787 (30.9% OF NET ASSETS) INVESTED IN SECURITIES WHOSE PAYMENT OF
PRINCIPAL AND INTEREST IS DEPENDENT UPON REVENUES GENERATED FROM HEALTH
CARE AND HOUSING PROJECTS, RESPECTIVELY.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
STATEMENT OF ASSETS AND LIABILITIES
October 31, 2000 (Unaudited)
Cost Value
--------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of
Investments 279,852,440 271,541,707
Cash 18,229
Interest receivable 4,658,882
Receivable for investment securities sold 730,024
Receivable for shares of Benefical Interest subscribed 147,000
Prepaid expenses 8,735
277,104,577
--------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 206,409
Payable for investment securities purchased 4,382,982
Payable for shares of Benefical Interest redeemed 243,271
Accrued expenses 30,825
4,863,487
--------------------------------------------------------------------------------
NET ASSETS ($) 272,241,090
--------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 281,256,495
Accumulated net realized gain (loss) on investments (704,672)
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 (8,310,733)
--------------------------------------------------------------------------------
NET ASSETS ($) 272,241,090
NET ASSET VALUE PER SHARE
<TABLE>
<CAPTION>
Class A Class B Class C
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Assets ($) 226,178,340 43,261,569 2,801,181
Shares Outstanding 18,915,116 3,617,389 234,089
------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE ($) 11.96 11.96 11.97
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF OPERATIONS
Six Months Ended October 31, 2000 (Unaudited)
--------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INTEREST INCOME 8,449,579
EXPENSES:
Management fee--Note 3(a) 757,816
Shareholder servicing costs--Note 3(c) 428,885
Distribution fees--Note 3(b) 118,491
Professional fees 19,397
Custodian fees 14,115
Registration fees 9,776
Prospectus and shareholders' reports 8,677
Trustees' fees and expenses--Note 3(d) 3,704
Loan commitment fees--Note 2 928
Miscellaneous 7,772
TOTAL EXPENSES 1,369,561
INVESTMENT INCOME--NET 7,080,018
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments (482,290)
Net unrealized appreciation (depreciation) on investments 5,462,880
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS 4,980,590
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 12,060,608
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
October 31, 2000 Year Ended
(Unaudited) April 30, 2000
--------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 7,080,018 15,340,606
Net realized gain (loss) on investments (482,290) (227,377)
Net unrealized appreciation
(depreciation) on investments 5,462,880 (27,588,286)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 12,060,608 (12,475,057)
--------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net:
Class A shares (5,999,130) (12,863,151)
Class B shares (1,022,408) (2,348,233)
Class C shares (58,480) (129,222)
Net realized gain on investments:
Class A shares -- (2,150,363)
Class B shares -- (412,360)
Class C shares -- (26,427)
TOTAL DIVIDENDS (7,080,018) (17,929,756)
--------------------------------------------------------------------------------
BENEFICAL INTEREST TRANSACTIONS ($):
Net proceeds from shares sold:
Class A shares 5,938,261 29,986,633
Class B shares 4,226,740 12,404,497
Class C shares 605,713 1,029,824
Dividends reinvested:
Class A shares 3,605,110 9,283,726
Class B shares 563,908 1,669,377
Class C shares 32,453 95,038
Cost of shares redeemed:
Class A shares (16,695,520) (49,455,500)
Class B shares (5,359,140) (25,629,469)
Class C shares (108,778) (1,823,597)
INCREASE (DECREASE) IN NET ASSETS
FROM BENEFICIAL INTEREST TRANSACTIONS (7,191,253) (22,439,471)
TOTAL INCREASE (DECREASE) IN NET ASSETS (2,210,663) (52,844,284)
--------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 274,451,753 327,296,037
END OF PERIOD 272,241,090 274,451,753
SEE NOTES TO FINANCIAL STATEMENTS.
Six Months Ended
October 31, 2000 Year Ended
(Unaudited) April 30, 2000
--------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
CLASS A (A)
Shares sold 500,900 2,445,834
Shares issued for dividends reinvested 303,534 770,041
Shares redeemed (1,406,473) (4,117,990)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (602,039) (902,115)
--------------------------------------------------------------------------------
CLASS B (A)
Shares sold 357,008 1,004,505
Shares issued for dividends reinvested 47,473 138,189
Shares redeemed (452,096) (2,098,431)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (47,615) (955,737)
--------------------------------------------------------------------------------
CLASS C
Shares sold 51,373 83,092
Shares issued for dividends reinvested 2,729 7,865
Shares redeemed (9,211) (151,541)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 44,891 (60,584)
(A) DURING THE PERIOD ENDED OCTOBER 31, 2000, 191,732 CLASS B SHARES
REPRESENTING $2,281,150 WERE AUTOMATICALLY CONVERTED TO 191,791 CLASS A
SHARES AND DURING THE PERIOD ENDED APRIL 30, 2000, 1,092,388 CLASS B SHARES
REPRESENTING $13,370,068 WERE AUTOMATICALLY CONVERTED TO 1,092,760 CLASS A
SHARES.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the
fiscal periods indicated. All information (except portfolio turnover rate)
reflects financial results for a single fund share. Total return shows how much
your investment in the fund would have increased (or decreased) during each
period, assuming you had reinvested all dividends and distributions. These
figures have been derived from the fund's financial statements.
<TABLE>
<CAPTION>
Six Months Ended
October 31, 2000 Year Ended April 30,
----------------------------------------------------------------
CLASS A SHARES (Unaudited) 2000 1999 1998 1997 1996
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value,
beginning of period 11.74 12.94 13.05 12.70 12.69 12.54
Investment Operations:
Investment income--net .31 .63 .65 .67 .68 .67
Net realized and unrealized gain
(loss) on investments .22 (1.10) .09 .50 .18 .23
Total from Investment Operations .53 (.47) .74 1.17 .86 .90
Distributions:
Dividends from investment
income--net (.31) (.63) (.65) (.67) (.68) (.67)
Dividends from net realized
gain on investments -- (.10) (.20) (.15) (.17) (.08)
Total Distributions (.31) (.73) (.85) (.82) (.85) (.75)
Net asset value, end of period 11.96 11.74 12.94 13.05 12.70 12.69
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(A) 9.09(b) (3.61) 5.76 9.40 6.91 7.24
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to
average net assets .91(b) .91 .90 .90 .90 .90
Ratio of net investment income
to average net assets 5.23(b) 5.16 4.97 5.12 5.29 5.23
Portfolio Turnover Rate 6.25(c) 28.37 29.30 18.12 43.63 41.65
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 226,178 229,184 264,255 262,560 266,658 283,878
(A) EXCLUSIVE OF SALES CHARGE.
(B) ANNUALIZED.
(C) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended
October 31, 2000 Year Ended April 30,
----------------------------------------------------------------
CLASS B SHARES (Unaudited) 2000 1999 1998 1997 1996
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value,
beginning of period 11.74 12.94 13.05 12.70 12.69 12.54
Investment Operations:
Investment income--net .28 .56 .58 .60 .61 .61
Net realized and unrealized
gain (loss)on investments .22 (1.10) .09 .50 .18 .23
Total from Investment Operations .50 (.54) .67 1.10 .79 .84
Distributions:
Dividends from investment
income--net (.28) (.56) (.58) (.60) (.61) (.61)
Dividends from net realized
gain on investments -- (.10) (.20) (.15) (.17) (.08)
Total Distributions (.28) (.66) (.78) (.75) (.78) (.69)
Net asset value, end of period 11.96 11.74 12.94 13.05 12.70 12.69
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(A) 8.57(b) (4.12) 5.20 8.83 6.34 6.66
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to
average net assets 1.41(b) 1.43 1.42 1.42 1.43 1.43
Ratio of net investment income
to average net assets 4.71(b) 4.62 4.44 4.59 4.75 4.68
Portfolio Turnover Rate 6.25(c) 28.37 29.30 18.12 43.63 41.65
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 43,262 43,044 59,806 50,141 45,329 41,179
(A) EXCLUSIVE OF SALES CHARGE.
(B) ANNUALIZED.
(C) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS (CONTINUED)
Six Months Ended
October 31, 2000 Year Ended April 30,
----------------------------------------------------------------
CLASS C SHARES (Unaudited) 2000 1999 1998 1997 1996(a)
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 11.75 12.95 13.06 12.71 12.69 12.67
Investment Operations:
Investment income--net .27 .54 .55 .57 .58 .41
Net realized and unrealized
gain (loss)on investments .22 (1.10) .09 .50 .19 .10
Total from Investment Operations .49 (.56) .64 1.07 .77 .51
Distributions:
Dividends from investment
income--net (.27) (.54) (.55) (.57) (.58) (.41)
Dividends from net realized
gain on investments -- (.10) (.20) (.15) (.17) (.08)
Total Distributions (.27) (.64) (.75) (.72) (.75) (.49)
Net asset value, end of period 11.97 11.75 12.95 13.06 12.71 12.69
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(B) 8.41(c) (4.32) 4.93 8.55 6.16 5.57(c)
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to
average net assets 1.67(c) 1.65 1.66 1.67 1.64 1.80(c)
Ratio of net investment income
to average net assets 4.44(c) 4.41 4.15 4.29 4.47 4.59(c)
Portfolio Turnover Rate 6.25(d) 28.37 29.30 18.12 43.63 41.65
------------------------------------------------------------------------------------------------------------------------------------
Net Assets,
end of period ($ x 1,000) 2,801 2,223 3,235 1,618 202 27
(A) FROM AUGUST 15, 1995 (COMMENCEMENT OF INITIAL OFFERING) TO APRIL 30, 1996.
(B) EXCLUSIVE OF SALES CHARGE.
(C) ANNUALIZED.
(D) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus Premier State Municipal Bond Fund (the "Trust") is registered under the
Investment Company Act of 1940, 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., which is a wholly-owned
subsidiary of Mellon Financial Corporation.
Dreyfus Service Corporation (the "Distributor"), a wholly-owned subsidiary of
the Manager, is the distributor of the fund's shares. The fund is authorized to
issue an unlimited number of $.001 par value shares of Beneficial Interest 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. Class B shares automatically convert to Class A shares after
six years. 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
series. Expenses directly attributable to each series are charged to that
series' operations; expenses which are applicable to all series are allocated
among them on a pro rata basis.
The fund' s financial statements are prepared in accordance with accounting
principles generally accepted in the United States, which may require the use of
management estimates and assumptions. Actual results could differ from those
estimates.
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (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 $10,999 during the period
ended October 31, 2000 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.
(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, if any, 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 $205,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to April 30, 2000. This amount
is calculated based on Federal income tax regulations which may differ from
financial reporting in accordance with generally accepted accounting principles.
If not applied, the carryover expires in fiscal 2008.
NOTE 2--Bank Line of Credit:
The fund participates with other Dreyfus-managed funds in a $500 million
redemption credit facility (the "Facility" ) to be utilized for temporary or
emergency purposes, including the financing of redemp-
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
tions. 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 October 31, 2000, 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 Distributor retained $3,846 during the period ended October 31, 2000, from
commissions earned on sales of the fund's shares.
(b) Under the Distribution Plan (the "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 October 31, 2000, Class B and
Class C shares were charged $108,604 and $9,887, respectively, pursuant to the
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 October 31, 2000, Class A, Class B and Class C
shares were charged $286,864, $54,302 and $3,296, respectively, pursuant to the
Shareholder Services Plan.
The fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of the
Manager, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the fund. During the period
ended October 31, 2000, the fund was charged $79,306 pursuant to the transfer
agency agreement.
(d) Each Board member also serves as a Board member of other funds within the
Dreyfus complex (collectively, the "Fund Group"). Each Board member who is not
an "affiliated person" as defined in the Act receives an annual fee of $50,000
and an attendance fee of $6,500 for each meeting attended and $500 for telephone
meetings. These fees are allocated among the funds in the Fund Group. The
Chairman of the Board receives an additional 25% of such compensation. Subject
to the fund' s Emeritus Program Guidelines, Emeritus Board members, if any,
receive 50% of the Trust's annual retainer fee and per meeting fee paid at the
time the Board member achieves emeritus status.
NOTE 4--Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding
short-term securities, during the period ended October 31, 2000, amounted to
$16,663,270 and $20,039,808, respectively.
At October 31, 2000, accumulated net unrealized depreciation on investments was
$8,310,733, consisting of $6,102,382 gross unrealized appreciation and
$14,413,115 gross unrealized depreciation.
At October 31, 2000, 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
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
100 Church Street
New York, NY 10286
Transfer Agent & Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166
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
(c) 2000 Dreyfus Service Corporation 052SA0010
Dreyfus Premier
State Municipal
Bond Fund,
Massachusetts Series
SEMIANNUAL REPORT October 31, 2000
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured * Not Bank-Guaranteed * May Lose Value
Contents
THE FUND
--------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Statement of Investments
9 Statement of Assets and Liabilities
10 Statement of Operations
11 Statement of Changes in Net Assets
13 Financial Highlights
16 Notes to Financial Statements
FOR MORE INFORMATION
---------------------------------------------------------------------------
Back Cover
The Fund
Dreyfus Premier
State Municipal Bond Fund,
Massachusetts Series
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Premier State
Municipal Bond Fund, Massachusetts Series, covering the six-month period from
May 1, 2000 through October 31, 2000. Inside, you'll find valuable information
about how the fund was managed during the reporting period, including a
discussion with the fund's portfolio manager, W. Michael Petty.
Despite some modest fluctuations because of changing economic conditions,
municipal bond prices generally rose modestly over the six-month reporting
period. Most sectors of the municipal bond market also benefited from slowing
economic growth as well. Additionally, the moderating effects of the Federal
Reserve Board' s (the "Fed") interest-rate hikes during the first half of 2000
helped the Fed to achieve its goal of slowing the U.S. economy. Other factors
such as higher energy prices and a weak euro also served to slow economic
growth.
In general, the overall investment environment that prevailed in the second half
of the 1990s had provided returns well above their long-term averages,
establishing unrealistic expectations for some investors. We believe that as the
risks of the stock market have become more apparent recently, the relative
stability and income potential of municipal bonds can make them an attractive
investment as part of a well-balanced portfolio.
For more information about the economy and financial markets, we encourage you
to visit the Market Commentary section of our website at www.dreyfus.com. Or, to
speak with a Dreyfus customer service representative, call us at 1-800-782-6620.
Thank you for investing in Dreyfus Premier State Municipal Bond Fund,
Massachusetts Series.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
November 15, 2000
DISCUSSION OF FUND PERFORMANCE
W. Michael Petty, Portfolio Manager
How did Dreyfus Premier State Municipal Bond Fund, Massachusetts Series perform
during the period?
For the six-month period ended October 31, 2000, the fund's Class A shares
provided a 5.43% total return, its Class B shares provided a 5.26% total return
and its Class C shares provided a 4.94% total return.(1) In comparison, the
Lipper Massachusetts Municipal Debt Funds category average provided a 5.33%
total return for the same period.(2)
We attribute the fund' s performance to a relatively strong investment
environment for municipal bonds, which was driven over the past six months
primarily by signs of an economic slowdown in the U.S., as well as positive
supply-and-demand factors affecting municipal bonds throughout the nation.
What is the fund's investment approach?
Our goal is to seek as high a level of federal and Massachusetts state
tax-exempt income as is practical without undue risk from a diversified
portfolio of municipal bonds. To achieve this objective, we employ two primary
strategies. First, we evaluate supply-and-demand factors in the bond market that
are affected by the relatively few municipal bonds issued by Massachusetts.
Based on that assessment, we select the individual Massachusetts 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,
creditworthiness of its issuer, insurance, and any provisions for early
redemption. Under most circumstances, we look for high yielding bonds that have
10-year call protection and that are selling at a discount to face value.
Second, while we do not attempt to predict changes in interest rates, we may
tactically manage the fund' 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
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
bonds to increase, we may reduce the fund'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 fund'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 Massachusetts municipal bond funds.
What other factors influenced the fund's performance?
The fund was positively influenced by favorable economic and market conditions.
When the reporting period began on May 1, 2000, the U.S. and Massachusetts
economies continued to grow strongly, raising concerns that long-dormant
inflationary pressures might reemerge. In response, the Federal Reserve Board
(the "Fed" ) raised short-term interest rates once during the reporting period,
for an increase of 0.50 percentage points. However, signs soon emerged that the
Fed's previous rate hikes were having the desired effect of slowing the economy.
Fewer housing starts, moderating growth and little change in the core inflation
rate suggested that the Fed's restrictive monetary policies could be near an
end.
In addition, Massachusetts and its municipalities enjoyed higher revenues during
the reporting period. The state's strong economy curtailed its need to borrow
and resulted in a reduced supply of securities compared to the same period in
1999. When supply falls and demand rises or remains steady, prices of existing
bonds generally tend to move higher.
Accordingly, we became less cautious as the investment climate improved. Our
defensive position early in the reporting period -- which emphasized
income-oriented bonds selling at a slight premium to face value -- held back the
fund' s performance when the market rally began. But as it became more apparent
that the economy was slowing, we shifted assets to longer term bonds selling at
a slight discount to their face value. This slightly more aggressive positioning
enabled the fund to participate more fully in the market rally.
What is the fund's current strategy?
Because we believe that slower economic growth, fewer inflation concerns and
potentially lower interest rates may benefit the municipal bond market, we have
recently put some cash to work in modestly aggressive bonds that have, in our
opinion, good liquidity characteristics. On the other hand, we have avoided
market sectors, such as hospitals, that we believe are likely to remain
relatively illiquid. Accordingly, we have maintained our modestly aggressive
security selection strategy. Despite the relative lack of supply, we continued
to find attractive investment opportunities in the Massachusetts marketplace.
November 15, 2000
(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.
HAD THESE CHARGES BEEN REFLECTED, RETURNS WOULD HAVE BEEN LOWER. PAST
PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. SHARE PRICE, YIELD AND
INVESTMENT RETURN FLUCTUATE SUCH THAT UPON REDEMPTION, FUND SHARES MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST. INCOME MAY BE SUBJECT TO STATE
AND LOCAL TAXES FOR NON-MASSACHUSETTS RESIDENTS AND SOME INCOME MAY BE
SUBJECT TO THE FEDERAL ALTERNATIVE MINIMUM TAX (AMT) FOR CERTAIN INVESTORS.
CAPITAL GAINS, IF ANY, ARE FULLY TAXABLE.
(2) SOURCE: LIPPER INC.
The Fund
STATEMENT OF INVESTMENTS
STATEMENT OF INVESTMENTS
October 31, 2000
<TABLE>
<CAPTION>
Principal
LONG-TERM MUNICIPAL INVESTMENTS--93.1% Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
MASSACHUSETTS--74.3%
Boston Industrial Development Financing Authority,
Sewer Facility Revenue
(Harbor Electric Energy Co. Project) 7.375%, 5/15/2015 2,500,000 2,564,150
Greater Lawrence Sanitation District
5.75%, 6/15/2014 (Insured; MBIA) 1,425,000 1,510,685
Lynn Water and Sewer Commission, General Revenue
7.25%, 12/1/2010 (Insured; MBIA, Prerefunded 12/1/2000) 1,000,000 (a) 1,022,340
Massachusetts Bay Transportation Authority,
General Transportation Systems
7%, 3/1/2021 1,000,000 1,176,950
Massachusetts Commonwealth
7%, 8/1/2012 (Prerefunded 8/1/2001) 1,850,000 (a) 1,922,316
Massachusetts Development Finance Agency, Revenue
(Landmark School) 5.25%, 6/1/2029 1,100,000 993,212
Massachusetts Educational Financing
Authority, Education Loan Revenue
5.85%, 7/1/2014 (Insured; AMBAC) 1,155,000 1,186,520
Massachusetts Education Loan Authority,
Education Loan Revenue
7.75%, 1/1/2008 (Insured; MBIA) 635,000 643,941
Massachusetts Health and Educational Facilities Authority,
Revenue:
(Boston Universtiy) 6%, 5/15/2059 2,500,000 2,534,425
(Medical Center of Central Massachusetts) 7.10%, 7/1/2021 1,000,000 1,037,460
(Milton Hospital) 7%, 7/1/2016 (Insured; MBIA) 2,050,000 2,094,526
(Northeastern University) 5%, 10/1/2029 (Insured; MBIA) 2,500,000 2,268,050
(Stonehill College) 5.25%, 7/1/2028 (Insured; MBIA) 2,000,000 1,889,880
Massachusetts Housing Finance Agency, Housing Development
5.40%, 6/1/2020 (Insured; MBIA) 1,850,000 1,776,500
Massachusetts Industrial Finance Agency, Revenue:
(College of the Holy Cross) 5%, 9/1/2023 (Insured; MBIA) 3,100,000 2,848,652
(Suffolk University) 5.25%, 7/1/2027 (Insured; AMBAC) 1,000,000 951,750
(Water Treatment-American Hingham) 6.95%, 12/1/2035 3,000,000 3,099,810
Health Care Facility (Health Foundation, Inc. Project)
6.75%, 12/1/2027 1,000,000 915,680
Resource Recovery (Ogden Haverhill Project)
5.60%, 12/1/2019 1,000,000 878,530
Massachusetts Port Authority, Revenue
Special Project (Harborside Hyatt) 10%, 3/1/2026 3,000,000 3,092,250
Massachusetts Water Pollution Abatement Trust,
Water Pollution Abatement Revenue
(New Bedford Program) 4.75%, 2/1/2026 (Insured; FGIC) 3,000,000 2,611,680
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS (CONTINUED)
Narragansett Regional School District
6.50%, 6/1/2016 (Insured; AMBAC) 1,205,000 1,333,682
Route 3 North Transportation Improvement Association, LR
5.75%, 6/15/2018 (Insured; MBIA) 2,000,000 2,061,700
Westfield 6.50%, 5/1/2017 (Insured; FGIC) 1,750,000 1,945,615
U.S. RELATED--18.8%
Guam Airport Authority, Revenue 6.70%, 10/1/2023 1,500,000 1,555,455
Puerto Rico Commonwealth 6%, 7/1/2014 1,000,000 1,030,260
Puerto Rico Commonwealth Highway and
Transportation Authority, Highway Revenue:
5.841%, 7/1/2009 1,000,000 (b) 1,055,000
5.941%, 7/1/2010 1,000,000 (b) 1,055,000
5%, 7/1/2036 2,000,000 1,818,880
Puerto Rico Public Buildings Authority,
Guaranteed Government Facilities Revenue
6.25%, 7/1/2015 (Insured; AMBAC) 1,100,000 1,250,865
Virgin Islands Public Finance Authority, Revenue
7.25%, 10/1/2018 (Prerefunded 10/1/2002) 2,750,000 (a) 2,958,587
TOTAL LONG-TERM MUNICIPAL INVESTMENTS
(cost $51,776,523) 53,084,351
------------------------------------------------------------------------------------------------------------------------------------
SHORT-TERM MUNICIPAL INVESTMENTS--5.2%
------------------------------------------------------------------------------------------------------------------------------------
Massachusetts Health and Educational Facilities Authority,
Revenue, VRDN (Capital Assets Program)
4.55% (cost $3,000,000) 3,000,000 (c) 3,000,000
-----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $54,776,523) 98.3% 56,084,351
CASH AND RECEIVABLES (NET) 1.7% 955,598
NET ASSETS 100.0% 57,039,949
The Fund
</TABLE>
STATEMENT OF INVESTMENTS (CONTINUED)
Summary of Abbreviations
AMBAC American Municipal Bond
Assurance Corporation
FGIC Financial Guaranty Insurance
Company
LR Lease Revenue
MBIA Municipal Bond Investors
Assurance Insurance Corporation
VRDN Variable Rate Demand Notes
<TABLE>
<CAPTION>
Summary of Combined Ratings (Unaudited)
Fitch or Moody's or Standard & Poor's Value (%)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
AAA Aaa AAA 54.5
AA Aa AA 5.2
A A A 9.6
BBB Baa BBB 18.2
F-1+, F-1 MIG1, VMIG1 & P1 SP1 & A1 5.4
Not Rated( d) Not Rated (d) Not Rated( d) 7.1
100.0
(A) BONDS WHICH ARE PREREFUNDED ARE COLLATERALIZED BY U.S. GOVERNMENT
SECURITIES WHICH ARE HELD IN ESCROW AND ARE USED TO PAY PRINCIPAL AND
INTEREST ON THE MUNICIPAL ISSUE AND TO RETIRE THE BONDS IN FULL AT THE
EARLIEST REFUNDING DATE.
(B) INVERSE FLOATER SECURITY--THE INTEREST RATE IS SUBJECT TO CHANGE
PERIODICALLY.
(C) SECURITIES PAYABLE ON DEMAND. VARIABLE INTEREST RATE SUBJECT TO PERIODIC
CHANGE.
(D) SECURITIES WHICH, WHILE NOT RATED BY FITCH, MOODY'S AND STANDARD & POOR'S
HAVE BEEN DETERMINED BY THE MANAGER TO BE OF COMPARABLE QUALITY TO THOSE
RATED SECURITIES IN WHICH THE FUND MAY INVEST.
(E) AT OCTOBER 31, 2000, 28.3% OF THE FUND'S NET ASSETS ARE INSURED BY MBIA.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
STATEMENT OF ASSETS AND LIABILITIES
October 31, 2000 (Unaudited)
Cost Value
--------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of Investments 54,776,523 56,084,351
Interest receivable 1,028,862
Receivable for shares of Beneficial Interest subscribed 60,318
Receivable for investment securities sold 49,688
Prepaid expenses 8,283
57,231,502
--------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 43,047
Payable for shares of Beneficial Interest redeemed 100,000
Accrued expenses 48,506
191,553
--------------------------------------------------------------------------------
NET ASSETS ($) 57,039,949
--------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 57,495,256
Accumulated net realized gain (loss) on investments (1,763,135)
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 1,307,828
--------------------------------------------------------------------------------
NET ASSETS ($) 57,039,949
NET ASSET VALUE PER SHARE
<TABLE>
<CAPTION>
Class A Class B Class C
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NET ASSETS ($) 52,224,333 4,661,943 153,673
Shares Outstanding 4,754,362 424,667 13,981
------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE ($) 10.98 10.98 10.99
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
STATEMENT OF OPERATIONS
Six Months Ended October 31, 2000 (Unaudited)
-------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INTEREST INCOME 1,764,842
EXPENSES:
Management fee--Note 3(a) 157,081
Shareholder servicing costs--Note 3(c) 89,756
Distribution fees--Note 3(b) 12,351
Registration fees 9,900
Prospectus and shareholders' reports 6,505
Professional fees 6,150
Custodian fees 3,363
Trustees' fees and expenses--Note 3(d) 937
Loan commitment fees--Note 2 184
Miscellaneous 6,529
TOTAL EXPENSES 292,756
INVESTMENT INCOME--NET 1,472,086
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments (113,695)
Net unrealized appreciation (depreciation) on investments 1,652,822
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS 1,539,127
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 3,011,213
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
October 31, 2000 Year Ended
(Unaudited) April 30, 2000
--------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 1,472,086 3,162,470
Net realized gain (loss) on investments (113,695) (1,652,208)
Net unrealized appreciation (depreciation)
on investments 1,652,822 (3,970,259)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 3,011,213 (2,459,997)
--------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net:
Class A shares (1,358,313) (2,893,777)
Class B shares (110,554) (259,468)
Class C shares (3,219) (9,225)
Net realized gain on investments:
Class A shares -- (69,030)
Class B shares -- (6,415)
Class C shares -- (209)
TOTAL DIVIDENDS (1,472,086) (3,238,124)
--------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS ($):
Net proceeds from shares sold:
Class A shares 2,146,923 3,182,470
Class B shares 259,080 939,541
Class C shares 9,353 86,863
Dividends reinvested:
Class A shares 796,340 1,761,629
Class B shares 65,639 168,615
Class C shares 1,373 5,188
Cost of shares redeemed:
Class A shares (3,010,239) (11,874,551)
Class B shares (439,075) (2,659,322)
Class C shares (2,055) (274,987)
Increase (Decrease) in Net Assets from
Beneficial Interest Transactions (172,661) (8,664,554)
TOTAL INCREASE (DECREASE) IN NET ASSETS 1,366,466 (14,362,675)
-------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 55,673,483 70,036,158
END OF PERIOD 57,039,949 55,673,483
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
Six Months Ended
October 31, 2000 Year Ended
(Unaudited) April 30, 2000
-------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
CLASS A (A)
Shares sold 198,192 289,495
Shares issued for dividends reinvested 73,246 161,649
Shares redeemed (277,614) (1,081,816)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (6,176) (630,672)
-------------------------------------------------------------------------------
CLASS B (A)
Shares sold 23,838 85,696
Shares issued for dividends reinvested 6,040 15,461
Shares redeemed (40,290) (243,009)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (10,412) (141,852)
--------------------------------------------------------------------------------
CLASS C
Shares sold 878 7,999
Shares issued for dividends reinvested 126 469
Shares redeemed (192) (24,788)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 812 (16,320)
(A) DURING THE PERIOD ENDED OCTOBER 31, 2000, 22,429 CLASS B SHARES
REPRESENTING $245,056 WERE AUTOMATICALLY CONVERTED TO 22,418 CLASS A SHARES
AND DURING THE PERIOD ENDED APRIL 30, 2000, 125,833 CLASS B SHARES
REPRESENTING $1,379,884 WERE AUTOMATICALLY CONVERTED TO 125,799 CLASS A
SHARES.
SEE NOTES TO FINANCIAL STATEMENTS.
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the
fiscal periods indicated. All information (except portfolio turnover rate)
reflects financial results for a single fund share. Total return shows how much
your investment in the fund would have increased (or decreased) during each
period, assuming you had reinvested all dividends and distributions. These
figures have been derived from the fund's financial statements.
<TABLE>
<CAPTION>
Six Months Ended
October 31, 2000 Year Ended April 30,
----------------------------------------------------------------
CLASS A SHARES (Unaudited) 2000 1999 1998 1997 1996
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value,
beginning of period 10.69 11.68 11.75 11.40 11.50 11.53
Investment Operations:
Investment income--net .28 .57 .59 .61 .63 .66
Net realized and unrealized
gain (loss) on investments .29 (.98) .11 .40 .17 --
Total from Investment Operations .57 (.41) .70 1.01 .80 .66
Distributions:
Dividends from investment
income--net (.28) (.57) (.59) (.61) (.63) (.66)
Dividends from net realized
gain on investments -- (.01) (.18) (.05) (.27) (.03)
Total Distributions (.28) (.58) (.77) (.66) (.90) (.69)
Net asset value, end of period 10.98 10.69 11.68 11.75 11.40 11.50
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) (A) 10.77(b) (3.42) 6.08 9.04 7.08 5.69
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to
average net assets .98(b) .98 .93 .91 .92 .92
Ratio of net investment income
to average net assets 5.20(b) 5.22 4.97 5.23 5.46 5.57
Portfolio Turnover Rate 27.96(c) 57.94 47.11 48.69 24.45 34.86
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 52,224 50,885 62,958 60,529 65,809 68,812
(A) EXCLUSIVE OF SALES CHARGE.
(B) ANNUALIZED.
(C) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS (CONTINUED)
Six Months Ended
October 31, 2000 Year Ended April 30,
----------------------------------------------------------------
CLASS B SHARES (Unaudited) 2000 1999 1998 1997 1996
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value,
beginning of period 10.68 11.67 11.75 11.40 11.49 11.52
Investment Operations:
Investment income--net .26 .52 .53 .55 .57 .60
Net realized and unrealized
gain (loss) on investments .30 (.98) .10 .40 .18 --
Total from Investment Operations .56 (.46) .63 .95 .75 .60
Distributions:
Dividends from investment
income--net (.26) (.52) (.53) (.55) (.57) (.60)
Dividends from net realized
gain on investments -- (.01) (.18) (.05) (.27) (.03)
Total Distributions (.26) (.53) (.71) (.60) (.84) (.63)
Net asset value, end of period 10.98 10.68 11.67 11.75 11.40 11.49
-----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) (A) 10.43(b) (3.93) 5.46 8.49 6.63 5.15
-----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average
net assets 1.49(b) 1.49 1.43 1.42 1.43 1.43
Ratio of net investment income
to average net assets 4.69(b) 4.70 4.46 4.71 4.94 5.03
Portfolio Turnover Rate 27.96(c) 57.94 47.11 48.69 24.45 34.86
-----------------------------------------------------------------------------------------------------------------------------------
Net Assets,
end of period ($ x 1,000) 4,662 4,648 6,733 6,584 6,064 5,255
(A) EXCLUSIVE OF SALES CHARGE.
(B) ANNUALIZED.
