DESCRIPTION OF ART WORK ON REPORT COVER
Small box above fund name showing a lions face.
DEAR SHAREHOLDER,
We are pleased to provide you with a review of the financial markets envi-
ronment as well as performance and portfolio activity information for the
Dreyfus S&P 500 Stock Index Fund for the year ended October 31, 1994.
As you know from recent correspondence, The Laurel Family of Funds is in-
tegrating with The Dreyfus Family of Funds. As part of this integration,
the Laurel S&P 500 Stock Index Fund is now known, and publicly listed, as
the Dreyfus S&P 500 Stock Index Fund. Please be assured that the new name
does not affect the value of your account or the investment objective or
strategy of your Fund. The integration is discussed in greater detail in
the notes to the financial statements of this report.
In the pages that follow, we have provided detailed financial statements
and a commentary on your Fund's investment management strategy and portfo-
lio changes for the reporting period.
We would like to extend our appreciation for your support and hope that
you will find that the Fund, which is now part of The Dreyfus Family of
Funds, will continue to satisfy your investment needs. As always, we wel-
come your thoughts and suggestions.
Sincerely,
Marie E. Connolly
Marie E. Connolly
President
Dreyfus S&P 500 Stock Index Fund
December 9, 1994
TABLE OF CONTENTS
Shareholder Letter 1
Economic Review 3
Portfolio Overview 4
Performance Summary 5
Portfolio of Investments 7
Statement of Assets and Liabilities 25
Statement of Operations 26
Statement of Changes in Net Assets 27
Financial Highlights 28
Notes to Financial Statements 30
Independent Auditors' Report 36
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK AND ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY. ALL
MUTUAL FUND SHARES INVOLVE CERTAIN INVESTMENT RISKS, INCLUDING THE POSSI-
BLE LOSS OF PRINCIPAL.
THE FUND IS DISTRIBUTED BY PREMIER MUTUAL FUND SERVICES, INC.
ECONOMIC REVIEW
One of the biggest news stories of the year -- business or otherwise --
was the rise in interest rates. This year's rise in rates was the most
dramatic in decades and sharply impacted the markets, the housing indus-
try, the growth of the economy and perhaps even had an effect on the out-
come of the November mid-term elections, held one week after the end of
the fiscal year.
On February 4, 1994, the Federal Reserve Board embarked on the first of
five interest rate hikes during the fiscal year ending October 31, 1994.
On November 15, 1994, the sixth and largest rate increase occurred. All
told, the Fed raised rates a total of 2.50 percentage points, nearly dou-
bling short-term rates from 3.00% to 5.50%.
At the same time, long-term interest rates rose in lock step to short-term
rates, creating havoc in the bond markets. Between October 31, 1993 and
October 31, 1994, the Lehman Brothers Treasury Bond Index fell 4.46%.
Stocks, as measured by the Standard & Poor's 500 Composite Stock Price
Index, performed better -- up 3.86% for the period. Stocks are influenced
by many factors, principally corporate earnings.
Despite rising interest rates throughout fiscal 1994, the economy grew at
a rate of 3.50%. Inflation is still a risk, but our 1995 outlook is still
under 3.50%. We expect the latest Fed action to slow the economy slightly
in 1995 to 3.00%. We also expect that inflation fears will ebb, and that
long-term interest rates will flatten out, which is good news for the bat-
tered bond market.
Recent overall growth rates understate the vigor in the private economy.
While Gross Domestic Product advanced at a rate of 3.70% in the first six
months of 1994, a 3.10% decline in the public sector masked a soaring
5.20% advance in the private economy.
Higher interest rates have taken some steam out of housing activity, but
rising job and income growth have proven to be powerful offsets. Moreover,
recent homebuyers are contributing to still-solid gains in consumer out-
lays for furniture and appliances. In addition, the rise in interest rates
has not yet dampened either consumers' desire to borrow or lenders' will-
ingness to supply credit.
However, two factors may dampen consumer optimism by early next year.
First, rising rates will increase monthly mortgage payments for consumers
holding adjustable rate mortgages. Those adjustable rate mortgages will
reset at rates approximately 2 percentage points higher than they carried
in 1994, taking $12-15 billion out of the spending stream by 1995. Thus,
housing and the consumer may shift away from starring roles in the expan-
sion of the economy. Second, exports and capital spending are taking cen-
ter stage, and should offset the effects of slower household spending
growth on economic performance. U.S. exports should benefit from the dol-
lar's 1994 weakness by taking advantage of overseas growth and increased
capital spending worldwide.
PORTFOLIO OVERVIEW
The Dreyfus S&P 500 Stock Index Fund seeks to fully replicate the total
return of The Standard & Poor's 500 Composite Stock Price Index (the
"benchmark"), a broad index of stock market performance quoted widely in
the business press. The 500 securities in the benchmark represent nearly
75% of the market value of all U.S. common stocks. The Fund's policy is to
purchase each and every stock in the index, with the present exception of
Mellon Bank Corporation stock.
For the year ended October 31, 1994, the benchmark posted a total return
of 3.92%. The Fund's Class R Shares' total return was 3.50% and the Fund's
Investor Class Shares (which commenced operations on April 18, 1994) had a
cumulative total return of 7.86% for the period ended October 31, 1994.
The benchmark had an aggregate total return of 6.32% for the period from
April 30, 1994 to October 31, 1994. While the S&P 500 Stock Index Fund is
a passive Fund, the goal of the Fund's management is to track the bench-
mark as closely as possible, and we hope to achieve that through replica-
tion of the Index with minimal transaction costs. As this was the first
full year of operation for the Fund, the Fund's management believes that
they were able to closely replicate the benchmark with a modest asset
base.
For the past year, the stock market has been hurt by rising interest rates
and the fear of inflation. The stock market was also hurt by a lack of
strong theme or direction. As rising interest rates continue to threaten
stock performance in 1995, we believe that the stock market remains one of
the best investments over the long term. And looking ahead to 1995, the
Fund's management believes that the increase in the asset size of the
Fund, coupled with the decision to use equity index futures while invest-
ing the Fund's assets, will enable the Fund to track the benchmark more
closely.
