DREYFUS DISCIPLINED EQUITY INCOME FUND, 497, 1996-11-29

DREYFUS DISCIPLINED EQUITY INCOME FUND
497, 1996-11-29

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PREMIER BALANCED FUND

PROSPECTUS MARCH 1, 1996
AS REVISED DECEMBER 1, 1996

Registration Mark

Premier Balanced Fund (the "Fund"), formerly called the
"Laurel Balanced Fund," is a separate, diversified portfolio of
The Dreyfus/Laurel Funds, Inc., an open-end management investment
company (the "Company"), known as a mutual fund. The Fund
seeks to outperform a hybrid index, 60% of which is the Standard & Poor's
500 Composite Stock Price Index and 40% of which is the Lehman Brothers
Intermediate Government/Corporate Bond Index, by investing in common
stocks and bonds in proportions consistent with their expected returns
and risks as determined by the Fund's investment manager.
By this Prospectus, the Fund is offering four Classes of
shares_Class A, Class B, Class C and Class R.
The Dreyfus Corporation serves as the Fund's investment
manager. The Dreyfus Corporation is referred to as "Dreyfus."
This Prospectus sets forth concisely information about the
Fund that you should know before investing. It should be read carefully
before you invest and retained for future reference.

The Statement of Additional Information ("SAI") dated March
1, 1996, as revised December 1, 1996, which may be further revised from
time to time, provides a further discussion of certain areas in this
Prospectus and other matters which may be of interest to some investors.
It has been filed with the Securities and Exchange Commission ("SEC") and
is incorporated herein by reference. The SEC maintains a web site
(http://www.sec.gov) that contains the SAI, material incorporated by
reference, and other information regarding the Fund. For a free copy,
write to the Fund at 144 Glenn Curtiss Boulevard, Uniondale, New York
11556-0144 or call 1-800-554-4611. When telephoning, ask for Operator
144.

MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR
GUARANTEED OR ENDORSED BY, ANY BANK, AND ARE NOT FEDERALLY INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY
OTHER AGENCY. ALL MUTUAL FUND SHARES INVOLVE CERTAIN INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
THE FEES TO WHICH THE FUND IS SUBJECT ARE SUMMARIZED IN THE
"EXPENSE SUMMARY" SECTION OF THE FUND'S PROSPECTUS. THE FUND PAYS AN
AFFILIATE OF MELLON BANK, N.A. ("MELLON BANK") TO BE ITS INVESTMENT
MANAGER. MELLON BANK OR AN AFFILIATE MAY BE PAID FOR PERFORMING OTHER
SERVICES FOR THE FUND, SUCH AS CUSTODIAN, TRANSFER AGENT OR FUND
ACCOUNTANT SERVICES. THE FUND IS DISTRIBUTED BY PREMIER MUTUAL FUND
SERVICES, INC.
- ------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- ------------------------------------------------------------------------------

(Continued from page 1)
Class A shares are subject to a sales charge imposed at the
time of purchase. (Class A shares of the Fund were formerly called
Investor Shares.) Class B shares are subject to a maximum 4% contingent
deferred sales charge imposed on redemptions made within six years of
purchase. Class C shares are subject to a 1% contingent deferred sales
charge imposed on redemptions made within the first year of purchase.
Class R shares are sold primarily to bank trust departments and other
financial service providers (including Mellon Bank and its affiliates)
("Banks") acting on behalf of customers having a qualified trust or
investment account or relationship at such institution, or to customers
who have received and hold shares of the Fund distributed to them by
virtue of such an account or relationship. (Class R shares of the Fund
were formerly called Trust Shares.) Other differences between the Classes
include the services offered to and the expenses borne by each Class and
certain voting rights, as described herein. These alternatives are
offered so an investor may choose the method of purchasing shares that is
most beneficial given the amount of purchase, the length of time the
investor expects to hold the shares and other circumstances.
Each Class of shares may be purchased or redeemed by
telephone using the TELETRANSFER Privilege.

TABLE OF CONTENTS

Expense Summary.................................... 3
Financial Highlights............................... 4
Alternative Purchase Methods....................... 8
Description of the Fund............................ 9
Management of the Fund............................. 18
How to Buy Fund Shares............................. 19
Shareholder Services............................... 25
How to Redeem Fund Shares.......................... 29
Distribution Plans (Class A Plan and Class B and C Plan) 33
Dividends, Other Distributions and Taxes........... 34
Performance Information............................ 36
General Information................................ 37

Page 2

<TABLE>
<CAPTION>
EXPENSE SUMMARY
CLASS A CLASS B CLASS C CLASS R
<S> <C> <C> <C> <C>
Shareholder Transaction Expenses
Maximum Sales Load Imposed on Purchases
...... (as a percentage of offering price) 5.75% none none none
Maximum Contingent Deferred Sales Charge Imposed
........................... on Redemptions
(as a percentage of the amount subject to charge) none* 4.00% 1.00% none
Annual Fund Operating Expenses
(as a percentage of average daily net assets)
Management Fee.......................... 1.00% 1.00% 1.00% 1.00%
12b-1 Fee1.............................. .25% 1.00% 1.00% none
Other Expenses ......................... .00% .00% .00% .00%
_____ _____ _____ _____
Total Fund Operating Expenses........... 1.25% 2.00% 2.00% 1.00%
Example:
You would pay the following expenses on a $1,000 investment,
assuming (1) a 5% annual return and (2) except where noted,
redemption at the end of each time period:
1 YEAR $ 70 $ 60/$202 $ 30/$202 $ 10
3 YEARS $ 95 $ 93/$632 $ 63 $ 32
5 YEARS $122 $128/$1082 $108 $ 55
10 YEARS $200 $196** $233 $122
</TABLE>

* A contingent deferred sales charge of 1.00% may be imposed on certain
redemptions of Class A shares purchased without an initial sales charge as
part of an investment of $1 million or more. See "How to Buy Fund Shares --
Class A shares."

** Assumes conversion of Class B shares to Class A shares approximately six
years after the date of purchase and, therefore, reflects Class A expenses
for years seven through ten.
(1) See "Distribution Plans (Class A Plan and Class B and C Plan)" for a
description of the Fund's Distribution Plans and Service Plan for Class A,
B and C shares.
(2) Assuming no redemption of shares.
- ------------------------------------------------------------------------------
THE AMOUNTS LISTED IN THE EXAMPLE SHOULD NOT BE CONSIDERED AS
REPRESENTATIVE OF FUTURE EXPENSES AND ACTUAL EXPENSES MAY BE GREATER OR LESS
THAN THOSE INDICATED. MOREOVER, WHILE THE EXAMPLE ASSUMES A 5% ANNUAL RETURN,
THE FUND'S ACTUAL PERFORMANCE WILL VARY AND MAY RESULT IN AN ACTUAL RETURN
GREATER OR LESS THAN 5%.
- ------------------------------------------------------------------------------

The purpose of the foregoing table is to assist you in understanding
the various costs and expenses that investors will bear, directly or
indirectly, the payment of which will reduce investors' return on an annual
basis. Long-term investors in Class A, B or C shares could pay more in 12b-1
fees than the economic equivalent of paying the maximum front-end sales
charges applicable to mutual funds sold by members of the National
Association of Securities Dealers, Inc. ("NASD"). The information in the
foregoing table does not reflect any fee waivers or expense reimbursement
arrangements that may be in effect. Certain banks, securities dealers and
brokers ("Selected Dealers") or other financial institutions (including
Mellon Bank and its affiliates) (collectively "Agents") may charge their
clients direct fees for effecting transactions in Fund shares; such fees are
not reflected in the foregoing table. See "Management of the Fund," "How to
Buy Fund Shares" and "Distribution Plans (Class A Plan and Class B and C
Plan)."

The Company understands that Agents may charge fees to their clients
who are owners of the Fund's Class A, B or C shares for various services
provided in connection with a client's account. These fees would be in
addition to any amounts received by an Agent under its Selling Agreement
("Agreement") with Premier Mutual Fund Services, Inc. (the "Distributor").
The Agreement requires each Agent to disclose to its clients any compensation
payable to such Agent by the Distributor and any other compensation payable
by the clients for various services provided in connection with their
accounts.
Page 3

FINANCIAL HIGHLIGHTS
The tables below are based upon a single Class A, Class B,
Class C and Class R share outstanding throughout the year or period and
should be read in conjunction with the financial statements and related
notes that appear in the Fund's Annual Report dated October 31, 1995,
which is incorporated by reference in the SAI. The financial statements
included in the Fund's Annual Report for the year or period ended October
31, 1995, have been audited by KPMG Peat Marwick LLP, independent
auditors, whose report appears in the Fund's Annual Report. Further
information about, and management's discussion of, the Fund's performance
is contained in the Fund's Annual Report, which may be obtained without
charge by writing to the address or calling the number set forth on the
cover page of this Prospectus.
<TABLE>
<CAPTION>
PREMIER BALANCED FUND
FOR A CLASS A SHARE OUTSTANDING THROUGHOUT EACH YEAR OR PERIOD.*
YEAR ENDED PERIOD ENDED
10/31/95 10/31/94#
----------- ------------
<S> <C> <C>
Net asset value, beginning of period $10.08 $ 9.73
------- -------
Income from investment operations:
Net investment income 0.28 0.11
Net realized and unrealized gain on investments 1.82 0.34
------- -------
Total from investment operations 2.10 0.45
------- -------
Less distributions:
Distributions from net investment income (0.27) (0.10)
------- -------
Net asset value, end of period $11.91 $10.08
------- -------
Total return 21.17% 4.68%
------- -------
Ratios to average net assets/supplemental data:
Net assets, end of period (000's) $1,650 $1,798
Ratio of operating expenses to average net assets 1.25% 1.29%**
Ratio of net investment income to average net assets 2.65% 1.98%**
Portfolio turnover rate 53.20% 83.00%
</TABLE>

*The Fund commenced selling Investor shares on April 14, 1994. On October
17, 1994, the Investor shares were redesignated as Class A shares.
** Annualized.
Total return represents aggregate total return for the period indicated.
#Prior to October 17, 1994, Mellon Bank served as the Fund's investment
manager. Effective October 17, 1994, Dreyfus began serving as the Fund's
investment manager.
Page 4
<TABLE>
<CAPTION>
PREMIER BALANCED FUND
FOR A CLASS B SHARE OUTSTANDING THROUGHOUT THE PERIOD.
PERIOD ENDED
10/31/95*
-----------
<S> <C>
Net asset value, beginning of period $ 9.76
-------
Income from investment operations:
Net investment income 0.14
Net realized and unrealized gain on investments 2.11
-------
Total from investment operations 2.25
-------
Less distributions:
Distributions from net investment income (0.12)
-------
Net asset value, end of period $11.89
=======
Total return 23.19%
-------
Ratios to average net assets/supplemental data:
Net assets, end of period (000's) $3,118
Ratio of operating expenses to average net assets 2.00%**
Ratio of net investment income to average net assets 2.50%**
Portfolio turnover rate 53.20%

*The Fund commenced operations on September 15, 1993. The Fund commenced
selling Class B shares on December 20, 1994.
** Annualized.
Page 5

PREMIER BALANCED FUND
FOR A CLASS C SHARE OUTSTANDING THROUGHOUT THE PERIOD.
PERIOD ENDED
10/31/95*
-----------

Net asset value, beginning of period $9.76
-------
Income from investment operations:
Net investment income 0.11
Net realized and unrealized gain on investments 2.15
-------
Total from investment operations 2.26
-------
Less distributions:
Distributions from net investment income (0.12)
-------
Net asset value, end of period $11.90
-------
-------
Total return 23.29%
-------
Ratios to average net assets/supplemental data:
Net assets, end of period (000's) $6
Ratio of operating expenses to average net assets 2.00%**
Ratio of net investment income to average net assets 2.50%**
Portfolio turnover rate 53.20%

*The Fund commenced operations on September 15, 1993. The Fund commenced
selling Class C shares on December 20, 1994.
** Annualized.
</TABLE>
Page 6
<TABLE>
<CAPTION>

PREMIER BALANCED FUND
FOR A CLASS R SHARE OUTSTANDING THROUGHOUT EACH YEAR OR PERIOD.*
YEAR YEAR PERIOD
ENDED ENDED ENDED
10/31/95 10/31/94## 10/31/93
<S> <C> <C> <C>

Net asset value, beginning or period $10.09 $10.18 $10.00
-------- -------- --------
Income from investment operations:
Net investment income 0.31 0.20** 0.02
Net realized and unrealized gain/(loss) on investments 1.81 (0.13) 0.16
-------- -------- --------
Total from investment operations 2.12 0.07 0.18
-------- -------- --------
Less distributions:
Distributions from net investment income (0.29) (0.16) ._-
-------- -------- --------
Net asset value, end of period $11.92 $10.09 $10.18
======== ======== ========
Total return 21.46% .68% 1.80%
-------- -------- --------
Ratios to average net assets/supplemental data:
Net Assets, end of period (000's) $97,881 $75,720 $28,904
Ratio of operating expenses to average net assets 1.00% 1.04%*** 1.15%#
Ratio of net investment income to average net assets 2.89% 2.23% 1.96%
Portfolio turnover rate 53.20% 83% _-
</TABLE>

* The Fund commenced operations on September 15, 1993.
On April 14, 1994, the Fund commenced selling Investor shares. Those
shares outstanding prior to April 14, 1994 were designated Trust
shares. On October 17, 1994, Trust Shares were redesignated as Class R
shares.
**Net investment income before reimbursement of expenses by the
investment adviser for the year ended October 31, 1994 was $0.2031. The
amount shown in this caption for each share outstanding throughout the
period may not accord with the change in the aggregate gains and loses
in the portfolio securities for the period because of the timing of
purchases and withdrawal of shares in relation to the fluctuations in
market values of the portfolio.
***Annualized expense ratio before voluntary reimbursement of expenses by
the investment adviser for the year ended October 31, 1994 was 1.09%.
Total return represents aggregate total return for the period indicated.
Annualized.
# For the period September 15, 1993 (commencement of operations) to
October 31, 1993, the adviser reimbursed expenses of the Fund amounting
to $0.0109.
##Prior to October 17, 1994, Mellon Bank served as the Fund's investment
manager. Effective October 17, 1994, Dreyfus began serving as the
Fund's investment manager.
Page 7

ALTERNATIVE PURCHASE METHODS
The Fund offers you four methods of purchasing Fund shares; you
may choose the Class of shares that best suits your needs, given the
amount of your purchase, the length of time you expect to hold your
shares and any other relevant circumstances. Each Fund share represents
an identical pro rata interest in the Fund's investment portfolio.

