DREYFUS LAUREL FUNDS INC, 497, 1995-08-29

DREYFUS LAUREL FUNDS INC
497, 1995-08-29

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Please See Supplement on Page 3
- -------------------------------------------------------------------------------
PROSPECTUS APRIL 10, 1995
DREYFUS/LAUREL PRIME MONEY MARKET FUND
DREYFUS/LAUREL TAX-EXEMPT MONEY MARKET FUND
DREYFUS/LAUREL U.S. TREASURY MONEY MARKET FUND
- -------------------------------------------------------------------------------
THIS PROSPECTUS DESCRIBES THE THREE INVESTMENT PORTFOLIOS LISTED
BELOW (EACH A "FUND" COLLECTIVELY THE "FUNDS" OR THE "MONEY MARKET FUNDS") OF
THE DREYFUS/LAUREL FUNDS, INC. (FORMERLY THE LAUREL FUNDS, INC.), AN
OPEN-END, DIVERSIFIED MANAGEMENT INVESTMENT COMPANY (THE "COMPANY") THAT IS
PART OF THE DREYFUS FAMILY OF FUNDS. THIS PROSPECTUS DESCRIBES TWO CLASSES OF
SHARES--INVESTOR SHARES AND CLASS R SHARES (COLLECTIVELY, THE "SHARES")--OF
THE FUNDS.
THE DREYFUS/LAUREL PRIME MONEY MARKET FUND SEEKS A HIGH LEVEL OF
CURRENT INCOME CONSISTENT WITH STABILITY OF PRINCIPAL BY INVESTING IN
HIGH-GRADE MONEY MARKET INSTRUMENTS.
THE DREYFUS/LAUREL TAX-EXEMPT MONEY MARKET FUND SEEKS INCOME EXEMPT
FROM FEDERAL INCOME TAX CONSISTENT WITH STABILITY OF PRINCIPAL BY INVESTING
IN TAX-EXEMPT MUNICIPAL OBLIGATIONS.
THE DREYFUS/LAUREL U.S. TREASURY MONEY MARKET FUND SEEKS A HIGH LEVEL
OF CURRENT INCOME CONSISTENT WITH STABILITY OF PRINCIPAL BY INVESTING IN
DIRECT OBLIGATIONS OF THE U.S. TREASURY AND REPURCHASE AGREEMENTS SECURED BY
SUCH OBLIGATIONS.
THE MONEY MARKET FUNDS SEEK TO MAINTAIN A STABLE NET ASSET VALUE
("NAV") OF $1.00 PER SHARE. INVESTMENTS IN THESE MONEY MARKET FUNDS ARE
NEITHER INSURED NOR GUARANTEED BY THE U.S. GOVERNMENT AND THERE CAN BE NO
ASSURANCE THAT THESE MONEY MARKET FUNDS WILL BE ABLE TO MAINTAIN A STABLE NET
ASSET VALUE OF $1.00 PER SHARE.
SHARES OF THE FUNDS ARE SOLD WITHOUT A SALES LOAD. INVESTOR SHARES OF
THE FUNDS ARE SUBJECT TO DISTRIBUTION AND SHAREHOLDERS SERVICING FEES.
YOU CAN PURCHASE OR REDEEM SHARES BY TELEPHONE USING THE DREYFUS TELET
RANSFER PRIVILEGE.
THE DREYFUS CORPORATION SERVES AS THE FUNDS' INVESTMENT MANAGER. THE
DREYFUS CORPORATION IF REFERRED TO AS "DREYFUS."
--------------
THIS PROSPECTUS SETS FORTH CONCISELY INFORMATION ABOUT THE FUNDS THAT
YOU SHOULD KNOW BEFORE INVESTING. IT SHOULD BE READ CAREFULLY BEFORE YOU
INVEST AND RETAINED FOR FUTURE REFERENCE.
A STATEMENT OF ADDITIONAL INFORMATION ("SAI") DATED APRIL 10, 1995,
WHICH MAY BE REVISED FROM TIME TO TIME, PROVIDES A FURTHER DISCUSSION OF
CERTAIN AREAS IN THIS PROSPECTUS AND OTHER MATTERS WHICH MAY BE OF INTEREST
TO SOME INVESTORS. IT HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION ("SEC") AND IS INCORPORATED HEREIN BY REFERENCE, FOR A FREE COPY,
WRITE TO THE FUNDS AT 144 GLENN CURTISS BOULEVARD, UNIONDALE, NEW YORK
11556-0144, OR CALL 1-800-645-6561. WHEN TELEPHONING, ASK FOR OPERATOR 666.
--------------
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
OR ENDORSED BY, ANY BANK, AND ARE NOT FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY.
ALL MONEY MARKET FUNDS INVOLVE CERTAIN INVESTMENT RISKS, INCLUDING THE
POSSIBLE LOSS OF PRINCIPAL.
THE FEES TO WHICH EACH FUND IS SUBJECT ARE SUMMARIZED IN THE "EXPENSE
SUMMARY" SECTION OF THE FUNDS' PROSPECTUS. EACH FUND PAYS MELLON BANK, N.A.
("MELLON BANK") OR ITS AFFILIATES TO BE ITS INVESTMENT MANAGER. MELLON BANK
OR AN AFFILIATE MAY BE PAID FOR PERFORMING OTHER SERVICES FOR THE FUNDS, SUCH
AS CUSTODIAN, TRANSFER AGENT OR FUND ACCOUNTANT SERVICES. THE FUNDS ARE
DISTRIBUTED BY PREMIER MUTUAL FUND SERVICES, INC.
- -------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF ITS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
- -------------------------------------------------------------------------------
(Continued from page 1)
BY THIS PROSPECTUS, THE FUNDS ARE OFFERING INVESTOR SHARES AND CLASS
R SHARES. (CLASS R SHARES OF THE FUNDS WERE FORMERLY CALLED TRUST SHARES.)
INVESTOR SHARES AND CLASS R SHARES ARE IDENTICAL, EXCEPT AS TO THE SERVICES
OFFERED TO AND THE EXPENSES BORNE BY EACH CLASS. CLASS R SHARES ARE SOLD
PRIMARILY TO BANK TRUST DEPARTMENTS AND OTHER FINANCIAL SERVICE PROVIDERS
(INCLUDING MELLON BANK, N.A. AND ITS AFFILIATES) ("BANKS") ACTING ON BEHALF
OF CUSTOMERS HAVING A QUALIFIED TRUST OR INVESTMENT ACCOUNT OR RELATIONSHIP
AT SUCH INSTITUTION. INVESTOR SHARES ARE PRIMARILY SOLD TO RETAIL INVESTORS
BY THE FUNDS' DISTRIBUTOR AND BY BANKS, SECURITIES BROKERS OR DEALERS AND
OTHER FINANCIAL INSTITUTIONS ("AGENTS") THAT HAVE ENTERED INTO A SELLING
AGREEMENT WITH THE FUNDS' DISTRIBUTOR.
TABLE OF CONTENTS
Page
EXPENSE SUMMARY................................... 4
FINANCIAL HIGHLIGHTS.............................. 5
DESCRIPTION OF THE FUNDS.......................... 11
MANAGEMENT OF THE FUNDS........................... 19
HOW TO BUY FUND SHARES............................ 21
SHAREHOLDER SERVICES.............................. 24
HOW TO REDEEM FUND SHARES......................... 27
DISTRIBUTION PLAN (INVESTOR SHARES ONLY).......... 30
PERFORMANCE INFORMATION........................... 30
DIVIDENDS, OTHER DISTRIBUTIONS AND TAXES.......... 31
GENERAL INFORMATION............................... 33

Page 2

September 1, 1995
THE DREYFUS/LAUREL FUNDS, INC. -
DREYFUS MONEY MARKET RESERVES
DREYFUS MUNICIPAL RESERVES
DREYFUS U.S. TREASURY RESERVES
SUPPLEMENT TO PROSPECTUS DATED APRIL 10, 1995
THE FOLLOWING INFORMATION SUPPLEMENTS, SHOULD BE READ IN CONJUNCTION
WITH, AND SUPERSEDES ANY CONTRARY INFORMATION CONTAINED IN THE FUNDS'
PROSPECTUS.
Investor shares are sold primarily to investors maintaining related
securities, brokerage, commodities trading or similar accounts with banks,
securities brokers/dealers or other financial institutions that have entered
into selling agreements with the Funds' distributor. Additionally, holders of
Investor shares of a Fund who have held their shares since August 31, 1995,
may continue to purchase Investor shares of the Fund whether or not they
otherwise would be eligible to do so.
THE FOLLOWING INFORMATION SUPERSEDES AND REPLACES THE FOURTH
PARAGRAPH IN THE SECTION IN THE FUNDS' PROSPECTUS ENTITLED "HOW TO BUY FUND
SHARES _ GENERAL".
The minimum initial investment is $100,000. Each Fund may waive its
minimum initial investment requirement for new Fund accounts opened through a
bank, securities dealer or other financial institution (collectively,
"Agents") whenever Dreyfus Institutional Services Division ("DISD") has
determined for the initial account opened through such Agent which is below
the Fund's minimum initial investment requirement that the existing accounts
in the Fund opened through that Agent have an average account size, or the
Agent has adequate intent and access to funds to result in maintenance of
accounts in the Fund opened through that Agent with an average account size,
in an amount equal to or in excess of $100,000. DISD is required to
periodically review the average size of the accounts opened through each
Agent and, if necessary, reevaluate the Agent's intent and access to funds.
DISD will discontinue the waiver as to new accounts to be opened through an
Agent if DISD determines that the average size of accounts opened through
that Agent is less than $100,000 and the Agent does not have the requisite
intent and access to funds. There is no minimum for subsequent purchases. The
initial investment must be accompanied by the Funds' Account Application.
THE FOLLOWING INFORMATION SUPERSEDES AND REPLACES THE FOURTH
PARAGRAPH IN THE SECTION IN THE FUNDS' PROSPECTUS ENTITLED "HOW TO REDEEM
FUND SHARES _ GENERAL".
Each Fund reserves the right to redeem a shareholder's account at its
option upon not less than 45 days' written notice if the net asset value of
such account is $10,000 or less ($500 or less in the case of holders of
shares of a Fund since August 31, 1995) and remains at or below such amount
during the notice period.
THE FOLLOWING INFORMATION SUPPLEMENTS, SHOULD BE READ IN CONJUNCTION
WITH, AND SUPERSEDES ANY CONTRARY INFORMATION CONTAINED IN THE FUNDS'
PROSPECTUS.
Effective June 9, 1995, the following name changes occurred:
Dreyfus/Laurel Prime Money Market Fund became Dreyfus Money Market Reserves,
Dreyfus/Laurel Tax-Exempt Money Market Fund became Dreyfus Municipal Reserves
and Dreyfus/Laurel U.S. Treasury Money Market Fund became Dreyfus U.S.
Treasury Reserves. As of such date, Dreyfus Municipal Reserves may invest
without limitation in municipal obligations the interest from which gives
rise to a preference item for purposes of the alternative minimum tax as long
as such investment is consistent with the Fund's investment objective. To
provide the Fund with added investment flexibility, references in the
Prospectus stating that the Fund has no current intention of investing in
such municipal obligations are hereby deleted.
THE FOLLOWING INFORMATION SUPERSEDES AND REPLACES THE THIRD SENTENCE
IN THE EIGHTH PARAGRAPH IN THE SECTION IN THE FUNDS' PROSPECTUS ENTITLED "HOW
TO BUY FUND SHARES _ GENERAL":
The instructions must specify your Fund account registration and Fund
account number PRECEDED BY THE DIGITS: "4790" Dreyfus Money Market
Reserves/Investor shares; "4800" Dreyfus Money Market Reserves/Class R
shares; "4860" Dreyfus Municipal Reserves/Investor shares; "4850" Dreyfus
Municipal Reserves/Class R shares; "4900" Dreyfus U.S. Treasury
Reserves/Investor shares; and "4890" Dreyfus U.S. Treasury Reserves/Class R
shares.
LMMKT/s090195

Page 3

EXPENSE SUMMARY
The purpose of the following table is to help you understand the various
costs and expenses that you, as a Shareholder, will bear directly or
indirectly in connection with an investment in the Investor or Class R Shares
of the Money Market Funds. (See "Management of the Funds.")
<TABLE>
<CAPTION>

INVESTOR SHARES CLASS R SHARES
---------------- ----------------
<S> <C> <C> <C>
SHAREHOLDERS TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases....................... none none
Maximum Sales Load Imposed on Reinvestments................... none none
Deferred Sales Load........................................... none none
Redemption Fee................................................ none none
Exchange Fee.................................................. none none
ESTIMATED ANNUAL FUND OPERATING EXPENSES
(as a percentage of net assets)
Management Fee................................................ 0.50% 0.50%
12b-1 Fees*................................................... 0.20% none
Other Expenses **............................................. 0.00% 0.00%
------ -------
Total Fund Operating Expenses.................................. 0.70% 0.50%

EXAMPLES
You would pay the following on
a $1,000 investment, assuming (1) a
5% annual return and (2) redemption
at the end of each time period: INVESTOR SHARES CLASS R SHARES
---------------- ----------------

1 Year $ 7 $ 5
3 Years $22 $16
5 Years N/A $28
10 Years N/A $63

</TABLE>

- -------------------------------------------------------------------------------
THE INFORMATION CONTAINED IN THE TABLE SHOULD NOT BE CONSIDERED A
REPRESENTATION OF PAST OR FUTURE EXPENSES. ACTUAL EXPENSES MAY BE MORE OR
LESS THAN THOSE SHOWN.
- -------------------------------------------------------------------------------
The Funds understand that banks, brokers, dealers or other financial
institutions (including Mellon Bank and its affiliates) (collectively
"Agents") may charge fees to their clients who are owners of the Fund's
Investor Shares for various services provided in connection with a client's
account. These fees would be in addition to any amounts received by an Agent
under its Selling Agreement ("Agreement") with Premier Mutual Fund Services,
Inc. ("Premier"). The Agreement requires each Agent to disclose to its
clients any compensation payable to such Agent by Premier and any other
compensation payable by the clients for various services provided in
connection with its account.
Long-term shareholders of Investor Shares could pay more in Rule
12b-1 fees than the economic equivalent of the maximum front-end sales
charges applicable to mutual funds sold by members of the National
Association of Securities Dealers, Inc.
Page 4

FINANCIAL HIGHLIGHTS
The following financial information for Investor and Class R Shares has been
derived from the financial statements which have been audited by KPMG Peat
Marwick LLP, the independent auditors for The Dreyfus/Laurel Funds, Inc., for
the indicated years or period ended October 31, whose reports accompany such
financial statements that appear in the Fund's Annual Report dated October
31, 1994 and which are incorporated by reference in the SAI. Further
information about the Fund's performance is contained in the Fund's Annual
Report, which may be obtained without charge.

DREYFUS/LAUREL PRIME MONEY MARKET FUND
FOR AN INVESTOR SHARE OUTSTANDING THROUGHOUT THE PERIOD.
PERIOD
ENDED
10/31/94*
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period.................................................... $ 1.00
-----------
Income from investment operations:
Net investment income........................................................... 0.0211
Less distributions:
Dividends from net investment income............................................ (0.0211)
-----------
Net asset value, end of period.......................................................... $ 1.00
Total return............................................................................ 2.14%
==========
Ratios to average net assets/supplemental data:
Net assets, end of period (in 000's)............................................ $ 3,611
Ratio of operating expenses to average net assets............................... 0.71%#
Ratio of net investment income to average net assets............................ 3.31%#
</TABLE>

- -----------------------------------------------------------------------------
* The Fund commenced selling Investor Shares on April 6, 1994. Effective
October 17, 1994, The Dreyfus Corporation serves as the Fund's investment
manager. Prior to October 17, 1994, Mellon Bank, N.A. served as the Fund's
investment manager.
Total return represents aggregate total return for the period indicated.
# Annualized.

Page 5

FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>

DREYFUS/LAUREL PRIME MONEY MARKET FUND
FOR A CLASS R SHARE OUTSTANDING THROUGHOUT EACH YEAR OR PERIOD.*

YEAR YEAR YEAR YEAR YEAR YEAR PERIOD
ENDED ENDED ENDED ENDED ENDED ENDED ENDED
10/31/94*## 10/31/93 10/31/92 10/31/91 10/31/90 10/31/89 10/31/88
---------- ---------- ---------- ---------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of year.............. $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
Income from
investment operations:
Net investment income 0.0344 0.0280 0.0385 0.0621 0.0820 0.0667 0.0601
Less distributions:
Dividends from net
investment income.... (0.0344) (0.0280) (0.0385) (0.0621) (0.0820) (0.0667) (0.0601)
Net asset value, end of year $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
Total return........... 3.52% 2.84% 3.92% 6.39% 8.55% 7.95% 6.18%
Ratios to average net
assets/supplemental data:
Net assets, end of year
(in 000's)........... $ 124,754 $103,760 $91,848 $105,329 $93,366 $92,257 $530
Ratio of operating expenses to
average net assets... 0.51% 0.50%** 0.50%** 0.50%** 0.16%** 0.00%** 0.60%#**
Ratio of net investment income
to average net assets 3.51% 2.80% 3.88% 6.13% 8.21% 8.97% 6.69%#
</TABLE>

Net investment income before expenses reimbursed by the
investment adviser for the year ended October 31, 1994 was $0.0331.
Total return represents aggregate total return for the periods
indicated.
Annualized operating expense ratio before expenses reimbursed by the
investment adviser for the year ended October 31, 1994 was 0.64%.
# Annualized.
## Effective October 17, 1994, The Dreyfus Corporation serves as
the Fund's investment manager. Prior to October 17, 1994, Mellon Bank,
N.A. served as the Fund's investment manager.
Page 6

DREYFUS/LAUREL TAX-EXEMPT MONEY MARKET FUND
FOR AN INVESTOR SHARE OUTSTANDING THROUGHOUT THE PERIOD.
PERIOD
ENDED
10/31/94*
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C>

Net asset value, beginning of period.................................................... $1.00
-----------
Income from investment operations:
Net investment income........................................................... 0.0113
Less distributions:
Dividends from net investment income............................................ (0.0122)
-----------
Net asset value, end of period.......................................................... $1.00
============
Total return............................................................................ 1.23%
============
Ratios to average net assets/supplemental data:
Net assets, end of period (in 000's)............................................ $1,161
Ratio of operating expenses to average net assets............................... 0.70%#
Ratio of net investment income to average net assets............................ 2.11%#
</TABLE>

- -----------------------------------------------------------------------------
* The Fund commenced selling Investor Shares on April 20,
1994.Effective October 17, 1994, The Dreyfus Corporation serves as the
Fund's investment manager. Prior to October 17, 1994, Mellon Bank, N.A.
served as the Fund's investment manager.
Total return represents aggregate total return for the period
indicated.
# Annualized.
Page 7

FINANCIAL HIGHLIGHTS (CONTINUED)

DREYFUS/LAUREL TAX-EXEMPT MONEY MARKET FUND
FOR A CLASS R SHARE OUTSTANDING THROUGHOUT EACH YEAR OR PERIOD.*

YEAR YEAR YEAR YEAR YEAR YEAR PERIOD
ENDED ENDED ENDED ENDED ENDED ENDED ENDED
10/31/94*## 10/31/93 10/31/92 10/31/91 10/31/90 10/31/89 10/31/88
---------- ---------- ---------- ----------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of year................ $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
------ ------ ------- ------ ------ ------ ------
Income from investment operations:
Net investment income.. 0.0228 0.0208 0.0291 0.0454 0.0454 0.0564 0.0592
Less distributions:
Dividends from net
investment income...... (0.0228) (0.0208) (0.0291) (0.0454) (0.0454) (0.0564) (0.0592)
-------- --------- -------- --------- --------- --------- ----------
Net asset value, end of year $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
====== ====== ====== ====== ====== ====== ======
Total return............. 2.29% 2.10% 2.94% 4.64% 5.79% 6.08% 4.22%
====== ====== ====== ====== ====== ====== ======
Ratios to average net
assets/supplemental data:
Net assets, end of year (in 000's) $205,105 $187,830 $184,719 $152,260 $152,260 $88,247 $56,224
Ratio of operating expenses
to average net assets.. 0.51% 0.50%** 0.50%** 0.50%** 0.55%** 0.70%** 0.70%**#
Ratio of net investment income
to average net assets.. 2.30% 2.08% 2.90% 4.49% 5.66% 5.95% 4.61%#
</TABLE>

- ---------------------------------
* The Fund commenced operations on December 10, 1987. The Fund
commenced selling Investor Shares on April 20, 1994. Those shares in
existence prior to April 4, 1994 were designated Trust Shares. Effective
as of October 17, 1994, the Fund's Trust Shares were reclassified as
Class R Shares.
** For the period ended October 31, 1988, the investment adviser
waived a portion of its advisory fee amounting to $0.0040 per share. For
the years or period ended October 31, 1993, 1992, 1991, 1990, 1989 and
1988, the investment adviser reimbursed expenses of the Fund amounting to
$0.0024, $0.0029, $0.0036, $0.0052, $0.0044 and $0.0031 per share,
respectively.
Net investment income before expenses reimbursed by the
investment adviser for the year ended October 31, 1994 was $0.0218.
Total return represents aggregate total return for the periods
indicated.
Annualized operating expense ratio before expenses reimbursed by the
investment adviser for the year ended October 31, 1994 was 0.60%.
# Annualized.
## Effective October 17, 1994, The Dreyfus Corporation serves as
the Fund's investment manager. Prior to October 17, 1994, Mellon Bank,
N.A. served as the Fund's investment manager.
Page 8

FINANCIAL HIGHLIGHTS
The following financial information for Investor and Class R Shares has been
derived from the financial statements which have been audited by KPMG Peat
Marwick LLP, the independent auditors for The Dreyfus/ Laurel Funds, Inc.,
for the indicated years or period ended October 31, whose reports accompany
such financial statements that appear in the Fund's Annual Report dated
October 31, 1994 and which are incorporated by reference in the SAI. Further
information about the Fund's performance is contained in the Fund's Annual
Report, which may be obtained without charge.

DREYFUS/LAUREL U.S. TREASURY MONEY MARKET FUND
FOR AN INVESTOR SHARE OUTSTANDING THROUGHOUT THE PERIOD.
PERIOD
ENDED
10/31/94*
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period.................................................... $1.00
-----------
Income from investment operations:
Net investment income................................................................... 0.0185
Less distributions:
Dividends from net investment income.................................................... (0.0195)
-----------
Net asset value, end of period.......................................................... $1.00
===========
Total return............................................................................ 1.96%
===========
Ratios to average net assets/supplemental data:
Net assets, end of period (in 000's).................................................... $1,324
Ratio of operating expenses to average net assets....................................... 0.70%#
Ratio of net investment income to average net assets.................................... 3.42%#
</TABLE>

- ------------------------------------------------------------------------------
* The Fund commenced selling Investor Shares on April 18, 1994.
Effective October 17, 1994, The Dreyfus Corporation serves as the Fund's
investment manager. Prior to October 17, 1994, Mellon Bank, N.A. served
as the Fund's investment manager.
Total return represents aggregate total return for the period
indicated.
# Annualized.
Page 9

FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>

DREYFUS/LAUREL U.S. TREASURY MONEY MARKET FUND
FOR A CLASS R SHARE OUTSTANDING THROUGHOUT EACH YEAR OR PERIOD.