(C) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended
October 31, 2000 Year Ended April 30,
---------------------------------------------------------------
CLASS C SHARES (Unaudited) 2000 1999 1998 1997 1996(a)
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value,
beginning of period 10.70 11.69 11.76 11.41 11.48 11.59
Investment Operations:
Investment income--net .23 .49 .50 .52 .54 .40
Net realized and unrealized
gain (loss) on investments .29 (.98) .11 .40 .20 (.08)
Total from Investment Operations .52 (.49) .61 .92 .74 .32
Distributions:
Dividends from investment
income--net (.23) (.49) (.50) (.52) (.54) (.40)
Dividends from net realized
gain on investments -- (.01) (.18) (.05) (.27) (.03)
Total Distributions (.23) (.50) (.68) (.57) (.81) (.43)
Net asset value, end of period 10.99 10.70 11.69 11.76 11.41 11.48
-----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) (B) 9.80(c) (4.16) 5.28 8.22 6.55 3.76(c)
-----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to
average net assets 1.90(c) 1.68 1.70 1.64 1.65 1.69(c)
Ratio of net investment income
to average net assets 4.26(c) 4.51 4.06 4.51 4.64 4.72(c)
Portfolio Turnover Rate 27.96(d) 57.94 47.11 48.69 24.45 34.86
-----------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 154 141 345 1 1 1
(A) FROM AUGUST 15, 1995 (COMMENCEMENT OF INITIAL OFFERING) TO APRIL 30, 1996.
(B) EXCLUSIVE OF SALES CHARGE.
(C) ANNUALIZED.
(D) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus Premier State Municipal Bond Fund (the "Trust") is registered under the
Investment Company Act of 1940, 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., which is a wholly-owned
subsidiary of Mellon Financial Corporation.
Dreyfus Service Corporation (the "Distributor"), a wholly-owned subsidiary of
the Manager, is the distributor of the fund's shares. The fund is authorized to
issue an unlimited number of $.001 par value shares of Beneficial Interest 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. Class B shares automatically convert to Class A shares after
six years. 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 accounting
principles generally accepted in the United States, which may require the use of
management estimates and assumptions. Actual results could differ from those
estimates.
(a) Portfolio valuation: Investments in securities (excluding options and
financial futures on municipal and U.S. treasury securities) are valued each
business day by an independent pricing service ("Service") approved by the Board
of Trustees. Investments for which quoted bid prices are readily available and
are representative of the bid side of the market in the judgment of the Service
are valued at the mean between the quoted bid prices (as obtained by the Service
from dealers in such securities) and asked prices (as calculated by the Service
based upon its evaluation of the market for such securities). Other investments
(which constitute a majority of the portfolio securities) are carried at fair
value as determined by the Service, based on methods which include consideration
of: yields or prices of municipal securities of comparable quality, coupon,
maturity and type; indications as to values from dealers; and general market
conditions. Options and financial futures on municipal and U.S. treasury
securities are valued at the last sales price on the securities exchange on
which such securities are primarily traded or at the last sales price on the
national securities market on each business day. Investments not listed on an
exchange or the national securities market, or securities for which there were
no transactions, are valued at the average of the most recent bid and asked
prices. Bid price is used when no asked price is available.
(b) Securities transactions and investment income: Securities transactions are
recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Interest income,
adjusted for amortization of premiums and original issue discounts on
investments, is earned from settlement date and recognized on the accrual basis.
Securities purchased or sold on a when-issued or delayed-delivery basis may be
settled a month or more after the trade date. Under the terms of the custody
agreement, the fund received net earnings credits of $3,820 during the period
ended October 31, 2000 based on available cash balances left on deposit. Income
earned under this arrangement is included in interest income.
The Fund
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.
(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, if any, 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 $282,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to April 30, 2000. This amount
is calculated based on Federal income tax regulations which may differ from
financial reporting in accordance with generally accepted accounting principles.
If not applied, the carryover expires in fiscal 2008.
NOTE 2--Bank Line of Credit:
The fund participates with other Dreyfus-managed funds in a $500 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
October 31, 2000, 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.
(b) Under the Distribution Plan (the "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 October 31, 2000, Class B and
Class C shares were charged $11,784 and $567, respectively, pursuant to the
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 October 31, 2000, Class A, Class B and Class C
shares were charged $65,319, $5,892 and $189, 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
The Fund
personnel and facilities to perform transfer agency services for the fund.
During the period ended October 31, 2000, the fund was charged $15,320 pursuant
to the transfer agency agreement.
(d) Each Board member also serves as a Board member of other funds within the
Dreyfus complex (collectively, the "Fund Group"). Each Board member who is not
an "affiliated person" as defined in the Act receives an annual fee of $50,000
and an attendance fee of $6,500 for each meeting attended and $500 for telephone
meetings. These fees are allocated among the funds in the Fund Group. The
Chairman of the Board receives an additional 25% of such compensation. Subject
to the fund' s Emeritus Program Guidelines, Emeritus Board members, if any,
receive 50% of the Trust's annual retainer fee and per meeting fee paid at the
time the Board member achieves emeritus status.
NOTE 4--Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding
short-term securities, during the period ended October 31, 2000, amounted to
$17,829,967 and $14,698,637, respectively.
At October 31, 2000, accumulated net unrealized appreciation on investment was
$1,307,828, consisting of $1,804,344 gross unrealized appreciation and $496,516
gross unrealized depreciation.
At October 31, 2000, 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).
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
100 Church Street
New York, NY 10286
Transfer Agent & Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166
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
(c) 2000 Dreyfus Service Corporation 063SA0010
Dreyfus Premier
State Municipal
Bond Fund,
Michigan Series
SEMIANNUAL REPORT October 31, 2000
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured * Not Bank-Guaranteed * May Lose Value
Contents
THE FUND
--------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 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
FOR MORE INFORMATION
---------------------------------------------------------------------------
Back Cover
The Fund
Dreyfus Premier
State Municipal Bond Fund,
Michigan Series
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Premier State
Municipal Bond Fund, Michigan Series, covering the six-month period from May 1,
2000 through October 31, 2000. Inside, you'll find valuable information about
how the fund was managed during the reporting period, including a discussion
with the fund's portfolio manager, W. Michael Petty.
Despite some modest fluctuations because of changing economic conditions,
municipal bond prices generally rose modestly over the six-month reporting
period. Most sectors of the municipal bond market also benefited from slowing
economic growth as well. Additionally, the moderating effects of the Federal
Reserve Board' s (the "Fed") interest-rate hikes during the first half of 2000
helped the Fed to achieve its goal of slowing the U.S. economy. Other factors
such as higher energy prices and a weak euro also served to slow economic
growth.
In general, the overall investment environment that prevailed in the second half
of the 1990s had provided returns well above their long-term averages,
establishing unrealistic expectations for some investors. We believe that as the
risks of the stock market have become more apparent recently, the relative
stability and income potential of municipal bonds can make them an attractive
investment as part of a well-balanced portfolio.
For more information about the economy and financial markets, we encourage you
to visit the Market Commentary section of our website at www.dreyfus.com. Or, to
speak with a Dreyfus customer service representative, call us at 1-800-782-6620.
Thank you for investing in Dreyfus Premier State Municipal Bond Fund, Michigan
Series.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
November 15, 2000
DISCUSSION OF FUND PERFORMANCE
W. Michael Petty, Portfolio Manager
How did Dreyfus Premier State Municipal Bond Fund, Michigan Series perform
during the period?
For the six-month period ended October 31, 2000, the fund's Class A shares
provided a 5.27% total return, its Class B shares provided a 5.00% total return
and its Class C shares provided a 4.87% total return.(1) In comparison, the
Lipper Michigan Municipal Debt Funds category average provided a 5.24% total
return for the same period.(2)
We attribute the fund' s performance to a relatively strong investment
environment for municipal bonds, which was driven over the past six months
primarily by signs of an economic slowdown in the U.S., as well as positive
supply-and-demand factors affecting municipal bonds throughout the nation.
What is the fund's investment approach?
Our goal is to seek as high a level of federal and Michigan state tax-exempt
income as is practical without undue risk from a diversified portfolio of longer
term municipal bonds. To achieve this objective, we employ two primary
strategies. First, we evaluate supply-and-demand factors in the bond market that
are affected by the relatively few municipal bonds issued by Michigan. Based on
that assessment, we select the individual Michigan 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, creditworthiness of its
issuer, insurance, and any provisions for early redemption. Under most
circumstances, we look for high yielding bonds that have 10-year call protection
and that are selling at a discount to face value.
Second, while we do not attempt to predict changes in interest rates, we may
tactically manage the fund' 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
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
bonds to increase, we may reduce the fund'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 fund'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 Michigan municipal bond funds.
What other factors influenced the fund's performance?
The fund was positively influenced by favorable economic and market conditions.
When the reporting period began on May 1, 2000, the U.S. and Michigan economies
continued to grow strongly, raising concerns that long-dormant inflationary
pressures might reemerge. In response, the Federal Reserve Board (the "Fed")
raised short-term interest rates once during the reporting period. However,
signs soon emerged that the Fed's previous rate hikes were having the desired
effect of slowing the economy. Fewer housing starts, moderating growth and
little change in the core inflation rate suggested that the Fed's restrictive
monetary policies could be near an end.
In addition, Michigan and its municipalities enjoyed higher revenues during the
reporting period. Michigan' s improved fiscal condition caused the major bond
rating agencies to upgrade its debt to triple-A, the highest rating
classification available. The state' s strong economy curtailed its need to
borrow and resulted in a reduced supply of securities compared to the same
period in 1999. When supply falls and demand rises or remains steady, prices of
existing bonds generally tend to move higher.
Accordingly, we became less cautious as the investment climate improved. Our
defensive position early in the reporting period -- which emphasized
income-oriented bonds selling at a slight premium to face value -- held back the
fund' s performance when the market rally began. But as it became more apparent
that the economy was slowing, we shifted assets to longer term bonds selling at
a slight discount to their face value. This slightly more aggressive positioning
enabled the fund to participate more fully in the market rally.
What is the fund's current strategy?
Because we believe that slower economic growth, fewer inflation concerns and
potentially lower interest rates may benefit the municipal bond market, we have
recently put some cash to work in modestly aggressive bonds that have, in our
opinion, good liquidity characteristics. On the other hand, we have avoided
market sectors, such as hospitals, that we believe are likely to remain
relatively illiquid. Accordingly, we have maintained our modestly aggressive
security selection strategy. Despite the relative lack of supply, we continued
to find attractive investment opportunities in the Michigan marketplace.
November 15, 2000
(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.
HAD THESE CHARGES BEEN REFLECTED, RETURNS WOULD HAVE BEEN LOWER. PAST
PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. SHARE PRICE, YIELD AND
INVESTMENT RETURN FLUCTUATE SUCH THAT UPON REDEMPTION, FUND SHARES MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST. INCOME MAY BE SUBJECT TO STATE
AND LOCAL TAXES FOR NON-MICHIGAN RESIDENTS AND SOME INCOME MAY BE SUBJECT
TO THE FEDERAL ALTERNATIVE MINIMUM TAX (AMT) FOR CERTAIN INVESTORS. CAPITAL
GAINS, IF ANY, ARE FULLY TAXABLE.
(2) SOURCE: LIPPER INC.
The Fund
STATEMENT OF INVESTMENTS
October 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
Principal
LONG-TERM MUNICIPAL INVESTMENTS--98.1% Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Allegan Hospital Finance Authority, HR
(Allegan General Hospital):
6.875%, 11/15/2017 4,460,000 4,435,515
7%, 11/15/2021 800,000 801,184
Anchor Bay School District, Building and Site
6%, 5/1/2023 (Insured; FGIC) 1,500,000 1,558,110
Brighton Area School District:
Zero Coupon, 5/1/2014 (Insured: AMBAC) 8,000,000 3,906,880
Zero Coupon, 5/1/2020 (Insured: AMBAC) 5,000,000 1,674,250
Caledonia Community Schools
4.75%, 5/1/2022 (Insured; FGIC) 2,000,000 1,762,620
Capital Region Airport Authority, Airport Revenue
6.70%, 7/1/2021 (Insured; MBIA) 2,500,000 2,610,725
Chippewa County Hospital Finance Authority, Revenue
5.625%, 11/1/2014 1,225,000 1,074,227
Chippewa Valley Schools:
7%, 5/1/2010 (Prerefunded 5/1/2001) 1,275,000 (a) 1,316,718
5%, 5/1/2027 (Insured; AMBAC) 2,675,000 2,423,283
Clarkston Community School
5.75%, 5/1/2016 (Insured; FGIC) (Prerefunded 5/1/2005) 1,340,000 (a) 1,415,991
Detroit:
(Unlimited Tax) 6.35%, 4/1/2014 2,870,000 3,008,305
Water Supply Systems Revenue
8.106%, 7/1/2022 (Insured; FGIC) 1,500,000 (b) 1,606,875
Detroit City School District, School Building and Site
Improvement 4.75%, 5/1/2028 (Insured; FGIC) 10,950,000 9,503,177
Dickinson County Healthcare Systems, HR
5.70%, 11/1/2018 3,000,000 2,507,580
Edwardsburg Public Schools
4.75%, 5/1/2024 (insured; FGIC) 1,000,000 875,950
Ferris State University of Michigan
5%, 10/1/2028 (Insured; AMBAC) 3,700,000 3,364,003
Fowlerville Community Schools School District:
5.60%, 5/1/2016 (Insured; MBIA) 2,995,000 3,157,329
4.75%, 5/1/2026 (Insured; FSA) 1,500,000 1,305,105
Grand Rapids Housing Finance Authority, Multi-Family Revenue
7.625%, 9/1/2023 (Collateralized; FNMA) 1,000,000 1,076,010
Grand Valley State University, Revenue
5.25%, 12/1/2020 (Insured; FGIC) 4,000,000 3,876,760
Huron Valley School District
Zero Coupon, 5/1/2018 (Insured; FGIC) 6,370,000 2,414,931
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
-----------------------------------------------------------------------------------------------------------------------------------
Kalamazoo Hospital Finance Authority,
Hospital Facilities Revenue (Borgess Medical Center)
6.25%, 6/1/2014 (Insured; FGIC) 2,000,000 2,211,920
Kent County, Airport Facilities Revenue
(Kent County International Airport):
5.90%, 1/1/2012 1,145,000 1,214,112
5.90%, 1/1/2013 1,095,000 1,161,094
6.10%, 1/1/2025 3,000,000 3,203,520
Lake Orion Community School District
5.80%, 5/1/2015 (Insured; AMBAC) 2,085,000 2,145,486
Leslie Public Schools (Ingham and Jackson Counties),
School Building and Site 6%, 5/1/2015
(Insured; AMBAC) (Prerefunded 5/1/2005) 1,000,000 (a) 1,066,780
Michigan Building Authority, Lease Revenue
6.75%, 10/1/2007 (Insured; AMBAC) 1,600,000 1,665,632
Michigan Higher Education Student Loan Authority,
Student Loan Revenue:
6.875%, 10/1/2007 (Insured; AMBAC) 2,250,000 2,321,708
7.55%, 10/1/2008 (Insured; MBIA) 330,000 337,178
6.125%, 9/1/2010 1,520,000 1,562,590
Michigan Hospital Finance Authority, HR:
(Crittenton Hospital) 6.70%, 3/1/2007 2,250,000 2,339,078
(Daughters of Charity National Health Systems--Providence
Hospital) 7%, 11/1/2021 (Prerefunded 11/1/2001) 2,700,000 (a) 2,820,798
(Detroit Medical Center) 8.125%, 8/15/2012 75,000 75,015
(Genesys Health Systems)
8.125%, 10/1/2021 (Prerefunded 10/1/2005) 5,000,000 (a) 5,851,000
(Sisters of Mercy Health Corp)
6.25%, 2/15/2009 (Insured; FSA) 1,065,000 1,109,474
Michigan Housing Development Authority:
6.75%, 12/1/2014 1,625,000 1,685,011
Rental Housing Revenue:
6.50%, 4/1/2006 2,000,000 2,085,220
7.70%, 4/1/2023 (Insured; FSA) 4,185,000 4,301,803
Michigan Housing Representatives, COP:
Zero Coupon, 8/15/2022 (Insured; AMBAC) 7,325,000 2,087,991
Zero Coupon, 8/15/2023 (Insured; AMBAC) 2,615,000 700,559
Michigan Municipal Bond Authority, Revenue
(State Revolving Fund):
6.50%, 10/1/2014 (Prerefunded 10/1/2004) 2,500,000 (a) 2,720,075
6.50%, 10/1/2017 (Prerefunded 10/1/2004) 3,500,000 (a) 3,808,105
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
Michigan Strategic Fund, Limited Obligation Revenue:
(Ledyard Association Ltd. Partnership Project)
6.25%, 10/1/2011
(Insured; ITT Lyndon Property Insurance Co) 3,075,000 3,217,250
(Northeastern Community Mental Health Foundation)
8.25%, 1/1/2009 1,185,000 1,209,648
SWDR (Genesee Power Station Project) 7.50%, 1/1/2021 3,000,000 3,086,400
Monroe County, PCR (Detroit Edison Project)
6.55%, 6/1/2024 (Insured; MBIA) 1,700,000 1,788,502
Monroe County Economic Development Corp, Ltd. Obligation
Revenue (Detroit Edison Co Project)
6.95%, 9/1/2022 (Insured; FGIC) 2,000,000 2,377,500
Northville, Special Assessment (Wayne County)
7.875%, 1/1/2006 1,685,000 1,693,644
Northwestern Michigan College, Community College
Improvement Revenue 7%, 7/1/2011 1,800,000 1,866,870
Redford Unified School District
5.50%, 5/1/2015 (Insured; AMBAC) 1,260,000 1,305,322
Romulus Community Schools
Zero Coupon 5/1/2020 (Insured; FGIC) 1,385,000 463,767
Romulus Economic Development Corp, Ltd. Obligation EDR
(Romulus Hir Ltd. Partnership Project)
7%, 11/1/2015 (Insured; ITT Lyndon Property Insurance Co) 3,700,000 4,263,991
Saint John's Public Schools 5%, 5/1/2021 (Insured; FGIC) 1,000,000 933,280
South Lyon Community Schools (School Building)
6.375%, 5/1/2018 (Prerefunded 5/1/2002) 1,500,000 (a) 1,570,545
Stockbridge Community Schools
5.50%, 5/1/2021 600,000 595,266
Wayne Charter County, Airport Revenue:
(Detroit Metropolitan Wayne County Airport)
5%, 12/1/2022 485,000 438,624
Special Facilities (Northwest Airlines Inc)
6.75%, 12/1/2015 5,720,000 5,711,534
TOTAL LONG-TERM MUNICIPAL INVESTMENTS
(cost $127,604,606) 132,671,820
</TABLE>
<TABLE>
<CAPTION>
Principal
SHORT-TERM MUNICIPAL INVESTMENTS--.7% Amount ($) Value ($)
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Midland County Economic Development Corp., Economic
Development Limited Obligation Revenue, VRDN
(Dow Chemical Co. Project) 4.70%
(cost $1,000,000) 1,000,000 (c) 1,000,000
-----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS
(cost $128,604,606) 98.8% 133,671,820
CASH AND RECEIVABLES (NET) 1.2% 1,639,751
NET ASSETS 100.0% 135,311,571
The Fund
</TABLE>
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Summary of Abbreviations
AMBAC American Municipal Bond
Assurance Corporation
COP Certificate of Participation
EDR Economic Development Revenue
FGIC Financial Guaranty Insurance
Company
FNMA Federal National Mortgage
Association
FSA Financial Security Assurance
HR Hospital Revenue
MBIA Municipal Bond Investors
Assurance Insurance
Corporation
PCR Pollution Control Revenue
SWDR Solid Waste Disposal Revenue
VRDN Variable Rate Demand Notes
Summary of Combined Ratings (Unaudited)
<TABLE>
<CAPTION>
Fitch or Moody's or Standard & Poor's Value (%)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
AAA Aaa AAA 63.5
AA Aa AA 8.2
A (A) A 6.5
BBB Baa BBB 4.1
F1 Mig1 SP1 .7
Not Rated(d) Not Rated(d) Not Rated(d) 17.0
100.0
(A) BONDS WHICH ARE PREREFUNDED ARE COLLATERALIZED BY U.S. GOVERNMENT
SECURITIES WHICH ARE HELD IN ESCROW AND ARE USED TO PAY PRINCIPAL AND
INTEREST ON THE MUNICIPAL ISSUE AND TO RETIRE THE BONDS IN FULL AT THE
EARLIEST REFUNDING DATE.
(B) INVERSE FLOATER SECURITY--THE INTEREST RATE IS SUBJECT TO CHANGE
PERIODICALLY.
(C) SECURITIES PAYABLE ON DEMAND.VARIABLE RATE INTEREST--SUBJECT TO PERIODIC
CHANGE.
(D) SECURITIES WHICH, WHILE NOT RATED BY FITCH, MOODY'S AND STANDARD & POOR'S
HAVE BEEN DETERMINED BY THE MANAGER TO BE OF COMPARABLE QUALITY TO THOSE
RATED SECURITIES IN WHICH THE FUND MAY INVEST.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
STATEMENT OF ASSETS AND LIABILITIES
October 31, 2000 (Unaudited)
Cost Value
--------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of
Investments 128,604,606 133,671,820
Cash 48,789
Interest receivable 2,322,641
Receivable for shares of Beneficial Interest subscribed 6,134
Prepaid expenses 7,254
136,056,638
--------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 101,388
Payable for investment securities purchased 591,222
Payable for shares of Beneficial Interest redeemed 28,588
Accrued expenses 23,869
745,067
--------------------------------------------------------------------------------
NET ASSETS ($) 135,311,571
--------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 132,722,314
Accumulated net realized gain (loss) on investments (2,477,957)
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 5,067,214
--------------------------------------------------------------------------------
NET ASSETS ($) 135,311,571
NET ASSET VALUE PER SHARE
<TABLE>
<CAPTION>
Class A Class B Class C
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Assets ($) 122,181,689 11,920,778 1,209,104
Shares Outstanding 8,316,125 811,521 82,273
------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE ($) 14.69 14.69 14.70
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
STATEMENT OF OPERATIONS
Six Months Ended October 31, 2000 (Unaudited)
--------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INTEREST INCOME 4,190,549
EXPENSES:
Management fee--Note 3(a) 378,454
Shareholder servicing costs--Note 3(c) 225,744
Distribution fees--Note 3(b) 35,660
Professional fees 8,993
Registration fees 8,722
Custodian fees 7,336
Prospectus and shareholders' reports 7,003
Trustees' fees and expenses--Note 3(d) 1,579
Loan commitment fees--Note 2 459
Miscellaneous 9,716
TOTAL EXPENSES 683,666
INVESTMENT INCOME (NET) 3,506,883
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments (228,982)
Net unrealized appreciation (depreciation) on investments 3,694,318
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS 3,465,336
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 6,972,219
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
October 31, 2000 Year Ended
(Unaudited) April 30, 2000
--------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 3,506,883 7,723,342
Net realized gain (loss) on investments (228,982) (2,252,887)
Net unrealized appreciation (depreciation)
on investments 3,694,318 (10,055,414)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 6,972,219 (4,584,959)
--------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net:
Class A shares (3,191,105) (6,855,425)
Class B shares (290,500) (805,529)
Class C shares (25,278) (62,388)
Net realized gain on investments:
Class A shares -- (779,580)
Class B shares -- (96,924)
Class C shares -- (7,763)
TOTAL DIVIDENDS (3,506,883) (8,607,609)
-------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS ($):
Net proceeds from shares sold:
Class A shares 3,322,567 12,607,868
Class B shares 552,912 1,932,898
Class C shares 197,091 172,133
Dividends reinvested:
Class A shares 1,786,116 4,300,261
Class B shares 136,907 502,087
Class C shares 12,736 25,391
Cost of shares redeemed:
Class A shares (9,680,518) (27,570,960)
Class B shares (2,188,070) (10,081,039)
Class C shares (133,584) (835,085)
INCREASE (DECREASE) IN NET ASSETS FROM
BENEFICIAL INTEREST TRANSACTIONS (5,993,843) (18,946,446)
TOTAL INCREASE (DECREASE) IN NET ASSETS (2,528,507) (32,139,014)
-------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 137,840,078 169,979,092
END OF PERIOD 135,311,571 137,840,078
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
Six Months Ended
October 31, 2000 Year Ended
(Unaudited) April 30, 2000
-------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
CLASS A(A)
Shares sold 228,267 861,443
Shares issued for dividends reinvested 122,723 294,083
Shares redeemed (666,055) (1,888,153)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (315,065) (732,627)
-------------------------------------------------------------------------------
CLASS B(A)
Shares sold 38,000 129,135
Shares issued for dividends reinvested 9,411 34,258
Shares redeemed (150,667) (683,893)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (103,256) (520,500)
-------------------------------------------------------------------------------
CLASS C
Shares sold 13,481 11,839
Shares issued for dividends reinvested 873 1,732
Shares redeemed (9,138) (57,083)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 5,216 (43,512)
(A) DURING THE PERIOD ENDED OCTOBER 31, 2000, 60,778 CLASS B SHARES
REPRESENTING $886,074 WERE AUTOMATICALLY CONVERTED TO 60,777 CLASS A SHARES
AND DURING THE PERIOD ENDED APRIL 30, 2000, 311,268 CLASS B SHARES
REPRESENTING $4,587,179 WERE AUTOMATICALLY CONVERTED TO 311,312 CLASS A
SHARES.
SEE NOTES TO FINANCIAL STATEMENTS.
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the
fiscal periods indicated. All information (except portfolio turnover rate)
reflects financial results for a single fund share. Total return shows how much
your investment in the fund would have increased (or decreased) during each
period, assuming you had reinvested all dividends and distributions. These
figures have been derived from the fund's financial statements.
<TABLE>
<CAPTION>
Six Months Ended
October 31, 2000 Year Ended April 30,
----------------------------------------------------------------
CLASS A SHARES (Unaudited) 2000 1999 1998 1997 1996
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value,
beginning of period 14.32 15.57 15.61 15.14 15.15 15.14
Investment Operations:
Investment income--net .38 .76 .78 .80 .81 .83
Net realized and unrealized gain
(loss) on investments .37 (1.16) .12 .48 .21 .20
Total from Investment Operations .75 (.40) .90 1.28 1.02 1.03
Distributions:
Dividends from investment
income--net (.38) (.76) (.78) (.80) (.81) (.83)
Dividends from net realized
gain on investments -- (.09) (.16) (.01) (.22) (.19)
Total Distributions (.38) (.85) (.94) (.81) (1.03) (1.02)
Net asset value, end of period 14.69 14.32 15.57 15.61 15.14 15.15
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(A) 10.45(b) (2.56) 5.89 8.55 6.89 6.81
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to
average net assets .94(b) .94 .92 .92 .91 .93
Ratio of net investment income
to average net assets 5.15(b) 5.18 4.96 5.12 5.34 5.35
Portfolio Turnover Rate 14.36(c) 29.55 36.17 41.46 22.32 56.88
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 122,182 123,635 145,764 149,221 155,568 166,538
(A) EXCLUSIVE OF SALES CHARGE.
(B) ANNUALIZED.
(C) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS (CONTINUED)
Six Months Ended
October 31, 2000 Year Ended April 30,
----------------------------------------------------------------
CLASS B SHARES (Unaudited) 2000 1999 1998 1997 1996
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value,
beginning of period 14.32 15.56 15.61 15.13 15.15 15.13
Investment Operations:
Investment income--net .34 .69 .70 .72 .74 .75
Net realized and unrealized gain
(loss) on investments .37 (1.15) .11 .49 .20 .21
Total from Investment Operations .71 (.46) .81 1.21 .94 .96
Distributions:
Dividends from investment
income--net (.34) (.69) (.70) (.72) (.74) (.75)
Dividends from net realized
gain on investments -- (.09) (.16) (.01) (.22) (.19)
Total Distributions (.34) (.78) (.86) (.73) (.96) (.94)
Net asset value, end of period 14.69 14.32 15.56 15.61 15.13 15.15
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(A) 9.92(b) (2.98) 5.29 8.08 6.27 6.33
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to
average net assets 1.46(b) 1.44 1.42 1.42 1.42 1.44
Ratio of net investment income
to average net assets 4.64(b) 4.66 4.44 4.61 4.82 4.82
Portfolio Turnover Rate 14.36(c) 29.55 36.17 41.46 22.32 56.88
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 11,921 13,101 22,338 20,938 19,338 19,031
(A) EXCLUSIVE OF SALES CHARGE.
(B) ANNUALIZED.
(C) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended
October 31, 2000 Year Ended April 30,
----------------------------------------------------------------
CLASS C SHARES (Unaudited) 2000 1999 1998 1997 1996(a)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value,
beginning of period 14.33 15.57 15.61 15.14 15.16 15.18
Investment Operations:
Investment income--net .32 .65 .66 .67 .69 .50
Net realized and unrealized gain
(loss) on investments .37 (1.15) .12 .48 .20 .17
Total from Investment Operations .69 (.50) .78 1.15 .89 .67
Distributions:
Dividends from investment
income--net (.32) (.65) (.66) (.67) (.69) (.50)
Dividends from net realized
gain on investments -- (.09) (.16) (.01) (.22) (.19)
Total Distributions (.32) (.74) (.82) (.68) (.91) (.69)
Net asset value, end of period 14.70 14.33 15.57 15.61 15.14 15.16
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(B) 9.66(c) (3.22) 5.08 7.70 5.94 6.12(c)
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to
average net assets 1.70(c) 1.69 1.67 1.69 1.72 1.70(c)
Ratio of net investment income
to average net assets 4.38(c) 4.43 4.16 4.26 4.47 4.47(c)
Portfolio Turnover Rate 14.36(d) 29.55 36.17 41.46 22.32 56.88
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 1,209 1,104 1,877 640 241 133
(A) FROM AUGUST 15, 1995 (COMMENCEMENT OF INITIAL OFFERING) TO APRIL 30, 1996.
(B) EXCLUSIVE OF SALES CHARGE.
(C) ANNUALIZED.
(D) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus Premier State Municipal Bond Fund (the "Trust") is registered under the
Investment Company Act of 1940, 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, which is a wholly-owned
subsidiary of Mellon Financial Corporation.
Dreyfus Service Corporation (the "Distributor"), a wholly-owned subsidiary of
the Manager, is the distributor of the fund's shares. The fund is authorized to
issue an unlimited number of $.001 par value shares of Beneficial Interest 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. Class B shares automatically convert to Class A shares after
six years. 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
series. Expenses directly attributable to each series are charged to that
series' operations; expenses which are applicable to all series are allocated
among them on a pro rata basis.
The fund' s financial statements are prepared in accordance with accounting
principles generally accepted in the United States, which may require the use of
management estimates and assumptions. Actual results could differ from those
estimates.
(a) Portfolio valuation: Investments in securities (excluding options and
financial futures on municipal and U.S. treasury securities) are valued each
business day by an independent pricing service ("Service") approved by the Board
of Trustees. Investments for which quoted bid prices are readily available and
are representative of the bid side of the market in the judgment of the Service
are valued at the mean between the quoted bid prices (as obtained by the Service
from dealers in such securities) and asked prices (as calculated by the Service
based upon its evaluation of the market for such securities). Other investments
(which constitute a majority of the portfolio securities) are carried at fair
value as determined by the Service, based on methods which include consideration
of: yields or prices of municipal securities of comparable quality, coupon,
maturity and type; indications as to values from dealers; and general market
conditions. Options and financial futures on municipal and U.S. treasury
securities are valued at the last sales price on the securities exchange on
which such securities are primarily traded or at the last sales price on the
national securities market on each business day. Investments not listed on an
exchange or the national securities market, or securities for which there were
no transactions, are valued at the average of the most recent bid and asked
prices. Bid price is used when no asked price is available.
(b) Securities transactions and investment income: Securities transactions are
recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Interest income,
adjusted for amortization of premiums and original issue discounts on
investments, is earned from settlement date and recognized on the accrual basis.
Securities purchased or sold on a when-issued or delayed-delivery basis may be
settled a month or more after the trade date. Under the terms of the custody
agreement, the fund received net earnings credits of $3,086 during the period
ended October 31, 2000 based on available cash balances left on deposit. Income
earned under this arrangement is included in interest income.
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
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.
(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, if any, 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 $1,231,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to April 30, 2000. This amount
is calculated based on Federal income tax regulations which may differ from
financial reporting in accordance with generally accepted accounting principles.
If not applied, the carryover expires in fiscal 2008.
NOTE 2--Bank Line of Credit:
The fund participates with other Dreyfus-managed funds in a $500 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
October 31, 2000, 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 Distributor retained $13,458 during the period ended October 31, 2000, from
commissions earned on sales of the fund's shares.
(b) Under the Distribution Plan (the "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 October 31, 2000, Class B and
Class C shares were charged $31,330 and $4,330, respectively, pursuant to the
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 October 31, 2000, Class A, Class B and Class C
shares were charged $154,916, $15,665 and $1,443, respectively, pursuant to the
Shareholder Services Plan.
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
The fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of the
Manager, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the fund. During the period
ended October 31, 2000, the fund was charged $37,270 pursuant to the transfer
agency agreement.