Class A shares are sold at net asset value per share plus a
maximum initial sales charge of 5.75% of the public offering price
imposed at the time of purchase. The initial sales charge may be reduced
or waived for certain purchases. See "How to Buy Fund Shares_Class A
shares." These shares are subject to an annual 12b-1 fee at the rate of
0.25 of 1% of the value of the average daily net assets of Class A. See
"Distribution Plan _ Class A shares."

Class B shares are sold at net asset value per share with no
initial sales charge at the time of purchase; as a result, the entire
purchase price is immediately invested in the Fund. Class B shares are
subject to a maximum 4% contingent deferred sales charge ("CDSC"), which
is assessed only if you redeem Class B shares within six years of
purchase. See "How to Buy Fund Shares _ Class B shares" and "How to
Redeem Fund Shares _ Contingent Deferred Sales Charge _ Class B shares."
These shares also are subject to an annual distribution fee at the rate
of 0.75 of 1% of the value of the average daily net assets of Class B. In
addition, Class B shares are subject to an annual service fee at the rate
of 0.25 of 1% of the value of the average daily net assets of Class B.
See "Distribution and Service Plans _ Class B and C." The distribution
and service fees paid by Class B will cause such Class to have a higher
expense ratio and to pay lower dividends than Class A. Approximately six
years after the date of purchase (or, in the case of Class B shares of
the Fund acquired through exchange of Class B shares of another fund
advised by Dreyfus, the date of purchase of the original Class B shares
of the fund exchanged), Class B shares will automatically convert to Class
A shares, based on the relative net asset values for shares of each such
Class, and will no longer be subject to the service plan fee of Class B
shares and will be subject to the lower distribution fee of Class A
shares. (Such conversion is subject to suspension by the Board of
Directors if adverse tax consequences might result.) Class B shares that
have been acquired through the reinvestment of dividends and other
distributions will be converted on a pro rata basis together with other
Class B shares, in the proportion that a shareholder's Class B shares
converting to Class A shares bears to the total Class B shares not
acquired through the reinvestment of dividends and other distributions.

Class C shares are sold at net asset value per share with no
initial sales charge at the time of purchase; as a result, the entire
purchase price is immediately invested in the Fund. Class C shares are
subject to a 1% CDSC, which is assessed only if you redeem Class C shares
within one year of purchase. See "How to Redeem Fund Shares _ Class C
shares." These shares also are subject to an annual distribution fee at
the rate of 0.75 of 1% of the value of the average daily net assets of
Class C. In addition, Class C shares are subject to an annual service fee
at the rate of 0.25 of 1% of the value of the average daily net assets of
Class C. See "Distribution and Service Plans _ Class B and C." The
distribution and service fees paid by Class C will cause such Class to
have a higher expense ratio and to pay lower dividends than Class A.

Class R shares generally may not be purchased directly by
individuals, although eligible institutions may purchase Class R shares
for accounts maintained by individuals. Class R
Page 8

shares are sold at net asset value per share primarily to Banks acting on
behalf of customers having a qualified trust or investment account or
relationship at such institution, or to customers who have received and
hold shares of the Fund distributed to them by virtue of such an account
or relationship. Class A, Class B and Class C shares are sold primarily to
retail investors by Agents that have entered into Agreements with the
Distributor.

The decision as to which Class of shares is most beneficial
to you depends on the amount and the intended length of your investment.
You should consider whether, during the anticipated life of your
investment in the Fund, the accumulated distribution fee, service fee and
CDSC, if any, on Class B or Class C shares would be less than the
accumulated distribution fee and initial sales charge on Class A shares
purchased at the same time, and to what extent, if any, such differential
would be offset by the return of Class A shares. Additionally, investors
qualifying for reduced initial sales charges who expect to maintain their
investment for an extended period of time might consider purchasing Class
A shares because the accumulated continuing distribution and service fees
on Class B or Class C shares may exceed the accumulated distribution fee
and initial sales charge on Class A shares during the life of the
investment. Finally, you should consider the effect of the CDSC period
and any conversion rights of the Classes in the context of your own
investment time frame. For example, while Class C shares have a shorter
CDSC period than Class B shares, Class C shares do not have a conversion
feature and, therefore, are subject to ongoing distribution and service
fees. Thus, Class B shares may be more attractive than Class C shares to
investors with longer term investment outlooks. Generally, Class A shares
may be more appropriate for investors who invest $1,000,000 or more in
Fund shares, but will not be appropriate for investors who invest less
than $50,000 in Fund shares.

DESCRIPTION OF THE FUND
INVESTMENT OBJECTIVE

The Fund seeks to outperform a hybrid index, 60% of which is
the Standard & Poor's 500 Composite Stock Price Index ("S&P 500") and 40%
of which is the Lehman Brothers Intermediate Government/Corporate Bond
Index ("Intermediate Index"), by investing in common stocks and bonds in
proportions consistent with their expected returns and risks as
determined by Dreyfus. There can be no assurance that the Fund will meet
its stated objective.

MANAGEMENT POLICIES
To outperform the hybrid index, Dreyfus first employs a
disciplined valuation methodology to the return and risks of common
stocks and bonds. Dreyfus considers various factors in determining the
relative attractiveness of investing in common stocks and bonds. The
factors which are evaluated include an interest-rate adjusted market
price/earnings ratio, interest rate spreads reflecting the term structure
of interest rates, and the level and volatility of the return premium for
common stocks. The final decision as to which asset class is relatively
more attractive is determined by a formal decision rule process based on
extensive research by Dreyfus.
After developing the expected return and risks of each asset
class, Dreyfus utilizes computer models designed to identify imbalances
in the pricing of common stocks and bonds. Dreyfus then invests the
Fund's assets in common stocks and bonds in proportions intended to
exploit the perceived imbalances. Under normal circumstances, the Fund's
total assets are allocated approximately 60% to common stocks and 40% to
bonds.
Page 9

However, the Fund is permitted to invest up to 75%, and as little
as 40%, of its total assets in common stocks and up to 60%, and as little
as 25%, of its total assets in bonds, as deemed advisable by Dreyfus.
Allocation of assets among common stocks and bonds permits the Fund to
exhibit less risk than a fund consisting entirely of common stocks.
Common stocks are selected so that, in the aggregate, the
investment characteristics and risk profile of the equity portion of the
Fund are similar to the S&P 500. These characteristics include such
measures as dividend yield (before expenses), price-to-earnings ratio,
"beta" (relative volatility), return on equity, and market price-to-book
value ratio. However, while it may maintain aggregate investment
characteristics similar to the S&P 500, the Fund seeks to invest in
individual common stocks which together will provide a higher total
return than the S&P 500. The Fund will not be operated as an index fund,
and the Fund's equity portion will not be limited to stocks included in
the S&P 500. Individual security selection is the foundation upon which
Dreyfus seeks to implement the investment objective and policies of the
equity portion of the Fund. Dreyfus collects information from diverse
sources from which Dreyfus constructs and combines valuation models into a
computerized comprehensive valuation ranking system identifying common
stocks that are undervalued and should be purchased or retained by the
Fund. These models include measures of changes in earnings and relative
value based on present and historical price-to-earnings ratios, as well as
dividend discount calculations. Once the ranking of common stocks is
complete, Dreyfus' experienced investment analysts construct the right
component of the Fund to resemble in the aggregate the S&P 500 Index, but
weighted toward the most attractive stocks as determined by the valuation
models.
The bond portion of the Fund normally is invested in U.S.
dollar-denominated fixed income obligations of domestic and foreign
issuers. The Fund's dollar-weighted average maturity may not exceed ten
years. Investment selections are based on fundamental economic, market,
and other factors leading to valuation by sector, maturity, and quality.
The Fund invests in investment grade bonds rated at least Baa by Moody's
Investors Service, Inc. ("Moody's") or BBB by Standard & Poor's , or if
unrated, determined to be of comparable quality by Dreyfus. The Fund
will, in a prudent and orderly fashion, sell bonds whose ratings drop
below these minimum ratings. Securities rated BBB by Standard & Poor's or
Baa by Moody's are considered by those rating agencies to be "investment
grade" securities, although Moody's considers securities rated Baa to
have speculative characteristics. Furthermore, while bonds rated BBB by
Standard & Poor's exhibit adequate protection parameters, adverse
economic conditions or changing circumstances are more likely to lead to
a weakened capacity to pay interest and principal for debt in this
category than debt in higher rated categories. Investment in foreign
obligations may be affected by governmental action in the issuer's
country of domicile. Examples of such governmental actions would be the
imposition of currency controls, interest limitations, seizure of assets,
or the declaration of a moratorium. In addition, evidences of ownership
of the Fund's securities may be held outside the United States and the
Fund may be subject to the risks associated with the holding of such
property overseas.
To implement a particular allocation strategy or for
liquidity purposes, other instruments in which the Fund may also invest
are: (1) U.S. Treasury bills, notes and bonds; (2) other obligations
issued or guaranteed as to interest and principal by the U.S. Government,
its agencies and instrumentalities; (3) mortgage-related securities
backed by the U.S. Government, its agencies and instrumentalities, or by
private organizations; (4) corporate obligations rated at least Baa by
Moody's or BBB by Standard & Poor's, or if unrated, deter-
Page 10

mined to be of comparable quality by Dreyfus; (5) instruments of U.S. and
foreign banks, including certificates of deposit, banker's acceptances and
time deposits, and may include Eurodollar Certificates of Deposit ("ECDs"),
Yankee Certificates of Deposit ("Yankee CDs") and Eurodollar Time Deposits
("ETDs"); (6) foreign securities evidenced by American Depository
Receipts ("ADRs"); (7) Eurodollar bonds and notes; (8) when-issued
transactions; (9) repurchase agreements; and (10) commercial paper.
The Fund may utilize securities lending and reverse
repurchase agreements. It may also enter into option and futures
contracts subject to certain limitations.
The S&P 500 is composed of 500 common stocks which are chosen
by Standard & Poor's to best capture the price performance of a large
cross-section of the U.S. publicly traded stock market. The S&P 500 is
structured to approximate the general distribution of industries in the
U.S. economy. The inclusion of a stock in the S&P 500 does not imply that
Standard & Poor's believes the stock to be an attractive or appropriate
investment, nor is Standard & Poor's in any way affiliated with the Fund.
The 500 securities, most of which trade on the New York Stock Exchange,
represent approximately 75% of the market value of all U.S. common
stocks. Each stock in the S&P 500 is weighted by its market
capitalization. That is, each security is weighted by its total market
value relative to the total market values of all the securities in the
S&P 500. Component stocks included in the S&P 500 are chosen with the aim
of achieving a distribution at the index level representative of the
various components of the U.S. economy and therefore do not represent the
500 largest companies. Aggregate market value and trading activity are
also considered in the selection process. A limited percentage of the S&P
500 may include foreign securities.
The Intermediate Index is an index established by Lehman
Brothers, Inc. which includes fixed rate debt issues rated investment
grade or higher by Moody's, Standard & Poor's, or Fitch Investors
Service, Inc. ("Fitch"). All issues have at least one year to maturity
and an outstanding par value of at least $100 million for U.S. Government
issues and $50 million for all others. The Intermediate Index includes
bonds with maturities of up to ten years.
The Lehman Brothers Government/Corporate Bond Index is a
combination of the Lehman Brothers Corporate Bond, Government Bond, and
Yankee Bond Indices. The Corporate Bond Index includes public, fixed
rate, non-convertible investment grade domestic corporate debt. Issues
included in this index are rated at least Baa by Moody's or BBB by
Standard & Poor's or, in the case of bonds unrated by Moody's or Standard
& Poor's, at least BBB by Fitch. Collateralized mortgage obligations are
not included in the Corporate Bond Index. The Yankee Bond Index includes
U.S. dollar denominated, SEC registered, public, non-convertible debt
issued or guaranteed by foreign sovereign governments, foreign
municipalities, foreign governmental agencies, or international agencies.
The Government Bond Index is a combination of the Treasury Bond Index and
the Agency Bond Index. The Treasury Bond Index includes public
obligations of the U.S. treasury; flower bonds and foreign-targeted bonds
are excluded. The Agency Bond Index includes publicly issued debt of
agencies of the U.S. Government, quasi-federal corporations, and
corporate debt guaranteed by the U.S. Government. Mortgage-backed
securities are not included in the Agency Index.
INVESTMENT TECHNIQUES
In connection with its investment objective and policies, the
Fund may employ, among others, the following investment techniques:
BORROWING. The Fund is authorized, within specified limits,
to borrow money for temporary administrative purposes and to pledge its
assets in connection with such borrowings.
Page 11

