DEAR SHAREHOLDER,
We are pleased to provide you with the Dreyfus/Laurel Short-Term Govern-
ment Securities Fund's Semi-Annual Report for the six months ended April
30, 1995.
In the pages that follow, we have provided you with a description of the
market environment, a commentary on your Fund's investment management
strategy and detailed financial statements for the past six months.
As you know, the Fund has been integrated into The Dreyfus Family of
Funds. We hope that you found the transition from The Laurel Funds to The
Dreyfus Family of Funds to be a smooth one. The extended family of funds
now offers you more investment alternatives in addition to expanded ser-
vices and privileges to better serve your investment needs.
We would like to extend our appreciation for your support of The Dreyfus
Family of Funds and hope that the Fund will continue to satisfy your in-
vestment needs. As always, we welcome your thoughts and suggestions.
Sincerely,
Marie E. Connolly
President
The Dreyfus/Laurel Funds, Inc. --
Dreyfus/Laurel Short-Term Government Securities Fund
June 20, 1995
TABLE OF CONTENTS
Shareholder Letter 1
Economic Review 3
Portfolio Overview 4
Portfolio of Investments 5
Statement of Assets and Liabilities 6
Statement of Operations 7
Statement of Changes in Net Assets 8
Financial Highlights 9
Notes to Financial Statements 11
ECONOMIC REVIEW
GROWTH SLOWS BUT STRENGTH REMAINS
Over the past six months, the U.S. economy appeared to come in for the
"soft landing" desired by the Federal Reserve Board and so many econo-
mists. Home sales and housing activity slipped almost 20% from their 1994
peaks, while demand for housing-related and other big-ticket consumer
items like cars and trucks was, in total, off 2%. The Mexican economic
downturn also cut into exports; total shipments dipped 6% from their De-
cember peak.
The Federal Reserve Board deserves at least partial credit for the slow-
down. Higher interest rates seem to have helped cool spending and to have
kept inflation in check. In fact, it was the economy's exuberance early on
that motivated the Fed to continue its anti-inflation policy by raising
short-term rates twice during the period, in November 1994 and again in
February 1995. By March, the economy appeared to be decelerating, allowing
the Fed to take no action at its mid-month meeting.
We expect that the dynamics of this demand slowdown will continue to de-
velop over the next several months as producers adapt their output to new
sales realities. Still, we believe the slowdown is temporary. Job and in-
come growth remain strong, and a rebound in consumer spending is probable.
In addition, businesses have initiated many new capital spending products
that will stretch into next year or longer. Recent interest-rate declines
may boost housing activity. Many of our trading partners are in the capi-
tal spending phases of their economic expansions, which will support U.S.
capital goods exports. Finally, the bulk of the Mexican recession's de-
pressing effects on U.S. growth may be over by summer's end.
INFLATION MAY INCH UP
With a stabilizing economy and a vigilant Fed, we remain confident that
inflation will only inch higher in the coming months. Slowing in the in-
dustrial sector has already begun to alleviate commodity and intermediate
price pressures. Wage settlements remain modest, and benefits growth is
flattening. Nonetheless, inflation is rising a bit, and we expect a fur-
ther mild escalation once the economy picks up again.
BOND INVESTORS RECOUP
What a difference a new year can make. For much of 1994, fixed-income mar-
kets were turned upside down by the Federal Reserve Board's tighter U.S.
monetary policy and investor fears of inflation -- all brought about by
rapid economic growth. Then in the first quarter of 1995, a reprieve as
fixed-income markets began to rally. Several changes contributed to this
welcome turn of events. First, investors finally gained confidence in the
Fed's anti-inflation policy just as some economic weakness began to
emerge. Meanwhile the Mexican economic crisis appeared to moderate some-
what, and many international central banks stepped in to take advantage of
the weak dollar by buying Treasury securities. This had the effect of sup-
porting the dollar, which set off a rally in Treasuries that spread
throughout the fixed-income market. The outcome was a rally that enabled
many bond investors to totally recoup losses sustained during 1994.
CAUTIOUSLY OPTIMISTIC
Given the underlying strength in the economy, we believe that the present
slowdown is merely the "pause that refreshes." The economy's deceleration
has doused inflation fears for now, making the decline in the dollar so
far benign. Nonetheless, the dollar's skid has the potential to become
troublesome if it stimulates the economy in a way that makes global inves-
tors wary of buying U.S. securities while the dollar is falling. For now,
we must wait and watch for trends in the U.S. economy and in international
markets as well.
PORTFOLIO OVERVIEW
During the six-months ended April 30, 1995, the Fund provided shareholders
with a competitive level of current income. During the six months ended
April 30, 1995, the Fund's Class R shares posted a six month total return
of 2.38%* while the Investor shares posted a total return of 2.25%*.
The Fund was managed against a backdrop of steady economic growth, low in-
flation and higher short-term interest rates. The pace of interest rate
increases slowed during the period, as the Federal Reserve Board chose not
to raise rates at its March meeting, instead adopting a "wait and see" at-
titude with respect to the slowing economy.
With the economy stabilizing and no realized threat of inflation at this
time, the fixed income market seems to have decided that no further Fed
action is needed in the next three or four months. Evidence of this may be
found in the narrowing spread between interest paid on investments with
different maturities, also known as a flattening of the yield curve. At
this time, investments with maturities of five years are not paying sig-
nificantly higher rates of interest than those with maturities of 0-3
years. For this reason, and given the small asset size of the Fund, we
have concentrated the Fund's portfolio mainly in Treasury securities. This
positioning has allowed us to maintain a solid income stream, while mini-
mizing credit risk and share price fluctuations over the period.
Given the market's relative stability at this time, we intend to maintain
our investment strategy over the near term. We will continue to monitor
the economy and the Fed closely, seeking to capitalize on appropriate in-
vestment opportunities as they arise. We believe our primary focus on
short-term securities issued directly by the U.S. government and its agen-
cies may continue to reward shareholders with high quality, relative sta-
bility, and steady income.
* Total return represents the change during the period in a hypothetical
account with dividends reinvested.
PORTFOLIO OF INVESTMENTS
DREYFUS/LAUREL SHORT-TERM GOVERNMENT SECURITIES FUND APRIL 30, 1995
<TABLE>
<CAPTION>
PRINCIPAL COUPON MATURITY VALUE
AMOUNT RATE DATE (NOTE 1)
<S> <C> <C> <C> <C>
U.S. TREASURY OBLIGATIONS -- 84.0%
$225,000 United States Treasury Bills 0.000%# 7/13/95 $222,311
100,000 United States Treasury Notes 5.125% 2/28/98 95,921
150,000 United States Treasury Notes 6.375% 1/15/00 147,003
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $465,798) 465,235
REPURCHASE AGREEMENT -- 15.5%
(Cost $85,777)
Agreement with Goldman Sachs & Company, dated
4/28/95 bearing 5.920% to be repurchased at
$85,819 on 5/1/95, collateralized by $84,000 U.S.
85,777 Treasury Bond, 7.625% due 2/15/25 85,777
TOTAL INVESTMENTS (Cost $551,575*) 99.5% 551,012
OTHER ASSETS AND LIABILITIES (NET) 0.5 2,736
NET ASSETS 100.0% $553,748
<FN>
* Aggregate cost for Federal tax purposes.
# Annualized yield on date of purchase was 5.800%.
</TABLE>
See Notes to Financial Statements.
STATEMENT OF ASSETS AND LIABILITIES
DREYFUS/LAUREL SHORT-TERM GOVERNMENT SECURITIES FUND
APRIL 30, 1995 (UNAUDITED)
<TABLE>
<S> <C> <C>
ASSETS
Investments, at value (Cost $551,575) (Note
1)
See accompanying schedule
Securities $465,235
Reprucahse agreement 85,777
Total investments $551,012
Interest receivable 3,707
TOTAL ASSETS 554,719
LIABILITIES
Investment management fee payable (Note 2) $608
Dividends payable 225
Accrued Directors' fees and expenses (Note
2) 137
Distribution fee payable (Note 3) 1
TOTAL LIABILITIES 971
NET ASSETS $553,748
NET ASSETS consist of:
Accumulated net realized gain on invest-
ments sold $191
Unrealized depreciation of investments (563)
Par value 55
Paid-in capital in excess of par value 554,065
TOTAL NET ASSETS $553,748
NET ASSET VALUE:
INVESTOR SHARES
Net asset value, offering and redemption
price per share ($5,187 / 519 shares of
capital stock outstanding) $9.99
CLASS R SHARES
Net asset value, offering and redemption
price per share ($548,561 / 54,893 shares
of capital stock outstanding) $9.99
</TABLE>
See Notes to Financial Statements.
STATEMENT OF OPERATIONS
DREYFUS/LAUREL SHORT-TERM GOVERNMENT SECURITIES FUND
FOR THE SIX MONTHS ENDED APRIL 30, 1995 (UNAUDITED)
<TABLE>
<S> <C> <C>
INVESTMENT INCOME
Interest $21,489
EXPENSES
Investment management fee (Note 2) $2,085
Directors' fees and expenses (Note 2) 78
Distribution fee (Note 3) 23
TOTAL EXPENSES 2,186
NET INVESTMENT INCOME 19,303
REALIZED AND UNREALIZED GAIN/(LOSS) ON IN-
VESTMENTS (Notes 1 and 4):
Net realized gain on investments during
the period 198
Net unrealized depreciation of invest-
ments during the period (471)
NET REALIZED AND UNREALIZED LOSS ON INVEST-
MENTS (273)
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS $19,030
</TABLE>
See Notes to Financial Statements.
STATEMENT OF CHANGES IN NET ASSETS
DREYFUS/LAUREL SHORT-TERM GOVERNMENT SECURITIES FUND
<TABLE>
<CAPTION>
SIX
MONTHS PERIOD
ENDED ENDED
4/30/95 10/31/94*
(UNAUDITED)
<S> <C> <C>
Net investment income $ 19,303 $ 16,118
Net realized gain/(loss) on investments
sold 198 (7)
Net unrealized depreciation of investments
during the period (471) (92)
Net increase in net assets resulting from
operations 19,030 16,019
Distributions to shareholders from net in-
vestment income:
Investor shares (414) (648)
Class R shares (18,889) (15,470)
Net increase/(decrease) in net assets from
Fund share transactions (Note 5):
Investor shares (32,644) 37,859
Class R shares (256,684) 805,589
Net increase/(decrease) in net assets (289,601) 843,349
NET ASSETS:
Beginning of period 843,349 --
End of period $553,748 $843,349
<FN>
* The Fund commenced operations on April 6, 1994.
</TABLE>
See Notes to Financial Statements.
FINANCIAL HIGHLIGHTS
DREYFUS/LAUREL SHORT-TERM GOVERNMENT SECURITIES FUND
FOR AN INVESTOR SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
<CAPTION>
SIX
MONTHS PERIOD
ENDED ENDED
4/30/95 10/31/94*#
(UNAUDITED)
<S> <C> <C>
Net asset value, beginning of period $10.00 $10.00
Income from investment operations:
Net investment income 0.26 0.18
Net realized and unrealized loss on invest-
ments (0.04) --
Total from investment operations 0.22 0.18
Less distributions:
Distributions from net investment income (0.23) (0.18)
Net asset value, end of period $9.99 $10.00
Total return++ 2.25% 1.84%
Ratios to average net assets/supplemental
data:
Net assets, end of period (in 000's) $5 $38
Ratio of operating expenses to average net
assets 0.80%+ 0.80%+
Ratio of net investment income to average
net assets 4.66%+ 3.30%+
Portfolio turnover rate 0% --
<FN>
* The Fund commenced selling Investor shares on April 12, 1994.
+ Annualized.
++ Total return represents aggregate total return for the period indi-
cated.
# Prior to October 17, 1994, Mellon Bank, N.A. served as the Fund's in-
vestment manager. Effective October 17, 1994, The Dreyfus Corporation
serves as the Fund's investment manager.
</TABLE>
See Notes to Financial Statements.
FINANCIAL HIGHLIGHTS
DREYFUS/LAUREL SHORT-TERM GOVERNMENT SECURITIES FUND
FOR A CLASS R SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
<CAPTION>
SIX
MONTHS PERIOD
ENDED ENDED
4/30/95 10/31/94*#
(UNAUDITED)
<S> <C> <C>
Net asset value, beginning of period $10.00 $10.00
Income from investment operations:
Net investment income 0.25 0.20
Net realized and unrealized loss on invest-
ments (0.01) --
Total from investment operations 0.24 0.20
Less distributions:
Distributions from net investment income (0.25) (0.20)
Net asset value, end of period $9.99 $10.00
Total return++ 2.38% 2.04%
Ratios to average net assets/supplemental
data:
Net assets, end of period (in 000's) $549 $805
Ratio of operating expenses to average net
assets 0.55%+ 0.55%+
Ratio of net investment income to average
net assets 4.91%+ 3.55%+
Portfolio turnover rate 0% --
<FN>
* The Fund commenced selling Trust shares on April 6, 1994. Effective Oc-
tober 17, 1994, the Fund's Trust shares were redesignated Class R
shares.
+ Annualized.
++ Total return represents aggregate total return for the period indi-
cated.
# Prior to October 17, 1994, Mellon Bank, N.A. served as the Fund's in-
vestment manager. Effective October 17, 1994, The Dreyfus Corporation
serves as the Fund's investment manager.
</TABLE>
See Notes to Financial Statements.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES
The Dreyfus/Laurel Funds, Inc. (the "Investment Company"), The Dreyfus/
Laurel Funds Trust, The Dreyfus/Laurel Tax-Free Municipal Funds and The
Dreyfus/Laurel Investment Series are all registered open-end management
investment companies that are now part of The Dreyfus Family of Funds. The
Investment Company is a series mutual fund with 19 separate investment
portfolios. This report contains financial statements for the Dreyfus/Lau-
rel Short-Term Government Securities Fund (the "Fund"). The Investment
Company was incorporated on August 6, 1987 as a Maryland corporation and
is registered with the Securities and Exchange Commission under the In-
vestment Company Act of 1940, as amended (the "1940 Act"), as a diversi-
fied, open-end management investment company. The Fund is currently autho-
rized to issue two classes of shares: Investor shares and Class R shares.
Investor shares are sold primarily to retail investors and bear a distri-
bution fee. Class R Shares are sold primarily to bank trust departments
and other financial service providers (including Mellon Bank and its af-
filiates) acting on behalf of customers having a qualified trust or in-
vestment account or relationship at such institution and bear no distribu-
tion fee. Each class of shares has identical rights and privileges, except
with respect to the distribution fee and voting rights on matters affect-
ing a single class. The following is a summary of significant accounting
policies consistently followed by the Fund in the preparation of its fi-
nancial statements in accordance with generally accepted accounting prin-
ciples.
(A) PORTFOLIO VALUATION
Investments in securities traded on a national securities exchange are
valued at the last reported sales price or, in the absence of a recorded
sale, at the mean of the closing bid and asked prices. Over-the-counter
securities are valued at the mean of the latest bid and asked prices. When
market quotations are not readily available, securities are valued at fair
value as determined in good faith by the Board of Directors. Bonds are
valued through valuations obtained from a commercial pricing service or at
the most recent mean of the bid and asked prices provided by investment
dealers in accordance with procedures established by the Board of Direc-
tors. Investments in U.S. Government Securities (other than short-term se-
curities) are valued at the most recent quoted bid price in the over-the-
counter market. Debt securities with maturities of 60 days or less from
the valuation day are valued on the basis of amortized cost.
(B) REPURCHASE AGREEMENTS
The Fund may engage in repurchase agreement transactions. Under the terms
of a typical repurchase agreement, the Fund through its custodian, takes
possession of an underlying debt obligation subject to an obligation of
the seller to repurchase, and the Fund to resell, the obligation at an
agreed-upon price and time, thereby determining the yield during the
Fund's holding period. This arrangement results in a fixed rate of return
that is not subject to market fluctuations during the Fund's holding pe-
riod. The value of the collateral is at least equal, at all times, to the
total amount of the repurchase obligations, including interest. In the
event of counterparty default, the Fund has the right to use the collat-
eral to offset losses incurred. There is potential loss to the Fund in the
event the Fund is delayed or prevented from exercising its rights to dis-
pose of the collateral securities, including the risk of a possible de-
cline in the value of the underlying securities during the period while
the Fund seeks to assert its rights. The Fund's investment manager, acting
under the supervision of the Board of Directors, reviews the value of the
collateral and the creditworthiness of those banks and dealers with which
the Fund enters into repurchase agreements to evaluate potential risks.
(C) SECURITIES TRANSACTIONS AND INVESTMENT INCOME
Securities transactions are recorded as of the trade date. Interest income
is recorded on the accrual basis. Realized gains and losses from securi-
ties sold are recorded on the identified cost basis. Investment income and
realized and unrealized gains and losses are allocated based upon the rel-
ative average daily net assets of each class of shares.
(D) EXPENSE ALLOCATION
Expenses of the Fund not directly attributable to the operations of any
class of shares are prorated between the classes based upon the relative
average daily net assets of each class. Distribution expense is directly
attributable to a particular class of shares and is charged only to that
class's operations.
(E) DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income, if any, are determined on a class
level and are declared daily and paid monthly. The Fund distributes any
net realized capital gains on a Fund level annually. Distributions to
shareholders are recorded on the ex-dividend date. Additional distribu-
tions of net investment income and capital gains for the Fund may be made
at the discretion of the Board of Directors in order to avoid the 4.00%
nondeductible Federal excise tax. Income distributions and capital gain
distributions on a Fund level are determined in accordance with income tax
regulations, which may differ from generally accepted accounting princi-
ples. These differences are primarily due to differing treatments of in-
come and gains on various investment securities held by the Fund, timing
differences and differing characterization of distributions made by the
Fund as a whole.
(F) FEDERAL INCOME TAXES
The Fund intends to qualify as a regulated investment company by complying
with the requirements of the Internal Revenue Code applicable to regulated
investment companies and by distributing substantially all of its taxable
income to its shareholders. Therefore, no Federal income tax provision is
required.
2. INVESTMENT MANAGEMENT FEE, DIRECTORS' FEES AND
OTHER PARTY TRANSACTIONS
The Investment Company has an investment management agreement with The
Dreyfus Corporation (the "Manager"), a wholly-owned subsidiary of Mellon
Bank, N.A. The Manager provides, or arranges for one or more third parties
to provide, investment advisory, administrative, custody, fund accounting
and transfer agency services to the Investment Company. The Manager also
directs the investments of the Fund in accordance with its investment ob-
jective, policies and limitations. For these services, the Fund is con-
tractually obligated to pay the Manager a fee, calculated daily and paid
monthly, at the annual rate of 0.55% of the value of the Fund's average
daily net assets. Out of its fee, the Manager pays all of the expenses of
the Fund except brokerage fees, taxes, interest, Rule 12b-1 distribution
fees and expenses, fees and expenses of non-interested Directors (includ-
ing counsel fees) and extraordinary expenses. In addition, the Manager is
required to reduce its fee in an amount equal to the Fund's allocable por-
tion of fees and expenses of the non-interested Directors (including coun-
sel).
Premier Mutual Fund Services, Inc. ("Premier") serves as the Investment
Company's distributor. Premier also serves as the Investment Company's
sub-administrator and, pursuant to a sub-administration agreement with the
Manager, provides various administrative and corporate secretarial ser-
vices to the Investment Company.
No officer or employee of Premier (or of any parent, subsidiary or affili-
ate thereof) receives any compensation from the Investment Company, The
Dreyfus/Laurel Funds Trust, The Dreyfus/Laurel Tax-Free Municipal Funds or
The Dreyfus/Laurel Investment Series (collectively, "The Dreyfus/Laurel
Funds") for serving as an officer, Director or Trustee of The Dreyfus/Lau-
rel Funds. In addition, no officer or employee of the Manager (or of any
parent, subsidiary or affiliate thereof) serves as an officer, Director or
Trustee of The Dreyfus/Laurel Funds. The Dreyfus/Laurel Funds pay each Di-
rector or Trustee who is not an officer or employee of Premier (or any
parent, subsidiary or affiliate thereof) or of the Manager, $27,000 per
annum, $1,000 for each Board meeting attended and $750 for each Audit Com-
mittee meeting attended, and reimburse each Director or Trustee for travel
and out-of-pocket expenses.
3. DISTRIBUTION PLAN
The Fund has adopted a distribution plan (the "Plan") pursuant to Rule
12b-1 under the 1940 Act relating to its Investor shares. Under the Plan,
the Fund may pay annually up to 0.25% of the value of the average daily
net assets attributable to its Investor shares to compensate Premier and
Dreyfus Service Corporation, an affiliate of the Manager, for shareholder
servicing activities and Premier for activities primarily intended to re-
sult in the sale of Investor shares. Class R shares bear no distribution
fee.
Under its terms, the Plan shall remain in effect from year to year, pro-
vided such continuance is approved annually by a vote of a majority of
those Directors who are not "interested persons" of the Investment Company
and who have no direct or indirect financial interest in the operation of
the Plan or in any agreement related to the Plan.
4. SECURITIES TRANSACTIONS
The cost of purchases of long-term U.S. government securities for the six
months ended April 30, 1995 was $243,391. There were no proceeds from
sales of securities for the six months ended April 30, 1995.
At April 30, 1995, aggregate gross unrealized depreciation for all securi-
ties in which there was an excess of tax cost over value was $563. There
was no aggregate gross unrealized appreciation for any securities in which
there was an excess of value over tax cost.
5. SHARES OF CAPITAL STOCK
The Investment Company has authority to issue 25 billion shares of capital
stock with a par value of $0.001. The Fund has authority to issue two
classes of shares. The table below summarizes the transactions in Fund
shares for the periods indicated:
<TABLE>
<CAPTION>
SIX MONTHS ENDED PERIOD ENDED
APRIL 30, 1995 OCTOBER 31, 1994*
<S> <C> <C> <C> <C>
SHARES AMOUNT SHARES AMOUNT
INVESTOR SHARES:
Sold 200 $2,000 4,091 $40,907
Issued as reinvestment of dividends and
distributions 40 403 62 624
Redeemed (3,507) (35,047) (367) (3,672)
Net increase/(decrease) (3,267) $(32,644) 3,786 $37,859
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS ENDED PERIOD ENDED
APRIL 30, 1995 OCTOBER 31, 1994*
<S> <C> <C> <C> <C>
SHARES AMOUNT SHARES AMOUNT
CLASS R SHARES:
Sold 7,773 $77,713 $ 96,520 $965,199
Issued as reinvestment of dividends and
distributions 1,867 18,666 1,545 15,449
Redeemed (35,306) (353,063) (17,506) (175,059)
Net increase/(decrease) (25,666) $(256,684) 80,559 $805,589
<FN>
* The Fund commenced operations and began selling Trust Shares on April 6,
1994. The Fund began selling Investor Shares on April 12, 1994. Effec-
tive as of October 17, 1994, the Fund's Trust Shares were redesignated
as Class R Shares.