YEAR YEAR YEAR PERIOD
ENDED ENDED ENDED ENDED
10/31/94*## 10/31/93 10/31/92 10/31/91*
---------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
Net asset value, beginning of year........................... $1.00 $1.00 $1.00 $1.00
---------- ---------- ---------- -----------
Income from investment operations:
Net investment income...................................... 0.0331 0.0274 0.0367 0.0424
Less distributions:
Dividends from net investment income....................... (0.0331) (0.0274) (0.0367) (0.0424)
---------- ---------- ---------- -----------
Net asset value, end of year................................. $1.00 $1.00 $1.00 $1.00
========== ======== ======== ========
Total return................................................. 3.37% 2.77% 3.73% 4.32%
========== ======== ======== ========
Ratios to average net assets/supplemental data:
Net assets, end of year (in 000's)........................... $228,797 $69,785 $69,187 $45,998
Ratio of operating expenses to average net assets............ 0.50% 0.50%** 0.50%** 0.34%#**
Ratio of net investment income to average net assets......... 3.62% 2.74% 3.63% 5.55%#
</TABLE>

- -----------------
* The Fund commenced operations on February 4, 1991. The Fund
commenced selling Investor Shares on April 18, 1994. Those shares
outstanding prior to April 4, 1994 were designated as Trust Shares.
Effective as of October 17, 1994, the Fund's Trust Shares were
redesignated as Class R Shares.
** For the period ended October 31, 1991, the investment adviser
waived a portion of its advisory fee amounting to $0.0010 per share. For
the years or period ended October 31, 1993, 1992 and 1991, the investment
adviser reimbursed expenses of the Fund amounting to $0.0040, $0.0040 and
$0.0048 per share, respectively.
+ Net investment income before expenses reimbursed by the
investment adviser for the year ended October 31, 1994 was $0.0323.
++ Total return represents aggregate total return for the periods
indicated.
+++ Annualized expense ratio before expenses reimbursed by the investment
adviser for the year ended October 31, 1994 was 0.59%.
# Annualized.
## Effective October 17, 1994, The Dreyfus Corporation serves as
the Fund's investment manager.Prior to October 17, 1994, Mellon Bank,
N.A. served as the Fund's investment manager.
Page 10

