DREYFUS VARIABLE INVESTMENT FUND, 485APOS, 1997-02-14

DREYFUS VARIABLE INVESTMENT FUND
485APOS, 1997-02-14

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Securities Act File No. 33-13690
Investment Company Act File No. 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. 17 /x/

and

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 /x/

Amendment No. 17 /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)

copy to:

Lewis G. Cole, Esq.
Stroock & Stroock & Lavan LLP
180 Maiden Lane
New York, New York 10038-4982

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

____ immediately upon filing pursuant to paragraph (b)

on (date) pursuant to paragraph (b)

____ 60 days after filing pursuant to paragraph (a)(i)

____ on (date) pursuant to paragraph (a)(i)

X 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 its 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 its fiscal
year ended December 31, 1996 will be filed on or about February 28, 1997.

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

Items in
Part A of
Form N-1A Caption Page

1 Cover Cover Page
2 Synopsis *
3 Condensed Financial Information 3
4 General Description of Registrant 15,33
5 Management of the Fund 27
5(a) Management's Discussion of Fund's Performance *
6 Capital Stock and Other Securities 33
7 Purchase of Securities Being Offered 31
8 Redemption or Repurchase 31
9 Pending Legal Proceedings *

Items in
Part B of
Form N-1A

10 Cover Page B-1
11 Table of Contents B-1
12 General Information and History B-39
13 Investment Objectives and Policies B-2
14 Management of the Fund B-18
15 Control Persons and Principal Holders
of Securities B-22
16 Investment Advisory and Other Services B-23
17 Brokerage Allocation B-34
18 Capital Stock and Other Securities B-39

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

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

19 Purchase, Redemption and Pricing of
Securities Being Offered B-30
20 Tax Status *
21 Underwriters B-30
22 Calculations of Performance Data B-36
23 Financial Statements B-48

Items in
Part C of
Form N-1A

24 Financial Statements and Exhibits C-1
25 Persons Controlled by or Under Common
Control with Registrant C-4
26 Number of Holders of Securities C-4
27 Indemnification C-5
28 Business and Other Connections of
Investment Adviser C-6
29 Principal Underwriters C-12
30 Location of Accounts and Records C-15
31 Management Services C-15
32 Undertakings C-15
- ---------
*Omitted since answer is negative or inapplicable.
<PAGE>

PROSPECTUS May 1, 1997

DREYFUS VARIABLE INVESTMENT FUND DREYFUS VARIABLE

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 THIRTEEN 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 MAY 1, 1997, 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 of Contents

Page Page
Condensed Financial Information.... 3 How to Redeem Shares........... 27
Performance Information............ 12 Dividends, Distributions and Taxes 27
Description of the Fund 12 General Information ........... 28
Management of the Fund ............ 24 Appendix ...................... 30
How to Buy Shares ................. 27

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.
<PAGE>
(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 is
managed as a "contrary value" portfolio and its investments include 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
2500(TM) 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 2500(TM)
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 U.S. major 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.

The Balanced Portfolio's investment objective is to provide investment
results that are greater than the total return performance of common stocks and
bonds in the aggregate, as represented by a hybrid index, 60% of which is
composed of the common stocks in the Standard & Poor's 500 Composite Stock Price
Index and 40% of which is composed of the bonds in the Lehman Brothers
Intermediate Government/Corporate Bond Index. This Series invests primarily in
common stocks and bonds in proportion consistent with their expected returns and
risks as determined by The Dreyfus Corporation.

The Low Duration High Yield Securities Portfolio's investment objective is
to maximize total return, consisting of capital appreciation and current income.
This Series seeks to achieve its objective by investing up to all of its assets
in a portfolio of lower rated fixed-income securities, commonly known as "junk
bonds," that, under normal market conditions, has an effective duration of three
and one-half years or less and an effective average portfolio maturity of four
years or less. Investments of this type are subject to a greater risk of loss of
principal and non-payment of interest. Investors should carefully assess the
risks associated with an investment in the Series.

CONDENSED FINANCIAL INFORMATION

The information in the following tables has been audited 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. No financial information is provided for
the Balanced Portfolio and Low Duration High Yield Securities Portfolio which
had not commenced operations as of the date of the financial information.

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.

<TABLE>
<CAPTION>
Money Market Portfolio
Year Ended December 31,

PER SHARE DATA 1990(1) 1991 1992 1993 1994 1995 1996
Net asset value, $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
beginning of period

Investment Operations:
Investment income-net .024 .058 .041 .032 .043 .055
Distributions:
Dividends from (.024) (.058) .041) (.032) (.043) (.055)
investment income-net
Net asset value, end $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
of period
TOTAL INVESTMENT RETURN 7.27%(2) 5.99% 4.14% 3.29% 4.37% 5.66%
RATIOS/SUPPLEMENT DATA:
Ratio of expenses to .03%(2) - - - - .62%
average net assets
Ratio of net
investment income 7.18%(2) 5.78% 4.10% 3.23% 4.62% 5.51%
to average net
assets
Decrease reflected
in above
expense ratios due 30.51%(2) 3.94% 4.25% 2.81% .88% .03%
to undertakings
by The Dreyfus
Corporation
Net assets, end of $741 $1,619 $790 $7,651 $34,728 $45,249
period (000's omitted)

</TABLE>

- --------------------
(1) From August 31, 1990 (commencment of operations) to December 31, 1990.
(2) Annualized.
<PAGE>
<TABLE>
<CAPTION>
Capital Appreciation Portfolio
------------------------------------------------------------
Year Ended December 31,
------------------------------------------------------------
<S> <C> <C> <C> <C>

PER SHARE DATA: 1993(1) 1994 1995 1996
Net asset value, $12.50 $13.27 $13.44
beginning of period

Investment Operations:
Investment income-net .08 .23 .23
Net realized and .76 .17 4.27
unrealized gain on investments

Total from Investment .84 .40 4.50
Operations
Distributions:
Dividends from investment (.07) (.23) (.23)
income-net
Net asset value, end of $13.27 $13.44 $17.71
period

TOTAL INVESTMENT RETURN 6.74%(2) 3.04% 33.52%

RATIOS/SUPPLEMENTAL DATA:

Ratio of expenses to .28%(2) .25% .85%
average net assets
Ratio of net investment 1.89%(2) 2.99% 2.08%
income to average net assets
Decrease reflected in 3.67%(2) .86%(2) .02%
above expense ratios due to
undertakings by The
Dreyfus Corporation
Portfolio Turnover Rate .01%(2) .12% 2.81%
Average commission rate --- --
paid(3)
Net assets, end of period $3,770 $16,118 $46,930
(000's omitted)
</TABLE>

- ----------------
(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.
<PAGE>
Growth and Income
Portfolio

------------------------------------
Year Ended December 31,
------------------------------------
1994(1) 1995 1996
PER SHARE DATA:
Net asset value, beginning of period...... $12.50 $11.98

