<PAGE>
SEMI-ANNUAL REPORT
THE DREYFUS FAMILY OF FUNDS
Description of Art Work on Report Cover
Small box above fund name showing a lion's face
Dreyfus Disciplined Stock Fund
APRIL 30, 1995
<PAGE>
DEAR SHAREHOLDER,
We are pleased to provide you with the Dreyfus Disciplined Stock 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 services 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
investment needs. As always, we welcome your thoughts and suggestions.
Sincerely,
Marie E. Connolly
President
The Dreyfus/Laurel Funds, Inc. --
Dreyfus Disciplined Stock Fund
June 20, 1995
1
................................................................................
<PAGE>
TABLE OF CONTENTS
..............................................................................
<TABLE>
<S> <C>
Shareholder Letter............................... 1
Economic Review.................................. 3
Portfolio Overview............................... 4
Portfolio of Investments......................... 5
Statement of Assets and Liabilities.............. 13
Statement of Operations.......................... 14
Statement of Changes in Net Assets............... 15
Financial Highlights............................. 16
Notes to Financial Statements.................... 20
</TABLE>
2
..............................................................................
<PAGE>
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 economists. 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 December peak.
The Federal Reserve Board deserves at least partial credit for the slowdown.
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 leave
rates unchanged at its mid-month meeting.
We expect that the dynamics of this demand slowdown will continue to develop
over the next several months as producers adapt their output to new sales
realities. Still, we believe the slowdown is temporary. Job and income 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 capital spending
phases of their economic expansions, which will support U.S. capital goods
exports. Finally, the bulk of the Mexican recession's depressing 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
industrial 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 further
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
significantly, while the stabilizing economy, low inflation and strong
corporate 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 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.
3
................................................................................
<PAGE>
ECONOMIC REVIEW (CONTINUED)
................................................................................
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 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 six months ended April 30, 1995 proved relatively challenging for the
Fund, as they did for most equity mutual funds. Nonetheless, the Fund's
returns were positive, with the Investor shares and the Class R shares
posting total returns of 7.41%* and 7.58%*, respectively. In contrast, the
Standard and Poor's 500 Composite Stock Index (the "S&P 500 Index") posted a
total return of 10.46% for the six months ended April 30, 1995.
During the recent semi-annual period, the market was up as a whole,
particularly during the first quarter of 1995, although trading was brisk and
the environment was extremely volatile. With the exception of the ongoing
strength of technology stocks, no clear leaders emerged. Sector performance
seemed to shift almost month to month, and individual stocks found it
difficult to ride a wave of success for long. Generally, stocks of companies
reporting lower-than-expected earnings were pummeled, yet those reporting
strong earnings were not rewarded in kind. In the face of these challenges,
your Fund's performance was disappointing and trailed its benchmark, the S&P
500 Index.
Fund management combines sophisticated computer modeling with fundamental
stock analysis in seeking to create a diversified portfolio of undervalued
investments with the potential for strong earnings momentum. In the recent
semi-annual period, this process produced a number of winners for the Fund.
For example, three of our top-performing holdings in the first quarter of
1995 were in the market-leading technology sector; Micron Technology Inc.,
which appreciated 78%; Intel Corporation, up 33%; and Adaptec Inc., up 40%
over the period. The Fund also benefited from strength among several of its
retail holdings including Limited Inc., Circuit City Stores, Inc., and Sears,
Roebuck & Company. Unfortunately, several of our cyclical holdings
underperformed, particularly in the month of January, due to market concern
that economic growth would soon peak and begin to taper off.
Our disciplined investment strategy is designed to provide shareholders with
investment returns that are consistently superior to the S&P 500 Index.
Despite the recent period's relative underperformance, we believe that our
investment process is effective, and we will continue to seek strong equity
returns over the long term.
- ------------
* Total return represents the change during the period in a hypothetical
account with dividends reinvested.
4
................................................................................
<PAGE>
PORTFOLIO OF INVESTMENTS (UNAUDITED)
...............................................................................
<TABLE>
- ------------------------------------------------------------------------------------
DREYFUS DISCIPLINED STOCK FUND APRIL 30, 1995
<CAPTION>
VALUE
SHARES (NOTE 1)
<C> <S> <C>
COMMON STOCKS -- 95.6%
FINANCIAL SERVICES -- 10.4%
48,100 American General Corporation $ 1,587,300
19,100 Bank of Boston Corporation 639,850
66,800 Bank of New York, Inc. 2,196,050
47,600 BankAmerica Corporation 2,356,200
61,700 Chase Manhattan Corporation 2,699,375
12,300 CIGNA Corporation 893,287
74,800 Citicorp 3,468,850
41,600 CoreStates Financial Corporation 1,357,200
33,600 Dean Witter, Discover & Company 1,423,800
24,000 Federal National Mortgage Association 2,118,000
29,200 First Bank System, Inc. 1,182,600
17,500 First Interstate Bancorp 1,345,312
40,300 First Union Corporation 1,823,575
19,900 First USA, Inc. 845,750
25,000 Illinova Corporation 581,250
35,800 MBNA Corporation 1,082,950
24,800 Old Republic International Corporation 638,600
21,800 Providian Corporation 743,925
22,200 SAFECO Corporation 1,254,300
33,100 St. Paul Companies 1,592,937
14,400 Standard Federal Bank 405,000
39,100 Travelers Inc. 1,617,762
------------
31,853,873
------------
ELECTRONICS -- 9.4%
13,900 Applied Materials, Inc.+ 856,587
28,300 Avnet, Inc. 1,259,350
56,800 Circuit City Stores, Inc. 1,469,700
38,300 Corning Inc. 1,278,262
25,000 Eaton Corporation 1,434,375
87,600 General Electric Company 4,905,600
35,600 General Instruments Corporation+ 1,214,850
45,200 Hewlett-Packard Company 2,988,850
50,100 Intel Corporation 5,128,987
44,600 Motorola, Inc. 2,536,625
</TABLE>
See Notes to Financial Statements. 5
...............................................................................
<PAGE>
PORTFOLIO OF INVESTMENTS (UNAUDITED) (CONTINUED)
...............................................................................
- --------------------------------------------------------------------------------
DREYFUS DISCIPLINED STOCK FUND APRIL 30, 1995
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
<C> <S> <C>
COMMON STOCKS (continued)
ELECTRONICS (CONTINUED)
22,500 Raychem Corporation $ 801,563
16,600 Raytheon Company 1,207,650
35,700 Tandy Corporation 1,767,150
36,000 Thermo Electron Corporation+ 1,939,500
------------
28,789,049
------------
OIL & GAS -- 9.1%
65,600 Amoco Corporation 4,305,000
27,000 British Petroleum, ADR 2,325,375
28,700 Enron Corporation 975,800
123,400 Exxon Corporation 8,591,725
50,400 Phillips Petroleum Company 1,764,000
41,000 Pogo Producing Company 922,500
37,300 Royal Dutch Petroleum, N.V. 4,625,200
32,400 Sonat, Inc. 984,150
48,500 Ultramar Corporation 1,267,063
101,600 USX-Marathon Group 1,905,000
------------
27,665,813
------------
TELECOMMUNICATIONS -- 8.6%
79,100 Ameritech Corporation 3,559,500
141,000 AT&T Corporation 7,155,750
30,000 Bell Atlantic Corporation 1,646,250
96,400 GTE Corporation 3,289,650
18,300 HBO & Company 837,225
38,500 LDDS Communications, Inc.+ 924,000
95,400 MCI Communications Corporation 2,074,950
78,900 Pacific Telesis Group 2,436,038
71,800 Southwestern Bell Corporation 3,168,175
63,100 Tele-Communications, Class A+ 1,206,788
------------
26,298,326
------------
DRUGS & COSMETICS -- 8.5%
27,300 American Home Products Corporation 2,105,512
18,600 Avon Products, Inc. 1,176,450
21,300 Colgate-Palmolive Company 1,496,325
</TABLE>
6 See Notes to Financial Statements.
...............................................................................
<PAGE>
PORTFOLIO OF INVESTMENTS (UNAUDITED) (CONTINUED)
...............................................................................
- --------------------------------------------------------------------------------
DREYFUS DISCIPLINED STOCK FUND APRIL 30, 1995
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
<C> <S> <C>
COMMON STOCKS (continued)
DRUGS & COSMETICS (CONTINUED)
48,104 Columbia/HCA Healthcare Corporation $ 2,020,368
30,400 Gillette Company 2,492,800
15,100 Lilly (Eli) 1,128,725
105,400 Merck & Company, Inc. 4,519,025
25,900 Mylan Labs, Inc. 796,425
35,300 Pfizer, Inc. 3,057,862
69,400 Procter & Gamble Company 4,849,325
17,900 Schering-Plough Corporation 1,349,212
24,100 SmithKline Beecham 936,887
------------
25,928,916
------------
OFFICE EQUIPMENT -- 5.5%
28,900 Adaptec Inc.+ 924,800
24,300 Compaq Computer Corporation+ 923,400
32,900 Computer Associates International, Inc. 2,117,938
36,100 Compuware Corporation+ 947,625
58,900 International Business Machines 5,580,775
10,600 Micron Technology, Inc. 871,850
55,100 Oracle Systems Corporation+ 1,680,550
39,900 Sun Microsystems, Inc.+ 1,591,013
17,600 Xerox Corporation 2,167,000
------------
16,804,951
------------
FOODS -- 5.5%
92,120 Archer-Daniels-Midland 1,681,190
114,300 Coca-Cola Company 6,643,687
36,500 ConAgra Inc. 1,213,625
30,300 CPC International, Inc. 1,776,337
21,100 IBP, Inc. 780,700
41,200 PepsiCo Inc. 1,714,950
25,500 Pioneer Hi-Bred International 956,250
14,500 Tyson Foods, Inc., Class A 344,375
12,600 Unilever, N.V. 1,683,675
------------
16,794,789
------------
</TABLE>
See Notes to Financial Statements. 7
...............................................................................
<PAGE>
PORTFOLIO OF INVESTMENTS (UNAUDITED) (CONTINUED)
...............................................................................
- --------------------------------------------------------------------------------
DREYFUS DISCIPLINED STOCK FUND APRIL 30, 1995
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
<C> <S> <C>
COMMON STOCKS (continued)
CONSUMER SERVICES -- 5.4%
57,100 Albertson's, Inc. $ 1,805,788
38,200 Eastman Kodak Company 2,196,500
73,700 Federated Department Stores, Inc.+ 1,556,913
108,000 Limited Inc. 2,308,500
39,400 Nordstrom, Inc. 1,516,900
24,700 Penney (J.C.) Company, Inc. 1,080,625
20,000 Safeway Inc.+ 750,000
71,500 Sears, Roebuck & Company 3,878,875
25,400 Service Corporation International 717,550
13,300 V.F. Corporation 671,650
------------
16,483,301
------------
CHEMICALS & FERTILIZERS -- 4.2%
71,100 du Pont (E.I.) de Nemours & Company 4,683,712
28,500 Eastman Chemical Corporation 1,617,375
20,100 Grace (W.R.) & Company 1,077,862
46,100 Lyondell Petrochemical Company 1,146,738
59,700 Praxair Inc. 1,417,875
39,700 Union Carbide Corporation 1,270,400
54,200 WMX Technologies, Inc. 1,476,950
------------
12,690,912
------------
MEDICAL SERVICES & SUPPLIES -- 3.8%
82,700 Abbott Laboratories 3,256,313
34,300 Humana Inc.+ 668,850
15,400 Intergrated Health Services, Inc. 533,225
61,100 Johnson & Johnson 3,971,500
15,100 Medtronic, Inc. 1,123,063
43,700 National Medical Enterprises, Inc.+ 742,900
34,500 United Healthcare Corporation 1,250,625
------------
11,546,476
------------
ENERGY -- 3.5%
39,000 CMS Energy Corporation 911,625
50,300 Consolidated Edison Company, Inc. 1,395,825
27,400 DQE, Inc. 924,750
</TABLE>
8 See Notes to Financial Statements.
...............................................................................
<PAGE>
PORTFOLIO OF INVESTMENTS (UNAUDITED) (CONTINUED)
...............................................................................
- --------------------------------------------------------------------------------
DREYFUS DISCIPLINED STOCK FUND APRIL 30, 1995
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
<C> <S> <C>
COMMON STOCKS (continued)
ENERGY (CONTINUED)
18,500 Duke Power Company $ 730,750
70,600 Entergy Corporation 1,535,550
26,400 FPL Group, Inc. 970,200
59,000 PECO Energy Company 1,519,250
26,600 Pinnacle West Capital Corporation 571,900
55,400 Southern Company 1,142,625
36,800 Unicom Corporation 966,000
------------
10,668,475
------------
AUTOMOTIVE -- 2.6%
68,700 Chrysler Corporation 2,962,687
18,600 Echlin Inc. 678,900
88,100 Ford Motor Company 2,378,700
26,100 General Motors Corporation, Class E 1,128,825
16,600 General Motors Corporation, Class H 649,475
------------
7,798,587
------------
BUILDING & CONSTRUCTION -- 2.5%
32,500 Georgia-Pacific Corporation 2,579,687
69,000 Lowe's Companies, Inc. 1,992,375
42,700 PPG Industries, Inc. 1,681,312
30,700 Weyerhaeuser Company 1,289,400
------------
7,542,774
------------
BROADCASTING & ENTERTAINMENT -- 2.4%
29,400 Capital Cities/ABC, Inc. 2,484,300
30,500 Disney (Walt) Company 1,688,938
15,300 King World Productions, Inc.+ 615,825
16,200 PolyGram N.V. 911,250
38,400 Reuters Holdings, ADR 1,747,200
------------
7,447,513
------------
MULTI-INDUSTRY -- 2.2%
79,200 Horsham Corporation, Quebec, Subvoting+ 1,079,100
20,600 ITT Corporation 2,152,700
28,600 Textron, Inc. 1,630,200
</TABLE>
See Notes to Financial Statements. 9
...............................................................................
<PAGE>
PORTFOLIO OF INVESTMENTS (UNAUDITED) (CONTINUED)
...............................................................................
- --------------------------------------------------------------------------------
DREYFUS DISCIPLINED STOCK FUND APRIL 30, 1995
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
<C> <S> <C>
COMMON STOCKS (continued)
MULTI-INDUSTRY (CONTINUED)
26,300 United Technologies $ 1,923,188
------------
6,785,188
------------
MACHINERY & HEAVY EQUIPMENT -- 2.2%
30,500 Case Corporation 773,938
45,400 Caterpillar Inc. 2,655,900
13,800 Deere & Company 1,131,600
19,400 Harnischfeger Industry, Inc. 572,300
13,300 Magna International, Class A 460,513
27,200 Varity Corporation+ 1,149,200
------------
6,743,451
------------
METALS & MINING -- 1.7%
39,200 Aluminum Company of America 1,759,100
53,900 American Barrick Resources Corporation 1,300,338
28,900 Inland Steel Industries, Inc.+ 733,338
14,700 Phelps Dodge Corporation 832,388
11,900 Potash Corporation Saskatchewan, Inc. 632,188
------------
5,257,352
------------
TOBACCO & VENDING -- 1.7%
75,700 Philip Morris Companies, Inc. 5,128,675
------------
PAPER & PRINTING -- 1.6%
33,300 International Paper Company 2,564,100
79,200 News Corporation, Ltd., ADR 1,544,400
14,500 Tribune Company 857,313
------------
4,965,813
------------
AEROSPACE & AVIATION -- 1.4%
38,927 Lockheed Corporation 2,248,034
19,200 McDonnell Douglas Corporation 1,190,400
16,700 Northrop Corporation 828,737
------------
4,267,171
------------
</TABLE>
10 See Notes to Financial Statements.
...............................................................................
<PAGE>
PORTFOLIO OF INVESTMENTS (UNAUDITED) (CONTINUED)
...............................................................................
- --------------------------------------------------------------------------------
DREYFUS DISCIPLINED STOCK FUND APRIL 30, 1995
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
<C> <S> <C>
COMMON STOCKS (continued)
RAILROADS -- 1.0%
45,700 Conrail, Inc. $ 2,496,363
18,100 Illinois Central Corporation 635,763
------------
3,132,126
------------
HOTEL & RESTAURANT -- 1.0%
49,400 Brinker International, Inc.+ 845,975
41,200 Morrison Restaurants, Inc. 932,150
23,900 Outback Steakhouse, Inc.+ 603,475
26,000 Sbarro, Inc. 669,500
------------
3,051,100
------------
AIR TRANSPORT -- 0.8%
11,500 AMR Corporation+ 774,812
14,100 Delta Air Lines, Inc. 921,787
10,200 Federal Express Corporation+ 693,600
------------
2,390,199
------------
TIRE & RUBBER -- 0.4%
34,600 Goodyear Tire & Rubber Company 1,314,800
------------
TRUCKING -- 0.2%
19,800 Ryder System 462,825
------------
TOTAL COMMON STOCKS
(Cost $265,922,308) 291,812,455
------------
</TABLE>
See Notes to Financial Statements. 11
...............................................................................
<PAGE>
PORTFOLIO OF INVESTMENTS (UNAUDITED) (CONTINUED)
.................................................................................
- -------------------------------------------------------------------------------
DREYFUS DISCIPLINED STOCK FUND APRIL 30, 1995
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
PRINCIPAL AMOUNT (NOTE 1)
<C> <S> <C>
REPURCHASE AGREEMENT -- 6.0%
(Cost $18,307,358)
$ 18,307,358 Agreement with Goldman Sachs & Company, 5.920%
dated 4/28/95, to be repurchased at
$18,316,390 on 5/1/95, collateralized by
$18,307,685 U.S. Treasury Notes, 7.750% due
1/31/00 $ 18,307,358
------------
TOTAL INVESTMENTS
(Cost $284,229,666*) 101.6% 310,119,813
OTHER ASSETS AND LIABILITIES (NET) (1.6) (4,983,086)
----- ------------
NET ASSETS 100.0% $305,136,727
===== ============
- --------------------------------------------------------------------------------
<FN>
* Aggregate cost for Federal tax purposes.
+ Non-income producing security.
</TABLE>
12 See Notes to Financial Statements.
.................................................................................
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
.................................................................................
- --------------------------------------------------------------------------------
DREYFUS DISCIPLINED STOCK FUND APRIL 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
Investments, at value (Cost $284,229,666) (Note 1)
See accompanying schedule $ 310,119,813
Cash 10,862
Receivable for Fund shares sold 1,214,889
Dividends and interest receivable 491,666
Receivable from investment advisor 29,003
Receivable for investment securities sold 17,849
--------------
TOTAL ASSETS 311,884,082
--------------
LIABILITIES:
Payable for investment securities purchased $ 6,121,821
Investment management fee payable (Note 2) 412,375
Payable for Fund shares redeemed 164,580
Accrued Directors' fees and expenses (Note 2) 43,036
Distribution fee payable (Note 3) 5,543
------------
TOTAL LIABILITIES 6,747,355
--------------
NET ASSETS $ 305,136,727
==============
NET ASSETS consist of:
Undistributed net investment income $ 1,325,473
Accumulated net realized loss on investments sold (2,974,446)
Unrealized appreciation of investments 25,890,147
Par value 15,839
Paid-in capital in excess of par value 280,879,714
--------------
TOTAL NET ASSETS $ 305,136,727
==============
NET ASSET VALUE
INVESTOR SHARES:
Net asset value, offering and redemption price per
share ($27,094,751 / 1,407,154 shares of capital
stock outstanding) $19.26
======
CLASS R SHARES:
Net asset value, offering and redemption price per
share ($278,041,976 / 14,431,535 shares of
capital stock outstanding) $19.27
======
</TABLE>
See Notes to Financial Statements. 13
.................................................................................