</TABLE>
6. CAPITAL LOSS CARRYFORWARD
At October 31, 1994, the Fund had available for federal income tax pur-
poses unused capital loss carryforward of $7 expiring in 2002.
DEAR SHAREHOLDER,
We are pleased to provide you with the Dreyfus/Laurel Prime Money Market,
U.S. Treasury Money Market and Tax-Exempt Money Market Funds' Semi-Annual
Report for the six months ended April 30, 1995.
In the pages that follow, we have provided you with a description of the
market environment, a commentary on the Fund's investment management
strategy and detailed financial statements for the past six months.
As you know, the Funds have been integrated into The Dreyfus Family of
Funds. We hope that you found the transition from The Laurel Funds to The
Dreyfus Family of Funds to be a smooth one. The extended family of funds
now offers you more investment alternatives in addition to expanded ser-
vices and privileges to better serve your investment needs.
Effective June 9, 1995, the Funds' Board of Directors voted to change the
names of the following Dreyfus/Laurel Funds:
<TABLE>
<CAPTION>
PRIOR NAME NEW NAME
<S> <C>
Dreyfus/Laurel Prime Money Market Fund Dreyfus Money Market Reserves
Dreyfus/Laurel U.S. Treasury Money Market
Fund Dreyfus U.S. Treasury Reserves
Dreyfus/Laurel Tax-Exempt Money Market
Fund Dreyfus Municipal Reserves
</TABLE>
We would like to extend our appreciation for your support of The Dreyfus
Family of Funds and hope that the Funds will continue to satisfy your in-
vestment needs. As always, we welcome your thoughts and suggestions.
Sincerely,
Marie E. Connolly
President
The Dreyfus/Laurel Funds, Inc. --
Dreyfus/Laurel Prime Money Market Fund
Dreyfus/Laurel U.S. Treasury Money Market Fund
Dreyfus/Laurel Tax-Exempt Money Market Fund
June 20, 1995
TABLE OF CONTENTS
Shareholder Letter 1
Economic Review 3
Portfolio Overview 4
Portfolio of Investments 6
Statement of Assets and Liabilities 21
Statement of Operations 23
Statement of Changes in Net Assets 24
Financial Highlights 26
Notes to Financial Statements 35
ECONOMIC REVIEW
GROWTH SLOWS BUT STRENGTH REMAINS
Over the past six months, the U.S. economy appeared to come in for the
"soft landing" desired by the Federal Reserve Board and so many econo-
mists. Home sales and housing activity slipped almost 20% from their 1994
peaks, while demand for housing-related and other big-ticket consumer
items like cars and trucks was, in total, off 2%. The Mexican economic
downturn also cut into exports; total shipments dipped 6% from their De-
cember peak.
The Federal Reserve Board deserves at least partial credit for the slow-
down. Higher interest rates seem to have helped cool spending and to have
kept inflation in check. In fact, it was the economy's exuberance early on
that motivated the Fed to continue its anti-inflation policy by raising
short-term rates twice during the period, in November 1994 and again in
February 1995. By March, the economy appeared to be decelerating, allowing
the Fed to take no action at its mid-month meeting.
We expect that the dynamics of this demand slowdown will continue to de-
velop over the next several months as producers adapt their output to new
sales realities. Still, we believe the slowdown is temporary. Job and in-
come growth remain strong, and a rebound in consumer spending is probable.
In addition, businesses have initiated many new capital spending projects
that will stretch into next year or longer. Recent interest-rate declines
may boost housing activity. Many of our trading partners are in the capi-
tal spending phases of their economic expansions, which will support U.S.
capital goods exports. Finally, the bulk of the Mexican recession's de-
pressing effects on U.S. growth may be over by summer's end.
INFLATION MAY INCH UP
With a stabilizing economy and a vigilant Fed, we remain confident that
inflation will only inch higher in the coming months. Slowing in the in-
dustrial sector has already begun to alleviate commodity and intermediate
price pressures. Wage settlements remain modest, and benefits growth is
flattening. Nonetheless, inflation is rising a bit, and we expect a fur-
ther mild escalation once the economy picks up again.
MONEY MARKET RETURNS IMPROVE
Higher interest rates have been a boon for money market investors, who
have seen strong returns over the semi-annual period ended April 30, 1995.
Many securities issuers presently are tabling their financing needs as
they await the next interest rate move by the Federal Reserve Board. The
effect of this "wait and see" attitude has been a decline in the supply of
money market securities. At the same time, many investors have begun to
scrutinize the quality of their portfolios and of new securities offerings
more closely than ever before. This level of credit quality scrutiny is
not new to the Dreyfus money market funds, which focus on traditional
money market instruments of the highest caliber. The market's new caution
may translate into stricter disclosure and credit quality requirements for
issuers in the months ahead.
CAUTIOUSLY OPTIMISTIC
Given the underlying strength in the economy, we believe that the present
slowdown is merely the "pause that refreshes." The economy's deceleration
has doused inflation fears for now, making the decline in the dollar so
far benign. Nonetheless, the dollar's skid has the potential to become
troublesome if it stimulates the economy in a way that makes global inves-
tors wary of buying U.S. securities while the dollar is falling. For now,
we must wait and watch for trends in the U.S. economy and in international
markets as well.
PORTFOLIO OVERVIEW
The Dreyfus/Laurel Prime Money Market Fund invests in high-grade money
market securities issued by banks, the federal government, and corpora-
tions. It also invests in repurchase agreements.
The Dreyfus/Laurel U.S. Treasury Money Market Fund invests exclusively in
direct obligations of the U.S. Treasury and repurchase agreements secured
by such obligations.
The Dreyfus/Laurel Tax-Exempt Money Market Fund invests at least 80% of
its assets in municipal bonds exempt from federal income taxes.
The semi-annual period ended April 30, 1995 was a positive one for the
Funds, which delivered competitive levels of current income while main-
taining their hallmarks of high credit quality and a stable $1 share
price.* The period was marked by a strong, though moderating economy, ris-
ing short-term interest rates and low inflation. In this favorable and
relatively stable investment climate, we began to extend the average matu-
rity of the portfolios slightly. This move placed the Funds in a flexible,
neutral stance, allowing them to benefit from potential interest-rate in-
creases while protecting them from any declines that might occur as the
market adjusts to economic change.
In the Prime Money Market and Tax-Exempt Money Market Funds, we also in-
vested a portion of portfolio assets in floating-rate instruments, target-
ing those with yields that reset daily, weekly and monthly. Interest rates
on floating-rate securities adjust at regular intervals, and when market
rates rise, investors benefit promptly. In the months ahead, we will be
re-evaluating these positions in light of changes in the interest-rate
climate, and may focus more on monthly floaters in order to lock in higher
interest rates for a longer period of time.
* There can be no assurance that the Funds will be able to maintain a sta-
ble net asset value of $1.00 per share.
All three Funds continue to emphasize traditional money market instruments
of high quality, steering clear of the complex derivative investments that
caused some other money market funds so many difficulties last year. Vir-
tually all Fund holdings are rated by nationally recognized ratings ser-
vices in their top two categories, with most investments rating in the top
category. The Tax-Exempt Money Market Fund does have a very small position
in Orange County, California tax and revenue anticipation notes. However,
we are hopeful that current negotiations will be successful, and we remain
confident that the Fund eventually will receive appropriate payment on its
investment.
Going forward, we intend to maintain the same flexible stance in all three
Funds and continue our focus on simply structured money market investments
with superior credit quality. With the economy stabilizing and inflation
low, we do not anticipate any interest-rate changes over the next few
months, although we will continue to monitor the economy and Federal Re-
serve Board policy closely.
PORTFOLIO OF INVESTMENTS (UNAUDITED)
DREYFUS/LAUREL PRIME MONEY MARKET FUND APRIL 30, 1995
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
<S> <C> <C>
COMMERCIAL PAPER -- 65.1%
$11,996,000 Abacus Funding Corporation
5.990% due 05/04/95 $ 11,989,952
14,000,000 Banco Espirito Santo
6.080% due 06/30/95 13,860,000
4,300,000 Barton Capital Corporation
5.990% due 05/01/95 4,300,000
15,000,000 Beta Finance Inc.
6.050% due 06/08/95 14,903,417
15,000,000 Bradford & Bingley
6.050% due 06/06/95 14,908,200
1,100,000 Broadway Capital Corporation
5.990% due 05/09/95 1,098,533
10,000,000 Commerzbank U.S.
5.990% due 05/01/95 10,000,000
14,000,000 Corporate Asset Funding
6.050% due 05/30/95 13,932,446
Enterprise Funding Corporation:
2,011,000 6.030% due 05/23/95 2,003,577
12,000,000 6.050% due 05/31/95 11,940,000
10,000,000 Great Lakes Chemical Corporation
5.990% due 05/01/95 10,000,000
15,000,000 Hanson Finance PLC
6.050% due 06/01/95 14,920,950
Nicollet Funding Corporation:
7,712,000 5.990% due 05/01/95 7,712,000
5,000,000 5.990% due 05/03/95 4,998,320
10,000,000 Pitney Bowes Corporation
5.990% due 05/05/95 9,993,300
14,000,000 Premium Funding Inc.
6.070% due 06/19/95 13,885,285
15,000,000 Prime Asset Vehicle Funding
6.050% due 06/01/95 14,921,209
14,000,000 San Paulo Financial
5.990% due 05/01/95 14,000,000
10,000,000 Temple Inland Inc.
5.990% due 05/08/95 9,988,314
TOTAL COMMERCIAL PAPER
(Cost $199,355,503) 199,355,503
SHORT TERM BONDS & NOTES -- 27.9%
10,000,000 AT & T Capital Corporation
6.260% due 10/13/95 9,997,885
10,000,000 Bank of New York
6.200% due 06/08/95 10,000,000
9,000,000 Bear Stearns Company, Inc.
6.100% due 08/04/95 9,000,000
5,000,000 CIT Group Holdings, Inc.
6.550% due 08/31/95 5,000,816
9,500,000 Comerica Bank of Detroit
5.950% due 11/15/95 9,495,255
10,000,000 Compagnie Bancaire U.S.A
6.120% due 04/29/96 9,998,038
10,000,000 Harris Trust & Savings Bank
6.125% due 05/15/95 10,000,000
10,000,000 Morgan Stanley Group
5.870% due 05/17/95 10,000,000
PNC Bank:
5,000,000 5.940% due 06/15/95 4,999,288
7,000,000 6.070% due 08/04/95 6,997,673
TOTAL SHORT TERM BONDS & NOTES
(Cost $85,488,955) 85,488,955
U.S. TREASURY OBLIGATION -- 1.6%
(Cost $4,997,856)
5,000,000 U.S. Treasury Bill
5.500% # due 05/04/95 4,997,856
REPURCHASE AGREEMENT -- 3.1%
(Cost $9,358,000)
9,358,000 Agreement with Lehman Brothers, dated 04/28/95 bear-
ing 5.920% to be repurchased at $9,362,617 on
05/01/95, collateralized by $9,640,000 U.S. Trea-
sury Bill, 5.920% due 06/29/95 9,358,000
TOTAL INVESTMENTS (Cost $299,200,314*) 97.7% 299,200,314
OTHER ASSETS AND LIABILITIES (NET) 2.3 6,950,059
NET ASSETS 100.0% $306,150,373
<FN>
* Aggregate cost for Federal tax purposes.
# Annualized yield to maturity.
</TABLE>
See Notes to Financial Statements.
PORTFOLIO OF INVESTMENTS (UNAUDITED)
DREYFUS/LAUREL U.S. TREASURY MONEY MARKET FUND APRIL 30, 1995
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
<S> <C> <C>
U.S. TREASURY OBLIGATIONS -- 47.5%
$ 5,000,000 U.S. Treasury Bills
5.155%# due 05/04/95 $ 4,997,852
150,000,000 U.S. Treasury Bills
5.750%# due 06/08/95 149,089,583
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $154,087,435) 154,087,435
REPURCHASE AGREEMENTS -- 59.2%
160,000,000 Agreement with Lehman Brothers, dated 04/28/95 bear-
ing 5.920% to be repurchased at $160,078,933 on
05/01/95, collateralized by $50,000,000 U.S. Trea-
sury Note, 8.875% due 08/15/00, $50,000,000 U.S.
Treasury Note, 13.750% due 08/15/04, $19,965,000
U.S. Treasury Note, 8.000% due 11/15/21 and by
$8,685,000 U.S. Treasury Note, 9.875% due 11/15/15 160,000,000
31,842,000 Agreement with Lehman Brothers, dated 04/28/95 bear-
ing 5.920% to be repurchased at $31,857,709 on
05/01/95, collateralized by $32,800,000 U.S. Trea-
sury Bill, 5.920% due 06/29/95 31,842,000
TOTAL REPURCHASE AGREEMENTS
(Cost $191,842,000) 191,842,000
TOTAL INVESTMENTS (Cost $345,929,435*) 106.7% 345,929,435
OTHER ASSETS AND LIABILITIES (NET) (6.7) (21,570,663)
NET ASSETS 100.0% $324,358,772
<FN>
* Aggregate cost for Federal tax purposes.
# Annualized yield to maturity.
</TABLE>
See Notes to Financial Statements.
PORTFOLIO OF INVESTMENTS (UNAUDITED)
DREYFUS/LAUREL TAX-EXEMPT MONEY MARKET FUND APRIL 30, 1995
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
<S> <C> <C>
MUNICIPAL BONDS AND NOTES -- 100.6%
ALABAMA -- 0.4%
$ 900,000 Alabama, Heatherbrook Housing Financial Authority
4.350% due 10/01/13++ $ 900,000
ALASKA -- 0.5%
1,155,000 Alaska, North Slope Boro, Series B
4.750% due 06/30/95 1,155,000
ARIZONA -- 2.5%
1,300,000 Arizona, Chandler County, Industrial Development Au-
thority
4.150% due 12/15/09+++ 1,300,000
1,500,000 Arizona, City of Mesa, Municipal Development Corpo-
ration
4.200% due 05/30/95 1,500,000
2,100,000 Arizona, Cochise County, Pollution Control Corpora-
tion, (Arizona Electric Power Company)
4.450% due 09/01/95++++ 2,100,000
500,000 Arizona, Pinal City, Industrial Control Revenue
4.850% due 12/01/05++ 500,000
5,400,000
ARKANSAS -- 0.1%
195,000 Arkansas Hospital Equipment Finance Authority
4.700% due 12/01/05++ 195,000
CALIFORNIA -- 8.4%
400,000 California, Anaheim Multifamily Housing Authority
4.500% due 07/15/20++ 400,000
950,000 California, City of Turlock
4.550% due 01/01/24++ 950,000
50,000 California, Concord Multifamily Housing Authority
4.400% due 07/15/18++ 50,000
California, Health Facilities Finance Authority:
400,000 4.850% due 01/01/15++ 400,000
1,800,000 4.500% due 10/01/24++ 1,800,000
2,100,000 California, Long Beach Harbor Revenue
3.850% due 05/10/95 2,100,000
900,000 California, Los Angeles County, Metropolitan Sales
Tax
4.550% due 07/01/20++ 900,000
100,000 California, Los Angeles County Multifamily Housing
Authority
4.600% due 7/01/15++ 100,000
140,000 California, Ontario Multifamily Housing Authority
4.450% due 12/01/05++ 140,000
2,000,000 California, Orange County Tax and Revenue Anticipa-
tion Notes
4.500% due 07/19/95 2,003,123
600,000 California, Pollution Control Financing Authority
3.900% due 09/15/98+++ 600,000
400,000 California, Sacramento County
4.550% due 06/01/20++ 400,000
700,000 California, San Diego Multifamily Housing Program
4.950% due 11/01/25++ 700,000
4,500,000 California, Santa Clara County Tax and Revenue An-
ticipation Notes
4.250% due 07/07/95 4,504,774
200,000 California, Santa Cruz Industrial Development Reve-
nue
4.700% due 11/01/18++ 200,000
3,000,000 California, State Floating LIBOR Index Note
4.365% due 06/28/95 3,000,000
18,247,897
COLORADO -- 2.4%
700,000 Colorado, Arapahoe County
4.090% due 05/15/13+++ 700,000
2,000,000 Colorado, Arapahoe County, Capital Improvement
4.450% due 08/31/95++++ 2,000,000
200,000 Colorado, City of Lakewood
4.100% due 12/15/99+++ 200,000
200,000 Colorado, Health Facilities Authority Revenue
4.650% due 05/15/20++ 200,000
2,000,000 Colorado, South Denver Metropolitan District
4.350% due 05/31/95++++ 2,000,000
5,100,000
CONNECTICUT -- 0.7%
1,560,000 Connecticut State Housing Finance Authority, Series
H-1
4.300% due 09/01/95++++# 1,560,000
DELAWARE -- 0.1%
300,000 Delaware, New Castle County
5.050% due 12/01/00++ 300,000
DISTRICT OF COLUMBIA -- 3.2%
District of Columbia:
2,000,000 9.375% due 06/01/95 2,012,929
5,000,000 4.050% due 07/01/95++++ 5,000,000
7,012,929
FLORIDA -- 6.8%
2,100,000 Florida, Hillsborough County, Port District Author-
ity
4.625% due 02/01/04++ 2,100,000
5,300,000 Florida, Housing Finance Agency
3.900% due 06/15/95++++ 5,300,000
1,000,000 Florida, Housing M/F Winwood
4.100% due 05/01/08+++ 1,000,000
1,150,000 Florida, Putnam County, Development Authority
4.800% due 03/15/14++ 1,150,000
Florida, Putnam County, Pollution Control Revenue,
(Seminole Electric Corporation):
2,000,000 4.250% due 06/15/95++++ 2,000,000
350,000 4.800% due 03/15/14++ 350,000
2,800,000 Florida, West Orange County, Hospital Tax District
4.250% due 07/13/95 2,800,000
14,700,000
GEORGIA -- 4.5%
1,770,000 Georgia, Cobb County, Development Authority
4.750% due 01/01/08++ 1,770,000
1,000,000 Georgia, Dekalb County, Housing Authority
4.750% due 06/01/04++ 1,000,000
1,900,000 Georgia, Fulton County
4.150% due 09/01/12+++ 1,900,000
3,000,000 Georgia, Fulton County, Development Authority
4.75% due 12/29/95 3,011,511
2,000,000 Georgia, Hart County, Industrial Building
4.850% due 05/01/09++ 2,000,000
9,681,511
HAWAII -- 1.2%
2,700,000 Hawaii, Budget & Finance, (Kaiser Permanente)
4.400% due 09/01/95++++ 2,700,000
ILLINOIS -- 20.7%
1,675,000 Illinois, Alsip Industrial Development Revenue,
(Ardco Inc. Project)
4.850% due 11/01/11++ 1,675,000
400,000 Illinois, City of Burbank
4.100% due 09/15/24+++ 400,000
500,000 Illinois, City of Chicago
9.875% due 07/01/95++ 514,386
2,700,000 Illinois, City of Chicago, General Obligation Bonds,
Series A-2
4.150% due 07/18/95 2,700,000
Illinois, City of Chicago, Tender Notes:
100,000 4.450% due 10/31/95++ 100,000
2,000,000 4.600% due 10/31/95 2,000,000
3,200,000 Illinois, City of Lockport
4.850% due 04/01/25++ 3,200,000
1,500,000 Illinois, Development Columbia Graphics
4.850% due 06/01/04++ 1,500,000
Illinois Development Finance Authority, General Ob-
ligation:
1,000,000 4.650% due 04/01/24++ 1,000,000
1,100,000 4.550% due 12/01/28++ 1,100,000
2,100,000 Illinois Development Finance Authority, Industrial
Development Revenue, (Overton Gear & Tool)
4.850% due 10/01/08++ 2,100,000
Illinois, Development Finance Authority, Residential
Rental Revenue:
1,700,000 4.950% due 04/01/24++ 1,700,000
1,625,000 4.650% due 02/01/25++ 1,625,000
1,600,000 Illinois Development Finance Authority, Utility Rev-
enue
4.650% due 02/01/19++ 1,600,000
Illinois Educational Facilities Authority:
500,000 4.800% due 01/01/09++ 500,000
1,000,000 4.300% due 01/01/18++ 1,000,000
3,400,000 4.500% due 12/01/25++ 3,400,000
2,615,000 4.500% due 03/01/28++ 2,615,000
Illinois Health Facilities Authority Revenue:
1,575,000 (Evangelical), Series B
4.750% due 01/01/16++ 1,575,000
(Franciscan Sisters Health):
3,700,000 4.450% due 11/01/05++ 3,700,000
2,220,000 5.250% due 01/01/18+ 2,220,000
4,000,000 (Ingalls), Series B,
4.750% due 01/01/16++ 4,000,000
1,300,000 Illinois, New Lenox
4.850% due 07/01/15++ 1,300,000
200,000 Illinois, Northbrook Industrial Development
4.700% due 07/01/02++ 200,000
3,050,000 Illinois, Zion General Obligation Bond
4.750% due 03/01/20++ 3,050,000
44,774,386
INDIANA -- 2.0%
475,000 Indiana, Auburn Industrial Development Authority
5.100% due 09/01/00++ 475,000
2,600,000 Indiana, City of Gary
4.150% due 07/15/02+++ 2,600,000
400,000 Indiana, Fort Wayne Economic Development Authority
5.000% due 07/01/09++ 400,000
300,000 Indiana, Fort Wayne Hospital Parkview Memorial, Se-
ries B
4.650% due 01/01/16++ 300,000
600,000 Indiana, Rushville Industrial Control Revenue
4.950% due 11/01/96++ 600,000
4,375,000
IOWA -- 1.8%
400,000 Iowa, Cedar Rapids Pollution Control Revenue
4.500% due 11/01/03++ 400,000
1,400,000 Iowa, Des Moines Hospital Facility
4.750% due 08/01/15++ 1,400,000
2,000,000 Iowa, Municipalities Workers Compensation Associa-
tion
3.950% due 07/01/95++++ 2,000,000
3,800,000
KANSAS -- 0.8%
1,000,000 Kansas, City of Burlington, Pollution Control Reve-
nue
3.950% due 05/17/95 1,000,000
700,000 Kansas, City of Wamego
4.100% due 11/15/14+++ 700,000
1,700,000
KENTUCKY -- 1.5%
1,850,000 Kentucky, Hopkinsville, Industrial Development Reve-
nue
4.625% due 05/01/00++ 1,850,000
1,500,000 Kentucky, Pendleton County
3.750% due 07/01/95 1,500,000
3,350,000
LOUISIANA -- 2.1%
1,895,000 Louisiana, Baton Rougue, Sales and Use Tax
9.000% due 08/01/95 1,914,461
100,000 Louisiana, East Baton Rouge, Pollution Control Au-
thority
5.200% due 12/01/11+ 100,000
1,250,000 Louisiana, Plaquemine, Harbor and Terminal District
4.500% due 03/15/96 1,250,000
1,300,000 Louisiana, Public Facilities Authority
4.950% due 12/01/05++ 1,300,000
4,564,461
MARYLAND -- 1.2%
50,000 Maryland, Frederick City General Obligation Bond
4.625% due 08/01/11++ 50,000
600,000 Maryland, Health and Higher Education
4.350% due 04/01/35++ 600,000
2,000,000 Maryland, Multifamily Housing Authority
4.700% due 06/06/95 2,000,000
2,650,000
MASSACHUSETTS -- 1.4%
1,400,000 Massachusetts, General Obligation Bond
7.000% due 06/01/95 1,402,712
1,600,000 Massachusetts, Utility Revenue
4.625% due 07/01/19++ 1,600,000
3,002,712
MICHIGAN -- 1.8%
3,825,000 Michigan, Flint Hospital, Hurley Medical Center
4.750% due 07/01/00++ 3,825,000
MINNESOTA -- 1.4%
3,100,000 Minnesota, Saint Cloud Hospital Facilities Authority
4.600% due 07/01/20++ 3,100,000
MISSISSIPPI -- 0.1%
300,000 Mississippi, Jackson, Industrial Development Revenue
(McCarthy Project)
4.800% due 12/01/15++ 300,000
MISSOURI -- 2.7%
1,900,000 Missouri, Environmental Improvement & Energy Re-
sources
4.750% due 10/01/02++ 1,900,000
1,300,000 Missouri, Kansas City Industrial Development Author-
ity
4.750% due 06/01/08++ 1,300,000
2,570,000 Missouri, Saint Charles County, Industrial Develop-
ment Authority
4.750% due 10/01/07++ 2,570,000
5,770,000
MONTANA -- 0.0%
105,000 Montana, Butte, Silver Bow Pollution Control Revenue
4.600% due 09/01/01++ 105,000
NEW YORK -- 0.2%
250,000 New York, Broome County
4.250% due 12/15/03++ 250,000
200,000 New York, Triborough Bridge & Tunnel Authority
4.450% due 01/01/24++ 200,000
450,000
NORTH CAROLINA -- 0.7%
200,000 North Carolina, Craven County, Industrial Finance
Authority
5.350% due 05/01/11+ 200,000
1,300,000 North Carolina, Wake County Pollution Control
4.200% due 07/24/95++++ 1,300,000
1,500,000
NORTH DAKOTA -- 0.4%
950,000 North Dakota, Mercer County
4.800% due 08/15/14++ 950,000
OREGON -- 1.0%
400,000 Oregon, Cascade Project, Economic Development Au-
thority
5.075% due 12/01/99++ 400,000
1,845,000 Oregon, Portland, Multifamily Revenue, (University
Park Apartments)
4.550% due 10/01/11++ 1,845,000
2,245,000
PENNSYLVANIA -- 8.4%
3,500,000 Pennsylvania, Allegheny County, Industrial Develop-
ment Authority
4.800% due 10/17/95 3,500,000
700,000 Pennsylvania, Bucks County, Industrial Development
Authority
4.350% due 07/01/15++ 700,000
1,100,000 Pennsylvania, Chartiers Valley, Industrial Develop-
ment Authority
4.300% due 12/01/16+++ 1,100,000
1,700,000 Pennsylvania, Chester County, Industrial Development
Authority
4.100% due 10/15/99+++ 1,700,000
2,700,000 Pennsylvania, City of Philadelphia, General Obliga-
tion Bonds
4.100% due 07/28/95 2,700,000
600,000 Pennsylvania, Jeanette Health Service Authority
4.950% due 07/01/99++ 600,000
200,000 Pennsylvania, Lehigh, Industrial Development Author-
ity
4.000% due 10/01/14+++ 200,000
1,250,000 Pennsylvania, Moon Industrial Development Authority
4.750% due 11/01/10++ 1,250,000
600,000 Pennsylvania, Quakertown General Health Authority
4.600% due 12/01/11++ 600,000
1,700,000 Pennsylvania, State Higher Educational Assistance
Agency
4.600% due 07/01/18++ 1,700,000
1,550,000 Pennsylvania, Upper Allegheny
4.500% due 01/15/96++++ 1,550,000
2,000,000 Pennsylvania, Washington County, Higher Education
Agency
4.750% due 11/01/05++ 2,000,000
500,000 Pennsylvania, Washington County, Industrial Develop-
ment Authority, (Wetterau Finance Company)
4.750% due 11/01/14++ 500,000
18,100,000
PUERTO RICO -- 0.1%
100,000 Puerto Rico, Industrial Control Revenue
4.550% due 12/01/15++ 100,000
RHODE ISLAND -- 0.2%
500,000 Rhode Island, Convention Center Revenue Authority
8.900% due 05/15/95 500,956
SOUTH CAROLINA -- 2.3%
100,000 South Carolina, Economic Development Authority
5.300% due 12/01/10+ 100,000
400,000 South Carolina, Lexington County
4.450% due 12/01/09++ 400,000
150,000 South Carolina, Richland County
4.950% due 10/01/08++ 150,000
1,600,000 South Carolina, Walhaila Revenue,
(Avondale Mills, Inc.)
