DREYFUS VARIABLE INVESTMENT FUND, 485BPOS, 1996-10-30

DREYFUS VARIABLE INVESTMENT FUND
485BPOS, 1996-10-30

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File Nos. 33-13690
811-5125

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ X ]

Pre-Effective Amendment No. [ ]

Post-Effective Amendment No. 16 [ X ]

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ X ]

Amendment No. 16 [ X ]

(Check appropriate box or boxes.)

DREYFUS VARIABLE INVESTMENT FUND
(Exact Name of Registrant as Specified in Charter)

c/o The Dreyfus Corporation
200 Park Avenue, New York, New York 10166
(Address of Principal Executive Offices) (Zip Code)

Registrant's Telephone Number, including Area Code: (212) 922-6000

Mark N. Jacobs, Esq.
200 Park Avenue
New York, New York 10166
(Name and Address of Agent for Service)

It is proposed that this filing will become effective (check appropriate
box)

immediately upon filing pursuant to paragraph (b)
----
X on November 1, 1996 pursuant to paragraph (b)
----
60 days after filing pursuant to paragraph (a)(i)
----
on (date) pursuant to paragraph (a)(i)
----
75 days after filing pursuant to paragraph (a)(ii)
----
on (date) pursuant to paragraph (a)(ii) of Rule 485
----

If appropriate, check the following box:

this post-effective amendment designates a new effective date for
a previously filed post-effective amendment.
----

Registrant has registered an indefinite number of shares of beneficial
interest under the Securities Act of 1933 pursuant to Section 24(f) of the
Investment Company Act of 1940. Registrant's Rule 24f-2 Notice for the
fiscal year ended December 31, 1995 was filed on February 28, 1996.

DREYFUS VARIABLE INVESTMENT FUND
Cross-Reference Sheet Pursuant to Rule 495(a)

Items in
Part A of
Form N-1A Caption Page
_________ _______ ____

1 Cover Page Cover

2 Synopsis *

3 Condensed Financial Information 3

4 General Description of Registrant 13, 31

5 Management of the Fund 25

5(a) Management's Discussion of Fund's Performance *

6 Capital Stock and Other Securities 31

7 Purchase of Securities Being Offered 29

8 Redemption or Repurchase 29

9 Pending Legal Proceedings *

Items in
Part B of
Form N-1A
- ---------

10 Cover Page Cover

11 Table of Contents Cover

12 General Information and History B-38

13 Investment Objectives and Policies B-2

14 Management of the Fund B-17

15 Control Persons and Principal B-21
Holders of Securities

16 Investment Advisory and Other B-22
Services

_____________________________________

NOTE: * Omitted since answer is negative or inapplicable.

DREYFUS VARIABLE INVESTMENT FUND
Cross-Reference Sheet Pursuant to Rule 495(a) (continued)

Items in
Part B of
Form N-1A Caption Page
_________ _______ _____

17 Brokerage Allocation B-33

18 Capital Stock and Other Securities B-38

19 Purchase, Redemption and Pricing B-29, B-30
of Securities Being Offered

20 Tax Status *

21 Underwriters B-29

22 Calculations of Performance Data B-35

23 Financial Statements B-47

Items in
Part C of
Form N-1A
_________

24 Financial Statements and Exhibits C-1

25 Persons Controlled by or Under C-4
Common Control with Registrant

26 Number of Holders of Securities C-4

27 Indemnification C-5

28 Business and Other Connections of C-6
Investment Adviser

29 Principal Underwriters C-12

30 Location of Accounts and Records C-15

31 Management Services C-15

32 Undertakings C-15

_____________________________________

NOTE: * Omitted since answer is negative or inapplicable.

- ------------------------------------------------------------------------------

PROSPECTUS NOVEMBER 1, 1996

DREYFUS VARIABLE INVESTMENT FUND
- ------------------------------------------------------------------------------
DREYFUS VARIABLE INVESTMENT FUND (THE "FUND") IS AN OPEN-END, MANAGEMENT
INVESTMENT COMPANY, KNOWN AS A MUTUAL FUND, THAT IS INTENDED TO BE A FUNDING
VEHICLE FOR VARIABLE ANNUITY CONTRACTS ("VA CONTRACTS") AND VARIABLE LIFE
INSURANCE POLICIES ("VLI POLICIES") OFFERED THROUGH SEPARATE ACCOUNTS OF
VARIOUS LIFE INSURANCE COMPANIES (THE "PARTICIPATING INSURANCE COMPANIES").
THE FUND PERMITS INVESTORS TO INVEST IN ELEVEN SEPARATE PORTFOLIOS (EACH, A
"SERIES"), ALTHOUGH CERTAIN PORTFOLIOS MAY NOT BE AVAILABLE FOR INVESTMENT
THROUGH CERTAIN VA CONTRACTS OR VLI POLICIES OFFERED BY CERTAIN PARTICIPATING
INSURANCE COMPANIES. A PURCHASER OF A VA CONTRACT OR VLI POLICY SHOULD REFER
TO THE PROSPECTUS FOR HIS OR HER CONTRACT OR POLICY FOR INFORMATION AS TO
WHICH PORTFOLIOS OF THE FUND ARE AVAILABLE FOR INVESTMENT THROUGH THE
CONTRACT OR POLICY. A GENERAL DESCRIPTION OF EACH SERIES IS SET FORTH ON THE
FOLLOWING PAGE.
THE DREYFUS CORPORATION SERVES AS THE FUND'S INVESTMENT ADVISER.
(CONTINUED ON NEXT PAGE)
THIS PROSPECTUS SETS FORTH CONCISELY INFORMATION ABOUT THE FUND THAT AN
INVESTOR SHOULD KNOW BEFORE INVESTING IN A SERIES THROUGH A VA CONTRACT OR
VLI POLICY OFFERED BY A PARTICIPATING INSURANCE COMPANY. IT SHOULD BE READ
AND RETAINED FOR FUTURE REFERENCE.

THE STATEMENT OF ADDITIONAL INFORMATION, DATED NOVEMBER 1, 1996, WHICH
MAY BE REVISED FROM TIME TO TIME, PROVIDES A FURTHER DISCUSSION OF CERTAIN
AREAS IN THIS PROSPECTUS AND OTHER MATTERS WHICH MAY BE OF INTEREST TO SOME
INVESTORS. IT HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION AND
IS INCORPORATED HEREIN BY REFERENCE. THE SECURITIES AND EXCHANGE COMMISSION
MAINTAINS A WEB SITE (HTTP://WWW.SEC.GOV) THAT CONTAINS THE STATEMENT OF
ADDITIONAL INFORMATION, MATERIAL INCORPORATED BY REFERENCE, AND OTHER
INFORMATION REGARDING THE FUND. FOR A FREE COPY OF THE STATEMENT OF
ADDITIONAL INFORMATION, WRITE TO THE FUND AT 144 GLENN CURTISS BOULEVARD,
UNIONDALE, NEW YORK 11556-0144, OR CALL 1-800-554-4611. WHEN TELEPHONING, ASK
FOR OPERATOR 144.

MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK, AND ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY. MUTUAL
FUND SHARES INVOLVE CERTAIN INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF
PRINCIPAL. THE NET ASSET VALUE OF FUNDS OTHER THAN MONEY MARKET FUNDS WILL
FLUCTUATE FROM TIME TO TIME.
<TABLE>
<CAPTION>

TABLE OF CONTENTS
PAGE PAGE
<S> <C> <C> <C>
CONDENSED FINANCIAL INFORMATION.. 3 HOW TO REDEEM SHARES................ 29
PERFORMANCE INFORMATION.......... 11 DIVIDENDS, DISTRIBUTIONS AND TAXES.. 30
DESCRIPTION OF THE FUND.......... 13 GENERAL INFORMATION................. 31
MANAGEMENT OF THE FUND........... 25 APPENDIX............................ 33
HOW TO BUY SHARES................ 29

</TABLE>

- ------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
- ------------------------------------------------------------------------------
FUND SHARES ARE AVAILABLE EXCLUSIVELY AS A FUNDING VEHICLE FOR LIFE INSURANCE
COMPANIES ISSUING VARIABLE LIFE INSURANCE POLICIES AND VARIABLE ANNUITY
CONTRACTS. THIS PROSPECTUS SHOULD BE ACCOMPANIED BY A PROSPECTUS FOR SUCH
POLICIES OR CONTRACTS.
- ------------------------------------------------------------------------------
(Continued from cover page)

The MONEY MARKET PORTFOLIO'S investment objective is to provide as
high a level of current income as is consistent with the preservation of
capital and the maintenance of liquidity. This Series invests in short-term
money market instruments. AN INVESTMENT IN THE MONEY MARKET PORTFOLIO IS
NEITHER INSURED NOR GUARANTEED BY THE U.S. GOVERNMENT. THERE CAN BE NO
ASSURANCE THAT THE MONEY MARKET PORTFOLIO WILL BE ABLE TO MAINTAIN A STABLE
NET ASSET VALUE OF $1.00 PER SHARE.

The CAPITAL APPRECIATION PORTFOLIO'S primary investment objective is
to provide long-term capital growth consistent with the preservation of
capital; current income is a secondary investment objective. This Series
invests primarily in the common stocks of domestic and foreign issuers.

The GROWTH AND INCOME PORTFOLIO'S investment objective is to provide
long-term capital growth, current income and growth of income, consistent
with reasonable investment risk. This Series invests primarily in equity
securities, debt securities and money market instruments of domestic and
foreign issuers.

The MANAGED ASSETS PORTFOLIO'S investment objective is to maximize
total return, consisting of capital appreciation and current income. This
Series follows an asset allocation strategy by investing in equity securities,
debt securities and money market instruments of domestic and foreign issuers.

The SMALL CAP PORTFOLIO'S investment objective is to maximize capital
appreciation. This Series invests primarily in common stocks of domestic and
foreign issuers. This Series will be particularly alert to companies that The
Dreyfus Corporation considers to be emerging smaller-sized companies which
are believed to be characterized by new or innovative products, services or
processes which should enhance prospects for growth in future earnings.

The SMALL COMPANY STOCK PORTFOLIO'S investment objective is to
provide investment results that are greater than the total return performance
of publicly-traded common stocks in the aggregate, as represented by the
Russell 2500trademark Index. This Series invests primarily in a portfolio of
equity securities of small- to medium-sized domestic issuers, while
attempting to maintain volatility and diversification similar to that of the
Russell 2500trademark Index.

The DISCIPLINED STOCK PORTFOLIO'S investment objective is to provide
investment results that are greater than the total return performance of
publicly-traded common stocks in the aggregate, as represented by the Standard
& Poor's 500 Composite Stock Price Index. This Series will use quantitative
statistical modeling techniques to construct a portfolio in an attempt to
achieve its investment objective, without assuming undue risk relative to the
broad stock market.

The INTERNATIONAL VALUE PORTFOLIO'S investment objective is long-term
capital growth. This Series invests primarily in a portfolio of
publicly-traded equity securities of foreign issuers which would be
characterized as "value" companies according to criteria established by The
Dreyfus Corporation.

The INTERNATIONAL EQUITY PORTFOLIO'S investment objective is to
maximize capital growth. This Series invests primarily in the equity
securities of foreign issuers located throughout the world.

The QUALITY BOND PORTFOLIO'S investment objective is to provide the
maximum amount of current income to the extent consistent with the
preservation of capital and the maintenance of liquidity. This Series invests
principally in debt obligations of corporations, the U.S. Government and its
agencies and instrumentalities, and major U.S. banking institutions.

The ZERO COUPON 2000 PORTFOLIO'S investment objective is to provide
as high an investment return as is consistent with the preservation of
capital. This Series invests primarily in debt obligations of the U.S.
Treasury that have been stripped of their unmatured interest coupons, interest
coupons that have been stripped from debt obligations issued by the U.S.
Treasury, receipts and certificates for such stripped debt obligations, and
stripped coupons and zero coupon securities issued by domestic corporations,
which will mature on or about December 31, 2000.

Page 2

CONDENSED FINANCIAL INFORMATION

The information in the following tables has been audited (except
where noted) by Ernst & Young LLP, the Fund's independent auditors. Further
financial data, related notes and report of independent auditors accompany
the Statement of Additional Information, available upon request.

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 such period
indicated. This information has been derived from the Series' financial
statements. The total investment return information set forth below does not
reflect certain expenses charged the separate accounts or related insurance
policies by the Participating Insurance Companies, the inclusion of which
would reduce the Series' total investment return for each period indicated.

MONEY MARKET PORTFOLIO
-----------------------------------------------------------------------------------------------
FOR THE SIX MONTH
PERIOD ENDED
YEAR ENDED DECEMBER 31, JUNE 30, 1996
----------------------------------------------------------------
PER SHARE DATA: 1990(1) 1991 1992 1993 1994 1995 (UNAUDITED)
------ ------ ------ ------ ------ ------ ----------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------ ------ ------ ------ ------ ------ ------
INVESTMENT OPERATIONS:
Investment income-net................ .024 .058 .041 .032 .043 .055 .025
DISTRIBUTIONS:
Dividends from investment income-net. (.024) (.058) (.041) (.032) (.043) (.055) (.025)
------ ------ ------ ------ ------ ------ ------
Net asset value, end of period....... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
====== ====== ====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN................ 7.27%(2) 5.99% 4.14% 3.29% 4.37% 5.66% 4.97%(2)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets .03%(2) -- -- -- -- .62% .60%(2)
Ratio of net investment income to
average net assets................... 7.18%(2) 5.78% 4.10% 3.23% 4.62% 5.51% 4.93%(2)
Decrease reflected in above
expense ratios due to undertakings
by The Dreyfus Corporation........... 30.51%(2) 3.94% 4.25% 2.81% .88% .03% --
Net assets, end of period (000's omitted) $741 $1,619 $790 $ 7,651 $34,728 $45,249 $50,163
(1) From August 31, 1990 (commencement of operations) to December 31, 1990.
(2) Annualized.

</TABLE>
Page 3
<TABLE>
<CAPTION>

CAPITAL APPRECIATION PORTFOLIO
------------------------------------------------
FOR THE SIX MONTH
PERIOD ENDED
YEAR ENDED DECEMBER 31, JUNE 30, 1996
------------------------------
PER SHARE DATA: 1993(1) 1994 1995 (UNAUDITED)
------- ------- ------- ----------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period...................... $12.50 $13.27 $13.44 $17.71
------- ------- ------- -------
INVESTMENT OPERATIONS:
Investment income-net..................................... .08 .23 .23 .13
Net realized and unrealized gain
on investments............................................ .76 .17 4.27 1.86
------- ------- ------- -------
TOTAL FROM INVESTMENT OPERATIONS.......................... .84 .40 4.50 1.99
------- ------- ------- -------
DISTRIBUTIONS:
Dividends from investment income-net...................... (.07) (.23) (.23) ._
------- ------- ------- -------
Net asset value, end of period............................ $13.27 $13.44 $17.71 $19.70
======= ======= ======= =======
TOTAL INVESTMENT RETURN..................................... 6.74%(2) 3.04% 33.52% 11.25%(2)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets................... .28%(2) .25% .85% .41%(2)
Ratio of net investment income to
average net assets........................................ 1.89%(2) 2.99% 2.08% .82%(2)
Decrease reflected in above expense ratios due to
undertakings by The Dreyfus Corporation................... 3.67%(2) .86% .02% _
Portfolio Turnover Rate................................... .01%(2) .12% 2.81% 1.90%(2)
Average commission rate paid(3)........................... _ _ _ $.0746
Net assets, end of period (000's omitted)................. $3,770 $16,118 $46,930 $71,774
(1) From April 5, 1993 (commencement of operations) to December 31, 1993.
(2) Not annualized.
(3) For fiscal years beginning January 1, 1996, the Series is required to disclose its
average commission rate paid per share for purchases and sales of investment securities.

</TABLE>
Page 4
<TABLE>
<CAPTION>

GROWTH AND INCOME PORTFOLIO
----------------------------------------
FOR THE SIX MONTH
YEAR ENDED PERIOD ENDED
DECEMBER 31, JUNE 30, 1996
--------------------
1994(1) 1995 (UNAUDITED)
------- ------- ----------------
<S> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of period............................... $12.50 $11.98 $18.33
------- ------- -------
INVESTMENT OPERATIONS:
Investment income-net.............................................. .28 .28 .16
Net realized and unrealized gain (loss)
on investments..................................................... (.43) 7.07 3.05
------- ------- -------
TOTAL FROM INVESTMENT OPERATIONS................................... (.15) 7.35 3.21
------- ------- -------
DISTRIBUTIONS:
Dividends from investment income-net............................... (.28) (.27) (.17)
Dividends from net realized gain on investments.................... (.09) (.73) (.20)
------- ------- -------
TOTAL DISTRIBUTIONS................................................ (.37) (1.00) (.37)

------- ------- -------
Net asset value, end of period..................................... $11.98 $18.33 $21.17
======= ======= =======
TOTAL INVESTMENT RETURN.............................................. (1.22%)(2) 61.89% 17.53%(2)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets............................ .22%(2) .92% .42%(2)
Ratio of net investment income to
average net assets................................................. 2.25%(2) 2.21% .96%(2)
Decrease reflected in above expense ratios due to
undertakings by The Dreyfus Corporation............................ 1.28%(2) .03% ._
Portfolio Turnover Rate............................................ 237.09%(2) 255.42% 147.96%(2)
Average commission rate paid(3).................................... ._ ._ $.1061
Net assets, end of period (000's omitted).......................... $1,040 $71,161 $156,771
(1) From May 2, 1994 (commencement of operations) to December 31, 1994.
(2) Not annualized.
(3) For fiscal years beginning January 1, 1996, the Series is required to disclose its average commission rate paid per share
for purchases and sales of investment securities.

</TABLE>
Page 5
<TABLE>
<CAPTION>

MANAGED ASSETS PORTFOLIO
-----------------------------------------------------------------------------------
FOR THE SIX MONTH
PERIOD ENDED
YEAR ENDED DECEMBER 31, JUNE 30, 1996
-----------------------------------------------------------------
PER SHARE DATA: 1990(1) 1991 1992 1993 1994 1995 (UNAUDITED)

------- ------- ------- ------- ------- ------- ----------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period. $10.00 $10.11 $10.76 $10.14 $12.92 $12.37 $11.70
------- ------- ------- ------- ------- ------- -------
INVESTMENT OPERATIONS:
Investment income-net................ .08 .41 .22 .20 .35 .51 .38
Net realized and unrealized gain
(loss) on investments................ .11 .66 (.11) 2.71 (.56) (.54) .05
------- ------- ------- ------- ------- ------- -------
TOTAL FROM INVESTMENT OPERATIONS..... .19 1.07 .11 2.91 (.21) (.03) .43
------- ------- ------- ------- ------- ------- -------
DISTRIBUTIONS:
Dividends from investment income-net. (.08) (.42) (.31) (.13) (.32) (.64) --
Dividends in excess of investment income-net -- -- -- -- (.02) -- --
Dividends from net realized gain on investments -- -- (.42) -- -- -- --
------- ------- ------- ------- ------- ------- -------
TOTAL DISTRIBUTIONS.................. (.08) (.42) (.73) (.13) (.34) (.64) --
------- ------- ------- ------- ------- ------- -------
Net asset value, end of period....... $10.11 $10.76 $10.14 $12.92 $12.37 $11.70 $12.13
======= ======= ======= ======= ======= ======= =======
TOTAL INVESTMENT RETURN................ 1.85%(2) 10.60% 1.07% 28.59% (1.56%) (.26%) 3.68%(2)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets .34%(2) 1.00% .97% .27% .25% .94% .44%(2)
Ratio of net investment income to
average net assets 2.11%(2) 4.46% 1.88% 1.87% 3.54% 3.56% 1.85%(2)
Decrease reflected in above expense ratios due
to undertakings by The Dreyfus Corporation 8.82%(2) 2.83% 1.70% 2.25% .88% -- --
and Comstock Partners, Inc.
Portfolio Turnover Rate.............. -- 91.97% 118.78% 99.08% 25.96% 53.88% 50.79%(2)
Average commission rate paid(3)...... -- -- -- -- -- -- $.0271
Net assets, end of period (000's omitted) $ 716 $2,179 $1,865 $7,957 $30,510 $25,272 $24,761
(1) From August 31, 1990 (commencement of operations) to December 31, 1990.
(2) Not annualized.
(3) For fiscal years beginning January 1, 1996, the Series is required to disclose its average commission rate paid per share for
purchases and sales of investment securities.

</TABLE>
Page 6
<TABLE>
<CAPTION>

SMALL CAP PORTFOLIO
------------------------------------------------------------------------------------
FOR THE SIX MONTH
PERIOD ENDED
YEAR ENDED DECEMBER 31, JUNE 30, 1996
------------------------------------------------------------------
PER SHARE DATA: 1990(1) 1991 1992 1993 1994 1995 (UNAUDITED)
------- ------- ------- ------- ------- ------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period. $10.00 $10.21 $20.60 $22.71 $34.45 $36.52 $46.13
------- ------- ------- ------- ------- ------- -------
INVESTMENT OPERATIONS:
Investment income-net................ .21(2) .14(2) .18(2) .14 .17 .16 .06
Net realized and unrealized gain on investments -- 15.85(2) 13.10(2) 14.93 2.50 10.54 4.86
------- ------- ------- ------- ------- ------- -------
TOTAL FROM INVESTMENT OPERATIONS..... .21(2) 15.99(2) 13.28(2) 15.07 2.67 10.70 4.92
------- ------- ------- ------- ------- ------- -------
DISTRIBUTIONS:
Dividends from investment income-net. -- (.15) (.15) (.14) (.16) (.18) --
Dividends in excess of investment income-net -- -- -- (.01) -- -- --
Dividends from net realized gain on investments -- (5.45) (11.02) (3.18) (.33) (.91) --
Dividends in excess of net realized gain
on investments....................... -- -- -- -- (.11) -- --
------- ------- ------- ------- ------- ------- -------
TOTAL DISTRIBUTIONS.................. -- (5.60) (11.17) (3.33) (.60) (1.09) --
------- ------- ------- ------- ------- ------- -------
Net asset value, end of period....... $10.21 $ 20.60 $22.71 $34.45 $36.52 $46.13 $51.05
======= ======= ======= ======= ======= ======= =======
TOTAL INVESTMENT RETURN................ 2.10%(3) 159.73% 71.28% 68.31% 7.75% 29.38% 10.67%(3)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets .34%(3) 1.16% .94% .25% .55% .83% .40%(3)
Ratio of net investment income to
average net assets 2.10%(3) .77% .76% .89% 1.18% .54% .14%(3)
Decrease reflected in above expense ratios due
to undertakings by The Dreyfus Corporation 84.84%(3) 3.64% 2.29% 1.79% .52% -- --
Portfolio Turnover Rate.............. -- 388.70% 358.27% 244.59% 106.00% 99.02% 45.13%(3)
Average commission rate paid(4)...... -- -- -- -- -- -- $.0579
Net assets, end of period (000's omitted) $36 $1,554 $2,679 $18,337 $173,215 $543,281 $800,625
(1) From August 31, 1990 (commencement of operations) to December 31, 1990.
(2) Based on average shares outstanding.
(3) Not annualized.
(4) For fiscal years beginning January 1, 1996, the
Series is required to disclose its average commission rate paid per share for purchases and sales of investment securities.

</TABLE>
Page 7
<TABLE>
<CAPTION>

SMALL COMPANY STOCK PORTFOLIO
--------------------------------------------------
FROM APRIL 30, 1996 (COMMENCEMENT OF OPERATIONS)
TO SEPTEMBER 30, 1996 (UNAUDITED)
--------------------------------------------------
<S> <C>
PER SHARE DATA:
Net asset value, beginning of period................. $12.50
-------
INVESTMENT OPERATIONS:
Investment income-net................................ .04
Net realized and unrealized gain
on investments....................................... .37
-------
TOTAL FROM INVESTMENT OPERATIONS..................... .41
-------
Net asset value, end of period....................... $12.91
=======
TOTAL INVESTMENT RETURN................................ 3.28%(1)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets.............. .45%(1)
Ratio of net investment income to
average net assets................................... .31%(1)
Decrease reflected in above expense ratio due to
undertaking by The Dreyfus Corporation............... .08%(1)
Portfolio Turnover Rate.............................. 26.43%(1)
Average commission rate paid(2)...................... $.0435
Net assets, end of period (000's omitted)............ $7,258
(1) Not annualized.
(2) The Series is required to disclose its average commission rate paid per share for
purchases and sales of investment securities.

</TABLE>

DISCIPLINED STOCK PORTFOLIO
--------------------------------------------------
FROM APRIL 30, 1996 (COMMENCEMENT OF OPERATIONS)
TO SEPTEMBER 30, 1996 (UNAUDITED)
--------------------------------------------------
<S> <C>
PER SHARE DATA:
Net asset value, beginning of period................. $12.50
-------
INVESTMENT OPERATIONS:
Investment income-net................................ .06
Net realized and unrealized gain
on investments....................................... .97
-------
TOTAL FROM INVESTMENT OPERATIONS..................... 1.03
-------
Net asset value, end of period....................... $13.53
=======
TOTAL INVESTMENT RETURN................................ 8.24%(1)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets.............. .50%(1)
Ratio of net investment income to
average net assets................................... .57%(1)
Decrease reflected in above expense ratio due to
undertaking by The Dreyfus Corporation............... .08%(1)
Portfolio Turnover Rate.............................. 23.10%(1)
Average commission rate paid(2)...................... $.0444
Net assets, end of period (000's omitted)............ $11,790
(1) Not annualized.
(2) The Series is required to disclose its average commission rate paid per share for
purchases and sales of investment securities.

</TABLE>
Page 8
<TABLE>
<CAPTION>

INTERNATIONAL VALUE PORTFOLIO
--------------------------------------------------
FROM APRIL 30, 1996 (COMMENCEMENT OF OPERATIONS)
TO SEPTEMBER 30, 1996 (UNAUDITED)
--------------------------------------------------
<S> <C>
PER SHARE DATA:
Net asset value, beginning of period................. $12.50
-------
INVESTMENT OPERATIONS:
Investment income-net................................ .10
Net realized and unrealized (loss)
on investments....................................... (.16)
-------
TOTAL FROM INVESTMENT OPERATIONS..................... (.06)
-------
Net asset value, end of period....................... $12.44
=======
TOTAL INVESTMENT RETURN................................ (.48%)(1)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets.............. .63%(1)
Ratio of net investment income to
average net assets................................... .95%(1)
Decrease reflected in above expense ratio due to
undertaking by The Dreyfus Corporation............... .11%(1)
Portfolio Turnover Rate.............................. 8.58%(1)
Average commission rate paid(2)...................... $.0396
Net assets, end of period (000's omitted)............ $6,783
(1) Not annualized.
(2) The Series is required to disclose its average commission rate paid per share for
purchases and sales of investment securities.

</TABLE>

INTERNATIONAL EQUITY PORTFOLIO
-------------------------------------------
FOR THE SIX MONTH
YEAR ENDED PERIOD ENDED
DECEMBER 31, JUNE 30, 1996
--------------------
1994(1) 1995 (UNAUDITED)
------- ------- ----------------
<S> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of period............................... $12.50 $12.02 $12.82
------- ------- -------
INVESTMENT OPERATIONS:
Investment income-net.............................................. .15 .15 .10
Net realized and unrealized gain (loss)
on investments..................................................... (.40) .74 .92
------- ------- -------
TOTAL FROM INVESTMENT OPERATIONS................................... (.25) .89 1.02
------- ------- -------
DISTRIBUTIONS:
Dividends from investment income-net............................... (.14) (.08) ._
Dividends in excess of investment income-net....................... (.09) (.01) ._
------- ------- -------
TOTAL DISTRIBUTIONS................................................ (.23) (.09) ._
------- ------- -------
CAPITAL CONTRIBUTION FROM AN AFFILIATE OF THE ADVISER.............. ._ ._ .22
------- ------- -------
Net asset value, end of period..................................... $12.02 $12.82 $14.06
======= ======= =======
TOTAL INVESTMENT RETURN.............................................. (2.00%)(2) 7.39% 9.67%(2, 3)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets............................ .23%(2) 1.59% .70%(2)
Ratio of net investment income to
average net assets................................................. 1.11%(2) 1.13% .97%(2)
Decrease reflected in above expense ratios due to
undertakings by The Dreyfus Corporation............................ 1.70%(2) .45% ._
Portfolio Turnover Rate............................................ 16.75%(2) 70.22% 142.02% (2)
Average commission rate paid (4)................................... ._ ._ $.0422
Net assets, end of period (000's omitted).......................... $1,089 $7,672 $18,663
(1) From May 2, 1994 (commencement of operations) to December 31, 1994.
(2) Not annualized.
(3) Had the Series not had a capital contribution by The Dreyfus Corporation during the period, the total investment return
would have been 7.96%.
(4) For fiscal years beginning January 1, 1996, the Series is required to disclose its average commission rate paid per share
for purchases and sales of investment securities.

</TABLE>
Page 9
<TABLE>
<CAPTION>

QUALITY BOND PORTFOLIO
------------------------------------------------------------------------------------
FOR THE SIX MONTH
PERIOD ENDED
YEAR ENDED DECEMBER 31, JUNE 30, 1996
---------------------------------------------------------------
PER SHARE DATA: 1990(1) 1991 1992 1993 1994 1995 (UNAUDITED)
------- ------- ------- ------- ------- ------- ----------------
<S> <C> <C> <C> <C> <C> <C> <C>
INVESTMENT OPERATIONS:
Net asset value, beginning of period. $10.00 $10.01 $10.67 $10.94 $11.81 $10.53 $11.81
------- ------- ------- ------- ------- ------- -------
INVESTMENT OPERATIONS:
Investment income-net................ .23 .70 .92 .76 .73 .68 .32
Net realized and unrealized gain
(loss) on investments .01 .66 .30 .88 (1.27) 1.42 (.53)
------- ------- ------- ------- ------- ------- -------
TOTAL FROM INVESTMENT OPERATIONS..... .24 1.36 1.22 1.64 (.54) 2.10 (.21)
------- ------- ------- ------- ------- ------- -------
DISTRIBUTIONS:
Dividends from investment income-net. (.23) (.70) (.92) (.76) (.73) (.69) (.27)
Dividends from net realized
gain on investments.................. -- -- (.03) (.01)(.01) (.13) _
------- ------- ------- ------- ------- ------- -------
TOTAL DISTRIBUTIONS.................. (.23) (.70) (.95) (.77) (.74) (.82) (.27)
------- ------- ------- ------- ------- ------- -------
Net asset value, end of period....... $10.01 $10.67 $10.94 $11.81 $10.53 $11.81 $11.33
======= ======= ======= ======= ======= ======= =======
TOTAL INVESTMENT RETURN................ 7.12%(2) 14.12% 12.09% 15.33% (4.59%) 20.42% (3.81%)(2)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets .15%(2) -- -- -- -- .81% .80%(2)
Ratio of net investment income
to average net assets................ 7.20%(2) 7.52% 8.54% 6.51% 7.03% 6.13% 5.80%(2)
Decrease reflected in above expense ratios due
to undertakings by The Dreyfus Corporation 137.05%(2) 13.13% 5.33% 3.51% 1.20% .04% _
Portfolio Turnover Rate.............. -- -- 9.39% 110.62% 64.80% 263.53% 51.24%(3)
Net assets, end of period (000's omitted) $59 $410 $405 $4,706 $13,244 $37,447 $51,854
(1) From August 31, 1990 (commencement of operations) to December 31, 1990.
(2) Annualized.
(3) Not annualized.

</TABLE>
Page 10
<TABLE>
<CAPTION>

ZERO COUPON 2000 PORTFOLIO
----------------------------------------------------------------------------------
FOR THE SIX MONTH
PERIOD ENDED
YEAR ENDED DECEMBER 31, JUNE 30, 1996
----------------------------------------------------------------
PER SHARE DATA: 1990(1) 1991 1992 1993 1994 1995 (UNAUDITED)
------- ------- ------- ------- ------- ------- ----------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period. $10.00 $10.45 $11.64 $11.77 $12.57 $11.39 $12.70
------- ------- ------- ------- ------- ------- -------
INVESTMENT OPERATIONS:
Investment income-net................ .22 .76 .83 .79 .69 .69 .33
Net realized and unrealized gain
(loss) on investments .45 1.25 .15 .96 (1.18) 1.31 (.50)
------- ------- ------- ------- ------- ------- -------
TOTAL FROM INVESTMENT OPERATIONS..... .67 2.01 .98 1.75 (.49) 2.00 (.17)
------- ------- ------- ------- ------- ------- -------
DISTRIBUTIONS;
Dividends from investment income-net. (.22) (.76) (.84) (.78) (.68) (.69) (.28)
Dividends from net realized
gain on investments.................. -- (.06) (.01) (.17) (.01) -- (.02)
------- ------- ------- ------- ------- ------- -------
TOTAL DISTRIBUTIONS.................. (.22) (.82) (.85) (.95) (.69) (.69) (.30)
------- ------- ------- ------- ------- ------- -------
Net asset value, end of period....... $10.45 $11.64 $11.77 $12.57 $11.39 $12.70 $12.23
======= ======= ======= ======= ======= ======= =======
TOTAL INVESTMENT RETURN................ 20.09%(2) 20.09% 8.87% 15.19% (3.91%) 17.95% (2.71%)(2)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets .70%(2) .72% .64% -- -- .68% .67%(2)
Ratio of net investment income to
average net assets................... 8.03%(2) 7.41% 7.15% 6.21% 6.04% 5.73% 5.49%(2)
Decrease reflected in above expense ratios due
to undertakings by The Dreyfus Corporation 81.13%(2) 5.04% 2.28% 2.43% 1.05% .03% _
Portfolio Turnover Rate.............. -- 42.82% 3.08% 106.35% -- 49.43% 13.39%(3)
Net assets, end of period (000's omitted) $155 $1,296 $1,362 $5,696 $10,913 $22,291 $28,339
(1) From August 31, 1990 (commencement of operations) to December 31, 1990.
(2) Annualized.
(3) Not annualized.

</TABLE>

Further information about the performance of each Series (other than
the International Value, Small Company Stock and Disciplined Stock Portfolios
which had not commenced operations as of December 31, 1995) is contained in
such Series' annual report which may be obtained without charge by writing to
the address or calling the number set forth on the cover page of this
Prospectus.

PERFORMANCE INFORMATION
MONEY MARKET PORTFOLIO -- From time to time, the Series will advertise its
yield and effective yield. It can be expected that these yields will
fluctuate substantially. Both yield figures are based on historical earnings
and are not intended to indicate future performance. The yield of the Series
refers to the income generated by an investment in the Series over a
seven-day period (which period will be stated in the advertisement). This
income is then "annualized." That is, the amount of income generated by the
investment during that week is assumed to be generated each week over a
52-week period and is shown as a percentage of the investment. The effective
yield is calculated similarly, but, when annualized, the income earned by an
investment in the Series is assumed to be reinvested. The effective yield
will be slightly higher than the yield because of the compounding effect of
this assumed reinvestment.
CAPITAL APPRECIATION, DISCIPLINED STOCK, GROWTH AND INCOME, INTERNATIONAL
EQUITY, INTERNATIONAL VALUE, MANAGED ASSETS, SMALL CAP AND SMALL COMPANY
STOCK PORTFOLIOS -- The Series may calculate performance on an average annual
total return or total return basis. Average annual total return is calculated
pursuant to a standardized formula which assumes that an investment in the
Series was purchased with an initial payment of $1,000 and that the
investment was redeemed at the end of a stated period of time, after giving
effect to the reinvestment of dividends and distributions during the period.
The return is expressed as a percentage rate which, if applied on a compounded
annual
Page 11

basis, would result in the redeemable value of the investment at the end of
the period. Advertisements of the Series' performance will include the
Series' average annual total return for one, five and ten year periods, or
for shorter time periods depending upon the length of time during which the
Series has operated.
Total return is computed on a per share basis and assumes the
reinvestment of dividends and distributions. Total return generally is
expressed as a percentage rate which is calculated by combining the income
and principal changes for a specified period and dividing by the net asset
value per share at the beginning of the period. Advertisements may include
the percentage rate of total return or may include the value of a
hypothetical investment at the end of the period, which assumes the
application of the percentage rate of total return.
QUALITY BOND AND ZERO COUPON 2000 PORTFOLIOS -- For purposes of advertising,
performance may be calculated on several bases, including current yield,
average annual total return and/or total return.
Current yield refers to the Series' annualized net investment income
per share over a 30-day period, expressed as a percentage of the net asset
value per share at the end of the period. For purposes of calculating current
yield, the amount of net investment income per share during that 30-day
period, computed in accordance with regulatory requirements, is compounded by
assuming that it is reinvested at a constant rate over a six-month period. An
identical result is then assumed to have occurred during a second six-month
period which, when added to the result for the first six months, provides an
"annualized" yield for an entire one-year period.
Average annual total return and total return for these Series will be
calculated as described above.
In addition, the Zero Coupon 2000 Portfolio will calculate on each
business day its anticipated growth rate, which is the annualized rate of
growth investors may expect from the time they purchase a share until the
Series' target date. The anticipated growth rate cannot be guaranteed, as it
involves certain assumptions about variable factors such as reinvestment of
dividends and distributions, the Series' expense ratio and its portfolio
composition. The rate will vary from day-to-day due to changes in interest
rates and other market factors affecting the value of such Series'
investments. Furthermore, differences in the price changes of securities with
different maturities can affect investment return, as can the skill of the
investment adviser in managing the Series. Under certain circumstances,
shareholder redemptions also could affect the anticipated growth rate. See
"Description of the Fund_Investment Considerations and Risks_Special
Considerations Relating to Stripped Securities."
APPLICABLE TO ALL SERIES -- Performance will vary from time to time and past
results are not necessarily representative of future results. Investors
should remember that performance is a function of portfolio management in
selecting the type and quality of portfolio securities and is affected by
operating expenses. Performance information, such as that described above,
may not provide a basis for comparison with other investments or other
investment companies using a different method of calculating performance.
Performance information of any Series should not be compared with other funds
that offer their shares directly to the public since the figures provided do
not reflect charges imposed by Participating Insurance Companies under their
VA contracts or VLI policies. The effective yield and total return for a
Series should be distinguished from the rate of return of a corresponding
sub-account or investment division of a separate account of a Participating
Insurance Company, which rate will reflect the deduction of additional
charges, including mortality and expense risk charges, and will therefore be
lower. Variable annuity contract holders and variable life insurance policy
holders should consult the prospectus for their contract or policy.

Calculations of the Series' yield or performance information may
reflect absorbed expenses pursuant to any undertaking that may be in effect.
See "Management of the Fund." Comparative performance information may be
used from time to time in advertising a Series' shares, including data from
the Consumer Price Index, Lipper Analytical Services, Inc., IBC's Money
Fund Reporttrademark, Money Magazine, Bank Rate
Page 12

Monitortrademark, N. Palm Beach, Fla. 33408, Standard & Poor's 500 Composite
Stock Price Index, Standard & Poor's MidCap 400 Index, Russell 2500trademark
Index, Morgan Stanley Capital International World Index, the Dow Jones
Industrial Average, Moody's Bond Survey Bond Index, Morningstar, Inc., Value
Line Mutual Fund Survey and other industry publications.

DESCRIPTION OF THE FUND
GENERAL
The Fund is intended to be a funding vehicle for VA contracts and VLI
policies to be offered by the separate accounts of Participating Insurance
Companies. The VA contracts and the VLI policies are described in separate
prospectuses issued by the Participating Insurance Companies over which the
Fund assumes no responsibility. The Fund currently does not foresee any
disadvantages to the holders of VA contracts and VLI policies arising from
the fact that the interests of the holders of such contracts and policies may
differ.
Nevertheless, the Fund's Board intends to monitor events in order to
identify any material conflicts which may arise and to determine what action,
if any, should be taken in response thereto. Resolution of an irreconcilable
conflict might result in the withdrawal of a substantial amount of a Series'
assets which could adversely affect such Series' net asset value per share.
Individual VA contract holders and VLI policy holders are not the
"shareholders" of the Fund. Rather, the Participating Insurance Companies and
their separate accounts are the shareholders (the "shareholders"), although
such companies will pass through voting rights to their VA contract holders
and VLI policy holders.
INVESTMENT OBJECTIVES AND MANAGEMENT POLICIES
Each Series has a different investment objective which it pursues
through separate investment policies, as described herein. The differences in
objectives and policies among the Series determine the types of portfolio
securities in which each Series invests, and can be expected to affect the
degree of risk to which each Series is subject and each Series' yield or
return. Each Series' investment objective cannot be changed without approval
by the holders of a majority (as defined in the Investment Company Act of
1940, as amended (the "1940 Act")) of such Series' outstanding voting shares.
There can be no assurance that a Series' investment objective will be
achieved. The types of portfolio securities in which each Series may invest
are described in greater detail below and under "Appendix_Certain Portfolio
Securities."

MONEY MARKET PORTFOLIO -- The Money Market Portfolio is a diversified
portfolio, the investment objective of which is to provide as high a level of
current income as is consistent with the preservation of capital and the
maintenance of liquidity. The Series invests in U.S. dollar denominated
short-term money market instruments, including securities issued or
guaranteed by the U.S. Government, its agencies or instrumentalities,
certificates of deposit, time deposits, bankers' acceptances and other
short-term obligations issued by domestic banks, foreign branches or foreign
subsidiaries of domestic banks, and domestic and foreign branches of foreign
banks, repurchase agreements, and high quality domestic and foreign
commercial paper and other short-term corporate and bank obligations,
including those with floating and variable rates of interest, issued by
domestic and foreign corporations. The Series will invest in U.S. dollar
denominated obligations issued or guaranteed by one or more foreign
governments or any of their political subdivisions, agencies or
instrumentalities, including obligations of supranational entities. The
Series currently does not intend to invest more than 20% of its assets in
foreign securities. Securities in which the Series will invest may not earn as
high a level of current income as long-term or lower quality securities
which generally have less liquidity, greater market risk and more fluctuation
in market value. In addition, the Series may engage in lending portfolio
securities and may enter into reverse repurchase agreements. See
"Appendix_Investment Techniques." During normal market conditions, at least
25% of the Series' assets will be invested in bank obligations. See
"Investment Considerations and Risks."

Page 13

The Money Market Portfolio seeks to maintain a net asset value of
$1.00 per share for purchases and redemptions. To do so, the Series uses the
amortized cost method of valuing its securities pursuant to Rule 2a-7 under
the 1940 Act, which Rule includes various maturity, quality and
diversification requirements, certain of which are summarized below. In
accordance with Rule 2a-7, the Series is required to maintain a
dollar-weighted average portfolio maturity of 90 days or less, purchase only
instruments having remaining maturities of 13 months or less and invest only
in U.S. dollar denominated securities determined in accordance with
procedures established by the Fund's Board to present minimal credit risks
and which are rated in one of the two highest rating categories for debt
obligations by at least two nationally recognized statistical rating
organizations (or one rating organization if the instrument was rated by only
one such organization) or, if unrated, are of comparable quality as
determined in accordance with procedures established by the Fund's Board. The
nationally recognized statistical rating organizations currently rating
instruments of the type the Money Market Portfolio may purchase are Moody's
Investors Service, Inc. ("Moody's"), Standard & Poor's Ratings Group
("S&P"), Duff & Phelps Credit Rating Co. ("Duff"), Fitch Investors
Service, L.P. ("Fitch"), IBCA Limited and IBCA Inc. and Thomson
BankWatch, Inc. and their rating criteria are described in the "Appendix"
to the Statement of Additional Information. For further information regarding
the amortized cost method of valuing securities, see "Determination of
Net Asset Value" in the Statement of Additional Information. There can be
no assurance that the Money Market Portfolio will be able to maintain a
stable net asset value of $1.00 per share.

CAPITAL APPRECIATION PORTFOLIO -- The Capital Appreciation Portfolio is a
diversified portfolio, the primary investment objective of which is to
provide long-term capital growth consistent with the preservation of capital;
current income is a secondary investment objective. During periods which
Fayez Sarofim & Co. ("Sarofim"), the Series' sub-investment adviser,
determines to be of market strength, the Series acts aggressively to increase
shareholders' capital by investing principally in common stocks of domestic
and foreign issuers, common stocks with warrants attached and debt securities
of foreign governments. The Series will seek investment opportunities
generally in large capitalization companies (those with market
capitalizations exceeding $500 million) which Sarofim believes have the
potential to experience above average and predictable earnings growth. Market
capitalization of a company's stock is its market price per share times the
number of shares outstanding. The Series will be alert to those foreign and
domestic issuers, which it considers undervalued by the stock market in terms
of current earnings, assets or growth prospects. These companies will include
those that management believes have new or innovative products, services or
processes which can enhance prospects for growth in future earnings. Other
than in periods of anticipated market weakness, the Series will invest at
least 80% of its net assets in common stocks. In periods of market weakness,
the Series may adopt a temporary defensive posture to preserve shareholders'
capital by investing the Series' assets in money market instruments of the
type in which the Money Market Portfolio invests ("Money Market
Instruments"). When market conditions warrant, all of the Series' assets may
be so invested.

The Series may invest up to 10% of the value of its assets in
securities of foreign governments and foreign companies which are not
publicly-traded in the United States. By investing in foreign securities, the
Series seeks to further its objective of capital growth. See "Investment
Considerations and Risks_Foreign Securities" below.

In addition, the Series may engage in various investment techniques,
such as lending portfolio securities and foreign currency transactions. For a
discussion of the investment techniques and their related risks, see
"Investment Considerations and Risks" and "Appendix_Investment Techniques"
below and "Investment Objectives and Management Policies_Management Policies"
in the Statement of Additional Information.

Page 14

GROWTH AND INCOME PORTFOLIO -- The Growth and Income Portfolio is a
non-diversified portfolio, the investment objective of which is long-term
capital growth, current income and growth of income, consistent with
reasonable investment risk. The Series invests in equity securities, debt
securities and Money Market Instruments of domestic and foreign issuers. The
proportion of the Series' assets invested in each type of security will vary
from time to time in accordance with The Dreyfus Corporation's assessment of
economic conditions and investment opportunities.