PERFORMANCE SUMMARY
DREYFUS S&P 500 STOCK INDEX FUND (UNAUDITED)
CHANGE IN VALUE OF $10,000 INVESTED FROM APRIL 18, 1994 -- OCTOBER 31,
1994+
DESCRIPTION OF MOUNTAIN CHART IN DREYFUS COVERS (INVESTOR SHARES)
A line graph depicting the total growth (including reinvestment of divi-
dends and capital gains) of a hypothetical investment of $10,000 in Drey-
fus S&P 500 Stock Index Fund Investor Shares from April 18, 1994 through
October 31, 1994 as compared with the growth of a $10,000 investment in
Standard & Poor's 500 Composite Stock Price Index. The plot points used to
draw the line graph were as follows:
<TABLE>
<CAPTION>
GROWTH OF $10,000
GROWTH OF $10,000 INVESTMENT IN THE
INVESTED IN INVESTOR STANDARD & POOR'S 500
MONTH ENDED SHARES OF THE FUND COMPOSITE STOCK PRICE INDEX
<S> <C> <C>
4/18/94 $10,000 --
4/94 $10,194 $10,000
5/94 $10,342 $10,163
6/94 $10,084 $ 9,914
9/94 $10,558 $10,398
10/94 $10,786 $10,631
</TABLE>
AGGREGATE TOTAL RETURN -- INVESTOR SHARES
Inception (4/18/94) through 10/31/94 7.86%
+ Hypothetical illustration of $10,000 invested in Investor Shares at in-
ception (April 18, 1994) and reinvestment of dividends and capital gains
at net asset value through October 31, 1994.
The Standard & Poor's 500 Composite Stock Price Index is an index com-
posed of 500 widely held common stocks listed on the New York Stock Ex-
change, American Stock Exchange and over-the-counter market. Because the
index is not a managed portfolio, there are no advisory fees or internal
management expenses reflected in the index's performance.
Index information is available at month-end only, therefore, the closest
month-end to inception date of the Fund has been used.
This period was one in which common stock prices fluctuated and the re-
sults should not be considered as representative of dividend income or
capital gain or loss which may be realized from an investment in the
Fund today. No adjustment has been made for a shareholder's tax liabil-
ity on dividends or capital gains.
NOTE: All figures cited here and on the following pages represent past
performance and do not guarantee future results. Investment return and
principal value of an investment will fluctuate so that an investor's
shares upon redemption may be worth more or less than original cost.
CHANGE IN VALUE OF $10,000 INVESTED FROM SEPTEMBER 30, 1993 -- OCTOBER 31,
1994+
DESCRIPTION OF MOUNTAIN CHART IN DREYFUS COVERS (CLASS R SHARES)
A line graph depicting the total growth (including reinvestment of divi-
dends and capital gains) of a hypothetical investment of $10,000 in Drey-
fus S&P 500 Stock Index Fund Class R Shares from September 30, 1993
through October 31, 1994 as compared with the growth of a $10,000 invest-
ment in Standard & Poor's 500 Composite Stock Price Index. The plot points
used to draw the line graph were as follows:
<TABLE>
<CAPTION>
GROWTH OF $10,000
GROWTH OF $10,000 INVESTMENT IN THE
INVESTED IN CLASS R STANDARD & POOR'S 500
MONTH ENDED SHARES OF THE FUND COMPOSITE STOCK PRICE INDEX
<S> <C> <C>
9/30/93 $10,000 $10,000
12/93 $10,261 $10,232
3/94 $10,321 $ 9,846
6/94 $10,136 $ 9,886
9/94 $10,354 $10,369
10/94 $10,588 $10,601
</TABLE>
AVERAGE ANNUAL TOTAL RETURN -- CLASS R SHARES (FORMERLY TRUST SHARES)
Year Ended 10/31/94 3.50%
Inception (9/30/93) through 10/31/94 5.42%
+ Hypothetical illustration of $10,000 invested in Class R Shares (for-
merly Trust Shares) at inception (September 30, 1993) and reinvestment
of dividends and capital gains at net asset value through October 31,
1994.
The Standard & Poor's 500 Composite Stock Price Index is an index com-
posed of 500 widely held common stocks listed on the New York Stock Ex-
change, American Stock Exchange and over-the-counter market. Because the
index is not a managed portfolio, there are no advisory fees or internal
management expenses reflected in the index's performance.
Index information is available at month-end only, therefore, the closest
month-end to inception date of the Fund has been used.
This period was one in which common stock prices fluctuated and the re-
sults should not be considered as representive of dividend income or
capital gain or loss which may be realized from an investment in the
Fund today. No adjustment has been made for a shareholder's tax liabil-
ity on dividends or capital gains.
NOTE: All figures cited here and on the following pages represent past
performance and do not guarantee future results. Investment return and
principal value of an investment will fluctuate so that an investor's
shares upon redemption may be worth more or less than original cost.
PORTFOLIO OF INVESTMENTS
DREYFUS S&P 500 STOCK INDEX FUND OCTOBER 31, 1994
<TABLE>
<CAPTION>
SHARES VALUE
(NOTE 1)
<S> <C> <C>
COMMON STOCKS -- 96.3%
OIL & GAS -- 10.4%
17,498 Amoco Corporation $ 1,108,936
2,140 Ashland Oil, Inc. 83,193
5,598 Atlantic Richfield 606,683
4,820 Baker Hughes, Inc. 98,810
22,626 Chevron Corporation 1,018,170
3,649 Coastal Corporation 103,997
8,659 Enron Corporation 280,335
2,201 Enserch Corporation 31,364
43,476 EXXON Corporation 2,733,554
1,186 Foster Wheeler Corporation 42,696
4,117 Halliburton Company 152,329
842 Helmerich & Payne, Inc. 26,313
1,747 Kerr-McGee Corporation 85,821
1,105 Louisiana Land & Exploration Company 50,139
4,664 Maxus Energy Corporation+ 22,154
1,782 McDermott International, Inc. 45,664
13,701 Mobil Corporation 1,178,286