4.750% due 12/01/00++ 1,600,000
South Carolina, York County:
2,000,000 4.300% due 09/15/95++++ 2,000,000
800,000 4.800% due 09/15/14++ 800,000
5,050,000
TENNESSEE -- 0.6%
Tennessee, Knox County, Industrial Revenue:
1,000,000 4.850% due 11/01/05++ 1,000,000
400,000 4.100% due 12/15/08+++ 400,000
1,400,000
TEXAS -- 9.2%
400,000 Texas, Birdville, Independent School District
7.500% due 02/15/96 409,298
1,020,000 Texas, Dallas-Fort Worth, Airport Authority
4.250% due 07/13/95 1,020,000
1,100,000 Texas, Dallas, Industrial Development Corporation
4.150% due 10/01/25+++ 1,100,000
Texas, Higher Education Authority:
1,300,000 4.600% due 04/01/20++ 1,300,000
2,780,000 4.750% due 12/01/25++ 2,780,000
340,000 Texas, Hospital Equipment Financing Council
4.750% due 04/07/05++ 340,000
1,000,000 Texas, Lubbock, Health Facility, Methodist Hospital
5.800% due 12/01/95 1,007,314
2,395,000 Texas, Nueces County, Health Facility Development
Corporation
4.800% due 07/01/15++ 2,395,000
1,000,000 Texas, Public Building Authority, Building Revenue
9.375% due 08/01/95++++ 1,017,907
Texas, Public Finance Authority, Series 93:
3,500,000 4.250% due 05/25/95 3,500,000
2,700,000 4.300% due 06/06/95 2,700,000
2,300,000 Texas, Tyler, Health Facilities Development Corpora-
tion
4.050% due 05/05/95++++ 2,300,000
19,869,519
UTAH -- 0.5%
700,000 Utah, State Board of Regents
4.500% due 11/01/00++ 700,000
300,000 Utah, State Board of Regents, Student Loans
4.600% due 11/01/13++ 300,000
1,000,000
VIRGINIA -- 3.0%
100,000 Virginia, Cambell City Industrial Control Revenue
5.300% due 04/01/15+ 100,000
Virginia, State Housing Development Authority:
4,000,000 3.900% due 05/10/95++++ 4,000,000
2,200,000 4.200% due 05/11/95++++ 2,200,000
200,000 Series A,
4.750 due 09/01/17++ 200,000
6,500,000
WASHINGTON -- 1.9%
1,100,000 Washington, Health Care Facilities
5.250% due 01/01/18+ 1,100,000
1,000,000 Washington, Pierce County, Economic Development
5.100% due 08/01/07++ 1,000,000
1,000,000 Washington, General Obligation Bond, Series B
4.625% due 06/01/95 1,000,097
1,000,000 Washington, South Colombia Basin
10.500% due 06/01/95 1,005,485
4,105,582
WEST VIRGINIA -- 1.5%
2,500,000 West Virginia, Public Energy Authority
4.200% due 05/04/95++++ 2,500,000
700,000 West Virginia, Putnam County
4.000% due 10/01/11+++ 700,000
3,200,000
WISCONSIN -- 1.8%
500,000 Wisconsin, City of Milwaukee
4.500% due 06/15/95 500,304
3,300,000 Wisconsin, Health & Education Facilities, (Alexian
Village Project)
4.250% due 07/24/95++++ 3,300,000
3,800,304
WYOMING -- 0.5%
1,000,000 Wyoming, Green River, Pollution Control Revenue
5.200% due 06/01/07+ 1,000,000
TOTAL INVESTMENTS (Cost $218,040,257*) 100.6% 218,040,257
OTHER ASSETS AND LIABILITIES (NET) (0.6) (1,322,263)
NET ASSETS 100.0% $216,717,994
<FN>
* Aggregate cost for Federal tax purposes.
+ Variable rate demand notes are payable upon not more than one busi-
ness day's notice. The interest rate shown reflects the rate cur-
rently in effect.
++ Variable rate demand notes are payable upon not more than seven busi-
ness days' notice. The interest rate shown reflects the rate cur-
rently in effect.
+++ Variable rate demand notes are payable upon not more than thirty
business days' notice. The interest rate shown reflects the rate cur-
rently in effect.
++++ "Put" bonds and notes have demand features which mature within one
year. The interest rate shown reflects the rate currently in effect.
# When-issued security (Note 1).
</TABLE>
See Notes to Financial Statements.
STATEMENT OF ASSETS AND LIABILITIES
THE DREYFUS/LAUREL FUNDS, INC. APRIL 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
DREYFUS/ DREYFUS/ DREYFUS/
LAUREL LAUREL LAUREL
PRIME U.S. TREASURY TAX-EXEMPT
MONEY MONEY MONEY
MARKET FUND MARKET FUND MARKET FUND
<S> <C> <C> <C>
ASSETS
Investments, at value (Cost $299,200,314,
$345,929,435 and $218,040,257, respectively)
(Note 1)
See accompanying schedules
Securities $ 289,842,314 $154,087,435 $ 218,040,257
Repurchase Agreements 9,358,000 191,842,000 --
TOTAL INVESTMENTS 299,200,314 345,929,435 218,040,257
Cash 5,144 2,613 53,734
Interest receivable 860,530 95,167 1,890,262
Receivable for Fund shares sold 10,009,864 2,079,181 1,151,461
Receivable from investment adviser -- -- 17,940
TOTAL ASSETS 310,075,852 348,106,396 221,153,654
LIABILITIES
Payable for Fund shares redeemed 2,922,536 22,790,962 3,877,513
Dividends payable 499,688 532,911 247,101
Investment management fee payable (Note 2) 363,111 360,782 265,977
Accrued Directors' fees and expenses 47,445 43,167 41,556
Distribution fee payable (Note 3) 28,537 5,064 3,513
Accrued expenses and other payables 64,162 14,738 --
TOTAL LIABILITIES 3,925,479 23,747,624 4,435,660
NET ASSETS $ 306,150,373 $ 324,358,772 $ 216,717,994
NET ASSETS consist of:
Distributions in excess of net investment income
earned to date $ -- $(46) $ (1,575)
Accumulated net realized gain on investments -- 5,410 --
Par value 306,150 324,353 216,719
Paid-in capital in excess of par value 305,844,223 324,029,055 216,502,850
TOTAL NET ASSETS $ 306,150,373 $ 324,358,772 $ 216,717,994
NET ASSETS:
Investor shares $ 170,759,898 $ 32,345,281 $ 20,704,671
Class R shares $ 135,390,475 $ 292,013,491 $ 196,013,323
SHARES OUTSTANDING:
Investor shares 170,759,898 32,344,689 20,704,763
Class R shares 135,390,475 292,008,148 196,014,203
INVESTOR SHARES
Net asset value, offering and redemption price per
share of capital stock outstanding $1.00 $1.00 $1.00
CLASS R SHARES
Net asset value, offering and redemption price per
share of capital stock outstanding $1.00 $1.00 $1.00
</TABLE>
See Notes to Financial Statements.
STATEMENT OF OPERATIONS
THE DREYFUS/LAUREL FUNDS, INC.
FOR THE SIX MONTHS ENDED APRIL 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
DREYFUS/ DREYFUS/ DREYFUS/
LAUREL LAUREL LAUREL
PRIME U.S. TREASURY TAX-EXEMPT
MONEY MONEY MONEY
MARKET FUND MARKET FUND MARKET FUND
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $ 9,062,557 $ 7,902,799 $ 4,437,351
EXPENSES:
Investment management fee (Note 2) 745,361 694,401 550,491
Distribution fee (Note 3) 178,722 29,520 20,870
Directors' fees and expenses
(Note 2) 31,057 28,933 22,936
TOTAL EXPENSES 955,140 752,854 594,297
NET INVESTMENT INCOME 8,107,417 7,149,945 3,843,054
REALIZED GAIN ON INVESTMENTS (Note 1):
Net realized gain on investments during the period -- 5,410 --
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 8,107,417 $ 7,155,355 $ 3,843,054
</TABLE>
See Notes to Financial Statements.
STATEMENT OF CHANGES IN NET ASSETS
THE DREYFUS/LAUREL FUNDS, INC.
FOR THE SIX MONTHS ENDED APRIL 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
DREYFUS/ DREYFUS/ DREYFUS/
LAUREL LAUREL LAUREL
PRIME U.S. TREASURY TAX-EXEMPT
MONEY MONEY MONEY
MARKET FUND MARKET FUND MARKET FUND
<S> <C> <C> <C>
Net investment income $ 8,107,417 $ 7,149,945 $ 3,843,054
Net realized gain on investments sold during the pe-
riod -- 5,410 --
Net increase in net assets resulting from operations 8,107,417 7,155,355 3,843,054
Distributions to shareholders from net investment
income:
Investor shares (4,607,430) (698,338) (350,649)
Class R shares (3,499,987) (6,451,607) (3,491,645)
Net increase/(decrease) in net assets from Fund
share transactions (Note 4):
Investor shares 167,148,456 31,021,189 19,544,046
Class R shares 10,636,967 63,211,501 (9,092,502)
Net increase in net assets 177,785,423 94,238,100 10,452,304
NET ASSETS:
Beginning of period 128,364,950 230,120,672 206,265,690
End of period (including distributions in excess of
net investment income earned to date of $0, $46
and $1,575, respectively) $ 306,150,373 $ 324,358,772 $ 216,717,994
</TABLE>
See Notes to Financial Statements.
STATEMENT OF CHANGES IN NET ASSETS
THE DREYFUS/LAUREL FUNDS, INC.
FOR THE YEAR ENDED OCTOBER 31, 1994
<TABLE>
<CAPTION>
DREYFUS/ DREYFUS/ DREYFUS/
LAUREL LAUREL LAUREL
PRIME U.S. TREASURY TAX-EXEMPT
MONEY MONEY MONEY
MARKET FUND MARKET FUND MARKET FUND
<S> <C> <C> <C>
Net investment income $ 4,078,746 $ 4,320,259 $ 4,859,332
Net increase in net assets resulting from operations 4,078,746 4,320,259 4,859,332
Distributions to shareholders from net investment
income:
Investor shares (44,787) (10,949) (10,965)
Class R shares (4,033,959) (4,308,785) (4,850,099)
Net increase in net assets from Fund share transac-
tions (Note 4):
Investor shares 3,611,442 1,323,500 1,160,717
Class R shares 20,993,449 159,011,800 17,277,012
Net increase in net assets 24,604,891 160,335,825 18,435,997
NET ASSETS:
Beginning of year 103,760,059 69,784,847 187,829,693
End of year (including distributions in excess of
net investment income of $0, $46 and $2,335, re-
spectively) $ 128,364,950 $ 230,120,672 $ 206,265,690
</TABLE>
See Notes to Financial Statements.
FINANCIAL HIGHLIGHTS
DREYFUS/LAUREL PRIME MONEY MARKET FUND
FOR AN INVESTOR SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
<CAPTION>
SIX
MONTHS PERIOD
ENDED ENDED
4/30/95 10/31/94*##
(UNAUDITED)
<S> <C> <C>
Net asset value, beginning of period $1.00 $1.00
Income from investment operations:
Net investment income 0.0254 0.0211
Less distributions:
Dividends from net investment income (0.0254) (0.0211)
Net asset value, end of period $1.00 $1.00
Total return+ 2.57% 2.14%
Ratios to average net assets/supplemental data:
Net assets, end of period (in 000's) $170,760 $3,611
Ratio of operating expenses to average net assets 0.70%# 0.71%#
Ratio of net investment income to average net assets 5.16%# 3.31%#
<FN>
* The Fund commenced selling Investor shares on April 6, 1994.
+ Total return represents aggregate total return for the period indi-
cated.
# 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.
</TABLE>
See Notes to Financial Statements.
FINANCIAL HIGHLIGHTS
DREYFUS/LAUREL PRIME MONEY MARKET FUND
FOR A CLASS R SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
<CAPTION>
SIX
MONTHS YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
4/30/95 10/31/94*## 10/31/93 10/31/92
(UNAUDITED)
<S> <C> <C> <C> <C>
Net asset value, beginning of period $1.00 $1.00 $1.00 $1.00
Income from investment operations:
Net investment income 0.0260 0.0344+ 0.0280 0.0385
Less distributions:
Dividends from net investment income (0.0260) (0.0344) (0.0280) (0.0385)
Net asset value, end of period $1.00 $1.00 $1.00 $1.00
Total return++ 2.68% 3.52% 2.84% 3.92%
Ratios to average net assets/
supplemental data:
Net assets, end of period
(in 000's) $135,390 $124,754 $103,760 $91,848
Ratio of operating expenses to average net assets 0.50%# 0.51%+++ 0.50%** 0.50%**
Ratio of net investment income to average net assets 5.36%# 3.51% 2.80% 3.88%
<FN>
* 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
redesignated as Trust shares. Effective 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 $.0007, $.0010, $.0038, $.0043 and $.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 $.0036, $.0027, $.0018, $.0026, $.0062 and
$.3952 per share, respectively.
+ Net investment income before expenses reimbursed by investment adviser
for the year ended October 31, 1994 was $0.0331.
++ Total return represents aggregate total return for the periods indi-
cated.
+++ 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.
</TABLE>
See Notes to Financial Statements.
FINANCIAL HIGHLIGHTS (CONTINUED)
DREYFUS/LAUREL PRIME MONEY MARKET FUND
FOR A CLASS R SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
<CAPTION>
YEAR YEAR YEAR PERIOD
ENDED ENDED ENDED ENDED
10/31/91 10/31/90 10/31/89 10/31/88*
<S> <C> <C> <C> <C>
Net asset value, beginning of period $1.00 $1.00 $1.00 $1.00
Income from investment operations:
Net investment income 0.0621 0.0820 0.0667 0.0601
Less distributions:
Dividends from net investment income (0.0621) (0.0820) (0.0667) (0.0601)
Net asset value, end of period $1.00 $1.00 $1.00 $1.00
Total return++ 6.39% 8.55% 7.95% 6.18%
Ratios to average net assets/
supplemental data:
Net assets, end of period
(in 000's) $105,329 $93,366 $92,257 $530
Ratio of operating expenses to average net assets 0.50%** 0.16%** 0.00%** 0.60%#**
Ratio of net investment income to average net assets 6.13% 8.21% 8.97% 6.69%#
<FN>
* 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 as Trust shares. Effective 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 $.0007, $.0010, $.0038, $.0043 and $.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 $.0036, $.0027, $.0018, $.0026, $.0062 and
$.3952 per share, respectively.
++ Total return represents aggregate total return for the periods indi-
cated.
# Annualized.
</TABLE>
See Notes to Financial Statements.
FINANCIAL HIGHLIGHTS
DREYFUS/LAUREL U.S. TREASURY MONEY MARKET FUND
FOR AN INVESTOR SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
<CAPTION>
SIX
MONTHS PERIOD
ENDED ENDED
4/30/95 10/31/94*##
(UNAUDITED)
<S> <C> <C>
Net asset value, beginning of period $1.00 $1.00
Income from investment operations:
Net investment income 0.0235 0.0185
Less distributions:
Dividends from net investment income (0.0235) (0.0195)
Net asset value, end of period $1.00 $1.00
Total return+ 2.37% 1.96%
Ratios to average net assets/supplemental data:
Net assets, end of period (in 000's) $32,345 $1,324
Ratio of operating expenses to average net assets 0.70%# 0.70%#
Ratio of net investment income to average net assets 4.81%# 3.42%#
<FN>
* The Fund commenced selling Investor shares on April 18, 1994.
+ Total return represents aggregate total return for the period indi-
cated.
# 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.
</TABLE>
See Notes to Financial Statements.
FINANCIAL HIGHLIGHTS
DREYFUS/LAUREL U.S. TREASURY MONEY MARKET FUND
FOR A CLASS R SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
<CAPTION>
SIX
MONTHS
ENDED
4/30/95
(UNAUDITED)
<S> <C>
Net asset value, beginning of period $1.00
Income from investment operations:
Net investment income 0.0245
Less distributions:
Dividends from net investment income (0.0245)
Net asset value, end of period $1.00
Total return++ 2.48%
Ratios to average net assets/supplemental data:
Net assets, end of period (in 000's) $292,013
Ratio of operating expenses to average net assets 0.50%#
Ratio of net investment income to average net assets 5.01%#
<FN>
* 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 Oc-
tober 17, 1994, the Fund's Trust shares were redesignated Class R
shares.
** For the period ended October 31, 1991, the investment adviser waived a
portion of its advisory fee amounting to $.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 $.0040, $.0040,
and $.0048 per share, respectively.
+ Net investment income before expenses reimbursed by investment adviser
for the year ended October 31, 1994 was $0.0323.
++ Total return represents aggregate total return for the periods indi-
cated.