The equity securities in which the Series may invest consist of
common stocks, preferred stocks and securities convertible into common
stocks, including those in the form of Depositary Receipts, as well as
warrants to purchase such securities. The Series will be particularly
alert to companies which offer opportunities for capital appreciation
and growth of earnings, while paying current dividends.
The debt securities in which the Series may invest include bonds,
debentures, notes, mortgage-related securities and municipal obligations.
Debt securities (other than convertible debt securities) purchased by the
Series must be rated at least Baa by Moody's or at least BBB by S&P, Fitch or
Duff or, if unrated, deemed to be of comparable quality by The Dreyfus
Corporation. Debt securities rated Baa by Moody's or BBB by S&P, Fitch or
Duff are considered investment grade obligations which lack outstanding
investment characteristics and have speculative characteristics as well. The
Series may invest up to 35% of the value of its net assets in convertible
debt securities rated not lower than Caa by Moody's or CCC by S&P, Fitch or
Duff, or, if unrated, deemed to be of comparable quality by The Dreyfus
Corporation. Debt securities rated Caa by Moody's and CCC by S&P, Fitch and
Duff are considered to have predominantly speculative characteristics with
respect to capacity to pay interest and repay principal and are considered to
be of poor standing. See "Investment Considerations and Risks_Lower Rated
Securities" below.
While the Series does not intend to limit the amount of its assets
invested in Money Market Instruments, except to the extent believed necessary
to achieve its investment objective, it does not expect under normal market
conditions to have a substantial portion of its assets invested in Money
Market Instruments. However, when The Dreyfus Corporation determines that
adverse market conditions exist, the Series may adopt a temporary defensive
posture and invest its entire portfolio in Money Market Instruments. The
Series also may invest in Money Market Instruments in anticipation of
investing cash positions.

In addition, the Series may engage in various investment techniques,
such as foreign currency transactions, options and futures transactions,
leveraging, lending portfolio securities and short-selling. For a discussion
of the investment techniques and their related risks, see "Investment
Considerations and Risks" and "Appendix_Investment Techniques" below and
"Investment Objectives and Management Policies_Management Policies" in the
Statement of Additional Information.

MANAGED ASSETS PORTFOLIO -- The Managed Assets Portfolio is a diversified
portfolio, the investment objective of which is to maximize total return,
consisting of capital appreciation and current income. The Series follows an
asset allocation strategy by investing in equity securities, debt securities
and Money Market Instruments of domestic and foreign issuers. The Series will
not be managed as a balanced portfolio and is not required to maintain a
portion of its investments in each of the Series' permitted investment
categories at all times. The asset classes, market sectors, securities and
portfolio strategies selected will be those that The Dreyfus Corporation and
Comstock Partners, Inc. ("Comstock"), the Series' sub-investment adviser,
believe prudent and offer the greatest potential for achieving the Series'
investment objective. The asset allocation mix selected will be a primary
determinant of the Series' investment performance.

The equity securities in which the Series may invest include common
stocks, preferred stocks, convertible securities and warrants. The debt
securities in which the Series may invest include bonds,
Page 15

debentures and notes. The Series may invest up to 60% of the value of its
total assets in the securities of foreign issuers, including those issued in
the form of Depositary Receipts. The Series may invest up to 20% of the value
of its total net assets in securities of issuers principally located in any
one foreign country, except that the Series may invest up to 35% of the value
of its total net assets in securities of issuers located in any one of the
following foreign countries: Australia, Canada, France, Japan, the United
Kingdom or Germany. The Series may invest in the securities of companies
whose principal activities are in, or governments of, emerging markets.
See "Investment Considerations and Risks-Foreign Securities" below.
The Series generally seeks to invest in equity securities determined
to offer above average potential for total return. In making this
determination, factors including price-earnings ratios, cash flow and the
relationship of asset value to market value of the securities will be taken
into account. The Series will be alert to companies engaged in restructuring
efforts, such as mergers, acquisitions and divestitures of less profitable
units.
The Series generally seeks to invest in debt securities where the
yield and potential for capital appreciation of the security are considered
sufficiently attractive in light of the risks of ownership of the security.
In determining whether the Series should invest in particular debt
securities, the factors considered may include: the price, coupon and yield
to maturity; assessment of the credit quality of the issuer; the issuer's
available cash flow and the related coverage ratios; the property, if any,
securing the obligation; and the terms of the debt securities, including the
subordination, default, sinking fund and early redemption provisions.
Ratings, if any, assigned to the securities by Moody's or S&P or other
recognized rating agencies also will be considered. The judgment of The
Dreyfus Corporation and Comstock as to credit quality of a debt security may
differ, however, from that suggested by the ratings published by a rating
service. The Series is not subject to any limit on the percentage of its
assets that may be invested in securities having a certain rating. Low-rated
and unrated securities have special risks relating to the ability of the
Series to receive timely, or perhaps ultimate, payment of principal and
interest. Such securities are considered to have speculative characteristics
and to be of poor quality; some obligations in which the Series may invest
may be in default. See "Investment Considerations and Risks_Lower Rated
Securities" below. The Series also may invest in Stripped Treasury Securities
(as defined below).
The Managed Assets Portfolio may invest up to 100% of its assets in
Money Market Instruments, but at no time will the Series' investments in bank
obligations, including time deposits, exceed 25% of its assets.
To the extent permitted under the 1940 Act, the Series may invest in
securities issued by closed-end investment companies which principally invest
in securities of foreign issuers. The Series also may purchase to a limited
extent securities representing the right to receive the capital appreciation
above a certain amount, and other securities representing the right to
receive dividends and all other attributes of beneficial ownership, in
respect of an entity's common stock or other similar instrument. These
securities typically are sold as shares in unit investment trusts.

In addition, the Series may engage in various investment techniques,
such as foreign currency transactions, options and futures transactions,
lending portfolio securities and short-selling. For a discussion of the
investment techniques and their related risks, see "Investment Considerations
and Risks" and "Appendix_Investment Techniques" below and "Investment
Objectives and Management Policies_Management Policies" in the Statement of
Additional Information.

SMALL CAP PORTFOLIO -- The Small Cap Portfolio is a diversified portfolio,
the investment objective of which is to maximize capital appreciation. The
Series seeks out companies that The Dreyfus Corporation believes have the
potential for significant growth. During periods The Dreyfus Corporation
judges to be of market strength, the Series will act aggressively to increase
shareholders' capital by investing principally in common stocks (some of
which may be dividend paying) of domestic and foreign issuers. Under normal
market conditions, the Series will invest at least 65% of its total assets in
companies, both domestic
Page 16

and foreign, with market capitalizations of less than $750 million at the
time of purchase, which the Series believes to be characterized by new or
innovative products or services which should enhance prospects for growth in
future earnings. The Series also will make investments based on prospective
economic or political changes. Further, the Series will invest in special
situations such as corporate restructurings, mergers or acquisitions, thereby
seeking out undervalued securities. In periods of market weakness, the Series
may adopt a temporary defensive posture to preserve shareholders' capital by
investing the Series' assets in Money Market Instruments. When the Series has
adopted a temporary defensive posture, the entire portfolio may be so invested.

The Series may invest up to 25% of the value of its assets in the
common stocks of foreign companies which are not publicly-traded in the
United States. The Series currently does not intend to invest more than 20%
of its assets in foreign securities. See "Investment Considerations and
Risks_Foreign Securities" below.

The Series also may invest in debt securities rated as low as the
lowest rating assigned by Moody's or S&P, and in unrated debt securities,
which have special risks. See "Investment Considerations and
Risks_Fixed-Income Securities" and "_Lower Rated Securities" below.

In addition, the Series may engage in various investment techniques,
such as lending portfolio securities, foreign currency transactions and, to a
limited extent, short-selling. For a discussion of the investment techniques
and their related risks, see "Investment Considerations and Risks" and
"Appendix_Investment Techniques" below and "Investment Objectives and
Management Policies_Management Policies" in the Statement of Additional
Information.

SMALL COMPANY STOCK PORTFOLIO -- The Small Company Stock Portfolio is a
diversified portfolio, the investment objective of which is to provide
investment results that are greater than the total return performance of
publicly-traded common stocks in the aggregate, as represented by the Russell
2500trademark Index.* The Russell 2500trademark Index is composed of common
stocks issued by small- and medium-sized companies, typically with market
capitalizations between $100 million and $2.7 billion. The Series invests
primarily in a portfolio of equity securities of small- to medium-sized
domestic issuers, while attempting to maintain volatility and diversification
similar to that of the Russell 2500trademark Index. The Series will invest in
the securities of such issuers that are considered by The Dreyfus Corporation
to offer above-average growth potential. The Series also may invest in
initial public offerings of stock when The Dreyfus Corporation determines
that such offerings provide above-average short-term appreciation
opportunities. The equity securities in which the Series invests consist of
common stocks, preferred stocks and securities convertible into common
stocks, including those in the form of American Depositary Receipts. The
Series also may invest up to 20% of its assets in foreign securities. See
"Investment Considerations and Risks_Foreign Securities" below.

While seeking desirable investments, the Series may invest in Money
Market Instruments. Under normal market conditions, the Series does not
expect to have a substantial portion of its assets invested in Money Market
Instruments. However, when The Dreyfus Corporation determines that adverse
market conditions exist, the Series may adopt a temporary defensive posture
and invest all of its assets in Money Market Instruments.

In an effort to increase returns, the Series may engage in various
investment techniques, such as lending portfolio securities, foreign currency
transactions, and options and futures transactions, and may enter into
reverse repurchase agreements. For a discussion of the investment techniques
and their related risks, see "Investment Considerations and Risks" and
"Appendix_Investment Techniques" below and "Investment Objectives and
Management Policies_Management Policies" in the Statement of Additional
Information.

- ----------------------
* Russell 2500trademark is a trademark of Frank Russell Company. The Series
is not sponsored, endorsed, sold or promoted by Frank Russell Company.
Page 17

DISCIPLINED STOCK PORTFOLIO -- The Disciplined Stock Portfolio is a
diversified portfolio, the investment objective of which is to provide
investment results that are greater than the total return performance of
publicly-traded common stocks in the aggregate, as represented by the Standard
& Poor's 500 Composite Stock Price Index ("S&P 500 Index").** The S&P 500
Index is composed of 500 common stocks, most of which are listed on the New
York Stock Exchange, chosen to reflect the industries of the U.S. economy.
The Series uses quantitative statistical modeling techniques to identify
equity securities which emphasize certain attributes expected to produce in
the aggregate total return greater than that of the S&P 500 Index. This
investment process utilizes disciplined control of fund risk and a process of
rigorous security selection. The Series is not an index fund and its
investments are not limited to securities of issuers in the S&P 500 Index.

Individual security selection is the foundation of the Series'
investment approach. Consistency of returns which exceed those of the S&P 500
Index and stability of the Series' asset value relative to the S&P 500 Index
are primary goals of the investment process. Information from diverse sources
is collected and used to construct valuation models which are combined to
form a comprehensive computerized valuation ranking system identifying common
stocks which appear to be over or under valued. These models include measures
of actual and estimated earnings changes and relative value based on dividend
discount calculations, book values to stock price ratios, earnings to stock
price ratios and return on equity ratios. The computerized ranking system
incorporates information from the most recent time period available to the
system and categorizes individual securities within each industry according
to relative attractiveness. The Dreyfus Corporation then uses the data
provided by the model to construct a portfolio in an attempt to achieve the
Series' investment objective, while attempting to maintain risk
characteristics similar to those of the S&P 500 Index.

Under normal circumstances, at least 65% of the Series' total assets
will be invested in equity securities, consisting of common stocks, preferred
stocks and securities convertible into common stocks, including those in the
form of American Depositary Receipts. While seeking desirable investments,
the Series may invest in Money Market Instruments. Under normal market
conditions, the Fund does not expect to have a substantial portion of its
assets invested in Money Market Instruments. However, when The Dreyfus
Corporation determines that adverse market conditions exist, the Series may
adopt a temporary defensive posture and invest all of its assets in Money
Market Instruments.

In an effort to increase returns, the Series may engage in various
investment techniques, such as options and futures transactions. For a
discussion of the investment techniques and their related risks, see
"Investment Considerations and Risks" and "Appendix--Investment Techniques"
below and "Investment Objectives and Management Policies--Management
Policies" in the Statement of Additional Information.

INTERNATIONAL VALUE PORTFOLIO -- The International Value Portfolio is a
diversified portfolio, the investment objective of which is long-term capital
growth. The Series anticipates that at least 65% of the value of its total
assets (except when maintaining a temporary defensive position) will be
invested in equity securities principally of foreign issuers which would be
characterized as "value" companies according to criteria established by The
Dreyfus Corporation. Under normal market conditions, the Series expects that
substantially all of its assets will be invested in securities of foreign
issuers. While there are no prescribed limits on geographic asset
distribution outside the United States, the Series ordinarily will seek to
invest its assets in not less than three foreign countries. The Series'
securities selections generally will be made without regard to an issuer's
market capitalization. Equity securities consist of common stocks,
convertible securities and preferred stocks.

- ----------------------
**"S&PRegistration Mark" and "Standard & Poor's 500 Composite Stock Price
Index" are trademarks of The McGraw-Hill Companies, Inc. The Series is not
sponsored, endorsed, sold or promoted by S&P or The McGraw-Hill Companies, Inc.
Page 18

The Series' investment approach is value-oriented, research-driven
and risk adverse. To manage the Series, The Dreyfus Corporation classifies
issuers as "growth" or "value" companies. In general, The Dreyfus Corporation
believes that companies with relatively low price to book ratios, low price
to earnings ratios or higher than average dividend payments in relation to
price should be classified as value companies. Alternatively, companies which
have above average earnings or sales growth and retention of earnings and
command higher price to earnings ratios fit the more classic growth
description. In addition, The Dreyfus Corporation intends to consider broader
measures of value, including operating return characteristics, overall
financial health and positive changes in business momentum. This
value-oriented, bottom-up investment style is both quantitative and
fundamentally based, focusing first on stock selection then enhanced by
country allocation guidelines.

The Series may invest, to a limited extent, in debt securities issued
by foreign governments and securities issued by closed-end investment
companies. While seeking desirable investments, the Series may invest in
Money Market Instruments. Under normal market conditions, the Series does not
expect to have a substantial portion of its assets invested in Money Market
Instruments. However, when The Dreyfus Corporation determines that adverse
market conditions exist, the Series may adopt a temporary defensive posture
and invest all of its assets in Money Market Instruments.

In addition, the Series may engage in various investment techniques,
such as foreign currency transactions, options and futures transactions and
lending portfolio securities. For a discussion of the investment techniques
and their related risks, see "Investment Considerations and Risks" and
"Appendix_Investment Techniques" below and "Investment Objectives and
Management Policies_Management Policies" in the Statement of Additional
Information.

INTERNATIONAL EQUITY PORTFOLIO -- The International Equity Portfolio is a
non-diversified portfolio, the investment objective of which is capital
growth. It is a fundamental policy of the Series that at least 65% of the
value of its total assets (except when maintaining a temporary defensive
position) will be invested in equity securities of foreign issuers. Equity
securities consist of common stocks, convertible securities and preferred
stocks. The Series also may invest in debt securities of foreign issuers that
management believes, based on market conditions, the financial condition of
the issuer, general economic conditions and other relevant factors, offer
opportunities for capital growth. Under normal market conditions, it is
expected that substantially all of the Series' assets will be invested in
securities of foreign issuers. While there are no prescribed limits on
geographic asset distribution outside the United States, the Series
ordinarily will seek to invest its assets in no fewer than three foreign
countries. The Series may invest up to 5% of its assets in securities of
companies that have been in continuous operation for fewer than three years.

The debt securities in which the Series may invest must be rated at
least Baa by Moody's or at least BBB by S&P, Fitch or Duff or, if unrated,
deemed to be of comparable quality by The Dreyfus Corporation. Debt
securities rated Baa by Moody's or BBB by S&P, Fitch or Duff are considered
investment grade obligations which lack outstanding investment
characteristics and have speculative characteristics as well. See "Investment
Considerations and Risks_Fixed-Income Securities" below.
While seeking desirable equity investments, the Series may invest in
Money Market Instruments. Under normal market conditions, the Series does not
expect to have a substantial portion of its assets invested in Money Market
Instruments. However, when The Dreyfus Corporation determines that adverse
market conditions exist, the Series may adopt a temporary defensive posture
and invest all of its assets in Money Market Instruments.

Page 19

QUALITY BOND PORTFOLIO -- The Quality Bond Portfolio is a diversified
portfolio, the investment objective of which is to provide the maximum amount
of current income to the extent consistent with the preservation of capital
and the maintenance of liquidity. The Series invests principally in debt
obligations of corporations, the U.S. Government and its agencies and
instrumentalities, and major U.S. banking institutions. At least 80% of the
value of the Series' net assets will consist of obligations of corporations
which, at the time of purchase by the Series, are rated at least A by Moody's
or S&P, or determined to be of comparable quality by The Dreyfus Corporation,
and of securities issued or guaranteed as to principal and interest by the
U.S. Government or its agencies or instrumentalities. The Series also may
invest in mortgage-related securities, municipal obligations and zero coupon
securities as described herein. At least 65% of the value of the Series' net
assets (except when maintaining a temporary defensive position) will be
invested in bonds, debentures and other debt instruments.

Up to 20% of the Series' assets may consist of high grade commercial
paper of U.S. issuers, certificates of deposit, time deposits and bankers'
acceptances, and corporate bonds which are rated in any category lower than A
by both Moody's and S&P. When deemed necessary for temporary defensive
purposes or in connection with loans of portfolio securities, the Series'
investment in high grade commercial paper, certificates of deposit, time
deposits and bankers' acceptances may exceed 20% of its assets, although the
Series currently does not intend to invest more than 5% of its assets in any
one of these types of instruments. Under no circumstances will the Series
invest more than 20% of its assets in corporate bonds which are rated lower
than A, but in no case lower than B, by both Moody's and S&P or are unrated.
In addition, the Series will invest no more than 5% of its assets in bonds
rated Ba or B by Moody's and BB or B by S&P. The Series may invest up to 10%
of its assets in securities of foreign issuers. See "Investment
Considerations and Risks -- Foreign Securities" below.

In addition, the Series may engage in various investment techniques,
such as lending portfolio securities. For a discussion of the investment
techniques and their related risks, see "Investment Considerations and Risks"
and "Appendix_Investment Techniques_Lending Portfolio Securities" below and
"Investment Objectives and Management Policies" in the Statement of
Additional Information.

ZERO COUPON 2000 PORTFOLIO -- The Zero Coupon 2000 Portfolio is a diversified
portfolio, the investment objective of which is to provide as high an
investment return as is consistent with the preservation of capital. The Zero
Coupon 2000 Portfolio invests in a portfolio consisting primarily (but
currently not anticipated to be in excess of 55% of the Series' assets) of
debt obligations issued by the U.S. Treasury that have been stripped of their
unmatured interest coupons, interest coupons that have been stripped from
debt obligations issued by the U.S. Treasury, and receipts and certificates
for stripped debt obligations and stripped coupons, including U.S. Government
trust certificates (collectively, "Stripped Treasury Securities"). See
"Appendix_Certain Portfolio Securities_Stripped Treasury Securities." The
Series also may purchase other zero coupon securities issued by the U.S.
Government and its agencies and instrumentalities, by a variety of tax exempt
issuers such as state and local governments and their agencies and
instrumentalities and by "mixed-ownership government corporations"
(collectively, "Stripped Government Securities"). In addition, the Series may
purchase zero coupon securities issued by domestic corporations which consist
of corporate debt obligations without interest coupons, and, if available,
interest coupons that have been stripped from corporate debt obligations, and
receipts and certificates for such stripped debt obligations and stripped
coupons (collectively, "Stripped Corporate Securities"). Stripped Corporate
Securities held by the Series will be rated at least Baa by Moody's or BBB by
S&P. In addition, the Series may purchase stripped Eurodollar obligations,
which are debt securities denominated in U.S. dollars that are issued by
foreign issuers, often guaranteed subsidiaries of domestic corporations. The
Series may invest up to 25% of its assets in securities of foreign issuers.
At the present time, the Series does not intend to invest more than 20% of
its assets in securities of foreign
Page 20

issuers. See "Investment Considerations and Risks -- Foreign Securities." To
the extent that a liquid secondary market is not available for Stripped
Treasury Securities, Stripped Government Securities, Stripped Corporate
Securities or stripped Eurodollar obligations, the Series will invest no more
than 15% of its net assets in such securities and in other securities that
are illiquid. For a further discussion concerning stripped securities,
including stripped Eurodollar obligations, see "Investment Considerations and
Risks_Special Considerations Relating to Stripped Securities" below.

Stripped Treasury Securities, Stripped Government Securities,
Stripped Corporate Securities and stripped Eurodollar obligations are
referred to collectively herein as "Stripped Securities." The Zero Coupon
2000 Portfolio is so designated because at least 65% of the value of the
Series' assets will consist of portfolio securities which will mature on or
about December 31, 2000.
In addition to investing at least 65% of its net assets in Stripped
Securities, the Series will purchase interest-bearing U.S. Government
securities and other Money Market Instruments held for the purpose of
providing income with which to pay the expenses of the Series and to provide
funds with which to meet redemption requests.
There can be no assurance that the Series' objective can be met if
Series shares are redeemed prior to maturity of the underlying Stripped
Securities because market prices of the Stripped Securities before maturity
will vary with changes in interest rates. Stripped Securities, including
stripped Eurodollar obligations, do not make any periodic payments of
interest prior to maturity and the stripping of the interest coupons causes
the Stripped Securities to be offered at a substantial (or "deep") discount
from their face amounts. The market value of Stripped Securities, and
therefore of the shares of the Series, will fluctuate with changes in
interest rates and other factors and may be subject to greater fluctuations
in response to changing interest rates than would a fund consisting of debt
obligations of comparable maturities that pay interest currently. The amount
of fluctuation increases with a longer period to maturity.
On December 31, 2000, the maturity date for the Zero Coupon 2000
Portfolio, the portfolio will be liquidated. Some of the Series' portfolio
securities may mature up to several months earlier than the planned maturity
date of the Series. Attempts will be made to match the maturity dates of the
portfolio assets with the Series' maturity date as closely as possible, but
securities may be purchased with earlier maturities where additional revenue
for the Series may be achieved by such purchases. Prior to December 31, 2000,
shareholders will be informed of the liquidation of the Series and will be
offered the opportunity to exchange their investment upon maturity for
another Series of the Fund. In the event the Zero Coupon 2000 Portfolio has
not received instructions from shareholders as to the disposition of funds
upon maturity of the Series, such funds will be invested automatically in the
Money Market Portfolio.

In addition, the Series may engage in various investment techniques,
such as options and futures transactions and lending portfolio securities.
For a discussion of the investment techniques and their related risks, see
"Investment Considerations and Risks" and "Appendix_Investment Techniques"
below and "Investment Objectives and Management Policies_Management Policies"
in the Statement of Additional Information.

INVESTMENT CONSIDERATIONS AND RISKS
GENERAL -- Since each Series will pursue different types of investments, the
risks of investing will vary depending on the Series selected for investment.
Before selecting a Series in which to invest, the investor should assess the
risks associated with the types of investments made by the Series. The net
asset value per share of each Series, other than the Money Market Portfolio,
should be expected to fluctuate. Investors should consider each Series as a
supplement to an overall investment program and should invest only if they
are willing to undertake the risks involved. See "Investment Objectives and
Management Policies_Management Policies" in the Statement of Additional
Information for a further discussion of certain risks.
Page 21

EQUITY SECURITIES -- (Capital Appreciation, Disciplined Stock, Growth and
Income, International Equity, International Value, Managed Assets, Small Cap
and Small Company Stock Portfolios) Equity securities fluctuate in value,
often based on factors unrelated to the value of the issuer of the
securities, and such fluctuations can be pronounced. Changes in the value of
the Series' investments will result in changes in the value of its shares and
thus the Series' total return to investors.
The securities of the smaller companies in which the Series may
invest may be subject to more abrupt or erratic market movements than larger,
more established companies, because these securities typically are traded in
lower volume and the issuers typically are more subject to changes in
earnings and prospects.
FIXED-INCOME SECURITIES -- (All Series) Even though interest-bearing
securities are investments which promise a stable stream of income, the
prices of such securities generally are inversely affected by changes in
interest rates and, therefore, are subject to the risk of market price
fluctuations. Certain securities that may be purchased by a Series, such as
those with interest rates that fluctuate directly or indirectly based on
multiples of a stated index, are designed to be highly sensitive to changes
in interest rates and can subject the holders thereof to extreme reductions
of yield and possibly loss of principal.
The values of fixed-income securities also may be affected by changes
in the credit rating or financial condition of the issuer. Certain securities
purchased by the Managed Assets, Growth and Income, International Equity and
Quality Bond Portfolios, such as those rated Baa or lower by Moody's and BBB
or lower by S&P, Fitch and Duff, may be subject to such risk with respect to
the issuing entity and to greater market fluctuations than certain lower
yielding, higher rated fixed-income securities. Once the rating of a
portfolio security has been changed, the Fund will consider all circumstances
deemed relevant in determining whether to continue to hold the security. See
"Appendix_Certain Portfolio Securities_Ratings" below and "Appendix" in the
Statement of Additional Information.
SPECIAL CONSIDERATIONS RELATING TO STRIPPED SECURITIES -- (Zero Coupon 2000
Portfolio and, to a limited extent, all other Series) A Stripped Security is
a debt obligation that does not entitle the holder to any periodic payments
of interest prior to maturity and therefore is issued and traded at a
discount from its face amount. The discount from face value at which Stripped
Securities are purchased varies depending on the time remaining until
maturity, prevailing interest rates, the liquidity of the security and the
perceived credit quality of the issuer. Because the discount from face value
is known at the time of investment, investors holding Stripped Securities
until maturity know the total amount of their investment return at the time
of investment. In contrast, a portion of the total realized return from
conventional interest-paying obligations comes from the reinvestment of
periodic interest. Since the rate to be earned on these reinvestments may be
higher or lower than the rate quoted on the interest-paying obligations at
the time of the original purchase, the investment's total return is uncertain
even for investors holding the securities to their maturity. This uncertainty
is commonly referred to as reinvestment risk and can have a significant
impact on total realized investment return. With Stripped Securities,
however, there are no cash distributions to reinvest, so investors bear no
reinvestment risk if they hold the Stripped Securities to maturity.
Stripped Securities can be sold prior to their due date in the
secondary market at their then prevailing market value, which depends
primarily on the time remaining to maturity, prevailing levels of interest
rates and the perceived credit quality of the issuer, which may be more or
less than the securities' value. The market prices of Stripped Securities are
generally more volatile than the market prices of securities that pay interest
periodically and, accordingly, are likely to respond to a greater degree to
changes in interest rates than do other debt obligations having similar
maturities and credit quality characteristics. As a result, the net asset
value of shares of the Zero Coupon 2000 Portfolio may fluctuate over a
greater range than shares of other mutual funds that invest in obligations of
the U.S. Government or corporations having similar maturities but that make
current distributions of interest.
Page 22

As an open-end investment company, the Zero Coupon 2000 Portfolio
will be issuing new shares and will be required to redeem its shares upon the
request of any shareholder at the net asset value next determined after
receipt of the request. However, because of the price volatility of Stripped
Securities prior to maturity, a shareholder who redeems shares may realize an
amount that is less or greater than the entire amount initially invested.
Accordingly, the Zero Coupon 2000 Portfolio may not be appropriate for
investors that expect to have a current need for income from the investment
or wish to liquidate their investment prior to December 31, 2000.
Each year the Zero Coupon 2000 Portfolio will be required to accrue
an increasing amount of income on its Stripped Securities. To maintain its
tax status as a regulated investment company and to avoid imposition of
excise taxes, however, the Zero Coupon 2000 Portfolio and any other Series
that invests in Stripped Securities will be required to distribute dividends
equal to substantially all of its net investment income, including the
accrued income, derived from its Stripped Securities for which it receives no
payments in cash prior to their maturity.
The Series cannot assure that it will be able to achieve a certain
level of return due to the possible necessity of having to sell certain
Stripped Securities to pay expenses or dividends or to meet redemptions at
times and at prices that might be disadvantageous, or, alternatively, to
invest assets received from new purchases at prevailing interest rates, which
would expose the Series to reinvestment risk. In addition, no assurance can
be given as to the liquidity of the market for certain of these securities.
Determination as to the liquidity of such securities will be made in
accordance with guidelines established by the Fund's Board. In accordance
with such guidelines, the Series' adviser will monitor the Series'
investments in such securities with particular regard to trading activity,
availability of reliable price information and other relevant information.

LOWER RATED SECURITIES--(Growth and Income, Managed Assets, Quality Bond and,
to a limited extent, Small Cap Portfolios) Each of these Series may invest a
portion of its assets in higher yielding (and, therefore, higher risk) debt
securities (convertible debt securities with respect to the Growth and Income
Portfolio) such as those rated Ba by Moody's or BB by S&P, Fitch or Duff, or
as low as those rated B by Moody's, S&P, Fitch or Duff in the case of the
Quality Bond Portfolio, or as low as those rated Caa by Moody's or CCC by
S&P, Fitch or Duff in the case of the Growth and Income Portfolio, or as low
as the lowest rating assigned by Moody's, S&P, Fitch or Duff in the case of
the Managed Assets and Small Cap Portfolios (commonly known as junk bonds).
They may be subject to certain risks with respect to the issuing entity and
to greater market fluctuations than certain lower yielding, higher rated
fixed-income securities. The retail secondary market for these securities may
be less liquid than that of higher rated securities; adverse conditions could
make it difficult at times for the Series to sell certain securities or could
result in lower prices than those used in calculating the Series' net asset
value. See "Appendix -- Certain Portfolio Securities -- Ratings."

FOREIGN SECURITIES -- (All Series) Foreign securities markets generally are
not as developed or efficient as those in the United States. Securities of
some foreign issuers are less liquid and more volatile than securities of
comparable U.S. issuers. Similarly, volume and liquidity in most foreign
securities markets are less than in the United States and, at times,
volatility of price can be greater than in the United States.
Because evidences of ownership of such securities usually are held
outside the United States, the Series will be subject to additional risks
which include possible adverse political and economic developments, seizure
or nationalization of foreign deposits and adoption of governmental
restrictions which might adversely affect the payment of principal and
interest on the foreign securities or restrict the payment of principal and
interest to investors located outside the country of the issuer, whether from
currency blockage or otherwise.
Developing countries have economic structures that are generally less
diverse and mature, and political systems that are less stable, than those of
developed countries. The markets of developing countries may be
Page 23

more volatile than the markets of more mature economies; however, such markets
may provide higher rates of return to investors. Many developing countries
providing investment opportunities for the Series have experienced
substantial, and in some periods extremely high, rates of inflation for many
years. Inflation and rapid fluctuations in inflation rates have had and may
continue to have adverse effects on the economies and securities markets of
certain of these countries.
Since foreign securities often are purchased with and payable in
currencies of foreign countries, the value of these assets as measured in
U.S. dollars may be affected favorably or unfavorably by changes in currency
rates and exchange control regulations.
The percentage of a Series' assets which may be invested in foreign
securities as noted above is not a fundamental policy and may be changed at
any time without shareholder approval.
FOREIGN CURRENCY TRANSACTIONS -- (Capital Appreciation, Growth and Income,
International Equity, International Value, Managed Assets, Small Cap and
Small Company Stock Portfolios) Currency exchange rates may fluctuate
significantly over short periods of time. They generally are determined by
the forces of supply and demand in the foreign exchange markets and the
relative merits of investments in different countries, actual or perceived
changes in interest rates and other complex factors, as seen from an
international perspective. Currency exchange rates also can be affected
unpredictably by intervention by U.S. or foreign governments or central
banks, or the failure to intervene, or by currency controls or political
developments in the United States or abroad. See "Appendix_Investment
Techniques_Foreign Currency Transactions."
USE OF DERIVATIVES -- (Disciplined Stock, Growth and Income, International
Value, International Equity, Managed Assets, Small Company Stock and Zero
Coupon 2000 Portfolios) These Series may invest in derivatives
("Derivatives"). These are financial instruments which derive their
performance, at least in part, from the performance of an underlying asset,
index or interest rate. The Derivatives the Series may use include options
and futures and, in the case of the Growth and Income Portfolio,
mortgage-related securities. While Derivatives can be used effectively in
furtherance of the Series' investment objective, under certain market
conditions, they can increase the volatility of the Series' net asset value,
can decrease the liquidity of the Series' portfolio and make more difficult
the accurate pricing of the Series' portfolio. See "Appendix_Investment
Techniques_Use of Derivatives" below, and "Investment Objectives and
Management Policies_Management Policies_Derivatives" in the Statement of
Additional Information.
BANK SECURITIES -- (Money Market Portfolio) To the extent the Money Market
Portfolio's investments are concentrated in the banking industry, the Series
will have correspondingly greater exposure to the risk factors which are
characteristic of such investments. Sustained increases in interest rates can
adversely affect the availability or liquidity and cost of capital funds for
a bank's lending activities, and a deterioration in general economic
conditions could increase the exposure to credit losses. In addition, the
value of and the investment return on the Money Market Portfolio's shares
could be affected by economic or regulatory developments in or related to the
banking industry, and competition within the banking industry as well as with
other types of financial institutions. The Money Market Portfolio, however,
will seek to minimize its exposure to such risks by investing only in debt
securities which are determined to be of high quality.
MUNICIPAL LEASE/PURCHASE OBLIGATIONS -- (Growth and Income and Quality Bond
Portfolios) Certain municipal lease/purchase obligations in which the Series
may invest may contain "non-appropriation" clauses which provide that the
municipality has no obligation to make lease payments in future years unless
money is appropriated for such purpose on a yearly basis. Although
"non-appropriation" lease/purchase obligations are secured by the leased
property, disposition of the leased property in the event of foreclosure
might prove difficult. In evaluating the credit quality of a municipal
lease/purchase obligation that is unrated, The Dreyfus Corporation will
consider, on an ongoing basis, a number of factors including the likelihood
that the issuing municipality will discontinue appropriating funding for the
leased property.
Page 24

PORTFOLIO TURNOVER -- (All Series) No Series will consider portfolio turnover
to be a limiting factor in making investment decisions. Under normal market
conditions, the portfolio turnover rates are anticipated to exceed 100% for
the Managed Assets and Small Cap Portfolios, to be less than 100% for the
Capital Appreciation, Disciplined Stock and Small Company Stock Portfolios
and to be less than 150% for the Growth and Income, Quality Bond, Zero Coupon
2000, International Value and International Equity Portfolios. Higher
portfolio turnover rates are likely to result in comparatively greater
brokerage commissions and transaction costs. In addition, short-term gains
realized from portfolio transactions are taxable to shareholders as ordinary
income. The Money Market Portfolio may have a high portfolio turnover, but
that should not adversely affect the Series since it usually does not pay
brokerage commissions when it purchases short-term debt obligations.

NON-DIVERSIFIED PORTFOLIOS -- (Growth and Income and International Equity
Portfolios) The Growth and Income and International Equity Portfolios are
classified as "non-diversified" investment companies, which means that the
proportion of such Series' assets that may be invested in the securities of a
single issuer is not limited by the 1940 Act. A "diversified" investment
company is required by the 1940 Act generally, with respect to 75% of its
total assets, to invest not more than 5% of such assets in the securities of
a single issuer. Since a relatively high percentage of each of these Series'
assets may be invested in the securities of a limited number of issuers, some
of which may be within the same industry, the Series' portfolio may be more
sensitive to changes in the market value of a single issuer or industry.
However, to meet Federal tax requirements, at the close of each quarter no
Series may have more than 25% of its total assets invested in any one issuer
and, with respect to 50% of total assets, more than 5% of its total assets
invested in any one issuer. These limitations do not apply to U.S. Government
securities.

STATE INSURANCE REGULATION -- (All Series) The Fund is intended to be a
funding vehicle for VA contracts and VLI policies to be offered by
Participating Insurance Companies and will seek to be offered in as many
jurisdictions as possible. Certain states have regulations concerning
concentration of investments, purchase and sale of futures contracts and short
sales of securities, among other techniques. If applied to the Fund, each
Series may be limited in its ability to engage in such techniques and to
manage its portfolio with the flexibility provided herein. It is the Fund's
intention that each Series operate in material compliance with current
insurance laws and regulations, as applied, in each jurisdiction in which the
Series is offered.

SIMULTANEOUS INVESTMENT BY OTHER SERIES OR FUNDS -- (All Series) Investment
decisions for each Series are made independently from those of the other
Series and investment companies managed by The Dreyfus Corporation (and,
where applicable, the Series' sub-investment adviser). If, however, such
other Series or investment companies desire to invest in, or dispose of, the
same securities as the Series, available investments or opportunities for
sales will be allocated equitably to each. In some cases, this procedure may
adversely affect the size of the position obtained for or disposed of by a
Series or the price paid or received by a Series.

MANAGEMENT OF THE FUND

INVESTMENT ADVISER -- The Dreyfus Corporation, located at 200 Park Avenue,
New York, New York 10166, was formed in 1947 and serves as the Fund's
investment adviser. The Dreyfus Corporation is a wholly-owned subsidiary of
Mellon Bank, N.A., which is a wholly-owned subsidiary of Mellon Bank
Corporation ("Mellon"). As of September 30, 1996, The Dreyfus Corporation
managed or administered approximately $81 billion in assets for approximately
1.7 million investor accounts nationwide.

The Dreyfus Corporation supervises and assists in the overall
management of the Fund's affairs under an Investment Advisory Agreement with
the Fund, subject to the authority of the Fund's Board in accordance with
Massachusetts law.

Mellon is a publicly owned multibank holding company incorporated
under Pennsylvania law in 1971 and registered under the Federal Bank Holding
Company Act of 1956, as amended. Mellon provides a comprehensive range of
financial products and services in domestic and selected international
markets.
Page 25

Mellon is among the twenty-five largest bank holding companies in
the United States based on total assets. Mellon's principal wholly-owned
subsidiaries are Mellon Bank, N.A., Mellon Bank (DE) National Association,
Mellon Bank (MD), The Boston Company, Inc., AFCO Credit Corporation and a
number of companies known as Mellon Financial Services Corporations. Through
its subsidiaries, including The Dreyfus Corporation, Mellon managed more than
$220 billion in assets as of June 30, 1996, including approximately $83
billion in proprietary mutual fund assets. As of June 30, 1996, Mellon,
through various subsidiaries, provided non-investment services, such as
custodial or administration services, for more than $876 billion in assets
including approximately $57 billion in mutual fund assets.

In allocating brokerage transactions for the Fund, The Dreyfus
Corporation seeks to obtain the best execution of orders at the most
favorable net price. Subject to this determination, The Dreyfus Corporation
may consider, among other things, the receipt of research services and/or the
sale of shares of the Fund or other funds managed, advised or administered by
The Dreyfus Corporation as factors in the selection of broker-dealers to
execute portfolio transactions for the Fund. See "Portfolio Transactions" in
the Statement of Additional Information.
The Dreyfus Corporation, from time to time, may make payments from
its own assets to Participating Insurance Companies in connection with the
provision of certain administrative services to one or more Series and/or to
purchasers of VA contracts or VLI policies.
The primary portfolio managers of the Series are as follows:
CAPITAL APPRECIATION PORTFOLIO -- Fayez Sarofim. He has been the Series'
primary portfolio manager since the Series commenced operations and has been
employed by Sarofim since 1958.
GROWTH AND INCOME PORTFOLIO -- Richard Hoey. He has been the Series' primary
portfolio manager since the Series commenced operations and has been employed
by The Dreyfus Corporation since April 1991.
MANAGED ASSETS PORTFOLIO -- Investment decisions are made by the Investment
Policy Committee of Comstock, and no person is primarily responsible for
making recommendations to that committee.
SMALL CAP PORTFOLIO -- Hilary R. Woods and Paul Kandel. Ms. Woods and
Mr. Kandel have been the Series' primary portfolio managers since October 1996.
Ms. Woods and Mr. Kandel have been employed by The Dreyfus Corporation since
1987 and 1994, respectively. Prior to joining The Dreyfus Corproation, Mr.
Kandel was a manager at Ark Asset Management for two years; prior thereto, he
was an Assistant Vice President at Bankers Trust Company for four years.

SMALL COMPANY STOCK PORTFOLIO -- James Wadsworth. He has been the Series'
primary portfolio manager since the Series commenced operations. In addition
to being a portfolio manager with The Dreyfus Corporation, Mr. Wadsworth also
has been employed by Laurel Capital Advisors, an affiliate of The Dreyfus
Corporation, since October 1990, and has been Chief Investment Officer of
Laurel Capital Advisors since June 1994. Mr. Wadsworth also is a First Vice
President of Mellon, where he has been employed since 1977.

DISCIPLINED STOCK PORTFOLIO -- Bert Mullins. He has been the Series' primary
portfolio manager since the Series commenced operations. In addition to being
a portfolio manager with The Dreyfus Corporation, Mr. Mullins also has been
employed by Laurel Capital Advisors, an affiliate of The Dreyfus Corporation,
since October 1990. Mr. Mullins also is a Vice President, Portfolio Manager
and Senior Security Analyst of Mellon, where he has been employed since 1966.

INTERNATIONAL VALUE PORTFOLIO -- Sandor Cseh. He has been the Series' primary
portfolio manager since the Series commenced operations and has been employed
by The Dreyfus Corporation since May 1996 and by The Boston Company Asset
Management, Inc., an affiliate of The Dreyfus Corporation, or its predecessor
since October 1994. Prior to joining The Boston Company Asset Management,
Inc., Mr. Cseh was President of Cseh International & Associates Inc., the
international money management division of Cashman, Farrell & Association,
and was a securities analyst with several banks.

INTERNATIONAL EQUITY PORTFOLIO -- Ronald Chapman. He has been the Series'
primary portfolio manager since April 1996 and has been employed by The
Dreyfus Corporation since January 1996. Prior thereto, Mr. Chapman served for
ten years as Vice President of the Global Strategy and Management Group for
Northern Trust Company.
Page 26

QUALITY BOND PORTFOLIO -- Garitt Kono. He has been the Series' primary
portfolio manager since June 1994 and has been employed by The Dreyfus
Corporation since September 1992. Prior to joining The Dreyfus Corporation,
Mr. Kono was Vice President--Fixed Income at The First Boston Corporation.

ZERO COUPON 2000 PORTFOLIO -- Garitt Kono. He has been the Series' primary
portfolio manager since June 1994 and has been employed by The Dreyfus
Corporation since September 1992.

Under the terms of the Investment Advisory Agreement, the Fund has
agreed to pay The Dreyfus Corporation a monthly fee at the annual rate set
forth below as a percentage of the relevant Series' average daily net
assets. The effective annual rate of the monthly investment advisory fee the
Fund paid The Dreyfus Corporation pursuant to any undertaking in effect for
the fiscal year ended December 31, 1995 (for the period April 30, 1996
(commencement of operations) through September 30, 1996 (unaudited) for the
Small Company Stock, Disciplined Stock and International Value Portfolios) as
a percentage of the relevant Series' average daily net assets also is set
forth below:

ANNUAL RATE OF EFFECTIVE ANNUAL
INVESTMENT ADVISORY RATE OF INVESTMENT
NAME OF SERIES FEE PAYABLE ADVISORY FEE PAID
--------------- -------------------- -------------------
<S> <C> <C>
MONEY MARKET PORTFOLIO .50% .47%
GROWTH AND INCOME PORTFOLIO .75% .72%
MANAGED ASSETS PORTFOLIO .375% .375%
SMALL CAP PORTFOLIO .75% .75%
SMALL COMPANY STOCK PORTFOLIO .75% .56%
DISCIPLINED STOCK PORTFOLIO .75% .56%
INTERNATIONAL VALUE PORTFOLIO 1.00% .74%
INTERNATIONAL EQUITY PORTFOLIO .75% .30%
QUALITY BOND PORTFOLIO .65% .61%
ZERO COUPON 2000 PORTFOLIO .45% .42%
CAPITAL APPRECIATION PORTFOLIO
0 to $150 million of total assets .55% .53%
$150 million to $300 million of total assets .50%
$300 million or more of total assets .375%

</TABLE>

SUB-INVESTMENT ADVISERS -- With respect to the Managed Assets Portfolio,
Comstock Partners, a registered investment adviser located at 10 Exchange
Place, Jersey City, New Jersey 07302, serves as the Series' sub-investment
adviser. Comstock Partners was formed in 1986 and, as of September 30, 1996,
managed approximately $605 million in assets for other mutual funds and
several discretionary accounts. Comstock Partners, subject to the supervision
and approval of The Dreyfus Corporation, provides investment advisory
assistance and the day-to-day management of the Managed Assets Portfolio, as
well as research and statistical information under a Sub-Investment Advisory
Agreement with the Fund, subject to the overall authority of the Fund's Board
in accordance with Massachusetts law. For the fiscal year ended December 31,
1995, the Fund paid Comstock Partners a monthly sub-investment advisory fee
at the annual rate of .375 of 1% of the value of the Managed Assets
Portfolio's average daily net assets.

With respect to the Capital Appreciation Portfolio, Sarofim, a
registered investment adviser located at Two Houston Center, Suite 2907,
Houston, Texas 77010, serves as the Series' sub-investment adviser. Sarofim
was formed in 1958 and, as of September 30, 1996, provided investment
advisory services to discretionary accounts having aggregate assets of
approximately $30.2 billion. Sarofim, subject to the supervision and approval
of The Dreyfus Corporation, provides investment advisory assistance and the
day-to-day management of the Capital Appreciation Portfolio, as well as
investment research and statis-
Page 27

tical information, under a Sub-Investment Advisory Agreement with the Fund,
subject to the overall authority of the Fund's Board in accordance with
Massachusetts law. Under the terms of the Sub-Investment Advisory Agreement
with respect to the Capital Appreciation Portfolio, the Fund has agreed to pay
Sarofim a monthly fee at the annual rate set forth below as percentage of
Capital Appreciation Portfolio's average daily net assets. The effective
annual rate of the monthly sub-investment advisory fee the Fund paid Sarofim
for the fiscal year ended December 31, 1995, as a percentage of Capital
Appreciation Portfolio's average daily net assets also is set forth below:

EFFECTIVE ANNUAL RATE OF
ANNUAL RATE OF SUB-INVESTMENT SUB-INVESTMENT ADVISORY
CAPITAL APPRECIATION PORTFOLIO ADVISORY FEE PAYABLE AGREEMENT PAID
________________________________________________ ---------------------------- -------------------------
<S> <C> <C>
0 to $150 million of total assets .20% .20%
$150 million to $300 million of total assets .25%
$300 million or more of total assets .375%

</TABLE>

With respect to the International Equity Portfolio, from May 2, 1994,
(commencement of operations) through March 31, 1996, The Dreyfus Corporation
engaged M&G Investment Management Limited ("M&G"), a registered investment
adviser located at Three Quays Tower Hill, London EC3R 6BQ, England, to serve
as the Series' sub-investment adviser. For the fiscal year ended December 31,
1995, The Dreyfus Corporation paid M&G a monthly sub-investment advisory fee
at the annual rate of .30 of 1% of the value of the International Equity
Portfolio's average daily net assets. Effective April 1, 1996, the
Sub-Investment Advisory Agreement between The Dreyfus Corporation and M&G was
terminated.

