<PAGE>
Dreyfus
BASIC
GNMA
Fund
Semi-Annual Report
June 30, 1996
<PAGE>
DREYFUS BASIC GNMA FUND
LETTER TO SHAREHOLDERS
Dear Shareholder:
We are pleased to provide you with this report on the Dreyfus BASIC GNMA
Fund. For its semi-annual reporting period ended June 30, 1996, your Fund
produced a total return of -.30%,* as compared to the Lipper GNMA Funds
Category total return average of -.91% for the same period.** Income
dividends of approximately $.482 per share were paid which is equivalent to
an annualized distribution rate per share of 6.49%.***
THE ECONOMY
So far this year, the economic story has been upbeat: solid growth,
strong gains in employment and low inflation. Yet along with this good news
has come the fear that the Federal Reserve Board might tighten monetary
policy lest the continued economic expansion brings a resurgence in
inflation. The growth in the economy has resulted in strong gains in
employment. Over recent months, these reports of new jobs have been
accompanied by rises in long-term interest rates, a reflection of the
market's concern that inflation perceptions by the Fed would result in its
acting to cool down an economy that risks overheating. To date, the Fed has
refrained from any overt tightening moves. The Fed cut rates three times
between last July and January of this year, and has since held the Federal
Funds rate steady at 5.25%, even as long-term rates in the bond market have
risen more than a full percentage point.
The interplay between job growth and economic growth has become the
dominant force affecting the outlook of investors for inflation and the
possibility for short-term interest rates. Along with handsome increases in
new jobs have come solid gains in retail sales, although many economists feel
that heavy consumer debt burdens will act as a constraint against any
acceleration in growth. Automobile sales remain strong, the third year in a
row of steady growth for auto manufacturers. Yet, what investors focus on and
what concerns the Fed may be two different things. On June 19th, the Fed's
Beige Book, a survey of business conditions in the 12 districts of the
Federal Reserve, reported that the economy was growing at a moderate pace and
that despite the tightening labor markets "indications of rising wages remain
scattered". Recent statements by officials of the Federal Reserve Board have
suggested that "sustained moderate growth" is the most likely path for the
economy and that labor markets, while tightening, do not yet indicate
significant inflationary pressures.
There seem to be few signs of inflation. Commodity and producer prices
remain subdued. Anecdotal reports from companies continue to attest to their
lack of ability to raise prices. Another measure of potential inflation,
delivery lead times - one of Chairman Greenspan's favorite indicators - has
been little changed for months. Furthermore, some of the inflationary
consequences of running large budget deficits have eased due to the growth in
the economy. Higher than expected tax payments - a result of economic growth
- - have reduced the Federal budget deficit to the $130 billion level, the
lowest since the early 1980s.
Nevertheless, there are limits to non-inflationary economic expansion. As
always, we remain watchful for signs of price pressures that could lead to a
resurgence of inflation. For now, there are few indications of that. In fact,
there also appears to be a growing consensus that the rate of economic growth
could taper off in the second half of the year due to the effect of higher
long-term interest rates on certain key sectors of the economy like housing
and consumer spending.
MARKET ENVIRONMENT
In describing the market environment for the last six months, we should
probably look at the activity of the 10-year Treasury note during that
period. The reason for choosing the 10-year note is that most GNMA Funds have
intermediate-term average lives ranging from 8 to 12 years and compare very
well against 10-year Treasuries.
In the beginning of January, the 10-year Treasury note was yielding
approximately 5.60%. At the end of June it was yielding approximately 6.70%.
The market environment for 10-year securities was quite negative. The
negativity, of course, carried over to the GNMA sector.
PORTFOLIO
With regard to the portfolio, throughout all of the first half of this
year we continued to maintain a duration which was considerably shorter than
that of the various indices against which we judge the Fund. This means that
the Fund was structured to be defensive at the beginning of the year and we
have maintained this defensive posture throughout the entire first half of
the year. We have tried to be about a half year shorter than the duration of
the indices we are compared against. Our issue selection also benefited the
Fund's performance. We own mostly seasoned GNMA securities that were issued
in 1993 or earlier and have been through at least one refinancing cycle.