10,785 Occidental Petroleum Corporation 235,922
3,511 Oryx Energy Company 50,910
4,285 Panhandle Eastern Corporation 100,698
1,635 Pennzoil Company 84,203
9,065 Phillips Petroleum Company 334,272
18,736 Royal Dutch Petroleum 2,182,744
3,044 Santa Fe Energy Resources, Inc.+ 27,777
8,535 Schlumberger, Ltd. 501,431
3,084 Sonat, Inc. 100,230
3,774 Sun Company, Inc. 121,240
5,900 Tenneco, Inc. 261,075
9,144 Texaco, Inc. 597,789
8,370 Unocal Corporation 244,823
10,202 USX-Marathon Group 191,288
1,600 Western Atlas+ 73,600
3,400 Williams Companies, Inc. 98,600
12,875,046
TELECOMMUNICATIONS -- 8.5%
54,500 AT&T Corporation 2,997,500
17,046 Airtouch Communications+ 509,249
19,386 Ameritech Corporation 782,710
14,774 Bell Atlantic Corporation 773,788
17,053 BellSouth Corporation 908,072
3,694 D.S.C. Communications Corporation 113,591
33,281 GTE Corporation 1,023,391
22,852 MCI Communications Corporation 525,596
14,777 Nynex Corporation 579,997
14,846 Pacific Telesis Group 469,505
21,205 Southwestern Bell Corporation 887,959
12,231 Sprint Corporation 399,036
15,712 U S West, Inc. 591,164
10,561,558
DRUGS & COSMETICS -- 7.9%
967 Alberto-Culver Company, Class B 24,537
2,393 Allergan, Inc. 63,115
2,714 Alza Corporation+ 48,174
10,572 American Home Products Corporation 671,322
2,329 Avon Products, Inc. 147,309
2,759 Beverly Enterprises, Inc.+ 41,730
17,759 Bristol Myers Squibb Company 1,036,682
1,903 Clorox Company 102,762
5,117 Colgate Palmolive Company 312,136
12,512 Columbia/HCA Healthcare Corporation 520,812
3,278 Dial Corporation 67,609
2,262 Ecolab, Inc. 48,350
7,794 Gillette Company 579,679
4,230 International Flavors & Fragrance, Inc. 185,591
10,208 Lilly (Eli) & Company 632,896
2,766 Mallinckrodt, Inc. 84,017
43,840 Merck & Company, Inc. 1,567,280
11,012 Pfizer, Inc. 816,265
2,252 Premark International, Inc. 100,777
24,088 Procter & Gamble Company 1,505,500
5,678 Rubbermaid, Inc. 156,145
6,720 Schering-Plough Corporation 478,800
1,600 Sigma-Aldrich Corporation 55,600
5,899 Upjohn Company 194,667
4,591 Warner Lambert Company 350,064
9,791,819
FOODS -- 6.3%
11,998 Archer Daniels Midland 343,443
1,000 Ball Corporation 28,250
4,888 Borden, Inc. 65,985
2,761 Brunos, Inc. 26,575
8,711 Campbell Soup Company 359,329
45,200 Coca-Cola Company 2,271,300
8,442 Conagra, Inc. 262,757
5,018 CPC International, Inc. 268,463
5,399 General Mills, Inc. 302,344
2,132 Giant Food, Inc., Class A 49,035
8,676 Heinz (H.J.) Company 322,097
3,263 Hershey Foods Corporation 154,174
7,703 Kellogg Company 452,551
27,452 Pepsico, Inc. 960,820
3,709 Pet, Inc. 63,980
3,200 Pioneer Hi-Bred International, Inc. 107,200
2,499 Quaker Oats Company 187,113
3,663 Ralston Purina Group 155,678
17,210 Sara Lee Corporation 423,796
6,243 Sysco Corporation 155,295
5,676 Unilever N.V. 674,025
4,210 Wrigley (W.M.) Jr. Company 189,976
7,824,186
OFFICE EQUIPMENT -- 5.2%
3,522 Amdahl Corporation+ 35,660
3,936 Apple Computer, Inc. 169,986
1,638 Autodesk, Inc. 56,511
4,684 Automatic Data Processing, Inc. 273,429
1,824 Avery Dennison Corporation 61,332
9,200 Cisco Systems, Inc. 277,150
9,107 Compaq Computer Corporation 365,418
5,458 Computer Associates International, Inc. 270,853
1,734 Computer Sciences Corporation 80,631
928 Cray Resh, Inc.+ 17,748
1,002 Data General Corporation+ 9,770
3,900 First Data Corporation 195,488
4,389 Honeywell, Inc. 141,545
1,588 Intergraph Corporation+ 13,697
20,569 International Business Machines 1,532,391
1,796 Lotus Development Corporation+ 68,697
20,300 Microsoft Corporation 1,278,900
3,631 Moore Corporation, Ltd. 65,812
13,048 Novell, Inc.+ 241,388
9,560 Oracle Systems Corporation 439,760
5,480 Pitney Bowes, Inc. 184,950
751 Shared Medical Systems Corporation 22,155
3,563 Sun Microsystems, Inc.+ 116,688
4,554 Tandem Computers, Inc.+ 80,264
5,683 Unisys Corporation+ 60,382
3,618 Xerox Corporation 370,845
6,431,450
BANKING -- 5.1%
14,190 Banc One Corporation 409,736
3,643 Bank of Boston Corporation 104,735
13,617 BankAmerica Corporation 592,340
2,888 Bankers Trust, New York Corporation 192,774
3,713 Barnett Banks Inc. 154,090
3,686 Boatmen's Bancshares Inc. 109,198
6,550 Chase Manhattan Corporation 235,800
9,136 Chemical Banking Corporation 347,168
13,340 Citicorp 636,985
5,062 CoreStates Financial Corporation 130,979
3,333 First Chicago Corporation 163,317
2,697 First Fidelity Bancorp 121,365
3,023 First Interstate Bancorp 241,840
5,662 First Union Corporation 254,790
4,476 Great Western Financial Corporation 80,009
5,040 MBNA Corporation 134,820
6,587 Morgan (J.P.) & Company, Inc. 407,571
5,116 NBD Bancorp, Inc. 157,317
5,400 National City Corporation 147,150
10,266 NationsBank Corporation 508,167
11,336 Norwest Corporation 277,732
8,123 PNC Financial Corporation 190,891
3,333 Shawmut National Corporation 68,742
4,556 SunTrust Banks, Inc. 230,648
6,200 Wachovia Corporation 207,700
2,013 Wells Fargo & Company 299,182
6,405,046
MERCHANDISING -- 5.1%
8,920 Albertsons, Inc. 267,600
5,032 American Stores Company 136,493
3,424 Charming Shoppes, Inc. 24,824
2,416 Dayton-Hudson Corporation 187,240
4,014 Dillard Department Stores, Class A 106,371
1,277 Fleming Companies, Inc. 30,648
4,973 Gap, Inc. 167,839
1,306 Great Atlantic & Pacific Tea Company, Inc. 34,119
16,081 K Mart Corporation 263,326
3,714 Kroger Company+ 97,028
12,038 Limited, Inc. 221,198
651 Longs Drug Stores Corporation 22,622
8,759 May Dept Stores Company 329,557