EXPENSES -- All expenses incurred in the operation of the Fund are borne by
the Fund, except to the extent specifically assumed by The Dreyfus
Corporation or a sub-investment adviser. The expenses borne by the Fund
include: organizational costs, taxes, interest, loan commitment fees,
interest and distributions paid on securities sold short, brokerage fees and
commissions, if any, fees of Board members who are not officers, directors,
employees or holders of 5% or more of the outstanding voting securities of
The Dreyfus Corporation or any sub-investment adviser or their affiliates,
Securities and Exchange Commission fees, state Blue Sky qualification fees,
advisory fees, charges of custodians, transfer and dividend disbursing
agents' fees, certain insurance premiums, industry association fees, outside
auditing and legal expenses, costs of independent pricing services, costs of
maintaining the Fund's existence, costs attributable to investor services
(including, without limitation, telephone and personnel expenses), costs of
preparing and printing prospectuses and statements of additional information
for regulatory purposes and for distribution to existing shareholders, costs
of shareholders' reports and meetings, and any extraordinary expenses.
Expenses attributable to a particular Series are charged against the assets
of that Series; other expenses of the Fund are allocated among the Series on
the basis determined by the Board, including, but not limited to,
proportionately in relation to the net assets of each Series.

From time to time, The Dreyfus Corporation (and, with respect to the
Managed Assets Portfolio and Capital Appreciation Portfolio, Comstock
Partners and Sarofim, respectively) may waive receipt of its fees and/or
voluntarily assume certain expenses of a Series, which would have the effect
of lowering the expense ratio of that Series and increasing yield to
investors. The Fund will not pay The Dreyfus Corporation (or, with respect to
the Managed Assets Portfolio or Capital Appreciation Portfolio, Comstock
Partners or Sarofim, respectively) at a later time for any amounts it may
waive nor will the Fund reimburse The Dreyfus Corporation (or, with respect
to the Managed Assets Portfolio or Capital Appreciation Portfolio, Comstock
Partners or Sarofim, respectively) for any amounts it may assume.
DISTRIBUTOR -- The Fund's distributor is Premier Mutual Fund Services, Inc.
(the "Distributor"), located at 60 State Street, Boston, Massachusetts 02109.
The Distributor's ultimate parent is Boston Institutional Group, Inc.
02940-9671.

Page 28

TRANSFER AND DIVIDEND DISBURSING AGENT AND CUSTODIAN -- Dreyfus Transfer,
Inc., a wholly-owned subsidiary of The Dreyfus Corporation, P.O. Box 9671,
Providence, Rhode Island 02940-9671, is the Fund's Transfer and Dividend
Disbursing Agent (the "Transfer Agent"). The Bank of New York, 90 Washington
Street, New York, New York 10286, serves as the Fund's Custodian with respect
to the International Equity, International Value, Managed Assets and Money
Market Portfolios. Mellon Bank, N.A., One Mellon Bank Center, Pittsburgh,
Pennsylvania 15258, serves as the Fund's Custodian with respect to the
Capital Appreciation, Growth and Income, Quality Bond, Small Cap, Zero Coupon
2000, Small Company Stock and Disciplined Stock Portfolios.

HOW TO BUY SHARES
Separate accounts of the Participating Insurance Companies place
orders based on, among other things, the amount of premium payments to be
invested pursuant to VA contracts and VLI policies. Individuals may not place
orders directly with the Fund. See the prospectus of the separate account of
the Participating Insurance Company for more information on the purchase of
Fund shares and with respect to the availability for investment in specific
portfolios of the Fund. The Fund does not issue share certificates.
Purchase orders from separate accounts based on premiums and
transaction requests received by the Participating Insurance Company on a
given business day in accordance with procedures established by the
Participating Insurance Company will be effected at the net asset value of
the applicable Series determined on such business day if the orders are
received by the Fund in proper form and in accordance with applicable
requirements on the next business day and Federal Funds (monies of member
banks within the Federal Reserve System which are held on deposit at a
Federal Reserve Bank) in the net amount of such orders are received by the
Fund on the next business day in accordance with applicable requirements. It
is each Participating Insurance Company's responsibility to properly transmit
purchase orders and Federal Funds in accordance with applicable requirements.
VA contract holders and VLI policy holders should refer to the prospectus for
their contracts or policies in this regard.
Fund shares are sold on a continuous basis. Net asset value per share
is determined as of the close of trading on the floor of the New York Stock
Exchange (currently 4:00 p.m., New York time), on each day that the New York
Stock Exchange is open for business. For purposes of determining net asset
value, options and futures will be valued 15 minutes after the close of
trading on the floor of the New York Stock Exchange. Net asset value per
share is computed by dividing the value of the net assets of each Series
(i.e., the value of its assets less liabilities) by the total number of
shares outstanding. The Zero Coupon 2000 and Quality Bond Portfolios'
investments are valued each business day by an independent pricing service
approved by the Fund's Board and are valued at fair value as determined by
the pricing service. The pricing service's procedures are reviewed under the
general supervision of the Fund's Board. The Money Market Portfolio uses the
amortized cost method of valuing its investments. The Disciplined Stock,
Managed Assets, Capital Appreciation, International Equity, International
Value, Growth and Income, Small Cap and Small Company Stock Portfolios'
investments are valued based on market value, or where market quotations are
not readily available, based on fair value as determined in good faith by the
Fund's Board. For further information regarding the methods employed in
valuing each Series' investments, see "Determination of Net Asset Value" in
the Statement of Additional Information.
HOW TO REDEEM SHARES
Series shares may be redeemed at any time by the separate accounts of
the Participating Insurance Companies. Individuals may not place redemption
orders directly with the Fund. Redemption requests from separate accounts
based on premiums and transaction requests received by the Participating
Insurance Company on a given business day in accordance with procedures
established by the
Page 29

Participating Insurance Company will be effected at the net asset value of
the applicable Series determined on such business day if the requests are
received by the Fund in proper form and in accordance with applicable
requirements on the next business day. It is each Participating Insurance
Company's responsibility to properly transmit redemption requests in
accordance with applicable requirements. VA contract holders and VLI
policy holders should consult their Participating Insurance Company in this
regard. The value of the shares redeemed may be more or less than their
original cost, depending on the Series' then-current net asset value. No
charges are imposed by the Fund when shares are redeemed.
The Fund ordinarily will make payment for all shares redeemed within
seven days after receipt by the Transfer Agent of a redemption request in
proper form, except as provided by the rules of the Securities and Exchange
Commission.
Should any conflict between VA contract holders and VLI policy
holders arise which would require that a substantial amount of net assets be
withdrawn, orderly portfolio management could be disrupted to the potential
detriment of such contract holders and policy holders.
DIVIDENDS, DISTRIBUTIONS AND TAXES
MONEY MARKET PORTFOLIO -- Declares dividends from net investment income on
each day that the Fund determines its net asset value. Dividends usually are
paid on the last calendar day of each month. The earnings for Saturdays,
Sundays and holidays are declared as dividends on the next business day.
ZERO COUPON 2000 AND QUALITY BOND PORTFOLIOS -- Declare and pay dividends
from net investment income monthly.
GROWTH AND INCOME PORTFOLIO -- Declares and pays dividends from net
investment income quarterly.
CAPITAL APPRECIATION, DISCIPLINED STOCK, INTERNATIONAL EQUITY, INTERNATIONAL
VALUE, MANAGED ASSETS, SMALL CAP AND SMALL COMPANY STOCK PORTFOLIOS --
Declare and pay dividends from net investment income annually.
APPLICABLE TO ALL SERIES -- Under the Internal Revenue Code of 1986, as
amended (the "Code"), each Series of the Fund is treated as a separate entity
for purposes of qualification and taxation as a regulated investment company.
Each Series will make distributions from net realized securities gains, if
any, once a year, but may make distributions on a more frequent basis to
comply with the distribution requirements of the Code, in all events in a
manner consistent with the provisions of the 1940 Act. No Series will make
distributions from net realized securities gains unless capital loss
carryovers, if any, have been utilized or have expired. Dividends are
automatically reinvested in additional shares at net asset value unless
payment in cash is elected. Shares begin earning dividends on the day the
purchase order is effective. If all shares in an account are redeemed at any
time, all dividends to which the shareholder is entitled will be paid along
with the proceeds of the redemption. An omnibus accountholder may indicate in
a partial redemption request that a portion of any accrued dividends to which
such account is entitled belongs to an underlying accountholder who has
redeemed all shares in his or her account, and such portion of the accrued
dividends will be paid to the accountholder along with the proceeds of the
redemption. All expenses are accrued daily and deducted before declaration of
dividends to investors.
Notice as to the tax status of dividends and distributions will be
mailed to shareholders annually. Dividends from net investment income
(including discount recognized as ordinary income, if any), together with
distributions of net realized short-term securities gains and all or a
portion of any gains realized from the sale or other disposition of certain
market discount bonds, generally are taxable as ordinary income whether
received in cash or reinvested in additional shares. Distributions from net
realized long-term securities gains generally are taxable as long-term capital
gains whether received in cash or reinvested in additional shares. Since the
Fund's shareholders are the Participating Insurance Companies and their
separate accounts, no discussion is included herein as to the Federal income
tax consequences to VA contract holders and VLI policy holders. For
information concerning the Federal income tax consequences to such holders,
see the prospectus for such contract or policy.
Page 30

Section 817(h) of the Code requires that the investments of a
segregated asset account of an insurance company be "adequately diversified"
as provided therein or in accordance with U.S. Treasury Regulations in order
for the account to serve as the basis for VA contracts or VLI policies.
Section 817(h) and the U.S. Treasury Regulations issued thereunder provide
the manner in which a segregated asset account will treat investments in a
regulated investment company for purposes of the diversification requirements.
If a Series satisfies certain conditions, a segregated asset account owning
shares of the Series will be treated as owning multiple investments
consisting of the account's proportionate share of each of the assets of the
Series. Each Series intends to satisfy the requisite conditions so that the
shares of the Series owned by a segregated asset account of a Participating
Insurance Company will be treated as multiple investments.

Management of the Fund believes that each Series (other than the
Disciplined Stock, International Value and Small Company Stock Portfolios
which had not commenced operations as of December 31, 1995) has qualified for
the fiscal year ended December 31, 1995 as a "regulated investment company"
under the Code. Each Series intends to continue to so qualify if such
qualification is in the best interests of its shareholders. It is expected
that each of the Disciplined Stock, International Value and Small Company
Stock Portfolios will qualify as a "regulated investment company" under the
Code so long as such qualification is in the best interests of its
shareholders. Qualification as a regulated investment company relieves the
Series of any liability for Federal income taxes to the extent its earnings
are distributed in accordance with applicable provisions of the Code. The
Series may be subject to a non-deductible 4% excise tax, measured with
respect to certain undistributed amounts of investment income and capital
gains. Participating Insurance Companies should consult their tax advisers
regarding specific questions as to Federal, state or local taxes.

GENERAL INFORMATION
The Fund was organized as an unincorporated business trust under the
laws of the Commonwealth of Massachusetts pursuant to an Agreement and
Declaration of Trust (the "Trust Agreement") dated October 29, 1986, and
commenced operations on August 31, 1990. The Fund is authorized to issue an
unlimited number of shares of beneficial interest, par value $.001 per share.
Each share has one vote. In accordance with current law, the Fund anticipates
that a Participating Insurance Company issuing a VA contract or VLI policy
that participates in the Fund will request voting actions from policy holders
and will vote shares in proportion to the voting instructions received. For
further information on voting rights, see the prospectus for the VA contract
or VLI policy for information in respect of voting.
The Fund is a "series fund," which is a mutual fund divided into
separate portfolios, each of which is treated as a separate entity for
certain matters under the 1940 Act and for other purposes. A shareholder of
one portfolio is not deemed to be a shareholder of any other portfolio. For
certain matters shareholders vote together as a group; as to others they vote
separately by portfolio.
To date, the Board has authorized the creation of eleven Series of
shares. All consideration received by the Fund for shares of one of the
Series, and all assets in which such consideration is invested, will belong
to that Series (subject only to the rights of creditors of the Fund) and will
be subject to the liabilities related thereto. The income attributable to,
and the expenses of, one Series would be treated separately from those of the
other Series. The Fund has the ability to create, from time to time, new
series without shareholder approval.
Under Massachusetts law, shareholders, under certain circumstances,
could be held personally liable for the obligations of the Fund. However, the
Trust Agreement disclaims shareholder liability for acts or obligations of
the Fund and requires that notice of such disclaimer be given in each
agreement, obligation or instrument entered into or executed by the Fund or a
Trustee. The Trust Agreement provides for indemnification from the Fund's
property for all losses and expenses of any shareholder held personally
liable for the obligations of the Fund. Thus, the risk of a shareholder's
incurring financial loss
Page 31

on account of shareholder liability is limited to circumstances in which the
Fund itself would be unable to meet its obligations, a possibility which
management believes is remote. Upon payment of any liability incurred by the
Fund, the shareholder paying such liability will be entitled to reimbursement
from the general assets of the Fund. The Fund intends to conduct its
operations in such a way so as to avoid, as far as possible, ultimate
liability of the shareholders for liabilities of the Fund. As described under
"Management of the Fund" in the Statement of Additional Information, the Fund
ordinarily will not hold shareholder meetings; however, shareholders under
certain circumstances may have the right to call a meeting of shareholders
for the purpose of voting to remove Trustees.
The Transfer Agent maintains a record of each shareholder's ownership
and will send confirmations and statements of account. Shareholder inquiries
may be made by writing to the Fund at 144 Glenn Curtiss Boulevard, Uniondale,
New York 11556-0144, or by calling 516-338-3300.
Owners of VLI policies and VA contracts issued by Participating
Insurance Companies for which shares of one or more Series are the investment
vehicle will receive from the Participating Insurance Companies unaudited
semi-annual financial statements and audited year-end financial statements
certified by the Fund's independent public auditors. Each report will show
the investments owned by the Fund and the market values thereof as determined
by the Fund's Board and will provide other information about the Fund and its
operations.
Page 32

APPENDIX
INVESTMENT TECHNIQUES
FOREIGN CURRENCY TRANSACTIONS -- (Capital Appreciation, Growth and Income,
Managed Assets, Small Company Stock, International Equity and International
Value Portfolios) Foreign currency transactions may be entered into for a
variety of purposes, including: to fix in U.S. dollars, between trade and
settlement date, the value of a security the Series has agreed to buy or
sell; to hedge the U.S. dollar value of securities the Series already owns,
particularly if it expects a decrease in the value of the currency in which
the foreign security is denominated; or to gain exposure to the foreign
currency in an attempt to realize gains.
Foreign currency transactions may involve, for example, the Series'
purchase of foreign currencies for U.S. dollars or the maintenance of short
positions in foreign currencies, which would involve the Series agreeing to
exchange an amount of a currency it did not currently own for another
currency at a future date in anticipation of a decline in the value of the
currency sold relative to the currency the Fund contracted to receive in the
exchange. The Series' success in these transactions will depend principally
on The Dreyfus Corporation's (and, where applicable, the Series'
sub-investment adviser's) ability to predict accurately the future exchange
rates between foreign currencies and the U.S. dollar.
SHORT-SELLING -- (Growth and Income and, to a limited extent, Managed Assets
and Small Cap Portfolios) In these transactions, the Series sells a security
it does not own in anticipation of a decline in the market value of the
security. To complete the transaction, the Series must borrow the security to
make delivery to the buyer. The Series is obligated to replace the security
borrowed by purchasing it subsequently at the market price at the time of
replacement. The price at such time may be more or less than the price at
which the security was sold by the Series, which would result in a loss or
gain, respectively.
Securities will not be sold short if, after effect is given to any
such short sale, the total market value of all securities sold short would
exceed 25% of the value of the Series' net assets. The Series may not sell
short the securities of any single issuer listed on a national securities
exchange to the extent of more than 5% of the value of the Series' net
assets. The Series may not make a short sale which results in the Series
having sold short in the aggregate more than 5% of the outstanding securities
of any class of an issuer.
The Growth and Income Portfolio also may make, and the Managed Assets
and Small Cap Portfolios only may make, short sales "against the box," in
which the Series enters into a short sale of a security it owns in order to
hedge an unrealized gain on the security. At no time will more than 15% of
the value of the Series' net assets be in deposits on short sales against the
box.
BORROWING MONEY -- (All Series) Each Series is permitted to borrow to the
extent permitted under the 1940 Act, which permits an investment company to
borrow in an amount up to 331/3% of the value of its total assets. Each
Series, other than the Growth and Income Portfolio, currently intends to
borrow money only for temporary or emergency (not leveraging) purposes, in an
amount up to 15% of the value of its total assets (including the amount
borrowed) valued at the lesser of cost or market, less liabilities (not
including the amount borrowed) at the time the borrowing is made. While
borrowings exceed 5% of the Series' total assets, the Series will not make
any additional investments. In addition, the Money Market and Small Company
Stock Portfolios may borrow for investment purposes on a secured basis
through entering into reverse repurchase agreements as described below.
LEVERAGE -- (Growth and Income and, to a limited extent, Money Market and
Small Company Stock Portfolios) Leveraging exaggerates the effect on net
asset value of any increase or decrease in the market value of the Series'
portfolio. Money borrowed for leveraging will be limited to 331/3% of the
value of the Series' total assets. These borrowings will be subject to
interest costs which may or may not be recovered by appreciation of the
securities purchased; in certain cases, interest costs may exceed the return
received on the securities purchased.
Page 33

The Series may enter into reverse repurchase agreements with banks,
brokers or dealers. This form of borrowing involves the transfer by the
Series of an underlying debt instrument in return for cash proceeds based on
a percentage of the value of the security. The Series retains the right to
receive interest and principal payments on the security. At an agreed upon
future date, the Series repurchases the security at principal plus accrued
interest. Except for these transactions, the Growth and Income Portfolio's
borrowings generally will be unsecured.
USE OF DERIVATIVES -- (Disciplined Stock, Growth and Income, International
Equity, International Value, Managed Assets, Small Company Stock and Zero
Coupon 2000 Portfolios) The Series may invest in the types of Derivatives
enumerated under "Description of the Fund -- Investment Considerations and
Risks -- Use of Derivatives." These instruments and certain related risks are
described more specifically under "Investment Objectives and Management
Policies -- Management Policies -- Derivatives" in the Statement of
Additional Information.
Derivatives can be volatile and involve various types and degrees of
risk, depending upon the characteristics of the particular Derivative and the
portfolio as a whole. Derivatives permit the Series to increase or decrease
the level of risk, or change the character of the risk, to which its
portfolio is exposed in much the same way as the Series can increase or
decrease the level of risk, or change the character of the risk, of its
portfolio by making investments in specific securities.
Derivatives may entail investment exposures that are greater than
their cost would suggest, meaning that a small investment in Derivatives
could have a large potential impact on the Series' performance.

If the Series invests in Derivatives at inappropriate times or judges
market conditions incorrectly, such investments may lower the Series' return
or result in a loss. The Series also could experience losses if its
Derivatives were poorly correlated with its other investments or if the
Series were unable to liquidate its position because of an illiquid secondary
market. The market for many Derivatives is, or suddenly can become, illiquid.
Changes in liquidity may result in significant, rapid and unpredictable
changes in the prices for Derivatives.

Although neither the Fund nor any Series will be a commodity pool,
Derivatives subject the Series to the rules of the Commodity Futures Trading
Commission which limit the extent to which the Series can invest in certain
Derivatives. The Series may invest in futures contracts and options with
respect thereto for hedging purposes without limit. However, the Series may
not invest in such contracts and options for other purposes if the sum of the
amount of initial margin deposits and premiums paid for unexpired options
with respect to such contracts, other than for bona fide hedging purposes,
exceed 5% of the liquidation value of the Series' assets, after taking into
account unrealized profits and unrealized losses on such contracts and
options; provided, however, that in the case of an option that is
in-the-money at the time of purchase, the in-the-money amount may be excluded
in calculating the 5% limitation.
The Series may invest up to 5% of its assets, represented by the
premium paid, in the purchase of call and put options. The Series may write
(i.e., sell) covered call and put option contracts to the extent of 20% of
the value of its net assets at the time such option contracts are written.
When required by the Securities and Exchange Commission, the Series will set
aside permissible liquid assets in a segregated account to cover its
obligations relating to its transactions in Derivatives. To maintain this
required cover, the Series may have to sell portfolio securities at
disadvantageous prices or times since it may not be possible to liquidate a
Derivative position at a reasonable price.
LENDING PORTFOLIO SECURITIES -- (All Series) Each Series may lend securities
from its portfolio to brokers, dealers and other financial institutions
needing to borrow securities to complete certain transactions. The Series
continues to be entitled to payments in amounts equal to the interest,
dividends or other distributions payable on the loaned securities which
affords the Series an opportunity to earn interest on the amount of the loan
and on the loaned securities' collateral. Loans of portfolio securities may
not exceed 331/3% (20% with respect to the Managed Assets and Zero Coupon
2000 Portfolios and
Page 34

10% with respect to the Capital Appreciation, Small Cap and Quality Bond
Portfolios) of the value of the Series' total assets, and the Series will
receive collateral consisting of cash, U.S. Government securities or
irrevocable letters of credit which will be maintained at all times in an
amount equal to at least 100% of the current market value of the loaned
securities. Such loans are terminable by the Series at any time upon specified
notice. The Series might experience risk of loss if the institution with
which it has engaged in a portfolio loan transaction breaches its agreement
with the Series.

FORWARD COMMITMENTS -- (All Series) Each Series may purchase securities on a
forward commitment or when-issued basis, which means that delivery and
payment take place a number of days after the date of the commitment to
purchase. The payment obligation and the interest rate receivable on a
forward commitment or when-issued security are fixed when the Series enters
into the commitment, but the Series does not make payment until it receives
delivery from the counterparty. The Series will commit to purchase such
securities only with the intention of actually acquiring the securities, but
the Series may sell these securities before the settlement date if it is
deemed advisable. A segregated account of the Series consisting of
permissible liquid assets at least equal at all times to the amount of the
commitments will be established and maintained at the Fund's custodian bank.

CERTAIN PORTFOLIO SECURITIES
CONVERTIBLE SECURITIES -- (Capital Appreciation, Disciplined Stock, Growth
and Income, International Equity, International Value, Managed Assets, Small
Cap and Small Company Stock Portfolios) Convertible securities may be
converted at either a stated price or stated rate into underlying shares of
common stock. Convertible securities have characteristics similar to both
fixed-income and equity securities. Convertible securities generally are
subordinated to other similar but non-convertible securities of the same
issuer, although convertible bonds, as corporate debt obligations, enjoy
seniority in right of payment to all equity securities, and convertible
preferred stock is senior to common stock, of the same issuer. Because of the
subordination feature, however, convertible securities typically have lower
ratings than similar non-convertible securities.
WARRANTS -- (Capital Appreciation, Growth and Income, International Equity,
International Value, Managed Assets, Small Cap and Small Company Stock
Portfolios) A warrant is an instrument issued by a corporation which gives
the holder the right to subscribe to a specified amount of the corporation's
capital stock at a set price for a specified period of time. The Series may
invest up to 5% (2% in the case of the Managed Assets, Capital Appreciation
and Small Cap Portfolios) of its net assets in warrants, except that this
limitation does not apply to warrants purchased by the Series that are sold
in units with, or attached to, other securities. Included in such amount, but
not exceed 2% of the value of the Series' net assets, may be warrants which
are not listed on the New York or American Stock Exchange.

MORTGAGE-RELATED SECURITIES -- (Growth and Income Portfolio) Mortgage-related
securities are a form of Derivative collateralized by pools of mortgages. The
mortgage-related securities which may be purchased include those with fixed,
floating and variable interest rates, those with interest rates that change
based on multiples of changes in interest rates and those with interest rates
that change inversely to changes in interest rates, as well as stripped
mortgage-backed securities. Stripped mortgage-backed securities usually are
structured with two classes that receive different proportions of interest
and principal distributions on a pool of mortgage-backed securities or whole
loans. A common type of stripped mortgage-backed security will have one class
receiving some of the interest and most of the principal from the mortgage
collateral, while the other class will receive most of the interest and the
remainder of the principal. Although certain mortgage-related securities are
guaranteed by a third party or otherwise similarly secured, the market value
of the security, which may fluctuate, is not secured. If a mortgage-related
security is purchased at a premium, all or part of the premium may be lost if
there is a decline in the market value of the security, whether resulting from
changes in interest rates or prepayments on the underlying mortgage
collateral. As with other interest-bearing securities, the prices of certain
mortgage-related securities are
Page 35

inversely affected by changes in interest rates. However, although the value
of a mortgage-related security may decline when interest rates rise, the
converse is not necessarily true, since in periods of declining interest rates
the mortgages underlying the security are more likely to be prepaid. For this
and other reasons, a mortgage-related security's stated maturity may be
shortened by unscheduled prepayments on the underlying mortgages, and,
therefore, it is not possible to predict accurately the security's return to
the Series. Moreover, with respect to stripped mortgage-backed securities, if
the underlying mortgage securities experience greater than anticipated
prepayments of principal, the Series may fail to fully recoup its initial
investment even if the securities are rated in the highest rating category by
a nationally recognized statistical rating organization. During periods of
rapidly rising interest rates, prepayments of mortgage-related securities may
occur at slower than expected rates. Slower prepayments effectively may
lengthen a mortgage-related security's stated maturity which generally would
cause the value of such security to fluctuate more widely in response to
changes in interest rates. Were the prepayments on the Series'
mortgage-related securities to decrease broadly, the Series' effective
duration, and thus sensitivity to interest rate fluctuations, would
increase. For further discussion concerning the investment considerations
involved, see "Description of the Fund_Investment Considerations and
Risks_Fixed-Income Securities" and "Illiquid Securities" below.

MUNICIPAL OBLIGATIONS -- (Growth and Income and Quality Bond Portfolios)
Municipal obligations are debt obligations issued by states, territories and
possessions of the United States and the District of Columbia and their
political subdivisions, agencies and instrumentalities, or multistate
agencies or authorities. Municipal obligations bear fixed, floating or
variable rates of interest. Certain municipal obligations are subject to
redemption at a date earlier than their stated maturity pursuant to call
options, which may be separated from the related municipal obligations and
purchased and sold separately. The Series also may acquire call options on
specific municipal obligations. The Series generally would purchase these
call options to protect the Series from the issuer of the related municipal
obligation redeeming, or other holder of the call option from calling away,
the municipal obligation before maturity.
While, in general, municipal obligations are tax exempt securities
having relatively low yields as compared to taxable, non-municipal
obligations of similar quality, certain municipal obligations are taxable
obligations, offering yields comparable to, and in some cases greater than,
the yields available on other permissible Series investments. Dividends
received by shareholders on Series shares which are attributable to interest
income received by the Series from municipal obligations generally will be
subject to Federal income tax. The Series will invest in municipal
obligations, the ratings of which correspond with the ratings of other
permissible Series investments. The Series currently intends to invest no
more than 25% of its assets in municipal obligations. However, this
percentage may be varied from time to time without shareholder approval.
DEPOSITARY RECEIPTS -- (Disciplined Stock, Growth and Income, International
Equity, International Value, Managed Assets and Small Company Stock
Portfolios) The Series may invest in the securities of foreign issuers in
the form of American Depositary Receipts ("ADRs"), European Depositary
Receipts ("EDRs") and other forms of depositary receipts. These securities
may not necessarily be denominated in the same currency as the securities
into which they may be converted. ADRs are receipts typically issued by a
United States bank or trust company which evidence ownership of underlying
securities issued by a foreign corporation. EDRs, which are sometimes
referred to as Continental Depositary Receipts ("CDRs"), are receipts issued
in Europe typically by non-United States banks and trust companies that
evidence ownership of either foreign or domestic securities. Generally, ADRs
in registered form are designed for use in the United States securities
markets and EDRs and CDRs in bearer form are designed for use in Europe.
FOREIGN GOVERNMENT OBLIGATIONS; SECURITIES OF SUPRANATIONAL ENTITIES -- (All
Series) Each Series may invest in obligations issued or guaranteed by one or
more foreign governments or any of their political subdivisions, agencies or
instrumentalities that are determined by The Dreyfus Corporation
Page 36

(and, if applicable, the Series' sub-investment adviser) to be of comparable
quality to the other obligations in which the Series may invest. Supranational
entities include international organizations designated or supported by
governmental entities to promote economic reconstruction or development and
international banking institutions and related government agencies. Examples
include the International Bank for Reconstruction and Development (the World
Bank), the European Coal and Steel Community, the Asian Development Bank and
the InterAmerican Development Bank.
MONEY MARKET INSTRUMENTS -- (All Series) Each Series may invest in the
following types of Money Market Instruments.
U.S. GOVERNMENT SECURITIES. Securities issued or guaranteed by the
U.S. Government or its agencies or instrumentalities include U.S. Treasury
securities that differ in their interest rates, maturities and times of
issuance. Some obligations issued or guaranteed by U.S. Government agencies
and instrumentalities are supported by the full faith and credit of the U.S.
Treasury; others by the right of the issuer to borrow from the Treasury;
others by discretionary authority of the U.S. Government to purchase certain
obligations of the agency or instrumentality; and others only by the credit
of the agency or instrumentality. These securities bear fixed, floating or
variable rates of interest. While the U.S. Government provides financial
support to such U.S. Government-sponsored agencies and instrumentalities, no
assurance can be given that it will always do so since it is not so obligated
by law.
REPURCHASE AGREEMENTS. In a repurchase agreement, the Series buys,
and the seller agrees to repurchase, a security at a mutually agreed upon
time and price (usually within seven days). The repurchase agreement thereby
determines the yield during the purchaser's holding period, while the
seller's obligation to repurchase is secured by the value of the underlying
security. Repurchase agreements could involve risks in the event of a default
or insolvency of the other party to the agreement, including possible delays
or restrictions upon the Series' ability to dispose of the underlying
securities. The Series may enter into repurchase agreements with certain
banks or non-bank dealers.
BANK OBLIGATIONS. The Series may purchase certificates of deposit,
time deposits, bankers' acceptances and other short-term obligations issued
by domestic banks, foreign subsidiaries or foreign branches of domestic
banks, domestic and foreign branches of foreign banks, domestic savings and
loan associations and other banking institutions. With respect to such
securities issued by foreign subsidiaries or foreign branches of domestic
banks, and domestic and foreign branches of foreign banks, the Series may be
subject to additional investment risks that are different in some respects
from those incurred by a fund which invests only in debt obligations of U.S.
domestic issuers. See "Description of the Fund -- Investment Considerations
and Risks -- Foreign Securities."
Certificates of deposit are negotiable certificates evidencing the
obligation of a bank to repay funds deposited with it for a specified period
of time.
Time deposits are non-negotiable deposits maintained in a banking
institution for a specified period of time (in no event longer than seven
days) at a stated interest rate.
Bankers' acceptances are credit instruments evidencing the obligation
of a bank to pay a draft drawn on it by a customer. These instruments reflect
the obligation both of the bank and the drawer to pay the face amount of the
instrument upon maturity. The other short-term obligations may include
uninsured, direct obligations bearing fixed, floating or variable interest
rates.
COMMERCIAL PAPER. Commercial paper consists of short-term, unsecured
promissory notes issued to finance short-term credit needs. The commercial
paper purchased by the Series will consist only of direct obligations which,
at the time of their purchase, are (a) rated not lower than Prime-1 by
Moody's, A-1 by S&P, F-1 by Fitch or Duff-1 by Duff, (b) issued by companies
having an outstanding unsecured debt issue currently rated at least A3 by
Moody's or A- by S&P, Fitch or Duff, or (c) if unrated, determined by The
Dreyfus Corporation (and, if applicable, the Series' sub-investment adviser)
to be of comparable quality to those rated obligations which may be purchased
by the Series.
Page 37

PARTICIPATION INTERESTS. The Series may purchase from financial
institutions participation interests in securities in which the Series may
invest. A participation interest gives the Series an undivided interest in
the security in the proportion that the Series' participation interest bears
to the total principal amount of the security. These instruments may have
fixed, floating or variable rates of interest with remaining maturities of 13
months or less. If the participation interest is unrated, or has been given a
rating below that which is permissible for purchase by the Series, the
participation interest will be backed by an irrevocable letter of credit or
guarantee of a bank, or the payment obligation otherwise will be
collateralized by U.S. Government securities, or, in the case of unrated
participation interests, The Dreyfus Corporation must have determined that
the instrument is of comparable quality to those instruments in which the
Series may invest.
INVESTMENT COMPANIES -- (Managed Assets and Small Company Stock Portfolios)
The Series may invest in securities issued by investment companies. Under the
1940 Act, the Series' investment in such securities, subject to certain
exceptions, currently is limited to (i) 3% of the total voting stock of any
one investment company, (ii) 5% of the Series' total assets with respect to
any one investment company and (iii) 10% of the Series' total assets in the
aggregate. Investments in the securities of other investment companies may
involve duplication of advisory fees and certain other expenses.
STRIPPED TREASURY SECURITIES -- (Zero Coupon 2000 Portfolio and, to a limited
extent, all other Series) Stripped Treasury Securities are U.S. Treasury
securities that have been stripped of their unmatured interest coupons (which
typically provide for interest payments semi-annually), interest coupons that
have been stripped from such U.S. Treasury securities, and receipts and
certificates for such stripped debt obligations and stripped coupons.
Stripped bonds and stripped coupons are sold at a deep discount
because the buyer of those securities receives only the right to receive a
future fixed payment on the security and does not receive any rights to
periodic interest payments on the security.
Stripped Treasury Securities will include one or more of the
following types of securities: (a) U.S. Treasury debt obligations originally
issued as bearer coupon bonds which have been stripped of their unmatured
interest coupons, (b) coupons which have been stripped from U.S. Treasury
bonds, either of which may be held through the Federal Reserve Bank's book
entry system called "Separate Trading of Registered Interest and Principal of
Securities" ("STRIPS") or "Coupon Under Book-Entry Safekeeping" ("CUBES"),
and (c) receipts or certificates for stripped U.S. Treasury debt obligations
evidencing ownership of future interest or principal payments on U.S.
Treasury notes or bonds which are direct obligations of the United States.
The receipts or certificates must be issued in registered form by a major
bank which acts as custodian and nominal holder of the underlying stripped
U.S. Treasury obligation (which may be held by it either in physical or in
book-entry form). See "Investment Objectives and Management
Policies_Portfolio Securities" in the Statement of Additional Information.
STRIPPED CORPORATE SECURITIES -- (Growth and Income, International Equity,
Managed Assets, Quality Bond and Zero Coupon 2000 Portfolios) Stripped
Corporate Securities consist of corporate debt obligations issued by domestic
corporations without interest coupons, and, if available, interest coupons
that have been stripped from corporate debt obligations, and receipts and
certificates for such stripped debt obligations and stripped coupons.
Stripped Corporate Securities purchased by the Managed Assets, Growth and
Income, International Equity or Quality Bond Portfolios will bear ratings
comparable to non-stripped corporate obligations that may be purchased by
such Series. Stripped Corporate Securities purchased by the Zero Coupon 2000
Portfolio will be rated at least Baa by Moody's or BBB by S&P. With respect
to other features of Stripped Corporate Securities, such as sales at deep
discounts, see "Stripped Treasury Securities" above and "Description of the
Fund_Investment Considerations and Risks_Special Considerations Relating to
Stripped Securities."
Page 38

ILLIQUID SECURITIES -- (All Series) Each Series may invest up to 15% (10%
with respect to the Money Market Portfolio) of the value of its net assets in
securities as to which a liquid trading market does not exist, provided such
investments are consistent with the Series' investment objective. Such
securities may include securities that are not readily marketable, such as
certain securities that are subject to legal or contractual restrictions on
resale, repurchase agreements providing for settlement in more than seven
days after notice, certain mortgage-backed securities, and certain privately
negotiated, non-exchange traded options and securities used to cover such
options. As to these securities, the Series is subject to a risk that should
the Series desire to sell them when a ready buyer is not available at a
price the Series deems representative of their value, the value of the
Series' net assets could be adversely affected.

RATINGS -- (Growth and Income, Managed Assets, Small Cap and Quality Bond
Portfolios) Securities rated Baa by Moody's are considered medium grade
obligations; they are neither highly protected nor poorly secured, and are
considered by Moody's to have speculative characteristics. Bonds rated BBB by
S&P, Fitch and Duff are investment grade and regarded as having adequate
capacity to pay interest and repay principal; however, adverse changes in
economic conditions and circumstances are more likely to have an adverse
impact on these bonds and, therefore, impair timely payment. Securities rated
Ba by Moody's are judged to have speculative elements; their future cannot be
considered as well assured and often the protection of interest and principal
payments may be very moderate. Securities rated BB by S&P, Fitch or Duff are
regarded as having predominantly speculative characteristics and, while such
obligations have less near-term vulnerability to default than other
speculative grade debt, they face major ongoing uncertainties or exposure to
adverse business, financial or economic conditions which could lead to
inadequate capacity to meet timely interest and principal payments.
Securities rated Caa by Moody's or CCC by S&P, Fitch or Duff are of poor
standing and may be in default or there may be present elements of danger
with respect to principal or interest. Such securities, though high yielding,
are characterized by great risk. See "Appendix" in the Statement of
Additional Information for a general description of securities ratings.

The ratings of Moody's, S&P, Fitch and Duff represent their opinions
as to the quality of the obligations which they undertake to rate. Ratings
are relative and subjective and, although ratings may be useful in evaluating
the safety of interest and principal payments, they do not evaluate the
market value risk of such obligations. Although these ratings may be an
initial criterion for selection of portfolio investments, The Dreyfus
Corporation also will evaluate these securities and the ability of the issuers
of such securities to pay interest and principal. The Series' ability to
achieve its investment objective may be more dependent on The Dreyfus
Corporation's credit analysis than might be the case for a fund that invested
in higher rated securities.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND IN THE
FUND'S OFFICIAL SALES LITERATURE IN CONNECTION WITH THE OFFER OF THE FUND'S
SHARES, AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER IN ANY STATE IN WHICH, OR TO ANY PERSON TO WHOM,
SUCH OFFERING MAY NOT LAWFULLY BE MADE.
Page 39
Variable
Investment
Fund

Prospectus

Registration Mark

Copy Rights 1996, Dreyfus Service Corporation
VIFp110196
Page 40

DREYFUS VARIABLE INVESTMENT FUND
PART B
(STATEMENT OF ADDITIONAL INFORMATION)

NOVEMBER 1, 1996

This Statement of Additional Information, which is not a prospectus,
supplements and should be read in conjunction with the current Prospectus
of Dreyfus Variable Investment Fund (the "Fund"), dated November 1, 1996,
as it may be revised from time to time. To obtain a copy of the Fund's
Prospectus, please write to the Fund at 144 Glenn Curtiss Boulevard,
Uniondale, New York 11556-0144, or call (516) 338-3300.

The Dreyfus Corporation (the "Manager") serves as the Fund's
investment adviser.

Premier Mutual Fund Services, Inc. (the "Distributor") is the
distributor of the Fund's shares.

TABLE OF CONTENTS

Page

Investment Objectives and Management Policies . . . . . . . . . .B-2
Management of the Fund. . . . . . . . . . . . . . . . . . . . . .B-17
Investment Advisory Agreements. . . . . . . . . . . . . . . . . .B-23
Purchase of Shares . . . . . . . . . . . . . . . . . . . . . . . B-29
Redemption of Shares. . . . . . . . . . . . . . . . . . . . . . .B-29
Determination of Net Asset Value. . . . . . . . . . . . . . . . .B-30
Dividends, Distributions and Taxes. . . . . . . . . . . . . . . .B-32
Portfolio Transactions. . . . . . . . . . . . . . . . . . . . . .B-33
Yield and Performance Information . . . . . . . . . . . . . . . .B-35
Information About the Fund. . . . . . . . . . . . . . . . . . . .B-38
Transfer and Dividend Disbursing Agent, Custodian,
Counsel and Independent Auditors . . . . . . . . . . . . . . .B-39
Appendix. . . . . . . . . . . . . . . . . . . . . . . . . . . . .B-40
Financial Statements and Reports of Independent Auditors. . . . .B-47

INVESTMENT OBJECTIVES AND MANAGEMENT POLICIES

The following information supplements and should be read in
conjunction with the sections in the Fund's Prospectus entitled
"Description of the Fund" and "Appendix."

Portfolio Securities

Depositary Receipts. (Disciplined Stock, Growth and Income,
International Equity, International Value, Managed Assets and Small Company
Stock Portfolios). These securities may be purchased through "sponsored"
or "unsponsored" facilities. A sponsored facility is established jointly
by the issuer of the underlying security and a depositary, whereas a
depositary may establish an unsponsored facility without participation by
the issuer of the deposited security. Holders of unsponsored depositary
receipts generally bear all the costs of such facilities and the depositary
of an unsponsored facility frequently is under no obligation to distribute
shareholder communications received from the issuer of the deposited
security or to pass through voting rights to the holders of such receipts
in respect of the deposited securities.

Repurchase Agreements. (All Series) The Fund's custodian or sub-
custodian will have custody of, and will hold in a segregated account,
securities acquired by a Series under a repurchase agreement. Repurchase
agreements are considered by the staff of the Securities and Exchange
Commission to be loans by the Series. In an attempt to reduce the risk of
incurring a loss on a repurchase agreement, each Series will enter into
repurchase agreements only with domestic banks with total assets in excess
of $1 billion, or primary government securities dealers reporting to the
Federal Reserve Bank of New York, with respect to securities of the type in
which the Series may invest, and will require that additional securities be
deposited with it if the value of the securities purchased should decrease
below the resale price.

Commercial Paper and Other Short-Term Corporate Obligations. (All
Series) These instruments include variable amount master demand notes,
which are obligations that permit a Series to invest fluctuating amounts at
varying rates of interest pursuant to direct arrangements between the
Series, as lender, and the borrower. These notes permit daily changes in
the amounts borrowed. Because these obligations are direct lending
arrangements between the lender and borrower, it is not contemplated that
such instruments generally will be traded, and there generally is no
established secondary market for these obligations, although they are
redeemable at face value, plus accrued interest, at any time. Accordingly,
where these obligations are not secured by letters of credit or other
credit support arrangements, the Series' right to redeem is dependent on
the ability of the borrower to pay principal and interest on demand. Such
obligations frequently are not rated by credit rating agencies, and a Fund
may invest in them only if at the time of an investment the borrower meets
the criteria set forth in the Fund's Prospectus for other commercial paper
issuers.

Convertible Securities. (Capital Appreciation, Disciplined Stock,
Growth and Income, International Equity, International Value, Managed
Assets, Small Cap and Small Company Stock Portfolios). Although to a
lesser extent than with fixed-income securities generally, the market value
of convertible securities tends to decline as interest rates increase and,
conversely, tends to increase as interest rates decline. In addition,
because of the conversion feature, the market value of convertible
securities tends to vary with fluctuations in the market value of the
underlying common stock. A unique feature of convertible securities is
that as the market price of the underlying common stock declines,
convertible securities tend to trade increasingly on a yield basis, and so
may not experience market value declines to the same extent as the
underlying common stock. When the market price of the underlying common
stock increases, the prices of the convertible securities tend to rise as a
reflection of the value of the underlying common stock. While no
securities investments are without risk, investments in convertible
securities generally entail less risk than investments in common stock of
the same issuer.

Convertible securities are investments that provide for a stable
stream of income with generally higher yields than common stocks. There
can be no assurance of current income because the issuers of the
convertible securities may default on their obligations. A convertible
security, in addition to providing fixed income, offers the potential for
capital appreciation through the conversion feature, which enables the
holder to benefit from increases in the market price of the underlying
common stock. There can be no assurance of capital appreciation, however,
because securities prices fluctuate. Convertible securities, however,
generally offer lower interest or dividend yields than non-convertible
securities of similar quality because of the potential for capital
appreciation.

Municipal Obligations. (Quality Bond and Growth and Income
Portfolios) Municipal obligations generally include debt obligations
issued to obtain funds for various public purposes as well as certain
industrial development bonds issued by or on behalf of public authorities.
Municipal obligations are classified as general obligation bonds, revenue
bonds and notes. General obligation bonds are secured by the issuer's
pledge of its faith, credit and taxing power for the payment of principal
and interest. Revenue bonds are payable from the revenue derived from a
particular facility or class of facilities or, in some cases, from the
proceeds of a special excise or other specific revenue source, but not from
the general taxing power. Industrial development bonds, in most cases, are
revenue bonds and generally do not carry the pledge of the credit of the
issuing municipality, but generally are guaranteed by the corporate entity
on whose behalf they are issued. Notes are short-term instruments which
are obligations of the issuing municipalities or agencies and are sold in
anticipation of a bond sale, collection of taxes or receipt of other
revenues. Municipal obligations include municipal lease/purchase
agreements which are similar to installment purchase contracts for property
or equipment issued by municipalities.

Mortgage-Related Securities--Government Agency Securities. (Growth
and Income Portfolio) Mortgage-related securities issued by the Government
National Mortgage Association ("GNMA") include GNMA Mortgage Pass-Through
Certificates (also known as "Ginnie Maes") which are guaranteed as to the
timely payment of principal and interest by GNMA and such guarantee is
backed by the full faith and credit of the United States. GNMA is a
wholly-owned U.S. Government corporation within the department of Housing
and Urban Development. GNMA certificates also are supported by the
authority of GNMA to borrow funds from the U.S. Treasury to make payments
under its guarantee.

Mortgage-Related Securities--Government Related Securities. (Growth
and Income Portfolio) Mortgage-related securities issued by the Federal
National Mortgage Association ("FNMA") include FNMA Guaranteed Mortgage
Pass-Through Certificates (also known as "Fannie Maes") which are solely
the obligations of FNMA and are not backed by or entitled to the full faith
and credit of the United States. FNMA is a government-sponsored
organization owned entirely by private stockholders. Fannie Maes are
guaranteed as to timely payment of principal and interest by FNMA.

Mortgage-related securities issued by the Federal Home Loan Mortgage
Corporation ("FHLMC") include FHLMC Mortgage Participation Certificates
(also known as "Freddie Macs" or "PCs"). FHLMC is a corporate
instrumentality of the United States created pursuant to an Act of
Congress, which is owned entirely by Federal Home Loan Banks. Freddie Macs
are not guaranteed by the United States or by any Federal Home Loan Bank
and do not constitute a debt or obligation of the United States or of any
Federal Home Loan Bank. Freddie Macs entitle the holder to timely payment
of interest, which is guaranteed by FHLMC. FHLMC guarantees either
ultimate collection or timely payment of all principal payments on the
underlying mortgage loans. When FHLMC does not guarantee timely payment of
principal, FHLMC may remit the amount due on account of its guarantee of
ultimate payment of principal at any time after default on an underlying
mortgage, but in no event later than one year after it becomes payable.

Mortgage-Related Securities--Private Entity Securities. (Growth and
Income Portfolio) These mortgage-related securities are issued by
commercial banks, savings and loan institutions, mortgage bankers, private
mortgage insurance companies and other non-governmental issuers. Timely
payment of principal and interest on mortgage-related securities backed by
pools created by non-governmental issuers often is supported partially by
various forms of insurance or guarantees, including individual loan, title,
pool and hazard insurance. The insurance and guarantees are issued by
government entities, private insurers and the mortgage poolers. There can
be no assurance that the private insurers or mortgage poolers can meet
their obligations under the policies, so that if the issuers default on
their obligations the holders of the security could sustain a loss. No
insurance or guarantee covers the Series or the price of the Series'
shares. Mortgage-related securities issued by non-governmental issuers
generally offer a higher rate of interest than government-agency and
government-related securities because there are no direct or indirect
government guarantees of payment. The Series will not invest more than 5%
of its assets in such private entity securities issued by any one issuer,
including any one bank or savings and loan institution.

