YEAR 2000 ISSUES (UNAUDITED)
The fund could be adversely affected if the computer systems used by The
Dreyfus Corporation and the fund' s other service providers do not properly
process and calculate date-related information from and after January 1, 2000.
The Dreyfus Corporation is working to avoid Year 2000-related problems in its
systems and to obtain assurances from other service providers that they are
taking similar steps. In addition, issuers of securities in which the fund
invests may be adversely affected by Year 2000-related problems. This could have
an impact on the value of the fund's investments and its share price.
DREYFUS VARIABLE INVESTMENT FUND, MONEY MARKET PORTFOLIO
- --------------------------------------------------------------------------------
LETTER TO SHAREHOLDERS
Dear Shareholder:
We are pleased to report the performance for the Dreyfus Variable Investment
Fund -- Money Market Portfolio for the 12-month period ended December 31, 1998.
For the period, your Portfolio produced a yield of 5.01% and, after taking into
account the effect of compounding, the effective yield was 5.12%.*
ECONOMIC REVIEW
During 1998, the main regions of the world had very different economic
fundamentals. The U.S. entered the year with a strong economy near full
employment, with unemployment only slightly above 4%. The tight labor market led
the Federal Reserve Board to contemplate a rise in interest rates early in the
year, but world economic weakness generated powerful enough disinflationary
forces that the Fed acted instead to ease credit beginning in September. After
many years of subpar economic growth, continental Europe moved into a sustained
economic expansion. The overall European economy benefited as interest rates in
peripheral countries such as Spain and Italy fell, approaching the lower levels
established by Germany, on the eve of currency unification. Unlike the U.S.,
Europe has substantial excess capacity of productive plant and labor. In Asia,
weak economies were pervasive as a result of a financial crisis. The Latin
American economies weakened in turn as the financial stresses spread throughout
that region. On balance, there was a substantial weakening of the world economy
over the course of 1998 moderated mainly by the American consumer's role as
"spender of last resort."
A main influence on the U.S. economy during the year was the foreign financial
crisis and consequent cooling of the world economy. The positive effects hit
first. Actual inflation and expected inflation dropped, causing a decline in
long-term Treasury bond yields and mortgage rates. This caused a boom in
housing. The fall in inflation left more of the growth in consumer income with
which to buy goods and services. Thus, consumers benefited from a combination of
good growth in income after inflation, a strong labor market, and increases in
the prices of assets they owned, including bonds, stocks and real estate. In a
sense, 1998 was a year of disinflationary boom in the U.S., as above-trend
economic growth coincided with negligible inflation.
The negative effect of Asian weakness was felt in the industrial sector more
than in the consumer sector. Corporate profits weakened, especially in sectors
affected by the Asian crisis such as world-traded commodities (oil, metals and
paper) and exports.
Evidence of a weaker world economy accumulated during 1998 as the financial
stresses continued. A worsened financial crisis occurred between the Russian
default in mid-August and the fallout from the Long Term Capital Management
hedge fund crisis through early October. However, energetic steps were taken to
stabilize the Japanese banks, design a support package for Brazil, ease monetary
policy, and help overinvested financial institutions rebuild their cash
reserves. Indications of a calming of financial fears were evident in the final
months of the year. In any case, there appears to have been a shift in the
priorities of key policymakers from fighting potential inflation to
restimulating future world economic growth.
The global economy survived a triple financial crisis in 1998 from Japan,
emerging market countries and overextended financial institutions. Excess
capacity persists in many worldwide industries after years of high capital
spending followed by the onset of a worldwide weakening in demand. Fortunately,
the U.S. has led the world in making the transition from the old manufacturing
industries to the new growth industries, such as biotechnology, software,
computer hardware and the Internet. This contributed to the favorable
combination of low unemployment and low inflation in the U.S., and may yet lead
toward more efficient allocation of capital elsewhere in the world.
As 1998 ended, interest rates set by central banks remained in a downtrend in
most parts of the world including Europe and the U.S. A similar trend had even
begun in many emerging countries, as the stresses of financial crisis relaxed.
MARKET ENVIRONMENT/PORTFOLIO FOCUS
The economic forces described above drove down interest rates in late summer
and early fall. Later in the year there was a modest increase in rates. One of
its effects was to change the yield curve from one that had been negative to a
positive, sloping structure. In this normal configuration, longer-term yields
exceeded those of the shorter-term instruments.