3,667 Melville Corporation 122,386
1,298 Mercantile Stores Company, Inc. 59,059
2,902 Nordstrom, Inc. 142,924
8,072 Penney (J.C.) Company, Inc. 408,645
2,137 Pep Boys -- Manny Moe & Jack 76,398
7,879 Price/Costco, Inc.+ 124,094
3,137 Rite Aid Corporation 75,288
12,215 Sears Roebuck & Company 604,643
2,514 Super Value, Inc. 60,965
2,265 Tandy Corporation 100,226
2,634 TJX Companies, Inc. 41,486
10,035 Toys "R" Us, Inc.+ 386,348
78,069 Wal-Mart Stores, Inc. 1,834,622
4,404 Walgreen Company 182,766
3,791 Whitman Corporation 62,552
2,512 Winn Dixie Stores, Inc. 132,822
4,670 Woolworth Corporation 72,385
6,376,474
ELECTRONIC TECHNOLOGY -- 4.8%
3,163 Advanced Micro Devices, Inc.+ 83,424
3,277 Amerada Hess Corporation 163,031
3,575 AMP, Inc. 270,358
813 Andrew Corporation 42,072
7,581 Corning, Inc. 257,754
4,857 Digital Equipment Corporation+ 148,746
1,086 E-System, Inc. 45,069
2,661 Eaton Corporation 139,370
2,167 EG&G, Inc. 34,943
69 Harris Computer Systems+ 966
1,381 Harris Corporation 59,210
8,885 Hewlett Packard Company 868,509
14,644 Intel Corporation 909,759
2,852 Loral Corporation 113,010
1,063 M/A-COM, Inc.+ 7,441
3,800 Micron Technology, Inc. 150,575
19,590 Motorola, Inc. 1,153,361
4,635 National Semiconductor Corporation+ 81,693
8,665 Northern Telecom, Ltd. 313,023
1,447 Perkin Elmer Corporation 42,688
4,631 Raytheon Company 295,226
1,073 Tektronix, Inc. 40,774
21,762 Tele-Communications, Class A+ 492,363
1,898 Teledyne, Inc. 32,503
3,210 Texas Instruments, Inc. 240,349
1,150 Zenith Electronics Corporation+ 16,100
6,002,317
PUBLIC UTILITY -- 4.0%
6,555 American Electric Power, Inc. 209,760
5,129 Baltimore Gas & Electric 119,249
5,780 Carolina Power & Light Company 152,448
6,681 Central & Southwest Corporation 150,323
5,153 Cinergy Corporation 119,163
1,672 Columbia Gas Systems, Inc.+ 46,607
8,413 Consolidated Edison Company, Inc. 209,273
3,242 Consolidated Natural Gas Company 117,523
5,279 Detroit Edison Company 139,234
6,107 Dominion Resources, Inc. 226,722
7,304 Duke Power Company 289,421
7,886 Entergy Corporation 184,335
6,652 FPL Group, Inc. 220,348
4,493 Houston Industries, Inc. 156,693
5,021 Niagara Mohawk Power Corporation 69,039
2,009 Nicor, Inc. 48,969
4,259 Noram Energy 25,554
2,400 Northern States Power Company 106,500
5,420 Ohio Edison Company 104,335
877 Oneok, Inc. 15,457
2,786 Pacific Enterprises 59,899
15,090 Pacific Gas & Electric Company 339,525
10,142 PacifiCorp. 178,753
8,269 PECO Energy Company 211,893
1,185 Peoples Energy Corporation 33,476
8,865 Public Service Enterprise Group, Inc. 232,706
15,587 SCE Corporation 216,270
21,994 Southern Company 434,382
7,840 Texas Utilities Company 255,780
1,497 TransCo Energy Company 21,519
7,970 Unicom Corporation 172,351
3,645 Union Electric Company 130,764
4,998,271
CHEMICALS & FERTILIZERS -- 3.8%
3,785 Air Products & Chemicals, Inc. 180,734
1,810 Alco Standard Corporation 103,170
4,809 Amgen, Inc.+ 268,102
9,467 Dow Chemical Company 695,825
23,711 du Pont (E.I.) de Nemours & Company 1,413,767
2,916 Eastman Chemical 157,464
3,276 Engelhard Corporation 76,986
853 First Mississippi Corporation 17,912
3,315 Grace (W.R.) & Company 131,357
2,542 Great Lakes Chemical Corporation 149,343
1,240 Hercules, Inc. 144,770
4,107 Monsanto Company 312,645
5,244 Morton International, Inc. 149,454
2,493 Nalco Chemical Company 80,398
4,641 Praxair, Inc. 107,323
2,288 Rohm & Haas Company 138,137
5,111 Union Carbide Corporation 169,302
16,607 WMX Technologies, Inc. 487,831
4,784,520
ELECTRICAL EQUIPMENT -- 3.5%
3,366 Circuit City Stores, Inc. 85,832
4,000 Cooper Industries, Inc. 149,500
7,679 Emerson Electric Company 466,499
59,778 General Electric Company 2,921,650
1,793 Grainger (W.W.), Inc. 98,615
3,718 Maytag Corporation 59,023
1,406 Raychem Corporation 52,022
2,580 Scientific Atlanta, Inc. 55,793
689 Thomas & Betts Corporation 49,091
1,636 Tyco Laboratories, Inc. 78,937
12,245 Westinghouse Electric Corporation 172,961
2,505 Whirlpool Corporation 130,260
4,320,183
MEDICAL SERVICES & SUPPLIES -- 3.0%
28,119 Abbott Laboratories 871,689
1,889 Bard (C.R.), Inc. 46,281
2,136 Bausch & Lomb, Inc. 69,420
9,944 Baxter International, Inc. 258,544
2,470 Becton Dickinson & Company 116,708
3,971 Biomet, Inc.+ 45,667
1,376 Community Psychiatric Centers 13,588
22,746 Johnson & Johnson 1,242,500
2,296 Manor Care, Inc. 63,140
3,914 Medtronic, Inc. 204,017
495 Millipore Corporation 25,431
5,918 National Medical Enterprises, Inc.+ 85,811
1,822 St. Jude Medical, Inc. 67,870
5,600 U.S. Healthcare 264,600
2,009 U.S. Surgical Corporation 45,203
6,200 United Healthcare Corporation 327,050
3,747,519
FINANCE -- 2.8%
4,355 Ahmanson (H.F.) & Company 83,289
16,894 American Express Company 519,491
1,880 Beneficial Corporation 73,556
6,118 Dean Witter, Discover & Company 236,305
9,554 Federal National Mortgage Association 726,104
6,217 Federal Home Loan Mortgage Corporation 338,827
4,749 Fleet Financial Group, Inc. 162,653
2,267 Golden West Financial Corporation 88,416
3,242 Household International Corporation 113,875
8,853 KeyCorp 253,416
7,234 Merrill Lynch & Company, Inc. 284,839
3,683 Salomon, Inc. 144,557
11,171 Travelers, Inc. 388,192
3,501 U.S. Bancorp 86,650
3,500,170
INSURANCE -- 2.7%
3,997 Aetna Life & Casualty Company 184,362
7,694 American General Corporation 211,585
10,921 American International Group, Inc. 1,022,479
2,993 Chubb Corporation (The) 209,136