Investment Operations:
Investment income-net................. .28 .28
Net realized and unrealized gain (.43) 7.07
(loss) on investments
Total from Investment Operations (.15) 7.35

Distributions:
Dividends from investment (.28) (.27)
income-net..........................
Dividends from net realized gain (.09) (.73)
on investments
Total Distributions (.37) (1.00)
Net asset value, end of period $11.98 $18.33

TOTAL INVESTMENT RETURN (1.22%)(2) 61.89%

RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net .22%(2) .92%
assets................................
Ratio of net investment income to
average net assets 2.25%(2) 2.21%
Decrease reflected in above
expense ratios due to undertakings 1.28%(2) .03%
by The Dreyfus Corporation
Portfolio Turnover Rate 237.09%(2) 255.42%
Average commission rate paid(3) --- ---
Net assets, end of period (000's $1,040 $71,161
omitted)

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

(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.
<PAGE>
<TABLE>
<CAPTION>
Managed Assets Portfolio

Year Ended December 31,
<S> <C> <C> <C> <C> <C> <C> <C>

PER SHARE DATA: 1990(1) 1991 1992 1993 1994 1995 1996
Net asset value, beginning of period.... $10.00 $10.11 $10.76 $10.14 $12.92 $12.37

Investment Operations:
Investment income-net................... .08 .41 .22 .20 .35 .51
Net realized and unrealized gain
(loss) on investments................. .11 .66 (.11) 2.71 (.56) (.54)
Total from Investment Operations...... .19 1.07 .11 2.91 (.21) (.03)

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

TOTAL INVESTMENT RETURN................... 1.85%(2) 10.60% 1.07% 28.59% (1.56%) (.26%)

RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets. .34%(2) 1.00% .97% .27% .25% .94%
Ratio of net investment income to average
net assets............................ 2.11%(2) 4.46% 1.88% 1.88% 3.34% 3.56%
Decrease reflected in above expense
ratios due to undertakings by
The Dreyfus Corporation
and Comstock Partners, Inc............. 8.82%(2) 2.83% 1.70% 2.25% .88% --
Portfolio Turnover Rate.................. --- 91.97% 118.78% 99.08% 25.96% 53.88%
Average commission rate paid(3) --- --- --- --- --- ---
Net assets, end of period (000's omitted) $716 $2,179 $1,865 $7,957 $30,510 $25,272
</TABLE>

- -------------------
(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.
<PAGE>
<TABLE>
<CAPTION>
Small Cap Portfolio
-------------------------------------------------------------------------

PER SHARE DATA: 1990(1) 1991 1992 1993 1994 1995 1996
Net asset value, begining of period..... $10.00 $10.21 $20.60 $22.71 $34.45 $36.52

Investment Operations:
Investment income-net................... .21(2) .14(2) .18(2) .14 .17 .16
Net realized and unrealized gain
on investments........................ --- 15.85(2) 13.10(2) 14.93 2.50 10.54
Total from Investment Operations.......... .21(2) 15.99(2) 13.28(2) 15.07 2.67 10.70

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 $36.72 $46.13

TOTAL INVESTMENT RETURN................... 2.10%(3) 159.73% 71.28% 68.31% 7.75% 29.38%

RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets. .34%(3) 1.16% .94% .25% .55% .83%
Ratio of net investment income to
average net assets................... 2.10%(3) .77% .76% .89% 1.18% .54%
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%
Average commission rate paid(4) --- --- --- --- --- ---
Net assets, end of period (000's omitted) $36 $1,554 $2,679 $18,337 $173,215 $543,281
</TABLE>

-------------------
(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.
<PAGE>
<TABLE>
<CAPTION>

Small Company Stock Portfolio
---------------------------------------------------------
From April 30, 1996
(commencement of operations)
to December 31, 1996
---------------------------------------------------------

<S> <C>
PER SHARE DATA:
Net asset value, beginning of period

Investment Operations
Investment income-net.....................................
Net realized and unrealized gain on investments...........
Total from Investment Operations..........................
Net asset value, end of period............................

TOTAL INVESTMENT RETURN.....................................

RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets
Ratio of net investment income to average net assets......
Decrease reflected in above expense ratio due to
undertaking by The Dreyfus Corporation.................
Portfolio Turnover Rate...................................
Average commission rate paid(2)...........................
Net assets, end of period (000's omitted).................
</TABLE>

- ---------
(1) Not annualized.
(2) The Series is required to disclose its average commission rate paid per
share for purchases and sales of investment securities.

Disciplined Stock Portfolio
---------------------------------------------------------
From April 30, 1996
(commencement of operations)
to December 31, 1996)
---------------------------------------------------------

<S> <C>
PER SHARE DATA:
Net asset value, beginning of period

Investment Operations
Investment income-net.........................................
Net realized and unrealized gain on investments...............
Total from Investment Operations..............................
Net asset value, end of period................................

TOTAL INVESTMENT RETURN.........................................

RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets
Ratio of net investment income to average net assets..........
Decrease reflected in above expense ratio due to
undertaking by The Dreyfus Corporation......................
Portfolio Turnover Rate.......................................
Average commission rate paid(2)...............................
Net assets, end of period (000's omitted).....................
</TABLE>

- ---------
(1) Not annualized.
(2) The Series is required to disclose its average commission rate paid per
share for purchases and sales of investment securities.
<PAGE>
<TABLE>
<CAPTION>

International Value Portfolio
---------------------------------------------------------
From April 30, 1996
(commencement of operations)
to December 31, 1996
---------------------------------------------------------

<S> <C>
PER SHARE DATA:
Net asset value, beginning of period

Investment Operations
Investment income-net.........................................
Net realized and unrealized (loss) on investments.............
Total from Investment Operations..............................
Net asset value, end of period................................

TOTAL INVESTMENT RETURN.........................................

RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets
Ratio of net investment income to average net assets..........
Decrease reflected in above expense ratio due to undertaking
by The Dreyfus Corporation..................................
Portfolio Turnover Rate.......................................
Average commission rate paid(2)...............................
Net assets, end of period (000's omitted).....................
</TABLE>

- ---------
(1) Not annualized.
(2) The Series is required to disclose its average commission rate paid per
share for purchases and sales of investment securities.