A flight to safety by global investors was the force that drove down
longer-term U.S. yields last fall. In recent weeks, investors appear to have
become more confident about the economic outlook. One factor has been the rise
in interest rates in Japan, which brought about some repatriation of investment
funds to that country. In addition, the introduction of the Euro currency at the
start of the new year, which was well received, put some downward pressure on
the U.S. dollar.
Investor fears of worldwide financial turmoil seemed to have receded recently.
Currently, prices and rates in the money market appear to be reacting more to
underlying economic forces than to such market psychology factors. This, of
course, can be constructive for investors in short-term money market
instruments.
The fact that the Federal Reserve Open Market Committee lowered interest rates
three times between late September and year-end seems to have been a strong
confidence-building factor in the markets. Currently, we expect the Fed to
remain in a "wait and see" mode for a while.
During the reporting period, we lengthened the average portfolio maturity, as
we deemed appropriate in order to take advantage of possible declining interest
rates. We will continue to monitor the market, including interest rates, in
seeking investment opportunities for the Portfolio.
Sincerely,
[Patricia A. Larkin signature]
Patricia A. Larkin
Senior Portfolio Manager
January 13, 1999
New York, N.Y.
* Effective yield is based upon dividends declared daily and reinvested monthly.
The Portfolio's performance does not reflect the deduction of additional charges
imposed in connection with investing in variable annuity contracts and variable
life insurance policies.
<TABLE>
DREYFUS VARIABLE INVESTMENT FUND, MONEY MARKET PORTFOLIO
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS DECEMBER 31, 1998
Principal
Negotiable Bank Certificates of Deposit--12.9% Amount Value
- ----------------------------------------------------- ____________ ____________
<S> <C> <C>
Branch Bank & Trust Co.
5.04%, 1/10/00 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,500,000 $ 2,499,262
Credit Suisse First Boston ( Yankee )
4.86%, 4/14/99 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,000,000 3,000,000
Lasalle National Bank
5.67%, 4/13/99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,000,000 3,000,000
Societe Generale
4.88%, 2/23/99 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,000,000 2,999,830
____________
TOTAL NEGOTIABLE BANK CERTIFICATES OF DEPOSIT
(cost $11,499,092) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $11,499,092
____________
Commercial Paper--47.8%
- -----------------------------------------------------
Bear Stearns Companies, Inc.
5.67%, 1/14/99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,000,000 $ 2,994,042
Canadian Imperial Holdings
5.04%, 6/28/99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,000,000 2,927,094
Ciesco L.P.
5.24%, 2/3/99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,000,000 3,980,897
Countrywide Home Loans
5.43%, 1/19/99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,000,000 2,991,900
FINOVA Capital Corp.
5.27%-5.34%, 1/14/99-3/19/99 . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,000,000 3,965,055
General Electric Capital Corp.
5.01%, 6/9/99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,000,000 2,935,208
General Electric Capital Services Inc.
5.01%, 6/9/99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,000,000 2,935,208
Goldman Sachs Group L.P.
5.14%, 4/20/99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,000,000 2,954,583
Hertz Corp.
5.29%, 1/27/99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,000,000 3,984,862
Merrill Lynch & Co. Inc.
5.06%, 1/14/99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,000,000 2,994,583
Morgan (J.P.) & Co.
5.04%, 4/16/99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,000,000 3,942,133
Paine Webber Group Inc.
5.71%, 1/7/99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,000,000 2,997,200
Swedbank Inc.
5.08%, 4/14/99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,000,000 2,957,513
____________
TOTAL COMMERCIAL PAPER
(cost $42,560,278) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $42,560,278
____________
DREYFUS VARIABLE INVESTMENT FUND, MONEY MARKET PORTFOLIO
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1998
Principal
Corporate Notes--14.7% Amount Value
- ----------------------------------------------------- ____________ ____________
CIT Group Holdings Inc.
4.87%, 9/21/99 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,000,000 $ 2,999,367
Heller Financial Inc.
5.05%-5.36%, 4/13/99-11/1/99 (a) . . . . . . . . . . . . . . . . . . . . . . . . . 4,050,000 4,070,529
IBM Credit Corp.
4.85%, 6/18/99 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,000,000 2,999,191
Salomon Smith Barney Holdings, Inc.
5.00%, 10/28/99 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,000,000 3,000,000
____________
TOTAL CORPORATE NOTES
(cost $13,069,087) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $13,069,087
____________
Short-Term Bank Notes--16.6%
- -----------------------------------------------------
Bankers Trust N.Y. Corp.