2,649 Cigna Corporation 174,503
1,977 Continental Corporation 29,902
2,816 General Reinsurance Corporation 315,392
1,711 Jefferson Pilot Corporation 92,822
3,583 Lincoln National Corporation 129,884
2,487 Marsh & McLennan Company 186,525
3,596 Providian Corporation 114,173
2,059 Safeco Corporation 103,207
3,000 St. Paul's Companies, Inc. 130,875
2,641 Torchmark Corporation 97,387
2,628 Transamerica Corporation 129,101
2,600 UNUM Corporation 119,275
2,975 USF&G Corporation 40,534
813 USLIFE Corporation 26,626
3,317,768
AUTOMOTIVE -- 2.6%
12,357 Chrysler Corporation 602,404
1,598 Cummins Engine Company, Inc. 67,915
3,930 Dana Corporation 100,706
2,113 Echlin, Inc. 64,975
34,978 Ford Motor Company 1,031,851
26,183 General Motors Corporation 1,034,229
4,382 Genuine Parts Company 158,300
3,033 Navistar International Corporation+ 39,807
1,435 PACCAR, Inc. 64,216
436 SPX Corporation 7,576
3,171,979
METALS & MINING -- 2.1%
7,937 Alcan Aluminum, Ltd. 212,315
3,078 Aluminum Company of America 262,400
12,500 American Barrick Resources Corporation 298,438
1,427 ASARCO, Inc. 44,772
3,294 Cyprus Minerals 87,703
3,916 Echo Bay Mines, Ltd. 47,971
5,001 Homestake Mining Company 93,769
4,008 Inco, Ltd. 120,741
14,634 Minnesota Mining & Manufacturing Company 810,358
320 Nacco Industries, Inc., Class A 18,880
2,817 Newmont Mining Corporation 116,553
2,519 Phelps Dodge Corporation 154,604
1,600 Pittston Services Group 44,200
8,472 Placer Dome, Inc. 183,207
2,129 Reynolds Metal Company 117,893
2,613,804
BUILDING MATERIALS -- 1.9%
1,298 Armstrong World Industries, Inc. 53,867
1,303 Boise Cascade Corporation 34,530
3,270 Champion International Corporation 120,990
1,036 Crane Company 28,102
3,154 Georgia Pacific Corporation 233,002
15,224 Home Depot, Inc. 692,692
3,845 Louisiana-Pacific Corporation 117,752
5,076 Lowes Companies, Inc. 201,771
5,388 Masco Corporation 127,965
1,482 Owens Corning Fiberglass Corporation+ 47,980
949 Potlatch Corporation 36,299
7,292 PPG Industries, Inc. 297,149
2,844 Sherwin Williams Company 92,785
7,276 Weyerhaeuser Company 285,582
2,370,466
TOBACCO & VENDING -- 1.8%
6,831 American Brands, Inc. 237,377
29,977 Philip Morris Companies, Inc. 1,836,091
6,895 UST, Inc. 182,718
2,256,186
PRINTING & PUBLISHING -- 1.8%
2,626 American Greetings Corporation, Class A 71,887
2,929 Deluxe Corporation 82,744
5,334 Donnelley (R.R.) & Sons Company 167,354
3,612 Dow Jones & Company, Inc. 107,909
5,900 Dun & Bradstreet Corporation 345,888
5,076 Gannett Company, Inc. 243,648
2,736 Harcourt General, Inc. 101,232
1,005 Harland (John H.) Company 21,482
1,953 Knight Ridder, Inc. 100,580
1,756 Mcgraw-Hill, Inc. 131,261
468 Meredith Corporation 22,932
3,681 New York Times Company 83,283
13,086 Time Warner, Inc. 464,553
4,041 Times Mirror Companies 131,838
2,582 Tribune Company 135,878
2,212,469
MULTI-INDUSTRY -- 1.3%
9,696 Allied Signal, Inc. 335,724
1,770 Bemis, Inc. 43,808
4,700 Burlington Resources, Inc. 198,575
764 Eastern Enterprises 19,864
1,544 Fleetwood Enterprises, Inc. 35,512
1,191 FMC Corporation+ 72,651
3,982 ITT Corporation 351,412
7,767 Rockwell International Corporation 270,874
2,937 Rowan Companies, Inc.+ 22,395
3,143 Textron, Inc. 160,293
2,223 TRW, Inc. 158,389
431 Zurn Industries, Inc. 7,866
1,677,363
AEROSPACE & AVIATION -- 1.2%
11,883 Boeing Corporation 521,367
2,216 General Dynamics Corporation 93,902
2,214 Lockheed Corporation 159,407
2,994 Martin Marietta Corporation 137,350
1,385 McDonnell Douglas Corporation 195,285
1,705 Northrop Corporation 74,807
4,311 United Technologies Corporation 271,593
1,453,711
RAILROADS -- 1.2%
3,012 Burlington Northern, Inc. 150,224
2,728 Conrail, Inc. 148,335
3,746 CSX Corporation 271,585
1,616 General Signal Corporation 58,176
4,637 Norfolk Southern Corporation 292,131
6,942 Santa Fe Pacific Corporation 106,733
4,165 Santa Fe Pacific Gold Corporation+ 59,872
7,095 Union Pacific Corporation 346,768
1,433,824
MACHINERY & HEAVY EQUIPMENT -- 1.1%
2,997 Black & Decker Corporation 75,300
478 Briggs & Stratton Corporation 33,221
1,124 Cincinnati Milacron, Inc. 30,770
3,033 Deere & Co. Common 217,618
6,146 Dresser Industries, Inc. 129,834
1,172 Giddings & Lewis, Inc. 18,166
1,455 Harnischfeger Industries, Inc. 36,375
4,024 Illinois Tool Works 180,577
3,722 Ingersoll Rand Company 132,596
1,483 Johnson Controls, Inc. 73,779
4,138 Pall Corporation 75,001
1,652 Parker-Hannifin Corporation 77,231
1,999 Safety Kleen Corporation 27,736
1,596 Snap-On Tools Corporation 50,673
1,698 Stanley Works Company 67,496
1,051 Timken Company 36,654
951 Trinova Corporation 33,285
1,507 Varity Corporation+ 57,643
1,353,955
PAPER & FOREST PRODUCTS -- 1.0%
1,421 Federal Paper Board Company, Inc. 42,630
4,319 International Paper Company 321,766
2,995 James River Corporation 68,511
5,600 Kimberly-Clark Corporation 288,400
2,090 Mead Corporation 103,716
2,643 Scott Paper Company 174,768
2,006 Temple Inland, Inc. 94,784
2,409 Union Camp Corporation 114,428
2,370 Westvaco Corporation 82,950
1,291,953
BROADCASTING & ENTERTAINMENT -- 1.0%
5,410 Capital Cities/ABC, Inc. 449,706
2,120 CBS, Inc. 126,935
7,800 Comcast Corporation, Class K 127,725
1,290 King World Productions, Inc.+ 45,795
12,400 Viacom, Inc., Class B+ 486,700
1,236,861
HOTEL & RESTAURANT -- 1.0%
1,644 Hilton Hotels Corporation 99,668
1,000 Luby's Cafeterias, Inc. 23,125
4,513 Marriott International Corporation 132,005