International Equity
Portfolio
---------------------------------------------------
Year Ended December 31,
---------------------------------------------------
1994(1) 1995 1996
<S> <C> <C> <C>
PER SHARE DATA
Net asset value, beginning of period................................: $12.50 $12.02

Investment Operations:
Investment income-net................................................ .15 .15
Net realized and unrealized gain (loss) on investments............... (.40) .74
Total from Investment Operations:.................................... (.25) .89

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................ --- ---
Net asset value, end of period....................................... $12.02 $12.82

TOTAL INVESTMENT RETURN................................................ (2.00%)(2) 7.39%

RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets.............................. .23%(2) 1.59%
Ratio of net investment income to average net asseets................ 1.11%(2) 1.13%
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%
Average commission rate paid(4)...................................... --- ---
Net Assets, end of period (000's omitted) $1,089 $7,672

</TABLE>
- ---------
(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.
<PAGE>
<TABLE>
<CAPTION>
Quality Bond Portfolio
-------------------------------------------------------------------------

<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
Investment income-net................... .23 .70 .92 .76 .73 .68
Net realized and unrealized gain (loss)
on investments........................ .01 .66 .30 .88 (1.27) 1.42
Total from Investment Operations...... .24 1.36 1.22 1.64 (.54) 2.10
Distributions
Dividends from investment income-net.... (.23) (.70) (.92) (.76) (.73) (.69)
Dividends from net realized gain on
Investments.......................... --- --- (.03) (.01) (.01) (.13)
Total Distributions (.23) (.70) (.95) (.77) (.74) (.82)
Net asset value, end of period.......... $10.01 $10.67 $10.94 $11.81 $10.53 $11.81

TOTAL INVESTMENT RETURN................... 7.12%(2) 14.12% 12.09% 15.33% (4.59%) 20.42%

RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets. .15%(2) --- --- --- --- .81%
Ratio of net investment income to
average net assets.................... 7.20%(2) 7.52% 8.54% 6.51% 7.03% 6.13%
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%
Net assets, end of period (000's omitted) $59 $410 $405 $4,706 $13,244 $37,447
</TABLE>
-------------------

(1) From August 31, 1990 (commencement of operations) to December
31, 1990.
(2) Annualized.
(3) Not annualized.
<PAGE>
<TABLE>
<CAPTION>
Zero Coupon 2000 Portfolio
-------------------------------------------------------------------------

Year Ended December 31,
-------------------------------------------------------------------------
--------------------------------------------------------------------------------
PER SHARE DATA: 1990(1) 1991 1992 1993 1994 1995 1996
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period.... $10.00 $10.45 $11.64 $11.77 $12.57 $11.39

Investment Operations:
Investment income-net................... .22 .76 .83 .79 .69 .69
Net realized and unrealized gain (loss)
on investments........................ .45 1.25 .15 .96 (1.18) 1.31
Total from Investment Operations...... .67 2.01 .98 1.75 (.49) (2.00)
Distributions
Dividends from investment income-net.... (.22) (.76) (.84) (.78) (.68) (.69)
Dividends from net realized gain on
investments.......... --- (.06) (.01) (.17) (.01) -----
Total Distributions (.22) (.82) (.85) (.95) (.69) (.69)
Net asset value, end of eriod........... $10.45 $11.64 $11.77 $12.57 $11.39 $12.70

TOTAL INVESTMENT RETURN................... 20.09(2) 20.09% 8.87% 15.19% (3.91%) 17.95%

RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets. .70%(2) .72 .64% --- --- .68%
Ratio of net investment income to
average net assets.................... 8.03%(2) 7.41% 7.15% 6.21% 6.04% 5.73%
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%
Net assets, end of period (000's omitted) $155 $1,296 $1,362 $5,696 $10,913 $28,339
</TABLE>

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

(1) From August 31, 1990 (commencement of operations) to December
31, 1990.
(2) Annualized.
(3) Not annualized.

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.

Balanced, 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 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.

Low Duration High Yield Securities, 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 Report(TM),
Money Magazine, Bank Rate Monitor(TM), N. Palm Beach, Fla. 33408, Standard &
Poor's 500 Composite Stock Price Index, Standard & Poor's MidCap 400 Index,
Russell 2500(TM) Index, Morgan Stanley Capital International World Index, the
Dow Jones Industrial Average, Moody's Bond Survey Bond Index, Lehman Brothers
Intermediate Government/Corporate 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."

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.

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 is managed as
a "contrary value" portfolio and its investments will include (i) securities
which are out-of-favor and whose price to earnings ratios are lower than the
rest of the market or industry, (ii) securities which are temporarily depressed
but for which a turnaround is expected and (iii) special situations, such as
corporate restructurings, gold stocks and high yield bonds. In connection
therewith, 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 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, 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 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 leveraging, 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 and foreign, with market capitalizations of less than
$1.5 billion 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
2500(TM) Index.* The Russell 2500(TM) 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 2500(TM) 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.

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.

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.

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 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.

Low Duration High Yield Securities Portfolio-The Low Duration High Yield
Securities Portfolio is a diversified portfolio, the investment objective of
which is to maximize total return, consisting of capital appreciation and
current income. Under normal market conditions, the Series will invest at least
65% of the value of its net assets in bonds, debentures, notes and other debt
instruments rated below investment grade, or, if unrated, determined by The
Dreyfus Corporation to be of comparable quality. The securities in which the
Series invests also include mortgage-related securities, asset-backed
securities, zero coupon securities, municipal obligations, preferred stock,
convertible debt obligations and convertible preferred stock. The issuers of
such securities may include domestic and foreign corporations, partnerships,
trusts or similar entities, and governmental entities or their political
subdivisions, agencies or instrumentalities. The Series may invest in companies
in, or governments of, developing countries.

Under normal market conditions, the Series will invest in a portfolio of
securities that has an effective duration of three and one-half years or less.
As a measure of a fixed-income security's cash flow, duration is an alternative
to the concept of "term to maturity" in assessing the price volatility
associated with changes in interest rates. Generally, the longer the duration,
the more volatility an investor should expect. For example, the market price of
a bond with a duration of two years would be expected to decline 2% if interest
rates rose 1%. Conversely, the market price of the same bond would be expected
to increase 2% if interest rates fell 1%. The market price of a bond with a
duration of four years would be expected to increase or decline twice as much as
the market price of a bond with a two-year duration. Duration is a way of
measuring a security's maturity in terms of the average time required to receive
the present value of all interest and principal payments as opposed to its term
to maturity. The maturity of a security measures only the time until final
payment is due; it does not take account of the pattern of a security's cash
flows over time, which would include how cash flow is affected by prepayments
and by changes in interest rates. Incorporating a security's yield, coupon
interest payments, final maturity and option features into one measure, duration
is computed by determining the weighted average maturity of a bond's cash flows,
where the present values of the cash flows serve as weights. In computing the
duration of the Series, The Dreyfus Corporation will estimate the duration of
obligations that are subject to features such as prepayment or redemption by the
issuer, put options retained by the investor or other imbedded options, taking
into account the influence of interest rates on prepayments and coupon flows.
This method of computing duration is known as option-adjusted duration.