(d) Each Board member also serves as a Board member of other funds within the
Dreyfus complex (collectively, the "Fund Group"). Each Board member who is not
an "affiliated person" as defined in the Act receives an annual fee of $50,000
and an attendance fee of $6,500 for each meeting attended and $500 for telephone
meetings. These fees are allocated among the funds in the Fund Group. The
Chairman of the Board receives an additional 25% of such compensation. Subject
to the fund' s Emeritus Program Guidelines, Emeritus Board members, if any,
receive 50% of the Trust's annual retainer fee and per meeting fee paid at the
time the Board member achieves emeritus status.
NOTE 4--Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding
short-term securities, during the period ended October 31, 2000, amounted to
$21,663,115 and $18,734,706, respectively.
At October 31, 2000, accumulated net unrealized appreciation on investments was
$5,067,214, consisting of $6,534,337 gross unrealized appreciation and
$1,467,123 gross unrealized depreciation.
At October 31, 2000, 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).
NOTES
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
100 Church Street
New York, NY 10286
Transfer Agent & Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166
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
(c) 2000 Dreyfus Service Corporation 053SA0010
Dreyfus Premier
State Municipal
Bond Fund,
Minnesota Series
SEMIANNUAL REPORT October 31, 2000
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured * Not Bank-Guaranteed * May Lose Value
Contents
THE FUND
--------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 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
FOR MORE INFORMATION
---------------------------------------------------------------------------
Back Cover
The Fund
Dreyfus Premier
State Municipal Bond Fund,
Minnesota Series
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Premier State
Municipal Bond Fund, Minnesota Series, covering the six-month period from May 1,
2000 through October 31, 2000. Inside, you'll find valuable information about
how the fund was managed during the reporting period, including a discussion
with the fund's portfolio manager, W. Michael Petty.
Despite some modest fluctuations because of changing economic conditions,
municipal bond prices generally rose modestly over the six-month reporting
period. Most sectors of the municipal bond market also benefited from slowing
economic growth as well. Additionally, the moderating effects of the Federal
Reserve Board' s (the "Fed") interest-rate hikes during the first half of 2000
helped the Fed to achieve its goal of slowing the U.S. economy. Other factors
such as higher energy prices and a weak euro also served to slow economic
growth.
In general, the overall investment environment that prevailed in the second half
of the 1990s had provided returns well above their long-term averages,
establishing unrealistic expectations for some investors. We believe that as the
risks of the stock market have become more apparent recently, the relative
stability and income potential of municipal bonds can make them an attractive
investment as part of a well-balanced portfolio.
For more information about the economy and financial markets, we encourage you
to visit the Market Commentary section of our website at www.dreyfus.com. Or, to
speak with a Dreyfus customer service representative, call us at 1-800-782-6620
Thank you for investing in Dreyfus Premier State Municipal Bond Fund, Minnesota
Series.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
November 15, 2000
DISCUSSION OF FUND PERFORMANCE
W. Michael Petty, Portfolio Manager
How did Dreyfus Premier State Municipal Bond Fund, Minnesota Series perform
during the period?
For the six-month period ended October 31, 2000, the fund's Class A shares
provided a 5.35% total return, its Class B shares provided a 5.01% total return
and its Class C shares provided a 4.92% total return.(1) In comparison, the
Lipper Minnesota Municipal Debt Funds category average provided a 5.05% total
return for the same period.(2)
We attribute the fund' s performance to a relatively strong investment
environment for municipal bonds, which was driven over the past six months
primarily by signs of an economic slowdown in the U.S., as well as positive
supply-and-demand factors affecting municipal bonds throughout the nation.
What is the fund's investment approach?
Our goal is to seek as high a level of federal and Minnesota state tax-exempt
income as is practical without undue risk from a diversified portfolio of longer
term municipal bonds. To achieve this objective, we employ two primary
strategies. First, we evaluate supply-and-demand factors in the bond market that
are affected by the relatively few municipal bonds issued by Minnesota. Based on
that assessment, we select the individual Minnesota 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, creditworthiness of its
issuer, insurance, and any provisions for early redemption. Under most
circumstances, we look for high yielding bonds that have 10-year call protection
and that are selling at a discount to face value.
Second, while we do not attempt to predict changes in interest rates, we may
tactically manage the fund' 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
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
bonds to increase, we may reduce the fund'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 fund'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 Minnesota municipal bond funds.
What other factors influenced the fund's performance?
The fund was positively influenced by favorable economic and market conditions.
When the reporting period began on May 1, 2000, the U.S. and Minnesota economies
continued to grow strongly, raising concerns that long-dormant inflationary
pressures might reemerge. In response, the Federal Reserve Board (the "Fed")
raised short-term interest rates once during the reporting period. However,
signs soon emerged that the Fed's previous rate hikes were having the desired
effect of slowing the economy. Fewer housing starts, moderating growth and
little change in the core inflation rate suggested that the Fed's restrictive
monetary policies could be near an end.
In addition, Minnesota and its municipalities enjoyed higher revenues during the
reporting period. The state's strong economy curtailed its need to borrow and
resulted in a sharply reduced supply of securities compared to the same period
in 1999. When supply falls and demand rises or remains steady, prices of
existing bonds generally tend to move higher.
Accordingly, we became less cautious as the investment climate improved. Our
defensive position early in the reporting period -- which emphasized
income-oriented bonds selling at a slight premium to face value -- held back the
fund' s performance when the market rally began. But as it became more apparent
that the economy was slowing, we shifted assets to longer term bonds selling at
a slight discount to their face value. This slightly more aggressive positioning
enabled the fund to participate more fully in the market rally.
What is the fund's current strategy?
Because we believe that slower economic growth, fewer inflation concerns and
potentially lower interest rates may benefit the municipal bond market, we have
recently attempted to put some cash to work in modestly aggressive bonds that
have, in our opinion, good liquidity characteristics. On the other hand, we have
avoided market sectors, such as hospitals, that we believe are likely to remain
relatively illiquid. Accordingly, we have maintained our modestly aggressive
security selection strategy. However, because of the lack of new supply,
investment opportunities in the Minnesota marketplace have been relatively
limited, leaving the fund with a higher percentage of cash than we would
currently otherwise hold. This cash reserve will be invested, as additional
investment opportunities become available.
November 15, 2000
(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.
HAD THESE CHARGES BEEN REFLECTED, RETURNS WOULD HAVE BEEN LOWER. PAST
PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. SHARE PRICE, YIELD AND
INVESTMENT RETURN FLUCTUATE SUCH THAT UPON REDEMPTION, FUND SHARES MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST. INCOME MAY BE SUBJECT TO STATE
AND LOCAL TAXES FOR NON-MINNESOTA RESIDENTS AND SOME INCOME MAY BE SUBJECT
TO THE FEDERAL ALTERNATIVE MINIMUM TAX (AMT) FOR CERTAIN INVESTORS. CAPITAL
GAINS, IF ANY, ARE FULLY TAXABLE.
(2) SOURCE: LIPPER INC.
The Fund
STATEMENT OF INVESTMENTS
October 31, 2000 (Unaudited)
STATEMENT OF INVESTMENTS
<TABLE>
<CAPTION>
Principal
LONG-TERM MUNICIPAL INVESTMENTS--94.9% Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Anoka County, SWDR (United Power Association Project)
6.95%, 12/1/2008 (Guaranteed; National Rural
Utilities Cooperative Finance Corp.) 3,825,000 3,907,696
Brooklyn Park 5.85%, 2/1/2016 (Insured; FSA) 1,425,000 1,468,462
Chaska, Electric Revenue 6%, 10/1/2020 3,000,000 3,036,690
Dakota County Housing and Redevelopment Authority, South
Saint Paul Revenue (Single Family-GNMA Program)
8.10%, 9/1/2012 65,000 65,731
Eden Prairie, MFHR:
(Eden Investments Project)
7.40%, 8/1/2025 (Insured; FHA) 500,000 511,145
(Welsh Parkway Apartments) 8%, 7/1/2026 (Insured; FHA) 2,735,000 2,805,317
Golden Valley, Revenue (Covenant Retirement Communities)
5.50%, 12/1/2029 2,000,000 1,757,700
Grand Rapids Housing and Redevelopment Authority, Revenue
(Governmental Housing-Lakeshore Project)
5.30%, 10/1/2029 1,000,000 900,610
Harmony, MFHR (Zedakah Foundation Project)
5.95 %, 9/1/2020 1,000,000 989,580
Hastings, Health Care Facility Revenue (Regina Medical
Center) 5.30%, 9/15/2028 (Insured; ACA) 1,735,000 1,533,948
Hubbard County, SWDR (Potlatch Corp. Project)
7.375%, 8/1/2013 1,000,000 1,010,590
Inver Grove Heights Independent School District Number 199
5.75%, 2/1/2017 2,225,000 2,273,727
Mahtomedi Independent School District Number 832
Zero Coupon, 2/1/2017 (Insured; MBIA) 1,275,000 523,796
Minneapolis:
Zero Coupon, 12/1/2014 1,825,000 872,423
Health Care Facilities Revenue (Shelter Care Foundation):
6%, 4/1/2010 870,000 801,383
6.50%, 4/1/2029 1,000,000 872,040
Home Ownership Program 7.10%, 6/1/2021 365,000 374,421
HR (Lifespan Inc.-Minneapolis Children's Medical Center
Project) 7%, 12/1/2020 (Prerefunded 6/1/2001) 5,650,000 (a) 5,846,055
MFHR (Churchill Apartments Project)
7.05%, 10/1/2022 (Insured; FSA) 4,000,000 4,137,400
MFMR (Seward Towers Project)
7.375%, 12/20/2030 (Collateralized; GNMA) 2,350,000 2,401,606
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
-----------------------------------------------------------------------------------------------------------------------------------
Minneapolis and Saint Paul Metropolitan Airports Commission,
Airport Revenue:
5%, 1/1/2030 (Insured; AMBAC) 1,915,000 1,743,761
5.125%, 1/1/2031 (Insured; FGIC) 2,150,000 2,009,326
Minneapolis Community Development Agency, Ltd. Tax
Support Development Revenue:
8%, 12/1/2009 300,000 303,426
7.75%, 12/1/2019 2,650,000 2,707,452
7.40%, 12/1/2021 2,000,000 2,089,260
Minneapolis-Saint Paul Housing and Redevelopment Authority,
Health Care Systems Revenue
(Group Health Plan Inc., Project) 6.75%, 12/1/2013 2,750,000 2,763,365
Minneapolis-Saint Paul Housing Finance Board, SFMR:
8.875%, 11/1/2018 (Collateralized; GNMA) 20,000 20,000
8.30%, 8/1/2021 (Collateralized; GNMA) 145,000 145,000
7.30%, 8/1/2031 (Collateralized; GNMA) 3,840,000 3,926,323
State of Minnesota (Duluth Airport) 6.25%, 8/1/2014 2,500,000 2,626,675
Minnesota Agricultural and Economic Development Board,
Revenue:
Fairview Health Care Systems 6.375%, 11/15/2029 2,000,000 2,028,400
Minnesota Small Business Development Loan
8.125%, 8/1/2009 500,000 501,830
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 3,736,535
College and University Revenue:
(College at Saint Benedict) 5.35%, 3/1/2020 1,000,000 930,120
(University of Saint Thomas):
5.35%, 4/1/2017 1,000,000 982,280
5.40%, 4/1/2022 2,125,000 2,049,924
Mortgage Revenue (Augsburg College) 5.30%, 10/1/2027 2,395,000 2,125,539
Minnesota Housing Finance Agency, Revenue:
Rental Housing 6.10%, 8/1/2009 1,975,000 1,977,982
Single Family Mortgage:
7.45%, 7/1/2022 (Insured; FHA) 720,000 735,134
6.95%, 7/1/2026 2,010,000 2,071,968
Minnesota Public Facilities Authority, Water Pollution Control
Revenue 6.50%, 3/1/2014 (Prerefunded 3/1/2001) 4,200,000 (a) 4,392,948
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
-----------------------------------------------------------------------------------------------------------------------------------
Minnesota Retirement Systems, Building Revenue
6%, 6/1/2030 1,475,000 1,541,021
New Hope, Housing and Health Care Facilities Revenue
(Masonic Home--North Ridge):
5.90, 3/1/2019 1,000,000 862,330
5.875%, 3/1/2029 3,000,000 2,469,390
Northern Municipal Power Agency, Electric System Revenue
6.065%, 1/1/2016 (Insured; FSA ) 5,000,000 (b,c) 5,074,700
City of Red Wing, Health Care Facilities Revenue
(River Region Obligation Group) 6.50%, 9/1/2022 3,445,000 3,707,750
Rosemount Independent School District Number 196
Zero Coupon, 4/1/2014 (Insured; MBIA) 3,000,000 1,483,170
Saint Cloud, Hospital Facilities Revenue
(The Saint Cloud Hospital)
7%, 7/1/2020 (Insured; AMBAC) (Prerefunded 7/1/2001) 1,000,000 (a) 1,036,750
Saint Paul Housing and Redevelopment Authority, Revenue:
Hospital (HealthEast Project)
5.70%, 11/1/2015 (Insured; ACA) 2,000,000 1,983,500
Single Family Mortgage
6.90%, 12/1/2021 (Insured; FNMA) 1,610,000 1,649,220
Sartell, PCR (Champion International Corp. Project)
6.95%, 10/1/2012 5,000,000 5,207,450
Seaway Port Authority of Duluth,
Industrial Development Dock and Wharf
Revenues (Cargill Inc. Project) 6.80%, 5/1/2012 3,000,000 3,126,390
Southern Municipal Power Agency,
Power Supply System Revenue:
Zero Coupon, 1/1/2021 (Insured; MBIA) 8,000,000 2,575,440
Zero Coupon, 1/1/2025 (Insured; MBIA) 5,255,000 1,329,095
Zero Coupon, 1/1/2026 (Insured; MBIA) 15,530,000 3,710,583
Zero Coupon, 1/1/2027 (Insured; MBIA) 4,800,000 1,083,456
University of Minnesota, College and University Revenue
5.50%, 7/1/2021 5,925,000 6,008,839
Washington County Housing and Redevelopment Authority,
Hospital Facility Revenue (Healtheast Project)
5.375%, 11/15/2018 (Insured; ACA) 5,000,000 4,627,200
Western Minnesota Municipal Power Agency, Electric Power
and Light Revenue 5.50%, 1/1/2012 (Insured; AMBAC) 900,000 927,036
TOTAL LONG-TERM MUNICIPAL INVESTMENTS
(cost $124,342,592) 124,360,888
Principal
SHORT-TERM INVESTMENTS--3.8% Amount ($) Value ($)
-----------------------------------------------------------------------------------------------------------------------------------
Beltrami County, Environmental Control Revenue,
VRDN (Northwood Panelboard Co. Project)
4.65% (LOC; Union Bank of Switzerland) 2,400,000 (d) 2,400,000
Minneapolis:
Multi-Family Rental Revenue, VRDN (Swinford) 4.55% 1,120,000 (d) 1,120,000
VRDN (People Serving People)
4.70% (LOC; U.S. Bank Trust) 1,500,000 1,500,000
TOTAL SHORT-TERM MUNICIPAL INVESTMENTS
(cost $5,020,000) 5,020,000
-----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $129,362,592) 98.7% 129,380,888
CASH AND RECEIVABLES (NET) 1.3% 1,741,672
NET ASSETS 100.0% 131,122,560
The Fund
</TABLE>
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Summary of Abbreviations
ACA American Capital Access
AMBAC American Municipal Bond
Assurance Corporation
FGIC Financial Guaranty Insurance
Company
FHA Federal Housing Administration
FNMA Federal National Mortgage Association
FSA Financial Security Assurance
GNMA Government National Mortgage
Association
HR Hospital Revenue
LOC Letter of Credit
MBIA Municipal Bond Investors Assurance
Insurance Corporation
MFHR Multi-Family Housing Revenue
MFMR Multi-Family Mortgage Revenue
PCR Pollution Control Revenue
SFMR Single Family Mortgage Revenue
SWDR Solid Waste Disposal Revenue
VRDN Variable Rate Demand Notes
Summary of Combined Ratings (Unaudited)
<TABLE>
<CAPTION>
Fitch or Moody's or Standard & Poor's Value (%)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
AAA Aaa AAA 37.6
AA Aa AA 13.6
A A A 21.7
BBB Baa BBB 12.2
F1 Mig1 SP1 5.9
Not Rated( e) Not Rated (e) Not Rated( e) 9.0
100.0
(A) BONDS WHICH ARE PREREFUNDED ARE COLLATERALIZED BY U.S. GOVERNMENT
SECURITIES WHICH ARE HELD IN ESCROW AND ARE USED TO PAY PRINCIPAL AND
INTEREST ON THE MUNICIPAL ISSUE AND TO RETIRE THE BONDS IN FULL AT THE
EARLIEST REFUNDING DATE.
(B) INVERSE FLOATER SECURITY-THE INTEREST RATE IS SUBJECT TO CHANGE
PERIODICALLY.
(C) SECURITY EXEMPT FROM REGISTRATION UNDER RULE 144A OF THE SECURITIES ACT OF
1933. THIS SECURITY MAY BE RESOLD IN TRANSACTIONS EXEMPT FROM REGISTRATION,
NORMALLY TO QUALIFIED INSTITUTIONAL BUYERS. AT OCTOBER 31, 2000, THIS
SECURITY AMOUNTED TO $5,074,700 3.9% OF NET ASSETS.
(D) SECURITIES PAYABLE ON DEMAND. VARIABLE RATE INTEREST- SUBJECT TO PERIODIC
CHANGE.
(E) SECURITIES WHICH, WHILE NOT RATED BY FITCH, MOODY'S AND STANDARD & POOR'S
HAVE BEEN DETERMINED BY THE MANAGER TO BE OF COMPARABLE QUALITY TO THOSE
RATED SECURITIES IN WHICH THE FUND MAY INVEST.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
STATEMENT OF ASSETS AND LIABILITIES
October 31, 2000 (Unaudited)
Cost Value
-------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of
Investments 129,362,592 129,380,888
Interest receivable 2,100,150
Receivable for shares of Beneficial Interest subscribed 12,805
Prepaid expenses 8,375
131,502,218
--------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 94,304
Payable for shares of Beneficial Interest redeemed 164,514
Accrued expenses 120,840
379,658
--------------------------------------------------------------------------------
NET ASSETS ($) 131,122,560
--------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 131,857,677
Accumulated net realized gain (loss) on investments (753,413)
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 18,296
--------------------------------------------------------------------------------
NET ASSETS ($) 131,122,560
NET ASSET VALUE PER SHARE
<TABLE>
<CAPTION>
Class A Class B Class C
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Assets ($) 116,234,031 13,883,451 1,005,078
Shares Outstanding 8,028,597 957,385 69,322
------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE ($) 14.48 14.50 14.50
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
STATEMENT OF OPERATIONS
Six Months Ended October 31, 2000 (Unaudited)
-------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INTEREST INCOME 4,043,185
EXPENSES:
Management fee--Note 3(a) 362,106
Shareholder servicing costs--Note 3(c) 203,775
Distribution fees--Note 3(b) 39,674
Registration fees 9,033
Professional fees 8,937
Custodian fees 6,921
Prospectus and shareholders' reports 6,431
Trustees' fees and expenses--Note 3(d) 1,813
Loan commitment fees--Note 2 450
Miscellaneous 6,086
TOTAL EXPENSES 645,226
INVESTMENT INCOME--NET 3,397,959
-------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments (314,887)
Net unrealized appreciation (depreciation) on investments 3,628,959
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS 3,314,072
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 6,712,031
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
October 31, 2000 Year Ended
(Unaudited) April 30, 2000
--------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 3,397,959 7,569,107
Net realized loss on investments (314,887) (447,921)
Net unrealized appreciation (depreciation)
on investments 3,628,959 (11,735,245)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 6,712,031 (4,614,059)
--------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net:
Class A shares (3,036,137) (6,551,289)
Class B shares (338,615) (971,307)
Class C shares (23,207) (46,511)
Net realized gain on investments:
Class A shares -- (504,105)
Class B shares -- (72,260)
Class C shares -- (2,995)
TOTAL DIVIDENDS (3,397,959) (8,148,467)
--------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS ($):
Net proceeds from shares sold:
Class A shares 3,109,689 16,089,847
Class B shares 475,911 1,911,126
Class C shares 22,945 486,001
Dividends reinvested:
Class A shares 1,840,251 4,327,654
Class B shares 198,549 649,087
Class C shares 9,996 31,502
Cost of shares redeemed:
Class A shares (7,904,307) (27,782,707)
Class B shares (1,821,287) (15,466,061)
Class C shares (128,020) (777,728)
INCREASE (DECREASE) IN NET ASSETS FROM
BENEFICIAL INTEREST TRANSACTIONS (4,196,273) (20,531,279)
TOTAL INCREASE (DECREASE) IN NET ASSETS (882,201) (33,293,805)
-------------------------------------------------------------------------------
NET ASSETS:
Beginning of Period 132,004,761 165,298,566
END OF PERIOD 131,122,560 132,004,761
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
Six Months Ended
October 31, 2000 Year Ended
(Unaudited) April 30, 2000
-------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
CLASS A (A)
Shares sold 217,091 1,102,831
Shares issued for dividends reinvested 128,339 301,122
Shares redeemed (554,794) (1,942,658)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (209,364) (538,705)
-------------------------------------------------------------------------------
CLASS B (A)
Shares sold 33,098 129,739
Shares issued for dividends reinvested 13,828 44,882
Shares redeemed (127,333) (1,065,330)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (80,407) (890,709)
-------------------------------------------------------------------------------
CLASS C
Shares sold 1,587 34,530
Shares issued for dividends reinvested 696 2,176
Shares redeemed (8,916) (53,552)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (6,633) (16,846)
(A) DURING THE PERIOD ENDED OCTOBER 31, 2000, 58,154 CLASS B SHARES
REPRESENTING $801,357 WERE AUTOMATICALLY CONVERTED TO 55,806 CLASS A SHARES
AND DURING THE PERIOD ENDED APRIL 30, 2000, 656,217 CLASS B SHARES
REPRESENTING $9,496,629 WERE AUTOMATICALLY CONVERTED TO 657,231 CLASS A
SHARES.
SEE NOTES TO FINANCIAL STATEMENTS.
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the
fiscal periods indicated. All information (except porfolio turnover rate)
reflects financial results for a single fund share. Total return shows how much
your investment in the fund would have increased (or decreased) during each
period, assuming you had reinvested all dividends and distributions. These
figures have been derived from the fund's financial statements.
<TABLE>
<CAPTION>
Six Months Ended
October 31, 2000 Year Ended April 30,
----------------------------------------------------------------
CLASS A SHARES (Unaudited) 2000 1999 1998 1997 1996
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value,
beginning of period 14.11 15.30 15.30 15.03 14.98 14.90
Investment Operations:
Investment income--net .38 .75 .78 .82 .82 .82
Net realized and unrealized
gain (loss) on investments .37 (1.13) .04 .27 .09 .08
Total from Investment Operations .75 (.38) .82 1.09 .91 .90
Distributions:
Dividends from investment
income--net (.38) (.75) (.78) (.82) (.82) (.82)
Dividends from net realized
gain on investments -- (.06) (.04) -- (.04) --
Total Distributions (.38) (.81) (.82) (.82) (.86) (.82)
Net asset value, end of period 14.48 14.11 15.30 15.30 15.03 14.98
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) (A) 10.61(b) (2.48) 5.41 7.36 6.16 6.11
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA ($):
Ratio of expenses to
average net assets .93(b) .93 .91 .90 .91 .90
Ratio of net investment income
to average net assets 5.28(b) 5.20 5.05 5.32 5.42 5.41
Portfolio Turnover Rate 5.10(c) 13.45 41.27 13.37 25.82 35.47
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 116,234 116,261 134,314 126,115 129,031 138,058
(A) EXCLUSIVE OF SALES CHARGE.
(B) ANNUALIZED.
(C) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS (continued)
Six Months Ended
October 31, 2000 Year Ended April 30,
----------------------------------------------------------------
CLASS B SHARES (Unaudited) 2000 1999 1998 1997 1996
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value,
beginning of period 14.14 15.33 15.33 15.06 15.01 14.92
Investment Operations:
Investment income--net .34 .67 .70 .74 .74 .74
Net realized and unrealized
gain (loss) on investments .36 (1.13) .04 .27 .09 .09
Total from Investment Operations .70 (.46) .74 1.01 .83 .83
Distributions:
Dividends from investment
income--net (.34) (.67) (.70) (.74) (.74) (.74)
Dividends from net realized
gain on investments -- (.06) (.04) -- (.04) --
Total Distributions (.34) (.73) (.74) (.74) (.78) (.74)
Net asset value, end of period 14.50 14.14 15.33 15.33 15.06 15.01
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) (A) 9.94(b) (2.97) 4.86 6.79 5.60 5.62
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average
net assets 1.42(b) 1.46 1.43 1.42 1.44 1.43
Ratio of net investment income
to average net assets 4.79(b) 4.64 4.52 4.79 4.90 4.87
Portfolio Turnover Rate 5.10(c) 13.45 41.27 13.37 25.82 35.47
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 13,883 14,671 29,562 28,568 26,004 25,617
(A) EXCLUSIVE OF SALES CHARGE.
(B) ANNUALIZED.
(C) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended
October 31, 2000 Year Ended April 30,
----------------------------------------------------------------
CLASS C SHARES (Unaudited) 2000 1999 1998 1997 1996(a)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value,
beginning of period 14.13 15.33 15.33 15.06 15.01 14.96
Investment Operations:
Investment income--net .32 .63 .65 .69 .70 .50
Net realized and unrealized
gain (loss) on investments .37 (1.14) .04 .27 .09 .05
Total from Investment Operations .69 (.51) .69 .96 .79 .55
Distributions:
Dividends from investment
income-net (.32) (.63) (.65) (.69) (.70) (.50)
Dividends from net realized
gain on investments -- (.06) (.04) -- (.04) --
Total Distributions (.32) (.69) (.69) (.69) (.74) (.50)
Net asset value, end of period 14.50 14.13 15.33 15.33 15.06 15.01
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) (B) 9.76(c) (3.30) 4.53 6.46 5.34 5.15(c)
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average
net assets 1.74(c) 1.73 1.74 1.73 1.67 1.42(c)
Ratio of net investment income
to average net assets 4.48(c) 4.38 4.16 4.40 4.62 4.00(c)
Portfolio Turnover Rate 5.10(d) 13.45 41.27 13.37 25.82 35.47
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 1,005 1,073 1,422 667 307 373
(A) FROM AUGUST 15, 1995 (COMMENCEMENT OF INITIAL OFFERING) TO APRIL 30, 1996.
(B) EXCLUSIVE OF SALES CHARGE.
(C) ANNUALIZED.
(D) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus Premier State Municipal Bond fund (the "Trust") is registered under the
Investment Company Act of 1940, 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 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., which is a wholly-owned
subsidiary of Mellon Financial Corporation.
Dreyfus Service Corporation (the "Distributor"), a wholly-owned subsidiary of
the Manager, is the distributor of the fund's shares. The fund is authorized to
issue an unlimited number of $.001 par value shares of Beneficial Interest 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. Class B shares automatically convert to Class A shares after
six years. 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
series. Expenses directly attributable to each series are charged to that
series' operations; expenses which are applicable to all series are allocated
among them on a pro rata basis.
The fund' s financial statements are prepared in accordance with accounting
principles generally accepted in the United States of America, which may require
the use of management estimates and assumptions. Actual results could differ
from those estimates.
(A) PORTFOLIO VALUATION: Investments in securities (excluding options and
financial futures on municipal and U.S. treasury securities) are valued each
business day by an independent pricing service ("Service") approved by the Board
of Trustees. Investments for which quoted bid prices are readily available and
are representative of the bid side of the market in the judgment of the Service
are valued at the mean between the quoted bid prices (as obtained by the Service
from dealers in such securities) and asked prices (as calculated by the Service
based upon its evaluation of the market for such securities). Other investments
(which constitute a majority of the portfolio securities) are carried at fair
value as determined by the Service, based on methods which include consideration
of: yields or prices of municipal securities of comparable quality, coupon,
maturity and type; indications as to values from dealers; and general market
conditions. Options and financial futures on municipal and U.S. treasury
securities are valued at the last sales price on the securities exchange on
which such securities are primarily traded or at the last sales price on the
national securities market on each business day. Investments not listed on an
exchange or the national securities market, or securities for which there were
no transactions, are valued at the average of the most recent bid and asked
prices. Bid price is used when no asked price is available.
(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Interest income,
adjusted for amortization of premiums and original issue discounts on
investments, is earned from settlement date and recognized on the accrual basis.
Securities purchased or sold on a when-issued or delayed-delivery basis may be
settled a month or more after the trade date. Under the terms of the custody
agreement, the fund received net earnings credits of $5,029 during the period
ended October 31, 2000 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
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
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, if any, 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 $158,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to April 30, 2000. This amount
is calculated based on Federal income tax regulations which may differ from
financial reporting in accordance with generally accepted accounting principles.
If not applied, the carryover expires in fiscal 2008.
NOTE 2--Bank Line of Credit:
The fund participates with other Dreyfus-managed funds in a $500 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
October 31, 2000, 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 Distributor retained $105 during the period ended October 31, 2000, from
commissions earned on sales of the fund's shares.
(B) Under the Distribution Plan (the "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 October 31, 2000, Class B and
Class C shares were charged $35,744 and $3,930, respectively, pursuant to the
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 answering
shareholder inquiries regarding the fund and providing reports and other
information, and services related to the maintenance of shareholder accounts.
The Distributor may make payments to Service Agents (a securities dealer,
financial institution or other industry professional) in respect of these
services. The Distributor determines the amounts to be paid to Service Agents.
During the period ended October 31, 2000, Class A, Class B and Class C shares
were charged $145,412, $17,872 and $1,310, respectively, pursuant to the
Shareholder Services Plan.
The fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of the
Manager, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the fund. During the period
ended October 31, 2000, the fund was charged $26,989 pursuant to the transfer
agency agreement.
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
(D) Each Board member also serves as a Board member of other funds within the
Dreyfus complex (collectively, the "Fund Group"). Each Board member who is not
an "affiliated person" as defined in the Act receives an annual fee of $50,000
and an attendance fee of $6,500 for each meeting attended and $500 for telephone
meetings. These fees are allocated among the funds in the Fund Group. The
Chairman of the Board receives an additional 25% of such compensation. Subject
to the fund' s Emeritus Program Guidelines, Emeritus Board members, if any,
receive 50% of the Trust's annual retainer fee and per meeting fee paid at the
time the Board member achieves emeritus status.
NOTE 4--Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding
short-term securities, during the period October 31, 2000, amounted to
$6,362,666 and $10,052,883, respectively.
At October 31, 2000, accumulated net unrealized appreciation on investments was
$18,296, consisting of $3,135,678 gross unrealized appreciation and $3,117,382
gross unrealized depreciation.
At October 31, 2000, 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).
NOTES
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
100 Church Street
New York, NY 10286
Transfer Agent & Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166
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
(c) 2000 Dreyfus Service Corporation 055SA0010
Dreyfus Premier State
Municipal Bond Fund,
New Jersey Series
SEMIANNUAL REPORT October 31, 2000
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured * Not Bank-Guaranteed * May Lose Value
Contents
THE FUND
--------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Statement of Investments
9 Statement of Assets and Liabilities
10 Statement of Operations
11 Statement of Changes in Net Assets
13 Financial Highlights
16 Notes to Financial Statements
FOR MORE INFORMATION
---------------------------------------------------------------------------
Back Cover
The Fund
Dreyfus Premier
State Municipal Bond Fund,
New Jersey Series
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Premier State
Municipal Bond Fund, New Jersey Series, covering the six-month period from May
1, 2000 through October 31, 2000. Inside, you'll find valuable information about
how the fund was managed during the reporting period, including a discussion
with the fund's portfolio manager, W. Michael Petty.
Despite some modest fluctuations because of changing economic conditions,
municipal bond prices generally rose modestly over the six-month reporting
period. Most sectors of the municipal bond market also benefited from slowing
economic growth as well. Additionally, the moderating effects of the Federal
Reserve Board' s (the "Fed") interest-rate hikes during the first half of 2000
helped the Fed to achieve its goal of slowing the U.S. economy. Other factors
such as higher energy prices and a weak euro also served to slow economic
growth.
In general, the overall investment environment that prevailed in the second half
of the 1990s had provided returns well above their long-term averages,
establishing unrealistic expectations for some investors. We believe that as the
risks of the stock market have become more apparent recently, the relative
stability and income potential of municipal bonds can make them an attractive
investment as part of a well-balanced portfolio.