SECURITIES LENDING. To increase return on Fund securities,
the Fund may lend its portfolio securities to broker-dealers and other
institutional investors pursuant to agreements requiring that the loans
be continuously secured by collateral equal at all times in value to at
least the market value of the securities loaned. There may be risks of
delay in receiving additional collateral or in recovering the securities
loaned or even a loss of rights to the collateral should the borrower of
the securities fail financially. Securities loans, however, are made only
to borrowers deemed by Dreyfus to be of good standing and when, in its
judgment, the income to be earned from the loan justifies the attendant
risks.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS. To secure
advantageous prices or yields, the Fund may purchase U.S. Government
Securities on a when-issued basis or may purchase or sell securities for
delayed delivery. In such transactions, delivery of the securities occurs
beyond the normal settlement periods, but no payment or delivery is made
by the Fund prior to the actual delivery or payment by the other party to
the transaction. The purchase of securities on a when-issued or delayed
delivery basis involves the risk that, as a result of an increase in
yields available in the marketplace, the value of the securities
purchased will decline prior to the settlement date. The sale of
securities for delayed delivery involves the risk that the prices
available in the market on the delivery date may be greater than those
obtained in the sale transaction. The Fund will establish a segregated
account consisting of cash, U.S. Government Securities or other
high-grade debt obligations in an amount at least equal at all times to
the amounts of its when-issued and delayed delivery commitments.
MASTER/FEEDER OPTION. The Company may in the future seek to
achieve the Fund's investment objective by investing all of the Fund's
net investable assets in another investment company having the same
investment objective and substantially the same investment policies and
restrictions as those applicable to the Fund. Shareholders of the Fund
will be given at least 30 days' prior notice of any such investment. Such
investment would be made only if the Company's Board of Directors
determines it to be in the best interest of the Fund and its
shareholders. In making that determination, the Board of Directors will
consider, among other things, the benefits to shareholders and/or the
opportunity to reduce costs and achieve operational efficiencies.
Although the Fund believes that the Board of Directors will not approve
an arrangement that is likely to result in higher costs, no assurance is
given that costs will be materially reduced if this option is
implemented.
FUTURES, OPTIONS AND OTHER DERIVATIVE INSTRUMENTS. The Fund
may purchase and sell various financial instruments ("Derivative
Instruments"), such as financial futures contracts (including interest
rate and index futures contracts) and options (including options on
securities, indices and futures contracts). The index Derivative
Instruments the Fund may use may be based on indices of U.S. or foreign
equity or debt securities. These Derivative Instruments may be used, for
example, to preserve a return or spread, to lock in unrealized market
value gains or losses, to facilitate or substitute for the sale or
purchase of securities, or to alter the exposure of a particular
investment or portion of the Fund's portfolio to fluctuations in interest
rates.
The Fund's ability to use these instruments may be limited by
market conditions, regulatory limits and tax considerations. The Fund
might not use and of these strategies and there can be no assurance that
any strategy that is used will succeed. See the SAI for more information
regarding these instruments and the risks relating thereto.
The Fund may not purchase put or call options that are traded
on a national stock exchange in an amount exceeding 5% of its net assets.
Page 12

RISKS OF DERIVATIVE INSTRUMENTS. The use of Derivative
Instruments involves special risks, including: (1) possible imperfect or
no correlation between price movements of the portfolio investments (held
or intended to be purchased) involved in the transaction and price
movements of the Derivative Instruments involved in the transaction; (2)
possible lack of a liquid secondary market for any particular Derivative
Instrument at a particular time; (3) the need for additional portfolio
management skills and techniques; (4) losses due to unanticipated market
price movements; (5) the fact that, while such strategies can reduce the
risk of loss, they can also reduce the opportunity for gain, or even
result in losses, by offsetting favorable price movements in portfolio
investments; (6) incorrect forecasts by Dreyfus concerning interest or
currency exchange rates or direction of price fluctuations of the
investment involved in the transaction, which may result in the strategy
being ineffective; (7) loss of premiums paid by the Fund on options it
purchases; and (8) the possible inability of the Fund to purchase or sell
a portfolio security at a time when it would otherwise be favorable for
it to do so, or the need to sell a portfolio security at a
disadvantageous time, due to the need for the Fund to maintain "cover" or
to segregate securities in connection with such transactions and the
possible inability of the Fund to close out or liquidate its positions.
Dreyfus may use Derivative Instruments for hedging purposes
(to adjust the risk characteristics of the Fund's portfolio) and may use
these instruments to adjust the return characteristics of the Fund's
portfolio of investments. This can increase investment risk. If Dreyfus
judges market conditions incorrectly or employs a strategy that does not
correlate well with the Fund's investments, these techniques could result
in a loss, regardless of whether the intent was to reduce risk or
increase return. These techniques may increase the volatility of the Fund
and may involve a small investment of cash relative to the magnitude of
the risk assumed. In addition, these techniques could result in a loss if
the counterparty to the transaction does not perform as promised or if
there is not a liquid secondary market to close out a position that the
Fund has entered into.
Options and futures transactions may increase portfolio
turnover rates, which results in correspondingly greater commission
expenses and transaction costs, and may result in certain tax
consequences.
CERTAIN PORTFOLIO SECURITIES
AMERICAN DEPOSITORY RECEIPTS. The Fund may invest in U.S.
dollar-denominated ADRs. ADRs typically are issued by an American bank or
trust company and evidence ownership of underlying securities issued by
foreign companies. ADRs are traded in the United States on national
securities exchanges or in the over-the-counter market.
COMMERCIAL PAPER. The Fund may invest in commercial paper.
These instruments are short-term obligations issued by banks and
corporations that have maturities ranging from 2 to 270 days. Each
instrument may be backed only by the credit of the issuer or may be
backed by some form of credit enhancement, typically in the form of a
guarantee by a commercial bank. Commercial paper backed by guarantees of
foreign banks may involve additional risk due to the difficulty of
obtaining and enforcing judgments against such banks and the generally
less restrictive regulations to which such banks are subject. The Fund
will only invest in commercial paper of U.S. and foreign companies rated
at the time of purchase at least A-1 by Standard & Poor's, Prime-1 by
Moody's, F-1 by Fitch, Duff 1 by Duff & Phelps, Inc., or A1 by IBCA, Inc.
FOREIGN SECURITIES. The Fund may purchase securities of
foreign issuers and may invest in obligations of foreign branches of
domestic banks and domestic branches of foreign
Page 13

banks. Investment in foreign securities presents certain risks, including
those resulting from fluctuations in currency exchange rates, revaluation
of currencies, adverse political and economic developments and the
possible imposition of currency exchange blockages or other foreign
governmental laws or restrictions, reduced availability of public
information concerning issuers, and the fact that foreign issuers are not
generally subject to uniform accounting, auditing and financial reporting
standards or to other regulatory practices and requirements comparable to
those applicable to domestic issuers. Moreover, securities of many foreign
issuers may be less liquid and their prices more volatile than those of
comparable domestic issuers. In addition, with respect to certain foreign
countries, there is the possibility of expropriation, confiscatory
taxation and limitations on the use or removal of funds or other assets of
the Fund, including withholding of dividends. Foreign securities may be
subject to foreign government taxes that would reduce the yield on such
securities.
ILLIQUID SECURITIES. The Fund will not knowingly invest more
than 15% of the value of its net assets in illiquid securities, including
time deposits and repurchase agreements having maturities longer than
seven days. Securities that have readily available market quotations are
not deemed illiquid for purposes of this limitation (irrespective of any
legal or contractual restrictions on resale.) The Fund may invest in
commercial obligations issued in reliance on the so-called "private
placement" exemption from registration afforded by Section 4(2) of the
Securities Act of 1933, as amended ("Section 4(2) paper"). The Fund may
also purchase securities that are not registered under the Securities Act
of 1933, as amended, but that can be sold to qualified institutional
buyers in accordance with Rule 144A under that Act ("Rule 144A
securities"). Liquidity determinations with respect to Section 4(2) paper
and Rule 144A securities will be made by the Board of Directors or by
Dreyfus pursuant to guidelines established by the Board of Directors. The
Board of Directors or Dreyfus will consider availability of reliable
price information and other relevant information in making such
determinations. Section 4(2) paper is restricted as to disposition under
the federal securities laws, and generally is sold to institutional
investors, such as the Fund that agree that they are purchasing the paper
for investment and not with a view to public distribution. Any resale by
the purchaser must be pursuant to registration or an exemption therefrom.
Section 4(2) paper normally is resold to other institutional investors
like the Fund through or with the assistance of the issuer or investment
dealers who make a market in the Section 4(2) paper, thus providing
liquidity. Rule 144A securities generally must be sold to other qualified
institutional buyers. If a particular investment in Section 4(2) paper or
Rule 144A securities is not determined to be liquid, that investment will
be included within the percentage limitation on investment in illiquid
securities. The ability to sell Rule 144A securities to qualified
institutional buyers is a recent development and it is not possible to
predict how this market will mature. Investing in Rule 144A securities
could have the effect of increasing the level of Fund illiquidity to the
extent that qualified institutional buyers become, for a time,
uninterested in purchasing these securities.
REPURCHASE AGREEMENTS. The Fund may enter into repurchase
agreements. A repurchase agreement involves the purchase of a security by
the Fund and a simultaneous agreement (generally with a bank or
broker-dealer) to repurchase that security from the Fund at a specified
price and date or upon demand. This investment technique offers a method
of earning income on idle cash. A risk associated with repurchase
agreements is the failure of the seller to repurchase the securities as
agreed, which may cause the Fund to suffer a loss if the market value of
such securities declines before they can be liquidat-
Page 14

ed on the open market. Repurchase agreements with a duration of more than
seven days are considered illiquid securities and are subject to the
associated limits discussed above.
REVERSE REPURCHASE AGREEMENTS. The Fund may enter into
reverse repurchase agreements to meet redemption requests where the
liquidation of Fund securities is deemed by Dreyfus to be
disadvantageous. Under a reverse repurchase agreement, the Fund: (i)
transfers possession of Fund securities to a bank or broker-dealer in
return for cash in an amount equal to a percentage of the securities'
market value; and (ii) agrees to repurchase the securities at a future
date by repaying the cash with interest. Cash or liquid high-grade debt
securities held by the Fund equal in value to the repurchase price
including any accrued interest will be maintained in a segregated account
while a reverse repurchase agreement is in effect.
ECDS, ETDS AND YANKEE CDS. The Fund may invest in ECDs, ETDs
and Yankee CDs. ECDs are U.S. dollar-denominated certificates of deposit
issued by foreign branches of domestic banks. ETDs are U.S.
dollar-denominated time deposits in a foreign branch of a U.S. bank or a
foreign bank. Yankee CDs are certificates of deposit issued by a U.S.
branch of a foreign bank denominated in U.S. dollars and held in the
United States. ECDs, ETDs and Yankee CDs are subject to somewhat
different risks than are the obligations of domestic banks.
EURODOLLAR BONDS AND NOTES. The Fund may invest in Eurodollar
bonds and notes. Eurodollar bonds and notes are obligations that pay
principal and interest in U.S. dollars held in banks outside the United
States, primarily in Europe. Investments in Eurodollar bonds and notes
involve risks that differ from investments in securities of domestic
issuers.
FIXED-INCOME SECURITIES. The Fund may invest in fixed-income
securities. In periods of declining interest rates, the Fund's yield (its
income from portfolio investments over a stated period of time) may tend
to be higher than prevailing market rates, and in periods of rising
interest rates, the Fund's yield may tend to be lower than prevailing
interest rates. Also, in periods of falling interest rates, the inflow of
net new money to the Fund from the continuous sale of its shares will
likely be invested in portfolio instruments producing lower yields than
the balance of the Fund's portfolio, thereby reducing the yield of the
Fund. In periods of rising interest rates, the opposite can be true. The
net asset value of a fund investing in fixed-income securities also may
change as general levels of interest rates fluctuate. When interest rates
increase, the value of a portfolio of fixed-income securities can be
expected to decline. Conversely, when interest rates decline, the value
of a portfolio of fixed-income securities can be expected to increase.
GNMA CERTIFICATES. The Fund may invest in Government National
Mortgage Association ("GNMA") Certificates. GNMA Certificates are
mortgage-backed securities representing part ownership of a pool of
mortgage loans. These loans are made by mortgage bankers, commercial
banks, savings and loan associations, and other lenders and are either
insured by the Federal Housing Administration or guaranteed by the
Veterans Administration. A "pool" or group of such mortgages is assembled
and, after being approved by GNMA, is offered to investors through
securities dealers. Once approved by GNMA, the timely payment of interest
and principal on each mortgage is guaranteed by the full faith and credit
of the U.S. Government. Although the mortgage loans in a pool underlying
a GNMA Certificate will have maturities of up to 30 years, the average
life of a GNMA Certificate will be substantially less because the
mortgages will be subject to normal principal amortization and also may
be prepaid prior to maturity. Prepayment rates vary widely and may be
affected by changes in mortgage interest
Page 15