24,758 McDonald's Corporation 711,793
3,639 Promus Companies, Inc.+ 107,805
1,040 Pulte Corporation 21,450
1,713 Ryans Family Steak Houses, Inc.+ 10,706
1,600 Shoney's, Inc.+ 24,000
3,594 Wendy's International, Inc. 53,012
1,183,564
AMUSEMENT -- 0.9%
1,600 Bally Entertainment Corporation+ 11,200
3,200 Brunswick Corporation 65,600
18,684 Disney (Walt) Productions 735,682
1,097 Handleman Company 12,341
3,089 Hasbro, Inc. 101,937
1,533 Jostens, Inc. 26,444
5,730 Mattel, Inc. 167,602
647 Outboard Marine Corporation 13,344
434 Skyline Corporation 8,572
1,142,722
BEVERAGE -- 0.8%
1,478 Adolph Coors Company, Class B 25,495
9,344 Anheuser-Busch Companies 474,208
2,206 Brown Forman Corporation, Class B 67,835
13,186 Seagram Company, Ltd. 407,117
974,655
CONSTRUCTION & MATERIALS HANDLING -- 0.6%
7,186 Caterpillar, Inc. 429,364
1,091 Centex Corporation 24,275
625 Clark Equipment Company+ 43,828
2,027 Dover Corporation 112,499
2,898 Fluor Corporation 143,451
1,249 Kaufman & Broad Corporation 16,237
1,113 Morrison Knudsen Corporation 17,391
787,045
BUSINESS SERVICES -- 0.6%
1,399 Alexander & Alexander Services, Inc. 28,330
3,882 Block (H&R), Inc. 172,264
6,907 Browing Ferris Industries, Inc. 219,297
1,607 Ceridian Corporation+ 41,782
2,702 Interpub Group Companies 89,165
517 JWP, Inc.+ 10
1,352 National Education Corporation+ 6,591
1,667 National Service Industries 44,592
1,490 Ogden Corporation 32,035
1,971 Rollins Environmental Services, Inc.+ 11,580
2,927 Service Corporation International 77,931
723,577
PHOTOGRAPHIC -- 0.5%
11,467 Eastman Kodak Company 551,849
1,567 Polaroid Corporation 52,690
604,539
APPAREL AND TEXTILES -- 0.5%
534 Brown Group, Inc. 18,089
1,366 Hartmarx Corporation+ 7,855
2,924 Liz Claiborne, Inc. 67,617
2,627 Nike, Inc., Class B 159,919
543 Oshkosh B' Gosh, Inc., Class A 8,145
2,837 Reebok International, Ltd. 113,125
1,405 Russell Corporation 42,150
603 Springs Industries, Inc. 24,346
1,801 Stride Rite Corporation 24,989
2,262 V.F. Corporation 114,514
580,749
STEEL -- 0.4%
3,355 Armco, Inc.+ 23,904
3,623 Bethlehem Steel Corporation+ 68,837
1,338 Inland Steel Industries, Inc.+ 47,834
2,972 Nucor Corporation 183,521
2,450 USX-US Steel Group 91,875
3,257 Worthington Industries, Inc. 72,468
488,439
AIR TRANSPORTATION -- 0.4%
2,632 AMR Corporation+ 145,089
1,766 Delta Air Lines, Inc. 92,052
2,001 Federal Express Corporation+ 121,561
4,800 Southwest Airlines Company 113,400
1,947 U S Air Group, Inc. 8,517
480,619
TIRE & RUBBER -- 0.2%
3,012 Cooper Tire & Rubber Company 74,171
835 Goodrich (B.F.) Company 37,471
4,998 Goodyear Tire & Rubber Company 174,930
286,572
TRUCKING -- 0.2%
1,079 Consolidated Freightways, Inc.+ 24,143
1,444 Roadway Services, Inc. 82,669
2,708 Ryder System 63,638
882 Yellow Corporation 17,199
187,649
CONTAINERS -- 0.1%
2,939 Crown Cork & Seal Company, Inc.+ 114,254
3,115 Stone Container Corporation+ 52,175
166,429
HOME FURNISHINGS -- 0.1%
439 Bassett Furniture Industries, Inc. 11,963
5,728 Newell Company 120,288
132,251
TOTAL COMMON STOCKS
(Cost $118,397,244) 119,747,708
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
<S> <C> <C>
U.S. TREASURY BILL -- 0.2%
(Cost $178,967)
$ 180,000 U.S. Treasury Bill,
4.550%# due 12/15/94 $ 178,967
REPURCHASE AGREEMENT -- 3.2%
(Cost $4,031,614)
4,031,614 Agreement with Barclays de Zoete Wedd, 4.780%
dated 10/31/94, to be repurchased at $4,032,149
on 11/1/94, collateralized by $4,002,000 U.S.
Treasury Notes, 5.875% due 5/15/95 4,031,614
TOTAL INVESTMENTS
(Cost $122,607,825*) 99.7% 123,958,289
OTHER ASSETS AND LIABILITIES (NET) 0.3 416,740
NET ASSETS 100.0% $124,375,029
<CAPTION>
SCHEDULE
OF FUTURES
CONTRACTS
<S> <C> <C>
FUTURES CONTRACTS -- LONG POSITION -- 3.2%
(Cost $3,983,550)
17 S&P 500 Stock Index Future,
December 1994 $ 4,015,825
<FN>
* Aggregate cost for Federal tax purposes.
+ Non-income producing security.
# Represents annualized yield to maturity (unaudited).
</TABLE>
See Notes to Financial Statements.
STATEMENT OF ASSETS AND LIABILITIES
DREYFUS S&P 500 STOCK INDEX FUND OCTOBER 31, 1994
<TABLE>
<S> <C> <C>
ASSETS
Investments, at value (Cost $122,607,825) (Note 1)
See accompanying schedule $123,958,289
Cash 14,342
Receivable for investment securities sold 360,713
Dividends and interest receivable 222,832
Receivable from investment adviser (Note 2) 47,392
Receivable for Fund shares sold 3,543
TOTAL ASSETS 124,607,111
LIABILITIES:
Payable for Fund shares redeemed 74,900
Payable for investment securities purchased 67,995
Investment management fee payable (Note 2) 43,190
Daily variation margin on open futures contracts (Note
1) 31,875
Accrued Directors' fees and expenses (Note 2) 14,112
Distribution fee payable (Note 3) 10
TOTAL LIABILITIES 232,082
NET ASSETS $124,375,029
NET ASSETS consist of:
Undistributed net investment income $ 775,257
Accumulated net realized gain on investments sold 479,290
Net unrealized appreciation of securities and futures
contracts 1,382,739
Par value 11,940
Paid-in capital in excess of par value 121,725,803
TOTAL NET ASSETS $124,375,029
NET ASSET VALUE
INVESTOR SHARES
Net asset value, offering and redemption price per
share ($380,652 / 36,577 shares of capital stock
outstanding) $10.41
CLASS R SHARES
Net asset value, offering and redemption price per
share ($123,994,377 / 11,903,386 shares of capital
stock outstanding) $10.42
</TABLE>
See Notes to Financial Statements.