+++ Annualized operating 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.
</TABLE>
See Notes to Financial Statements.
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
YEAR YEAR YEAR PERIOD
ENDED ENDED ENDED ENDED
10/31/94*## 10/31/93 10/31/92 10/31/91*
<S> <C> <C> <C>
$ 1.00 $1.00 $1.00 $1.00
0.0331+ 0.0274 0.0367 0.0424
(0.0331) (0.0274) (0.0367) (0.0424)
$ 1.00 $1.00 $1.00 $1.00
3.37% 2.77% 3.73% 4.32%
$228,797 $69,785 $69,187 $45,998
0.50%+++ 0.50%** 0.50%** 0.34%#**
3.62% 2.74% 3.63% 5.55%#
</TABLE>
See Notes to Financial Statements.
FINANCIAL HIGHLIGHTS
DREYFUS/LAUREL TAX-EXEMPT MONEY MARKET FUND
FOR AN INVESTOR SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
<CAPTION>
SIX
MONTHS PERIOD
ENDED ENDED
4/30/95 10/31/94*##
(UNAUDITED)
<S> <C> <C>
Net asset value, beginning of period $1.00 $1.00
Income from investment operations:
Net investment income 0.0157 0.0113
Less distributions:
Dividends from net investment income (0.0157) (0.0122)
Net asset value, end of period $1.00 $1.00
Total return+ 1.59% 1.23%
Ratios to average net assets/supplemental data:
Net assets, end of period (in 000's) $20,705 $1,161
Ratio of operating expenses to average net assets 0.70%# 0.70%#
Ratio of net investment income to average net assets 3.17%# 2.11%#
<FN>
* The Fund commenced selling Investor shares on April 20, 1994.
+ Total return represents aggregate total return for the period indi-
cated.
# 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.
</TABLE>
See Notes to Financial Statements.
FINANCIAL HIGHLIGHTS
DREYFUS/LAUREL TAX-EXEMPT MONEY MARKET FUND
FOR A CLASS R SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
<CAPTION>
SIX
MONTHS YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
4/30/95 10/31/94*## 10/31/93 10/31/92
(UNAUDITED)
<S> <C> <C> <C> <C>
Net asset value, beginning of period $1.00 $1.00 $1.00 $1.00
Income from investment operations:
Net investment income 0.0167 0.0228+ 0.0208 0.0291
Less distributions:
Dividends from net investment income (0.0167) (0.0228) (0.0208) (0.0291)
Net asset value, end of period $1.00 $1.00 $1.00 $1.00
Total return++ 1.69% 2.29% 2.10% 2.94%
Ratios to average net assets/
supplemental data:
Net assets, end of period
(in 000's) $196,013 $205,105 $187,830 $184,719
Ratio of operating expenses to average net assets 0.50%# 0.51%+++ 0.50%** 0.50%**
Ratio of net investment income to average net assets 3.37%# 2.30% 2.08% 2.90%
<FN>
* The Fund commenced operations on December 10, 1987. The Fund commenced
selling Investor shares on April 20, 1994. Those shares outstanding
prior to April 4,1994, were designated as Trust shares. Effective Oc-
tober 17, 1994, the Fund's Trust shares were redesignated Class R
shares.
** For the period ended October 31, 1988, the investment adviser waived a
portion of its advisory fee amounting to $.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 $.0024, $.0029, $.0036, $.0052, $.0044 and
$.0031 per share,
respectively.
+ Net investment income before expenses reimbursed by the investment ad-
viser for the year ended October 31, 1994 was $0.0218.
++ Total return represents aggregate total return for the periods indi-
cated.
+++ Annualized operating expense ratio before expenses reimbursed by the
investment adviser for the year ended October 31, 1994 was 0.61%.
# 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.
</TABLE>
See Notes to Financial Statements.
FINANCIAL HIGHLIGHTS (CONTINUED)
DREYFUS/LAUREL TAX-EXEMPT MONEY MARKET FUND
FOR A CLASS R SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
<CAPTION>
YEAR YEAR YEAR PERIOD
ENDED ENDED ENDED ENDED
10/31/91 10/31/90 10/31/89 10/31/88*
<S> <C> <C> <C> <C>
Net asset value, beginning of period $1.00 $1.00 $1.00 $1.00
Income from investment operations:
Net investment income 0.0291 0.0454 0.0564 0.0592
Less distributions:
Dividends from net investment income (0.0291) (0.0454) (0.0564) (0.0592)
Net asset value, end of period $1.00 $1.00 $1.00 $1.00
Total return++ 2.94% 4.64% 5.79% 6.08%
Ratios to average net assets/
supplemental data:
Net assets, end of period
(in 000's) $184,719 $152,260 $88,247 $56,224
Ratio of operating expenses to average net assets 0.50%** 0.50%** 0.55%** 0.70%#**
Ratio of net investment income to average net assets 2.90% 4.49% 5.66% 5.95%#
<FN>
* The Fund commenced operations on December 10, 1987. The Fund commenced
selling Investor shares on April 20, 1994. Those shares outstanding
prior to April 4,1994, were designated as Trust shares. Effective Oc-
tober 17, 1994, the Fund's Trust shares were redesignated Class R
shares.
** For the period ended October 31, 1988, the investment adviser waived a
portion of its advisory fee amounting to $.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 $.0024, $.0029, $.0036, $.0052, $.0044 and
$.0031 per share,
respectively.
++ Total return represents aggregate total return for the periods indi-
cated.
# Annualized.
</TABLE>
See Notes to Financial Statements.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES
The Dreyfus/Laurel Funds, Inc. (the "Investment Company"), The Dreyfu-
s/Laurel Funds Trust, The Dreyfus/Laurel Tax-Free Municipal Funds and The
Dreyfus/Laurel Investment Series are all registered open-end investment
companies that are part of The Dreyfus Family of Funds. The Investment
Company is a series mutual fund which consists of 19 separate investment
portfolios. These financial statements report on the Dreyfus/Laurel Prime
Money Market Fund, Dreyfus/Laurel U.S. Treasury Money Market Fund and the
Dreyfus/Laurel Tax-Exempt Money Market Fund (each a "Fund" and collec-
tively the "Funds"). The Investment Company was incorporated on August 6,
1987 as a Maryland corporation and is registered with the Securities and
Exchange Commission under the Investment Company Act of 1940, as amended
(the "1940 Act"), as a diversified, open- end management investment com-
pany. Each Fund offers two classes of shares: Investor shares and Class R
shares. Investor shares are sold primarily to retail investors and bear a
distribution fee. Class R shares are sold primarily to bank trust depart-
ments and other financial service providers (including Mellon and its af-
filiates) acting on behalf of customers having a qualified trust or in-
vestment account or relationship at such institution, and bear no distri-
bution fee. Each class of shares has identical rights and privileges
except with respect to distribution fees and voting rights on matters af-
fecting a single class. The following is a summary of significant account-
ing policies consistently followed by each Fund in the preparation of its
financial statements.
(A) PORTFOLIO VALUATION
Short-term investments with maturities of 60 days or less from the valua-
tion day are valued on the basis of amortized cost. Amortized cost valua-
tion involves valuing an instrument at its cost initially and thereafter
assuming a constant amortization to maturity of any discount or premium,
regardless of the effect of fluctuating interest rates on the market value
of the instrument.
(B) REPURCHASE AGREEMENTS
Each Fund may engage in repurchase agreement transactions. Under the terms
of a typical repurchase agreement, a Fund, through its custodian takes
possession of an underlying debt obligation, subject to an obligation of
the seller to repurchase, and the Fund to resell the obligation at an
agreed-upon price and time, thereby determining the yield during the
Fund's holding period. This arrangement results in a fixed rate of return
that is not subject to market fluctuations during the Fund's holding pe-
riod. The value of the collateral is at least equal at all times to the
total amount of the repurchase obligations, including interest. In the
event of counterparty default, the Fund has the right to use the collat-
eral to offset losses incurred. There is potential loss to a Fund in the
event the Fund is delayed or prevented from exercising its rights to dis-
pose of the collateral securities including the risk of a possible decline
in the value of the underlying securities during the period while the Fund
seeks to assert its rights. Each Fund's investment manager, acting under
the supervision of the Board of Directors, reviews the value of the col-
lateral and the creditworthiness of those banks and dealers with which a
Fund enters into repurchase agreements to evaluate potential risks.
(C) SECURITY TRANSACTIONS AND INVESTMENT INCOME
Securities transactions are recorded as of the trade date. Interest income
is recorded on the accrual basis. Securities purchased or sold on a when-
issued or delay-delivery basis may be settled a month or more after the
trade date. Realized gains and losses from securities transactions are re-
corded on the identified cost basis. Investment income and realized and
unrealized gains and losses are allocated based upon relative daily net
assets of each class of shares.
(D) EXPENSE ALLOCATION
Expenses of a Fund not directly attributable to the operations of any
class of shares of the Fund are prorated between its classes based upon
the relative average daily net assets of each class. Distribution expense
is directly attributable to a particular class of shares and is charged
only to that class' operations.
(E) DIVIDENDS TO SHAREHOLDERS
Dividends from net investment income, if any, of a Fund are determined on
a class level and are declared daily and paid monthly. Additional distri-
butions of net investment income and capital gains for each Fund may be
made at the discretion of the Board of Directors in order to avoid the 4%
nondeductible federal excise tax. Income distributions and capital gains
distributions on a Fund level are determined in accordance with income tax
regulations which may differ from generally accepted accounting princi-
ples. These differences are primarily due to differing treatments of in-
come on various investment securities held by a Fund, timing differences
and differing characterization of distributions made by a Fund as a whole.
(F) FEDERAL INCOME TAXES
Each Fund intends to continue to qualify as a regulated investment company
by complying with the requirements of the Internal Revenue Code applicable
to regulated investment companies and by distributing substantially all of
its taxable income to its shareholders. Therefore, no federal income tax
provision is required.
2. INVESTMENT MANAGEMENT FEE, DIRECTORS' FEES AND
OTHER PARTY TRANSACTIONS
The Investment Company has entered into an investment management agreement
with The Dreyfus Corporation (the "Manager"), a wholly-owned subsidiary of
Mellon Bank, N.A. ("Mellon"). The Manager provides, or arranges for one or
more third parties to provide, investment advisory, administrative, cus-
tody, fund accounting and transfer agency services to the Investment Com-
pany. The Manager also directs the investments of each Fund in accordance
with its investment objectives, policies and limitations. For these ser-
vices, each Fund pays the Manager a fee, calculated daily and paid
monthly, at the annual rate of 0.50% of the value of each Fund's average
daily net assets. Out of its fee, the Manager pays all of the expenses of
each Fund except brokerage, taxes, interest, Rule 12b-1 distribution fees
and expenses, fees and expenses of non-interested directors (including
counsel fees) and extraordinary expenses. In addition, the Manager is re-
quired to reduce its fee in an amount equal to each Fund's allocable por-
tion of fees and expenses of the non-interested directors (including coun-
sel).
Premier Mutual Fund Services, Inc. ("Premier") serves as the Investment
Company's distributor. Premier also serves as the Investment Company's
sub-administrator and, pursuant to a sub-administration agreement with the
Manager, provides various administrative and corporate secretarial ser-
vices to the Investment Company.
No officer or employee of Premier (or of any parent, subsidiary or affili-
ate thereof) receives any compensation from the Investment Company, The
Dreyfus/Laurel Funds Trust, The Dreyfus/Laurel Tax-Free Municipal Funds or
The Dreyfus/Laurel Investment Series (collectively, "The Dreyfus/Laurel
Funds") for serving as an officer, Director or Trustee of The Dreyfus/Lau-
rel Funds. In addition, no officer or employee of the Manager (or of any
parent, subsidiary or affiliate thereof) serves as an officer, Director or
Trustee of The Dreyfus/Laurel Funds. The Dreyfus/Laurel Funds pay each Di-
rector or Trustee who is not an officer or employee of Premier (or of any
parent, subsidiary or affiliate thereof) or of the Manager, $27,000 per
annum, $1,000 for each Board meeting attended and $750 for each Audit Com-
mittee meeting attended, and reimburse each Director or Trustee for travel
and out-of-pocket expenses.
3. DISTRIBUTION PLAN
Each Fund has adopted a distribution plan (the "Plan") pursuant to Rule
12b-1 under the 1940 Act relating to its Investor shares. Under the Plan,
each Fund may pay up to 0.25% of the value of the average daily net assets
attributable to its Investor shares to compensate Dreyfus Service Corpora-
tion, an affiliate of the Manager, for shareholder servicing activities
and Premier for shareholder servicing activities and activities primarily
intended to result in the sale of Investor shares. Class R shares bear no
distribution fee.
Under its terms, the Plan shall remain in effect from year to year, pro-
vided such continuance is approved annually by a vote of a majority of
those Directors who are not "interested persons" of the Investment Company
and who have no direct or indirect financial interest in the operation of
the Plan or in any agreement related to the Plan.
4. SHARES OF CAPITAL STOCK
The Investment Company has authority to issue 25 billion shares of capital
stock with a par value of $.001. Each Fund has authority to issue two
classes of shares. The table below summarizes the transactions in Fund
shares. Because each Fund has sold shares, issued shares of reinvestments
of dividends and redeemed shares only at a constant net asset value of
$1.00 per share, the number of shares represented by such sales, reinvest-
ments and redemptions is the same as the amounts shown below for such
transactions.
DREYFUS/LAUREL PRIME MONEY MARKET FUND
<TABLE>
<CAPTION>
SIX MONTHS ENDED PERIOD ENDED
APRIL 30, 1995 OCTOBER 31, 1994*
<S> <C> <C>
INVESTOR SHARES:
Sold 177,258,498 6,781,761
Issued in exchange for shares of Dreyfus/Laurel Cash
Management Fund (Note 5) 209,866,862 --
Issued as reinvestment of dividends 4,242,794 31,002
Redeemed (224,219,698) (3,201,321)
Net increase 167,148,456 3,611,442
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1995 OCTOBER 31, 1994*
<S> <C> <C>
CLASS R SHARES:
Sold 127,022,031 214,477,712
Issued as reinvestment of dividends 1,830,199 2,593,570
Redeemed (118,215,263) (196,077,833)
Net increase 10,636,967 20,993,449
</TABLE>
DREYFUS/LAUREL U.S. TREASURY MONEY MARKET FUND
<TABLE>
<CAPTION>
SIX MONTHS ENDED PERIOD ENDED
APRIL 30, 1995 OCTOBER 31, 1994*
<S> <C> <C>
INVESTOR SHARES:
Sold 74,356,927 2,966,555
Issued in exchange for shares of Dreyfus/Laurel Gov-
ernment Money Fund (Note 5) 44,774,273 --
Issued as reinvestment of dividends 605,800 9,219
Redeemed (88,715,811) (1,652,274)
Net increase 31,021,189 1,323,500
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1995 OCTOBER 31, 1994*
<S> <C> <C>
CLASS R SHARES:
Sold 629,822,560 801,362,826
Issued as reinvestment of dividends 5,168,579 2,669,895
Redeemed (571,779,638) (645,020,921)
Net increase 63,211,501 159,011,800
</TABLE>
DREYFUS/LAUREL TAX-EXEMPT MONEY MARKET FUND
<TABLE>
<CAPTION>
SIX MONTHS ENDED PERIOD ENDED
APRIL 30, 1995 OCTOBER 31, 1994*
<S> <C> <C>
INVESTOR SHARES:
Sold 5,488,627 1,304,565
Issued in exchange for shares of Dreyfus/Laurel Tax-
Free Money Fund (Note 5) 21,402,629 --
Issued as reinvestment of dividends 316,109 9,953
Redeemed (7,663,319) (153,801)
Net increase 19,544,046 1,160,717
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1995 OCTOBER 31, 1994*
<S> <C> <C>
CLASS R SHARES:
Sold 359,363,269 639,468,498
Issued in exchange for shares of Dreyfus/Laurel Tax-
Free Money Fund (Note 5) 17,563,875 --
Issued as reinvestment of dividends 1,162,037 1,778,576
Redeemed (387,181,683) (623,970,062)
Net increase/(decrease) (9,092,502) 17,277,012
<FN>
* Dreyfus/Laurel Prime Money Market commenced selling Investor shares on
April 6, 1994, Dreyfus/Laurel U.S. Treasury Money Market commenced sell-
ing Investor shares on April 18, 1994 and Dreyfus/Laurel Tax-Exempt
Money Market commenced selling Investor shares on April 20, 1994. Those
shares outstanding prior to April 4, 1994, for the Dreyfus/Laurel Prime
Money Market, Dreyfus/Laurel U.S. Treasury Money Market, and Dreyfu-
s/Laurel Tax-Exempt Money Market Fund were designated as Class R shares
of the respective Fund.
</TABLE>
5. REORGANIZATIONS
On November 7, 1994, the Dreyfus/Laurel Prime Money Market Fund, Dreyfu-
s/Laurel U.S. Treasury Money Market Fund and the Dreyfus/Laurel Tax-Exempt
Money Market Fund (the "Acquiring Funds") acquired the assets and certain
liabilities of the Dreyfus/ Laurel Cash Management Fund, Dreyfus/Laurel
Government Money Fund and the Dreyfus/ Laurel Tax-Free Money Fund (the
"Acquired Funds") in exchange for shares of the Acquiring Funds, pursuant
to a plan of reorganization approved by the Acquired Funds' shareholders
on May 20, 1994. Total shares issued by the Acquiring Funds, the total net
assets of the Acquired Funds and the Acquiring Funds are as follows:
<TABLE>
<CAPTION>
TOTAL NET
SHARES TOTAL NET TOTAL NET ASSETS OF
ISSUED BY ASSETS OF ASSETS OF ACQUIRING
ACQUIRING ACQUIRED ACQUIRING ACQUIRED ACQUIRING FUND AFTER
FUND FUND FUND FUND FUND ACQUISITION
<S> <C> <C> <C> <C> <C>
Dreyfus/Laurel Dreyfus/Laurel 209,866,862 $209,866,862 $140,893,718 $350,763,086
Prime Money Cash Management
Market Fund Fund
Dreyfus/Laurel Dreyfus/Laurel 44,774,273 $44,774,273 $229,047,015 $273,830,785
U.S. Treasury Government
Money Market Fund Money Fund
Dreyfus/Laurel Dreyfus/Laurel 38,966,504 $38,966,504 $200,924,634 $239,891,898
Tax-Exempt Tax-Free
Money Market Fund Money Fund
</TABLE>
6. SUBSEQUENT EVENT
Effective June 9, 1995 the Fund's Board of Directors voted to change the
names of the following Dreyfus/Laurel Funds:
<TABLE>
<CAPTION>
CURRENT NAME NEW NAME
<S> <C>
Dreyfus/Laurel Prime Money Market Fund Dreyfus Money Market Reserves
Dreyfus/Laurel U.S. Treasury Money
Market Fund Dreyfus U.S. Treasury Reserves
Dreyfus/Laurel Tax-Exempt Money Market
Fund Dreyfus Municipal Reserves
</TABLE>
DEAR SHAREHOLDER,
We are pleased to provide you with the Dreyfus S&P 500 Stock Index Fund's
Semi-Annual Report for the six months ended April 30, 1995.
In the pages that follow, we have provided you with a description of the
market environment, a commentary on your Fund's investment management
strategy and detailed financial statements for the past six months.
As you know, the Fund has been integrated into The Dreyfus Family of
Funds. We hope that you found the transition from The Laurel Funds to The
Dreyfus Family of Funds to be a smooth one. The extended family of funds
now offers you more investment alternatives in addition to expanded ser-
vices and privileges to better serve your investment needs.
We would like to extend our appreciation for your support of The Dreyfus
Family of Funds and hope that the Fund will continue to satisfy your in-
vestment needs. As always, we welcome your thoughts and suggestions.
Sincerely,
Marie E. Connolly
President
The Dreyfus/Laurel Funds, Inc. --
Dreyfus S&P 500 Stock Index Fund
June 20, 1995
TABLE OF CONTENTS
Shareholder Letter 1
Economic Review 3
Portfolio Overview 4
Portfolio of Investments 5
Statement of Assets and Liabilities 24
Statement of Operations 25
Statement of Changes in Net Assets 26
Financial Highlights 27
Notes to Financial Statements 29
ECONOMIC REVIEW
GROWTH SLOWS BUT STRENGTH REMAINS
Over the past six months, the U.S. economy appeared to come in for the
"soft landing" desired by the Federal Reserve Board and so many econo-
mists. Home sales and housing activity slipped almost 20% from their 1994
peaks, while demand for housing-related and other big-ticket consumer
items like cars and trucks was, in total, off 2%. The Mexican economic
downturn also cut into exports; total shipments dipped 6% from their De-
cember peak.
The Federal Reserve Board deserves at least partial credit for the slow-
down. Higher interest rates do seem to have helped cool spending and to
have kept inflation in check. In fact, it was the economy's exuberance
early on that motivated the Fed to continue its anti-inflation policy by
raising short-term rates twice during the period, in November 1994 and
again in February 1995. By March, the economy appeared to be decelerating,
allowing the Fed to take no action at its mid-month meeting.
We expect that the dynamics of this demand slowdown will continue to de-
velop over the next several months as producers adapt their output to new
sales realities. Still, we believe the slowdown is temporary. Job and in-
come growth remain strong, and a rebound in consumer spending is probable.
In addition, businesses have initiated many new capital spending projects
that will stretch into next year or longer. Recent interest-rate declines
may boost housing activity. Many of our trading partners are in the capi-
tal spending phases of their economic expansions, which will support U.S.
capital goods exports. Finally, the bulk of the Mexican recession's de-
pressing effects on U.S. growth may be over by summer's end.
INFLATION MAY INCH UP
With a stabilizing economy and a vigilant Fed, we remain confident that
inflation will only inch higher in the coming months. Slowing in the in-
dustrial sector has already begun to alleviate commodity and intermediate
price pressures. Wage settlements remain modest, and benefits growth is
flattening. Nonetheless, inflation is rising a bit, and we expect a fur-
ther mild escalation once the economy picks up again.
STOCK MARKET RALLIES
After a fairly flat 1994, the first four months of 1995 heralded a strong
rally in the equities market. A bond market rally has helped equities sig-
nificantly, while the stabilizing economy, low inflation and strong corpo-
rate earnings have done the rest. In terms of sectors, leadership has ro-
tated frequently, although high tech has been a consistent winner. Health-
care stocks have rebounded due to Washington's lack of resolve on the
reform front. Financial stocks have also been strong, along with food and
beverage cyclicals. Cyclical industrial stocks have performed moderately,
while consumer/retail stocks have lagged. Takeover activity is up, and the
market remains somewhat volatile as investors watch the economy and the
Fed for signs of change.
