DREYFUS STRATEGIC MUNICIPALS, INC.
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LETTER TO SHAREHOLDERS
Dear Shareholder:
We are pleased to provide you with this report on Dreyfus Strategic
Municipals, Inc. for the 12-month period ended September 30, 1998. Your Fund
produced a total return, including share price changes and dividend income
generated, of 8.61% .* During the reporting period, the Fund produced income
dividends exempt from Federal personal income taxes of $0.636 per share.** This
is equivalent to a Federally tax-free distribution rate per share of 6.17%.***
THE ECONOMY
The risk of global recession loomed large by the end of the reporting period.
Since last summer, the international economic crisis has spread from Asia and
Russia into Latin America and its effects are evident in the U.S., as witnessed
by early signs of a slowing in our domestic economy. Second-quarter gross
domestic product grew at an annual rate of 1.8%, well below the 5.5% rate in the
first quarter, while the trade deficit has continued to widen, affected by
weakening foreign demand and low-priced imports. These developments have
heightened a sense of global economic interdependence and have resulted in a
shift in emphasis by the Federal Reserve Board whereby fighting inflation has
taken a subordinate role to that of maintaining stable U.S. economic growth. As
Fed Chairman Alan Greenspan noted in early September: "It is just not credible
that the United States can remain an oasis of prosperity unaffected by a world
that is experiencing greatly increased stress." On September 29, the Federal
Open Market Committee cut interest rates for the first time since January 1996.
That quarter-point reduction in the Federal Funds target rate to 5.25% was
designed to cushion the adverse effects of the overseas economic crisis on the
domestic economy. (The Federal Funds rate is the interest rate that banks charge
each other for overnight loans.)
So far, shock waves from the overseas economic turmoil have been dampened by
the continued propensity of U.S. consumers to spend. In the first half of the
year, their spending outpaced earned income, an unsustainable phenomenon, yet a
telling indicator of the level of consumer optimism. The reasons for such
optimism are no surprise. Inflation remains tame, running at an annual rate
comfortably below 2% . After-tax income is growing. Of great economic and
psychological importance to consumers, jobs are plentiful; the unemployment rate
has been at or near 30-year lows throughout the reporting period and new jobs
have been created at a robust pace.
While the corporate sector wrestles with the economic implications of global
developments, consumers have powered the economy. The consumer sector comprises
two-thirds of the activity in the $8-trillion U.S. economy and, with the
business sector slowing (corporate profits declined in the second quarter for
the first time in nearly a decade) , any significant pullback in household
spending could trigger a recession. Up to now, the spillover effect from
developments abroad has been largely confined to the manufacturing sector, whose
activity has contracted of late due to the falloff in foreign demand. Aside from
this "erosion at the edges" as Chairman Greenspan describes it, layoffs on a
broader scale--a factor that could weaken consumer resolve to spend--so far have
not occurred. It is clear that the Fed is concerned about the possibility of
worldwide recession. The recent interest rate reduction was an initial step
toward mitigating the domestic effects of international financial turmoil and a
gesture meant to serve notice to the world of the seriousness of its purpose.
MARKET ENVIRONMENT
Conditions in the fixed income markets during the past 12 months have been
very dynamic. The normal economic fundamentals that exert the greatest influence
on the direction of interest rates have taken a backseat to other influences.
Price movements have often resulted from factors that are difficult to discern.
Most investors have seen, and perhaps felt, the effects of the Asian and
emerging market crises on stocks; it has only come to light in recent weeks how
dramatic the impact could be on the bond markets. Generally, the various market
sectors respond similarly to economic and other news by moving in the same
direction-though not necessarily at the same pace. However, these are not normal
times. Fear of a widening crisis in the foreign markets has pushed more
investors to the relative safety of U.S. Treasury bonds. Compounding the problem
are substantial hedge fund positions involving complex transactions. The rapid
rise in U.S. Treasury prices has forced the unwinding of many of these positions
which, in turn, has occasionally disrupted the fixed income market.
It is difficult to anticipate when the markets will return to more normal
conditions. The bond markets continue to be driven by foreign events and hedge
funds' deleveraging needs. Mindful of these forces and the prospects for
softening in the domestic economy, it appears that the Fed will have to maintain
an accommodative bias in its conduct of monetary policy.
The impact on municipal securities has generally been positive. Yields have
moved lower throughout the past year, though the path down has not been a smooth
one. With stock prices experiencing significant erosion, more signals of a
slowing economy, and the consensus view that the Fed will act again to lower
short-term interest rates, we believe that the merits of owning tax-exempt
securities are compelling. For example, some "AAA"-rated municipal bonds are
yielding nearly 100% of taxable U.S. Treasury bonds. Furthermore, while newly
issued municipal securities have been marketed at a near record level in 1998,
future projections call for a curtailment in the quantity of issues.
PORTFOLIO FOCUS
In managing the Fund, the generation of income exempt from Federal income tax
is a principal focus. In the current market environment, because of the
narrowing yield differentials between the highest quality and lower rated
tax-exempts, opportunities to add enhanced yield were limited during the
reporting period. However, we would anticipate that a softening in the U.S.
economy could lead to more opportunities in the future. In view of the declining
interest rate environment and the impending retirement of many of the Fund's
original security holdings, it is likely that a future adjustment will have to
be made to the dividend distribution.
With our focus on income generation, management has elected to maintain an
unchanged posture with respect to the Fund' s duration. Duration has been
maintained between six and seven years. This is considerably shorter than the
benchmark indices. This duration positioning has worked successfully in terms of
total return* measurement whenever interest rates were flat or rising during the
Fund's fiscal year. During the market's upswing this past year, the Fund did not
capture as much price appreciation as more aggressively structured funds, that
is, those with longer durations.
While no one can determine when this period of market turbulence will end, we
continue to focus on maximizing the Fund's distribution of tax-free income. We
trust that this philosophy is in keeping with your investment objectives.
Very truly yours,
[Richard J. Moynihan signature logo]
Richard J. Moynihan
Director, Municipal Portfolio Management
The Dreyfus Corporation
October 16, 1998
New York, N.Y.
*Total return includes reinvestment of dividends and any capital gains paid,
based upon net asset value per share.
**Some income may be subject to the Federal Alternative Minimum Tax (AMT) for
certain shareholders.
*** Distribution rate per share is based upon dividends per share paid from net
investment income during the period, divided by the market price per share at
the end of the period.
DREYFUS STRATEGIC MUNICIPALS, INC.