<PAGE>
STATEMENT OF OPERATIONS
.................................................................................
- --------------------------------------------------------------------------------
DREYFUS DISCIPLINED STOCK FUND
- --------------------------------------------------------------------------------
FOR THE SIX MONTHS ENDED APRIL 30, 1995 (UNAUDITED)
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Dividends $ 3,089,553
Interest 245,960
-------------
TOTAL INVESTMENT INCOME 3,335,513
-------------
EXPENSES:
Investment management fee (Note 2) $ 1,129,679
Distribution fee (Note 3) 30,680
Directors' fees and expenses (Note 2) 25,674
------------
TOTAL EXPENSES 1,186,033
-------------
NET INVESTMENT INCOME 2,149,480
-------------
REALIZED AND UNREALIZED GAIN/(LOSS) ON
INVESTMENTS (Notes 1 and 4):
Net realized loss on investments during
the period (2,824,186)
-------------
Net change in unrealized appreciation of
investments during the period 20,488,450
-------------
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS 17,664,264
-------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $ 19,813,744
=============
</TABLE>
14 See Notes to Financial Statements.
.................................................................................
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
.................................................................................
- --------------------------------------------------------------------------------
DREYFUS DISCIPLINED STOCK FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR
4/30/95 ENDED
(UNAUDITED) 10/31/94
<S> <C> <C>
Net investment income $ 2,149,480 $ 3,269,818
Net realized gain/(loss) on investments sold
during the period (2,824,186) 7,508,638
Net unrealized appreciation/(depreciation) on
investments during the period 20,488,450 (2,678,128)
-------------- --------------
Net increase in net assets resulting from
operations 19,813,744 8,100,328
Distributions to shareholders from net
investment income:
Investor shares (133,862) (31,895)
Class R shares (1,720,694) (2,567,476)
Distribution to shareholders from net realized
gain
on investments:
Investor shares (607,507) --
Class R shares (5,904,735) (4,454,514)
Net increase in net assets from Fund share
transactions (Note 5):
Investor shares 6,088,907 19,054,127
Class R shares 28,951,564 145,594,026
-------------- --------------
Net increase in net assets 46,487,417 165,694,596
NET ASSETS:
Beginning of period 258,649,310 92,954,714
-------------- --------------
End of period (including undistributed net
investment income of $1,325,473 and
$1,030,549, respectively) $ 305,136,727 $ 258,649,310
============== ==============
</TABLE>
See Notes to Financial Statements. 15
.................................................................................
<PAGE>
FINANCIAL HIGHLIGHTS
.................................................................................
- --------------------------------------------------------------------------------
DREYFUS DISCIPLINED STOCK FUND
- --------------------------------------------------------------------------------
FOR AN INVESTOR SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
<CAPTION>
SIX MONTHS
ENDED PERIOD
4/30/95 ENDED
(UNAUDITED) 10/31/94*#
<S> <C> <C>
- ---------------------------------------------------------------------------------
Net asset value, beginning of period $ 18.54 $ 17.86
-------- -------
Income from investment operations:
Net investment income 0.14 0.16
Net realized and unrealized gain on investments 1.17 0.66
-------- -------
Total from investment operations 1.31 0.82
-------- -------
Less distributions:
Distributions from net investment income (0.12) (0.14)
Distributions from net realized gains (0.47) --
-------- -------
Total distributions (0.59) (0.14)
-------- -------
Net asset value, end of period $ 19.26 $ 18.54
======== =======
Total return++ 7.41% 4.62%
======== =======
Ratios to average net assets/supplemental data:
Net assets, end of period (in 000's) $27,095 $19,580
Ratio of operating expenses to average net assets 1.15%** 1.15%**
Ratio of net investment income to average net assets 1.45%** 1.29%**
Portfolio turnover rate 31% 106%
- --------------------------------------------------------------------------------
<FN>
* The Fund commenced selling Investor shares on April 6, 1994.
** Annualized.
++ Total return represents aggregate total return for the period indicated.
# Prior to October 17, 1994, Mellon Bank, N.A. served as the Fund's investment
manager. Effective October 17, 1994, The Dreyfus Corporation serves as the
Fund's investment manager.
</TABLE>
16 See Notes to Financial Statements.
.................................................................................
<PAGE>
.................................................................................
[This Page Intentionally Left Blank]
17
.................................................................................
<PAGE>
FINANCIAL HIGHLIGHTS
.................................................................................
- --------------------------------------------------------------------------------
DREYFUS DISCIPLINED STOCK FUND
- --------------------------------------------------------------------------------
<TABLE>
FOR A CLASS R SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<CAPTION>
SIX
MONTHS
ENDED YEAR YEAR
04/30/95 ENDED ENDED
(UNAUDITED) 10/31/94*** 10/31/93
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------
Net asset value, beginning of period $ 18.54 $ 18.69 $ 17.21
--------- ---------- --------
Income from investment operations:
Net investment income 0.14 0.26# 0.30
Net realized and unrealized gain/(loss)
on investments 1.20 0.25 2.56
--------- ---------- --------
Total from investment operations 1.34 0.51 2.86
--------- ---------- --------
Less distributions:
Distributions from net investment income (0.14) (0.26) (0.31)
Distributions from net realized gains (0.47) (0.40) (1.07)
--------- ---------- --------
Total distributions (0.61) (0.66) (1.38)
--------- ---------- --------
Net asset value, end of period $ 19.27 $ 18.54 $ 18.69
========= ========== ========
Total return++ 7.58% 2.82% 17.46%
========= ========== ========
Ratios to average net assets/supplemental
data:
Net assets, end of period (in 000's) $278,042 $ 239,069 $92,955
Ratio of operating expenses to average
net assets+++ 0.90%** 0.90%+ 0.90%
Ratio of net investment income to average
net assets 1.70%** 1.54% 1.82%
Portfolio turnover rate 31% 106% 64%
- --------------------------------------------------------------------------------
<FN>
* The Fund commenced operations on December 31, 1987. The Fund commenced selling
Investor shares on April 6, 1994. Those shares outstanding prior to April 4,
1994 were designated Trust shares. Effective October 17, 1994, the Fund's Trust
shares were redesignated Class R shares.
** Annualized.
*** Prior to October 17, 1994, Mellon Bank, N.A. served as the Fund's investment
manager. Effective October 17, 1994, The Dreyfus Corporation serves as the
Fund's investment manager.
+ Annualized expense ratio before reimbursement of expenses by the adviser was
0.96% for the year ended October 31, 1994.
++ Total return represents aggregate total return for the periods indicated.
+++ For the years or period ended October 31, 1990, 1989, and 1988, the investment
adviser waived a portion of its advisory fee amounting to $0.0322, $0.1032, and
$0.0392 per share, respectively. For the years of period ended October 31,
1993, 1992, 1991, 1990, 1989, and 1988, the investment adviser reimbursed
expenses of the Fund amounting to $0.0627, $0.0981, $0.1721, $0.3329, $0.7153
and $0.6040 per share, respectively.
# Net investment income per share before reimbursement of expenses by the
investment adviser was $0.25 for the year ended October 31, 1994.
</TABLE>
18 See Notes to Financial Statements.
.................................................................................
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
.................................................................................
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR YEAR YEAR YEAR PERIOD
ENDED ENDED ENDED ENDED ENDED
10/31/92 10/31/91 10/31/90 10/31/89 10/31/88*
<S> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 16.40 $ 12.41 $ 13.73 $ 11.08 $ 10.00
-------- -------- ------- ------- -------
Income from investment operations:
Net investment income 0.27 0.27 0.23 0.33 0.11
Net realized and unrealized gain/(loss)
on investments 1.33 4.04 (0.60) 2.62 0.97
-------- -------- ------- ------- -------
Total from investment operations 1.60 4.31 (0.37) 2.95 1.08
-------- -------- ------- ------- -------
Less distributions:
Distributions from net investment income (0.27) (0.27) (0.28) (0.30) --
Distributions from net realized gains (0.52) (0.05) (0.67) -- --
-------- -------- ------- ------- -------
Total distributions (0.79) (0.32) (0.95) (0.30) --
-------- -------- ------- ------- -------
Net asset value, end of period $ 17.21 $ 16.40 $ 12.41 $ 13.73 $ 11.08
======== ======== ======= ======= =======
Total return++ 10.06% 35.27% (3.09)% 27.12% 10.80%
======== ======== ======= ======= =======
Ratios to average net assets/supplemental
data:
Net assets, end of period (in 000's) $ 43,742 $ 25,931 $ 9,517 $ 2,614 $ 1,619
Ratio of operating expenses to average
net assets+++ 0.90% 0.90% 0.82% 0.35% 0.35%**
Ratio of net investment income to average
net assets 1.73% 1.92% 2.22% 2.85% 2.58%**
Portfolio turnover rate 84% 69% 76% 93% 42%
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 19
.................................................................................
<PAGE>
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 which consists of 19 separate
investment portfolios. These financial statements report on the Dreyfus
Disciplined Stock 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 offers two classes of shares: Investor shares and Class R
shares. The Investor shares are sold primarily to retail investors and bear a
distribution fee. The Class R shares are sold primarily to bank trust
departments and other financial service providers (including Mellon Bank and
its affiliates) acting on behalf of customers having a qualified trust or
investment account or relationship at such institutions, and bear no
distribution fee. Currently, Investor shares are available only to existing
Investor shareholders. Each class of shares has identical rights and
privileges except with respect to distribution 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 in accordance with generally accepted accounting
principals.
(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 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 Directors. 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 period. 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 collateral to offset losses
incurred. There is potential loss to the Fund in the event the
20
.................................................................................
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
.................................................................................
Fund is delayed or prevented from exercising its rights to dispose 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 collateral and the
creditworthiness of those banks and dealers with which the Fund enters into
repurchase agreements to evaluate potential risks.
(C) 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 daily net assets of each
class.
(D) EXPENSE ALLOCATION
Expenses of the Fund not directly attributable to the operations of any class
of shares are prorated among 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.
(E) DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income, if any, are determined on a class
level, and are declared and paid quarterly. 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 income 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 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.
(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 entered into 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
21
.................................................................................
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
.................................................................................
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, policies and
limitations. For these services, the Fund pays the Manager a fee, calculated
daily and paid monthly, at the annual rate of 0.90% 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 six months ended April 30, 1995, the Fund incurred total brokerage
commissions of $260,072, of which $31,930 was paid to InvestNet Corporation,
a subsidiary of Mellon Bank Corporation.
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 services
to the Investment Company.
No officer or employee of Premier (or of any parent, subsidiary or affiliate
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/Laurel
Funds. In addition, no officer or employee of the Manager (or any parent,
subsidiary or 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 Committee meeting
attended, and reimburses 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 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, provided
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.
22
.................................................................................
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
.................................................................................
4. SECURITIES TRANSACTIONS
The cost of purchases and proceeds from sales of securities, excluding
short-term investments and U.S. government securities, for the six months
ended April 30, 1995 were $102,039,436 and $78,449,932, respectively.
At April 30, 1995, aggregate gross unrealized appreciation for all securities
in which there was an excess of value over tax cost and aggregate gross
unrealized depreciation for all securities in which there was an excess of
tax cost over value were $32,935,685 and $7,045,538, respectively.
<TABLE>
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 the authority to issue two
classes of shares. The table below summarizes the transactions in Fund shares
for the period indicated:
<CAPTION>
SIX MONTHS ENDED PERIOD ENDED
April 30, 1995 October 31, 1994*
SHARES AMOUNT SHARES AMOUNT
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INVESTOR SHARES:
Sold 1,560,323 $ 27,462,139 1,098,681 $ 19,823,569
Issued as reinvestment
of dividends and
distributions 10,101 175,161 575 10,293
Redeemed (1,219,577) (21,548,393) (42,949) (779,735)
---------- ------------ --------- ------------
Net increase 350,847 $ 6,088,907 1,056,307 $ 19,054,127
========== ============ ========= ============
=========================================================================================
</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 5,366,869 $ 97,541,498 10,921,206 $200,565,074
Issued as reinvestment of
dividends and
distributions 318,834 5,540,084 308,851 5,583,366
Redeemed (4,146,803) (74,130,018) (3,310,422) (60,554,414)
---------- ------------ ---------- ------------
Net increase 1,538,900 $ 28,951,564 7,919,635 $145,594,026
========== ============ ========== ============
- --------------------------------------------------------------------------------------------
<FN>
* The Fund commenced selling Investor shares on April 6, 1994. Any shares
outstanding prior to April 4, 1994 were designated Trust shares. Effective
October 17, 1994, the Fund's Trust shares were redesignated Class R shares.
</TABLE>
6. DIVIDENDS
On May 2, 1995, the Board of Directors declared a dividend from net
investment income for the Investor and Class R shares in the amount of
$0.0691 and $0.0849 per share, respectively, payable on May 8, 1995 to
shareholders of record on May 1, 1995.
23
.................................................................................
<PAGE>
FOR MORE INFORMATION ON YOUR FUND, INCLUDING:
- -- General Fund Information.
- -- Additional Prospectuses - Read the prospectus carefully before you invest.
- -- Account Information.
- -- Performance and Share Price Information.
CALL 1-800-645-6561
24 HOURS A DAY, 7 DAYS A WEEK.
Or write:
The Dreyfus Family of Funds
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
Further information is contained
in the Prospectus, which must
precede or accompany this report.
The Fund is distributed by:
Premier Mutual Fund Services, Inc.
One Exchange Place 10th floor
Boston, MA 02109 328/728SA954
DEAR SHAREHOLDER,
We are pleased to provide you with the Dreyfus Disciplined Midcap Stock
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 Disciplined Midcap Stock 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 12
Statement of Operations 13
Statement of Changes in Net Assets 14
Financial Highlights 15
Notes to Financial Statements 17
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 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
During the six months ended April 30, 1995, Dreyfus Disciplined Midcap
Stock Fund successfully navigated a volatile stock market environment to
post positive returns. The Investor shares and Class R shares posted total
returns of 4.38%* and 4.49%*, respectively. In contrast, the Fund's bench-
mark, the Standard & Poor's 400 Midcap Index (the "Index") posted a total
return of 6.35% for the six month period ended April 30, 1995. Although
large capitalization stocks provided higher returns than stocks from com-
panies with market capitalizations of $200 million to $5 billion, midcap
stock returns did surpass those of smaller capitalization issues.
The Fund's objective is to provide shareholders with returns that are
equal or superior to the return of the Index. In pursuing this objective,
we utilize an active, risk-controlled approach that combines fundamental
stock analysis with sophisticated computer modeling techniques. The Fund
attempts to remain fully invested in the stock market at all times, allo-
cating its assets among different market sectors in the same percentages
as the Index while using its own disciplined investment process in seeking
to select the most attractive stocks within each sector.
The market's volatility during the recent semi-annual period largely ac-
counts for the Fund's lag in performance relative to the Index. Despite
this challenge, our disciplined investment process did uncover a number of
stocks that yielded impressive returns. In the market-leading technology
sector, two semiconductor industry firms, Micron Technology and Teradyne,
tallied strong gains for the Fund. In the rebounding health care sector,
the Fund benefited from excellent price gains in its holdings of
Medtronic, the world's largest manufacturer of implantable heart devices.
The portfolio also benefited from the continued worldwide boom in gambling
with its holding of Players International, which recently opened a new and
highly lucrative property in Louisiana.
* Total return represents the change during the period in a hypothetical
account with dividends reinvested.
In addition, growth in the business services and banking sectors came from
several mid-sized companies during the semi-annual period. Business ser-
vice holdings in Equifax, SPS Transaction Services, and MBNA all tallied
solid returns for the portfolio. Our holding of Boston-based bank BayBanks
benefited from ongoing strength in that market area, while holdings of
Midlantic Bank were buoyed by that bank's successful cost-cutting and re-
structuring efforts.
Going forward, Fund management believes that our disciplined investment
approach along with possible ongoing growth in the asset base of the Fund
has the potential to provide shareholders with competitive returns over
the long term.