rates. In periods of falling interest rates, the rate of prepayment on
higher interest mortgage rates tends to increase, thereby shortening the
actual average life of the GNMA Certificate. Conversely, when interest
rates are rising, the rate of prepayment tends to decrease, thereby
lengthening the average life of the GNMA Certificate. Reinvestment of
prepayments may occur at higher or lower rates than the original yield of
the certificates. Due to the prepayment feature and the need to reinvest
prepayments of principal at current rates, GNMA Certificates, with
underlying mortgages bearing higher interest rates, can be less effective
than typical non-callable bonds of similar maturities at locking in yields
during periods of declining interest rates, although they may have
comparable risks of decline in value during periods of rising interest
rates.
MORTGAGE PASS-THROUGH CERTIFICATES. The Fund may invest in
mortgage pass-through certificates. Mortgage pass-through certificates
are issued by governmental, government-related and private organizations
and are backed by pools of mortgage loans. These mortgage loans are made
by lenders such as savings and loan associations, mortgage bankers,
commercial banks and others to residential home buyers throughout the
United States. The securities are deemed "pass-through" securities
because they provide investors with monthly payments of principal and
interest that, in effect, are a "pass-through" of the monthly payments
made by the individual borrowers on the underlying mortgage loans. The
principal governmental issuer of such securities is GNMA, which is a
wholly owned U.S. government corporation within the Department of Housing
and Urban Development. Government related issuers include the Federal
Home Loan Mortgage Corporation ("FHLMC"), and the Federal National
Mortgage Association ("FNMA"), both government-sponsored corporations
owned entirely by private stockholders. Commercial banks, savings and
loan institutions, private mortgage insurance companies, mortgage bankers
and other secondary market issuers also create pass-through pools of
conventional residential mortgage loans. Such issuers may be the
originators of the underlying mortgage loans as well as the guarantors of
the mortgage-related securities. The market value of mortgage-related
securities depends on, among other things, the level of interest rates,
the certificates' coupon rates and the payment history of underlying
mortgage loans. For further information, see the SAI.
OTHER INVESTMENT COMPANIES. The Fund may invest in securities
issued by other investment companies to the extent that such investments
are consistent with the Fund's investment objective and policies and
permissible under the Investment Company Act of 1940, as amended (the
"1940 Act"). As a shareholder of another investment company, the Fund
would bear, along with other shareholders, its pro rata portion of the
other investment company's expenses, including advisory fees. These
expenses would be in addition to the advisory and other expenses that the
Fund bears directly in connection with its own operations.
U.S. GOVERNMENT SECURITIES. The Fund may invest in
obligations issued or guaranteed as to both principal and interest by the
U.S. Government or backed by the full faith and credit of the United
States ("U.S. Government Securities"). In addition to direct obligations
of the U.S. Treasury, U.S. Government Securities include securities
issued or guaranteed by the Federal Housing Administration, Farmers Home
Administration, Export-Import Bank of the United States, Small Business
Administration, GNMA, General Services Administration and Maritime
Administration. Investments may also be made in U.S. Government
obligations that do not carry the full faith and credit guarantee, such
as those issued by FNMA, FHLMC or other instrumentalities.
Page 16

VARIABLE AMOUNT MASTER DEMAND NOTES. The Fund may invest in
Variable Amount Master Demand Notes. Variable amount master demand notes
are unsecured obligations that are redeemable upon demand and are
typically unrated. These instruments are issued pursuant to written
agreements between their issuers and holders. The agreements permit the
holders to increase (subject to an agreed maximum) and the holders and
issuers to decrease the principal amount of the notes, and specify that
the rate of interest payable on the principal fluctuates according to an
agreed-upon formula. If an issuer of a variable amount master demand note
were to default on its payment obligation, the Fund might be unable to
dispose of the note because of the absence of a secondary market and
might, for this or other reasons, suffer a loss to the extent of the
default. The Fund will only invest in variable amount master demand notes
issued by entities that Dreyfus considers creditworthy.
PORTFOLIO TURNOVER. While both stocks and other securities
are purchased for the Fund on the basis of potential for capital
appreciation and income and not for short-term trading profits, the
Fund's turnover rate for stocks and/or other securities may exceed 100%.
A portfolio turnover rate of 100% would occur, for example, if all the
securities held by the Fund were replaced once in a period of one year. A
higher rate of portfolio turnover involves correspondingly greater
brokerage commissions and other expenses that must be borne directly by
the Fund and, thus, indirectly by its shareholders. In addition, a high
rate of portfolio turnover may result in the realization of larger
amounts of short-term capital gains that, when distributed to the Fund's
shareholders, are taxable to them as ordinary income. Nevertheless, Fund
transactions in stocks and other securities will be based only upon
investment considerations and will not be limited by any other
considerations when Dreyfus deems it appropriate to make changes in the
Fund's assets.
LIMITING INVESTMENT RISKS. The Fund is subject to a number of
investment limitations. Certain limitations are matters of fundamental
policy and may not be changed without the affirmative vote of the holders
of a majority of the Fund's outstanding shares. As a fundamental policy,
the Fund may not (i) borrow money in an amount exceeding 331/3% of the
Fund's total assets at the time of borrowing; (ii) make loans or lend
securities in excess of 331/3% of the Fund's total assets; (iii)
purchase, with respect to 75% of the Fund's total assets, securities of
any one issuer representing more than 5% of the Fund's total assets
(other than securities issued or guaranteed by the U.S. Government, its
agencies and instrumentalities) or more than 10% of that issuer's
outstanding voting securities; and (iv) invest more than 25% of the value
of the Fund's total assets in the securities of one or more issuers
conducting their principal activities in the same industry; provided that
there shall be no such limitation on investments in obligations of the
U.S. Government, state and municipal governments and their political
subdivisions or investments in domestic banks, including U.S. branches of
foreign banks and foreign branches of U.S. banks. The SAI describes all
of the Fund's fundamental and non-fundamental restrictions.
The investment objective, policies, restrictions, practices
and procedures of the Fund, unless otherwise specified, may be changed
without shareholder approval. If the Fund's investment objective,
policies, restrictions, practices or procedures change, shareholders
should consider whether the Fund remains an appropriate investment in
light of the shareholder's then-current position and needs.
In order to permit the sale of the Fund's shares in certain
states, the Fund may make commitments more restrictive than the
investment policies and restrictions described in
Page 17

this Prospectus and the SAI. Should the Fund determine that any such
commitment is no longer in the best interest of the Fund, it may consider
terminating sales of its shares in the states involved.
MANAGEMENT OF THE FUND

INVESTMENT MANAGER -- Dreyfus, located at 200 Park Avenue,
New York, New York 10166, was formed in 1947. Dreyfus is a wholly-owned
subsidiary of Mellon Bank, which is a wholly-owned subsidiary of Mellon
Bank Corporation ("Mellon"). As of October 31, 1996, Dreyfus managed or
administered approximately $82 billion in assets for more than 1.7 million
investor accounts nationwide.

Dreyfus serves as the Fund's investment manager. Dreyfus
supervises and assists in the overall management of the Fund's affairs
under an Investment Management Agreement with the Fund, subject to the
overall authority of the Company's Board of Directors in accordance with
Maryland law. Pursuant to the Investment Management Agreement, Dreyfus
provides, or arranges for one or more third parties to provide,
investment advisory, administrative, custody, fund accounting and
transfer agency services to the Fund. As the Fund's investment manager,
Dreyfus manages the Fund by making investment decisions based on the
Fund's investment objective, policies and restrictions.
The fixed income portion of the Fund is managed by Laurie
Carroll. Ms. Carroll has managed the fixed income portion of the Fund
since September 15, 1993. Ms. Carroll is a Senior Vice President and
portfolio manager at Mellon Bank. Ms. Carroll has been employed by Mellon
Bank since 1986. The equity portion of the Fund is managed by Ron Gala.
Mr. Gala has managed the equity portion of the Fund since September 15,
1993. Mr. Gala is Vice President and portfolio manager for Mellon Bank
and is a portfolio manager for Mellon Equity Associates. Mr. Gala is also
responsible for Mellon Equity Associates' asset allocation. Mr. Gala has
been employed by Mellon Bank in various capacities since 1982. Ms.
Carroll and Mr. Gala have been employed by Dreyfus as portfolio managers
since October 17, 1994.

Mellon is a publicly owned multibank holding company
incorporated under Pennsylvania law in 1971 and registered under the Bank
Holding Company Act of 1956, as amended. Mellon provides a comprehensive
range of financial products and services in domestic and selected
international markets. Mellon is among the twenty-five largest bank
holding companies in the United States based on total assets. Mellon's
principal wholly-owned subsidiaries are Mellon Bank, Mellon Bank (DE)
National Association, Mellon Bank (MD), The Boston Company, Inc., AFCO
Credit Corporation and a number of companies known as Mellon Financial
Services Corporations. Through its subsidiaries, including Dreyfus,
Mellon managed approximately more than $ 226 billion in assets as of
September 30, 1996, including $ 85 billion in mutual fund assets. As of
September 30, 1996, Mellon, through various subsidiaries, provided
non-investment services, such as custodial or administration services,
for more than $905 billion in assets, including approximately $60 billion
in mutual fund assets.

Under the Investment Management Agreement, the Fund has
agreed to pay Dreyfus a monthly fee at the annual rate of 1.00 of 1% of
the value of the Fund's average daily net assets. Dreyfus pays all of the
Fund's expenses, except brokerage fees, taxes, interest, Rule 12b-1 fees
(if applicable) and extraordinary expenses. In order to compensate
Dreyfus for paying virtually all of the Fund's expenses, the Fund's
investment management fee is higher than the investment advisory fees
paid by most investment companies. Most, if not all, such companies also
pay for additional non-investment advisory expenses that are not paid by
such companies' investment advisers. From time to time, Dreyfus may waive
(either volun-
Page 18

tarily or pursuant to applicable state limitations) a
portion of the investment management fees payable by the Fund. For the
fiscal year ended October 31, 1995, the Fund paid Dreyfus 1.00% of its
average daily net assets in investment management fees, less fees and
expenses of the non-interested Directors (including counsel fees). For
the fiscal year ended October 31, 1995, for Class A and Class R shares,
total operating expenses (excluding Rule 12b-1 fees) of the Fund were
1.00% of the average daily net assets for each of the Fund's Class A and
Class R shares. For the period from December 20, 1994 through October 31,
1995 for Class B and Class C shares, total operating expenses (excluding
Rule 12b-1 fees) of the Fund were 1.00% (annualized) of the average daily
net assets for each of the Fund's Class B and Class C shares.
In addition, Class A, B and C shares are subject to certain
Rule 12b-1 distribution and shareholder servicing fees. See "Distribution
Plans (Class A Plan and Class B and C Plan)."
In allocating brokerage transactions for the Fund, Dreyfus
seeks to obtain the best execution of orders at the most favorable net
price. Subject to this determination, Dreyfus may consider, among other
things, the receipt of research services and/or the sale of shares of the
Fund or other funds managed, advised or administered by Dreyfus as
factors in the selection of broker-dealers to execute portfolio
transactions for the Fund. See "Portfolio Transactions" in the SAI.
Dreyfus may pay the Fund's distributor for shareholder
services from Dreyfus' own assets, including past profits but not
including the management fee paid by the Fund. The Fund's distributor may
use part or all of such payments to pay Agents in respect of these
services.
Dreyfus is authorized to allocate purchase and sale orders
for portfolio securities to certain financial institutions, including, in
the case of agency transactions, financial institutions that are
affiliated with Dreyfus or Mellon Bank or that have sold shares of the
Fund, if Dreyfus believes that the quality of the transaction and the
commission are comparable to what they would be with other qualified
brokerage firms. From time to time, to the extent consistent with its
investment objective, policies and restrictions, the Fund may invest in
securities of companies with which Mellon Bank has a lending
relationship.

DISTRIBUTOR -- The Fund's distributor is Premier Mutual Fund
Services, Inc. (the "Distributor"). The Distributor is located at 60
State Street, Boston, Massachusetts 02109. The Distributor is a
wholly-owned subsidiary of FDI Distribution Services, Inc., a provider of
mutual fund administration services, which in turn is a wholly-owned
subsidiary of FDI Holdings, Inc., the parent company of which is Boston
Institutional Group, Inc.