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SELECTED INFORMATION SEPTEMBER 30, 1998 (UNAUDITED)
Market Price per share September 30, 1998. . . . $105_16
Shares Outstanding September 30, 1998. . . . . . 58,313,521
New York Stock Exchange Ticker Symbol. . . . . . LEO
<TABLE>
<CAPTION>
MARKET PRICE (NEW YORK STOCK EXCHANGE)
Fiscal Year Ended September 30, 1998
_________________________________________________________________________________________________
Quarter Quarter Quarter Quarter
Ended Ended Ended Ended
December 31, 1997 March 31, 1998 June 30, 1998 September 30, 1998
__________________ ______________ _____________ ___________________
<S> <C> <C> <C>
High
$10 15_16 $11 3_16 $10 7_16 $10 7_16
Low
10 3_16 10 9 1_2 9 7_8
Close
10 7_8 10 10 1_4 10 5_16
PERCENTAGE GAIN (LOSS) based on change in Market Price*
September 23, 1987 (commencement of operations) through September 30, 1998 .
135.50%
</TABLE>
October 1, 1988 through September 30, 1998 . . . . . . . . . 116.32
October 1, 1993 through September 30, 1998 . . . . . . . . . 30.85
October 1, 1997 through September 30, 1998 . . . . . . . . . 3.35
January 1, 1998 through September 30, 1998 . . . . . . . . . (.72)
April 1, 1998 through September 30, 1998 . . . . . . . . . . 6.31
July 1, 1998 through September 30, 1998. . . . . . . . . . . 2.13
NET ASSET VALUE PER SHARE
September 23, 1987 (commencement of operations) . . . . . . $9.32
September 30, 1997 . . . . . . . . . . . . . . . . . . . . 10.02
December 31, 1997 . . . . . . . . . . . . . . . . . . . . . 10.09
March 31, 1998 . . . . . . . . . . . . . . . . . . . . . . 10.13
June 30, 1998 . . . . . . . . . . . . . . . . . . . . . . . 10.11
September 30, 1998 . . . . . . . . . . . . . . . . . . . . 10.22
<TABLE>
<CAPTION>
PERCENTAGE GAIN based on change in Net Asset Value*
<S> <C> <C>
September 23, 1987 (commencement of operations) through September 30, 1998 . . . . . . . . . . . 150.40%
October 1, 1988 through September 30, 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . 119.02
October 1, 1993 through September 30, 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . 38.32
October 1, 1997 through September 30, 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.61
January 1, 1998 through September 30, 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.05
April 1, 1998 through September 30, 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.00
July 1, 1998 through September 30, 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.62
</TABLE>
* With dividends reinvested.
<TABLE>
<CAPTION>
DREYFUS STRATEGIC MUNICIPALS, INC.
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STATEMENT OF INVESTMENTS SEPTEMBER 30, 1998
Principal
Long-Term Municipal Investments--98.3% Amount Value
- ------------------------------------------------------- _____________ _____________
Alabama--.9%
Alabama Industrial Development Authority, SWDR
<S> <C> <C>
(Pine City Fiber Co.) 6.45%, 12/1/2023 (Guaranteed; Boise Cascade Corp.) . . . . . . . . $ 5,000,000 $ 5,408,750
Alaska--1.1%
Alaska Housing Finance Corp., Refunding 5.75%, 6/1/2024 (Insured; MBIA). . . . . . . . . . 6,300,000 6,612,039
Arizona--5.6%
Apache County Industrial Development Authority, PCR
(Tucson Electric Power Co. Project) 5.85%, 3/1/2028 . . . . . . . . . . . . . . . . . . 5,000,000 5,038,500
Coconino County, PCR (Nevada Power Co. Project) 6.375%, 10/1/2036. . . . . . . . . . . . . 4,250,000 4,641,595
Pima County Industrial Development Authority, Industrial Revenue
(Tucson Electric Power Co. Project) 6%, 9/1/2029 . . . . . . . . . . . . . . . . . . . . 15,500,000 15,765,050
Tempe Industrial Development Authority, IDR
(California Micro Devices Corp. Project) 10.50%, 3/1/2018 . . . . . . . . . . . . . . . 7,315,000 7,566,929
Arkansas--1.2%
Little River County, Revenue, Refunding
(Pacific Corp. Project) 5.60%, 10/1/2026 . . . . . . . . . . . . . . . . . . . . . . . . 3,100,000 3,145,787
Fayetteville Public Facilities Board, Revenue, Refunding
(Butterfield Trail Village Project) 9.50%, 9/1/2014 (Prerefunded 9/1/1999) (a) . . . . . 4,000,000 4,296,720
California--5.6%
California 7.469%, 12/1/2018 (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,000,000 10,401,800
Foothill/Eastern Transportation Corridor Agency, Toll Road Revenue:
Zero Coupon, 1/1/2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43,860,000 11,484,302
Zero Coupon, 1/1/2029 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54,830,000 11,705,108
Colorado--4.6%
Bent County, COP (Medium Security Correctional Facility Project) 9.50%, 7/15/2013. . . . . 12,950,000 14,063,700
Colorado Health Facilities Authority, Revenue, Refunding
(Rocky Mountain Adventist) 6.625%, 2/1/2013 . . . . . . . . . . . . . . . . . . . . . . 6,950,000 7,518,232
Denver City and County, Airport Revenue:
8%, 11/15/2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,670,000 4,060,011
8%, 11/15/2025 (Prerefunded 11/15/2001) (a) . . . . . . . . . . . . . . . . . . . . . . 1,330,000 1,497,647
Connecticut--.7%
Connecticut Housing Finance Authority, Housing Mortgage Finance Program. . . . . . . . . . 4,175,000 4,412,641
5.85%, 11/15/2028
Florida--7.6%
Escambia County, PCR (Champion International Corp. Project) 6.90%, 8/1/2022. . . . . . . . 7,000,000 7,751,590
Florida Board of Education, Capital Outlay 8.756%, 6/1/2019 (b,c). . . . . . . . . . . . . 20,000,000 23,596,800
Florida Housing Finance Agency, MFHR
(Palm Aire Retirement Facility Project) 10%, 1/1/2020 (d) . . . . . . . . . . . . . . . 4,724,245 4,157,336
DREYFUS STRATEGIC MUNICIPALS, INC.