PORTFOLIO OF INVESTMENTS (UNAUDITED)
DREYFUS DISCIPLINED MIDCAP STOCK FUND APRIL 30, 1995
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
<S> <C> <C>
COMMON STOCKS -- 90.6%
FINANCIAL SERVICES -- 16.4%
3,500 Advanta Corporation $ 121,625
3,500 Allied Group, Inc. 102,375
3,600 American General Corporation 118,800
2,789 American National Insurance Company 177,102
10,900 Bank of New York Company, Inc. 358,338
2,700 BayBanks, Inc. 168,750
3,800 Bergen Brunswig Corporation 90,250
3,700 Crestar Financial Corporation 166,500
7,500 Cullen Frost Bankers 275,625
3,600 Dean Witter, Discover & Company 152,550
4,900 Equifax, Inc. 158,637
5,700 First Bank System, Inc. 230,850
2,200 First Chicago Corporation 121,550
3,000 First Interstate Bancorp 230,625
4,200 Foothill Group, Inc. 91,350
5,100 Fremont General Corporation 112,838
6,300 MBNA Corporation 190,575
5,400 Midlantic Corporation 197,100
3,400 Ohio Casualty Corporation 99,450
3,100 Rochester Community Savings Bank 57,737
3,222,627
TECHNOLOGY -- 14.9%
2,500 Altera Corporation+ 202,188
2,500 Applied Material, Inc.+ 154,062
3,400 Autodesk, Inc. 115,813
3,000 Cabletron Systems Inc.+ 142,500
6,600 Cadence Design Systems, Inc.+ 212,850
6,300 Cypress Semiconductor Corporation+ 190,575
3,500 Dell Computer+ 191,625
3,100 Informix Corporation+ 122,062
4,300 Komag, Inc.+ 166,088
4,400 Loral Corporation 206,800
1,700 Micron Technology, Inc. 139,825
2,300 Millipore Corporation 141,162
2,000 Novellus Systems, Inc.+ 121,500
4,526 Seagate Technology+ 144,266
4,100 StrataCom, Inc.+ 150,675
4,400 Sun Microsystems, Inc.+ 175,450
2,200 Sybase, Inc.+ 53,350
2,400 Teradyne, Inc.+ 121,500
3,100 3 Com Corporation 173,600
2,925,891
BASIC INDUSTRIES -- 11.6%
2,000 Alumax, Inc.+ 56,500
1,900 Cleveland-Cliffs, Inc. 69,588
2,500 Cyprus Minerals, Inc. 69,688
2,900 Eastman Chemical 164,575
2,300 Fleetwood Enterprises, Inc. 52,900
4,100 First Mississippi Corporation 102,500
2,500 Greenfield Industries, Inc. 73,750
9,200 Jefferson Smurfit Corporation+ 124,200
3,800 Olin Corporation 212,325
3,500 Rayonier, Inc. 115,938
6,000 Schulman, Inc. 188,250
1,316 Sherwin-Williams Company 46,882
7,300 Smith International, Inc.+ 125,925
2,300 Temple Inland, Inc. 101,200
3,400 U. S. Can Corporation+ 69,700
3,800 Varian Associates 174,800
5,400 Vigoro Corporation 215,325
2,900 Viking Office Products, Inc.+ 79,750
1,500 Watkins Johnson Company 59,437
5,200 Wellman, Inc. 140,400
2,400 Western Waste Industries+ 44,400
2,288,033
CONSUMER SERVICES -- 10.3%
3,600 American Stores Company 92,250
2,100 A. O. Smith Corporation 50,138
3,900 Caldor Corporation+ 75,563
5,000 Carson Pirie Scott & Company+ 80,625
7,300 Circuit City Stores, Inc. 188,888
6,800 Coors (Adolph) Company, Class B 111,350
3,300 DeVry, Inc.+ 126,225
4,000 Heritage Media Corporation, Class A+ 102,000
4,600 Manpower, Inc. 153,525
1,400 Michaels Stores, Inc.+ 39,900
6,100 Morrison Restaurants, Inc. 138,013
2,100 Nordstrom, Inc. 80,850
2,300 Papa Johns International 79,637
7,900 Pittston Services Group 187,625
3,800 Players International, Inc.+ 112,575
1,700 Ralston Purina Company 80,750
3,000 Reebok International, Ltd. 93,750
2,000 Royal Caribbean Cruises, Ltd., ADR 47,750
4,000 Scientific Games Holdings Corporation+ 97,000
780 Strattec Security Systems 9,067
1,800 Tandy Corporation 89,100
2,036,581
UTILITIES -- 9.3%
12,300 Baltimore Gas & Electric Company 290,588
8,800 Boston Edison Company 210,100
8,200 Commonwealth Energy Systems 336,200
7,000 DQE, Inc. 236,250
11,200 General Public Utilities Corporation 319,200
7,500 MCN Corporation 144,375
14,400 Portland General Corporation 298,800
1,835,513
HEALTH CARE/PHARMACEUTICALS -- 7.0%
5,000 Allergan, Inc. 135,625
2,300 Becton, Dickinson & Company 128,225
3,300 Cardinal Health, Inc. 152,212
3,500 Columbia/HCA Healthcare Corporation 147,000
5,600 Coram Healthcare Corporation+ 114,800
3,700 Elan Plc Ireland, ADR+ 130,888
5,500 HealthCare COMPARE Corporation+ 165,344
2,300 Hillhaven Corporation+ 63,250
1,700 Medtronic, Inc. 126,437
4,500 Mylan Labs, Inc. 138,375
4,000 OrNda Healthcorp+ 70,000
1,372,156
ENERGY -- 5.2%
1,800 Ashland Coal, Inc. 49,725
3,900 Benton Oil & Gas Company 48,018
7,500 Brooklyn Union Gas Company 181,875
3,800 LTV Corporation+ 54,150
8,700 Peco Energy Company 224,025
2,994 UltraMar Corporation 78,218
7,500 Union Texas Petroleum Holdings, Inc. 160,313
7,100 Williams Companies, Inc. 233,413
1,029,737
COMMUNICATIONS -- 4.6%
1,600 ADC Telecommunications, Inc.+ 52,800
6,800 ALC Communications Corporation+ 259,250
2,284 DSC Communications Corporation+ 84,508
4,200 InterVoice, Inc.+ 63,525
7,200 LDDS Communications, Inc.+ 172,800
3,200 Scripps (E.W.) Company, Class A 91,600
1,900 Tellabs, Inc.+ 131,100
2,000 United States Cellular Corporation+ 58,000
913,583
GENERAL BUSINESS -- 3.1%
6,556 Bowne & Company, Inc. 107,354
6,200 Central Newspaper, Inc., Class A 161,200
3,900 Chesapeake Corporation 120,900
2,800 King World Productions, Inc.+ 112,700
3,910 SPS Transaction Services, Inc.+ 119,744
621,898
CONSUMER DURABLES -- 2.9%
7,100 Brunswick Corporation 151,762
3,600 Cummins Engine Company, Inc. 161,100
3,600 Harley Davidson, Inc. 85,950
4,300 Leggett & Platt, Inc. 165,550
564,362
CONSUMER BASICS -- 2.7%
2,600 Alberto-Culver Company, Class B 81,900
4,600 Lancaster Colony Corporation 159,850
2,300 Thorn Apple Valley, Inc. 41,830
6,900 Tyson Foods, Inc., Class A 163,875
4,300 Whitman Corporation 78,475
525,930
TRANSPORTATION -- 1.8%
2,000 Conrail, Inc. 109,250
3,900 Illinois Central Corporation 136,987
3,800 Landstar System, Inc.+ 110,200
356,437
CONSUMER NON-DURABLES -- 0.8%
2,600 Haggar Corporation 52,650
2,000 V. F. Corporation 101,000
153,650
TOTAL COMMON STOCKS
(Cost $16,808,500) 17,846,398
PRINCIPAL
AMOUNT
U.S. TREASURY OBLIGATIONS -- 0.2%
(Cost $34,967)
U.S. Treasury Bills,
$ 35,000 5.060%# due 05/04/95 34,967
REPURCHASE AGREEMENT -- 10.9%
(Cost $2,144,553)
Agreement with Goldman Sachs & Company,
5.920% dated 04/28/95, to be repurchased
at $2,145,611 on 05/01/95, collateralized
by $2,084,000 U.S. Treasury Notes, 7.625%
2,144,553 due 02/15/25 2,144,553
TOTAL INVESTMENTS
(Cost $18,988,020*) 101.7% 20,025,918
OTHER ASSETS AND LIABILITIES (NET) (1.7) (339,582)
NET ASSETS 100.0% $19,686,336
<FN>
* Aggregate cost for Federal tax purposes.
+ Non-income producing security.
# Annualized yield at date of purchase.
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE OF FUTURE CONTRACTS
NUMBER OF FUTURES CONTRACTS -- LONG POSITION
CONTRACTS (Cost $933,125)
<S> <C> <C>
10 S&P Midcap 400, June 1995 $ 932,500
</TABLE>
See Notes to Financial Statements.
STATEMENT OF ASSETS AND LIABILITIES
DREYFUS DISCIPLINED MIDCAP STOCK FUND
APRIL 30, 1995 (UNAUDITED)
<TABLE>
<S> <C> <C>
ASSETS
Investments, at value (Cost
$18,988,020)(Note 1)
See accompanying schedule
Repurchase agreement $ 2,144,553
Securities 17,881,365 $ 20,025,918
Receivable for investment securities sold 281,665
Receivable for Fund shares sold 58,914
Dividends and interest receivable 26,509
Receivable from investment adviser 20,878
TOTAL ASSETS 20,413,884
LIABILITIES:
Payable for investment securities purchased $ 670,075
Investment management fee payable (Note 2) 30,972
Due to custodian 22,581
Accrued Directors' fees and expenses (Note
2) 3,179
Daily variation margin on open futures con-
tracts (Note 1) 625
Distribution fee payable (Note 3) 116
TOTAL LIABILITIES 727,548
NET ASSETS $ 19,686,336
NET ASSETS consist of:
Undistributed net investment income $ 58,007
Accumulated net realized loss on invest-
ments sold and futures contracts (937,405)
Net unrealized appreciation of investments
and futures contracts 1,037,273
Par value 1,942
Paid-in capital in excess of par value 19,526,519
TOTAL NET ASSETS $ 19,686,336
NET ASSETS VALUE
INVESTOR SHARES
Net asset value, offering and redemption
price per share ($632,629 / 62,455 shares
of capital stock outstanding) $10.13
CLASS R SHARES
Net asset value, offering and redemption
price per share ($19,053,707 / 1,879,962
shares of capital stock outstanding) $10.14
</TABLE>
See Notes to Financial Statements.
STATEMENT OF OPERATIONS
DREYFUS DISCIPLINED MIDCAP STOCK FUND
FOR THE SIX MONTHS ENDED APRIL 30, 1995 (UNAUDITED)
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Dividends $ 170,502
Interest 23,667
TOTAL INVESTMENT INCOME 194,169
EXPENSES:
Investment management fee (Note 2) $ 87,416
Directors' fees and expenses (Note 2) 1,619
Distribution fee (Note 3) 306
TOTAL EXPENSES 89,341
NET INVESTMENT INCOME 104,828
REALIZED AND UNREALIZED GAIN/(LOSS) ON IN-
VESTMENTS (Notes 1 and 4):
Net realized loss on:
Securities transactions (170,833)
Futures contracts (2,651)
Net realized loss on investments during
the period (173,484)
Net change in unrealized appreciation/
(depreciation) of:
Securities 705,871
Futures contracts (500)
Net unrealized appreciation of invest-
ments during the period 705,371
NET REALIZED AND UNREALIZED GAIN ON INVEST-
MENTS 531,887
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS $ 636,715
</TABLE>
See Notes to Financial Statements.
STATEMENT OF CHANGES IN NET ASSETS
DREYFUS DISCIPLINED MIDCAP STOCK FUND
<TABLE>
<CAPTION>
SIX
MONTHS PERIOD
ENDED ENDED
4/30/95 10/31/94*
(UNAUDITED)
<S> <C> <C>
Net investment income $ 104,828 $ 159,637
Net realized loss on investments and fu-
tures contracts during the period (173,484) (763,921)
Net unrealized appreciation of investments
and futures contracts during the period 705,371 331,902
Net increase/(decrease) in net assets re-
sulting from operations 636,715 (272,382)
Distributions to shareholders from net in-
vestment income:
Investor shares (627) (94)
Class R shares (95,833) (109,904)
Net increase in net assets from Fund share
transactions (Note 5)
Investor shares 552,359 53,937
Class R shares 370,727 18,551,438
Net increase in net assets 1,463,341 18,222,995
NET ASSETS:
Beginning of period 18,222,995 --
End of period (including undistributed net
investment income of $58,007 and $49,639,
respectively) $19,686,336 $18,222,995
<FN>
* The Fund commenced operations on November 12, 1993.
</TABLE>
See Notes to Financial Statements.
FINANCIAL HIGHLIGHTS
DREYFUS DISCIPLINED MIDCAP STOCK 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 $9.75 $10.00
Income from investment operations:
Net investment income 0.05 0.05
Net realized and unrealized gain/(loss) on
investments 0.37 (0.26)
Total from investment operations 0.42 (0.21)
Less distributions:
Distributions from net investment income (0.04) (0.04)
Net asset value, end of period $10.13 $9.75
Total return++ 4.38% (2.06)%
Ratios to average net assets/supplemental
data:
Net assets, end of period (in 000's) $633 $54
Ratio of operating expenses to average net
assets 1.35%+ 1.40%+
Ratio of net investment income to average
net assets 1.05%+ 0.73%+
Portfolio turnover rate 46% 83%
<FN>
* The Fund commenced selling Investor shares on April 6, 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 DISCIPLINED MIDCAP STOCK 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 $9.76 $10.00
Income from investment operations:
Net investment income 0.06 0.09**
Net realized and unrealized gain/(loss) on
investments 0.37 (0.27)
Total from investment operations 0.43 (0.18)
Less distributions:
Distributions from net investment income (0.05) (0.06)
Net asset value, end of period $10.14 $9.76
Total return++ 4.49% (1.77)%
Ratios to average net assets/supplemental
data:
Net assets, end of period (in 000's) $19,054 $18,169
Ratio of operating expenses to average net
assets 1.10%+ 1.16%+***
Ratio of net investment income to average
net assets 1.30%+ 0.98%+
Portfolio turnover rate 46% 83%
<FN>
* The Fund commenced operations on November 12, 1993. Any shares out-
standing prior to April 4, 1994 were designated as Trust shares. Ef-
fective October 17, 1994, the Fund's Trust shares were redesignated as
Class R shares.
+ Annualized.
++ Total return represents aggregate total return for the period indi-
cated.
** Net investment income before reimbursement of expenses by investment
adviser for the period ended October 31, 1994 was $0.06.
*** Annualized expense ratio before voluntary reimbursement of expenses by
the investment adviser for the period ended October 31, 1994 was
1.53%.
# 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 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 Disciplined Mid-
cap Stock Fund (the "Fund"). The Investment Company was incorporated on
August 6, 1987 as a Maryland corporation and is registered with the Secu-
rities and Exchange Commission under the Investment Company Act of 1940,
as amended (the "1940 Act"), as a diversified open-end management invest-
ment company. The Fund currently 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 departments and other financial service providers (including
Mellon Bank and its affiliates) acting on behalf of customers having a
qualified trust or investment account or relationship at such institutions
and bear no distribution fee. Each class of shares has identical rights
and privileges except with respect to the distribution fee 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 in accordance with generally ac-
cepted accounting principles.
(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 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 Direc-
tors. Bonds are valued through valuations obtained from a commercial pric-
ing service or at the most recent mean of the bid and asked prices pro-
vided by investment dealers in accordance with procedures established by
the Board of Directors. 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 takes possession of an under-
lying debt obligation subject to an obligation of the seller to repur-
chase, 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 mar-
ket fluctuations during the Fund's holding period. The value of the col-
lateral is at least equal, at all times, to the total amount of the repur-
chase obligations, including interest. In the event of counterparty de-
fault, the Fund has the right to use the collateral to offset losses
incurred. There is potential loss to the Fund in the event the Fund is de-
layed or prevented from exercising its rights to dispose 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 collateral and the creditwor-
thiness of those banks and dealers with which the Fund enters into repur-
chase 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 payment ("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 future contracts as a hedging device involves several risks.
The change in value of the 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
secondary 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 sold are recorded
on the identified cost basis. Investment income and realized and unreal-
ized gains and losses are allocated based upon relative 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 prorated between the classes based upon the relative
average daily net assets of each class of shares. 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 quarterly. The Fund distrib-
utes any net realized capital gains on a Fund level annually. Dividends
and distributions 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% 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
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 entered into 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 ac-
counting and transfer agency services to the Investment Company. The Man-
ager also directs the investments of the Fund in accordance with its in-
vestment objective, policies and limitations. For these services, the Fund
pays the Manager a fee, calculated daily and paid monthly, at the annual
rate of 1.10% 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 broker-
age, taxes, interest, Rule 12b-1 distribution fees and expenses, fees and
expenses of non-interested directors (including counsel fees) and extraor-
dinary 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 Municipals 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 any of
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 per each Audit Com-
mittee meeting attended, and reimburses 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. 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 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 six months
ended April 30, 1995 aggregated $7,572,165 and $7,311,916, respectively.
At April 30, 1995, aggregate gross unrealized appreciation for all securi-
ties in which there was an excess of value over tax cost amounted to
$1,726,229. For the same period, the gross unrealized depreciation for all
securities in which there was an excess of tax cost over value amounted to
$688,331.
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 two
classes of shares. The table below summarizes 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 61,332 $594,314 6,048 $ 59,087
Issued as reinvestment of dividends 29 266 7 66
Redeemed (4,425) (42,221) (536) (5,216)
Net increase 56,936 $552,359 5,519 $ 53,937
</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 446,538 $4,404,299 2,122,927 $21,172,051
Issued as reinvestment of dividends 9,836 92,555 11,107 109,104
Redeemed (437,134) (4,126,127) (273,312) (2,729,717)
Net increase 19,240 $370,727 1,860,722 $18,551,438
<FN>
* The Fund commenced operations on November 12, 1993. The Fund commenced
selling Investor shares on April 6, 1994. Any shares outstanding prior
to April 4, 1994 were designated Trust shares. Effective October 17,
1994, 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 an unused capital loss carryforward of $764,046 expiring in 2002.
7. DIVIDENDS
On May 2, 1995 the Board of Directors declared dividends from net invest-
ment income for the Investor and Class R shares in the amount of $.0218
and $.0301 per share, respectively, payable on May 8, 1995 to shareholders
of record on May 1, 1995.
<PAGE>
THE DREYFUS
DREYFUS EQUITY INCOME FUND
Small box above fund name
showing a lions face.
<PAGE>
DEAR SHAREHOLDER,
We are pleased to provide you with the Dreyfus Equity Income 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 services 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
investment needs. As always, we welcome your thoughts and suggestions.
Sincerely,
Marie E. Connolly
President
The Dreyfus/Laurel Funds, Inc. --
Dreyfus Equity Income Fund
June 20, 1995
1
.................................................................................
<PAGE>
TABLE of CONTENTS
.................................................................................
<TABLE>
<S> <C>
Shareholder Letter........................................ 1
Economic Review........................................... 3
Portfolio Review.......................................... 4
Portfolio of Investments.................................. 5
Statement of Assets and Liabilities....................... 12
Statement of Operations................................... 13
Statement of Changes in Net Assets........................ 14
Financial Highlights...................................... 15
Notes to Financial Statements............................. 17
</TABLE>
2
.................................................................................
<PAGE>
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 economists. 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 December peak.
The Federal Reserve Board deserves at least partial credit for the slowdown.
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 develop
over the next several months as producers adapt their output to new sales
realities. Still, we believe the slowdown is temporary. Job and income 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 capital spending phases of
their economic expansions, which will support U.S. capital goods exports.
Finally, the bulk of the Mexican recession's depressing 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
industrial 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 further
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
significantly, while the stabilizing economy, low inflation, and strong
corporate 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 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.
3
.................................................................................
<PAGE>
ECONOMIC REVIEW (continued)
.................................................................................
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 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 REVIEW
.................................................................................
The six months ended April 30, 1995 proved somewhat challenging for most
equity mutual funds, including this one. While the stock market rose as a
whole, particularly in the first quarter of 1995, trading was brisk, and the
market experienced a fair amount of volatility. The performance of technology
stocks was the only constant; performance among other sectors shifted almost
continuously, leaving the market with no clear leaders. Generally, stocks of
companies reporting lower-than-expected earnings were pummeled, yet those
reporting strong earnings were not rewarded in kind. Even those stocks that
appreciated did not ride the wave of success for long; strong performers
seemed to appear and disappear with alarming speed.
Despite these difficulties, the Fund posted positive returns for the period.
For the six months ended April 30, 1995 the Fund's Investor and Class R shares
posted total returns of 8.91%* and 9.10%,* respectively. In contrast, the
Standard and Poor's 500 Composite Stock Price Index (the "S&P 500 Index")
posted a total return of 10.46% for the same time period.
The Fund's objective is to provide shareholders with an above-average level of
income along with moderate long-term growth of income and principal. Using a
combination of sophisticated statistical computer models and fundamental stock
analysis, Fund management selects individual stocks in seeking to meet our
income and growth criteria. Utility, energy and financial stocks are widely
represented in the portfolio because of their high current income. However,
the total return performance of these potentially higher-yielding stocks also
tends to lag somewhat when the market is rising strongly, as they did in the
recent semi-annual period.
- ---------
* TOTAL RETURN REPRESENTS THE CHANGE DURING THE PERIOD IN A HYPOTHETICAL ACCOUNT
WITH DIVIDENDS REINVESTED.
4
.................................................................................
<PAGE>
PORTFOLIO of INVESTMENTS (unaudited)
.................................................................................
- --------------------------------------------------------------------------------
DREYFUS EQUITY INCOME FUND APRIL 30, 1995
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
COMMON STOCKS -- 89.2%
<C> <S> <C>
OIL & GAS -- 11.3%
1,050 Amoco Corporation $ 68,906
500 Atlantic Richfield 57,250
400 British Petroleum PLC ADR 34,450
2,250 Exxon Corporation 156,656
500 Lyondell Petrochemical Company 12,438
300 Mobil Corporation 28,463
800 Phillips Petroleum Company 28,000
750 Royal Dutch Petroleum 93,000
500 Sonat Inc. 15,188
800 Texaco Inc. 54,700
1,400 Ultramar Corporation 36,575
800 USX-Marathon Group 31,875
-----------
617,501
-----------
TELECOMMUNICATIONS -- 9.4%
1,150 Ameritech Inc. 51,750
1,350 A T & T Corporation 68,513
1,100 BCE Inc. 34,925
1,150 Bell Atlantic Corporation 63,106
550 Bellsouth Corporation 33,688
1,350 GTE Corporation 46,069
1,250 Nynex Corporation 51,094
2,350 Pacific Telesis Group 72,556
1,550 Southwestern Bell Corporation 68,394
500 U S West Inc. 20,688
-----------
510,783
-----------
DRUGS & COSMETICS -- 9.0%
450 American Home Products Inc. 34,706
500 Avon Products Inc. 31,625
650 Bristol-Myers Squibb Company 42,331
300 Colgate-Palmolive Company 21,075
200 Eli Lilly Company 14,950
500 Gillette Company 41,000
2,100 Merck & Company Inc. 90,038
900 Pfizer Inc. 77,963
1,250 Procter & Gamble Company 87,344
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS. 5
.................................................................................