DESCRIPTION OF THE FUNDS
GENERAL
By this Prospectus, each Fund is offering Investor Shares and Class R
Shares. (Class R Shares of the Funds were formerly called Trust Shares.)
Investor Shares and Class R shares are identical, except as to the services
offered to and the expenses borne by each Class. Class R shares are sold
primarily to bank trust departments and other financial service providers
(including Mellon Bank and its affiliates) ("Banks") acting on behalf of
customers having a qualified trust or investment account or relationship at
such institution, or to customers who have received and hold shares of a Fund
distributed to them by virtue of such an account or relationship. Investor
Shares are primarily sold to retail investors by the Distributor and by
Agents that have entered into a Selling Agreement with the Distributor. If
shares of a Fund are held in an account at a Bank or with an Agent, such Bank
or Agent may require you to place all Fund purchase, exchange and redemption
orders through them. All Banks and Agents have agreed to transmit transaction
requests to each Fund's transfer agent or to the Distributor. Distributor and
shareholder servicing paid by Investor Shares will cause Investor shares to
have a higher expense ratio and pay lower dividends than Class R.
DREYFUS/LAUREL PRIME MONEY MARKET FUND
INVESTMENT OBJECTIVE AND POLICIES
Dreyfus/Laurel Prime Money Market Fund seeks a high level of current
income consistent with stability of principal by investing in high-grade
money market instruments. There can be no assurance that the Dreyfus/Laurel
Prime Money Market Fund will meet its stated investment objective. See "Other
Investment Policies and Risk Factors" for a detailed description of risks and
other Fund investment policies. See "Other Investment Policies and Risk
Factors _ Limiting Investment Risks" for a discussion of the Fund's
investment limitations.
The instruments in which Dreyfus/Laurel Prime Money Market Fund invests
include (1) U.S. Treasury bills, notes and bonds; (2) other obligations
issued or guaranteed as to interest and principal by the U.S. Government, its
agencies and instrumentalities; (3) instruments of U.S. and foreign banks,
including certificates of deposit, banker's acceptances, and time deposits,
and may include Eurodollar Certificates of Deposit ("ECDs"), Yankee
Certificates of Deposit ("Yankee CDs"), and Eurodollar Time Deposits
("ETDs"); (4) commercial paper of U.S. and foreign companies; (5) corporate
obligations; (6) mortgage-related securities backed by U.S. Government
agencies or instrumentalities; (7) variable amount master demand notes; (8)
floating rate notes; and (9) repurchase agreements. The Dreyfus/Laurel Prime
Money Market Fund also may utilize reverse repurchase agreements. (See "Other
Investment Policies and Risk Factors.")
DREYFUS/LAUREL TAX-EXEMPT MONEY MARKET FUND
INVESTMENT OBJECTIVE AND POLICIES
Dreyfus/Laurel Tax-Exempt Money Market Fund seeks income exempt from
federal income tax consistent with stability of principal by investing in
tax-exempt municipal obligations. There can be no assurance that the
Dreyfus/Laurel Tax-Exempt Money Market Fund will meet its stated investment
objective. See "Other Investment Policies and Risk Factors" for a detailed
description of risks and other Fund investment policies. See "Other
Investment Policies and Risk Factors _ Limiting Investment Risks" for discussi
on of the Fund's investment limitations.
Dreyfus/Laurel Tax-Exempt Money Market Fund intends to invest 100%,
and has adopted a policy requiring that it invest at least 80%, of its total
assets in municipal obligations. Debt obligations the
Page 11
interest on which is a "tax preference item" for purposes of the alternative
minimum tax are not counted toward meeting the 80% test.
TYPES OF MUNICIPAL SECURITIES. Municipal securities are obligations
issued by or on behalf of states, territories and possessions of the United
States and their political subdivisions, agencies, and instrumentalities, the
interest from which is, in the opinion of bond counsel, exempt from regular
federal income tax. The municipal securities in which Dreyfus/Laurel
Tax-Exempt Money Market Fund may invest include: (1) municipal notes,
including tax anticipation and revenue anticipation notes, bond anticipation
notes, construction loan notes and tax-exempt commercial paper; (2)
short-term municipal bonds, including general obligation bonds, revenue
bonds, industrial revenue bonds and private activity bonds; and (3) municipal
leases.
Dreyfus/Laurel Tax-Exempt Money Market Fund may purchase certain
municipal securities, including certain industrial development bonds and
bonds issued after August 7, 1986 to finance "private activities," the
interest on which may constitute a "tax preference item" for purposes of the
alternative minimum tax, even though the interest will continue to be fully
tax-exempt for federal income tax purposes. However, the Dreyfus/Laurel
Tax-Exempt Money Market Fund has no current intention of investing in such
municipal securities. (See "Taxes.")
YIELD FACTORS AND RATINGS. Yields on municipal securities are
dependent on a variety of factors, including the general conditions of the
money market and of the municipal bond and municipal note markets, the size
of a particular offering, the maturity of the obligation and the rating of
the issue. The achievement of the Dreyfus/Laurel Tax-Exempt Money Market
Fund's investment objective is dependent in part on the continuing ability of
the issuers of the municipal securities in which Dreyfus/Laurel Tax-Exempt
Money Market Fund invests to meet their obligations for the payment of
principal and interest when due. Obligations of issuers of municipal
securities are subject to the provisions of bankruptcy, insolvency and other
laws affecting the rights and remedies of creditors. The possibility exists,
therefore, that, as a result of litigation or other conditions, the ability
of any issuer to pay, when due, the principal of and interest on its
municipal securities may be materially affected.
All of the Dreyfus/Laurel Tax-Exempt Money Market Fund's municipal
securities, including municipal leases, at the time of purchase must present
minimal credit risks and either be backed by the full faith and credit of the
United States or be of high quality as determined in accordance with
procedures adopted by the Board of Directors.
ADDITIONAL INFORMATION. The Dreyfus/Laurel Tax-Exempt Money Market
Fund may invest more than 25% of its assets in industrial development bonds,
in participation interests therein issued by banks and in municipal
securities and other obligations guaranteed by the U.S. Government, its
agencies or instrumentalities. A participation interest gives the
Dreyfus/Laurel Tax-Exempt Money Market Fund an undivided interest in a
municipal bond owned by a bank and generally is backed by the bank's
irrevocable letter of credit or guarantee.
TAXABLE INVESTMENTS. The Dreyfus/Laurel Tax-Exempt Money Market Fund
will attempt to invest 100% of its net assets in municipal securities, the
interest on which, in the opinion of bond counsel, is exempt from regular
federal income tax. The Dreyfus/Laurel Tax-Exempt Money Market Fund also may
under certain circumstances invest up to 20% of the value of its net assets
in certain securities the interest income on which is subject to federal
income tax.
The Dreyfus/Laurel Tax-Exempt Money Market Fund may invest in any of
the following taxable instruments: (1) U.S. Treasury bills, notes and bonds;
(2) other obligations issued or guaranteed as to interest and principal by
the U.S. Government, its agencies and instrumentalities; (3) instruments of
U.S. and foreign banks, including certificates of deposit, banker's
acceptances and time deposits, and
Page 12
may include "ECDs", "Yankee CDs" and Eurodollar Time Deposits ("ETDs");
(4) commercial paper of U.S and foreign companies; (5) corporate obligations;
(6) mortgage-related securities backed by U.S. Government agencies or
instrumentalities; (7) variable amount master demand notes; (8) floating rate
notes; and (9) repurchase agreements. The Fund also may utilize reverse
repurchase agreements. (See "Other Investment Policies and Risk Factors.")
DREYFUS/LAUREL U.S. TREASURY MONEY MARKET FUND
INVESTMENT OBJECTIVE AND POLICIES
Dreyfus/Laurel U.S. Treasury Money Market Fund seeks a high level of
current income consistent with stability of principal by investing in direct
obligations of the U.S. Treasury and repurchase agreements secured by such
obligations. There can be no assurance that the Dreyfus/Laurel U.S. Treasury
Money Market Fund will meet its stated investment objective. See "Other
Investment Policies and Risk Factors" below for a detailed description of
risks and other Fund investment policies. See "Other Investment Policies and
Risk Factors _ Limiting Investment Risks" for discussion of the Fund's
investment limitations.
The Dreyfus/Laurel U.S. Treasury Money Market Fund invests only in
direct obligations of the U.S. Treasury, such as Treasury bills, notes and
bonds, with remaining maturities of 397 days or less, and in repurchase
agreements of duration of 397 days or less secured by direct obligations of
the U.S. Treasury.
OTHER INVESTMENT POLICIES AND RISK FACTORS
BORROWING. Each Fund is authorized, within specified limits, to
borrow money for temporary administrative purposes and to pledge its assets
in connection with such borrowings.
COMMERCIAL PAPER. The Dreyfus/Laurel Prime Money Market and
Dreyfus/Laurel Tax-Exempt Money Market Funds may invest in commercial paper.
These instruments are short-term obligations issued by banks and corporations
that have maturities ranging from 2 to 270 days. Each instrument may be
backed only by the credit of the issuer or may be backed by some form of
credit enhancement, typically in the form of a guarantee by a commercial
bank. Commercial paper backed by guarantees of foreign banks may involve
additional risk due to the difficulty of obtaining and enforcing judgments
against such banks and the generally less restrictive regulations to which
such banks are subject. A Fund will only invest in commercial paper of U.S.
and foreign companies rated A-1 at the time of purchase by Standard & Poor's
Ratings Group, Prime-1 by Moody's Investors Service, Inc. ("Moody's"), F-1 by
Fitch's Investor Service, Inc., Duff 1 by Duff & Phelps, Inc. or A1 by IBCA,
Inc.
ECDS, ETDS AND YANKEE CDS. The Dreyfus/Laurel Prime Money Market and
Dreyfus/Laurel Tax-Exempt Money Market Funds may invest in ECDs, ETDs and
Yankee CDs. ECDs are U.S. dollar-denominated certificates of deposit issued
by foreign branches of domestic banks. ETDs are U.S. dollar-denominated time
deposits in a foreign branch of a U.S. bank or a foreign bank. Yankee CDs are
certificates of deposit issued by a U.S. branch of a foreign bank denominated
in U.S. dollars and held in the United States. ECDs, ETDs and Yankee CDs are
subject to somewhat different risks than are the obligations of domestic
banks. (See "Foreign Securities.")
EURODOLLAR BONDS AND NOTES. The Dreyfus/Laurel Prime Money Market
Fund may invest in Eurodollar bonds and notes. Eurodollar bonds and notes are
obligations which pay principal and interest in U.S. dollars held in banks
outside the United States, primarily in Europe. Investments in Eurodollar
bonds and notes involve risks that differ from investments in securities of
domestic issuers. (See "Foreign Securities.")
FLOATING RATE SECURITIES. The Dreyfus/Laurel Prime Money Market and
Dreyfus/Laurel Tax-Exempt Money Market Funds may invest in floating rate
securities. A floating rate security provides for the automatic adjustment of
its interest whenever a specified interest rate changes. Interest rates on
Page 13
these securities are ordinarily tied to, and are a percentage of, a widely
recognized interest rate, such as the yield on 90-day U.S. Treasury bills or
the prime rate of a specified bank. These rates may change as often as twice
daily. Generally, changes in interest rates will have a smaller effect on the
market value of floating rate securities than on the market value of
comparable fixed income obligations. Thus, investing in variable and floating
rate securities generally allows less opportunity for capital appreciation
and depreciation than investing in comparable fixed income securities.
FOREIGN SECURITIES. The Dreyfus/Laurel Prime Money Market and
Dreyfus/Laurel Tax-Exempt Money Market Funds may purchase securities of
foreign issuers and may invest in obligations of foreign branches of domestic
banks and domestic branches of foreign banks. Investment in foreign
securities presents certain risks, including those resulting from
fluctuations in currency exchange rates, revaluation of currencies, future
political and economic developments and the possible imposition of currency
exchange blockages or other foreign governmental laws or restrictions,
reduced availability of public information concerning issuers, and the fact
that foreign issuers are not generally subject to uniform accounting,
auditing and financial reporting standards or to other regulatory practices
and requirements comparable to those applicable to domestic issuers.
Moreover, securities of many foreign issuers may be less liquid and their
prices more volatile than those of comparable domestic issuers. In addition,
with respect to certain foreign countries, there is the possibility of
expropriation, confiscatory taxation and limitations on the use or removal of
funds or other assets of a Fund, including withholding of dividends. Foreign
securities may be subject to foreign government taxes that would reduce the
yield on such securities.
GNMA CERTIFICATES. The Dreyfus/Laurel Prime Money Market and
Dreyfus/Laurel Tax-Exempt Money Market Funds may invest in Government
National Mortgage Association ("GNMA") Certificates ("GNMA Certificates").
GNMA Certificates are mortgage-backed securities representing part ownership
of a pool of mortgage loans. These loans are made by mortgage bankers,
commercial banks, savings and loan associations, and other lenders and are
either insured by the Federal Housing Administration or guaranteed by the
Veterans Administration. A "pool" or group of such mortgages is assembled
and, after being approved by GNMA, is offered to investors through securities
dealers. Once approved by GNMA, the timely payment of interest and principal
on each mortgage is guaranteed by the full faith and credit of the U.S.
Government. Although the mortgage loans in a pool underlying a GNMA
Certificate will have maturities of up to 30 years, the average life of a
GNMA Certificate will be substantially less because the mortgages will be
subject to normal principal amortization and also may be prepaid prior to
maturity. Prepayment rates vary widely and may be affected by changes in
mortgage interest rates. In periods of falling interest rates, the rate of
prepayment on higher interest mortgage rates tends to increase, thereby
shortening the actual average life of the GNMA Certificate. Conversely, when
interest rates are rising, the rate of prepayment tends to decrease, thereby
lengthening the average life of the GNMA Certificate. Reinvestment of payments
may occur at higher or lower rates than the original yield on the GNMA
Certificates. Due to the prepayment feature and the need to reinvest
prepayments of principal at current rates, GNMA Certificates with underlying
mortgages bearing higher interest rates can be less effective than typical
non-callable bonds of similar maturities at locking in yields during periods
of declining interest rates, although they may have comparable risks of
decline in value during periods of rising interest rates.
ILLIQUID SECURITIES. Each Fund will not knowingly invest more than
10% of the value of its net assets in illiquid securities, including time
deposits and repurchase agreements having maturities longer than seven days.
Securities that have readily available market quotations are not deemed
illiquid for purposes of this limitation (irrespective of any legal or
contractual restrictions on resale). A Fund may invest in commercial
obligations issued in reliance on the so-called "private placement" exemption
Page 14
from registration afforded by Section 4(2) of the Securities Act of 1933, as
amended ("Section 4(2) paper"). A Fund may also purchase securities that are
not registered under the Securities Act of 1933, as amended, but which can be
sold to qualified institutional buyers in accordance with Rule 144A under
that Act ("Rule 144A securities"). Liquidity determinations with respect to
Section 4(2) paper and Rule 144A Securities will be made by the Board of
Directors as required. The Board will consider availability of reliable price
information and other relevant information in making such determinations.
Section 4(2) paper is restricted as to disposition under the federal
securities laws, and generally is sold to institutional investors such as the
Fund that agree that they are purchasing the paper for investment and not
with a view to public distribution. Any resale by the purchaser must be in an
exempt transaction. Section 4(2) paper normally is resold to other
institutional investors like the Fund through or with the assistance of the
issuer or investment dealers who make a market in the Section 4(2) paper,
thus providing liquidity. Rule 144A securities generally must be sold to
other qualified institutional buyers. If a particular investment in Section
4(2) paper or Rule 144A securities is not determined to be liquid, that
investment will be included within the percentage limitation on investment in
illiquid securities. The ability to sell Rule 144A securities to qualified
institutional buyers is a recent development and it is not possible to
predict how this market will mature. Investing in Rule 144A securities could
have the effect of increasing the level of fund illiquidity to the extent
that qualified institutional buyers become, for a time, uninterested in
purchasing these securities.
MORTGAGE PASS-THROUGH CERTIFICATES. The Dreyfus/Laurel Prime Money
Market and Dreyfus/Laurel Tax-Exempt Money Market Funds may invest in
Mortgage Pass-Through Certificates. Mortgage pass-through certificates are
issued by governmental, government-related and private organizations and are
backed by pools of mortgage loans. These mortgage loans are made by lenders
such as savings and loan associations, mortgage bankers, commercial banks and
others to residential home buyers throughout the United States. The
securities are "pass-through" securities because they provide investors with
monthly payments of principal and interest which in effect are a
"pass-through" of the monthly payments made by the individual borrowers on
the underlying mortgage loans. The principal governmental issuer of such
securities is the GNMA, which is a wholly-owned U.S. government corporation
within the Department of Housing and Urban Development. Government related
issuers include the Federal Home Loan Mortgage Corporation ("FHLMC") and the
Federal National Mortgage Association ("FNMA"), both government-sponsored
corporations owned entirely by private stockholders. Commercial banks,
savings and loan institutions, private mortgage insurance companies, mortgage
bankers and other secondary market issuers also create pass-through pools of
conventional residential mortgage loans. Such issuers may be the originators
of the underlying mortgage loans as well as the guarantors of the
mortgage-related securities. The market value of mortgage-related securities
depends on, among other things, the level of interest rates, the
certificates' coupon rates and the payment history of underlying mortgage
loans. For further information, see the SAI.
MUNICIPAL LEASES. The Dreyfus/Laurel Tax-Exempt Money Market Fund may
invest in municipal leases. Municipal leases frequently have special risks
not normally associated with general obligation or revenue bonds. Leases and
installment purchase or conditional sale contracts (which normally provide
for title to the leased asset to pass eventually to the government issuer)
have evolved as a means for governmental issuers to acquire property and
equipment without meeting the constitutional and statutory requirements for
the issuance of debt. The debt-issuance limitations of many state
constitutions and statutes are deemed to be inapplicable because of the
inclusion in many leases or contracts of "non-
appropriation" clauses that provide that the governmental issuer has no
obligation to make future payments under the lease or contract unless money
is appropriated for such purpose by the appropriate legislative body on a
Page 15
yearly or other periodic basis. To reduce these risks, the Dreyfus/Laurel
Tax-Exempt Money Market Fund will only purchase municipal leases subject to a
non-appropriation clause when the payment of principal and accrued interest
is backed by an unconditional irrevocable letter of credit or guarantee of a
bank.
The Dreyfus/Laurel Tax-Exempt Money Market Fund proposes to purchase
municipal lease obligations principally from banks, equipment vendors or
other parties that have entered into an agreement with the Dreyfus/Laurel
Tax-Exempt Money Market Fund providing that such party will remarket the
municipal lease obligations on certain conditions (described below) within
seven days after demand by the Dreyfus/Laurel Tax-Exempt Money Market Fund.
(Such agreements are referred to as "remarketing agreements" and the party
that agrees to remarket or repurchase a municipal lease obligation is
referred to as a "remarketing party.") The agreement will provide for a
remarketing price equal to the principal balance on the obligation as
determined pursuant to the terms of the remarketing agreement as of the
repurchase date (plus accrued interest). The Funds' investment manager, The
Dreyfus Corporation ("Dreyfus"), anticipates that, in most cases, the
remarketing agreement will also provide for the seller of the municipal lease
obligation or the remarketing party to service it for a servicing fee. The
conditions to the Dreyfus/Laurel Tax-Exempt Money Market Fund's right to
require the remarketing party to purchase or remarket the obligation are that
the Dreyfus/Laurel Tax-Exempt Money Market Fund must certify at the time of
remarketing that (1) payments of principal and interest under the municipal
lease obligation are current and the Dreyfus/Laurel Tax-Exempt Money Market
Fund has no knowledge of any default thereunder by the governmental issuer,
(2) such remarketing is necessary in the sole opinion of a designated officer
of the Dreyfus/Laurel Tax-Exempt Money Market Fund to meet the Fund's
liquidity needs, and (3) the governmental issuer has not notified the Dreyfus/
Laurel Tax-Exempt Money Market Fund of termination of the underlying lease.
The remarketing agreement described above requires the remarketing
party to purchase (or market to a third party) municipal lease obligations of
the Dreyfus/Laurel Tax-Exempt Money Market Fund under certain conditions to
provide liquidity if share redemptions of the Dreyfus/Laurel Tax-Exempt Money
Market Fund exceed purchases of Dreyfus/Laurel Tax-Exempt Money Market Fund
shares. The Dreyfus/Laurel Tax-Exempt Money Market Fund will only enter into
remarketing agreements with banks, equipment vendors or other responsible
parties (such as insurance companies, broker-dealers and other financial
institutions) that in Dreyfus' opinion are capable of meeting their
obligations to the Fund. Dreyfus will regularly monitor the ability of
remarketing parties to meet their obligation to the Dreyfus/Laurel Tax-Exempt
Money Market Fund. The Dreyfus/Laurel Tax-Exempt Money Market Fund will enter
into remarketing agreements covering at least 75% in the principal amount of
the municipal lease obligations in its Fund. The Dreyfus/Laurel Tax-Exempt
Money Market Fund will not enter into remarketing agreements with any one
remarketing party in excess of 5% of its total assets. Remarketing agreements
with broker-dealers may require an exemptive order under the Investment
Company Act of 1940, as amended (the "1940 Act"). The Dreyfus/Laurel
Tax-Exempt Money Market Fund will not enter into such agreements with
broker-dealers prior to the issuance of such an order in interpretation of
the SEC that such an order is not required. There can be no assurance that
such an order or interpretation will be granted.
The "remarketing" feature of the agreement entitles the remarketing
party to attempt to resell the Dreyfus/Laurel Tax-Exempt Money Market Fund's
municipal lease obligation within seven days after demand from the Fund;
however, the remarketing party will be obligated to repurchase the municipal
lease obligation for its own account at the end of the seven-day period if
such obligation has not been resold. The remarketing agreement will often be
entered into with the party who has sold a municipal
Page 16
lease obligation to the Dreyfus/Laurel Tax-Exempt Money Market Fund, but
remarketing agreements may also be entered into with a separate remarketing
party of the same type that meets the credit and other criteria listed above.
Up to 25% of the Dreyfus/Laurel Tax-Exempt Money Market Fund's municipal lease
obligations may not be covered by remarketing agreements. The Dreyfus/Laurel
Tax-Exempt Money Market Fund, however, will not invest in municipal lease
obligations that are not subject to remarketing agreements if, as a result of
such investment, more than 10% of its total assets would be invested in
illiquid securities such as (1) municipal lease obligations not subject to
remarketing agreements and not deemed by Dreyfus at the time of purchase to be
at least of comparable quality to rated municipal debt obligations, or (2)
other illiquid assets such as securities restricted as to resale under federal
or state securities laws. For purposes of the preceding sentence, a municipal
lease obligation that is backed by an irrevocable bank letter of credit or an
insurance policy, issued by a bank or issuer deemed by Dreyfus to be of high
quality and minimal credit risk, will not be deemed to be "illiquid" solely
because the underlying municipal lease obligation is unrated, if Dreyfus
determines that such municipal lease obligation is readily marketable because
it is backed by such letter of credit or insurance policy.
As used within this section, high quality means that the municipal
lease obligation meets all of the following criteria: (1) the underlying
equipment is for an essential governmental function; (2) the municipality has
a documented history of stable financial operations and timely payments of
principal and interest on its municipal debt or lease obligation; (3) the
lease/purchase agreement contains proper terms and conditions to protect
against non-appropriation, substitution of equipment and other more general
risks associated with the purchase of securities; (4) the equipment
underlying the lease was leased in a proper and legal manner; and (5) the
equipment underlying the lease was leased from a reputable equipment vendor.
A letter of credit or insurance policy would generally provide that the
issuer of the letter of credit or insurance policy would pay the outstanding
principal balance of the municipal lease obligations plus any accrued but
unpaid interest upon non-appropriation or default by the governmental lessee.
However, the terms of each letter of credit or insurance policy may vary
significantly and would affect the degree to which such protections increase
the liquidity of a particular municipal lease obligation.
OTHER INVESTMENT COMPANIES. Each Fund may invest in securities issued
by other investment companies to the extent that such investments are
consistent with the Fund's investment objective and policies and permissible
under the 1940 Act. As a shareholder of another investment company, a Fund
would bear, along with other shareholders, its pro rata portion of the other
investment company's expenses, including advisory fees. These expenses would
be in addition to the advisory and other expenses that the Fund bears
directly in connection with its own operations.
REPURCHASE AGREEMENTS. Each Fund may enter into repurchase
agreements. A repurchase agreement involves the purchase of a security by a
Fund and a simultaneous agreement (generally with a bank or broker-dealer) to
repurchase that security from a Fund at a specified price and date or upon
demand. This technique offers a method of earning income on idle cash. A risk
associated with repurchase agreements is the failure of the seller to
repurchase the securities as agreed, which may cause a Fund to suffer a loss
if the market value of such securities declines before they can be liquidated
on the open market. Repurchase agreements with a duration of more than seven
days are considered illiquid securities and are subject to the limit stated
above.
REVERSE REPURCHASE AGREEMENTS. The Dreyfus/Laurel Prime Money Market
and Dreyfus/Laurel Tax-Exempt Money Market Funds may enter into reverse
repurchase agreements to meet redemption requests where the liquidation of
fund securities is deemed by Dreyfus to be disadvantageous. Under a reverse
repurchase agreement, a Fund: (i) transfers possession of fund securities to
a bank or broker-dealer in return for cash in an amount equal to a percentage
of the securities' market value; and (ii) agrees to repurchase the securities
Page 17
at a future date by repaying the cash with interest. Cash or liquid
high-grade debt securities held by the Fund equal in value to the repurchase
price including any accrued interest will be maintained in a segregated
account while a reverse repurchase agreement is in effect.
SECURITIES LENDING. To increase return on fund securities, each Fund
may lend its portfolio securities to broker-dealers and other institutional
investors pursuant to agreements requiring that the loans be continuously
secured by collateral equal at all times in value to at least the market
value of the securities loaned. There may be risks of delay in receiving
additional collateral or in recovering the securities loaned or even a loss
of rights to the collateral should the borrower of the securities fail
financially. However, loans are made only to borrowers deemed by Dreyfus to
be of good standing and when, in its judgment, the income to be earned from
the loan justifies the attendant risks.
STAND-BY COMMITMENTS. The Dreyfus/Laurel Tax-Exempt Money Market
Fund's investments may include "stand-by commitments," which are rights to
resell municipal securities at specified periods prior to their maturity
dates to the seller or to some third party at an agreed-upon price or yield.
Stand-by commitments may involve certain expenses and risks, including the
inability of the issuer of the commitment to pay for the securities at the
time the commitment is exercised, non-marketability of the commitment, and
differences between the maturity of the commitment.
U.S. GOVERNMENT SECURITIES. Each Fund may invest in obligations
issued or guaranteed as to both principal and interest by the U.S. Government
or backed by the full faith and credit of the United States. In addition to
direct obligations of the U.S. Treasury, these include securities issued or
guaranteed by the Federal Housing Administration, Farmers Home
Administration, Export-Import Bank of the United States, Small Business
Administration, GNMA, General Services Administration and Maritime
Administration. Investments may also be made in U.S. Government obligations
that do not carry the full faith and credit guarantee, such as those issued
by the FNMA, the FHLMC, or other instrumentalities.
VARIABLE AMOUNT MASTER DEMAND NOTES. The Dreyfus/Laurel Prime Money
Market Fund may invest in Variable Amount Master Demand Notes. Variable
amount master demand notes are unsecured obligations that are redeemable upon
demand and are typically unrated. These instruments are issued pursuant to
written agreements between their issuers and holders. The agreements permit
the holders to increase (subject to an agreed maximum) and the holders and
issuers to decrease the principal amount of the notes, and specify that the
rate of interest payable on the principal fluctuates according to an
agreed-upon formula. If an issuer of a variable amount master demand note
were to default on its payment obligation, a Fund might be unable to dispose
of the note because of the absence of a secondary market and might, for this
or other reasons, suffer a loss to the extent of the default. A Fund will
only invest in variable amount master demand notes issued only by entities
that Dreyfus considers creditworthy.
VARIABLE RATE OBLIGATIONS. The Dreyfus/Laurel Tax-Exempt Money Market
Fund may invest in variable rate obligations whose interest rates are
adjusted either at predesignated periodic intervals or whenever there is a
change in the market rate to which the security's interest rate is tied. The
adjustments minimize changes in the market value of the obligation and,
accordingly, enhance the ability of the Dreyfus/Laurel Tax-Exempt Money
Market Fund to maintain a stable NAV. The Dreyfus/Laurel Tax-Exempt Money
Market Fund may also purchase participation interests in variable rate
securities such as industrial development bonds backed by letters of credit
or insured or guaranteed by financial institutions, such as banks, or
insurance companies, whose credit quality ratings are judged by Dreyfus to be
comparable in quality to the two highest quality ratings of Moody's or
Standard & Poor's.
WHEN ISSUED SECURITIES AND DELAYED DELIVERY TRANSACTIONS. To secure
advantageous prices or yields, each Fund may purchase U.S. Government
securities on a when-issued basis or may purchase or sell securities for
Page 18
delayed delivery. In such transactions, delivery of the securities occurs
beyond the normal settlement periods, but no payment or delivery is made by a
Fund prior to the actual delivery or payment by the other party to the
transaction. The purchase of securities on a when-issued or delayed delivery
basis involves the risk that, as a result of an increase in yields available
in the market place, the value of the securities purchased will decline prior
to the settlement date. The sale of securities for delayed delivery involves
the risk that the prices available in the market on the delivery date may be
greater than those obtained in the sale transactions. Each Fund will
establish a segregated account consisting of cash, U.S. Government securities
or other high-grade debt obligations in an amount equal to the amounts of its
when-issued and delayed delivery commitments.
MASTER/FEEDER OPTION. The Dreyfus/Laurel Funds, Inc. may in the
future seek to achieve a Fund's investment objective by investing all of a
Fund's assets in another investment company having the same investment
objective and substantially the same investment policies and restrictions as
those applicable to the Fund. Shareholders of the Fund will be given at least
30 days' prior notice of any such investment. Such investment would be made
only if the directors determine it to be in the best interest of the Fund and
its shareholders. In making that determination, the directors will consider,
among other things, the benefits to shareholders and/or the opportunity to
reduce costs and achieve operational efficiencies. Although the Funds believe
that the directors will not approve an arrangement that is likely to result
in higher costs, no assurance is given that costs will be materially reduced
if this option is implemented.
LIMITING INVESTMENT RISKS. Each Fund is subject to a number of
investment limitations. Certain limitations are matters of fundamental policy
and may not be changed without the affirmative vote of the holders of a
majority of each Fund's outstanding Shares. The SAI describes all of a Fund's
fundamental and non-fundamental restrictions.
The investment objective, policies, restrictions, practices and
procedures of a Fund, unless otherwise specified, may be changed without
shareholder approval. If a Fund's investment objective, policies,
restrictions, practices or procedures change, shareholders should consider
whether the Fund remains an appropriate investment in light of their then
current position and needs.
In order to permit the sale of a Fund's Shares in certain states, a
Fund may make commitments more restrictive than the investment policies and
restrictions described in this Prospectus and the SAI. Should a Fund
determine that any such commitment is no longer in the best interests of the
Fund, it may consider terminating sales of its Shares in the states involved.
MANAGEMENT OF THE FUNDS
INVESTMENT MANAGER. Dreyfus, located at 200 Park Avenue, New York,
New York 10166, was formed in 1947. Dreyfus is a wholly-owned subsidiary of
Mellon Bank, which is a wholly-owned subsidiary of Mellon Bank Corporation
("Mellon"). As of March 31, 1995, Dreyfus managed or administered
approximately $72 billion in assets for more than 1.9 million investor
accounts nationwide.
Dreyfus serves as the Funds' investment manager. Dreyfus supervises
and assists in the overall management of the Funds' affairs under an
Investment Management Agreement with the Funds, subject to the overall
authority of the Company's Board of Directors in accordance with Maryland
law. Pursuant to the Investment Management Agreement, Dreyfus provides, or
arranges for one or more third parties to provide, investment advisory,
administrative, custody, fund accounting and transfer agency services to the
Funds. As the Funds' investment manager, Dreyfus manages the Funds by making
investment decisions based on the Funds' investment objective, policies and
restrictions.
Mellon is a publicly owned multibank holding company incorporated
under Pennsylvania law in 1971 and registered under the Bank Holding Company
Act of 1956, as amended. Mellon provides a comprehensive range of financial
Page 19
products and services in domestic and selected international markets. Mellon
is among the twenty-five largest bank holding companies in the United States
based on total assets. Mellon's principal wholly-owned subsidiaries are
Mellon Bank, Mellon Bank (DE) National Association, Mellon Bank (MD), The
Boston Company, Inc., AFCO Credit Corporation and a number of companies known
as Mellon Financial Services Corporations. Through its subsidiaries,
including Dreyfus, Mellon managed approximately $193 billion in assets as of
December 31, 1994, including $76 billion in mutual fund assets. As of
December 31, 1994, Mellon, through various subsidiaries, provided
non-investment services, such as custodial or administration services, for
approximately $654 billion in assets, including approximately $74 billion in
mutual fund assets.
Dreyfus pays all of the expenses of each Fund except brokerage fees,
taxes, interest, fee, and expenses of the non-interested Directors (including
counsel fees) and extraordinary expenses. Although Dreyfus does not pay for
the fees and expenses of the non-interested Directors (including counsel
fees), Dreyfus is contractually required to reduce its investment management
fee in an amount equal to each Fund's allocable share of such expenses. In
order to compensate Dreyfus for paying virtually all of a Fund's expenses,
each Fund's investment management fee is higher than the investment advisory
fees paid by most investment companies. Most if not all, such companies also
pay for additional non-investment advisory expenses that are not paid by such
companies' investment advisers. From time to time, Dreyfus may waive (either
voluntarily or pursuant to applicable state limitations) additional
investment management fees payable by a Fund. For the period from November 1,
1993 to April 3, 1994, the Prime Money Market Fund, the U.S. Treasury Money
Market Fund and the Tax-Exempt Money Market Fund paid its investment adviser,
Mellon Bank, 0.19%, 0.13%, and 0.32%, respectively (annualized) of its
average daily net assets in investment advisory fees (net of expenses
reimbursed), under the Fund's previous investment advisory contract (such
contract covered only the provision of investment advisory and certain
specified administrative services). For the period from April 4, 1994 through
the fiscal year ended October 31, 1994, each Fund paid Mellon Bank or the
Manager 0.50% (annualized) of its average daily net assets in investment
management fees, less fees and expenses of the non-interested Directors
(including counsel fees).
For the fiscal year ended October 31, 1994, total operating expenses
(excluding Rule 12b-1 fees) (net of expenses reimbursed) of the Prime Money
Market Fund were 0.51% (annualized) of the average daily net assets of each
class for both the Investor Class and Class R. For the fiscal year ended
October 31, 1994, total operating expenses (excluding Rule 12b-1 fees) (net
of expenses reimbursed) of the U.S. Treasury Money Market Fund were 0.50%
(annualized) of the average daily net assets of each class for both the
Investor Class and Class R. For the fiscal year ended October 31, 1994, total
operating expenses (excluding Rule 12b-1 fees) (net of expenses reimbursed)
of the Tax-Exempt Money Market Fund were 0.50% and 0.51% (annualized) of the
average daily net assets of each class for the Investor Class and Class R,
respectively. Without the reimbursement, operating expenses would have been
higher.
In addition, Investor shares may be subject to certain distribution
and service fees. See "Distribution Plan (Investor Shares only)."
Dreyfus may pay the Distributor for shareholder services from
Dreyfus' own assets, including past profits but not including the management
fee paid by the Funds. The Distributor may use part or all of such payments
to pay Agents in respect of these services.
Dreyfus is authorized to allocate purchase and sale orders for
portfolio securities to certain financial institutions, including, in the
case of agency transactions, financial institutions that are affiliated with
Dreyfus or Mellon Bank or that have sold shares of the Funds, if Dreyfus
believes that the quality of the transaction and the commission are
comparable to what they would be with other qualified brokerage firms. From
Page 20
time to time, to the extent consistent with its investment objective, policies
and restrictions, the Funds may invest in securities of companies with which
Mellon Bank has a lending relationship.
The Funds' distributor is Premier Mutual Fund Services, Inc. (the
"Distributor"). The Distributor is located at One Exchange Place, Boston,
Massachusetts 02109. The Distributor is a wholly-owned subsidiary of
Institutional Administration Services, Inc., a provider of mutual fund
administration services, the parent company of which is Boston Institutional
Group, Inc.
CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT, AND
SUB-ADMINISTRATOR--Mellon Bank (One Mellon Bank Center, Pittsburgh,
Pennsylvania 15258) is the Funds' custodian and fund accountant. The Funds'
Transfer and Dividend Disbursing Agent is The Shareholder Services Group,
Inc. (the "Transfer Agent"), a subsidiary of First Data Corporation, One
American Express Plaza, Providence, Rhode Island 02903. Premier Mutual Fund
Services, Inc. is the Funds' sub-administrator and, pursuant to a
Sub-Administration Agreement with Dreyfus, provides various administrative
and corporate secretarial services to the Funds.
HOW TO BUY FUND SHARES
GENERAL-- Investor Shares are offered to any investor and may be
purchased through the Distributor or Agents that have entered into Selling
Agreements with the Distributor.
Class R Shares are sold primarily to Banks acting on behalf of
customers having a qualified trust or investment account or relationship at
such institution, or to customers who have received and hold shares of the
Fund distributed to them by virtue of such an account or relationship. A
Retirement Plan is a certain qualified or non-qualified employee benefit plan
or other program, including pension, profit-sharing and other deferred
compensation plans, whether established by corporations, partnerships, non-pro
fit entities or state and local governments ("Retirement Plan"). Class R
Shares may be purchased for a Retirement Plan only by a custodian, trustee,
investment manager or other entity authorized to act on behalf of such Plan.
Institutions effecting transactions in Class R Shares for the accounts of
their clients may charge their clients direct fees in connection with such
transactions. It is not recommended that the Dreyfus/Laurel Tax-Exempt Money
Market Fund be used as a vehicle for Keogh, IRA or other qualified plans.
Stock certificates are issued only upon your written request. No
certificates are issued for fractional shares. The Funds reserve the right to
reject any purchase order.
The minimum initial investment is $2,500, or $1,000 if you are a
client of an Agent which has made an aggregate minimum initial purchase for
its customers of $2,500. Subsequent investments must be at least $100.
However, the minimum initial investment for Dreyfus-sponsored Keogh Plans,
IRAs, SEP-IRAs and 403(b)(7) Plans with only one participant is $750, with no
minimum on subsequent purchases. Individuals who open an IRA also may open a
non-working spousal IRA with a minimum initial investment of $250. The
initial investment must be accompanied by the Fund's Account Application. For
full-time or part-time employees of Dreyfus or any of its affiliates or
subsidiaries, directors of Dreyfus, board members of a fund advised by
Dreyfus including members of the Company's board, or the spouse or minor
child of any of the foregoing, the minimum initial investment in $1,000. For
full-time or part-time employees of Dreyfus or any of its affiliates or
subsidiaries who elect to have a portion of their pay directly deposited into
their Fund account, the minimum initial investment is $50. The Dreyfus/Laurel
Prime Money Market and U.S. Treasury Money Market Fund reserve the right to
offer their shares without regard to minimum purchase requirements to
employees participating in certain qualified or non-qualified employee
benefit plans or other programs where contributions or account information
can be transmitted in a manner and form acceptable to the Funds. The Funds
reserve the right to vary further the initial and subsequent investment
minimum requirements at any time.
Page 21
The Internal Revenue Code of 1986, as amended (the "Code"), imposes
various limitations on the amount that may be contributed to Retirement
Plans. These limitations apply with respect to participants at the plan level
and, therefore, do not directly affect the amount that may be invested in a
Fund by a Retirement Plan. Participants and plan sponsors should consult
their tax advisers for details.
You may purchase shares of a Fund by check or wire, or through the
Dreyfus TELETRANSFER Privilege described below. Checks should be made payable
to "The Dreyfus Family of Funds" or, if for Dreyfus retirement plan accounts,
to "The Dreyfus Trust Company, Custodian." Payments to open new accounts
which are mailed should be sent to The Dreyfus Family of Funds, P.O. Box
9387, Providence, Rhode Island 02940-9387, together with your Account
Application indicating which Class of shares is being purchased. For
subsequent investments, your Fund account number should appear on the check
and an investment slip should be enclosed and sent to The Dreyfus Family of
Funds, P.O. Box 105, Newark, New Jersey 07101-0105. For Dreyfus retirement
plan accounts, both initial and subsequent investments should be sent to The
Dreyfus Trust Company, Custodian, P.O. Box 6427, Providence, Rhode Island
02940-6427. Neither initial nor subsequent investments should be made by
third party check. PURCHASE ORDERS MAY BE DELIVERED IN PERSON ONLY TO A
DREYFUS FINANCIAL CENTER. THESE ORDERS WILL BE FORWARDED TO THE FUND AND WILL
BE PROCESSED ONLY UPON RECEIPT THEREBY. FOR THE LOCATION OF THE NEAREST
DREYFUS FINANCIAL CENTER, PLEASE CALL ONE OF THE TELEPHONE NUMBERS LISTED
UNDER "GENERAL INFORMATION."
Wire payments may be made if your bank account is in a commercial
bank that is a member of the Federal Reserve System or any other bank having