CAUTIOUSLY OPTIMISTIC
Given the underlying strength in the economy, we believe that the present
slowdown is merely the "pause that refreshes." The economy's deceleration
has doused inflation fears for now, making the decline in the dollar so
far benign. Nonetheless, the dollar's skid has the potential to become
troublesome if it stimulates the economy in a way that makes global inves-
tors wary of buying U.S. securities while the dollar is falling. For now,
we must wait and watch for trends in the U.S. economy and in international
markets as well.
PORTFOLIO OVERVIEW
Although the six months ended April 30, 1995 proved somewhat challenging
for most equity mutual funds, Dreyfus S&P 500 Stock Index Fund weathered
the environment well. The Fund is structured to seek to match the total
return of the Standard & Poor's 500 Composite Stock Price Index (the "S&P
500 Index"), a broad index of stock market performance quoted widely in
the business press. In the recent semi-annual period, the Fund largely
succeeded in this objective, providing shareholders with returns that es-
sentially mirrored those of the S&P 500 Index.
For the six-months ended April 30, 1995, the Fund's Class R shares and In-
vestor shares posted total returns of 10.19%* and 10.08%*, respectively.
In contrast, the S&P 500 posted a total return of 10.46% for the same pe-
riod.
The semi-annual period was marked by continued growth in the U.S. economy,
albeit at a somewhat slower pace than in the previous six months. This
"pause" in growth refreshed the stock market, which rallied during the
first quarter of 1995. However, the market's strength was accompanied by
volatility. Sector performance shifted almost constantly, and even those
individual stocks that performed well found it difficult to ride the wave
of their success for long. High technology issues were a clear exception,
continuing their long run upward throughout the period.
* Total return represents the change during the period in a hypothetical
account with dividends reinvested.
PORTFOLIO OF INVESTMENTS (UNAUDITED)
DREYFUS S&P 500 STOCK INDEX FUND APRIL 30, 1995
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
<S> <C> <C>
COMMON STOCKS -- 97.5%
OIL & GAS -- 10.2%
19,798 Amoco Corporation $ 1,299,244
2,340 Ashland Oil, Inc. 86,580
6,298 Atlantic Richfield 721,121
5,720 Baker Hughes, Inc. 128,700
26,126 Chevron Corporation 1,237,719
4,049 Coastal Corporation 120,457
10,059 Enron Corporation 342,006
2,601 Enserch Corporation 44,867
49,676 EXXON Corporation 3,458,692
1,386 Foster Wheeler Corporation 51,282
4,617 Halliburton Company 177,177
1,042 Helmerich & Payne, Inc. 30,869
1,947 Kerr-McGee Corporation 101,001
1,305 Louisiana Land & Exploration Company 47,796
2,182 McDermott International, Inc. 60,005
15,801 Mobil Corporation 1,499,120
12,685 Occidental Petroleum Corporation 291,755
3,811 Oryx Energy Company 52,401
5,985 Panhandle Eastern Corporation 143,640
1,835 Pennzoil Company 89,686
10,465 Phillips Petroleum Company 366,275
21,536 Royal Dutch Petroleum 2,670,464
3,544 Santa Fe Energy Resources, Inc.+ 33,225
9,535 Schlumberger, Ltd. 599,513
3,484 Sonat, Inc. 105,828
4,274 Sun Company, Inc. 128,754
7,600 Tenneco, Inc. 348,650
10,444 Texaco, Inc. 714,108
9,670 Unocal Corporation 278,013
11,502 USX-Marathon Group 215,662
2,100 Western Atlas + 94,500
3,700 Williams Companies, Inc. 121,637
15,660,747
DRUGS & COSMETICS -- 8.4%
967 Alberto-Culver Company, Class B, 30,461
2,393 Allergan, Inc. 64,910
3,314 Alza Corporation+ 64,623
12,172 American Home Products Corporation 938,764
2,729 Avon Products, Inc. 172,609
6,000 Boston Scientific Corporation+ 163,500
20,359 Bristol Myers Squibb Company 1,325,880
2,103 Clorox Company 123,551
5,817 Colgate Palmolive Company 408,644
17,512 Columbia/HCA Healthcare Corporation 735,504
3,678 Dial Corporation 88,732
2,662 Ecolab, Inc. 61,226
8,894 Gillette Company 729,308
4,430 International Flavors & Fragrance, Inc. 227,591
11,708 Lilly (Eli) & Company 875,173
2,966 Mallinckrodt, Inc. 106,776
49,740 Merck & Company, Inc. 2,132,603
12,612 Pfizer, Inc. 1,092,515
2,452 Premark International, Inc. 118,309
27,488 Procter & Gamble Company 1,920,724
6,378 Rubbermaid, Inc. 188,151
7,320 Schering-Plough Corporation 551,745
1,900 Sigma-Aldrich Corporation 84,075
6,799 Upjohn Company 246,464
5,391 Warner Lambert Company 429,932
12,881,770
TELECOMMUNICATIONS -- 8.2%
62,800 AT&T Corporation 3,187,100
19,746 Airtouch Communications+ 530,674
7,600 Alltel Corporation 188,100
22,086 Ameritech Corporation 993,870
17,474 Bell Atlantic Corporation 958,886
19,853 BellSouth Corporation 1,215,995
4,494 D.S.C. Communications Corporation+ 166,278
38,681 GTE Corporation 1,319,989
27,152 MCI Communications Corporation 590,556
16,877 Nynex Corporation 689,847
16,946 Pacific Telesis Group 523,208
24,005 Southwestern Bell Corporation 1,059,221
13,831 Sprint Corporation 456,423
18,812 U S West, Inc. 778,347
12,658,494
FOODS -- 6.4%
20,697 Archer Daniels Midland 377,720
1,200 Ball Corporation 41,100
3,161 Brunos, Inc. 38,722
10,011 Campbell Soup Company 513,064
50,900 Coca-Cola Company 2,958,563
9,942 Conagra, Inc. 330,572
5,918 CPC International, Inc. 346,942
6,199 General Mills, Inc. 378,139
2,332 Giant Food, Inc., Class A 62,673
9,576 Heinz (H.J.) Company 402,192
3,463 Hershey Foods Corporation 181,808
8,903 Kellogg Company 565,341
31,652 Pepsico, Inc. 1,317,515
3,400 Pioneer Hi-Bred International, Inc. 127,500
5,398 Quaker Oats Company 193,653
3,963 Ralston Purina Group 188,243
19,210 Sara Lee Corporation 535,479
7,343 Sysco Corporation 205,604
6,276 Unilever N.V. 838,631
4,710 Wrigley (W.M.) Jr. Company 209,006
9,812,467
OFFICE EQUIPMENT -- 6.1%
4,722 Amdahl Corporation+ 56,074
4,636 Apple Computer, Inc. 177,327
1,938 Autodesk, Inc. 66,013
5,584 Automatic Data Processing, Inc. 358,772
2,024 Avery Dennison Corporation 82,225
10,800 Cisco Systems, Inc. 430,650
10,507 Compaq Computer Corporation 399,266
6,458 Computer Associates International, Inc. 415,734
2,134 Computer Sciences Corporation 105,366
928 Cray Resh, Inc.+ 18,328
2,500 CUC International, Inc. 101,875
1,502 Data General Corporation+ 11,827
4,800 First Data Corporation 270,000
5,189 Honeywell, Inc. 200,425
1,788 Intergraph Corporation+ 19,221
23,369 International Business Machines 2,214,213
1,796 Lotus Development Corporation+ 56,574
4,000 Micron Technology, Inc. 329,000
23,300 Microsoft Corporation 1,907,688
3,831 Moore Corporation, Ltd. 75,662
14,748 Novell, Inc.+ 320,769
17,190 Oracle Systems Corporation 524,295
6,180 Pitney Bowes, Inc. 229,432
951 Shared Medical Systems Corporation 35,900
5,600 Silicon Graphics, Inc. 210,000
3,763 Sun Microsystems, Inc. 150,050
4,554 Tandem Computers, Inc. 58,063
6,883 Unisys Corporation 70,551
4,118 Xerox Corporation 507,029
9,402,329
ELECTRONIC TECHNOLOGY -- 5.4%
4,263 Advanced Micro Devices, Inc.+ 153,467
3,577 Amerada Hess Corporation 181,086
8,350 AMP, Inc. 356,962
1,519 Andrew Corporation 75,191
3,400 Applied Materials, Inc. 209,525
9,081 Corning, Inc. 303,078
5,857 Digital Equipment Corporation 270,154
1,286 E-System, Inc. 82,143
3,061 Eaton Corporation 175,625
2,167 EG&G, Inc. 36,568
1,581 Harris Corporation 74,307
20,370 Hewlett Packard Company 1,346,966
16,644 Intel Corporation 1,703,930
3,252 Loral Corporation 152,844
1,063 M/A-COM, Inc.+ 12,357
23,490 Motorola, Inc. 1,335,994
5,035 National Semiconductor Corporation+ 115,176
10,065 Northern Telecom, Ltd. 366,114
1,647 Perkin Elmer Corporation 51,263
4,831 Raytheon Company 351,455
1,073 Tektronix, Inc. 48,822
25,262 Tele-Communications, Class A+ 483,136
2,098 Teledyne, Inc. 51,663
3,610 Texas Instruments, Inc. 382,660
1,850 Zenith Electronics Corporation+ 13,875
8,334,361
BANKING -- 5.1%
15,890 Banc One Corporation 468,755
4,143 Bank Of Boston Corporation 138,791
7,600 Bank Of New York Corporation 249,850
15,017 BankAmerica Corporation 743,342
3,088 Bankers Trust, New York Corporation 167,524
3,913 Barnett Banks Inc. 182,932
4,986 Boatmen's Bancshares Inc. 165,785
7,050 Chase Manhattan Corporation 308,438
9,836 Chemical Banking Corporation 410,653
15,840 Citicorp 734,580
5,762 CoreStates Financial Corporation 187,985
3,533 First Chicago Corporation 195,198
3,097 First Fidelity Bancorp 149,430
3,223 First Interstate Bancorp 247,768
6,862 First Union Corporation 310,506
5,376 Great Western Financial Corporation 113,568
5,740 MBNA Corporation 173,635
7,587 Morgan (J.P.) & Company, Inc. 497,897
6,416 NBD Bancorp, Inc. 196,490
6,000 National City Corporation 164,250
11,066 NationsBank Corporation 553,300
12,436 Norwest Corporation 329,554
9,323 PNC Financial Corporation 234,240
4,833 Shawmut National Corporation 128,074
4,756 SunTrust Banks, Inc. 258,013
6,700 Wachovia Corporation 235,337
2,013 Wells Fargo & Company 333,906
7,879,801
MERCHANDISING -- 4.7%
10,220 Albertsons, Inc. 323,207
5,932 American Stores Company 152,008
4,124 Charming Shoppes, Inc. 22,424
2,816 Dayton-Hudson Corporation 189,023
4,514 Dillard Department Stores, Class A 116,800
1,477 Fleming Companies, Inc. 35,817
5,773 Gap, Inc. 184,014
1,506 Great Atlantic & Pacific Tea Company, Inc. 37,838
18,281 K Mart Corporation 253,649
4,714 Kroger Company + 120,207
14,338 Limited, Inc. 306,475
851 Longs Drug Stores Corporation 28,828
9,959 May Department Stores Compamy 361,014
4,067 Melville Corporation 145,395
1,498 Mercantile Stores Company, Inc. 66,286
3,202 Nordstrom, Inc. 123,277
9,272 Penney (J.C.) Company, Inc. 405,650
2,337 Pep Boys -- Manny Moe & Jack 60,178
7,879 Price/Costco, Inc.+ 115,230
3,337 Rite Aid Corporation 77,585
15,515 Sears Roebuck & Company 841,689
2,714 Super Value, Inc. 71,582
2,965 Tandy Corporation 146,767
2,834 TJX Companies, Inc. 32,591
11,135 Toys "R" Us. Inc.+ 281,159
91,969 Wal-Mart Stores, Inc. 2,184,264
4,904 Walgreen Company 230,488
4,191 Whitman Corporation 76,486
2,912 Winn Dixie Stores, Inc. 161,252
5,270 Woolworth Corporation 84,320
7,235,503
PUBLIC UTILITY -- 4.0%
7,355 American Electric Power, Inc. 240,876
5,929 Baltimore Gas & Electric 140,073
6,280 Carolina Power & Light Company 172,700
7,581 Central & Southwest Corporation 186,682
6,253 Cinergy Corporation. 157,107
1,872 Columbia Gas Systems, Inc.+ 55,224
9,413 Consolidated Edison Company, Inc. 261,211
3,642 Consolidated Natural Gas Company 143,404
5,879 Detroit Edison Company 166,082
6,907 Dominion Resources, Inc. 252,105
8,204 Duke Power Company 324,058
9,086 Entergy Corporation 197,621
7,552 FPL Group, Inc. 277,536
4,600 General Public Utility Corporation 131,100
5,293 Houston Industries, Inc. 209,074
5,821 Niagara Mohawk Power Corporation 80,766
2,009 Nicor, Inc. 49,723
4,859 Noram Energy 29,761
2,600 Northern States Power Company 115,050
6,120 Ohio Edison Company 123,165
1,077 Oneok, Inc. 20,598
3,186 Pacific Enterprises 78,455
17,290 Pacific Gas & Electric Company 464,669
11,342 PacifiCorp 215,498
8,969 PECO Energy Company 230,952
1,385 Peoples Energy Corporation 34,971
9,765 Public Service Enterprise Group, Inc. 268,538
17,887 SCE Corporation 299,607
26,294 Southern Company 542,314
9,040 Texas Utilities Company 294,930
8,570 Unicom Corporation 224,963
4,145 Union Electric Company 147,666
6,136,479
ELECTRICAL EQUIPMENT -- 3.6%
3,766 Circuit City Stores, Inc. 97,445
4,700 Cooper Industries, Inc. 183,300
8,879 Emerson Electric Company 597,113
68,478 General Electric Company 3,834,767
1,993 Grainger (W.W.), Inc. 120,576
4,318 Maytag Corporation 74,485
1,606 Raychem Corporation 57,214
2,980 Scientific Atlanta, Inc. 67,795
689 Thomas & Betts Corporation 43,924
3,136 Tyco Laboratories, Inc. 164,640
14,345 Westinghouse Electric Corporation 215,175
2,905 Whirlpool Corporation 159,049
5,615,483
CHEMICALS & FERTILIZERS -- 3.6%
4,485 Air Products & Chemicals, Inc. 225,932
2,210 Alco Standard Corporation 156,634
5,309 Amgen, Inc. 385,898
10,967 Dow Chemical Company 762,206
21,011 du Pont (E.I.) de Nemours & Company 1,384,100
3,216 Eastman Chemical 182,508
3,676 Engelhard Corporation 141,066
853 First Mississippi Corporation 21,325
3,715 Grace (W.R.) & Company 199,217
2,742 Great Lakes Chemical Corporation 161,092
4,520 Hercules, Inc. 225,435
11,100 Laidlaw, Inc., Class B 99,900
4,707 Monsanto Company 391,858
5,744 Morton International, Inc. 178,064
2,693 Nalco Chemical Company 94,255
5,341 Praxair, Inc. 126,849
2,688 Rohm & Haas Company 156,240
6,011 Union Carbide Corporation 192,352
19,407 WMX Technologies, Inc. 528,841
5,613,772
MEDICAL SERVICES & SUPPLIES -- 3.2%
32,119 Abbott Laboratories 1,264,686
2,089 Bard (C.R.), Inc. 60,842
2,336 Bausch & Lomb, Inc. 90,520
11,344 Baxter International, Inc. 394,204
2,670 Becton Dickinson & Company 148,852
3,359 Beverly Enterprises, Inc. + 48,286
4,571 Biomet, Inc. + 79,993
1,576 Community Psychiatric Centers 20,882
25,746 Johnson & Johnson 1,673,490
2,496 Manor Care, Inc. 73,320
4,614 Medtronic, Inc. 343,166
995 Millipore Corporation 61,067
8,018 National Medical Enterprises, Inc.+ 136,306
1,822 St Jude Medical, Inc. 78,346
6,900 United Healthcare Corporation 250,125
6,400 U.S. Healthcare 171,200
2,209 U.S. Surgical Corporation 49,150
4,944,435
FINANCE -- 2.9%
4,555 Ahmanson (H.F.) & Company 95,655
19,794 American Express Company 687,841
2,080 Beneficial Corporation 84,760
6,818 Dean Witter, Discover & Company 288,913
10,954 Federal National Mortgage Association 966,691
7,217 Federal Home Loan Mortgage Corporation 470,908
5,449 Fleet Financial Group, Inc. 178,455
2,267 Golden West Financial Corporation 103,715
3,742 Household International Corporation 175,406
9,653 Keycorp 258,218
7,534 Merrill Lynch & Company, Inc. 342,797
4,083 Salomon, Inc. 147,498
12,771 Travelers, Inc. 528,400
3,801 U.S. Bancorp 105,003
4,434,260
INSURANCE -- 2.7%
4,497 Aetna Life & Casualty Company 256,329
8,094 American General Corporation 267,102
12,621 American International Group, Inc. 1,347,292
3,393 Chubb Corporation (The) 271,440
2,849 Cigna Corporation 206,909
2,177 Continental Corporation 42,996
3,216 General Reinsurance Corporation 409,637
1,911 Jefferson Pilot Corporation 108,449
3,783 Lincoln National Corporation 154,157
2,887 Marsh & McLennan Company 226,269
3,796 Providian Corporation 129,538
2,459 Safeco Corporation 138,933
3,400 St Paul's Companies, Inc. 163,625
2,941 Torchmark Corporation 114,699
2,828 Transamerica Corporation 160,136
2,800 UNUM Corporation 120,050
3,575 USF&G Corporation 52,731
813 USLIFE Corporation 30,894
4,201,186
AUTOMOTIVE -- 2.4%
14,157 Chrysler Corporation 610,521
1,598 Cummins Engine Company, Inc. 71,511
3,930 Dana Corporation 101,197
2,313 Echlin, Inc. 84,424
40,978 Ford Motor Company 1,106,406
30,183 General Motors Corporation 1,362,008
4,882 Genuine Parts Company 189,177
3,033 Navistar International Corporation+ 42,841
1,435 PACCAR, Inc. 66,010
436 SPX Corporation 5,941
3,640,036
METALS & MINING -- 2.0%
9,037 Alcan Aluminum, Ltd. 256,425
7,256 Aluminum Company Of America 325,613
14,000 American Barrick Resources Corporation 337,750
1,627 ASARCO, Inc. 44,336
3,694 Cyprus Minerals 102,970
4,516 Echo Bay Mines, Ltd. 42,902
5,501 Homestake Mining Company 92,829
4,708 Inco, Ltd. 121,820
16,834 Minnesota Mining & Manufacturing Company 1,003,727
320 Nacco Industries, Inc., Class A 17,720
3,317 Newmont Mining Corporation 138,899
2,719 Phelps Dodge Corporation 153,963
1,600 Pittston Services Group 38,000
9,472 Placer Dome, Inc. 224,960
2,529 Reynolds Metal Company 127,399
3,029,313
TOBACCO & VENDING -- 1.9%
7,931 American Brands, Inc. 321,206
34,077 Philip Morris Companies, Inc. 2,308,717
7,895 UST, Inc. 222,047
2,851,970
BUILDING MATERIALS -- 1.8%
1,498 Armstrong World Industries, Inc. 68,159
1,803 Boise Cascade Corporation 59,048
3,670 Champion International Corporation 161,480
1,236 Crane Company 42,951
3,554 Georgia Pacific Corporation 282,099
18,124 Home Depot, Inc. 756,677
4,345 Louisiana-Pacific Corporation 110,797
6,376 Lowes Companies, Inc. 184,107
6,388 Masco Corporation 162,894
1,682 Owens Corning Fiberglass Corporation+ 61,603
1,149 Potlatch Corporation 48,976
8,292 PPG Industries, Inc. 326,498
3,344 Sherwin Williams Company 119,130
8,176 Weyerhaeuser Company 343,392
2,727,811
PRINTING & PUBLISHING -- 1.6%
3,026 American Greetings Corporation, Class A 82,459
3,229 Deluxe Corporation 99,695
6,134 Donnelley (R.R.) & Sons Company 208,556
3,812 Dow Jones & Company, Inc. 133,420
6,800 Dun & Bradstreet Corporation 354,450
5,576 Gannett Company, Inc. 293,437
2,936 Harcourt General, Inc. 120,009
1,205 Harland (John H.) Company 26,811
2,153 Knight Ridder, Inc. 116,800
1,956 Mcgraw-Hill, Inc. 145,967
936 Meredith Corporation 23,400
3,881 New York Times Company 87,808
15,186 Time Warner, Inc. 556,187
5,041 Times Mirror Companies 91,368
2,582 Tribune Company 152,661
2,493,028
AEROSPACE & AVIATION -- 1.4%
13,683 Boeing Corporation 752,565
2,616 General Dynamics Corporation 121,317
9,228 Lockheed Martin 532,917
4,455 McDonnell Douglas Corporation 276,210
1,905 Northrop Corporation 94,536
4,811 United Technologies Corporation 351,804
2,129,349
MULTI-INDUSTRY -- 1.4%
11,296 Allied Signal, Inc. 447,604
1,970 Bemis, Inc. 54,667
5,100 Burlington Resources, Inc. 199,537
764 Eastern Enterprises 22,825
1,844 Fleetwood Enterprises, Inc. 42,412
1,391 FMC Corporation 85,373
4,282 ITT Corporation 447,469
8,667 Rockwell International Corporation 378,098
3,237 Rowan Companies, Inc.+ 22,254
3,443 Textron, Inc. 196,251
2,623 TRW, Inc. 195,086
431 Zurn Industries, Inc. 8,674
2,100,250
RAILROADS -- 1.2%
3,612 Burlington Northern, Inc. 214,914
3,128 Conrail, Inc. 170,867
4,046 CSX Corporation 322,163
1,816 General Signal Corporation 67,419
5,237 Norfolk Southern Corporation 352,843
6,022 Santa Fe Pacific Corporation 140,764
5,265 Santa Fe Pacific Gold Corporation+ 66,471
8,195 Union Pacific Corporation 449,701
1,785,142
MACHINERY & HEAVY EQUIPMENT -- 1.1%
3,397 Black & Decker Corporation 101,910
1,156 Briggs & Stratton Corporation 40,604
1,324 Cincinnati Milacron, Inc. 35,417
3,433 Deere & Company 281,506
7,346 Dresser Industrues, Inc. 160,694
1,372 Giddings & Lewis, Inc. 24,867
1,755 Harnischfeger Industries, Inc. 51,773
4,424 Illinois Tool Works 221,753
4,122 Ingersoll Rand Company 147,362
1,483 Johnson Controls, Inc. 80,453
4,438 Pall Corporation 103,738
1,852 Parker-Hannifin Corporation 96,304
2,199 Safety Kleen Corporation 37,383
1,596 Snap-On Tools Corporation 59,451
1,698 Stanley Works Company 67,283
1,251 Timken Company 50,509
1,151 Trinova Corporation 39,997
1,707 Varity Corporation+ 72,121
1,673,125
AMUSEMENT -- 1.1%
1,800 Bally Entertainment Corporation+ 18,675
3,700 Brunswick Corporation 79,087
20,784 Disney (Walt) Productions 1,150,914
1,297 Handleman Company 13,781
3,389 Hasbro, Inc. 107,601
1,733 Jostens, Inc. 34,877
8,887 Mattel, Inc. 211,066
847 Outboard Marine Corporation 18,740
434 Skyline Corporation 7,703
1,642,444
PAPER & FOREST PRODUCTS -- 1.1%
1,621 Federal Paper Board Company, Inc. 48,022
5,019 International Paper Company 386,463
3,395 James River Corporation 92,089
6,500 Kimberly-Clark Corporation 368,063
2,290 Mead Corporation 118,508
2,943 Scott Paper Company 262,295
2,206 Temple Inland, Inc. 97,064
2,809 Union Camp Corporation 140,801
2,570 Westvaco Corporation 107,940
1,621,245
HOTEL & RESTAURANT -- 1.0%
1,844 Hilton Hotels Corporation 140,836
1,000 Luby's Cafeterias, Inc. 19,000
5,013 Marriott International Corporation 180,468
28,058 McDonald's Corporation 982,030
4,139 Promus Companies, Inc.+ 159,351
1,040 Pulte Corporation 22,490
2,113 Ryans Family Steak Houses, Inc.+ 14,791
1,600 Shoney's, Inc.+ 18,400
4,094 Wendy's International, Inc. 69,598
1,606,964
BROADCASTING & ENTERTAINMENT -- 1.0%
6,210 Capital Cities/ABC. Inc. 524,745
2,520 CBS, Inc. 161,595
9,600 Comcast Corporation, Class K 151,200
1,490 King World Productions, Inc. 59,973
14,300 Viacom, Inc., Class B+ 656,012
1,553,525
BEVERAGE -- 0.7%