<PAGE>
PORTFOLIO of INVESTMENTS (unaudited) (continued)
.................................................................................
- --------------------------------------------------------------------------------
DREYFUS EQUITY INCOME FUND APRIL 30, 1995
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
COMMON STOCKS (continued)
<C> <S> <C>
DRUGS & COSMETICS (CONTINUED)
200 Schering-Plough Corporation $ 15,075
400 Smithkline Beecham 15,550
300 Warner Lambert Company 15,950
-----------
487,607
-----------
BANKING -- 6.1%
1,600 Bank Of New York Company Inc. 52,600
750 BankAmerica Corporation 37,125
1,400 Chase Manhattan Corporation 61,250
1,650 Corestates Financial Corporation 53,831
200 First Bank System Inc. 8,100
300 First Interstate Bancorp 23,063
800 First Union Corporation 36,200
1,150 MBNA Corporation 34,788
400 National City Corporation 10,950
550 PNC Financial Corporation 13,819
-----------
331,726
-----------
PUBLIC UTILITIES -- 4.7%
1,750 CINergy Corporation 43,969
1,500 Consolidated Edison Company Inc. 41,625
700 DQE, Inc. 23,625
900 Entergy Corporation 19,575
300 FPL Group Inc. 11,025
950 Pacific Enterprises 23,394
1,350 Peco Energy Company 34,763
1,900 Southern Company 39,188
800 Unicom Corporation 21,000
-----------
258,164
-----------
MERCHANDISING -- 4.7%
900 Albertsons Inc. 28,463
1,750 Limited Inc. 37,406
1,050 May Department Stores Company 38,063
450 Nordstrom Inc. 17,325
1,000 Penney J C Company Inc. 43,750
1,200 Sears Roebuck & Company 65,100
</TABLE>
6 SEE NOTES TO FINANCIAL STATEMENTS.
.................................................................................
<PAGE>
PORTFOLIO of INVESTMENTS (unaudited) (continued)
.................................................................................
- --------------------------------------------------------------------------------
DREYFUS EQUITY INCOME FUND APRIL 30, 1995
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
COMMON STOCKS (continued)
<C> <S> <C>
MERCHANDISING (CONTINUED)
550 Tandy Corporation $ 27,225
-----------
257,332
-----------
FOOD -- 4.3%
1,650 Coca-Cola Company 95,906
550 Conagra Inc. 18,288
650 CPC International Inc. 38,105
150 IBP Inc. 5,550
1,000 Pepsico Inc. 41,625
250 Unilever N V 33,405
-----------
232,879
-----------
CHEMICALS & FERTILIZERS -- 4.1%
1,400 du Pont (EI) de Nemours & Company 92,225
650 Eastman Chemical 36,888
300 Grace W.R. & Company 16,088
400 Monsanto Company 33,300
750 Union Carbide Corporation 24,000
800 WMX Technologies Inc. 21,800
-----------
224,301
-----------
OFFICE EQUIPMENT -- 4.0%
950 International Business Machines 90,013
200 Micron Technology Inc. 16,450
600 Pitney Bowes Inc. 22,275
750 Reynolds & Reynolds Company 19,875
550 Xerox Corporation 67,719
-----------
216,332
-----------
INSURANCE -- 3.3%
1,100 American General Corporation 36,300
750 American National Insurance Company 47,625
400 CIGNA Corporation 29,050
350 Providian Corporation 11,944
500 Safeco Corporation 28,250
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS. 7
.................................................................................
<PAGE>
PORTFOLIO of INVESTMENTS (unaudited) (continued)
.................................................................................
- --------------------------------------------------------------------------------
DREYFUS EQUITY INCOME FUND APRIL 30, 1995
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
COMMON STOCKS (continued)
<C> <S> <C>
INSURANCE (CONTINUED)
600 St. Paul Companies $ 28,875
-----------
182,044
-----------
ELECTRONICS -- 3.0%
650 Corning Inc. 21,694
350 Eaton Corporation 20,080
800 Hewlett Packard Company 52,900
650 Motorola Inc. 36,968
450 Raytheon Company 32,738
-----------
164,380
-----------
MEDICAL -- 2.9%
1,900 Abbott Laboratories 74,812
350 Baxter International Inc. 12,162
1,050 Johnson & Johnson 68,250
-----------
155,224
-----------
ELECTRICAL EQUIPMENT -- 2.8%
350 Avnet Inc. 15,575
650 Circuit City Stores Inc. 16,819
2,100 General Electric Company 117,600
-----------
149,994
-----------
AEROSPACE & AVIATION -- 2.5%
150 Delta Air Lines Inc. 9,806
896 Lockheed Corporation 51,744
300 McDonnell Douglas Corporation 18,600
450 Northrop Corporation 22,331
450 United Technologies 32,906
-----------
135,387
-----------
BUILDING MATERIALS -- 2.4%
300 Georgia Pacific Corporation 23,812
1,100 Lowes Company 31,762
600 PPG Industries Inc. 23,625
</TABLE>
8 SEE NOTES TO FINANCIAL STATEMENTS.
.................................................................................
<PAGE>
PORTFOLIO of INVESTMENTS (unaudited) (continued)
.................................................................................
- --------------------------------------------------------------------------------
DREYFUS EQUITY INCOME FUND APRIL 30, 1995
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
COMMON STOCKS (continued)
<C> <S> <C>
BUILDING MATERIALS (CONTINUED)
1,200 Weyerhaeuser Company $ 50,400
-----------
129,599
-----------
AUTOMOTIVE -- 1.9%
1,200 Chrysler Corporation 51,750
300 Echlin Inc. 10,950
1,000 General Motors Corporation, Class H 39,125
-----------
101,825
-----------
TOBACCO & VENDING -- 1.7%
1,400 Philip Morris Companies Inc. 94,850
-----------
FINANCE -- 1.3%
200 Dean Witter Discover & Company 8,475
400 Federal National Mortgage Association 35,300
600 Reuters Holdings PLC ADR 27,300
-----------
71,075
-----------
RAILROADS -- 1.2%
850 Conrail Inc. 46,430
600 Illinois Central 21,075
-----------
67,505
-----------
METALS -- 1.2%
800 Aluminum Company Of America 35,900
300 Phelps Dodge Corporation 16,987
200 Potash Corporation 10,625
-----------
63,512
-----------
MULTI-INDUSTRY -- 1.1%
300 ITT Corporation 31,350
450 Textron Inc. 25,650
-----------
57,000
-----------
PRINTING & PUBLISHING -- 1.0%
250 Gannett Company Inc. 13,155
150 McGraw-Hill Inc. 11,195
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS. 9
.................................................................................
<PAGE>
PORTFOLIO of INVESTMENTS (unaudited) (continued)
.................................................................................
- --------------------------------------------------------------------------------
DREYFUS EQUITY INCOME FUND APRIL 30, 1995
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
COMMON STOCKS (continued)
<C> <S> <C>
PRINTING & PUBLISHING (CONTINUED)
450 Tribune Company $ 26,605
-----------
50,955
-----------
BUSINESS SERVICES -- 0.9%
1,200 Block H & R Inc. 50,550
-----------
PHOTOGRAPHY & PHOTOGRAPHIC EQUIPMENT -- 0.9%
800 Eastman Kodak Company 46,000
-----------
RESTAURANTS -- 0.6%
950 Morrison Restaurants Inc. 21,494
525 Sbarro Inc. 13,518
-----------
35,012
-----------
TRUCKING -- 0.6%
450 Caterpillar Inc. 26,325
350 Ryder System 8,180
-----------
34,505
-----------
MACHINERY & HEAVY EQUIPMENT -- 0.6%
400 Deere & Company 32,800
-----------
ENTERTAINMENT -- 0.5%
500 Disney, Walt Productions 27,688
-----------
PAPER -- 0.4%
300 International Paper Company 23,100
-----------
TIRE & RUBBER -- 0.3%
500 Goodyear Tire & Rubber 19,000
-----------
BEVERAGES -- 0.3%
300 Anheuser-Busch Companies 17,438
-----------
TEXTILES -- 0.2%
250 V F Corporation 12,625
-----------
TOTAL COMMON STOCKS (Cost $4,444,841) 4,858,693
-----------
</TABLE>
10 SEE NOTES TO FINANCIAL STATEMENTS.
.................................................................................
<PAGE>
PORTFOLIO of INVESTMENTS (unaudited) (continued)
.................................................................................
- --------------------------------------------------------------------------------
DREYFUS EQUITY INCOME FUND APRIL 30, 1995
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
CONVERTIBLE PREFERRED STOCKS -- 4.2%
<C> <S> <C>
300 Ashland Oil Inc., 6.250% Conv. Pfd. $ 17,850
200 Barnett Banks Inc., $4.50 Series A, Conv. Pfd. 17,800
450 Burlington Northern Inc., 6.250% Series A, Conv. Pfd. 29,138
1,200 Citicorp, Depositary Shares representing 1/12 share, Series
15, Conv. Pfd. 24,000
400 First U.S.A. Inc., 6.250% Series A, Conv. Pfd. 15,450
650 Ford Motor Company, Depositary Shares representing 1/1000
share, Series 15, Conv. Pfd. 57,282
350 General Motors Corporation, Depositary Shares representing
1/10 share, Series C, Conv. Pfd. 21,920
2,300 RJR Nabisco Holdings, Depositary Shares representing 1/10
share, 9.250% Series C, Conv. Pfd. 13,800
500 Travelers Inc., 5.500% Series B, Conv. Pfd. 30,188
-----------
TOTAL CONVERTIBLE PREFERRED STOCKS
(Cost $252,015) 227,428
-----------
<CAPTION>
PRINCIPAL
AMOUNT
<C> <S> <C>
CONVERTIBLE BONDS AND NOTES -- 1.0%
$ 18,000 General Instrument, Convertible Subordinate Notes
5.000% due 6/15/00 26,595
11,000 Pogo Producing Company, Convertible Subordinate Notes 5.500%
due 3/15/04 12,470
10,000 Wendy's International Inc., Convertible Subordinate
Debentures 7.000% due 4/1/06 14,450
-----------
TOTAL CONVERTIBLE BONDS AND NOTES
(Cost $49,822) 53,515
-----------
REPURCHASE AGREEMENT -- 4.6% (Cost $250,692)
250,692 Agreement with Goldman Sachs dated 4/28/95, bearing 5.920%
to be repurchased at $250,816 on 5/1/95, collateralized by
$251,203 U.S. Treasury Bond, 7.625% due 2/15/25 250,692
-----------
TOTAL INVESTMENTS (Cost $4,997,370*) 99.0% 5,390,328
OTHER ASSETS AND LIABILITIES (NET) 1.0 53,074
------ ----------
NET ASSETS 100.0% $ 5,443,402
------ ----------
------ ----------
------------------------------------------------------------------------------------
<FN>
* AGGREGATE COST FOR FEDERAL TAX PURPOSES.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS. 11
.................................................................................
<PAGE>
STATEMENT of ASSETS and LIABILITIES
.................................................................................
- --------------------------------------------------------------------------------
DREYFUS EQUITY INCOME FUND APRIL 30, 1995 (UNAUDITED)
<TABLE>
<S> <C> <C>
ASSETS:
Investments, at value (Cost $4,997,370) (Note 1)
See accompanying schedule $ 5,390,328
Cash 133
Receivable for investment securities sold 60,613
Dividends and interest receivable 13,946
Receivable for Fund shares sold 3,210
------------
TOTAL ASSETS 5,468,230
------------
LIABILITIES:
Payable for investment securities purchased $ 14,610
Investment management fee payable (Note 2) 7,678
Payable for Fund shares redeemed 1,758
Accrued Directors' fees and expenses (Note 2) 639
Distribution fee payable (Note 3) 143
---------
TOTAL LIABILITIES 24,828
------------
NET ASSETS $ 5,443,402
------------
------------
NET ASSETS consist of:
Undistributed net investment income $ 42,515
Accumulated net realized loss on investments sold (58,166)
Unrealized appreciation of investments 392,958
Par value 507
Paid-in capital in excess of par value 5,065,588
------------
TOTAL NET ASSETS $ 5,443,402
------------
------------
NET ASSET VALUE
INVESTOR SHARES
Net asset value, offering and redemption price per share
($748,100 DIVIDED BY 69,655 shares of capital stock
outstanding) $10.74
------
------
CLASS R SHARES
Net asset value, offering and redemption price per share
($4,695,302 DIVIDED BY 436,975 shares of capital stock
outstanding) $10.75
------
------
</TABLE>
12 SEE NOTES TO FINANCIAL STATEMENTS.
.................................................................................
<PAGE>
STATEMENT of OPERATIONS
.................................................................................
- --------------------------------------------------------------------------------
DREYFUS EQUITY INCOME FUND
FOR THE SIX MONTHS ENDED APRIL 30, 1995 (UNAUDITED)
<TABLE>
<S> <C> <C>
INVESTMENT INCOME
Dividends $ 82,040
Interest 8,276
----------
TOTAL INVESTMENT INCOME 90,316
----------
EXPENSES
Investment management fee (Note 2) $ 22,002
Directors' fees and expenses (Note 2) 500
Distribution fee (Note 3) 336
---------
TOTAL EXPENSES 22,838
----------
NET INVESTMENT INCOME 67,478
----------
REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS
(Notes 1 and 4):
Net realized loss on investments sold during the
period (48,567)
Net unrealized appreciation of investments
during the period 429,830
----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS 381,263
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 448,741
----------
----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS. 13
.................................................................................
<PAGE>
STATEMENT of CHANGES in NET ASSETS
.................................................................................
- --------------------------------------------------------------------------------
DREYFUS EQUITY INCOME FUND
<TABLE>
<CAPTION>
SIX
MONTHS
ENDED PERIOD
4/30/95 ENDED
(UNAUDITED) 10/31/94*
<S> <C> <C>
Net investment income $ 67,478 $ 23,451
Net realized loss on investments during the period (48,567) (9,599)
Net unrealized appreciation/(depreciation) of investments during the period 429,830 (36,872)
------------ ------------
Net increase/(decrease) in net assets resulting from operations 448,741 (23,020)
Distributions from net investment income:
Investor shares (198) --
Class R shares (48,216) --
Net increase/(decrease) in net assets from Fund share transactions (Note
5):
Investor shares 700,325 1,001
Class R shares (662,931) 5,027,700
------------ ------------
Net increase in net assets 437,721 5,005,681
NET ASSETS:
Beginning of period 5,005,681 0
------------ ------------
End of period (including undistributed net investment income of $42,515 and
$23,451, respectively) $ 5,443,402 $ 5,005,681
------------ ------------
------------ ------------
------------------------------------------------------------------------------------
<FN>
* THE FUND COMMENCED OPERATIONS ON SEPTEMBER 2, 1994.
</TABLE>
14 SEE NOTES TO FINANCIAL STATEMENTS.
.................................................................................
<PAGE>
FINANCIAL HIGHLIGHTS
.................................................................................
- --------------------------------------------------------------------------------
DREYFUS EQUITY INCOME FUND
FOR AN INVESTOR SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
<CAPTION>
SIX
MONTHS
ENDED PERIOD
4/30/95 ENDED
(UNAUDITED) 10/31/94*#
<S> <C> <C>
-----------------------------------------------------------------------
Net Asset Value:
Beginning of period $ 9.95 $10.00
-------- --------
Income from investment operations:
Net investment income 0.10 0.03
Net realized and unrealized gain/(loss) on
investments 0.78 (0.08)
-------- --------
Total from investment operations 0.88 (0.05)
Less distributions:
Distributions from net investment income (0.09) --
-------- --------
Net Asset Value:
End of period $10.74 $ 9.95
-------- --------
Total Return++ 8.91% (0.50)%
-------- --------
-------- --------
Ratios to average net assets/ Supplemental data:
Net assets, end of period (in 000's) $ 748 $ 1
Ratio of operating expenses to average net assets 1.15%+ 1.15%+
Ratio of net investment income to average net
assets 2.46%+ 2.65%+
Portfolio turnover rate 18% 5%
-----------------------------------------------------------------------
<FN>
* THE FUND COMMENCED SELLING INVESTOR SHARES ON SEPTEMBER 2, 1994.
+ ANNUALIZED.
++ TOTAL RETURN REPRESENTS AGGREGATE TOTAL RETURN FOR THE PERIOD INDICATED.
# PRIOR TO OCTOBER 17, 1994, MELLON BANK, N.A. SERVED AS THE FUND'S INVESTMENT
MANAGER. EFFECTIVE OCTOBER 17, 1994, THE DREYFUS CORPORATION SERVES AS THE
FUND'S INVESTMENT MANAGER.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS. 15
.................................................................................
<PAGE>
FINANCIAL HIGHLIGHTS
.................................................................................
- --------------------------------------------------------------------------------
DREYFUS EQUITY INCOME FUND
FOR A CLASS R SHARE THROUGHOUT EACH PERIOD.
<TABLE>
<CAPTION>
SIX
MONTHS
ENDED PERIOD
4/30/95 ENDED
(UNAUDITED) 10/31/94*#
<S> <C> <C>
-----------------------------------------------------------------------
Net Asset Value:
Beginning of period $ 9.95 $10.00
-------- --------
Income from investment operations:
Net investment income 0.14 0.05
Net realized and unrealized gain/(loss) on
investments 0.76 (0.10)
-------- --------
Total from investment operations 0.90 (0.05)
Less distributions:
Distributions from net investment income (0.10) --
-------- --------
Net Asset Value:
End of period $10.75 $ 9.95
-------- --------
Total Return++ 9.10% (0.50)%
-------- --------
-------- --------
Ratios to average net assets/ Supplemental data:
Net assets, end of period (in 000's) $4,695 $5,005
Ratio of operating expenses to average net assets 0.90%+ 0.90%+
Ratio of net investment income to average net
assets 2.71%+ 2.90%+
Portfolio turnover rate 18% 5%
-----------------------------------------------------------------------
<FN>
* THE FUND COMMENCED SELLING TRUST SHARES ON SEPTEMBER 2, 1994. EFFECTIVE
OCTOBER 17, 1994, TRUST SHARES WERE REDESIGNATED CLASS R SHARES.
+ ANNUALIZED.
++ TOTAL RETURN REPRESENTS AGGREGATE TOTAL RETURN FOR THE PERIOD INDICATED.
# PRIOR TO OCTOBER 17, 1994, MELLON BANK, N.A. SERVED AS THE FUND'S INVESTMENT
MANAGER. EFFECTIVE OCTOBER 17, 1994, THE DREYFUS CORPORATION SERVES AS THE
FUND'S INVESTMENT MANAGER.
</TABLE>
16 SEE NOTES TO FINANCIAL STATEMENTS.
.................................................................................