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STATEMENT OF INVESTMENTS (CONTINUED) SEPTEMBER 30, 1998
Principal
Long-Term Municipal Investments (continued) Amount Value
- ------------------------------------------------------- _____________ _____________
Florida (continued)
Palm Beach County, Solid Waste IDR:
(Okeelanta Power Limited Partnership Project)
6.70%, 2/15/2015 (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,000,000 $ 2,400,000
(Osceola Power Limited Partnership Project)
6.95%, 1/1/2022 (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,150,000 7,228,500
Georgia--2.9%
Effingham County Development Authority, SWDR:
(Fort James Project) 5.625%, 7/1/2018 . . . . . . . . . . . . . . . . . . . . . . . . . 5,000,000 5,096,500
Private Colleges and Universities Facilities Authority, Revenue, Refunding
(Clark Atlanta University Project) 8.25%, 1/1/2015 (Prerefunded 1/1/2003) (a) . . . . . 10,245,000 12,402,802
Hawaii--1.5%
Hawaii Department of Transportation, Special Facility Revenue:
(Caterair International Corp. Project) 10.125%, 12/1/2010 . . . . . . . . . . . . . . . 4,500,000 4,756,905
(Continental Airlines, Inc.) 5.625%, 11/15/2027 . . . . . . . . . . . . . . . . . . . . 4,000,000 4,041,560
Illinois--4.4%
Chicago-O'Hare International Airport, Special Facility Revenue:
Refunding (Delta Airlines Project) 6.45%, 5/1/2018 . . . . . . . . . . . . . . . . . . . 3,855,000 4,121,843
(United Airlines, Inc. Project) 8.95%, 5/1/2018 . . . . . . . . . . . . . . . . . . . . 9,080,000 10,115,937
Illinois Development Finance Authority, Revenue, Refunding
(Community Rehabilitation Providers Facilities Acquisition Program) 6%, 7/1/2015 . . . . 3,500,000 3,692,885
Illinois Health Facilities Authority, Revenue, Refunding
(Ravenswood Hospital Medical Center Project) 8.80%, 6/1/2006 . . . . . . . . . . . . . . 8,000,000 8,106,240
Indiana--5.1%
Indiana Housing Finance Authority, SFMR 5.95%, 1/1/2029. . . . . . . . . . . . . . . . . . 4,000,000 4,246,440
Indianapolis Airport Authority, Special Facility Revenue
(United Airlines, Inc. Project) 6.50%, 11/15/2031 . . . . . . . . . . . . . . . . . . . 24,000,000 26,229,120
Kentucky--4.1%
Kenton County Airport Board, Airport Revenue
(Special Facilities-Delta Airlines Project):
7.50%, 2/1/2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,000,000 11,045,300
6.125%, 2/1/2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,000,000 13,374,920
Louisiana--2.7%
Parish of Saint James, SWDR (Freeport-McMoRan Partnership Project)
7.70%, 10/1/2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,000,000 10,904,800
West Feliciana Parish, PCR, (Gulf States) 5.80%, 12/1/2015 . . . . . . . . . . . . . . . . 5,000,000 5,135,700
Maryland--1.2%
Baltimore County, PCR, Refunding
(Bethlehem Steel Corp. Project) 7.50%, 6/1/2015 . . . . . . . . . . . . . . . . . . . . 2,500,000 2,792,125
Maryland Community Development Administration
(Department of Housing and Community Development Housing) 5.65%, 7/1/2039 . . . . . . . 4,500,000 4,620,015
DREYFUS STRATEGIC MUNICIPALS, INC.
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STATEMENT OF INVESTMENTS (CONTINUED) SEPTEMBER 30, 1998
Principal
Long-Term Municipal Investments (continued) Amount Value
- ------------------------------------------------------- _____________ _____________
Massachusetts--1.6%
Massachusetts Industrial Finance Agency, Revenue
(Ogden Haverhill Project) 5.60%, 12/1/2019 . . . . . . . . . . . . . . . . . . . . . . . $ 6,000,000 $ 6,100,680
Massachusetts Health and Educational Facilities Authority, Revenue, Refunding
(Beth Israel Hospital Issue) 8.471%, 7/1/2025 (Insured; AMBAC) (b) . . . . . . . . . . . 3,000,000 3,498,750
Michigan--3.4%
Michigan Hospital Finance Authority, HR, Refunding
(Genesys Health System Obligated Group)
8.125%, 10/1/2021 (Prerefunded 10/1/2005) (a) . . . . . . . . . . . . . . . . . . . . . 5,000,000 6,340,500
Michigan Strategic Fund, SWDR, Refunding
(Genesee Power Station Project) 7.50%, 1/1/2021 . . . . . . . . . . . . . . . . . . . . 7,000,000 7,654,010
Wayne Charter County, Special Airport Facilities Revenue, Refunding
(Northwest Airlines, Inc.) 6.75%, 12/1/2015 . . . . . . . . . . . . . . . . . . . . . . 5,685,000 6,359,355
Mississippi--3.1%
Claiborne County, PCR:
(Middle South Energy, Inc.):
9.50%, 12/1/2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,000,000 2,075,420
9.875%, 12/1/2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,180,000 10,569,792
Refunding (System Energy Resources, Inc.) 6.20%, 2/1/2026 . . . . . . . . . . . . . . . 5,425,000 5,625,291
Nevada--3.0%
Clark County, IDR:
(Southwest Gas Corp.) 7.50%, 9/1/2032 . . . . . . . . . . . . . . . . . . . . . . . . . 4,000,000 4,447,920
(Nevada Power Company Project):
5.60%, 10/1/2030 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,000,000 7,095,060
Refunding 5.90%, 10/1/2030 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,000,000 6,152,400
New Hampshire--4.7%
New Hampshire Industrial Development Authority, PCR
(Public Service Co. Project):
7.65%, Series A, 5/1/2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,645,000 16,790,996
7.65%, Series C, 5/1/2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,500,000 3,756,375
New Hampshire Business Finance Authority, PCR, Revenue, Refunding
(Public Service Co. Project) 6%, 5/1/2021 . . . . . . . . . . . . . . . . . . . . . . . 7,000,000 7,229,810
New Jersey--3.6%
New Jersey Health Care Facilities Financing Authority, Revenue
(Christian Health Care Center) 8.75%, 7/1/2018
(Insured; MBIA, Prerefunded 7/1/2006) (a) . . . . . . . . . . . . . . . . . . . . . . . 16,810,000 21,431,742
New Mexico--.8%
Farmington, PCR (Tuscon Electric Power Co., San Juan)
6.95%, 10/1/2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,000,000 4,522,280
New York--1.5%
New York State Energy Research and Development Authority, Electric Facilities
Revenue
(Long Island Lighting Co.):
7.15%, 2/1/2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,000,000 3,299,310
6.90%, 8/1/2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,275,000 3,608,395
DREYFUS STRATEGIC MUNICIPALS, INC.