1,478 Adolph Coors Company, Class B 24,202
10,444 Anheuser-Busch Companies 607,058
2,706 Brown Forman Corporation, Class B 89,298
14,886 Seagram Company, Ltd. 403,783
1,124,341
CONSTRUCTION & MATERIALS HANDLING -- 0.6%
7,186 Caterpillar, Inc. 467,181
1,091 Centex Corporation 26,184
625 Clark Equipment Company+ 53,438
2,227 Dover Corporation 144,755
3,398 Fluor Corporation 174,997
1,249 Kaufman & Broad Corporation 16,393
1,313 Morrison Knudsen Corporation 10,340
893,288
BUSINESS SERVICES -- 0.6%
1,799 Alexander & Alexander Services, Inc. 42,951
4,082 Block (H&R), Inc. 171,954
7,907 Browing Ferris Industries, Inc. 260,931
1,807 Ceridian Corporation+ 62,342
3,102 Interpub Group Companies 117,876
517 JWP, Inc.+ 10
1,867 National Service Industries 52,743
1,990 Ogden Corporation 40,546
3,827 Service Corporation International 108,113
857,466
PHOTOGRAPHIC -- 0.5%
13,567 Eastman Kodak Company 780,103
1,767 Polaroid Corporation 60,078
840,181
AIR TRANSPORTATION -- 0.4%
3,032 AMR Corporation+ 204,281
1,966 Delta Air Lines, Inc. 128,527
2,201 Federal Express Corporation+ 149,668
5,700 Southwest Airlines Company 131,813
2,347 U S Air Group, Inc. 17,016
631,305
APPAREL AND TEXTILES -- 0.4%
734 Brown Group, Inc. 20,369
1,366 Hartmarx Corporation+ 7,513
2,924 Liz Claiborne, Inc. 52,632
2,827 Nike, Inc., Class B 216,619
543 Oshkosh B' Gosh, Inc., Class A 8,959
3,237 Reebok International, Ltd. 101,156
1,605 Russell Corporation 47,347
603 Springs Industries, Inc. 23,442
2,001 Stride Rite Corporation 23,762
2,462 V.F. Corporation 124,331
626,130
STEEL -- 0.3%
4,055 Armco, Inc.+ 28,385
4,423 Bethlehem Steel Corporation+ 62,475
1,838 Inland Steel Industries, Inc.+ 46,639
3,372 Nucor Corporation 161,856
2,950 USX-US Steel Group 89,975
3,457 Worthington Industries, Inc. 65,251
454,581
TIRE & RUBBER -- 0.2%
3,212 Cooper Tire & Rubber Company 78,694
1,035 Goodrich (B.F.) Company 48,257
6,098 Goodyear Tire & Rubber Company 231,724
358,675
CONTAINERS -- 0.1%
3,539 Crown Cork & Seal Company, Inc.+ 151,292
3,515 Stone Container Corporation+ 69,861
221,153
TRUCKING -- 0.1%
1,679 Consolidated Freightways, Inc.+ 42,815
1,644 Roadway Services, Inc. 79,734
3,108 Ryder System 72,649
1,082 Yellow Corporation 19,476
214,674
HOME FURNISHINGS -- 0.1%
439 Bassett Furniture Industries, Inc. 11,743
6,228 Newell Company 147,137
158,880
TOTAL COMMON STOCKS
(Cost $136,716,778) 150,045,963
PREFERRED STOCK -- 0.0% (Cost $272)
ELECTRONIC TECHNOLOGY -- 0.0%
18 Teledyne, Inc., Series E 259
PRINCIPAL
AMOUNT
U.S. TREASURY BILL -- 0.2% (Cost $263,397)
U.S. Treasury Bill,
$ 265,000 5.690% # due 6/8/95 263,298
REPURCHASE AGREEMENT -- 2.7%
(Cost $4,163,308)
Agreement with Goldman Sachs and Company,
5.920% dated 4/28/95, to be repurchased
at $4,165,362 on 5/1/95, collateralized
by $4,044,000 U.S. Treasury Bond, 7.625%
$4,163,308 due 2/15/25 $ 4,163,308
TOTAL INVESTMENTS
(Cost $141,143,755*) 100.4% 154,472,828
OTHER ASSETS AND LIABILITIES (NET) (0.4) (559,154)
NET ASSETS 100.0% $153,913,674
<FN>
* Aggregate cost for Federal tax purposes.
+ Non-income producing security.
# Represents annualized yield to maturity.
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE OF FUTURES CONTRACTS
NUMBER OF FUTURES CONTRACTS -- LONG POSITION
CONTRACTS (Cost $2,759,200)
<S> <C> <C>
11 S&P 500 Stock Index Future, June 1995 $ 2,842,125
</TABLE>
See Notes to Financial Statements.
STATEMENT OF ASSETS AND LIABILITIES
DREYFUS S&P 500 STOCK INDEX FUND APRIL 30, 1995 (UNAUDITED)
<TABLE>
<S> <C> <C>
ASSETS
Investments, at value (Cost $141,143,755)
(Note 1) See accompanying schedule $154,472,828
Cash 21,655
Dividends and interest receivable 247,078
Receivable for Fund shares sold 114,867
Receivable from investment advisor 40,185
Daily variation margin on open futures con-
tracts (Note 1) 7,975
TOTAL ASSETS 154,904,588
LIABILITIES
Payable for Fund shares redeemed $ 643,832
Payable for investment securities purchased 229,846
Investment management fee payable (Note 2) 94,026
Accrued Directors' fees and expenses (Note
2) 22,433
Distribution fee payable (Note 3) 777
TOTAL LIABILITIES 990,914
NET ASSETS $153,913,674
NET ASSETS consist of:
Undistributed net investment income $1,052,796
Accumulated net realized gain on securities
sold and futures contracts 361,954
Net unrealized appreciation of securities
and futures contracts 13,411,998
Par value 13,613
Paid-in capital in excess of par value 139,073,313
TOTAL NET ASSETS $153,913,674
NET ASSET VALUE
INVESTOR SHARES
Net asset value, offering and redemption
price per share ($4,805,261 / 425,344
shares of capital stock outstanding) $11.30
CLASS R SHARES
Net asset value, offering and redemption
price per share ($149,108,413 /
13,187,570 shares of capital stock out-
standing) $11.31
</TABLE>
See Notes to Financial Statements.
STATEMENT OF OPERATIONS
DREYFUS S&P 500 STOCK INDEX FUND
FOR THE SIX MONTHS ENDED APRIL 30, 1995 (UNAUDITED)
<TABLE>
<S> <C> <C>
INVESTMENT INCOME
Dividends $ 1,735,012
Interest 175,164
TOTAL INVESTMENT INCOME 1,910,176
EXPENSES
Investment management fee (Note 2) $253,508
Directors' fees and expenses (Note 2) 13,342
Distribution fee (Note 3) 1,828
TOTAL EXPENSES 268,678
NET INVESTMENT INCOME 1,641,498
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
(Notes 1 and 4):
Net realized gain on:
Securities transactions 105,537
Futures contracts 288,091
Net realized gain on investments during the
period 393,628
Net change in unrealized appreciation of:
Securities 11,978,609
Futures contracts 50,650
Net unrealized appreciation of investments
during the period 12,029,259
NET REALIZED AND UNREALIZED GAIN ON INVEST-
MENTS 12,422,887
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS $14,064,385
</TABLE>
See Notes to Financial Statements.
STATEMENT OF CHANGES IN NET ASSETS
DREYFUS S&P 500 STOCK INDEX FUND
<TABLE>
<CAPTION>
SIX
MONTHS YEAR
ENDED ENDED
4/30/95 10/31/94
(UNAUDITED)
<S> <C> <C>
Net investment income $ 1,641,498 $ 2,524,633
Net realized gain on securities and future
contracts during the period 393,628 479,171
Net unrealized appreciation on securities
and future contracts during the period 12,029,259 876,438
Net increase in net assets resulting from
operations 14,064,385 3,880,242
Distributions to shareholders from net in-
vestment income:
Investor shares (4,353) (1,186)
Class R shares (1,359,606) (1,772,327)
Distribution to shareholders from net real-
ized gain on investments:
Investor shares (2,114) --
Class R shares (508,850) (13,841)
Net increase in net assets from Fund share
transactions (Note 5):
Investor shares 4,215,247 380,301
Class R shares 13,133,936 97,897,647
Net increase in net assets 29,538,645 100,370,836
NET ASSETS:
Beginning of period 124,375,029 24,004,193
End of period (including undistributed net
investment income of $1,052,796 and
$775,257, respectively) $153,913,674 $124,375,029
</TABLE>
See Notes to Financial Statements.
FINANCIAL HIGHLIGHTS
DREYFUS S&P 500 STOCK INDEX FUND
FOR AN INVESTOR SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
<CAPTION>
SIX
MONTHS PERIOD
ENDED ENDED
4/30/95 10/31/94*+++
(UNAUDITED)
<S> <C> <C>
Net asset value, beginning of period $10.41 $ 9.78
Income from investment operations:
Net investment income 0.09 0.17
Net realized and unrealized gain on invest-
ments 0.94 0.59
Total from investment operations 1.03 0.76
Less distributions:
Distributions from net investment income (0.10) (0.13)
Distributions from net capital gains (0.04) --
Total distributions (0.14) (0.13)
Net asset value, end of period $11.30 $10.41
Total return++ 10.08% 7.86%
Ratios to average net assets/supplemental
data:
Net assets, end of period (in 000's) $4,805 $381
Ratio of operating expenses to average net
assets 0.65%** 0.65%**
Ratio of net investment income to average
net assets 2.21%** 2.13%**
Portfolio turnover rate 1% 13%
<FN>
* The Fund commenced selling Investor shares on April 18, 1994.
** Annualized.
++ Total return represents aggregate total return for the period indi-
cated.
+++ Prior to October 17, 1994, Mellon Bank, N.A. served as the Fund's in-
vestment manager.
Effective October 17, 1994, The Dreyfus Corporation serves as the
Fund's investment
manager.
</TABLE>
See Notes to Financial Statements.
FINANCIAL HIGHLIGHTS
DREYFUS S&P 500 STOCK INDEX FUND
FOR A CLASS R SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
<CAPTION>
SIX
MONTHS YEAR PERIOD
ENDED ENDED ENDED
4/30/95 10/31/94*+++ 10/31/93*
(UNAUDITED)
<S> <C> <C> <C>
Net asset value, beginning of period $10.42 $10.23 $10.00
Income from Operations:
Net investment income 0.13 0.21# 0.01
Net realized and unrealized gain on invest-
ments 0.91 0.14 0.22
Total from investment income 1.04 0.35 0.23
Less distributions:
Distributions from net investment income (0.11) (0.16) --
Distributions from net capital gains (0.04) (0.00)+ --
Total distributions (0.15) (0.16) --
Net asset value, end of period $11.31 $10.42 $10.23
Total return++ 10.19% 3.50% 2.30%
Ratios to average net assets/supplemental
data:
Net assets, end of period (in 000's) $149,108 $123,994 $24,004
Ratio of operating expenses to average net
assets 0.40%** 0.40%*** 0.40%**##
Ratio of net investment income to average
net assets 2.46%** 2.38% 1.32%**
Portfolio turnover rate 1% 13% 22%###
<FN>
* The Fund commenced operations on September 30, 1993. The Fund com-
menced selling Investor shares on April 18, 1994. Those shares out-
standing prior to April 4, 1994 were designated Trust shares. Effec-
tive October 17, 1994, the Fund's Trust shares were redesignated as
Class R shares.
** Annualized.
*** Annualized expense ratio before voluntary reimbursement of expenses
by the investment adviser for the year ended October 31, 1994 was
0.45%.
+ Amount represents less than $0.01.
++ Total return represents aggregate total return for the period indi-
cated.
+++ Prior to October 17, 1994, Mellon Bank, N.A. served as the Fund's in-
vestment manager.
Effective October 17, 1994, The Dreyfus Corporation serves as the
Fund's investment
manager.
# Net investment income before reimbursement of expenses by the invest-
ment adviser for the year ended October 31, 1994 was $0.21.
## For the period September 30, 1993 (commencement of operations) to Oc-
tober 31, 1993, the investment adviser reimbursed expenses of the
Fund amounting to $0.0103 per share.
### Turnover calculation does not include in-kind purchases amounting to
$22,472,314.
</TABLE>
See Notes to Financial Statements.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES
The Dreyfus/Laurel Funds, Inc. (the "Investment Company"), The Dreyfu-
s/Laurel Funds Trust, The Dreyfus/Laurel Tax-Free Municipal Funds and The
Dreyfus/Laurel Investment Series are all registered open-end investment
companies that are now part of The Dreyfus Family of Funds. The Investment
Company is a series mutual fund with 19 separate investment portfolios.
This report contains financial statements for the Dreyfus S&P 500 Stock
Index Fund (the "Fund"). The Investment Company was incorporated on August
6, 1987 as a Maryland corporation and is registered with the Securities
and Exchange Commission under the Investment Company Act of 1940, as
amended (the "1940 Act"), as a diversified, open-end management investment
company. The Fund is currently authorized to issue two classes of shares:
Investor shares and Class R shares. Investor shares are sold primarily to
retail investors through the Fund's distributor and financial intermediar-
ies and bear a distribution fee. Class R shares are sold primarily to bank
trust departments and other finanical service providers (including Mellon
Bank and its affiliates) acting on behalf of customers having a qualified
trust or investment account or relationship at such institution and bear
no distribution fee. Each class of shares has identical rights and privi-
leges except with respect to distribution fees and voting rights on mat-
ters affecting a single class. The following is a summary of significant
accounting policies consistently followed by the Fund in the preparation
of its financial statements in accordance with generally accepted account-
ing principals.
(A) PORTFOLIO VALUATION
Investments in securities which are traded on a national securities ex-
change are valued at the last reported sales price or, in the absence of a
recorded sale; at the mean of the latest bid and asked prices. Securities
traded over-the-counter are priced at the mean of the latest bid and asked
prices but will be valued at the last sale price if required by regula-
tions of the Securities and Exchange Commission. When market quotations
are not readily available, securities are valued at fair value as deter-
mined in good faith by the Board of Directors. Bonds are valued through
valuations obtained from a commercial pricing service or at the most re-
cent mean of the bid and asked prices provided by investment dealers in
accordance with procedures established by the Board of Directors. Debt se-
curities with maturities of 60 days or less are valued at amortized cost.
(B) REPURCHASE AGREEMENTS
The Fund may engage in repurchase agreement transactions. Under the terms
of a typical repurchase agreement, the Fund through its custodian, takes
possession of an underlying debt obligation, subject to an obligation of
the seller to repurchase, and the Fund to resell, the obligation at an
agreed-upon price and time, thereby determining the yield during the
Fund's holding period. This arrangement results in a fixed rate of return
that is not subject to market fluctuations during the Fund's holding pe-
riod. The value of the collateral is at least equal at all times to the
total amount of the repurchase obligations, including interest. In the
event of counterparty default, the Fund has the right to use the collat-
eral to offset losses incurred. There is potential loss to the Fund in the
event the Fund is delayed or prevented from exercising its rights to dis-
pose of the collateral securities including the risk of a possible decline
in the value of the underlying securities during the period while the Fund
seeks to assert its rights. The Fund's investment manager, acting under
the supervision of the Board of Directors, reviews the value of the col-
lateral and the creditworthiness of those banks and dealers with which the
Fund enters into repurchase agreements to evaluate potential risks.
(C) FUTURES CONTRACTS ACCOUNTING PRINCIPLES
The Fund may enter into futures contracts. Upon entering into a futures
contract, the Fund is required to deposit with the broker an amount of
cash or cash equivalents equal to a certain percentage of the contract
amount. This is known as the initial margin. Subsequent payments ("varia-
tion margin") are made or received by the Fund each day, depending on the
daily fluctuation of the value of the contract. The daily changes in the
contract are recorded as unrealized gains or losses. The Fund recognizes a
realized gain or loss when the contract is closed.
The use of futures contracts as a hedging device involves several risks.
The change in value of futures contracts primarily corresponds with the
value of their underlying instruments, which may not correlate with the
change in value of the hedged investments. In addition, the Fund may not
be able to enter into a closing transaction because of an illiquid second-
ary market.
(D) SECURITIES TRANSACTIONS AND INVESTMENT INCOME
Securities transactions are recorded as of the trade date. Dividend income
is recorded on the ex-dividend date. Interest income is recorded on the
accrual basis. Realized gains and losses from securities transactions are
recorded on the identified cost basis. Investment income and realized and
unrealized gains and losses are allocated based upon relative daily net
assets of each class of shares.
(E) EXPENSE ALLOCATION
Expenses of the Fund not directly attributable to the operations of any
class of shares are prorated between the classes based upon the relative
average daily net assets of each class. Distribution expense is directly
attributable to a particular class of shares and is charged only to that
class' operations.
(F) DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income, if any, of the Fund are determined
on a class level, are declared and paid four times yearly. The Fund dis-
tributes any net realized capital gains on a Fund level annually. Distri-
butions to shareholders are recorded on the ex-dividend date. Additional
distributions of net investment income and capital gains for the Fund may
be made at the discretion of the Board of Directors in order to avoid the
4.00% nondeductible federal excise tax. Income distributions and capital
gain distributions on a Fund level are determined in accordance with in-
come tax regulations which may differ from generally accepted accounting
principles. These differences are primarily due to differing treatments of
income and gains on various investment securities held by the Fund, timing
differences and differing characterization of distributions made by the
Fund as a whole.
(G) FEDERAL INCOME TAXES
It is the Fund's intention to qualify as a regulated investment company by
complying with the requirements of the Internal Revenue Code applicable to
regulated investment companies and by distributing substantially all of
its taxable income to its shareholders. Therefore, no Federal income tax
provision is required.
2. INVESTMENT MANAGEMENT FEE, DIRECTORS' FEES AND OTHER PARTY TRANSACTIONS
The Investment Company has an investment management agreement with The
Dreyfus Corporation (the "Manager"), a wholly-owned subsidiary of Mellon
Bank, N.A. ("Mellon Bank"). The Manager provides, or arranges for one or
more third parties to provide investment advisory, administrative, cus-
tody, fund accounting and transfer agency services to the Investment Com-
pany. The Manager also directs the investments of the Fund in accordance
with its investment objectives, policies and limitations. For these ser-
vices, the Fund is contractually obligated to pay the Manager a fee, cal-
culated daily and paid monthly, at the annual rate of 0.40% of the value
of the Fund's average daily net assets. Out of its fee, the Manager pays
all of the expenses of the Fund except brokerage fees, taxes, interest,
Rule 12b-1 distribution fees and expenses, fees and expenses of non- in-
terested directors (including counsel fees) and extraordinary expenses. In
addition, the Manager is required to reduce its fee in an amount equal to
the Fund's allocable portion of fees and expenses of the non-interested
directors (including counsel).
Premier Mutual Fund Services, Inc. ("Premier") serves as the Investment
Company's distributor. Premier also serves as the Investment Company's
sub-administrator and, pursuant to a sub-administration agreement with the
Manager, provides various administrative and corporate secretarial ser-
vices to the Investment Company.
No officer or employee of Premier (or of any parent, subsidiary or affili-
ate thereof) receives any compensation from the Investment Company, The
Dreyfus/Laurel Funds Trust, The Dreyfus/Laurel Tax-Free Municipal Funds
and The Dreyfus/Laurel Investment Series (collectively "The Dreyfus/Laurel
Funds") for serving as an officer, Director or Trustee of The Dreyfus/Lau-
rel Funds. In addition, no officer or employee of the Manager (or of any
parent, subsidiary or affiliate thereof) serves as an officer, Director or
Trustee of The Dreyfus/Laurel Funds. The Dreyfus/Laurel Funds pay each Di-
rector or Trustee who is not an officer or employee of Premier (or any
parent, subsidiary or affiliate thereof) or of the Manager, $27,000 per
annum, $1,000 for each Board meeting attended and $750 for each Audit Com-
mittee meeting attended, and reimburse each Director or Trustee for travel
and out-of-pocket expenses.