Stripped Treasury Securities. (Zero Coupon 2000 Portfolio and, to a
limited extent, all other Series) The U.S. Government does not issue
Stripped Treasury Securities directly. The STRIPS program, which is
ongoing, is designed to facilitate the secondary market stripping of
selected U.S. Treasury notes and bonds into separate interest and principal
components. Under the program, the U.S. Treasury continues to sell its
notes and bonds through its customary auction process. A purchaser of
those specified notes and bonds who has access to a book-entry account at a
Federal Reserve bank, however, may separate the Treasury notes and bonds
into interest and principal components. The selected Treasury securities
thereafter may be maintained in the book-entry system operated by the
Federal Reserve in a manner that permits the separate trading and ownership
of the interest and principal payments. Investment banks also may strip
U.S. Treasury securities and sell them under proprietary names. Such
securities may not be as liquid as STRIPS and CUBES and are not viewed by
the staff of the Securities and Exchange Commission as U.S. Government
securities for purposes of the Investment Company Act of 1940, as amended
(the "1940 Act"). CUBES, like STRIPS, are direct obligations of the U.S.
Government. CUBES are coupons that have previously been physically
stripped from U.S. Treasury notes and bonds, but which were deposited with
the Federal Reserve Bank's book-entry system and are now carried and
transferable in book-entry form only. Only stripped U.S. Treasury coupons
maturing on or after January 15, 1988, that were stripped prior to January
5, 1987, were eligible for conversion to book-entry form under the CUBES
program.

By agreement, the underlying debt obligations will be held separate
from the general assets of the custodian and nominal holder of such
securities, and will not be subject to any right, charge, security
interest, lien or claim of any kind in favor of or against the custodian or
any person claiming through the custodian, and the custodian will be
responsible for applying all payments received on those underlying debt
obligations to the related receipts or certificates without making any
deductions other than applicable tax withholding. The custodian is
required to maintain insurance for the protection of holders of receipts or
certificates in customary amounts against losses resulting from the custody
arrangement due to dishonest or fraudulent action by the custodian's
employees. The holders of receipts or certificates, as the real parties in
interest, are entitled to the rights and privileges of the underlying debt
obligations, including the right, in the event of default in payment of
principal or interest, to proceed individually against the issuer without
acting in concert with other holders of those receipts or certificates or
the custodian.

Publicly filed documents state that counsel to the underwriters of
certificates or other evidences of ownership of U.S. Treasury securities
have stated that for Federal tax and securities purposes, purchasers of
such certificates most likely will be deemed the beneficial holders of the
underlying U.S. Government securities, which are payable in full at their
stated maturity amount and are not subject to redemption prior to maturity.

See "Description of the Fund--Investment Considerations and Risks--Special
Considerations Relating to Stripped Securities" in the Prospectus.

Illiquid Securities. (All Series) When purchasing securities that
have not been registered under the Securities Act of 1933, as amended, and
are not readily marketable, a Series will endeavor, to the extent
practicable, to obtain the right to registration at the expense of the
issuer. Generally, there will be a lapse of time between the Series'
decision to sell any such security and the registration of the security
permitting sale. During any such period, the price of the securities will
be subject to market fluctuations. However, where a substantial market of
qualified institutional buyers has developed for certain unregistered
securities purchased by the Series pursuant to Rule 144A under the
Securities Act of 1933, as amended, the Series intends to treat such
securities as liquid securities in accordance with procedures approved by
the Fund's Board. Because it is not possible to predict with assurance how
the market for specific restricted securities sold pursuant to Rule 144A
will develop, the Fund's Board has directed the Manager to monitor
carefully the relevant Series' investments in such securities with
particular regard to trading activity, availability of reliable price
information and other relevant information. To the extent that, for a
period of time, qualified institutional buyers cease purchasing restricted
securities pursuant to Rule 144A, a Series' investing in such securities
may have the effect of increasing the level of illiquidity in its
investment portfolio during such period.

Management Policies

Leverage. (Growth and Income and, to a limited extent, Money Market
and Small Company Stock Portfolios) For borrowings for investment
purposes, the 1940 Act requires the Series to maintain continuous asset
coverage (that is, total assets including borrowings, less liabilities
exclusive of borrowings) of 300% of the amount borrowed. If the required
coverage should decline as a result of market fluctuations or other
reasons, the Series may be required to sell some of its portfolio
securities within three days to reduce the amount of its borrowings and
restore the 300% asset coverage, even though it may be disadvantageous from
an investment standpoint to sell securities at that time. The Series also
may be required to maintain minimum average balances in connection with
such borrowing or pay a commitment or other fee to maintain a line of
credit; either of these requirements would increase the cost of borrowing
over the stated interest rate. To the extent a Series enters into a
reverse repurchase agreement, the Series will maintain in a segregated
custodial account permissible liquid assets at least equal to the aggregate
amount of its reverse repurchase obligations, plus accrued interest, in
certain cases, in accordance with releases promulgated by the Securities
and Exchange Commission. The Securities and Exchange Commission views
reverse repurchase transactions as collateralized borrowings by a Series.

Short-Selling. (Growth and Income and, to a limited extent, Managed
Assets and Small Cap Portfolios). Until a Series closes its short position
or replaces the borrowed security, it will: (a) maintain a segregated
account, containing permissible liquid assets, at such a level that the
amount deposited in the account plus the amount deposited with the broker
as collateral always equals the current value of the security sold short;
or (b) otherwise cover its short position.

Lending Portfolio Securities. (All Series) In connection with its
securities lending transactions, a Series may return to the borrower or a
third party which is unaffiliated with the Series, and which is acting as a
"placing broker," a part of the interest earned from the investment of
collateral received for securities loaned.

The Securities and Exchange Commission currently requires that the
following conditions must be met whenever portfolio securities are loaned:
(1) the Series must receive at least 100% cash collateral from the
borrower; (2) the borrower must increase such collateral whenever the
market value of the securities rises above the level of such collateral;
(3) the Series must be able to terminate the loan at any time; (4) the
Series must receive reasonable interest on the loan, as well as any
dividends, interest or other distributions payable on the loaned
securities, and any increase in market value; (5) the Series may pay only
reasonable custodian fees in connection with the loan; and (6) while voting
rights on the loaned securities may pass to the borrower, the Fund's Board
must terminate the loan and regain the right to vote the securities if a
material event adversely affecting the investment occurs.

Derivatives. (Disciplined Stock, Growth and Income, International
Equity, International Value, Managed Assets, Small Company Stock and Zero
Coupon 2000 Portfolios) A Series may invest in Derivatives (as defined in
the Fund's Prospectus) for a variety of reasons, including to hedge certain
market risks, to provide a substitute for purchasing or selling particular
securities or to increase potential income gain. Derivatives may provide a
cheaper, quicker or more specifically focused way for the Series to invest
than "traditional" securities would.

Derivatives can be volatile and involve various types and degrees of
risk, depending upon the characteristics of the particular Derivative and
the portfolio as a whole. Derivatives permit a Series to increase or
decrease the level of risk, or change the character of the risk, to which
its portfolio is exposed in much the same way as the Series can increase or
decrease the level of risk, or change the character of the risk, of its
portfolio by making investments in specific securities.

Derivatives may be purchased on established exchanges or through
privately negotiated transactions referred to as over-the-counter
Derivatives. Exchange-traded Derivatives generally are guaranteed by the
clearing agency which is the issuer or counterparty to such Derivatives.
This guarantee usually is supported by a daily payment system (i.e.,
variation margin requirements) operated by the clearing agency in order to
reduce overall credit risk. As a result, unless the clearing agency
defaults, there is relatively little counterparty credit risk associated
with Derivatives purchased on an exchange. By contrast, no clearing agency
guarantees over-the-counter Derivatives. Therefore, each party to an over-
the-counter Derivative bears the risk that the counterparty will default.
Accordingly, the Manager (or, if applicable, the Series' sub-investment
adviser) will consider the creditworthiness of counterparties to over-the-
counter Derivatives in the same manner as it would review the credit
quality of a security to be purchased by a Series. Over-the-counter
Derivatives are less liquid than exchange-traded Derivatives since the
other party to the transaction may be the only investor with sufficient
understanding of the Derivative to be interested in bidding for it.

Futures Transactions--In General. (Disciplined Stock, Growth and Income,
International Equity, International Value, Managed Assets, Small Company
Stock and Zero Coupon 2000 Portfolios) A Series may enter into futures
contracts in U.S. domestic markets, such as the Chicago Board of Trade and
the International Monetary Market of the Chicago Mercantile Exchange, or,
if permitted in the Fund's Prospectus, on exchanges located outside the
United States, such as the London International Financial Futures Exchange
and the Sydney Futures Exchange Limited. Foreign markets may offer
advantages such as trading opportunities or arbitrage possibilities not
available in the United States. Foreign markets, however, may have greater
risk potential than domestic markets. For example, some foreign exchanges
are principal markets so that no common clearing facility exists and an
investor may look only to the broker for performance of the contract. In
addition, any profits that a Series might realize in trading could be
eliminated by adverse changes in the exchange rate, or the Series could
incur losses as a result of those changes. Transactions on foreign
exchanges may include both commodities which are traded on domestic
exchanges and those which are not. Unlike trading on domestic commodity
exchanges, trading on foreign commodity exchanges is not regulated by the
Commodity Futures Trading Commission.

Engaging in these transactions involves risk of loss to a Fund which
could adversely affect the value of the Series' net assets. Although each
Series intends to purchase or sell futures contracts only if there is an
active market for such contracts, no assurance can be given that a liquid
market will exist for any particular contract at any particular time. Many
futures exchanges and boards of trade limit the amount of fluctuation
permitted in futures contract prices during a single trading day. Once the
daily limit has been reached in a particular contract, no trades may be
made that day at a price beyond that limit or trading may be suspended for
specified periods during the trading day. Futures contract prices could
move to the limit for several consecutive trading days with little or no
trading, thereby preventing prompt liquidation of futures positions and
potentially subjecting the Series to substantial losses.

Successful use of futures by a Series also is subject to the ability
of the Manager (or, if applicable, the Series' sub-investment adviser) to
predict correctly movements in the direction of the relevant market and, to
the extent the transaction is entered into for hedging purposes, to
ascertain the appropriate correlation between the transaction being hedged
and the price movements of the futures contract. For example, if a Series
uses futures to hedge against the possibility of a decline in the market
value of securities held in its portfolio and the prices of such securities
instead increase, the Series will lose part or all of the benefit of the
increased value of securities which it has hedged because it will have
offsetting losses in its futures positions. Furthermore, if in such
circumstances the Series has insufficient cash, it may have to sell
securities to meet daily variation margin requirements. A Series may have
to sell such securities at a time when it may be disadvantageous to do so.

Pursuant to regulations and/or published positions of the Securities
and Exchange Commission, a Series may be required to segregate permissible
liquid assets in connection with its commodities transactions in an amount
generally equal to the value of the underlying commodity. The segregation
of such assets will have the effect of limiting a Series' ability otherwise
to invest those assets.

Specific Futures Transactions. The Disciplined Stock, Growth and Income,
International Equity, International Value, Managed Assets and Small Company
Stock Portfolios may purchase and sell stock index futures contracts. A
stock index future obligates the Series to pay or receive an amount of cash
equal to a fixed dollar amount specified in the futures contract multiplied
by the difference between the settlement price of the contract on the
contract's last trading day and the value of the index based on the stock
prices of the securities that comprise it at the opening of trading in such
securities on the next business day.

The Growth and Income, International Equity, International Value,
Managed Assets and Small Company Stock Portfolios may purchase and sell
currency futures. A foreign currency future obligates the Series to
purchase or sell an amount of a specific currency at a future date at a
specific price.

The Growth and Income, International Equity, International Value,
Managed Assets and Zero Coupon 2000 Portfolios may purchase and sell
interest rate futures contracts. An interest rate future obligates the
Series to purchase or sell an amount of a specific debt security at a
future date at a specific price.

Options--In General. (Disciplined Stock, Growth and Income, International
Equity, Managed Assets, Small Company Stock and Zero Coupon 2000
Portfolios) The Series may purchase and write (i.e., sell) call or put
options with respect to specific securities. A call option gives the
purchaser of the option the right to buy, and obligates the writer to sell,
the underlying security or securities at the exercise price at any time
during the option period, or at a specific date. Conversely, a put option
gives the purchaser of the option the right to sell, and obligates the
writer to buy, the underlying security or securities at the exercise price
at any time during the option period, or at a specific date.

A covered call option written by a Series is a call option with
respect to which the Series owns the underlying security or otherwise
covers the transaction by segregating cash or other securities. A put
option written by a Series is covered when, among other things, cash or
liquid securities having a value equal to or greater than the exercise
price of the option are placed in a segregated account with the Fund's
custodian to fulfill the obligation undertaken. The principal reason for
writing covered call and put options is to realize, through the receipt of
premiums, a greater return than would be realized on the underlying
securities alone. A Series receives a premium from writing covered call or
put options which it retains whether or not the option is exercised.

There is no assurance that sufficient trading interest to create a
liquid secondary market on a securities exchange will exist for any
particular option or at any particular time, and for some options no such
secondary market may exist. A liquid secondary market in an option may
cease to exist for a variety of reasons. In the past, for example, higher
than anticipated trading activity or order flow, or other unforeseen
events, at times have rendered certain of the clearing facilities
inadequate and resulted in the institution of special procedures, such as
trading rotations, restrictions on certain types of orders or trading halts
or suspensions in one or more options. There can be no assurance that
similar events, or events that may otherwise interfere with the timely
execution of customers' orders, will not recur. In such event, it might
not be possible to effect closing transactions in particular options. If,
as a covered call option writer, the Series is unable to effect a closing
purchase transaction in a secondary market, it will not be able to sell the
underlying security until the option expires or it delivers the underlying
security upon exercise or it otherwise covers its position.

Specific Options Transactions. The Disciplined Stock, Growth and Income,
International Equity, Managed Assets and Small Company Stock Portfolios may
purchase and sell call and put options in respect of specific securities
(or groups or "baskets" of specific securities) or stock indices listed on
national securities exchanges or traded in the over-the-counter market. An
option on a stock index is similar to an option in respect of specific
securities, except that settlement does not occur by delivery of the
securities comprising the index. Instead, the option holder receives an
amount of cash if the closing level of the stock index upon which the
option is based is greater than, in the case of a call, or less than, in
the case of a put, the exercise price of the option. Thus, the
effectiveness of purchasing or writing stock index options will depend upon
price movements in the level of the index rather than the price of a
particular stock.

The Growth and Income, International Equity, Managed Assets and Small
Company Stock Portfolios may purchase and sell call and put options on
foreign currency. These options convey the right to buy or sell the
underlying currency at a price which is expected to be lower or higher than
the spot price of the currency at the time the option is exercised or
expires.

The Disciplined Stock, Growth and Income, International Equity,
Managed Assets and Small Company Stock Portfolios may purchase cash-settled
options on equity index swaps in pursuit of its investment objective.
Equity index swaps involve the exchange by the Series with another party of
cash flows based upon the performance of an index or a portion of an index
of securities which usually includes dividends. A cash-settled option on a
swap gives the purchaser the right, but not the obligation, in return for
the premium paid, to receive an amount of cash equal to the value of the
underlying swap as of the exercise date. These options typically are
purchased in privately negotiated transactions from financial institutions,
including securities brokerage firms.

Successful use by a Series of options will be subject to the ability
of the Manager (or, if applicable, the Series' sub-investment adviser) to
predict correctly movements in the prices of individual stocks, the stock
market generally, foreign currencies or interest rates. To the extent such
predictions are incorrect, a Series may incur losses.

Future Developments. A Series may take advantage of opportunities in
the area of options and futures contracts and options on futures contracts
and any other Derivatives which are not presently contemplated for use by
the Series or which are not currently available but which may be developed,
to the extent such opportunities are both consistent with the Series'
investment objective and legally permissible for the Series. Before
entering into such transactions or making any such investment on behalf of
a Series, the Fund will provide appropriate disclosure in its Prospectus or
Statement of Additional Information.

Forward Commitments. (All Series) Securities purchased on a forward
commitment or when-issued basis are subject to changes in value (generally
changing in the same way, i.e., appreciating when interest rates decline
and depreciating when interest rates rise) based upon the public's
perception of the creditworthiness of the issuer and changes, real or
anticipated, in the level of interest rates. Securities purchased on a
forward commitment or when-issued basis may expose a Series to risks
because they may experience such fluctuations prior to their actual
delivery. Purchasing securities on a when-issued basis can involve the
additional risk that the yield available in the market when the delivery
takes place actually may be higher than that obtained in the transaction
itself. Purchasing securities on a forward commitment or when-issued basis
when a Series is fully or almost fully invested may result in greater
potential fluctuation in the value of the Series' net assets and its net
asset value per share.

Investment Considerations and Risks

Lower Rated Securities. (Growth and Income, Managed Assets, Small Cap
and Quality Bond Portfolios) Each of the Growth and Income, Managed
Assets, Small Cap and Quality Bond Portfolios is permitted to invest in
securities (convertible debt securities with respect to the Growth and
Income Portfolio) rated Ba or lower by Moody's Investors Service, Inc.
("Moody's") or BB or lower by Standard & Poor's Ratings Group ("S&P"),
Fitch Investors Service, L.P. ("Fitch") and Duff & Phelps Credit Rating Co.
("Duff"). In no case, however, will the Quality Bond Portfolio invest in
bonds rated lower than B by Moody's and S&P and in no case will the Growth
and Income Portfolio invest in convertible debt securities rated lower than
Caa by Moody's and CCC by S&P, Fitch and Duff. Such securities, though
higher yielding, are characterized by risk. See "Description of the
Fund--Investment Considerations and Risks--Lower Rated Securities" in the
Prospectus for a discussion of certain risks and "Appendix" for a general
description of Moody's, S&P, Fitch and Duff ratings. Although ratings may
be useful in evaluating the safety of interest and principal payments, they
do not evaluate the market value risk of these securities. The Series will
rely on its adviser's judgment, analysis and experience in evaluating the
creditworthiness of an issuer.

Investors should be aware that the market values of many of these
securities tend to be more sensitive to economic conditions than are higher
rated securities. These securities generally are considered by S&P,
Moody's, Fitch and Duff to be, on balance, predominantly speculative with
respect to capacity to pay interest and repay principal in accordance with
the terms of the obligation and generally will involve more credit risk
than securities in the higher rating categories.

Companies that issue certain of these securities often are highly
leveraged and may not have available to them more traditional methods of
financing. Therefore, the risk associated with acquiring the securities of
such issuers generally is greater than is the case with higher rated
securities and will fluctuate over time. For example, during an economic
downturn or a sustained period of rising interest rates, highly leveraged
issuers of these securities may experience financial stress. During such
periods, such issuers may not have sufficient revenues to meet their
interest payment obligations. The issuer's ability to service its debt
obligations also may be affected adversely by specific corporate
developments, or the issuer's inability to meet specific projected business
forecasts, or the unavailability of additional financing. The risk of loss
because of default by the issuer is significantly greater for the holders
of these securities because such securities generally are unsecured and
often are subordinated to other creditors of the issuer.

Because there is no established retail secondary market for many of
these securities, the Fund anticipates that such securities could be sold
only to a limited number of dealers or institutional investors. To the
extent a secondary trading market for these securities does exist, it
generally is not as liquid as the secondary market for higher rated
securities. The lack of a liquid secondary market may have an adverse
impact on market price and yield and the Series' ability to dispose of
particular issues when necessary to meet such Series' liquidity needs or in
response to a specific economic event such as a deterioration in the
creditworthiness of the issuer. The lack of a liquid security market for
certain securities also may make it more difficult for the Series to obtain
accurate market quotations for purposes of valuing the Series' portfolio
and calculating its net asset value. Adverse publicity and investor
perceptions, whether or not based on fundamental analysis, may decrease the
values and liquidity of these securities. In such cases, judgment may play
a greater role in valuation because less reliable, objective data may be
available.

These securities may be particularly susceptible to economic
downturns. It is likely that any economic recession could disrupt severely
the market for such securities and may have an adverse impact on the value
of such securities. In addition, it is likely that any such economic
downturn could adversely affect the ability of the issuers of such
securities to repay principal and pay interest thereon and increase the
incidence of default for such securities.

The Series may acquire these securities during an initial offering.
Such securities may involve special risks because they are new issues. The
Series has no arrangement with any persons concerning the acquisition of
such securities, and the Manager (or, if applicable, the Series' sub-
investment adviser) will review carefully the credit and other
characteristics pertinent to such new issues.

The credit risk factors pertaining to lower rated securities also
apply to lower rated Stripped Corporate Securities in which each Series
other than the Quality Bond Portfolio may invest and pay-in-kind bonds in
which each Series may invest up to 5% of its total assets. Stripped
Corporate Securities are debt obligations which do not entitle the holder
to any periodic payments of interest prior to maturity or a specified cash
payment date when the securities begin paying current interest (the "cash
payment date") and therefore are issued and traded at a discount from their
face amounts or par value. The discount varies depending on the time
remaining until maturity or cash payment date, prevailing interest rates,
liquidity of the security and perceived credit quality of the issuer. The
discount, in the absence of financial difficulties of the issuer, decreases
as the final maturity or cash payment date of the security approaches.

The market prices of Stripped Corporate Securities generally are more
volatile than the market prices of securities that pay interest
periodically and are likely to respond to changes in interest rates to a
greater degree than do non-zero coupon securities having similar maturities
and credit quality. Such Stripped Corporate Securities, pay-in-kind or
delayed interest bonds carry an additional risk in that, unlike bonds which
pay interest throughout the period to maturity, the relevant Series will
realize no cash until the cash payment date unless a portion of such
securities are sold and, if the issuer defaults, the Series may obtain no
return at all on its investment. See "Dividends, Distributions and Taxes."

Investment Restrictions

Capital Appreciation, Managed Assets, Money Market, Quality Bond,
Small Cap and Zero Coupon 2000 Portfolios. Each of these Series (except as
noted below) has adopted investment restrictions numbered 1 through 14 as
fundamental policies. These restrictions cannot be changed, as to a
Series, without approval by the holders of a majority (as defined in the
1940 Act) of such Series' outstanding voting shares. However, the
amendment of these restrictions to add an additional Series, which
amendment does not substantively affect the restrictions with respect to an
existing Series, will not require approval as described in the preceding
sentence. Investment restrictions numbered 15 and 16 are not fundamental
policies and may be changed, as to a Series, by vote of a majority of the
Fund's Board members at any time. With respect to the Capital Appreciation
Portfolio, investment restrictions numbered 2 and 3, 10 through 12 and 14
are not fundamental policies and may be changed, as to that Series, by vote
of a majority of the Fund's Board members at any time. Except where
otherwise expressly stated, none of these Series may:

1. Borrow money, except, with respect to each Series other than the
Money Market Portfolio, to the extent permitted under the 1940 Act (which
currently limits borrowing to no more than 33 1/3% of the value of the
Series' total assets); the Money Market Portfolio may borrow money only (i)
from banks for temporary or emergency (not leveraging) purposes in an
amount up to 15% of the value of its total assets (including the amount
borrowed) based on the lesser of cost or market, less liabilities (not
including the amount borrowed) at the time the borrowing is made and (ii)
in connection with the entry into reverse repurchase agreements to the
extent described in the Prospectus. While borrowings under (i) above
exceed 5% of a Series' total assets, the Series will not make any
additional investments.

2. Sell securities short or purchase securities on margin, except
that the Managed Assets and Small Cap Portfolios may engage in short sales
and each Series may obtain such short-term credit as may be necessary for
the clearance of purchases and sales of securities.

3. Purchase or write puts and calls or combinations thereof, except
as described in the Prospectus and Statement of Additional Information.

4. Act as an underwriter of securities of other issuers.

5. Purchase or sell real estate or real estate investment trust
securities, but each Series may purchase and sell securities that are
secured by real estate and may purchase and sell securities issued by
companies that invest or deal in real estate.

6. Invest in commodities, except that the Managed Assets, Capital
Appreciation and Zero Coupon 2000 Portfolios may invest in futures
contracts, including those related to indices, and options on futures
contracts or indices, and commodities underlying or related to any such
futures contracts as well as invest in forward contracts and currency
options.

7. Lend any funds or other assets except through the purchase of
bonds, debentures or other debt securities, or the purchase of bankers'
acceptances, commercial paper of corporations, and repurchase agreements.
However, each Series may lend its portfolio securities to the extent set
forth in the Prospectus. Any portfolio securities will be loaned according
to guidelines established by the Securities and Exchange Commission and the
Fund's Board.

8. Invest more than 5% of its assets in the obligations of any one
issuer, except that up to 25% of the value of the Series' total assets may
be invested, and securities issued or guaranteed by the U.S. Government or
its agencies or instrumentalities may be purchased, without regard to any
such limitations. Notwithstanding the foregoing, to the extent required by
the rules of the Securities and Exchange Commission, the Money Market
Portfolio will not invest more than 5% of its assets in the obligations of
any one bank.

9. Purchase the securities of any issuer if such purchase would cause
the Series to hold more than 10% of the voting securities of such issuer.
This restriction applies only with respect to 75% of such Series' total
assets.

10. Invest in the securities of a company for the purpose of
exercising management or control, but the Series will vote the securities
it owns as a shareholder in accordance with its views.

11. Purchase or retain the securities of any issuer if the officers
or Board members of the Fund or the officers or Directors of the Manager
(and, with respect to the Managed Assets Portfolio, the officers and
Directors of Comstock Partners, Inc. and, with respect to the Capital
Appreciation Portfolio, the officers and Directors of Fayez Sarofim & Co.)
individually own beneficially more than 1/2 of l% of the securities of such
issuer or together own beneficially more than 5% of the securities of such
issuer.

12. Purchase securities of any company having less than three years'
continuous operations (including operations of any predecessors) if such
purchase would cause the value of its investments in all such companies to
exceed 5% of the value of its total assets.

13. Invest, except in the case of the Money Market Portfolio, more
than 25% of its total assets in the securities of issuers in any single
industry; provided that for temporary defensive purposes, there shall be no
limitation on the purchase of obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities. The Money Market Portfolio
may not invest less than 25% of its assets in obligations issued by banks
under normal market conditions.

14. Purchase warrants, except each of the Capital Appreciation,
Managed Assets and Small Cap Portfolios may purchase warrants not to exceed
2% of its respective net assets. For purposes of this restriction, such
warrants shall be valued at the lower of cost or market, except that
warrants acquired by the Series in units or attached to securities shall
not be included within this 2% restriction.

15. Pledge, hypothecate, mortgage or otherwise encumber its assets,
except to the extent necessary to secure permitted borrowings. The Managed
Assets, Capital Appreciation, Zero Coupon 2000 and Small Cap Portfolios'
entry into collateral arrangements with respect to options, currency
options, futures contracts, including those related to indices, and options
on futures contracts or indices and arrangements with respect to initial or
variation margin for futures contracts or options will not be deemed to be
pledges of such Series' assets.

16. Enter into repurchase agreements providing for settlement in more
than seven days after notice or purchase securities which are illiquid if,
in the aggregate, more than 15% (10% with respect to the Money Market
Portfolio) of the value of the Series' net assets would be so invested.

* * *

Disciplined Stock, Growth and Income, International Equity,
International Value and Small Company Stock Portfolios. Each of these
Series has adopted investment restrictions numbered 1 through 8 as
fundamental policies, and each of the Disciplined Stock, International
Value and Small Company Stock Portfolios has adopted investment
restrictions numbered 16 and 17 as additional fundamental policies. These
restrictions cannot be changed, as to a Series, without approval by the
holders of a majority (as defined in the 1940 Act) of such Series'
outstanding voting shares. However, the amendment of these restrictions to
add an additional Series, which amendment does not substantively effect the
restrictions with respect to an existing Series, will not require approval
as described in the preceding sentence. Investment restrictions numbered 9
through 15 are not fundamental policies and may be changed, as to a Series,
by vote of a majority of the Fund's Board members at any time. None of
these Series may:

1. Invest more than 25% of the value of its total assets in the
securities of issuers in any single industry, provided that there shall be
no limitation on the purchase of obligations issued or guaranteed by the
U.S. Government, its agencies or instrumentalities.

2. Invest in commodities, except that a Series may purchase and sell
options, forward contracts, futures contracts, including those relating to
indices, and options on futures contracts or indices.

3. Purchase, hold or deal in real estate, or oil, gas or other
mineral leases or exploration or development programs, but a Series may
purchase and sell securities that are secured by real estate or issued by
companies that invest or deal in real estate.

4. Borrow money, except to the extent permitted under the 1940 Act
(which currently limits borrowing to no more than 33 1/3% of the value of
the Series' total assets). For purposes of this Investment Restriction,
the entry into options, forward contracts, futures contracts, including
those relating to indices, and options on futures contracts or indices
shall not constitute borrowing.

5. Make loans to others, except through the purchase of debt
obligations and the entry into repurchase agreements. However, a Series
may lend its portfolio securities in an amount not to exceed 33 1/3% of the
value of its total assets. Any loans of portfolio securities will be made
according to guidelines established by the Securities and Exchange
Commission and the Fund's Board.

6. Act as an underwriter of securities of other issuers, except to
the extent a Series may be deemed an underwriter under the Securities Act
of 1933, as amended, by virtue of disposing of portfolio securities.

7. Issue any senior security (as such term is defined in Section
18(f) of the 1940 Act), except to the extent the activities permitted in
Investment Restriction Nos. 2, 4, 11 and 12 may be deemed to give rise to a
senior security.

8. Purchase securities on margin, but a Series may make margin
deposits in connection with transactions in options, forward contracts,
futures contracts, including those relating to indices, and options on
futures contracts or indices.

9. Purchase securities of any company having less than three years'
continuous operations (including operations of any predecessor) if such
purchase would cause the value of its investments in all such companies to
exceed 5% of the value of its total assets.

10. Invest in the securities of a company for the purpose of
exercising management or control, but the Series will vote the securities
it owns as a shareholder in accordance with its views.

11. Pledge, mortgage or hypothecate its assets, except to the extent
necessary to secure permitted borrowings and to the extent related to the
purchase of securities on a when-issued or forward commitment basis and the
deposit of assets in escrow in connection with writing covered put and call
options and collateral and initial or variation margin arrangements with
respect to options, forward contracts, futures contracts, including those
relating to indices, and options on futures contracts or indices.

12. Purchase, sell or write puts, calls or combinations thereof,
except as described in the Prospectus and Statement of Additional
Information.

13. Enter into repurchase agreements providing for settlement in more
than seven days after notice or purchase securities which are illiquid, if,
in the aggregate, more than 15% of the value of its net assets would be so
invested.

14. Purchase securities of other investment companies, except to the
extent permitted under the 1940 Act.

15. Purchase warrants in excess of 5% of its net assets. For
purposes of this restriction, such warrants shall be valued at the lower of
cost or market, except that warrants acquired by a Series in units or
attached to securities shall not be included within this restriction.

The following investment restrictions numbered 16 and 17 apply only to
the Disciplined Stock, International Value and Small Company Stock
Portfolios. None of these Series may:

16. Invest more than 5% of its assets in the obligations of any
single issuer, except that up to 25% of the value of the Series' total
assets may be invested, and securities issued or guaranteed by the U.S.
Government, or its agencies or instrumentalities may be purchased, without
regard to any such limitation.

17. Hold more than 10% of the outstanding voting securities of any
single issuer. This Investment Restriction applies only with respect to
75% of the Series' total assets.

* * *

If a percentage restriction is adhered to at the time of investment, a
later change in percentage resulting from a change in values or assets will
not constitute a violation of such restriction.

The Fund may make commitments more restrictive than the restrictions
listed above so as to permit the sale of a Series' shares in certain
states. Should the Fund determine that a commitment is no longer in the
best interest of a Series and its shareholders, the Fund reserves the right
to revoke the commitment by terminating the sale of such Series' shares in
the state involved.

In addition, each Series has adopted the following policies as
non-fundamental policies. Each Series intends (i) to comply with the
diversification requirements prescribed in regulations under Section 817(h)
of the Internal Revenue Code of 1986, as amended (the "Code"), and (ii) to
comply in all material respects with insurance laws and regulations that
the Fund has been advised are applicable to investments of separate
accounts of Participating Insurance Companies. In addition, each Series,
except the Growth and Income and International Equity Portfolios, has
agreed not to invest more than 10% of its total assets in the obligations
of any one issuer (excluding U.S. Government securities) and to purchase no
more than 10% of an issuer's outstanding securities. As non-fundamental
policies, these policies may be changed by vote of a majority of the Board
members at any time.

MANAGEMENT OF THE FUND

Board members and officers of the Fund, together with information as
to their principal business occupations during at least the last five
years, are shown below. Each Board member who is deemed to be an
"interested person" of the Fund, as defined in the 1940 Act, is indicated
by an asterisk.

Board Members of the Fund

* JOSEPH S. DiMARTINO, Chairman of the Board. Since January 1995, Chairman
of the Board of various funds in the Dreyfus Family of Funds. He is
also Chairman of the Board of Directors of Noel Group, Inc., a venture
capital company; and a director of The Muscular Dystrophy Association,
HealthPlan Services Corporation, Belding Heminway Company, Inc., a
manufacturer and marketer of industrial threads, specialty yarns, home
furnishings and fabrics, Curtis Industries, Inc., a national
distributor of security products, chemicals, and automotive and other
hardware, and Staffing Resources, Inc. For more than five years prior
to January 1995, he was President, a director and, until August 1994,
Chief Operating Officer of the Manager and Executive Vice President
and a director of Dreyfus Service Corporation, a wholly-owned
subsidiary of the Manager and, until August 24, 1994, the Fund's
distributor. From August 1994 until December 31, 1994, he was a
director of Mellon Bank Corporation. He is 52 years old and his
address is 200 Park Avenue, New York, New York 10166.

*DAVID P. FELDMAN, Board Member. Chairman and Chief Executive Officer of
AT&T Investment Management Corporation. He is also a trustee of
Corporate Property Investors, a real estate investment company, and a
director of several mutual funds in the 59 Wall Street Mutual Funds
group and of The Jeffrey Company, a private investment company. He is
56 years old and his address is One Oak Way, Berkeley Heights, New
Jersey 07922.

JOHN M. FRASER, JR., Board Member. President of Fraser Associates, a
service company for planning and arranging corporate meetings and
other events. From September 1975 to June 1978, he was Executive Vice
President of Flagship Cruises, Ltd. Prior thereto, he was Senior Vice
President and Resident Director of the Swedish-American Line for the
United States and Canada. He is 74 years old and his address is 133
East 64th Street, New York, New York 10021.

ROBERT R. GLAUBER, Board Member. Research Fellow, Center for Business and
Government at the John F. Kennedy School of Government, Harvard
University, since January 1992. He was Under Secretary of the
Treasury for Finance at the U.S. Treasury Department, from May 1989 to
January 1992. For more than five years prior thereto, he was a
Professor of Finance at the Graduate School of Business Administration
of Harvard University. He is also a director of MidOcean Reinsurance
Co., Ltd., Cooke & Bieler, Inc., investment counselors, NASD
Regulation, Inc. and the Federal Reserve Bank of Boston. He is 57
years old and his address is 79 John F. Kennedy Street, Cambridge,
Massachusetts 02138.

JAMES F. HENRY, Board Member. President of the CPR Institute for Dispute
Resolution, a non-profit organization principally engaged in the
development of alternatives to business litigation. He was of counsel
to the law firm of Lovejoy, Wasson & Ashton from October 1975 to
December 1976 and from October 1979 to June 1983, and was a partner of
the firm from January 1977 to September 1979. He was President and a
director of the Edna McConnell Clark Foundation, a philanthropic
organization, from September 1971 to December 1976. Mr. Henry is 65
years old and his address is c/o CPR Institute for Dispute Resolution,
366 Madison Avenue, New York, New York 10017.

ROSALIND GERSTEN JACOBS, Board Member. Director of Merchandise and
Marketing for Corporate Property Investors, a real estate investment
company. From 1974 to 1976, she was owner and manager of a
merchandise and marketing consulting firm. Prior to 1974, she was a
Vice President of Macy's, New York. Mrs. Jacobs is 70 years old and
her address is c/o Corporate Property Investors, 305 East 47th Street,
New York, New York 10017.

IRVING KRISTOL, Board Member. John M. Olin Distinguished Fellow of the
American Enterprise Institute for Public Policy Research, co-editor of
The Public Interest magazine, and an author or co-editor of several
books. From May 1981 to December 1994, he was a consultant to the
Manager on economic matters; from 1969 to 1988, he was Professor of
Social Thought at the Graduate School of Business Administration, New
York University; and from September 1969 to August 1979, he was Henry
R. Luce Professor of Urban Values at New York University. Mr. Kristol
is 76 years old and his address is c/o The Public Interest, 1112 16th
Street, N.W., Suite 530, Washington, D.C. 20036.

DR. PAUL A. MARKS, Board Member. President and Chief Executive Officer of
Memorial Sloan-Kettering Cancer Center. He is also a director
emeritus of Pfizer, Inc., a pharmaceutical company, where he served as
a director from 1978 to 1996; a director of Tularik, Inc., a
biotechnology company; and a general partner of LINC Venture Lease
Partners II, L.P., a limited partnership engaged in leasing. He was
Vice President for Health Sciences and Director of the Cancer Center
at Columbia University from 1973 to 1980; Professor of Medicine and of
Human Genetics and Development at Columbia University from 1968 to
1982; and a director of Life Technologies, Inc., a life science
company producing products for cell and molecular biology and
microbiology, from 1986 to 1996, and of Biotechnology General, Inc., a
biotechnology development company from 1992 to 1993. Dr. Marks is 69
years old and his address is c/o Memorial Sloan-Kettering Cancer
Center, 1275 York Avenue, New York, New York 10021.

DR. MARTIN PERETZ, Board Member. Editor-in-Chief of The New Republic
magazine and a lecturer in Social Studies at Harvard University, where
he has been a member of the faculty since 1965. He is a trustee of
The Center for Blood Research at the Harvard Medical School and of the
Academy for Liberal Education, an accrediting agency for colleges and
universities certified by the U.S. Department of Education; and a
director of LeukoSite Inc., a biopharmaceutical company. From 1988 to
1991, he was a director of Carmel Container Corporation. Dr. Peretz
is 56 years old and his address is c/o The New Republic, 1220 19th
Street, N.W., Washington, D.C. 20036.

BERT W. WASSERMAN, Board Member. Financial Consultant. From January 1990
to March 1995, Executive Vice President and Chief Financial Officer,
and, from January 1990 to March 1993, a director of Time Warner Inc.
from 1981 to 1990, he was a member of the office of the President and
a director of Warner Communications, Inc. He is also a director of
The New Germany Fund, Mountasia Entertainment International, Inc., the
Lillian Vernon Corporation, Winstar Communications, Inc. and
International Discount Telecommunications Corporation. Mr. Wasserman
is 63 years old and his address is 126 East 56th Street, Suite 12
North, New York, New York 10022-3613.

There ordinarily will be no meetings of shareholders for the purpose
of electing Board members unless and until such time as less than a
majority of the Board members holding office have been elected by
shareholders, at which time the Board members then in office will call a
shareholders' meeting for the election of Board members. Under the 1940
Act, shareholders of record of not less than two-thirds of the outstanding
shares of the Fund may remove a Board members through a declaration in
writing or by vote cast in person or by proxy at a meeting called for that
purpose. The Board members are required to call a meeting of shareholders
for the purpose of voting upon the question of removal of any such Board
members when requested in writing to do so by the shareholders of record of
not less than 10% of the Fund's outstanding shares.

The Fund typically pays its Board members an annual retainer and a per
meeting fee and reimburses them for their expenses. The Chairman of the
Board receives an additional 25% of such compensation. Emeritus Board
members are entitled to receive an annual retainer and a per meeting fee of
one-half the amount paid to them as Board members. The aggregate amount of
compensation paid to each Board member by the Fund, and by all other funds
in the Dreyfus Family of Funds for which such person is a Board member (the
number of which is set forth in parenthesis next to each Board member's
total compensation) for the year ended December 31, 1995, were as follows:

Total Compensation
From Fund and
Aggregate Fund Complex
Name of Board Compensation Paid to Board
Member From Fund* Member

Joseph S. DiMartino $4,080 $448,618 (93)

David P. Feldman $3,750 $113,783 (37)

John M. Fraser, Jr. $3,750 $58,606 (14)

Robert R. Glauber $3,750 $97,503 (20)

James F. Henry $3,750 $53,500 (10)

Rosalind Gersten Jacobs $3,750 $92,500 (20)

Irving Kristol $3,750 $53,500 (10)

Dr. Paul A. Marks $3,500 $49,427 (10)

Dr. Martin Peretz $3,750 $53,500 (10)

Bert W. Wasserman $3,750 $54,739 (10)
______________________________
* Amount does not include reimbursed expenses for attending Board
meetings, which amounted to $764 for all Board members as a group.

Officers of the Fund

MARIE E. CONNOLLY, President and Treasurer. President, Chief Executive
Officer and a director of the Distributor and an officer of other
investment companies advised or administered by the Manager. From
December 1991 to July 1994, she was President and Chief Compliance
Officer of Funds Distributor, Inc., the ultimate parent of which is
Boston Institutional Group, Inc. Prior to December 1991, she served
as Vice President and Controller, and later as Senior Vice President,
of The Boston Company Advisors, Inc. She is 38 years old.

JOHN E. PELLETIER, Vice President and Secretary. Senior Vice President,
General Counsel and Secretary of the Distributor and an officer of
other investment companies advised or administered by the Manager.
From February 1992 to July 1994, he served as Counsel for The Boston
Company Advisors, Inc. From August 1990 to February 1992, he was
employed as an Associate at Ropes & Gray. He is 32 years old.

RICHARD W. INGRAM, Vice President and Assistant Treasurer. Senior Vice
President and Director of Client Services and Treasury Operations of
Funds Distributor, Inc. and an officer of other investment companies
advised or administered by the Manager. From March 1994 to November
1995, he was Vice President and Division Manager for First Data
Investor Services Group. From 1989 to 1994, he was Vice President,
Assistant Treasurer and Tax Director - Mutual Funds of The Boston
Company, Inc. He is 41 years old.

MARY A. NELSON, Vice President and Assistant Treasurer. Vice President and
Manager of Treasury Services and Administration of Funds Distributor,
Inc. and an officer of other investment companies advised or
administered by the Manager. From September 1989 to July 1994, she
was an Assistant Vice President and Client Manager for The Boston
Company, Inc. She is 32 years old.

ELIZABETH A. BACHMAN, Vice President and Assistant Secretary. Assistant
Vice President of the Distributor and an officer of other investment
companies advised or administered by the Manager. She is 27 years
old.

DOUGLAS C. CONROY, Vice President and Assistant Secretary. Supervisor of
Treasury Services and Administration of Funds Distributor, Inc. and an
officer of other investment companies advised or administered by the
Manager. From April 1993 to January 1995, he was a Senior Fund
Accountant for Investors Bank and Trust Company. From December 1991
to March 1993, Mr. Conroy was employed as a Fund Accountant at The
Boston Company, Inc. He is 27 years old.

MARK A. KARPE, Vice President and Assistant Secretary. Senior Paralegal of
the Distributor and an officer of other investment companies advised
or administered by the Manager. From August 1993 to May 1996, he
attended Hofstra University School of Law. Prior to August 1993, he
was employed as an Associate Examiner at the National Association of
Securities Dealers. He is 27 years old.

JOSEPH F. TOWER, III, Vice President and Assistant Treasurer. Senior Vice
President, Treasurer and Chief Financial Officer of the Distributor
and an officer of other investment companies advised or administered
by the Manager. From July 1988 to August 1994, he was employed by The
Boston Company, Inc. where he held various management positions in the
Corporate Finance and Treasury areas. He is 35 years old.

The address of each officer of the Company is 200 Park Avenue, New
York, New York 10166.

The following shareholders are known by the Fund to own of record 5%
or more of the indicated Series' shares outstanding on October 1, 1996:

Shareholder Series Percentage of
Shares

Transamerica Occidental Growth and Income 65.20%
Life Insurance Company International Equity 86.77%
1150 South Olive Street Capital Appreciation 76.18%
Los Angeles, CA Money Market 81.33%
90015-2223 Managed Assets 67.57%
Zero Coupon 2000 61.61%
Quality Bond 73.16%
Small Cap 17.30%
Disciplined Stock 32.62%
Small Company Stock 47.50%

First Transamerica Life Growth and Income 19.94%
Insurance Company International Equity 13.23%
1150 South Olive Street Capital Appreciation 23.72%
Los Angeles, CA Money Market 18.22%
90015-2211 Managed Assets 27.86%
Zero Coupon 2000 18.50%
Quality Bond 14.91%
Small Cap 6.14%
Disciplined Stock 21.49%
Small Company Stock 24.55%
International Value 5.62%

Providian Life and Health Growth and Income 7.85%
Insurance Company Zero Coupon 2000 16.25%
P.O. Box 32830 Quality Bond 8.44%
Louisville, KY
40232-2830

Provident Mutual Life & Growth and Income 5.08%
Annuity Company of America
P.O. Box 1717
Valley Forge, PA
19482-1717

Allomon Corporation Disciplined Stock 45.89%
c/o Mellon Bank, N.A. Small Company Stock 27.95%
One Mellon Bank Center International Value 73.34%
Pittsburgh, PA
15258

Valic Separate Account A Small Cap 68.86%
2929 Allen Parkway
Houston, Texas
77019-2197

A shareholder that beneficially owns, directly or indirectly, 25% or
more of a Series' voting securities may be deemed to be a "control person"
(as defined in the 1940 Act) of such Series.

INVESTMENT ADVISORY AGREEMENTS

The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Management
of the Fund."

The Manager provides advisory services pursuant to the Investment
Advisory Agreement (the "Agreement") with the Fund dated August 24, 1994,
as amended, May 23, 1996. As to each Series, the Agreement is subject to
annual approval by (i) the Fund's Board or (ii) vote of a majority (as
defined in the 1940 Act) of the outstanding voting securities of such
Series, provided that in either event the continuance also is approved by a
majority of the Board members who are not "interested persons" (as defined
in the 1940 Act) of the Fund or the Manager, by vote cast in person at a
meeting called for the purpose of voting on such approval. The Agreement
was approved by shareholders of each Series (other than the Growth and
Income, International Equity, Disciplined Stock, Small Company Stock and
International Value Portfolios) on August 22, 1994 and by the shareholder
of the Growth and Income and International Equity Portfolios on August 2,
1994. The Agreement was last approved by the Fund's Board, including a
majority of the Board members who are not "interested persons" of any party
to the Agreement, at a meeting held on May 23, 1996. As to each Series,
the Agreement is terminable without penalty, on 60 days' notice, by the
Fund's Board or by vote of the holders of a majority of the shares of such
Series, or, upon not less than 90 days' notice, by the Manager. The
Agreement will terminate automatically, as to the relevant Series, in the
event of its assignment (as defined in the 1940 Act).