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STATEMENT OF INVESTMENTS (CONTINUED) SEPTEMBER 30, 1998
Principal
Long-Term Municipal Investments (continued) Amount Value
- ------------------------------------------------------- _____________ _____________
New York (continued)
New York State Mortgage Agency, Homeowner Mortgage Revenue, Refunding
6.05%, 4/1/2026 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,990,000 $ 2,150,872
North Carolina--.8%
Charlotte, Special Facilities Revenue, Refunding
(Charlotte / Douglas International Airport) 5.60%, 7/1/2027 (Guaranteed; U.S. Air) . . . 5,000,000 5,038,500
Ohio--1.7%
Cleveland, Airport Special Revenue (Continental Airlines, Inc. Project) 5.375%, 9/15/2027. . 10,455,000 10,276,847
Pennsylvania--9.7%
Beaver County Industrial Development Authority, PCR, Refunding
(Cleveland Electric Project) 7.625%, 5/1/2025 . . . . . . . . . . . . . . . . . . . . . 7,000,000 8,006,250
Butler County Industrial Development Authority, First Mortgage Revenue
(Saint John Lutheran Care Center):
9.75%, 10/1/1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 175,000 175,019
Refunding 10%, Series A1, 10/1/2017 . . . . . . . . . . . . . . . . . . . . . . . . . 8,450,000 10,650,211
Refunding 10%, Series A2, 10/1/2017 . . . . . . . . . . . . . . . . . . . . . . . . . 940,000 1,194,298
Cambria County Hospital Development Authority, HR, Refunding
(Conemaugh Valley Memorial Hospital) 8.875%, 7/1/2018 . . . . . . . . . . . . . . . . . 7,000,000 7,141,050
Lehigh County General Purpose Authority, Revenue (Wiley House)
9.50%, 11/1/2016 (Prerefunded 11/1/2001) (a) . . . . . . . . . . . . . . . . . . . . . . 3,000,000 3,543,600
Montgomery County Industrial Development Authority, First Mortgage Revenue
(Meadowood Corp. Project):
8.25%, 12/1/2018 (Prerefunded 12/1/2000) (a) . . . . . . . . . . . . . . . . . . . . . 3,750,000 4,169,588
Refunding 10.25%, 12/1/2020 (Prerefunded 12/1/2000) (a) . . . . . . . . . . . . . . . 5,000,000 5,761,950
Pennsylvania Housing Finance Agency, SFMR, 8.293%, 4/1/2025 (b). . . . . . . . . . . . . . 6,000,000 6,660,000
Philadelphia Hospitals and Higher Education Facilities Authority, Revenue
(Northwestern Corp.) 8.50%, 6/1/2016 (Prerefunded 6/1/2000) (a) . . . . . . . . . . . . 5,200,000 5,707,000
York County Hospital Authority, Revenue, Refunding
(Health Center--Lutheran Social Services) 6.50%, 4/1/2022 . . . . . . . . . . . . . . . 4,250,000 4,595,185
South Carolina--2.3%
Piedmont Municipal Power Agency, Electric Revenue, Refunding
6.55%, 1/1/2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,000,000 4,007,320
South Carolina Housing Authority, Homeownership Mortgage Revenue 9%, 7/1/2018. . . . . . . 690,000 702,406
Spartanburg County, Hospital Facilities Revenue (Spartanburg General Hospital
System)
8.746%, 4/13/2022 (Prerefunded 4/15/2002) (a,b) . . . . . . . . . . . . . . . . . . . . 7,700,000 9,268,875
Texas--4.1%
Houston Airport System, Special Facilities Revenue
Airport Improvement (Continental Airlines) 6.125%, 7/15/2027 . . . . . . . . . . . . . . 8,100,000 8,569,881
Texas Department of Housing and Community Affairs
Collateralized Home Mortgage Revenue, Refunding 6.90%, 7/2/2024 . . . . . . . . . . . . 11,000,000 12,638,450
DREYFUS STRATEGIC MUNICIPALS, INC.
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STATEMENT OF INVESTMENTS (CONTINUED) SEPTEMBER 30, 1998
Principal
Long-Term Municipal Investments (continued) Amount Value
- ------------------------------------------------------- _____________ _____________
Texas (continued)
Tyler Health Facilities Development Corp., HR, Refunding
(East Texas Medical Center Regional Health Care System Project) 6.75%, 11/1/2025 . . . . $ 3,000,000 $ 3,245,910
Utah--1.9%
Carbon County, SWDR, Refunding (Sunnyside Cogeneration) 9.25%, 7/1/2018 (d). . . . . . . . 10,000,000 6,002,000
Toelle County, Hazardous Waste Treatment Revenue
(Union Pacific Project) 5.70%, 11/1/2026 . . . . . . . . . . . . . . . . . . . . . . . . 5,000,000 5,064,400
Virginia--.9%
Fairfax County Water Authority, Revenue 7.909%, 4/1/2029 (b,c) . . . . . . . . . . . . . . 5,000,000 5,516,300
Washington--.7%
Public Utility District No. 1 of Pend Orielle County, Electric Revenue
6.375%, 1/1/2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,755,000 4,217,015
West Virginia--2.6%
Braxton County, SWDR (Weyerhaeuser Co. Project) 5.80%, 6/1/2027. . . . . . . . . . . . . . 14,390,000 15,372,693
Wisconsin--1.9%
Wisconsin Housing and Economic Development Authority, Homeownership Revenue
8.799%, 7/1/2025 (b,c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,000,000 11,298,000
Wyoming--.8%
Sweetwater County, SWDR (FMC Corp. Project):
7%, 6/1/2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,200,000 2,439,866
6.90%, 9/1/2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,000,000 2,214,780
_____________
TOTAL INVESTMENTS (cost $538,835,341). . . . . . . . . . . . . . . . . . . . . . . . . . . 98.3% $585,622,481
_______ _____________
CASH AND RECEIVABLES (NET) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.7% $ 10,070,840
_______ _____________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.0% $595,693,321
_______ _____________
</TABLE>
<TABLE>
<CAPTION>
DREYFUS STRATEGIC MUNICIPALS, INC.