3. DISTRIBUTION PLAN
The Fund has adopted a distribution plan (the "Plan") pursuant to Rule
12b-1 under the 1940 Act relating to its Investor shares. Under the Plan,
the Fund may pay up annually to 0.25% of the value of the average daily
net assets attributable to its Investor shares to compensate Premier and
Dreyfus Service Corporation, an affiliate of the Manager, for shareholder
servicing activities and Premier for activities primarily intended to re-
sult in the sale of Investor shares. The Class R shares bear no distribu-
tion fee.
Under its terms, the Plan shall remain in effect from year to year, pro-
vided such continuance is approved annually by a vote of a majority of
those Directors who are not "interested persons" of the Investment Company
and who have no direct or indirect finanical interest in the operation of
the Plan or in any agreement related to the Plan.
4. SECURITIES TRANSACTIONS
Purchases and proceeds from sales of securities, excluding short-term in-
vestments and U.S. government securities for the six months ended April
30, 1995 were $19,040,917 and $826,646, respectively.
At April 30, 1995, aggregate gross unrealized appreciation for all securi-
ties in which there is an excess of value over tax cost and aggregate
gross unrealized depreciation for all securities in which there is an ex-
cess of tax cost over value were $18,845,304 and $5,516,231, respectively.
5. SHARES OF CAPITAL STOCK
The Investment Company has authority to issue 25 billion shares of capital
stock with a par value of $0.001. The table below summarizes the transac-
tions in Fund shares for the year or period indicated:
<TABLE>
<CAPTION>
SIX MONTHS ENDED PERIOD ENDED
APRIL 30, 1995 OCTOBER 31, 1994*
<S> <C> <C> <C> <C>
SHARES AMOUNT SHARES AMOUNT
INVESTOR SHARES:
Sold 469,515 $5,079,668 77,042 $ 775,958
Issued as reinvestment of dividends and
distributions 595 6,010 117 1,172
Redeemed (81,343) (870,431) (40,582) (396,829)
Net increase 388,767 $4,215,247 36,577 $380,301
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1995 OCTOBER 31, 1994*
<S> <C> <C> <C> <C>
SHARES AMOUNT SHARES AMOUNT
CLASS R SHARES:
Sold 2,462,699 $25,536,413 12,100,667 $123,501,816
Issued as reinvestment of dividends 183,705 1,857,676 177,979 1,784,732
Redeemed (1,362,220) (14,260,153) (2,720,889) (27,388,901)
Net increase 1,284,184 $13,133,936 9,557,757 $97,897,647
<FN>
* The Fund commenced selling Investor shares on April 18, 1994. Any shares
outstanding prior to April 4, 1994 were designated Class R shares.
</TABLE>
6. DIVIDENDS
On May 2, 1995, the Board of Directors declared a dividend from net in-
vestment income for the Investor and Class R shares in the amount of
$0.0683 and $0.0776 per share, respectively, payable on May 8, 1995 to
shareholders of record on May 1, 1995.
DEAR SHAREHOLDER,
We are pleased to provide you with the Premier Balanced Fund's Semi-Annual
Report for the six months ended April 30, 1995.
In the pages that follow, we have provided you with a description of the
market environment, a commentary on your Fund's investment management
strategy and detailed financial statements for the past six months.
As you know, the Fund has been integrated into The Dreyfus Family of
Funds. We hope that you found the transition from The Laurel Funds to The
Dreyfus Family of Funds to be a smooth one. The extended family of funds
now offers you more investment alternatives in addition to expanded ser-
vices and privileges to better serve your investment needs.
We would like to extend our appreciation for your support of The Dreyfus
Family of Funds and hope that the Fund will continue to satisfy your in-
vestment needs. As always, we welcome your thoughts and suggestions.
Sincerely,
Marie E. Connolly
President
The Dreyfus/Laurel Funds, Inc. --
Premier Balanced Fund
June 20, 1995
TABLE OF CONTENTS
Shareholder Letter 1
Economic Review 3
Portfolio Overview 4
Portfolio of Investments 5
Statement of Assets and Liabilities 14
Statement of Operations 16
Statement of Changes in Net Assets 17
Financial Highlights 18
Notes to Financial Statements 21
ECONOMIC REVIEW
GROWTH SLOWS BUT STRENGTH REMAINS
Over the past six months, the U.S. economy appeared to come in for the
"soft landing" desired by the Federal Reserve Board and so many econo-
mists. Home sales and housing activity slipped almost 20% from their 1994
peaks, while demand for housing-related and other big-ticket consumer
items like cars and trucks was, in total, off 2%. The Mexican economic
downturn also cut into exports; total shipments dipped 6% from their De-
cember peak.
The Federal Reserve Board deserves at least partial credit for the slow-
down. Higher interest rates seem to have helped cool spending and to have
kept inflation in check. In fact, it was the economy's exuberance early on
that motivated the Fed to continue its anti-inflation policy by raising
short-term rates twice during the period, in November 1994 and again in
February 1995. By March, the economy appeared to be decelerating, allowing
the Fed to take no action at its mid-month meeting.
We expect that the dynamics of this demand slowdown will continue to de-
velop over the next several months as producers adapt their output to new
sales realities. Still, we believe the slowdown is temporary. Job and in-
come growth remain strong, and a rebound in consumer spending is probable.
In addition, businesses have initiated many new capital spending projects
that will stretch into next year or longer. Recent interest-rate declines
may boost housing activity. Many of our trading partners are in the capi-
tal spending phases of their economic expansions, which will support U.S.
capital goods exports. Finally, the bulk of the Mexican recession's de-
pressing effects on U.S. growth may be over by summer's end.
INFLATION MAY INCH UP
With a stabilizing economy and a vigilant Fed, we remain confident that
inflation will only inch higher in the coming months. Slowing in the in-
dustrial sector has already begun to alleviate commodity and intermediate
price pressures. Wage settlements remain modest, and benefits growth is
flattening. Nonetheless, inflation is rising a bit, and we expect a fur-
ther mild escalation once the economy picks up again.
STOCK MARKET RALLIES
After a fairly flat 1994, the first four months of 1995 heralded a strong
rally in the equities market. A bond market rally has helped equities sig-
nificantly, while the stabilizing economy, low inflation, and strong cor-
porate earnings have done the rest. In terms of sectors, leadership has
rotated frequently, although high tech has been a consistent winner.
Healthcare stocks have rebounded since the collapse of the Clinton health
reform program. Financial stocks have also been strong, along with food
and beverage issues. Cyclical industrial stocks have performed moderately,
while consumer/retail stocks have lagged. Takeover activity is up, and the
market remains somewhat volatile as investors watch the economy and the
Fed for signs of change.
BOND INVESTORS RECOUP
What a difference a new year can make. For much of 1994, fixed-income mar-
kets were turned upside down by the Federal Reserve Board's tighter U.S.
monetary policy and investor fears of inflation -- all brought about by
rapid economic growth. Then in the first quarter of
1995, a reprieve as fixed-income markets began to rally. Several changes
contributed to this welcome turn of events. First, investors finally
gained confidence in the Fed's anti- inflation policy just as some eco-
nomic weakness began to emerge. Meanwhile the Mexican economic crisis ap-
peared to moderate somewhat, and with the help of international central
banks, the falling U.S. dollar recovered some ground. The outcome was a
market rally that enabled many bond investors to recoup losses sustained
during 1994.
CAUTIOUSLY OPTIMISTIC
Given the underlying strength in the economy, we believe that the present
slowdown is merely the "pause that refreshes." The economy's deceleration
has doused inflation fears for now, making the decline in the dollar so
far benign. Nonetheless, the dollar's skid has the potential to become
troublesome if it makes global investors wary of buying U.S. securities
while the dollar is falling. For now, we must wait and watch for trends in
the U.S. economy and in international markets as well.
PORTFOLIO OVERVIEW
The Fund achieved a total return of 6.30%* for its Class A shares and
6.41% for its Class R shares during the six-month fiscal period ended
April 30, 1995. The Class B shares posted a total return of 8.50%* for the
period from inception (December 19, 1994) through April 30, 1995. This
compares with an average total return of 6.41% for all balanced funds
tracked by Lipper Analytical Services, Inc. for the same time span.
In January, as the bond market began rising, management reduced the equity
exposure. By late March, the balance between equities and bonds stood at
45%/55%. In April, as the stock market moved up, we boosted the equity
portion of the portfolio to its "normal" level of 60% for this Fund, and
since April, we have been raising the equity allocation toward an objec-
tive of 75%.
In the equity portfolio, prime holdings were in energy, health care, com-
munications, capital goods, consumer stocks, chemicals and technology com-
panies.
In most industry categories, the Fund was roughly in line with industry
weightings of the Standard & Poor's 500 Composite Stock Price Index. How-
ever, we were somewhat overweighted in consumer cyclical stocks and under-
weighted in consumer staples, metals and mining. The median market capi-
talization of stocks in the Fund's portfolio was notably smaller than in
the S&P 500 Index.
As stated above, we are now emphasizing equities. However, we are always
geared to make changes in allocation of assets should market conditions
make that advisable.
* Total return represents the change during the period in a hypothetical
account with dividends reinvested, without taking into account the maxi-
mum front-end sales load of 4.5% in the case of Class A shares and the
applicable contingent deferred sales charge imposed on redemptions in
the case of Class B shares which became effective on December 19, 1995.
With the sales charge or CDSC the total return, for the same period,
would have been 1.52% for Class A shares and 4.50% for Class B shares.
PORTFOLIO OF INVESTMENTS (UNAUDITED)
PREMIER BALANCED FUND APRIL 30, 1995
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
<S> <C> <C>
COMMON STOCKS -- 62.3%
CONSUMER BASICS -- 12.5%
13,200 Abbott Laboratories $ 519,750
6,300 Amgen, Inc. 457,931
34,500 Archer Daniels Midland 629,625
20,100 Coca-Cola Company 1,168,313
11,100 ConAgra, Inc. 369,075
1,700 Hormel George & Company 46,538
3,900 IBP, Inc. 144,300
20,700 Johnson & Johnson 1,345,500
6,375 Mattel Inc. 151,406
12,300 McDonald's Corporation 430,500
2,700 Medtronic, Inc. 200,813
20,400 Merck & Company, Inc. 874,650
15,300 Mirage Resorts, Inc. 459,000
8,000 Pepsico, Inc. 333,000
5,700 Pfizer, Inc. 493,763
16,500 Philip Morris Companies, Inc. 1,117,875
5,400 Premark International, Inc. 260,550
3,600 Ralston Purina Company 171,000
11,700 Schering-Plough Corporation 881,888
10,800 Seagram Company 292,950
4,200 Tyson Foods, Inc., Class A 99,750
3,000 Unilever N.V. 400,875
10,849,052
TECHNOLOGY -- 8.3%
7200 Apple Computer, Inc. 275,400
5,600 Applied Materials Inc. 345,100
11,100 Computer Associates International, Inc. 714,563
5,100 Eaton Corporation 292,613
7,800 Harris Corporation 366,600
8,400 Hewlett-Packard Company 555,450
International Business Machines Corpora-
11,700 tion 1,108,575
16,200 Oracle Systems Corporation+ 494,100
3,300 Raytheon Company 240,075
6,900 Reynolds & Reynolds Company, Class A 182,850
8,400 Rockwell International Corporation 366,450
7,500 Tandy Corporation 371,250
8,100 Texas Instruments Inc. 858,600
8,100 Textron, Inc. 461,700
4,500 Xerox Corporation 554,063
7,187,389
ENERGY -- 6.6%
12,500 Amoco Corporation 820,312
3,300 Atlantic Richfield 377,850
15,600 Exxon Corporation 1,086,150
4,200 Halliburton Company 161,175
8,100 Mobil Corporation 768,488
15,900 Peco Energy Company 409,425
12,900 Royal Dutch Petroleum Company 1,599,600
14,100 Williams Companies, Inc. 463,538
5,686,538
UTILITIES -- 6.4%
28,800 Ameritech Corporation 1,296,000
16,800 BellSouth Corporation 1,029,000
16,800 Consolidated Edison Company, Inc. 466,200
5,400 DQE, Inc. 182,250
15,000 General Public Utilities Corporation 427,500
15,600 MCI Communications Corporation 339,300
11,400 Panhandle Eastern Corporation 273,600
17,700 Public Service Enterprise Group, Inc. 486,750
12,000 Southwestern Bell Corporation 529,500
9,300 Sprint Corporation 306,900
3,600 Teradyne Inc. 182,250
5,519,250
FINANCIAL SERVICES -- 5.9%
3,900 American National Insurance Company 247,650
6,300 Bank America Corporation 311,850
12,600 Bank of New York Company, Inc. 414,225
9,000 Chase Manhattan Corporation 393,750
15,300 Citicorp 709,538
8,700 Dean Witter Discover & Company 368,663
6,900 First Chicago Corporation 381,225
3,900 First Interstate Bancorp 299,813
8,400 First U.S.A., Inc. 357,000
7,500 MBNA Corporation 226,875
13,500 NationsBank Corporation 675,000
5,700 Transamerica Corporation 322,763
4,800 Travelers, Inc. 198,600
4,800 USLIFE Corporation 182,400
5,089,352
CONSUMER NON-DURABLES -- 4.9%
5,700 American Greetings Corporation, Class A 155,325
11,100 Champion International Corporation 488,400
17,700 Circuit City Stores, Inc. 457,988
2,100 Colgate Palmolive Company 147,525
5,100 Dilliard Department Stores, Class A 131,962
13,500 Federated Department Stores 285,188
5,100 Gillette Company 418,200
2,700 Goodyear Tire & Rubber 102,600
10,500 Newell Company 248,062
3,000 Nike Inc., Class B 229,875
2,700 Nordstrom Inc. 103,950
8,400 Rite Aid Corporation 195,300
14,700 Sears Roebuck & Company 797,475
4,800 V.F. Corporation 242,400
4,800 Wallgreen Company 225,600
4,229,850
CAPITAL GOODS -- 3.4%
5,100 Avnet, Inc. 226,950
7,200 Caterpillar Inc. 421,200
5,100 Cummins Engine, Inc. 228,225
5,700 Deere & Company 467,400
3,000 Dover Corporation 195,000
21,600 General Electric Company 1,209,600
4,200 Wellman, Inc. 113,400
2,861,775
ENTERTAINMENT -- 2.5%
1,800 ALC Communications Corporation 68,625
5,700 Capital Cities ABC Inc. 481,650
6,900 King World Productions 277,725
30,900 Pacific Telesis Group 954,038
7,200 Walt Disney Productions 398,700
2,180,738
TRANSPORTATION -- 2.3%
2,100 AMR Corporation 141,487
3,900 Conrail Inc. 213,038
3,300 Consolidated Freightways, Inc. 84,150
4,200 Federal Express Corporation+ 285,600
4,200 Harley Davidson Inc. 100,275
5,100 Illinois Central Corporation 179,136
9,312 Lockheed Martin 537,767
2,700 Northrop Corporation 133,988
11,700 Ryder System 273,488
1,948,929
CHEMICAL -- 2.2%
3,000 Cabot Corporation 117,750
4,800 Dow Chemical Company 333,600
8,700 Du Pont E I Nemours & Company 573,112
12,600 Eastman Chemical 715,050
5,100 Union Carbide Corporation 163,200
1,902,712
BASIC INDUSTRIES -- 1.9%
8,400 ASARCO, Inc. 228,900
2,700 Federal Paper Board Company 79,987
7,800 Inland Steel Industries 197,925
5,700 International Paper Company 438,900
3,600 Phelps Dodge Corporation 203,850
7,700 Philips N.V. 296,450
3,000 Reynolds Metal Company 151,125
2,100 Temple-Inland, Inc. 92,400
1,689,537
HEALTHCARE -- 1.5%
12,600 Baxter International Inc. 437,850
6,300 Becton Dickinson & Company 351,225
8,400 Cooper Industries, Inc. 327,600
5,400 U.S. Healthcare 144,450
1,261,125
CONSUMER DURABLES -- 1.2%
12,000 Chrysler Corporation 517,500
16,500 Ford Motor Company 445,500
1,500 Magna International, Class A+ 51,937
1,014,937
INSURANCE -- 1.1%
9,000 CIGNA Corporation 653,625
6,900 Exel Ltd. 313,950
967,575
CONSUMER SERVICES -- 0.8%
10,200 Manpower Inc. 340,425
9,600 Safeway, Inc.+ 360,000
700,425
BUILDING MATERIALS -- 0.5%
6,900 PPG Industries, Inc. 271,687
4,200 Weyerhaeuser Company 176,400
448,087
MINING -- 0.2%
6,300 Pittston Services Group
149,625
GENERAL BUSINESS -- 0.1%
3,600 Coastal Corporation 107,100
TOTAL COMMON STOCKS
(Cost $46,913,459) 53,793,996
</TABLE>
<TABLE>
<CAPTION>
ANNUALIZED
YIELD AT
PRINCIPAL DATE OF MATURITY VALUE
AMOUNT PURCHASE DATE (NOTE 1)
<S> <C> <C> <C> <C>
U.S. TREASURY OBLIGATIONS--19.5%
$ 700,000 U.S. Treasury Bills 5.690% 06/08/95 $ 695,637
200,000 U.S. Treasury Bills 5.125 12/31/98 189,206
COUPON
RATE
100,000 U.S. Treasury Bond 12.375 05/15/04 134,761
950,000 U.S. Treasury Notes 8.625 10/15/95 960,184
300,000 U.S. Treasury Notes 4.250 11/30/95 296,700
500,000 U.S. Treasury Notes 4.250 12/31/95 493,560
200,000 U.S. Treasury Notes 4.625 02/15/96 197,458
650,000 U.S. Treasury Notes 7.500 02/29/96 656,214
200,000 U.S. Treasury Notes 4.250 05/15/96 195,776
500,000 U.S. Treasury Notes 6.000 06/30/96 497,680
700,000 U.S. Treasury Notes 4.375 11/15/96 678,622
1,500,000 U.S. Treasury Notes 7.500 01/31/97 1,522,725
1,500,000 U.S. Treasury Notes 6.625 03/31/97 1,500,810
1,000,000 U.S. Treasury Notes 8.875 11/15/97 1,049,720
200,000 U.S. Treasury Notes 5.125 11/30/98 189,376
500,000 U.S. Treasury Notes 5.625 01/31/98 486,275
400,000 U.S. Treasury Notes 7.000 04/15/99 402,851
1,000,000 U.S. Treasury Notes 6.875 07/31/99 1,000,130
2,000,000 U.S. Treasury Notes 7.500 10/31/99 2,047,580
400,000 U.S. Treasury Notes 6.375 01/15/00 392,008
800,000 U.S. Treasury Notes 6.250 02/15/03 762,903
500,000 U.S. Treasury Notes 5.750 08/15/03 459,345
2,000,000 U.S. Treasury Notes 7.250 08/15/04 2,024,000
TOTAL U.S. TREASURY OBLI-
GATIONS
(Cost $16,925,255) 16,833,521
CORPORATE BONDS AND NOTES
-- 13.5%
FINANCIAL SERVICES -- 6.9%
250,000 American General Finance 6.625 06/01/97 248,125
Associates Corporation of
100,000 North America 7.500 05/15/99 100,500
AVCO Financial Services,
190,000 Inc. 7.500 11/15/96 191,900
Chemical Banking Corpora-
500,000 tion 8.625 05/01/03 526,875
Chrysler Financial Corpo-
1,000,000 ration 5.625 01/15/99 937,500
75,000 Commercial Credit Group 6.700 02/01/99 73,030
First Chicago Corporation,
800,000 Medium Term Note 6.830 09/08/97 794,000
150,000 First Chicago Corporation 9.875 08/15/00 165,000
Ford Motor Credit Corpora-
100,000 tion 5.625 12/15/98 95,125
General Motors Acceptance
500,000 Corporation 7.750 01/15/99 503,750
International Lease Fi-
100,000 nance Corporation 4.750 01/15/97 96,500
150,000 Norwest Financial, Inc. 7.000 01/15/03 145,500
Republic New York Corpora-
1,000,000 tion 9.750 12/01/00 1,105,000
Republic New York Corpora-
500,000 tion 7.750 05/15/02 507,500
500,000 Wells Fargo & Company 6.125 11/01/03 451,875
5,942,180
ENERGY -- 2.4%
500,000 BP North America 9.875 03/15/04 570,625
500,000 Texaco Capital, Inc. 6.875 07/15/99 490,625
1,000,000 WMX Technologies 8.125 02/01/98 1,025,000
2,086,250
UTILITIES -- 1.4%
Consolidated Edison Com-
150,000 pany, Inc. 6.375 04/01/03 139,875
125,000 Duke Power Company 7.500 04/01/99 126,405
500,000 Duke Power Company 6.125 07/22/03 457,500
Virginia Electric & Power
500,000 Company 7.250 03/01/97 503,125
1,226,905
BASIC INDUSTRY -- 1.3%
Aluminum Company of Amer-
100,000 ica 5.750 02/01/01 93,125
1,000,000 CSX Corporation 8.400 08/01/96 1,018,750
1,111,875
CONSUMER BASICS -- 1.2%
100,000 Heinz (H.J.) Company 6.875 01/15/03 97,250
1,000,000 Philip Morris Inc. 6.000 11/15/99 942,500
1,039,750
RETAIL -- 0.3%
175,000 Sears Roebuck Company 6.250 01/15/04 158,375
150,000 Wal-Mart Stores, Inc. 5.500 03/01/98 144,188
302,563
TOTAL CORPORATE BONDS AND
NOTES
(Cost $12,904,830) 11,709,523
U.S. AGENCY OBLIGATIONS --
1.6%
Federal Home Loan Mortgage
500,000 Association 5.400 11/01/00 452,755
Federal National Mortgage
1,000,000 Association 5.300 12/10/98 943,490
TOTAL U.S. AGENCY OBLIGA-
TIONS
(Cost $1,357,813 ) 1,396,245
REPURCHASE AGREEMENT -- 2.4%
(Cost $2,106,662)
Agreement with Goldman Sachs, dated
4/28/95 bearing 5.920%, to be repur-
chased at $2,107,701 on 5/01/95, col-
lateralized by $2,107,429 U.S. Treasury
$2,106,662 Bond, 7.625% due 02/15/25 $2,106,662
TOTAL INVESTMENTS (Cost $80,208,019*) 99.3% 85,839,947
OTHER ASSETS AND LIABILITIES (NET ) 0.7 581,910
NET ASSETS 100.0% $86,421,857
<FN>
* Aggregate cost for Federal tax purposes.