CUSTODIAN; TRANSFER AND DIVIDEND DISBURSING AGENT; AND
SUB-ADMINISTRATOR -- Mellon Bank, One Mellon Bank Center, Pittsburgh, PA
15258 is the Fund's custodian. The Fund's transfer and dividend
disbursing agent is Dreyfus Transfer, Inc. (the "Transfer Agent"), a
wholly-owned subsidiary of Dreyfus, located at One American Express
Plaza, Providence, Rhode Island 02903. Premier Mutual Fund Services,
Inc. serves as the Fund's sub-administrator and, pursuant to a
Sub-Administration Agreement with Dreyfus, provides various
administrative and corporate secretarial services to the Fund.
HOW TO BUY FUND SHARES
GENERAL. Class A shares, Class B shares and Class C shares
may be purchased only by clients of Agents, except that full-time or
part-time employees or directors of Dreyfus or any of its affiliates or
subsidiaries, Board members of a fund advised by Dreyfus, including
members of the Company's Board, or the spouse or minor child of any of
the foregoing may purchase Class A shares directly through the
Distributor. Subsequent purchases may be sent directly to the Transfer
Agent or your Agent.
Page 19

Class R shares are sold primarily to Banks acting on behalf
of customers having a qualified trust or investment account or
relationship at such institution, or to customers who have received and
hold shares of the Fund distributed to them by virtue of such an account
or relationship. In addition, holders of Class R shares of the Fund who
have held their shares since April 4, 1994, may continue to purchase
Class R shares of the Fund, whether or not they otherwise would be
eligible to do so. Class R shares may be purchased for a retirement plan
only by a custodian, trustee, investment manager or other entity
authorized to act on behalf of such plan. Institutions effecting
transactions in Class R shares for the accounts of their clients may
charge their clients direct fees in connection with such transactions.
When purchasing Fund shares, you must specify which Class is
being purchased. Stock certificates are issued only upon your written
request. No certificates are issued for fractional shares. The Fund
reserves the right to reject any purchase order.
Agents may receive different levels of compensation for
selling different Classes of shares. Management understands that some
Agents may impose certain conditions on their clients which are different
from those described in this Prospectus, and, to the extent permitted by
applicable regulatory authority, may charge their clients direct fees
which would be in addition to any amounts which might be received under
the Distribution and Service Plans. Each Agent has agreed to transmit to
its clients a schedule of such fees. You should consult your Agent in
this regard.
The minimum initial investment is $1,000. Subsequent
investments must be at least $100. However, the minimum initial
investment for Dreyfus-sponsored Keogh Plans, IRAs, SEP-IRAs and 403(b)(7)
Plans with only one participant is $750, with no minimum on subsequent
purchases. Individuals who open an IRA also may open a non-working
spousal IRA with a minimum initial investment of $250. The initial
investment must be accompanied by the Fund's Account Application. The
Fund reserves the right to offer Fund shares without regard to minimum
purchase requirements to employees participating in certain qualified or
non-qualified employee benefit plans or other programs where
contributions or account information can be transmitted in a manner and
form acceptable to the Fund. The Fund reserves the right to vary further
the initial and subsequent investment minimum requirements at any time.
The Internal Revenue Code of 1986, as amended (the "Code"),
imposes various limitations on the amount that may be contributed to
certain qualified or non-qualified employee benefit plans or other
programs, including pension, profit-sharing and other deferred
compensation plans, whether established by corporations, partnerships,
non-profit entities or state and local governments ("Retirement Plans").
These limitations apply with respect to participants at the plan level
and, therefore, do not directly affect the amount that may be invested in
the Fund by a Retirement Plan. Participants and plan sponsors should
consult their tax advisers for details.

investment slip should be enclosed. For Dreyfus retirement plan accounts,
payments which are mailed should be sent to The Dreyfus Trust Company,
Custodian, P.O. Box 6427, Providence, Rhode Island 02940-6427. Neither
initial nor subsequent investments should be made by third party check.

Wire payments may be made if your bank account is in a
commercial bank that is a member of the Federal Reserve System or any
other bank having a correspondent bank in New York City. Immediately
available funds may be transmitted by wire to Boston Safe Deposit and
Trust Company together with the Fund's DDA #044350/Premier Balanced Fund
and applicable class for purchase of Fund shares in your name.

The wire must indicate which Class of shares is being
purchased and it must include your Fund account number (for new accounts,
your Taxpayer Identification Number ("TIN") should be included instead),
account registration and dealer number, if applicable. If your initial
purchase of Fund shares is by wire, you should call 1-800-645-6561 after
completing your wire payment to obtain your Fund account number. Please
include your Fund account number on the Fund's Account Application and
promptly mail the Account Application to the Fund, as no redemptions will
be permitted until the Account Application is received. You may obtain
further information about remitting funds in this manner from your bank.
All payments should be made in U.S. dollars and, to avoid fees and
delays, should be drawn only on U.S. banks. A charge will be imposed if
any check used for investment in your account does not clear. The Fund
makes available to certain large institutions the ability to issue
purchase instructions through compatible computer facilities.

Account Application for further information concerning this requirement.
Failure to furnish a certified TIN to the Fund could subject you to a $50
penalty imposed by the Internal Revenue Service (the "IRS").
NET ASSET VALUE PER SHARE ("NAV"). An investment portfolio's
NAV refers to the worth of one share. The NAV for shares of each Class of
the Fund is computed by adding, with respect to such Class of shares, the
value of the Fund's investments, cash, and other assets attributable to
that Class, deducting liabilities of the Class and dividing the result by
number of shares of that Class outstanding. Shares of each Class of the
Fund are offered on a continuous basis. The valuation of assets for
determining NAV for the Fund may be summarized as follows:
The portfolio securities of the Fund, except as otherwise
noted, listed or traded on a stock exchange, are valued at the latest
sale price. If no sale is reported, the mean of the latest bid and asked
prices is used. Securities traded over-the-counter are priced at the mean
of the latest bid and asked prices but will be valued at the last sale
price if required by regulations of the SEC. When market quotations are
not readily available, securities and other assets are valued at a fair
value as determined in good faith in accordance with procedures
established 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.
NAV is determined on each day that the New York Stock
Exchange ("NYSE") is open (a "business day"), as of the close of business
of the regular session of the NYSE (usually 4 p.m. Eastern Time).
Investments and requests to exchange or redeem shares received by the
Fund in proper form before such close of business are effective on, and
will receive the price determined on, that day (except investments made
by electronic funds transfer, which are effective two business days after
your call). Investment, exchange and redemption requests received after
such close of business are effective on, and receive the share price
determined on, the next business day.
Orders for the purchase of Fund shares received by dealers by
the close of trading on the floor of the NYSE on any business day and
transmitted to the Distributor or its designee by the close of its
business day (normally 5:15 p.m., New York time) will be based on the
public offering price per share determined as of the close of trading on
the floor of the NYSE on that day. Otherwise, the orders will be based on
the next determined public offering price. It is the dealer's
responsibility to transmit orders so that they will be received by the
Distributor or its designee before the close of its business day.

CLASS A SHARES. The public offering price of Class A shares
is the NAV of that Class plus, except for shareholders beneficially
owning Class A shares on November 30, 1996, a sales load as shown below:

<TABLE>
<CAPTION>
Total Sales Load
-------------------
As a % of As a % of Dealers' Reallowance
Offering Price Net Asset Value as a % of
Amount of Transaction Per Share Per Share Offering Price
---------------------- -------------- ---------------- -------------------------
<S> <C> <C> <C>
Less than $50,000......... 5.75 6.10 5.00
$50,000 to less than $100,000 4.50 4.70 3.75
$100,000 to less than $250,000 3.50 3.60 2.75
$250,000 to less than $500,000 2.50 2.60 2.25
$500,000 to less than $1,000,000 2.00 2.00 1.75
$1,000,000 or more........ 0 0 0

Page 22

For shareholders who opened Fund accounts after December 19,
1994, but who beneficially owned Class A shares on November 30, 1996, the
public offering price for Class A shares is the NAV of that Class plus a
sales load as shown below:

Total Sales Load
-----------------------------------
As a % of As a % of Dealers' Reallowance
Offering Price Net Asset Value as a % of
Amount of Transaction Per Share Per Share Offering Price
---------------------- ----------------------- ---------------- -------------------------
Less than $50,000......... 4.50 4.70 4.25
$50,000 to less than $100,000 4.00 4.20 3.75
$100,000 to less than $250,000 3.00 3.10 2.75
$250,000 to less than $500,000 2.50 2.60 2.25
$500,000 to less than $1,000,000 2.00 2.00 1.75
$1,000,000 or more........ 0 0 0
</TABLE>

Holders of Class A accounts of the Fund as of December 19, 1994
may continue to purchase Class A shares of the Fund at NAV. However,
investments by such holders in OTHER funds advised by Dreyfus will be
subject to any applicable front-end sales load.

There is no initial sales charge on purchases of $1,000,000
or more of Class A shares. However, if you purchase Class A shares
without an initial sales charge as part of an investment of at least
$1,000,000 and redeem all or a portion of those shares within one year of
purchase, a CDSC of 1.00% will be imposed at the time of redemption. The
terms contained in the sections of the Fund's Prospectus entitled "How to
Redeem Fund Shares _ Contingent Deferred Sales Charge _ Class B" (other
than the amount of the CDSC and its time periods) and "How to Redeem Fund
Shares_Waiver of CDSC" are applicable to the Class A shares subject to a
CDSC. Letter of Intent and Right of Accumulation apply to such purchases
of Class A shares.

Full-time employees of NASD member firms and full-time
employees of other financial institutions which have entered into an
agreement with the Distributor pertaining to the sale of Fund shares (or
which otherwise have a brokerage related or clearing arrangement with an
NASD member firm or financial institution with respect to the sale of
such shares) may purchase Class A shares for themselves directly or
pursuant to an employee benefit plan or other program, or for their
spouses or minor children, at net asset value, provided that they have
furnished the Distributor with such information as it may request from
time to time in order to verify eligibility for this privilege. This
privilege also applies to full-time employees of financial institutions
affiliated with NASD member firms whose full-time employees are eligible
to purchase Class A shares at NAV. In addition, Class A shares are
offered at NAV to full-time or part-time employees of Dreyfus or any of
its affiliates or subsidiaries, directors of Dreyfus, Board members of a
fund advised by Dreyfus, including members of the Company's Board, or the
spouse or minor child of any of the foregoing.
Class A shares will be offered at NAV without a sales load to
employees participating in Eligible Benefit Plans. Class A shares also
may be purchased (including by exchange) at NAV without a sales load for
Dreyfus-sponsored IRA "Rollover Accounts" with the distribution proceeds
from a qualified retirement plan or a Dreyfus-sponsored 403(b)(7) plan,
provided that, at the time of such distribution, such qualified
retirement plan or Dreyfus-sponsored 403(b)(7) plan (a) met the
requirements of an Eligible Benefit Plan and all or a portion of such
plan's assets were invested in funds in the Dreyfus Family of Funds or
certain other products made available by the Distributor to such plans,
or (b) invested all of its assets in certain funds in the Premier Family
of Funds or the Dreyfus Family of Funds or certain other products made
available by the Distributor to such plans.
Page 23

Class A shares may be purchased at NAV through certain
broker-dealers and other financial institutions which have entered into
an agreement with the Distributor, which includes a requirement that such
shares be sold for the benefit of clients participating in a "wrap
account" or a similar program under which such clients pay a fee to such
broker-dealer or other financial institution.
Class A shares also may be purchased at NAV, subject to
appropriate documentation, through a broker-dealer or other financial
institution with the proceeds from the redemption of shares of a
registered open-end management investment company not managed by Dreyfus
or its affiliates. The purchase of Class A shares of the Fund must be
made within 60 days of such redemption and the shareholder must have
either (i) paid an initial sales charge or a CDSC or (ii) been obligated
to pay at any time during the holding period, but did not actually pay on
redemption, a deferred sales charge with respect to such redeemed shares.
Class A shares also may be purchased at NAV, subject to
appropriate documentation, by (i) qualified separate accounts maintained
by an insurance company pursuant to the laws of any State or territory
of the United States, (ii) a State, county or city or instrumentality
thereof, (iii) a charitable organization (as defined in Section 501(c)(3)
of the Code) investing $50,000 or more in Fund shares, and (iv) a
charitable remainder trust (as defined in Section 501(c)(3) of the Code).
The dealer reallowance may be changed from time to time but
will remain the same for all dealers. The Distributor, at its expense,
may provide additional promotional incentives to dealers that sell shares
of funds advised by Dreyfus which are sold with a sales load, such as
Class A shares. In some instances, those incentives may be offered only
to certain dealers who have sold or may sell significant amounts of
shares. Dealers receive a larger percentage of the sales load from the
Distributor than they receive for selling most other funds.
CLASS B SHARES. The public offering price for Class B shares
is the NAV of that Class. No initial sales charge is imposed at the time
of purchase. A CDSC is imposed, however, on certain redemptions of Class
B shares as described under "How to Redeem Fund Shares." The Distributor
compensates certain Agents for selling Class B shares at the time of
purchase from the Distributor's own assets. The proceeds of the CDSC and
the distribution fee, in part, are used to defray these expenses.
CLASS C SHARES. The public offering price for Class C shares
is the NAV of that Class. No initial sales charge is imposed at the time
of purchase. A CDSC is imposed, however, on redemptions of Class C shares
made within the first year of purchase. See "Class B shares" above and
"How to Redeem Fund Shares."
CLASS R SHARES. The public offering price for Class R shares
is the NAV of that Class.

RIGHT OF ACCUMULATION--CLASS A SHARES. Reduced sales loads
apply to any purchase of Class A shares, shares of other funds in the
Premier Family of Funds, shares of certain other funds advised by Dreyfus
which are sold with a sales load and shares acquired by a previous
exchange of such shares (hereinafter referred to as "Eligible Funds"), by
you and any related "purchaser" as defined in the SAI, where the
aggregate investment, including such purchase, is $50,000 or more. If,
for example, you previously purchased and still hold Class A shares, or
shares of any other Eligible Fund or combination thereof, with an
aggregate current market value of $40,000 and subsequently purchase Class
A shares or shares of an Eligible Fund having a current value of $20,000,
the sales load applicable to the subsequent purchase would be reduced to
Page 24

4.50% of the offering price. All present holdings of Eligible Funds may
be combined to determine the current offering price of the aggregate
investment in ascertaining the sales load applicable to each subsequent
purchase. Class A shares purchased by shareholders beneficially owning
Fund shares on November 30, 1996, but who opened their Fund accounts after
December 19, 1994, are subject to a different sales load schedule, as
described above under "Class A shares."