Seasoned GNMAs are much more consistent regarding prepayments. Virtually all
of these seasoned securities that we hold have outperformed nonseasoned
securities. Our Fund has benefited positively from this course of action.
Included in this report is a series of detailed statements about your
Fund's holdings and its financial condition. We hope they are informative.
Please know that we greatly appreciate your continued confidence in the Fund
and in The Dreyfus Corporation.
Very truly yours,
[Garitt A. Kono signature logo]
Garitt A. Kono
Portfolio Manager
July 15, 1996
New York, N.Y.
* Total return includes reinvestment of dividends and any capital gains
paid.
**SOURCE: LIPPER ANALYTICAL SERVICES, INC. - Average total return for all
funds in the Lipper GNMA Funds Category reflect reinvestment of
distributions. The Fund's share price, yield and investment return fluctuate
and an investor may receive more or less than original cost upon redemption.
Past performance is no guarantee of future results..
***Annualized distribution rate per share is based upon dividends per share
paid from net investment income during the period, divided by the net asset
value per share at the end of the period.
<TABLE>
<CAPTION>
DREYFUS BASIC GNMA FUND
STATEMENT OF INVESTMENTS JUNE 30, 1996 (UNAUDITED)
PRINCIPAL
BONDS-90.8% AMOUNT VALUE
_______ ______
<S> <C> <C>
MORTGAGE-BACKED SECURITIES
Government National Mortgage Association I:
7%, 6/15/2008-12/15/2023................................................ $12,873,569 $12,439,605
7 1/2% (a).............................................................. 1,000,000 986,560
7 1/2%, 11/15/2010-8/15/2025............................................ 15,798,512 15,657,682
8%, 6/15/2017-2/15/2025................................................. 5,141,808 5,203,051
8 1/2%, 8/15/2018-3/15/2022............................................. 2,147,563 2,219,955
9%, 5/15/2016-11/15/2022................................................ 2,213,667 2,336,008
9 1/2%, 1/15/2017-12/15/2021............................................ 1,096,245 1,179,865
______
40,022,726
______
Government National Mortgage Association II:
9%, 3/20/2016-7/20/2025................................................. 2,332,272 2,427,925
9 1/2%, 9/20/2021-12/20/2021............................................ 377,089 401,600
______
2,829,525
______
Government National Mortgage Association I,
Project Loan;
9 1/4%, 10/15/2023...................................................... 959,690 1,013,673
______
Federal Home Loan Mortgage Corp.,
Real Estate Mortgage Investment Conduit:
Ser. 77, Cl. F,
8 1/2%, 6/15/2017..................................................... 75,789 75,901
Ser. 86, Cl. F,
9%, 10/15/2020........................................................ 300,000 319,728
Ser. 128, Cl. H,
8 3/4%, 9/15/2019..................................................... 582,279 590,565
Ser. 1030, Cl. E,
9%, 3/15/2019......................................................... 673,135 686,806
Ser. 1092, Cl. J,
8 1/2%, 5/15/2020..................................................... 1,000,000 1,031,520
Ser. 1395, Cl. C,
6%, 11/15/2018........................................................ 1,265,516 1,243,546
Ser. 1455, Cl. K,
7%, 6/15/2020......................................................... 1,500,000 1,474,800
______
5,422,866
______
Federal National Mortgage Association,
Real Estate Mortgage Investment Conduit;
Cl. G27-E,
8 1/2%, 2/25/2018....................................................... 347,110 348,675
______
TOTAL BONDS
(cost $50,056,833)...................................................... $49,637,465
======
DREYFUS BASIC GNMA FUND
STATEMENT OF INVESTMENTS (CONTINUED) JUNE 30, 1996 (UNAUDITED)
PRINCIPAL
SHORT-TERM INVESTMENTS-5.9% AMOUNT VALUE
_______ ______
REPURCHASE AGREEMENT;
Lanston (Aubrey G.) & Co., Inc., 5 1/4%
Dated 6/28/1996, Due 7/1/1996 in the amount of $3,201,400 (fully
collateralized
by $3,303,000 U.S. Treasury Bills, due 11/7/1996, value $3,242,401) (b)
(cost $3,200,000)....................................................... $ 3,200,000 $ 3,200,000
======
TOTAL INVESTMENTS
(cost $53,256,833)...................................................... 96.7% $52,837,465
==== ======
CASH AND RECEIVABLES (NET).................................................. 3.3% $ 1,799,544
==== ======
NET ASSETS.................................................................. 100.0% $54,637,009
==== ======
NOTES TO STATEMENT OF INVESTMENTS:
(a) Purchased on a forward commitment basis.