The following persons are officers and/or directors of the Manager:
W. Keith Smith, Chairman of the Board; Christopher M. Condron, President,
Chief Executive Officer, Chief Operating Officer and a director; Stephen E.
Canter, Vice Chairman, Chief Investment Officer and a director; Lawrence S.
Kash, Vice Chairman--Distribution and a director; Philip L. Toia, Vice
Chairman--Operations and Administration and a director; William T.
Sandalls, Jr., Senior Vice President and Chief Financial Officer; Elie M.
Genadry, Vice President--Institutional Sales; William F. Glavin, Jr., Vice
President--Corporate Development; Mark N. Jacobs, Vice President, General
Counsel and Secretary; Patrice M. Kozlowski, Vice President--Corporate
Communications; Mary Beth Leibig, Vice President--Human Resources; Jeffrey
N. Nachman, Vice President--Mutual Fund Accounting; Andrew S. Wasser, Vice
President--Information Services; Elvira Oslapas, Assistant Secretary; and
Mandell L. Berman, Frank V. Cahouet, Alvin E. Friedman, Lawrence M. Greene
and Julian M. Smerling, directors.

With respect to the Managed Assets Portfolio, the Fund has entered
into a Sub-Investment Advisory Agreement (the "Comstock Sub-Advisory
Agreement") with Comstock Partners, Inc. dated May 21, 1990. As to such
Series, the Comstock Sub-Advisory Agreement is subject to annual approval
by (i) the Fund's Board or (ii) vote of a majority (as defined in the 1940
Act) of the Series' outstanding voting securities, provided that in either
event the continuance also is approved by a majority of the Board members
who are not "interested persons" (as defined in the 1940 Act) of the Fund
or Comstock Partners, Inc., by vote cast in person at a meeting called for
the purpose of voting on such approval. The Comstock Sub-Advisory
Agreement was approved by shareholders on July 12, 1991, and was last
approved by the Fund's Board, including a majority of the Board members who
are not "interested persons" of any party to the Comstock Sub-Advisory
Agreement, at a meeting held on March 11, 1996. The Comstock Sub-Advisory
Agreement is terminable without penalty, on 60 days' notice, by the Fund's
Board or by vote of the holders of a majority of the Series' outstanding
voting securities, or, upon not less than 90 days' notice, by Comstock
Partners, Inc. The Comstock Sub-Advisory Agreement will terminate
automatically in the event of its assignment (as defined in the 1940 Act).

The following persons are officers and/or directors of Comstock
Partners, Inc.: Charles L. Minter, Vice Chairman of the Board and
President; W. Troy Hottenstein, Chief Operating Officer; and Robert
Ringstad, Vice President of Operations.

With respect to the Capital Appreciation Portfolio, the Fund has
entered into a Sub-Investment Advisory Agreement (the "Sarofim Sub-Advisory
Agreement") with Fayez Sarofim & Co. dated August 17, 1992. As to such
Series, the Sarofim Sub-Advisory Agreement is subject to annual approval by
(i) the Fund's Board or (ii) vote of a majority (as defined in the 1940
Act) of the Series' outstanding voting securities, provided that in either
event the continuance also is approved by a majority of the Board members
who are not "interested persons" (as defined in the 1940 Act) of the Fund
or Fayez Sarofim & Co., by vote cast in person at a meeting called for the
purpose of voting on such approval. The Sarofim Sub-Advisory Agreement was
last approved by the Fund's Board, including a majority of the Board
members who are not "interested persons" of any party to the Sarofim Sub-
Advisory Agreement, at a meeting held on March 11, 1996. The Sarofim
Sub-Advisory Agreement is terminable without penalty, on 60 days' notice,
by the Fund's Board or by vote of the holders of a majority of the Series'
outstanding voting securities, or, upon not less than 90 days' notice, by
Fayez Sarofim & Co. The Sarofim Sub-Advisory Agreement will terminate
automatically in the event of its assignment (as defined in the 1940 Act).

The following persons are officers and/or directors of Fayez Sarofim &
Co.: Fayez S. Sarofim, Chairman of the Board and President; Raye G. White,
Executive Vice President, Secretary, Treasurer and a director; Russell M.
Frankel, Russell B. Hawkins, William K. McGee, Jr., Charles E. Sheedy and
Ralph B. Thomas, Senior Vice Presidents; and Nancy Daniel, Frank P. Lee and
James A. Reynolds, III, Vice Presidents.

The Manager manages the Fund's portfolio of investments in accordance
with the stated policies of the Fund, subject to the approval of the Fund's
Board. With respect to the Managed Assets Portfolio, Comstock Partners,
Inc., and, with respect to the Capital Appreciation Portfolio, Fayez
Sarofim & Co., provides day-to-day management of such Series' portfolio of
investments, in each case subject to the supervision of the Manager and the
Fund's Board. The Series' adviser is responsible for investment decisions,
and provides the Fund with portfolio managers who are authorized by the
Fund's Board to execute purchases and sales of securities. The Series'
portfolio managers are:

Series Portfolio Manager

Money Market Bernard W. Kiernan, Jr.
Patricia A. Larkin

Quality Bond Garitt Kono
Zero Coupon 2000 Kevin M. McClintock
Gerald E. Thunelius

Small Cap Thomas A. Frank
Elaine Reese

Growth and Income Richard Hoey

International Equity Ronald Chapman

Managed Assets Charles L. Minter
W. Troy Hottenstein

Capital Appreciation Russell B. Hawkins
Fayez S. Sarofim

Disciplined Stock Bert Mullins

Small Company Stock James Wadsworth

International Value Sandor Cseh

The Manager, Comstock Partners, Inc. and Fayez Sarofim & Co. maintain
research departments with professional portfolio managers and securities
analysts who provide research services for the Fund as well as for other
funds advised by the Manager, Comstock Partners, Inc. or Fayez Sarofim &
Co. All purchases and sales of each Series are reported for the Board's
review at the meeting subsequent to such transactions.

All expenses incurred in the operation of the Fund are borne by the
Fund, except to the extent specifically assumed by the Manager (or, if
applicable, the Series sub-investment advisor). The expenses borne by the
Fund include: organizational costs, taxes, interest, loan commitment fees,
dividends and interest on securities sold short, brokerage fees and
commissions, if any, fees of Board members who are not officers, directors,
employees or holders of 5% or more of the outstanding voting securities of
the Manager, Comstock Partners, Inc. or Fayez Sarofim & Co., or any
affiliates thereof, Securities and Exchange Commission fees, state Blue Sky
qualification fees, advisory fees, charges of custodians, transfer and
dividend disbursing agents' fees, certain insurance premiums, industry
association fees, outside auditing and legal expenses, costs of maintaining
the Fund's existence, costs of independent pricing services, costs
attributable to investor services (including, without limitation, telephone
and personnel expenses), costs of shareholders' reports and meetings, costs
of preparing and printing prospectuses and statements of additional
information for regulatory purposes and for distribution to existing
shareholders, and any extraordinary expenses. Expenses attributable to a
particular Series are charged against the assets of that Series; other
expenses of the Fund are allocated among the Series on the basis determined
by the Fund's Board, including, but not limited to, proportionately in
relation to the net assets of each Series.

The Manager maintains office facilities on behalf of the Fund, and
furnishes statistical and research data, clerical help, accounting, data
processing, bookkeeping and internal auditing and certain other required
services to the Fund. The Manager also may make such advertising and
promotional expenditures, using its own resources, as it from time to time
deems appropriate.

As compensation for its services, the Fund has agreed to pay the
Manager a monthly fee at the annual rate set forth in the Fund's
Prospectus. The fees paid by the Fund to the Manager with respect to each
Series (other than the Disciplined Stock, Small Company Stock and
International Value Portfolios) for the fiscal years ended December 31,
1993, 1994 and 1995 were as follows:

Fee Paid For
Year Ended
December 31, 1993

Advisory Reduction Net
Series Fee Payable in Fee Fee Paid

Capital Appreciation* $ 4,494 $ 4,494 $ 0
Money Market 13,390 13,390 0
Managed Assets 11,281 11,281 0
Zero Coupon 2000 9,842 9,842 0
Quality Bond 9,382 9,382 0
Small Cap 45,094 45,094 0
_____________________
* From April 5, 1993 (commencement of operations) through December 31,
1993.

Fee Paid For
Year Ended
December 31, 1994

Advisory Reduction Net
Series Fee Payable in Fee Fee Paid

Capital Appreciation $ 49,561 $ 49,561 $ 0
Growth and Income* 5,069 5,069 0
International Equity* 5,080 5,080 0
Money Market 108,958 108,958 0
Managed Assets 79,001 79,001 0
Zero Coupon 2000 38,947 38,947 0
Quality Bond 60,106 60,106 0
Small Cap 487,316 340,893 146,423
_____________________________
* From May 2, 1994 (commencement of operations) through December 31,
1994.

Fee Paid For
Year Ended
December 31, 1995

Advisory Reduction Net
Series Fee Payable in Fee Fee Paid

Capital Appreciation $157,346 $6,445 $150,901
Growth and Income 194,344 8,743 185,601
International Equity 29,314 17,393 11,921
Money Market 187,396 10,251 177,145
Managed Assets 108,913 0 108,913
Zero Coupon 2000 70,948 4,371 66,577
Quality Bond 147,830 10,017 137,813
Small Cap 2,610,562 0 2,610,562

As compensation for Comstock Partners, Inc.'s services, the Fund has
agreed to pay Comstock Partners, Inc. a monthly sub-advisory fee at the
annual rate set forth in the Fund's Prospectus. The fees payable by the
Fund to Comstock Partners, Inc. with respect to the Managed Assets
Portfolio for the fiscal years ended December 31, 1993, 1994 and 1995
amounted to $11,281, $79,001 and $108,913, respectively. The sub-advisory
fee payable to Comstock Partners, Inc. for fiscal 1994 was reduced by
$44,151 pursuant to an undertaking in effect, resulting in a net fee paid
to Comstock Partners, Inc. of $34,850 for fiscal 1994.

As compensation for Fayez Sarofim & Co.'s services, the Fund has
agreed to pay Fayez Sarofim & Co. a monthly sub-advisory fee at the annual
rate set forth in the Fund's Prospectus. The fees payable by the Fund to
Fayez Sarofim & Co. with respect to the Capital Appreciation Portfolio for
the period April 5, 1993 (commencement of operations) through December 31,
1993 and for the fiscal years ended December 31, 1994 and 1995 amounted to
$1,634, $18,022 and $57,217, respectively. However, no sub-advisory fee
was paid to Fayez Sarofim & Co. for the period April 5, 1993 (commencement
of operations) through December 31, 1993 or for the fiscal year ended
December 31, 1994 pursuant to an undertaking then in effect.

Prior to April 1, 1996, M&G Investment Management Limited served as
sub-investment adviser for the International Equity Portfolio pursuant to a
Sub-Investment Advisory Agreement with the Manager. Pursuant to such
agreement, the Manager agreed to pay M&G Investment Management Limited a
monthly fee at the annual rate of .30 of 1% of the value of the
International Equity Portfolio's average daily net assets. For the period
May 2, 1994 (commencement of operations) through December 31, 1994, no sub-
advisory fee was paid by the Manager to M&G Investment Management Limited
with respect to the International Equity Portfolio pursuant to an
undertaking then in effect. For the fiscal year ended December 31, 1995,
the Manager paid M&G Investment Management Limited a sub-advisory fee in
the amount of $4,800.

Prior to May 24, 1996, The Boston Company Asset Management, Inc.
served as sub-investment adviser for the International Value Portfolio
pursuant to a Sub-Investment Advisory Agreement with the Manager. Pursuant
to such agreement, the Manager agreed to pay The Boston Company Asset
Management, Inc. a monthly sub-advisory fee at the annual rate of .50 of 1%
of the value of the International Value Portfolio's average daily net
assets. For the period April 30, (commencement of operations) through
May 24, 1996 (termination date of the Sub-Investment Advisory Agreement
between the Manager and The Boston Company Asset Management, Inc.), no sub-
advisory fee was paid by the Manager to The Boston Company Asset
Management, Inc.

Prior to May 24, 1996, Laurel Capital Advisors served as sub-
investment adviser for the Disciplined Stock and Small Company Stock
Portfolios pursuant to a Sub-Investment Advisory Agreement with the
Manager. Pursuant to such agreement, the Manager agreed to pay Laurel
Capital Advisors a monthly sub-advisory fee at the annual rate set forth
below:

Annual Fee as a Percentage
of Average Daily Net Assets
Total Assets of each such Series

0 to $100 million .25%
$100 million to $1 billion .20%
$1 billion to $1.5 billion .15%
$1.5 billion or more .10%

For the period April 30, 1996 (commencement of operations) through May
24, 1996 (termination date of the Sub-Investment Advisory Agreement between
the Manager and Laurel Capital Advisors), no sub-advisory fee was paid by
the Manager to Laurel Capital Advisors.

The Manager (and, with respect to the Managed Assets Portfolio and
Capital Appreciation Portfolio, Comstock Partners, Inc. and Fayez Sarofim &
Co., respectively) has agreed that if, in any fiscal year, the aggregate
expenses of the Fund, exclusive of taxes, brokerage, interest on borrowings
and (with the prior written consent of the necessary state securities
commissions) extraordinary expenses, but including the advisory fees,
exceed the expense limitation of any state having jurisdiction over the
Fund, the Fund may deduct from the payment to be made to the Manager (and,
with respect to the Managed Assets Portfolio and Capital Appreciation
Portfolio, Comstock Partners, Inc. and Fayez Sarofim & Co., respectively),
or the Manager (and, with respect to the Managed Assets Portfolio and
Capital Appreciation Portfolio, Comstock Partners, Inc. and Fayez Sarofim &
Co., respectively) will bear, such excess expense to the extent required by
state law. Such deduction or payment, if any, will be estimated daily, and
reconciled and effected or paid, as the case may be, on a monthly basis.

The aggregate of the fees payable to the Manager (other than for the
Capital Appreciation Portfolio) and Comstock Partners, Inc. is not subject
to reduction as the value of a Series' assets increases.

PURCHASE OF SHARES

The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "How to Buy
Shares."

The Distributor. The Distributor serves as the Fund's distributor on
a best efforts basis pursuant to an agreement which is renewable annually.
The Distributor also acts as distributor for the other funds in the Dreyfus
Family of Funds and for certain other investment companies.

REDEMPTION OF SHARES

The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "How to
Redeem Shares."

Redemption Commitment. The Fund has committed to pay in cash all
redemption requests by any shareholder of record, limited in amount during
any 90-day period to the lesser of $250,000 or 1% of the value of a Series'
net assets at the beginning of such period. Such commitment is irrevocable
without the prior approval of the Securities and Exchange Commission. In
the case of requests for redemption in excess of such amount, the Fund's
Board reserves the right to make payments in whole or part in securities
(which may include non-marketable securities) or other assets of the Series
in case of an emergency or any time a cash distribution would impair the
liquidity of the Series to the detriment of the existing shareholders. In
such event, the securities would be valued in the same manner as the
Series' portfolio is valued. If the recipient sold such securities,
brokerage charges might be incurred.

Suspension of Redemptions. The right of redemption may be suspended
or the date of payment postponed (a) during any period when the New York
Stock Exchange is closed (other than customary weekend and holiday
closings), (b) when trading in the markets the Fund ordinarily utilizes is
restricted, or when an emergency exists as determined by the Securities and
Exchange Commission so that disposal of the Fund's investments or
determination of its net asset value is not reasonably practicable, or (c)
for such other periods as the Securities and Exchange Commission by order
may permit to protect the Fund's shareholders.

DETERMINATION OF NET ASSET VALUE

The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "How to Buy
Shares."

Money Market Portfolio. The valuation of the Money Market Portfolio's
securities is based upon their amortized cost which does not take into
account unrealized capital gains or losses. This involves valuing an
instrument at its cost and thereafter assuming a constant amortization to
maturity of any discount or premium, regardless of the impact of
fluctuating interest rates on the market value of the instrument. While
this method provides certainty in valuation, it may result in periods
during which value, as determined by amortized cost, is higher or lower
than the price the Series would receive if it sold the instrument.

The Fund's Board has established, as a particular responsibility
within the overall duty of care owed to the Money Market Portfolio's
shareholders, procedures reasonably designed to stabilize the Series' price
per share as computed for the purpose of purchases and redemptions at
$1.00. Such procedures include review of the Series' portfolio holdings by
the Fund's Board, at such intervals as it deems appropriate, to determine
whether the Series' net asset value per share calculated by using available
market quotations or market equivalents deviates from $1.00 per share based
on amortized cost. In such review, investments for which market quotations
are readily available will be valued at the most recent bid price or yield
equivalent for such securities or for securities of comparable maturity,
quality and type, as obtained from one or more of the major market makers
for the securities to be valued. Other investments and assets will be
valued at fair value as determined in good faith by the Fund's Board.

The extent of any deviation between the Money Market Portfolio's net
asset value based upon available market quotations or market equivalents
and $1.00 per share based on amortized cost will be examined by the Fund's
Board. If such deviation exceeds 1/2 of l%, the Board members promptly
will consider what action, if any, will be initiated. In the event the
Board determines that a deviation exists which may result in material
dilution or other unfair results to investors or existing shareholders, it
has agreed to take such corrective action as it regards as necessary and
appropriate, including: selling portfolio instruments prior to maturity to
realize capital gains or losses or to shorten average portfolio maturity;
withholding dividends or paying distributions from capital or capital
gains; redeeming shares in kind; or establishing a net asset value per
share by using available market quotations or market equivalents.

Zero Coupon 2000 and Quality Bond Portfolios. Substantially all of
each Series' investments are valued each business day by an independent
pricing service (the "Service") approved by the Fund's Board. When, in the
judgment of the Service, quoted bid prices for investments are readily
available and are representative of the bid side of the market, these
investments 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 are carried at fair value as
determined by the Service, based on methods which include consideration of:

yields or prices of municipal bonds of comparable quality, coupon, maturity
and type; indications as to values from dealers; and general market
conditions. The Service's procedures are reviewed by the Fund's officers
under the general supervision of the Board. Short-term investments are not
valued by the Service and are carried at amortized cost, which approximates
value. Other investments that are not valued by the Service are valued at
the average of the most recent bid and asked prices in the market in which
such investments are primarily traded, or at the last sales price for
securities traded primarily on an exchange. In the absence of reported
sales of investments traded primarily on an exchange, the average of the
most recent bid and asked prices is used. Bid price is used when no asked
price is available. Investments traded in foreign currencies are
translated to U.S. dollars at the prevailing rates of exchange. Expenses
and fees of a Series, including the advisory fee (reduced by the expense
limitation, if any), are accrued daily and taken into account for the
purpose of determining the net asset value of shares.

Capital Appreciation, Disciplined Stock, Growth and Income,
International Equity, International Value, Managed Assets, Small Company
Stock and Small Cap Portfolios. Each Series' portfolio securities are
valued at the last sale price on the securities exchange or national
securities market on which such securities are primarily traded.
Securities not listed on an exchange or national securities market, or
securities in which there were no transactions, are valued at the average
of the most recent bid and asked prices, except in the case of open short
positions where the asked price is used for valuation purposes. Bid price
is used when no asked price is available. Market quotations for foreign
securities in foreign currencies are translated into U.S. dollars at the
prevailing rates of exchange. Because of the need to obtain prices as of
the close of trading on various exchanges throughout the world, the
calculation of net asset value may not take place contemporaneously with
the determination of prices of many of the Series' portfolio securities.
Short-term investments are carried at amortized cost, which approximates
value. Any securities or other assets for which recent market quotations
are not readily available are valued at fair value as determined in good
faith by the Fund's Board. Expenses and fees, including the advisory fees
(reduced by the expense limitation, if any), are accrued daily and taken
into account for the purpose of determining the net asset value of shares.

Restricted securities, as well as securities or other assets for which
market quotations are not readily available, or are not valued by a pricing
service approved by the Fund's Board, are valued at fair value as
determined in good faith by the Fund's Board. The Fund's Board will review
the method of valuation on a current basis. In making their good faith
valuation of restricted securities, the Board members generally will take
the following factors into consideration: restricted securities which are,
or are convertible into, securities of the same class of securities for
which a public market exists usually will be valued at market value less
the same percentage discount at which purchased. This discount will be
revised periodically by the Fund's Board if the Board members believe that
it no longer reflects the value of the restricted securities. Restricted
securities not of the same class as securities for which a public market
exists usually will be valued initially at cost. Any subsequent adjustment
from cost will be based upon considerations deemed relevant by the Fund's
Board.

New York Stock Exchange Closings. The holidays (as observed) on which
the New York Stock Exchange is closed currently are: New Year's Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving and Christmas.

DIVIDENDS, DISTRIBUTIONS AND TAXES

The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Dividends,
Distributions and Taxes."

Each Series (other than the Disciplined Stock, Small Company Stock and
International Value Portfolios which had not commenced operations as of
December 31, 1995) has qualified as a "regulated investment company" under
the Code for the fiscal year ended December 31, 1995. It is expected that
each of the Disciplined Stock, Small Company Stock and International Value
Portfolios will qualify as a regulated investment company under the Code.
Each Series intends to continue to so qualify as long as such qualification
is in the best interests of its shareholders. As a regulated investment
company, each Series will pay no Federal income tax on net investment
income and net realized securities gains to the extent that such income and
gains are distributed to shareholders in accordance with applicable
provisions of the Code. To qualify as a regulated investment company, the
Series must distribute at least 90% of its net income (consisting of net
investment income and net short-term capital gain) to its shareholders,
derive less than 30% of its annual gross income from gain on the sale of
securities held for less than three months, and meet certain asset
diversification and other requirements. The term "regulated investment
company" does not imply the supervision of management or investment
practices or policies by any government agency.

Any dividend or distribution paid shortly after an investor's purchase
may have the effect of reducing the net asset value of the shares below the
cost of the investment. Such a dividend or distribution would be a return
of investment in an economic sense, although taxable as stated in the
Prospectus. In addition, the Code provides that if a shareholder holds
shares of the Series for six months or less and has received a capital gain
distribution with respect to such shares, any loss incurred on the sale of
such shares will be treated as long-term capital loss to the extent of the
capital gain distribution received.

Ordinarily, gains and losses realized from portfolio transactions will
be treated as capital gains and losses. However, all or a portion of the
gain or loss realized from the disposition of foreign currency, non-U.S.
dollar denominated debt instruments, and certain financial futures and
options, may be treated as ordinary income or loss under Section 988 of the
Code. In addition, all or a portion of the gain realized from the
disposition of certain market discount bonds will be treated as ordinary
income under Section 1276 of the Code. Finally, all or a portion of the
gain realized from engaging in "conversion transactions" may be treated as
ordinary income under Section 1258 of the Code. "Conversion transactions"
are defined to include certain forward, futures, option and straddle
transactions, transactions marketed or sold to produce capital gains, or
transactions described in Treasury regulations to be issued in the future.

Under Section 1256 of the Code, gain or loss realized by a Series from
certain financial futures and options transactions (other than those taxed
under Section 988 of the Code) will be treated as 60% long-term capital
gain or loss and 40% short-term capital gain or loss. Gain or loss will
arise upon the exercise or lapse of such futures and options as well as
from closing transactions. In addition, any such futures or options
remaining unexercised at the end of the Series' taxable year will be
treated as sold for their then fair market value, resulting in additional
gain or loss to the Series characterized in the manner described above.

Offsetting positions held by a Series involving financial futures and
options may constitute "straddles." Straddles are defined to include
"offsetting positions" in actively traded personal property. The tax
treatment of straddles is governed by Sections 1092 and 1258 of the Code,
which, in certain circumstances, overrides or modifies the provisions of
Sections 988 and 1256 of the Code. As such, all or a portion of any short-
or long-term capital gain from certain "straddle" transactions may be
recharacterized as ordinary income.

If a Series were treated as entering into straddles by reason of its
futures or options transactions, such straddles could be characterized as
"mixed straddles" if the futures or options transactions comprising such
straddles were governed by Section 1256 of the Code. The Series may make
one or more elections with respect to "mixed straddles." Depending upon
which election is made, if any, the results to the Series may differ. If
no election is made, to the extent the straddle rules apply to positions
established by the Series, losses realized by the Series will be deferred
to the extent of unrealized gain in any offsetting positions. Moreover, as
a result of the straddle and conversion transaction rules, short-term
capital loss on straddle positions may be recharacterized as long-term
capital loss, and long-term capital gain may be recharacterized as short-
term capital gain or ordinary income.

Investment by a Series in securities issued at a discount or providing
for deferred interest or for payment of interest in the form of additional
obligations could, under special tax rules, affect the amount, timing and
character of distributions to shareholders by causing a Series to recognize
income prior to the receipt of cash payments. For example, the Series
could be required to recognize annually a portion of the discount (or
deemed discount) at which such securities were issued and to distribute an
amount equal to such income in order to maintain its qualification as a
regulated investment company. In such case, the Series may have to dispose
of securities which it might otherwise have continued to hold in order to
generate cash to satisfy these distribution requirements.

Since shareholders of the Fund will be the separate accounts of
Participating Insurance Companies, no discussion is included herein as to
the Federal income tax consequences at the level of the holders of the VA
contracts or VLI policies. For information concerning the Federal income
tax consequences to such holders, see the prospectuses for such VA
contracts or VLI policies.

PORTFOLIO TRANSACTIONS

General. Transactions are allocated to various dealers by the Fund's
portfolio managers in their best judgment. The primary consideration is
prompt and effective execution of orders at the most favorable price.
Subject to that primary consideration, dealers may be selected for
research, statistical or other services to enable the Manager (and, if
applicable, the Series' sub-investment adviser) to supplement its own
research and analysis with the views and information of other securities
firms.

Research services furnished by brokers through which the Fund effects
securities transactions may be used by the Manager (or, if applicable, the
Series' sub-investment adviser) in advising other funds or accounts and,
conversely, research services furnished to the Manager (or, if applicable,
the Series' sub-investment adviser) by brokers in connection with other
funds or accounts may be used in advising a Series. Although it is not
possible to place a dollar value on these services, it is the opinion of
the Manager (and, if applicable, the Series' sub-investment adviser) that
the receipt and study of such services should not reduce the overall
research department expenses.

Money Market, Quality Bond and Zero Coupon 2000 Portfolios. Purchases
and sales of portfolio securities usually are principal transactions.
Portfolio securities ordinarily are purchased directly from the issuer or
from an underwriter or market maker. Usually no brokerage commissions are
paid by the Series for such purchases and sales. The prices paid to
underwriters of newly-issued securities usually include a concession paid
by the issuer to the underwriter, and purchases of securities from market
makers may include the spread between the bid and asked price. No
brokerage commissions were paid for the fiscal years ended December 31,
1993, 1994 and 1995. There were no concessions on principal transactions
for the fiscal years ended December 31, 1993, 1994 and 1995, except that
concessions on principal transactions for the Quality Bond Portfolio, where
determinable, amounted to $1,250 for the fiscal year ended December 31,
1993, none of which was paid to the Distributor. The high portfolio
turnover rate for the Quality Bond Portfolio in fiscal 1995 is largely
attributable to the significant increase in its assets during the period.

Capital Appreciation, Disciplined Stock, Growth and Income,
International Equity, International Value, Managed Assets, Small Company
Stock and Small Cap Portfolios. Brokers also will be selected because of
their ability to handle special executions such as are involved in large
block trades or broad distributions, provided the primary consideration is
met. Large block trades may, in certain cases, result from two or more
funds in the Dreyfus Family of Funds being engaged simultaneously in the
purchase or sale of the same security. Certain of the Series' transactions
in securities of foreign issuers may not benefit from the negotiated
commission rates available for transactions in securities of domestic
issuers. Higher portfolio turnover rates are likely to result in
comparatively greater brokerage expenses. The overall reasonableness of
brokerage commissions paid is evaluated based upon knowledge of available
information as to the general level of commissions paid by other
institutional investors for comparable services.

In connection with its portfolio securities transactions for the
fiscal years ended December 31, 1993, 1994 and 1995, the Managed Assets
Portfolio paid brokerage commissions of $5,937, $38,724 and $45,926,
respectively, none of which was paid to the Distributor. The above figures
for the Managed Assets Portfolio do not include concessions on principal
transactions which, where determinable, amounted to $37,885, $21,115 and
$3,165 for the fiscal years ended December 31, 1993, 1994 and 1995,
respectively, none of which was paid to the Distributor.

In connection with its portfolio securities transactions for the
fiscal years ended December 31, 1993, 1994 and 1995, the Small Cap
Portfolio paid brokerage commissions of $6,138, $409,523 and $1,240,756,
respectively, none of which was paid to the Distributor. The above figures
for the Small Cap Portfolio do not include concessions on principal
transactions, which, where determinable, amounted to $311,099, $402,933 and
$3,918,624 for the fiscal years ended December 31, 1993, 1994, and 1995,
respectively, none of which was paid to the Distributor.

In connection with its portfolio securities transactions for the
period April 5, 1993 (commencement of operations) through December 31, 1993
and for the fiscal years ended December 31, 1994 and 1995, the Capital
Appreciation Portfolio paid brokerage commissions of $3,731, $8,911 and
$26,346, respectively, none of which was paid to the Distributor. The
above figures for the Capital Appreciation Portfolio do not include
concessions on principal transactions which, where determinable, amounted
to $5,720 for the fiscal year ended December 31, 1995. There were no
concessions on principal transactions for the period April 5, 1993
(commencement of operations) through December 31, 1993 and for the fiscal
year ended December 31, 1994.

In connection with portfolio securities transactions for the period
May 2, 1994 (commencement of operations) through December 31, 1994 and for
the fiscal year ended December 31, 1995, the Growth and Income Portfolio
paid brokerage commissions of $6,175 and $277,680, respectively, none of
which was paid to the Distributor. The increase in brokerage commissions
paid by the Growth and Income Portfolio for fiscal 1995 is largely
attributable to the significant increase in its assets in fiscal 1995. The
above figures for the Growth and Income Portfolio do not include
concessions on principal transactions which, where determinable, amounted
to $1,006,258 for the fiscal year ended December 31, 1995, none of which
was paid to the Distributor. There were no concessions on principal
transactions for period May 2, 1994 (commencement of operations) through
December 31, 1994.

In connection with portfolio transactions for the period May 2, 1994
(commencement of operations) through December 31, 1994 and for the fiscal
year ended December 31, 1995, the International Equity Portfolio paid
brokerage commissions of $5,171 and $41,932, respectively. There were no
concessions on principal transactions for these periods.

YIELD AND PERFORMANCE INFORMATION

The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Performance
Information."

The performance figures shown below do not reflect the separate
charges applicable to the variable annuity contracts and variable life
policies offered by Participating Insurance Companies.

The yield and effective yield for the seven-day period ended June 30,
1996 for the following Series were:

Effective
Series Yield Yield

Money Market 4.88% 5.00%

Yield is computed in accordance with a standardized method which
involves determining the net change in the value of a hypothetical
pre-existing Money Market Portfolio account having a balance of one share
at the beginning of a seven calendar day period for which yield is to be
quoted, dividing the net change by the value of the account at the
beginning of the period to obtain the base period return, and annualizing
the results (i.e., multiplying the base period return by 365/7). The net
change in the value of the account reflects the value of additional shares
purchased with dividends declared on the original share and any such
additional shares and fees that may be charged to shareholder accounts, in
proportion to the length of the base period and the Series' average account
size, but does not include realized gains and losses or unrealized
appreciation and depreciation. Effective annualized yield is computed by
adding 1 to the base period return (calculated as described above), raising
that sum to a power equal to 365 divided by 7, and subtracting 1 from the
result.

Yields will fluctuate and are not necessarily representative of future
results. The investor should remember that yield is a function of the type
and quality of the instruments in the portfolio, portfolio maturity and
operating expenses. An investor's principal in the Fund is not guaranteed.
See "Determination of Net Asset Value" for a discussion of the manner in
which the Series' price per share is determined.

The current yields for the 30-day period ended June 30, 1996 for the
following Series were:

Current
Series Yield

Zero Coupon 2000 5.91%
Quality Bond 5.87%

Current yield is computed pursuant to a formula which operates as
follows: The amount of the relevant Series' expenses accrued for the
30-day period (net of reimbursements) is subtracted from the amount of the
dividends and interest earned (computed in accordance with regulatory
requirements) by such Series during the period. That result is then
divided by the product of: (a) the average daily number of such Series'
shares outstanding during the period that were entitled to receive
dividends, and (b) the net asset value per share on the last day of the
period less any undistributed earned income per share reasonably expected
to be declared as a dividend shortly thereafter. The quotient is then
added to 1, and that sum is raised to the 6th power, after which 1 is
subtracted. The current yield is then arrived at by multiplying the result
by 2.

The average total return for the periods indicated for each of the
following Series was:

1-year period 5-year period 5.830-year period
Series ended June 30, 1996 ended June 30, 1996 ended June 30, 1996
<S> <C> <C> <C>
Zero Coupon 2000 4.00% 10.37% 10.58%
Quality Bond 4.54% 10.06% 9.56%
Managed Assets 4.25% 7.07% 7.10%
Small Cap 24.64% 49.54% 52.70%

</TABLE>

1-year period 3.238-year period
ended June 30, 1996 ended June 30, 1996

Capital Appreciation 26.84% 16.36%

1-year period 2.164-year period
ended June 30, 1996 ended June 30, 1996

Growth and Income 41.30% 33.75%
International Equity 16.14% 6.83%

0.419-year period
ended September 30, 1996

Small Company Stock 8.01%
Disciplined Stock 20.80%
International Value (1.14)%

Average annual total return is calculated by determining the ending
redeemable value of an investment purchased with a hypothetical $1,000
payment made at the beginning of the period (assuming the reinvestment of
dividends and distributions), dividing by the amount of the initial
investment, taking the "n"th root of the quotient (where "n" is the number
of years in the period) and subtracting 1 from the result.

Total return for each of the following Series for the period indicated
was:

Series August 31, 1990 (commencement of operations) to June 30, 1996
<S> <C>
Zero Coupon 2000 79.76%
Quality Bond 70.28%
Managed Assets 49.14%
Small Cap 1,079.48%

</TABLE>

April 5, 1993 (commencement of operations) to June 30, 1996

Capital Appreciation 63.37%

May 2, 1994 (commencement of operations) to June 30, 1996

Growth and Income 87.95%
International Equity 15.42%

April 30, 1996 (commencement of operations) to September 30, 1996

Small Company Stock 3.28%
Disciplined Stock 8.24%
International Value (0.48)%

Total return is calculated by subtracting the amount of the relevant
Series' net asset value per share at the beginning of a stated period from
the net asset value per share at the end of the period (after giving effect
to the reinvestment of dividends and distributions during the period), and
dividing the result by the net asset value per share at the beginning of
the period.

From time to time, advertising materials for the Fund may refer to or
discuss then-current or past economic or financial conditions, developments
and/or events. From time to time advertising materials for the Fund also
may refer to Morningstar ratings and related analyses supporting the
rating. From time to time, advertising materials from the Fund may refer
to, or include, commentary by the Fund's portfolio managers relating to
their investment strategy, asset growth of the Series, current or past
business, political, economic or financial conditions and other matters of
general interest to shareholders.

From time to time, the Fund may advertise that Thomas A. Frank was
awarded "1994 Variable Fund Manager of the Year" by Morningstar, Inc. for
managing the Fund's Small Cap Portfolio.

INFORMATION ABOUT THE FUND

The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "General
Information."

Each Series share has one vote and, when issued and paid for in
accordance with the terms of the offering, is fully paid and
non-assessable. Shares have no preemptive, subscription or conversion
rights and are freely transferable.

Rule 18f-2 under the 1940 Act provides that any matter required to be
submitted under the provisions of the 1940 Act or applicable state law or
otherwise to the holders of the outstanding voting securities of any
investment company, such as the Fund, will not be deemed to have been
effectively acted upon unless approved by the holders of a majority of the
outstanding shares of each series affected by such matter. Rule 18f-2
further provides that a series shall be deemed to be affected by a matter
unless it is clear that the interests of each series in the matter are
identical or that the matter does not affect any interest of such series.
However, the Rule exempts the selection of independent accountants and the
election of Board members from the separate voting requirements of the
rule.

The Fund sends annual and semi-annual financial statements to all its
shareholders.

TRANSFER AND DIVIDEND DISBURSING AGENT, CUSTODIAN,
COUNSEL AND INDEPENDENT AUDITORS

Dreyfus Transfer, Inc., a wholly-owned subsidiary of the Manager, P.O.
Box 9671, Providence, Rhode Island 02940-9671, is the Fund's transfer and
dividend disbursing agent. Under a transfer agency agreement with the
Fund, the Transfer Agent arranges for the maintenance of shareholder
account records for the Fund, the handling of certain communications
between shareholders and the Fund and the payment of dividends and
distributions payable by the Fund. For these services, the Transfer Agent
receives a monthly fee computed on the basis of the number of shareholder
accounts it maintains for the Fund during the month, and is reimbursed for
certain out-of-pocket expenses. For the period December 1, 1995 (effective
date of transfer agency agreement) through June 30, 1996 (unaudited), the
Fund paid the Transfer Agent $314.

The Bank of New York, 90 Washington Street, New York, New York 10286,
serves as custodian of the Fund's investments with respect to the
International Equity, International Value, Managed Assets and Money Market
Portfolios.

Mellon Bank, N.A., the Manager's parent, One Mellon Bank Center,
Pittsburgh, Pennsylvania 15258, serves as the Fund's Custodian with respect
to the Capital Appreciation, Growth and Income, Quality Bond, Small Cap,
Zero Coupon 2000, Small Company Stock and Disciplined Stock Portfolios.
Under a custody agreement with the Fund, Mellon Bank, N.A. holds each such
Series' securities and keeps all necessary accounts and records. For its
custody services, Mellon Bank, N.A. receives a monthly fee based on the
market value of each Series' assets held in custody and receives certain
securities transactions charges.

The Transfer Agent, The Bank of New York and Mellon Bank, N.A. have no
part in determining the investment policies of the Fund or which securities
are to be purchased or sold by the Fund.

Stroock & Stroock & Lavan, 7 Hanover Square, New York, New York
10004-2696, as counsel for the Fund, has rendered its opinion as to certain
legal matters regarding the due authorization and valid issuance of the
shares being sold pursuant to the Fund's Prospectus.

Ernst & Young LLP, 787 Seventh Avenue, New York, New York 10019,
independent auditors, have been selected as auditors of the Fund.
APPENDIX

Description of certain ratings:

S&P

Bond Ratings

AAA

Bonds rated AAA have the highest rating assigned to a debt obligation.
Capacity to pay interest and repay principal is extremely strong.

Bonds rated AA have a very strong capacity to pay interest and repay
principal and differ from the highest rated issues only in small degree.

Bonds rated A have a strong capacity to pay interest and repay
principal although they are somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions than bonds in
higher rated categories.

BBB

Bonds rated BBB are regarded as having an adequate capacity to pay
interest and repay principal. Whereas they normally exhibit adequate
protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay
interest and repay principal for bonds in this category than for bonds in
higher rated categories.

Bonds rated BB have less near-term vulnerability to default than other
speculative grade bonds. However, they face major ongoing uncertainties or
exposure to adverse business, financial or economic conditions which could
lead to inadequate capacity to meet timely interest and principal payment.

Bonds rated B have a greater vulnerability to default but presently
have the capacity to meet interest payments and principal repayments.
Adverse business, financial or economic conditions would likely impair
capacity or willingness to pay interest and repay principal.

CCC

Bonds rated CCC have a current identifiable vulnerability to default,
and are dependent upon favorable business, financial and economic
conditions to meet timely payments of interest and repayment of principal.
In the event of adverse business, financial or economic conditions, they
are not likely to have the capacity to pay interest and repay principal.

The rating CC is typically applied to bonds subordinated to senior
debt which is assigned an actual or implied CCC rating.

The rating C is typically applied to bonds subordinated to senior debt
which is assigned an actual or implied CCC- rating.

Bonds rated D are in default, and payment of interest and/or repayment
of principal is in arrears.

S&P's letter ratings may be modified by the addition of a plus or a
minus sign, which is used to show relative standing within the major
ratings categories, except in the AAA (Prime Grade) category.

Commercial Paper Ratings

An S&P commercial paper rating is a current assessment of the
likelihood of timely payment of debt having an original maturity of no more
than 365 days. Issues assigned an A rating are regarded as having the
greatest capacity for timely payment. Issues in this category are
delineated with the numbers 1, 2 and 3 to indicate the relative degree of
safety.

A-1

This designation indicates the degree of safety regarding timely
payment is either overwhelming or very strong. Those issues determined to
possess overwhelming safety characteristics are denoted with a plus sign
(+) designation.

A-2

Capacity for timely payment on issues with this designation is strong.
However, the relative degree of safety is not as high as for issues
designated A-1.

Moody's

Bond Ratings

Aaa

Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to
as "gilt edge." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized
are most unlikely to impair the fundamentally strong position of such
issues.

Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally
known as high grade bonds. They are rated lower than the best bonds
because margins of protection may not be as large as in Aaa securities or
fluctuation of protective elements may be of greater amplitude or there may
be other elements present which make the long-term risks appear somewhat
larger than in Aaa securities.

Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper medium grade obligations. Factors giving
security to principal and interest are considered adequate, but elements
may be present which suggest a susceptibility to impairment sometime in the
future.

Baa

Bonds which are rated Baa are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest
payments and principal security appear adequate for the present but certain
protective elements may be lacking or may be characteristically unreliable
over any great length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as well.

Bonds which are rated Ba are judged to have speculative elements;
their future cannot be considered as well assured. Often the protection of
interest and principal payments may be very moderate and thereby not well
safeguarded during both good and bad times over the future. Uncertainty of
position characterizes bonds in this class.

Bonds which are rated B generally lack characteristics of the
desirable investment. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of time may
be small.

Caa

Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to
principal or interest.

Bonds which are rated Ca present obligations which are speculative in
a high degree. Such issues are often in default or have other marked
shortcomings.

Bonds which are rated C are the lowest rated class of bonds, and
issues so rated can be regarded as having extremely poor prospects of ever
attaining any real investment standing.

Moody's applies the numerical modifiers 1, 2 and 3 to show relative
standing within the major rating categories, except in the Aaa category and
in the categories below B. The modifier 1 indicates a rating for the
security in the higher end of a rating category; the modifier 2 indicates a
mid-range ranking; and the modifier 3 indicates a ranking in the lower end
of a rating category.

Commercial Paper Ratings

The rating Prime-1 (P-1) is the highest commercial paper rating
assigned by Moody's. Issuers of P-1 paper must have a superior capacity
for repayment of short-term promissory obligations, and ordinarily will be
evidenced by leading market positions in well established industries, high
rates of return on funds employed, conservative capitalization structures
with moderate reliance on debt and ample asset protection, broad margins in
earnings coverage of fixed financial charges and high internal cash
generation, and well established access to a range of financial markets and
assured sources of alternate liquidity.

Issuers (or related supporting institutions) rated Prime-2 (P-2) have
a strong capacity for repayment of short-term promissory obligations. This
ordinarily will be evidenced by many of the characteristics cited above but
to a lesser degree. Earnings trends and coverage ratios, while sound, will
be more subject to variation. Capitalization characteristics, while still
appropriate, may be more affected by external conditions. Ample alternate
liquidity is maintained.

Fitch

Bond Ratings

The ratings represent Fitch's assessment of the issuer's ability to
meet the obligations of a specific debt issue or class of debt. The
ratings take into consideration special features of the issue, its
relationship to other obligations of the issuer, the current financial
condition and operative performance of the issuer and of any guarantor, as
well as the political and economic environment that might affect the
issuer's future financial strength and credit quality.

AAA

Bonds rated AAA are considered to be investment grade and of the
highest credit quality. The obligor has an exceptionally strong ability to
pay interest and repay principal, which is unlikely to be affected by
reasonably foreseeable events.

Bonds rated AA are considered to be investment grade and of very high
credit quality. The obligor's ability to pay interest and repay principal
is very strong, although not quite as strong as bonds rated AAA. Because
bonds rated in the AAA and AA categories are not significantly vulnerable
to foreseeable future developments, short-term debt of these issuers is
generally rated F-1+.

Bonds rated A are considered to be investment grade and of high credit
quality. The obligor's ability to pay interest and repay principal is
considered to be strong, but may be more vulnerable to adverse changes in
economic conditions and circumstances than bonds with higher ratings.

BBB

Bonds rated BBB are considered to be investment grade and of
satisfactory credit quality. The obligor's ability to pay interest and
repay principal is considered to be adequate. Adverse changes in economic
conditions and circumstances, however, are more likely to have an adverse
impact on these bonds and, therefore, impair timely payment. The
likelihood that the ratings of these bonds will fall below investment grade
is higher than for bonds with higher ratings.

Bonds rated BB are considered speculative. The obligor's ability to
pay interest and repay principal may be affected over time by adverse
economic changes. However, business and financial alternatives can be
identified which could assist the obligor in satisfying its debt service
requirements.

Bonds rated B are considered highly speculative. While bonds in this
class are currently meeting debt service requirements, the probability of
continued timely payment of principal and interest reflects the obligor's
limited margin of safety and the need for reasonable business and economic
activity throughout the life of the issue.

CCC

Bonds rated CCC have certain identifiable characteristics, which, if
not remedied, may lead to default. The ability to meet obligations
requires an advantageous business and economic environment.

Plus (+) and minus (-) signs are used with a rating symbol to indicate
the relative position of a credit within the rating category.

Short-Term Ratings

Fitch's short-term ratings apply to debt obligations that are payable
on demand or have original maturities of up to three years, including
commercial paper, certificates of deposit, medium-term notes, and municipal
and investment notes.

Although the credit analysis is similar to Fitch's bond rating
analysis, the short-term rating places greater emphasis than bond ratings
on the existence of liquidity necessary to meet the issuer's obligations in
a timely manner.

F-1+

Exceptionally Strong Credit Quality. Issues assigned this rating are
regarded as having the strongest degree of assurance for timely payment.

F-1

Very Strong Credit Quality. Issues assigned this rating reflect an
assurance of timely payment only slightly less in degree than issues rated
F-1+.

Duff

Bond Ratings

AAA

Bonds rated AAA are considered highest credit quality. The risk
factors are negligible, being only slightly more than for risk-free U.S.
Treasury debt.

Bonds rated AA are considered high credit quality. Protection factors
are strong. Risk is modest but may vary slightly from time to time because
of economic conditions.