- -----------------------------------------------------------------------------
Summary of Abbreviations
- -----------------------------------------------------------------------------
<S> <C> <C> <C>
AMBAC American Municipal Bond Assurance Corporation MFHR Multi-Family Housing Revenue
COP Certificate of Participation PCR Pollution Control Revenue
HR Hospital Revenue SFMR Single Family Mortgage Revenue
IDR Industrial Development Revenue SWDR Solid Waste Disposal Revenue
MBIA Municipal Bond Investors Assurance
</TABLE>
<TABLE>
<CAPTION>
Insurance Corporation
Summary of Combined Ratings (Unaudited)
- -----------------------------------------------------------------------------
Fitch or Moody's or Standard & Poor's Percentage of Value
_______ ________ _________________ ___________________
<S> <C> <C> <C>
AAA Aaa AAA 7.5%
AA Aa AA 10.1
A A A 5.7
BBB Baa BBB 35.8
BB Ba BB 11.6
B B B 4.3
Not Rated (e) Not Rated (e) Not Rated (e) 25.0
_______
100.0%
_______
</TABLE>
Notes to Statement of Investments:
- -----------------------------------------------------------------------------
(a)Bonds which are prerefunded are collateralized by U.S. Government
securities which are held in escrow and are used to pay principal and interest
on the municipal issue and to retire the bonds in full at the earliest
refunding date.
(b)Inverse floater security-the interest rate is subject to change
periodically.
(c)Securities exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At September 30,
1998, these securities amounted to $50,812,900 or 8.5% of net assets.
(d) Non-income producing security; interest payments in default.
(e)Securities which, while not rated by Fitch, Moody's and Standard & Poor's
have been determined by the Manager to be of comparable quality to those rated
securities in which the Fund may invest.
SEE NOTES TO FINANCIAL STATEMENTS.
<TABLE>
<CAPTION>
DREYFUS STRATEGIC MUNICIPALS, INC.
- -----------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES SEPTEMBER 30, 1998
Cost Value
_____________ _____________
<S> <C> <C> <C>
ASSETS: Investments in securities--See Statement of Investments . . $538,835,341 $585,622,481
Interest receivable . . . . . . . . . . . . . . . . . . . 10,929,452
Prepaid expenses . . . . . . . . . . . . . . . . . . . . 24,295
_____________
596,576,228
_____________
LIABILITIES: Due to The Dreyfus Corporation and affiliates . . . . . . 399,176
Cash overdraft due to Custodian . . . . . . . . . . . . . 313,756
Accrued expenses . . . . . . . . . . . . . . . . . . . . 169,975
_____________
882,907
_____________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $595,693,321
_____________
REPRESENTED BY: Paid-in capital . . . . . . . . . . . . . . . . . . . . . $552,973,597
Distributions in excess of investment income--net . . . . (251,285)
Accumulated net realized gain (loss) on investments . . . (3,816,131)
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 . . . . . . . . . . . . . . . . 46,787,140
_____________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $595,693,321
_____________
SHARES OUTSTANDING
(500 MILLION SHARES OF $.001 PAR VALUE COMMON STOCK AUTHORIZED). . . . . . . . . . . . . . 58,313,521
NET ASSET VALUE per share. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $10.22
_______
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS STRATEGIC MUNICIPALS, INC.
- -----------------------------------------------------------------------------
STATEMENT OF OPERATIONS YEAR ENDED SEPTEMBER 30, 1998
INVESTMENT INCOME
INCOME Interest Income . . . . . . . . . . . . . . . . . . . . . $38,826,380
EXPENSES: Management fee--Note 3(a) . . . . . . . . . . . . . . . . $ 4,390,050
Shareholder servicing costs . . . . . . . . . . . . . . . 195,324
Shareholders' reports . . . . . . . . . . . . . . . . . . 110,200
Custodian fees--Note 3(b) . . . . . . . . . . . . . . . . 101,986
Directors' fees and expenses--Note 3(c) . . . . . . . . . 57,556
Registration fees . . . . . . . . . . . . . . . . . . . . 43,794
Professional fees . . . . . . . . . . . . . . . . . . . . 41,922
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . 26,831
____________
Total Expenses . . . . . . . . . . . . . . . . . . . . 4,967,663
____________
INVESTMENT INCOME--NET . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33,858,717
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--Note 4:
Net realized gain (loss) on investments . . . . . . . . . $ (2,094,022)
Net unrealized appreciation (depreciation) on investments . . 16,608,666
____________
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS . . . . . . . . . . . . . . . . . . 14,514,644
____________
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS . . . . . . . . . . . . . . . . . . . $48,373,361
____________
</TABLE>
<TABLE>
<CAPTION>
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS STRATEGIC MUNICIPALS, INC.
- -----------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
Year Ended Year Ended
September 30, 1998 September30, 1997
__________________ __________________
OPERATIONS:
<S> <C> <C>
Investment income--net . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 33,858,717 $ 37,555,090
Net realized gain (loss) on investments . . . . . . . . . . . . . . . . . . . (2,094,022) 2,426,534
Net unrealized appreciation (depreciation) on investments . . . . . . . . . . 16,608,666 6,626,171
_____________ _____________
Net Increase (Decrease) in Net Assets Resulting from Operations . . . . . . 48,373,361 46,607,795
_____________ _____________
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net . . . . . . . . . . . . . . . . . . . . . . . . . . . . (36,879,678) (38,863,028)
_____________ _____________
CAPITAL STOCK TRANSACTIONS:
Dividends reinvested--Note 1(c) . . . . . . . . . . . . . . . . . . . . . . . 6,990,423 9,392,309
_____________ _____________
Total Increase (Decrease) in Net Assets . . . . . . . . . . . . . . . . . . 18,484,106 17,137,076
NET ASSETS:
Beginning of Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 577,209,215 560,072,139
_____________ _____________
End of Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $595,693,321 $577,209,215
_____________ _____________
UNDISTRIBUTED INVESTMENT INCOME (DISTRIBUTIONS IN EXCESS OF INVESTMENT INCOME)--NET. . $ (251,285) $ 2,769,676
_____________ _____________
Shares Shares
_____________ _____________
CAPITAL SHARE TRANSACTIONS:
Increase (Decrease) in Shares Outstanding as a Result of Dividends Reinvested . 688,950 947,655
_____________ _____________
</TABLE>
<TABLE>
<CAPTION>
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS STRATEGIC MUNICIPALS, INC.
- -----------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share of Common
Stock outstanding, total investment return, ratios to average net assets and
other supplemental data for each period indicated. This information has been
derived from the financial statements and market price data for the Fund's
shares.