(b) Held by the custodian in a segregated account as collateral for
securities purchased on a forward commitment basis.
See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS BASIC GNMA FUND
STATEMENT OF ASSETS AND LIABILITIES JUNE 30, 1996 (UNAUDITED)
<S> <C> <C>
ASSETS:
Investments in securities, at value-Note 1(a,b)
(cost $53,256,833)-see statement...................................... $52,837,465
Cash.................................................................... 259,861
Receivable for investment securities sold............................... 2,037,874
Interest receivable..................................................... 323,869
Receivable for shares of Beneficial Interest subscribed................. 221,589
Paydowns receivable..................................................... 62,258
Prepaid expenses........................................................ 5,238
______
55,748,154
LIABILITIES:
Due to The Dreyfus Corporation and affiliates........................... $ 51,668
Payable for investment securities purchased............................. 979,375
Payable for shares of Beneficial Interest redeemed...................... 18,318
Accrued expenses........................................................ 61,784 1,111,145
____ ______
NET ASSETS.................................................................. $54,637,009
======
REPRESENTED BY:
Paid-in capital......................................................... $55,083,355
Accumulated undistributed investment income-net......................... 21,087
Accumulated net realized (loss) on investments.......................... (48,065)
Accumulated net unrealized (depreciation) on investments-Note 4......... (419,368)
______
NET ASSETS at value applicable to 3,668,861 shares outstanding
(unlimited number of $.001 par value shares of Beneficial Interest authorized) $54,637,009
======
NET ASSET VALUE, offering and redemption price per share
($54,637,009 / 3,668,861 shares)........................................ $14.89
======
See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS BASIC GNMA FUND
STATEMENT OF OPERATIONS SIX MONTHS ENDED JUNE 30, 1996 (UNAUDITED)
<S> <C> <C>
INVESTMENT INCOME:
INTEREST INCOME......................................................... $ 1,923,720
EXPENSES:
Management fee-Note 3(a).............................................. $ 163,081
Shareholder servicing costs-Note 3(b)................................. 58,334
Trustees' fees and expenses-Note 3(c)................................. 19,886
Legal fees............................................................ 14,399
Custodian fees-Note 3(b).............................................. 10,453
Auditing fees......................................................... 10,146
Registration fees..................................................... 7,946
Prospectus and shareholders' reports.................................. 1,314
Miscellaneous......................................................... 6,919
______
TOTAL EXPENSES.................................................. 292,478
Less-reduction in management fee due to
undertaking-Note 3(a)............................................. 115,807
______
NET EXPENSES.................................................... 176,671
______
INVESTMENT INCOME-NET........................................... 1,747,049
REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS:
Net realized gain on investments-Note 4................................. $ 144,429
Net unrealized (depreciation) on investments............................ (2,063,242)
______
NET REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS............... (1,918,813)
______
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS...................... $ (171,764)
======
See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS BASIC GNMA FUND