Bonds rated A have protection factors which are average but adequate.
However, risk factors are more variable and greater in periods of economic
stress.

BBB

Bonds rated BBB are considered to have below average protection
factors but still considered sufficient for prudent investment.
Considerable variability in risk exists during economic cycles.

Bonds rated BB are below investment grade but are deemed by Duff as
likely to meet obligations when due. Present or prospective financial
protection factors fluctuate according to industry conditions or company
fortunes. Overall quality may move up or down frequently within the
category.

Bonds rated B are below investment grade and possess the risk that
obligations will not be met when due. Financial protection factors will
fluctuate widely according to economic cycles, industry conditions and/or
company fortunes. Potential exists for frequent changes in quality rating
within this category or into a higher or lower quality rating grade.

CCC

Bonds rated CCC are well below investment grade securities. Such
bonds may be in default or have considerable uncertainty as to timely
payment of interest, preferred dividends and/or principal. Protection
factors are narrow and risk can be substantial with unfavorable economic or
industry conditions and/or with unfavorable company developments.

Plus (+) and minus (-) signs are used with a rating symbol (except
AAA) to indicate the relative position of a credit within the rating
category.

Commercial Paper Rating

The rating Duff-1 is the highest commercial paper rating assigned by
Duff. Paper rated Duff-1 is regarded as having very high certainty of
timely payment with excellent liquidity factors which are supported by
ample asset protection. Risk factors are minor.

FINANCIAL STATEMENTS AND REPORTS OF INDEPENDENT AUDITORS

The Fund's Annual Report to Shareholders for the fiscal year ended
December 31, 1995 for each Series (other than the Small Company Stock,
Disciplined Stock and International Value Portfolios which had not
commenced operations as of December 31, 1995) and Semi-Annual Report to
Shareholders for the six month period ended June 30, 1996 (unaudited) for
each Series are separate documents supplied with this Statement of
Additional Information, and the financial statements, accompanying notes
and, with respect to the Annual Report, report of independent auditors
appearing therein are incorporated by reference in this Statement of
Additional Information.

Schedule III - Investment in Affiliates - December 31, 1995, Small Cap
Portfolio is also incorporated by reference in this Statement of Additional
Information.

Dreyfus Variable Investment Fund, Disciplined Stock Portfolio
Statement of Investments September 30, 1996 (Unaudited)

Common Stocks-97.8% Shares Value
------ --------
<S> <C> <C>
Basic Industries- 5.5% Cooper Tire and Rubber........................... 1,700 $ 36,763
Dow Chemical..................................... 1,000 80,250
Fort Howard...................................... 1,400 (a) 34,125
Goodrich (B.F.).................................. 600 27,075
Kimberly-Clark................................... 1,200 105,750
Lubrizol......................................... 800 23,000
Mead............................................. 500 29,312
Monsanto......................................... 1,150 41,975
Morton International............................. 1,100 43,725
Olin............................................. 300 25,200
PPG Industries................................... 1,100 59,813
Praxair.......................................... 1,500 64,500
Sealed Air....................................... 400 (a) 14,900
Union Carbide.................................... 1,450 66,156
--------
652,544
--------

Capital Spending- 21.9% AGCO............................................. 1,400 35,700
Adaptec.......................................... 750 (a) 45,000
Altera........................................... 500 (a) 25,313
Ascend Communications............................ 300 (a) 19,838
Atmel............................................ 1,100 (a) 33,962
Avnet............................................ 500 24,250
Bay Networks..................................... 1,000 27,250
Cadence Design System............................ 800 (a) 28,600
Case............................................. 550 26,813
Caterpillar...................................... 800 60,300
Ceridian......................................... 650 (a) 32,500
cisco Systems.................................... 1,900 (a) 117,918
Compaq Computer.................................. 1,100 (a) 70,538
Computer Associates International................ 1,200 71,700
Cooper Industries................................ 1,200 51,900
Emerson Electric................................. 750 67,594
Gateway 2000..................................... 400 (a) 19,150
General Electric................................. 3,850 350,350
General Motors, Cl. H............................ 800 46,200
Harnischfeger Industries......................... 1,300 49,075
Illinois Tool Works.............................. 800 57,700
Intel............................................ 2,600 248,138
International Business Machines.................. 1,200 149,400
Lockheed Martin.................................. 750 67,594
Manpower......................................... 700 23,275
McDonnell Douglas................................ 1,150 60,375
Microsoft........................................ 1,400 (a) 184,625
Olsten........................................... 450 11,193
Omnicom Group.................................... 700 32,725
Oracle........................................... 2,800 (a) 119,175
Pitney Bowes..................................... 700 36,838
Rockwell International........................... 1,200 67,650
Sun Microsystems................................. 750 (a) 46,594
3COM............................................. 1,100 (a) 66,069
Textron.......................................... 550 46,750
Thermo Electron.................................. 850 34,425
U.S. Robotics.................................... 350 22,618
United Technologies.............................. 650 78,081
Xerox............................................ 500 26,812
--------
2,583,988
--------

Consumer Cyclical- 11.4% Albertson's...................................... 1,200 50,550
Belo (A.H.), Cl. A............................... 500 17,250
Borg-Warner Automotive........................... 200 7,100
Chrysler......................................... 2,700 77,288
Dayton Hudson.................................... 1,350 44,550
Disney (Walt).................................... 1,500 95,063
Eckerd........................................... 1,300 (a) 36,400
Federated Department Stores...................... 1,800 (a) 60,300
Gap.............................................. 2,500 72,188
General Motors................................... 1,800 86,400
Goodyear Tire & Rubber........................... 1,400 64,575
Infinity Broadcasting, Cl. A..................... 1,400 (a) 44,100
King World Productions........................... 300 (a) 11,062
Lear............................................. 600 (a) 19,800
Liz Claiborne.................................... 800 29,800
Marriott International........................... 1,100 60,638
NIKE, Cl. B...................................... 300 36,450
New York Times, Cl. A............................ 1,400 47,250
NewsCorp., A.D.S................................. 2,900 60,538
Outback Steakhouse............................... 950 (a) 22,918
Reynolds & Reynolds, Cl. A....................... 1,500 39,187
Safeway.......................................... 1,350 (a) 57,543
Sears, Roebuck................................... 2,300 102,925
TJX Cos.......................................... 1,500 53,812
Wal-Mart Stores.................................. 5,600 147,700
--------
1,345,387
--------

Consumer Staples- 14.1% Avon Products.................................... 1,200 59,550
Boston Chicken................................... 1,200 (a) 42,300
Campbell Soup.................................... 700 54,600
Coca-Cola........................................ 5,800 295,075
Coca-Cola Enterprises............................ 700 31,675
Colgate-Palmolive................................ 600 52,125
ConAgra.......................................... 1,500 73,875
Dole Food........................................ 1,100 46,200
Eastman Kodak.................................... 1,100 86,350
First Brands..................................... 1,100 28,738
Gillette......................................... 1,500 108,187
Hershey Foods.................................... 1,100 55,275
Johnson & Johnson................................ 3,900 199,875
Philip Morris Cos................................ 1,900 170,525
Procter & Gamble................................. 950 92,625
Ralston-Purina Group............................. 700 47,950
Sara Lee......................................... 2,000 71,500
Seagram.......................................... 1,350 50,456
Unilever N.V..................................... 600 94,575
--------
1,661,456
--------

Energy- 9.3% Amoco............................................ 1,400 98,700
British Petroleum, A.D.S......................... 1,300 162,500
Coastal.......................................... 1,100 45,375
Columbia Gas System.............................. 600 33,600
Consolidated Natlural Gas........................ 950 50,944
Exxon............................................ 2,750 228,938
Halliburton...................................... 500 25,813
Kerr-McGee....................................... 600 36,525
Mobil............................................ 500 57,875
Noble Drilling................................... 2,400 (a) 36,300
Royal Dutch Petroleum............................ 1,650 257,606
Sonat............................................ 950 42,037
Tosco............................................ 400 21,950
--------
1,098,163
--------

Financial- 14.0% ACE.............................................. 650 34,369
AMBAC............................................ 500 27,875
Allstate......................................... 1,850 91,112
BankAmerica...................................... 2,200 180,675
Bank of Boston................................... 2,040 118,065
Barnett Banks.................................... 2,000 67,500
Bear Stearns Cos................................. 2,460 57,195
CIGNA............................................ 800 95,900
Chase Manhattan.................................. 1,950 156,244
Citicorp......................................... 800 72,500
Federal National Mortgage Association............ 1,600 55,800
First Chicago NBD................................ 2,900 131,225
General Re....................................... 200 28,350
ITT Hartford Group............................... 1,150 67,850
Merrill Lynch.................................... 1,200 78,750
NationsBank...................................... 700 60,813
Old Republic International....................... 1,100 27,225
PNC Bank......................................... 2,300 76,762
Providian........................................ 800 34,400
Salomon.......................................... 1,200 54,750
Standard Federal Bancorporation.................. 400 18,300
Travelers Group.................................. 2,200 108,075
--------
1,643,735
--------

Health Care- 8.8% Amgen............................................ 1,100 (a) 69,438
Becton, Dickinson................................ 1,100 48,675
Columbia/HCA Healthcare.......................... 1,000 56,875
Guidant.......................................... 600 33,150
Lilly (Eli)...................................... 2,000 129,000
Medtronic........................................ 1,200 76,950
Merck & Co....................................... 3,000 211,125
OrNda Healthcorp................................. 550 (a) 15,056
Oxford Health Plans.............................. 700 (a) 34,825
Pfizer........................................... 1,800 142,425
Pharmacia & Upjohn............................... 1,850 76,312
Schering-Plough.................................. 1,300 79,950
Smithkline Beecham, A.D.S........................ 500 30,438
United Healthcare................................ 850 35,381
--------
1,039,600
--------

Mining And Metals- 1.7% Aluminum Co. of America.......................... 1,050 61,950
Barrick Gold..................................... 2,100 52,763
Potash Corp. Saskatchewan........................ 750 54,843
Reynolds Metals.................................. 600 30,675
--------
200,231
--------

Transportation- 1.6% CSX.............................................. 1,300 65,650
Conrail.......................................... 1,100 79,613
Continental Airlines, Cl. B....................... 800 (a) 17,900
Delta Air Lines.................................. 350 25,200
--------
188,363
--------

Utilities- 9.5% AT&T............................................. 1,600 83,600
Allegheny Power System........................... 1,000 29,000
Ameritech........................................ 2,500 131,563
BellSouth........................................ 4,100 151,700
CMS Energy....................................... 400 12,050
Entergy.......................................... 3,300 89,100
GPU.............................................. 1,300 39,975
GTE.............................................. 3,750 144,375
Illinova......................................... 900 23,850
MCI Communications............................... 4,800 123,000
SBC Communications............................... 3,100 149,187
Southern......................................... 1,500 33,937
Texas Utilities.................................. 2,700 106,987
--------
1,118,324
--------

TOTAL COMMON STOCKS
(cost $10,848,249)............................. $ 11,531,791
========
Principal
Short-Term Investments-6.3% Amount
-------

U.S. Treasury Bills: 4.86%, 11/7/96................................... $ 383,000 $ 381,062
4.95%, 11/14/96.................................. 17,000 16,898
5.14%, 11/21/96.................................. 121,000 120,158
4.95%, 11/29/96.................................. 45,000 44,636

4.95%, 12/5/96................................... 31,000 30,722
4.93%, 12/12/96.................................. 147,000 145,542
--------
TOTAL SHORT-TERM INVESTMENTS
(cost $738,885)............................... $ 739,018
===============
104.1% $ 12,270,809
TOTAL INVESTMENTS (cost $11,587,134)........................................................ ============ ===============
(4.1%) $ (480,433)
LIABILITIES, LESS CASH AND RECEIVABLES...................................................... ============ ===============

NET ASSETS.................................................................................. 100.0% $ 11,790,376
============ ===============

Note to Statement of Investments;
- ---------------------
(a) Non-income producing.

See notes to financial statements.

DREYFUS VARIABLE INVESTMENT FUND, DISCIPLINED STOCK PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES SEPTEMBER 30, 1996 (UNAUDITED)
ASSETS:
Investments in securities, at value
(cost $11,587,134)-see statement........................................ $12,270,809
Cash.................................................................... 75,284
Receivable for investment securities sold............................... 71,091
Dividends receivable.................................................... 23,298
Prepaid expenses........................................................ 496
--------
12,440,978
LIABILITIES:
Due to The Dreyfus Corporation and affiliates........................... $ 13,745
Payable for investment securities purchased............................. 625,282
Accrued expenses........................................................ 11,575 650,602
-------- --------
NET ASSETS.................................................................. $11,790,376
========
REPRESENTED BY:
Paid-in capital......................................................... $11,108,072
Accumulated undistributed investment income-net......................... 48,630
Accumulated net realized (loss) on investments.......................... (50,001)
Accumulated net unrealized appreciation on investments-Note 5........... 683,675
--------
NET ASSETS at value applicable to 871,703 shares outstanding
(unlimited number of $.001 par value shares of Beneficial Interest authorized) $11,790,376
=========
NET ASSET VALUE, offering and redemption price per share
($11,790,376 / 871,703 shares).......................................... $13.53
====

See notes to financial statements.

DREYFUS VARIABLE INVESTMENT FUND, DISCIPLINED STOCK PORTFOLIO
STATEMENT OF OPERATIONS
FROM APRIL 30, 1996 (COMMENCEMENT OF OPERATIONS) TO SEPTEMBER 30, 1996 (UNAUDITED)
INVESTMENT INCOME:
INCOME:
Cash dividends (net of $1,248 foreign taxes withheld at source)....... $ 75,283
Interest.............................................................. 16,070
--------
TOTAL INCOME.................................................... $ 91,353
EXPENSES:
Investment advisory fee-Note 4(a)..................................... 27,107
Custodian fees-Note 4(a).............................................. 10,508
Auditing fees......................................................... 5,000
Registration fees..................................................... 3,830
Prospectus and shareholders' reports.................................. 2,026
Legal fees............................................................ 166
Shareholder servicing costs........................................... 157
Trustees' fees and expenses-Note 4(b)................................. 129
Miscellaneous......................................................... 664
--------
TOTAL EXPENSES.................................................. 49,587
Less-reduction in investment advisory fee due to undertaking-Note 4(a) 6,864
--------
NET EXPENSES.................................................... 42,723
--------
INVESTMENT INCOME-NET........................................... 48,630
REALIZED AND UNREALIZED GAIN ON INVESTMENTS-Note 5:
Net realized (loss) on investments...................................... $ (50,001)
Net unrealized appreciation on investments.............................. 683,675
--------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS................. 633,674
--------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $682,304
========

See notes to financial statements.

DREYFUS VARIABLE INVESTMENT FUND, DISCIPLINED STOCK PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
FROM APRIL 30, 1996 (COMMENCEMENT OF OPERATIONS) TO SEPTEMBER 30, 1996 (UNAUDI
TED)
OPERATIONS:
Investment income-net..................................................................... $ 48,630
Net realized (loss) on investments........................................................ (50,001)
Net unrealized appreciation on investments for the period................................. 683,675
--------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.................................... 682,304
--------
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold............................................................. 11,420,732
Cost of shares redeemed................................................................... (312,660)
--------
Increase In Net Assets From Beneficial Interest Transactions.............................. 11,108,072
--------
TOTAL INCREASE IN NET ASSETS............................................................ 11,790,376
NET ASSETS:
Beginning of period....................................................................... --
--------
End of period (including undistributed investment income-net;
$48,630 on September 30, 1996)............................................................ $11,790,376
========
SHARES
--------
CAPITAL SHARE TRANSACTIONS:
Shares sold............................................................................. 895,803
Shares redeemed......................................................................... (24,100)
--------
NET INCREASE IN SHARES OUTSTANDING.................................................. 871,703
========

</TABLE>

See notes to financial statements.

DREYFUS VARIABLE INVESTMENT FUND, DISCIPLINED STOCK PORTFOLIO
FINANCIAL HIGHLIGHTS (UNAUDITED)

Reference is made to page __ of the Fund's Prospectus
dated November 1, 1996.

See notes to financial statements.

DREYFUS VARIABLE INVESTMENT FUND, DISCIPLINED STOCK PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
NOTE 1-GENERAL:
Dreyfus Variable Investment Fund (the "Fund") is registered under the
Investment Company Act of 1940 ("Act") as an open-end management investment
company, operating as a series company currently offering eleven series,
including the Disciplined Stock Portfolio (the "Series") and is intended to
be a funding vehicle for variable annuity contracts and variable life
insurance policies to be offered by the separate accounts of life insurance
companies. The Series is a diversified portfolio. The Series' investment
objective is to provide investment results that are greater than the total
return performance of publicly-traded common stocks in the aggregate, as
represented by the Standard & Poor's 500 Composite Stock Price Index. The
Dreyfus Corporation ("Dreyfus") serves as the Series' investment adviser.
Dreyfus is a direct subsidiary of Mellon Bank, N.A. ("Mellon"). Effective May
24, 1996, Laurel Capital Advisors, an affiliate of Mellon, no longer serves
as the Series' sub-investment adviser. Premier Mutual Fund Services, Inc.
acts as the distributor of the Series' shares, which are sold without a sales
charge.
As of September 30, 1996, Allomon Corporation, an indirect subsidiary of
Mellon Bank Corporation, held 400,000 shares of the Series.
The Fund 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 Series' financial statements are prepared in accordance with
generally accepted accounting principles which may require the use of
management estimates and assumptions. Actual results could differ from those
estimates.
NOTE 2-SIGNIFICANT ACCOUNTING POLICIES:
(A) PORTFOLIO VALUATION: Investments in securities (including options and
financial futures) 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. Securities 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, except for open short positions, where the asked price is used for
valuation purposes. Bid price is used when no asked price is available.
Securities for which there are no such valuations are valued at fair value as
determined in good faith under the direction of the Board of Trustees.
(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. Dividend
income is recognized on the ex-dividend date and interest income, including,
where applicable, amortization of discount on investments, is recognized on
the accrual basis.
(C) DIVIDENDS TO SHAREHOLDERS: Dividends are recorded on the ex-dividend
date. Dividends from investment income-net and 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. To the extent that
net realized capital gain can be offset by capital loss carryovers, if any,
it is the policy of the Series not to distribute such gain.

DREYFUS VARIABLE INVESTMENT FUND, DISCIPLINED STOCK PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(D) FEDERAL INCOME TAXES: It is the policy of the Series 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.
NOTE 3-BANK LINE OF CREDIT:
The Series participates with other Dreyfus-managed Funds in a $300
million unsecured line of credit primarily to be utilized for temporary or
emergency purposes, including the financing of redemptions. Interest is
charged to the Series at rates which are related to the Federal Funds rate in
effect at the time of borrowings. For the period ending September 30, 1996,
the Series did not borrow under the line of credit.
NOTE 4-INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
(A) Pursuant to an Investment Advisory Agreement ("Agreement") with
Dreyfus, the investment advisory fee is computed at the annual rate of .75 of
1% of the value of the Series' average daily net assets and is payable
monthly. The Agreement provides that if in any full year the aggregate
expenses of the Series, exclusive of taxes, brokerage, interest on borrowings
and extraordinary expenses, exceed the expense limitation of any state having
jurisdiction over the Series, the Series may deduct from the payments to be
made to Dreyfus, or Dreyfus will bear the amount of such excess to the extent
required by state law.
However, Dreyfus has undertaken, from April 30, 1996 through December 31,
1996, to reduce the management fee paid by or reimburse such excess expenses
of the Series, to the extent that the Series' aggregate annual expenses
(exclusive of certain expenses as described above) exceed an annual rate of
1.25% of the value of the Series' average daily net assets. The reduction in
investment advisory fee, pursuant to the undertaking, amounted to $6,864
during the period from April 30, 1996 through September 30, 1996.
The undertaking may be extended, modified or terminated by Dreyfus,
provided that the resulting expense reimbursement would not be less than the
amount required pursuant to the Agreement.
The Series compensates Dreyfus Transfer, Inc., a wholly owned subsidiary
of Dreyfus, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the Series.
The Series compensates Mellon under a custody agreement for providing
custodial services for the Series. During the period ended September 30,
1996, $10,508 was paid to Mellon pursuant to the custody agreement.
(B) 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.
(C) BROKERAGE COMMISSIONS: During the period ended September 30, 1996,
the Series incurred total brokerage commissions of $13,736 of which $3,759
was paid to Dreyfus Investment Services Corporation, a subsidiary of Mellon
Bank Corporation.

DREYFUS VARIABLE INVESTMENT FUND, DISCIPLINED STOCK PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

NOTE 5-SECURITIES TRANSACTIONS:
The aggregate amount of purchases and sales of investment securities,
excluding short-term securities, during the period ended September 30, 1996,
amounted to $12,621,166 and $1,722,987, respectively.
At September 30, 1996, accumulated net unrealized appreciation on
investments was $683,675,
consisting of $860,220 gross unrealized appreciation and $176,545 gross
unrealized depreciation.
At September 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).
<TABLE>
<CAPTION>

Dreyfus Variable Investment Fund, International Value Portfolio
Statement of Investments September 30, 1996 (Unaudited)
Shares Value
Common Stocks_90.0% __________ _________
<S> <C> <C>
Argentina_1.0% YPF Sociedad Anonima, A.D.R................... 3,000 $ 68,625
___________
Australia_3.0% Amcor......................................... 6,000 36,164
Boral......................................... 18,000 46,274
Commonwealth Bank of Australia, A.D.R......... 1,000 (a) 17,500
Commonwealth Instalment....................... 5,500 32,454
Goodman Fielder .............................. 21,000 21,428
Southcorp Holdings............................ 18,000 51,115
___________
204,935
___________
Austria_.4% Creditanstalt-Bankverein...................... 200 24,436
___________
Denmark_1.0% Tele Danmark, A.D.R........................... 3,000 70,875
___________
France 8.1% Alcatel Alsthom, A.D.R........................ 3,650 61,594
C.S.F. (Thompson)............................. 2,324 68,909
Credit Local De France........................ 400 34,108
Danone........................................ 600 87,674
Elf Aquitaine, A.D.R.......................... 2,500 98,439
Guyenne & Gascogne............................ 125 43,241
Rhone-Poulenc, A.D.R.......................... 2,430 68,040
Societe Generale.............................. 800 88,527
___________
550,532
___________
Germany_6.3% Bayer......................................... 2,000 73,466
Bayerische Motoren Werke...................... 110 63,027
Deutsche Bank................................. 1,800 84,893
Henkel KGaA................................... 125 5,395
Siemens....................................... 1,300 68,611
Tarkett....................................... 3,000 60,905
VEBA.......................................... 1,400 73,374
___________
429,671
___________
Hong Kong_3.4% Cheung Kong................................... 9,000 69,249
HSBC.......................................... 3,600 66,804
Hong Kong Electric............................ 21,000 67,891
Yue Yuen Industrial........................... 100,000 27,156
___________
231,100
___________
Italy_2.9% Fiat Spa...................................... 10,000 28,157
Istituto Mobiliare Italiano, A.D.R............ 3,000 76,500
Stet, Di Risp................................. 35,000 94,552
___________
199,209
___________
Japan_28.9% Canon......................................... 5,000 98,383
Chudenko...................................... 1,000 33,243
Credit Saison................................. 5,000 119,947
Dai-Tokyo Fire & Marine Insurance............. 18,000 124,368
Hitachi....................................... 10,000 97,035
Hitachi Koki.................................. 9,000 80,863
Honda Motor................................... 3,000 75,472
Ito-Yokado.................................... 2,000 113,747
Kao........................................... 8,000 99,910
Mabuchi Motor................................. 1,000 55,705
Mikuni Coca Cola.............................. 4,000 54,627
Mitsubishi Heavy Industries................... 13,000 105,939
Murata Manufacturing.......................... 3,000 107,278
Nichiei....................................... 1,200 79,137
Nishimatsu Construction....................... 5,000 48,518
Ono Pharmaceutical............................ 2,000 65,229
Sankyo........................................ 2,500 92,093
Sekisui House................................. 8,000 87,691
Sony.......................................... 1,000 63,163
Toshiba....................................... 15,000 103,908
Toyota Motor.................................. 4,000 102,426
Yamanouchi Pharmaceutical..................... 3,000 63,612
Yamato Transport.............................. 8,000 86,972
___________
1,959,266
___________
Malaysia_1.7% Affin Holdings................................ 15,000 34,717
IOI Properties................................ 10,000 31,723
Malaysia International Shipping............... 15,000 46,090
___________
112,530
___________
Mexico_.6% Telefonos de Mexico, Series L, A.D.R.......... 1,300 41,763
___________
Netherlands_7.5% ABN-Amro Holdings............................. 1,218 67,596
Akzo Nobel NV, A.D.R.......................... 500 30,250
Hollandsche Beton Groep....................... 300 54,385
Hunter Douglas................................ 816 57,025
ING Groep..................................... 781 24,389
Koninklinke KNP............................... 2,000 47,017
Philips Electronics NV, A.D.R................. 1,200 43,050
Royal PTT Nederland, A.D.R.................... 1,500 51,750
Stad Rotterdam CVA............................ 1,516 55,853
Unilever NV, A.D.R............................ 500 78,813
___________
510,128
___________
New Zealand_1.2% Air New Zealand............................... 7,000 19,558
Fletcher Challenge Energy..................... 25,000 59,722
___________
79,280
___________
Norway_1.0% Christiania Bank.............................. 10,000 25,706
Orkla AS...................................... 800 40,022
___________
65,728
___________
Portugal_.4% Portugal Telecom, A.D.R....................... 1,000 25,750
___________
Singapore_1.2% Development Bank of Singapore................. 4,000 49,165
Far East Levingston Shipbuilding.............. 6,000 28,348
___________
77,513
___________
Spain_3.8% Corporacion Bancaria de Espana, A.D.R......... 3,700 77,238
Gas Y Electridad.............................. 1,200 64,884
Iberdrola..................................... 3,000 29,100
Repsol, A.D.R................................. 2,700 89,438
___________
260,660
___________
Sweden_1.6% Marieberg Tidnings............................ 2,000 51,321
Scania AB `A', A.D.R.......................... 1,000 27,000
Volvo AB `B', A.D.R........................... 1,300 28,275
___________
106,596
___________
Switzerland_4.4% Magazine Zum Globus........................... 100 50,666
Nestle........................................ 70 78,082
Schweizerischer Banksverein................... 550 104,993
Zurich Versicherungs.......................... 225 62,295
___________
296,036
___________
United Kingdom_11.6% Abbey National................................ 10,000 92,912
BTR........................................... 24,000 101,632
Bunzl......................................... 20,000 74,205
Devro......................................... 10,100 38,738
Hanson, A.D.R................................. 2,500 30,938
Laird Group................................... 8,000 57,485
National Westminster Bank..................... 10,118 107,552
Powergen...................................... 12,298 93,375
RTZ........................................... 7,000 107,229
Scapa Group................................... 10,000 42,347
Smith (David S.) Holdings..................... 8,134 41,388
___________
787,801
___________
TOTAL COMMON STOCKS
(cost $6,147,178).......................... $ 6,102,434
============
Convertible Preferred Stocks_1.0%
Germany; Henkel KGaA-Vorzug
(cost $69,000).............................. 125 $ 70,777
============
Preferred Stocks_1.4%
Germany; RWE AG (non-voting)
(cost $87,889).............................. 3,000 $ 91,801
============

Principal
Short-Term Investments_4.7% Amount
_________
U.S. Treasury Bills: 5.10%, 11/29/96............................... $ 92,000 $ 91,257
5.10%, 12/5/96................................ 142,000 140,725
5.06%,12/12/96................................ 89,000 88,117
___________
TOTAL SHORT-TERM INVESTMENTS
(cost $320,046)......................... $ 320,099
============
TOTAL INVESTMENTS (cost $6,624,113)........................................................... 97.1% $ 6,585,111
====== ============
CASH AND RECEIVABLES (NET)............................................................ ....... 2.9% $ 198,209
====== ============
NET ASSETS.................................................................................... 100.0% $ 6,783,320
====== ============

Note to Statement of Investments;
__________________________-
(a) 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 September 30,
1996, this security amounted to $17,500 or .26% of net assets.

See notes to financial statements.

Dreyfus Variable Investment Fund, International Value Portfolio
Statement of Assets and Liabilities September 30, 1996 (Unaudited)

ASSETS:
Investments in securities, at value
(cost $6,624,113)_see statement..................................................... 6,585,111
Cash ................................................................................... 197,407
Dividends receivable.................................................................... 24,963
Prepaid expenses........................................................................ 49
___________
................ 6,807,530
LIABILITIES:
Due to The Dreyfus Corporation and affiliates $5,399
Payable for investment securities purchased 3,261
Accrued expenses .......................... .... 15,550 24,210
__________ _____________
NET ASSETS............................................................................. $ 6,783,320
==============
REPRESENTED BY:
Paid-in capital........................................................................ $6,786,776
Accumulated undistributed investment income-net........................................ 55,601
Accumulated net realized (loss) on investments......................................... (18,680)
Accumulated net unrealized (depreciation) on investments and foreign
currency transactions............................................................. (40,377)
___________
NET ASSETS at value applicable to 545,420 shares outstanding
(unlimited number of $.001 par value shares of Beneficial Interest authorized)......... 6,783,320
============
NET ASSET VALUE, offering and redemption price per share
($6,783,320 /545,420 shares)........................................................... $12.44
========

See notes to financial statements.

Dreyfus Variable Investment Fund, International Value Portfolio
Statement of Operations
from April 30, 1996 (commencement of operations) to September 30, 1996 (Unaudited)

INVESTMENT INCOME:
Income:
Cash dividends (net of $11,501 foreign taxes withheld at source) $76,154
Interest............................................ 16,401
___________
Total Income............................................... $92,555
Expenses:
Investment advisory fee_Note 3(a).................. 24,636
Custodian fees...................................... 9,357
Auditing fees....................................... 6,250
Registration fees................................... 2,057
Prospectus and shareholders' reports................ 375
Legal fees.......................................... 104
Shareholder servicing costs......................... 101
Trustees' fees and expenses_Note 3(b).............. 97
Miscellaneous....................................... 542
___________
Total Expenses......................... 43,519
Less_reduction in investment advisory fee due to undertaking--Note 3(a) 6,565
___________
Net Expenses............................................... 36,954
___________
INVESTMENT INCOME_NET..................................... 55,601
___________
REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS:
Net realized (loss) on investments and foreign currency transactions--Note 4(a) ($9,616)
Net realized (loss) on forward currency exchange contracts (9,064)
Net Realized (Loss).................................................. ___________ (18,680)
Net unrealized (depreciation) on investments and foreign currency
transactions........................................................... (40,377)
___________
NET REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS......... (59,057)
___________
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS........................ ($3,456)
===========
See notes to financial statements.

Dreyfus Variable Investment Fund, International Value Portfolio
Statement of Changes in Net Assets
from April 30, 1996 (commencement of operations) to September 30, 1996 (Unaudited)

OPERATIONS:
Investment income_net.......... ... $55,601
Net realized (loss) on investments. (18,680)
Net unrealized (depreciation) on investments for the period (40,377)
___________
Net (Decrease) In Net Assets Resulting From Operations (3,456)
___________
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold.... .. 6,935,914
Cost of shares redeemed............ (149,138)
___________
Increase In Net Assets From Beneficial Interest Transactions 6,786,776
___________
Total Increase In Net Assets 6,783,320
NET ASSETS:
Beginning of period................ _
End of period (including undistributed investment income-net;
$55,601 on September 30, 1996) $6,783,320
============

Shares
___________
CAPITAL SHARE TRANSACTIONS:
Shares sold........................ 557,490
Shares redeemed.................... (12,070)
___________
Net Increase In Shares Outstanding 545,420
============
</TABLE>
See notes to financial statements.

Dreyfus Variable Investment Fund, International Value Portfolio
Financial Highlights (Unaudited)

Reference is made to page __ of the Fund's Prospectus
dated November 1, 1996.

See notes to financial statements.

Dreyfus Variable Investment Fund, International Value Portfolio
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1_General:
Dreyfus Variable Investment Fund (the "Fund") is registered under the
Investment Company Act of 1940 ("Act") as an open-end management investment
company, operating as a series company currently offering eleven series,
including the International Value Portfolio (the "Series") and is intended to
be a funding vehicle for variable annuity contracts and variable life
insurance policies to be offered by the separate accounts of life insurance
companies. The Series is a diversified portfolio. The Series' investment
objective is long-term capital growth. The Dreyfus Corporation ("Dreyfus")
serves as the Series' investment adviser. Dreyfus is a direct subsidiary of
Mellon Bank, N.A. ("Mellon"). Effective May 24, 1996, TBC Asset Management,
an affiliate of Mellon, no longer serves as the Series' sub-investment
adviser. Premier Mutual Fund Services, Inc. acts as the distributor of the
Series' shares, which are sold without a sales charge.
As of September 30, 1996, Allomon Corporation, an indirect subsidiary of
Mellon Bank Corporation, held 400,000 shares of the Series.
The Fund 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 Series' financial statements are prepared in accordance with
generally accepted accounting principles which may require the use of
management estimates and assumptions. Actual results could differ from those
estimates.
NOTE 2_Significant Accounting Policies:
(a) Portfolio valuation: Investments in securities (including options
and financial futures) 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. Securities 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, except for open short positions, where the asked price is used
for valuation purposes. Bid price is used when no asked price is available.
Securities for which there are no such valuations are valued at fair value as
determined in good faith under the direction of the Board of Trustees.
Investments denominated in foreign currencies are translated to U.S. dollars
at the prevailing rates of exchange. Forward currency exchange contracts are
valued at the forward rate.
(b) Foreign currency transactions: The Series does not isolate that
portion of the results of operations resulting from changes in foreign
exchange rates on investments from the fluctuations arising from changes in
market prices of securities held. Such fluctuations are included with the
net realized and unrealized gain or loss from investments.
Net realized foreign exchange gains or losses arise from sales and
maturities of short-term securities, sales of foreign currencies, currency
gains or losses realized on securities transactions, the difference between
the amounts of dividends, interest and foreign withholding taxes recorded on
the Series' books, and the U.S. dollar equivalent of the amounts actually
received or paid. Net unrealized foreign exchange gains or losses arise from
changes in the value of assets and liabilities other than investments in
securities, resulting from changes in exchange rates. Such gains and losses
are included with net realized and unrealized gain or loss on investments.
(c) 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. Dividend income is recognized on the ex-dividend
date and interest income, including, where applicable, amortization of
discount on investments, is recognized on the accrual basis.
(d) Dividends to shareholders: Dividends are recorded on the ex-dividend
date. Dividends from investment income-net and 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. To the extent that
net realized capital gain can be offset by capital loss carryovers, if any,
it is the policy of the Series not to distribute such gain.
(e) Federal income taxes: It is the policy of the Series 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.
NOTE 3_Investment Advisory Fee and Other Transactions With Affiliates:
(a) Pursuant to an Investment Advisory Agreement ("Agreement") with
Dreyfus, the investment advisory fee is computed at the annual rate of 1% of
the value of the Series' average daily net assets and is payable monthly.
The Agreement provides that if in any full year the aggregate expenses of the
Series, exclusive of taxes, brokerage, interest on borrowings and
extraordinary expenses, exceed the expense limitation of any state having
jurisdiction over the Series, the Series may deduct from the payments to be
made to Dreyfus, or Dreyfus will bear the amount of such excess to the extent
required by state law.
However, Dreyfus has undertaken, from April 30, 1996 through December 31,
1996, to reduce the management fee paid by or reimburse such excess expenses
of the Series, to the extent that the Series' aggregate annual expenses
(exclusive of certain expenses as described above) exceed an annual rate of
1.50% of the value of the Series' average daily net assets. The reduction in
investment advisory fee, pursuant to the undertaking, amounted to $6,565
during the period from April 30, 1996 through September 30, 1996.
The undertaking may be extended, modified or terminated by Dreyfus,
provided that the resulting expense reimbursement would not be less than the
amount required pursuant to the Agreement.
The Series compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary
of Dreyfus, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the Series.
(b) 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:
(a) The aggregate amount of purchases and sales of investment securities,
excluding short-term securities and forward currency exchange contracts,
during the period from April 30, 1996 through September 30, 1996 amounted to
$6,666,056 and $388,787, respectively.
The Series enters into forward currency exchange contracts in order to
hedge its exposure to changes in foreign currency exchange rates on its
foreign portfolio holdings. When executing forward currency exchange
contracts, the Series is obligated to buy or sell a foreign currency at a
specified rate on a certain date in the future. With respect to sales of
forward currency exchange contracts, the Series would incur a loss if the
value of the contract increases between the date the forward contract is
opened and the
date the forward contract is closed. The Series realizes a gain if the value
of the contract decreases between those dates. With respect to purchases of
forward currency exchange contracts, the Series would incur a loss if the
value of the contract decreases between the date the forward contract is
opened and the date the forward contract is closed. The Series realizes a
gain if the value of the contract increases between those dates. The Series
is also exposed to credit risk associated with counter party nonperformance
on these forward currency exchange contracts which is typically limited to
the unrealized gains on such contracts that are recognized in the Statement
of Assets and Liabilities. At September 30, 1996, there were no open forward
currency exchange contracts.
(b) At September 30, 1996, accumulated net unrealized depreciation on
investments was $39,002, consisting of $187,797 gross unrealized appreciation
and $226,799 gross unrealized depreciation.
At September 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).

DREYFUS VARIABLE INVESTMENT FUND,
INTERNATIONAL VALUE PORTFOLIO
200 Park Avenue
New York, NY 10166
INVESTMENT ADVISER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
CUSTODIAN
The Bank of New York
90 Washington Street
New York, NY 10286
TRANSFER AGENT &
DIVIDEND DISBURSING AGENT
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940

Printed in U.S.A. 152SA969
[Dreyfus logo]
Variable
Investment Fund,
INTERNATIONAL VALUE
PORTFOLIO
Semi-Annual Report
September 30, 1996
<TABLE>
<CAPTION>

Dreyfus Variable Investment Fund, Small Company Stock Portfolio September 30, 1996 (Unaudited)
Statement of Investments
Common Stocks--92.7%

Shares Value
____________ ______________
<S> <C> <C>
Basic Industries--6.2% ACX Technologies................................. 1,950 (a) $ 33,881
American Buildings............................... 700 (a) 18,550
AptarGroup....................................... 800 25,700
Arcadian......................................... 2,200 54,725
Cabot............................................ 2,100 58,538
Caraustar Industries............................. 1,150 34,141
Cytec Industries................................. 2,850 (a) 110,794
IMCO Recycling................................... 800 13,000
Jacobs Engineering Group......................... 900 (a) 20,250
Medusa........................................... 1,050 32,288
Sealed Air....................................... 700 (a) 26,075
Triangle Pacific................................. 1,050 (a) 20,738
______________
448,680
______________

Business Services--8.5% Analysts International........................... 700 32,200
Flightsafety International....................... 700 31,237
Heritage Media, Cl. A............................ 2,100 (a) 39,637
Hummingbird Communications....................... 1,050 (a) 30,188
Mutual Risk Management........................... 2,233 64,757
NetManage........................................ 1,850 (a) 16,245
PHH.............................................. 1,600 47,600
Philip Environmental............................. 5,800 (a) 55,100
Pittston Brinks Group............................ 2,450 76,869
Regis............................................ 1,475 38,350
Sotheby's Holdings, Cl. A........................ 2,400 39,300
Sterling Software................................ 1,050 (a) 80,194
SunGuard Data Systems............................ 1,500 (a) 67,500
______________
619,177
______________

Capital Goods--16.5% ADVANTA, Cl. B................................... 700 29,925
AGCO............................................. 2,300 58,650
AMETEK........................................... 1,500 28,313
Adaptec.......................................... 1,300 (a) 78,000
Altron........................................... 1,750 (a) 23,625
Amphenol, Cl. A.................................. 1,650 (a) 37,744
Atmel............................................ 1,900 (a) 58,663
CIDCO............................................ 1,300 (a) 26,975
Cognex........................................... 1,150 (a) 18,688
Colonial Data Technologies....................... 2,900 (a) 32,988
Dallas Semiconductor............................. 1,250 22,813
Danka Business Systems, A.D.R.................... 700 27,825
ECI Telecom...................................... 1,500 31,500
Electroglas...................................... 1,150 (a) 15,813
Electronics For Imaging.......................... 1,350 (a) 96,863
Elsag Bailey Process Automation, N.V............. 1,950 (a) 41,681
Hadco............................................ 1,150 (a) 36,800
Kennametal....................................... 1,150 39,531
Plantronics...................................... 700 (a) 26,338
Quanex........................................... 1,500 40,313
Rohr............................................. 1,400 (a) 27,475
Shiva............................................ 800 (a) 45,900
Silicon Valley Group............................. 2,800 (a) 49,700
Sirrom Capital................................... 400 12,100
Tech Data........................................ 1,850 (a) 51,569
Tellabs.......................................... 1,150 (a) 81,219
Thermedics....................................... 1,750 (a) 46,156
Thiokol.......................................... 600 28,125
Wyle Electronics................................. 1,250 40,156
Zebra Technologies, Cl. A........................ 1,600 (a) 41,000
______________
1,196,448
______________

Consumer Cyclical--16.9% Apple South...................................... 1,300 17,388
Borg-Warner Automotive........................... 1,050 37,275
Breed Technologies............................... 1,900 52,962
Clear Channel Communications..................... 700 (a) 61,950
CompUSA.......................................... 1,650 (a) 89,100
Devon Group...................................... 1,050 (a) 24,675
Eckerd........................................... 3,050 (a) 85,400
Fila Holdings ADS................................ 700 67,288
Fingerhut........................................ 2,200 29,150
General Nutrition................................ 3,300 (a) 57,956
Harman International............................. 800 39,000
Infinity Broadcasting, Cl. A..................... 2,000 (a) 63,000
Interface, Cl. A................................. 1,850 31,912
Interstate Hotels................................ 600 (a) 16,575
Luby's Cafeterias................................ 1,050 25,200
Regal Cinemas.................................... 2,175 (a) 54,375
Reynolds & Reynolds, Cl. A....................... 1,800 47,025
Richfood Holdings................................ 850 31,662
Ryan's Family Steak House........................ 3,150 (a) 24,019
Sports Authority................................. 1,800 (a) 47,925
Sturm Ruger...................................... 1,100 21,587
Tommy Hilfiger................................... 950 (a) 56,287
Toro............................................. 700 23,275
U.S. Office Products............................. 900 (a) 32,287
Waban............................................ 1,500 (a) 34,313
Wallace Computer Services........................ 1,600 45,200
Warnaco Group, Cl. A............................. 2,000 47,500
Winnebago Industries............................. 2,400 19,200
Zale............................................. 1,850 (a) 40,469
______________
1,223,955
______________

Consumer Staples--2.5% IBP.............................................. 1,250 29,062
Ionics........................................... 500 (a) 23,562
Morningstar Group................................ 3,150 (a) 36,225
Paragon Trade Brands............................. 1,050 (a) 24,544
Robert Mondavi, Cl. A............................ 1,300 (a) 42,575
Ultratech Stepper................................ 1,300 (a) 24,538
______________
180,506
______________

Energy--6.9% Benton Oil & Gas................................. 2,450 (a) 53,287
Cairn Energy USA................................. 2,200 (a) 21,725
Holly............................................ 850 23,375
KN Energy........................................ 850 29,963
Nabors Industries................................ 3,350 (a) 45,644
Noble Drilling................................... 4,200 (a) 63,525
Pacific Enterprises.............................. 2,450 74,112
Reading & Bates.................................. 2,300 (a) 62,388
Smith International.............................. 1,650 (a) 57,956
Valero Energy.................................... 1,300 28,437
WICOR............................................ 1,050 38,194
______________
498,606
______________

Health Care--9.9% AmeriSource Health, Cl. A........................ 1,700 (a) 75,650
Lincare Holdings................................. 1,800 (a) 72,000
Living Centers of America........................ 1,150 (a) 28,750
Mariner Health Group............................. 2,100 (a) 32,287
NABI............................................. 2,000 (a) 23,750
OrNda Healthcorp................................. 3,900 (a) 106,763
Rotech Medical................................... 1,900 (a) 31,350
Teva Pharmaceutical Industries, A.D.R............ 1,950 90,431
Universal Health Services, Cl. B................. 2,200 (a) 59,950
Vencor........................................... 2,000 (a) 64,500
Vital Signs...................................... 1,100 22,550
Vivra............................................ 1,500 (a) 48,937
Watson Pharmaceuticals........................... 1,600 (a) 60,000
______________
716,918
______________

Interest Sensitive--16.3% AMBAC............................................ 700 39,025
AMRESCO.......................................... 1,850 (a) 42,319
Bancorp Hawaii................................... 1,500 58,500
Bank United, Cl. A............................... 600 (a) 14,925
CMAC Investment.................................. 1,400 88,900
City National.................................... 2,300 41,687
Clayton Homes.................................... 3,150 69,300
Conseco.......................................... 1,050 51,712
Crestar Financial................................ 1,150 67,850
Cullen Frost Bankers............................. 1,600 48,200
Edwards (A.G.)................................... 1,250 36,406
First Tennessee National......................... 1,400 46,462
Franchise Finance Corp. of America............... 1,400 32,900
Health Care Property Investors................... 1,250 40,782
Kimco Realty..................................... 1,150 34,212
Mid Ocean........................................ 1,050 44,756
Money Store...................................... 1,850 49,025
ONBANCorp........................................ 1,150 39,818
Old Kent Financial............................... 1,092 46,273
Old Republic International....................... 2,300 56,925
People's Bank.................................... 2,200 54,450
RCSB Financial................................... 700 18,725
Reliance Group Holdings.......................... 3,800 29,450
Standard Federal Bancorporation.................. 1,150 52,612
USLIFE........................................... 1,300 39,000
United Companies Financial....................... 1,250 41,406
______________
1,185,620
______________

Mining and Metals--2.2% Brush Wellman.................................... 1,300 25,025
Cable Design Technologies........................ 1,050 (a) 42,000
Pittston Minerals Group.......................... 1,400 19,775
Potash........................................... 1,000 73,125
______________
159,925
______________

Transportation--1.5% Air Express International........................ 700 19,775
America West Airlines, Cl. B..................... 2,550 (a) 29,962
Illinois Central................................. 1,300 41,113
Pittston Burlington Group........................ 1,150 20,844
______________
111,694
______________

Utilities--5.3% CalEnergy........................................ 2,200 (a) 70,125
DQE.............................................. 1,750 48,781
Frontier......................................... 1,600 42,600
Illinova......................................... 1,500 39,750
LCI International................................ 1,650 (a) 51,975
MidAmerican Energy............................... 2,650 42,069
Pinnacle West Capital............................ 1,850 54,806
Vanguard Cellular Systems........................ 1,950 (a) 37,781
______________
387,887
______________

TOTAL COMMON STOCKS
(cost $6,555,931).............................. $ 6,729,416
==============

Principal
Amount
Short-Term Investments--6.6% ------------

U.S. Treasury Bills: 5.11%, 10/10/96.................................. $ 41,000 $ 40,951
5.14%, 11/21/96.................................. 114,000 113,207
4.95%, 11/29/96.................................. 172,000 170,610
4.93%, 12/12/96.................................. 152,000 150,492
---------------
TOTAL SHORT-TERM INVESTMENTS
(cost $475,163)................................ $ 475,260
===============
99.3% $ 7,204,676
TOTAL INVESTMENTS (cost $7,031,094)......................................................... ============ ===============
.7% $ 53,419
CASH AND RECEIVABLES (NET).................................................................. ============ ===============
100.0% $ 7,258,095
NET ASSETS.................................................................................. ============ ===============

Note to Statement of Investments;

(a) Non-income producing.