STATEMENT OF OPERATIONS
DREYFUS S&P 500 STOCK INDEX FUND
FOR THE YEAR ENDED OCTOBER 31, 1994
<TABLE>
<S> <C> <C>
INVESTMENT INCOME
Dividends $ 2,855,289
Interest 92,708
TOTAL INVESTMENT INCOME 2,947,997
EXPENSES:
Investment management fee (Note 2) 257,527
Investment advisory fee (Note 2) 113,981
Transfer agent fees (Note 2) 25,062
Custodian fees (Note 2) 21,753
Directors' fees and expenses (Note 2) 16,832
Administration fee (Note 2) 10,838
Legal and audit fees 6,877
Amortization of organization costs (Note 6) 3,137
Distribution fee (Note 3) 308
Other 19,250
Expenses reimbursed by investment adviser
(Note 2) (52,201)
TOTAL EXPENSES 423,364
NET INVESTMENT INCOME 2,524,633
REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS
(Notes 1 and 4):
Net realized gain on:
Securities transactions 468,523
Futures contracts 10,648
Net realized gain on investments during the year 479,171
Net change in unrealized appreciation of:
Securities 844,163
Futures contracts 32,275
Net unrealized appreciation of investments during the
year 876,438
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS 1,355,609
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 3,880,242
</TABLE>
See Notes to Financial Statements.
STATEMENT OF CHANGES IN NET ASSETS
DREYFUS S&P 500 STOCK INDEX FUND
<TABLE>
<CAPTION>
YEAR PERIOD
ENDED ENDED
10/31/94 10/31/93*
<S> <C> <C>
Net investment income $ 2,524,633 $ 24,137
Net realized gain on securities and
futures contracts during the year 479,171 13,960
Net unrealized appreciation on securi-
ties and futures contracts during
the year 876,438 506,301
Net increase in net assets resulting
from operations 3,880,242 544,398
Distributions to shareholders from net
investment income:
Investor Shares (1,186) --
Class R Shares (1,772,327) --
Distribution to shareholders from net
realized gain on investments:
Class R Shares (13,841) --
Net increase in net assets from Fund
share transactions (Note 5):
Investor Shares 380,301 --
Class R Shares 97,897,647 23,459,795
Net increase in net assets 100,370,836 24,004,193
NET ASSETS:
Beginning of year 24,004,193 --
End of year (including undistributed
net investment income of $775,257
and $24,137, respectively) $124,375,029 $24,004,193
<FN>
* The Fund commenced operations on September 30, 1993.
</TABLE>
See Notes to Financial Statements.
FINANCIAL HIGHLIGHTS
DREYFUS S&P 500 STOCK INDEX FUND
FOR AN INVESTOR SHARE OUTSTANDING THROUGHOUT THE PERIOD.
<TABLE>
<CAPTION>
PERIOD
ENDED
10/31/94*
<S> <C>
Net asset value, beginning of period $ 9.78
Income from investment operations:
Net investment income 0.17
Net realized and unrealized gain on investments 0.59
Total from investment operations 0.76
Less distributions:
Distributions from net investment income (0.13)
Net asset value, end of period $ 10.41
Total return++ 7.86%
Ratios to average net assets/supplemental data:
Net assets, end of period (in 000's) $ 381
Ratio of operating expenses to average net assets 0.65%**
Ratio of net investment income to average net assets 2.13%**
Portfolio turnover rate 13%
<FN>
* The Fund commenced selling Investor Shares on April 18, 1994.
** Annualized.
++ Total return represents aggregate total return for the period indi-
cated.
</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>
YEAR PERIOD
ENDED ENDED
10/31/94* 10/31/93*
<S> <C> <C>
Net asset value, beginning of period $ 10.23 $ 10.00
Income from investment operations:
Net investment income 0.21# 0.01
Net realized and unrealized gain/(loss) on investments 0.14 0.22
Total from investment income 0.35 0.23
Less distributions:
Distributions from net investment income (0.16) --
Distributions from net capital gains (0.00)+ --
Total distributions (0.16) --
Net asset value, end of period $ 10.42 $ 10.23
Total return++ 3.50% 2.30%
Ratios to average net assets/ supplemental data:
Net assets, end of period (in 000's) $123,994 $24,004
Ratio of operating expenses to average net assets 0.40%*** 0.40%**##
Ratio of net investment income to average net assets 2.38% 1.32%**
Portfolio turnover rate 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 as of October 17, 1994, the Fund's Trust Shares were redesignated
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.
# Net investment income per share before reimbursement of expenses by
the investment 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
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 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. These financial statements report on 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 commenced operations on September 30, 1993. The Fund
currently offers two classes of shares: Investor Shares and Class R Shares
(effective October 17, 1994, the Trust Shares were redesignated 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 acting on behalf of customers
having a qualified trust or investment account or relationship at such in-
stitutions and bear no distribution fee. Each class of shares has identi-
cal rights and privileges, except with respect to distribution fees and
voting rights on matters affecting a single class. The following is a sum-
mary of significant accounting policies consistently followed by the Fund
in the preparation of its financial statements in accordance with gener-
ally accepted accounting principles.
(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. Debt securities with maturities of 60 days or less are valued at am-
ortized 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) 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) SECURITY 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.
(E) EXPENSE ALLOCATION
Expenses of the Fund not directly attributable to the operations of any
class of shares are pro rated 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, are determined on a class
level, and are declared and paid four times annually. Distributions from
net realized capital gains, if any, are determined on a Fund level and are
declared and paid annually. Additional distributions of net investment in-
come and capital gains for the 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 gain distributions on a Fund level
are determined in accordance with income tax regulations, which may differ
from generally accepted accounting principles. These differences are pri-
marily due to differing treatments of income and gains on various invest-
ment securities held by the Fund, timing differences and differing charac-
terization of distributions made by the Fund as a whole.
(G) 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 RELATED PARTY
TRANSACTIONS
Effective as of October 17, 1994, the Investment Company's investment man-
agement agreement with Mellon Bank, N.A. ("Mellon Bank"), a wholly-owned
subsidiary of Mellon Bank Corporation was transferred to The Dreyfus Cor-
poration (the "Manager"), a wholly-owned subsidiary of Mellon Bank. 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 objective, poli-
cies and limitations. For these services, the Fund pays the Manager a fee,
calculated 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, 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 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).