The Series' investment in high yield debt securities may cause the Series'
share price to be highly volatile at times. Securities rated below investment
grade carry a high degree of risk and are considered speculative by the credit
rating agencies. Bond prices are inversely related to interest rate changes;
however, bond price volatility also is inversely related to coupon. Accordingly,
below investment grade debt securities may be relatively less sensitive to
interest rate changes than higher quality debt securities of comparable
maturity, because of their higher coupon. This higher coupon is what the
investor receives in return for bearing greater credit risk. The higher credit
risks associated with below investment grade debt securities potentially can
have greater affect on the value of such securities than may be the case with
higher quality issues of comparable maturity. These securities may be
particularly susceptible to economic downturns. It is likely that an economic
recession could disrupt severly 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. See "Investment Considerations and
Risks-Lower Rated Securities" and "Appendix-Certain Portfolio
Securities-Ratings" below for a discussion of certain risks, and "Appendix" in
the Statement of Additional Information. The Series may hold investment grade
rated debt securities (or unrated securities of comparable quality) when the
yield differential between below investment grade and investment grade
securities narrows and the risk of loss may be reduced with only a relatively
small reduction in yield. The Series also may invest in investment grade rated
debt securities when The Dreyfus Corporation determines that a defensive
investment position is appropriate in light of market or economic conditions.

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, swaps,
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.

Balanced Portfolio-The Balanced Portfolio is a diversified portfolio, the
investment objective of which is to provide investment results that are greater
than the total return performance of common stocks and bonds in the aggregate,
as represented by a hybrid index, 60% of which is composed of the common stocks
in the S&P 500 Index and 40% of which is composed of the bonds in the Lehman
Brothers Intermediate Government/Corporate Bond Index (the "Intermediate
Index"). The Series invests in common stocks and bonds in proportions consistent
with their expected returns and risks as determined by The Dreyfus Corporation.

To outperform the hybrid index, The Dreyfus Corporation first employs a
disciplined valuation methodology to the return and risks of common stocks and
bonds. The Dreyfus Corporation considers various factors in determining the
relative attractiveness of investing in common stocks and bonds. The factors
which are evaluated include an interest-rate adjusted market price/earnings
ratio, interest rate spreads reflecting the term structure of interest rates,
and the level and volatility of the return premium for common stocks. The final
decision as to which asset class is relatively more attractive is determined by
a formal decision rule process based on extensive research by The Dreyfus
Corporation.

After developing the expected return and risks of each asset class, The
Dreyfus Corporation utilizes computer models designed to identify imbalances in
the pricing of common stocks and bonds. The Dreyfus Corporation then invests the
Series' assets in common stocks and bonds in proportions intended to exploit the
perceived imbalances. Under normal circumstances, the Series' total assets are
allocated approximately 60% to common stocks and 40% to bonds. However, the
Series is permitted to invest up to 75%, and as little as 40%, of its total
assets in common stocks and up to 60%, and as little as 25%, of its total assets
in bonds, as deemed advisable by The Dreyfus Corporation.

Common stocks are selected so that, in the aggregate, the investment
characteristics and risk profile of the equity portion of the Series are similar
to the S&P 500. These characteristics include such measures as dividend yield
(before expenses), price-to-earnings ratio, "beta" (relative volatility), return
on equity, and market price-to-book value ratio. However, while it may maintain
aggregate investment characteristics similar to the S&P 500, the Series seeks to
invest in individual common stocks which together will provide a higher total
return than the S&P 500. The Series will not be operated as an index fund, and
the Series' equity portion will not be limited to stocks included in the S&P
500. Individual security selection is the foundation upon which The Dreyfus
Corporation seeks to implement the investment objective and policies of the
equity portion of the Series. The Dreyfus Corporation collects information from
diverse sources from which The Dreyfus Corporation constructs and combines
valuation models into a computerized valuation ranking system identifying common
stocks that are undervalued and should be purchased or retained by the Series.
These models include measures of changes in earnings and relative value based on
present and historical price-to-earnings ratios, as well as dividend discount
calculations. Once the ranking of common stocks is complete, The Dreyfus
Corporation's experienced investment analysts construct the right component of
the Series to resemble in the aggregate the S&P 500 Index, but weighted toward
the most attractive stocks as determined by the valuation models.

The bond portion of the Series' portfolio ordinarily is invested in U.S.
dollar-denominated fixed-income obligations of domestic and foreign issuers. The
Series' dollar-weighted average maturity may not exceed ten years. Investment
selections are based on fundamental economic, market, and other factors leading
to valuation by sector, maturity, and quality. The Series invests in bonds rated
investment grade by Moody's or S&P, or if unrated, determined to be of
comparable quality by The Dreyfus Corporation. The Series will, in a prudent and
orderly fashion, sell bonds whose ratings drop below these minimum ratings.

The S&P 500 is composed of 500 common stocks which are chosen by S&P to
best capture the price performance of a large cross-section of the U.S. publicly
traded stock market.

The Intermediate Index is an index established by Lehman Brothers, Inc.
which includes fixed rate debt issues rated investment grade or higher by
Moody's, S&P or Fitch. All issues have at least one year to maturity and an
outstanding par value of at least $100 million for U.S. Government issues and
$50 million for all others. The Intermediate Index includes bonds with
maturities of up to ten years.

The Series also may engage in various investment techniques, such as
lending portfolio securities 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.

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.

Equity Securities - (Balanced, 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 Low Duration High Yield Securities, 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.

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, Low Duration High Yield
Securities, Managed Assets, Quality Bond and, to a limited extent, Small Cap
Portfolios) The Low Duration High Yield Securities Portfolio invests primarily,
and each 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 Low Duration High Yield Securities, 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 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, Low Duration High Yield Securities,
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 - (Balanced, Disciplined Stock, Growth and Income,
International Value, International Equity, Low Duration High Yield Securities,
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, and, in the case of the Low
Duration High Yield Securities Portfolio, mortgage-related securities,
asset-backed securities and swaps. 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, Low Duration
High Yield Securities 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.

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 Low Duration High Yield Securities, Managed Assets and Small Cap
Portfolios, to be less than 100% for the Balanced, 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 ________________, 1997, The Dreyfus Corporation managed or administered
approximately $__ billion in assets for approximately ___ 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. 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 $233 billion in assets as of December 31,
1996, including approximately $86 billion in proprietary mutual fund assets. As
of December 31, 1996, Mellon, through various subsidiaries, provided
non-investment services, such as custodial or administration services, for more
than $1,046 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:

Balanced Portfolio-Laurie Carroll and Ron Gala. Ms. Carroll has managed the
fixed-income portion of the Series since the Series commenced operations. Ms.
Carroll is a Senior Vice President and portfolio manager at Mellon Bank, N.A.
Ms. Carroll has been employed by Mellon Bank, N.A. since 1986. Mr. Gala has
managed the equity portion of the Series since the Series commenced operations.
Mr. Gala is Vice President and a portfolio manager for Mellon Bank, N.A. and is
a portfolio manager for Mellon Equity Associates. Mr. Gala also is responsible
for Mellon Equity Associates' asset allocation. Mr. Gala has been employed by
Mellon Bank, N.A. in various capacities since 1982. Ms. Carroll and Mr. Gala
have been employed by The Dreyfus Corporation as portfolio managers since
October 1994.