Year Ended September 30,
______________________________________________________
PER SHARE DATA: 1998 1997 1996 1995 1994
______ ______ ______ ______ ______
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period . . . . . . . . . . $10.02 $ 9.88 $ 9.96 $ 9.73 $10.43
______ ______ ______ ______ ______
Investment Operations:
Investment income--net . . . . . . . . . . . . . . . . . .59 .66 .68 .71 .73
Net realized and unrealized gain (loss)
on investments . . . . . . . . . . . . . . . . . . . .25 .16 (.09) .23 (.69)
______ ______ ______ ______ ______
Total from Investment Operations . . . . . . . . . . . . .84 .82 .59 .94 .04
______ ______ ______ ______ ______
Distributions:
Dividends from investment income--net . . . . . . . . . . (.64) (.68) (.67) (.71) (.72)
Dividends from net realized gain on investments . . . . . -- -- -- -- (.02)
______ ______ ______ ______ ______
Total Distributions . . . . . . . . . . . . . . . . . . . (.64) (.68) (.67) (.71) (.74)
______ ______ ______ ______ ______
Net asset value, end of period . . . . . . . . . . . . . $10.22 $10.02 $ 9.88 $ 9.96 $ 9.73
______ ______ ______ ______ ______
Market value, end of period . . . . . . . . . . . . . . . $ 10 5_16 $ 10 5_8 $ 10 $ 9 5_8 $ 9 7_8
______ ______ ______ ______ ______
TOTAL INVESTMENT RETURN* . . . . . . . . . . . . . . . . . . 3.35% 13.77% 11.23% 4.91% (4.63%)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets . . . . . . . . . .85% .85% .86% .87% .86%
Ratio of net investment income
to average net assets . . . . . . . . . . . . . . . . 5.78% 6.64% 6.92% 7.30% 7.24%
Portfolio Turnover Rate . . . . . . . . . . . . . . . . . 20.95% 16.66% 19.27% 13.68% 4.85%
Net Assets, end of period (000's Omitted) . . . . . . . . $595,693 $577,209 $560,072 $559,862 $541,124
- -----------------------------
</TABLE>
* Calculated based on market value.
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS STRATEGIC MUNICIPALS, INC.
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES:
Dreyfus Strategic Municipals, Inc. (the "Fund" ) is registered under the
Investment Company Act of 1940, as amended (the "Act" ) as a diversified
closed-end management investment company. The Fund's investment objective is to
maximize current income exempt from Federal income tax to the extent consistent
with the preservation of capital. The Dreyfus Corporation (the "Manager") serves
as the Fund's investment adviser. The Manager is a direct subsidiary of Mellon
Bank, N.A.
The Fund' s 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 in municipal debt securities (excluding
options and financial futures on municipal and U.S. treasury securities) are
valued on the last business day of each week and month by an independent pricing
service (" Service" ) approved by the Board of Directors. Investments for which
quoted bid prices are readily available and are representative of the bid side
of the market in the judgment of the Service are valued at the mean between the
quoted bid prices (as obtained by the Service from dealers in such securities)
and asked prices (as calculated by the Service based upon its evaluation of the
market for such securities). Other investments (which constitute a majority of
the portfolio securities) are carried at fair value as determined by the
Service, based on methods which include consideration of: yields or prices of
municipal securities of comparable quality, coupon, maturity and type;
indications as to values from dealers; and general market conditions. Options
and financial futures on municipal and U.S. treasury securities are valued at
the last sales price on the securities exchange on which such securities are
primarily traded or at the last sales price on the national securities market on
the last business day of each week and month. Investments not listed on an
exchange or the national securities market, or securities for which there were
no transactions, are valued at the average of the most recent bid and asked
prices. Bid price is used when no asked price is available.
(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,
adjusted for amortization of premiums and original issue discounts on
investments, is earned from settlement date and recognized on the accrual basis.
Securities purchased or sold on a when-issued or delayed-delivery basis may be
settled a month or more after the trade date.
(C) DIVIDENDS TO SHAREHOLDERS: Dividends are recorded on the ex-dividend date.
Dividends from investment income-net are declared and paid monthly. Dividends
from net realized capital gain are normally declared and paid at least annually.
To the extent that net realized capital gain can be offset by capital loss
carryovers, it is the policy of the Fund not to distribute such gain.
For shareholders who elect to receive their distributions in additional shares
of the Fund, in lieu of cash, such distributions will be reinvested at the lower
of the market price or net asset value per share (but not less than 95% of the
market price) as defined in the dividend reinvestment and cash purchase plan.
On September 30, 1998, the Board of Directors declared a cash dividend of
$.051 per share from investment income-net, payable on October 28, 1998 to
shareholders of record as of the close of business on October 14, 1998.
(D) FEDERAL INCOME TAXES: It is the policy of the Fund to continue to qualify
as a regulated investment company, which can distribute tax exempt dividends, by
complying with the applicable provisions of the Internal Revenue Code of 1986,
as amended and to make distributions of income and net realized capital gain
sufficient to relieve it from substantially all Federal income and excise taxes
DREYFUS STRATEGIC MUNICIPALS, INC.
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The Fund has an unused capital loss carryover of approximately $1,304,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to September 30, 1998. The
carryover does not include net realized securities losses from November 1, 1997
through September 30, 1998 which are treated, for Federal income tax purposes,
as arising in fiscal 1999. If not applied, the carryover expires in fiscal 2004
NOTE 2--BANK LINE OF CREDIT:
The Fund participates with other Dreyfus-managed funds in a $100 million
unsecured line of credit primarily to be utilized for temporary or emergency
purposes. Interest is charged to the Fund at rates which are related to the
Federal Funds rate in effect at the time of borrowings. During the period ended
September 30, 1998, the Fund did not borrow under the line of credit.
NOTE 3--MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
(A) Pursuant to a management agreement ("Agreement") with the Manager, the
management fee is computed at the annual rate of .75 of 1% of the value of the
Fund' s average weekly net assets and is payable monthly. The Agreement provides
for an expense reimbursement from the Manager should the Fund's aggregate
expenses, exclusive of taxes, interest on borrowings, brokerage and
extraordinary expenses, in any full fiscal year exceed the lesser of (1) the
expense limitation of any state having jurisdiction over the Fund or (2) 2% of
the first $10 million, 1 1/2% of the next $20 million and 1% of the excess over
$30 million of the average value of the Fund's net assets. During the period
ended September 30, 1998, there was no expense reimbursement pursuant to the
agreement.
(B) The Fund compensates Boston Safe Deposit and Trust Company, an affiliate
of the Manager, under a custody agreement for providing custodial services to
the Fund. During the period ended September 30, 1998, the Fund was charged
$101,986 pursuant to the custody agreement.