+ Non-income producing security.
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE OF FUTURE CONTRACTS
NUMBER OF FUTURES CONTRACTS -- LONG POSITION
CONTRACTS (COST $4,506,641)
<S> <C> <C>
11 2 Year U.S. Treasury Note Future, June 1995 $2,249,500
13 5 Year U.S. Treasury Note Future, June 1995 1,352,813
9 10 Year U.S. Treasury Note Future, June 1995 947,813
$4,550,126
</TABLE>
See Notes to Financial Statements.
STATEMENT OF ASSETS AND LIABILITIES
PREMIER BALANCED FUND APRIL 30, 1995 (UNAUDITED)
<TABLE>
<S> <C> <C>
ASSETS
Investments, at value (Cost $80,208,019)
(Note 1)
See accompanying schedule $85,839,947
Cash 86,414
Interest receivable 522,641
Dividends receivable 88,266
Receivable from investment advisor 39,792
Receivable for Fund shares sold 38,729
Receivable for investment securities sold 22,383
TOTAL ASSETS 86,638,172
LIABILITIES:
Investment management fee payable (Note 2) $140,506
Payable for Fund shares redeemed 52,994
Accrued Directors' fees and expenses (Note
2) 14,155
Daily variation margin on open future con-
tracts (Note 1) 4,891
Payable for investment securities purchased 2,727
Distribution fee payable (Note 3) 831
Service fee payable (Note 3) 211
TOTAL LIABILITIES 216,315
NET ASSETS $ 86,421,857
NET ASSETS consist of:
Undistributed net investment income $ 801,059
Accumulated net realized loss on invest-
ments sold (1,900,875)
Net unrealized appreciation of securities
and future contracts 5,675,413
Par value 8,136
Paid-in capital in excess of par value 81,838,124
TOTAL NET ASSETS $ 86,421,857
NET ASSET VALUE
CLASS A SHARES
Net asset value and redemption price per
share
($994,448 / 93,764 shares of capital
stock outstanding) $10.61
Maximum offering price per share ($10.61 /
0.955) (based on sales charge of 4.50% of
the offering price on April 30, 1995) $11.11
CLASS B SHARES
Net asset value and offering price per
share+ ($1,059,646 / 100,084 shares of
capital stock
outstanding) $10.59
CLASS C SHARES
Net asset value and offering price per
share+
($16.28 / 1.537 shares of capital stock
outstanding) $10.59
CLASS R SHARES
Net asset value, offering and redemption
price per share ($84,367,747 / 7,941,779
shares of capital stock outstanding) $10.62
<FN>
+ Redemption price per share is equal to net asset value less any applica-
ble contingent deferred sales charge.
</TABLE>
See Notes to Financial Statements.
STATEMENT OF OPERATIONS
PREMIER BALANCED FUND
FOR THE SIX MONTHS ENDED APRIL 30, 1995 (UNAUDITED)
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest $ 851,645
Dividends 734,178
TOTAL INVESTMENT INCOME 1,585,823
EXPENSES:
Investment management fee (Note 2) $ 400,625
Directors' fees and expenses (Note 2) 8,176
Distribution fee (Note 3) 5,165
Service fee (Note 3) 399
TOTAL EXPENSES 414,365
NET INVESTMENT INCOME 1,171,458
REALIZED AND UNREALIZED GAIN/(LOSS) ON IN-
VESTMENTS (Notes 1 and 4):
Net realized gain/(loss) on:
Securities transactions 639,833
Futures contracts (319,693)
Net realized gain on investments during
the period 320,140
Net change in unrealized appreciation
of:
Securities 3,953,961
Futures contracts 43,485
Net unrealized appreciation of invest-
ments during the period 3,997,446
NET REALIZED AND UNREALIZED GAIN ON INVEST-
MENTS 4,317,586
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS $ 5,489,044
</TABLE>
See Notes to Financial Statements.
STATEMENT OF CHANGES IN NET ASSETS
PREMIER BALANCED FUND
<TABLE>
<CAPTION>
SIX
MONTHS PERIOD
ENDED ENDED
4/30/95 10/31/94*
(UNAUDITED)
<S> <C> <C>
Net investment income $ 1,171,458 $ 1,412,756
Net realized gain/(loss) on securities and
futures contracts during the period 320,140 (2,221,015)
Net unrealized appreciation on securities
and futures contracts during the period 3,997,446 1,375,144
Net increase in net assets resulting from
operations 5,489,044 566,885
Distributions to shareholders from net in-
vestment income:
Class A (37,231) (4,401)
Class R (818,943) (971,670)
Net increase/(decrease) in net assets from
Fund share transactions (Note 5):
Class A (920,072) 1,781,199
Class B 1,013,942 --
Class C 16 --
Class R 4,170,760 47,248,223
Net increase in net assets 8,897,516 48,620,236
NET ASSETS:
Beginning of period 77,524,341 28,904,105
End of period (including undistributed net
investment income of $801,059 and
$485,775, respectively) $ 86,421,857 $ 77,524,341
<FN>
* The Fund commenced operations on September 15, 1993.
</TABLE>
See Notes to Financial Statements.
FINANCIAL HIGHLIGHTS
PREMIER BALANCED FUND
FOR A CLASS A SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
<CAPTION>
SIX
MONTHS PERIOD
ENDED ENDED
4/30/95 10/31/94*#
(UNAUDITED)
<S> <C> <C>
Net asset value, beginning of period $10.08 $9.73
Income from investment operations:
Net investment income 0.15 0.11
Net realized and unrealized gain on invest-
ments 0.48 0.34++
Total from investment operations 0.63 0.45
Less distributions:
Distributions from net investment income (0.10) (0.10)
Net asset value, end of period $10.61 $10.08
Total Return+ 6.30% 4.68%
Ratios to average net assets/supplemental
data:
Net assets, end of period (in 000's) $994 $1,798
Ratio of operating expenses to average net
assets 1.25%** 1.29%**
Ratio of net investment income to average
net assets 2.63%** 1.98%**
Portfolio turnover rate 37% 83%
<FN>
* The Fund commenced selling Investor Shares on April 14, 1994. On Octo-
ber 17, 1994, Investor Shares were redesignated as Class A Shares.
** Annualized.
+ Total return represents aggregate total return for the period indicated
and does not reflect any applicable sales charge.
++ The amount shown in this caption for each share outstanding throughout
the period may not accord with the change in the aggregate gains and
losses in the portfolio securities for the period because of the timing
of purchases and withdrawals of shares in relation to the fluctuations
market values of the portfolio.
# Prior to October 17, 1994, Mellon Bank, N.A. served as the Fund's in-
vestment manager. Effective October 17, 1994, The Dreyfus Corporation
serves as the Fund's investment manager.
</TABLE>
See Notes to Financial Statements.
FINANCIAL HIGHLIGHTS
PREMIER BALANCED FUND
FOR A CLASS B SHARE OUTSTANDING THROUGHOUT THE PERIOD.
<TABLE>
<CAPTION>
PERIOD
ENDED
4/30/95*
(UNAUDITED)
<S> <C>
Net asset value, beginning of period $9.76
Income from investment operations:
Net investment income 0.03
Net realized and unrealized gain on invest-
ments 0.80
Total from investment operations 0.83
Net asset value, end of period $10.59
Total Return+ 8.50%
Ratios to average net assets/supplemental
data:
Net assets, end of period (in 000's) $1,060
Ratio of operating expenses to average net
assets 2.00%**
Ratio of net investment income to average
net assets 1.88%**
Portfolio turnover rate 37%
<FN>
* The Fund commenced selling Class B shares on December 20, 1994.
** Annualized.
+ Total return represents aggregate total return for the period indicated
and does not reflect any applicable sales charge.
</TABLE>
See Notes to Financial Statements.
FINANCIAL HIGHLIGHTS
PREMIER BALANCED FUND
FOR A CLASS R SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
<CAPTION>
SIX
MONTHS YEAR PERIOD
ENDED ENDED ENDED
4/30/95 10/31/94+++ 10/31/93*
(UNAUDITED)
<S> <C> <C> <C>
Net asset value, beginning of period $10.09 $10.18 $10.00
Income from investment operations:
Net investment income 0.14 0.20** 0.02
Net realized and unrealized gain/(loss) on
investments 0.50 (0.13) 0.16
Total from investment operations 0.64 0.07 0.18
Less distributions:
Distributions from net investment income (0.11) (0.16) --
Net asset value, end of period $10.62 $10.09 $10.18
Total Return+ 6.41% 0.68% 1.80%
Ratios to average net assets/supplemental
data:
Net assets, end of period (in 000's) $84,368 $75,726 $28,904
Ratio of operating expenses to average net
assets 1.00%++ 1.04%*** 1.15%#++
Ratio of net investment income to average
net assets 2.88%++ 2.23% 1.96%++
Portfolio turnover rate 37% 83% --
<FN>
* The Fund commenced operations on September 15, 1993. On April 14,
1994, the Fund commenced selling Investor shares. Those shares out-
standing prior to April 14, 1994 were designated as Trust Shares. On
October 17, 1994, Trust Shares were redesignated as Class R shares.
** Net investment income before reimbursement of expenses by the invest-
ment adviser for the year ended October 31, 1994 was $0.2031.
*** Annualized expense ratio before voluntary reimbursement of expenses
by the investment adviser for the year ended October 31, 1994 was
1.09%.
+ Total return represents aggregate total return for the periods indi-
cated.
++ Annualized.
+++ Prior to October 17, 1994, Mellon Bank, N.A. served as the Fund's in-
vestment manager. Effective October 17, 1994, The Dreyfus Corporation
serves as the Fund's investment manager.
# For the period September 30, 1993 (commencement of operations) to Octo-
ber 31, 1993, the investment adviser reimbursed expenses of the Fund
amounting to $0.0109.
</TABLE>
See Notes to Financial Statements.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES
The Dreyfus/Laurel Funds, Inc. (the "Investment Company"), The Dreyfu-
s/Laurel Funds Trust, The Dreyfus/Laurel Tax-Free Municipal Funds and The
Dreyfus/Laurel Investment Series are all registered open-end investment
companies that are now part of The Dreyfus Family of Funds. The Investment
Company is a series mutual fund with 19 separate investment portfolios.
This report contains financial statements for the Premier Balanced Fund
(formerly known as Laurel Balanced Fund) (the "Fund"). The Investment Com-
pany was incorporated on August 6, 1987 as a Maryland corporation and is
registered with the Securities and Exchange Commission under the Invest-
ment Company Act of 1940, as amended (the "1940 Act"), as a diversified,
open-end management investment company. The Fund currently offers four
classes of shares: Class A, Class B, Class C and Class R shares. Class A,
Class B and Class C shares are sold primarily to the retail investors
through financial intermediaries and bear a distribution fee. Class A
shares are sold with a front-end sales charge, while Class B and Class C
shares are subject to a contingent deferred sales charge ("CDSC"). Class R
shares are sold primarily to bank trust departments and other financial
service providers (including Mellon Bank and its affiliates) acting on be-
half of customers having a qualified trust or investment account or rela-
tionship at such institution and bear no distribution fee. Each class of
shares has identical rights and privileges, except with respect to distri-
bution fees and voting rights on matters affecting a single class. The
following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements.
(A) PORTFOLIO VALUATION
Investments in securities traded on a national securities exchange are
valued at the last reported sales price or, in the absence of a recorded
sale, at the mean of the latest bid and asked prices. Over-the-counter se-
curities are valued at the mean of the latest bid and asked prices. When
market quotations are not readily available, securities are valued at fair
value as determined in good faith by the Board of Directors. Bonds are
valued through valuations obtained from a commercial pricing service or at
the most recent mean of the bid and asked prices provided by investment
dealers in accordance with procedures established by the Board of Direc-
tors. Investments in U.S. Government securities (other than short-term se-
curities) are valued at the most recent quoted bid price in the over-the-
counter market. Debt securities with maturities of 60 days or less are
valued at amortized cost.
(B) REPURCHASE AGREEMENTS
The Fund may engage in repurchase agreement transactions. Under the terms
of a typical repurchase agreement, the Fund, through its custodian, takes
possession of an underlying debt obligation, subject to an obligation of
the seller to repurchase, and the Fund to resell, the obligation at an
agreed-upon price and time, thereby determining the yield during the
Fund's holding period. This arrangement results in a fixed rate of return
that is not subject to market fluctuations during the Fund's holding pe-
riod. The value of the collateral is at least equal at all times to the
total amount of the repurchase obligations, including interest. In the
event of counterparty default, the Fund has the right to use the collat-
eral to offset losses incurred. There is potential loss to the Fund in the
event the Fund is delayed or prevented from exercising its rights to dis-
pose of the collateral securities including the risk of a possible decline
in the value of the underlying securities during the period while the Fund
seeks to assert its rights. The Fund's investment manager, acting under
the supervision of the Board of Directors, reviews the value of the col-
lateral and the creditworthiness of those banks and dealers with which the
Fund enters into repurchase agreements to evaluate potential risks.
(C) FUTURES CONTRACTS ACCOUNTING PRINCIPLES
The Fund may enter into futures contracts to hedge against fluctuations in
the value of its portfolio. Upon entering into a futures contract, the
Fund is required to deposit with the broker an amount of cash or cash
equivalents equal to a certain percentage of the contract amount. This is
known as the initial margin. Subsequent payments ("variation margin") are
made or received by the Fund each day, depending on the daily fluctuation
of the value of the contract. The daily changes in the contract are re-
corded as unrealized gains or losses. The Fund recognizes a realized gain
or loss when the contract is closed.
The use of futures contracts as a hedging device involves several risks.
The change in value of futures contracts primarily corresponds with the
value of their underlying instruments, which may not correlate with the
change in value of the hedged investments. In addition, the Fund may not
be able to enter into a closing transaction because of an illiquid second-
ary market.
(D) SECURITIES TRANSACTIONS AND INVESTMENT INCOME
Securities transactions are recorded as of the trade date. Dividend income
is recorded on the ex-dividend date. Interest income is recorded on the
accrual basis. Realized gains and losses from securities transactions are
recorded on the identified cost basis. Investment income and realized and
unrealized gains and losses are allocated based upon relative average
daily net assets of each class of shares.
(E) EXPENSE ALLOCATION
Expenses of the Fund not directly attributable to the operations of any
class of shares are prorated between the classes based upon the relative
average daily net assets of each class. Distribution expense is directly
attributable to a particular class of shares and is charged only to that
class' operations.
(F) DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income, if any, of the Fund are determined
on a class level, and are declared and paid four times yearly. The Fund
distributes any net realized capital gains on a Fund level annually. Dis-
tributions to shareholders are recorded on the ex-dividend date. Addi-
tional distributions of net investment income and capital gains for the
Fund may be made at the discretion of the Board of Directors in order to
avoid the 4.00% nondeductible federal excise tax. Income distributions and
capital gain distributions on a Fund level are determined in accordance
with income tax regulations which may differ from generally accepted ac-
counting principles. These differences are primarily due to differing
treatments of income and gains on various investment securities held by
the Fund, timing differences and differing characterization of distribu-
tions made by the Fund as a whole.
(G) FEDERAL INCOME TAXES
It is the Fund's intention to qualify as a regulated investment company by
complying with the requirements of the Internal Revenue Code applicable to
regulated investment companies and by distributing substantially all of
its taxable income to its shareholders. Therefore, no Federal income tax
provision is required.
2. INVESTMENT MANAGEMENT FEE, DIRECTORS' FEES AND OTHER PARTY TRANSACTIONS
The Investment Company has an investment management agreement with The
Dreyfus Corporation (the "Manager") a wholly-owned subsidiary of Mellon
Bank, N.A. ("Mellon Bank"). The Manager provides, or arranges for one or
more third parties to provide investment advisory, administrative, cus-
tody, fund accounting and transfer agency services to the Investment Com-
pany. The Manager also directs the investments of the Fund in accordance
with its investment objectives, policies and limitations. For these ser-
vices, the Fund is contractually obligated to pay the Manager a fee, cal-
culated daily and paid monthly, at the annual rate of 1.00% of the value
of the Fund's average daily net assets. Out of its fee, the Manager pays
all of the expenses of the Fund except brokerage fees, taxes, interest,
Rule 12b-1 distribution fees and expenses, fees and expenses of non- in-
terested directors (including counsel fees) and extraordinary expenses. In
addition, the Manager is required to reduce its fee in an amount equal to
the Fund's allocable portion of fees and expenses of the non-interested
directors (including counsel).
Premier Mutual Fund Services, Inc. ("Premier") serves as the Investment
Company's distributor. Premier also serves as the Investment Company's
sub-administrator and, pursuant to a sub-administration agreement with the
Manager, provides various administrative and corporate secretarial ser-
vices to the Investment Company.
No officer or employee of Premier (or of any parent, subsidiary or affili-
ate thereof) receives any compensation from the Investment Company, The
Dreyfus/Laurel Funds Trust, The Dreyfus/Laurel Tax-Free Municipal Funds or
The Dreyfus/Laurel Investment Series (collectively "The Dreyfus/Laurel
Funds") for serving as an officer, Director or Trustee of The Dreyfus/Lau-
rel Funds. In addition, no officer or employee of the Manager (or of any
parent, subsidiary of affiliate thereof), serves as an officer, Director
or Trustee of The Dreyfus/Laurel Funds. The Dreyfus/Laurel Funds pay each
Director or Trustee who is not an officer or employee of Premier (or any
parent, subsidiary or affiliate thereof), or of the Manager, $27,000 per
annum, $1,000 for each Board meeting attended and $750 per each Audit Com-
mittee meeting attended, and reimburses each Director or Trustee for
travel and out-of-pocket expenses.
3. DISTRIBUTION PLAN
Class A shares are subject to a distribution plan (the "Plan") adopted
pursuant to Rule 12b-1 of the 1940 Act. Under the Plan, the Fund may pay
annually up to 0.25% of its average daily net assets attributable to Class
A shares to compensate Premier and Dreyfus Service Corporation, an affili-
ate of the Manager, for shareholder servicing activities and Premier for
activities and expenses primarily intended to result in the sale of Class
A shares. Class B and Class C shares are subject to a distribution plan
adopted pursuant to Rule 12b-1, pursuant to which the Fund pays Premier
for distributing the Fund's Class B and C shares, at an aggregate annual
rate of 0.75% of the value of the average daily net assets of Class B and
C shares, respectively. Class B and Class C shares are also subject to a
service plan adopted pursuant to Rule 12b-1, pursuant to which the Fund
pays Dreyfus Service Corporation or Premier for providing certain services
to the holders of Class B and C shares a fee at the annual rate of 0.25%
of the value of the average daily net assets of Class B and C shares. For
the six months ended April 30, 1995, the distribution fees for Class A and
Class B were $3,967 and $1,198, respectively. For the six months ended
April 30, 1995, the service fees for Class B shares were $399. The Class R
Shares bear no service or distribution fee.
Under its terms, the Plan shall remain in effect from year to year, pro-
vided such continuance is approved annually by a vote of a majority of
those Directors who are not "interested persons" of the Investment Company
and who have no direct or indirect financial interest in the operation of
the plans or in any agreement related to the plans.
4. SECURITIES TRANSACTIONS
Purchases and proceeds from sales of securities, excluding short-term in-
vestments and U.S. government securities for the six months ended April
30, 1995 aggregated $22,506,478 and $27,390,051, respectively.
The cost of purchases and proceeds from sales of long-term U.S. government
securities for the six months ended April 30, 1995 aggregated $9,386,563
and $203,187, respectively.
At April 30, 1995, aggregate gross unrealized appreciation for all securi-
ties in which there is an excess of value over tax cost and aggregate
gross unrealized depreciation for all securities in which there is an ex-
cess of tax cost over value were $6,976,746 and $1,344,818, respectively.
5. SHARES OF CAPITAL STOCK
The Investment Company has authority to issue 25 billion shares of capital
stock with a par value of $.001. The Fund has authority to issue four
classes of shares (Class A, Class B, Class C and Class R). The table below
summarizes the transactions in Fund shares for the periods indicated.
<TABLE>
<CAPTION>
SIX MONTHS ENDED PERIOD ENDED
APRIL 30, 1995 OCTOBER 31, 1994*
SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
CLASS A SHARES:
Sold 517,913 $5,041,555 181,775 $1,814,500
Issued as reinvestment of dividends and
distributions 3,591 35,143 328 3,242
Redeemed (606,153) (5,996,770) (3,690) (36,563)
Net increase/(decrease) (84,649) $(920,072) 178,413 $1,781,199
</TABLE>
<TABLE>
<CAPTION>
PERIOD ENDED
APRIL 30, 1995***
SHARES AMOUNT
<S> <C> <C>
CLASS B SHARES:
Sold 100,084 $1,013,942
Net increase 100,084 $1,013,942
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS ENDED PERIOD ENDED
APRIL 30, 1995 OCTOBER 31, 1994**
SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
CLASS R SHARES:
Sold 1,405,268 $13,985,900 5,842,428 $58,817,291
Issued as reinvestment of dividends and
distributions 83,000 817,035 97,922 969,095
Redeemed (1,053,783) (10,632,175) (1,272,959) (12,538,163)
Net increase 434,485 $4,170,760 4,667,391 $47,248,223
<FN>
* On April 14, 1994, the Fund commenced selling Investor shares. On Oc-
tober 17, 1994 Investor shares were redesignated as Class A shares.
** The Fund commenced operations on September 15, 1993. On April 14,
1994, the Fund commenced selling Investor shares. Those shares out-
standing prior to April 14, 1994 were redesignated Trust shares. Ef-
fective October 17, 1994, Trust shares were redesignated as Class R
shares.
*** The Fund commenced selling Class B shares on December 20, 1994.
</TABLE>
As of April 30, 1995, the Fund had issued 1.537 Class C shares in the
amount of $16.28.
6. CAPITAL LOSS CARRY FORWARD
At October 31, 1994, the Fund had available for Federal income tax pur-
poses unused capital loss carryforwards of $2,187,496 expiring in the year
2002.
7. DIVIDENDS
On May 2, 1995, the Board of Directors declared dividends from net invest-
ment income for the Class A shares and Class R shares in the amount of
$0.0902 per share and $0.0850 per share, respectively, payable on May 8,
1995 to shareholders of record on May 1, 1995.