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.

Low Duration High Yield Securities Portfolio-Roger King. He has been the
Series' primary portfolio manager since the Series commenced operations and has
been employed by The Dreyfus Corporation since February 1996. Prior thereto, Mr.
King was a Vice President of High Yield Research, and, most recently, director
of High Yield Research at Citibank Securities, Inc.

Managed Assets Portfolio-Timothy M. Ghriskey. He has been the Series'
primary portfolio manager since January 1, 1997. Mr. Ghriskey has been employed
by The Dreyfus Corporation since July 1995. For more than five years prior
thereto, he was Vice President and Associate Managing Partner of Loomis, Sayles
& Company.

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 Corporation, 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.

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, 1996 as a percentage of the relevant Series' average daily net
assets also is set forth below:

<TABLE>
<CAPTION>
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%
Growth and Income Portfolio .75%
Managed Assets Portfolio .75%
Small Cap Portfolio .75%
Small Company Stock Portfolio .75%
Disciplined Stock Portfolio .75%
International Value Portfolio 1.00%
International Equity Portfolio .75%
Quality Bond Portfolio .65%
Zero Coupon 2000 Portfolio .45%
Balanced Portfolio .__%
Low Duration High Yield Securities .__%
Capital Appreciation Portfolio
0 to $150 million of total assets .55%
$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 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 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. 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, 1996, 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
Capital Appreciation Portfolio Advisory Fee Payable Advisory Fee 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 Managed Assets Portfolio, from August 31, 1990
(commencement of operations) through December 31, 1996, Comstock Partners, Inc.
("Comstock Partners"), a registered investment adviser located at 10 Exchange
Place, Jersey City, New Jersey 07302, served as the Series' sub-investment
adviser. Comstock Partners, subject to the supervision and approval of The
Dreyfus Corporation, provided 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, 1996, 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. Effective
December 31, 1996, the Sub-Investment Advisory Agreement with Comstock Partners
was terminated.

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 period January 1, 1996 through March
31, 1996, The Dreyfus Corporation paid M&G a monthly sub-investment advisory fee
at the effective 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
Capital Appreciation Portfolio, Sarofim) 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 Capital
Appreciation Portfolio, Sarofim) at a later time for any amounts it may waive
nor will the Fund reimburse The Dreyfus Corporation (or, with respect to the
Capital Appreciation Portfolio, Sarofim) 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.

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 Balanced, Capital
Appreciation, Growth and Income, Low Duration High Yield Securities, 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
Low Duration High Yield Securities, 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 Balanced, 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
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.

Balanced, Growth and Income and Low Duration High Yield Securities
Portfolios - Declare and pay 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.

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 Balanced
and Low Duration High Yield Securities Portfolios which had not commenced
operations as of December 31, 1996) has qualified for the fiscal year ended
December 31, 1996 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 Balanced and Low
Duration High Yield Securities 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 thirteen 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 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>
Appendix
Investment Techniques

Foreign Currency Transactions - (Capital Appreciation, Growth and Income,
Low Duration High Yield Securities, 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, Low Duration High Yield Securities
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 and Low Duration High Yield Securities Portfolios
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 and Low Duration High Yield Securities
Portfolios, 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 Balanced, 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, Low Duration High Yield Securities and, to
a limited extent, Balanced, 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.

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 and Low Duration High Yield Securities
Portfolios' borrowings generally will be unsecured.

Use of Derivatives - (Balanced, Disciplined Stock, Growth and Income,
International Equity, International Value, Low Duration High Yield Securities,
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, exceeds 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 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 - (Balanced, Capital Appreciation, Disciplined
Stock, Growth and Income, International Equity, International Value, Low
Duration High Yield Securities, 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 - (Balanced, 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 and Low Duration High
Yield Securities Portfolios) 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.

The mortgage-related securities in which the Series may invest also
include multi-class pass through certificates secured principally by mortgage
loans on commercial properties. These mortgage-related securities are structured
similarly to mortgage-related securities secured by pools of residential
mortgages. Commercial lending, however, generally is viewed as exposing the
lender to a greater risk of loss than one- to four-family residential lending.
Commercial lending, for example, typically involves larger loans to single
borrowers or groups of related borrowers than residential one- to four- family
mortgage loans. In addition, the repayment of loans secured by income producing
properties typically is dependent upon the successful operation of the related
real estate project and the cash flow generated therefrom. Consequently, adverse
changes in economic conditions and circumstances are more likely to have an
adverse impact on mortgage-related securities secured by loans on commercial
properties than on those secured by loans on residential properties.

The Series also may invest in subordinated mortgage-related securities
("Subordinated Securities"), which are issued or sponsored by commercial banks,
savings and loan institutions, mortgage bankers, private mortgage insurance
companies and other non-governmental issuers. Subordinated Securities have no
governmental guarantee, and are subordinated in some manner as to the payment of
principal and/or interest to the holders of more senior mortgage-related
securities arising out of the same pool of mortgages. The holders of
Subordinated Securities typically are compensated with a higher stated yield
than are the holders of more senior mortgage-related securities. On the other
hand, Subordinated Securities typically subject the holder to greater risk than
senior mortgage-related securities and tend to be rated in a lower rating
category, and frequently a substantially lower rating category, than the senior
mortgage-related securities issued in respect of the same pool of mortgages.
Subordinated Securities generally are likely to be more sensitive to changes in
prepayment and interest rates and the market for such securities may be less
liquid than is the case for traditional fixed-income securities and senior
mortgage-related securities.

As with other interest-bearing securities, the prices of certain
mortgage-related securities are 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 expected 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.

Asset-Backed Securities-(Low Duration High Yield Securities Portfolio)
Asset-backed securities are a form of Derivative. The securitization techniques
used for asset-backed securities are similar to those used for mortgage-related
securities. These securities include debt securities and securities with
debt-like characteristics. The collateral for these securities has included home
equity loans, automobile and credit card receivables, boat loans, computer
leases, airplane leases, mobile home loans, recreational vehicle loans and
hospital account receivables. The Series may invest in these and other types of
asset-backed securities that may be developed in the future.

Asset-backed securities present certain risks that are not presented by
mortgage-related securities. Primarily, these securities may provide the Series
with a less effective security interest in the related collateral than do
mortgage-related securities. Therefore, there is the possibility that recoveries
on the underlying collateral may not, in some cases, be available to support
payments on these securities.

Municipal Obligations - (Growth and Income, Low Duration High Yield
Securities 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 - (Balanced, 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 (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.

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 - (Balanced, 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,
Low Duration High Yield Securities, 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 Low
Duration High Yield Securities, 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."