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED SIX MONTHS ENDED
DECEMBER 31, JUNE 30, 1996
1995 (UNAUDITED)
________ __________
<S> <C> <C>
OPERATIONS:
Investment income-net.................................................. $ 3,425,681 $ 1,747,049
Net realized gain on investments....................................... 1,605,147 144,429
Net unrealized appreciation (depreciation) on investments for the period 2,562,661 (2,063,242)
______ ______
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS...... 7,593,489 (171,764)
______ ______
DIVIDENDS TO SHAREHOLDERS FROM;
Investment income-net.................................................. (3,415,254) (1,745,341)
______ ______
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold.......................................... 22,533,965 9,690,899
Dividends reinvested................................................... 2,239,783 1,166,624
Cost of shares redeemed................................................ (18,274,607) (9,917,984)
______ ______
INCREASE IN NET ASSETS FROM BENEFICIAL INTEREST TRANSACTIONS......... 6,499,141 939,539
______ ______
TOTAL INCREASE (DECREASE) IN NET ASSETS.......................... 10,677,376 (977,566)
NET ASSETS:
Beginning of period.................................................... 44,937,199 55,614,575
______ ______
End of period (including undistributed investment income-net:
$19,379 in 1995 and $21,087 in 1996)................................. $55,614,575 $54,637,009
====== ======
SHARES SHARES
______ ______
CAPITAL SHARE TRANSACTIONS:
Shares sold............................................................ 1,509,390 641,315
Shares issued for dividends reinvested................................. 150,171 77,519
Shares redeemed........................................................ (1,227,891) (656,198)
______ ______
NET INCREASE IN SHARES OUTSTANDING................................... 431,670 62,636
====== ======
See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS BASIC GNMA FUND
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share of
Beneficial Interest outstanding, total investment return, ratios to average
net assets and other supplemental data for each period indicated. This
information has been derived from the Fund's financial statements.
SIX MONTHS ENDED
YEAR ENDED DECEMBER 31, JUNE 30, 1996
__________________________________________________
PER SHARE DATA: 1991 1992 1993 1994 1995 (UNAUDITED)
____ ____ ____ ____ ____ ______
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period.. $14.55 $15.34 $15.20 $15.39 $14.16 $15.42
____ ____ ____ ____ ____ ____
INVESTMENT OPERATIONS:
Investment income-net................. 1.06 1.16 1.11 1.08 1.03 .48
Net realized and unrealized gain (loss)
on investments...................... .79 (.14) .19 (1.23) 1.25 (.53)
____ ____ ____ ____ ____ ____
TOTAL FROM INVESTMENT OPERATIONS.... 1.85 1.02 1.30 (.15) 2.28 (.05)
____ ____ ____ ____ ____ ____
DISTRIBUTIONS;
Dividends from investment income-net.. (1.06) (1.16) (1.11) (1.08) (1.02) ( .48)
____ ____ ____ ____ ____ ____
Net asset value, end of period........ $15.34 $15.20 $15.39 $14.16 $15.42 $14.89
==== ==== ==== ==== ==== ====
TOTAL INVESTMENT RETURN................... 13.28% 7.02% 8.75% (.99%) 16.62% (.60%)(1)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets - - - .06% .50% .65%(1)
Ratio of net investment income to
average net assets.................. 7.78% 7.70% 7.15% 7.34% 6.86% 6.43%(1)
Decrease reflected in above expense ratios due
to undertakings by the Manager (limited to
the expense limitation provision of the
management agreement)..................... 1.50% 1.42% 1.28% 1.43% .78% .43%(1)
Portfolio Turnover Rate............... 40.28% 30.99% 34.02% 290.20% 254.36% 56.01%(2)
Net Assets, end of period (000's Omitted) $25,036 $45,280 $54,224 $44,937 $55,615 $54,637
(1) Annualized.
(2) Not annualized.