(C) Each director who is not an "affiliated person" as defined in the Act
receives from the Fund an annual fee of $4,500 and an attendance fee of $500 per
meeting. The Chairman of the Board receives an additional 25% of such
compensation and the Director Emeritus receives 50% of such compensation.
NOTE 4--SECURITIES TRANSACTIONS:
The aggregate amount of purchases and sales of investment securities,
excluding short-term securities, during the period ended September 30, 1998
amounted to $120,677,273 and $130,998,939, respectively.
At September 30, 1998, accumulated net unrealized appreciation on investments
was $46,787,140, consisting of $53,819,400 gross unrealized appreciation and
$7,032,260 gross unrealized depreciation.
At September 30, 1998, the cost of investments for Federal income tax purposes
was substantially the same as the cost for financial reporting purposes (see the
Statement of Investments).
DREYFUS STRATEGIC MUNICIPALS, INC.
- -----------------------------------------------------------------------------
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF DIRECTORS
DREYFUS STRATEGIC MUNICIPALS, INC.
We have audited the accompanying statement of assets and liabilities of
Dreyfus Strategic Municipals, Inc., including the statement of investments, as
of September 30, 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. Our procedures included verification by examination of securities
held by the custodian as of September 30, 1998. 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 Strategic Municipals, Inc. at September 30, 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
November 3, 1998
DREYFUS STRATEGIC MUNICIPALS, INC.
- -----------------------------------------------------------------------------
DIVIDEND REINVESTMENT AND CASH PURCHASE PLAN (UNAUDITED)
Under the Fund's Dividend Reinvestment and Cash Purchase Plan (the "Plan"), a
shareholder who has Fund shares registered in his name will have all
distributions reinvested automatically by The Bank of New York, as Plan agent
(the "Agent" ), in additional shares of the Fund at the lower of prevailing
market price or net asset value (but not less than 95% of market value at the
time of valuation) unless such shareholder elects to receive cash as provided
below. If market price is equal to or exceeds net asset value, shares will be
issued at net asset value. If net asset value exceeds market price or if a cash
dividend only is declared, the Agent, as agent for the Plan participants, will
buy Fund shares in the open market. A Plan participant is not relieved of any
income tax that may be payable on such dividends or distributions.
A shareholder who owns Fund shares registered in nominee name through his
broker/dealer (i.e., in "street name") may not participate in the Plan, but may
elect to have cash dividend distributions reinvested by his broker/dealer in
additional shares of the Fund if such service is provided by the broker/dealer;
otherwise such distributions will be treated like any other cash dividend.
A shareholder who has Fund shares registered in his name may elect to withdraw
from the Plan at any time for a $2.50 fee and thereby elect to receive cash in
lieu of shares of the Fund. Changes in elections must be in writing, sent to The
Bank of New York, Dividend Reinvestment Department, P.O. Box 1958, Newark, New
Jersey 07101-9774, should include the shareholder's name and address as they
appear on the Agent's records and will be effective only if received more than
fifteen days prior to the record date for any distribution.
A Plan participant who has Fund shares registered in his name has the option
of making additional cash payments to the Agent, semi-annually, in any amount
from $1,000 to $10,000, for investment in the Fund's shares in the open market
on or about January 15 and July 15. Any voluntary cash payments received more
than 30 days prior to these dates will be returned by the Agent, and interest
will not be paid on any uninvested cash payments. A participant may withdraw a
voluntary cash payment by written notice, if the notice is received by the Agent
not less than 48 hours before the payment is to be invested. A shareholder who
owns Fund shares registered in street name should consult his broker/dealer to
determine whether an additional cash purchase option is available through his
broker/dealer.
The Agent maintains all shareholder accounts in the Plan and furnishes written
confirmations of all transactions in the account. Shares in the account of each
Plan participant will be held by the Agent in non-certificated form in the name
of the participant, and each such participant's proxy will include those shares
purchased pursuant to the Plan.
The Fund pays the Agent's fee for reinvestment of dividends and distributions.
Plan participants pay a pro rata share of brokerage commissions incurred with
respect to the Agent's open market purchases and purchases from voluntary cash
payments, and a $1.25 fee for each purchase made from a voluntary cash payment.
The Fund reserves the right to amend or terminate the Plan as applied to any
voluntary cash payments made and any dividend or distribution paid subsequent to
notice of the change sent to Plan participants at least 90 days before the
record date for such dividend or distribution. The Plan also may be amended or
terminated by the Agent on at least 90 days' written notice to Plan
participants.
DREYFUS STRATEGIC MUNICIPALS, INC.
- -----------------------------------------------------------------------------
IMPORTANT TAX INFORMATION (UNAUDITED)
In accordance with Federal tax law, the Fund hereby designates all the
dividends paid from investment income-net during the fiscal year ended September
30, 1998 as "exempt-interest dividends" (not generally subject to regular
Federal income tax).
As required by Federal tax law rules, shareholders will receive notification
of their portion of the Fund's taxable ordinary dividends (if any) and capital
gain distributions (if any) paid for the 1998 calendar year on Form 1099-DIV
which will be mailed by January 31, 1999.
<TABLE>
<CAPTION>
DREYFUS STRATEGIC MUNICIPALS, INC.
- -----------------------------------------------------------------------------
PROXY RESULTS (UNAUDITED)
During the fiscal year ending September 30, 1998, stockholders voted on the
following proposals presented at the annual stockholders' meeting held on May
15, 1998. The description of each proposal and the number of shares voted are as
follows:
Shares
___________________________________________________
For Authority Withheld
_________________ _______________________
1. To elect three Class III Directors:*
<S> <C> <C>
Hodding Carter III . . . . . . . . . . . . . . . . . . . 45,156,401 954,358
Joseph S. DiMartino . . . . . . . . . . . . . . . . . . 45,209,409 901,351
Richard C. Leone . . . . . . . . . . . . . . . . . . . . 45,296,886 813,873
</TABLE>
<TABLE>
<CAPTION>
Shares
___________________________________________________
For Against Abstained
_________________ ______________ ______________
2. To ratify the selection of Ernst & Young LLP
<S> <C> <C> <C>
as independent auditors of the Fund . . . . . . . . . . 45,103,529 359,827 647,403
* The terms of these Class III Directors expire in 2001.