4.90%, 3/19/99 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,000,000 $ 999,917
Bank of America FSB
5.03%, 6/15/99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,000,000 3,058,496
Citigroup
5.16%, 4/15/99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,000,000 2,019,878
First Union National Bank
5.21%, 9/24/99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,000,000 3,000,000
Key Bank N.A.
4.87%, 2/24/99 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,000,000 2,999,698
Norwest Corp.
5.09%, 10/15/99 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,685,000 2,731,354
____________
TOTAL SHORT-TERM BANK NOTES
(cost $14,809,343) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $14,809,343
____________
Time Deposits--4.5%
- -----------------------------------------------------
Westdeutsche Landesbank Girozentrale (Grand Cayman)
5.25%, 1/4/99
(cost $4,000,000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,000,000 $ 4,000,000
____________
DREYFUS VARIABLE INVESTMENT FUND, MONEY MARKET PORTFOLIO
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1998
Principal
Repurchase Agreements--3.3% Amount Value
- ----------------------------------------------------- ____________ ____________
SBC Warburg Dillon Read Inc.
4.25%, dated 12/31/98, due 1/4/99 in the amount
of $2,940,388 (fully collateralized by
$3,058,000 U.S. Treasury Bills, due 6/3/99,
value $3,000,049)
(cost $2,939,000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,939,000 $ 2,939,000
____________
TOTAL INVESTMENTS
(cost $88,876,800) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99.8% $88,876,800
_______ ____________
CASH AND RECEIVABLES (NET) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2% $ 147,906
_______ ____________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.0% $89,024,706
_______ ____________
Notes to Statement of Investment:
- -----------------------------------------------------------------------------
(a) Variable interest rate--subject to periodic change.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
DREYFUS VARIABLE INVESTMENT FUND, MONEY MARKET PORTFOLIO
- -----------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES DECEMBER 31, 1998
Cost Value
_______________ ______________
<S> <C> <C>
ASSETS: Investments in securities--See Statement
of Investments--Note 1(b) . . . . . . . . . . . . . . . . . . $88,876,800 $88,876,800
Interest receivable . . . . . . . . . . . . . . . . . . . . . . 429,750
Prepaid expenses and other assets . . . . . . . . . . . . . . . 2,080
____________
89,308,630
____________
LIABILITIES: Due to The Dreyfus Corporation and affiliates . . . . . . . . . 37,706
Cash overdraft due to Custodian . . . . . . . . . . . . . . . . 48,395
Payable for shares of Beneficial Interest redeemed . . . . . . 181,753
Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . 16,070
____________
283,924
____________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $89,024,706
____________
REPRESENTED BY: Paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . $89,028,815
Accumulated net realized gain (loss) on investments . . . . . . (4,109)
____________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $89,024,706
____________
SHARES OUTSTANDING
(UNLIMITED NUMBER OF $.001 PAR VALUE SHARES OF BENEFICIAL INTEREST AUTHORIZED) . . . . . . 89,028,815
NET ASSET VALUE, offering and redemption price per share . . . . . . . . . . . . . . . . . $1.00
______
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
DREYFUS VARIABLE INVESTMENT FUND, MONEY MARKET PORTFOLIO
- -----------------------------------------------------------------------------
STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 1998
INVESTMENT INCOME
<S> <C> <C>
INCOME Interest Income . . . . . . . . . . . . . . . . . . . . . . . . $4,141,842
EXPENSES: Investment advisory fee--Note 2(a) . . . . . . . . . . . . . . $ 371,422
Professional fees . . . . . . . . . . . . . . . . . . . . . . . 16,991
Prospectus and shareholders' reports . . . . . . . . . . . . 12,202
Custodian fees . . . . . . . . . . . . . . . . . . . . . . . . 8,080
Registration fees . . . . . . . . . . . . . . . . . . . . . . . 6,738
Trustees' fees and expenses--Note 2(b) . . . . . . . . . . . 1,370
Shareholder servicing costs . . . . . . . . . . . . . . . . . . 715
____________
Total Expenses . . . . . . . . . . . . . . . . . . . . . 417,518
____________
INVESTMENT INCOME--NET . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,724,324
NET REALIZED GAIN (LOSS) ON INVESTMENTS--Note 1(b) . . . . . . . . . . . . . . . . . . . . (2,038)
____________
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS . . . . . . . . . . . . . . . . . . $3,722,286
____________
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
DREYFUS VARIABLE INVESTMENT FUND, MONEY MARKET PORTFOLIO
- -----------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
Year Ended Year Ended
December 31, 1998 December 31, 1997