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 - (Balanced, Growth and Income, Low Duration High Yield
Securities, 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 and
Duff are of poor standing and may be in default or there may be present elements
of danger with respect to principal or interest. Securities rated C by Moody's
are regarded as having extremely poor prospects of ever attaining any real
investment standing. Securities rated D by S&P, Fitch and Duff are in default
and the payment of interest and/or repayment of principal is in arrears. 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>

DREYFUS VARIABLE INVESTMENT FUND
PART B
(STATEMENT OF ADDITIONAL INFORMATION)
MAY 1, 1997

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 May 1, 1997, 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. (Balanced, 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. (Balanced, Capital Appreciation, Disciplined
Stock, Growth and Income, International Equity, International Value, Low
Duration High Yield Securities, 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, Low Duration High Yield
Securities 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. (Balanced,
Growth and Income and Low Duration High Yield Securities Portfolios)
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. (Balanced,
Growth and Income and Low Duration High Yield Securities Portfolios)
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 and Low Duration High Yield Securities Portfolios) 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, Low Duration High Yield Securities and,
to a limited extent, Balanced, 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, Low Duration High Yield Securities
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. (Balanced, Disciplined Stock, Growth and Income,
International Equity, International Value, Low Duration High Yield Securities,
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. (Balanced, Disciplined Stock, Growth
and Income, International Equity, International Value, Low Duration High Yield
Securities, 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 Balanced, 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, Low
Duration High Yield Securities, 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, Low
Duration High Yield Securities, 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.

Interest Rate Swaps. (Low Duration High Yield Securities Portfolio)
Interest rate swaps involve the exchange by the Series with another party of
their respective commitments to pay or receive interest (for example, an
exchange of floating rate payments for fixed-rate payments). The exchange
commitments can involve payments to be made in the same currency or in different
currencies. The use of interest rate swaps is a highly specialized activity
which involves investment techniques and risks different from those associated
with ordinary portfolio security transactions. If the Manager is incorrect in
its forecasts of market values, interest rates and other applicable factors, the
investment performance of the Series would diminish compared with what it would
have been if these investment techniques were not used. Moreover, even if the
Manager is correct in its forecasts, there is a risk that the swap position may
correlate imperfectly with the price of the asset or liability being hedged.
There is no limit on the amount of interest rate swap transactions that may be
entered into by the Series. These transactions do not involve the delivery of
securities or other underlying assets or principal. Accordingly, the risk of
loss with respect to interest rate swaps is limited to the net amount of
interest payments that the Series is contractually obligated to make. If the
other party to an interest rate swap defaults, the Series' risk of loss consists
of the net amount of interest payments that the Series contractually is entitled
to receive.

Credit Derivatives. (Low Duration High Yield Securities Portfolio) The
Series may engage in credit derivative transactions. There are two broad
categories of credit derivatives: default price risk derivatives and market
spread derivatives. Default price risk derivatives are linked to the price of
reference securities or loans after a default by the issuer or borrower,
respectively. Market spread derivatives are based on the risk that changes in
market factors, such as credit spreads, can cause a decline in the value of a
security, loan or index. There are three basic transactional forms for credit
derivatives: swaps, options and structured instruments. The use of credit
derivatives is a highly specialized activity which involves strategies and risks
different from those associated with ordinary portfolio security transactions.
If the Manager is incorrect in its forecasts of default risks, market spreads or
other applicable factors, the investment performance of the Series would
diminish compared with what it would have been if these techniques were not
used. Moreover, even if the manager is correct in its forecasts, there is a risk
that a credit derivative position may correlate imperfectly with the price of
the asset or liability being hedged. There is no limit on the amount of credit
derivative transactions that may be entered into by the Series. The Series' risk
of loss in a credit derivative transaction varies with the form of the
transaction. For example, if the Series purchases a default option on a
security, and if no default occurs with respect to the security, the Series'
loss is limited to the premium it paid for the default option. In contrast, if
there is a default by the grantor of a default option, the Series' loss will
include both the premium that it paid for the option and the decline in value of
the underlying security that the default option hedged.

Options-In General. (Balanced, Disciplined Stock, Growth and Income,
International Equity, Low Duration High Yield Securities, 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 Balanced, 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, Low Duration High Yield
Securities, 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.

Each of the Disciplined Stock, Growth and Income, International
Equity, Managed Assets and Small Company Stock Portfolios may purchase
cash-settled options on equity index swaps and the Low Duration High Yield
Securities Portfolio may purchase cash-settled options on interest rate 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.

Portfolio Maturity. (Low Duration High Yield Securities Portfolio)
Under normal market conditions, the average effective portfolio maturity is
expected to be four years or less for the Low Duration High Yield Securities
Portfolio. For purposes of calculating average effective portfolio maturity, a
security that is subject to redemption at the option of the issuer on a
particular date (the "call date") which is prior to the security's stated
maturity may be deemed to mature on the call date rather than on its stated
maturity date. The call date of a security will be used to calculate average
effective portfolio maturity when the Manager reasonably anticipates, based upon
information available to it, that the issuer will exercise its right to redeem
the security. The Manager may base its conclusion on such factors as the
interest rate paid on the security compared to prevailing market rates, the
amount of cash available to the issuer of the security, events affecting the
issuer of the security, and other factors that may compel or make it
advantageous for the issuer to redeem a security prior to its stated maturity.

Investment Considerations and Risks

Lower Rated Securities. (Growth and Income, Low Duration High Yield
Securities, 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.

* * *

Balanced, Disciplined Stock, Growth and Income, International Equity,
International Value, Low Duration High Yield Securities and Small Company Stock
Portfolios. Each of these Series has adopted investment restrictions numbered 1
through 8 as fundamental policies, and each of the Baalanced, Disciplined Stock,
International Value, Low Duration High Yield Securities 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 Balanced, Disciplined Stock, International Value, Low Duration High Yield
Securities 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.

JAMESF. 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, 1996, 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 $___ for all Board members as a group.

Officers of the Fund

MARIEE. 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. KEELEY, 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 February 13, 9967:

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,
______, 1997. 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 Balanced, Growth and Income, International Equity, Disciplined Stock, Low
Duration High Yield Securities,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 ___
23, 1997. 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; William T. Sandalls, Jr., Senior Vice
President and Chief Financial Officer; 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, Burton C. Borgelt and Frank V. Cahouet, directors.

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 Hilary R. Woods
Paul Kandel
Growth and Income Richard Hoey

International Equity Ronald Chapman

Managed Assets Timothy M. Ghriskey

Capital Appreciation Russell B. Hawkins
Fayez S. Sarofim

Disciplined Stock Bert Mullins

Small Company Stock James Wadsworth

International Value Sandor Cseh

Balanced Laurie Carroll
Ron Gala

Low Duration
High Yield Securities Roger King

The Manager, 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, 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 adviser). 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, 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 Balanced
and Low Duration High Yield Securities Portfolios) for the fiscal years ended
December 31, 1994, 1995 and 1996 (to the extent the Series was operational) were
as follows:

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

Fee Paid for Year Ended December 31, 1996 [TO BE PROVIDED]

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 fiscal years ended
December 31, 1994, 1995 and 1996 amounted to $18,022, $57,217 $_____,
respectively. However, no sub-advisory fee was paid to Fayez Sarofim & Co. for
the fiscal year ended December 31, 1994 pursuant to an undertaking then in
effect.