See independent accountants' review report and notes to financial statements.
</TABLE>
DREYFUS BASIC GNMA FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES:
Dreyfus BASIC GNMA Fund (the "Fund") is registered under the Investment
Company Act of 1940 ("Act") as a diversified open-end management investment
company. The Fund's investment objective is to provide investors with as high
a level of current income as is consistent with the preservation of capital
by investing principally in instruments issued by the Government National
Mortgage Association. The Dreyfus Corporation ("Manager") serves as the
Fund's investment adviser. The Manager is a direct subsidiary of Mellon Bank,
N.A. ("Mellon"). Premier Mutual Fund Services, Inc. (the "Distributor") acts
as the distributor of the Fund's shares, which are sold to the public without
a sales charge.
(A) PORTFOLIO VALUATION: The Fund's investments (excluding U.S.
Government obligations and short-term investments) 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 securities of comparable
quality, coupon, maturity and type; indications as to values from dealers;
and general market conditions. Investments in U.S. Government obligations are
valued at the mean between quoted bid and asked prices. Short-term investments
are carried at amortized cost, which approximates value.
(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 (including, where applicable, amortization of discount on short-term
investments) is recognized on the accrual basis.
The Fund may enter into repurchase agreements with financial
institutions, deemed to be creditworthy by the Fund's Manager, subject to the
seller's agreement to repurchase and the Fund's agreement to resell such
securities at a mutually agreed upon price. Securities purchased subject to
repurchase agreements are deposited with the Fund's custodian and, pursuant
to the terms of the repurchase agreement, must have an aggregate market value
greater than or equal to the repurchase price plus accrued interest at all
times. If the value of the underlying securities falls below the value of the
repurchase price plus accrued interest, the Fund will require the seller to
deposit additional collateral by the next business day. If the request for
additional collateral is not met, or the seller defaults on its repurchase
obligation, the Fund maintains the right to sell the underlying securities at
market value and may claim any resulting loss against the seller.
(C) DIVIDENDS TO SHAREHOLDERS: It is the policy of the Fund to declare
dividends daily from investment income-net. Such dividends are paid monthly.
Dividends from net realized capital gain are normally declared and paid
annually, but the Fund may make distributions on a more frequent basis to
comply with the distribution requirements of the Internal Revenue Code. To
the extent that net realized capital gain can be offset by capital loss
carryovers, it is the policy of the Fund not to distribute such gain.
(D) FEDERAL INCOME TAXES: It is the policy of the Fund to continue to
qualify as a regulated investment company, if such qualification is in the
best interests of its shareholders, by complying with the applicable
provisions of the Internal Revenue Code, and to make distributions of taxable
income sufficient to relieve it from substantially all Federal income and
excise taxes.
DREYFUS BASIC GNMA FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
The Fund has an unused capital loss carryover of approximately $192,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to December 31, 1995. If not
applied, the carryover expires in fiscal 2002.
NOTE 2-BANK LINE OF CREDIT:
The Fund participates in a $100 million unsecured line of credit provided
by The Bank of New York, primarily for temporary or emergency purposes,
including the meeting of redemption requests that otherwise might require the
untimely disposition of securities. Interest is payable at the Federal Funds
rate plus .50% on an annualized basis. For the period ended June 30, 1996,
the Fund did not borrow under the line of credit.