For more information about the economy and financial markets, we encourage you
to visit the Market Commentary section of our website at www.dreyfus.com. Or, to
speak with a Dreyfus customer service representative, call us at 1-800-782-6620
Thank you for investing in Dreyfus Premier State Municipal Bond Fund, New Jersey
Series.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
November 15, 2000
DISCUSSION OF FUND PERFORMANCE
W. Michael Petty, Portfolio Manager
How did Dreyfus Premier State Municipal Bond Fund, New Jersey Series perform
during the period?
For the six-month period ended October 31, 2000, the fund's Class A shares
provided a 5.48% total return, its Class B shares provided a 5.22% total return
and its Class C shares provided a 5.10% total return.(1) In comparison, the
Lipper New Jersey Municipal Debt Funds category average provided a 5.29% total
return for the same period.(2)
We attribute the fund' s performance to a relatively strong investment
environment for municipal bonds, which was driven over the past six months
primarily by signs of an economic slowdown in the U.S., as well as positive
supply-and-demand factors affecting municipal bonds throughout the nation.
What is the fund's investment approach?
Our goal is to seek as high a level of federal and New Jersey state tax-exempt
income as is practical without undue risk from a diversified portfolio of
municipal bonds. To achieve this objective, we employ two primary strategies.
First, we evaluate supply-and-demand factors in the bond market that are
affected by the relatively few municipal bonds issued by New Jersey. Based on
that assessment, we select the individual New Jersey 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, creditworthiness of its
issuer, insurance, and any provisions for early redemption. Under most
circumstances, we look for high yielding bonds that have 10-year call protection
and that are selling at a discount to face value.
Second, while we do not attempt to predict changes in interest rates, we may
tactically manage the fund' 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
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
bonds to increase, we may reduce the fund'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 fund'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.
What other factors influenced the fund's performance?
The fund was positively influenced by favorable economic and market conditions.
When the reporting period began on May 1, 2000, the U.S. and New Jersey
economies continued to grow strongly, raising concerns that long-dormant
inflationary pressures might reemerge. In response, the Federal Reserve Board
(the "Fed" ) raised short-term interest rates once during the reporting period.
However, signs soon emerged that the Fed's previous rate hikes were having the
desired effect of slowing the economy. Fewer housing starts, moderating growth
and little change in the core inflation rate suggested that the Fed's
restrictive monetary policies could be near an end.
In addition, New Jersey and its municipalities enjoyed higher revenues during
the reporting period. The state's strong economy curtailed its need to borrow
and resulted in a reduced supply of securities compared to the same period in
1999. When supply falls and demand rises or remains steady, prices of existing
bonds generally tend to move higher.
Accordingly, we became less cautious as the investment climate improved. Our
defensive position early in the reporting period -- which emphasized
income-oriented bonds selling at a slight premium to face value -- held back the
fund' s performance when the market rally began. But as it became more apparent
that the economy was slowing, we shifted assets to longer term bonds selling at
a slight discount to their face value. This slightly more aggressive positioning
enabled the fund to participate more fully in the market rally.
What is the fund's current strategy?
Because we believe that slower economic growth, fewer inflation concerns and
potentially lower interest rates may benefit the municipal bond market, we have
recently put some cash to work in modestly aggressive bonds that have, in our
opinion, good liquidity characteristics. On the other hand, we have avoided
market sectors, such as hospitals, that we believe are likely to remain
relatively illiquid. Accordingly, we have maintained our modestly aggressive
security selection strategy. However, because of the lack of new supply,
investment opportunities in the New Jersey marketplace have been relatively
limited.
November 15, 2000
(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.
HAD THESE CHARGES BEEN REFLECTED, RETURNS WOULD HAVE BEEN LOWER. PAST
PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. SHARE PRICE, YIELD AND
INVESTMENT RETURN FLUCTUATE SUCH THAT UPON REDEMPTION, FUND SHARES MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST. INCOME MAY BE SUBJECT TO STATE
AND LOCAL TAXES FOR NON-NEW JERSEY RESIDENTS, AND SOME INCOME MAY BE
SUBJECT TO THE FEDERAL ALTERNATIVE MINIMUM TAX (AMT) FOR CERTAIN INVESTORS.
CAPITAL GAINS, IF ANY, ARE FULLY TAXABLE.
(2) SOURCE: LIPPER INC.
The Fund
October 31, 2000 (Unaudited)
STATEMENT OF INVESTMENTS
<TABLE>
<CAPTION>
Principal
LONG-TERM MUNICIPAL INVESTMENTS--90.4% Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
NEW JERSEY--80.9%
Bergen County Housing Development Corp., Revenue
(Mortgage--Park Ridge) 5.95%, 7/1/2025 (Insured; MBIA) 500,000 500,555
Bordentown Sewer Authority, Revenue
5.375%, 12/1/2020 (Insured; FGIC) 880,000 873,550
Camden County Improvement Authority, Revenue
(Health Care Redevelopment Project--Cooper
Health System Obligation Group)
5.875%, 2/15/2015 100,000 73,552
Carteret Board of Education COP
6%, 1/15/2024 (Insured; MBIA) 440,000 463,822
Higher Education Student Assistance Authority,
Student Loan Revenue
6.125%, 6/1/2017 (Insured; MBIA) 600,000 627,546
Mercer County Improvement Authority, Revenue
(County Courthouse Project) 5.75%, 11/1/2017 500,000 517,570
New Jersey Economic Development Authority, Revenue
First Mortgage
(The Evergreens):
6%, 10/1/2017 650,000 562,386
6%, 10/1/2022 700,000 591,787
(Fellowship Village) 5.50%, 1/1/2018 450,000 370,633
Special Facility (Continental Airlines Inc. Project)
6.25%, 9/15/2019 500,000 469,950
State Lease (State Office Buildings Projects)
6.125%, 6/15/2018 (Insured; AMBAC) 1,000,000 1,070,440
(Department of Human Services) 6.25%, 7/1/2024 500,000 523,370
Water Facilities
(New Jersey American Water Co. Inc. Project)
6.50%, 4/1/2022 (Insured; FGIC) 500,000 516,545
New Jersey Health Care Facilities Financing Authority, Revenue:
(Burdette Tomlin Memorial Hospital) 5.50%, 7/1/2019 150,000 142,359
(General Hospital Center at Passaic) 6.75%, 7/1/2019
(Insured; FSA) 550,000 630,317
(Saint Barnabas) Zero Coupon, 7/1/2023 (Insured; MBIA) 1,000,000 273,940
(Society of the Valley Hospital) 5.375%,
7/1/2025.(Insured; AMBAC) 500,000 487,950
New Jersey Highway Authority, Garden State Parkway
General Revenue
6%, 1/1/2019 640,000 685,971
New Jersey Turnpike Authority, Turnpike Revenue
6.50%, 1/1/2016 220,000 247,089
Rahway, COP 5.625%, 2/15/2020 (Insured; MBIA) 600,000 612,636
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
NEW JERSEY (CONTINUED)
South Jersey Transportation Authority, LR
(Raytheon Aircraft Service Inc. Project) 6.15%, 1/1/2022 500,000 460,865
West Orange Board of Education COP
6%, 10/1/2024 (Insured; MBIA) 500,000 526,450
U.S. RELATED--9.5%
Puerto Rico Housing Bank and Finance Agency, SFMR
6.25%, 4/1/2029 (Insured GNMA) 280,000 284,558
Virgin Islands Public Finance Authority Gross Receipts
Taxes Lien Note
Gross Receipts Taxes Lien Note 6.50%, 10/1/2024 1,000,000 1,034,300
TOTAL LONG-TERM MUNICIPAL INVESTMENTS
(cost $12,673,921) 12,548,141
------------------------------------------------------------------------------------------------------------------------------------
SHORT-TERM MUNICIPAL INVESTMENTS--9.4%
------------------------------------------------------------------------------------------------------------------------------------
Port Authority of New York and New Jersey,
Special Obligation Revenue, VRDN
(Versatile Structure Obligation) 4.60%
(cost $1,300,000) 1,300,000 (a) 1,300,000
------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $13,973,921) 99.8% 13,848,141
CASH AND RECEIVABLES (NET) .2% 26,493
NET ASSETS 100.0% 13,874,634
The Fund
</TABLE>
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Summary of Abbreviations
AMBAC American Municipal Bond
Assurance Corporation
COP Certificate of Participation
FGIC Financial Guaranty Insurance
Company
FSA Financial Security Assurance
GNMA Government National Mortgage
Association
LR Lease Revenue
MBIA Municipal Bond Investors Assurance
Insurance Corporation
SFMR Single Family Mortgage Revenue
VRDN Variable Rate Demand Notes
Summary of Combined Ratings (Unaudited)
<TABLE>
<CAPTION>
Fitch or Moody's or Standard & Poor's Value (%)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
AAA Aaa AAA 54.6
AA Aa AA 3.7
A A A 6.6
BBB Baa BBB 13.5
BB Ba BB 3.4
B B B .5
F1 MIG1/P1 SP1/A1 9.3
Not Rated (b) Not Rated (b) Not Rated (b) 8.4
100.0
(A) SECURITIES PAYABLE ON DEMAND. VARIABLE INTEREST RATE-SUBJECT TO PERIODIC
CHANGE.
(B) SECURITIES WHICH, WHILE NOT RATED BY FITCH, MOODY'S AND STANDARD & POOR'S
HAVE BEEN DETERMINED BY THE MANAGER TO BE OF COMPARABLE QUALITY TO THOSE
RATED SECURITIES IN WHICH THE FUND MAY INVEST.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
STATEMENT OF ASSETS AND LIABILITIES
October 31, 2000 (Unaudited)
Cost Value
--------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of Investments 13,973,921 13,848,141
Cash 339,177
Interest receivable 182,844
Prepaid expenses 6,327
14,376,489
--------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 12,556
Payable for investment securities purchased 489,299
501,855
--------------------------------------------------------------------------------
NET ASSETS ($) 13,874,634
--------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 14,593,269
Accumulated net realized gain (loss) on investments (592,855)
Accumulated net unrealized appreciation (depreciation) on investments--Note
4 (125,780)
--------------------------------------------------------------------------------
NET ASSETS ($) 13,874,634
NET ASSET VALUE PER SHARE
<TABLE>
<CAPTION>
Class A Class B Class C
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Assets ($) 5,635,575 7,779,336 459,723
Shares Outstanding 465,757 643,120 37,951
------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE ($) 12.10 12.10 12.11
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
STATEMENT OF OPERATIONS
Six Months Ended October 31, 2000 (Unaudited)
-------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INTEREST INCOME 402,761
EXPENSES:
Management fee--Note 3(a) 37,665
Shareholder servicing costs--Note 3(c) 24,080
Distribution fees--Note 3(b) 21,541
Prospectus and shareholders' reports 8,378
Registration fees 6,680
Professional fees 4,633
Custodian fees 1,083
Trustees' fees and expenses--Note 3(d) 426
Loan commitment fees--Note 2 47
Miscellaneous 2,893
TOTAL EXPENSES 107,426
INVESTMENT INCOME--NET 295,335
-------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS-NOTE 4 ($):
Net realized gain (loss) on investments (101,241)
Net unrealized appreciation (depreciation) on investments 503,736
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS 402,495
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 697,830
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
October 31, 2000 Year Ended
(Unaudited) April 30, 2000
--------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 295,335 697,241
Net realized gain (loss) on investments (101,241) (491,965)
Net unrealized appreciation (depreciation)
on investments 503,736 (1,130,979)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 697,830 (925,703)
--------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net:
Class A shares (122,640) (242,137)
Class B shares (163,890) (443,125)
Class C shares (8,805) (11,979)
Net realized gain on investments:
Class A shares -- (64,561)
Class B shares -- (135,112)
Class C shares -- (2,550)
TOTAL DIVIDENDS (295,335) (899,464)
--------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS ($):
Net proceeds from shares sold:
Class A shares 942,782 1,037,158
Class B shares 631,147 975,090
Class C shares 6,840 422,771
Dividends reinvested:
Class A shares 66,326 191,033
Class B shares 94,881 369,450
Class C shares 5,922 8,141
Cost of shares redeemed:
Class A shares (478,901) (893,433)
Class B shares (1,664,365) (3,261,000)
Class C shares (4,335) (307,408)
INCREASE (DECREASE) IN NET ASSETS FROM
BENEFICIAL INTEREST TRANSACTIONS (399,703) (1,458,198)
TOTAL INCREASE (DECREASE) IN NET ASSETS 2,792 (3,283,365)
-------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 13,871,842 17,155,207
END OF PERIOD 13,874,634 13,871,842
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
Six Months Ended
October 31, 2000 Year Ended
(Unaudited) April 30, 2000
-------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
CLASS A (A)
Shares sold 79,312 85,133
Shares issued for dividends reinvested 5,551 15,905
Shares redeemed (40,434) (73,722)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 44,429 27,316
-------------------------------------------------------------------------------
CLASS B( A)
Shares sold 52,814 80,244
Shares issued for dividends reinvested 7,945 30,723
Shares redeemed (140,947) (272,697)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (80,188) (161,730)
-------------------------------------------------------------------------------
CLASS C
Shares sold 568 36,111
Shares issued for dividends reinvested 495 663
Shares redeemed (361) (26,027)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 702 10,747
(A) DURING THE PERIOD ENDED OCTOBER 31, 2000 61,334 CLASS B SHARES REPRESENTING
$729,971 WERE AUTOMATICALLY CONVERTED TO 61,341 CLASS A SHARES AND DURING
THE PERIOD ENDED APRIL 30, 2000, 11,326 CLASS B SHARES REPRESENTING
$134,440 WERE AUTOMATICALLY CONVERTED TO 11,330 CLASS A SHARES.
SEE NOTES TO FINANCIAL STATEMENTS.
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the
fiscal periods indicated. All information (except porfolio turnover rate)
reflects financial results for a single fund share. Total return shows how much
your investment in the fund would have increased (or decreased) during each
period, assuming You had reinvested all dividends and distributions. These
figures have been derived from the fund's financial statements.
<TABLE>
<CAPTION>
Six Months Nine
Ended Months
October 31, Ended Year Ended
2000 Year Ended April 30, April 30, July 31,
_______________________ ______________
CLASS A SHARES (Unaudited) 2000 1999 1998 1997(a) 1996 1995
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value,
beginning of period 11.74 13.14 13.08 12.63 12.79 12.71 12.58
Investment Operations:
Investment income--net .28 .59 .57 .61 .42 .59 .71
Net realized and unrealized gain
(loss) on investments .36 (1.24) .15 .56 (.02) .08 .13
Total from Investment Operations .64 (.65) .72 1.17 .40 .67 .84
Distributions:
Dividends from investment
income--net (.28) (.59) (.57) (.61) (.42) (59) (.71)
Dividends from net realized gain
on investments -- (.16) (.09) (.11) (.14) -- --
Total Distributions (.28) (.75) (.66) (.72) (.56) (59) (.71)
Net asset value, end of period 12.10 11.74 13.14 13.08 12.63 12.79 12.71
-----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) (B) 10.87(c) (4.96) 5.52 9.48 4.25(c) 5.31 7.01
-----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average
net assets 1.26(c) .88 1.08 1.02 1.20(c) 1.14 .10
Ratio of net investment income
to average net assets 4.62(c) 4.84 4.28 4.73 4.39(c) 4.55 5.60
Decrease reflected in above expense
ratios due to undertakings by
The Dreyfus Corporation -- .44 -- .03 .10(c) .08 1.35
Portfolio Turnover Rate 32.10(d) 120.61 64.40 50.78 110.12(d) 28.14 43.48
-----------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 5,636 4,946 5,179 4,454 4,837 5,212 4,981
(A) THE FUND CHANGED ITS FISCAL YEAR END FROM JULY 31 TO APRIL 30.
(B) EXCLUSIVE OF SALES CHARGE.
(C) ANNUALIZED.
(D) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS (CONTINUED)
Six Months Nine
Ended Months
October 31, Ended Year Ended
2000 Year Ended April 30, April 30, July 31,
_______________________ ______________
CLASS B SHARES (Unaudited) 2000 1999 1998 1997(a) 1996 1995
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 11.74 13.14 13.07 12.63 12.79 12.71 12.58
Investment Operations:
Investment income--net .25 .53 .50 .55 .37 .52 .65
Net realized and unrealized gain (loss)
on investments .36 (1.24) .16 .55 (.02) .08 .13
Total from Investment Operations .61 (.71) .66 1.10 .35 .60 .78
Distributions:
Dividends from investment income--net (.25) (.53) (.50) (.55) (.37) (.52) (.65)
Dividends from net realized gain
on investments -- (.16) (.09) (.11) (.14) -- --
Total Distributions (.25) (.69) (.59) (.66) (.51) (.52) (.65)
Net asset value, end of period 12.10 11.74 13.14 13.07 12.63 12.79 12.71
-----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) (B) 10.35(c) (5.45) 5.08 8.85 3.74(c) 4.79 6.48
-----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average
net assets 1.75(c) 1.40 1.58 1.53 1.69(c) 1.63 .61
Ratio of net investment income
to average net assets 4.13(c) 4.32 3.78 4.20 3.88(c) 4.04 5.00
Decrease reflected in above expense
ratios due to undertakings by
The Dreyfus Corporation -- .42 -- .03 .09(c) .08 1.29
Portfolio Turnover Rate 32.10(d) 120.61 64.40 50.78 110.12(d) 28.14 43.48
Net Assets, end of period
($ x 1,000) 7,779 8,488 11,628 10,533 8,680 8,910 6,852
(A) THE FUND CHANGED ITS FISCAL YEAR END FROM JULY 31 TO APRIL 30.
(B) EXCLUSIVE OF SALES CHARGE.
(C) ANNUALIZED.
(D) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
Nine Months Year
Six Months Ended Ended Ended
October 31, 2000 Year Ended April 30, April 30, July 31,
-----------------------------
CLASS C SHARES (Unaudited) 2000 1999 1998 1997(a) 1996(b)
---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value, beginning of period 11.75 13.15 13.09 12.64 12.78 13.21
Investment Operations:
Investment income--net .23 .50 .46 .50 .35 .32
Net realized and unrealized gain (loss)
on investments .36 (1.24) .15 .56 -- (.43)
Total from Investment Operations .59 (.74) .61 1.06 .35 (.11)
Distributions:
Dividends from investment income-net (.23) (.50) (.46) (.50) (.35) (.32)
Dividends from net realized gain
on investments -- (.16) (.09) (.11) (.14) --
Total Distributions (.23) (.66) (.55) (.61) (.49) (.32)
Net asset value, end of period 12.11 11.75 13.15 13.09 12.64 12.78
-------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(C) 10.12(d) (5.66) 4.67 8.55 3.72(d) (1.21)(d
-------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets 1.97(d) 1.63 1.88 1.91 1.97(d) 1.95(d)
Ratio of net investment income
to average net assets 3.90(d) 4.05 3.42 3.65 3.62(d) 3.68(d
Decrease reflected in above expense
ratios due to undertakings by
The Dreyfus Corporation -- .41 -- .06 .76(d) .02(d)
Portfolio Turnover Rate 32.10(e) 120.61 64.40 50.78 110.12(e) 28.14
-------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x1,000) 460 438 349 118 1 6
(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 CHARGE.
(D) ANNUALIZED.
(E) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus Premier State Municipal Bond Fund (the "Trust") is registered under the
Investment Company Act of 1940, 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, which is a wholly-owned
subsidiary of Mellon Financial Corporation.
Dreyfus Service Corporation (the "Distributor"), a wholly-owned subsidiary of
the Manager, is the distributor of the fund's shares. The fund is authorized to
issue an unlimited number of $.001 par value shares of Beneficial Interest 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. Class B shares automatically convert to Class A shares after
six years. 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 series are charged to that series'
operations; expenses which are applicable to all series are allocated among them
on a pro rata basis.
The fund' s financial statements are prepared in accordance with accounting
principles generally accepted in the United States, which may require the use of
management estimates and assumptions. Actual results could differ from those
estimates.
(A) PORTFOLIO VALUATION: Investments in securities (excluding options and
financial futures on municipal and U.S. treasury securities) are valued each
business day by an independent pricing service ("Service") approved by the Board
of Trustees. Investments for which quoted bid prices are readily available and
are representative of the bid side of the market in the judgment of the Service
are valued at the mean between the quoted bid prices (as obtained by the Service
from dealers in such securities) and asked prices (as calculated by the Service
based upon its evaluation of the market for such securities). Other investments
(which constitute a majority of the portfolio securities) are carried at fair
value as determined by the Service based on methods which include consideration
of: yields or prices of municipal securities of comparable quality, coupon,
maturity and type; indications as to values from dealers; and general market
conditions. Options and financial futures on municipal and U.S. treasury
securities are valued at the last sales price on the securities exchange on
which such securities are primarily traded or at the last sales price on the
national securities market on each business day. Investments not listed on an
exchange or the national securities market, or securities for which there were
no transactions, are valued at the average of the most recent bid and asked
prices. Bid price is used when no asked price is available.
(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Interest income,
adjusted for amortization of premiums and original issue discounts on
investments, is earned from settlement date and recognized on the accrual basis.
Securities purchased or sold on a when-issued or delayed-delivery basis may be
settled a month or more after the trade date. Under the terms of the custody
agreement, the fund received net earnings credits of $1,481 during the period
ended October 31, 2000 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
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
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, if any, 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, 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 $367,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to April 30, 2000. This amount
is calculated based on Federal income tax regulations which may differ from
financial reporting in accordance with generally accepted accounting principles.
If not applied, the carryover expires in fiscal 2008.
NOTE 2--Bank Line of Credit:
The fund participates with other Dreyfus-managed funds in a $500 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
October 31, 2000, 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.
(B) Under the Distribution Plan (the "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 October 31, 2000, Class B and
Class C shares were charged $19,848 and $1,693, 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 October 31, 2000, Class A, Class B and Class C
shares were charged $6,632, $9,924 and $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 October 31, 2000, the fund was charged $4,433 pursuant to the transfer
agency agreement.
(D) Each Board member also serves as a Board member of other funds within the
Dreyfus complex (collectively, the "Fund Group"). Each Board member who is not
an "affiliated person" as defined in the Act
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
receives an annual fee of $50,000 and an attendance fee of $6,500 for each
meeting attended and $500 for telephone meetings. These fees are allocated among
the funds in the Fund Group. The Chairman of the Board receives an additional
25% of such compensation. Subject to the fund's Emeritus Program Guidelines,
Emeritus Board members, if any, receive 50% of the Trust's annual retainer fee
and per meeting fee paid at the time the Board member achieves emeritus status.
NOTE 4--Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding
short-term securities, during the period ended October 31, 2000, amounted to
$4,217,831 and $3,884,800, respectively.
At October 31, 2000, accumulated net unrealized depreciation on investments was
$125,780, consisting of $285,749 gross unrealized appreciation and $411,529
gross unrealized depreciation.
At October 31, 2000, 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).
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
100 Church Street
New York, NY 10286
Transfer Agent & Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166
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
(c) 2000 Dreyfus Service Corporation 380SA0010
Dreyfus Premier State
Municipal Bond Fund,
North Carolina Series
SEMIANNUAL REPORT October 31, 2000
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured * Not Bank-Guaranteed * May Lose Value
Contents
THE FUND
--------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Statement of Investments
10 Statement of Assets and Liabilities
11 Statement of Operations
12 Statement of Changes in Net Assets
14 Financial Highlights
17 Notes to Financial Statements
FOR MORE INFORMATION
---------------------------------------------------------------------------
Back Cover
The Fund
Dreyfus Premier
State Municipal Bond Fund,
North Carolina Series
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Premier State
Municipal Bond Fund, North Carolina Series, covering the six-month period from
May 1, 2000 through October 31, 2000. Inside, you'll find valuable information
about how the fund was managed during the reporting period, including a
discussion with the fund's portfolio manager, W. Michael Petty.
Despite some modest fluctuations because of changing economic conditions,
municipal bond prices generally rose modestly over the six-month reporting
period. Most sectors of the municipal bond market also benefited from slowing
economic growth as well. Additionally, the moderating effects of the Federal
Reserve Board' s (the "Fed") interest-rate hikes during the first half of 2000
helped the Fed to achieve its goal of slowing the U.S. economy. Other factors
such as higher energy prices and a weak euro also served to slow economic
growth.
In general, the overall investment environment that prevailed in the second half
of the 1990s had provided returns well above their long-term averages,
establishing unrealistic expectations for some investors. We believe that as the
risks of the stock market have become more apparent recently, the relative
stability and income potential of municipal bonds can make them an attractive
investment as part of a well-balanced portfolio.
For more information about the economy and financial markets, we encourage you
to visit the Market Commentary section of our website at www.dreyfus.com. Or, to
speak with a Dreyfus customer service representative, call us at 1-800-782-6620
Thank you for investing in Dreyfus Premier State Municipal Bond Fund, North
Carolina Series.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
November 15, 2000
DISCUSSION OF FUND PERFORMANCE
W. Michael Petty, Portfolio Manager
How did Dreyfus Premier State Municipal Bond Fund, North Carolina Series perform
during the period?
For the six-month period ended October 31, 2000, the fund's Class A shares
provided a 5.14% total return, its Class B shares provided a 4.88% total return
and its Class C shares provided a 4.75% total return.(1) In comparison, the
Lipper North Carolina Municipal Debt Funds category average provided a 5.33%
total return for the same period.(2)
We attribute the fund' s good absolute performance to a relatively strong
investment environment for municipal bonds, which was driven over the past six
months primarily by signs of an economic slowdown in the U.S., as well as
positive supply-and-demand factors affecting municipal bonds throughout the
nation. However, the fund's lagging performance relative to its peer group is
primarily the result of our defensive positioning early in the reporting period,
which caused the fund to miss out on a portion of the market's rally.
What is the fund's investment approach?
Our goal is to seek as high a level of federal and North Carolina state
tax-exempt income as is practical without undue risk from a diversified
portfolio of municipal bonds. To achieve this objective, we employ two primary
strategies. First, we evaluate supply-and-demand factors in the bond market that
are affected by the relatively few municipal bonds issued by North Carolina.
Based on that assessment, we select the individual North Carolina 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,
creditworthiness of its issuer, insurance, and any provisions for early
redemption. Under most circumstances, we look for high yielding bonds that have
10-year call protection and that are selling at a discount to face value.
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
Second, while we do not attempt to predict changes in interest rates, we may
tactically manage the fund' 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 fund' 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
fund' 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 North Carolina municipal bond funds.
What other factors influenced the fund's performance?
The fund was positively influenced by favorable economic and market conditions.
When the reporting period began on May 1, 2000, the U.S. and North Carolina
economies continued to grow strongly, raising concerns that long-dormant
inflationary pressures might reemerge. In response, the Federal Reserve Board
(the "Fed" ) raised short-term interest rates once during the reporting period,
for an increase of 0.50 percentage points. However, signs soon emerged that the
Fed's previous rate hikes were having the desired effect of slowing the economy.
Fewer housing starts, moderating growth and little change in the core inflation
rate suggested that the Fed's restrictive monetary policies could be near an
end.
In addition, North Carolina and its municipalities enjoyed higher revenues
during the reporting period, curtailing their need to borrow and resulting in a
reduced supply of securities compared to the same period in 1999. When supply
falls and demand rises or remains steady, prices of existing bonds generally
tend to move higher.
Accordingly, we became less cautious as the investment climate improved. Our
defensive position early in the reporting period -- which emphasized
income-oriented bonds selling at a slight premium to face value -- held back the
fund' s performance when the market
rally began. But as it became more apparent that the economy was slowing, we
shifted assets to longer term bonds selling at a slight discount to their face
value. This slightly more aggressive positioning enabled the fund to participate
more fully in the market rally.
What is the fund's current strategy?
Because we believe that slower economic growth, fewer inflation concerns and
potentially lower interest rates may benefit the municipal bond market, we have
recently put some cash to work in modestly aggressive bonds that have, in our
opinion, good liquidity characteristics. Accordingly, we have maintained our
modestly aggressive security selection strategy. Despite the relative lack of
supply, we continued to find attractive investment opportunities when North
Carolina municipalities came to the market with a limited number of new issues.
November 15, 2000
(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.
HAD THESE CHARGES BEEN REFLECTED, RETURNS WOULD HAVE BEEN LOWER. PAST
PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. SHARE PRICE, YIELD AND
INVESTMENT RETURN FLUCTUATE SUCH THAT UPON REDEMPTION, FUND SHARES MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST. INCOME MAY BE SUBJECT TO STATE
AND LOCAL TAXES FOR NON-NORTH CAROLINA RESIDENTS AND SOME INCOME MAY BE
SUBJECT TO THE FEDERAL ALTERNATIVE MINIMUM TAX (AMT) FOR CERTAIN INVESTORS.
CAPITAL GAINS, IF ANY, ARE FULLY TAXABLE.
(2) SOURCE: LIPPER INC.
The Fund
STATEMENT OF INVESTMENTS
October 31, 2000 (Unaudited)
STATEMENT OF INVESTMENTS
<TABLE>
<CAPTION>
Principal
LONG-TERM MUNICIPAL INVESTMENTS--96.1% Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
NORTH CAROLINA--76.5%
Appalachian State University, Utility System Revenue
5%, 5/15/2024 (Insured MBIA) 1,160,000 1,077,710
Buncombe County Metropolitan Sewage District,
Sewage System Revenue
6.75%, 7/1/2022 (Prerefunded 7/1/2002) 500,000 (a) 528,235
Charlotte:
Storm Water Fee Revenue 6%, 6/1/2025 2,000,000 2,096,500
Special Facilities Revenue (Charlotte-Douglas
International Airport) 5.60%, 7/1/2027 3,250,000 2,417,577
Water and Sewer System Revenue 5.25%, 6/1/2025 1,710,000 1,653,792
Monroe, Combined Enterprise System Revenue
4.50%, 3/1/2023 2,130,000 1,792,161
New Hanover County, Public Improvement
5.75%, 11/1/2017 1,700,000 1,790,491
New Hanover County Industrial Facilities and Pollution Control
Financing Authority (Occidental Petroleum)
6.50%, 8/1/2014 1,000,000 1,002,000
North Carolina Eastern Municipal Power Agency, Power
System Revenue:
5.70%, 1/1/2013 2,690,000 2,790,122
6%, 1/1/2013 2,500,000 2,511,625
6%, 1/1/2022 1,000,000 975,350
6.75%, 1/1/2026 3,000,000 3,111,270
North Carolina Educational Assistance Authority, Guaranteed
Student Loan Revenue 6.35%, 7/1/2016 4,375,000 4,546,719
North Carolina Housing Finance Agency,
Single Family Revenue 6.50%, 9/1/2026 3,950,000 4,035,715
North Carolina Medical Care Commission,
Health, Hospital and Nursing Home Revenue:
(Annie Penn Memorial Hospital Project)
7.50%, 8/15/2021 3,750,000 3,957,862
(Depaul Community Facilities Project)
7.625%, 11/1/2029 2,115,000 2,036,174
(Halifax Regional Medical Center) 5%, 8/15/2024 800,000 607,552
(North Carolina Housing Foundation Inc.)