<PAGE>
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 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 Equity Income 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 intermediaries and bear a distribution fee.
Class R shares are sold primarily to bank trust departments and other
financial 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 privileges except with respect to the
distribution fee 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 in
accordance with generally accepted accounting principles.
(A) PORTFOLIO VALUATION
Investments in securities which are 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 Directors. 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 period. 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 collateral to offset losses incurred. There is
potential loss to the Fund in the event the
17
.................................................................................
<PAGE>
NOTES to FINANCIAL STATEMENTS (unaudited) (continued)
.................................................................................
Fund is delayed or prevented from exercising its rights to dispose 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 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. Dividend income is
recorded on the ex-dividend date. Interest income is recorded on the accrual
basis. Realized gains and losses from securities sold 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.
(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' operations.
(E) 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 yearly. The Fund distributes any net
realized capital gains on a Fund level annually. Distributions 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 income 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.
(F) 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.
18
.................................................................................
<PAGE>
NOTES to FINANCIAL STATEMENTS (unaudited) (continued)
.................................................................................
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, 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
objectives, policies and limitations. For these services, the Fund is
contractually obligated to pay the Manager a fee, calculated daily and paid
monthly, at the annual rate of 0.90% 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 (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 services to
the Investment Company.
No officer or employee of Premier (or of any parent, subsidiary or affiliate
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/Laurel 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 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 Committee 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 result in the sale of
Investor shares. Class R shares bear no distribution fee.
19
.................................................................................
<PAGE>
NOTES to FINANCIAL STATEMENTS (unaudited) (continued)
.................................................................................
Under its terms, the Plan shall remain in effect from year to year, provided
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
Purchases and proceeds from sales of securities, excluding short-term
investments and U.S. government securities, for the six months ended April 30,
1995 aggregated $884,662 and $925,324, respectively.
At April 30, 1995, gross unrealized appreciation for all securities in which
there was an excess of tax cost over value amounted to $472,272. The aggregate
gross unrealized depreciation for all securities in which there was an excess
of tax cost over value amounted to $79,314.
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 two classes
of shares. The table below summarizes transactions in Fund shares for the
periods indicated.
<TABLE>
<CAPTION>
SIX MONTHS ENDED PERIOD ENDED
OCTOBER 31,
APRIL 30, 1995 1994*
SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
------------------------------------------------------------------
INVESTOR SHARES:
Sold 72,744 $733,204 132 $ 1,300
Issued as reinvestment of
dividends and distributions 20 188 -- --
Redeemed (3,211) (33,067 ) (30 ) (299)
------ --------- ------ -------
Net increase 69,553 $700,325 102 $ 1,001
------ --------- ------ -------
------ --------- ------ -------
------------------------------------------------------------------
<FN>
* THE FUND COMMENCED OPERATIONS AND BEGAN SELLING INVESTOR SHARES ON SEPTEMBER
2, 1994.
</TABLE>
20
.................................................................................
<PAGE>
NOTES to FINANCIAL STATEMENTS (unaudited) (continued)
.................................................................................
<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 6,673 $ 63,500 502,825 $ 5,027,800
Issued as reinvestment of
dividends and distributions 2,405 23,569 -- --
Redeemed (74,918 ) (750,000) (10 ) (100)
-------- ----------- ---------- -----------
Net increase/(decrease) (65,840 ) $ (662,931) 502,815 $ 5,027,700
-------- ----------- ---------- -----------
-------- ----------- ---------- -----------
------------------------------------------------------------------------------
<FN>
** THE FUND COMMENCED OPERATIONS AND BEGAN SELLING TRUST SHARES ON SEPTEMBER 2,
1994. EFFECTIVE OCTOBER 17, 1994, THE FUND'S TRUST SHARES WERE REDESIGNATED
AS CLASS R SHARES.
</TABLE>
6. CAPITAL LOSS CARRYFORWARDS
At October 31, 1994, the Fund had available for federal income tax purposes
unused capital losses of $9,599 expiring in the year 2002.
7. DIVIDENDS
On May 2, 1995, the Board of Directors declared dividends from net investment
income for Investor and Class R shares in the amount of $0.0762 and $0.0850
per share, respectively, payable on May 8, 1995 to shareholders of record on
May 1, 1995.
21
.................................................................................
<PAGE>
THE DREYFUS BOND
MARKET INDEX FUND
Small box above fund
name showing a lions face.
<PAGE>
DEAR SHAREHOLDER,
We are pleased to provide you with the Dreyfus Bond Market 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 services 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
investment needs. As always, we welcome your thoughts and suggestions.
Sincerely,
Marie E. Connolly
President
The Dreyfus/Laurel Funds, Inc. --
Dreyfus Bond Market Index Fund
June 20, 1995
1
.................................................................................
<PAGE>
TABLE of CONTENTS
.................................................................................
<TABLE>
<S> <C>
Shareholder Letter........................................ 1
Economic Review........................................... 3
Portfolio Overview........................................ 4
Portfolio of Investments.................................. 5
Statement of Assets and Liabilities....................... 8
Statement of Operations................................... 9
Statement of Changes in Net Assets........................ 10
Financial Highlights...................................... 11
Notes to Financial Statements............................. 13
</TABLE>
2
.................................................................................
<PAGE>
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 economists. 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 December peak.
The Federal Reserve Board deserves at least partial credit for the slowdown.
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 develop
over the next several months as producers adapt their output to new sales
realities. Still, we believe the slowdown is temporary. Job and income 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 capital spending phases of
their economic expansions, which will support U.S. capital goods exports.
Finally, the bulk of the Mexican recession's depressing 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
industrial 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 further
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 markets
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 somewhat, and many international central banks
stepped in to take advantage of the weak dollar by buying
3
.................................................................................
<PAGE>
ECONOMIC REVIEW (continued)
.................................................................................
Treasury securities. This had the effect of supporting 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 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 Dreyfus Bond Market Index Fund seeks to closely replicate the returns of
the domestic bond market's major benchmark, the Lehman Brothers
Government/Corporate Bond Index. During the semi-annual period completed April
30, 1995, the Fund largely tracked the Index, which posted strong returns
after one of the most dismal years on record. For the six-month period ended
April 30, 1995, the Fund's Investor shares and Class R shares posted total
returns of 6.20%* and 6.33%*, respectively. During the same period, the Lehman
Brothers Government/Corporate Bond Index returned 6.96%, just slightly ahead
of the Fund.
Fund returns lagged the Index slightly due to the relatively small size of the
Fund's assets. The Fund matched the Index in terms of sector and quality
allocations, with the exception of a slightly larger cash position.
-----------
* TOTAL RETURN REPRESENTS THE CHANGE DURING THE PERIOD IN A HYPOTHETICAL
ACCOUNT WITH DIVIDENDS REINVESTED.
4
.................................................................................
<PAGE>
PORTFOLIO of INVESTMENTS (unaudited)
.................................................................................
- --------------------------------------------------------------------------------
DREYFUS BOND MARKET INDEX FUND APRIL 30, 1995
<TABLE>
<CAPTION>
PRINCIPAL COUPON MATURITY VALUE
AMOUNT RATE DATE (NOTE 1)
U.S. TREASURY OBLIGATIONS -- 59.7%
<C> <S> <C> <C> <C>
$100,000 U.S. Treasury Bonds 11.750% 02/15/01 $ 122,901
100,000 U.S. Treasury Bonds 10.750 05/15/03 122,412
275,000 U.S. Treasury Bonds 11.625 11/15/04 359,984
150,000 U.S. Treasury Bonds 8.750 11/15/08 164,538
200,000 U.S. Treasury Bonds 7.250 05/15/16 195,854
100,000 U.S. Treasury Bonds 7.500 11/15/16 100,571
100,000 U.S. Treasury Bonds 8.875 08/15/17 115,177
125,000 U.S. Treasury Bonds 8.500 02/15/20 139,335
130,000 U.S. Treasury Bonds 8.750 05/15/20 148,636
150,000 U.S. Treasury Bonds 8.125 08/15/21 161,300
100,000 U.S. Treasury Bonds 6.250 08/15/23 86,267
100,000 U.S. Treasury Notes 4.625 08/15/95 99,638
100,000 U.S. Treasury Notes 6.500 11/30/96 100,022
100,000 U.S. Treasury Notes 6.250 01/31/97 99,531
250,000 U.S. Treasury Notes 4.750 02/15/97 242,372
100,000 U.S. Treasury Notes 5.625 08/31/97 97,807
100,000 U.S. Treasury Notes 8.875 11/15/97 104,972
100,000 U.S. Treasury Notes 6.000 11/30/97 98,359
100,000 U.S. Treasury Notes 5.125 04/30/98 95,681
100,000 U.S. Treasury Notes 4.750 08/31/98 94,024
100,000 U.S. Treasury Notes 6.375 01/15/99 98,583
100,000 U.S. Treasury Notes 6.375 01/15/00 98,002
100,000 U.S. Treasury Notes 5.500 04/15/00 94,300
100,000 U.S. Treasury Notes 7.750 02/15/01 103,921
100,000 U.S. Treasury Notes 6.250 02/15/03 95,363
200,000 U.S. Treasury Notes 5.750 08/15/03 183,737
100,000 U.S. Treasury Notes 7.250 05/15/04 101,186
----------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $3,512,660) 3,524,473
----------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 3.2%
(Cost $183,480)
200,000 Federal National Mortgage Association 5.300 12/10/98 188,698
----------
CORPORATE BONDS AND NOTES -- 33.2%
FINANCIAL SERVICES -- 11.4%
20,000 American General, Inc. 6.625 06/01/97 19,850
50,000 Associate Corporation of North America 7.500 05/15/99 50,250
50,000 AVCO Financial Services, Inc. 7.500 11/15/96 50,500
25,000 BankAmerica Corporation 7.750 07/15/02 25,187
50,000 Beneficial Corporation 9.125 02/15/98 52,437
50,000 Chrysler Financial Corporation 5.375 10/15/98 46,750
25,000 Commercial Credit Group 6.700 08/01/99 24,344
40,000 Ford Motor Credit Company 8.000 06/15/02 41,000
25,000 General Electric Capital Corporation 8.750 11/26/96 25,719
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS. 5
.................................................................................
<PAGE>
PORTFOLIO of INVESTMENTS (unaudited) (continued)
.................................................................................
- --------------------------------------------------------------------------------
DREYFUS BOND MARKET INDEX FUND APRIL 30, 1995
<TABLE>
<CAPTION>
PRINCIPAL COUPON MATURITY VALUE
AMOUNT RATE DATE (NOTE 1)
CORPORATE BONDS AND NOTES (continued)
<C> <S> <C> <C> <C>
FINANCIAL SERVICES (CONTINUED)
$100,000 General Motors Acceptance Corporation 7.750% 04/15/97 $ 101,375
20,000 Greyhound Financial Corporation 9.125 02/27/02 21,475
50,000 International Lease Finance Corporation 4.750 01/15/97 48,250
25,000 NationsBank Corporation 6.625 01/15/98 24,719
25,000 Norwest Financial, Inc. 5.500 04/15/98 23,937
115,000 Wells Fargo & Company 8.200 11/01/96 116,869
----------
672,662
----------
UTILITIES -- 10.3%
50,000 Alabama Power Company 6.000 03/01/00 47,688
50,000 American Telephone and Telegraph
Corporation 5.125 04/01/01 44,313
20,000 B.P. North America, Inc. 9.875 03/15/04 22,825
50,000 Carolina Power and Light Company 5.375 07/01/98 47,625
25,000 Consolidated Edison 6.250 04/01/98 24,344
40,000 Consolidated Natural Gas Company 5.375 10/15/98 38,550
50,000 Duke Power Company 7.500 04/01/99 50,562
25,000 Florida Power and Light Company 7.750 02/01/23 23,906
50,000 MCI Communications Corporation 6.250 03/23/99 48,188
25,000 New Jersey Bell Telephone Company 8.000 06/01/22 25,406
70,000 Pacific Telephone and Telegraph
Corporation 4.625 04/01/99 63,438
25,000 Pennsylvania Power and Light Company 6.550 03/01/06 22,688
25,000 Public Service Electric & Gas Company 8.750 07/01/99 26,219
50,000 Southwestern Bell Telephone Company 4.500 08/01/97 47,375
50,000 Union Electric Company 5.500 03/01/97 48,812
25,000 Virginia Electric & Power Company 7.625 07/01/07 24,969
----------
606,908
----------
RETAIL -- 3.5%
50,000 J.C. Penney, Inc. 9.050 03/01/01 53,812
100,000 Sears Roebuck & Company 8.550 08/01/96 102,000
50,000 Wal-Mart Stores, Inc. 5.500 03/01/98 48,063
----------
203,875
----------
CONSUMER NON-DURABLES -- 3.2%
25,000 Archer Daniels Midland Company 8.125 06/01/12 25,469
35,000 Coca Cola Company 6.625 10/01/02 33,863
25,000 Hershey Foods Corporation 8.800 02/15/21 27,312
25,000 PepsiCo, Inc. 7.625 12/18/98 25,437
40,000 Philip Morris, Inc. 9.250 02/15/00 42,750
30,000 Procter & Gamble Company 8.700 08/01/01 32,137
----------
186,968
----------
</TABLE>
6 SEE NOTES TO FINANCIAL STATEMENTS.
.................................................................................
<PAGE>
PORTFOLIO of INVESTMENTS (unaudited) (continued)
.................................................................................
- --------------------------------------------------------------------------------
DREYFUS BOND MARKET INDEX FUND APRIL 30, 1995
<TABLE>
<CAPTION>
PRINCIPAL COUPON MATURITY VALUE
AMOUNT RATE DATE (NOTE 1)
CORPORATE BONDS AND NOTES (continued)
<C> <S> <C> <C> <C>
BASIC INDUSTRIES -- 1.7%
$ 50,000 Aluminum Company of America 5.750% 02/01/01 $ 46,562
55,000 Gannett, Inc. 5.850 05/01/00 51,494
----------
98,056
----------
AEROSPACE AND AVIATION -- 0.9%
25,000 Boeing Corporation 8.100 11/15/06 25,875
30,000 Rockwell International Corporation 6.750 09/15/02 29,100
----------
54,975
----------
CHEMICALS -- 0.8%
40,000 du Pont (E.I.) de Nemours & Company 6.750 10/15/02 38,450
10,000 Monsanto Company 8.200 04/15/25 10,000
----------
48,450
----------
OIL AND GAS -- 0.8%
25,000 Mobil Corporation 6.500 12/17/96 24,875
25,000 Texaco, Inc. 6.875 08/15/23 21,719
----------
46,594
----------
AUTOMOTIVE -- 0.6%
40,000 General Motors Corporation 7.000 06/15/03 38,000
----------
TOTAL CORPORATE BONDS AND NOTES
(Cost $2,065,538) 1,956,488
----------
REPURCHASE AGREEMENT -- 2.0% (Cost $119,152)
119,152 Agreement with Goldman Sachs & Company, dated 4/28/95
bearing 5.920% to be repurchased at $119,211 on 5/1/95,
collateralized by $116,000 U.S. Treasury Bond, 7.625% due
2/15/25 119,152
----------
TOTAL INVESTMENTS
(Cost $5,880,830*) 98.1% 5,788,811
OTHER ASSETS AND LIABILITIES (NET) 1.9 110,350
------ ----------
NET ASSETS 100.0% $5,899,161
------ ----------
------ ----------
------------------------------------------------------------------------------------
<FN>
* AGGREGATE COST FOR FEDERAL TAX PURPOSES.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS. 7
.................................................................................
<PAGE>
STATEMENT of ASSETS and LIABILITIES
.................................................................................
- --------------------------------------------------------------------------------
DREYFUS BOND MARKET INDEX FUND
APRIL 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
ASSETS
<S> <C> <C>
Investments, at value (Cost $5,880,830) (Note 1)
See accompanying schedule $ 5,788,811
Cash 2,563
Interest receivable 118,730
Receivable from investment adviser 28,444
Receivable for Fund shares sold 574
-----------
TOTAL ASSETS 5,939,122
-----------
LIABILITIES
Payable for Fund shares redeemed $29,299
Dividends payable 4,910
Investment management fee payable (Note 2) 4,643
Accrued Directors' fees and expenses (Note 2) 1,084
Distribution fee payable (Note 3) 25
-------
TOTAL LIABILITIES 39,961
-----------
NET ASSETS 5,899,161
-----------
-----------
NET ASSETS consist of:
Accumulated net realized loss on investments sold (79,651)
Unrealized depreciation of investments (92,019)
Par value 625
Paid-in capital in excess of par value 6,070,206
-----------
TOTAL NET ASSETS 5,899,161
-----------
-----------
NET ASSET VALUE
INVESTOR SHARES
Net asset value, offering and redemption price per share
($121,056 DIVIDED BY 12,824 shares of capital stock
outstanding) $9.44
-----
-----
CLASS R SHARES
Net asset value, offering and redemption price per share
($5,778,105 DIVIDED BY 612,102 shares of capital
stock outstanding) $9.44
-----
-----
</TABLE>
8 SEE NOTES TO FINANCIAL STATEMENTS.
.................................................................................
<PAGE>
STATEMENT of OPERATIONS
.................................................................................
- --------------------------------------------------------------------------------
DREYFUS BOND MARKET INDEX FUND
FOR THE SIX MONTHS ENDED APRIL 30, 1995 (UNAUDITED)
<TABLE>
<S> <C> <C>
INVESTMENT INCOME
Interest $ 218,134
---------
EXPENSES
Investment management fee (Note 2) $12,657
Directors' fees and expenses (Note 2) 666
Distribution fee (Note 3) 116
-------
TOTAL EXPENSES 13,439
---------
NET INVESTMENT INCOME 204,695
---------
REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS
(Notes 1 and 4):
Net realized loss on investments during the period (10,718)
Net unrealized appreciation of investments during the
period 264,539
---------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS 253,821
---------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 458,516
---------
---------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS. 9
.................................................................................
<PAGE>
STATEMENT of CHANGES in NET ASSETS
.................................................................................
- --------------------------------------------------------------------------------
DREYFUS BOND MARKET INDEX FUND
<TABLE>
<CAPTION>
SIX MONTHS
ENDED PERIOD
4/30/95 ENDED
(UNAUDITED) 10/31/94*
<S> <C> <C>
Net investment income $ 204,695 $ 289,972
Net realized loss on investments sold (10,718) (68,933)
Net unrealized appreciation/(depreciation) of investments during the period 264,539 (356,558)
----------- -----------
Net increase/(decrease) in net assets resulting from operations 458,516 (135,519)
Distributions to shareholders from net investment income:
Investor shares (2,790) (622)
Class R shares (201,905) (289,350)
Net increase in net assets from Fund share transactions
(Note 5):
Investor shares 78,708 39,119
Class R shares 1,064,543 4,888,461
----------- -----------
Net increase in net assets 1,397,072 4,502,089
NET ASSETS:
Beginning of period 4,502,089 --
----------- -----------
End of period $5,899,161 $ 4,502,089
----------- -----------
----------- -----------
------------------------------------------------------------------------------------
<FN>
* THE FUND COMMENCED OPERATIONS ON NOVEMBER 30, 1993.
</TABLE>
10 SEE NOTES TO FINANCIAL STATEMENTS.
.................................................................................
<PAGE>
FINANCIAL HIGHLIGHTS
.................................................................................