See notes to financial statements.

DREYFUS VARIABLE INVESTMENT FUND, SMALL COMPANY STOCK PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES SEPTEMBER 30, 1996 (UNAUDITED)
ASSETS:
Investments in securities, at value
(cost $7,031,094)-see statement....................................... $7,204,676
Cash.................................................................... 70,134
Receivable for investment securities sold............................... 9,902
Dividends receivable.................................................... 2,067
Prepaid expenses........................................................ 65
-----
7,286,844
LIABILITIES:
Due to The Dreyfus Corporation and affiliates........................... $ 7,748
Payable for investment securities purchased............................. 11,021
Accrued expenses........................................................ 9,980 28,749
---- -----
NET ASSETS.................................................................. $7,258,095
=====
REPRESENTED BY:
Paid-in capital......................................................... $7,052,389
Accumulated undistributed investment income-net......................... 21,575
Accumulated undistributed net realized gain on investments.............. 10,549
Accumulated net unrealized appreciation on investments-Note 5........... 173,582
-----
NET ASSETS at value applicable to 562,272 shares outstanding
(unlimited number of $.001 par value shares of Beneficial
Interest authorized).................................................... $7,258,095
=====
NET ASSET VALUE, offering and redemption price per share
($7,258,095 / 562,272 shares)........................................... $12.91
=====

See notes to financial statements.

DREYFUS VARIABLE INVESTMENT FUND, SMALL COMPANY STOCK PORTFOLIO
STATEMENT OF OPERATIONS
FROM APRIL 30, 1996 (COMMENCEMENT OF OPERATIONS) TO SEPTEMBER 30, 1996 (UNAUDITED)
INVESTMENT INCOME:
INCOME:
Cash dividends (net of $178 foreign taxes withheld at source)......... $ 28,043
Interest.............................................................. 24,975
----
TOTAL INCOME.................................................... $ 53,018
EXPENSES:
Investment advisory fee-Note 4(a)..................................... 22,106
Auditing fees......................................................... 6,000
Custodian fees-Note 4(a).............................................. 5,015
Registration fees..................................................... 2,432
Prospectus and shareholders' reports.................................. 751
Shareholder servicing costs........................................... 144
Legal fees............................................................ 116
Trustees' fees and expenses-Note 4(b)................................. 92
Miscellaneous......................................................... 491
----
TOTAL EXPENSES.................................................. 37,147
Less-reduction in investment advisory fee
due to undertaking-Note 4(a)...................................... 5,704
NET EXPENSES.................................................... 31,443
----
INVESTMENT INCOME-NET........................................... 21,575
REALIZED AND UNREALIZED GAIN ON INVESTMENTS-Note 5:
Net realized gain on investments........................................ $ 10,549
Net unrealized appreciation on investments.............................. 173,582
----
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS......................... 184,131
----
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $205,706
====

See notes to financial statements.

DREYFUS VARIABLE INVESTMENT FUND, SMALL COMPANY STOCK PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
FROM APRIL 30, 1996 (COMMENCEMENT OF OPERATIONS) TO SEPTEMBER 30, 1996 (UNAUDI
TED)
OPERATIONS:
Investment income-net....................................................................... $ 21,575
Net realized gain on investments............................................................ 10,549
Net unrealized appreciation on investments for the period................................... 173,582
------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS...................................... 205,706
------
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold............................................................... 11,001,647
Cost of shares redeemed..................................................................... (3,949,258)
------
INCREASE IN NET ASSETS FROM BENEFICIAL INTEREST TRANSACTIONS.............................. 7,052,389
------
TOTAL INCREASE IN NET ASSETS.......................................................... 7,258,095
NET ASSETS:
Beginning of period......................................................................... --
------
End of period (including undistributed investment income-net;
$21,575 on September 30, 1996).............................................................. $ 7,258,095
======

SHARES
------
CAPITAL SHARE TRANSACTIONS:
Shares sold................................................................................. 881,581
Shares redeemed............................................................................. (319,309)
------
NET INCREASE IN SHARES OUTSTANDING........................................................ 562,272
======

</TABLE>

See notes to financial statements.

DREYFUS VARIABLE INVESTMENT FUND, SMALL COMPANY STOCK PORTFOLIO
FINANCIAL HIGHLIGHTS (UNAUDITED)

Reference is made to page __ of the Fund's Prospectus
dated November 1, 1996.

See notes to financial statements.

DREYFUS VARIABLE INVESTMENT FUND, SMALL COMPANY STOCK PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1-GENERAL:
Dreyfus Variable Investment Fund (the "Fund") is registered under the
Investment Company Act of 1940 ("Act") as an open-end management investment
company, operating as a series company currently offering eleven series,
including the Small Company Stock Portfolio (the "Series") and is intended to
be a funding vehicle for variable annuity contracts and variable life
insurance policies to be offered by the separate accounts of life insurance
companies. The Series is a diversified portfolio. The Series' investment
objective is to provide investment results that are greater than the total
return performance of publicly-traded common stocks in the aggregate, as
represented by the Russell 2500 Index. The Dreyfus Corporation ("Dreyfus")
serves as the Series' investment adviser. Dreyfus is a direct subsidiary of
Mellon Bank, N.A. ("Mellon"). Effective May 24, 1996, Laurel Capital
Advisors, an affiliate of Mellon, no longer serves as the Series'
sub-investment adviser. Premier Mutual Fund Services, Inc. acts as the
distributor of the Series' shares, which are sold without a sales charge.
As of September 30, 1996, Allomon Corporation, an indirect subsidiary of
Mellon Bank Corporation, held 157,145 shares of the Series.
The Fund 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 Series' financial statements are prepared in accordance with
generally accepted accounting principles which may require the use of
management estimates and assumptions. Actual results could differ from those
estimates.
NOTE 2-SIGNIFICANT ACCOUNTING POLICIES:
(A) PORTFOLIO VALUATION: Investments in securities (including options and
financial futures) 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. Securities 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, except for open short positions, where the asked price is used for
valuation purposes. Bid price is used when no asked price is available.
Securities for which there are no such valuations are valued at fair value as
determined in good faith under the direction of the Board of Trustees.
Investments denominated in foreign currencies are translated to U.S. dollars
at the prevailing rates of exchange.
(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. Dividend
income is recognized on the ex-dividend date and interest income, including,
where applicable, amortization of discount on investments, is recognized on
the accrual basis.
(C) DIVIDENDS TO SHAREHOLDERS: Dividends are recorded on the ex-dividend
date. Dividends from investment income-net and dividends from net realized
capital gain are normally declared and paid annually, but the Series may make
distributions on a more frequent basis to comply with the distribution
requirements of the Internal Revenue Code. To the extent that net realized
capital gain can be offset by capital loss carryovers, if any, it is the
policy of the Series not to distribute such gain.

DREYFUS VARIABLE INVESTMENT FUND, SMALL COMPANY STOCK PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

(D) FEDERAL INCOME TAXES: It is the policy of the Series 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.
NOTE 3-BANK LINE OF CREDIT:
The Series participates with other Dreyfus-managed Funds in a $300
million unsecured line of credit primarily to be utilized for temporary or
emergency purposes, including the financing of redemptions. Interest is
charged to the Series at rates which are related to the Federal Funds rate in
effect at the time of borrowings. For the period ended September 30, 1996,
the Series did not borrow under the line of credit.
NOTE 4-INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
(A) Pursuant to an Investment Advisory Agreement ("Agreement") with
Dreyfus, the investment advisory fee is computed at the annual rate of .75 of
1% of the value of the Series' average daily net assets and is payable
monthly. The Agreement provides that if in any full year the aggregate
expenses of the Series, exclusive of taxes, brokerage, interest on borrowings
and extraordinary expenses, exceed the expense limitation of any state having
jurisdiction over the Series, the Series may deduct from the payments to be
made to Dreyfus, or Dreyfus will bear the amount of such excess to the extent
required by state law.
However, Dreyfus has undertaken, from April 30, 1996 through December 31,
1996, to reduce the management fee paid by or reimburse such excess expenses
of the Series, to the extent that the Series' aggregate annual expenses
(exclusive of certain expenses as described above) exceed an annual rate of
1.25% of the value of the Series' average daily net assets. The reduction in
investment advisory fee, pursuant to the undertaking, amounted to $5,704
during the period from April 30, 1996 through September 30, 1996.
The undertaking may be extended, modified or terminated by Dreyfus,
provided that the resulting expense reimbursement would not be less than the
amount required pursuant to the Agreement.
The Series compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary
of Dreyfus, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the Series.
The Series compensates Mellon under a custody agreement for providing
custodial services for the Series. During the period ended September 30,
1996, $5,015 was paid to Mellon pursuant to the custody agreement.
(B) 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 5-SECURITIES TRANSACTIONS:
The aggregate amount of purchases and sales of investment securities,
excluding short-term securities, during the period ended September 30, 1996,
amounted to $7,936,105 and $1,391,076, respectively.

DREYFUS VARIABLE INVESTMENT FUND, SMALL COMPANY STOCK PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

At September 30, 1996, accumulated net unrealized appreciation on
investments was $173,582, consisting of $537,298 gross unrealized
appreciation and $363,716 gross unrealized depreciation.
At September 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).

Dreyfus Variable Investment Fund, Small Company Stock Portfolio

DREYFUS VARIABLE INVESTMENT FUND

PART C. OTHER INFORMATION
_________________________

Item 24. Financial Statements and Exhibits. - List
_______ _________________________________________

(a) Financial Statements:

Included in Part A of the Registration Statement

Condensed Financial Information for the period from April 30,
1996 (commencement of operations) to September 30, 1996
(Unaudited). Disciplined Stock, Small Company Stock and
International Value Portfolios.

Condensed Financial Information for the period from April 5,
1993 (commencement of operations) to December 31, 1993, and
for each of the two years in the period ended December 31,
1995; and for the six-month period ended June 30, 1996
(Unaudited). Capital Appreciation Portfolio.

Condensed Financial Information for the period from May 2,
1994 (commencement of operations) to December 31, 1994, and
for the year ended December 31, 1995; and for the six-month
period ended June 30, 1996 (Unaudited). Growth and Income
and International Equity Portfolios.

Condensed Financial Information for the period from August
31, 1990 (commencement of operations) to December 31, 1990,
and for each of the five years in the period ended December
31, 1995; and for the six-month period ended June 30, 1996
(Unaudited). All Series except Capital Appreciation, Growth
and Income, Disciplined Stock, Small Company Stock,
International Equity and International Value Portfolios.

Included in Part B of the Registration Statement:

Statement of Investments--September 30, 1996
(Unaudited). Disciplined Stock, Small Company Stock and
International Value Portfolios.

Statement of Investments--December 31, 1995; and June
30, 1996 (Unaudited). All Series except Disciplined
Stock, Small Company Stock and International Value
Portfolios.

Statement of Financial Futures--December 31, 1995; and
June 30, 1996 (Unaudited). Managed Assets Portfolio.

Statement of Assets and Liabilities--September 30, 1996
(Unaudited). Disciplined Stock, Small Company Stock and
International Value Portfolios.

Item 24. Financial Statements and Exhibits. - List (continued)
_______ _____________________________________________________

Statement of Assets and Liabilities--December 31, 1995,
and June 30, 1996 (Unaudited). All Series except
Disciplined Stock, Small Company Stock and
International Value Portfolios.

Statement of Operations--September 30, 1996
(Unaudited). Disciplined Stock, Small Company Stock
and International Value Portfolios.

Statement of Operations--December 31, 1995; and June
30, 1996 (Unaudited). All Series except Disciplined
Stock, Small Company Stock and International Value
Portfolios.

Statement of Changes in Net Assets--for the period April
30, 1996 (commencement of operations) to September 30,
1996 (Unaudited). Disciplined Stock, Small Company
Stock and International Value Portfolios.

Statement of Changes in Net Assets--for the period May
2, 1994 (commencement of operations) to December 31,
1994, and for the year ended December 31, 1995; and for
the six-month period ended June 30, 1996 (Unaudited).
Growth and Income and International Equity Portfolios.

Statement of Changes in Net Assets--for each of the two
years ended December 31, 1995; and for the six-month
period ended June 30, 1996 (Unaudited). All Series
except Growth and Income, Disciplined Stock, Small
Company Stock, International Equity and International
Value Portfolios.

Notes to Financial Statements--for the period April 30,
1996 (commencement of operations) to September 30, 1996
(Unaudited). Disciplined Stock, Small Company Stock
and International Value Portfolios.

Notes to Financial Statements--December 31, 1995; and
June 30, 1996 (Unaudited). All Series except
Disciplined Stock, Small Company Stock and
International Value Portfolios.

Schedule III - Investment in Affiliates--December 31,
1995 Small Cap Portfolio.

Report of Ernst & Young LLP, Independent Auditors,
dated February 9, 1996.

All other Schedules and financial statement information, for which
provision is made in the applicable accounting regulations of the
Securities and Exchange Commission, are either omitted because they are not
required under the related instructions, they are inapplicable, or the
required information is presented in the financial statements or notes
thereto which are included in Part B of the Registration Statement.

Item 24. Financial Statements and Exhibits. - List (continued)
_______ _____________________________________________________

(b) Exhibits:

(1) Registrant's Agreement and Declaration of Trust and Articles of
Amendment thereto are incorporated by reference to Exhibit (1) of
Post-Effective Amendment No. 13 to the Registration Statement on
Form N-1A, filed on April 19, 1995.

(2) Registrant's By-Laws are incorporated by reference to Exhibit (2)
of Post-Effective Amendment No. 13 to the Registration Statement
on Form N-1A, filed on April 19, 1995.

(5)(a) Investment Advisory Agreement, as Amended.

(5)(b) Sub-Investment Advisory Agreement between the Registrant and
Comstock Partners, Inc. is incorporated by reference to Exhibit
(5)(b) of Post-Effective Amendment No. 13 to the Registration
Statement on Form N-1A, filed on April 19, 1995.

(5)(c) Sub-Investment Advisory Agreement between the Registrant and
Fayez Sarofim and Co. is incorporated by reference to Exhibit
(5)(c) of Post-Effective Amendment No. 13 to the Registration
Statement on Form N-1A, filed on April 19, 1995.

(6) Distribution Agreement is incorporated by reference to Exhibit
(6) of Post-Effective Amendment No. 15 to the Registration
Statement on Form N-1A, filed on April 16, 1996.

(8)(a) Custody Agreement between the Fund and The Bank of New York is
incorporated by reference to Exhibit (8)(a) of Post-Effective
Amendment No. 13 to the Registration Statement on Form N-1A,
filed on April 19, 1995.

(8)(b) Custody Agreement between the Fund and Mellon Bank, N.A.

(10) Opinion and consent of Registrant's counsel is incorporated by
reference to Exhibit (10) of Post-Effective Amendment No. 13 to
the Registration Statement on Form N-1A, filed on April 19, 1995.

(11) Consent of Independent Auditors.

(12) Financial Data Schedule.

(16) Schedules of Computation of Performance Data are incorporated by
reference to the Exhibit (16) of Post-Effective Amendment No. 11
to the Registration Statement on Form N-1A, filed on April 28,
1994.

Other Exhibits
______________

(a) Powers of Attorney. Other Powers of Attorney are
incorporated by reference to Other Exhibits (a) of
Post-Effective Amendment Nos. 12 and 15 to the
Registration Statement on Form N-1A, filed on September
16, 1994 and April 16, 1996, respectively.

(b) Certificate of Secretary. Other Certificates of
Secretary are incorporated by reference to Other
Exhibits (b) of Pre-Effective Amendment No. 7 and of
Post-Effective Amendment No. 15, to the Registration
Statement on Form N-1A, filed on July 10, 1990 and
April 16, 1996, respectively.

Item 25. Persons Controlled by or under Common Control with Registrant.
_______ ______________________________________________________________

Not Applicable

Item 26. Number of Holders of Securities.
_______ ________________________________

(1)
Title of Class
______________

Shares of Beneficial Interest
(Par value $.001) (2)
Number of Record Holders
as of October 1, 1996
________________________

Money Market Portfolio. . . . . . . . . . . . . . . . . . . . .3

Managed Assets Portfolio. . . . . . . . . . . . . . . . . . . .4

Zero Coupon 2000 Portfolio. . . . . . . . . . . . . . . . . . .9

Quality Bond Portfolio. . . . . . . . . . . . . . . . . . . . .5

Small Cap Portfolio . . . . . . . . . . . . . . . . . . . . . .7

Capital Appreciation Portfolio. . . . . . . . . . . . . . . . .3

Growth and Income Portfolio . . . . . . . . . . . . . . . . . .7

International Equity Portfolio. . . . . . . . . . . . . . . . .2

Disciplined Stock Portfolio . . . . . . . . . . . . . . . . . .3

Small Company Stock Portfolio . . . . . . . . . . . . . . . . .3

International Value Portfolio . . . . . . . . . . . . . . . . .3

Item 27. Indemnification
_______ _______________

The Statement as to the general effect of any contract,
arrangements or statute under which a director, officer,
underwriter or affiliated person of the Registrant is insured or
indemnified in any manner against any liability which may be
incurred in such capacity, other than insurance provided by any
director, officer, affiliated person or underwriter for their own
protection, is incorporated by reference to Item 27 of Part II of
Pre-Effective Amendment No. 7 to the Registration Statement on
Form N-1A, filed on July 10, 1990.

Reference is also made to the Distribution Agreement previously
filed as Exhibit (6).

Item 28. Business and Other Connections of Investment Adviser.
_______ ____________________________________________________

The Dreyfus Corporation ("Dreyfus") and subsidiary companies
comprise a financial service organization whose business consists
primarily of providing investment management services as the
investment adviser, manager and distributor for sponsored
investment companies registered under the Investment Company Act
of 1940 and as an investment adviser to institutional and
individual accounts. Dreyfus also serves as sub-investment
adviser to and/or administrator of other investment companies.
Dreyfus Service Corporation, a wholly-owned subsidiary of Dreyfus,
serves primarily as a registered broker-dealer of shares of
investment companies sponsored by Dreyfus and of other investment
companies for which Dreyfus acts as investment adviser, sub
investment adviser or administrator. Dreyfus Management, Inc.,
another wholly-owned subsidiary, provides investment management
services to various pension plans, institutions and individuals.

0Item 28. Business and Other Connections of Investment Adviser (continued)
________ ________________________________________________________________

Officers and Directors of Investment Adviser
____________________________________________

Name and Position
with Dreyfus Other Businesses
_________________ ________________

MANDELL L. BERMAN Real estate consultant and private investor
Director 29100 Northwestern Highway, Suite 370
Southfield, Michigan 48034;
Past Chairman of the Board of Trustees:
Skillman Foundation;
Member of The Board of Vintners Intl.

FRANK V. CAHOUET Chairman of the Board, President and
Director Chief Executive Officer:
Mellon Bank Corporation****;
Mellon Bank, N.A.****
Director:
Avery Dennison Corporation
150 North Orange Grove Boulevard
Pasadena, California 91103;
Saint-Gobain Corporation
750 East Swedesford Road
Valley Forge, Pennsylvania 19482;
Teledyne, Inc.
1901 Avenue of the Stars
Los Angeles, California 90067

ALVIN E. FRIEDMAN Senior Adviser to Dillon, Read & Co. Inc.
Director 535 Madison Avenue
New York, New York 10022;
Director and Member of the Executive
Committee of Avnet, Inc.**

LAWRENCE M. GREENE None
Director

JULIAN M. SMERLING None
Director

W. KEITH SMITH Chairman and Chief Executive Officer:
Chairman of the Board The Boston Company*****;
Vice Chairman of the Board:
Mellon Bank Corporation****;
Mellon Bank, N.A.****;
Director:
Dentsply International, Inc.
570 West College Avenue
York, Pennsylvania 17405

CHRISTOPHER M. CONDRON Vice Chairman:
President, Chief Mellon Bank Corporation****;
Executive Officer, The Boston Company*****;
Chief Operating Deputy Director:
Officer and a Mellon Trust****;
Director Chief Executive Officer:
The Boston Company Asset Management,
Inc.*****;
President:
Boston Safe Deposit and Trust Company*****

STEPHEN E. CANTER Director:
Vice Chairman and The Dreyfus Trust Company++;
Chief Investment Officer, Formerly, Chairman and Chief Executive Officer:
and a Director Kleinwort Benson Investment Management
Americas Inc.*

LAWRENCE S. KASH Chairman, President and Chief
Vice Chairman-Distribution Executive Officer:
and a Director The Boston Company Advisors, Inc.
53 State Street
Exchange Place
Boston, Massachusetts 02109
Executive Vice President and Director:
Dreyfus Service Organization, Inc.***;
Director:
Dreyfus America Fund
The Dreyfus Consumer Credit Corporation*;
The Dreyfus Trust Company++;
Dreyfus Service Corporation*;
President:
The Boston Company*****;
Laurel Capital Advisors****;
Boston Group Holdings, Inc.;
Executive Vice President:
Mellon Bank, N.A.****;
Boston Safe Deposit and Trust
Company*****;

PHILIP L. TOIA Chairman of the Board and Trust Investment
Vice Chairman-Operations Officer:
and Administration The Dreyfus Trust Company++;
and a Director Chairman of the Board and Chief Operating
Officer:
Major Trading Corporation*;
Chairman and Director:
Dreyfus Transfer, Inc.
One American Express Plaza
Providence, Rhode Island 02903
Director:
Dreyfus Precious Metals, Inc.*;
Dreyfus Service Corporation*;
Seven Six Seven Agency, Inc.*;
President and Director:
Dreyfus Acquisition Corporation*;
The Dreyfus Consumer Credit Corporation*;
Dreyfus-Lincoln, Inc.*;
Dreyfus Management, Inc.*;
Dreyfus Personal Management, Inc.*;
Dreyfus Partnership Management, Inc.+;
Dreyfus Service Organization, Inc.***;
The Truepenny Corporation*;
Formerly, Senior Vice President:
The Chase Manhattan Bank, N.A. and
The Chase Manhattan Capital Markets
Corporation
One Chase Manhattan Plaza
New York, New York 10081

WILLIAM T. SANDALLS, JR. Director:
Senior Vice President and Dreyfus Partnership Management, Inc.*;
Chief Financial Officer Seven Six Seven Agency, Inc.*;
President and Director:
Lion Management, Inc.*;
Executive Vice President and Director:
Dreyfus Service Organization, Inc.*;
Vice President, Chief Financial Officer and
Director:
Dreyfus Acquisition Corporation*;
Dreyfus America Fund
Vice President and Director:
The Dreyfus Consumer Credit Corporation*;
The Truepenny Corporation*;
Treasurer, Financial Officer and Director:
The Dreyfus Trust Company++;
Treasurer and Director:
Dreyfus Management, Inc.*;
Dreyfus Personal Management, Inc.*;
Dreyfus Service Corporation*;
Major Trading Corporation*;
Formerly, President and Director:
Sandalls & Co., Inc.

ELIE M. GENADRY President:
Vice President- Institutional Services Division of Dreyfus
Institutional Sales Service Corporation*;
Broker-Dealer Division of Dreyfus Service
Corporation*;
Group Retirement Plans Division of Dreyfus
Service Corporation;
Executive Vice President:
Dreyfus Service Corporation*;
Dreyfus Service Organization, Inc.***;
Vice President:
The Dreyfus Trust Company++

WILLIAM F. GLAVIN, JR. Executive Vice President:
Vice President-Corporate Dreyfus Service Corporation*;
Development Senior Vice President:
The Boston Company Advisors, Inc.
53 State Street
Exchange Place
Boston, Massachusetts 02109

MARK N. JACOBS Vice President, Secretary and Director:
Vice President- Lion Management, Inc.*;
General Counsel Secretary:
and Secretary The Dreyfus Consumer Credit Corporation*;
Dreyfus Management, Inc.*;
Assistant Secretary:
Dreyfus Service Organization, Inc.***;
Major Trading Corporation*;
The Truepenny Corporation*

PATRICE M. KOZLOWSKI None
Vice President-
Corporate Communications

MARY BETH LEIBIG None
Vice President-
Human Resources

JEFFREY N. NACHMAN President and Director:
Vice President-Mutual Fund Dreyfus Transfer, Inc.
Accounting One American Express Plaza
Providence, Rhode Island 02903

ANDREW S. WASSER Vice President:
Vice President-Information Mellon Bank Corporation****
Services

ELVIRA OSLAPAS Assistant Secretary:
Assistant Secretary Dreyfus Service Corporation*;
Dreyfus Management, Inc.*;
Dreyfus Acquisition Corporation, Inc.*;
The Truepenny Corporation+

______________________________________

* The address of the business so indicated is 200 Park Avenue, New
York, New York 10166.
** The address of the business so indicated is 80 Cutter Mill Road,
Great Neck, New York 11021.
*** The address of the business so indicated is 131 Second Street, Lewes,
Delaware 19958.
**** The address of the business so indicated is One Mellon Bank Center,
Pittsburgh, Pennsylvania 15258.
***** The address of the business so indicated is One Boston Place, Boston,
Massachusetts 02108.
+ The address of the business so indicated is Atrium Building, 80 Route
4 East, Paramus, New Jersey 07652.
++ The address of the business so indicated is 144 Glenn Curtiss
Boulevard, Uniondale, New York 11556-0144.

Item 28(b). Business and Other Connections of Sub-Investment Advisers
_________________________________________________________

(i) Registrant is fulfilling the requirement of this Item 28(b) to
provide a list of the officers and directors of Comstock Partners, Inc.
("Comstock"), the sub-investment adviser to Registrant's Managed Assets
Portfolio, together with information as to any other business, profession,
vocation or employment of a substantial nature engaged in by Comstock or
those of its officers and directors during the past two years, by
incorporating by reference the information contained in the Form ADV filed
with the SEC pursuant to the Investment Advisers Act of 1940 by Comstock (SEC
File No. 801-28570).

(ii) Registrant is fulfilling the requirement of this Item 28(b) to
provide a list of the officers and directors of Fayez Sarofim & Co.
("Sarofim"), the sub-investment adviser to Registrant's Capital Appreciation
Portfolio, together with information as to any other business, profession,
vocation or employment of a substantial nature engaged in by Sarofim or those
of its officers and directors during the past two years, by incorporating by
reference the information contained in the Form ADV filed with the SEC
pursuant to the Investment Advisers Act of 1940 by Sarofim (SEC File No. 801-
1725).

Item 29. Principal Underwriters
________ ______________________

(a) Other investment companies for which Registrant's principal
underwriter (exclusive distributor) acts as principal underwriter or
exclusive distributor:

1) Comstock Partners Funds, Inc.
2) Dreyfus A Bonds Plus, Inc.
3) Dreyfus Appreciation Fund, Inc.
4) Dreyfus Asset Allocation Fund, Inc.
5) Dreyfus Balanced Fund, Inc.
6) Dreyfus BASIC GNMA Fund
7) Dreyfus BASIC Money Market Fund, Inc.
8) Dreyfus BASIC Municipal Fund, Inc.
9) Dreyfus BASIC U.S. Government Money Market Fund
10) Dreyfus California Intermediate Municipal Bond Fund
11) Dreyfus California Tax Exempt Bond Fund, Inc.
12) Dreyfus California Tax Exempt Money Market Fund
13) Dreyfus Cash Management
14) Dreyfus Cash Management Plus, Inc.
15) Dreyfus Connecticut Intermediate Municipal Bond Fund
16) Dreyfus Connecticut Municipal Money Market Fund, Inc.
17) Dreyfus Florida Intermediate Municipal Bond Fund
18) Dreyfus Florida Municipal Money Market Fund
19) The Dreyfus Fund Incorporated
20) Dreyfus Global Bond Fund, Inc.
21) Dreyfus Global Growth Fund
22) Dreyfus GNMA Fund, Inc.
23) Dreyfus Government Cash Management
24) Dreyfus Growth and Income Fund, Inc.
25) Dreyfus Growth and Value Funds, Inc.
26) Dreyfus Growth Opportunity Fund, Inc.
27) Dreyfus Income Funds
28) Dreyfus Institutional Money Market Fund
29) Dreyfus Institutional Short Term Treasury Fund
30) Dreyfus Insured Municipal Bond Fund, Inc.
31) Dreyfus Intermediate Municipal Bond Fund, Inc.
32) Dreyfus International Funds, Inc.
33) The Dreyfus/Laurel Funds, Inc.
34) The Dreyfus/Laurel Funds Trust
35) The Dreyfus/Laurel Tax-Free Municipal Funds
36) Dreyfus Stock Index Fund, Inc.
37) Dreyfus LifeTime Portfolios, Inc.
38) Dreyfus Liquid Assets, Inc.
39) Dreyfus Massachusetts Intermediate Municipal Bond Fund
40) Dreyfus Massachusetts Municipal Money Market Fund
41) Dreyfus Massachusetts Tax Exempt Bond Fund
42) Dreyfus MidCap Index Fund
43) Dreyfus Money Market Instruments, Inc.
44) Dreyfus Municipal Bond Fund, Inc.
45) Dreyfus Municipal Cash Management Plus
46) Dreyfus Municipal Money Market Fund, Inc.
47) Dreyfus New Jersey Intermediate Municipal Bond Fund
48) Dreyfus New Jersey Municipal Bond Fund, Inc.
49) Dreyfus New Jersey Municipal Money Market Fund, Inc.
50) Dreyfus New Leaders Fund, Inc.
51) Dreyfus New York Insured Tax Exempt Bond Fund
52) Dreyfus New York Municipal Cash Management
53) Dreyfus New York Tax Exempt Bond Fund, Inc.
54) Dreyfus New York Tax Exempt Intermediate Bond Fund
55) Dreyfus New York Tax Exempt Money Market Fund
56) Dreyfus 100% U.S. Treasury Intermediate Term Fund
57) Dreyfus 100% U.S. Treasury Long Term Fund
58) Dreyfus 100% U.S. Treasury Money Market Fund
59) Dreyfus 100% U.S. Treasury Short Term Fund
60) Dreyfus Pennsylvania Intermediate Municipal Bond Fund
61) Dreyfus Pennsylvania Municipal Money Market Fund
62) Dreyfus S&P 500 Index Fund
63) Dreyfus Short-Intermediate Government Fund
64) Dreyfus Short-Intermediate Municipal Bond Fund
65) Dreyfus Investment Grade Bond Funds, Inc.
66) The Dreyfus Socially Responsible Growth Fund, Inc.
67) Dreyfus Tax Exempt Cash Management
68) The Dreyfus Third Century Fund, Inc.
69) Dreyfus Treasury Cash Management
70) Dreyfus Treasury Prime Cash Management
71) Dreyfus Variable Investment Fund
72) Dreyfus Worldwide Dollar Money Market Fund, Inc.
73) General California Municipal Bond Fund, Inc.
74) General California Municipal Money Market Fund
75) General Government Securities Money Market Fund, Inc.
76) General Money Market Fund, Inc.
77) General Municipal Bond Fund, Inc.
78) General Municipal Money Market Fund, Inc.
79) General New York Municipal Bond Fund, Inc.
80) General New York Municipal Money Market Fund
81) Premier Insured Municipal Bond Fund
82) Premier California Municipal Bond Fund
83) Premier Equity Funds, Inc.
84) Premier Global Investing, Inc.
85) Premier GNMA Fund
86) Premier Growth Fund, Inc.
87) Premier Municipal Bond Fund
88) Premier New York Municipal Bond Fund
89) Premier State Municipal Bond Fund
90) Premier Strategic Growth Fund
91) Premier Value Fund

(b)
Positions and
Name and principal Positions and offices with offices with
business address the Distributor Registrant
__________________ ___________________________ _____________

Marie E. Connolly+ Director, President, Chief President and
Executive Officer and Compliance Treasurer
Officer

Joseph F. Tower, III+ Senior Vice President, Treasurer Vice President
and Chief Financial Officer and Assistant
Treasurer

John E. Pelletier+ Senior Vice President, General Vice President
Counsel, Secretary and Clerk and Secretary

Roy M. Moura+ First Vice President None

Dale F. Lampe+ Vice President None

Mary A. Nelson+ Vice President Vice President
and Assistant
Treasurer

Paul Prescott+ Vice President None

Elizabeth A. Bachman++ Assistant Vice President Vice President
and Assistant
Secretary

Jean M. O'Leary+ Assistant Secretary and None
Assistant Clerk

John W. Gomez+ Director None

William J. Nutt+ Director None

________________________________
+ Principal business address is One Exchange Place, Boston, Massachusetts
02109.
++ Principal business address is 200 Park Avenue, New York, New York 10166.

Item 30. Location of Accounts and Records
________________________________

1. First Data Investor Services Group, Inc.,
a subsidiary of First Data Corporation
P.O. Box 9671
Providence, Rhode Island 02940-9671

2. The Bank of New York
90 Washington Street
New York, New York 10286

3. Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, Rhode Island 02940-9671

4. The Dreyfus Corporation
200 Park Avenue
New York, New York 10166

5. Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, Pennsylvania 15258

Item 31. Management Services
_______ ___________________

Not Applicable

Item 32. Undertakings
________ ____________

(1) To call a meeting of shareholders for the purpose of voting upon
the question of removal of a Board member or members when
requested in writing to do so by the holders of at least 10% of
the Registrant's outstanding shares of beneficial interest and
in connection with such meeting to comply with the provisions of
Section 16(c) of the Investment Company Act of 1940 relating to
shareholder communications.

(2) To furnish each person to whom a prospectus is delivered with a
copy of the Fund's latest Annual Report to Shareholders, upon
request and without charge.

SIGNATURES
---------------

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all
of the requirements for effectiveness of this Amendment to the Registration
Statement pursuant to Rule 485(b) under the Securities Act of 1933 and has
duly caused this Amendment to the Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of
New York, and State of New York on the 23rd day of October, 1996.

DREYFUS VARIABLE INVESTMENT FUND

BY: /s/Marie E. Connolly*
____________________________
MARIE E. CONNOLLY, PRESIDENT

Pursuant to the requirements of the Securities Act of 1933, this
Amendment to the Registration Statement has been signed below by the
following persons in the capacities and on the date indicated.

Signatures Title Date

___________________________ ___________________________ ___________

/s/Marie E. Connolly* President and Treasurer (Principal 10/25/96
______________________________ Executive and Financial Officer)
Marie E. Connolly

/s/Joseph F. Tower* Assistant Treasurer (Principal 10/25/96
______________________________ Accounting Officer)
Joseph F. Tower

/s/Joseph S. DiMartino* Trustee 10/25/96
______________________________
Joseph S. DiMartino

/s/David P. Feldman* Trustee 10/25/96
______________________________
David P. Feldman

/s/John M. Fraser, Jr.* Trustee 10/25/96
______________________________
John M. Fraser, Jr.

/s/Robert R. Glauber* Trustee 10/25/96
______________________________
Robert R. Glauber

/s/James F. Henry* Trustee 10/25/96
______________________________
James F. Henry

/s/Rosalind Gersten Jacobs* Trustee 10/25/96
______________________________
Rosalind Gersten Jacobs

/s/Irving Kristol* Trustee 10/25/96
______________________________
Irving Kristol

/s/Dr. Paul A. Marks* Trustee 10/25/96
______________________________
Dr. Paul A. Marks

/s/Dr. Martin Peretz* Trustee 10/25/96
______________________________
Dr. Martin Peretz

/s/Bert W. Wasserman* Trustee 10/25/96
______________________________
Bert W. Wasserman

*BY: /s/Elizabeth A. Bachman
__________________________
Elizabeth A. Bachman,
Attorney-in-Fact

INDEX OF EXHIBITS

(5)(a) Investment Advisory Agreement

(8)(b) Custody Agreement between the Fund and Mellon Bank, N.A.

(11) Consent of Independent Auditors

(12) Financial Data Schedule

Other Exhibits:

(a) Power of Attorney

(b) Certificate of Secretary

Exhibit (5) (a)
INVESTMENT ADVISORY AGREEMENT

DREYFUS VARIABLE INVESTMENT FUND
200 Park Avenue
New York, New York 10166

August 24, 1994
As Amended, May 23, 1996

The Dreyfus Corporation
200 Park Avenue
New York, New York 10166

Dear Sirs:

The above-named investment company (the "Fund")
consisting of the series named on Schedule 1 hereto, as such
Schedule may be revised from time to time (each, a "Series"),
herewith confirms its agreement with you as follows:

The Fund desires to employ its capital by investing and
reinvesting the same in investments of the type and in accordance
with the limitations specified in its charter documents and in
its Prospectus and Statement of Additional Information as from
time to time in effect, copies of which have been or will be
submitted to you, and in such manner and to such extent as from
time to time may be approved by the Fund's Board. The Fund
desires to employ you to act as the Fund's investment adviser.

In this connection it is understood that from time to
time you will employ or associate with yourself such person or
persons as you may believe to be particularly fitted to assist
you in the performance of this Agreement. Such person or persons
may be officers or employees who are employed by both you and the
Fund. The compensation of such person or persons shall be paid
by you and no obligation may be incurred on the Fund's behalf in
any such respect. We have discussed and concur in your employing
on this basis the indicated sub-advisers ("Dreyfus-engaged Sub-
Investment Advisers") and we intend to employ the indicated sub-
advisers ("Fund-engaged Sub-Investment Advisers") named on
Schedule 1 hereto to act as the Fund's sub-investment adviser
with respect to the Series indicated on Schedule 1 hereto (the
"Sub-Advised Series") to provide day-to-day management of the
Sub-Advised Series' investments.

Subject to the supervision and approval of the Fund's
Board, you will provide investment management of each Series'
portfolio in accordance with such Series' investment objectives
and policies as stated in the Fund's Prospectus and Statement of
Additional Information as from time to time in effect. In
connection therewith, you will obtain and provide investment
research and will supervise each Series' investments and conduct,
or with respect to the Sub-Advised Series, supervise, a
continuous program of investment, evaluation and, if appropriate,
sale and reinvestment of such Series' assets. You will furnish
to the Fund such statistical information, with respect to the
investments which a Series may hold or contemplate purchasing, as
the Fund may reasonably request. The Fund wishes to be informed
of important developments materially affecting any Series'
portfolio and shall expect you, on your own initiative, to
furnish to the Fund from time to time such information as you may
believe appropriate for this purpose.

In addition, you will supply office facilities (which
may be in your own offices), data processing services, clerical,
accounting and bookkeeping services, internal auditing and legal
services, internal executive and administrative services, and
stationery and office supplies; prepare reports to each Series'
stockholders, tax returns, reports to and filings with the
Securities and Exchange Commission and state Blue Sky
authorities; calculate the net asset value of each Series'
shares; and generally assist in all aspects of the Fund's
operations. You shall have the right, at your expense, to engage
other entities to assist you in performing some or all of the
obligations set forth in this paragraph, provided each such
entity enters into an agreement with you in form and substance
reasonably satisfactory to the Fund. You agree to be liable for
the acts or omissions of each such entity to the same extent as
if you had acted or failed to act under the circumstances.

You shall exercise your best judgment in rendering the
services to be provided to the Fund hereunder and the Fund agrees
as an inducement to your undertaking the same that neither you
nor a Dreyfus-engaged Sub-Investment Adviser shall be liable
hereunder for any error of judgment or mistake of law or for any
loss suffered by one or more Series, provided that nothing herein
shall be deemed to protect or purport to protect you or the
Dreyfus-engaged Sub-Investment Adviser against any liability to
the Fund or a Series or to its security holders to which you
would otherwise be subject by reason of willful misfeasance, bad
faith or gross negligence in the performance of your duties
hereunder, or by reason of your reckless disregard of your
obligations and duties hereunder, or to which the Dreyfus-engaged
Sub-Investment Adviser would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence in the
performance of its duties under its Sub-Investment Advisory
Agreement with you or by reason of its reckless disregard of its
obligations and duties under said Agreement.

In consideration of services rendered pursuant to this
Agreement, the Fund will pay you on the first business day of
each month a fee at the rate set forth opposite each Series' name
on Schedule 1 hereto. Net asset value shall be computed on such
days and at such time or times as described in the Fund's then-
current Prospectus and Statement of Additional Information. Upon
any termination of this Agreement before the end of any month,
the fee for such part of a month shall be pro-rated according to
the proportion which such period bears to the full monthly period
and shall be payable upon the date of termination of this Agree-
ment.

For the purpose of determining fees payable to you, the
value of each Series' net assets shall be computed in the manner
specified in the Fund's charter documents for the computation of
the value of each Series' net assets.

You will bear all expenses in connection with the
performance of your services under this Agreement and will pay
all fees of each Dreyfus-engaged Sub-Investment Adviser in
connection with its duties in respect of the Fund. All other
expenses to be incurred in the operation of the Fund (other than
those borne by any Sub-Investment Adviser) will be borne by the
Fund, except to the extent specifically assumed by you. The
expenses to be borne by the Fund include, without limitation, the
following: organizational costs, taxes, interest, loan
commitment fees, interest and distributions paid on securities
sold short, brokerage fees and commissions, if any, fees of Board
members who are not your officers, directors or employees or
holders of 5% or more of your outstanding voting securities or
those of any Sub-Investment Adviser or any affiliate of you or
any Sub-Investment Adviser, Securities and Exchange Commission
fees and state Blue Sky qualification fees, advisory fees,
charges of custodians, transfer and dividend disbursing agents'
fees, certain insurance premiums, industry association fees,
outside auditing and legal expenses, costs of independent pricing
services, costs of maintaining the Fund's existence, costs
attributable to investor services (including, without limitation,
telephone and personnel expenses), costs of preparing and
printing prospectuses and statements of additional information
for regulatory purposes and for distribution to existing
stockholders, costs of stockholders' reports and meetings, and
any extraordinary expenses.

As to each Series, if in any fiscal year the aggregate
expenses of the Fund (including fees pursuant to this Agreement
and the Fund's Sub-Investment Advisory Agreement with a Fund-
engaged Sub-Investment Adviser, but excluding interest, taxes,
brokerage and, with the prior written consent of the necessary
state securities commissions, extraordinary expenses) exceed the
expense limitation of any state having jurisdiction over the
Series, the Fund may deduct from the fees to be paid hereunder
(and the Sub-Investment Advisory Agreement with the Fund-engaged
Sub-Investment Adviser), or you (and the Fund-engaged Sub-
Investment Adviser) will bear, such excess expense to the extent
required by state law. Your obligation pursuant hereto will be
limited to the amount of your fees hereunder. Such deduction or
payment, if any, will be estimated daily, and reconciled and
effected or paid, as the case may be, on a monthly basis.

The Fund understands that you and each Dreyfus-engaged
Sub-Investment Adviser now act, and that from time to time
hereafter you or a Dreyfus-engaged Sub-Investment Adviser may
act, as investment adviser to one or more other investment
companies and fiduciary or other managed accounts, and the Fund
has no objection to your and the Dreyfus-engaged Sub-Investment
Adviser's so acting, provided that when the purchase or sale of
securities of the same issuer is suitable for the investment
objectives of two or more companies or accounts managed by you
which have available funds for investment, the available
securities will be allocated in a manner believed by you to be
equitable to each company or account. It is recognized that in
some cases this procedure may adversely affect the price paid or
received by one or more Series or the size of the position
obtainable for or disposed of by one or more Series.

In addition, it is understood that the persons employed
by you to assist in the performance of your duties hereunder will
not devote their full time to such service and nothing contained
herein shall be deemed to limit or restrict your right or the
right of any of your affiliates to engage in and devote time and
attention to other businesses or to render services of whatever
kind or nature.

Neither you nor a Dreyfus-engaged Sub-Investment
Adviser shall be liable for any error of judgment or mistake of
law or for any loss suffered by the Fund in connection with the
matters to which this Agreement relates, except, in the case of
you, for a loss resulting from willful misfeasance, bad faith or
gross negligence on your part in the performance of your duties
or from reckless disregard by you of your obligations and duties
under this Agreement and, in the case of a Dreyfus-engaged Sub-
Investment Adviser, for a loss resulting from willful
misfeasance, bad faith or gross negligence on its part in the
performance of its duties or from reckless disregard by it of its
obligations and duties under its Sub-Investment Advisory
Agreement with you. Any person, even though also your officer,
director, partner, employee or agent, who may be or become an
officer, Board member, employee or agent of the Fund, shall be
deemed, when rendering services to the Fund or acting on any
business of the Fund, to be rendering such services to or acting
solely for the Fund and not as your officer, director, partner,
employee or agent or one under your control or direction even
though paid by you.

As to each Series, this Agreement shall continue until
the date set forth opposite such Series' name on Schedule 1
hereto (the "Reapproval Date") and thereafter shall continue
automatically for successive annual periods ending on the day of
each year set forth opposite the Series' name on Schedule 1
hereto (the "Reapproval Day"), provided such continuance is
specifically approved at least annually by (i) the Fund's Board
or (ii) vote of a majority (as defined in the Investment Company
Act of 1940) of such Series' outstanding voting securities,
provided that in either event its continuance also is approved by
a majority of the Fund's Board members who are not "interested
persons" (as defined in said Act) of any party to this Agreement,
by vote cast in person at a meeting called for the purpose of
voting on such approval. As to each Series, this Agreement is
terminable without penalty, on 60 days' notice, by the Fund's
Board or by vote of holders of a majority of such Series' shares
or, upon not less than 90 days' notice, by you. This Agreement
also will terminate automatically, as to the relevant Series, in
the event of its assignment (as defined in said Act).

The Fund recognizes that from time to time your
directors, officers and employees may serve as directors,
trustees, partners, officers and employees of other corporations,
business trusts, partnerships or other entities (including other
investment companies) and that such other entities may include
the name "Dreyfus" as part of their name, and that your
corporation or its affiliates may enter into investment advisory
or other agreements with such other entities. If you cease to
act as the Fund's investment adviser, the Fund agrees that, at
your request, the Fund will take all necessary action to change
the name of the Fund to a name not including "Dreyfus" in any
form or combination of words.

The Fund is agreeing to the provisions of this
Agreement that limit a Dreyfus-engaged Sub-Investment Adviser's
liability and other provisions relating to a Dreyfus-engaged Sub-
Investment Adviser so as to induce the Dreyfus-engaged Sub-
Investment Adviser to enter into its Sub-Investment Advisory
Agreement with you and to perform its obligations. Each Dreyfus-
engaged Sub-Investment Adviser is expressly made a third party
beneficiary of this Agreement with rights as respects the Sub-
Advised Series to the same extent as if it had been a party
hereto.