Prior to December 31, 1996, Comstock Partners, Inc. served as sub-
investment adviser for the Managed Assets Portfolio pursuant to a Sub-
Investment Advisory Agreement (the "Comstock Sub-Advisory Agreement") with the
Fund dated May 21, 1990. The Comstock Sub-Advisory Agreement was terminated as
of December 31, 1996. As compensation for Comstock Partners, Inc.'s services,
the Fund 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, 1994, 1995 and 1996 amounted to $79,001,
$108,913 and $____, 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.

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 and for the period January 1, 1996 through April 1,
1996, the Manager paid M&G Investment Management Limited a sub-advisory fees in
the amount of $4,800 and $____ respectively.

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, 1996 (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 Capital Appreciation Portfolio, Fayez
Sarofim & Co.) 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 Capital
Appreciation Portfolio, Fayez Sarofim & Co.), or the Manager (and, with respect
to the and Capital Appreciation Portfolio, Fayez Sarofim & Co.) 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) 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, Low Duration High Yield Securities 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.

Balanced, 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 Balanced and Low Duration High Yield Securities
Portfolios which had not commenced operations as of December 31, 1996) has
qualified as a "regulated investment company" under the Code for the fiscal year
ended December 31, 1996. It is expected that each of the Balanced and Low
Duration High Yield Securities 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, 1994, 1995 and 1996. There were no
concessions on principal transactions for the fiscal years ended December 31,
1994, 1995 and 1996, except that concessions on principal transactions for the
Quality Bond Portfolio, where determinable, amounted to $_____ for the fiscal
year ended December 31, 1996, 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.

Balanced, Capital Appreciation, Disciplined Stock, Growth and Income,
International Equity, International Value, Low Duration High Yield Securities,
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, 1994, 1995 and 1996, the Managed Assets Portfolio paid
brokerage commissions of $38,724, $45,926 and $______, 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 $21,115, $3,165 and $______ for the fiscal years ended
December 31, 1994, 1995 and 1996, respectively, none of which was paid to the
Distributor.

In connection with its portfolio securities transactions for the fiscal
years ended December 31, 1994, 1995 and 1996, the Small Cap Portfolio paid
brokerage commissions of $409,523, $1,240,756 and $_______, 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 $402,933, $3,918,624 and $________ for the fiscal
years ended December 31, 1994, 1995 and 1996, respectively, none of which was
paid to the Distributor.

In connection with its portfolio securities transactions for the fiscal
years ended December 31, 1994, 1995 and 1996, the Capital Appreciation Portfolio
paid brokerage commissions of $8,911, $26,346 and $_______, 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 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
years ended December 31, 1995 and 1996, the Growth and Income Portfolio paid
brokerage commissions of $6,175, $277,680 and $_______, 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 years
ended December 31, 1995 and 1996, the International Equity Portfolio paid
brokerage commissions of $5,171, $41,932 and $_______, 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 December 31,
1996 for the following Series were:

Effective
Series Yield Yield

Money Market ____% ____%

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 December 31, 1996 for the
following Series were:

Current
Series Yield

Zero Coupon 2000 ____%
Quality Bond ____%

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 _____-year period
Series ended December 31, 1996 ended December 31, 1996 ended December 31, 1996

Zero Coupon 2000 ____% _____% _____%
Quality Bond ____% _____% _____%
Managed Assets ____% _____% _____%
Small Cap ____% _____% _____%
</TABLE>

1-year period _____-year period
ended December 31, 1996 ended December 31, 1996

Capital Appreciation _____% _____%

1-year period _____-year period
ended December 31, 1996 ended December 31, 1996

Growth and Income _____% _____%
International Equity _____% _____%

_____-year period
ended December 31, 1996

Small Company Stock _____%
Disciplined Stock _____%
International Value _____%

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 December 31, 1996

Zero Coupon 2000 _____%
Quality Bond _____%
Managed Assets _____%
Small Cap _____%

April 5, 1993 (commencement of operations) to December 31, 1996

Capital Appreciation _____%

May 2, 1994 (commencement of operations) to December 31, 1996

Growth and Income _____%
International Equity _____%

April 30, 1996 (commencement of operations) to December 31, 1996

Small Company Stock _____%
Disciplined Stock _____
International Value _____%

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.

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 fiscal year ended
December 31, 1996, the Fund paid the Transfer Agent $___.

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 Balanced, Capital Appreciation, Growth and Income, Low Duration High Yield
Securities, 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 transaction charges. For the fiscal year ended December 31,
1996, the Fund paid Mellon Bank N.A. $_________ pursuant to the Custody
Agreement.

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 LLP, 180 Maiden Lane, New York, New York
10038-4982, 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.

Bonds rated CC are minimally protected. Default in payment of interest
and/or principal seems probable over time.

Bonds rated C are in imminent default in payment of interest or principal.

DDD, DD and D

Bonds rated DDD, DD and D are in actual default of interest and/or
principal payments. Such bonds are extremely speculative and should be valued on
the basis of their ultimate recovery value in liquidation or reorganization of
the obligor. DDD represents the highest potential for recovery on these bonds
and D represents the lowest potential for recovery.

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.

Defaulted debt obligations. Issuer has failed to meet scheduled principal
and/or interest payments.

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, 1996 for each Series (other than the Balanced and Low Duration High Yield
Securities Portfolios which had not commenced operations as of December 31,
1996) are separate documents supplied with this Statement of Additional
Information, and the financial statements, accompanying notes and report of
independent auditors appearing therein are incorporated by reference in this
Statement of Additional Information.
DREYFUS VARIABLE INVESTMENT FUND

PART C. OTHER INFORMATION

Item 24. Financial Statements and Exhibits

Included in Part A of the Registration Statement:*

Condensed Financial Information for the period from April
30, 1996 (commencement of operations) to December 31,
1996. 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 three years in the period ended December
31, 1996. Capital Appreciation Portfolio.

Condensed Financial Information for the period from May 2,
1994 (commencement of operations) to December 31, 1994, and
for the two years ended December 31, 1996. 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 six years in the period ended December 31,
1996. 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-December 31, 1996.
Disciplined Stock, Small Company Stock and
International Value Portfolios.

Statement of Investments-December 31, 1996. All
Series, except Disciplined Stock, Small Company Stock
and International Value Portfolios.

Statement of Financial Futures-December 31, 1996.
Managed Assets Portfolio.