- --------------------------------------------------------------------------------
DREYFUS BOND MARKET INDEX FUND
FOR AN INVESTOR SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
<CAPTION>
SIX MONTHS
ENDED PERIOD
4/30/95 ENDED
(UNAUDITED) 10/31/94*#
<S> <C> <C>
----------------------------------------------------------------------------
Net asset value, beginning of period $9.15 $9.44
----------- ----------
Income from investment operations:
Net investment income 0.27 0.24
Net realized and unrealized gain/(loss) on
investments 0.29 (0.28)
----------- ----------
Total from investment operations 0.56 (0.04)
Less distributions:
Distributions from net investment income (0.27) (0.25)
----------- ----------
Net asset value, end of period $9.44 $9.15
----------- ----------
Total return++ 6.20% (0.46)%
----------- ----------
----------- ----------
Ratios to average net assets/supplemental data:
Net assets, end of period (in 000's) $ 121 $ 38
Ratio of operating expenses to average net assets 0.65%+ 0.65%+
Ratio of net investment income to average net
assets 5.90%+ 4.81%+
Portfolio turnover rate 34% 188%
----------------------------------------------------------------------------
<FN>
* THE FUND COMMENCED SELLING INVESTOR SHARES ON APRIL 28, 1994.
+ ANNUALIZED.
++ TOTAL RETURN REPRESENTS AGGREGATE TOTAL RETURN FOR THE PERIOD INDICATED.
# PRIOR TO OCTOBER 17, 1994, MELLON BANK, N.A. SERVED AS THE FUND'S INVESTMENT
MANAGER. EFFECTIVE OCTOBER 17, 1994, THE DREYFUS CORPORATION SERVES AS THE
FUND'S INVESTMENT MANAGER.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS. 11
.................................................................................
<PAGE>
FINANCIAL HIGHLIGHTS
.................................................................................
- --------------------------------------------------------------------------------
DREYFUS BOND MARKET INDEX FUND
FOR A CLASS R SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
<CAPTION>
SIX MONTHS
ENDED PERIOD
4/30/95 ENDED
(UNAUDITED) 10/31/94*#
<S> <C> <C>
----------------------------------------------------------------------------
Net asset value, beginning of period $ 9.15 $10.00
----------- ----------
Income from investment operations:
Net investment income 0.28 0.49**
Net realized and unrealized gain/(loss) on
investments 0.29 (0.85)
----------- ----------
Total from investment operations 0.57 (0.36)
Less distributions:
Distributions from net investment income (0.28) (0.49)
----------- ----------
Net asset value, end of period $ 9.44 $9.15
----------- ----------
Total return++ 6.33% (3.68)%
----------- ----------
----------- ----------
Ratios to average net assets/supplemental data:
Net assets, end of period (in 000's) $5,778 $4,464
Ratio of operating expenses to average net assets 0.40%+ 0.40%+***
Ratio of net investment income to average net
assets 6.15%+ 5.05%+
Portfolio turnover rate 34% 188%
----------------------------------------------------------------------------
<FN>
* THE FUND COMMENCED OPERATIONS ON NOVEMBER 30, 1993. ON APRIL 28, 1994, THE
FUND BEGAN SELLING INVESTOR SHARES AND THE SHARES EXISTING PRIOR TO APRIL 28,
1994 WERE DESIGNATED TRUST SHARES. EFFECTIVE OCTOBER 17, 1994 THE FUND'S
TRUST SHARES WERE REDESIGNATED CLASS R SHARES.
** NET INVESTMENT INCOME BEFORE REIMBURSEMENT OF EXPENSES BY INVESTMENT ADVISER
FOR THE PERIOD ENDED OCTOBER 31, 1994 WAS $0.39 PER SHARE.
*** ANNUALIZED EXPENSE RATIO BEFORE REIMBURSEMENT OF EXPENSES BY INVESTMENT
ADVISER FOR THE PERIOD ENDED OCTOBER 31, 1994 WAS 1.41%.
+ ANNUALIZED.
++ TOTAL RETURN REPRESENTS AGGREGATE TOTAL RETURN FOR THE PERIOD INDICATED.
# PRIOR TO OCTOBER 17, 1994, MELLON BANK, N.A. SERVED AS THE FUND'S INVESTMENT
MANAGER. EFFECTIVE OCTOBER 17, 1994, THE DREYFUS CORPORATION SERVES AS THE
INVESTMENT MANAGER.
</TABLE>
12 SEE NOTES TO FINANCIAL STATEMENTS.
.................................................................................
<PAGE>
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 Bond
Market 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 and bear a distribution fee. Class R shares are sold primarily to
bank trust departments and other financial 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 privileges,
except with respect to the distribution fee 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 in accordance with generally 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 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 Directors. Investments in U.S.
Government securities (other than short-term securities) 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 period. The value of the collateral is
at least equal, at all times, to the total amount of the repurchase
obligations,
13
.................................................................................
<PAGE>
NOTES to FINANCIAL STATEMENTS (unaudited) (continued)
.................................................................................
including interest. In the event of counterparty default, the Fund has the
right to use the collateral 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 dispose 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 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 securities sold
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.
(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' 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 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 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.
(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.
14
.................................................................................
<PAGE>
NOTES to FINANCIAL STATEMENTS (unaudited) (continued)
.................................................................................
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, 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, policies and limitations. For these services, the Fund is
contractually obligated to pay 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 fees, 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).
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 services to
the Investment Company.
No officer or employee of Premier (or of any parent, subsidiary or affiliate
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/Laurel 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 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 for each Audit Committee 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 result in the sale of
Investor shares. Class R shares bear no distribution fee.
15
.................................................................................
<PAGE>
NOTES to FINANCIAL STATEMENTS (unaudited) (continued)
.................................................................................
Under its terms, the Plan shall remain in effect from year to year, provided
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 securities, excluding short-term investments and U.S.
government securities, for the six months ended April 30, 1995 was $1,004,705.
There were no proceeds from sales of securities excluding short-term
investments and U.S. government securities, for the six months ended April 30,
1995.
The cost of purchases and proceeds from sales of long-term U.S. government
securities, for the six months ended April 30, 1995, aggregated $2,148,832 and
$1,994,343, respectively.
At April 30, 1995, aggregate gross unrealized appreciation for all securities
in which there was an excess of value over tax cost and aggregate gross
unrealized depreciation for all securities in which there was an excess of tax
cost over value were $72,138 and $164,157, 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 Fund has authority to issue two classes
of shares. The table below summarizes 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>
-----------------------------------------------------------------------------------
INVESTOR SHARES:
Sold 9,647 $ 88,071 4,136 $ 38,751
Issued as reinvestment of
dividends and distributions 220 2,050 50 468
Redeemed (1,218) (11,413) (11) (100)
--------- ------------ ---------- ------------
Net increase 8,649 $ 78,708 4,175 $ 39,119
--------- ------------ ---------- ------------
--------- ------------ ---------- ------------
-----------------------------------------------------------------------------------
</TABLE>
16
.................................................................................
<PAGE>
NOTES to FINANCIAL STATEMENTS (unaudited) (continued)
.................................................................................
<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 382,667 $ 3,497,289 1,448,406 $ 14,406,896
Issued as reinvestment of
dividends and distributions 20,571 190,624 27,373 261,497
Redeemed (279,190) (2,623,370) (987,725) (9,779,932)
--------- ------------ ---------- ------------
Net increase 124,048 $ 1,064,543 488,054 $ 4,888,461
--------- ------------ ---------- ------------
--------- ------------ ---------- ------------
-----------------------------------------------------------------------------------
<FN>
* THE FUND COMMENCED OPERATIONS ON NOVEMBER 30, 1993 AND BEGAN SELLING INVESTOR
SHARES ON APRIL 28, 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.
</TABLE>
6. CAPITAL LOSS CARRYFORWARD
At October 31, 1994, the Fund had available for federal income tax purposes
unused capital loss carryforward of $68,933 expiring in the year 2002.
17
.................................................................................
<PAGE>
SEMI-ANNUAL REPORT
Description of Art Work on Report Cover
Small box above fund name showing a lion's face.
Premier Limited Term Income
APRIL 30, 1995
<PAGE>
DEAR SHAREHOLDER,
We are pleased to provide you with the Premier Limited Term Income 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 services 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
investment needs. As always, we welcome your thoughts and suggestions.
Sincerely,
Marie E. Connolly
President
The Dreyfus/Laurel Funds, Inc. --
Premier Limited Term Income Fund
June 20, 1995
1
...............................................................................
<PAGE>
TABLE OF CONTENTS
...............................................................................
Shareholder Letter.......................................................... 1
Economic Review............................................................. 3
Portfolio Overview.......................................................... 4
Portfolio of Investments.................................................... 6
Statement of Assets and Liabilities.......................................... 10
Statement of Operations...................................................... 11
Statement of Changes in Net Assets........................................... 12
Financial Highlights......................................................... 13
Notes to Financial Statements................................................ 17
2
...............................................................................
<PAGE>
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 economists. 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 December peak.
The Federal Reserve Board deserves at least partial credit for the slowdown.
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 develop
over the next several months as producers adapt their output to new sales
realities. Still, we believe the slowdown is temporary. Job and income 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 capital spending
phases of their economic expansions, which will support U.S. capital goods
exports. Finally, the bulk of the Mexican recession's depressing 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
industrial 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 further
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 markets
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 somewhat, and many international central
banks stepped in to take advantage of the weak dollar by buying Treasury
securities. This had the effect of supporting the dollar, which set off a
rally in
3
...............................................................................
<PAGE>
ECONOMIC REVIEW (CONTINUED)
...............................................................................
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 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
...............................................................................
Favorable market conditions enabled the Premier Limited Term Income Fund to
deliver competitive income and relative stability of principal for the six
months ended April 30, 1995. For this six-month period, the Fund's Class A
and Class R Shares posted total returns of 4.99%* and 5.12%*, respectively.
For the period from inception (December 19, 1994) to April 30, 1995, the
Fund's Class B shares posted a total return of 4.77%*.
During the period, the Fund was managed against a backdrop of steady economic
growth, low inflation, and moderately higher interest rates. Amid this
relatively stable market environment, the Fund benefited particularly from
the performance of its holdings of corporate and mortgage and asset-backed
securities. A "barbell" structure, whereby the portfolio is overweighted in
securities with both short and long maturities, also added significantly to
Fund returns early in the period when interest rates were still rising.
Unfortunately, this structure hindered returns in the first quarter of 1995,
when the rise in interest rates slowed.
Anticipating the economy's ongoing strength, we added significantly to the
portfolio's corporate securities position early in the period, bringing these
holdings to 40% of assets as of April 30, 1995. This was double the corporate
securities position in the Fund's performance benchmark, the Lehman Brothers
Intermediate Government Corporate Bond Index (the "Index"). With a growing
economy and strong corporate earnings, the portfolio's corporate securities
provided a good source of income.
- ---------------
* Total return represents the change during the period in a hypothetical account
with dividends reinvested, without taking into account the maximum front-end
sales load of 3.0% 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 December 19, 1994. With the sales charge or CDSC, the
total return for the Class A and Class B shares for the same periods would
have been 1.84% and 1.77%, respectively.
4
...............................................................................
<PAGE>
PORTFOLIO OVERVIEW (CONTINUED)
...............................................................................
As of April 30, 1995, mortgage and asset-backed securities represented 6% of
the Fund's assets, and these securities benefited from the rise in interest
rates. The new higher interest rates stemmed the tide of home refinancing
that had been so prevalent when rates were low. The current interest-rate
climate provides much less incentive to refinance, and mortgage-backed
securities have been a good source of income for the Fund.
In addition to these sector strategies, we have also brought the portfolio's
average maturity into a more neutral position. When interest rates were
rising quickly, we kept the average maturity short to protect against rate
changes. The portfolio's present neutral position is in line with the Index
and designed to keep the Fund flexible for any rate changes that may occur.
5
...............................................................................
<PAGE>
PORTFOLIO OF INVESTMENTS (UNAUDITED)
...............................................................................
- --------------------------------------------------------------------------------
PREMIER LIMITED TERM INCOME FUND APRIL 30, 1995
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
<C> <S> <C>
CORPORATE BONDS AND NOTES -- 48.8%
FINANCIAL SERVICES -- 14.5%
$ 2,500,000 ADVANTA Corporation
5.125% due 11/15/96 $ 2,418,750
500,000 American Express Company
8.500% due 08/15/01 528,750
2,100,000 Commercial Credit Group
7.375% due 11/15/96 2,118,375
250,000 Ford Motor Credit Company
8.875% due 08/01/96 256,250
1,000,000 Ford Motor Credit Company
7.125% due 12/01/97 1,001,250
1,500,000 General Motors Acceptance Corporation
7.875% due 02/28/97 1,520,625
743,937 General Motors Acceptance Corporation
4.500% due 09/15/97 733,745
2,000,000 U.S. Leasing Corporation
7.000% due 11/01/97 1,990,000
---------------
10,567,745
---------------
UTILITIES -- 7.7%
4,000,000 Bell Atlantic New Jersey
5.875% due 02/01/04 3,610,000
2,000,000 Texas Utilities Company
6.375% due 08/01/97 1,967,500
---------------
5,577,500
---------------
BANKING AND FINANCE -- 6.9%
500,000 American General Finance Corporation
8.100% due 08/15/95 502,500
500,000 Associates Corporation of North America
6.000% due 12/01/95 499,375
1,100,000 BankAmerica Corporation
6.000% due 07/15/97 1,075,250
500,000 International Lease Finance Corporation
6.625% due 06/01/96 499,375
</TABLE>
6 See Notes to Financial Statements.
...............................................................................
<PAGE>
PORTFOLIO OF INVESTMENTS (UNAUDITED) (CONTINUED)
...............................................................................
- --------------------------------------------------------------------------------
PREMIER LIMITED TERM INCOME FUND APRIL 30, 1995
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
<C> <S> <C>
CORPORATE BONDS AND NOTES (continued)
BANKING AND FINANCE (CONTINUED)
$ 2,500,000 International Lease Finance Corporation
5.750% due 03/15/98 $ 2,406,250
--------------
4,982,750
--------------
ENERGY -- 5.0%
2,500,000 Exxon Capital Corporation
8.250% due 11/01/99 2,600,000
1,000,000 Shell Oil Company
7.700% due 02/01/96 1,007,500
--------------
3,607,500
--------------
TECHNOLOGY -- 4.4%
3,000,000 Rockwell International Corporation
8.375% due 02/15/01 3,180,000
--------------
CONSUMER NON-DURABLES -- 4.3%
2,000,000 McDonald's Corporation
8.375% due 10/29/99 2,102,500
1,000,000 Warner-Lambert Company
8.000% due 09/01/98 1,032,500
--------------
3,135,000
--------------
CONSUMER SERVICES -- 3.0%
2,100,000 Wal-Mart Stores, Inc.
8.625% due 04/01/01 2,231,250
--------------
CHEMICALS -- 1.3%
940,000 Du Pont (E.I.) de Nemours & Company
8.450% due 10/15/96 961,150
--------------
</TABLE>
See Notes to Financial Statements. 7
...............................................................................
<PAGE>
PORTFOLIO OF INVESTMENTS (UNAUDITED) (CONTINUED)
...............................................................................
- --------------------------------------------------------------------------------
PREMIER LIMITED TERM INCOME FUND APRIL 30, 1995
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
<C> <S> <C>
CORPORATE BONDS AND NOTES (continued)
CONSUMER DURABLES -- 1.0%
$ 500,000 Gillette Company
4.750% due 08/15/96 $ 488,750
250,000 Johnson & Johnson
8.500% due 08/15/95 251,875
--------------
740,625
--------------
OTHER -- 0.7%
500,000 BP America, Inc.
7.875% due 05/15/02 511,875
--------------
TOTAL CORPORATE BONDS AND NOTES
(Cost $36,819,785) 35,495,395
--------------
U.S. TREASURY BONDS AND NOTES -- 39.2%
1,060,000 U.S. Treasury Bonds
12.375% due 05/15/04 1,428,466
1,000,000 U.S. Treasury Bonds
12.000% due 05/15/05 1,344,270
1,550,000 U.S. Treasury Notes
9.250% due 01/15/96 1,581,232
5,000,000 U.S. Treasury Notes
9.375% due 04/15/96 5,144,350
2,000,000 U.S. Treasury Notes
7.568% due 01/15/98 2,056,960
5,000,000 U.S. Treasury Notes
8.875% due 11/15/98 5,319,599
2,000,000 U.S. Treasury Notes
8.875% due 02/15/99 2,135,540
2,000,000 U.S. Treasury Notes
7.500% due 05/15/02 2,061,300
1,500,000 U.S. Treasury Notes
6.250% due 02/15/03 1,430,445
4,000,000 U.S. Treasury Notes
7.250% due 05/15/04 4,047,440
</TABLE>
8 See Notes to Financial Statements.
...............................................................................
<PAGE>
PORTFOLIO OF INVESTMENTS (UNAUDITED) (CONTINUED)
...............................................................................
- --------------------------------------------------------------------------------
PREMIER LIMITED TERM INCOME FUND APRIL 30, 1995
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
<C> <S> <C>
U.S. TREASURY BONDS AND NOTES (continued)
$ 1,800,000 U.S. Treasury Notes
7.875% due 11/15/04 $ 1,899,360
------------
TOTAL U.S. TREASURY BONDS AND NOTES
(Cost $28,234,143) 28,448,962
------------
GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION -- 5.1%
1,328,675 Government National Mortgage Association
7.000% due 11/15/23 1,258,504
1,390,595 Government National Mortgage Association
7.000% due 03/15/24 1,317,153
1,157,196 Government National Mortgage Association
7.500% due 03/15/24 1,129,713
------------
TOTAL GOVERNMENT NATIONAL
MORTGAGE ASSOCIATION
(Cost $3,970,930) 3,705,370
------------
REPURCHASE AGREEMENT -- 5.2%
(Cost $3,752,717)
3,752,717 Agreement with Goldman Sachs & Company, dated
04/28/95 bearing 5.920% to be repurchased at
$3,754,568 on 05/01/95, collateralized by
$3,753,632 U.S. Treasury Bond, 7.625% due
02/15/25 3,752,717
------------
TOTAL INVESTMENTS
(Cost $72,777,575*) 98.3% 71,402,444
OTHER ASSETS AND LIABILITIES (NET) 1.7 1,262,545
----- -----------
NET ASSETS 100.0% $72,664,989
===== ===========
<FN>
- --------------------------------------------------------------------------------
* Aggregate cost for Federal tax purposes.
</TABLE>
See Notes to Financial Statements. 9
...............................................................................
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
...............................................................................
- --------------------------------------------------------------------------------
PREMIER LIMITED TERM INCOME FUND APRIL 30, 1995 (UNAUDITED)
<TABLE>
<S> <C> <C>
ASSETS:
Investments, at value (Cost $72,777,575) (Note 1)
See accompanying schedule $71,402,444
Interest receivable 1,478,007
Receivable from investment adviser 16,216
Receivable for Fund shares sold 13,170
-----------
TOTAL ASSETS 72,909,837
-----------
LIABILITIES:
Dividends payable $117,346
Investment management fee payable (Note 2) 81,378
Payable for Fund shares redeemed 30,341
Directors' fees and expenses (Note 2) 15,549
Distribution fee payable (Note 3) 228
Service fee payable (Note 3) 6
--------
TOTAL LIABILITIES 244,848
-----------
NET ASSETS $72,664,989
===========
NET ASSETS consist of:
Distributions in excess of net investment income earned to date $ (22,636)
Accumulated net realized loss on investments sold (2,416,671)
Unrealized depreciation of investments (1,375,131)
Par value 6,952
Paid-in capital in excess of par value 76,472,475
-----------
TOTAL NET ASSETS $72,664,989
===========
NET ASSET VALUE
CLASS A SHARES:
Net asset value and redemption price per share
($1,017,105 / 97,306 shares of capital stock
outstanding) $10.45
======
Maximum offering price per share ($10.45 / 0.970)
(based on sales charge of 3.00% of the offering price
on April 30, 1995) $10.77
======
CLASS B SHARES:
Net asset value and offering price per share+
($31,411 / 3,006 shares of capital stock outstanding) $10.45
======
CLASS C SHARES:
Net asset value and offering price per share+
($15.60 / 1.493 shares of capital stock outstanding) $10.45
======
CLASS R SHARES:
Net asset value, offering and redemption price per share
($71,616,457 / 6,851,631 shares of capital stock
outstanding) $10.45
======
<FN>
- --------------------------------------------------------------------------------
+ Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge.