__________________ __________________
<S> <C> <C>
OPERATIONS:
Investment income--net . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,724,324 $ 3,093,574
Net realized gain (loss) on investments . . . . . . . . . . . . . . . . . . . (2,038) (1,289)
____________ ____________
Net Increase (Decrease) in Net Assets Resulting from Operations . . . . . . 3,722,286 3,092,285
____________ ____________
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,724,324) (3,093,574)
____________ ____________
BENEFICIAL INTEREST TRANSACTIONS ($1.00 per share):
Net proceeds from shares sold . . . . . . . . . . . . . . . . . . . . . . . . 98,705,448 62,971,700
Dividends reinvested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,724,324 3,093,574
Cost of shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . (78,031,019) (57,622,106)
____________ ____________
Increase (Decrease) in Net Assets from Beneficial Interest Transactions . . 24,398,753 8,443,168
____________ ____________
Total Increase (Decrease) in Net Assets . . . . . . . . . . . . . . . . . 24,396,715 8,441,879
NET ASSETS:
Beginning of Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64,627,991 56,186,112
____________ ____________
End of Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 89,024,706 $ 64,627,991
____________ ____________
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
DREYFUS VARIABLE INVESTMENT FUND, MONEY MARKET PORTFOLIO
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share of
Beneficial Interest outstanding, total investment return, ratios to average net
assets and other supplemental data for each period indicated. This information
has been derived from the Series' financial statements.
Year Ended December 31,
______________________________________________________
PER SHARE DATA: 1998 1997 1996 1995 1994
_______ _______ _______ _______ _______
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period . . . . . . . . . . $ 1.00 $ !.00 $ 1.00 $ 1.00 $ 1.00
_______ _______ _______ _______ _______
Investment Operations:
Investment income--net . . . . . . . . . . . . . . . . . .050 .050 .050 .055 .043
_______ _______ _______ _______ _______
Distributions:
Dividends from investment income--net . . . . . . . . . . (.050) (.050) (.050) (.055) (.043)
_______ _______ _______ _______ _______
Net asset value, end of period . . . . . . . . . . . . . $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
_______ _______ _______ _______ _______
TOTAL INVESTMENT RETURN. . . . . . . . . . . . . . . . . . . 5.12% 5.19% 5.10% 5.66% 4.37%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets . . . . . . . . . .56% .61% .62% .62% --
Ratio of net investment income to average net assets . . 5.01% 5.08% 4.96% 5.51% 4.62%
Decrease reflected in above expense ratios due to
undertakings by The Dreyfus Corporation . . . . . . . -- -- -- .03% .88%
Net Assets, end of period (000's Omitted) . . . . . . . . $89,025 $64,628 $56,186 $45,249 $34,728
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
DREYFUS VARIABLE INVESTMENT FUND, MONEY MARKET PORTFOLIO
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES:
Dreyfus Variable Investment Fund (the "Fund" ) is registered under the
Investment Company Act of 1940, as amended (the "Act") as an open-end management
investment company, operating as a series company currently offering thirteen
series, including the Money Market Portfolio (the "Series") and is intended to
be a funding vehicle for variable annuity contracts and variable life insurance
policies to be offered by the separate accounts of life insurance companies. The
Series is a diversified portfolio. The Series' investment objective is to
provide as high a level of current income as is consistent with the preservation
of capital and the maintenance of liquidity. The Dreyfus Corporation ("Dreyfus")
serves as the Series' investment adviser. Dreyfus is a direct subsidiary of
Mellon Bank, N.A. Premier Mutual Fund Services, Inc. is the distributor of the
Series' shares, which are sold without a sales charge.
It is the Series' policy to maintain a continuous net asset value per share
of $1.00; the Series has adopted certain investment, portfolio valuation and
dividend and distribution policies to enable it to do so. There is no assurance,
however, that the Fund will be able to maintain a stable net asset value per
share of $1.00.
The Fund accounts separately for the assets, liabilities and operations of
each series. Expenses directly attributable to each series are charged to that
series' operations; expenses which are applicable to all series are allocated
among them on a pro rata basis.
The Series' financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management estimates
and assumptions. Actual results could differ from those estimates.
(A) PORTFOLIO VALUATION: Investments are valued at amortized cost, which has
been determined by the Fund's Board of Trustees to represent the fair value of
the Series' investments.