6.625%, 8/15/2030 (Insured; ACA) 3,250,000 3,388,807
(Northeast Medical Center Project):
5.50%, 11/1/2025 1,000,000 988,620
5.50%, 11/1/2030 2,000,000 1,966,820
(Pitt County Memorial Hospital)
4.75%, 12/1/2028 (Insured; MBIA) 260,000 221,923
(Southeast Regional Medical Center)
6.25%, 6/1/2029 2,000,000 2,011,400
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
NORTH CAROLINA (CONTINUED)
North Carolina Medical Care Commission,
Health, Hospital and Nursing Home Revenue
(Wilson Memorial Hospital Project)
Zero Coupon, 11/1/2016 (Insured; AMBAC) 3,055,000 1,272,377
North Carolina Municipal Power Agency Number 1,
Catawba Electric Revenue
5.50%, 1/1/2015 (Insured; MBIA) 4,000,000 4,100,760
Sampson Area Development Corp., Installment Payment
Revenue 4.75%, 6/1/2024 (Insured; MBIA) 1,000,000 880,510
Shelby, Combined Enterprise System Revenue
5.625%, 5/1/2014 1,000,000 1,016,850
University of North Carolina, Multiple Utility Revenues:
Zero Coupon, 8/1/2018 2,500,000 948,700
4.50%, 10/1/2018 1,250,000 1,099,300
4.50%, 10/1/2023 1,580,000 1,334,231
University of North Carolina Hospitals at Chapel Hill, Revenue
5%, 2/15/2024 (Insured; AMBAC) 1,000,000 928,880
U.S. RELATED--19.6%
Guam Airport Authority, Airport and Marina Revenue
6.70%, 10/1/2023 2,000,000 2,073,940
Guam Power Authority, Electric Power and Light Revenues
6.30%, 10/1/2022 2,000,000 2,117,420
Commonwealth of Puerto Rico
6.80%, 7/1/2021 (Prerefunded 7/1/2002) 600,000 (a) 634,638
Puerto Rico Ports Authority, Revenue
6%, 7/1/2021 (Insured; AMBAC) 2,750,000 2,761,220
Virgin Islands Territory, Hugo Insurance Claims Fund Program
7.75%, 7/1/2011 1,025,000 1,067,784
Virgin Islands Public Finance Authority, Revenues,
Matching Fund Loan Notes 7.25%, 10/1/2018 4,000,000 4,303,400
Virgin Islands Water and Power Authority, Electric System
Revenue 7.40%, 7/1/2011 1,595,000 1,644,955
TOTAL LONG-TERM MUNICIPAL INVESTMENTS
(cost $71,618,279) 71,693,390
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Principal
SHORT-TERM MUNICIPAL INVESTMENTS--2.0% Amount ($) Value ($)
-----------------------------------------------------------------------------------------------------------------------------------
Raleigh-Durham Airport Authority, Special Facilities
Revenue, VRDN (American Airlines)
4.60% (LOC; Royal Bank of Canada)
(cost $1,500,000) 1,500,000 (b) 1,500,000
-----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $73,118,279) 98.1% 73,193,390
CASH AND RECEIVABLES (NET) 1.9% 1,454,335
NET ASSETS 100.0% 74,647,725
</TABLE>
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Summary of Abbreviations
ACA American Capital Access
AMBAC American Municipal Bond
Assurance Corporation
LOC Letter of Credit
MBIA Municipal Bond Investors
Assurance Insurance
Corporation
VRDN Variable Rate Demand Notes
Summary of Combined Ratings (Unaudited)
<TABLE>
<CAPTION>
Fitch or Moody's or Standard & Poor's Value (%)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
AAA Aaa AAA 41.6
AA Aa AA 12.1
A A A 15.8
BBB Baa BBB 20.9
F1 MIG1 SP1 2.0
Not Rated(c) Not Rated(c) Not Rated(c) 7.6
100.0
(A) BONDS WHICH ARE PREREFUNDED ARE COLLATERALIZED BY U.S. GOVERNMENT
SECURITIES WHICH ARE HELD IN ESCROW AND ARE USED TO PAY PRINCIPAL AND
INTEREST ON THE MUNICIPAL ISSUE AND TO RETIRE THE BONDS IN FULL AT THE
EARLIEST REFUNDING DATE.
(B) SECURITIES PAYABLE ON DEMAND. VARIABLE RATE INTEREST--SUBJECT TO PERIODIC
CHANGE.
(C) SECURITIES WHICH, WHILE NOT RATED BY FITCH, MOODY'S AND STANDARD & POOR'S
HAVE BEEN DETERMINED BY THE MANAGER TO BE OF COMPARABLE QUALITY TO THOSE
RATED SECURITIES IN WHICH THE FUND MAY INVEST.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
STATEMENT OF ASSETS AND LIABILITIES
October 31, 2000 (Unaudited)
Cost Value
--------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of Investments 73,118,279 73,193,390
Cash 393,127
Interest receivable 1,148,941
Prepaid expenses 7,366
74,742,824
--------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 59,064
Payable for shares of Beneficial Interest redeemed 26,000
Accrued expenses 10,035
95,099
--------------------------------------------------------------------------------
NET ASSETS ($) 74,647,725
--------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 75,676,940
Accumulated net realized gain (loss) on investments (1,104,326)
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 75,111
--------------------------------------------------------------------------------
NET ASSETS ($) 74,647,725
NET ASSET VALUE PER SHARE
<TABLE>
<CAPTION>
Class A Class B Class C
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Assets ($) 55,558,644 18,527,038 562,043
Shares Outstanding 4,237,454 1,414,261 42,852
-----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE ($) 13.11 13.10 13.12
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
STATEMENT OF OPERATIONS
Six Months Ended October 31, 2000 (Unaudited)
--------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INTEREST INCOME 2,292,246
EXPENSES:
Management fee--Note 3(a) 208,950
Shareholder servicing costs--Note 3(c) 123,471
Distribution fees--Note 3(b) 50,417
Prospectus and shareholders' reports 10,756
Registration fees 8,136
Auditing fees 5,506
Custodian fees 4,658
Trustees' fees and expenses--Note 3(d) 974
Legal fees 400
Loan commitment fees--Note 2 252
Miscellaneous 2,999
TOTAL EXPENSES 416,519
INVESTMENT INCOME--NET 1,875,727
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments (110,678)
Net unrealized appreciation (depreciation) on investments 1,957,250
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS 1,846,572
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 3,722,299
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
October 31, 2000 Year Ended
(Unaudited) April 30, 2000
--------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 1,875,727 3,897,409
Net realized gain (loss) on investments (110,678) (944,064)
Net unrealized appreciation (depreciation)
on investments 1,957,250 (6,184,731)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 3,722,299 (3,231,386)
--------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net:
Class A shares (1,422,086) (2,714,734)
Class B shares (440,449) (1,159,710)
Class C shares (13,192) (22,965)
Net realized gain on investments:
Class A shares -- (154,335)
Class B shares -- (65,459)
Class C shares -- (1,171)
TOTAL DIVIDENDS (1,875,727) (4,118,374)
-------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS ($):
Net proceeds from shares sold:
Class A shares 2,171,221 19,895,728
Class B shares 724,712 3,458,755
Class C shares 5,677 536,777
Dividends reinvested:
Class A shares 716,929 1,521,432
Class B shares 253,115 727,452
Class C shares 4,940 7,805
Cost of shares redeemed:
Class A shares (4,572,723) (8,658,982)
Class B shares (2,776,587) (21,222,657)
Class C shares (135,096) (270,201)
INCREASE (DECREASE) IN NET ASSETS FROM
BENEFICIAL INTEREST TRANSACTIONS (3,607,812) (4,003,891)
TOTAL INCREASE (DECREASE) IN NET ASSETS (1,761,240) (11,353,651)
-------------------------------------------------------------------------------
NET ASSETS:
Beginning of Period 76,408,965 87,762,616
END OF PERIOD 74,647,725 76,408,965
SEE NOTES TO FINANCIAL STATEMENTS.
Six Months Ended
October 31, 2000 Year Ended
(Unaudited) April 30, 2000
-------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
CLASS A (A)
Shares sold 167,561 1,491,337
Shares issued for dividends reinvested 55,197 117,049
Shares redeemed (353,297) (665,463)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (130,539) 942,923
-------------------------------------------------------------------------------
CLASS B (A)
Shares sold 56,201 258,146
Shares issued for dividends reinvested 19,510 55,751
Shares redeemed (214,600) (1,596,342)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (138,889) (1,282,445)
-------------------------------------------------------------------------------
CLASS C
Shares sold 439 41,378
Shares issued for dividends reinvested 380 599
Shares redeemed (10,411) (20,613)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (9,592) 21,364
(A) DURING THE PERIOD ENDED OCTOBER 31, 2000, 131,237 CLASS B SHARES
REPRESENTING $1,705,906 WERE AUTOMATICALLY CONVERTED TO 131,160 CLASS A
SHARES, AND DURING THE PERIOD ENDED APRIL 30, 2000, 1,104,632 CLASS B
SHARES REPRESENTING $14,624,314 WERE AUTOMATICALLY CONVERTED TO 1,104,109
CLASS A SHARES.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the
fiscal periods indicated. All information (except portfolio turnover rate)
reflects financial results for a single fund share. Total return shows how much
your investment in the fund would have increased (or decreased) during each
period, assuming you had reinvested all dividends and distributions.These
figures have been derived from the fund's financial statements.
<TABLE>
<CAPTION>
Six Months Ended
October 31, 2000 Year Ended April 30,
----------------------------------------------------------------
CLASS A SHARES (Unaudited) 2000 1999 1998 1997 1996
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value,
beginning of period 12.79 13.95 13.91 13.23 12.91 12.72
Investment Operations:
Investment income--net .33 .65 .66 .67 .67 .67
Net realized and unrealized
gain (loss) on investments .32 (1.12) .11 .68 .32 .19
Total from Investment Operations .65 (.47) .77 1.35 .99 .86
Distributions:
Dividends from investment
income--net (.33) (.65) (.66) (.67) (.67) (.67)
Dividends from net realized
gain on investments -- (.04) (.07) -- -- --
Total Distributions (.33) (.69) (.73) (.67) (.67) (.67)
Net asset value, end of period 13.11 12.79 13.95 13.91 13.23 12.91
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) (A) 10.20(b) (3.38) 5.63 10.39 7.81 6.79
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to
average net assets .97(b) .97 .94 .87 1.04 .98
Ratio of net investment income
to average net assets 5.07(b) 4.97 4.68 4.89 5.10 5.11
Decrease reflected in above
expense ratios due to
undertakings by
The Dreyfus Corporation -- -- -- -- -- .02
Portfolio Turnover Rate 20.39(c) 39.92 41.15 32.28 44.91 47.15
-----------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ X 1,000) 55,559 55,883 47,794 41,592 42,130 47,042
(A) EXCLUSIVE OF SALES CHARGE.
(B) ANNUALIZED.
(C) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended
October 31, 2000 Year Ended April 30,
---------------------------------------------------------------
CLASS B SHARES (Unaudited) 2000 1999 1998 1997 1996
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value,
beginning of period 12.78 13.94 13.90 13.22 12.90 12.71
Investment Operations:
Investment income--net .30 .58 .59 .60 .60 .60
Net realized and unrealized
gain (loss)on investments .32 (1.12) .11 .68 .32 .19
Total from Investment Operations .62 (.54) .70 1.28 .92 .79
Distributions:
Dividends from investment
income--net (.30) (.58) (.59) (.60) (.60) (.60)
Dividends from net realized gain
on investments -- (.04) (.07) -- -- --
Total Distributions (.30) (.62) (.66) (.60) (.60) (.60)
Net asset value, end of period 13.10 12.78 13.94 13.90 13.22 12.90
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) (A) 9.68(b) (3.88) 5.10 9.84 7.27 6.25
------------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data (%):
Ratio of expenses to
average net assets 1.46(b) 1.48 1.44 1.38 1.54 1.49
Ratio of net investment income
to average net assets 4.57(b) 4.42 4.16 4.39 4.59 4.59
Decrease reflected in above
expense ratios due to
undertakings by
The Dreyfus Corporation -- -- -- -- -- .02
Portfolio Turnover Rate 20.39(c) 39.92 41.15 32.28 44.91 47.15
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ X 1,000) 18,527 19,854 39,535 45,296 43,979 42,668
(A) EXCLUSIVE OF SALES CHARGE.
(B) ANNUALIZED.
(C) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS (CONTINUED)
Six Months Ended
October 31, 2000 Year Ended April 30,
----------------------------------------------------------------
CLASS C SHARES (Unaudited) 2000 1999 1998 1997 1996 (a)
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value,
beginning of period 12.80 13.96 13.90 13.22 12.90 12.76
Investment Operations:
Investment income--net .28 .55 .56 .57 .57 .40
Net realized and unrealized
gain (loss) on investments .32 (1.12) .13 .68 .32 .14
Total from Investment Operations .60 (.57) .69 1.25 .89 .54
Distributions:
Dividends from investment
income--net (.28) (.55) (.56) (.57) (.57) (.40)
Dividends from net realized gain
on investments -- (.04) (.07) -- -- --
Total Distributions (.28) (.59) (.63) (.57) (.57) (.40)
Net asset value, end of period 13.12 12.80 13.96 13.90 13.22 12.90
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) (B) 9.42(c) (4.10) 5.02 9.58 7.00 5.92(c)
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to
average net assets 1.70(c) 1.72 1.63 1.62 1.77 1.73(c)
Ratio of net investment income
to average net assets 4.36(c) 4.22 3.83 4.08 4.31 4.31(c)
Portfolio Turnover Rate 20.39(d) 39.92 41.15 32.28 44.91 47.15
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ X 1,000) 562 671 434 44 11 1
(A) FROM AUGUST 15, 1995 (COMMENCEMENT OF INITIAL OFFERING) TO APRIL 30, 1996.
(B) EXCLUSIVE OF SALES CHARGE.
(C) ANNUALIZED.
(D) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus Premier State Municipal Bond fund (the "Trust") is registered under the
Investment Company Act of 1940, 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., which is a wholly-owned
subsidiary of Mellon Financial Corporation.
Dreyfus Service Corporation (the "Distributor"), a wholly-owned subsidiary of
the Manager, is the distributor of the fund's shares. The fund is authorized to
issue an unlimited number of $.001 par value shares of Beneficial Interest 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. Class B shares automatically convert to Class A shares after
six years.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
series. Expenses directly attributable to each series are charged to that
series' operations; expenses which are applicable to all series are allocated
among them on a pro rata basis.
The fund' s financial statements are prepared in accordance with accounting
principles generally accepted in the United States, which may require the use of
management estimates and assumptions. Actual results could differ from those
estimates.
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (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 $3,654 during the period
ended October 31, 2000 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.
(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, if any, 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 $306,000
available fo Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to April 30, 2000. This amount
is calculated based on Federal income tax regulations which may differ from
financial reporting on accordance with generally accepted accounting principles.
If not applied, the carryover expires in fiscal 2008.
NOTE 2--Bank Line of Credit:
The fund participates with other Dreyfus-managed funds in a $500 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
October 31, 2000, the fund did not borrow under the Facility.
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
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 Distributor retained $39 during the period ended October 31, 2000, from
commissions earned on sales of the fund's shares.
(b) Under the Distribution plan (the "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
October 31, 2000, Class B and Class C shares were charged $48,147 and $2,270,
respectively, pursuant to the 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 October 31, 2000, Class A, Class B and Class C
shares were charged $70,147, $24,074 and $756 respectively, pursuant to the
Shareholder Services Plan.
The fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of the
Manager, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the fund. During the period
ended October 31, 2000, the fund was charged $20,693 pursuant to the transfer
agency agreement.
(d) Each Board member also serves as a Board member of other funds within the
Dreyfus complex (collectively, the "Fund Group"). Each Board member who is not
an "affiliated person" as defined in the Act receives an annual fee of $50,000
and an attendance fee of $6,500 for each meeting attended and $500 for telephone
meetings.These fees are allocated among the funds in the Fund Group. The
Chairman of the Board receives an additional 25% of such compensation. The
Chairman of the Board received an additional 25% of such compensation. Subject
to the fund' s Emeritus Program Guidelines, Emeritus Board members, if any,
receive 50% of the Trust's annual retainer fee and per meeting fee paid at the
time the Board member achieves emeritus status.
NOTE 4--Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding
short-term securities, during the period ended October 31, 2000, amounted to
$15,252,796 and $14,381,431, respectively.
At October 31, 2000, accumulated net unrealized appreciation on investments was
$75,111, consisting of $1,813,824 gross unrealized appreciation and $1,738,713
gross unrealized depreciation.
At October 31, 2000, 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
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
100 Church Street
New York, NY 10286
Transfer Agent & Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166
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
(c) 2000 Dreyfus Service Corporation 065SA0010
Dreyfus Premier State
Municipal Bond Fund,
Ohio Series
SEMIANNUAL REPORT October 31, 2000
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured * Not Bank-Guaranteed * May Lose Value
Contents
THE FUND
--------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 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
FOR MORE INFORMATION
---------------------------------------------------------------------------
Back Cover
The Fund
Dreyfus Premier
State Municipal Bond Fund,
Ohio Series
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Premier State
Municipal Bond Fund, Ohio Series, covering the six-month period from May 1, 2000
through October 31, 2000. Inside, you'll find valuable information about how the
fund was managed during the reporting period, including a discussion with the
fund's portfolio manager, W. Michael Petty.
Despite some modest fluctuations because of changing economic conditions,
municipal bond prices generally rose modestly over the six-month reporting
period. Most sectors of the municipal bond market also benefited from slowing
economic growth as well. Additionally, the moderating effects of the Federal
Reserve Board' s (the "Fed") interest-rate hikes during the first half of 2000
helped the Fed to achieve its goal of slowing the U.S. economy. Other factors
such as higher energy prices and a weak euro also served to slow economic
growth.
In general, the overall investment environment that prevailed in the second half
of the 1990s had provided returns well above their long-term averages,
establishing unrealistic expectations for some investors. We believe that as the
risks of the stock market have become more apparent recently, the relative
stability and income potential of municipal bonds can make them an attractive
investment as part of a well-balanced portfolio.
For more information about the economy and financial markets, we encourage you
to visit the Market Commentary section of our website at www.dreyfus.com. Or, to
speak with a Dreyfus customer service representative, call us at 1-800-782-6620
Thank you for investing in Dreyfus Premier State Municipal Bond Fund, Ohio
Series.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
November 15, 2000
DISCUSSION OF FUND PERFORMANCE
W. Michael Petty, Portfolio Manager
How did Dreyfus Premier State Municipal Bond Fund, Ohio Series perform during
the period?
For the six-month period ended October 31, 2000, the fund's Class A shares
provided a 4.85% total return, its Class B shares provided a 4.58% total return
and its Class C shares provided a 4.45% total return.(1) In comparison, the
Lipper Ohio Municipal Debt Funds category average provided a 4.91% total return
for the same period.(2)
We attribute the fund' s good absolute performance to a relatively strong
investment environment for municipal bonds, which was driven over the past six
months primarily by signs of an economic slowdown in the U.S., as well as
positive supply-and-demand factors affecting municipal bonds throughout the
nation. However, the fund's modestly lagging performance relative to our peer
group is primarily the result of our defensive positioning early in the
reporting period, which caused the fund to miss out on a small portion of the
market's rally.
What is the fund's investment approach?
Our goal is to seek as high a level of federal and Ohio tax-exempt income as is
practical without undue risk from a diversified portfolio of municipal bonds. To
achieve this objective, we employ two primary strategies. First, we evaluate
supply-and-demand factors in the bond market that are affected by the relatively
few municipal bonds issued by Ohio. Based on that assessment, we select the
individual Ohio 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, creditworthiness of its issuer, insurance, and any provisions
for early redemption. Under most circumstances, we look for high yielding bonds
that have 10-year call protection and that are selling at a discount to face
value.
Second, while we do not attempt to predict changes in interest rates, we may
tactically manage the fund' s average duration -- a measure of
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
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 fund'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 fund'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.
What other factors influenced the fund's performance?
The fund was positively influenced by favorable economic and market conditions.
When the reporting period began on May 1, 2000, the U.S. and Ohio economies
continued to grow strongly, raising concerns that long-dormant inflationary
pressures might reemerge. In response, the Federal Reserve Board (the "Fed")
raised short-term interest rates once during the reporting period, for an
increase of 0.50 percentage points. However, signs soon emerged that the Fed's
previous rate hikes were having the desired effect of slowing the economy. Fewer
housing starts, moderating growth and little change in the core inflation rate
suggested that the Fed's restrictive monetary policies could be near an end.
In addition, Ohio and its municipalities enjoyed higher revenues during the
reporting period, curtailing their need to borrow and resulting in a reduced
supply of securities compared to the same period in 1999. When supply falls and
demand rises or remains steady, prices of existing bonds generally tend to move
higher.
Accordingly, we became less cautious as the investment climate improved. Our
defensive position early in the reporting period -- which emphasized
income-oriented bonds selling at a slight premium to face value -- held back the
fund' s performance when the market rally began. But as it became more apparent
that the economy was slowing, we shifted assets to longer term bonds selling at
a slight discount to their face value. This slightly more aggressive positioning
enabled the fund to participate more fully in the market rally.
What is the fund's current strategy?
Because we believe that slower economic growth, fewer inflation concerns and
potentially lower interest rates may benefit the municipal bond market, we have
recently put some cash to work in modestly aggressive bonds that have, in our
opinion, good liquidity characteristics. On the other hand, we have avoided
market sectors, such as hospitals, that we believe are likely to remain
relatively illiquid. Accordingly, we have maintained our modestly aggressive
security selection strategy. Despite the relative lack of supply, we continued
to find attractive investment opportunities, including tax-exempt zero-coupon
bonds that we purchased in an attempt to further diversify the fund's portfolio
November 15, 2000
(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.
HAD THESE CHARGES BEEN REFLECTED, RETURNS WOULD HAVE BEEN LOWER. PAST
PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. SHARE PRICE, YIELD AND
INVESTMENT RETURN FLUCTUATE SUCH THAT UPON REDEMPTION, FUND SHARES MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST. INCOME MAY BE SUBJECT TO STATE
AND LOCAL TAXES FOR NON-OHIO RESIDENTS AND SOME INCOME MAY BE SUBJECT TO
THE FEDERAL ALTERNATIVE MINIMUM TAX (AMT) FOR CERTAIN INVESTORS. CAPITAL
GAINS, IF ANY, ARE FULLY TAXABLE.
(2) SOURCE: LIPPER INC.
The Fund
STATEMENT OF INVESTMENTS
October 31, 2000 (Unaudited)
STATEMENT OF INVESTMENTS
<TABLE>
<CAPTION>
Principal
LONG-TERM MUNICIPAL INVESTMENTS--98.5% Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
OHIO--96.4%
Akron:
6%, 12/1/2012 1,380,000 1,508,547
Pension Revenue 4.75%, 12/1/2023 (Insured; AMBAC) 1,330,000 1,166,836
Sewer Systems Revenue
5.875%, 12/1/2016 (Insured; MBIA) 1,200,000 1,248,504
Akron-Wilbeth Housing Development Corp., First Mortgage
Revenue 7.90%, 8/1/2003 (Insured; FHA) 1,005,000 1,064,677
Allen County, Industrial First Mortgage Revenue
6.75%, 11/15/2008 (Guaranteed; K-Mart Corp.) 1,280,000 1,294,387
City of Barberton, Hospital Facilities Revenue
(The Barberton Citizens Hospital Co. Project)
7.25%, 1/1/2012 (Prerefunded 1/1/2002) 2,400,000 (a) 2,518,296
Board of Education of the Cleveland City School District
8%, 12/1/2001 750,000 765,053
Butler County, Hospital Facilities Improvement Revenue
(Fort Hamilton Hughes Group) 7.25%, 1/1/2001 910,000 910,655
City of Cambridge, HR (Guernsey Memorial Hospital Project)
8%, 12/1/2006 2,000,000 2,072,840
Clermont County, Hospital Facilities Revenue
(Mercy Health Systems):
5.625%, 9/1/2016 (Insured; AMBAC) 4,250,000 4,320,592
7.50%, 9/1/2019
(Prerefunded 9/1/2001) (Insured; AMBAC) 175,000 (a) 177,180
City of Cleveland:
Airport Special Revenue (Continental Airlines Inc. Project)
5.375%, 9/15/2027 5,000,000 3,996,200
COP:
(Motor Vehicle, Motorized and Communication
Equipment) 7.10%, 7/1/2002 590,000 596,118
(Stadium Project)
5.25%, 11/15/2022 (Insured; AMBAC) 2,785,000 2,688,026
Parking Facility Improvement Revenue
8%, 9/15/2012 (Prerefunded 9/15/2002) 5,000,000 (a) 5,402,950
Public Power System Revenue
5.125%, 11/15/2018 (Insured; MBIA) 9,650,000 9,330,103
Waterworks Revenue 5.50%, 1/1/2021 (Insured; MBIA) 8,000,000 8,111,680
Cleveland-Cuyahoga County Port Authority, Revenue:
(Capital Improvements Project) 5.375%, 5/15/2019 1,000,000 883,690
(Port of Cleveland) 5.375%, 5/15/2018 2,685,000 2,423,508
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
OHIO (CONTINUED)
Cuyahoga County:
HR:
Improvement:
5%, 12/1/2019 7,025,000 6,664,477
(MetroHealth Systems Project) 6.125%, 2/15/2024 4,845,000 4,767,722
(Meridia Health Systems)
7%, 8/15/2023 (Prerefunded 8/15/2001) 1,750,000 (a) 1,819,527
Hospital Facilities Revenue (Canton Inc. Project)
7.50%, 1/1/2030 5,445,615
Jail Facilities 7%, 10/1/2013 (Prerefunded 10/1/2001) 6,125,000 (a) 6,387,640
Delaware County, Sewer Disposal Improvement
4.75%, 12/1/2024 (Insured; MBIA) 1,000,000 880,980
Eaton, IDR (Baxter International Inc. Project)
6.50%, 12/1/2012 1,500,000 1,572,660
Euclid City School District, Improvement
7.10%, 12/1/2011 (Prerefunded 12/1/2001) 1,000,000 (a) 1,047,920
Village of Evendale, IDR (Ashland Oil Inc. Project)
6.90%, 11/1/2010 2,000,000 2,050,700
Fairfield City School District,
School Improvement Unlimited Tax:
7.20%, 12/1/2011 (Insured; FGIC) 1,000,000 1,127,240
7.20%, 12/1/2012 (Insured; FGIC) 1,250,000 1,411,175
6.10%, 12/1/2015 (Insured; FGIC) 2,000,000 2,087,820
6%, 12/1/2020 (Insured; FGIC) 2,000,000 2,056,640
Findlay 5.875%, 7/1/2017 2,000,000 2,077,260
Forest Hills Local School District
5.70%, 12/1/2016 (Insured; MBIA) 1,000,000 1,033,070
Franklin County:
Health Care Facilities Revenue, Improvement
(Friendship Village of Columbus)
5.375%, 8/15/2028 (Insured; ACA) 5,000,000 4,434,450
HR:
(Children's Hospital Project):
6.60%, 5/1/2013 4,000,000 4,205,600
5%, 5/1/2018 2,310,000 2,104,987
Holy Cross Health Systems Corp.:
Improvement 5.80%, 6/1/2016 2,000,000 2,032,100
(Mount Carmel Health) 6.75%, 6/1/2019
(Insured; MBIA) (Prerefunded 6/1/2002) 2,500,000 (a) 2,635,250
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
OHIO (CONTINUED)
Gahanna-Jefferson Public Schools 4.75%, 12/1/2021 1,325,000 1,173,261
Gallia County Local School District 7.375%, 12/1/2004 570,000 627,023
Greater Cleveland Gateway Economic Development Corp.:
Senior Lien Excise Tax Revenue
6.875%, 9/1/2005 (Insured; FSA) 1,500,000 1,555,155
Stadium Revenue 7.50%, 9/1/2005 5,675,000 5,897,120
Greater Cleveland Regional Transit Authority
5.65%, 12/1/2016 (Insured; FGIC) 5,445,000 5,796,856
Hamilton County, Sales Tax Revenue
Zero Coupon, 12/1/2027 18,440,000 3,924,954
Hamilton County, Hospital Facilities Improvement Revenue
(Deaconess Hospital) 7%, 1/1/2012 2,570,000 2,681,898
Hilliard School District, School Improvement:
Zero Coupon, 12/1/2013 (Insured; FGIC) 1,655,000 834,782
Zero Coupon, 12/1/2014 (Insured; FGIC) 1,655,000 785,744
Kirtland Local School District 7.50%, 12/1/2009 760,000 776,705
Knox County, IDR (Weyerhaeuser Co. Project) 9%, 10/1/2007 1,000,000 1,201,590
Lakota Local School District 6.125%, 12/1/2017
(Insured; AMBAC) (Prerefunded 12/1/2005) 1,075,000 (a) 1,152,282
Lowellville, Sanitary Sewer Systems Revenue (Browning-Ferris
Industries Inc.) 7.25%, 6/1/2006 900,000 903,159
Marion County, Health Care Facilities Revenue, Improvement
(United Church Homes Inc.) 6.375%, 11/15/2010 2,825,000 2,679,597
Moraine, SWDR (General Motors Corp. Project):
6.75%, 7/1/2014 5,000,000 5,664,200
5.65%, 7/1/2024 3,800,000 3,782,482
Middleburg Heights 4.375%, 12/1/2018 5,725,000 4,898,138
North Olmstead 5.375%, 12/1/2020 (Insured; MBIA) 780,000 779,298
North Royalton City School District
6.10%, 12/1/2019 (Insured; MBIA) 2,500,000 2,663,075
State of Ohio:
Economic Development Revenue
Ohio Enterprise Bond Fund (VSM Corp. Project)
7.375%, 12/1/2011 885,000 915,957
PCR (Standard Oil Co. Project) 6.75%, 12/1/2015
(Guaranteed; British Petroleum Co. p.l.c.) 2,700,000 3,110,562
Ohio Air Quality Development Authority, PCR
(Cleveland Electric Illuminating Co. Project)
6.85%, 7/1/2023 5,250,000 5,271,893
Ohio Building Authority, State Facilities (Juvenile Correctional
Projects) 6.60%, 10/1/2014 (Insured; AMBAC) 1,660,000 1,812,654
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
OHIO (CONTINUED)
Ohio Housing Finance Agency
Residential Mortgage Revenue:
6.35%, 9/1/2031 (Guaranteed; GNMA) 5,000,000 5,175,300
6.05, 9/1/2017 (Guaranteed; GNMA) 2,955,000 3,035,228
Ohio Municipal Generation Agency
5.375%, 2/15/2024 (Insured; AMBAC) 4,000,000 3,875,760
Ohio Turnpike Commission, Turnpike Revenue,
Highway Improvements:
4.50%, 2/15/2024 (Insured; FGIC) 650,000 548,964
5.75%, 2/15/2024 (Prerefunded 2/15/2004) 6,100,000 (a) 6,438,489
4.75%, 2/15/2028 (Insured; FGIC) 2,000,000 1,739,400
Ohio Water Development Authority, Revenue
Fresh Water 5.90%, 12/1/2015 (Insured; AMBAC) 4,650,000 4,851,624
Pollution Facilities (Cleveland Electric)
6.10%, 8/1/2020 4,000,000 3,767,920
Ottawa County, Sanitary Sewer Systems Special Assessment
(Portage-Catawba Island Sewer Project)
7%, 9/1/2011 (Insured; AMBAC) (Prerefunded 9/1/2001) 1,000,000 (a) 1,041,330
Parma, Hospital Improvement Revenue (Parma Community
General Hospital Association) 5.375%, 11/1/2029 4,000,000 3,388,600
Shelby County, Hospital Facilities Revenue, Improvement
(The Shelby County Memorial Hospital Association)
7.70% 9/1/2018 2,500,000 2,679,850
South Euclid, Recreation Facilities
7%, 12/1/2011 (Prerefunded 12/1/2001) 2,285,000 (a) 2,393,606
South-Western City School District (Franklin and
Pickway Counties) School Building Construction
4.75%, 12/1/2026 (Insured; AMBAC) 2,500,000 2,187,975
Southwest Regional Water District, Water Revenue:
6%, 12/1/2015 (Insured; MBIA) 1,600,000 1,670,592
6%, 12/1/2020 (Insured; MBIA) 1,250,000 1,289,363
Springboro, Water System Revenue
4.75%, 12/1/2023 (Insured; AMBAC) 2,600,000 2,289,508
Student Loan Funding Corp.,
Student Loan Revenue 7.20%, 8/1/2003 235,000 236,008
Summit County 6.50%, 12/1/2016 (Insured; FGIC) 2,000,000 2,229,700
Toledo 5.625%, 12/1/2011 (Insured; AMBAC) 1,000,000 1,052,300
University of Cincinnati, University and College Revenue, COP
6.75%, 12/1/2009 (Prerefunded 12/1/2001) (Insured; MBIA) 750,000 (a) 783,435
Warren:
7.75%, 11/1/2010 (Prerefunded 11/1/2000) 2,785,000 (a) 2,840,700
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
-----------------------------------------------------------------------------------------------------------------------------------
OHIO (CONTINUED)
Warren (continued):
Waterworks Revenue 5.50%, 11/1/2015 (Insured; FGIC) 1,450,000 1,501,809
Westerville, Improvement 4.50%, 12/1/2018 4,650,000 4,067,541
Youngstown:
5.375%, 12/1/2025 (Insured; AMBAC) 2,195,000 2,141,749
5.375%, 12/1/2031 (Insured; AMBAC) 2,370,000 2,477,243
U.S. RELATED--2.1%
Puerto Rico Electric Power Authority, Power Revenue
Zero Coupon, 7/1/2017 (Insured; MBIA) 5,000,000 2,094,300
Virgin Islands Public Finance Authority, Revenue
6.375%, 10/1/2019 3,000,000 3,084,120
TOTAL LONG-TERM MUNICIPAL INVESTMENTS
(cost $231,340,935) 234,093,474
-----------------------------------------------------------------------------------------------------------------------------------
SHORT-TERM MUNICIPAL INVESTMENTS--1.1%
-----------------------------------------------------------------------------------------------------------------------------------
Ohio Air Quality Development Authority, Pollution
Control Facilities Revenue, VRDN (Toledo Edison Project)
4.55% (LOC; Barclays Bank p.l.c.)