</TABLE>
10 See Notes to Financial Statements.
...............................................................................
<PAGE>
STATEMENT OF OPERATIONS
...............................................................................
- --------------------------------------------------------------------------------
PREMIER LIMITED TERM INCOME FUND
FOR THE SIX MONTHS ENDED APRIL 30, 1995 (UNAUDITED)
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest $2,614,506
----------
EXPENSES:
Investment management fee (Note 2) $244,619
Directors' fees and expenses (Note 2) 8,435
Distribution fee (Note 3) 1,281
Service fee (Note 3) 15
--------
TOTAL EXPENSES 254,350
----------
NET INVESTMENT INCOME 2,360,156
----------
REALIZED AND UNREALIZED GAIN/(LOSS) ON
INVESTMENTS (Notes 1 and 4):
Net realized loss on investments sold during
the period (562,325)
----------
Net unrealized appreciation of investments
during the period 2,528,222
----------
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS 1,965,897
----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS 4,326,053
==========
</TABLE>
See Notes to Financial Statements. 11
...............................................................................
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
...............................................................................
- --------------------------------------------------------------------------------
PREMIER LIMITED TERM INCOME FUND
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR
4/30/95 ENDED
(UNAUDITED) 10/31/94
<S> <C> <C>
Net investment income $ 2,360,156 $ 4,266,712
Net realized loss on investments sold during
the period (562,325) (1,876,669)
Net unrealized appreciation/(depreciation) of
investments during the period 2,528,222 (4,583,309)
------------ -----------
Net increase/(decrease) in net assets resulting
from operations 4,326,053 (2,193,266)
Distributions to shareholders from net
investment income:
Class A shares (26,902) (10,352)
Class B shares (263) --
Class R shares (2,332,991) (4,462,330)
Distribution to shareholders from net realized
gain:
Class R shares -- (490,042)
Net increase/(decrease) in net assets from Fund
share transactions (Note 5):
Class A shares 60,933 944,565
Class B shares 30,972 --
Class C shares 16 --
Class R shares (12,730,946) 30,016,014
------------ -----------
Net increase/(decrease) in net assets (10,673,128) 23,804,589
NET ASSETS:
Beginning of period 83,338,117 59,533,528
------------ -----------
End of period (including distributions in excess
of net investment income of $22,636 and
$22,636, respectively) $ 72,664,989 $83,338,117
============ ===========
</TABLE>
12 See Notes to Financial Statements.
...............................................................................
<PAGE>
FINANCIAL HIGHLIGHTS
...............................................................................
- --------------------------------------------------------------------------------
PREMIER LIMITED TERM INCOME FUND
FOR A CLASS A SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
<CAPTION>
SIX
MONTHS
ENDED PERIOD
04/30/95 ENDED
(UNAUDITED) 10/31/94*#
<S> <C> <C>
- ----------------------------------------------------------------------------------
Net asset value, beginning of period $ 10.22 $ 10.49
------- -------
Income from investment operations:
Net investment income 0.27 0.28
Net realized and unrealized gain/(loss) on
investments 0.23 (0.27)
------- -------
Total from investment operations 0.50 0.01
------- -------
Less distributions:
Dividends from net investment income (0.27) (0.28)
------- -------
Total distributions (0.27) (0.28)
------- -------
Net asset value, end of period $ 10.45 $ 10.22
======= =======
Total return+ 4.99% 0.11%
======= =======
Ratios to average net assets/Supplemental Data:
Net assets, end of period (in 000's) $ 1,017 $ 932
Ratio of operating expenses to average net assets 0.85%** 0.83%**
Ratio of net investment income to average net
assets 5.35%** 4.47%**
Portfolio turnover rate 43% 117%
<FN>
--------------------------------------------------------------------------------
* The Fund commenced selling Investor shares on April 7, 1994. Effective October
17, 1994, the Fund's Investor shares were redesignated Class A shares.
** Annualized.
+ Total return represents aggregate total return for the periods indicated and
does not include any applicable sales charge.
# Prior to October 17, 1994, Mellon Bank, N.A. served as the Fund's investment
manager. Effective October 17, 1994, The Dreyfus Corporation serves as the
Fund's investment manager.
</TABLE>
See Notes to Financial Statements. 13
...............................................................................
<PAGE>
FINANCIAL HIGHLIGHTS
.................................................................................
- --------------------------------------------------------------------------------
PREMIER LIMITED TERM INCOME FUND
FOR A CLASS B SHARE OUTSTANDING THROUGHOUT THE PERIOD.
<TABLE>
<CAPTION>
PERIOD
ENDED
04/30/95*
(UNAUDITED)
<S> <C>
- --------------------------------------------------------------------------------
Net asset value, beginning of period $ 10.15
----------
Income from investment operations:
Net investment income 0.22
Net realized and unrealized gain on investments 0.29
----------
Total from investment operations 0.51
----------
Less distributions:
Distributions from net investment income (0.21)
----------
Total distributions (0.21)
----------
Net asset value, end of period $ 10.45
==========
Total return++ 4.77%
==========
Ratios to average net assets/Supplemental Data:
Net assets, end of period (in 000's) $31
Ratio of operating expenses to average net assets 1.34%**
Ratio of net investment income to average net assets 4.86%**
Portfolio turnover rate 43%
<FN>
--------------------------------------------------------------------------------
* The Fund commenced selling Class B shares on December 19, 1994.
** Annualized.
++ Total return represents aggregate total return for the period indicated and does
not reflect any applicable sales charge.
</TABLE>
14 See Notes to Financial Statements.
.................................................................................
<PAGE>
FINANCIAL HIGHLIGHTS
.................................................................................
- --------------------------------------------------------------------------------
PREMIER LIMITED TERM INCOME FUND
FOR A CLASS R SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR
04/30/95 ENDED
(UNAUDITED) 10/31/94***
- -------------------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period $ 10.22 $ 11.07
-------- --------
Income from investment operations:
Net investment income 0.28 0.49#
Net realized and unrealized gain/(loss) on
investments 0.24 (0.75)
-------- --------
Total from investment operations 0.52 (0.26)
-------- --------
Less distributions:
Distributions from net investment income (0.29) (0.53)
Distributions from net realized capital gains -- (0.06)
-------- --------
Total distributions (0.29) (0.59)
-------- --------
Net asset value, end of period $ 10.45 $ 10.22
======= ========
Total return++ 5.12% (2.46)%
======= ========
Ratios to average net assets/Supplemental Data:
Net assets, end of period (in 000's) $71,616 $ 82,406
Ratio of operating expenses to average net
assets+++ 0.60%** 0.60%+
Ratio of net investment income to average net
assets 5.60%** 4.70%
Portfolio turnover rate 43% 117%
<FN>
--------------------------------------------------------------------------------
** Annualized.
*** Prior to October 17, 1994, Mellon Bank, N.A. served as the Fund's investment
manager. Effective October 17, 1994, The Dreyfus Corporation serves as the
Fund's investment manager.
+ Annualized expense ratio before reimbursement of expenses by the investment
adviser was 0.60% for the year ended October 31, 1994.
++ Total return represents aggregate total return for the periods indicated.
+++ For the year ended October 31, 1992 and the period ended October 31, 1991, the
investment adviser waived all or a portion of its advisory fee amounting to
$0.0064 and $0.0107 per share, respectively. For the years ended October 31,
1993 and 1992 and the period ended October 31, 1991, the investment adviser
reimbursed expenses of the Fund amounting to $0.0509, $0.1147, and $0.0732 per
share, respectively.
# Net investment income before reimbursement of expenses by the investment adviser
was $0.49 for the year ended October 31, 1994.
</TABLE>
See Notes to Financial Statements. 15
.................................................................................
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
.................................................................................
- --------------------------------------------------------------------------------
PREMIER LIMITED TERM INCOME FUND
FOR A CLASS R SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
<CAPTION>
YEAR YEAR PERIOD
ENDED ENDED ENDED
10/31/93 10/31/92 10/31/91*
<S> <C> <C> <C>
- --------------------------------------------------------------------------------
Net asset value, beginning of period $10.71 $10.41 $10.00
------ ------ ------
Income from investment operations:
Net investment income 0.51 0.62 0.19
Net realized and unrealized gain/(loss) on
investments 0.46 0.30 0.36
------ ------ ------
Total from investment operations 0.97 0.92 0.55
------ ------ ------
Less distributions:
Distributions from net investment income (0.52) (0.62) (0.14)
Distributions from net realized capital
gains (0.09) -- --
------ ------ ------
Total distributions (0.61) (0.62) (0.14)
------ ------ ------
Net asset value, end of period $11.07 $10.71 $10.41
====== ====== ======
Total return++ 9.33% 9.11% 5.49%
====== ====== ======
Ratios to average net assets/Supplemental
Data:
Net assets, end of period (in 000's) $59,534 $20,619 $9,608
Ratio of operating expenses to average net
assets+++ 0.60% 0.51% 0.02%**
Ratio of net investment income to average
net assets 4.81% 5.91% 7.16%**
Portfolio turnover rate 112% 67% 23%
<FN>
- --------------------------------------------------------------------------------
* The Fund commenced operations on July 11, 1991. The Fund commenced selling Class
A shares on April 7, 1994. Those shares outstanding prior to April 4, 1994 were
designated as Trust shares. On October 17, 1994, Trust shares were redesignated
as Class R shares.
** Annualized.
++ Total return represents aggregate total return for the periods indicated.
+++ For the year ended October 31, 1992 and the period ended October 31, 1991, the
investment adviser waived all or a portion of its advisory fee amounting to
$0.0064 and $0.0107 per share, respectively. For the years ended October 31,
1993 and 1992 and the period ended October 31, 1991, the investment adviser
reimbursed expenses of the Fund amounting to $0.0509, $0.1147, and $0.0732 per
share, respectively.
</TABLE>
16 See Notes to Financial Statements.
.................................................................................
<PAGE>
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 which consists of 19 separate
investment portfolios. These financial statements report on the Premier
Limited Term Income 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 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 retail investors through financial intermediaries and
bear a distribution fee and/or service 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") and a service fee. Class R shares
are sold primarily to bank trust departments and other financial 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 or service fee. Class R shares
are offered without a front-end sales load or CDSC. Each class of shares has
identical rights and privileges, except with respect to distribution 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 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 Directors. Investments in U.S.
government securities (other than short-term securities) 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
17
.................................................................................
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
................................................................................
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
period. 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 collateral 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 dispose 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 collateral and the
creditworthiness of those banks and dealers with which the 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. 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.
(D) EXPENSE ALLOCATION
Expenses of the Fund not directly attributable to the operations of any class
of shares are prorated among 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.
(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. 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 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 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.
(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.
18
.................................................................................
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
.................................................................................
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. 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, policies and limitations. For these services, the Fund
pays the Manager a fee, calculated daily and paid monthly, at the annual rate
of 0.60% 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).
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 services
to the Investment Company.
No officer or employee of Premier (or of any parent, subsidiary or affiliate
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/Laurel
Funds. In addition, no officer or employee of the Manager (or any parent,
subsidiary or 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 for each Audit Committee meeting
attended, and reimburses 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 Class A, B and C shares. Under the Plan,
the Fund may pay annually up to 0.25% of the value of its average daily net
assets attributable to its Class A shares to compensate Premier and Dreyfus
Service Corporation, an affiliate of the Manager, for shareholder servicing
activities and Premier for activities and expenses primarily intended to
result in the sale of Class A shares. Under the Plan, the Fund may pay
Premier for distributing the Fund's Class B and Class C shares at an
aggregate annual rate of 0.50% of the value of the average daily net assets
of Class B and Class C
19
.................................................................................
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
.................................................................................
shares. 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 Class C shares a fee at the annual rate of 0.25% of the value of the
average daily net assets of Class B and Class C shares. Class R shares bear
no service or distribution fee. For the six months ended April 30, 1995, the
service fee for Class B shares was $15. For the six months ended April 30,
1995, the distribution fee for Class A and Class B shares was $1,252 and $29,
respectively.
Under its terms, the Plan shall remain in effect from year to year, provided
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
Purchases and proceeds from sales of securities, excluding short-term
investments and U.S. government securities, for the six months ended April
30, 1995 were $1,066,527 and $7,451,545, respectively.
The cost of purchases and proceeds from sales of long-term U.S. government
securities for the six months ended April 30, 1995 were $31,066,891 and
$33,105,467, respectively.
At April 30, 1995, aggregate gross unrealized appreciation for all securities
in which there was an excess of value over tax cost and aggregate gross
unrealized depreciation for all securities in which there was an excess of
tax cost over value were $302,734 and $1,677,865, 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:
20
.................................................................................
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
<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 27,804 $ 884,692 91,768 $ 950,058
Issued as reinvestment of
dividends and distributions 938 9,646 390 4,011
Redeemed (22,677) (833,405) (917) (9,504)
-------- ---------- ------- ---------
Net increase 6,065 $ 60,933 91,241 $ 944,565
======== ========== ======= =========
</TABLE>
<TABLE>
<CAPTION>
=====================================================================================
PERIOD ENDED
April 30, 1995**
SHARES AMOUNT
<S> <C> <C>
- -------------------------------------------------------------------------------------
CLASS B SHARES:
Sold 2,997 $ 30,883
Issued as reinvestment of
dividends and distributions 9 89
------ --------
Net increase 3,006 $ 30,972
====== ========
</TABLE>
<TABLE>
<CAPTION>
=====================================================================================
SIX MONTHS ENDED YEAR ENDED
April 30, 1995 October 31, 1994*
SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------
CLASS R SHARES:
Sold 3,089,546 $ 30,868,511 6,051,387 $ 65,415,979
Issued as reinvestment of
dividends and distributions 153,650 1,581,506 352,406 3,726,095
Redeemed (4,456,337) (45,180,963) (3,716,619) (39,126,060)
---------- ------------ ---------- ------------
Net increase/(decrease) (1,213,141) $(12,730,946) 2,687,174 $ 30,016,014
========== ============ ========== ============
<FN>
=====================================================================================
* The Fund commenced selling Class A shares on April 7, 1994. Any shares
outstanding prior to April 4, 1994 were designated Trust shares. On October
17, 1994, Trust shares were redesignated as Class R shares.
** The Fund commenced selling Class B shares on December 19, 1994.
As of April 30, 1995, the Fund had issued 1.493 Class C shares in the amount
of $15.60.
6. CAPITAL LOSS CARRYFORWARD
At October 31, 1994, The Fund had available for federal income tax purposes
unused capital loss carryforwards of $1,854,347 expiring in the year 2002.
22
21
......................................................................................
</TABLE>
<PAGE>
FOR MORE INFORMATION ON YOUR FUND, INCLUDING:
- -- General Fund Information.
- -- Additional Prospectuses - Read the prospectus carefully before you invest.
- -- Account Information.
- -- Performance and Share Price Information.
CALL 1-800-645-6561
24 HOURS A DAY, 7 DAYS A WEEK.
Or write:
The Dreyfus Family of Funds
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
Further information is contained
in the Prospectus, which must
precede or accompany this report.
The Fund is distributed by:
Premier Mutual Fund Services, Inc.
One Exchange Place 10th floor
Boston, MA 02109 PLISA954
DEAR SHAREHOLDER,
We are pleased to provide you with the Premier Small Company Stock 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 the 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 Small Company Stock 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 12
Statement of Operations 14
Statement of Changes in Net Assets 15
Financial Highlights 16
Notes to Financial Statements 19
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.
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
For the six month period ended April 30, 1995, the Fund achieved a total
return of 9.22%* for its Class A shares and 9.41% for its Class R shares.
For the period from inception (December 19, 1994) to April 30, 1995, the
Fund's Class B shares posted a total return of 15.49%*. We are pleased to
report that for the six month period ended April 30, 1995, the Fund has
achieved its objective of outperforming the Russell 2500 benchmark, before
fees.
During the period, small capitalization stocks underperformed large cap
stocks, as the 30 blue chips in the Dow Jones Industrial Average led the
stock market to higher ground.
The best performers in the Fund were either takeover targets or were in
the two strongest sectors of the market during this period: technology and
finance.
Takeover candidates include Dr. Pepper/Seven-Up (Cadbury), Hillhaven (Ho-
rizon) and Caesar's World (ITT). Strong technology stocks in the portfolio
included LSI Logic Corporation, Electronics for Imaging, Inc., Informix
Corporation, Adaptec Inc., Integrated Device Technologies, Inc. and Sili-
con Valley Group, Inc. Financial stocks that contributed to the Fund's
performance included Midlantic Corporation, Money Stores, Inc., Green Tree
Financial Corporation and ADVANTA Corporation.
The Fund's management believes that if the rally in the large-cap market
is sustained, small cap stocks will benefit from the same rising tide.
Furthermore, since small cap stocks tend to be more volatile both in ris-
ing and falling markets, their rate of appreciation may well outdo that of
the larger companies, assuming that the bullish trend continues.
* 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, 1994.
With the sales charge or CDSC, the total return for the same periods
would have been 4.30% for Class A shares and 11.49% for Class B shares,
respectively.