(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions
are recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Interest income is
recognized on the accrual basis. Cost of investments represents amortized cost.
Under the terms of the custody agreement, the Series received net earnings
credits of $5,637 during the period ended December 31, 1998 based on available
cash balances left on deposit. Income earned under this arrangement is included
in interest income.
The Series may enter into repurchase agreements with financial institutions,
deemed to be creditworthy by the Fund' s Manager, subject to the seller's
agreement to repurchase and the Series' agreement to resell such securities at a
mutually agreed upon price. Securities purchased subject to repurchase
agreements are deposited with the Series' custodian and, pursuant to the terms
of the repurchase agreement, must have an aggregate market value greater than or
equal to the terms of the repurchase price plus accrued interest at all times.
If the value of the underlying securities falls below the value of the
repurchase price plus accrued interest, the Series will require the seller to
deposit additional collateral by the next business day. If the request for
additional collateral is not met, or the seller defaults on its repurchase
obligation, the Series maintains its right to sell the underlying seurities at
market value and may claim any resulting loss against the seller.
(D) DIVIDENDS TO SHAREHOLDERS: It is the policy of the Series to declare
dividends daily from investment income-net. Such dividends are paid monthly.
Dividends from net realized capital gain, if any, are normally declared and paid
annually, but the Series may make distributions on a more frequent basis to
comply with the distribution requirements of the Internal Revenue Code of 1986,
as amended (the "Code"). To the extent that a net realized capital gain can be
offset by capital loss carryovers, it is the policy of the Series not to
distribute such gain.
DREYFUS VARIABLE INVESTMENT FUND, MONEY MARKET PORTFOLIO
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(E) FEDERAL INCOME TAXES: It is the policy of the Series to continue to
qualify as a regulated investment company, if such qualification is in the best
interests of its shareholders, by complying with the applicable provisions of
the Code, and to make distributions of taxable income sufficient to relieve it
from substantially all Federal income and excise taxes.
The Series has an unused capital loss carryover of approximately $3,550
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to December 31, 1998. The
carryover does not include net realized securities losses from November 1, 1998
through December 31, 1998 which are treated, for Federal income tax purposes, as
arising in fiscal 1999. If not applied, $850 of the carryover expires in fiscal
2004, $1,300 expires in fiscal 2005 and $1,400 expires in fiscal 2006.
NOTE 2--INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
(A) Pursuant to an Investment Advisory Agreement with Dreyfus, the investment
advisory fee is computed at the annual rate of .50 of 1% of the value of the
Series' average daily net assets and is payable monthly.
The Series compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of
Dreyfus, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the Series. During the period
ended December 31, 1998, the Series was charged $86 pursuant to the transfer
agency agreement.
(B) Each trustee who is not an "affiliated person" as defined in the Act
receives from the Fund an annual fee of $2,500 and an attendance fee of $250 per
meeting. The Chairman of the Board receives an additional 25% of such
compensation.
DREYFUS VARIABLE INVESTMENT FUND, MONEY MARKET PORTFOLIO
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REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF TRUSTEES
DREYFUS VARIABLE INVESTMENT FUND, MONEY MARKET PORTFOLIO
We have audited the accompanying statement of assets and liabilities,
including the statement of investments, of Dreyfus Variable Investment Fund,
Money Market Portfolio (one of the Series constituting the Dreyfus Variable
Investment Fund) as of December 31, 1998, and the related statement of
operations for the year then ended, the statement of changes in net assets for
each of the two years in the period then ended, and financial highlights for
each of the years indicated therein. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights. Our procedures included confirmation of
securities owned as of December 31, 1998 by correspondence with the custodian
and brokers. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Dreyfus Variable Investment Fund, Money Market Portfolio at December 31, 1998,
the results of its operations for the year then ended, the changes in its net
assets for each of the two years in the period then ended, and the financial
highlights for each of the indicated years, in conformity with generally
accepted accounting principles.
New York, New York
February 4, 1999
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DREYFUS VARIABLE INVESTMENT FUND,
MONEY MARKET PORTFOLIO
200 Park Avenue
New York, NY 10166
INVESTMENT ADVISER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
CUSTODIAN
The Bank of New York
90 Washington Street
New York, NY 10286
TRANSFER AGENT &
DIVIDEND DISBURSING AGENT
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Printed in U.S.A. 117AR9812
Variable
Investment Fund,
MONEY MARKET
PORTFOLIO
Annual Report
December 31, 1998