(cost $2,500,000) 2,500,000 (b) 2,500,000
-----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $233,840,935) 99.6% 236,593,474
CASH AND RECEIVABLES (NET) .4% 973,527
NET ASSETS 100.0% 237,567,001
</TABLE>
Summary of Abbreviations
ACA American Capital Access
AMBAC American Municipal Bond Assurance
Corporation
COP Certificate of Participation
FGIC Financial Guaranty Insurance Company
FHA Federal Housing Administration
FSA Financial Security Assurance
GNMA Government National Mortgage
Association
HR Hospital Revenue
IDR Industrial Development Revenue
LOC Letter of Credit
MBIA Municipal Bond Investors Assurance
Insurance Corporation
PCR Pollution Control Revenue
SWDR Solid Waste Disposal Revenue
VRDN Variable Rate Demand Notes
Summary of Combined Ratings (Unaudited)
<TABLE>
<CAPTION>
Fitch or Moody's or Standard & Poor's Value (%)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
AAA Aaa AAA 47.9
AA Aa AA 14.1
A A A 13.3
BBB Baa BBB 15.8
BB Ba BB 2.6
F1 Mig1 SP1 1.1
Not Rated( c) Not Rated( c) Not Rated( c) 5.2
100.0
(A) BONDS WHICH ARE PREREFUNDED ARE COLLATERALIZED BY U.S. GOVERNMENT
SECURITIES WHICH ARE HELD IN ESCROW AND ARE USED TO PAY PRINCIPAL AND
INTEREST ON THE MUNICIPAL ISSUE AND TO RETIRE THE BONDS IN FULL AT THE
EARLIEST REFUNDING DATE.
(B) SECURITIES PAYABLE ON DEMAND. VARIABLE RATE INTEREST -- SUBJECT TO PERIODIC
CHANGE.
(C) SECURITIES WHICH, WHILE NOT RATED BY FITCH, MOODY'S AND STANDARD & POOR'S
HAVE BEEN DETERMINED BY THE MANAGER TO BE OF COMPARABLE QUALITY TO THOSE
RATED SECURITIES IN WHICH THE FUND MAY INVEST.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
STATEMENT OF ASSETS AND LIABILITIES
October 31, 2000 (Unaudited)
Cost Value
--------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of
Investments 233,840,935 236,593,474
Cash 356,194
Interest receivable 4,390,891
Receivable for shares of Beneficial Interest subscribed 241,557
Receivable for investment securities sold 182,500
Prepaid expenses 6,780
241,771,396
--------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 109,815
Payable for investment securities purchased 3,873,322
Payable for shares of Beneficial Interest redeemed 100,693
Accrued expenses 120,565
4,204,395
--------------------------------------------------------------------------------
NET ASSETS ($) 237,567,001
--------------------------------------------------------------------------------
COMPOSTION OF NET ASSETS ($):
Paid-in capital 237,545,947
Accumulated net realized gain (loss) on investments (2,731,485)
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 2,752,539
--------------------------------------------------------------------------------
NET ASSETS ($) 237,567,001
NET ASSET VALUE PER SHARE
<TABLE>
<CAPTION>
Class A Class B Class C
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Assets ($) 195,512,742 37,749,933 4,304,326
Shares Outstanding 16,106,436 3,108,998 354,149
------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE ($) 12.14 12.14 12.15
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
STATEMENT OF OPERATIONS
Six Months Ended October 31, 2000 (Unaudited)
--------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INTEREST INCOME 7,287,225
EXPENSES:
Management fee--Note 3(a) 663,611
Shareholder servicing costs--Note 3(c) 377,927
Distribution fees--Note 3(b) 109,538
Professional fees 17,486
Custodian fees 12,656
Prospectus and shareholders' reports 10,200
Registration fees 7,725
Trustees' fees and expenses--Note 3(d) 3,451
Loan commitment fees--Note 2 828
Miscellaneous 12,872
TOTAL EXPENSES 1,216,294
INVESTMENT INCOME--NET 6,070,931
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments (145,091)
Net unrealized appreciation (depreciation) on investments 5,279,659
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS 5,134,568
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 11,205,499
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
October 31, 2000 Year Ended
(Unaudited) April 30, 2000
-------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 6,070,931 13,755,875
Net realized gain (loss) on investments (145,091) (2,585,658)
Net unrealized appreciation (depreciation) on
investments 5,279,659 (18,256,668)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 11,205,499 (7,086,451)
-------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net:
Class A shares (5,106,071) (11,481,786)
Class B shares (887,605) (2,164,842)
Class C shares (77,255) (109,247)
Net realized gain on investments:
Class A shares -- (331,315)
Class B shares -- (66,227)
Class C shares -- (3,915)
TOTAL DIVIDENDS (6,070,931) (14,157,332)
-------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS ($):
Net proceeds from shares sold:
Class A shares 3,895,286 21,382,144
Class B shares 2,632,960 7,765,705
Class C shares 1,392,202 1,821,593
Dividends reinvested:
Class A shares 3,250,550 7,451,787
Class B shares 585,142 1,505,465
Class C shares 46,498 77,434
Cost of shares redeemed:
Class A shares (17,847,817) (46,590,037)
Class B shares (5,731,635) (20,973,075)
Class C shares (304,835) (432,787)
INCREASE (DECREASE) IN NET ASSETS FROM
BENEFICIAL INTEREST TRANSACTIONS (12,081,649) (27,991,771)
TOTAL INCREASE (DECREASE) IN NET ASSETS (6,947,081) (49,235,554)
-------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 244,514,082 293,749,636
END OF PERIOD 237,567,001 244,514,082
SEE NOTES TO FINANCIAL STATEMENTS.
Six Months Ended
October 31, 2000 Year Ended
(Unaudited) April 30, 2000
-------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
CLASS A (A)
Shares sold 325,211 1,746,590
Shares issued for dividends reinvested 270,346 617,430
Shares redeemed (1,491,580) (3,878,095)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (896,023) (1,514,075)
-------------------------------------------------------------------------------
CLASS B (A)
Shares sold 220,453 634,572
Shares issued for dividends reinvested 48,652 124,511
Shares redeemed (479,703) (1,728,996)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (210,598) (969,913)
-------------------------------------------------------------------------------
CLASS C
Shares sold 115,502 150,041
Shares issued for dividends reinvested 3,861 6,425
Shares redeemed (25,466) (36,124)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 93,897 120,342
(A) DURING THE PERIOD ENDED OCTOBER 31, 2000, 170,086 CLASS B SHARES
REPRESENTING $2,047,727 WERE AUTOMATICALLY CONVERTED TO 170,209 CLASS A
SHARES AND DURING THE PERIOD ENDED APRIL 30, 2000, 906,408 CLASS B SHARES
REPRESENTING $11,001,478 WERE AUTOMATICALLY CONVERTED TO 907,005 CLASS A
SHARES.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the
fiscal periods indicated. All information (except portfolio turnover rates)
reflects financial results for a single fund share. Total return shows how much
your investment in the fund would have increased (or decreased) during each
period, assuming you had reinvested all dividends and distributions. These
figures have been derived from the fund's financial statements.
<TABLE>
<CAPTION>
Six Months Ended
October 31, 2000 Year Ended April 30,
----------------------------------------------------------------
CLASS A SHARES (Unaudited) 2000 1999 1998 1997 1996
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value,
beginning of period 11.88 12.80 12.86 12.65 12.58 12.62
Investment Operations:
Investment income--net .31 .63 .65 .67 .69 .71
Net realized and unrealized
gain (loss) on investments .26 (.90) .08 .34 .17 .14
Total from Investment Operations .57 (.27) .73 1.01 .86 .85
Distributions:
Dividends from investment
income--net (.31) (.63) (.65) (.67) (.69) (.71)
Dividends from net realized
gain on investments -- (.02) (.14) (.13) (.10) (.18)
Total Distributions (.31) (.65) (.79) (.80) (.79) (.89)
Net asset value, end of period 12.14 11.88 12.80 12.86 12.65 12.58
-----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) (A) 9.62(b) (2.08) 5.72 8.09 6.91 6.77
-----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to
average net assets .92(b) .91 .91 .90 .91 .89
Ratio of net investment income
to average net assets 5.12(b) 5.20 5.00 5.17 5.40 5.49
Portfolio Turnover Rate 19.95(c) 26.70 40.36 24.73 29.65 43.90
-----------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ X 1,000) 195,513 201,974 237,027 237,618 242,572 257,639
(A) EXCLUSIVE OF SALES CHARGE.
(B) ANNUALIZED.
(C) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended
October 31, 2000 Year Ended April 30,
---------------------------------------------------------------
CLASS B SHARES (Unaudited) 2000 1999 1998 1997 1996
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value,
beginning of period 11.88 12.81 12.87 12.65 12.59 12.63
Investment Operations:
Investment income--net .28 .57 .58 .60 .62 .64
Net realized and unrealized
gain (loss) on investments .26 (.91) .08 .35 .16 .14
Total from Investment Operations .54 (.34) .66 .95 .78 .78
Distributions:
Dividends from investment
income--net (.28) (.57) (.58) (.60) (.62) (.64)
Dividends from net realized
gain on investments -- (.02) (.14) (.13) (.10) (.18)
Total Distributions (.28) (.59) (.72) (.73) (.72) (.82)
Net asset value, end of period 12.14 11.88 12.81 12.87 12.65 12.59
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) (A) 9.09(b) (2.66) 5.17 7.62 6.27 6.19
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average
net assets 1.42(b) 1.42 1.42 1.41 1.42 1.42
Ratio of net investment income
to average net assets 4.62(b) 4.68 4.47 4.65 4.87 4.94
Portfolio Turnover Rate 19.95(c) 26.70 40.36 24.73 29.65 43.90
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ X 1,000) 37,750 39,445 54,929 50,453 44,746 40,476
(A) EXCLUSIVE OF SALES CHARGE.
(B) ANNUALIZED.
(C) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS (CONTINUED)
Six Months Ended
October 31, 2000 Year Ended April 30,
----------------------------------------------------------------
CLASS C SHARES (Unaudited) 2000 1999 1998 1997 1996(a)
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value,
beginning of period 11.89 12.82 12.88 12.66 12.59 12.68
Investment Operations:
Investment income--net .26 .54 .55 .57 .59 .43
Net realized and unrealized
gain (loss) on investments .26 (.91) .08 .35 .17 .09
Total from Investment Operations .52 (.37) .63 .92 .76 .52
Distributions:
Dividends from investment
income--net (.26) (.54) (.55) (.57) (.59) (.43)
Dividends from net realized
gain on investments -- (.02) (.14) (.13) (.10) (.18)
Total Distributions (.26) (.56) (.69) (.70) (.69) (.61)
Net asset value, end of period 12.15 11.89 12.82 12.88 12.66 12.59
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)( B) 8.83(c) (2.90) 4.92 7.35 6.07 5.66(c)
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average
net assets 1.66(c) 1.67 1.66 1.66 1.64 1.63(c)
Ratio of net investment income
to average net assets 4.32(c) 4.41 4.20 4.38 4.44 4.66(c)
Portfolio Turnover Rate 19.95(d) 26.70 40.36 24.73 29.65 43.90
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ X 1,000) 4,304 3,095 1,793 579 694 1
(A) FROM AUGUST 15, 1995 (COMMENCEMENT OF INITIAL OFFERING) TO APRIL 30, 1996.
(B) EXCLUSIVE OF SALES CHARGE.
(C) ANNUALIZED.
(D) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus Premier State Municipal Bond Fund (the "Trust") is registered under the
Investment Company Act of 1940, 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., which is a wholly-owned subsidiary
of Mellon Financial Corporation.
Dreyfus Service Corporation (the "Distributor"), a wholly-owned subsidiary of
the Manager, is the distributor of the fund's shares. The fund is authorized to
issue an unlimited number of $.001 par value shares of Benefial Interest 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. Class B shares automatically convert to Class A shares after six
years. 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
series. Expenses directly attributable to each series are charged to that
series' operations; expenses which are applicable to all series are allocated
among them on a pro rata basis.
The fund' s financial statements are prepared in accordance with accounting
principles generally accepted in the United States, which may require the use of
management estimates and assumptions. Actual results could differ from those
estimates.
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (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 $1,675 during the period
ended October 31, 2000 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.
(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, if any, 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 $1,283,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to April 30, 2000. This amount
is calculated based on Federal income tax regulations which may differ from
financial reporting in accordance with generally accepted accounting principles.
If not applied, the carryover expires in fiscal 2008.
NOTE 2--Bank Line of Credit:
The fund participates with other Dreyfus-managed funds in a $500 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 rats in effect at the time of borrowings. During the period ended October
31, 2000, the fund did not borrow under the Facility.
The Fund
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 Distributor retained $1,659 during the period ended October 31, 2000, from
commissions earned on sales of the fund's shares.
(B) Under the Distribution Plan (the "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 October 31, 2000, Class B and
Class C shares were charged $96,121 and $13,417, respectively, pursuant to the
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 October 31, 2000, Class A, Class B and Class C
shares were charged $249,108, $48,061 and $4,472, respectively, pursuant to the
Shareholder Services Plan.
The fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of the
Manager, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the fund. During the period
ended October 31, 2000, the fund was charged $55,393 pursuant to the transfer
agency agreement.
(D) Each Board member also serves as a Board member of other funds within the
Dreyfus complex (collectively, the "Fund Group"). Each Board member who is not
an "affiliated person" as defined in the Act receives an annual fee of $50,000
and an attendance fee of $6,500 for each meeting attended and $500 for telephone
meetings.These fees are allocated among the funds in the Fund Group. The
Chairman of the Board receives an additional 25% of such compensation. Subject
to the fund' s Emeritus Program Guidelines, Emeritus Board members, if any,
receive 50% of the Trust's annual retainer fee and per meeting fee paid at the
time the Board member achieves emeritus status.
NOTE 4--Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding
short-term securities, during the period ended October 31, 2000, amounted to
$47,486,265 and $45,595,843, respectively.
At October 31, 2000, accumulated net unrealized appreciation on investments was
$2,752,539, consisting of $6,877,799 gross unrealized appreciation and
$4,125,260 gross unrealized depreciation.
At October 31, 2000, 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
Notes
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
100 Church Street
New York, NY 10286
Transfer Agent & Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166
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
(c) 2000 Dreyfus Service Corporation 057SA0010
Dreyfus Premier State
Municipal Bond Fund,
Pennsylvania Series
SEMIANNUAL REPORT October 31, 2000
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured * Not Bank-Guaranteed * May Lose Value
Contents
THE FUND
--------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 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
FOR MORE INFORMATION
---------------------------------------------------------------------------
Back Cover
The Fund
Dreyfus Premier
State Municipal Bond Fund,
Pennsylvania Series
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Premier State
Municipal Bond Fund, Pennsylvania Series, covering the six-month period from May
1, 2000 through October 31, 2000. Inside, you'll find valuable information about
how the fund was managed during the reporting period, including a discussion
with the fund's portfolio manager, Douglas Gaylor.
Despite some modest fluctuations because of changing economic conditions,
municipal bond prices generally rose modestly over the six-month reporting
period. Most sectors of the municipal bond market also benefited from slowing
economic growth as well. Additionally, the moderating effects of the Federal
Reserve Board' s (the "Fed") interest-rate hikes during the first half of 2000
helped the Fed to achieve its goal of slowing the U.S. economy. Other factors
such as higher energy prices and a weak euro also served to slow economic
growth.
In general, the overall investment environment that prevailed in the second half
of the 1990s had provided returns well above their long-term averages,
establishing unrealistic expectations for some investors. We believe that as the
risks of the stock market have become more apparent recently, the relative
stability and income potential of municipal bonds can make them an attractive
investment as part of a well-balanced portfolio.
For more information about the economy and financial markets, we encourage you
to visit the Market Commentary section of our website at www.dreyfus.com. Or, to
speak with a Dreyfus customer service representative, call us at 1-800-782-6620
Thank you for investing in Dreyfus Premier State Municipal Bond Fund,
Pennsylvania Series.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
November 15, 2000
DISCUSSION OF FUND PERFORMANCE
Douglas Gaylor, Portfolio Manager
How did Dreyfus Premier State Municipal Bond Fund, Pennsylvania Series perform
during the period?
For the six-month period ended October 31, 2000, the fund's Class A shares
provided a 5.77% total return, its Class B shares provided a 5.44% total return
and its Class C shares provided a 5.30% total return.(1) In comparison, the
Lipper Pennsylvania Municipal Debt Funds category average provided a 5.24% total
return for the same period.(2)
We attribute the fund' s good absolute performance to a relatively strong
investment environment for municipal bonds over the past six months, which was
driven primarily by signs of an economic slowdown in the U.S., as well as
positive supply-and-demand factors affecting municipal bonds throughout the
nation. The fund' s good relative performance is largely the result of our
security selection strategy. The fund' s holdings of previously out-of-favor
bonds provided particularly attractive gains.
What is the fund's investment approach?
Our goal is to seek as high a level of federal and Pennsylvania state tax-exempt
income as is practical without undue risk from a diversified portfolio of
municipal bonds. To achieve this objective, we employ two primary strategies.
First, for between one-half and three-quarters of the total fund, we look for
bonds that can potentially offer attractive current income. We typically look
for bonds that can provide consistently high current yields. We also try to
ensure that we select bonds that are most likely to obtain attractive prices if
and when we decide to sell them in the secondary market.
Second, for the remainder of the fund, we try to look for bonds that we believe
have the potential to 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 belief is that these bonds' prices
will rise as they return to favor over time.
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
What other factors influenced the fund's performance?
The fund was positively influenced over the past six months by favorable
economic and market conditions. When the reporting period began on May 1, 2000,
the U.S. and Pennsylvania economies continued to grow strongly, raising concerns
that long-dormant inflationary pressures might reemerge. In response, the
Federal Reserve Board (the "Fed") raised short-term interest rates once during
the reporting period for an increase of 0.50 percentage points. However, signs
soon emerged that the Fed's previous rate hikes were having the desired effect
of slowing the economy. Fewer housing starts, moderating growth and little
change in the core inflation rate may suggest that the Fed's restrictive
monetary policies could be near an end.
In addition, the continuing strength of the Pennsylvania economy helped keep
municipal bond yields relatively low compared to bonds from other states.
Pennsylvania and its municipalities enjoyed higher tax revenues, curtailing
their need to borrow and resulting in a sharply reduced supply of securities
compared to the same period in 1999. In fact, compared to other states, the
fall-off in supply was particularly severe in Pennsylvania. At the same time,
demand has been strong from Pennsylvania residents seeking to protect their
wealth. When demand rises and supply falls, prices of existing bonds tend to
move higher.
In this environment, we received particularly strong returns from some of the
out-of-favor bonds -- including bonds selling at deep discounts to their face
values -- that we had purchased during the 1999 market decline. As these
discount securities returned to favor among investors as their prices rose, we
gradually sold them into a market characterized by steady demand from individual
investors. We redeployed the proceeds of those sales primarily to relatively
defensive, income-oriented bonds with attractive yields and modest price
premiums.
What is the fund's current strategy?
Because we expect that slower economic growth, fewer inflation concerns and
potentially lower interest rates may benefit the municipal bond market, we are
currently on the lookout for out-of-favor bonds that, in our opinion, are likely
to return to favor in the future. We have found a limited number of such
opportunities in bonds issued by Pennsylvania hospitals. Although hospitals are
currently under financial pressure because of the effects of health care reform,
we have focused on bonds with high credit ratings or third-party insurance,
which helps minimize the likelihood of default.
In addition, a relatively large number of municipal bonds are scheduled to
mature shortly after the new year begins, which may set the stage for strong
market performance as investors reinvest their principal. In our opinion, this
should maintain demand for high quality, tax-exempt, fixed-income securities
even if the supply of new municipal bonds changes directions and starts to rise.
November 15, 2000
(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.
HAD THESE CHARGES BEEN REFLECTED, RETURNS WOULD HAVE BEEN LOWER. PAST
PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. SHARE PRICE, YIELD AND
INVESTMENT RETURN FLUCTUATE SUCH THAT UPON REDEMPTION, FUND SHARES MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST. INCOME MAY BE SUBJECT TO STATE
AND LOCAL TAXES FOR NON-PENNSYLVANIA RESIDENTS AND SOME INCOME MAY BE
SUBJECT TO THE FEDERAL ALTERNATIVE MINIMUM TAX (AMT) FOR CERTAIN INVESTORS.
CAPITAL GAINS, IF ANY, ARE FULLY TAXABLE.
(2) SOURCE: LIPPER INC.
The Fund
STATEMENT OF INVESTMENTS
October 31, 2000 (Unaudited)
STATEMENT OF INVESTMENTS
<TABLE>
<CAPTION>
Principal
LONG-TERM MUNICIPAL INVESTMENTS--95.2% Amount ($) Value ($)
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
PENNSYLVANIA--91.0%
Allegheny County Hospital Development Authority, Revenue:
(Health Center--UPMC Health System):
4.50%, 8/1/2015 (Insured; MBIA) 2,000,000 1,769,340
4.75%, 12/15/2016 (Insured; AMBAC) 2,245,000 1,999,240
5%, 11/1/2018 1,000,000 919,210
(Hospital--South Hills Health) 5.125%, 5/1/2029 3,000,000 2,391,420
Allegheny County Industrial Development Authority,
Medical Center Revenue (Presbyterian Medical Center of
Oakmont Pennsylvania, Inc.)
6.75%, 2/1/2026 (Insured; FHA) 1,720,000 1,815,288
Allegheny County Residential Finance Authority, SFMR:
7.40%, 12/1/2022 1,180,000 1,212,592
7.95%, 6/1/2023 700,000 715,029
Bangor Area School District:
4.50%, 3/15/2016 (Insured; FSA) 2,040,000 1,832,593
4.50%, Series A, 3/15/2017 (Insured; FSA) 1,205,000 1,071,775
4.50%, Series B, 3/15/2017 (Insured; FSA) 2,130,000 1,894,507
Beaver County Industrial Development Authority, PCR
(Pennsylvania Power Company Mansfield Project)
7.15%, 9/1/2021 3,000,000 3,079,830
Berks County Municipal Authority, Revenue
(Phoebe--Devitt Homes Project)
5.50%, 5/15/2015 780,000 680,737
Bradford County Industrial Development Authority, SWDR
(International Paper Company Projects) 6.60%, 3/1/2019 4,250,000 4,299,385
Butler Area School District, 4.75%, 10/1/2022 (Insured; FGIC) 2,190,000 1,938,150
Charleroi Area School Authority, School Revenue
Zero Coupon, 10/1/2020 (Insured; FGIC) 2,000,000 655,500
Chester County Health and Education Facilities Authority,
Health System Revenue
(Jefferson Health System) 5.375%, 5/15/2027 2,000,000 1,752,680
Coatesville Area School District
4.50%, 10/1/2016 (Insured; FSA) 6,855,000 6,165,524
Dauphin County General Authority, Revenue
(Office and Parking, Riverfront Office)
6%, 1/1/2025 3,000,000 2,833,770
Erie:
Zero Coupon, 11/15/2019 (Insured; FSA) 1,685,000 578,797
Zero Coupon, 11/15/2020 (Insured; FSA) 2,110,000 681,235
Erie County Higher Education Building Authority,
College Revenue
(Mercyhurst College Project) 5.75%, 3/15/2020 2,000,000 1,904,560
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA (CONTINUED)
Erie School District Zero Coupon,
9/1/2015 (Insured; FSA) 1,135,000 511,068
Franklin County Industrial Development Authority, HR
(The Chambersburg Hospital)
5%, 7/1/2018 (Insured; AMBAC) 1,200,000 1,101,252
Gettysburg Municipal Authority, College Revenue
(Gettysburg College)
4.75%, 8/15/2023 (Insured; AMBAC) 2,000,000 1,745,060
Girtys Run Joint Sewer Authority, Sewer Revenue
4.50%, 11/1/2020 (Insured; FSA) 4,580,000 3,903,809
Harrisburg Authority, Office and Parking Revenue
6%, 5/1/2019 2,000,000 1,851,780
Harrisburg Redevelopment Authority, Revenue:
Zero Coupon, 5/1/2018 (Insured; FSA) 2,750,000 1,013,512
Zero Coupon, 11/1/2018 (Insured; FSA) 2,750,000 985,022
Zero Coupon, 11/1/2019 (Insured; FSA) 2,750,000 924,412
Zero Coupon, 5/1/2020 (Insured; FSA) 2,750,000 891,990
Zero Coupon, 11/1/2020 (Insured; FSA) 2,750,000 866,607
Lancaster Area Sewer Authority, Revenue
4.50%, 4/1/2018 (Insured; MBIA) 5,730,000 4,983,553
Luzerne County Industrial Development Authority,
Exempt Facilities Revenue
(Pennsylvania Gas and Water Company Project)
7.125%, 12/1/2022 4,000,000 4,222,240
McKeesport Area School District, GO
Zero Coupon, 10/1/2021 (Insured; AMBAC) 3,455,000 1,064,175
Montgomery County Higher Educational and Health Authority,
Revenue First Mortgage (Montgomery Income Project)
10.50%, 9/1/2020 2,845,000 2,946,879
Montgomery County Industrial Development Authority, RRR
7.50%, 1/1/2012 (LOC; Banque Paribas) 14,715,000 15,090,968
Montour School District, Notes:
Zero Coupon, 1/1/2024 (Insured; FGIC) 1,155,000 308,246
Zero Coupon, 1/1/2025 (Insured; FGIC) 2,015,000 506,773
Norristown (Asset Guarantee) Zero Coupon, 12/15/2014 1,465,000 668,362
Northampton County Industrial Development Authority, PCR
(Bethlehem Steel) 7.55%, 6/1/2017 5,700,000 5,532,078
Pennsylvania Economic Development Financing Authority:
RRR (Northampton Generating Project) 6.50%, 1/1/2013 6,500,000 6,365,840
Wastewater Treatment Revenue
(Sun Co. Inc.--R and M Project) 7.60%, 12/1/2024 4,240,000 4,442,799
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA (CONTINUED)
Pennsylvania Housing Finance Agency:
6.50%, 7/1/2023 2,750,000 2,846,773
Single Family Mortgage:
6.75%, 4/1/2016 3,000,000 3,127,290
6.85%, 4/1/2016 (Insured; FHA) 3,700,000 3,823,173
6.875%, 10/1/2024 2,000,000 2,095,560
6.90%, 4/1/2025 6,250,000 6,556,375
Pennsylvania Finance Authority, Guaranteed Revenue
(Penn Hills Project):
5.45%, 12/1/2019 (Insured; FGIC) 2,615,000 2,591,910
Zero Coupon, 12/1/2022 (Insured; FGIC) 1,200,000 343,164
Zero Coupon, 12/1/2023 (Insured; FGIC) 3,790,000 1,019,510
Zero Coupon, 12/1/2024 (Insured; FGIC) 3,790,000 960,879
Zero Coupon, 12/1/2025 (Insured; FGIC) 3,790,000 905,431
Pennsylvania Higher Education Assistance Agency,
Student Loan Revenue
7.05%, 10/1/2016 (Insured; AMBAC) 2,500,000 2,696,775
Pennsylvania State Higher Educational Facilities Authority, Revenue:
(State System Higher Education):
5%, 6/15/2019 (Insured; AMBAC) 2,000,000 1,872,520
5%, 6/15/2024 (Insured; FSA) 1,770,000 1,627,568
(UPMC Health System):
4.65%, 8/1/2012 (Insured; FSA) 2,000,000 1,845,480
4.875%, 8/1/2019 (Insured; FSA) 1,250,000 1,108,713
Philadelphia:
4.75%, 5/15/2020 (Insured; FGIC) 8,900,000 7,871,872
Gas Works Revenue:
5%, 7/1/2018 (Insured; FSA) 3,500,000 3,275,755
5%, 7/1/2023 (Insured; FSA) 5,400,000 4,983,228
6.375%, 7/1/2026 (Insured; CMAC) 1,000,000 1,039,660
Philadelphia Hospitals and Higher Education Facilities Authority:
HR (Temple University Hospital) 6.625%, 11/15/2023 6,515,000 6,034,584
Revenue (Jefferson Health System) 5%, 5/15/2011 2,000,000 1,875,840
Philadelphia School District 4.50%, 4/1/2023 (Insured; MBIA) 16,625,000 13,923,105
Pittsburgh and Allegheny County Public Auditorium Authority,
Excise Tax Revenue
(Hotel Room) 5%, 2/1/2024 (Insured, AMBAC) 1,750,000 1,606,815
Pittsburgh Urban Redevelopment Authority Mortgage Revenue:
7.05%, 4/1/2023 1,785,000 1,819,558
(Sidney Square Project) 6.65%, 9/1/2028 3,350,000 3,402,629
Pottstown School District 4.75%, 6/1/2022 (Insured; MBIA) 3,760,000 3,324,554
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA (CONTINUED)
Southeast Delco School District:
Zero Coupon, 2/1/2020 (Insured; MBIA) 2,055,000 696,542
Zero Coupon, 2/1/2023 (Insured; MBIA) 2,055,000 577,743
Southeastern Transportation Authority, Special Revenue
4.75%, 3/1/2024 (Insured; FGIC) 2,775,000 2,422,353
Spring-Ford Area School District
4.75%, 3/1/2022 (Insured; FGIC) 8,935,000 7,881,117
State Public School Building Authority, School Revenue
(School District of York Project)
4.75%, 2/15/2014 (Insured; FGIC) 1,655,000 1,559,937
Upper Merion General Authority, LR
6%, 8/15/2016 1,000,000 1,021,340
Washington County Industrial Development Authority:
PCR (West Pennsylvania Power Company Mitchell)
6.05%, 4/1/2014 Insured; AMBAC) 3,000,000 3,158,340
Revenue (Presbyterian Medical Center)
6.75%, 1/15/2023 (Insured; FHA) 3,000,000 3,126,870
U.S. RELATED--4.2%
Commonwealth of Puerto Rico (Public Improvement)
4.50%, 7/1/2023 5,000,000 4,324,300
Puerto Rico Electric Power Authority, Power Revenue
5%, 7/1/2023 5,500,000 5,152,510
TOTAL LONG-TERM MUNICIPAL INVESTMENTS
(cost $216,308,941) 212,617,360
------------------------------------------------------------------------------------------------------------------------------------
SHORT-TERM MUNICIPAL INVESTMENTS--1.8%
------------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA;
Geisinger Authority Health System, Revenue,
VRDN (Geisinger Health):
4.60% (Prerefunded 12/1/2000) 3,000,000 (a,b) 3,000,000
4.60% 1,100,000 (b) 1,100,000
TOTAL SHORT-TERM MUNICIPAL INVESTMENTS
(cost $4,100,000) 4,100,000
------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $220,408,941) 97.0% 216,717,360
CASH AND RECEIVABLES (NET) 3.0% 6,596,916
NET ASSETS 100.0% 223,314,276
The Fund
</TABLE>
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Summary of Abbreviations
AMBAC American Municipal Bond
Assurance Corporation
CMAC Capital Market Assurance
Corporation
FGIC Financial Guaranty
Insurance Company
FHA Federal Housing Administration
FSA Financial Security Assurance
GO General Obligation
HR Hospital Revenue
LOC Letter of Credit
LR Lease Revenue
MBIA Municipal Bond Investors
Assurance Insurance Corporation
PCR Pollution Control Revenue
RRR Resources Recovery Revenue
SFMR Single Family Mortgage Revenue
SWDR Solid Waste Disposal Revenue
VRDN Variable Rate Demand Notes
Summary of Combined Ratings (Unaudited)
<TABLE>
<CAPTION>
Fitch or Moody's or Standard & Poor's Value (%)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
AAA Aaa AAA 57.8
AA Aa AA 11.0
A A A 9.9
BBB Baa BBB 11.9
F1 MIG1/P1 SP1/A1 1.9
Not Rated (c) Not Rated (c) Not Rated (c) 7.5
100.0
(A) BONDS WHICH ARE PREREFUNDED ARE COLLATERALIZED BY U.S. GOVERNMENT
SECURITIES WHICH ARE HELD IN ESCROW AND ARE USED TO PAY PRINCIPAL AND
INTEREST ON THE MUNICIPAL ISSUE AND TO RETIRE THE BONDS IN FULL AT THE
EARLIEST REFUNDING DATE.
(B) SECURITIES PAYABLE ON DEMAND. VARIABLE INTEREST RATE-SUBJECT TO PERIODIC
CHANGE.