PORTFOLIO OF INVESTMENTS (UNAUDITED)
PREMIER SMALL COMPANY STOCK FUND APRIL 30, 1995
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
<S> <C> <C>
COMMON STOCKS -- 95.4%
FINANCIAL SERVICES -- 18.6%
2,600 Acordia, Inc. $ 80,925
2,500 ADVANTA Corporation, Class B 80,625
2,500 AMBAC, Inc. 101,875
5,900 AMRESCO, Inc. 42,037
2,500 BayBanks Inc. 156,250
2,100 CMAC Investment 77,700
1,200 Columbia First Savings Bank 68,400
3,000 Crestar Financial Corporation 135,000
6,150 Edwards (AG) Inc. 140,681
5,800 Firstar Corporation 167,475
2,100 Franklin Quest Company+ 69,825
4,300 Green Tree Financial Corporation 175,763
2,600 John Alden Financial Corporation 47,125
2,800 Kimco Realty 105,700
4,300 Mercantile Bancorp, Inc. 156,950
3,600 Midlantic Corporation 131,400
9,100 Money Stores, Inc. 212,713
5,900 Mutual Risk Management, Ltd. 181,425
3,500 Old Kent Financial Corporation 108,500
5,400 Old Republic International Corporation 139,050
8,100 Peoples Bank of Bridgeport 119,475
7,600 Pinnacle West Capital Corporation 163,400
2,500 PXRE Corporation 60,625
4,400 Regions Financial Corporation 152,900
2,500 Rochester Community Savings Bank 46,563
1,950 Standard Federal Bank 54,844
5,100 UJB Financial, Inc. 139,612
2,750 United Companies Financial Corporation 104,844
2,600 United Wisconsin Services, Inc. 52,650
3,100 USLIFE Corporation 117,800
5,000 West One Bancorp 138,125
3,530,257
TECHNOLOGY -- 12.5%
2,600 Analysts International Corporation 65,650
6,200 Electronics For Imaging, Inc.+ 282,100
5,100 Exabyte Corporation+ 64,388
3,200 Harman International Industries, Inc. 116,800
7,100 Informix Corporation+ 279,563
4,400 Integrated Device Technology, Inc.+ 167,750
3,500 KENETECH Corporation+ 37,625
3,000 LSI Logic Corporation+ 199,875
4,200 Minerals Technologies, Inc. 139,650
6,200 Quantum Corporation+ 114,700
7,500 Silicon Valley Group, Inc.+ 217,500
4,300 Sterling Software, Inc.+ 146,200
2,800 SunGard Data System, Inc.+ 130,550
3,000 Thermo Electronics Corporation+ 161,625
4,300 Thiokol Corporation 119,863
2,850 Zebra Technologies Corporation, Class A+ 130,744
2,374,583
BASIC INDUSTRIES -- 11.7%
5,200 Birmingham Steel Corporation 103,350
5,800 Brush Wellman, Inc. 114,550
3,500 CDI Corporation+ 89,687
4,600 Chesapeake Corporation of Virginia 142,600
8,975 Clayton Homes, Inc. 151,453
3,000 Cytec Industries, Inc.+ 109,125
5,700 Federal Paper Board Company, Inc. 168,862
8,500 Haverty Furniture Companies, Inc. 87,125
8,200 Horsham Corporation 111,725
7,800 International Specialty Products, Inc. 62,400
3,500 Medusa Corporation 79,187
8,500 Pittston Services Group 201,875
3,600 Ply Gem Industries, Inc. 59,850
5,000 Potash Corporation Saskatchewan, Inc. 265,625
5,800 Read-Rite Corporation+ 123,250
3,700 Shorewood Packaging Group+ 58,275
7,600 Sterling Chemicals, Inc.+ 95,000
2,800 Tredegar Industries, Inc. 63,700
6,200 Watts Industries, Inc., Class A 139,888
2,227,527
HEALTHCARE/PHARMACEUTICALS -- 11.0%
1,750 American Medical Response, Inc.+ 44,844
2,300 Cardinal Health, Inc. 106,088
4,500 Circa Pharmaceuticals, Inc.+ 109,688
3,300 Community Health Systems, Inc.+ 114,675
3,700 Coram Healthcare Corporation+ 75,850
1,800 Cordis Corporation+ 129,150
2,300 DENTSPLY International, Inc. 81,075
4,650 Health Care Properties, Inc. 140,662
5,300 Hillhaven Corporation+ 145,750
2,600 Lancaster Colony Corporation 90,350
5,400 Lincare Holdings, Inc.+ 166,725
10,100 OrNda Healthcorp+ 176,750
2,100 PacifiCare Health Systems+ 130,200
7,800 Teva Pharmaceutical Industries, ADR 267,150
3,600 Universal Health Services, Inc.+ 94,950
3,600 Ventritex Inc.+ 54,000
5,200 Vivra Inc.+ 167,050
2,094,957
CONSUMER SERVICES -- 9.6%
6,300 Adaptec Inc.+ 201,600
4,600 Apple South, Inc. 66,700
4,400 Big B, Inc. 63,800
3,700 Brinker International, Inc.+ 63,362
8,900 Cash America International 67,862
5,100 Danka Business Systems Plc., ADR 139,612
4,350 Dollar General Corporation 101,137
3,300 Eckerd Corporation+ 96,112
4,300 Fieldcrest Cannon, Inc.+ 95,138
3,800 Haggar Corporation 76,950
3,600 IMCO Recycling, Inc. 56,700
4,400 Interface Inc., Class A 61,050
3,600 Loewen Group, Inc. 101,531
3,700 Morrison Restaurants, Inc. 83,712
2,800 PHH Corporation 112,700
1,950 Ralcorp Holdings, Inc.+ 45,094
5,700 Rex Stores Corporation+ 77,662
5,150 Staples Inc.+ 124,244
3,300 Stop & Shop Companies, Inc.+ 87,863
5,600 Waban Inc.+ 93,100
1,815,929
ENERGY -- 7.2%
9,100 Benton Oil & Gas+ 112,043
4,800 Cabot Corporation 188,400
5,300 DQE, Inc. 178,875
5,600 Illinova Corporation 130,200
3,300 KN Energy, Inc. 83,738
13,100 Nabors Industries+ 123,631
3,800 Petroleum Geo-Services Corporation, ADR+ 103,788
4,800 Pogo Producing Company 108,000
4,800 Seagull Energy Corporation+ 85,200
7,200 Smith International, Inc.+ 124,200
5,100 Ultramar Corporation 133,238
1,371,313
COMMUNICATIONS -- 5.7%
4,200 ALC Communications Corporation+ 160,125
1,150 Clear Channel Communications, Inc.+ 64,687
5,450 ECI Telecommunications, Ltd.+ 91,969
3,500 Heritage Media Corporation, Class A+ 89,250
3,200 Infinity Broadcasting Corporation, Class A+ 136,400
4,600 LCI International, Inc.+ 116,150
6,200 Tellabs, Inc.+ 427,800
1,086,381
ELECTRONICS -- 4.8%
4,200 AMETEK Inc. 68,250
6,100 Atmel Corporation+ 268,400
3,300 Checkpoint Systems+ 69,712
5,700 CompUSA Inc.+ 141,788
5,400 Cypress Semiconductor Corporation+ 163,350
7,000 First Alert, Inc.+ 86,625
5,300 VLSI Technology, Inc. 112,956
911,081
UTILITIES -- 3.4%
5,900 Eastern Utilities Associates 140,862
6,600 Iowa-Illinois Gas & Electric Company 138,600
5,400 Pacific Enterprises Company 132,975
3,700 Southern Indiana Gas & Electric Company 111,925
7,400 Southwestern Energy Company 112,850
637,212
CONSUMER BASICS -- 2.7%
7,200 IBP, Inc. 266,400
5,900 Richfood Holdings, Inc. 118,000
4,900 Robert Mondavi Corporation+ 69,825
2,050 Smithfield Foods, Inc.+ 46,638
500,863
GENERAL BUSINESS -- 2.4%
2,100 Avid Technology+ 84,655
4,750 Bowne & Company, Inc. 77,781
3,350 Devon Group, Inc.+ 89,613
2,800 King World Productions, Inc.+ 112,700
1,650 Scholastic Corporation+ 92,400
457,149
CONSUMER DURABLES -- 2.2%
3,500 Borg-Warner Automotive, Inc. 90,125
3,500 Gentex Corporation+ 67,375
4,100 Outboard Marine Corporation 90,713
2,600 Toro Company 75,075
8,400 Winnebago Industries, Inc. 85,050
408,338
TRANSPORTATION -- 1.8%
2,900 Air Express International 68,150
5,800 Arkansas Best Corporation 58,725
3,600 Consolidated Freightways, Inc. 91,800
1,400 Kansas City Southern Industries, Inc. 52,500
4,200 SkyWest Inc. 74,550
345,725
MACHINERY & HEAVY EQUIPMENT -- 1.1%
3,925 AGCO Corporation 139,828
3,600 Termedics 67,950
207,778
MINING -- 0.7%
4,200 Kennametal, Inc. 140,700
TOTAL COMMON STOCKS
(Cost $16,825,335) 18,109,793
PRINCIPAL
AMOUNT
REPURCHASE AGREEMENT -- 18.9%
(Cost $3,577,852)
Agreement with Goldman Sachs & Company,
dated 04/28/95 bearing 5.920% to be re-
purchased at $3,579,617 on 05/01/95, col-
lateralized by $3,578,614 U.S. Treasury
$3,577,852 Bond, 7.625% due 02/15/25 $ 3,577,852
TOTAL INVESTMENTS
(Cost $20,403,187*) 114.3% 21,687,645
OTHER ASSETS AND LIABILITIES (NET) (14.3) (2,708,397)
NET ASSETS 100.0% $18,979,248
<FN>
* Aggregate cost for Federal tax purposes.
+ Non-income producing security.
</TABLE>
See Notes to Financial Statements.
STATEMENT OF ASSETS AND LIABILITIES
PREMIER SMALL COMPANY STOCK FUND
APRIL 30, 1995 (UNAUDITED)
<TABLE>
<S> <C> <C>
ASSETS
Investments, at value (Cost
$20,403,187)(Note 1)
See accompanying schedule:
Securities $18,109,793
Repurchase agreement 3,577,852 $21,687,645
Cash 242,756
Receivable for Fund shares sold 93,890
Dividends and interest receivable 18,771
TOTAL ASSETS 22,043,062
LIABILITIES
Payable for investment securities purchased $3,031,434
Investment management fee payable (Note 2) 30,547
Accrued Directors' fees and expenses (Note
2) 1,538
Distribution fee payable (Note 3) 245
Service fee payable (Note 3) 50
TOTAL LIABILITIES 3,063,814
NET ASSETS $18,979,248
NET ASSETS consist of:
Undistributed net investment income $28,563
Accumulated net realized gain on invest-
ments sold 73,413
Unrealized appreciation of investments 1,284,458
Par value 1,727
Paid-in capital in excess of par value 17,591,087
TOTAL NET ASSETS $18,979,248
NET ASSET VALUE
CLASS A SHARES
Net asset value and redemption price per
share ($493,054 / 44,907 shares of capi-
tal stock outstanding) $10.98
Maximum offering price per share ($10.98 /
0.955)
(based on sales charge of 4.50% of the
offering price on April 30, 1995) $11.50
CLASS B SHARES
Net asset value and offering price per
share+ ($277,710 / 25,350 shares of capi-
tal stock outstanding) $10.96
CLASS C SHARES
Net asset value and offering price per
share+ ($17.32 / 1.581 shares of capital
stock outstanding) $10.96
CLASS R SHARES
Net asset value, offering and redemption
price per share ($18,208,467 / 1,656,824
shares of capital stock outstanding) $10.99
<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 SMALL COMPANY STOCK FUND
FOR THE SIX MONTHS ENDED APRIL 30, 1995 (UNAUDITED)
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Dividends $ 83,018
Interest 31,959
TOTAL INVESTMENT INCOME 114,977
EXPENSES
Investment management fee (Note 2) $ 76,444
Directors' fees and expenses (Note 2) 1,243
Distribution fee (Note 3) 691
Service fee (Note 3) 109
TOTAL EXPENSES 78,487
NET INVESTMENT INCOME 36,490
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
(Notes 1 and 4):
Net realized gain on investments sold
during the period 101,688
Net unrealized appreciation of invest-
ments durin the period 1,215,666
NET REALIZED AND UNREALIZED GAIN ON INVEST-
MENTS 1,317,354
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS $1,353,844
</TABLE>
See Notes to Financial Statements.
STATEMENT OF CHANGES IN NET ASSETS
PREMIER SMALL COMPANY STOCK FUND
<TABLE>
<CAPTION>
SIX
MONTHS PERIOD
ENDED ENDED
4/30/95 10/31/94*
(UNAUDITED)
<S> <C> <C>
Net investment income $ 36,490 $ 18,644
Net realized gain/(loss) on investments
sold during the period 101,688 (28,275)
Net unrealized appreciation of investments
during the period 1,215,666 68,792
Net increase in net assets resulting from
operations 1,353,844 59,161
Distributions to shareholders from net in-
vestment income:
Class A shares (167) --
Class R shares (26,404) --
Net increase in net assets from Fund share
transactions (Note 5):
Class A shares 389,423 58,919
Class B shares 262,236 --
Class C shares 17 --
Class R shares 6,193,840 10,688,379
Net increase in net assets 8,172,789 10,806,459
NET ASSETS
Beginning of period 10,806,459 --
End of period (including undistributed net
investme income of $28,563 and $18,644,
respectively) $18,979,248 $10,806,459
<FN>
* The Fund commenced operations on September 2, 1994.
</TABLE>
See Notes to Financial Statements.
FINANCIAL HIGHLIGHTS
PREMIER SMALL COMPANY STOCK 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 $10.07 $10.00
Income from investment operations:
Net investment income 0.02 0.01
Net realized and unrealized gain on invest-
ments 0.91 0.06
Total from investment operations 0.93 0.07
Less distributions:
Dividends from net investment income (0.02) --
Total distributions (0.02) --
Net asset value, end of period $10.98 $10.07
Total return++ 9.22% 0.70%
Ratios to average net assets/supplemental
data:
Net assets, end of period (in 000's) $493 $60
Ratio of operating expenses to average net
assets 1.50%+ 1.50%+
Ratio of net investment income to average
net assets 0.35%+ 0.83%+
Portfolio turnover rate 23% 8%
<FN>
* The Fund commenced operations and commenced selling Class A shares on
September 2, 1994. Effective October 17, 1994, the Fund's Investor
shares were redesignated as Class A shares.
+ Annualized.
++ Total return represents aggregate total return for the periods indi-
cated and does not reflect any applicable sales charge.
# 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 SMALL COMPANY STOCK FUND
FOR A CLASS B SHARE OUTSTANDING THROUGHOUT THE PERIOD.
<TABLE>
<CAPTION>
PERIOD
ENDED
04/30/95*
(UNAUDITED)
<S> <C>
Net asset value, beginning of period $9.49
Income from investment operations:
Net investment loss (0.01)
Net realized and unrealized gain on invest-
ments 1.48
Total from investment operations 1.47
Net asset value, end of period $10.96
Total return++ 15.49%
Ratios to average net assets/supplemental
data:
Net assets, end of period (in 000's) $278
Ratio of operating expenses to average net
assets 2.25%+
Ratio of net investment loss to average net
assets (0.40)%+
Portfolio turnover rate 23%
<FN>
* The Fund commenced selling Class B shares on December 19, 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 SMALL COMPANY STOCK 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 $10.07 $10.00
Income from investment operations:
Net investment income 0.02 0.02
Net realized and unrealized gain on invest-
ments 0.92 0.05
Total from investment operations 0.94 0.07
Less distributions:
Dividends from net investment income (0.02) --
Total distributions (0.02) --
Net asset value, end of period $10.99 $10.07
Total return++ 9.41% 0.70%
Ratios to average net assets/supplemental
data:
Net assets, end of period (in 000's) $18,208 $10,747
Ratio of operating expenses to average net
assets 1.25%+ 1.25%+
Ratio of net investment income to average
net assets 0.60%+ 1.08%+
Portfolio turnover rate 23% 8%
<FN>
* The Fund commenced operations and commenced selling Trust shares on
September 2, 1994. Effective October 17, 1994, the Fund's Trust shares
were redesignated as Class R shares.
+ Annualized.
++ Total return represents aggregate total return for the periods 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 which consists of 19 separate
investment portfolios. This report contains financial statements for the
Premier Small Company Stock 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 man-
agement 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 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") and service fees. Class R shares
are sold primarily to bank trust departments and other financial 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. Class R shares are of-
fered without a front-end sales load or CDSC. Each class of shares has
identical rights and privileges, except with respect to the distribution
fee 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 in accordance with
generally 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 from the valua-
tion 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) 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 sold are recorded
on the identified cost basis. Investment income and realized and unreal-
ized gains and losses are allocated based upon relative average daily net
assets of each class.
(D) EXPENSE ALLOCATION
Expenses of the Fund not directly attributable to the operations of any
class of shares are prorated among the classes based upon the relative av-
erage daily net assets of each class. Distribution expense is directly at-
tributable to a particular class of shares and is charged only to that
class' operations.
(E) DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income, if any, are determined on a class
level and are declared and paid quarterly. Distributions from any net re-
alized capital gains, if any, are determined on a Fund level and are de-
clared 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.
(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 entered into 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 ac-
counting and transfer agency services to the Investment Company. The Man-
ager also directs the investment of the Fund in accordance with its in-
vestment objective, policies and limitations. For these services, the Fund
pays the Manager a fee, calculated daily and paid monthly, at the annual
rate of 1.25% 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 broker-
age, taxes, interest, Rule 12b-1 distribution fees and expenses, fees and
expenses of non-interested directors (including counsel fees) and extraor-
dinary 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 Com-
pany'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.
For the six month period ended April 30, 1995, the Fund received from
shareholders $23,340 representing commissions (sales charges) on sales of
Class A shares. The front end sales charge applicable to Class A shares
became effective December 19, 1994.
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 per 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 Class A, B and C shares. Under
the Plan, the Fund may pay annually up to 0.25% of the value of the aver-
age daily net assets attributable to its Class A shares to compensate Pre-
mier and Dreyfus Service Corporation, an affiliate of the Manager, for
shareholder servicing activities and Premier for activities and expenses
primarily intended to result in the sale of Class A shares. Under the
Plan, the Fund may pay Premier for distributing the Fund's Class B and
Class C shares at an annual rate of 0.75% of the value of the average
daily net assets of Class B and Class C shares. Class B and Class C shares
are also subject to a service plan adopted pursuant to Rule 12b-1, pursu-
ant to which the Fund pays Dreyfus Service Corporation or Premier for pro-
viding certain services to the holders of Class B and Class C shares a fee
at the annual rate of 0.25% of the value of the average daily net assets
of Class B and Class C shares. The Class R shares bear no service or dis-
tribution fee. For the six months ended April 30, 1995, the distribution
fee for Class A and Class B shares was $365 and $326, respectively. For
the six months ended April 30, 1995, the service fee for Class B shares
was $109.
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 six months
ended April 30, 1995 aggregated $9,555,131 and $2,801,176, respectively.
At April 30, 1995, aggregate gross unrealized appreciation for all securi-
ties in which there was an excess of value over tax cost amounted to
$1,906,590 and aggregate gross unrealized depreciation for all securities
in which there was an excess of tax cost over value amounted to $622,132.
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 currently offers four classes of
shares. The table below summarizes transactions in Fund shares for the pe-
riods 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 47,089 $468,102 5,966 $59,219
Issued as reinvestment of dividends 13 130 -- --
Redeemed (8,131) (78,809) (30) (300)
Net increase 38,971 $389,423 5,936 $58,919
</TABLE>
<TABLE>
<CAPTION>
PERIOD ENDED
APRIL 30, 1995**
SHARES AMOUNT
<S> <C> <C>
CLASS B SHARES:
Sold 25,350 $262,236
Net increase 25,350 $262,236
</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 1,397,632 $14,415,913 1,330,335 $13,289,944
Issued as reinvestment of dividends 1,906 18,909 -- --
Redeemed (810,082) (8,240,982) (262,967) (2,601,565)
Net increase 589,456 $6,193,840 1,067,368 $10,688,379
<FN>
* The Fund commenced operations on September 2, 1994. Effective October
17, 1994, the Fund's Investor shares and Trust shares were redesignated
as Class A shares and Class R shares, respectively.
** The Fund commenced selling Class B shares on December 19, 1994.
</TABLE>
As of April 30, 1995, the Fund had issued 1.581 Class C shares in the
amount of $17.32.
6. CAPITAL LOSS CARRYFORWARD
At October 31, 1994, the Fund had available for federal income tax pur-
poses an unused capital loss carryforward of $28,275 expiring in 2002.
7. DIVIDENDS
On May 2, 1995, the Board of Directors declared dividends from net invest-
ment income for the Class A and Class R shares in the amount of $.0082 and
$.0172 per share, respectively, payable on May 8, 1995 to shareholders of
record on May 1,1995.