a correspondent bank in New York City. Immediately available funds may be
transmitted by wire to Boston Safe Deposit & Trust Co., together with the
applicable Class' DDA # as shown below, for purchase of Fund shares in your
name:
DDA# 043427 Dreyfus/Laurel Prime Money Market/Investor shares;
DDA# 043435 Dreyfus/Laurel Prime Money Market/Class R shares;
DDA# 043516 Dreyfus/Laurel Tax-Exempt Money Market Fund/Investor
shares;
DDA# 043508 Dreyfus/Laurel Tax-Exempt Money Market Fund/Class R
shares;
DDA# 043567 Dreyfus/Laurel U.S.Treasury Money Market Fund/Investor
shares;
DDA# 043559 Dreyfus/Laurel U.S. Treasury Money Market Fund/Class R
shares.
The wire must include your Fund account number (for new accounts, your
Taxpayer Identification Number ("TIN") should be included instead), account
registration and dealer number, if applicable. If your initial purchase of
Fund shares is by wire, you should call 1-800-645-6561 after completing your
wire payment in order to obtain your Fund account number. Please include your
Fund account number on the Funds' Account Application and promptly mail the
Account Application to the Fund, as no redemptions will be permitted until
the Account Application is received. You may obtain further information about
remitting funds in this manner from your bank. All payments should be made in
U.S. dollars and, to avoid fees and delays, should be drawn only on U.S. banks
. A charge will be imposed if any check used for investment in your account
does not clear. The Funds make available to certain large institutions the
ability to issue purchase instructions through compatible computer
facilities.
Subsequent investments also may be made by electronic transfer of
funds from an account maintained in a bank or other domestic financial
institution that is an Automated Clearing House ("ACH") member. You must
direct the institution to transmit immediately available funds through the
ACH System to Boston Safe Deposit & Trust Co. with instructions to credit
your Fund account. The instructions must specify your Fund account
registration and Fund account number PRECEDED BY THE DIGITS:
"4790" Dreyfus/Laurel Prime Money Market Fund/Investor Shares;
"4480" Dreyfus/Laurel Prime Money Market Fund/Class R Shares;
Page 22
"4860" Dreyfus/Laurel Tax-Exempt Money Market Fund/Investor Shares;
"4850" Dreyfus/Laurel Tax-Exempt Money Market Fund/Class R Shares;
"4900" Dreyfus/Laurel U.S. Treasury Money Market Fund/Investor
Shares;
"4890" Dreyfus/Laurel U.S. Treasury Money Market Fund/Class R Shares.
The Distributor may pay dealers a fee of up to .5% of the amount
invested through such dealers in Fund shares by employees participating in
qualified or non-qualified employee benefit plans or other programs where (i)
the employers or affiliated employers maintaining such plans or programs have
a minimum of 250 employees eligible for participation in such plans or
programs or (ii) such plan's or program's aggregate investment in The Dreyfus
Family of Funds or certain other products made available by the Distributor
to such plans or programs exceeds one million dollars ("Eligible Benefit
Plans"). The determination of the number of employees eligible for
participation in a plan or program shall be made on the date Fund shares are
first purchased by or on behalf of employees participating in such plan or
program and on each subsequent January 1st. All present holdings of shares of
funds in the Dreyfus Family of Funds by Eligible Benefit Plans will be
aggregated to determine the fee payable with respect to each purchase of Fund
shares. The Distributor reserves the right to cease paying these fees at any
time. The Distributor will pay such fees from its own funds, other than
amounts received from the Fund, including past profits or any other source
available to it.
Federal regulations require that you provide a certified TIN upon
opening or reopening an account. See "Dividends, Other Distributions and
Taxes" and the Funds' Account Application for further information concerning
this requirement. Failure to furnish a certified TIN to the Funds could
subject you to a $50 penalty imposed by the Internal Revenue Service (the
"IRS").
NET ASSET VALUE ("NAV") The price of your shares is their NAV. NAV is
determined on each day that the New York Stock Exchange ("NYSE") is open (a
"business day"). Investments and requests to exchange or redeem shares
received by a Fund before 4 p.m., Eastern time, are effective on, and will
receive the price next determined on, that business day (except purchase
orders made through the Dreyfus TELETRANSFER Privilege, which are effective
one business day after your call). The NAV of each Fund is calculated two
times each business day, at 12 noon and 4 p.m., Eastern time. Investment,
exchange or redemption requests received after 4 p.m. Eastern time, for Money
Market Funds, are effective on, and receive the first Share price determined
on the next business day.
An investment portfolio's NAV refers to the worth of one share. The
NAV for Investor and Class R Shares of a Money Market Fund is calculated on
the basis of amortized cost, which involves initially valuing a portfolio
instrument at its cost and thereafter assuming a constant amortization to
maturity of any discount or premium, regardless of the impact of fluctuating
interest rates on the market value of the instrument. Each Money Market Fund
intends to maintain a constant NAV of $1.00 per share, although there is no
assurance that this can be done on a continuing basis.
The yield of most classes of shares of the Money Market Funds are
published weekly in leading financial publications and daily in many local
newspapers.
DREYFUS TELETRANSFER PRIVILEGE -- You may purchase shares of a Fund
(minimum $500 and maximum $150,000 per day) by telephone if you have checked
the appropriate box and supplied the necessary information on the Funds'
Account Application or have filed a Shareholder Services Form with the
Transfer Agent. The proceeds will be transferred between the bank account
designated in one of these documents and your Fund account. Only a bank
account maintained in a domestic financial institution which is an ACH member
may be so designated. The Funds may modify or terminate this Privilege at any
time or charge a service fee upon notice to shareholders. No such fee
currently is contemplated.
Page 23
If you have selected the Dreyfus TELETRANSFER Privilege, you may
request a Dreyfus TELETRANSFER purchase of Fund shares by telephoning
1-800-221-4060 or, if calling from overseas, 1-401-455-3306.
SHAREHOLDER SERVICES
The services and privileges described under this heading may not be
available to clients of certain Agents and some Agents may impose certain
conditions on their clients which are different from those described in this
Prospectus. You should consult your Agent in this regard.
FUND EXCHANGES
You may purchase, in exchange for shares of a Class, Shares of the
same class of certain other funds managed or administered by Dreyfus, to the
extent such shares are offered for sale in your state of residence. These
funds have different investment objectives which may be of interest to you.
If you desire to use this service, please call 1-800-645-6561 to determine if
it is available and whether any conditions are imposed on its use. WITH
RESPECT TO CLASS R SHARES HELD BY RETIREMENT PLANS, EXCHANGES MAY BE MADE
ONLY BETWEEN A SHAREHOLDER'S RETIREMENT PLAN ACCOUNT IN ONE FUND AND SUCH
SHAREHOLDER'S RETIREMENT PLAN ACCOUNT IN ANOTHER FUND.
To request an exchange, you or your Agent acting on your behalf must
give exchange instructions to the Transfer Agent in writing or by telephone.
Before any exchange, you must obtain and should review a copy of the current
prospectus of the fund into which the exchange is being made. Prospectuses
may be obtained by calling 1-800-645-6561. Except in the case of Personal
Retirement Plans, the shares being exchanged must have a current value of at
least $500; furthermore, when establishing a new account by exchange, the
shares being exchanged must have a value of at least the minimum initial
investment required for the fund into which the exchange is being made. The
ability to issue exchange instructions by telephone is given to all Fund
shareholders automatically, unless you check the relevant "No" box on the
Account Application, indicating that you specifically refuse this Privilege.
The Telephone Exchange Privilege may be established for an existing account
by written request, signed by all shareholders on the account, or by a
separate Shareholder Services Form, also available by calling
1-800-645-6561. If you previously have established the Telephone Exchange
Privilege, you may telephone exchange instructions by calling 1-800-221-4060
or, if calling from overseas, 1-401-455-3306. See "How to Redeem Fund
Shares_Procedures." Upon an exchange, the following shareholder services and
privileges, as applicable and where available, will be automatically carried
over to the fund into which the exchange is made: Telephone Exchange
Privilege, Check Redemption Privilege, Wire Redemption Privilege, Telephone
Redemption Privilege, Dreyfus TELETRANSFER Privilege and the dividends and
distributions payment option (except for Dividend Sweep) selected by the
investor.
Shares will be exchanged at the next determined NAV; however, a sales
load may be charged with respect to exchanges of Investor Shares into funds
sold with a sales load. If you are exchanging Investor Shares into a fund
that charges a sales load, you may qualify for share prices which do not
include the sales load or which reflect a reduced sales load, if the shares
of the fund from which you are exchanging were: (a) purchased with a sales
load, (b) acquired by a previous exchange from shares purchased with a sales
load, or (c) acquired through reinvestment of dividends or other
distributions paid with respect to the foregoing categories of shares. To
qualify, at the time of the exchange you must notify the Transfer Agent or
your Agent must notify the Distributor. Any such qualification is subject to
confirmation of your holdings through a check of appropriate records. See
"Shareholder Services" in the SAI. No fees currently are charged shareholders
directly in connection with exchanges, although the Fund reserves the right,
upon not less than 60 days' written notice, to charge shareholders a nominal
fee in accordance with rules promulgated by the SEC. The Funds reserve the
right to reject any exchange request in whole or in part. The availability of
Page 24
fund exchanges may be modified or terminated at any time upon notice to
shareholders. The exchange of shares of one fund for shares of another is
treated for Federal income tax purposes as a sale of the shares given in
exchange by the shareholder and, therefore, an exchanging shareholder may
realize, or an exchange on behalf of a Retirement Plan which is not tax
exempt may result in, a taxable gain or loss. The exchange of shares of one
fund for shares of another is treated for Federal income tax purposes as a
sale of the shares given in exchange by the shareholder and, therefore, an
exchanging shareholder may realize, or an exchange on behalf of a Retirement
Plan which is not tax exempt may result in, a taxable gain or loss.
DREYFUS AUTO-EXCHANGE PRIVILEGE
Dreyfus Auto-Exchange Privilege enables you to invest regularly (on a
semi-monthly, monthly, quarterly or annual basis), in exchange for shares of
a Fund, in shares of the same Class of certain other funds in the Dreyfus
Family of Funds of which you are currently an investor. WITH RESPECT TO CLASS
R SHARES HELD BY RETIREMENT PLANS, EXCHANGES PURSUANT TO THE DREYFUS
AUTO-EXCHANGE PRIVILEGE MAY BE MADE ONLY BETWEEN A SHAREHOLDER'S RETIREMENT
PLAN ACCOUNT IN ONE FUND AND SUCH SHAREHOLDER'S RETIREMENT PLAN ACCOUNT IN
ANOTHER FUND. The amount you designate, which can be expressed either in
terms of a specific dollar or share amount ($100 minimum), will be exchanged
automatically on the first and/or fifteenth day of the month according to the
schedule you have selected. Shares will be exchanged at the then-current NAV;
however a sales load may be charged with respect to exchanges of Investor
Shares into funds sold with a sales load. The right to exercise this
Privilege may be modified or canceled by the Funds or the Transfer Agent. You
may modify or cancel your exercise of this Privilege at any time by mailing
written notification to The Dreyfus Family of Funds, P.O. Box 9671,
Providence, Rhode Island 02940-9671. The Funds may charge a service fee for
the use of this Privilege. No such fee currently is contemplated. For more
information concerning this Privilege and the funds in the Dreyfus Family of
Funds eligible to participate in this Privilege, or to obtain a Dreyfus
Auto-Exchange Authorization Form, please call toll free 1-800-645-6561.
DREYFUS-AUTOMATIC ASSET BUILDER
Dreyfus-AUTOMATIC Asset Builder permits you to purchase shares of a
Fund (minimum of $100 and maximum of $150,000 per transaction) at regular
intervals selected by you. Shares of a Fund are purchased by transferring
funds from the bank account designated by you. At your option, the bank
account designated by you will be debited in the specified amount, and Fund
Shares will be purchased, once a month, on either the first or fifteenth day,
or twice a month, on both days. Only an account maintained at a domestic
financial institution which is an ACH member may be so designated. To
establish a Dreyfus-AUTOMATIC Asset Builder account, you must file an
authorization form with the Transfer Agent. You may obtain the necessary
authorization by calling 1-800-645-6561 from the Distributor. You may cancel
your participation in this Privilege or change the amount of purchase at any
time by mailing written notification to The Dreyfus Family of Funds, P.O. Box
9671, Providence, Rhode Island 02940-9671, or, if to Dreyfus retirement plan
accounts to The Dreyfus Trust Company, Custodian, P.O. Box 6427, Providence,
Rhode Island 02940-6427, and the notification will be effective three
business days following receipt. The Funds may modify or terminate this
Privilege at any time or charge a service fee. No such fee currently is
contemplated.
DREYFUS DIVIDEND OPTIONS
Dreyfus Dividend Sweep enables you to invest automatically dividends
or dividends and capital gain distributions, if any, paid by a Fund in Shares
of the same class of certain other funds in the Dreyfus Family of Funds of
which you are an investor. Shares of the other fund will be purchased at the
then-current NAV; however, a sales load may be charged with respect to
investments in shares of a fund sold with a sales load. If you are investing
Page 25
in a fund that charges a sales load, you may qualify for share prices which
do not include the sales load or which reflect a reduced sales load. See
"Shareholder Services" in the SAI. Dreyfus Dividend ACH permits you to
transfer electronically on the payment date dividends or dividends and
capital gain distributions, if any, from a Fund to a designated bank account.
Only an account maintained at a domestic financial institution which is an
ACH member may be so designated. Banks may charge a fee for this service.
For more information concerning these Privileges, or to request a
Dreyfus Dividend Options Form, please call toll free 1-800-645-6561. You may
cancel these privileges by mailing written notification to The Dreyfus Family
of Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671. Enrollment in
or cancellation of these Privileges is effective three business days
following receipt. These Privileges are available only for existing accounts
and may not be used to open new accounts. Minimum subsequent investments do
not apply for Dreyfus Dividend Sweep. The Funds may modify or terminate these
Privileges at any time or charge a service fee. No such fee currently is
contemplated. Shares held under Keogh Plans, IRAs or other retirement plans
are not eligible for Dreyfus Dividend Sweep.
DREYFUS GOVERNMENT DIRECT DEPOSIT PRIVILEGE
Dreyfus Government Direct Deposit Privilege enables you to purchase
shares of a Fund (minimum of $100 and maximum of $50,000 per transaction) by
having Federal salary, Social Security, or certain veterans', military or
other payments from the Federal government automatically deposited into your
Fund account. You may deposit as much of such payments as you elect. To
enroll in Dreyfus Government Direct Deposit, you must file with the Transfer
Agent a completed Direct Deposit Sign-Up Form for each type of payment that
you desire to include in this Privilege. The appropriate form may be obtained
by calling 1-800-645-6561. Death or legal incapacity will terminate your
participation in this Privilege. You may elect at any time to terminate your
participation by notifying in writing the appropriate Federal agency.
Further, the Funds may terminate your participation upon 30 days' notice to
you.
DREYFUS PAYROLL SAVINGS PLAN
Dreyfus Payroll Savings Plan permits you to purchase shares of a Fund
(minimum of $100 per transaction) automatically on a regular basis. Depending
upon the direct deposit program of your employer, you may have part or all of
your paycheck transferred to your existing Dreyfus account electronically
through the ACH system at each pay period. To establish a Dreyfus Payroll
Savings Plan account, you must file an authorization form with your
employer's payroll department. Your employer must complete the reverse side
of the form and return it to The Dreyfus Family of Funds, P.O. Box 9671,
Providence, Rhode Island 02940-9671. You may obtain the necessary
authorization form by calling 1-800-645-6561. You may change the amount of
purchase or cancel the authorization only by written notification to your
employer. It is the sole responsibility of your employer, not the
Distributor, Dreyfus, the Funds, the Transfer Agent or any other person, to
arrange for transactions under the Dreyfus Payroll Savings Plan. The Funds
may modify or terminate this Privilege at any time or charge a service fee.
No such fee currently is contemplated.
AUTOMATIC WITHDRAWAL PLAN
The Automatic Withdrawal Plan permits you to request withdrawal of a
specified dollar amount (minimum of $50) on either a monthly or quarterly
basis if you have a $5,000 minimum account.
Particular Retirement Plans, including Dreyfus sponsored retirement
plans, may permit certain participants to establish an automatic withdrawal
plan from such Retirement Plans. Participants should consult their Retirement
Plan sponsor and tax adviser for details. Such a withdrawal plan is different
than the Automatic Withdrawal Plan. An application for the Automatic
Withdrawal Plan can be obtained by calling 1-800-645-6561. The Automatic
Withdrawal Plan may be ended at any time by the shareholder, the Fund or the
Page 26
Transfer Agent. Shares for which certificates have been issued may not be
redeemed through the Automatic Withdrawal Plan.
RETIREMENT PLANS
The Fund offers a variety of pension and profit-sharing plans,
including Keogh Plans, IRAs, SEP-IRAs and IRA "Rollover Accounts," 401(k)
Salary Reduction Plans and 403(b)(7) Plans. Plan support services also are
available. You can obtain details on the various plans by calling the
following numbers toll free: for Keogh Plans, please call 1-800-358-5566;
for IRAs and IRA "Rollover Accounts," please call 1-800-645-6561; for
SEP-IRAs, 401(k) Salary Reduction Plans and 403(b)(7) Plans, please call
1-800-322-7880.
HOW TO REDEEM FUND SHARES
GENERAL--You may request redemption of your Shares at any time. Redemption
requests should be transmitted to the Transfer Agent as described below. When
a request is received in proper form, the Funds will redeem the Shares at the
next determined NAV as described below. If you hold Fund shares of more than
one Class, any request for redemption must specify the Class of Shares being
redeemed. If you fail to specify the Class of Shares to be redeemed or if you
own fewer Shares of the Class than specified to be redeemed, the redemption
request may be delayed until the Transfer Agent receives further instructions
from you or your Agent.
The Funds impose no charges when shares are redeemed directly through
the Distributor. Agents or other institutions may charge their clients a
nominal fee for effecting redemptions of Fund Shares. Any certificates
representing Fund shares being redeemed must be submitted with the redemption
request. The value of the Shares redeemed may be more or less than their
original cost, depending upon the Funds' then-current NAV.
The Funds ordinarily will make payment for all Shares redeemed within
seven days after receipt by the Transfer Agent of a redemption request in
proper form, except as provided by the rules of the SEC. HOWEVER, IF YOU HAVE
PURCHASED FUND SHARES BY CHECK, BY THE DREYFUS TELETRANSFER PRIVILEGE OR
THROUGH DREYFUS-AUTOMATIC ASSET BUILDER AND SUBSEQUENTLY SUBMIT A WRITTEN
REDEMPTION REQUEST TO THE TRANSFER AGENT, THE REDEMPTION PROCEEDS WILL BE
TRANSMITTED TO YOU PROMPTLY UPON BANK CLEARANCE OF YOUR PURCHASE CHECK,
DREYFUS TELETRANSFER PURCHASE OR DREYFUS-AUTOMATIC ASSET BUILDER ORDER, WHICH
MAY TAKE UP TO EIGHT BUSINESS DAYS OR MORE. IN ADDITION, THE FUNDS WILL NOT
HONOR REDEMPTION CHECKS UNDER THE CHECK REDEMPTION PRIVILEGE AND WILL REJECT
REQUESTS TO REDEEM SHARES BY WIRE OR TELEPHONE OR PURSUANT TO THE DREYFUS
TELETRANSFER PRIVILEGE FOR A PERIOD OF EIGHT BUSINESS DAYS AFTER RECEIPT BY
THE TRANSFER AGENT OF THE PURCHASE CHECK, THE DREYFUS TELETRANSFER PURCHASE
OR THE DREYFUS-AUTOMATIC ASSET BUILDER ORDER AGAINST WHICH SUCH REDEMPTION IS
REQUESTED. THESE PROCEDURES WILL NOT APPLY IF YOUR SHARES WERE PURCHASED BY
WIRE PAYMENT, OR IF YOU OTHERWISE HAVE A SUFFICIENT COLLECTED BALANCE IN YOUR
ACCOUNT TO COVER THE REDEMPTION REQUEST. PRIOR TO THE TIME ANY REDEMPTION IS
EFFECTIVE, DIVIDENDS ON SUCH SHARES WILL ACCRUE AND BE PAYABLE, AND YOU WILL
BE ENTITLED TO EXERCISE ALL OTHER RIGHTS OF BENEFICIAL OWNERSHIP. Fund Shares
will not be redeemed until the Transfer Agent has received your Account
Application.
The Funds reserve the right to redeem your account at its option upon
not less than 45 days' written notice if the net asset value of your account
is $500 or less and remains so during the notice period.
PROCEDURES--You may redeem Shares of a Fund by using the regular redemption
procedure through the Transfer Agent, the Check Redemption Privilege, the
Wire Redemption Privilege, the Telephone Redemption Privilege or, through the
Dreyfus TELETRANSFER Privilege. Other redemption procedures may be in effect
Page 27
for clients of certain Agents and institutions. The Funds make available to
certain large institutions the ability to issue redemption instructions
through compatible computer facilities.
You may redeem shares of a Fund by telephone if you have checked the
appropriate box on the Funds' Account Application or have filed a Shareholder
Services Form with the Transfer Agent. If you select a telephone redemption
privilege or Telephone Exchange Privilege, which is granted automatically
unless you refuse it, you authorize the Transfer Agent to act on telephone
instructions from any person representing himself or herself to be you, or a
representative of your Agent, and reasonably believed by the Transfer Agent
to be genuine. The Funds will require the Transfer Agent to employ reasonable
procedures, such as requiring a form of personal identification, to confirm
that instructions are genuine and, if it does not follow such procedures, the
Funds or the Transfer Agent may be liable for any losses due to unauthorized
or fraudulent instructions. Neither the Funds nor the Transfer Agent will be
liable for following telephone instructions reasonably believed to be
genuine.
During times of drastic economic or market conditions, you may
experience difficulty in contacting the Transfer Agent by telephone to
request a redemption or an exchange of Fund Shares. In such cases, you should
consider using the other redemption procedures described herein. Use of these
other redemption procedures may result in your redemption request being
processed at a later time than it would have been if telephone redemption had
been used.
REGULAR REDEMPTION. Under the regular redemption procedure, you may
redeem your shares by written request mailed to The Dreyfus Family of Funds,
P.O. Box 9671, Providence, Rhode Island 02940-9671, or if for Dreyfus
retirement plan accounts to The Dreyfus Trust Company, Custodian, P.O. Box
6427, Providence, Rhode Island 02940-6427. REDEMPTION REQUESTS MAY BE
DELIVERED IN PERSON ONLY TO A DREYFUS FINANCIAL CENTER. THESE REQUESTS WILL
BE FORWARDED TO THE FUND AND WILL BE PROCESSED ONLY UPON RECEIPT THEREBY. FOR
THE LOCATION OF THE NEAREST FINANCIAL CENTER, PLEASE CALL THE TELEPHONE NUMBER
LISTED UNDER "GENERAL INFORMATION." Redemption requests must be signed by
each shareholder, including each owner of a joint account, and each signature
must be guaranteed. The Transfer Agent has adopted standards and procedures
pursuant to which signature-guarantees in proper form generally will be
accepted from domestic banks, brokers, dealers, credit unions, national
securities exchanges, registered securities associations, clearing agencies
and savings associations, as well as from participants in the New York Stock
Exchange Medallion Signature Program, the Securities Transfer Agents
Medallion Program ("STAMP"), and the Stock Exchanges Medallion Program. For
more information with respect to signature-guarantees, please call one of the
telephone numbers listed under "General Information."
Redemption proceeds of at least $1,000 will be wired to any member
bank of the Federal Reserve System in accordance with a written
signature-guaranteed request.
CHECK REDEMPTION PRIVILEGE -- You may request on the Account
Application, Shareholder Services Form or by later written request that a
Fund provide Redemption Checks drawn on the Fund's account. Redemption Checks
may be made payable to the order of any person in the amount of $500 or more.
Redemption Checks should not be used to close your account. Redemption Checks
are free, but the Transfer Agent will impose a fee for stopping payment of a
Redemption Check upon your request or if the Transfer Agent cannot honor the
Redemption Check due to insufficient funds or other valid reason. You should
date your Redemption Checks with the current date when you write them. Please
do not postdate your Redemption Checks. If you do, the Transfer Agent will
honor, upon presentment, even if presented before the date of the check, all
postdated Redemption Checks which are dated within six months of presentment
for payment, if they are otherwise in good order. Shares for which
certificates have been issued may not be redeemed by Redemption Check. Shares
held under Keogh Plans, IRAs or other retirement plans are not eligible for
Page 28
this Privilege. This Privilege may be modified or terminated at any time by
the Funds or the Transfer Agent upon notice to shareholders.
WIRE REDEMPTION PRIVILEGE. You may request by wire or telephone that
redemption proceeds (minimum $1,000) be wired to your account at a bank which
is a member of the Federal Reserve System, or a correspondent bank if your
bank is not a member. To establish the Wire Redemption Privilege, you must
check the appropriate box and supply the necessary information on the Funds'
Account Application or file a Shareholder Services Form with the Transfer
Agent. You may direct that redemption proceeds be paid by check (maximum
$150,000 per day) made out to the owners of record and mailed to your
address. Redemption proceeds of less than $1,000 will be paid automatically
by check. Holders of jointly registered Fund or bank accounts may have
redemption proceeds of only up to $250,000 wired within any 30-day period.
You may telephone redemption requests by calling 1-800-221-4060 or, if
calling from overseas, 1-401-455-3306. The Funds reserve the right to refuse
any redemption request, including requests made shortly after a change of
address, and may limit the amount involved or the number of such requests.
This Privilege may be modified or terminated at any time by the Transfer
Agent or the Fund. The Funds' SAIs set forth instructions for transmitting
redemption requests by wire. Shares held under Keogh Plans, IRAs or other
retirement plans, and shares for which certificates have been issued, are not
eligible for this Privilege.
TELEPHONE REDEMPTION PRIVILEGE. You may redeem shares of a Fund
(maximum $150,000 per day) by telephone if you checked the appropriate box on
the Fund's Account Application or have filed a Shareholder Services Form with
the Transfer Agent. The redemption proceeds will be paid by check and mailed
to your address. You may telephone redemption instructions by calling
1-800-221-4060 or, if calling from overseas, 1-401-455-3306. The Funds
reserve the right to refuse any request made by telephone, including requests
made shortly after a change of address, and may limit the amount involved or
the number of such requests. This Privilege may be modified or terminated at
any time by the Transfer Agent or the Funds. Shares held under Keogh Plans,
IRAs or other retirement plans, and shares for which certificates have been
issued, are not eligible for this Privilege.
DREYFUS TELETRANSFER PRIVILEGE. You may redeem shares of a Fund
(minimum $500 per day) by telephone if you have checked the appropriate box
and supplied the necessary information on the Funds' Account Application or
have filed a Shareholder Services Form with the Transfer Agent. The proceeds
will be transferred between your Fund account and the bank account designated
in one of these documents. Only such an account maintained in a domestic
financial institution which is an ACH member may be so designated. Redemption
proceeds will be on deposit in your account at an ACH member bank ordinarily
two days after receipt of the redemption request or, at your request, paid by
check (maximum $150,000 per day) and mailed to your address. Holders of
jointly registered Fund or bank accounts may redeem through the Dreyfus TELETR
ANSFER Privilege for transfer to their bank account only up to $250,000
within any 30-day period. The Funds reserve the right to refuse any request
made by telephone, including requests made shortly after a change of address,
and may limit the amount involved or the number of such requests. The Funds
may modify or terminate this Privilege at any time or charge a service fee
upon notice to shareholders. No such fee currently is contemplated.
If you have selected the Dreyfus TELETRANSFER Privilege, you may
request a Dreyfus TELETRANSFER redemption of Fund shares by telephoning
1-800-221-4060 or, if calling from overseas, 1-401-455-3306. Shares held
under Keogh Plans, IRAs or other retirement plans, and shares issued in
certificate form, are not eligible for this Privilege.
Page 29
DISTRIBUTION PLAN (INVESTOR SHARES ONLY)
The Investor Shares of each Fund are subject to a Distribution Plan
("Plan'') adopted pursuant to Rule 12b-1 under the 1940 Act ("Rule 12b-1'').
The Investor Shares of the Funds bear some of the cost of selling those
shares under the Plan. The Plan allows each Money Market Fund to spend
annually up to 0.25% of the average daily net assets attributable to Investor
Shares to compensate Dreyfus Service Corporation, an affiliate of Dreyfus,
for shareholder servicing activities and Premier for shareholder servicing
activities and for activities or expenses primarily intended to result in the
sale of Investor Shares of a Fund. The Plan allows Premier to make payments
from the Rule 12b-1 fees it collects from a Fund to compensate Agents that
have entered into Shareholder Servicing and Sales Support Agreements
("Agreements'') with Premier. Under the Agreements, the Agents are obligated
to provide distribution related services with regard to the Funds and/or
shareholder services to the Agent's clients that own Investor Shares of a
Fund.
The Funds and Premier may suspend or reduce payments under the Plan
at any time, and payments are subject to the continuation of a Fund's Plan
and the Agreements described above. From time to time, the Agents, Premier
and the Funds may agree to voluntarily reduce the maximum fees payable under
the Plan. See the SAI for more details on the Plan.
Potential investors should read this Prospectus in light of the terms
governing Agreements with their Agents. An Agent entitled to receive
compensation for selling and servicing a Fund's shares may receive different
compensation with respect to one Class of shares over another.
PERFORMANCE INFORMATION
From time to time, a Fund may advertise the yield and total return on
a class of Shares. The Dreyfus/Laurel Tax-Exempt Money Market Fund may
advertise tax-equivalent yields. TOTAL RETURN, YIELD AND THE TAX EQUIVALENT
YIELD FIGURES ARE BASED ON HISTORICAL EARNINGS AND ARE NOT INTENDED TO
INDICATE FUTURE PERFORMANCE. The "total return'' of a Class of shares of a
Fund may be calculated on an average annual total return basis or a
cumulative total return basis. Average annual total return refers to the
average annual compounded rates of return on a Class of shares over one-,
five-, and ten-year periods or the life of the Fund (as stated in the
advertisement) that would equate an initial amount invested at the beginning
of a stated period to the ending redeemable value of the investment, assuming
the reinvestment of all dividends and capital gains distributions. Cumulative
total return reflects the total percentage change in the value of the
investment over the measuring period, again assuming the reinvestment of all
dividends and capital gains distributions.
The "yield'' of a Class of shares in a Money Market Fund refers to
the income generated by an investment in such Class over a seven-day period
identified in the advertisement. This income is then "annualized.'' That is,
the amount of income generated by the investment during that week is assumed
to be generated each week over a 52-week period and is shown as a percentage
of the investment. The "effective yield'' is calculated similarly, but, when
annualized, the income earned by an investment in a Class of shares in a
Money Market Fund is assumed to be reinvested. The "effective yield'' will be
slightly higher than the "yield'' because of the compounding effect of this
assumed reinvestment. The tax-equivalent yield of a the Dreyfus/Laurel
Tax-Exempt Money Market Fund shows the level of taxable yield needed to
produce an after-tax equivalent to such fund's tax-free yield. This is done
by increasing a Class's yield by the amount necessary to reflect the payment
of federal income tax (and state income tax, if applicable) at a stated tax
rate.
Total return and yield quotations will be computed separately for
each Class of a Fund's shares. Because of the difference in the fees and
expenses borne by Class R and Investor Shares of each Fund, the return and
Page 30
yield on Class R Shares will generally be higher than the return and yield on
Investor Shares. Any fees charged by a Bank or Agent directly to its
customers' account in connection with investments in the Fund will not be
included in calculations of total return or yield. Each Fund's annual report
contains additional performance information and is available upon request
without charge from the Fund's distributor or your Bank or Agent.
A Fund may compare the performance of its Investor and Class R Shares
with various industry standards of performance including Lipper Analytical
Services, Inc. ratings, and the Consumer Price Index. Performance rankings as
reported in CHANGING TIMES, BUSINESS WEEK, INSTITUTIONAL INVESTOR, THE WALL
STREET JOURNAL, IBC/DONOGHUE'S MONEY FUND REPORT, MUTUAL FUND FORECASTER, NO
LOAD INVESTOR, MONEY MAGAZINE, MORNINGSTAR MUTUAL FUND VALUES, U.S. NEWS AND
WORLD REPORT, FORBES, FORTUNE, BARRON'S, FINANCIAL PLANNING, FINANCIAL
PLANNING ON WALL STREET, CERTIFIED FINANCIAL PLANNER TODAY, INVESTMENT
ADVISOR, KIPLINGER'S, SMART MONEY, and similar publications may also be used
in comparing the Fund's performance. Furthermore, a Fund may quote its
Investor and Class R Shares' total returns and yields in advertisements or in
shareholder reports. A Fund may also advertise non-standardized performance
information, such as total return for periods other than those required to be
shown or cumulative performance data. A Fund may advertise a quotation of
yield or other similar quotation demonstrating the income earned or
distributions made by the Fund.
DIVIDENDS, OTHER DISTRIBUTIONS AND TAXES
Each Fund declares daily and pays monthly (on the 20th day or next
business day if the 20th falls on a Saturday, Sunday or national holiday)
dividends from its net investment income, if any. Each Fund does not expect
to realize any long-term capital gains or losses, and does not anticipate
payment of any capital gain distribution.
Unless you choose to receive dividend and/or capital gain
distributions in cash, your distributions will be automatically reinvested in
additional shares of the distributing Fund at the NAV. You may change the
method of receiving distributions at any time by writing to the Funds. Checks
which are sent to shareholders who have requested distributions to be paid in
cash and which are subsequently returned by the United States Postal Service
as not deliverable or which remain uncashed for six months or more will be
reinvested in additional Fund shares in the shareholder's account at the then
current NAV. Subsequent Fund distributions will be automatically reinvested
in additional Fund shares in the shareholder's account.
Distributions paid by a Fund with respect to one Class of Shares may
be greater or less per share than those paid with respect to another Class of
Shares due to the different expenses of the different Classes. Shares
purchased on a day on which a Fund calculates its NAV will not begin to
accrue dividends until the following day. Except as provided below,
redemption orders effected on any particular day will receive all dividends
declared through the day of redemption. However, if immediately available
funds are received by the Transfer Agent prior to 12:00 noon, Eastern time,
you may receive the dividend declared on the day of purchase. You will not
receive the dividends declared on the day of redemption if the redemption
order is placed prior to 12:00 noon, Eastern time.
You may elect to have distributions on Shares held in IRAs and 403(b)
accounts paid in cash only if you are at least 59 1/2 years old or are
permanently and totally disabled. Distribution checks normally are mailed
within seven days after the record date.
Each Fund intends to continue to qualify for treatment as a regulated
investment company under the Code so that it will be relieved of federal
income tax on that part of its investment company taxable income (consisting
generally of taxable net investment income and net short-term capital gain)
and net capital gain (the excess of net long-term capital gain over net
Page 31
short-term capital loss) that is distributed to its shareholders. In
addition, the Dreyfus/Laurel Tax-Exempt Money Market Fund intends to continue
to qualify to pay "exempt-interest'' dividends, which requires, among other
things, that at the close of each quarter of its taxable year at least 50% of
the value of its total assets must consist of municipal securities.
Dividends from a Fund's investment company taxable income are taxable
to you as ordinary income, to the extent of the Fund's earnings and profits.
Distributions by the Dreyfus/Laurel Tax-Exempt Money Market Fund that are
designated by it as "exempt-interest dividends'' generally may be excluded by
you from your gross income. Distributions by a Fund (including the
Dreyfus/Laurel Tax-Exempt Money Market Fund) of net capital gain, when
designated as such, are taxable to you as long-term capital gains, regardless
of the length of time you have owned your Shares. The Funds are not expected
to realize long-term capital gains.
Interest on indebtedness incurred or continued to purchase or carry
shares of the Dreyfus/Laurel Tax-Exempt Money Market Fund will not be
deductible for federal income tax purposes to the extent that Fund's
distributions consist of exempt-interest dividends. Although it has no
current intention to do so, the Dreyfus/Laurel Tax-Exempt Money Market Fund
may invest in "private activity bonds,'' the interest on which is treated as
a tax preference item for shareholders in determining their liability for the
alternative minimum tax. Proposals may be introduced before Congress for the
purpose of restricting or eliminating the federal income tax exemption for
interest on municipal securities. If such a proposal were enacted, the
availability of such securities for investment by the Dreyfus/Laurel
Tax-Exempt Money Market Fund and the value of its portfolio would be
affected. In such event, that Fund would reevaluate its investment objective
and policies.
Dividends and other distributions are taxable to you regardless of
whether they are received in cash or reinvested in additional Fund Shares,
even if the value of your Shares is below your cost. If you purchase Shares
shortly before a taxable distribution (i.e., any distribution other than an
exempt-interest dividend paid by the Dreyfus/Laurel Tax-Exempt Money Market
Fund), you must pay income taxes on the distribution, even though the value
of your investment (plus cash received, if any) remains the same. In
addition, the share price at the time you purchase Shares may include
unrealized gains in the securities held in the Fund. If these portfolio
securities are subsequently sold and the gains are realized, they will, to
the extent not offset by capital losses, be paid to you as a capital gain
distribution and will be taxable to you.
Dividends paid by the Funds to qualified retirement plans ordinarily,
will not be subject to taxation until the proceeds are distributed from the
retirement plans. The Fund will not report to the IRS dividends paid to such
plans. Generally, distributions from qualified retirement plans, except those
representing returns of non-deductible contributions thereto, will be taxable
as ordinary income and, if made prior to the time the participant reaches age
59 1/2, generally will be subject to an additional tax equal to 10% of the
taxable portion of the distribution. If the distribution from such a
retirement plan (other than certain governmental or church plans) for any
taxable year following the year in which the participant reaches age 70 1/2
is less than the "minimum required distribution'' for that taxable year, an
excise tax equal to 50% of the deficiency may be imposed by the IRS. The
administrator, trustee or custodian of such a retirement plan will be
responsible for reporting such distributions from such plans to the IRS.
Moreover, certain contributions to a qualified retirement plan in excess of
the amounts permitted by law may be subject to an excise tax.
In January of each year, the Funds will send you a Form 1099-DIV
notifying you of the status for federal income tax purposes of your
distributions for the preceding year. The Funds also will advise shareholders
of the percentage, if any, of the dividends paid by the Dreyfus/Laurel
Page 32
Tax-Exempt Money Market Fund that are exempt from federal income tax and the
portion, if any, of those dividends that is a tax preference item for
purposes of the alternative minimum tax.
You must furnish the Funds with your taxpayer identification number
("TIN'') and state whether you are subject to withholding for prior
under-reporting, certified under penalties of perjury as prescribed by the
Code and the regulations thereunder. Unless previously furnished, investments
received without such a certification will be returned. Each Fund is required
to withhold a portion of all dividends, capital gain distributions and
redemption proceeds payable to any individuals and certain other non-corporate
shareholders who do not provide the Fund with a correct TIN; withholding
from dividends and capital gain distributions also is required for such
shareholders who otherwise are subject to backup withholding.
Each Fund will be subject to a 4% nondeductible excise tax to the
extent it fails to distribute by the end of any calendar year substantially
all of its taxable ordinary income for that year and capital gain net income
for the one-year period ending on October 31 of that year, plus certain other
amounts. Each Fund expects to make such distributions as are necessary to
avoid the imposition of this tax.
The foregoing is only a summary of some of the important tax
considerations generally affecting each Fund and its shareholders; see the
SAI for a further discussion. There may be other federal, state or local tax
considerations applicable to a particular investor; for example, the
Dreyfus/Laurel Tax-Exempt Money Market Fund's dividends may be wholly or
partly taxable under state and/or local laws. You therefore are urged to
consult your own tax adviser.
GENERAL INFORMATION
The Laurel Funds, Inc. was incorporated in Maryland on August 6, 1987
and changed its name to The Dreyfus/Laurel Funds, Inc. on October 17, 1994.
The Dreyfus/Laurel Funds, Inc. is registered with the SEC under the 1940 Act
as a diversified, open-end management investment company. The Dreyfus/Laurel
Funds, Inc. has an authorized capitalization of 25 billion Shares of $0.001
par value stock with equal voting rights. The Articles of Incorporation
permit the Directors to create an unlimited number of investment portfolios
(each a "fund''). Each of the Funds offered by this Prospectus currently
issues two Classes of Shares designated "Investor'' and "Class R'' Shares.
Each Share (regardless of Class) has one vote. All Shares of a Fund
(and classes thereof) vote together as a single class, except as to any
matter for which a separate vote of any fund or Class is required by the 1940
Act, and except as to any matter which affects the interests of one or more
particular funds or Classes, in which case only the shareholders of the
affected fund or class are entitled to vote, each as a separate class. At
your written request, the Funds will issue negotiable stock certificates.
At March 31, 1995, Mellon Bank Corporation, the investment manager's
parent, owned of record through its direct and indirect subsidiaries more
than 25% of The Dreyfus/Laurel Funds, Inc.'s outstanding voting shares, and
is deemed, under the 1940 Act, to be a controlling shareholder.
Only holders of Investor shares will be entitled to vote on matters
submitted to shareholders pertaining to the Distribution Plan relating to
that Class.
Unless otherwise required by the 1940 Act, ordinarily it will not be
necessary for the Funds to hold annual meetings of shareholders. As a result,
Fund shareholders may not consider each year the election of Directors or the
appointment of auditors. However, the holders of at least 10% of the shares
outstanding and entitled to vote may require the Company to hold a special
meeting of shareholders for purposes of removing a Director from office and
for any other proper purpose. Company shareholders may remove a Director by
the affirmative vote of a majority of the Company's voting shares. In
addition, the Board of Directors will call a meeting of shareholders for the
purpose of electing Directors if, at any time, less than a majority of the
Page 33
Directors then holding office have been elected by shareholders.
The Transfer Agent maintains a record of your ownership and will send
you confirmations and statements of account.
Shareholder inquiries may be made by writing to the Funds at 144 Glenn
Curtiss Boulevard, Uniondale, New York 11556-0144, or by calling toll free
1-800-645-6561.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND IN THE
FUNDS' OFFICIAL SALES LITERATURE IN CONNECTION WITH THE OFFER OF THE FUNDS'
SHARES, AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUNDS. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER IN ANY STATE IN WHICH, OR TO ANY PERSON TO WHOM,
SUCH OFFERING MAY NOT LAWFULLY BE MADE.