NOTE 3-MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
(A) Pursuant to a management agreement ("Agreement") with the Manager,
the management fee is computed at the annual rate of .60 of 1% of the value
of the Fund's average daily net assets and is payable monthly. The Agreement
provides for an expense reimbursement from the Manager should the Fund's
aggregate expenses, exclusive of taxes, brokerage, interest on borrowings and
extraordinary expenses, exceed the expense limitation of any state having
jurisdiction over the Fund for any full year. The most stringent state
expense limitation applicable to the Fund presently requires reimbursement of
expenses in any full fiscal year that such expenses (exclusive of certain
expenses as described above) exceed 21\2% of the first $30 million, 2% of the
next $70 million and 11\2% of the excess over $100 million of the average
value of the Fund's net assets in accordance with California "blue sky"
regulations. However, the Manager has undertaken through June 30, 1998 to
reduce the management fee paid by, or reimburse such excess expenses of the
Fund, to the extent that the Fund's aggregate annual expenses (exclusive of
certain expenses as described above) exceed an annual rate of .65 of 1% of
the value of the Fund's average daily net assets. The reduction in management
fee, pursuant to the undertaking, amounted to $115,807 during the six months
ended June 30, 1996.
The undertaking may be extended, modified or terminated by the Manager,
provided that the resulting expense reimbursement would not be less than the
amount required pursuant to the Agreement.
(B) Pursuant to the Fund's Shareholder Services Plan, the Fund reimburses
Dreyfus Service Corporation, a wholly-owned subsidiary of the Manager, an
amount not to exceed an annual rate of .25 of 1% of the value of the Fund's
average daily net assets for certain allocated expenses of providing personal
services and/or maintaining shareholder accounts. 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.
During the six months ended June 30, 1996, the Fund was charged an aggregate
of $27,290 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. Such
compensation amounted to $23,321 during the six months ended June 30, 1996.
Effective May 29, 1996, the Fund entered into a custody agreement with
Mellon to provide custodial services for the Fund. During the period from May
29, 1996 through June 30, 1996, $1,571 was paid to Mellon pursuant to the
custody agreement.
DREYFUS BASIC GNMA FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
(C) Each trustee who is not an "affiliated person" as defined in the Act
receives from the Fund an annual fee of $2,500 and an attendance fee of $250
per meeting. The Chairman of the Board receives an additional 25% of such
compensation.
NOTE 4-SECURITIES TRANSACTIONS:
The aggregate amount of purchases and sales (including paydowns) of
investment securities, excluding short-term securities, during the six months
ended June 30, 1996 amounted to $28,235,873 and $31,447,068, respectively.
At June 30, 1996, accumulated net unrealized depreciation on investments
was $419,368, consisting of $367,223 gross unrealized appreciation and
$786,591 gross unrealized depreciation.
At June 30, 1996, 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).
REVIEW REPORT OF ERNST & YOUNG LLP, INDEPENDENT ACCOUNTANTS
SHAREHOLDERS AND BOARD OF TRUSTEES
DREYFUS BASIC GNMA FUND
We have reviewed the accompanying statement of assets and liabilities of
Dreyfus BASIC GNMA Fund, including the statement of investments, as of June
30, 1996, and the related statements of operations and changes in net assets
and financial highlights for the six month period ended June 30, 1996. These
financial statements and financial highlights are the responsibility of the
Fund's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures
to financial data, and making inquiries of persons responsible for financial
and accounting matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing standards, which
will be performed for the full year with the objective of expressing an
opinion regarding the financial statements and financial highlights taken as
a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the interim financial statements and financial highlights
referred to above for them to be in conformity with generally accepted
accounting principles.
We have previously audited, in accordance with generally accepted
auditing standards, the statement of changes in net assets for the year ended
December 31, 1995 and financial highlights for each of the five years in the
period ended December 31, 1995 and in our report dated February 6, 1996, we
expressed an unqualified opinion on such statement of changes in net assets
and financial highlights.
[Ernst and Young LLP signature logo]
New York, New York
July 30, 1996
[Dreyfus lion "d" logo]
DREYFUS BASIC
GNMA FUND
200 Park Avenue
New York, NY 10166
MANAGER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
CUSTODIAN
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
TRANSFER AGENT &
DIVIDEND DISBURSING AGENT
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Printed in U.S.A. 080AR966
[Dreyfus logo]
BASIC
GNMA
Fund
Semi-Annual
Report
June 30, 1996