</TABLE>
YEAR 2000 RISKS (UNAUDITED)
Like other mutual funds, financial and business organizations and individuals
around the world, 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 and data from and after
January 1, 2000. This is commonly known as the "Year 2000 Problem." The Dreyfus
Corporation is taking steps to address the Year 2000 Problem with respect to the
computer systems that it uses and to obtain assurances that comparable steps are
being taken by the Fund's other major service providers. At this time, however,
there can be no assurances that these steps will be sufficient to avoid any
adverse impact on the Fund.
OFFICERS AND DIRECTORS
DREYFUS STRATEGIC MUNICIPALS, INC.
200 Park Avenue
New York, NY 10166
Directors
Joseph S. DiMartino, Chairman
Lucy Wilson Benson
David W. Burke
Martin D. Fife
Whitney I. Gerard
Robert R. Glauber
Arthur A. Hartman
George L. Perry
Paul Wolfowitz
Officers
President and Treasurer
Marie E. Connolly
Vice President and Secretary
Margart W. Chambers
Vice President and Assistant Treasurer
Mary A. Nelson
Vice President, Assistant Treasurer and Assistant Secretary
Michael Petrucelli
Vice President, Assistant Treasurer and Assistant Secretary
Stephanie Pierce
Vice President and Assistant Treasurer
Joseph F. Tower, III
Vice President and Assistant Treasurer
George A. Rio
Vice President and Assistant Secretary
Douglas C. Conroy
Vice President and Assistant Secretary
Christopher J. Kelley
Vice President and Assistant Secretary
Kathleen K. Morrisey
Vice President and Assistant Secretary
Ellia Vasquez
Portfolio Managers
Joseph P. Darcy
A. Paul Disdier
Karen M. Hand
Stephen C. Kris
Richard J. Moynihan
Jill C. Shaffro
Samuel J. Weinstock
Monica S. Wieboldt
Investment Adviser
The Dreyfus Corporation
Custodian
Mellon Bank, N.A.
Counsel
Stroock & Stroock & Lavan
Transfer Agent, Dividend Distribution Agent and Registrar Mellon Bank, N.A.
Stock Exchange Listing
AMEX Symbol: DNM
Initial SEC Effective Date
10/21/88
The Net Asset Value appears in the following publications: Barron's, Closed-End
Bond Funds section under the heading "Municipal Bond Funds" every Monday; Wall
Street Journal, Mutual Funds section under the heading "Closed-End Bond Funds"
every Monday; New York Times, Money and Business Section under the heading
"Closed-End Bond Funds--Single State Municipal Bond Funds" every Sunday.
Notice is hereby given in accordance with Section 23(c) of the Investment
Company Act of 1940, as amended, that the Fund may purchase shares of its common
stock in the open market when it can do so at prices below the then current net
asset value per share.
Directors
Joseph S. DiMartino, Chairman
David W. Burke
Hodding Carter, III
Ehoud Houminer
Richard C. Leone
Hans C. Mautner
Robin R. Smith
John E. Zuccotti
Robert B. Rivel, Director Emeritus
Officers
President and Treasurer
Marie E. Connolly
Vice President and Secretary
Margart W. Chambers
Vice President, Assistant Treasurer and Assistant Secretary
Michael Petrucelli
Vice President, Assistant Treasurer and Assistant Secretary
Stephanie Pierce
Vice President and Assistant Treasurer
Mary A. Nelson
Vice President and Assistant Treasurer
George A. Rio
Vice President and Assistant Treasurer
Joseph F. Tower, III
Vice President and Assistant Secretary
Douglas C. Conroy
Vice President and Assistant Secretary
Christopher J. Kelley
Vice President and Assistant Secretary
Kathleen K. Morrisey
Vice President and Assistant Secretary
Elba Vasquez
Portfolio Managers
Joseph P. Darcy
A. Paul Disdier
Karen M. Hand
Stephen C. Kris
Richard J. Moynihan
Jill C. Shaffro
Samuel J. Weinstock
Monica S. Wieboldt
Investment Adviser
The Dreyfus Corporation
Custodian
Mellon Bank, N.A.
Counsel
Stroock & Stroock & Lavan
Transfer Agent,
Dividend Distribution Agent
and Registrar
Mellon Bank, N.A.
Stock Exchange Listing
AMEX Symbol: DNM
Initial SEC Effective Date
10/21/88
The Net Asset Value appears in
the following publications:
Barron's, Closed-End Bond Funds section under the heading
"Municipal Bond Funds" every Monday; Wall Street Journal,
Mutual Funds section under the heading "Closed-End Bond Funds"
every Monday; New York Times,
Money and Business Section under
the heading "Closed-End Bond
Funds--Single State Municipal
Bond Funds" every Sunday.
Notice is hereby given in accordance with Section 23(c) of the Investment
Company Act of 1940, as amended, that the Fund may purchase shares of its common
stock in the open market when it can do so at prices below the then current net
asset value per share.
Investment Adviser
The Dreyfus Corporation
Custodian
Boston Safe Deposit
and Trust Company
Counsel
Stroock & Stroock & Lavan LLP
Transfer Agent, Dividend Distribution Agent and Registrar The Bank of New York
Stock Exchange Listing
NYSE Symbol: LEO
Initial SEC Effective Date
9/23/87
The Net Asset Value appears in the following publications: Barron's, Closed-End
Bond Funds section under the heading "Municipal Bond Funds" every Monday; Wall
Street Journal, Mutual Funds section under the heading "Closed-End Bond Funds"
every Monday; New York Times, Money and Business Section under the heading
"Closed-End Bond Funds--Single State Municipal Bond Funds" every Sunday.
Notice is hereby given in accordance with Section 23(c) of the Investment
Company Act of 1940, as amended, that the Fund may purchase shares of its common
stock in the open market when it can do so at prices below the then current net
asset value per share.
- --------------------------------------------------------------------------------
Notice is hereby given in accordance with Section 23(c) of the Investment
Company Act of 1940, as amended, that the Fund may purchase shares of its common
stock in the open market when it can do so at prices below the then current net
asset value per share.
- --------------------------------------------------------------------------------
Dreyfus lion "d" logo (reg.tm)
Dreyfus logo (reg.tm)
DREYFUS STRATEGIC MUNICIPALS, INC.
200 Park Avenue
New York, NY 10166
MANAGER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
CUSTODIAN
Boston Safe Deposit and
Trust Company
One Boston Place
Boston, MA 02108
TRANSFER AGENT,
DIVIDEND DISTRIBUTION AGENT
AND REGISTRAR
The Bank of New York
101 Barclay Street
New York, NY 10286
Printed in U.S.A. 853AR989
Strategic
Municipals, Inc.
Annual Report
September 30, 1998