Page 34

Dreyfus/Laurel Prime Money Market Fund
Dreyfus/Laurel Tax-Exempt Money Market Fund
Dreyfus/Laurel U.S. Treasury Money Market Fund
PROSPECTUS

Registration Mark

Copy Rights 1995 Dreyfus Service Corporation
LMMKTp1041095

PROSPECTUS
APRIL 10, 1995
DREYFUS/LAUREL PRIME MONEY MARKET FUND
DREYFUS/LAUREL TAX-EXEMPT MONEY MARKET FUND
DREYFUS/LAUREL U.S. TREASURY MONEY MARKET FUND
THIS PROSPECTUS DESCRIBES THE THREE INVESTMENT PORTFOLIOS LISTED
BELOW (EACH A "FUND" COLLECTIVELY THE "FUNDS" OR THE "MONEY MARKET FUNDS") OF
THE DREYFUS/LAUREL FUNDS, INC. (FORMERLY THE LAUREL FUNDS, INC.), AN
OPEN-END, DIVERSIFIED MANAGEMENT INVESTMENT COMPANY (THE "COMPANY") THAT IS
PART OF THE DREYFUS FAMILY OF FUNDS. THIS PROSPECTUS DESCRIBES TWO CLASSES OF
SHARES--INVESTOR SHARES AND CLASS R SHARES (COLLECTIVELY, THE "SHARES")--OF
THE FUNDS.
THE DREYFUS/LAUREL PRIME MONEY MARKET FUND SEEKS A HIGH LEVEL OF
CURRENT INCOME CONSISTENT WITH STABILITY OF PRINCIPAL BY INVESTING IN
HIGH-GRADE MONEY MARKET INSTRUMENTS.
THE DREYFUS/LAUREL TAX-EXEMPT MONEY MARKET FUND SEEKS INCOME EXEMPT
FROM FEDERAL INCOME TAX CONSISTENT WITH STABILITY OF PRINCIPAL BY INVESTING
IN TAX-EXEMPT MUNICIPAL OBLIGATIONS.
THE DREYFUS/LAUREL U.S. TREASURY MONEY MARKET FUND SEEKS A HIGH LEVEL
OF CURRENT INCOME CONSISTENT WITH STABILITY OF PRINCIPAL BY INVESTING IN
DIRECT OBLIGATIONS OF THE U.S. TREASURY AND REPURCHASE AGREEMENTS SECURED BY
SUCH OBLIGATIONS.
THE MONEY MARKET FUNDS SEEK TO MAINTAIN A STABLE NET ASSET VALUE
("NAV") OF $1.00 PER SHARE. INVESTMENTS IN THESE MONEY MARKET FUNDS ARE
NEITHER INSURED NOR GUARANTEED BY THE U.S. GOVERNMENT AND THERE CAN BE NO
ASSURANCE THAT THESE MONEY MARKET FUNDS WILL BE ABLE TO MAINTAIN A STABLE NET
ASSET VALUE OF $1.00 PER SHARE.
SHARES OF THE FUNDS ARE SOLD WITHOUT A SALES LOAD. INVESTOR SHARES OF
THE FUNDS ARE SUBJECT TO DISTRIBUTION AND SHAREHOLDERS SERVICING FEES.
YOU CAN PURCHASE OR REDEEM SHARES BY TELEPHONE USING THE DREYFUS TELET
RANSFER PRIVILEGE.
THE DREYFUS CORPORATION SERVES AS THE FUNDS' INVESTMENT MANAGER. THE
DREYFUS CORPORATION IF REFERRED TO AS "DREYFUS."
THIS PROSPECTUS SETS FORTH CONCISELY INFORMATION ABOUT THE FUNDS THAT
YOU SHOULD KNOW BEFORE INVESTING. IT SHOULD BE READ CAREFULLY BEFORE YOU
INVEST AND RETAINED FOR FUTURE REFERENCE.
A STATEMENT OF ADDITIONAL INFORMATION ("SAI") DATED APRIL 10, 1995,
WHICH MAY BE REVISED FROM TIME TO TIME, PROVIDES A FURTHER DISCUSSION OF
CERTAIN AREAS IN THIS PROSPECTUS AND OTHER MATTERS WHICH MAY BE OF INTEREST
TO SOME INVESTORS. IT HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION ("SEC") AND IS INCORPORATED HEREIN BY REFERENCE, FOR A FREE COPY,
WRITE TO THE FUNDS AT 144 GLENN CURTISS BOULEVARD, UNIONDALE, NEW YORK
11556-0144, OR CALL 1-800-645-6561. WHEN TELEPHONING, ASK FOR OPERATOR 666.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
OR ENDORSED BY, ANY BANK, AND ARE NOT FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY.
ALL MONEY MARKET FUNDS INVOLVE CERTAIN INVESTMENT RISKS, INCLUDING THE
POSSIBLE LOSS OF PRINCIPAL.
- -------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF ITS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
- -------------------------------------------------------------------------------
(Continued from page 1)
THE FEES TO WHICH EACH FUND IS SUBJECT ARE SUMMARIZED IN THE "EXPENSE
SUMMARY" SECTION OF THE FUNDS' PROSPECTUS. EACH FUND PAYS MELLON BANK, N.A.
("MELLON BANK") OR ITS AFFILIATES TO BE ITS INVESTMENT MANAGER. MELLON BANK
OR AN AFFILIATE MAY BE PAID FOR PERFORMING OTHER SERVICES FOR THE FUNDS, SUCH
AS CUSTODIAN, TRANSFER AGENT OR FUND ACCOUNTANT SERVICES. THE FUNDS ARE
DISTRIBUTED BY PREMIER MUTUAL FUND SERVICES, INC.
BY THIS PROSPECTUS, THE FUNDS ARE OFFERING INVESTOR SHARES AND CLASS
R SHARES. (CLASS R SHARES OF THE FUNDS WERE FORMERLY CALLED TRUST SHARES.)
INVESTOR SHARES AND CLASS R SHARES ARE IDENTICAL, EXCEPT AS TO THE SERVICES
OFFERED TO AND THE EXPENSES BORNE BY EACH CLASS. CLASS R SHARES ARE SOLD
PRIMARILY TO BANK TRUST DEPARTMENTS AND OTHER FINANCIAL SERVICE PROVIDERS
(INCLUDING MELLON BANK, N.A. AND ITS AFFILIATES) ("BANKS") ACTING ON BEHALF
OF CUSTOMERS HAVING A QUALIFIED TRUST OR INVESTMENT ACCOUNT OR RELATIONSHIP
AT SUCH INSTITUTION. INVESTOR SHARES ARE PRIMARILY SOLD TO RETAIL INVESTORS
BY THE FUNDS' DISTRIBUTOR AND BY BANKS, SECURITIES BROKERS OR DEALERS AND
OTHER FINANCIAL INSTITUTIONS ("AGENTS") THAT HAVE ENTERED INTO A SELLING
AGREEMENT WITH THE FUNDS' DISTRIBUTOR.

TABLE OF CONTENTS
EXPENSE SUMMARY................................... 4
FINANCIAL HIGHLIGHTS.............................. 5
DESCRIPTION OF THE FUNDS.......................... 11
MANAGEMENT OF THE FUNDS........................... 19
HOW TO BUY FUND SHARES............................ 20
SHAREHOLDER SERVICES.............................. 23
HOW TO REDEEM FUND SHARES......................... 26
DISTRIBUTION PLAN (INVESTOR SHARES ONLY).......... 28
PERFORMANCE INFORMATION........................... 29
DIVIDENDS, OTHER DISTRIBUTIONS AND TAXES.......... 29
GENERAL INFORMATION............................... 31
Page 2
September 1, 1995
THE DREYFUS/LAUREL FUNDS, INC. _
DREYFUS MONEY MARKET RESERVES
DREYFUS MUNICIPAL RESERVES
DREYFUS U.S. TREASURY RESERVES
SUPPLEMENT TO PROSPECTUS DATED APRIL 10, 1995
THE FOLLOWING INFORMATION SUPPLEMENTS, SHOULD BE READ IN CONJUNCTION
WITH, AND SUPERSEDES ANY CONTRARY INFORMATION CONTAINED IN THE FUNDS'
PROSPECTUS.
Investor shares are sold primarily to investors maintaining related
securities, brokerage, commodities trading or similar accounts with banks,
securities brokers/dealers or other financial institutions that have entered
into selling agreements with the Funds' distributor. Additionally, holders of
Investor shares of a Fund who have held their shares since August 31, 1995,
may continue to purchase Investor shares of the Fund whether or not they
otherwise would be eligible to do so.
THE FOLLOWING INFORMATION SUPERSEDES AND REPLACES THE FOURTH
PARAGRAPH IN THE SECTION IN THE FUNDS' PROSPECTUS ENTITLED "HOW TO BUY FUND
SHARES _ GENERAL".
The minimum initial investment is $100,000. Each Fund may waive its
minimum initial investment requirement for new Fund accounts opened through a
bank, securities dealer or other financial institution (collectively,
"Agents") whenever Dreyfus Institutional Services Division ("DISD") has
determined for the initial account opened through such Agent which is below
the Fund's minimum initial investment requirement that the existing accounts
in the Fund opened through that Agent have an average account size, or the
Agent has adequate intent and access to funds to result in maintenance of
accounts in the Fund opened through that Agent with an average account size,
in an amount equal to or in excess of $100,000. DISD is required to
periodically review the average size of the accounts opened through each
Agent and, if necessary, reevaluate the Agent's intent and access to funds.
DISD will discontinue the waiver as to new accounts to be opened through an
Agent if DISD determines that the average size of accounts opened through
that Agent is less than $100,000 and the Agent does not have the requisite
intent and access to funds. There is no minimum for subsequent purchases. The
initial investment must be accompanied by the Funds' Account Application.
THE FOLLOWING INFORMATION SUPERSEDES AND REPLACES THE FOURTH
PARAGRAPH IN THE SECTION IN THE FUNDS' PROSPECTUS ENTITLED "HOW TO REDEEM
FUND SHARES _ GENERAL".
Each Fund reserves the right to redeem a shareholder's account at its
option upon not less than 45 days' written notice if the net asset value of
such account is $10,000 or less ($500 or less in the case of holders of
shares of a Fund since August 31, 1995) and remains at or below such amount
during the notice period.
THE FOLLOWING INFORMATION SUPPLEMENTS, SHOULD BE READ IN CONJUNCTION
WITH, AND SUPERSEDES ANY CONTRARY INFORMATION CONTAINED IN THE FUNDS'
PROSPECTUS.
Effective June 9, 1995, the following name changes occurred:
Dreyfus/Laurel Prime Money Market Fund became Dreyfus Money Market Reserves,
Dreyfus/Laurel Tax-Exempt Money Market Fund became Dreyfus Municipal Reserves
and Dreyfus/Laurel U.S. Treasury Money Market Fund became Dreyfus U.S.
Treasury Reserves. As of such date, Dreyfus Municipal Reserves may invest
without limitation in municipal obligations the interest from which gives
rise to a preference item for purposes of the alternative minimum tax as long
as such investment is consistent with the Fund's investment objective. To
provide the Fund with added investment flexibility, references in the
Prospectus stating that the Fund has no current intention of investing in
such municipal obligations are hereby deleted.
THE FOLLOWING INFORMATION SUPERSEDES AND REPLACES THE THIRD SENTENCE
IN THE EIGHTH PARAGRAPH IN THE SECTION IN THE FUNDS' PROSPECTUS ENTITLED "HOW
TO BUY FUND SHARES _ GENERAL":
The instructions must specify your Fund account registration and Fund
account number PRECEDED BY THE DIGITS: "4790" Dreyfus Money Market
Reserves/Investor shares; "4800" Dreyfus Money Market Reserves/Class R
shares; "4860" Dreyfus Municipal Reserves/Investor shares; "4850" Dreyfus
Municipal Reserves/Class R shares; "4900" Dreyfus U.S. Treasury
Reserves/Investor shares; and "4890" Dreyfus U.S. Treasury Reserves/Class R
shares.
LMMKT/s090195
Page 3
EXPENSE SUMMARY
The purpose of the following table is to help you understand the various
costs and expenses that you, as a Shareholder, will bear directly or
indirectly in connection with an investment in the Investor or Class R Shares
of the Money Market Funds. (See "Management of the Funds.")

- --------------------------------
* See "Investor Shares' Distribution Plan" for a description of each
Fund's Plan of Distribution for the Investor Class.
** Does not include fees and expenses of the non-interested directors
(including counsel). The investment manager is contractually required to
reduce its Management Fee in an amount equal to the Fund's allocable portion
of such fees and expenses, which are estimated to be 0.02% of the Fund's net
assets (See "Management of the Funds.")
- ------------------------------------------------------------------------------
THE INFORMATION CONTAINED IN THE TABLE SHOULD NOT BE CONSIDERED A
REPRESENTATION OF PAST OR FUTURE EXPENSES. ACTUAL EXPENSES MAY BE MORE OR
LESS THAN THOSE SHOWN.
- ------------------------------------------------------------------------------
The Funds understand that banks, brokers, dealers or other financial
institutions (including Mellon Bank and its affiliates) (collectively
"Agents") may charge fees to their clients who are owners of the Fund's
Investor Shares for various services provided in connection with a client's
account. These fees would be in addition to any amounts received by an Agent
under its Selling Agreement ("Agreement") with Premier Mutual Fund Services,
Inc. ("Premier"). The Agreement requires each Agent to disclose to its
clients any compensation payable to such Agent by Premier and any other
compensation payable by the clients for various services provided in
connection with its account.
Long-term shareholders of Investor Shares could pay more in Rule
12b-1 fees than the economic equivalent of the maximum front-end sales
charges applicable to mutual funds sold by members of the National
Association of Securities Dealers, Inc.
Page 4
FINANCIAL HIGHLIGHTS
The following financial information for Investor and Class R Shares has been
derived from the financial statements which have been audited by KPMG Peat
Marwick LLP, the independent auditors for The Dreyfus/Laurel Funds, Inc., for
the indicated years or period ended October 31, whose reports accompany such
financial statements that appear in the Fund's Annual Report dated October
31, 1994 and which are incorporated by reference in the SAI. Further
information about the Fund's performance is contained in the Fund's Annual
Report, which may be obtained without charge.
<TABLE>
<CAPTION>

DREYFUS/LAUREL PRIME MONEY MARKET FUND
FOR AN INVESTOR SHARE OUTSTANDING THROUGHOUT THE PERIOD.
PERIOD
ENDED
10/31/94*
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period.................................................... $ 1.00
-----------
Income from investment operations:
Net investment income........................................................... 0.0211
Less distributions:
Dividends from net investment income............................................ (0.0211)
-----------
Net asset value, end of period.......................................................... $ 1.00
Total return............................................................................ 2.14%
==========
Ratios to average net assets/supplemental data:
Net assets, end of period (in 000's)............................................ $ 3,611
Ratio of operating expenses to average net assets............................... 0.71%#
Ratio of net investment income to average net assets............................ 3.31%#
</TABLE>

- ------------------------------------------------------------------------------
* The Fund commenced selling Investor Shares on April 6, 1994. Effective
October 17, 1994, The Dreyfus Corporation serves as the Fund's investment
manager. Prior to October 17, 1994, Mellon Bank, N.A. served as the Fund's
investment manager.
Total return represents aggregate total return for the period indicated.
# Annualized.
Page 5
FINANCIAL HIGHLIGHTS
(CONTINUED)
<TABLE>
<CAPTION>

DREYFUS/LAUREL PRIME MONEY MARKET FUND
FOR A CLASS R SHARE OUTSTANDING THROUGHOUT EACH YEAR OR PERIOD.*

YEAR YEAR YEAR YEAR YEAR YEAR PERIOD
ENDED ENDED ENDED ENDED ENDED ENDED ENDED
10/31/94*## 10/31/93 10/31/92 10/31/91 10/31/90 10/31/89 10/31/88
---------- ---------- ---------- ---------- ---------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of year.............. $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
Income from
investment operations:
Net investment income 0.0344 0.0280 0.0385 0.0621 0.0820 0.0667 0.0601
Less distributions:
Dividends from net
investment income.... (0.0344) (0.0280) (0.0385) (0.0621) (0.0820) (0.0667) (0.0601)
Net asset value, end of year $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
Total return........... 3.52% 2.84% 3.92% 6.39% 8.55% 7.95% 6.18%
Ratios to average net
assets/supplemental data:
Net assets, end of year
(in 000's)........... $ 124,754 $103,760 $91,848 $105,329 $93,366 $92,257 $530
Ratio of operating expenses to
average net assets... 0.51% 0.50%** 0.50%** 0.50%** 0.16%** 0.00%** 0.60%#**
Ratio of net investment income
to average net assets 3.51% 2.80% 3.88% 6.13% 8.21% 8.97% 6.69%#
</TABLE>

- ----------------------------------------
* The Fund commenced operations on November 18, 1987. The Fund
commenced selling Investor Shares on April 6, 1994.
Those shares outstanding prior to April 4, 1994 were designated Trust
Shares. Effective as of October 17, 1994, the Fund's Trust Shares were
redesignated Class R Shares.
** For the years or period ended October 31, 1992, 1991, 1990,
1989 and 1988, the investment adviser waived all or a portion of its
advisory fee amounting to $0.0007, $0.0010, $0.0038, $0.0043 and $0.0045
per share, respectively. For the years or period ended October 31, 1993,
1992, 1991, 1990, 1989 and 1988, the investment adviser reimbursed
expenses of the Fund amounting to $0.0036, $0.0027, $0.0018, $0.0026,
$0.0062 and $0.3952 per share, respectively.
+ Net investment income before expenses reimbursed by the
investment adviser for the year ended October 31, 1994 was $0.0331.
++ Total return represents aggregate total return for the periods
indicated.
+++ Annualized operating expense ratio before expenses reimbursed by the
investment adviser for the year ended October 31, 1994 was 0.64%.
# Annualized.
## Effective October 17, 1994, The Dreyfus Corporation serves as
the Fund's investment manager. Prior to October 17, 1994, Mellon Bank,
N.A. served as the Fund's investment manager.
Page 6
FINANCIAL HIGHLIGHTS
The following financial information for Investor and Class R Shares has been
derived from the financial statements which have been audited by KPMG Peat
Marwick LLP, the independent auditors for The Dreyfus/Laurel Funds, Inc., for
the indicated years or period ended October 31, whose reports accompany such
financial statements that appear in the Fund's Annual Report dated October
31, 1994 and which are incorporated by reference in the SAI. Further
information about the Fund's performance is contained in the Fund's Annual
Report which may be obtained without charge.

Net asset value, beginning of period.................................................... $1.00
--------
Income from investment operations:
Net investment income........................................................... 0.0113
Less distributions:
Dividends from net investment income............................................ (0.0122)
---------
Net asset value, end of period.......................................................... $1.00
========
Total return............................................................................ 1.23%
========
Ratios to average net assets/supplemental data:
Net assets, end of period (in 000's)............................................ $1,161
Ratio of operating expenses to average net assets............................... 0.70%#
Ratio of net investment income to average net assets............................ 2.11%#
</TABLE>

- ------------------------------------------------------------------------------
* The Fund commenced selling Investor Shares on April 20,
1994.Effective October 17, 1994, The Dreyfus Corporation serves as the
Fund's investment manager. Prior to October 17, 1994, Mellon Bank, N.A.
served as the Fund's investment manager.
+ Total return represents aggregate total return for the period
indicated.
# Annualized.
Page 7

FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>

DREYFUS/LAUREL TAX-EXEMPT MONEY MARKET FUND
FOR A CLASS R SHARE OUTSTANDING THROUGHOUT EACH YEAR OR PERIOD.*

YEAR YEAR YEAR YEAR YEAR YEAR PERIOD
ENDED ENDED ENDED ENDED ENDED ENDED ENDED
10/31/94*## 10/31/93 10/31/92 10/31/91 10/31/90 10/31/89 10/31/88
---------- ---------- ---------- ----------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of year................ $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
------ ------ ------- ------ ------ ------ ------
Income from investment operations:
Net investment income.. 0.0228 0.0208 0.0291 0.0454 0.0454 0.0564 0.0592
Less distributions:
Dividends from net
investment income...... (0.0228) (0.0208) (0.0291) (0.0454) (0.0454) (0.0564) (0.0592)
-------- --------- -------- --------- --------- --------- ---------
Net asset value, end of year $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
====== ====== ====== ====== ====== ====== ======
Total return............. 2.29% 2.10% 2.94% 4.64% 5.79% 6.08% 4.22%
====== ====== ====== ====== ====== ====== ======
Ratios to average net
assets/supplemental data:
Net assets, end of year (in 000's) $205,105 $187,830 $184,719 $152,260 $152,260 $88,247 $56,224
Ratio of operating expenses
to average net assets.. 0.51% 0.50%** 0.50%** 0.50%** 0.55%** 0.70%** 0.70%**#
Ratio of net investment income
to average net assets.. 2.30% 2.08% 2.90% 4.49% 5.66% 5.95% 4.61%#
</TABLE>

- ---------------------------------
* The Fund commenced operations on December 10, 1987. The Fund
commenced selling Investor Shares on April 20, 1994. Those shares in
existence prior to April 4, 1994 were designated Trust Shares. Effective
as of October 17, 1994, the Fund's Trust Shares were reclassified as
Class R Shares.
** For the period ended October 31, 1988, the investment adviser
waived a portion of its advisory fee amounting to $0.0040 per share. For
the years or period ended October 31, 1993, 1992, 1991, 1990, 1989 and
1988, the investment adviser reimbursed expenses of the Fund amounting to
$0.0024, $0.0029, $0.0036, $0.0052, $0.0044 and $0.0031 per share,
respectively.
+ Net investment income before expenses reimbursed by the
investment adviser for the year ended October 31, 1994 was $0.0218.
++ Total return represents aggregate total return for the periods
indicated.
Annualized operating expense ratio before expenses reimbursed by the
investment adviser for the year ended October 31, 1994 was 0.60%.
# Annualized.
## Effective October 17, 1994, The Dreyfus Corporation serves as
the Fund's investment manager. Prior to October 17, 1994, Mellon Bank,
N.A. served as the Fund's investment manager.
Page 8

FINANCIAL HIGHLIGHTS
The following financial information for Investor and Class R Shares has been
derived from the financial statements which have been audited by KPMG Peat
Marwick LLP, the independent auditors for The Dreyfus/ Laurel Funds, Inc.,
for the indicated years or period ended October 31, whose reports accompany
such financial statements that appear in the Fund's Annual Report dated
October 31, 1994 and which are incorporated by reference in the SAI. Further
information about the Fund's performance is contained in the Fund's Annual
Report, which may be obtained without charge.
<TABLE>
<CAPTION>

DREYFUS/LAUREL U.S. TREASURY MONEY MARKET FUND
FOR AN INVESTOR SHARE OUTSTANDING THROUGHOUT THE PERIOD.
PERIOD
ENDED
10/31/94*
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period.................................................... $1.00
-----------
Income from investment operations:
Net investment income................................................................... 0.0185
Less distributions:
Dividends from net investment income.................................................... (0.0195)
-----------
Net asset value, end of period.......................................................... $1.00
===========
Total return............................................................................ 1.96%
===========
Ratios to average net assets/supplemental data:
Net assets, end of period (in 000's).................................................... $1,324
Ratio of operating expenses to average net assets....................................... 0.70%#
Ratio of net investment income to average net assets.................................... 3.42%#
</TABLE>

- -----------------------------------------------------------------------------
* The Fund commenced selling Investor Shares on April 18, 1994.
Effective October 17, 1994, The Dreyfus Corporation serves as the Fund's
investment manager. Prior to October 17, 1994, Mellon Bank, N.A. served
as the Fund's investment manager.
+ Total return represents aggregate total return for the period
indicated.
# Annualized.
Page 9

FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>

DREYFUS/LAUREL U.S. TREASURY MONEY MARKET FUND
FOR A CLASS R SHARE OUTSTANDING THROUGHOUT EACH YEAR OR PERIOD.