(C) SECURITIES WHICH, WHILE NOT RATED BY FITCH, MOODY'S AND STANDARD & POOR'S
HAVE BEEN DETERMINED BY THE MANAGER TO BE OF COMPARABLE QUALITY TO THOSE
RATED SECURITIES IN WHICH THE FUND MAY INVEST.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
STATEMENT OF ASSETS AND LIABILITES
October 31, 2000 (Unaudited)
Cost Value
--------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of
Investments 220,408,941 216,717,360
Cash 3,054,154
Interest receivable 3,251,373
Receivable for shares of Beneficial Interest subscribed 574,999
Prepaid expenses 6,360
223,604,246
--------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 166,138
Payable for shares of Beneficial Interest redeemed 98,074
Accrued expenses 25,758
289,970
--------------------------------------------------------------------------------
NET ASSETS ($) 223,314,276
--------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 228,762,437
Accumulated net realized gain (loss) on investments (1,756,580)
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 (3,691,581)
--------------------------------------------------------------------------------
NET ASSETS ($) 223,314,276
NET ASSET VALUE PER SHARE
<TABLE>
<CAPTION>
Class A Class B Class C
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Assets ($) 187,007,127 34,349,452 1,957,697
Shares Outstanding 12,145,594 2,232,960 127,096
------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE ($) 15.40 15.38 15.40
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
STATEMENT OF OPERATIONS
Six Months Ended October 31, 2000 (Unaudited)
--------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INTEREST INCOME 6,739,632
EXPENSES:
Management fee--Note 3(a) 611,022
Shareholder servicing costs--Note 3(c) 356,382
Distribution fees--Note 3(b) 95,514
Professional fees 13,708
Custodian fees 11,708
Prospectus and shareholders' reports 10,614
Registration fees 7,645
Trustees' fees and expenses--Note 3(d) 3,045
Loan commitment fees--Note 2 737
Miscellaneous 12,720
TOTAL EXPENSES 1,123,095
INVESTMENT INCOME--NET 5,616,537
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments (1,223,164)
Net unrealized appreciation (depreciation) on investments 7,831,253
NET REALIZED AND UNREALIZED GAIN (LOSS) IN INVESTMENTS 6,608,089
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 12,224,626
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
October 31, 2000 Year Ended
(Unaudited) April 30, 2000
--------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 5,616,537 12,061,317
Net realized gain (loss) on investments (1,223,164) 452,220
Net unrealized appreciation (depreciation)
on investments 7,831,253 (21,787,858)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 12,224,626 (9,274,321)
-------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net:
Class A shares (4,754,440) (9,678,252
Class B shares (824,373) (2,339,115
Class C shares (37,724) (43,950
Net realized gain on investments:
Class A shares - (3,547,348
Class B shares - (861,532
Class C shares - (19,855
TOTAL DIVIDENDS (5,616,537) (16,490,052
-------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS ($):
Net proceeds from shares sold:
Class A shares 10,084,578 31,806,266
Class B shares 2,960,426 9,233,839
Class C shares 701,392 809,497
Dividends reinvested:
Class A shares 2,371,501 7,038,799
Class B shares 547,267 2,185,100
Class C shares 25,962 44,344
Cost of shares redeemed:
Class A shares (11,705,689) (33,930,306)
Class B shares (9,186,076) (35,538,987)
Class C shares (95,581) (376,973)
INCREASE (DECREASE) IN NET ASSETS
FROM BENEFICIAL INTEREST TRANSACTIONS (4,296,220) (18,728,421)
TOTAL INCREASE (DECREASE) IN NET ASSETS 2,311,869 (44,492,794)
--------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 221,002,407 265,495,201
END OF PERIOD 223,314,276 221,002,407
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF CHANGES IN NET ASSETS (continued)
Six Months Ended
October 31, 2000 Year Ended
(Unaudited) April 30, 2000
--------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
CLASS A(A)
Shares sold 663,300 2,029,925
Shares issued for dividends reinvested 155,839 460,266
Shares redeemed (773,034) (2,211,504)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 46,105 278,687
--------------------------------------------------------------------------------
CLASS B(A)
Shares sold 193,959 590,695
Shares issued for dividends reinvested 36,021 142,505
Shares redeemed (607,814) (2,283,203)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (377,834) (1,550,003)
--------------------------------------------------------------------------------
CLASS C
Shares sold 46,465 52,892
Shares issued for dividends reinvested 1,704 2,914
Shares redeemed (6,320) (24,746)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 41,849 31,060
(A) DURING THE PERIOD ENDED OCTOBER 31, 2000, 398,720 CLASS B SHARES
REPRESENTING $6,072,930 WERE AUTOMATICALLY CONVERTED TO 398,471 CLASS A
SHARES AND DURING THE PERIOD ENDED APRIL 30, 2000, 1,477,344 CLASS B SHARES
REPRESENTING $22,894,751 WERE AUTOMATICALLY CONVERTED TO 1,476,804 CLASS A
SHARES.
SEE NOTES TO FINANCIAL STATEMENTS.
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the
fiscal periods indicated. All information (except portfolio turnover rate)
reflects financial results for a single fund share. Total return shows how much
your investment in the fund would have increased (or decreased) during each
period , assuming you had reinvested all dividends and distributions. These
figures have been derived from the fund's financial statements.
<TABLE>
<CAPTION>
Six Months Ended
October 31, 2000 Year Ended April 30,
----------------------------------------------------------------
CLASS A SHARES (Unaudited) 2000 1999 1998 1997 1996
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value,
beginning of period 14.94 16.56 16.68 16.23 16.17 16.12
Investment Operations:
Investment income--net .39 .79 .82 .85 .85 .87
Net realized and unrealized gain
(loss) on investments .46 (1.33) .16 .71 .24 .32
Total from Investment Operations .85 (.54) .98 1.56 1.09 1.19
Distributions:
Dividends from investment
income--net (.39) (.79) (.82) (.85) (.85) (.87)
Dividends from net realized
gain on investments -- (.29) (.28) (.26) (.18) (.27)
Total Distributions (.39) (1.08) (1.10) (1.11) (1.03) (1.14)
Net asset value, end of period 15.40 14.94 16.56 16.68 16.23 16.17
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(A) 11.45(b) (3.24) 5.97 9.83 6.89 7.46
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to
average net assets .92(b) .94 .92 .92 .92 .92
Ratio of net investment income
to average net assets 5.15(b) 5.12 4.90 5.09 5.22 5.28
Portfolio Turnover Rate 4.99(c) 34.29 48.14 34.82 60.57 52.69
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 187,007 180,760 195,728 196,055 201,229 216,802
(A) EXCLUSIVE OF SALES CHARGE.
(B) ANNUALIZED.
(C) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS (continued)
Six Months Ended
October 31, 2000 Year Ended April 30,
----------------------------------------------------------------
CLASS B SHARES (Unaudited) 2000 1999 1998 1997 1996
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value,
beginning of period 14.93 16.55 16.67 16.23 16.16 16.11
Investment Operations:
Investment income--net .35 .71 .74 .77 .77 .79
Net realized and unrealized gain
(loss) on investments .45 (1.33) .16 .70 .25 .32
Total from Investment Operations .80 (.62) .90 1.47 1.02 1.11
Distributions:
Dividends from investment
income--net (.35) (.71) (.74) (.77) (.77) (.79)
Dividends from net realized
gain on investments -- (.29) (.28) (.26) (.18) (.27)
Total Distributions (.35) (1.00) (1.02) (1.03) (.95) (1.06)
Net asset value, end of period 15.38 14.93 16.55 16.67 16.23 16.16
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(A) 10.79(b) (3.75) 5.43 9.20 6.41 6.92
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to
average net assets 1.44(b) 1.46 1.43 1.43 1.43 1.43
Ratio of net investment income
to average net assets 4.63(b) 4.57 4.39 4.57 4.71 4.76
Portfolio Turnover Rate 4.99(c) 34.29 48.14 34.82 60.57 52.69
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 34,349 38,968 68,869 74,855 71,671 72,610
(A) EXCLUSIVE OF SALES CHARGE.
(B) ANNUALIZED.
(C) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended
October 31, 2000 Year Ended April 30,
----------------------------------------------------------------
CLASS C SHARES (Unaudited) 2000 1999 1998 1997 1996(a)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value,
beginning of period 14.95 16.57 16.69 16.23 16.16 16.18
Investment income--net .34 .67 .69 .70 .69 .53
Net realized and unrealized gain
(loss) on investments .45 (1.33) .16 .72 .25 .25
Total from Investment Operations .79 (.66) .85 1.42 .94 .78
Distributions:
Dividends from investment
income--net (.34) (.67) (.69) (.70) (.69) (.53)
Dividends from net realized
gain on investments - (.29) (.28) (.26) (.18) (.27)
Total Distributions (.34) (.96) (.97) (.96) (.87) (.80)
Net asset value, end of period 15.40 14.95 16.57 16.69 16.23 16.16
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(B) 10.51(c) (3.98) 5.16 8.91 5.92 6.71(c)
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to
average net assets 1.66(c) 1.70 1.69 1.69 1.83 1.70(c)
Ratio of net investment income
to average net assets 4.35(c) 4.35 4.07 3.98 4.28 4.46(c)
Portfolio Turnover Rate 4.99(d) 34.39 48.14 34.82 60.57 52.69
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 1,958 1,274 898 463 32 21
(A) FROM AUGUST 15, 1995 (COMMENCEMENT OF INITIAL OFFERING) TO APRIL 30, 1996.
(B) EXCLUSIVE OF SALES CHARGE.
(C) ANNUALIZED.
(D) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
</TABLE>
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus Premier State Municipal Bond Fund (the "Trust") is registered under the
Investment Company Act of 1940, 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., which is a wholly-owned
subsidiary of Mellon Financial Corporation.
Dreyfus Service Corporation (the "Distributor"), a wholly-owned subsidiary of
the Manager, is the distributor of the fund's shares. The fund is authorized to
issue an unlimited number of $.001 par value shares of Beneficial Interest 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. Class B shares automatically convert to Class A shares after
six years. 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
series. Expenses directly attributable to each series are charged to that
series' operations; expenses which are applicable to all series are allocated
among them on a pro rata basis.
The fund' s financial statements are prepared in accordance with accounting
principles generally accepted in the United States, which may require the use of
management estimates and assumptions. Actual results could differ from those
estimates.
(a) Portfolio valuation: Investments in securities (excluding options and
financial futures on municipal and U.S. treasury securities) are valued each
business day by an independent pricing service ("Service") approved by the Board
of Trustees. Investments for which quoted bid prices are readily available and
are representative of the bid side of the market in the judgment of the Service
are valued at the mean between the quoted bid prices (as obtained by the Service
from dealers in such securities) and asked prices (as calculated by the Service
based upon its evaluation of the market for such securities). Other investments
(which constitute a majority of the portfolio securities) are carried at fair
value as determined by the Service, based on methods which include consideration
of: yields or prices of municipal securities of comparable quality, coupon,
maturity and type; indications as to values from dealers; and general market
conditions. Options and financial futures on municipal and U.S. treasury
securities are valued at the last sales price on the securities exchange on
which such securities are primarily traded or at the last sales price on the
national securities market on each business day. Investments not listed on an
exchange or the national securities market, or securities for which there were
no transactions, are valued at the average of the most recent bid and asked
prices. Bid price is used when no asked price is available.
(b) Securities transactions and investment income: Securities transactions are
recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Interest income,
adjusted for amortization of premiums and original issue discounts on
investments, is earned from settlement date and recognized on the accrual basis.
Securities purchased or sold on a when-issued or delayed-delivery basis may be
settled a month or more after the trade date. Under the terms of the custody
agreement, the fund received net earnings credits of $5,520 during the period
ended October 31, 2000 based on available cash balances left on deposit. Income
earned under this arrangement is included in interest income.
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
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.
(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 $500 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
October 31, 2000, 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 Distributor retained $3,161 during the period ended October 31, 2000, from
commissions earned on sales of the fund's shares.
(b) Under the Distribution Plan (the "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 October 31, 2000, Class B and
Class C shares were charged $89,012 and $6,502, respectively, pursuant to the
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 October 31, 2000 Class A, Class B and Class C
shares were charged $231,064, $44,506, and $2,167, respectively, pursuant to the
Shareholder Services Plan.
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
The fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of the
Manager, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the fund. During the period
ended October 31, 2000, the fund was charged $74,490 pursuant to the transfer
agency agreement.
(d) Each Board member also serves as a Board member of other funds within the
Dreyfus complex (collectively, the "Fund Group"). Each Board member who is not
an "affiliated person" as defined in the Act receives an annual fee of $50,000
and an attendance fee of $6,500 for each meeting attended and $500 for telephone
meetings. These fees are allocated among the funds in the Fund Group. The
Chairman of the Board receives an additional 25% of such compensation. Subject
to the fund' s Emeritus Program Guidelines, Emeritus Board members, if any,
receive 50% of the Trust's annual retainer fee and per meeting fee paid at the
time the Board member achieves emeritus status.
NOTE 4--Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding
short-term securities, during the period ended October 31, 2000, amounted to
$10,620,547 and $20,649,714, respectively.
At October 31, 2000, accumulated net unrealized depreciation on investments was
$3,691,581, consisting of $3,221,395 gross unrealized appreciation and
$6,912,976 gross unrealized depreciation.
At October 31, 2000, 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).
NOTES
For More Information
Dreyfus Premier 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
100 Church Street
New York, NY 10286
Transfer Agent & Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166
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
(c) 2000 Dreyfus Service Corporation 058SA0010
Dreyfus Premier
State Municipal
Bond Fund,
Texas Series
SEMIANNUAL REPORT October 31, 2000
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured * Not Bank-Guaranteed * May Lose Value
Contents
THE FUND
--------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Statement of Investments
10 Statement of Assets and Liabilities
11 Statement of Operations
12 Statement of Changes in Net Assets
14 Financial Highlights
17 Notes to Financial Statements
FOR MORE INFORMATION
---------------------------------------------------------------------------
Back Cover
The Fund
Dreyfus Premier
State Municipal Bond Fund,
Texas Series
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Premier State
Municipal Bond Fund, Texas Series, covering the six-month period from May 1,
2000 through October 31, 2000. Inside, you'll find valuable information about
how the fund was managed during the reporting period, including a discussion
with the fund's portfolio manager, Douglas Gaylor.
Despite some modest fluctuations because of changing economic conditions,
municipal bond prices generally rose modestly over the six-month reporting
period. Most sectors of the municipal bond market also benefited from slowing
economic growth as well. Additionally, the moderating effects of the Federal
Reserve Board' s (the "Fed") interest-rate hikes during the first half of 2000
helped the Fed to achieve its goal of slowing the U.S. economy. Other factors
such as higher energy prices and a weak euro also served to slow economic
growth.
In general, the overall investment environment that prevailed in the second half
of the 1990s had provided returns well above their long-term averages,
establishing unrealistic expectations for some investors. We believe that as the
risks of the stock market have become more apparent recently, the relative
stability and income potential of municipal bonds can make them an attractive
investment as part of a well-balanced portfolio.
For more information about the economy and financial markets, we encourage you
to visit the Market Commentary section of our website at www.dreyfus.com. Or, to
speak with a Dreyfus customer service representative, call us at 1-800-782-6620.
Thank you for investing in Dreyfus Premier State Municipal Bond Fund, Texas
Series.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
November 15, 2000
DISCUSSION OF FUND PERFORMANCE
Douglas Gaylor, Portfolio Manager
How did Dreyfus Premier State Municipal Bond Fund, Texas Series perform during
the period?
For the six-month period ended October 31, 2000, the fund's Class A shares
provided a 5.85% total return, its Class B shares provided a 5.59% total return
and its Class C shares provided a 5.46% total return.(1) In comparison, the
Lipper Texas Municipal Debt Funds category average provided a 5.11% total return
for the same period.(2)
We attribute the fund' s good absolute performance to a relatively strong
investment environment for municipal bonds over the past six months, which was
driven primarily by signs of an economic slowdown in the U.S., as well as
positive supply-and-demand factors affecting municipal bonds throughout the
nation. The fund' s good relative performance is largely the result of our
security selection strategy. The fund' s holdings of previously out-of-favor
bonds provided particularly attractive gains.
What is the fund's investment approach?
Our goal is to seek as high a level of federal and Texas state tax-exempt income
as is practical without undue risk from a diversified portfolio of municipal
bonds. To achieve this objective, we employ two primary strategies. First, for
between one-half and three-quarters of the total fund, we look for bonds that
can potentially offer attractive current income. We typically look for bonds
that can provide consistently high current yields. We also try to ensure that we
select bonds that are most likely to obtain attractive prices if and when we
decide to sell them in the secondary market.
Second, for the remainder of the fund, we try to look for bonds that we believe
have the potential to 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 belief is that these bonds' prices
will rise as they return to favor over time.
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
What other factors influenced the fund's performance?
The fund was positively influenced over the past six months by favorable
economic and market conditions. When the reporting period began on May 1, 2000,
the U.S. and Texas economies continued to grow strongly, raising concerns that
long-dormant inflationary pressures might reemerge. In response, the Federal
Reserve Board (the "Fed" ) raised short-term interest rates once during the
reporting period for an increase of 0.50 percentage points. However, signs soon
emerged that the Fed' s previous rate hikes were having the desired effect of
slowing the economy. Fewer housing starts, moderating growth and little change
in the core inflation rate may suggest that the Fed's restrictive monetary
policies could be near an end.
In addition, the continuing strength of the Texas economy helped keep municipal
bond yields relatively low compared to taxable bonds. Texas and its
municipalities enjoyed higher revenues during the reporting period, curtailing
their need to borrow and resulting in a reduced supply of securities compared to
the same period in 1999. When supply falls and demand rises or remains steady,
prices of existing bonds tend to move higher.
In this environment, we received particularly strong returns from some of the
out-of-favor bonds -- including bonds selling at deep discounts to their face
values -- that we had purchased during the 1999 market decline. As these
discount securities returned to favor among investors and their prices rose, we
gradually sold them. We redeployed the proceeds of those sales primarily to
relatively defensive, income-oriented bonds with attractive yields and modest
price premiums.
What is the fund's current strategy?
Because we expect that slower economic growth, fewer inflation concerns and
potentially lower interest rates may benefit the municipal bond market, we are
currently on the lookout for out-of-favor Texas bonds that, in our opinion, are
likely to return to favor in the future. We have found a limited number of such
opportunities in bonds issued by hospitals. Although hospitals are currently
under financial pressure because of the effects of health care reform, we have
focused on bonds with high credit ratings or third-party insurance, which helps
minimize the likelihood of default.
In addition, a relatively large number of municipal bonds are scheduled to
mature shortly after the new year begins, which may set the stage for strong
market performance as investors reinvest their principal. In our opinion, this
should maintain demand for high quality, tax-exempt, fixed-income securities
even if the supply of new municipal bonds changes directions and starts to rise
November 15, 2000
(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.
HAD THESE CHARGES BEEN REFLECTED, RETURNS WOULD HAVE BEEN LOWER. PAST
PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. SHARE PRICE, YIELD AND
INVESTMENT RETURN FLUCTUATE SUCH THAT UPON REDEMPTION, FUND SHARES MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST. INCOME MAY BE SUBJECT TO STATE
AND LOCAL TAXES FOR NON-TEXAS RESIDENTS AND SOME INCOME MAY BE SUBJECT TO
THE FEDERAL ALTERNATIVE MINIMUM TAX (AMT) FOR CERTAIN INVESTORS. CAPITAL
GAINS, IF ANY, ARE FULLY TAXABLE. RETURN FIGURES PROVIDED REFLECT THE
ABSORPTION OF FUND EXPENSES BY THE DREYFUS CORPORATION PURSUANT TO AN
UNDERTAKING IN EFFECT THAT MAY BE EXTENDED, TERMINATED OR MODIFIED AT ANY
TIME. HAD THESE EXPENSES NOT BEEN ABSORBED, THE FUND'S RETURN WOULD HAVE
BEEN LOWER.
(2) SOURCE: LIPPER INC.
The Fund
STATEMENT OF INVESTMENTS
October 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
Principal
LONG-TERM INVESTMENTS--97.1% Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
TEXAS--95.7%
Aledo Independent School District, Unlimited Tax School Building
(Permanent School Fund Guaranteed)
Zero Coupon, 2/15/2014 1,225,000 594,897
Brazos Higher Education Authority Inc., Student Loan Revenue
6.80%, 12/1/2004 700,000 742,931
Clear Creek Independent School District
(Permanent School Fund Guaranteed)
4.25%, 2/1/2013 1,475,000 1,356,026
Coastal Water Authority, Water Conveyance System
6.25%, 12/15/2017 (Insured; AMBAC) 5,885,000 5,946,322
Dallas-Fort Worth Regional Airport, Joint Revenue
6.625%, 11/1/2021 (Insured; FGIC) 1,250,000 1,276,500
Denison Hospital Authority, HR
(Texoma Medical Center Project) 6.125%, 8/15/2017 750,000 624,832
Eanes Independent School District
(Permanent School Fund Guaranteed)
4.50%, 8/1/2017 1,400,000 1,241,744
El Paso Housing Authority, Multi-Family Revenue
(Section 8 Projects) 6.25%, 12/1/2009 2,510,000 2,561,907
Grape Creek-Pulliam Independent School District
Public Facility Corp., School Facility LR
7.25%, 5/15/2021 (Prerefunded 5/15/2006) 2,200,000 (a) 2,499,552
Grapevine-Colleyville Independent School District, Unlimited
Tax School Building (Permanent School Fund Guaranteed):
Zero Coupon, 8/15/2017 2,590,000 1,002,848
Zero Coupon, 8/15/2018 2,390,000 867,044
Gulf Coast Waste Disposal Authority, SWDR
(Champion International Corp. Project) 7.25%, 4/1/2017 560,000 578,861
Houston, Public Improvement 4.75%, 3/1/2016 1,160,000 1,068,882
Houston Independent School District
(Permanent School Fund Guaranteed):
Zero Coupon, 8/15/2015 3,000,000 1,344,750
4.75%, 2/15/2022 2,500,000 2,204,300
Irving Independent School District
(Permanent School Fund Guaranteed):
Zero Coupon, 2/15/2010 1,985,000 1,244,039
Zero Coupon, 2/15/2016 1,000,000 431,600
Katy Independent School District, Limited Tax Refunding
and School Building (Permanent School Fund Guaranteed)
4.75%, 2/15/2021 1,295,000 1,142,527
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
-----------------------------------------------------------------------------------------------------------------------------------
TEXAS (CONTINUED)
La Porte Independent School District
(Permanent School Fund Guaranteed)
4.50%, 2/15/2017 1,000,000 885,840
Lakeway Municipal Utility District
Zero Coupon, 9/1/2013 (Insured; FGIC) 1,850,000 932,751
Leon County, PCR (Nucor Corp. Project) 7.375%, 8/1/2009 750,000 777,878
Lower Colorado River Authority, Revenue, Junior Lein
4.50%, 1/1/2017 (Insured; FSA) 1,410,000 1,279,166
Round Rock Independent School District
(Permanent School Fund Guaranteed)
4.50%, 8/1/2016 1,950,000 1,756,638
Texas:
(Veterans Housing Assistance) 6.80%, 12/1/2023 2,145,000 2,231,444
(Water Development) 5%, 8/1/2020 250,000 233,465
Texas Department Housing and Community Affairs, MFHR
(Harbors and Plumtree) 6.35%, 7/1/2016 1,300,000 1,321,125
Texas Higher Education Coordinating Board,
College Student Loan Revenue
7.30%, 10/1/2003 240,000 249,307
Texas National Research Laboratory Commission Financing Corp.,
LR (Superconducting Super Collider) 6.95%, 12/1/2012 700,000 809,256
Texas Public Finance Authority, Building Revenue
(State Preservation Board Project):
4.50%, 2/1/2018 (Insured; AMBAC) 2,805,000 2,456,984
4.50%, 2/1/2019 (Insured; AMBAC) 2,165,000 1,879,350
Texas Public Property Finance Corp., Revenue
(Mental Health and Retardation)
8.875%, 9/1/2011 (Prerefunded 9/1/2001) 455,000 (a) 479,597
Texas Water Development Board, Revenue,
State Revolving Fund
4.75%, 7/15/2020 1,695,000 1,512,143
Tomball Hospital Authority, Revenue 6%, 7/1/2013 5,000,000 4,574,150
Tomball Independent School District
(Permanent School Fund Guaranteed) 4.75%, 2/15/2020 2,515,000 2,236,313
Tyler Health Facility Development Corp., HR
(East Texas Medical Center Regional Health)
6.625%, 11/1/2011 1,135,000 1,006,688
University of Texas (Financing System) University Revenues
3.75%, 8/15/2018 5,000,000 3,903,900
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
TEXAS (CONTINUED)
Victoria, Utility System Revenue
4.75%, 12/1/2022 (Insured; MBIA) 1,105,000 965,858
Waxahachie Community Development Corp., Sales Tax Revenue:
Zero Coupon, 8/1/2020 (Insured; MBIA) 1,430,000 445,760
Zero Coupon, 8/1/2023 (Insured; MBIA) 1,000,000 256,560
West Side Calhoun County Navigation District, SWDR
(Union Carbide Chemical and Plastics) 8.20%, 3/15/2021 500,000 513,890
U.S. RELATED--1.4%
Puerto Rico (Public Improvement)
4.50%, 7/1/2023 (Insured; FSA) 1,000,000 864,860
TOTAL LONG-TERM MUNICIPAL INVESTMENTS
(cost $59,527,339) 58,302,485
-----------------------------------------------------------------------------------------------------------------------------------
SHORT-TERM MUNICIPAL INVESTMENTS--1.7%
-----------------------------------------------------------------------------------------------------------------------------------
Brazos River Harbor Navigation District, Harbor Revenue, VRDN
(BASF Corp. Project) 4.75%
(cost $1,000,000) 1,000,000 (b) 1,000,000
-----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $60,527,339) 98.8% 59,302,485
CASH AND RECEIVABLES (NET) 1.2% 717,454
NET ASSETS 100.0% 60,019,939
</TABLE>
Summary of Abbreviations
AMBAC American Municipal Bond
Assurance Corporation
FGIC Financial Guaranty Insurance
Company
FSA Financial Security Assurance
HR Hospital Revenue
LR Lease Revenue
MBIA Municipal Bond Investors
Assurance Insurance
Corporation
MFHR Multi-Family Housing Revenue
PCR Pollution Control Revenue
SWDR Solid Waste Disposal Revenue
VRDN Variable Rate Demand Notes
Summary of Combined Ratings (Unaudited)
<TABLE>
<CAPTION>
Fitch or Moody's or Standard & Poor's Value (%)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
AAA Aaa AAA 65.5
AA Aa AA 7.3
A A A 8.2
BBB Baa BBB 10.6
B B B 1.7
F1 MIG1/P1 SP1/A1 1.7
Not Rated(c) Not Rated(c) Not Rated(c) 5.0
100.0
(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) SECURITIES PAYABLE ON DEMAND. VARIABLE INTEREST RATE--SUBJECT TO PERIODIC
CHANGE.
(C) 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.
(D) AT OCTOBER 31, 2000, 27.2% OF THE FUND'S NET ASSETS ARE GUARANTEED BY
PERMANENT SCHOOL FUND.
(E) AT OCTOBER 31, 2000, THE FUND HAD $15,229,889 (25.4%) OF NET ASSETS
INVESTED IN SECURITIES WHOSE PAYMENT OF PRINCIPAL AND INTEREST IS DEPENDENT
UPON REVENUES GENERATED FROM CITY-MUNICIPAL GENERAL OBLIGATIONS PROJECTS.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
STATEMENT OF ASSETS AND LIABILITIES
October 31, 2000 (Unaudited)
Cost Value
--------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of Investments 60,527,339 59,302,485
Interest receivable 947,830
Receivable for shares of Beneficial Interest subscribed 14,843
Prepaid expenses 6,628
60,271,786
--------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 38,333
Cash overdraft due to Custodian 111,536
Payable for shares of Beneficial Interest redeemed 87,199
Accrued expenses 14,779
251,847
--------------------------------------------------------------------------------
NET ASSETS ($) 60,019,939
--------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 61,335,241
Accumulated net realized gain (loss) on investments (90,448)
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 (1,224,854)
-------------------------------------------------------------------------------
NET ASSETS ($) 60,019,939
NET ASSET VALUE PER SHARE
<TABLE>
<CAPTION>
Class A Class B Class C
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Assets ($) 53,438,394 6,300,535 281,010
Shares Outstanding 2,677,606 315,772 14,089
------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE ($) 19.96 19.95 19.95
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
STATEMENT OF OPERATIONS
Six Months Ended October 31, 2000 (Unaudited)
--------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INTEREST INCOME 1,757,447
EXPENSES:
Management fee--Note 3(a) 166,849
Shareholder servicing costs--Note 3(c) 91,304
Distribution fees--Note 3(b) 17,961
Registration fees 9,082
Prospectus and shareholders' reports 7,784
Professional fees 5,295
Custodian fees 2,986
Trustees' fees and expenses--Note 3(d) 854
Loan commitment fees--Note 2 203
Miscellaneous 5,023
TOTAL EXPENSES 307,341
Less-reduction in management fee due to
undertaking--Note 3(a) (31,522)
NET EXPENSES 275,819
INVESTMENT INCOME--NET 1,481,628
-------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments 20,916
Net unrealized appreciation (depreciation) on investments 1,921,678
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS 1,942,594
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 3,424,222
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
October 31, 2000 Year Ended
(Unaudited) April 30, 2000
-------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 1,481,628 3,292,246
Net realized gain (loss) on investments 20,916 211,363
Net unrealized appreciation (depreciation)
on investments 1,921,678 (6,522,846)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 3,424,222 (3,019,237)
--------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net:
Class A shares (1,325,104) (2,765,973)
Class B shares (150,926) (504,058)
Class C shares (5,598) (22,215)
Net realized gain on investments:
Class A shares -- (774,143)
Class B shares -- (135,906)
Class C shares -- (8,474)
TOTAL DIVIDENDS (1,481,628) (4,210,769)
--------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS ($):
Net proceeds from shares sold:
Class A shares 2,212,572 7,421,968
Class B shares 130,187 924,779
Class C shares 24,057 248,924
Dividends reinvested:
Class A shares 574,534 1,661,140
Class B shares 82,650 401,134
Class C shares 2,626 20,594
Cost of shares redeemed:
Class A shares (3,534,071) (11,288,329)
Class B shares (1,607,578) (9,561,557)
Class C shares (18,585) (555,206)
INCREASE (DECREASE) IN NET ASSETS FROM
BENEFICIAL INTEREST TRANSACTIONS (2,133,608) (10,726,553)
TOTAL INCREASE (DECREASE) IN NET ASSETS (191,014) (17,956,559)
-------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 60,210,953 78,167,512
END OF PERIOD 60,019,939 60,210,953
SEE NOTES TO FINANCIAL STATEMENTS.
Six Months Ended
October 31, 2000 Year Ended
(Unaudited) April 30, 2000
-------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
CLASS A(A)
Shares sold 114,376 368,896
Shares issued for dividends reinvested 29,240 84,082
Shares redeemed (180,685) (569,598)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (37,069) (116,620)
-------------------------------------------------------------------------------
CLASS B(A)
Shares sold 6,644 44,887
Shares issued for dividends reinvested 4,211 20,194
Shares redeemed (82,365) (474,815)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (71,510) (409,734)
-------------------------------------------------------------------------------
CLASS C
Shares sold 1,219 12,088
Shares issued for dividends reinvested 134 1,034
Shares redeemed (959) (28,464)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 394 (15,342)
(A) DURING THE PERIOD ENDED OCTOBER 31, 2000, 35,260 CLASS B SHARES
REPRESENTING $690,397 WERE AUTOMATICALLY CONVERTED TO 35,261 CLASS A SHARES
AND DURING THE PERIOD ENDED APRIL 30, 2000, 279,353 CLASS B SHARES
REPRESENTING $5,593,499 WERE AUTOMATICALLY CONVERTED TO 279,364 CLASS A
SHARES.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the
fiscal periods indicated. All information (except portfolio turnover rate)
reflects financial results for a single fund share. Total return shows how much
your investment in the fund would have increased (or decreased) during each
period, assuming you had reinvested all dividends and distributions. These
figures have been derived from the fund's financial statements.
<TABLE>
<CAPTION>
Six Months Ended
October 31, 2000 Year Ended April 30,
----------------------------------------------------------------
CLASS A SHARES (Unaudited) 2000 1999 1998 1997 1996
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value,
beginning of period 19.33 21.37 21.68 20.99 20.84 20.69
Investment Operations:
Investment income--net .49 .98 1.00 1.08 1.17 1.20
Net realized and unrealized
gain (loss) on investments .63 (1.77) .21 .99 .41 .45
Total from Investment Operations 1.12 (.79) 1.21 2.07 1.58 1.65
Distributions:
Dividends from investment
income--net (.49) (.98) (1.00) (1.08) (1.17) (1.20)
Dividends from net realized
gain on investments -- (.27) (.52) (.30) (.26) (.30)
Total Distributions (.49) (1.25) (1.52) (1.38) (1.43) (1.50)
Net asset value, end of period 19.96 19.33 21.37 21.68 20.99 20.84
-----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) (A) 11.60(b) (3.62) 5.66 10.03 7.74 8.06
-----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to
average net assets .85(b) .85 .85 .72 .37 .37
Ratio of net investment
income to average net assets 4.94(b) 4.95 4.59 4.96 5.54 5.64
Decrease reflected in above
expense ratios due to
undertakings by
The Dreyfus Corporation .10(b) .14 .07 .18 .55 .55
Portfolio Turnover Rate 1.59(c) 22.70 49.67 27.18 61.22 49.24
-----------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 53,438 52,464 60,516 59,758 60,849 62,864
(A) EXCLUSIVE OF SALES CHARGE.