This Agreement has been executed on behalf of the Fund
by the undersigned officer of the Fund in his capacity as an
officer of the Fund. The obligations of this Agreement shall
only be binding upon the assets and property of the Fund and
shall not be binding upon any Board member, officer or
shareholder of the Fund individually.

If the foregoing is in accordance with your
understanding, will you kindly so indicate by signing and
returning to us the enclosed copy hereof.

Very truly yours,

DREYFUS VARIABLE INVESTMENT
FUND

By:___________________________

Accepted:

THE DREYFUS CORPORATION

By:_______________________________

SCHEDULE 1

Annual Fee as
a Percentage
of Average
Daily Net
Name of Series Assets Reapproval Date Reapproval Day

Managed Assets
Portfolio1 .375 of 1% May 21, 1996 May 21st

Capital Appreciation
Portfolio2 * May 21, 1996 May 21st

Disciplined Stock
Portfolio .75 of 1% May 21, 1997 May 21st

Growth and Income
Portfolio .75 of 1% May 21, 1996 May 21st

International Equity
Portfolio .75 of 1% May 21, 1996 May 21st

International Value
Portfolio 1% May 21, 1997 May 21st

Money Market
Portfolio .50 of 1% May 21, 1996 May 21st

Quality Bond
Portfolio .65 of 1% May 21, 1996 May 21st

Small Cap Portfolio .75 of 1% May 21, 1996 May 21st

Small Company
Stock Portfolio .75 of 1% May 21, 1997 May 21st

Zero Coupon 2000
Portfolio .45 of 1% May 21, 1996 May 21st
_________________________
* .55% of the first $150 million of total assets; .50% of the next $150
million of total assets; and .375% of total assets over $300 million.

1 The Fund has employed Comstock Partners, Inc. to act as sub-investment
adviser.

2 The Fund has employed Fayez Sarofim & Co. to act as sub-investment
adviser.

Exhibit (8) (b)

CUSTODY AGREEMENT

AGREEMENT dated as of May 10, 1996, between Dreyfus Variable Investment
Fund, an incorporated business trust organized under the laws of the
Commonwealth of Massachusets (the "Fund"), having its principal office and
place of business at 200 Park Avenue, New York, New York 10166, and Mellon
Bank, N.A., (the "Custodian"), a national banking association with its
principal place of business at One Mellon Bank Center, Pittsburgh, PA
15258, with respect to the Fund's Captial Appreciation, Growth and Income,
Quality Bond, Small Cap, Zero Coupon 2000, Small Company Stock and
Disciplined Stock Portfolios.

W I T N E S S E T H:

That for and in consideration of the mutual promises hereinafter set
forth, the Fund and the Custodian agree as follows:

1. Definitions.

Whenever used in this Agreement or in any Schedules to this Agreement,
the following words and phrases, unless the context otherwise requires,
shall have the following meanings:

(a) "Affiliated Person" shall have the meaning of the term
within Section 2(a)3 of the 1940 Act.

(b) "Authorized Person" shall mean those persons duly
authorized by the Board of Trustees of the Fund to give Oral
Instructions and Written Instructions on behalf of the Fund
and listed in the certification annexed hereto as Appendix A
or such other certification as may be received by the
Custodian from time to time.

(c) "Book-Entry System" shall mean the Federal
Reserve/Treasury book-entry system for United States and
federal agency Securities, its successor or successors and
its nominee or nominees, in which the Custodian is hereby
specifically authorized and instructed on a continuous and
on-going basis to deposit all Securities eligible for deposit
therein, and to utilize the Book-Entry System to the extent
possible in connection with its performance hereunder.

(d) "Business Day" shall mean each day on which the Fund is
required to determine its net asset value, and any other day
on which the Securities and Exchange Commission may require
the Fund to be open for business.

(e) "Certificate" shall mean any notice, instruction or
other instrument in writing, authorized or required by this
Agreement to be given to the Custodian, which is actually
received by the Custodian and signed on behalf of the Fund by
any two Authorized Persons or any two officers thereof.

(f) "Master Trust Agreement" shall mean the Agreement and
Declaration of Trust of the Fund dated October 29, 1986 as
the same may be amended from time to time.

(g) "Depository" shall mean The Depository Trust Company
("DTC"), a clearing agency registered with the Securities and
Exchange Commission under Section 17(a) of the Securities
Exchange Act of 1934, as amended, its successor or successors
and its nominee or nominees, in which the Custodian is hereby
specifically authorized and instructed on a continuous and
on-going basis to deposit all Securities eligible for deposit
therein, and to utilize the Book-Entry System to the extent
possible in connection with its performance hereunder. The
term "Depository" shall further mean and include any other
person to be named in a Certificate authorized to act as a
depository under the 1940 Act, its successor or successors
and its nominee or nominees.

(h) "Money Market Security" shall be deemed to include,
without limitation, debt obligations issued or guaranteed as
to interest and principal by the government of the United
States or agencies or instrumentalities thereof ("U.S.
government securities"), commercial paper, bank certificates
of deposit, bankers' acceptances and short-term corporate
obligations, where the purchase or sale of such securities
normally requires settlement in federal funds on the same day
as such purchase or sale, and repurchase and reverse
repurchase agreements with respect to any of the foregoing
types of securities and bank time deposits.

(i) "Oral Instructions" shall mean verbal instructions
actually received by the Custodian from a person reasonably
believed by the Custodian to be an Authorized Person.

(j) "Prospectus" shall mean the Fund's current prospectus
and statement of additional information relating to the
registration of the Fund's Shares under the Securities Act of
1933, as amended.

(k) "Shares" shall mean all or any part of each class of
shares of beneficial interest of the Fund listed in the
Certificate annexed hereto as Appendix B, as it may be
amended from time to time, which from time to time are
authorized and/or issued by the Fund.

(l) "Security" or "Securities" shall be deemed to include
bonds, debentures, notes, stocks, shares, evidences of
indebtedness, and other securities, commodities interests
and investments from time to time owned by the Fund.

(m) "Transfer Agent" shall mean the person which performs
the transfer agent, dividend disbursing agent and shareholder
servicing agent functions for the Fund.

(n) "Written Instructions" shall mean a written
communication actually received by the Custodian from a
person reasonably believed by the Custodian to be an
Authorized Person by any system, including, without
limitation, electronic transmissions, facsimile and telex,
whereby the receiver of such communication is able to verify
by codes or otherwise with a reasonable degree of certainty
the authenticity of the sender of such communication.

(o) The "1940 Act" refers to the Investment Company Act of
1940, and the Rules and Regulations thereunder, all as
amended from time to time.

2. Appointment of Custodian.

(a) The Fund hereby constitutes and appoints the Custodian
as custodian of all the Securities and monies at the time
owned by or in the possession of the Fund during the period
of this Agreement.

(b) The Custodian hereby accepts appointment as such
custodian and agrees to perform the duties thereof as
hereinafter set forth.

3. Compensation.

(a) The Fund will compensate the Custodian for its services
rendered under this Agreement in accordance with the fees set
forth in the Fee Schedule annexed hereto as Schedule A and
incorporated herein. Such Fee Schedule does not include out
of-pocket disbursements of the Custodian for which the
Custodian shall be entitled to bill separately. Out-of
pocket disbursements shall consist of the items specified in
the Schedule of Out-of-pocket charges annexed hereto as
Schedule B and incorporated herein, which schedule may be
modified by the Custodian upon not less than thirty days
prior written notice to the Fund.

(b) Any compensation agreed to hereunder may be adjusted
from time to time by attaching to Schedule A of this
Agreement a revised Fee Schedule, dated and signed by an
Authorized Officer or authorized representative of each party
hereto.

(c) The Custodian will bill the Fund as soon as practicable
after the end of each calendar month, and said billings will
be detailed in accordance with Schedule A, as amended from
time to time. The Fund will promptly pay to the Custodian
the amount of such billing. The Custodian may charge against
any monies held on behalf of the Fund pursuant to this
Agreement such compensation and disbursements incurred by the
Custodian in the performance of its duties pursuant to this
Agreement. The Custodian shall also be entitled to charge
against any money held on behalf of the Fund pursuant to this
Agreement the amount of any loss, damage, liability or
expense incurred with respect to the Fund, including counsel
fees, for which it shall be entitled to reimbursement under
the provisions of this Agreement.

4. Custody of Cash and Securities.

(a) Receipt and Holding of Assets.

The Fund will deliver or cause to be delivered to the
Custodian or its permitted Sub-Custodians all Securities and
monies owned by it at any time during the period of this
Agreement. The Custodian will not be responsible for such
Securities and monies until actually received by it. The
Fund shall instruct the Custodian from time to time in its
sole discretion, by means of Written Instructions, or, in
connection with the purchase or sale of Money Market
Securities, by means of Oral Instructions confirmed in
writing in accordance with Section 11(h) hereof or Written
Instructions, as to the manner in which and in what amounts
Securities and monies are to be deposited on behalf of the
Fund in the Book-Entry System or the Depository. Securities
and monies of the Fund deposited in the Book-Entry System or
the Depository will be represented in accounts which include
only assets held by the Custodian for customers, including
but not limited to accounts for which the Custodian acts in a
fiduciary or representative capacity.

(b) Accounts and Disbursements. The Custodian shall
establish and maintain a separate account for the Fund and
shall credit to the separate account all monies received by
it for the account of such Fund and shall disburse the same
only:

1. In payment for Securities purchased for the Fund,
as provided in Section 5 hereof;

2. In payment of dividends or distributions with
respect to the Shares, as provided in Section 7 hereof;

3. In payment of original issue or other taxes with
respect to the Shares, as provided in Section 8 hereof;

4. In payment for Shares which have been redeemed by
the Fund, as provided in Section 8 hereof;

5. Pursuant to a Certificate setting forth the name
and address of the person to whom the payment is to be
made, the amount to be paid and the purpose for which
payment is to be made, provided that in the event of
disbursements pursuant to this Sub-section 4(b)(5), the
Fund shall indemnify and hold the Custodian harmless
from any claims or losses arising out of such
disbursements in reliance on such Certificate; or

6. In payment of fees and in reimbursement of the
expenses and liabilities of the Custodian attributable
to the Fund, as provided in Sections 3 and 11(i).

(c) Confirmation and Statements. Promptly after the close
of business on each day, the Custodian shall furnish the Fund
with confirmations and a summary of all transfers to or from
the account of the Fund during said day. Where securities
purchased by the Fund are in a fungible bulk of securities
registered in the name of the Custodian (or its nominee) or
shown on the Custodian's account on the books of the
Depository or the Book-Entry System, the Custodian shall by
book entry or otherwise identify the quantity of those
securities belonging to the Fund. At least monthly, the
Custodian shall furnish the Fund with a detailed statement of
the Securities and monies held for the Fund under this
Agreement.

(d) Registration of Securities and Physical Separation. All
Securities held for the Fund which are issued or issuable
only in bearer form, except such Securities as are held in
the Book-Entry System, shall be held by the Custodian in that
form; all other Securities held for the Fund may be
registered in the name of the Fund, in the name of the
Custodian, in the name of any duly appointed registered
nominee of the Custodian as the Custodian may from time to
time determine, or in the name of the Book-Entry System or
the Depository or their successor or successors, or their
nominee or nominees. The Fund reserves the right to instruct
the Custodian as to the method of registration and
safekeeping of the Securities. The Fund agrees to furnish to
the Custodian appropriate instruments to enable the Custodian
to hold or deliver in proper form for transfer, or to
register in the name of its registered nominee or in the name
of the Book-Entry System or the Depository, any Securities
which it may hold for the account of the Fund and which may
from time to time be registered in the name of the Fund. The
Custodian shall hold all such Securities specifically
allocated to the Fund which are not held in the Book-Entry
System or the Depository in a separate account for the Fund
in the name of the Fund physically segregated at all times
from those of any other person or persons.

(e) Segregated Accounts. Upon receipt of a Certificate the
Custodian will establish segregated accounts on behalf of the
Fund to hold liquid or other assets as it shall be directed
by a Certificate and shall increase or decrease the assets in
such segregated accounts only as it shall be directed by
subsequent Certificate.

(f) Collection of Income and Other Matters Affecting
Securities. Unless otherwise instructed to the contrary by a
Certificate, the Custodian by itself, or through the use of
the Book-Entry System or the Depository with respect to
Securities therein deposited, shall with respect to all
Securities held for the Fund in accordance with this
Agreement:

1. Collect all income due or payable;

2. Present for payment and collect the amount payable
upon all Securities which may mature or be called,
redeemed, retired or otherwise become payable.
Notwithstanding the foregoing, the Custodian only shall
have such responsibility to the Fund for Securities
which are called if either (i) the Custodian received a
written notice of such call; or (ii) notice of such call
appears in one or more of the publications listed in
Appendix C annexed hereto, which may be amended at any
time by the Custodian upon five (5) Business Days prior
notification to the Fund;

3. Surrender Securities in temporary form for
definitive Securities;

4. Execute any necessary declarations or certificates
of ownership under the Federal income tax laws or the
laws or regulations of any other taxing authority now or
hereafter in effect; and

5. Hold directly, or through the Book-Entry System or
the Depository with respect to Securities therein
deposited, for the account of the Fund all rights and
similar Securities issued with respect to any Securities
held by the Custodian hereunder for the Fund.

(g) Delivery of Securities and Evidence of Authority. Upon
receipt of a Certificate, the Custodian, directly or through
the use of the Book-Entry System or the Depository, shall:

1. Execute and deliver or cause to be executed and
delivered to such persons as may be designated
in such Certificate, proxies, consents, authorizations,
and any other instruments whereby the authority of the
Fund as owner of any Securities may be exercised;

2. Deliver or cause to be delivered any Securities
held for the Fund in exchange for other Securities or
cash issued or paid in connection with the liquidation,
reorganization, refinancing, merger, consolidation or
recapitalization of any corporation, or the exercise of
any conversion privilege;

3. Deliver or cause to be delivered any Securities
held for the Fund to any protective committee,
reorganization committee or other person in connection
with the reorganization, refinancing, merger,
consolidation or recapitalization or sale of assets of
any corporation, and receive and hold under the terms of
this Agreement in the separate account for the Fund such
certificates of deposit, interim receipts or other
instruments or documents as may be issued to it to
evidence such delivery;

4. Make or cause to be made such transfers or
exchanges of the assets specifically allocated to the
separate account of the Fund and take such other steps
as shall be stated in a Certificate to be for the
purpose of effectuating any duly authorized plan of
liquidation, reorganization, merger, consolidation or
recapitalization of the Fund;

5. Deliver Securities upon the receipt of payment in
connection with any repurchase agreement related to such
Securities entered into by the Fund;

6. Deliver Securities owned by the Fund to the issuer
thereof or its agent when such Securities are called or
otherwise become payable. Notwithstanding the
foregoing, the Custodian shall have no responsibility
for monitoring or ascertaining any call, redemption or
retirement dates with respect to put bonds which are
owned by the Fund and held by the Custodian or its
nominees. Nor shall the Custodian have any
responsibility or liability to the Fund for any loss by
the Fund for any missed payments or other defaults
resulting therefrom; unless the Custodian received
timely notification from the Fund specifying the time,
place and manner for the presentment of any such put
bond owned by the Fund and held by the Custodian or its
nominee. The Custodian shall not be responsible and
assumes no liability to the Fund for the accuracy or
completeness of any notification the Custodian may
furnish to the Fund with respect to put bonds

7. Deliver Securities for delivery in connection with
any loans of Securities made by the Fund but only
against receipt of adequate collateral as agreed upon
from time to time by the Custodian and the Fund which
may be in the form of cash or U.S. government securities
or a letter of credit;

8. Deliver Securities for delivery as security in
connection with any borrowings by the Fund requiring a
pledge of Fund assets, but only against receipt of
amounts borrowed;

9. Deliver Securities upon receipt of a Certificate
from the Fund for delivery to the Transfer Agent or to
the holders of Shares in connection with distributions
in kind, as may be described from time to time in the
Fund's Prospectus, in satisfaction of requests by
holders of Shares for repurchase or redemption;

10. Deliver Securities as collateral in connection with
short sales by the Fund of common stock for which the
Fund owns the stock or owns preferred stocks or debt
securities convertible or exchangeable, without payment
or further consideration, into shares of the common
stock sold short;

11. Deliver Securities for any purpose expressly
permitted by and in accordance with procedures described
in the Fund's Prospectus; and

12. Deliver Securities for any other proper business
purpose, but only upon receipt of, in addition to
Written Instructions, a certified copy of a resolution
of the Board of Directors signed by an Authorized Person
and certified by the Secretary of the Fund, specifying
the Securities to be delivered, setting forth the
purpose for which such delivery is to be made, declaring
such purpose to be a proper business purpose, and naming
the person or persons to whom delivery of such
Securities shall be made.

(h) Endorsement and Collection of Checks, Etc. The
Custodian is hereby authorized to endorse and collect all
checks, drafts or other orders for the payment of money
received by the Custodian for the account of the Fund.

5. Purchase and Sale of Investments of the Fund.

(a) Promptly after each purchase of Securities for the Fund,
the Fund shall deliver to the Custodian (i) with respect to
each purchase of Securities which are not Money Market
Securities, a Certificate; and (ii) with respect to each
purchase of Money Market Securities, either a Written
Instruction or Oral Instruction, in either case specifying
with respect to each purchase: (1) the name of the issuer
and the title of the Securities; (2) the number of shares or
the principal amount purchased and accrued interest, if any;
(3) the date of purchase and settlement; (4) the purchase
price per unit; (5) the total amount payable upon such
purchase; (6) the name of the person from whom or the broker
through whom the purchase was made, if any; and (7) whether
or not such purchase is to be settled through the Book-Entry
System or the Depository. The Custodian shall receive the
Securities purchased by or for the Fund and upon receipt of
Securities shall pay out of the monies held for the account
of the Fund the total amount payable upon such purchase,
provided that the same conforms to the total amount payable
as set forth in such Certificate, Written or Oral
Instruction.

(b) Promptly after each sale of Securities of the Fund, the
Fund shall deliver to the Custodian (i) with respect to each
sale of Securities which are not Money Market Securities, a
Certificate, and (ii) with respect to each sale of Money
Market Securities, either Written Instruction or Oral
Instructions, in either case specifying with respect to such
sale: (1) the name of the issuer and the title of the
Securities; (2) the number of shares or principal amount
sold, and accrued interest, if any; (3) the date of sale; (4)
the sale price per unit; (5) the total amount payable to the
Fund upon such sale; (6) the name of the broker through whom
or the person to whom the sale was made; and (7) whether or
not such sale is to be settled through the Book-Entry System
or the Depository. The Custodian shall deliver or cause to
be delivered the Securities to the broker or other person
designated by the Fund upon receipt of the total amount
payable to the Fund upon such sale, provided that the same
conforms to the total amount payable to the Fund as set forth
in such Certificate, Written or Oral Instruction. Subject to
the foregoing, the Custodian may accept payment in such form
as shall be satisfactory to it, and may deliver Securities
and arrange for payment in accordance with the customs
prevailing among dealers in Securities.

6. Lending of Securities.

If the Fund is permitted by the terms of the Master
Trust Agreement and as disclosed in its Prospectus to lend
securities, within 24 hours after each loan of Securities,
the Fund shall deliver to the Custodian a Certificate
specifying with respect to each such loan: (a) the name of
the issuer and the title of the Securities; (b) the number
of shares or the principal amount loaned; (c) the date of
loan and delivery; (d) the total amount to be delivered to
the Custodian, and specifically allocated against the loan of
the Securities, including the amount of cash collateral and
the premium, if any, separately identified; and (e) the name
of the broker, dealer or financial institution to which the
loan was made.

Promptly after each termination of a loan of Securities,
the Fund shall deliver to the Custodian a Certificate
specifying with respect to each such loan termination and
return of Securities: (a) the name of the issuer and the
title of the Securities to be returned; (b) the number of
shares or the principal amount to be returned; (c) the date
of termination; (d) the total amount to be delivered by the
Custodian (including the cash collateral for such Securities
minus any offsetting credits as described in said
Certificate); and (e) the name of the broker, dealer or
financial institution from which the Securities will be
returned. The Custodian shall receive all Securities returned
from the broker, dealer or financial institution to which
such Securities were loaned and upon receipt thereof shall
pay the total amount payable upon such return of Securities
as set forth in the Certificate. Securities returned to the
Custodian shall be held as they were prior to such loan.

7. Payment of Dividends or Distributions.

(a) The Fund shall furnish to the Custodian a Certificate
specifying the date of payment of any dividend or
distribution, and the total amount payable to the Transfer
Agent on the payment date.

(b) Upon the payment date specified in such Certificate, the
Custodian shall pay out the total amount payable to the
Transfer Agent of the Fund.

8. Sale and Redemption of Shares of the Fund.

(a) Whenever the Fund shall sell any Shares, or whenever any
shares are redeemed, the Fund shall deliver or cause to be
delivered to the Custodian a Written Instruction from the
Transfer Agent duly specifying:

1. The net amount of money to be received by the
Custodian, where the sale of such Shares exceeds
redemption; and

2. The net amount of money to be paid for such Shares,
where redemptions exceed purchases.

The Custodian understands and agrees that Written
Instructions may be furnished subsequent to the purchase of
Shares and that the information contained therein will be
derived from the sales of Shares as reported to the Fund by
the Transfer Agent.

(b) Upon receipt of money from the Transfer Agent, the
Custodian shall credit such money to the separate account of
the Fund.

(c) Upon issuance of any Shares in accordance with the
foregoing provisions of this Section 8, the Custodian shall
pay all original issue or other taxes required to be paid in
connection with such issuance upon the receipt of a Written
Instruction specifying the amount to be paid.

(d) Upon receipt from the Transfer Agent of Written
Instructions setting forth the net amount of money to be paid
for Shares received by the Transfer Agent for redemption, the
Custodian shall make payment to the Transfer Agent of such
net amount.

9. Indebtedness.

(a) The Fund will cause to be delivered to the Custodian by
any bank (excluding the Custodian) from which the Fund
borrows money for investment or for temporary administrative
or emergency purposes using Securities as collateral for such
borrowings, a notice or undertaking in the form currently
employed by any such bank setting forth the amount which such
bank will loan to the Fund against delivery of a stated
amount of collateral. The Fund shall promptly deliver to the
Custodian a Certificate stating with respect to each such
borrowing: (1) the name of the bank; (2) the amount and
terms of the borrowing, which may be set forth by
incorporating by reference an attached promissory note, duly
endorsed by the Fund, or other loan agreement; (3) the time
and date, if known, on which the loan is to be entered into
(the "borrowing date"); (4) the date on which the loan
becomes due and payable; (5) the total amount payable to the
Fund on the borrowing date; (6) the market value of
Securities to be delivered as collateral for such loan,
including the name of the issuer, the title and the number of
shares or the principal amount of any particular Securities;
and (7) a statement that such loan is in conformance with the
1940 Act and the Fund's Prospectus.

(b) Upon receipt of the Certificate referred to in
subparagraph (a) above, the Custodian shall deliver on the
borrowing date the specified collateral and the executed
promissory note, if any, against delivery by the lending bank
of the total amount of the loan payable, provided that the
same conforms to the total amount payable as set forth in the
Certificate. The Custodian may, at the option of the lending
bank, keep such collateral in its possession, but such
collateral shall be subject to all rights therein given the
lending bank by virtue of any promissory note or loan
agreement. The Custodian shall deliver as additional
collateral in the manner directed by the Fund from time to
time such Securities as may be specified in the Certificate
to collateralize further any transaction described in this
Section 9. The Fund shall cause all Securities released from
collateral status to be returned directly to the Custodian,
and the Custodian shall receive from time to time such return
of collateral as may be tendered to it. In the event that
the Fund fails to specify in the Certificate all of the
information required by this Section 9, the Custodian shall
not be under any obligation to deliver any Securities.
Collateral returned to the Custodian shall be held hereunder
as it was prior to being used as collateral.

10. Persons Having Access to Assets of the Fund.

(a) No trustee or agent of the Fund, and no officer,
director, employee or agent of the Fund's investment adviser,
of any sub-investment adviser of the Fund, or of the Fund's
administrator, shall have physical access to the assets of
the Fund held by the Custodian or be authorized or permitted
to withdraw any investments of the Fund, nor shall the
Custodian deliver any assets of the Fund to any such person.
No officer, director, employee or agent of the Custodian who
holds any similar position with the Fund's investment
adviser, with any sub-investment adviser of the Fund or with
the Fund's administrator shall have access to the assets of
the Fund.

(b) Nothing in this Section 10 shall prohibit any duly
authorized officer, employee or agent of the Fund, or any
duly authorized officer, director, employee or agent of the
investment adviser, of any sub-investment adviser of the Fund
or of the Fund's administrator, from giving Oral Instructions
or Written Instructions to the Custodian or executing a
Certificate so long as it does not result in delivery of or
access to assets of the Fund prohibited by paragraph (a) of
this Section 10.

11. Concerning the Custodian.

(a) Standard of Conduct. Notwithstanding any other
provision of this Agreement, neither the Custodian nor its
nominee shall be liable for any loss or damage, including
counsel fees, resulting from its action or omission to act or
otherwise, except for any such loss or damage arising out of
the negligence, misfeasance or willful misconduct of the
Custodian or any of its employees, Sub-Custodians or agents.
The Custodian may, with respect to questions of law, apply
for and obtain the advice and opinion of counsel to the Fund
or of its own counsel, at the expense of the Fund, and shall
be fully protected with respect to anything done or omitted
by it in good faith in conformity with such advice or
opinion. The Custodian shall not be liable to the Fund for
any loss or damage resulting from the use of the Book-Entry
System or the Depository, except to the extent such loss or
damage arises by reason of any negligence, misfeasance or
willful misconduct on the part of the Custodian or any of its
employees or agents.

(b) Limit of Duties. Without limiting the generality of the
foregoing, the Custodian shall be under no duty or obligation
to inquire into, and shall not be liable for:

1. The validity of the issue of any Securities
purchased by the Fund, the legality of the purchase
thereof, or the propriety of the amount paid therefor;

2. The legality of the sale of any Securities by the
Fund or the propriety of the amount for which the same
are sold;

3. The legality of the issue or sale of any Shares, or
the sufficiency of the amount to be received therefor;

4. The legality of the redemption of any Shares, or
the propriety of the amount to be paid therefor;

5. The legality of the declaration or payment of any
distribution of the Fund;

6. The legality of any borrowing for temporary or
emergency administrative purposes.

(c) No Liability Until Receipt. The Custodian shall not be
liable for, or considered to be the Custodian of, any money,
whether or not represented by any check, draft, or other
instrument for the payment of money, received by it on behalf
of the Fund until the Custodian actually receives and
collects such money directly or by the final crediting of the
account representing the Fund's interest in the Book-Entry
System or the Depository.

(d) Amounts Due from Transfer Agent. The Custodian shall
not be under any duty or obligation to take action to effect
collection of any amount due to the Fund from the Transfer
Agent nor to take any action to effect payment or
distribution by the Transfer Agent of any amount paid by the
Custodian to the Transfer Agent in accordance with this
Agreement.

(e) Collection Where Payment Refused. The Custodian shall
not be under any duty or obligation to take action to effect
collection of any amount, if the Securities upon which such
amount is payable are in default, or if payment is refused
after due demand or presentation, unless and until (a) it
shall be directed to take such action by a Certificate and
(b) it shall be assured to its satisfaction of reimbursement
of its costs and expenses in connection with any such action.

(f) Appointment of Agents and Sub-Custodians. The Custodian
may appoint one or more banking institutions, including but
not limited to banking institutions located in foreign
countries, to act as Depository or Depositories or as Sub
Custodian or as Sub-Custodians of Securities and monies at
any time owned by the Fund. The Custodian shall use
reasonable care in selecting a Depository and/or Sub
Custodian located in a country other than the United States
("Foreign Sub-Custodian"), which selection shall be in
accordance with the requirements of Rule 17f-5 under the 1940
Act, and shall oversee the maintenance of any Securities or
monies of the Fund by any Foreign Sub-Custodian. In
addition, the Custodian shall hold the Fund harmless from,
and indemnify the Fund against, any loss, action, claim,
demand, expense and proceeding, including counsel fees, that
occurs as a result of the failure of any Foreign Sub
Custodian or Depository to exercise reasonable care with
respect to the safekeeping of Securities and monies of the
Fund. Notwithstanding the generality of the foregoing,
however, the Custodian shall not be liable for any losses
resulting from the general risk of investing or holding
Securities and monies in a particular country, including, but
not limited to, losses resulting from nationalization,
expropriation, devaluation, revaluation, confiscation,
seizure, cancellation, destruction or similar action by any
governmental authority, de facto or de jure; or enactment,
promulgation, imposition or enforcement by any such
governmental authority of currency restrictions, exchange
controls, taxes, levies or other charges affecting the Fund's
property; or acts of war, terrorism, insurrection or
revolution; or any other similar act or event beyond the
Custodian's control.

(g) No Duty to Ascertain Authority. The Custodian shall not
be under any duty or obligation to ascertain whether any
Securities at any time delivered to or held by it for the
Fund are such as may properly be held by the Fund under the
provisions of the Master Trust Agreement and the Prospectus.

(h) Reliance on Certificates and Instructions. The
Custodian shall be entitled to rely upon any Certificate,
notice or other instrument in writing received by the
Custodian and reasonably believed by the Custodian to be
genuine and to be signed by an officer or Authorized Person
of the Fund. The Custodian shall be entitled to rely upon
any Written Instructions or Oral Instructions actually
received by the Custodian pursuant to the applicable Sections
of this Agreement and reasonably believed by the Custodian to
be genuine and to be given by an Authorized Person. The Fund
agrees to forward to the Custodian Written Instructions from
an Authorized Person confirming such Oral Instructions in
such manner so that such Written Instructions are received by
the Custodian, whether by hand delivery, telex or otherwise,
by the close of business on the same day that such Oral
Instructions are given to the Custodian. The Fund agrees
that the fact that such confirming instructions are not
received by the Custodian shall in no way affect the validity
of the transactions or enforceability of the transactions
hereby authorized by the Fund. The Fund agrees that the
Custodian shall incur no liability to the Fund in acting upon
Oral Instructions given to the Custodian hereunder concerning
such transactions provided such instructions reasonably
appear to have been received from a duly Authorized Person.

(i) Overdraft Facility and Security for Payment. In the
event that the Custodian is directed by Written Instruction
(or Oral Instructions confirmed in writing in accordance with
Section 11(h) hereof) to make any payment or transfer of
monies on behalf of the Fund for which there would be, at the
close of business on the date of such payment or transfer,
insufficient monies held by the Custodian on behalf of the
Fund, the Custodian may, in its sole discretion, provide an
overdraft (an "Overdraft") to the Fund in an amount
sufficient to allow the completion of such payment or
transfer. Any Overdraft provided hereunder: (a) shall be
payable on the next Business Day, unless otherwise agreed by
the Fund and the Custodian; and (b) shall accrue interest
from the date of the Overdraft to the date of payment in full
by the Fund at a rate agreed upon in writing, from time to
time, by the Custodian and the Fund. The Custodian and the
Fund acknowledge that the purpose of such Overdraft is to
temporarily finance the purchase of Securities for prompt
delivery in accordance with the terms hereof, to meet
unanticipated or unusual redemption, to allow the settlement
of foreign exchange contracts or to meet other emergency
expenses not reasonably foreseeable by the Fund. The
Custodian shall promptly notify the Fund in writing (an
"Overdraft Notice") of any Overdraft by facsimile
transmission or in such other manner as the Fund and the
Custodian may agree in writing. To secure payment of any
Overdraft, the Fund hereby grants to the Custodian a
continuing security interest in and right of setoff against
the Securities and cash in the Fund's account from time to
time in the full amount of such Overdraft. Should the Fund
fail to pay promptly any amounts owed hereunder, the
Custodian shall be entitled to use available cash in the
Fund's account and to liquidate Securities in the account as
is necessary to meet the Fund's obligations under the
Overdraft. In any such case, and without limiting the
foregoing, the Custodian shall be entitled to take such other
actions(s) or exercise such other options, powers and rights
as the Custodian now or hereafter has as a secured creditor
under the Pennsylvania Uniform Commercial Code or any other
applicable law.

(j) Inspection of Books and Records. The books and records
of the Custodian shall be open to inspection and audit at
reasonable times by officers and auditors employed by the
Fund and by the appropriate employees of the Securities and
Exchange Commission.

The Custodian shall provide the Fund with any report
obtained by the Custodian on the system of internal
accounting control of the Book-Entry System or the Depository
and with such reports on its own systems of internal
accounting control as the Fund may reasonably request from
time to time.

12. Term and Termination.

(a) This Agreement shall become effective on the date first
set forth above (the "Effective Date") and shall continue in
effect thereafter until such time as this Agreement may be
terminated in accordance with the provisions hereof.

(b) Either of the parties hereto may terminate this
Agreement by giving to the other party a notice in writing
specifying the date of such termination, which shall be not
less than 60 days after the date of receipt of such notice.
In the event such notice is given by the Fund, it shall be
accompanied by a certified vote of the Board of Trustees of
the Fund, electing to terminate this Agreement and
designating a successor custodian or custodians, which shall
be a person qualified to so act under the 1940 Act.

In the event such notice is given by the Custodian, the
Fund shall, on or before the termination date, deliver to the
Custodian a certified vote of the Board of Trustees of the
Fund, designating a successor custodian or custodians. In
the absence of such designation by the Fund, the Custodian
may designate a successor custodian, which shall be a person
qualified to so act under the 1940 Act. If the Fund fails to
designate a successor custodian, the Fund shall upon the date
specified in the notice of termination of this Agreement and
upon the delivery by the Custodian of all Securities (other
than Securities held in the Book-Entry System which cannot be
delivered to the Fund) and monies then owned by the Fund, be
deemed to be its own custodian and the Custodian shall
thereby be relieved of all duties and responsibilities
pursuant to this Agreement, other than the duty with respect
to Securities held in the Book-Entry System which cannot be
delivered to the Fund.

(c) Upon the date set forth in such notice under paragraph
(b) of this Section 12, this Agreement shall terminate to the
extent specified in such notice, and the Custodian shall upon
receipt of a notice of acceptance by the successor custodian
on that date deliver directly to the successor custodian all
Securities and monies then held by the Custodian on behalf of
the Fund, after deducting all fees, expenses and other
amounts for the payment or reimbursement of which it shall
then be entitled.

13. Limitation of Liability.

The Fund and the Custodian agree that the obligations of
the Fund under this Agreement shall not be binding upon any
of the Trustees, shareholders, nominees, officers, employees
or agents, whether past, present or future, of the Fund,
individually, but are binding only upon the assets and
property of the Fund, as provided in the Master Trust
Agreement. The execution and delivery of this Agreement have
been authorized by the Trustees of the Fund, and signed by an
authorized officer of the Fund, acting as such, and neither
such authorization by such Trustees nor such execution and
delivery by such officer shall be deemed to have been made by
any of them or any shareholder of the Fund individually or to
impose any liability on any of them or any shareholder of the
Fund personally, but shall bind only the assets and property
of the Fund as provided in the Master Trust Agreement.

14. Miscellaneous.

(a) Annexed hereto as Appendix A is a certification signed
by the Secretary of the Fund setting forth the names and the
signatures of the present Authorized Persons. The Fund
agrees to furnish to the Custodian a new certification in
similar form in the event that any such present Authorized
Person ceases to be such an Authorized Person or in the event
that other or additional Authorized Persons are elected or
appointed. Until such new certification shall be received,
the Custodian shall be fully protected in acting under the
provisions of this Agreement upon Oral Instructions or
signatures of the present Authorized Persons as set forth in
the last delivered certification.

(b) Annexed hereto as Appendix B is a certification signed
by the Secretary of the Fund setting forth the names and the
signatures of the present officers of the Fund. The Fund
agrees to furnish to the Custodian a new certification in
similar form in the event any such present officer ceases to
be an officer of the Fund or in the event that other or
additional officers are elected or appointed. Until such new
certification shall be received, the Custodian shall be fully
protected in acting under the provisions of this Agreement
upon the signature of an officer as set forth in the last
delivered certification.

(c) Any notice or other instrument in writing, authorized or
required by this Agreement to be given to the Custodian,
shall be sufficiently given if addressed to the Custodian and
mailed or delivered to it at its offices at One Mellon Bank
Center, Pittsburgh, PA 15258 or at such other place as the
Custodian may from time to time designate in writing.

(d) Any notice or other instrument in writing, authorized or
required by this Agreement to be given to the Fund, shall be
sufficiently given if addressed to the Fund and mailed or
delivered to it at its offices at 200 Park Avenue, New York,
New York 10166 or at such other place as the Fund may from
time to time designate in writing.

(e) This Agreement may not be amended or modified in any
manner except by a written agreement executed by both parties
with the same formality as this Agreement, (i) authorized, or
ratified and approved by a vote of the Board of Trustees of
the Fund, including a majority of the members of the Board of
Trustees of the Fund who are not "interested persons" of the
Fund (as defined in the 1940 Act), or (ii) authorized, or
ratified and approved by such other procedures as may be
permitted or required by the 1940 Act.

(f) This Agreement shall extend to and shall be binding upon
the parties hereto, and their respective successors and
assigns; provided, however, that this Agreement shall not be
assignable by the Fund without the written consent of the
Custodian, or by the Custodian without the written consent of
the Fund authorized or approved by a vote of the Board of
Trustees of the Fund. Nothing in this Agreement shall give
or be construed to give or confer upon any third party any
rights hereunder.

(g) The Fund represents that a copy of the Master Trust
Agreement is on file with the Secretary of the Commonwealth
of Massachusetts.

(h) This Agreement shall be construed in accordance with the
laws of the Commonwealth of Pennsylvania.

(i) The captions of the Agreement are included for
convenience of reference only and in no way define or delimit
any of the provisions hereof or otherwise affect their
construction or effect.

(j) This agreement may be executed in any number of
counterparts, each of which shall be deemed to be an
original, but such counterparts shall, together, constitute
only one instrument.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their respective representatives duly authorized as of
the day and year first above written.

Dreyfus Variable Investment Fund

By:
Name:
Title:

MELLON BANK, N.A.

By:
Name:
Title:

CUSTODIAN ACCOUNT FOR PORTFOLIO SECURITIES TRANSACTIONS

APPENDIX A

John E. Pelletier, Secretary of Dreyfus Variable Investment Fund, a
business trust organized under the laws of the Commonwealth of
Massachusetts (the "Fund"), do hereby certify that:

The following individuals have been duly authorized as Authorized
Persons to give Oral Instructions and Written Instructions on behalf of the
Fund and portfolios indicated and the specimen signatures set forth
opposite their respective names are their true and correct signatures:

Name Signature Portfolio*

Jim Windels (CAP,GIP,SCSP, DSP)

Paul Casti (QBP, ZCP)

Tom Durante (SCP)

Frank Brensic (CAP, GIP)

Bill McDowell (QBP, ZCP)

Anna Mancini (SCP)

Brian Ward (SCSP, DSP)

Rob Robol (DSP, CAP, GIP,
SCSP)

Bill Maeder (QBP, ZCP)

Mary Macchia (SCP)

Name Signature Portfolio*

Helen Minaya (CAP, GIP)

Lucy Dermezis (GIP, CAP)

Christine Bonci (QBP)

Paul Goerke ("SCP")

Nadya Benjamin ("ZCP")

Linda Cipollone ("SCSP")

Erik Naviloff ("DSP")

Matt Plastina ("QBP, ZCP")

Andrea O'Sullivan ("SCP")

Robert Svagna ("SCP")

Chris Schiller ("DSP")
___________________________________

* Capital Appreciation Portfolio ("CAP")
Growth and Income Portfolio ("GIP")
Quality Bond Portfolio ("QBP")
Small Cap Portfolio ("SCP")
Zero Coupon Portfolio ("ZCP")
Small Company Stock Portfolio ("SCSP")
Disciplined Stock Portfolio ("DSP")

Secretary
Dated: May 10, 1996

APPENDIX B

DREYFUS VARIABLE INVESTMENT FUND

I, Eric B. Fischman, Vice President and Assistant Secretary of Dreyfus
Variable Investment Fund, a business trust organized and existing under the
laws of the Commonwealth of Massachusetts (the "Fund"), do hereby certify
that the only series of shares of the Fund issued and/or authorized by the
Fund as of the date of this Custody Agreement are shares of beneficial
interest, $.001 par value, as follows:

Capital Appreciation Portfolio
Growth and Income Portfolio
Small Cap Portfolio
Small Company Stock Portfolio
Disciplined Stock Portfolio
Quality Bond Portfolio
Zero Coupon Portfolio
Money Market Portfolio*
Managed Assets Portfolio*
International Value Portfolio*
International Equity Portfolio*

________________________
*Mellon Bank, N.A. does
not serve as custodian
with respect to these
Portfolios.

Dated:

APPENDIX C

The following are designated publications for purposes of Section 4 (f)
2:

The Bond Buyer
Depository Trust Company Notices
Financial Daily Card Service
New York Times
Standard & Poor's Called Bond Record
Wall Street Journal

SCHEDULE A

I. Asset Based Charges

A. U.S. Securities (Net Asset Value)
First $1 Billion 0.70 Basis Points
Next $1 Billion 0.50 Basis Points
Excess 0.25 Basis Points

B. International Securities (Market Value)

Foreign Assets in all funds will be totaled by country and charged a
basis point fee by category.

Euroclear 5.00 Basis Points

Category I 8.00 Basis Points

Category II 14.00 Basis Points

Category III 16.00 Basis Points

Category IV 45.00 Basis Points

(A complete listing of countries is on page 2 of this fee schedule)

II. Transaction Charges

A. Domestic
U.S. Buy/Sell transaction (DTC, PTC, Fed):
Zero Coupon Portfolio $10
Quality Bond Portfolio $10
Small Cap Portfolio $10
Growth and Income Portfolio $ 7
Capital Appreciaton Portfolio $ 7
Small Company Stock Portfolio $ 7
Disciplined Stock Portfolio $ 7
Physical U.S. Buy/Sell transaction $20

B. International
Euroclear $ 25
Category I $ 35
Category II $ 60
Category III $ 80
Category IV $100

C. Other Transactions
Futures Transaction $ 8
Paydown Transaction $ 5
Margin Variation Wire $ 10
F/X not executed at BSDT $ 20
Options Round Trip $ 20
Wire Transfer $ 5

III. Out-of-Pocket Expenses

The Custodian will pass through to the client any out-of-pocket
expenses including, but not limited to, postage, courier expense,
registration fees, stamp duties telex charges, custom reporting or
custom programming, internal/external tax, legal or consulting costs,
proxy voting expenses, etc.

The Custodian reserves the right to amend its fees if the service
requirements change in a way that materially affects our
responsibilities or costs. Support of other derivative investment
strategies or special processing requirements (e.g. external cash
sweep, third party securities lending etc.) may result in additional
fees.

IV. Country by Country Categories:

Category I Category II Category III CategoryIV
Australia Argentina Austria Bangladesh
Belgium Denmark Indonesia Brazil
Canada Finland Israel Colombia
France Hong Kong South Korea China
Germany Malaysia Philippines Czech Republic
Ireland Mexico Singapore Greece
Italy Norway Thailand India
Japan Spain Jordan
Netherlands Luxembourg
New Zealand Pakistan
South Africa Peru
Sweden Poland
Switzerland Portugal
United Kingdom Sri Lanka
Cedel Taiwan
Turkey
Uruguay
Venezuela

SCHEDULE B

The Fund will pay to the Custodian as soon as possible after the end of
each month all out-of-pocket expenses reasonably incurred in connection
with the assets of the Fund.

Exhibit (11)

CONSENT OF INDEPENDENT AUDITORS

We consent to the reference to our firm under the captions "Condensed
Financial Information" and "Transfer and Dividend Disbursing Agent,
Custodian, Counsel and Independent Auditors" and to the use of our report
dated February 9, 1996 in this Registration Statement (Form N-1A No.
33-13690) of Dreyfus Variable Investment Fund.

ERNST & YOUNG LLP

New York, New York
October 28, 1996

Other Exhibit (a)

DREYFUS VARIABLE INVESTMENT FUND

Assistant Secretary's Certificate

The undersigned, Elizabeth A. Bachman, Assistant Secretary of Dreyfus
Variable Investment Fund (the "Fund'), hereby certifies that set forth below
is a copy of the resolution adopted by the Written Consent of the Fund's
Board members on October 21, 1996, authorizing the signing by Elizabeth A.
Bachman, Marie E. Connolly, Richard W. Ingram, Mark A. Karpe and John E.
Pelletier on behalf of the proper officers of the Fund pursuant to a power of
attorney:

RESOLVED, that the Registration Statement and any and all
amendments and supplements thereto may be signed by any
one of Elizabeth A. Bachman, Marie E. Connolly, Richard
W. Ingram, Mark A. Karpe and John E. Pelletier as the
attorney-in-fact for the proper officers of the Fund,
with full power of substitution and resubstitution; and
that the appointment of each of such persons as such
attorney-in-fact hereby is authorized and approved, and
that such attorney's-in-fact, and each of them, shall
have full power and authority to do and perform each and
every act and thing requisite and necessary to be done in
connection with such Registration Statement and any and
all amendments and supplements thereto, as whom he or she
is acting as attorney-in-fact, might or could do in
person.

IN WITNESS THEREOF, I have hereunder signed by name and affixed the seal
of the Fund on October 23, 1996.

Elizabeth A. Bachman
Assistant Secretary

Other Exhibit (b)

POWER OF ATTORNEY

The undersigned hereby constitute and appoint Elizabeth A. Bachman,
Marie E. Connolly, Richard W. Ingram, Mark A. Karpe and John E. Pelletier,
and each of them, with full power to act without the other, his or her true
and lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, for him or her, and in his or her name, place and stead, in
any and all capacities (until revoked in writing) to sign any and all
amendments to the Registration Statement of each Fund enumerated on Exhibit A
hereto (including post-effective amendments and amendments thereto), and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing ratifying and confirming all that
said attorneys-in-fact and agents or any of them, or their or his or her
substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.

/s/Joseph S. DiMartino October 21, 1996
Joseph S. DiMartino

/s/ David P. Feldman October 21, 1996
David P. Feldman

/s/John M. Fraser, Jr. October 21, 1996
John M. Fraser, Jr.

/s/ Robert R. Glauber October 21, 1996
Robert R. Glauber

/s/James F. Henry October 21, 1996
James F. Henry

/s/RosalindGersten Jacobs October 21, 1996
Rosalind Gersten Jacobs

/s/Irving Kristol October 21, 1996
Irving Kristol

/s/Paul A. Marks October 21, 1996
Paul A. Marks

/s/Martin Peretz October 21, 1996
Martin Peretz

/s/Bert W. Wasserman October 21, 1996
Bert Wasserman

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<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
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