To qualify for reduced sales loads, at the time of purchase
you or your Agent must notify the Distributor if orders are made by wire,
or the Transfer Agent if orders are made by mail. The reduced sales load
is subject to confirmation of your holdings through a check of
appropriate records.
TELETRANSFER PRIVILEGE -- You may purchase Fund shares
(minimum $500 and maximum $150,000 per day) by telephone if you have
checked the appropriate box and supplied the necessary information on the
Fund's Account Application or have a filed Shareholder Services Form with
the Transfer Agent. The proceeds will be transferred between the bank
account designated in one of these documents and your Fund account. Only
a bank account maintained in a domestic financial institution which is an
ACH member may be so designated. The Fund may modify or terminate this
privilege at any time or charge a service fee upon notice to
shareholders. No such fee currently is contemplated.

If you have selected the TELETRANSFER Privilege, you may
request a TELETRANSFER purchase of Fund shares by calling 1-800-645-6561
or, if calling from overseas, 516-794-5452.

SHAREHOLDER SERVICES
The services and privileges described under this heading may
not be available to clients of certain Agents and some Agents may impose
certain conditions on their clients which are different from those
described in this Prospectus. You should consult your Agent in this
regard.
FUND EXCHANGES
You may purchase, in exchange for shares of a Class, shares
of the same class of certain other funds managed or administered by
Dreyfus, to the extent such shares are offered for sale in your state of
residence. These funds have different investment objectives which may be
of interest to you. If you desire to use this service, please call
1-800-645-6561 to determine if it is available and whether any conditions
are imposed on its use. WITH RESPECT TO CLASS R SHARES HELD BY RETIREMENT
PLANS, EXCHANGES MAY BE MADE ONLY BETWEEN A SHAREHOLDER'S RETIREMENT PLAN
ACCOUNT IN ONE FUND AND SUCH SHAREHOLDER'S RETIREMENT PLAN ACCOUNT IN
ANOTHER FUND.

To request an exchange, your Agent acting on your behalf must
give exchange instructions to the Transfer Agent in writing or by
telephone. Before any exchange, you must obtain and should review a copy
of the current prospectus of the fund into which the exchange is being
made. Prospectuses may be obtained by calling 1-800-645-6561. Except in
the case of personal retirement plans, the shares being exchanged must
have a current value of at least $500; furthermore, when establishing a
new account by exchange, the shares being exchanged must have a value of
at least the minimum initial investment required for the fund into which
the exchange is being made. The ability to issue exchange instructions by
telephone is given to all Fund shareholders automatically, unless you
check the relevant "No" box on the Account Application, indicating that
you specifically refuse this privilege. The Telephone Exchange Privilege
may be established for an existing account by written
Page 25

request, signed by all shareholders on the account, or by a separate
Shareholder Services Form, available by calling 1-800-645-6561, or by oral
request from any of the authorized signatories on the account, by calling
1-800-645-6561. If you previously have established the Telephone Exchange
Privilege, you may telephone exchange instructions (including over The
Dreyfus TouchRegistration Mark Automated Telephone System) by calling
1-800-645-6561 or, if calling from overseas,516-794-5452. See "How to
Redeem Fund Shares_Procedures." Upon an exchange, the following
shareholder services and privileges, as applicable and where available,
will be automatically carried over to the fund into which the exchange is
made: Telephone Exchange Privilege, TELETRANSFER Privilege and the
dividends and distributions payment option (except for Dividend Sweep)
selected by the investor.

Shares will be exchanged at the next determined NAV; however,
a sales load may be charged with respect to exchanges of Class A shares
into funds sold with a sales load. No CDSC will be imposed on Class B or
C shares at the time of an exchange; however, Class B or C shares
acquired through an exchange will be subject to the higher CDSC applicable
to the exchanged or acquired shares. The CDSC applicable on redemption of
the acquired Class B or C shares will be calculated from the date of the
initial purchase of the Class B or C shares exchanged, as the case may be.
If you are exchanging Class A shares into a fund that charges a sales
load, you may qualify for share prices which do not include the sales
load or which reflect a reduced sales load, if the shares of the fund
from which you are exchanging were: (a) purchased with a sales
load, (b) acquired by a previous exchange from shares purchased with a
sales load, or (c) acquired through reinvestment of dividends or other
distributions paid with respect to the foregoing categories of shares. To
qualify, at the time of the exchange your Agent must notify the
Distributor. Any such qualification is subject to confirmation of your
holdings through a check of appropriate records. See "Shareholder
Services" in the SAI. No fees currently are charged shareholders directly
in connection with exchanges, although the Fund reserves the right, upon
not less than 60 days' written notice, to charge shareholders a nominal
fee in accordance with rules promulgated by the SEC. The Fund reserves
the right to reject any exchange request in whole or in part. The
availability of Fund Exchanges may be modified or terminated at any time
upon notice to shareholders.
The exchange of shares of one fund for shares of another is
treated for Federal income tax purposes as a sale of the shares given in
exchange by the shareholder and, therefore, an exchanging shareholder may
realize, or an exchange on behalf of a Retirement Plan which is not tax
exempt may result in, a taxable gain or loss.
AUTO-EXCHANGE PRIVILEGE
Auto-Exchange Privilege enables you to invest regularly (on a
semi-monthly, monthly, quarterly or annual basis), in exchange for shares
of the Fund, in shares of the same class of other funds in the Premier
Family of Funds or certain other funds in the Dreyfus Family of Funds of
which you are currently an investor. WITH RESPECT TO CLASS R SHARES HELD
BY RETIREMENT PLANS, EXCHANGES PURSUANT TO THE AUTO-EXCHANGE PRIVILEGE
MAY BE MADE ONLY BETWEEN A SHAREHOLDER'S RETIREMENT PLAN ACCOUNT IN ONE
FUND AND SUCH SHAREHOLDER'S RETIREMENT PLAN ACCOUNT IN ANOTHER FUND. The
amount you designate, which can be expressed either in terms of a
specific dollar or share amount ($100 minimum), will be exchanged
automatically on the first and/or fifteenth day of the month according to
the schedule you have selected. Shares will be exchanged at the
then-current NAV; however, a sales load may be charged with respect to
exchanges of Class A shares into funds sold with a sales load. No CDSC
will be imposed on Class B or C shares at the time of an exchange;
Page 26

however, Class B or C shares acquired through an exchange will be subject
to the higher CDSC applicable to the exchanged or acquired shares. The
CDSC applicable on redemption of the acquired Class B or C shares will be
calculated from the date of the initial purchase of the Class B or C
shares exchanged, as the case may be. See "Shareholder Services" in the
SAI. The right to exercise this privilege may be modified or canceled by
the Fund or the Transfer Agent. You may modify or cancel your exercise of
this Privilege at any time by mailing written notification to Premier
Balanced Fund, P.O. Box 6587, Providence, Rhode Island 02940-6587. The
Fund may charge a service fee for the use of this Privilege. No such fee
currently is contemplated. The exchange of shares of one fund for shares
of another is treated for Federal income tax purposes as a sale of the
shares given in exchange by the shareholder and, therefore, an exchanging
shareholder may realize, or an exchange on behalf of a Retirement Plan
which is not tax exempt may result in, a taxable gain or loss. For more
information concerning this privilege and the funds in the Premier Family
of Funds or the Dreyfus Family of Funds eligible to participate in this
privilege, or to obtain an Auto-Exchange Authorization Form, please call
toll free 1-800-645-6561.
DREYFUS-AUTOMATIC ASSET BUILDERRegistration Mark
Dreyfus-AUTOMATIC Asset Builder permits you to purchase Fund
shares (minimum of $100 and maximum of $150,000 per transaction) at
regular intervals selected by you. Fund shares are purchased by
transferring funds from the bank account designated by you. At your
option, the bank account designated by you will be debited in the
specified amount, and Fund shares will be purchased, once a month, on
either the first or fifteenth day, or twice a month, on both days. Only
an account maintained at a domestic financial institution which is an ACH
member may be so designated. To establish an AUTOMATIC Asset Builder
account, you must file an authorization form with the Transfer Agent. You
may obtain the necessary authorization form by calling 1-800-645-6561.
You may cancel your participation in this Privilege or change the amount
of purchase at any time by mailing written notification to Premier
Balanced Fund, P.O. Box 6587, Providence, Rhode Island 02940-6587, and
the notification will be effective three business days following receipt.
The Fund may modify or terminate this Privilege at any time or charge a
service fee. No such fee currently is contemplated.
DIVIDEND OPTIONS

Dividend Sweep enables you to invest automatically dividends
or dividends and other distributions, if any, paid by the Fund in shares
of the same class of another fund in the Premier Family of Funds or
certain of the Dreyfus Family of Funds of which you are an investor.
Shares of the other fund will be purchased at the then-current NAV;
however, a sales load may be charged with respect to investments in
shares of a fund sold with a sales load. If you are investing in a fund
that charges a sales load, you may qualify for share prices which do not
include the sales load or which reflect a reduced sales load. If you are
investing in a fund or class that charges a CDSC, the shares purchased
will be subject on redemption to the CDSC, if any, applicable to the
purchased shares. See "Shareholder Services" in the SAI. Dividend ACH
permits you to transfer electronically on the payment date dividends or
dividends and other distributions, if any, from the Fund to a designated
bank account. Only an account maintained at a domestic financial
institution which is an ACH member may be so designated. Banks may charge
a fee for this service.

For more information concerning these privileges, or to
request a Dividend Options Form, please call toll free 1-800-645-6561.
You may cancel these Privileges by mailing
Page 27

written notification to Premier Balanced Fund, P.O. Box 6587, Providence,
Rhode Island 02940-6587. To select a new fund after cancellation, you must
submit a new Dividend Options Form. Enrollment in or cancellation of these
Privileges is effective three business days following receipt. These
Privileges are available only for existing accounts and may not be used
to open new accounts. Minimum subsequent investments do not apply for
Dividend Sweep. The Fund may modify or terminate these Privileges at any
time or charge a service fee. No such fee currently is contemplated.
Shares held under Keogh Plans, IRAs or other retirement plans are not
eligible for Dividend Sweep.
GOVERNMENT DIRECT DEPOSIT PRIVILEGE
Government Direct Deposit Privilege enables you to purchase
Fund shares (minimum of $100 and maximum of $50,000 per transaction) by
having Federal salary, Social Security, or certain veterans', military or
other payments from the Federal government automatically deposited into
your Fund account. You may deposit as much of such payments as you elect.
You should consider whether Direct Deposit of your entire payment into a
fund with fluctuating NAV, such as the Fund, may be appropriate for you.
To enroll in Government Direct Deposit, you must file with the Transfer
Agent a completed Direct Deposit Sign-Up Form for each type of payment
that you desire to include in this privilege. The appropriate form may be
obtained by calling 1-800-645-6561. Death or legal incapacity will
terminate your participation in this Privilege. You may elect at any time
to terminate your participation by notifying in writing the appropriate
Federal agency. Further, the Fund may terminate your participation upon
30 days' notice to you.
AUTOMATIC WITHDRAWAL PLAN
The Automatic Withdrawal Plan permits you to request
withdrawal of a specified dollar amount (minimum of $50) on either a
monthly or quarterly basis if you have a $5,000 minimum account.
Particular Retirement Plans, including Dreyfus sponsored
retirement plans, may permit certain participants to establish an
automatic withdrawal plan from such Retirement Plans. Participants should
consult their Retirement Plan sponsor and tax adviser for details. Such a
withdrawal plan is different from the Automatic Withdrawal Plan. An
application for the Automatic Withdrawal Plan can be obtained from the
Distributor by calling 1-800-645-6561. The Automatic Withdrawal Plan may
be ended at any time by the shareholder, the Fund or the Transfer Agent.
Shares for which certificates have been issued may not be redeemed
through the Automatic Withdrawal Plan.

