August 2, 1994
DREYFUS NEW YORK TAX EXEMPT FUNDS
SUPPLEMENT TO COMBINED PROSPECTUS
DATED JULY 25, 1994
I. PROPOSED MERGER OF THE DREYFUS CORPORATION
The Dreyfus Corporation ("Dreyfus"),the adviser to the MONEY MARKET
FUND and the LONGER TERM FUNDS, has entered into an Agreement and Plan
of Merger providing for the merger (the "Merger") of Dreyfus with a
subsidiary of Mellon Bank, N.A. ("Mellon").
Following the Merger, it is planned that Dreyfus will be a direct
subsidiary of Mellon. Closing of the Merger is subject to a number of
contingencies, including approvals of the stockholders of Dreyfus and of
Mellon. The Merger is expected to occur in late August 1994, but could
occur significantly later.
The Merger will result in the automatic termination of each Fund's
current investment advisory agreement with Dreyfus, as required by the
Investment Company Act of 1940, as amended. The Merger also will
necessitate implementation of a new Service Plan as to the INTERMEDIATE
BOND FUND only.
II. RESULTS OF EACH FUND'S SHAREHOLDER VOTE
THE FOLLOWING INFORMATION SUPPLEMENTS AND SUPERSEDES ANY
CONTRARY INFORMATION CONTAINED IN THE PROSPECTUS.
On August 2, 1994, each Fund's shareholders voted respectively to
approve a new investment advisory agreement with Dreyfus, and the
shareholders of the INTERMEDIATE BOND FUND voted to approved a new
Service Plan, all to become effective upon consummation of the Merger.
The shareholders of each LONGER TERM FUND voted to approve,
respectively, changes to certain of each Fund's fundamental policies and
investment restrictions to permit each Fund to (i) borrow money to the
extent permitted under the Investment Company Act of 1940, as amended
and (ii) pledge its assets to the extent necessary to secure permitted
borrowings and make such policy non-fundamental. Shareholders of the
MONEY MARKET FUND voted to approve certain changes to the Fund's
fundamental policy and investment restrictions to (i) increase to 15% of
the value of the Fund's net assets the amount the Fund may borrow from
banks for temporary or emergency (not leveraging) purposes, (ii) permit
the Fund to pledge its assets to the extent necessary to secure borrowings
and make such policy non-fundamental, and (iii) permit the Fund to invest
up to 10% of the value of its net assets in illiquid securities and make
such policy non-fundamental.
III. REVISED MANAGEMENT POLICIES
THE FOLLOWING INFORMATION SUPPLEMENTS AND SHOULD BE READ IN
CONJUNCTION WITH, AND SUPERCEDES ANY CONTRARY INFORMATION
CONTAINED IN, THE SECTION IN THE PROSPECTUS ENTITLED "DESCRIPTION
OF THE FUNDS __ MANAGEMENT POLICIES."
BORROWING MONEY __ As a fundamental policy, each LONGER TERM FUND
is permitted to borrow to the extent permitted under the Investment
Company Act of 1940. However, each LONGER TERM FUND currently intends
to borrow money only for temporary or emergency (not
(CONTINUED ON REVERSE SIDE)
leveraging) purposes, in an amount up to 15% of the value of such Fund's
respective 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. As a Fundamental policy, the
MONEY MARKET FUND is permitted to borrow money only from banks for
temporary or emergency (not leveraging) purposes, in an amount up to 15%
of the value of the Fund's respective total assets (including the amount
borrowed) valued at the lesser of cost or market, less liability (not
including the amount borrowed) at the time the borrowing is made. While
borrowings exceed 5% of each Fund's total assets, such Fund will not make
any additional investments.
NYTEF/stkr080294
August 2, 1994
DREYFUS NEW YORK TAX EXEMPT FUNDS
Supplement to Combined Statement of Additional Information
Dated July 25, 1994
At a meeting of each Fund shareholders held on August 2, 1994, each
Fund's respective shareholders approved certain new Investment
Restrictions which supersede and replace current Investment Restrictions
numbered 2, 3, and 6 as to the Money Market Fund, and 2 and 10 as to each
Longer Term Fund in the section of the Statement of Additional Information
entitled "Investment Restrictions." Investment Restriction number 2 for
each Fund is a fundamental policy and cannot be changed without approval
by the holders of a majority (as defined in the Investment Company Act of
1940, as amended (the "Act") of a Fund's outstanding voting shares.
Investment Restrictions numbered 3 and 6 as to the Money Market Fund, and
10 as to each Longer Term Fund are not fundamental policies and may be
changed by vote of a majority of a Fund's Board members at any time. The
Money Market Fund may not:
2. Borrow money, except from banks for temporary or emergency (not
leveraging) purposes in an amount up to 15% of the value of the Fund's
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. While borrowings exceed 5% of the value of
the Fund's total assets, the Fund will not make any additional
investments.
3. Pledge, mortgage, hypothecate or otherwise encumber its assets,
except to the extent necessary to secure permitted borrowings.
6. Enter into repurchase agreements providing for settlement in
more than seven days after notice or purchase securities which are
illiquid (which securities could include participation interests
(including municipal lease/purchase agreements) that are not subject to
the demand feature described in the Fund's Prospectus and floating and
variable rate demand notes and bonds as to which the Fund cannot exercise
the demand feature described in the Fund's Prospectus on less than seven
days' notice and as to which there is no secondary market) if, in the
aggregate, more than 10% of the value of the Fund's net assets would be so
invested.
Each Longer Term Fund may not:
2. Borrow money, except to the extent permitted under the Act. For
purposes of this investment restriction, entering into options, forward
contracts, futures contracts, including those relating to indexes, and
options on futures contracts or indexes shall not constitute borrowing.
10. Pledge, mortgage, hypothecate or otherwise encumber its assets,
except to the extent necessary to secure permitted borrowings and to the
extent related to the deposit of assets in escrow in connection with the
purchase of securities on a when-issued or delayed-delivery basis and
collateral and initial or variation margin arrangements with respect to
options, futures contracts, including those related to indexes, and
options on futures contracts or indexes.
The following information supplements and should be read in
conjunction with the section in the Fund's Statement of Additional
Information entitled "Investment Objective and Management Policies", and
applies to the Money Market Fund only.
Illiquid Securities. When purchasing securities that have not been
registered under the Securities Act of 1933, as amended, and are not
readily marketable, the Fund will endeavor to obtain the right to
registration at the expense of the issuer. Generally, there will be a
lapse of time between the Fund's 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, if a substantial market of qualified institutional buyers
develops pursuant to Rule 144A under the Securities Act of 1933, as
amended, for certain unregistered securities held by the Fund, the Fund
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 restricted securities pursuant
to Rule 144A will develop, the Fund's Board has directed the Manager to
monitor carefully the Fund's 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, the Fund's investing in such securities
may have the effect of increasing the level of illiquidity in the Fund's
portfolio during such period.