Statement of Assets and Liabilities-December 31, 1996.
Disciplined Stock, Small Company Stock and
International Value Portfolios.

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

* To be filed by Amendment.

Statement of Assets and Liabilities-December 31,
1996. All Series, except Disciplined Stock, Small
Company Stock and International Value Portfolios.

Statement of Operations--December 31, 1996.
Disciplined Stock, Small Company Stock and
International Value Portfolios.

Statement of Operations--December 31, 1996. 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 December
31, 1996. Disciplined Stock, Small Company Stock and
International Value Portfolios.

Statement of Changes in Net Assets-for each of the two
years ended December 31, 1996. All Series, except
Disciplined Stock, Small Company Stock, and
International Value Portfolios.

Notes to Financial Statements--for the period April
30, 1996 (commencement of operations) to December 31,
1996. Disciplined Stock, Small Company Stock and
International Value Portfolios.

Notes to Financial Statements--December 31, 1996. All
Series, except Disciplined Stock, Small Company Stock
and International Value Portfolios.

Report of Ernst & Young LLP, Independent Auditors,
dated ____________, 1997.

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.

(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, is incorporated by
reference to Post-Effective Amendment No. 16 to the
Registration Statement on Form N-1A, filed on October 25, 1996.

(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. is
incorporated by reference to Post-Effective Amendment No. 16
to the Registration Statement on Form N-1A, filed on October
25, 1996.

(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.

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

* To be filed by Amendment.

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. 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) (2)
Number of Record
Title of Class Holders as of January 1, 1997

Beneficial Interests,
par value $.001 per share

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

Reference is made to Article EIGHTH of the Registrant's Agreement and
Declaration of Trust filed as Exhibit 1. The application of these provisions is
limited by Article 10 of the Registrant's By- Laws filed as Exhibit 2 and by the
following undertaking set forth in the rules promulgated by the Securities and
Exchange Commission:

Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to trustees, officers and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in
the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in such Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment
by the registrant of expenses incurred or paid by a trustee,
officer or controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such
trustee, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public
policy as expressed in such Act and will be governed by the final
adjudication of such issue.

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

Item 28(a). Business and Other Connections of Investment Adviser

The Dreyfus Corporation ("Dreyfus") and its subsidiary companies comprise a
financial service organization whose business consists primarily of providing
investment management services as the investment adviser and manager for
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 Management, Inc., another wholly-owned subsidiary, provides
investment management services to various pension plans, institutions and
individuals.

Officers and Directors of Dreyfus

Name and Position with
Dreyfus Other Businesses

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

BURTON C. BORGELT Chairman Emeritus of the Board:
Director Past Chairman, Chief Executive Officer
and director:
Dentsply International, Inc.
570 West College Avenue
York, Pennsylvania 17405
Director:
DeVlieg-Bullard, Inc.
1 Gorham Island
Westport, Connecticut 06880
Mellon Bank Corporation;***
Mellon Bank, N.A.***

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

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

STEPHEN E. CANTER Former Chairman and Chief Executive
Vice Chairman, Chief Officer:
Investment Officer and Kleinwort Benson Investment Management
a Director 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:
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 & Trust*****

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;*
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.

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

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*

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

PATRICE M. KOZLOWSKI None
Vice President-
Corporate Communications

MARY BETH LEIBIG None
Vice President-
Human Resources

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 Adviser

Registrant is fulfilling the requirement of this Item 28(b) to provide a
list of the officers and directors of Fayez Sarofim & Co., the sub-investment
adviser to Registrant's Capital Appreciation Portfolio (the "Sub-Adviser"),
together with information as to any other business, profession, vocation or
employment of a substantial nature engaged in by the Sub-Adviser 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 the Sub-Adviser (SEC File No. 801-1725).

Item 29. Principal Underwriters

(a) Other investment companies for which Registrant's prin cipal
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 Fund, 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 MidCap Index Fund
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 Michigan Municipal Money Market Fund, Inc.
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 Short-Intermediate Government Fund
63. Dreyfus Short-Intermediate Municipal Bond Fund
64. The Dreyfus Socially Responsible Growth Fund, Inc.
65. Dreyfus S&P 500 Fund
66. Dreyfus Stock Index Fund
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 California Municipal Bond Fund
82. Premier Equity Funds, Inc.
83. Premier Global Investing, Inc.
84. Premier GNMA Fund
85. Premier Growth Fund, Inc.
86. Premier Insured Municipal Bond Fund
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 offices with Positions and
Name and principal Premier Mutual offices with
business address Fund Services, Inc. Registrant

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

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

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

Roy M. Moura+ First Vice President None

Dale F. Lampe+ Vice President None

Paul Prescott+ Vice President None

Elizabeth A. Keeley++ Attorney Vice President
and Assistant
Secretary

Mary A. Nelson+ Assistant Treasurer None

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, Massa
chusetts 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 02903-9671

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

Registrant hereby undertakes

(1) to file a post-effective amendment, using financial
statements which need not be certified, within four to six
months from the effective date of Registrant's 1933
Act Registration Statement with respect to the
Registrant's Balanced and Low Duration High Yield
Securities Portfolios.

(2) to call a meeting of shareholders for the purpose of
voting upon the question of removal of a Board member
or Board members when requested in writing to do so by
the holders of at least 10% of the Registrant's
outstanding shares 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.

(3) To furnish each person to whom a prospectus is delivered
with a copy of the Registrant's latest Annual Report to
Shareholders, upon request and without charge.
<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant 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 13th day of February, 1997.

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 2/13/97
______________________ Executive and Financial Officer)
Marie E. Connolly

/s/Joseph F. Tower* Assistant Treasurer(Principal 2/13/97
______________________ Accounting Officer)
Joseph F. Tower

/s/ Joseph S. DiMartino* Trustee 2/13/97
- -----------------------
Joseph S. DiMartino

/s/ David P. Feldman* Trustee 2/13/97
- -----------------------
David P. Feldman

/s/ John M. Fraser, Jr.* Trustee 2/13/97
- -----------------------
John M. Fraser, Jr.

/s/ Robert R. Glauber* Trustee 2/13/97
- -----------------------
Robert R. Glauber

/s/ James F. Henry* Trustee 2/13/97
- -----------------------
James F. Henry

/s/ Rosalind Gersten Jacobs* Trustee 2/13/97
- --------------------------
Rosalind Gersten Jacobs

/s/ Irving Kristol* Trustee 2/13/97
- ------------------------
Irving Kristol

/s/ Dr. Paul A. Marks* Trustee 2/13/97
- ------------------------
Dr. Paul A. Marks

/s/ Dr. Martin Peretz* Trustee 2/13/97
- ------------------------
Dr. Martin Peretz

/s/ Bert W. Wasserman* Trustee 2/13/97
- -------------------------
Bert W. Wasserman

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