No CDSC with respect to Class B shares will be imposed on
withdrawals made under the Automatic Withdrawal Plan, provided that the
amounts withdrawn under the plan do not exceed on an annual basis 12% of
the account value at the time the shareholder elects to participate in
the Automatic Withdrawal Plan. Withdrawals with respect to Class B shares
under the Automatic Withdrawal Plan that exceed on an annual basis 12% of
the value of the shareholder's account will be subject to a CDSC on the
amounts exceeding 12% of the initial account value. Class C shares
withdrawn pursuant to the Automatic Withdrawal Plan will be subject to
any applicable CDSC. Purchases of additional Class A shares where the
sales load is imposed concurrently with withdrawals of Class A shares
generally are undesirable.

the various plans by calling the following numbers toll free: for Keogh
Plans, please call 1-800-358-5566; for IRAs and IRA "Rollover Accounts,"
please call 1-800-645-6561; for SEP-IRAs, 401(k) Salary Reduction Plans
and 403(b)(7) Plans, please call 1-800-322-7880.
LETTER OF INTENT--CLASS A SHARES
By signing a Letter of Intent form, available from the
Distributor, you become eligible for the reduced sales load applicable to
the total number of Eligible Fund shares purchased in a 13-month period
pursuant to the terms and conditions set forth in the Letter of Intent. A
minimum initial purchase of $5,000 is required. To compute the applicable
sales load, the offering price of shares you hold (on the date of
submission of the Letter of Intent) in any Eligible Fund that may be used
toward "Right of Accumulation" benefits described above may be used as a
credit toward completion of the Letter of Intent. However, the reduced
sales load will be applied only to new purchases.
The Transfer Agent will hold in escrow 5% of the amount
indicated in the Letter of Intent for payment of a higher sales load if
you do not purchase the full amount indicated in the Letter of Intent.
The escrow will be released when you fulfill the terms of the Letter of
Intent by purchasing the specified amount. If your purchases qualify for
a further sales load reduction, the sales load will be adjusted to
reflect your total purchase at the end of 13 months. If total purchases
are less than the amount specified, you will be requested to remit an
amount equal to the difference between the sales load actually paid and
the sales load applicable to the aggregate purchases actually made. If
such remittance is not received within 20 days, the Transfer Agent, as
attorney-in-fact pursuant to the terms of the Letter of Intent, will
redeem an appropriate number of Class A shares of the Fund held in escrow
to realize the difference. Signing a Letter of Intent does not bind you
to purchase, or the Fund to sell, the full amount indicated at the sales
load in effect at the time of signing, but you must complete the intended
purchase to obtain the reduced sales load. At the time you purchase Class
A shares, you must indicate your intention to do so under a Letter of
Intent.
HOW TO REDEEM FUND SHARES
GENERAL--You may request redemption of your shares at any
time. Redemption requests should be transmitted to the Transfer Agent as
described below. When a request is received in proper form, the Fund will
redeem the shares at the next determined net asset value as described
below. If you hold Fund shares of more than one Class, any request for
redemption must specify the Class of shares being redeemed. If you fail
to specify the Class of shares to be redeemed or if you own fewer shares
of the Class than specified to be redeemed, the redemption request may be
delayed until the Transfer Agent receives further instructions from you
or your Agent.
The Fund imposes no charges (other than any applicable CDSC)
when shares are redeemed directly through the Distributor. Agents or
other institutions may charge their clients a nominal fee for effecting
redemptions of Fund shares. Any certificates representing Fund shares
being redeemed must be submitted with the redemption request. The value
of the shares redeemed may be more or less than their original cost,
depending upon the Fund's then-current NAV.
The Fund ordinarily will make payment for all shares redeemed
within seven days after receipt by the Transfer Agent of a redemption
request in proper form, except as provided by the rules of the SEC.
HOWEVER, IF YOU HAVE PURCHASED FUND SHARES BY CHECK, BY THE TELETRANSFER
PRIVILEGE OR THROUGH AUTOMATIC ASSET BUILDER AND SUBSEQUENTLY SUB-
Page 29

MIT A WRITTEN REDEMPTION REQUEST TO THE TRANSFER AGENT, THE REDEMPTION
PROCEEDS WILL BE TRANSMITTED TO YOU PROMPTLY UPON BANK CLEARANCE OF YOUR
PURCHASE CHECK, TELETRANSFER PURCHASE OR AUTOMATIC ASSET BUILDER ORDER,
WHICH MAY TAKE UP TO EIGHT BUSINESS DAYS OR MORE. IN ADDITION, THE FUND
WILL REJECT REQUESTS TO REDEEM SHARES BY WIRE OR TELEPHONE OR PURSUANT TO
THE TELETRANSFER PRIVILEGE FOR A PERIOD OF EIGHT BUSINESS DAYS AFTER
RECEIPT BY THE TRANSFER AGENT OF THE PURCHASE CHECK, THE TELETRANSFER
PURCHASE OR THE AUTOMATIC ASSET BUILDER ORDER AGAINST WHICH SUCH
REDEMPTION IS REQUESTED. THESE PROCEDURES WILL NOT APPLY IF YOUR SHARES
WERE PURCHASED BY WIRE PAYMENT, OR IF YOU OTHERWISE HAVE A SUFFICIENT
COLLECTED BALANCE IN YOUR ACCOUNT TO COVER THE REDEMPTION REQUEST. PRIOR
TO THE TIME ANY REDEMPTION IS EFFECTIVE, DIVIDENDS ON SUCH SHARES WILL
ACCRUE AND BE PAYABLE, AND YOU WILL BE ENTITLED TO EXERCISE ALL OTHER
RIGHTS OF BENEFICIAL OWNERSHIP. Fund shares will not be redeemed until the
Transfer Agent has received your Account Application.
The Fund reserves the right to redeem your account at its
option upon not less than 45 days' written notice if the net asset value
of your account is $500 or less and remains so during the notice period.
CONTINGENT DEFERRED SALES CHARGE--CLASS B SHARES--A CDSC
payable to the Distributor is imposed on any redemption of Class B shares
which reduces the current net asset value of your Class B shares to an
amount which is lower than the dollar amount of all payments by you for
the purchase of Class B shares of the Fund held by you at the time of
redemption. No CDSC will be imposed to the extent that the net asset
value of the Class B shares redeemed does not exceed (i) the current net
asset value of Class B shares acquired through reinvestment of dividends
or other distributions, plus (ii) increases in the net asset value of
your Class B shares above the dollar amount of all your payments for the
purchase of Class B shares held by you at the time of redemption.
If the aggregate value of Class B shares redeemed has
declined below their original cost as a result of the Fund's performance,
a CDSC may be applied to the then-current net asset value rather than the
purchase price.
In circumstances where the CDSC is imposed, the amount of the
charge will depend on the number of years from the time you purchased the
Class B shares until the time of redemption of such shares. Solely for
purposes of determining the number of years from the time of any payment
for the purchase of Class B shares, all payments during a month will be
aggregated and deemed to have been made on the first day of the month.
The following table sets forth the rates of the CDSC:
<TABLE>
<CAPTION>
Year Since CDSC as a % of Amount
Purchase Payment Invested or Redemption
Was Made Proceeds
----------------- ------------------------
<S> <C>
First.................................................... 4.00
Second................................................... 4.00
Third.................................................... 3.00
Fourth................................................... 3.00
Fifth.................................................... 2.00
Sixth.................................................... 1.00
</TABLE>
In determining whether a CDSC is applicable to a redemption,
the calculation will be made in a manner that results in the lowest
possible rate. It will be assumed that the redemption is made first of
amounts representing shares acquired pursuant to the reinvestment of
dividends and other distributions; then of amounts representing the
increase in net asset value of Class B shares above the total amount of
payments for the purchase of Class B shares made during
the preceding six years; then of amounts representing the cost
Page 30

of shares purchased six years prior to the redemption; and finally, of
amounts representing the cost of shares held for the longest period of
time within the applicable six-year period.
For example, assume an investor purchased 100 shares at $10
share for a cost of $1,000. Subsequently, the shareholder acquired five
additional shares through dividend reinvestment. During the second year
after the purchase the investor decided to redeem $500 of his or her
investment. Assuming at the time of the redemption the NAV had
appreciated to $12 per share, the value of the investor's shares would be
$1,260 (105 shares at $12 per share). The CDSC would not be applied to
the value of the reinvested dividend shares and the amount which
represents appreciation ($260). Therefore, $240 of the $500 redemption
proceeds ($500 minus $260) would be charged at a rate of 4% (the
applicable rate in the second year after purchase) for a total CDSC of
$9.60.
For purposes of determining the applicable CDSC payable with
respect to redemption of Class B shares of the Fund where such shares
were acquired through exchange of Class B shares of another fund advised
by Dreyfus, the year since purchase payment was made is based on the date
of purchase of the original Class B shares of the fund exchanged.
CONTINGENT DEFERRED SALES CHARGE--CLASS C SHARES--A CDSC of
1% payable to the Distributor is imposed on any redemption of Class C
shares within one year of the date of purchase. The basis for calculating
the payment of any such CDSC will be the method used in calculating the
CDSC for Class B shares. See "Contingent Deferred Sales Charge_Class B
shares" above.

WAIVER OF CDSC--The CDSC applicable to Class B and Class C
shares (and to certain Class A shares) will be waived in connection with
(a) redemptions made within one year after the death or disability, as
defined in Section 72(m)(7) of the Code, of the shareholder, (b)
redemptions by employees participating in Eligible Benefit Plans, (c)
redemptions as a result of a combination of any investment company with
the Fund by merger, acquisition of assets or otherwise, (d) a distribution
following retirement under a tax-deferred retirement plan or upon
attaining age 701\2 in the case of an IRA or Keogh plan or custodial
account pursuant to Section 403(b) of the Code, (e) with respect to Class
B shares, redemptions made pursuant to the Automatic Withdrawal Plan,
provided that amounts withdrawn under such plan do not exceed on an annual
basis 12% of the value of the shareholder's account at the time the
shareholder elects to participate in the Plan, and (f) redemptions by such
shareholders as the SEC or its staff may permit. If the Company's Board
of Directors determines to discontinue the waiver of the CDSC, the
disclosure in the Fund's prospectus will be revised appropriately. Any
Fund shares subject to a CDSC which were purchased prior to the
termination of such waiver will have the CDSC waived as provided in the
Fund's prospectus at the time of the purchase of such shares.

To qualify for a waiver of the CDSC, at the time of
redemption you must notify the Transfer Agent or your Agent must notify
the Distributor. Any such qualification is subject to confirmation of
your entitlement.
PROCEDURES--You may redeem Fund shares by using the regular
redemption procedure through the Transfer Agent, or, through the
TELETRANSFER Privilege or, if you are a client of a Selected Dealer,
through the Selected Dealer. If you have given your Agent authority to
instruct the Transfer Agent to redeem shares and to credit the proceeds of
such redemptions to a designated account at your Agent, you may redeem
shares only in this manner and in accordance with the regular redemption
procedure described below. If you wish to use the other redemption
methods described below, you must arrange with your Agent for delivery of
the required application(s) to the Transfer
Page 31

Agent. Other redemption procedures may be in effect for clients of certain
Agents and institutions. The Fund makes available to certain large
institutions the ability to issue redemption instructions through
compatible computer facilities.

You may redeem Fund shares by telephone if you have checked
the appropriate box on the Fund's Account Application or have filed a
Shareholder Services Form with the Transfer Agent. If you select the
TELETRANSFER Privilege or telephone exchange privilege, which is granted
automatically unless you refuse it, you authorize the Transfer Agent to
act on telephone instructions (including over The Dreyfus TouchRegistration
Mark Automated Telephone System) from any person representing himself or
herself to be you, or a representative of your Agent, and reasonably
believed by the Transfer Agent to be genuine. The Fund will require the
Transfer Agent to employ reasonable procedures, such as requiring a form
of personal identification, to confirm that instructions are genuine and,
if it does not follow such procedures, the Fund or the Transfer Agent may
be liable for any losses due to unauthorized or fraudulent instructions.
Neither the Fund nor the Transfer Agent will be liable for following
telephone instructions reasonably believed to be genuine.

During times of drastic economic or market conditions, you
may experience difficulty in contacting the Transfer Agent by telephone
to request a TELETRANSFER redemption or an exchange of Fund shares. In
such cases, you should consider using the other redemption procedures
described herein. Use of these other redemption procedures may result in
your redemption request being processed at a later time than it would
have been if TELETRANSFER redemption had been used. During the delay, the
Fund's NAV may fluctuate.
REGULAR REDEMPTION. Under the regular redemption procedure,
you may redeem your shares by written request mailed to Premier Balanced
Fund, P.O. Box 6587, Providence, Rhode Island 02940-6587. Redemption
requests must be signed by each shareholder, including each owner of a
joint account, and each signature must be guaranteed. The Transfer Agent
has adopted standards and procedures pursuant to which signature-
guarantees in proper form generally will be accepted from domestic banks,
brokers, dealers, credit unions, national securities exchanges, registered
securities associations, clearing agencies and savings associations, as
well as from participants in the New York Stock Exchange Medallion
Signature Program, the Securities Transfer Agents Medallion Program
("STAMP"), and the Stock Exchanges Medallion Program. For more
information with respect to signature-guarantees, please call
1-800-554-4611.
Redemption proceeds of at least $1,000 will be wired to any
member bank of the Federal Reserve System in accordance with a written
signature-guaranteed request.
TELETRANSFER PRIVILEGE. You may redeem Fund shares (minimum
$500 per day) by telephone if you have checked the appropriate box and
supplied the necessary information on the Fund's Account Application or
have filed a Shareholder Services Form with the Transfer Agent. The
proceeds will be transferred between your Fund account and the bank
account designated in one of these documents. Only such an account
maintained in a domestic financial institution which is an ACH member may
be so designated. Redemption proceeds will be on deposit in your account
at an ACH member bank ordinarily two days after receipt of the redemption
request or, at your request, paid by check (maximum $150,000 per day) and
mailed to your address. Holders of jointly registered Fund or bank
accounts may redeem through the TELETRANSFER Privilege for transfer to
their bank account only up to $250,000 within any 30-day period. The Fund
reserves the right to refuse any request made by telephone, including
requests made shortly after a change of address, and may limit the amount
involved or the number of such requests.
Page 32

The Fund may modify or terminate this Privilege at any time or charge a
service fee upon notice to shareholders. No such fee currently is
contemplated.

If you have selected the TELETRANSFER Privilege, you may
request a TELETRANSFER redemption of Fund shares by calling
1-800-645-6561 or, if calling from overseas, 516-794-5452. Shares held
under Keogh Plans, IRAs or other retirement plans, and shares issued in
certificate form, are not eligible for this Privilege.