- ----------------------------------------------------------------------------
* The Fund commenced operations on February 4, 1991. The Fund
commenced selling Investor Shares on April 18, 1994. Those shares
outstanding prior to April 4, 1994 were designated as Trust Shares.
Effective as of October 17, 1994, the Fund's Trust Shares were
redesignated as Class R Shares.
** For the period ended October 31, 1991, the investment adviser
waived a portion of its advisory fee amounting to $0.0010 per share. For
the years or period ended October 31, 1993, 1992 and 1991, the investment
adviser reimbursed expenses of the Fund amounting to $0.0040, $0.0040 and
$0.0048 per share, respectively.
+ Net investment income before expenses reimbursed by the
investment adviser for the year ended October 31, 1994 was $0.0323.
++ Total return represents aggregate total return for the periods
indicated.
+++ Annualized expense ratio before expenses reimbursed by the investment
adviser for the year ended October 31, 1994 was 0.59%.
# Annualized.
## Effective October 17, 1994, The Dreyfus Corporation serves as
the Fund's investment manager.Prior to October 17, 1994, Mellon Bank,
N.A. served as the Fund's investment manager.
Page 10
DESCRIPTION OF THE FUNDS
GENERAL
By this Prospectus, each Fund is offering Investor Shares and Class R
Shares. (Class R Shares of the Funds were formerly called Trust Shares.)
Investor Shares and Class R shares are identical, except as to the services
offered to and the expenses borne by each Class. Class R shares are sold
primarily to bank trust departments and other financial service providers
(including Mellon Bank and its affiliates) ("Banks") acting on behalf of
customers having a qualified trust or investment account or relationship at
such institution, or to customers who have received and hold shares of a Fund
distributed to them by virtue of such an account or relationship. Investor
Shares are primarily sold to retail investors by the Distributor and by
Agents that have entered into a Selling Agreement with the Distributor. If
shares of a Fund are held in an account at a Bank or with an Agent, such Bank
or Agent may require you to place all Fund purchase, exchange and redemption
orders through them. All Banks and Agents have agreed to transmit transaction
requests to each Fund's transfer agent or to the Distributor. Distributor and
shareholder servicing paid by Investor Shares will cause Investor shares to
have a higher expense ratio and pay lower dividends than Class R.
DREYFUS/LAUREL PRIME MONEY MARKET FUND
INVESTMENT OBJECTIVE AND POLICIES
Dreyfus/Laurel Prime Money Market Fund seeks a high level of current
income consistent with stability of principal by investing in high-grade
money market instruments. There can be no assurance that the Dreyfus/Laurel
Prime Money Market Fund will meet its stated investment objective. See "Other
Investment Policies and Risk Factors" for a detailed description of risks and
other Fund investment policies. See "Other Investment Policies and Risk
Factors _ Limiting Investment Risks" for a discussion of the Fund's
investment limitations.
The instruments in which Dreyfus/Laurel Prime Money Market Fund
invests include (1) U.S. Treasury bills, notes and bonds; (2) other
obligations issued or guaranteed as to interest and principal by the U.S.
Government, its agencies and instrumentalities; (3) instruments of U.S. and
foreign banks, including certificates of deposit, banker's acceptances, and
time deposits, and may include Eurodollar Certificates of Deposit ("ECDs"),
Yankee Certificates of Deposit ("Yankee CDs"), and Eurodollar Time Deposits
("ETDs"); (4) commercial paper of U.S. and foreign companies; (5) corporate
obligations; (6) mortgage-related securities backed by U.S. Government
agencies or instrumentalities; (7) variable amount master demand notes; (8)
floating rate notes; and (9) repurchase agreements. The Dreyfus/Laurel Prime
Money Market Fund also may utilize reverse repurchase agreements. (See "Other
Investment Policies and Risk Factors.")
DREYFUS/LAUREL TAX-EXEMPT MONEY MARKET FUND
INVESTMENT OBJECTIVE AND POLICIES
Dreyfus/Laurel Tax-Exempt Money Market Fund seeks income exempt from
federal income tax consistent with stability of principal by investing in
tax-exempt municipal obligations. There can be no assurance that the
Dreyfus/Laurel Tax-Exempt Money Market Fund will meet its stated investment
objective. See "Other Investment Policies and Risk Factors" for a detailed
description of risks and other Fund investment policies. See "Other
Investment Policies and Risk Factors _ Limiting Investment Risks" for discussi
on of the Fund's investment limitations.
Dreyfus/Laurel Tax-Exempt Money Market Fund intends to invest 100%,
and has adopted a policy requiring that it invest at least 80%, of its total
assets in municipal obligations. Debt obligations the interest on which is a
"tax preference item" for purposes of the alternative minimum tax are not
counted toward meeting the 80% test.
Page 11
TYPES OF MUNICIPAL SECURITIES. Municipal securities are obligations
issued by or on behalf of states, territories and possessions of the United
States and their political subdivisions, agencies, and instrumentalities, the
interest from which is, in the opinion of bond counsel, exempt from regular
federal income tax. The municipal securities in which Dreyfus/Laurel
Tax-Exempt Money Market Fund may invest include: (1) municipal notes,
including tax anticipation and revenue anticipation notes, bond anticipation
notes, construction loan notes and tax-exempt commercial paper; (2)
short-term municipal bonds, including general obligation bonds, revenue
bonds, industrial revenue bonds and private activity bonds; and (3) municipal
leases.
Dreyfus/Laurel Tax-Exempt Money Market Fund may purchase certain
municipal securities, including certain industrial development bonds and
bonds issued after August 7, 1986 to finance "private activities," the
interest on which may constitute a "tax preference item" for purposes of the
alternative minimum tax, even though the interest will continue to be fully
tax-exempt for federal income tax purposes. However, the Dreyfus/Laurel
Tax-Exempt Money Market Fund has no current intention of investing in such
municipal securities. (See "Taxes.")
YIELD FACTORS AND RATINGS. Yields on municipal securities are
dependent on a variety of factors, including the general conditions of the
money market and of the municipal bond and municipal note markets, the size
of a particular offering, the maturity of the obligation and the rating of
the issue. The achievement of the Dreyfus/Laurel Tax-Exempt Money Market
Fund's investment objective is dependent in part on the continuing ability of
the issuers of the municipal securities in which Dreyfus/Laurel Tax-Exempt
Money Market Fund invests to meet their obligations for the payment of
principal and interest when due. Obligations of issuers of municipal
securities are subject to the provisions of bankruptcy, insolvency and other
laws affecting the rights and remedies of creditors. The possibility exists,
therefore, that, as a result of litigation or other conditions, the ability
of any issuer to pay, when due, the principal of and interest on its
municipal securities may be materially affected.
All of the Dreyfus/Laurel Tax-Exempt Money Market Fund's municipal
securities, including municipal leases, at the time of purchase must present
minimal credit risks and either be backed by the full faith and credit of the
United States or be of high quality as determined in accordance with
procedures adopted by the Board of Directors.
ADDITIONAL INFORMATION. The Dreyfus/Laurel Tax-Exempt Money Market
Fund may invest more than 25% of its assets in industrial development bonds,
in participation interests therein issued by banks and in municipal
securities and other obligations guaranteed by the U.S. Government, its
agencies or instrumentalities. A participation interest gives the
Dreyfus/Laurel Tax-Exempt Money Market Fund an undivided interest in a
municipal bond owned by a bank and generally is backed by the bank's
irrevocable letter of credit or guarantee.
TAXABLE INVESTMENTS. The Dreyfus/Laurel Tax-Exempt Money Market Fund
will attempt to invest 100% of its net assets in municipal securities, the
interest on which, in the opinion of bond counsel, is exempt from regular
federal income tax. The Dreyfus/Laurel Tax-Exempt Money Market Fund also may
under certain circumstances invest up to 20% of the value of its net assets
in certain securities the interest income on which is subject to federal
income tax.
The Dreyfus/Laurel Tax-Exempt Money Market Fund may invest in any of
the following taxable instruments: (1) U.S. Treasury bills, notes and bonds;
(2) other obligations issued or guaranteed as to interest and principal by
the U.S. Government, its agencies and instrumentalities; (3) instruments of
U.S. and foreign banks, including certificates of deposit, banker's
acceptances and time deposits, and may include "ECDs", "Yankee CDs" and
Eurodollar Time Deposits ("ETDs"); (4) commercial paper of U.S and foreign
companies; (5) corporate obligations; (6) mortgage-related securities backed
by U.S. Government agencies or instrumentalities; (7) variable amount master
demand notes; (8) floating rate notes; and (9) repurchase agreements. The
Fund also may utilize reverse repurchase agreements. (See "Other Investment
Policies and Risk Factors.")
Page 12
DREYFUS/LAUREL U.S. TREASURY MONEY MARKET FUND
INVESTMENT OBJECTIVE AND POLICIES
Dreyfus/Laurel U.S. Treasury Money Market Fund seeks a high level of
current income consistent with stability of principal by investing in direct
obligations of the U.S. Treasury and repurchase agreements secured by such
obligations. There can be no assurance that the Dreyfus/Laurel U.S. Treasury
Money Market Fund will meet its stated investment objective. See "Other
Investment Policies and Risk Factors" below for a detailed description of
risks and other Fund investment policies. See "Other Investment Policies and
Risk Factors _ Limiting Investment Risks" for discussion of the Fund's
investment limitations.
The Dreyfus/Laurel U.S. Treasury Money Market Fund invests only in
direct obligations of the U.S. Treasury, such as Treasury bills, notes and
bonds, with remaining maturities of 397 days or less, and in repurchase
agreements of duration of 397 days or less secured by direct obligations of
the U.S. Treasury.
OTHER INVESTMENT POLICIES AND RISK FACTORS
BORROWING. Each Fund is authorized, within specified limits, to
borrow money for temporary administrative purposes and to pledge its assets
in connection with such borrowings.
COMMERCIAL PAPER. The Dreyfus/Laurel Prime Money Market and
Dreyfus/Laurel Tax-Exempt Money Market Funds may invest in commercial paper.
These instruments are short-term obligations issued by banks and corporations
that have maturities ranging from 2 to 270 days. Each instrument may be
backed only by the credit of the issuer or may be backed by some form of
credit enhancement, typically in the form of a guarantee by a commercial
bank. Commercial paper backed by guarantees of foreign banks may involve
additional risk due to the difficulty of obtaining and enforcing judgments
against such banks and the generally less restrictive regulations to which
such banks are subject. A Fund will only invest in commercial paper of U.S.
and foreign companies rated A-1 at the time of purchase by Standard & Poor's
Ratings Group, Prime-1 by Moody's Investors Service, Inc. ("Moody's"), F-1 by
Fitch's Investor Service, Inc., Duff 1 by Duff & Phelps, Inc. or A1 by IBCA,
Inc.
ECDS, ETDS AND YANKEE CDS. The Dreyfus/Laurel Prime Money Market and
Dreyfus/Laurel Tax-Exempt Money Market Funds may invest in ECDs, ETDs and
Yankee CDs. ECDs are U.S. dollar-denominated certificates of deposit issued
by foreign branches of domestic banks. ETDs are U.S. dollar-denominated time
deposits in a foreign branch of a U.S. bank or a foreign bank. Yankee CDs are
certificates of deposit issued by a U.S. branch of a foreign bank denominated
in U.S. dollars and held in the United States. ECDs, ETDs and Yankee CDs are
subject to somewhat different risks than are the obligations of domestic
banks. (See "Foreign Securities.")
EURODOLLAR BONDS AND NOTES. The Dreyfus/Laurel Prime Money Market
Fund may invest in Eurodollar bonds and notes. Eurodollar bonds and notes are
obligations which pay principal and interest in U.S. dollars held in banks
outside the United States, primarily in Europe. Investments in Eurodollar
bonds and notes involve risks that differ from investments in securities of
domestic issuers. (See "Foreign Securities.")
FLOATING RATE SECURITIES. The Dreyfus/Laurel Prime Money Market and
Dreyfus/Laurel Tax-Exempt Money Market Funds may invest in floating rate
securities. A floating rate security provides for the automatic adjustment of
its interest whenever a specified interest rate changes. Interest rates on
these securities are ordinarily tied to, and are a percentage of, a widely
recognized interest rate, such as the yield on 90-day U.S. Treasury bills or
the prime rate of a specified bank. These rates may change as often as twice
daily. Generally, changes in interest rates will have a smaller effect on the
market value of floating rate securities than on the market value of
comparable fixed income obligations. Thus, investing in variable and floating
rate securities generally allows less opportunity for capital appreciation
and depreciation than investing in comparable fixed income securities.
FOREIGN SECURITIES. The Dreyfus/Laurel Prime Money Market and
Dreyfus/Laurel Tax-Exempt Money Market Funds may purchase securities of
foreign issuers and may invest in obligations
Page 13
of foreign branches of domestic banks and domestic branches of foreign banks.
Investment in foreign securities presents certain risks, including those
resulting from fluctuations in currency exchange rates, revaluation of
currencies, future political and economic developments and the possible
imposition of currency exchange blockages or other foreign governmental laws
or restrictions, reduced availability of public information concerning
issuers, and the fact that foreign issuers are not generally subject to
uniform accounting, auditing and financial reporting standards or to other
regulatory practices and requirements comparable to those applicable to
domestic issuers. Moreover, securities of many foreign issuers may be less
liquid and their prices more volatile than those of comparable domestic
issuers. In addition, with respect to certain foreign countries, there is the
possibility of expropriation, confiscatory taxation and limitations on the use
or removal of funds or other assets of a Fund, including withholding of
dividends. Foreign securities may be subject to foreign government taxes that
would reduce the yield on such securities.
GNMA CERTIFICATES. The Dreyfus/Laurel Prime Money Market and
Dreyfus/Laurel Tax-Exempt Money Market Funds may invest in Government
National Mortgage Association ("GNMA") Certificates ("GNMA Certificates").
GNMA Certificates are mortgage-backed securities representing part ownership
of a pool of mortgage loans. These loans are made by mortgage bankers,
commercial banks, savings and loan associations, and other lenders and are
either insured by the Federal Housing Administration or guaranteed by the
Veterans Administration. A "pool" or group of such mortgages is assembled
and, after being approved by GNMA, is offered to investors through securities
dealers. Once approved by GNMA, the timely payment of interest and principal
on each mortgage is guaranteed by the full faith and credit of the U.S.
Government. Although the mortgage loans in a pool underlying a GNMA
Certificate will have maturities of up to 30 years, the average life of a
GNMA Certificate will be substantially less because the mortgages will be
subject to normal principal amortization and also may be prepaid prior to
maturity. Prepayment rates vary widely and may be affected by changes in
mortgage interest rates. In periods of falling interest rates, the rate of
prepayment on higher interest mortgage rates tends to increase, thereby
shortening the actual average life of the GNMA Certificate. Conversely, when
interest rates are rising, the rate of prepayment tends to decrease, thereby
lengthening the average life of the GNMA Certificate. Reinvestment of payments
may occur at higher or lower rates than the original yield on the GNMA
Certificates. Due to the prepayment feature and the need to reinvest
prepayments of principal at current rates, GNMA Certificates with underlying
mortgages bearing higher interest rates can be less effective than typical
non-callable bonds of similar maturities at locking in yields during periods
of declining interest rates, although they may have comparable risks of
decline in value during periods of rising interest rates.
ILLIQUID SECURITIES. Each Fund will not knowingly invest more than
10% of the value of its net assets in illiquid securities, including time
deposits and repurchase agreements having maturities longer than seven days.
Securities that have readily available market quotations are not deemed
illiquid for purposes of this limitation (irrespective of any legal or
contractual restrictions on resale). A Fund may invest in commercial
obligations issued in reliance on the so-called "private placement" exemption
from registration afforded by Section 4(2) of the Securities Act of 1933, as
amended ("Section 4(2) paper"). A Fund may also purchase securities that are
not registered under the Securities Act of 1933, as amended, but which can be
sold to qualified institutional buyers in accordance with Rule 144A under
that Act ("Rule 144A securities"). Liquidity determinations with respect to
Section 4(2) paper and Rule 144A Securities will be made by the Board of
Directors as required. The Board will consider availability of reliable price
information and other relevant information in making such determinations.
Section 4(2) paper is restricted as to disposition under the federal
securities laws, and generally is sold to institutional investors such as the
Fund that agree that they are purchasing the paper for investment and not
with a view to public distribution. Any resale by the purchaser must be in an
exempt transaction. Section 4(2) paper normally is resold to other
institutional investors like the Fund through or with the assistance of the
issuer or investment dealers who make a market in the Section 4(2) paper,
thus providing liquidity. Rule 144A securities generally must be sold to
other qualified institutional buyers. If a particular investment in Section
4(2) paper or Rule 144A securities is not determined to be liquid, that
investment will be included within the percentage limitation on investment in
illiquid securities. The ability to sell
Page 14
Rule 144A securities to qualified institutional buyers is a recent development
and it is not possible to predict how this market will mature. Investing in
Rule 144A securities could have the effect of increasing the level of fund
illiquidity to the extent that qualified institutional buyers become, for a
time, uninterested in purchasing these securities.
MORTGAGE PASS-THROUGH CERTIFICATES. The Dreyfus/Laurel Prime Money
Market and Dreyfus/Laurel Tax-Exempt Money Market Funds may invest in
Mortgage Pass-Through Certificates. Mortgage pass-through certificates are
issued by governmental, government-related and private organizations and are b
acked by pools of mortgage loans. These mortgage loans are made by lenders
such as savings and loan associations, mortgage bankers, commercial banks and
others to residential home buyers throughout the United States. The
securities are "pass-through" securities because they provide investors with
monthly payments of principal and interest which in effect are a
"pass-through" of the monthly payments made by the individual borrowers on
the underlying mortgage loans. The principal governmental issuer of such
securities is the GNMA, which is a wholly-owned U.S. government corporation
within the Department of Housing and Urban Development. Government related
issuers include the Federal Home Loan Mortgage Corporation ("FHLMC") and the
Federal National Mortgage Association ("FNMA"), both government-sponsored
corporations owned entirely by private stockholders. Commercial banks,
savings and loan institutions, private mortgage insurance companies, mortgage
bankers and other secondary market issuers also create pass-through pools of
conventional residential mortgage loans. Such issuers may be the originators
of the underlying mortgage loans as well as the guarantors of the
mortgage-related securities. The market value of mortgage-related securities
depends on, among other things, the level of interest rates, the
certificates' coupon rates and the payment history of underlying mortgage
loans. For further information, see the SAI.
MUNICIPAL LEASES. The Dreyfus/Laurel Tax-Exempt Money Market Fund may
invest in municipal leases. Municipal leases frequently have special risks
not normally associated with general obligation or revenue bonds. Leases and
installment purchase or conditional sale contracts (which normally provide
for title to the leased asset to pass eventually to the government issuer)
have evolved as a means for governmental issuers to acquire property and
equipment without meeting the constitutional and statutory requirements for
the issuance of debt. The debt-issuance limitations of many state
constitutions and statutes are deemed to be inapplicable because of the
inclusion in many leases or contracts of "non-appropriation" clauses that
provide that the governmental issuer has no obligation to make future payments
under the lease or contract unless money is appropriated for such purpose by
the appropriate legislative body on a yearly or other periodic basis. To
reduce these risks, the Dreyfus/Laurel Tax-Exempt Money Market Fund will only
purchase municipal leases subject to a non-appropriation clause when the
payment of principal and accrued interest is backed by an unconditional
irrevocable letter of credit or guarantee of a bank.
The Dreyfus/Laurel Tax-Exempt Money Market Fund proposes to purchase
municipal lease obligations principally from banks, equipment vendors or
other parties that have entered into an agreement with the Dreyfus/Laurel
Tax-Exempt Money Market Fund providing that such party will remarket the
municipal lease obligations on certain conditions (described below) within
seven days after demand by the Dreyfus/Laurel Tax-Exempt Money Market Fund.
(Such agreements are referred to as "remarketing agreements" and the party
that agrees to remarket or repurchase a municipal lease obligation is
referred to as a "remarketing party.") The agreement will provide for a
remarketing price equal to the principal balance on the obligation as
determined pursuant to the terms of the remarketing agreement as of the
repurchase date (plus accrued interest). The Funds' investment manager, The
Dreyfus Corporation ("Dreyfus"), anticipates that, in most cases, the
remarketing agreement will also provide for the seller of the municipal lease
obligation or the remarketing party to service it for a servicing fee. The
conditions to the Dreyfus/Laurel Tax-Exempt Money Market Fund's right to
require the remarketing party to purchase or remarket the obligation are that
the Dreyfus/Laurel Tax-Exempt Money Market Fund must certify at the time of
remarketing that (1) payments of principal and interest under the municipal
lease obligation are current and the Dreyfus/Laurel Tax-Exempt Money Market
Fund has no knowledge of any default thereunder by the governmental issuer,
(2) such remarketing is necessary in the sole opinion of a designated officer
Page 15
of the Dreyfus/Laurel Tax-Exempt Money Market Fund to meet the Fund's
liquidity needs, and (3) the governmental issuer has not notified the Dreyfus/
Laurel Tax-Exempt Money Market Fund of termination of the underlying lease.
The remarketing agreement described above requires the remarketing
party to purchase (or market to a third party) municipal lease obligations of
the Dreyfus/Laurel Tax-Exempt Money Market Fund under certain conditions to
provide liquidity if share redemptions of the Dreyfus/Laurel Tax-Exempt Money
Market Fund exceed purchases of Dreyfus/Laurel Tax-Exempt Money Market Fund
shares. The Dreyfus/Laurel Tax-Exempt Money Market Fund will only enter into
remarketing agreements with banks, equipment vendors or other responsible
parties (such as insurance companies, broker-dealers and other financial
institutions) that in Dreyfus' opinion are capable of meeting their
obligations to the Fund. Dreyfus will regularly monitor the ability of
remarketing parties to meet their obligation to the Dreyfus/Laurel Tax-Exempt
Money Market Fund. The Dreyfus/Laurel Tax-Exempt Money Market Fund will enter
into remarketing agreements covering at least 75% in the principal amount of
the municipal lease obligations in its Fund. The Dreyfus/Laurel Tax-Exempt
Money Market Fund will not enter into remarketing agreements with any one
remarketing party in excess of 5% of its total assets. Remarketing agreements
with broker-dealers may require an exemptive order under the Investment
Company Act of 1940, as amended (the "1940 Act"). The Dreyfus/Laurel
Tax-Exempt Money Market Fund will not enter into such agreements with
broker-dealers prior to the issuance of such an order in interpretation of
the SEC that such an order is not required. There can be no assurance that
such an order or interpretation will be granted.
The "remarketing" feature of the agreement entitles the remarketing
party to attempt to resell the Dreyfus/Laurel Tax-Exempt Money Market Fund's
municipal lease obligation within seven days after demand from the Fund;
however, the remarketing party will be obligated to repurchase the municipal
lease obligation for its own account at the end of the seven-day period if
such obligation has not been resold. The remarketing agreement will often be
entered into with the party who has sold a municipal lease obligation to the
Dreyfus/Laurel Tax-Exempt Money Market Fund, but remarketing agreements may
also be entered into with a separate remarketing party of the same type that
meets the credit and other criteria listed above. Up to 25% of the
Dreyfus/Laurel Tax-Exempt Money Market Fund's municipal lease obligations
may not be covered by remarketing agreements. The Dreyfus/Laurel Tax-Exempt
Money Market Fund, however, will not invest in municipal lease obligations
that are not subject to remarketing agreements if, as a result of such
investment, more than 10% of its total assets would be invested in illiquid
securities such as (1) municipal lease obligations not subject to remarketing
agreements and not deemed by Dreyfus at the time of purchase to be at least
of comparable quality to rated municipal debt obligations, or (2) other
illiquid assets such as securities restricted as to resale under federal
or state securities laws. For purposes of the preceding sentence, a municipal
lease obligation that is backed by an irrevocable bank letter of credit or an
insurance policy, issued by a bank or issuer deemed by Dreyfus to be of high
quality and minimal credit risk, will not be deemed to be "illiquid" solely
because the underlying municipal lease obligation is unrated, if Dreyfus
determines that such municipal lease obligation is readily marketable because
it is backed by such letter of credit or insurance policy.
As used within this section, high quality means that the municipal
lease obligation meets all of the following criteria: (1) the underlying
equipment is for an essential governmental function; (2) the municipality has
a documented history of stable financial operations and timely payments of
principal and interest on its municipal debt or lease obligation; (3) the
lease/purchase agreement contains proper terms and conditions to protect
against non-appropriation, substitution of equipment and other more general
risks associated with the purchase of securities; (4) the equipment
underlying the lease was leased in a proper and legal manner; and (5) the
equipment underlying the lease was leased from a reputable equipment vendor.
A letter of credit or insurance policy would generally provide that the
issuer of the letter of credit or insurance policy would pay the outstanding
principal balance of the municipal lease obligations plus any accrued but
unpaid interest upon non-appropriation or default by the governmental lessee.
However, the terms of each letter of credit or insurance policy may vary
significantly and would affect the degree to which such protections increase
the liquidity of a particular municipal lease obligation.
Page 16
OTHER INVESTMENT COMPANIES. Each Fund may invest in securities issued
by other investment companies to the extent that such investments are
consistent with the Fund's investment objective and policies and permissible
under the 1940 Act. As a shareholder of another investment company, a Fund
would bear, along with other shareholders, its pro rata portion of the other
investment company's expenses, including advisory fees. These expenses would
be in addition to the advisory and other expenses that the Fund bears
directly in connection with its own operations.
REPURCHASE AGREEMENTS. Each Fund may enter into repurchase
agreements. A repurchase agreement involves the purchase of a security by a
Fund and a simultaneous agreement (generally with a bank or broker-dealer) to
repurchase that security from a Fund at a specified price and date or upon
demand. This technique offers a method of earning income on idle cash. A risk
associated with repurchase agreements is the failure of the seller to
repurchase the securities as agreed, which may cause a Fund to suffer a loss
if the market value of such securities declines before they can be liquidated
on the open market. Repurchase agreements with a duration of more than seven
days are considered illiquid securities and are subject to the limit stated
above.
REVERSE REPURCHASE AGREEMENTS. The Dreyfus/Laurel Prime Money Market
and Dreyfus/Laurel Tax-Exempt Money Market Funds may enter into reverse
repurchase agreements to meet redemption requests where the liquidation of
fund securities is deemed by Dreyfus to be disadvantageous. Under a reverse
repurchase agreement, a Fund: (i) transfers possession of fund securities to
a bank or broker-dealer in return for cash in an amount equal to a percentage
of the securities' market value; and (ii) agrees to repurchase the securities
at a future date by repaying the cash with interest. Cash or liquid
high-grade debt securities held by the Fund equal in value to the repurchase
price including any accrued interest will be maintained in a segregated
account while a reverse repurchase agreement is in effect.
SECURITIES LENDING. To increase return on fund securities, each Fund
may lend its portfolio securities to broker-dealers and other institutional
investors pursuant to agreements requiring that the loans be continuously
secured by collateral equal at all times in value to at least the market
value of the securities loaned. There may be risks of delay in receiving
additional collateral or in recovering the securities loaned or even a loss
of rights to the collateral should the borrower of the securities fail
financially. However, loans are made only to borrowers deemed by Dreyfus to
be of good standing and when, in its judgment, the income to be earned from
the loan justifies the attendant risks.
STAND-BY COMMITMENTS. The Dreyfus/Laurel Tax-Exempt Money Market
Fund's investments may include "stand-by commitments," which are rights to
resell municipal securities at specified periods prior to their maturity
dates to the seller or to some third party at an agreed-upon price or yield.
Stand-by commitments may involve certain expenses and risks, including the
inability of the issuer of the commitment to pay for the securities at the
time the commitment is exercised, non-marketability of the commitment, and
differences between the maturity of the commitment.
U.S. GOVERNMENT SECURITIES. Each Fund may invest in obligations
issued or guaranteed as to both principal and interest by the U.S. Government
or backed by the full faith and credit of the United States. In addition to
direct obligations of the U.S. Treasury, these include securities issued or
guaranteed by the Federal Housing Administration, Farmers Home