For the period from April 4, 1994 to October 16, 1994, Mellon Bank served
as the Investment Company's investment manager pursuant to the investment
management agreement described above. Prior to April 4, 1994, the Invest-
ment Company had individual contracts with Mellon Bank to provide custody,
accounting, and transfer agency services to the Fund. Effective April 4,
1994, custody, accounting, and transfer agency services are covered by the
investment management agreement described above.
Prior to April 4, 1994, the Investment Company had an investment advisory
agreement under which the Fund paid Mellon Bank an annual fee of 0.30% of
the value of the Fund's average daily net assets for investment advisory
services. For the period from November 1, 1993 through April 3, 1994, Mel-
lon Bank, as investment adviser, voluntarily agreed to reimburse expenses
in the amount of $52,201.
Prior to September 23, 1994, Frank Russell Investment Management Company
(the "Administrator") served as the Fund's administrator and provided,
pursuant to an administration agreement, various administrative and corpo-
rate secretarial services to the Fund. For the period from April 4, 1994
to September 23, 1994, Mellon Bank, as investment manager, paid the Admin-
istrator's fee out of the management fee described above. Prior to April
4, 1994, the Investment Company paid the Administrator the following fees
for the services supplied by the Administrator pursuant to the administra-
tion agreement: (i) an annual fee of $500,000; (ii) an annual asset-based
fee, payable monthly on a pro rata basis, based on the following percent-
ages of the aggregate average daily net assets of the Investment Company:
up to and including $10 billion -- 0.01%, over $10 billion -- 0.005%; and
(iii) all start-up costs (including out- of-pocket, blue sky registration
and personnel costs) for new portfolios (prior to and for 6 months follow-
ing commencement of operations).
Prior to April 4, 1994, the Investment Company had a contract with Russell
Fund Distributors, Inc. to serve as distributor of its shares. Effective
April 4, 1994, through October 16, 1994, Funds Distributor, Inc. served as
distributor of the Investment Company's shares. Effective as of October
17, 1994, Premier Mutual Fund Services, Inc. ("Premier") serves as the In-
vestment Company's distributor. Premier also serves as the Investment Com-
pany's sub-administrator and, pursuant to a sub-administration agreement
with the Manager, provides various administrative and corporate secre-
tarial services to the Investment Company.
No officer or employee of Premier (or of any parent, subsidiary or affili-
ate thereof) receives any compensation from The Dreyfus/Laurel Funds,
Inc., The Dreyfus/Laurel Funds Trust, The Dreyfus/Laurel Tax-Free Munici-
pal Funds or The Dreyfus/Laurel Investment Series (collectively, "The
Dreyfus/Laurel Funds") for serving as an officer, Director or Trustee of
The Dreyfus/Laurel Funds. In addition, no officer or employee of the Man-
ager (or of any parent, subsidiary or affiliate thereof) serves as an of-
ficer, 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), $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. Prior to April 4, 1994, the Investment Company
paid each Director $15,000 per annum plus reimbursement 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. Prior to April 4, 1994, the Fund had a distribution and shareholder
services plan under which the Fund was authorized to spend annually up to
0.35% of its average daily net assets on distribution and shareholder ser-
vicing expenses.
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 and proceeds from sales of securities, excluding
short-term investments and U.S. government securities, for the year ended
October 31, 1994 were $108,326,116 and $13,817,502, respectively.
At October 31, 1994, aggregate gross unrealized appreciation for all secu-
rities in which there was an excess of value over tax cost and aggregate
gross unrealized depreciation for all securities in which there was an ex-
cess of tax cost over value were $8,105,402 and $6,754,938, 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:
DREYFUS S&P 500 STOCK INDEX FUND
<TABLE>
<CAPTION>
PERIOD ENDED
10/31/94*
SHARES AMOUNT
<S> <C> <C>
INVESTOR SHARES:
Sold 77,042 $ 775,958
Issued as reinvestment of
dividends and distributions 117 1,172
Redeemed (40,582) (396,829)
Net increase 36,577 $ 380,301
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED PERIOD ENDED
10/31/94* 10/31/93**
SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
CLASS R SHARES:
Sold 12,100,667 $123,501,816 2,371,252 $23,719,270
Issued as reinvestment
of dividends and dis-
tributions 177,979 1,784,732 -- --
Redeemed (2,720,889) (27,388,901) (25,523) (259,475)
Net increase 9,557,757 $ 97,897,647 2,345,629 $23,459,795
<FN>
* The Fund commenced selling Investor Shares on April 18, 1994. Those
shares outstanding prior to April 4, 1994 were designated Trust Shares.
Effective as of October 17, 1994, the Fund's Trust Shares were redesig-
nated Class R Shares.
** The Fund commenced operations on September 30, 1993.
</TABLE>
6. ORGANIZATION COSTS
The Fund paid all costs in connection with the Fund's organization includ-
ing the fees and expenses of registering and qualifying the Fund's shares
for distribution under federal and state securities regulations. Prior to
April 4, 1994, all such costs were being amortized on the straight-line
method over a period of five years. On April 4, 1994, the remaining unam-
ortized organization costs were reimbursed by Mellon Bank as the invest-
ment adviser.
7. DIVIDENDS
On November 2, 1994, the Board of Directors declared a dividend from net
investment income for the Investor and Class R Shares in the amount of
$0.0584 and $0.0650 per share, respectively, payable on November 9, 1994
to shareholders of record on November 2, 1994.
INDEPENDENT AUDITORS' REPORT
KPMG
The Board of Directors and Shareholders
The Dreyfus/Laurel Funds, Inc.
We have audited the accompanying statement of assets and liabilities of
the Dreyfus S&P 500 Stock Index Fund of The Dreyfus/Laurel Funds, Inc.,
including the portfolio of investments, as of October 31, 1994, and the
related statement of operations for the year then ended, the statement of
changes in net assets for each of the two years in the period then ended,
and the financial highlights for each of the periods indicated herein.
These financial statements and financial highlights are the responsibility
of the Fund's management. Our responsibility is to express an opinion on
these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and fi-
nancial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclo-
sures in the financial statements. Our procedures included confirmation of
securities owned as of October 31, 1994, by correspondence with the custo-
dian and brokers. An audit also includes assessing the accounting princi-
ples used and significant estimates made by management, as well as evalu-
ating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position
of the Dreyfus S&P 500 Stock Index Fund of The Dreyfus/Laurel Funds, Inc.,
as of October 31, 1994, and the results of its operations for the year
then ended, changes in its net assets for each of the two years in the pe-
riod then ended, and the financial highlights for each of the periods in-
dicated herein, in conformity with generally accepted accounting
principles.
KPMG Peat Marwick LLP
Pittsburgh, Pennsylvania
December 9, 1994