(B) ANNUALIZED.
(C) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended
October 31, 2000 Year Ended April 30,
----------------------------------------------------------------
CLASS B SHARES (Unaudited) 2000 1999 1998 1997 1996
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value,
beginning of period 19.32 21.37 21.68 20.98 20.84 20.69
Investment Operations:
Investment income--net .44 .88 .89 .97 1.06 1.09
Net realized and unrealized
gain (loss) on investments .63 (1.78) .21 1.00 .40 .45
Total from Investment Operations 1.07 (.90) 1.10 1.97 1.46 1.54
Distributions:
Dividends from investment
income--net (.44) (.88) (.89) (.97) (1.06) (1.09)
Dividends from net realized
gain on investments -- (.27) (.52) (.30) (.26) (.30)
Total Distributions (.44) (1.15) (1.41) (1.27) (1.32) (1.39)
Net asset value, end of period 19.95 19.32 21.37 21.68 20.98 20.84
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) (A) 11.09(b) (4.14) 5.13 9.53 7.15 7.51
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to
average net assets 1.35(b) 1.35 1.35 1.23 .88 .88
Ratio of net investment income
to average net assets 4.45(b) 4.41 4.09 4.44 5.03 5.13
Decrease reflected in above
expense ratios due to
undertakings by
The Dreyfus Corporation .12(b) .16 .08 .18 .55 .55
Portfolio Turnover Rate 1.59(c) 22.70 49.67 27.18 61.22 49.24
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 6,301 7,483 17,031 20,454 17,396 17,461
(A) EXCLUSIVE OF SALES CHARGE.
(B) ANNUALIZED.
(C) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS (CONTINUED)
Six Months Ended
October 31, 2000 Year Ended April 30,
----------------------------------------------------------------
CLASS C SHARES (Unaudited) 2000 1999 1998 1997 1996(a)
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value,
beginning of period 19.31 21.36 21.67 20.97 20.83 20.78
Investment Operations:
Investment income--net .41 .84 .83 .91 .99 .73
Net realized and unrealized
gain (loss) on investments .64 (1.78) .21 1.00 .40 .35
Total from Investment Operations 1.05 (.94) 1.04 1.91 1.39 1.08
Distributions:
Dividends from investment
income--net (.41) (.84) (.83) (.91) (.99) (.73)
Dividends from net realized
gain on investments -- (.27) (.52) (.30) (.26) (.30)
Total Distributions (.41) (1.11) (1.35) (1.21) (1.25) (1.03)
Net asset value, end of period 19.95 19.31 21.36 21.67 20.97 20.83
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) (B) 10.83(c) (4.33) 4.86 9.24 6.79 7.29(c)
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to
average net assets 1.60(c) 1.60 1.60 1.52 1.19 1.18(c)
Ratio of net investment income
to average net assets 4.19(c) 4.15 3.79 4.10 4.57 4.77(c)
Decrease reflected in above
expense ratios due to
undertakings by
The Dreyfus Corporation .14(c) .15 .11 .15 .54 .58(c)
Portfolio Turnover Rate 1.59(d) 22.70 49.67 27.18 61.22 49.24
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 281 265 620 261 129 1
(A) FROM AUGUST 15, 1995 (COMMENCEMENT OF INITIAL OFFERING) TO APRIL 30, 1996.
(B) EXCLUSIVE OF SALES CHARGE.
(C) ANNUALIZED.
(D) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus Premier State Municipal Bond Fund (the "Trust") is registered under the
Investment Company Act of 1940, 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, which is a wholly-owned subsidiary
of Mellon Financial Corporation.
Dreyfus Service Corporation (the "Distributor"), a wholly-owned subsidiary of
the Manager, is the distributor of the fund's shares. The fund is authorized to
issue an unlimited number of $.001 par value shares of Beneficial Interest 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. Class B shares automatically convert to Class A shares after
six years. 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
series. Expenses directly attributable to each series are charged to that
series' operations; expenses which are applicable to all series are allocated
among them on a pro rata basis.
The fund' s financial statements are prepared in accordance with accounting
principles generally accepted in the United States, which may require the use of
management estimates and assumptions. Actual results could differ from those
estimates.
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (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 $2,573 during the period
ended October 31, 2000 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.
(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 $500 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
October 31, 2000, 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,
2000 through October 31, 2000
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
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 fees,
commitment fees, interest on borrowings and extraordinary expenses, exceeded an
annual rate of .85 of 1% of the value of the fund's average daily net assets.
The reduction in management fee, pursuant to the undertaking, amounted to
$31,522 during the period ended October 31, 2000.
(b) Under the Distribution Plan (the "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 October 31, 2000, Class B and
Class C shares were charged $16,958 and $1,003, respectively, pursuant to the
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 October 31, 2000, Class A, Class B and Class C shares
were charged $67,027, $8,479 and $334, respectively, pursuant to the Shareholder
Services Plan.
The fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of the
Manager, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the fund. During the period
ended October 31, 2000, the fund was charged $12,945 pursuant to the transfer
agency agreement.
(d) Each Board member also serves as a Board member of other funds within the
Dreyfus complex (collectively, the "Fund Group"). Each Board member who is not
an "affiliated person" as defined in the Act receives an annual fee of $50,000
and an attendance fee of $6,500 for each meeting attended and $500 for telephone
meetings. These fees are allocated among the funds in the Fund Group. The
Chairman of the Board receives an additional 25% of such compensation. Subject
to the fund' s Emeritus Program Guidelines, Emeritus Board members, if any,
receive 50% of the Trust's annual retainer fee and per meeting fee paid at the
time the Board member achieves emeritus status.
NOTE 4--Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding
short-term securities, during the period ended October 31, 2000, amounted to
$921,880 and $2,867,650, respectively.
At October 31, 2000, accumulated net unrealized depreciation on investments was
$1,224,854, consisting of $926,202 gross unrealized appreciation and $2,151,056
gross unrealized depreciation.
At October 31, 2000, 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
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
100 Church Street
New York, NY 10286
Transfer Agent & Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166
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
(c) 2000 Dreyfus Service Corporation 061SA0010
Dreyfus Premier
State Municipal
Bond Fund,
Virginia Series
SEMIANNUAL REPORT October 31, 2000
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured * Not Bank-Guaranteed * May Lose Value
Contents
THE FUND
--------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Statement of Investments
10 Statement of Assets and Liabilities
11 Statement of Operations
12 Statement of Changes in Net Assets
14 Financial Highlights
17 Notes to Financial Statements
FOR MORE INFORMATION
---------------------------------------------------------------------------
Back Cover
The Fund
Dreyfus Premier
State Municipal Bond Fund,
Virginia Series
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Premier State
Municipal Bond Fund, Virginia Series, covering the six-month period from May 1,
2000 through October 31, 2000. Inside, you'll find valuable information about
how the fund was managed during the reporting period, including a discussion
with the fund's portfolio manager, Samuel Weinstock.
Despite some modest fluctuations because of changing economic conditions,
municipal bond prices generally rose modestly over the six-month reporting
period. Most sectors of the municipal bond market also benefited from slowing
economic growth as well. Additionally, the moderating effects of the Federal
Reserve Board' s (the "Fed") interest-rate hikes during the first half of 2000
helped the Fed to achieve its goal of slowing the U.S. economy. Other factors
such as higher energy prices and a weak euro also served to slow economic
growth.
In general, the overall investment environment that prevailed in the second half
of the 1990s had provided returns well above their long-term averages,
establishing unrealistic expectations for some investors. We believe that as the
risks of the stock market have become more apparent recently, the relative
stability and income potential of municipal bonds can make them an attractive
investment as part of a well-balanced portfolio.
For more information about the economy and financial markets, we encourage you
to visit the Market Commentary section of our website at www.dreyfus.com. Or, to
speak with a Dreyfus customer service representative, call us at 1-800-782-6620
Thank you for investing in Dreyfus Premier State Municipal Bond Fund, Virginia
Series.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
November 15, 2000
DISCUSSION OF FUND PERFORMANCE
Samuel Weinstock, Portfolio Manager
How did Dreyfus Premier State Municipal Bond Fund, Virginia Series perform
during the period?
For the six-month period ended October 31, 2000, the fund's Class A shares
provided a 5.45% total return, its Class B shares provided a 5.24% total return
and its Class C shares provided a 5.06% total return.(1) In comparison, the
Lipper Virginia Municipal Debt Funds category average provided a 5.05% total
return for the same period.(2)
We attribute the fund' s good absolute performance to a relatively strong
investment environment for municipal bonds, which was driven primarily by signs
of an economic slowdown in the U.S., as well as positive supply-and-demand
factors. The fund' s good relative performance is largely the result of our
attempts to strike a more optimal balance between income-oriented bonds and
bonds that we believe will provide attractive total returns, which include
income and changes in price.
What is the fund's investment approach?
Our goal is to seek as high a level of federal and Virginia state tax-exempt
income as is practical without undue risk from a diversified portfolio of
municipal bonds.
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 two years. Second, we evaluate issuers' credit quality to
find bonds that we believe provide high yields at attractive prices. Third, we
look for bonds with attractive 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 use computer models to evaluate the likely performance of bonds under
various market scenarios, including a 0.25 percentage-
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
point rise in interest rates and a 0.50 percentage-point decline. When we find
securities that we believe will provide participation when the market rises and
some protection against declines, we generally tend to hold them for the long
term.
What other factors influenced the fund's performance?
The fund was positively influenced over the past six months by favorable
economic and market conditions. When the reporting period began on May 1, 2000,
the U.S. and Virginia economies continued to grow strongly, raising concerns
that long-dormant inflationary pressures might reemerge. In response, the
Federal Reserve Board (the "Fed") raised short-term interest rates once during
the reporting period for an increase of 0.50 percentage points. However, signs
soon emerged that the Fed's previous rate hikes were having the desired effect
of slowing the economy, suggesting that the Fed's restrictive monetary policies
could be near an end.
In addition, the continuing strength of Virginia' s economy helped keep
municipal bond yields relatively low compared to taxable bonds. Virginia and its
municipalities enjoyed higher revenues during the reporting period, curtailing
their need to borrow and resulting in a reduced supply of securities compared to
the same period in 1999. When supply falls and demand rises or remains steady,
prices of existing bonds tend to move higher.
In this environment, we sold some of our shorter term holdings that were less
liquid -- that is, more difficult to trade -- than we would have liked. We also
sold income-oriented bonds into a secondary market characterized by very strong
demand from individual investors. As a result, we have generally been able to
maximize the prices we receive.
We redeployed the proceeds of those sales primarily into bonds that we believe
are more likely to provide attractive total returns, including intermediate-term
bonds with no provisions for early redemption by their issuers. Other new
purchases have typically included general obligation bonds issued by Virginia
counties, essential services bonds, and triple-A rated bonds financing
Virginia's water works.
What is the fund's current strategy?
We have generally maintained the same strategy that we have employed through
much of the reporting period. We have continued to attempt to upgrade our
holdings with insured and highly rated bonds, which we expect will serve to
balance our long-standing holdings of lower rated, high yield bonds.
We also intend to carefully monitor the current economic slowdown. We are doing
this not to forecast interest-rate trends, but to identify factors that may
affect our holdings' credit quality. By conducting intensive credit analyses of
existing and potential holdings, we believe that we can more effectively seek to
improve the fund's income stream. At the same time, we intend to focus on risk
management through broad diversification and by maintaining a balance between
income-oriented and total return-oriented bonds.
November 15, 2000
(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.
HAD THESE CHARGES BEEN REFLECTED, RETURNS WOULD HAVE BEEN LOWER. PAST
PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. SHARE PRICE, YIELD AND
INVESTMENT RETURN FLUCTUATE SUCH THAT UPON REDEMPTION, FUND SHARES MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST. INCOME MAY BE SUBJECT TO STATE
AND LOCAL TAXES FOR NON-VIRGINIA RESIDENTS, AND SOME INCOME MAY BE SUBJECT
TO THE FEDERAL ALTERNATIVE MINIMUM TAX (AMT) FOR CERTAIN INVESTORS. CAPITAL
GAINS, IF ANY, ARE FULLY TAXABLE. TOTAL RETURN INCLUDES REINVESTMENT OF
DIVIDENDS.
(2) SOURCE: LIPPER INC.
The Fund
STATEMENT OF INVESTMENTS
STATEMENT OF INVESTMENTS
October 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
Principal
LONG-TERM MUNICIPAL INVESTMENTS--98.5% Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
VIRGINIA--66.1%
Alexandria Redevelopment and Housing Authority,
Multi-Family Housing Mortgage Revenue
(Buckingham Village Apartments)
6.125%, 7/1/2021 3,000,000 3,033,450
Beford County Industrial Development Authority,
IDR (Nekossa Packaging Corp. Project)
5.60%, 12/1/2025 3,300,000 2,945,910
Chesapeake Bay Bridge and Tunnel Commission District, Revenue,
General Resolution 5.50%, 7/1/2025 (Insured; MBIA) 2,500,000 2,525,125
Chesapeake Toll Road, Expressway Revenue
5.625%, 7/15/2019 1,250,000 1,237,050
Dinwiddie County Industrial Development Authority, LR
(Dinwiddie County School Facilities Project)
6%, 2/1/2018 (Insured; MBIA) 500,000 521,910
Dulles Town Center Community Development Authority,
Special Assessment Tax (Dulles Town Center Project)
6.25%, 3/1/2026 3,000,000 2,855,370
Fairfax County Park Authority, Park Facilities Revenue
6.625%, 7/15/2020 2,665,000 2,734,850
Fairfax County Redevelopment and Housing Authority, MFHR
(Paul Spring Retirement Center)
6%, 12/15/2028 (Insured; FHA) 600,000 609,192
Fairfax County Water Authority, Water Revenue:
5.50% 4/1/2018 1,655,000 1,673,801
5.50%, 4/1/2019 1,830,000 1,843,030
5.75%, 4/1/2029 (Prerefunded 4/1/2002) 1,525,000 (a) 1,553,655
Hampton Redevelopment and Housing Authority,
First Mortgage Revenue
(Olde Hampton Hotel Associates Project)
6.50%, 7/1/2016 2,640,000 2,481,626
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 2,997,435
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) 1,000,000 (a) 1,114,460
(Potomac Place) 6.25%, 12/20/2027 700,000 726,082
Residential Care Facility (First Mortgage-Westminster
Lake Ridge) 6.625%, 1/1/2026 1,500,000 1,494,360
Industrial Development Authority of the Town of West Point,
SWDR (Chesapeake Corp. Project) 6.375%, 3/1/2019 500,000 452,665
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
-----------------------------------------------------------------------------------------------------------------------------------
VIRGINIA (CONTINUED)
Isle Wight County Industrial Development Authority,
Solid Waste Disposal Facilities Revenue
(Union Camp Corp. Project)
6.10%, 5/1/2027 2,850,000 2,787,784
Prince William County Park Authority, Revenue
6.875%, 10/15/2016 (Prerefunded 10/15/2004) 3,000,000 (a) 3,294,300
Richmond Metropolitan Authority, Expressway Revenue
5.25%, 7/15/2017 (Insured; FGIC) 3,100,000 3,094,606
Staunton Industrial Development Authority,
Educational Facilities Revenue (Mary Baldwin College)
6.75%, 11/1/2021 3,145,000 3,216,045
University of Virginia, University Revenue 5.75%, 5/1/2021 1,200,000 1,215,660
Upper Occoquan Sewer Authority, Regional Sewer Revenue
5.15%, 7/1/2020 (Insured; MBIA) 2,000,000 1,927,760
Virginia Beach Development Authority, Revenue:
Industrial Development Mortgage
(Ramada Oceanside Resort) 8%, 8/1/2010 310,000 324,080
Nursing Home (Sentara Life Care Corp.) 7.75%, 11/1/2021 1,000,000 1,045,590
Virginia Housing Development Authority:
Commonwealth Mortgage:
6.60%, 7/1/2020 1,075,000 1,092,888
5.50%, 1/1/2022 2,690,000 2,588,937
Multi-Family Housing 5.95%, 5/1/2016 2,000,000 2,035,960
Virginia Public Building Authority, Public Facilities Revenue
5.75%, 8/1/2018 2,500,000 2,579,775
Virginia Resouce Authority, Clean Water Revenue
(State Revolving Fund) 5.375%, 10/1/2022 3,035,000 (b) 3,004,013
U.S. RELATED--32.4%
Childrens Trust Fund Tobacco Settlement Revenue,
Asset Backed Bonds 6%, 7/1/2026 3,000,000 (b) 2,982,210
Commonwealth of Puerto Rico:
6.169%, 7/1/2012 2,950,000 (c) 3,350,610
(Public Improvement):
5.50% 7/1/2012 (Insured; MBIA) 50,000 53,395
5.25%, 7/1/2015 (Insured; MBIA) 3,000,000 3,088,110
6%, 7/1/2026 (Prerefunded 7/1/2007) 1,500,000 (a) 1,658,220
Guam Airport Authority, Revenue 6.70%, 10/1/2023 2,000,000 2,073,940
Puerto Rico Highway and Transportation Authority,
Highway Revenue:
5.50%, 7/1/2015 (Insured; MBIA) 20,000 21,168
6.146%, 7/1/2015 3,990,000 (c) 4,456,112
6.625%, 7/1/2018 (Prerefunded 7/1/2002) 2,000,000 (a) 2,110,280
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
U.S. RELATED (CONTINUED)
Puerto Rico Industrial, Tourist, Educational, Medical and
Environmental Control Facilities Financing Authority,
Higher Education Revenue (Ana G. Mendez University
System Project) 5.375%, 2/1/2019 1,350,000 1,264,869
Puerto Rico Ports Authority, Special Facilities Revenue
(American Airlines) 6.25%, 6/1/2026 3,000,000 3,055,920
Virgin Islands Public Finance Authority, Revenue
Gross Receipts Taxes Loan Note 6.50%, 10/1/2024 3,000,000 3,102,900
Virgin Islands Water and Power Authority, Electric System
7.40%, 7/1/2011 (Prerefunded 7/1/2001) 1,720,000 (a) 1,773,870
TOTAL LONG-TERM MUNICIPAL INVESTMENTS
(cost $87,150,708) 87,998,973
------------------------------------------------------------------------------------------------------------------------------------
SHORT-TERM MUNICIPAL INVESTMENT--1.6%
------------------------------------------------------------------------------------------------------------------------------------
Roanoke Industrial Development Authority, HR
(Carilion Health System)
VRDN 4.60% (cost $1,400,000) 1,400,000 (d) 1,400,000
------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $88,550,708) 100.1% 89,398,973
LIABILITIES, LESS CASH AND RECEIVABLES (.1%) (90,041)
NET ASSETS 100.0% 89,308,932
</TABLE>
Summary of Abbreviations
FGIC Financial Guaranty Insurance
Company
FHA Federal Housing Administration
HR Hospital Revenue
IDR Industrial Development Revenue
LR Lease Revenue
MBIA Municipal Bond Investors
Assurance Insurance Corporation
MFHR Multi-Family Housing Revenue
SWDR Solid Waste Disposal Revenue
VRDN Variable Rate Demand Notes
Summary of Combined Ratings (Unaudited)
<TABLE>
<CAPTION>
Fitch or Moody's or Standard & Poor's Value (%)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
AAA Aaa AAA 36.0
AA Aa AA 15.1
A A A 4.6
BBB Baa BBB 23.5
BB Ba BB 3.9
F1 MIG1/P1 SP1/A1 1.6
Not Rated (e) Not Rated (e) Not Rated (e) 15.3
100.0
(A) BONDS WHICH ARE PREREFUNDED ARE COLLATERALIZED BY U.S. GOVERNMENT
SECURITIES WHICH ARE HELD IN ESCROW AND ARE USED TO PAY PRINCIPAL AND
INTEREST ON THE MUNICIPAL ISSUE AND TO RETIRE THE BONDS IN FULL AT THE
EARLIEST REFUNDING DATE.
(B) PURCHASED ON A DELAYED DELIVERY BASIS.
(C) INVERSE FLOATER SECURITY--THE INTEREST RATE IS SUBJECT TO CHANGE
PERIODICALLY.
(D) SECURITIES PAYABLE ON DEMAND. VARIABLE INTEREST RATE--SUBJECT TO PERIODIC
CHANGE.
(E) SECURITIES WHICH, WHILE NOT RATED BY FITCH, MOODY'S AND STANDARD & POOR'S
HAVE BEEN DETERMINED BY THE MANAGER TO BE OF COMPARABLE QUALITY TO THOSE
RATED SECURITIES IN WHICH THE FUND MAY INVEST.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
STATEMENT OF ASSETS AND LIABILITIES
October 31, 2000 (Unaudited)
--------------------------------------------------------------------------------
Cost Value
--------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of Investments 88,550,708 89,398,973
Cash 189,427
Receivable for investment securities sold 4,326,532
Interest receivable 1,502,391
Prepaid expenses 7,139
95,424,462
--------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 70,716
Payable for investment securities purchased 5,945,966
Payable for shares of Beneficial Interest redeemed 67,514
Accrued expenses 31,334
6,115,530
--------------------------------------------------------------------------------
NET ASSETS ($) 89,308,932
--------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 90,539,397
Accumulated net realized gain (loss) on investments (2,078,730)
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 848,265
--------------------------------------------------------------------------------
NET ASSETS ($) 89,308,932
NET ASSET VALUE PER SHARE
<TABLE>
<CAPTION>
Class A Class B Class C
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Assets ($) 66,904,509 19,565,760 2,838,663
Shares Outstanding 4,109,035 1,201,905 174,443
------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE ($) 16.28 16.28 16.27
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
STATEMENT OF OPERATIONS
Six Months Ended October 31, 2000 (Unaudited)
--------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INTEREST INCOME 2,751,246
EXPENSES:
Management fee--Note 3(a) 249,760
Shareholder servicing costs--Note 3(c) 143,281
Distribution fees--Note 3(b) 61,795
Prospectus and shareholders' reports 8,018
Registration fees 7,801
Professional fees 7,351
Custodian fees 4,948
Trustees' fees and expenses--Note 3(d) 1,509
Loan commitment fees--Note 2 299
Miscellaneous 6,802
TOTAL EXPENSES 491,564
INVESTMENT INCOME--NET 2,259,682
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments (26,606)
Net unrealized appreciation (depreciation) on investments 2,525,818
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS 2,499,212
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 4,758,894
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
October 31, 2000 Year Ended
(Unaudited) April 30, 2000
--------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 2,259,682 4,871,421
Net realized gain (loss) on investments (26,606) (2,049,473)
Net unrealized appreciation
(depreciation) on investments 2,525,818 (7,002,802)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 4,758,894 (4,180,854)
--------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net:
Class A shares (1,728,024) (3,555,627)
Class B shares (467,165) (1,183,931)
Class C shares (64,493) (131,863)
Net realized gain on investments:
Class A shares -- (14,353)
Class B shares -- (4,898)
Class C shares -- (521)
TOTAL DIVIDENDS (2,259,682) (4,891,193)
--------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS ($):
Net proceeds from shares sold:
Class A shares 3,552,721 13,520,146
Class B shares 1,036,330 2,450,891
Class C shares 7,663 1,029,974
Dividends reinvested:
Class A shares 844,285 1,781,475
Class B shares 243,890 610,636
Class C shares 18,803 33,411
Cost of shares redeemed:
Class A shares (6,396,042) (13,581,470)
Class B shares (3,353,673) (14,374,110)
Class C shares (315,578) (939,870)
INCREASE (DECREASE) IN NET ASSETS
FROM BENEFICIAL INTEREST TRANSACTIONS (4,361,601) (9,468,917)
TOTAL INCREASE (DECREASE) IN NET ASSETS (1,862,389) (18,540,964)
-------------------------------------------------------------------------------
NET ASSETS:
Beginning of Period 91,171,321 109,712,285
END OF PERIOD 89,308,932 91,171,321
SEE NOTES TO FINANCIAL STATEMENTS.
Six Months Ended
October 31, 2000 Year Ended
(Unaudited) April 30, 2000
--------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
CLASS A (A)
Shares sold 221,863 819,840
Shares issued for dividends reinvested 52,470 110,040
Shares redeemed (398,446) (834,478)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (124,113) 95,402
--------------------------------------------------------------------------------
CLASS B (A)
Shares sold 64,977 149,838
Shares issued for dividends reinvested 15,164 37,644
Shares redeemed (209,590) (873,486)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (129,449) (686,004)
--------------------------------------------------------------------------------
CLASS C
Shares sold 480 64,286
Shares issued for dividends reinvested 1,170 2,071
Shares redeemed (19,752) (58,119)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (18,102) 8,238
(A) DURING THE PERIOD ENDED OCTOBER 31, 2000, 146,724 CLASS B SHARES
REPRESENTING $2,364,606 WERE AUTOMATICALLY CONVERTED TO 146,748 CLASS A
SHARES, AND DURING THE PERIOD ENDED APRIL 30, 2000, 471,244 CLASS B SHARES
REPRESENTING $7,723,625 WERE AUTOMATICALLY CONVERTED TO 471,274 CLASS A
SHARES
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the
fiscal periods indicated. All information (except porfolio turnover rate)
reflects financial results for a single fund share. Total return shows how much
your investment in the fund would have increased (or decreased) during each
period, assuming you had reinvested all dividends and distributions. These
figures have been derived from the fund's financial statements.
<TABLE>
<CAPTION>
Six Months Ended
October 31, 2000 Year Ended April 30,
----------------------------------------------------------------
CLASS A SHARES (Unaudited) 2000 1999 1998 1997 1996
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value,
beginning of period 15.84 17.31 17.37 16.61 16.27 16.03
Investment Operations:
Investment income--net .41 .83 .85 .88 .94 .93
Net realized and unrealized
gain (loss) on investments .44 (1.47) .17 .76 .34 .24
Total from Investment Operations .85 (.64) 1.02 1.64 1.28 1.17
Distributions:
Dividends from investment
income--net (.41) (.83) (.85) (.88) (.94) (.93)
Dividends from net realized
gain on investments -- (.00)(a) (.23) (.00)(a) -- --
Total Distributions (.41) (.83) (1.08) (.88) (.94) (.93)
Net asset value, end of period 16.28 15.84 17.31 17.37 16.61 16.27
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(B) 10.81(c) (3.65) 5.98 10.05 8.02 7.32
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA ($):
Ratio of expenses to
average net assets .94(c) .97 .92 .75 .39 .50
Ratio of net investment income
to average net assets 5.12(c) 5.12 4.83 5.10 5.67 5.58
Decrease reflected in above
expense ratios due to
undertakings by
The Dreyfus Corporation -- -- -- .14 .55 .55
Portfolio Turnover Rate 20.36(d) 31.63 30.19 21.25 45.29 50.06
-----------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 66,905 67,043 71,612 65,086 61,099 61,149
(A) AMOUNT REPRESENTS LESS THAN $.01 PER SHARE.
(B) EXCLUSIVE OF SALES CHARGE.
(C) ANNUALIZED.
(D) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended
October 31, 2000 Year Ended April 30,
----------------------------------------------------------------
CLASS B SHARES (Unaudited) 2000 1999 1998 1997 1996
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value,
beginning of period 15.83 17.31 17.37 16.60 16.27 16.03
Investment Operations:
Investment income--net .37 .75 .76 .79 .86 .84
Net realized and unrealized
gain (loss) on investments .45 (1.48) .17 .77 .33 .24
Total from Investment Operations .82 (.73) .93 1.56 1.19 1.08
Distributions:
Dividends from investment
income--net (.37) (.75) (.76) (.79) (.86) (.84)
Dividends from net realized
gain on investments -- (.00)(a) (.23) (.00)(a) -- --
Total Distributions (.37) (.75) (.99) (.79) (.86) (.84)
Net asset value, end of period 16.28 15.83 17.31 17.37 16.60 16.27
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(B) 10.39(c) (4.21) 5.44 9.56 7.41 6.77
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to
average net assets 1.45(c) 1.48 1.43 1.26 .90 1.01
Ratio of net investment income
to average net assets 4.61(c) 4.59 4.32 4.58 5.15 5.06
Decrease reflected in above
expense ratios due to
undertakings by
The Dreyfus Corporation -- -- -- .14 .55 .55
Portfolio Turnover Rate 20.36(d) 31.63 30.19 21.25 45.29 50.06
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 19,566 21,081 34,912 40,100 35,787 33,120
(A) AMOUNT REPRESENTS LESS THAN $.01 PER SHARE.
(B) EXCLUSIVE OF SALES CHARGE.
(C) ANNUALIZED.
(D) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS (continued)
Six Months Ended
October 31, 2000 Year Ended April 30,
----------------------------------------------------------------
CLASS C SHARES (Unaudited) 2000 1999 1998 1997 1996(a)
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value,
beginning of period 15.83 17.30 17.36 16.60 16.26 16.17
Investment Operations:
Investment income--net .35 .71 .72 .75 .81 .57
Net realized and unrealized
gain (loss) on investments .44 (1.47) .17 .76 .34 .09
Total from Investment Operations .79 (.76) .89 1.51 1.15 .66
Distributions:
Dividends from investment
income--net (.35) (.71) (.72) (.75) (.81) (.57)
Dividends from net realized
gain on investments -- .(00)(b) (.23) .(00)(b) -- --
Total Distributions (.35) (.71) (.95) (.75) (.81) (.57)
Net asset value, end of period 16.27 15.83 17.30 17.36 16.60 16.26
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) (C) 10.04 (4.37) 5.19 9.22 7.18 5.64(d)
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to
average net assets 1.68(d) 1.70 1.66 1.54 1.17 1.21(d)
Ratio of net investment income
to average net assets 4.39(d) 4.37 4.06 4.24 4.83 4.55(d)
Decrease reflected in
above expense ratios
due to undertakings by
The Dreyfus Corporation -- -- -- .11 .54 .52(d)
Portfolio Turnover Rate 20.36(e) 31.63 30.19 21.25 45.29 50.06
-----------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 2,839 3,048 3,188 1,996 674 166
(A) FROM AUGUST 15, 1995 (COMMENCEMENT OF INITIAL OFFERING) TO APRIL 30, 1996.
(B) AMOUNT REPRESENTS LESS THAN $.01 PER SHARE.
(C) EXCLUSIVE OF SALES CHARGE.
(D) ANNUALIZED.
(E) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus Premier State Municipal Bond Fund (the "Trust") is registered under the
Investment Company Act of 1940, 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, which is a wholly-owned
subsidiary of Mellon Financial Corporation.
Dreyfus Service Corporation (the "Distributor"), a wholly-owned subsidiary of
the Manager, is the distributor of the fund's shares. The fund is authorized to
issue an unlimited number of $.001 par value shares of Beneficial Interest 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. Class B shares automatically convert to Class A shares after
six years. 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
series. Expenses directly attributable to each fund are charged to that series'
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 accounting
principles generally accepted in the United States, which may require the use of
management estimates and assumption. Actual results could differ from those
estimates.
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (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 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.
(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, if any, 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 $423,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to April 30, 2000. This amount
is calculated based on Federal income tax regulation which may differ from
financial reporting in accordance with generally accepted accounting principles.
If not applied, the carryover expires in fiscal 2008.
NOTE 2--Bank Line of Credit:
The fund participates with other Dreyfus-managed funds in a $500 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 period ended October
31, 2000, the fund did not borrow under the Facility.
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
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.
(b) Under the Distribution Plan (the "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 October 31, 2000, Class B and
Class C shares were charged $50,767 and $11,028, respectively, pursuant to the
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 October 31, 2000, Class A, Class B and Class C
shares were charged $84,468, $25,383 and $3,676, respectively, pursuant to the
Shareholder Services Plan.
The fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of the
Manager, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the fund. During the period
ended October 31, 2000, the fund was charged $25,063 pursuant to the transfer
agency agreement.
(d) Each Board member also serves as a Board member of other funds within the
Dreyfus complex (collectively, the "Fund Group" ). Each Board member who is not
an "affiliated person" as defined in the Act receives an annual fee of $50,000
and an attendance fee of $6,500 for each meeting attended and $500 for telephone
meetings. These fees are allocated among the funds in the Fund Group. The
Chairman of the Board receives an additional 25% of such compensation. Subject
to the fund's Emeritus Program Guidelines, Emeritus Board members, if any,
receive 50% of the Trust's annual retainer fee and per meeting fee paid at the
time the Board member achieves emeritus status.
NOTE 4--Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding
short-term securities, during the period ended October 31, 2000, amounted to
$19,055,076 and $17,757,090, respectively.
At October 31, 2000, accumulated net unrealized appreciation on investments was
$848,265, consisting of $2,426,459 gross unrealized appreciation and $1,578,194
gross unrealized depreciation.
At October 31, 2000, 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
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
100 Church Street
New York, NY 10286
Transfer Agent & Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166
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
(c) 2000 Dreyfus Service Corporation 066SA0010