Administration, Export-Import Bank of the United States, Small Business
Administration, GNMA, General Services Administration and Maritime
Administration. Investments may also be made in U.S. Government obligations
that do not carry the full faith and credit guarantee, such as those issued
by the FNMA, the FHLMC, or other instrumentalities.
VARIABLE AMOUNT MASTER DEMAND NOTES. The Dreyfus/Laurel Prime Money
Market Fund may invest in Variable Amount Master Demand Notes. Variable
amount master demand notes are unsecured obligations that are redeemable upon
demand and are typically unrated. These instruments are issued pursuant to
written agreements between their issuers and holders. The agreements permit
the holders to increase (subject to an agreed maximum) and the holders and
issuers to decrease the principal amount of the notes, and specify that the
rate of interest payable on the principal fluctuates according to an
agreed-upon formula. If an issuer of a vari-
Page 17
able amount master demand note were to default on its payment obligation, a
Fund might be unable to dispose of the note because of the absence of a
secondary market and might, for this or other reasons, suffer a loss to the
extent of the default. A Fund will only invest in variable amount master
demand notes issued only by entities that Dreyfus considers creditworthy.
VARIABLE RATE OBLIGATIONS. The Dreyfus/Laurel Tax-Exempt Money Market
Fund may invest in variable rate obligations whose interest rates are
adjusted either at predesignated periodic intervals or whenever there is a
change in the market rate to which the security's interest rate is tied. The
adjustments minimize changes in the market value of the obligation and,
accordingly, enhance the ability of the Dreyfus/Laurel Tax-Exempt Money
Market Fund to maintain a stable NAV. The Dreyfus/Laurel Tax-Exempt Money
Market Fund may also purchase participation interests in variable rate
securities such as industrial development bonds backed by letters of credit
or insured or guaranteed by financial institutions, such as banks, or
insurance companies, whose credit quality ratings are judged by Dreyfus to be
comparable in quality to the two highest quality ratings of Moody's or
Standard & Poor's.
WHEN ISSUED SECURITIES AND DELAYED DELIVERY TRANSACTIONS. To secure
advantageous prices or yields, each Fund may purchase U.S. Government
securities on a when-issued basis or may purchase or sell securities for
delayed delivery. In such transactions, delivery of the securities occurs
beyond the normal settlement periods, but no payment or delivery is made by a
Fund prior to the actual delivery or payment by the other party to the
transaction. The purchase of securities on a when-issued or delayed delivery
basis involves the risk that, as a result of an increase in yields available
in the market place, the value of the securities purchased will decline prior
to the settlement date. The sale of securities for delayed delivery involves
the risk that the prices available in the market on the delivery date may be
greater than those obtained in the sale transactions. Each Fund will
establish a segregated account consisting of cash, U.S. Government securities
or other high-grade debt obligations in an amount equal to the amounts of its
when-issued and delayed delivery commitments.
MASTER/FEEDER OPTION. The Dreyfus/Laurel Funds, Inc. may in the
future seek to achieve a Fund's investment objective by investing all of a
Fund's assets in another investment company having the same investment
objective and substantially the same investment policies and restrictions as
those applicable to the Fund. Shareholders of the Fund will be given at least
30 days' prior notice of any such investment. Such investment would be made
only if the directors determine it to be in the best interest of the Fund and
its shareholders. In making that determination, the directors will consider,
among other things, the benefits to shareholders and/or the opportunity to
reduce costs and achieve operational efficiencies. Although the Funds believe
that the directors will not approve an arrangement that is likely to result
in higher costs, no assurance is given that costs will be materially reduced
if this option is implemented.
LIMITING INVESTMENT RISKS. Each Fund is subject to a number of
investment limitations. Certain limitations are matters of fundamental policy
and may not be changed without the affirmative vote of the holders of a
majority of each Fund's outstanding Shares. The SAI describes all of a Fund's
fundamental and non-fundamental restrictions.
The investment objective, policies, restrictions, practices and
procedures of a Fund, unless otherwise specified, may be changed without
shareholder approval. If a Fund's investment objective, policies,
restrictions, practices or procedures change, shareholders should consider
whether the Fund remains an appropriate investment in light of their then
current position and needs.
In order to permit the sale of a Fund's Shares in certain states, a
Fund may make commitments more restrictive than the investment policies and
restrictions described in this Prospectus and the SAI. Should a Fund
determine that any such commitment is no longer in the best interests of the
Fund, it may consider terminating sales of its Shares in the states involved.
Page 18
MANAGEMENT OF THE FUNDS
INVESTMENT MANAGER. Dreyfus, located at 200 Park Avenue, New York,
New York 10166, was formed in 1947. Dreyfus is a wholly-owned subsidiary of
Mellon Bank, which is a wholly-owned subsidiary of Mellon Bank Corporation
("Mellon"). As of March 31, 1995, Dreyfus managed or administered
approximately $72 billion in assets for more than 1.9 million investor
accounts nationwide.
Dreyfus serves as the Funds' investment manager. Dreyfus supervises
and assists in the overall management of the Funds' affairs under an
Investment Management Agreement with the Funds, subject to the overall
authority of the Company's Board of Directors in accordance with Maryland
law. Pursuant to the Investment Management Agreement, Dreyfus provides, or
arranges for one or more third parties to provide, investment advisory,
administrative, custody, fund accounting and transfer agency services to the
Funds. As the Funds' investment manager, Dreyfus manages the Funds by making
investment decisions based on the Funds' investment objective, policies and
restrictions.
Mellon is a publicly owned multibank holding company incorporated
under Pennsylvania law in 1971 and registered under the Bank Holding Company
Act of 1956, as amended. Mellon provides a comprehensive range of financial
products and services in domestic and selected international markets. Mellon
is among the twenty-five largest bank holding companies in the United States
based on total assets. Mellon's principal wholly-owned subsidiaries are
Mellon Bank, Mellon Bank (DE) National Association, Mellon Bank (MD), The
Boston Company, Inc., AFCO Credit Corporation and a number of companies known
as Mellon Financial Services Corporations. Through its subsidiaries,
including Dreyfus, Mellon managed approximately $193 billion in assets as of
December 31, 1994, including $76 billion in mutual fund assets. As of
December 31, 1994, Mellon, through various subsidiaries, provided
non-investment services, such as custodial or administration services, for
approximately $654 billion in assets, including approximately $74 billion in
mutual fund assets.
Dreyfus pays all of the expenses of each Fund except brokerage fees,
taxes, interest, fee, and expenses of the non-interested Directors (including
counsel fees) and extraordinary expenses. Although Dreyfus does not pay for
the fees and expenses of the non-interested Directors (including counsel
fees), Dreyfus is contractually required to reduce its investment management
fee in an amount equal to each Fund's allocable share of such expenses. In
order to compensate Dreyfus for paying virtually all of a Fund's expenses,
each Fund's investment management fee is higher than the investment advisory
fees paid by most investment companies. Most if not all, such companies also
pay for additional non-investment advisory expenses that are not paid by such
companies' investment advisers. From time to time, Dreyfus may waive (either
voluntarily or pursuant to applicable state limitations) additional
investment management fees payable by a Fund. For the period from November 1,
1993 to April 3, 1994, the Prime Money Market Fund, the U.S. Treasury Money
Market Fund and the Tax-Exempt Money Market Fund paid its investment adviser,
Mellon Bank, 0.19%, 0.13%, and 0.32%, respectively (annualized) of its
average daily net assets in investment advisory fees (net of expenses
reimbursed), under the Fund's previous investment advisory contract (such
contract covered only the provision of investment advisory and certain
specified administrative services). For the period from April 4, 1994 through
the fiscal year ended October 31, 1994, each Fund paid Mellon Bank or the
Manager 0.50% (annualized) of its average daily net assets in investment
management fees, less fees and expenses of the non-interested Directors
(including counsel fees).
For the fiscal year ended October 31, 1994, total operating expenses
(excluding Rule 12b-1 fees) (net of expenses reimbursed) of the Prime Money
Market Fund were 0.51% (annualized) of the average daily net assets of each
class for both the Investor Class and Class R. For the fiscal year ended
October 31, 1994, total operating expenses (excluding Rule 12b-1 fees) (net
of expenses reimbursed) of the U.S. Treasury Money Market Fund were 0.50%
(annualized) of the average daily net assets of each class for both the
Investor Class and Class R. For the fiscal year ended October 31, 1994, total
operating expenses (excluding Rule 12b-1 fees) (net of expenses reimbursed)
of the Tax-Exempt Money Market Fund were 0.50% and 0.51% (annu-
Page 19
alized) of the average daily net assets of each class for the Investor Class
and Class R, respectively. Without the reimbursement, operating expenses
would have been higher.
In addition, Investor shares may be subject to certain distribution
and service fees. See "Distribution Plan (Investor Shares only)."
Dreyfus may pay the Distributor for shareholder services from
Dreyfus' own assets, including past profits but not including the management
fee paid by the Funds. The Distributor may use part or all of such payments
to pay Agents in respect of these services.
Dreyfus is authorized to allocate purchase and sale orders for
portfolio securities to certain financial institutions, including, in the
case of agency transactions, financial institutions that are affiliated with
Dreyfus or Mellon Bank or that have sold shares of the Funds, if Dreyfus
believes that the quality of the transaction and the commission are
comparable to what they would be with other qualified brokerage firms. From
time to time, to the extent consistent with its investment objective, policies
and restrictions, the Funds may invest in securities of companies with which
Mellon Bank has a lending relationship.
The Funds' distributor is Premier Mutual Fund Services, Inc. (the
"Distributor"). The Distributor is located at One Exchange Place, Boston,
Massachusetts 02109. The Distributor is a wholly-owned subsidiary of
Institutional Administration Services, Inc., a provider of mutual fund
administration services, the parent company of which is Boston Institutional
Group, Inc.
CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT, AND
SUB-ADMINISTRATOR--Mellon Bank (One Mellon Bank Center, Pittsburgh,
Pennsylvania 15258) is the Funds' custodian and fund accountant. The Funds'
Transfer and Dividend Disbursing Agent is The Shareholder Services Group,
Inc. (the "Transfer Agent"), a subsidiary of First Data Corporation, One
American Express Plaza, Providence, Rhode Island 02903. Premier Mutual Fund
Services, Inc. is the Funds' sub-administrator and, pursuant to a
Sub-Administration Agreement with Dreyfus, provides various administrative
and corporate secretarial services to the Funds.
HOW TO BUY FUND SHARES
GENERAL-- Investor Shares are offered to any investor and may be
purchased through the Distributor or Agents that have entered into Selling
Agreements with the Distributor.
Class R Shares are sold primarily to Banks acting on behalf of
customers having a qualified trust or investment account or relationship at
such institution, or to customers who have received and hold shares of the
Fund distributed to them by virtue of such an account or relationship. A
Retirement Plan is a certain qualified or non-qualified employee benefit plan
or other program, including pension, profit-sharing and other deferred
compensation plans, whether established by corporations, partnerships, non-pro
fit entities or state and local governments ("Retirement Plan"). Class R
Shares may be purchased for a Retirement Plan only by a custodian, trustee,
investment manager or other entity authorized to act on behalf of such Plan.
Institutions effecting transactions in Class R Shares for the accounts of
their clients may charge their clients direct fees in connection with such
transactions. It is not recommended that the Dreyfus/Laurel Tax-Exempt Money
Market Fund be used as a vehicle for Keogh, IRA or other qualified plans.
Stock certificates are issued only upon your written request. No
certificates are issued for fractional shares. The Funds reserve the right to
reject any purchase order.
The minimum initial investment is $2,500, or $1,000 if you are a
client of an Agent which has made an aggregate minimum initial purchase for
its customers of $2,500. Subsequent investments must be at least $100.
However, the minimum initial investment for Dreyfus-sponsored Keogh Plans,
IRAs, SEP-IRAs and 403(b)(7) Plans with only one participant is $750, with no
minimum on subsequent purchases. Individuals who open an IRA also may open a
non-working spousal IRA with a minimum initial investment of $250. The
initial investment must be accompanied by the Fund's Account Application. For
full-time or part-time employees of Dreyfus or any of its affiliates or
subsidiaries, directors of Dreyfus, board members of a fund
Page 20
advised by Dreyfus including members of the Company's board, or the spouse or
minor child of any of the foregoing, the minimum initial investment in $1,000.
For full-time or part-time employees of Dreyfus or any of its affiliates or
subsidiaries who elect to have a portion of their pay directly deposited into
their Fund account, the minimum initial investment is $50. The Dreyfus/Laurel
Prime Money Market and U.S. Treasury Money Market Fund reserve the right to
offer their shares without regard to minimum purchase requirements to
employees participating in certain qualified or non-qualified employee
benefit plans or other programs where contributions or account information
can be transmitted in a manner and form acceptable to the Funds. The Funds
reserve the right to vary further the initial and subsequent investment
minimum requirements at any time.
The Internal Revenue Code of 1986, as amended (the "Code"), imposes
various limitations on the amount that may be contributed to Retirement
Plans. These limitations apply with respect to participants at the plan level
and, therefore, do not directly affect the amount that may be invested in a
Fund by a Retirement Plan. Participants and plan sponsors should consult
their tax advisers for details.
You may purchase shares of a Fund by check or wire, or through the
Dreyfus TELETRANSFER Privilege described below. Checks should be made payable
to "The Dreyfus Family of Funds" or, if for Dreyfus retirement plan accounts,
to "The Dreyfus Trust Company, Custodian." Payments to open new accounts
which are mailed should be sent to The Dreyfus Family of Funds, P.O. Box
9387, Providence, Rhode Island 02940-9387, together with your Account
Application indicating which Class of shares is being purchased. For
subsequent investments, your Fund account number should appear on the check
and an investment slip should be enclosed and sent to The Dreyfus Family of
Funds, P.O. Box 105, Newark, New Jersey 07101-0105. For Dreyfus retirement
plan accounts, both initial and subsequent investments should be sent to The
Dreyfus Trust Company, Custodian, P.O. Box 6427, Providence, Rhode Island
02940-6427. Neither initial nor subsequent investments should be made by
third party check. PURCHASE ORDERS MAY BE DELIVERED IN PERSON ONLY TO A
DREYFUS FINANCIAL CENTER. THESE ORDERS WILL BE FORWARDED TO THE FUND AND WILL
BE PROCESSED ONLY UPON RECEIPT THEREBY. FOR THE LOCATION OF THE NEAREST
DREYFUS FINANCIAL CENTER, PLEASE CALL ONE OF THE TELEPHONE NUMBERS LISTED
UNDER "GENERAL INFORMATION."
Wire payments may be made if your bank account is in a commercial
bank that is a member of the Federal Reserve System or any other bank having
a correspondent bank in New York City. Immediately available funds may be
transmitted by wire to Boston Safe Deposit & Trust Co., together with the
applicable Class' DDA # as shown below, for purchase of Fund shares in your
name:
DDA# 043427 Dreyfus/Laurel Prime Money Market/Investor shares;
DDA# 043435 Dreyfus/Laurel Prime Money Market/Class R shares;
DDA# 043516 Dreyfus/Laurel Tax-Exempt Money Market Fund/Investor
shares;
DDA# 043508 Dreyfus/Laurel Tax-Exempt Money Market Fund/Class R
shares;
DDA# 043567 Dreyfus/Laurel U.S.Treasury Money Market Fund/Investor
shares;
DDA# 043559 Dreyfus/Laurel U.S. Treasury Money Market Fund/Class R
shares.
The wire must include your Fund account number (for new accounts, your
Taxpayer Identification Number ("TIN") should be included instead), account
registration and dealer number, if applicable. If your initial purchase of
Fund shares is by wire, you should call 1-800-645-6561 after completing your
wire payment in order to obtain your Fund account number. Please include your
Fund account number on the Funds' Account Application and promptly mail the
Account Application to the Fund, as no redemptions will be permitted until
the Account Application is received. You may obtain further information about
remitting funds in this manner from your bank. All payments should be made in
U.S. dollars and, to avoid fees and delays, should be drawn only on U.S. banks
. A charge will be imposed if any check used for investment in your account
does not clear. The Funds make available to certain large institutions the
ability to issue purchase instructions through compatible computer
facilities.
Subsequent investments also may be made by electronic transfer of
funds from an account maintained in a bank or other domestic financial
institution that is an Automated Clearing House ("ACH") member. You must
direct the institution to transmit immediately available
Page 21
funds through the ACH System to Boston Safe Deposit & Trust Co. with
instructions to credit your Fund account. The instructions must specify your
Fund account registration and Fund account number PRECEDED BY THE DIGITS:
"4790" Dreyfus/Laurel Prime Money Market Fund/Investor Shares;
"4480" Dreyfus/Laurel Prime Money Market Fund/Class R Shares;
"4860" Dreyfus/Laurel Tax-Exempt Money Market Fund/Investor Shares;
"4850" Dreyfus/Laurel Tax-Exempt Money Market Fund/Class R Shares;
"4900" Dreyfus/Laurel U.S. Treasury Money Market Fund/Investor
Shares;
"4890" Dreyfus/Laurel U.S. Treasury Money Market Fund/Class R Shares.
The Distributor may pay dealers a fee of up to .5% of the amount
invested through such dealers in Fund shares by employees participating in
qualified or non-qualified employee benefit plans or other programs where (i)
the employers or affiliated employers maintaining such plans or programs have
a minimum of 250 employees eligible for participation in such plans or
programs or (ii) such plan's or program's aggregate investment in The Dreyfus
Family of Funds or certain other products made available by the Distributor
to such plans or programs exceeds one million dollars ("Eligible Benefit
Plans"). The determination of the number of employees eligible for
participation in a plan or program shall be made on the date Fund shares are
first purchased by or on behalf of employees participating in such plan or
program and on each subsequent January 1st. All present holdings of shares of
funds in the Dreyfus Family of Funds by Eligible Benefit Plans will be
aggregated to determine the fee payable with respect to each purchase of Fund
shares. The Distributor reserves the right to cease paying these fees at any
time. The Distributor will pay such fees from its own funds, other than
amounts received from the Fund, including past profits or any other source
available to it.
Federal regulations require that you provide a certified TIN upon
opening or reopening an account. See "Dividends, Other Distributions and
Taxes" and the Funds' Account Application for further information concerning
this requirement. Failure to furnish a certified TIN to the Funds could
subject you to a $50 penalty imposed by the Internal Revenue Service (the
"IRS").
NET ASSET VALUE ("NAV") The price of your shares is their NAV. NAV is
determined on each day that the New York Stock Exchange ("NYSE") is open (a
"business day"). Investments and requests to exchange or redeem shares
received by a Fund before 4 p.m., Eastern time, are effective on, and will
receive the price next determined on, that business day (except purchase
orders made through the Dreyfus TELETRANSFER Privilege, which are effective
one business day after your call). The NAV of each Fund is calculated two
times each business day, at 12 noon and 4 p.m., Eastern time. Investment,
exchange or redemption requests received after 4 p.m. Eastern time, for Money
Market Funds, are effective on, and receive the first Share price determined
on the next business day.
An investment portfolio's NAV refers to the worth of one share. The
NAV for Investor and Class R Shares of a Money Market Fund is calculated on
the basis of amortized cost, which involves initially valuing a portfolio
instrument at its cost and thereafter assuming a constant amortization to
maturity of any discount or premium, regardless of the impact of fluctuating
interest rates on the market value of the instrument. Each Money Market Fund
intends to maintain a constant NAV of $1.00 per share, although there is no
assurance that this can be done on a continuing basis.
The yield of most classes of shares of the Money Market Funds are
published weekly in leading financial publications and daily in many local
newspapers.
DREYFUS TELETRANSFER PRIVILEGE -- You may purchase shares of a Fund
(minimum $500 and maximum $150,000 per day) by telephone if you have checked
the appropriate box and supplied the necessary information on the Funds'
Account Application or have filed a Shareholder Services Form with the
Transfer Agent. The proceeds will be transferred between the bank account
designated in one of these documents and your Fund account. Only a bank
account maintained in a domestic financial institution which is an ACH member
may be so designated. The Funds may modify or terminate this Privilege at any
time or charge a service fee upon notice to shareholders. No such fee
currently is contemplated.
If you have selected the Dreyfus TELETRANSFER Privilege, you may
request a Dreyfus TELETRANSFER purchase of Fund shares by telephoning
1-800-221-4060 or, if calling from overseas, 1-401-455-3306.
Page 22
SHAREHOLDER SERVICES
The services and privileges described under this heading may not be
available to clients of certain Agents and some Agents may impose certain
conditions on their clients which are different from those described in this
Prospectus. You should consult your Agent in this regard.
FUND EXCHANGES
You may purchase, in exchange for shares of a Class, Shares of the
same class of certain other funds managed or administered by Dreyfus, to the
extent such shares are offered for sale in your state of residence. These
funds have different investment objectives which may be of interest to you.
If you desire to use this service, please call 1-800-645-6561 to determine if
it is available and whether any conditions are imposed on its use. WITH
RESPECT TO CLASS R SHARES HELD BY RETIREMENT PLANS, EXCHANGES MAY BE MADE
ONLY BETWEEN A SHAREHOLDER'S RETIREMENT PLAN ACCOUNT IN ONE FUND AND SUCH
SHAREHOLDER'S RETIREMENT PLAN ACCOUNT IN ANOTHER FUND.
To request an exchange, you or your Agent acting on your behalf must
give exchange instructions to the Transfer Agent in writing or by telephone.
Before any exchange, you must obtain and should review a copy of the current
prospectus of the fund into which the exchange is being made. Prospectuses
may be obtained by calling 1-800-645-6561. Except in the case of Personal
Retirement Plans, the shares being exchanged must have a current value of at
least $500; furthermore, when establishing a new account by exchange, the
shares being exchanged must have a value of at least the minimum initial
investment required for the fund into which the exchange is being made. The
ability to issue exchange instructions by telephone is given to all Fund
shareholders automatically, unless you check the relevant "No" box on the
Account Application, indicating that you specifically refuse this Privilege.
The Telephone Exchange Privilege may be established for an existing account
by written request, signed by all shareholders on the account, or by a
separate Shareholder Services Form, also available by calling
1-800-645-6561. If you previously have established the Telephone Exchange
Privilege, you may telephone exchange instructions by calling 1-800-221-4060
or, if calling from overseas, 1-401-455-3306. See "How to Redeem Fund
Shares_Procedures." Upon an exchange, the following shareholder services and
privileges, as applicable and where available, will be automatically carried
over to the fund into which the exchange is made: Telephone Exchange
Privilege, Check Redemption Privilege, Wire Redemption Privilege, Telephone
Redemption Privilege, Dreyfus TELETRANSFER Privilege and the dividends and
distributions payment option (except for Dividend Sweep) selected by the
investor.
Shares will be exchanged at the next determined NAV; however, a sales
load may be charged with respect to exchanges of Investor Shares into funds
sold with a sales load. If you are exchanging Investor Shares into a fund
that charges a sales load, you may qualify for share prices which do not
include the sales load or which reflect a reduced sales load, if the shares
of the fund from which you are exchanging were: (a) purchased with a sales
load, (b) acquired by a previous exchange from shares purchased with a sales
load, or (c) acquired through reinvestment of dividends or other
distributions paid with respect to the foregoing categories of shares. To
qualify, at the time of the exchange you must notify the Transfer Agent or
your Agent must notify the Distributor. Any such qualification is subject to
confirmation of your holdings through a check of appropriate records. See
"Shareholder Services" in the SAI. No fees currently are charged shareholders
directly in connection with exchanges, although the Fund reserves the right,
upon not less than 60 days' written notice, to charge shareholders a nominal
fee in accordance with rules promulgated by the SEC. The Funds reserve the
right to reject any exchange request in whole or in part. The availability of
fund exchanges may be modified or terminated at any time upon notice to
shareholders. The exchange of shares of one fund for shares of another is
treated for Federal income tax purposes as a sale of the shares given in
exchange by the shareholder and, therefore, an
Page 23
exchanging shareholder may realize, or an exchange on behalf of a Retirement
Plan which is not tax exempt may result in, a taxable gain or loss. The
exchange of shares of one fund for shares of another is treated for Federal
income tax purposes as a sale of the shares given in exchange by the
shareholder and, therefore, an exchanging shareholder may realize, or an
exchange on behalf of a Retirement Plan which is not tax exempt may result
in, a taxable gain or loss.
DREYFUS AUTO-EXCHANGE PRIVILEGE
Dreyfus Auto-Exchange Privilege enables you to invest regularly (on a
semi-monthly, monthly, quarterly or annual basis), in exchange for shares of
a Fund, in shares of the same Class of certain other funds in the Dreyfus
Family of Funds of which you are currently an investor. WITH RESPECT TO CLASS
R SHARES HELD BY RETIREMENT PLANS, EXCHANGES PURSUANT TO THE DREYFUS
AUTO-EXCHANGE PRIVILEGE MAY BE MADE ONLY BETWEEN A SHAREHOLDER'S RETIREMENT
PLAN ACCOUNT IN ONE FUND AND SUCH SHAREHOLDER'S RETIREMENT PLAN ACCOUNT IN
ANOTHER FUND. The amount you designate, which can be expressed either in
terms of a specific dollar or share amount ($100 minimum), will be exchanged
automatically on the first and/or fifteenth day of the month according to the
schedule you have selected. Shares will be exchanged at the then-current NAV;
however a sales load may be charged with respect to exchanges of Investor
Shares into funds sold with a sales load. The right to exercise this
Privilege may be modified or canceled by the Funds or the Transfer Agent. You
may modify or cancel your exercise of this Privilege at any time by mailing
written notification to The Dreyfus Family of Funds, P.O. Box 9671,
Providence, Rhode Island 02940-9671. The Funds may charge a service fee for
the use of this Privilege. No such fee currently is contemplated. For more
information concerning this Privilege and the funds in the Dreyfus Family of
Funds eligible to participate in this Privilege, or to obtain a Dreyfus
Auto-Exchange Authorization Form, please call toll free 1-800-645-6561.
DREYFUS-AUTOMATIC ASSET BUILDER
Dreyfus-AUTOMATIC Asset Builder permits you to purchase shares of a
Fund (minimum of $100 and maximum of $150,000 per transaction) at regular
intervals selected by you. Shares of a Fund are purchased by transferring
funds from the bank account designated by you. At your option, the bank
account designated by you will be debited in the specified amount, and Fund
Shares will be purchased, once a month, on either the first or fifteenth day,
or twice a month, on both days. Only an account maintained at a domestic
financial institution which is an ACH member may be so designated. To
establish a Dreyfus-AUTOMATIC Asset Builder account, you must file an
authorization form with the Transfer Agent. You may obtain the necessary
authorization by calling 1-800-645-6561 from the Distributor. You may cancel
your participation in this Privilege or change the amount of purchase at any
time by mailing written notification to The Dreyfus Family of Funds, P.O. Box
9671, Providence, Rhode Island 02940-9671, or, if to Dreyfus retirement plan
accounts to The Dreyfus Trust Company, Custodian, P.O. Box 6427, Providence,
Rhode Island 02940-6427, and the notification will be effective three
business days following receipt. The Funds may modify or terminate this
Privilege at any time or charge a service fee. No such fee currently is
contemplated.
DREYFUS DIVIDEND OPTIONS
Dreyfus Dividend Sweep enables you to invest automatically dividends
or dividends and capital gain distributions, if any, paid by a Fund in Shares
of the same class of certain other funds in the Dreyfus Family of Funds of
which you are an investor. Shares of the other fund will be purchased at the
then-current NAV; however, a sales load may be charged with respect to
investments in shares of a fund sold with a sales load. If you are investing
in a fund that charges a sales load, you may qualify for share prices which
do not include the sales load or which reflect a reduced sales load. See
"Shareholder Services" in the SAI. Dreyfus Dividend ACH permits you to
transfer electronically on the payment date dividends or dividends and
capital gain distributions, if any, from a Fund to a designated bank account.
Only an account maintained at a domestic financial institution which is an
ACH member may be so designated. Banks may charge a fee for this service.
For more information concerning these Privileges, or to request a
Dreyfus Dividend Options Form, please call toll free 1-800-645-6561. You may
cancel these privileges by mailing written notification to The Dreyfus Family
of Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671. Enrollment in
or cancellation of these Privileges is effective three business days
Page 24
following receipt. These Privileges are available only for existing accounts
and may not be used to open new accounts. Minimum subsequent investments do
not apply for Dreyfus Dividend Sweep. The Funds may modify or terminate these
Privileges at any time or charge a service fee. No such fee currently is
contemplated. Shares held under Keogh Plans, IRAs or other retirement plans
are not eligible for Dreyfus Dividend Sweep.
DREYFUS GOVERNMENT DIRECT DEPOSIT PRIVILEGE
Dreyfus Government Direct Deposit Privilege enables you to purchase
shares of a Fund (minimum of $100 and maximum of $50,000 per transaction) by
having Federal salary, Social Security, or certain veterans', military or
other payments from the Federal government automatically deposited into your
Fund account. You may deposit as much of such payments as you elect. To
enroll in Dreyfus Government Direct Deposit, you must file with the Transfer
Agent a completed Direct Deposit Sign-Up Form for each type of payment that
you desire to include in this Privilege. The appropriate form may be obtained
by calling 1-800-645-6561. Death or legal incapacity will terminate your
participation in this Privilege. You may elect at any time to terminate your
participation by notifying in writing the appropriate Federal agency.
Further, the Funds may terminate your participation upon 30 days' notice to
you.
DREYFUS PAYROLL SAVINGS PLAN
Dreyfus Payroll Savings Plan permits you to purchase shares of a Fund
(minimum of $100 per transaction) automatically on a regular basis. Depending
upon the direct deposit program of your employer, you may have part or all of
your paycheck transferred to your existing Dreyfus account electronically
through the ACH system at each pay period. To establish a Dreyfus Payroll
Savings Plan account, you must file an authorization form with your
employer's payroll department. Your employer must complete the reverse side
of the form and return it to The Dreyfus Family of Funds, P.O. Box 9671,
Providence, Rhode Island 02940-9671. You may obtain the necessary
authorization form by calling 1-800-645-6561. You may change the amount of
purchase or cancel the authorization only by written notification to your
employer. It is the sole responsibility of your employer, not the
Distributor, Dreyfus, the Funds, the Transfer Agent or any other person, to
arrange for transactions under the Dreyfus Payroll Savings Plan. The Funds
may modify or terminate this Privilege at any time or charge a service fee.
No such fee currently is contemplated.
AUTOMATIC WITHDRAWAL PLAN
The Automatic Withdrawal Plan permits you to request withdrawal of a
specified dollar amount (minimum of $50) on either a monthly or quarterly
basis if you have a $5,000 minimum account.
Particular Retirement Plans, including Dreyfus sponsored retirement
plans, may permit certain participants to establish an automatic withdrawal
plan from such Retirement Plans. Participants should consult their Retirement
Plan sponsor and tax adviser for details. Such a withdrawal plan is different
than the Automatic Withdrawal Plan. An application for the Automatic
Withdrawal Plan can be obtained by calling 1-800-645-6561. The Automatic
Withdrawal Plan may be ended at any time by the shareholder, the Fund or the
Transfer Agent. Shares for which certificates have been issued may not be
redeemed through the Automatic Withdrawal Plan.
RETIREMENT PLANS
The Fund offers a variety of pension and profit-sharing plans,
including Keogh Plans, IRAs, SEP-IRAs and IRA "Rollover Accounts," 401(k)
Salary Reduction Plans and 403(b)(7) Plans. Plan support services also are
available. You can obtain details on the various plans by calling the
following numbers toll free: for Keogh Plans, please call 1-800-358-5566;
for IRAs and IRA "Rollover Accounts," please call 1-800-645-6561; for
SEP-IRAs, 401(k) Salary Reduction Plans and 403(b)(7) Plans, please call
1-800-322-7880.
Page 25
HOW TO REDEEM FUND SHARES
GENERAL--You may request redemption of your Shares at any time. Redemption
requests should be transmitted to the Transfer Agent as described below. When
a request is received in proper form, the Funds will redeem the Shares at the
next determined NAV as described below. If you hold Fund shares of more than
one Class, any request for redemption must specify the Class of Shares being
redeemed. If you fail to specify the Class of Shares to be redeemed or if you
own fewer Shares of the Class than specified to be redeemed, the redemption
request may be delayed until the Transfer Agent receives further instructions
from you or your Agent.
The Funds impose no charges when shares are redeemed directly through
the Distributor. Agents or other institutions may charge their clients a
nominal fee for effecting redemptions of Fund Shares. Any certificates
representing Fund shares being redeemed must be submitted with the redemption
request. The value of the Shares redeemed may be more or less than their
original cost, depending upon the Funds' then-current NAV.
The Funds ordinarily will make payment for all Shares redeemed within
seven days after receipt by the Transfer Agent of a redemption request in
proper form, except as provided by the rules of the SEC. HOWEVER, IF YOU HAVE
PURCHASED FUND SHARES BY CHECK, BY THE DREYFUS TELETRANSFER PRIVILEGE OR
THROUGH DREYFUS-AUTOMATIC ASSET BUILDER AND SUBSEQUENTLY SUBMIT A WRITTEN
REDEMPTION REQUEST TO THE TRANSFER AGENT, THE REDEMPTION PROCEEDS WILL BE
TRANSMITTED TO YOU PROMPTLY UPON BANK CLEARANCE OF YOUR PURCHASE CHECK,
DREYFUS TELETRANSFER PURCHASE OR DREYFUS-AUTOMATIC ASSET BUILDER ORDER, WHICH
MAY TAKE UP TO EIGHT BUSINESS DAYS OR MORE. IN ADDITION, THE FUNDS WILL NOT
HONOR REDEMPTION CHECKS UNDER THE CHECK REDEMPTION PRIVILEGE AND WILL REJECT
REQUESTS TO REDEEM SHARES BY WIRE OR TELEPHONE OR PURSUANT TO THE DREYFUS
TELETRANSFER PRIVILEGE FOR A PERIOD OF EIGHT BUSINESS DAYS AFTER RECEIPT BY
THE TRANSFER AGENT OF THE PURCHASE CHECK, THE DREYFUS TELETRANSFER PURCHASE
OR THE DREYFUS-AUTOMATIC ASSET BUILDER ORDER AGAINST WHICH SUCH REDEMPTION IS
REQUESTED. THESE PROCEDURES WILL NOT APPLY IF YOUR SHARES WERE PURCHASED BY
WIRE PAYMENT, OR IF YOU OTHERWISE HAVE A SUFFICIENT COLLECTED BALANCE IN YOUR
ACCOUNT TO COVER THE REDEMPTION REQUEST. PRIOR TO THE TIME ANY REDEMPTION IS
EFFECTIVE, DIVIDENDS ON SUCH SHARES WILL ACCRUE AND BE PAYABLE, AND YOU WILL
BE ENTITLED TO EXERCISE ALL OTHER RIGHTS OF BENEFICIAL OWNERSHIP. Fund Shares
will not be redeemed until the Transfer Agent has received your Account
Application.
The Funds reserve the right to redeem your account at its option upon
not less than 45 days' written notice if the net asset value of your account
is $500 or less and remains so during the notice period.
PROCEDURES--You may redeem Shares of a Fund by using the regular redemption
procedure through the Transfer Agent, the Check Redemption Privilege, the
Wire Redemption Privilege, the Telephone Redemption Privilege or, through the
Dreyfus TELETRANSFER Privilege. Other redemption procedures may be in effect
for clients of certain Agents and institutions. The Funds make available to
certain large institutions the ability to issue redemption instructions
through compatible computer facilities.
You may redeem shares of a Fund by telephone if you have checked the
appropriate box on the Funds' Account Application or have filed a Shareholder
Services Form with the Transfer Agent. If you select a telephone redemption
privilege or Telephone Exchange Privilege, which is granted automatically
unless you refuse it, you authorize the Transfer Agent to act on telephone
instructions from any person representing himself or herself to be you, or a
representative of your Agent, and reasonably believed by the Transfer Agent
to be genuine. The Funds will require the Transfer Agent to employ reasonable
procedures, such as requiring a form of personal identification, to confirm
that instructions are genuine and, if it does not follow such procedures, the
Funds or the Transfer Agent may be liable for any losses due to unauthorized
or fraudulent instructions. Neither the Funds nor the Transfer Agent will be
liable for following telephone instructions reasonably believed to be
genuine.
During times of drastic economic or market conditions, you may
experience difficulty in contacting the Transfer Agent by telephone to
request a redemption or an exchange of Fund
Page 26
Shares. In such cases, you should consider using the other redemption
procedures described herein. Use of these other redemption procedures may
result in your redemption request being processed at a later time than it
would have been if telephone redemption had been used.
REGULAR REDEMPTION. Under the regular redemption procedure, you may
redeem your shares by written request mailed to The Dreyfus Family of Funds,
P.O. Box 9671, Providence, Rhode Island 02940-9671, or if for Dreyfus
retirement plan accounts to The Dreyfus Trust Company, Custodian, P.O. Box
6427, Providence, Rhode Island 02940-6427. REDEMPTION REQUESTS MAY BE
DELIVERED IN PERSON ONLY TO A DREYFUS FINANCIAL CENTER. THESE REQUESTS WILL
BE FORWARDED TO THE FUND AND WILL BE PROCESSED ONLY UPON RECEIPT THEREBY. FOR
THE LOCATION OF THE NEAREST FINANCIAL CENTER, PLEASE CALL THE TELEPHONE NUMBER
LISTED UNDER "GENERAL INFORMATION." Redemption requests must be signed by
each shareholder, including each owner of a joint account, and each signature
must be guaranteed. The Transfer Agent has adopted standards and procedures
pursuant to which signature-guarantees in proper form generally will be
accepted from domestic banks, brokers, dealers, credit unions, national
securities exchanges, registered securities associations, clearing agencies
and savings associations, as well as from participants in the New York Stock
Exchange Medallion Signature Program, the Securities Transfer Agents
Medallion Program ("STAMP"), and the Stock Exchanges Medallion Program. For
more information with respect to signature-guarantees, please call one of the
telephone numbers listed under "General Information."
Redemption proceeds of at least $1,000 will be wired to any member
bank of the Federal Reserve System in accordance with a written
signature-guaranteed request.
CHECK REDEMPTION PRIVILEGE -- You may request on the Account
Application, Shareholder Services Form or by later written request that a
Fund provide Redemption Checks drawn on the Fund's account. Redemption Checks
may be made payable to the order of any person in the amount of $500 or more.
Redemption Checks should not be used to close your account. Redemption Checks
are free, but the Transfer Agent will impose a fee for stopping payment of a
Redemption Check upon your request or if the Transfer Agent cannot honor the
Redemption Check due to insufficient funds or other valid reason. You should
date your Redemption Checks with the current date when you write them. Please
do not postdate your Redemption Checks. If you do, the Transfer Agent will
honor, upon presentment, even if presented before the date of the check, all
postdated Redemption Checks which are dated within six months of presentment
for payment, if they are otherwise in good order. Shares for which
certificates have been issued may not be redeemed by Redemption Check. Shares
held under Keogh Plans, IRAs or other retirement plans are not eligible for
this Privilege. This Privilege may be modified or terminated at any time by
the Funds or the Transfer Agent upon notice to shareholders.
WIRE REDEMPTION PRIVILEGE. You may request by wire or telephone that
redemption proceeds (minimum $1,000) be wired to your account at a bank which
is a member of the Federal Reserve System, or a correspondent bank if your
bank is not a member. To establish the Wire Redemption Privilege, you must
check the appropriate box and supply the necessary information on the Funds'
Account Application or file a Shareholder Services Form with the Transfer
Agent. You may direct that redemption proceeds be paid by check (maximum
$150,000 per day) made out to the owners of record and mailed to your
address. Redemption proceeds of less than $1,000 will be paid automatically
by check. Holders of jointly registered Fund or bank accounts may have
redemption proceeds of only up to $250,000 wired within any 30-day period.
You may telephone redemption requests by calling 1-800-221-4060 or, if
calling from overseas, 1-401-455-3306. The Funds reserve the right to refuse
any redemption request, including requests made shortly after a change of
address, and may limit the amount involved or the number of such requests.
This Privilege may be modified or terminated at any time by the Transfer
Agent or the Fund. The Funds' SAIs set forth instructions for transmitting
redemption requests by wire. Shares held under Keogh Plans, IRAs or other
retirement plans, and shares for which certificates have been issued, are not
eligible for this Privilege.
TELEPHONE REDEMPTION PRIVILEGE. You may redeem shares of a Fund
(maximum $150,000 per day) by telephone if you checked the appropriate box on
the Fund's Account Application or have filed a Shareholder Services Form with
the Transfer Agent. The redemption proceeds will
Page 27
be paid by check and mailed to your address. You may telephone redemption
instructions by calling 1-800-221-4060 or, if calling from overseas,
1-401-455-3306. The Funds reserve the right to refuse any request made by
telephone, including requests made shortly after a change of address, and may
limit the amount involved or the number of such requests. This Privilege may
be modified or terminated at any time by the Transfer Agent or the Funds.
Shares held under Keogh Plans, IRAs or other retirement plans, and shares
for which certificates have been issued, are not eligible for this Privilege.
DREYFUS TELETRANSFER PRIVILEGE. You may redeem shares of a Fund
(minimum $500 per day) by telephone if you have checked the appropriate box
and supplied the necessary information on the Funds' Account Application or
have filed a Shareholder Services Form with the Transfer Agent. The proceeds
will be transferred between your Fund account and the bank account designated
in one of these documents. Only such an account maintained in a domestic
financial institution which is an ACH member may be so designated. Redemption
proceeds will be on deposit in your account at an ACH member bank ordinarily
two days after receipt of the redemption request or, at your request, paid by
check (maximum $150,000 per day) and mailed to your address. Holders of
jointly registered Fund or bank accounts may redeem through the Dreyfus TELETR
ANSFER Privilege for transfer to their bank account only up to $250,000
within any 30-day period. The Funds reserve the right to refuse any request
made by telephone, including requests made shortly after a change of address,
and may limit the amount involved or the number of such requests. The Funds
may modify or terminate this Privilege at any time or charge a service fee
upon notice to shareholders. No such fee currently is contemplated.
If you have selected the Dreyfus TELETRANSFER Privilege, you may
request a Dreyfus TELETRANSFER redemption of Fund shares by telephoning
1-800-221-4060 or, if calling from overseas, 1-401-455-3306. Shares held
under Keogh Plans, IRAs or other retirement plans, and shares issued in
certificate form, are not eligible for this Privilege.
DISTRIBUTION PLAN
(INVESTOR SHARES ONLY)
The Investor Shares of each Fund are subject to a Distribution Plan
("Plan'') adopted pursuant to Rule 12b-1 under the 1940 Act ("Rule 12b-1'').
The Investor Shares of the Funds bear some of the cost of selling those
shares under the Plan. The Plan allows each Money Market Fund to spend
annually up to 0.25% of the average daily net assets attributable to Investor
Shares to compensate Dreyfus Service Corporation, an affiliate of Dreyfus,
for shareholder servicing activities and Premier for shareholder servicing
activities and for activities or expenses primarily intended to result in the
sale of Investor Shares of a Fund. The Plan allows Premier to make payments
from the Rule 12b-1 fees it collects from a Fund to compensate Agents that
have entered into Shareholder Servicing and Sales Support Agreements
("Agreements'') with Premier. Under the Agreements, the Agents are obligated
to provide distribution related services with regard to the Funds and/or
shareholder services to the Agent's clients that own Investor Shares of a
Fund.
The Funds and Premier may suspend or reduce payments under the Plan
at any time, and payments are subject to the continuation of a Fund's Plan
and the Agreements described above. From time to time, the Agents, Premier
and the Funds may agree to voluntarily reduce the maximum fees payable under
the Plan. See the SAI for more details on the Plan.
Potential investors should read this Prospectus in light of the terms
governing Agreements with their Agents. An Agent entitled to receive
compensation for selling and servicing a Fund's shares may receive different
compensation with respect to one Class of shares over another.
Page 28
PERFORMANCE INFORMATION
From time to time, a Fund may advertise the yield and total return on
a class of Shares. The Dreyfus/Laurel Tax-Exempt Money Market Fund may
advertise tax-equivalent yields. TOTAL RETURN, YIELD AND THE TAX EQUIVALENT
YIELD FIGURES ARE BASED ON HISTORICAL EARNINGS AND ARE NOT INTENDED TO
INDICATE FUTURE PERFORMANCE. The "total return'' of a Class of shares of a
Fund may be calculated on an average annual total return basis or a
cumulative total return basis. Average annual total return refers to the
average annual compounded rates of return on a Class of shares over one-,
five-, and ten-year periods or the life of the Fund (as stated in the
advertisement) that would equate an initial amount invested at the beginning
of a stated period to the ending redeemable value of the investment, assuming
the reinvestment of all dividends and capital gains distributions. Cumulative
total return reflects the total percentage change in the value of the
investment over the measuring period, again assuming the reinvestment of all
dividends and capital gains distributions.
The "yield'' of a Class of shares in a Money Market Fund refers to
the income generated by an investment in such Class over a seven-day period
identified in the advertisement. This income is then "annualized.'' That is,
the amount of income generated by the investment during that week is assumed
to be generated each week over a 52-week period and is shown as a percentage
of the investment. The "effective yield'' is calculated similarly, but, when
annualized, the income earned by an investment in a Class of shares in a
Money Market Fund is assumed to be reinvested. The "effective yield'' will be
slightly higher than the "yield'' because of the compounding effect of this
assumed reinvestment. The tax-equivalent yield of a the Dreyfus/Laurel
Tax-Exempt Money Market Fund shows the level of taxable yield needed to
produce an after-tax equivalent to such fund's tax-free yield. This is done
by increasing a Class's yield by the amount necessary to reflect the payment
of federal income tax (and state income tax, if applicable) at a stated tax
rate.
Total return and yield quotations will be computed separately for
each Class of a Fund's shares. Because of the difference in the fees and
expenses borne by Class R and Investor Shares of each Fund, the return and
yield on Class R Shares will generally be higher than the return and yield on
Investor Shares. Any fees charged by a Bank or Agent directly to its
customers' account in connection with investments in the Fund will not be
included in calculations of total return or yield. Each Fund's annual report
contains additional performance information and is available upon request
without charge from the Fund's distributor or your Bank or Agent.
A Fund may compare the performance of its Investor and Class R Shares
with various industry standards of performance including Lipper Analytical
Services, Inc. ratings, and the Consumer Price Index. Performance rankings as
reported in CHANGING TIMES, BUSINESS WEEK, INSTITUTIONAL INVESTOR, THE WALL
STREET JOURNAL, IBC/DONOGHUE'S MONEY FUND REPORT, MUTUAL FUND FORECASTER, NO
LOAD INVESTOR, MONEY MAGAZINE, MORNINGSTAR MUTUAL FUND VALUES, U.S. NEWS AND
WORLD REPORT, FORBES, FORTUNE, BARRON'S, FINANCIAL PLANNING, FINANCIAL
PLANNING ON WALL STREET, CERTIFIED FINANCIAL PLANNER TODAY, INVESTMENT
ADVISOR, KIPLINGER'S, SMART MONEY, and similar publications may also be used
in comparing the Fund's performance. Furthermore, a Fund may quote its
Investor and Class R Shares' total returns and yields in advertisements or in
shareholder reports. A Fund may also advertise non-standardized performance
information, such as total return for periods other than those required to be
shown or cumulative performance data. A Fund may advertise a quotation of
yield or other similar quotation demonstrating the income earned or
distributions made by the Fund.
DIVIDENDS, OTHER DISTRIBUTIONS AND TAXES
Each Fund declares daily and pays monthly (on the 20th day or next
business day if the 20th falls on a Saturday, Sunday or national holiday)
dividends from its net investment income, if any. Each Fund does not expect
to realize any long-term capital gains or losses, and does not anticipate
payment of any capital gain distribution.
Page 29
Unless you choose to receive dividend and/or capital gain
distributions in cash, your distributions will be automatically reinvested in
additional shares of the distributing Fund at the NAV. You may change the
method of receiving distributions at any time by writing to the Funds. Checks
which are sent to shareholders who have requested distributions to be paid in
cash and which are subsequently returned by the United States Postal Service
as not deliverable or which remain uncashed for six months or more will be
reinvested in additional Fund shares in the shareholder's account at the then
current NAV. Subsequent Fund distributions will be automatically reinvested
in additional Fund shares in the shareholder's account.
Distributions paid by a Fund with respect to one Class of Shares may
be greater or less per share than those paid with respect to another Class of
Shares due to the different expenses of the different Classes. Shares
purchased on a day on which a Fund calculates its NAV will not begin to
accrue dividends until the following day. Except as provided below,
redemption orders effected on any particular day will receive all dividends
declared through the day of redemption. However, if immediately available
funds are received by the Transfer Agent prior to 12:00 noon, Eastern time,
you may receive the dividend declared on the day of purchase. You will not
receive the dividends declared on the day of redemption if the redemption
order is placed prior to 12:00 noon, Eastern time.
You may elect to have distributions on Shares held in IRAs and 403(b)
accounts paid in cash only if you are at least 59 1/2 years old or are
permanently and totally disabled. Distribution checks normally are mailed
within seven days after the record date.
Each Fund intends to continue to qualify for treatment as a regulated
investment company under the Code so that it will be relieved of federal
income tax on that part of its investment company taxable income (consisting
generally of taxable net investment income and net short-term capital gain)
and net capital gain (the excess of net long-term capital gain over net
short-term capital loss) that is distributed to its shareholders. In
addition, the Dreyfus/Laurel Tax-Exempt Money Market Fund intends to continue
to qualify to pay "exempt-interest'' dividends, which requires, among other
things, that at the close of each quarter of its taxable year at least 50% of
the value of its total assets must consist of municipal securities.
Dividends from a Fund's investment company taxable income are taxable
to you as ordinary income, to the extent of the Fund's earnings and profits.
Distributions by the Dreyfus/Laurel Tax-Exempt Money Market Fund that are
designated by it as "exempt-interest dividends'' generally may be excluded by
you from your gross income. Distributions by a Fund (including the
Dreyfus/Laurel Tax-Exempt Money Market Fund) of net capital gain, when
designated as such, are taxable to you as long-term capital gains, regardless
of the length of time you have owned your Shares. The Funds are not expected
to realize long-term capital gains.
Interest on indebtedness incurred or continued to purchase or carry
shares of the Dreyfus/Laurel Tax-Exempt Money Market Fund will not be
deductible for federal income tax purposes to the extent that Fund's
distributions consist of exempt-interest dividends. Although it has no
current intention to do so, the Dreyfus/Laurel Tax-Exempt Money Market Fund
may invest in "private activity bonds,'' the interest on which is treated as
a tax preference item for shareholders in determining their liability for the
alternative minimum tax. Proposals may be introduced before Congress for the
purpose of restricting or eliminating the federal income tax exemption for
interest on municipal securities. If such a proposal were enacted, the
availability of such securities for investment by the Dreyfus/Laurel
Tax-Exempt Money Market Fund and the value of its portfolio would be
affected. In such event, that Fund would reevaluate its investment objective
and policies.
Dividends and other distributions are taxable to you regardless of
whether they are received in cash or reinvested in additional Fund Shares,
even if the value of your Shares is below your cost. If you purchase Shares
shortly before a taxable distribution (i.e., any distribution other than an
exempt-interest dividend paid by the Dreyfus/Laurel Tax-Exempt Money Market
Fund), you must pay income taxes on the distribution, even though the value
of your investment (plus cash received, if any) remains the same. In
addition, the share price at the time you purchase Shares may include
unrealized gains in the securities held in the Fund. If these portfolio
securities are subsequently sold and the gains are realized, they will, to
the extent not offset by capital losses, be paid to you as a capital gain
distribution and will be taxable to you.
Page 30
Dividends paid by the Funds to qualified retirement plans ordinarily,
will not be subject to taxation until the proceeds are distributed from the
retirement plans. The Fund will not report to the IRS dividends paid to such
plans. Generally, distributions from qualified retirement plans, except those
representing returns of non-deductible contributions thereto, will be taxable
as ordinary income and, if made prior to the time the participant reaches age
59 1/2, generally will be subject to an additional tax equal to 10% of the
taxable portion of the distribution. If the distribution from such a
retirement plan (other than certain governmental or church plans) for any
taxable year following the year in which the participant reaches age 70 1/2
is less than the "minimum required distribution'' for that taxable year, an
excise tax equal to 50% of the deficiency may be imposed by the IRS. The
administrator, trustee or custodian of such a retirement plan will be
responsible for reporting such distributions from such plans to the IRS.
Moreover, certain contributions to a qualified retirement plan in excess of
the amounts permitted by law may be subject to an excise tax.
In January of each year, the Funds will send you a Form 1099-DIV
notifying you of the status for federal income tax purposes of your
distributions for the preceding year. The Funds also will advise shareholders
of the percentage, if any, of the dividends paid by the Dreyfus/Laurel
Tax-Exempt Money Market Fund that are exempt from federal income tax and the
portion, if any, of those dividends that is a tax preference item for
purposes of the alternative minimum tax.
You must furnish the Funds with your taxpayer identification number
("TIN'') and state whether you are subject to withholding for prior
under-reporting, certified under penalties of perjury as prescribed by the
Code and the regulations thereunder. Unless previously furnished, investments
received without such a certification will be returned. Each Fund is required
to withhold a portion of all dividends, capital gain distributions and
redemption proceeds payable to any individuals and certain other non-corporate
shareholders who do not provide the Fund with a correct TIN; withholding
from dividends and capital gain distributions also is required for such
shareholders who otherwise are subject to backup withholding.
Each Fund will be subject to a 4% nondeductible excise tax to the
extent it fails to distribute by the end of any calendar year substantially
all of its taxable ordinary income for that year and capital gain net income
for the one-year period ending on October 31 of that year, plus certain other
amounts. Each Fund expects to make such distributions as are necessary to
avoid the imposition of this tax.
The foregoing is only a summary of some of the important tax
considerations generally affecting each Fund and its shareholders; see the
SAI for a further discussion. There may be other federal, state or local tax
considerations applicable to a particular investor; for example, the
Dreyfus/Laurel Tax-Exempt Money Market Fund's dividends may be wholly or
partly taxable under state and/or local laws. You therefore are urged to
consult your own tax adviser.
GENERAL INFORMATION
The Laurel Funds, Inc. was incorporated in Maryland on August 6, 1987
and changed its name to The Dreyfus/Laurel Funds, Inc. on October 17, 1994.
The Dreyfus/Laurel Funds, Inc. is registered with the SEC under the 1940 Act
as a diversified, open-end management investment company. The Dreyfus/Laurel
Funds, Inc. has an authorized capitalization of 25 billion Shares of $0.001
par value stock with equal voting rights. The Articles of Incorporation
permit the Directors to create an unlimited number of investment portfolios
(each a "fund''). Each of the Funds offered by this Prospectus currently
issues two Classes of Shares designated "Investor'' and "Class R'' Shares.
Each Share (regardless of Class) has one vote. All Shares of a Fund
(and classes thereof) vote together as a single class, except as to any
matter for which a separate vote of any fund or Class is required by the 1940
Act, and except as to any matter which affects the interests of one or more
particular funds or Classes, in which case only the shareholders of the
affected fund or class are entitled to vote, each as a separate class. At
your written request, the Funds will issue negotiable stock certificates.
Page 31
At March 31, 1995, Mellon Bank Corporation, the investment manager's
parent, owned of record through its direct and indirect subsidiaries more
than 25% of The Dreyfus/Laurel Funds, Inc.'s outstanding voting shares, and
is deemed, under the 1940 Act, to be a controlling shareholder.
Only holders of Investor shares will be entitled to vote on matters
submitted to shareholders pertaining to the Distribution Plan relating to
that Class.
Unless otherwise required by the 1940 Act, ordinarily it will not be
necessary for the Funds to hold annual meetings of shareholders. As a result,
Fund shareholders may not consider each year the election of Directors or the
appointment of auditors. However, the holders of at least 10% of the shares
outstanding and entitled to vote may require the Company to hold a special
meeting of shareholders for purposes of removing a Director from office and
for any other proper purpose. Company shareholders may remove a Director by
the affirmative vote of a majority of the Company's voting shares. In
addition, the Board of Directors will call a meeting of shareholders for the
purpose of electing Directors if, at any time, less than a majority of the
Directors then holding office have been elected by shareholders.
The Transfer Agent maintains a record of your ownership and will send
you confirmations and statements of account.
Shareholder inquiries may be made by writing to the Funds at 144 Glenn
Curtiss Boulevard, Uniondale, New York 11556-0144, or by calling toll free
1-800-645-6561.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND IN THE
FUNDS' OFFICIAL SALES LITERATURE IN CONNECTION WITH THE OFFER OF THE FUNDS'
SHARES, AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUNDS. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER IN ANY STATE IN WHICH, OR TO ANY PERSON TO WHOM,
SUCH OFFERING MAY NOT LAWFULLY BE MADE.
Page 32
PROSPECTUS
(LION PHOTO)
DREYFUS
ASSET MANAGEMENT ACCOUNT
Copy Rights 1995 Dreyfus Service Corporation
TR1401.6 REV8/95
LC7/95 PD8/95