REDEMPTION THROUGH A SELECTED DEALER. If you are a customer
of a Selected Dealer, you may make redemption requests to your Selected
Dealer. If the Selected Dealer transmits the redemption request so that
it is received by the Transfer Agent prior to the close of trading on the
floor of the NYSE (currently 4:00 p.m., New York time), the redemption
request will be effective on that day. If a redemption request is
received by the Transfer Agent after the close of trading on the floor of
the NYSE, the redemption request will be effective on the next business
day. It is the responsibility of the Selected Dealer to transmit a
request so that it is received in a timely manner. The proceeds of the
redemption are credited to your account with the Selected Dealer. See
"How to Buy Fund Shares" for a discussion of additional conditions or
fees that may be imposed upon redemption.
In addition, the Distributor will accept orders from Selected
Dealers with which it has sales agreements for the repurchase of shares
held by shareholders. Repurchase orders received by dealers by the close
of trading on the floor of the NYSE on any business day and transmitted
to the Distributor or its designee prior to the close of its business day
(normally 5:15 p.m., New York time) are effected at the price determined
as of the close of trading on the floor of the NYSE on that day.
Otherwise, the shares will be redeemed at the next determined NAV. It is
the responsibility of the Selected Dealer to transmit orders on a timely
basis. The Selected Dealer may charge the shareholder a fee for executing
the order. This repurchase arrangement is discretionary and may be
withdrawn at any time.

Upon written request, you may reinvest up to the number of
Class A or Class B shares you have redeemed, within 45 days of
redemption, at the then-prevailing NAV without a sales load, or reinstate
your account for the purpose of exercising Fund Exchanges. Upon
reinstatement, a Class B shareholder's account will be credited with an
amount equal to the CDSC previously paid upon redemption of the Class B
shares reinvested. The Reinvestment Privilege may be exercised only once.

it collects from the Fund to compensate Agents that have entered into
Agreements with the Distributor. Under the Agreements, the Agents are
obligated to provide distribution related services with regard to the Fund
and/or shareholder services to the Agent's clients that own Class A shares
of the Fund.
The Fund and the Distributor may suspend or reduce payments
under the Plan at any time, and payments are subject to the continuation
of the Fund's Plan and the Agreements described above. From time to time,
the Agents, the Distributor and the Fund may agree to voluntarily reduce
the maximum fees payable under the Plan. See the SAI for more details on
the Plan.
DISTRIBUTION AND SERVICE PLANS--CLASS B AND C SHARES-- Under
a Distribution Plan adopted pursuant to Rule 12b-1, the Fund pays the
Distributor for distributing the Fund's Class B and C shares at an
aggregate annual rate of .75 of 1% of the value of the average daily net
assets of Class B and C. Under a Service Plan adopted pursuant to Rule
12b-1, the Fund pays Dreyfus Service Corporation or the Distributor for
the provision of certain services to the holders of Class B and C shares
a fee at the annual rate of .25 of 1% of the value of the average daily
net assets of Class B and C. The services provided may include personal
services relating to shareholder accounts, such as answering shareholder
inquiries regarding the Fund and providing reports and other information,
and providing services related to the maintenance of such shareholder
accounts. With regard to such services, each Agent is required to
disclose to its clients any compensation payable to it by the Fund and
any other compensation payable by their clients in connection with the
investment of their assets in Class B and C shares. The Distributor may
pay one or more Agents in respect of distribution and other services for
these Classes of shares. The Distributor determines the amounts, if any,
to be paid to Agents under the Distribution and Service Plans and the
basis on which such payments are made. The fees payable under the
Distribution and Service Plans are payable without regard to actual
expenses incurred.
DIVIDENDS, OTHER DISTRIBUTIONS AND TAXES
The Fund declares and pays dividends from its net investment
income, if any, four times yearly and distributes net realized gains, if
any, once a year, but it may make distributions on a more frequent basis
to comply with the distribution requirements of the Code, in all events
in a manner consistent with the provisions of the 1940 Act. The Fund will
not make distributions from net realized gains unless capital loss
carryovers, if any, have been utilized or have expired. Investors other
than qualified Retirement Plans may choose whether to receive dividends
and other distributions in cash, to receive dividends in cash and
reinvest other distributions in additional Fund shares, or to reinvest
both dividends and other distributions in additional Fund shares;
dividends and other distributions paid to qualified Retirement Plans are
reinvested automatically in additional Fund shares at NAV. All expenses
are accrued daily and deducted before declaration of dividends to
investors. Dividends paid by each Class will be calculated at the same
time and in the same manner and will be in the same amount, except that
the expenses attributable solely to a particular Class will be borne
exclusively by that Class. Class B and C shares will receive lower per
share dividends than Class A shares which will receive lower per share
dividends than Class R shares, because of the higher expenses borne by
the relevant Class. See "Expense Summary."
It is expected that the Fund will qualify for treatment as a
"regulated investment company" under the Code so long as such
qualification is in the best interests of its sharehold-
Page 34

ers. Such qualification will relieve the Fund of any liability for federal
income tax to the extent its earnings are distributed in accordance with
applicable provisions of the Code.
Dividends derived from net investment income, together with
distributions from net realized short-term capital gains and all or a
portion of any gains realized from the sale or other disposition of
certain market discount bonds (collectively, "Dividend Distributions"),
paid by the Fund will be taxable to U.S. shareholders, including certain
non-qualified Retirement Plans, as ordinary income whether received in
cash or reinvested in Fund shares. Distributions from the Fund's net
capital gain (the excess of net long-term capital gain over net
short-term capital loss) will be taxable to such shareholders as
long-term capital gains for Federal income tax purposes, regardless of
how long the shareholders have held their Fund shares and whether such
distributions are received in cash or reinvested in Fund shares. The net
capital gain of an individual generally will not be subject to federal
income tax at a rate in excess of 28%. Dividends and other distributions
also may be subject to state and local taxes.
Dividend Distributions paid by the Fund to a non-resident
foreign investor generally are subject to U.S. withholding tax at the
rate of 30%, unless the foreign investor claims the benefit of a lower
rate specified in a tax treaty. Distributions from net capital gain paid
by the Fund to a non-resident foreign investor, as well as the proceeds
of any redemptions from a non-resident foreign investor's account,
regardless of the extent to which gain or loss may be realized, generally
will not be subject to U.S. withholding tax. However, such distributions
may be subject to backup withholding, as described below, unless the
foreign investor certifies his non-U.S. residency status.
Notice as to the tax status of your dividends and other
distributions will be mailed to you annually. You also will receive
periodic summaries of your account which will include information as to
dividends and distributions from net capital gain, if any, paid during
the year.
The Code provides for the "carryover" of some or all of the
sales load imposed on Class A shares if (1) an investor redeems those
shares or exchanges those shares for shares of another fund advised or
administered by Dreyfus within 91 days of purchase and (2) in the case of
a redemption, acquires other Fund Class A shares through exercise of the
Reinvestment Privilege or, in the case of an exchange, such other fund
reduces or eliminates its otherwise applicable sales load for the purpose
of the exchange. In this case, the amount of the sales load charged the
investor for the original Class A shares, up to the amount of the
reduction of the sales load pursuant to the Reinvestment Privilege or on
the exchange, as the case may be, is not included in the basis of such
shares for purposes of computing gain or loss on the redemption or the
exchange, and instead is added to the basis of the fund shares received
pursuant to the Reinvestment Privilege or the exchange.
Dividends and other distributions paid by the Fund to
qualified Retirement Plans ordinarily will not be subject to taxation
until the proceeds are distributed from the Retirement Plans. The Fund
will not report to the IRS distributions paid to such plans. Generally,
distributions from qualified Retirement Plans, except those representing
returns of non-deductible contributions thereto, will be taxable as
ordinary income and, if made prior to the time the participant reaches
age 591\2, generally will be subject to an additional tax equal to 10% of
the taxable portion of the distribution. If the distribution from such a
Retirement Plan (other than certain governmental or church plans) for any
taxable year following the year in which the participant reaches age 701/2
is less than the
Page 35

"minimum required distribution" for that taxable year, an
excise tax equal to 50% of the deficiency may be imposed by the IRS. The
administrator, trustee or custodian of such a Retirement Plan will be
responsible for reporting distributions from such plans to the IRS.
Moreover, certain contributions to a qualified Retirement Plan in excess
of the amounts permitted by law may be subject to an excise tax. If a
distributee of an "eligible rollover distribution" from a qualified
Retirement Plan does not elect to have the eligible rollover distribution
paid directly from the plan to an eligible retirement plan in a "direct
rollover," the eligible rollover distribution is subject to a 20% income
tax withholding.
With respect to individual investors and certain
non-qualified Retirement Plans, federal regulations generally require the
Fund to withhold ("backup withholding") and remit to the U.S. Treasury
31% of dividends, distributions from net capital gain and the proceeds of
any redemption, regardless of the extent to which gain or loss may be
realized, paid to a shareholder if such shareholder fails to certify that
the TIN furnished in connection with opening an account is correct and
that such shareholder has not received notice from the IRS of being
subject to backup withholding as a result of a failure to properly report
taxable dividend or interest income on a Federal income tax return.
Furthermore, the IRS may notify the Fund to institute backup withholding
if the IRS determines a shareholder's TIN is incorrect or if a
shareholder has failed to properly report taxable dividend and interest
income on a federal income tax return.
A TIN is either the Social Security number or employer
identification number of the record owner of the account. Any tax
withheld as a result of backup withholding does not constitute an
additional tax imposed on the record owner of the account and may be
claimed as a credit on the record owner's Federal income tax return.
The Fund may be subject to a non-deductible 4% excise tax,
measured with respect to certain undistributed amounts of taxable
investment income and capital gains.
You should consult your tax advisers regarding specific
questions as to Federal, state or local taxes.
PERFORMANCE INFORMATION
For purposes of advertising, performance for each Class may
be calculated on the basis of average annual total return and/or total
return. These total return figures reflect changes in the price of the
shares and assume that any income dividends and/or capital gains
distributions made by the Fund during the measuring period were
reinvested in shares of the same Class. These figures also take into
account any applicable distribution and shareholder servicing fees. As a
result, at any given time, the performance of Class B and C should be
expected to be lower than that of Class A and the performance of Class A,
B and C should be expected to be lower than that of Class R. Performance
for each Class will be calculated separately.
Average annual total return is calculated pursuant to a
standardized formula which assumes that an investment was purchased with
an initial payment of $1,000 and that the investment was redeemed at the
end of a stated period of time, after giving effect to the reinvestment
of dividends and other distributions during the period. The return is
expressed as a percentage rate which, if applied on a compounded annual
basis, would result in the redeemable value of the investment at the end
of the period. Advertisements of the Fund's performance will include the
Fund's average annual total return for one, five and ten year periods, or
for shorter periods depending upon the length of time during which the
Fund has operated. Computations of average annual
Page 36

total return for periods of less than one year represent an annualization
of the Fund's actual total return for the applicable period.
Total return is computed on a per share basis and assumes the
reinvestment of dividends and other distributions. Total return generally
is expressed as a percentage rate which is calculated by combining the
income and principal changes for a specified period and dividing by the
net asset value (or maximum offering price in the case of Class A shares)
per share at the beginning of the period. Advertisements may include the
percentage rate of total return or may include the value of a
hypothetical investment at the end of the period which assumes the
application of the percentage rate of total return. Total return also may
be calculated by using the net asset value per share at the beginning of
the period instead of the maximum offering price per share at the
beginning of the period for Class A shares or without giving effect to
any applicable CDSC at the end of the period for Class B or C shares.
Calculations based on the net asset value per share do not reflect the
deduction of the sales load on the Fund's Class A shares, which, if
reflected, would reduce the performance quoted.
The Fund may also advertise the yield on a Class of shares.
The Fund's yield is calculated by dividing a Class of shares' annualized
net investment income per share during a recent 30-day (or one month)
period by the maximum public offering price per share of such Class on
the last day of that period. Since yields fluctuate, yield data cannot
necessarily be used to compare an investment in a Class of shares with
bank deposits, savings accounts, and similar investment alternatives
which often provide an agreed-upon or guaranteed fixed yield for a stated
period of time.
Performance will vary from time to time and past results are
not necessarily representative of future results. You should remember
that performance is a function of portfolio management in selecting the
type and quality of portfolio securities and is affected by operating
expenses. Performance information, such as that described above, may not
provide a basis for comparison with other investments or other investment
companies using a different method of calculating performance.

The Fund may compare the performance of its shares with
various industry standards of performance including Lipper Analytical
Services, Inc. ratings, Standard & Poor's Composite Index of 500 Stocks,
Lehman Brothers Government/Corporate Intermediate Bond Index, CDA
Technologies indexes, other indexes created by Lehman Brothers, the
Consumer Price Index, and the Dow Jones Industrial Average. Performance
rankings as reported in CHANGING TIMES, BUSINESS WEEK, INSTITUTIONAL
INVESTOR, THE WALL STREET JOURNAL, IBC/DONOGHUE'S MONEY FUND REPORT,
MUTUAL FUND FORECASTER, NO LOAD INVESTOR, MONEY MAGAZINE, MORNINGSTAR
MUTUAL FUND VALUES, U.S. NEWS AND WORLD REPORT, FORBES, FORTUNE, BARRON'S
and similar publications may also be used in comparing the Fund's
performance. Furthermore, the Fund may quote its shares' total returns
and yields in advertisements or in shareholder reports. The Fund may also
advertise non-standardized performance information, such as total return
for periods other than those required to be shown or cumulative
performance data. The Fund may advertise a quotation of yield or other
similar quotation demonstrating the income earned or distributions made
by the Fund.

GENERAL INFORMATION
The Company was incorporated in Maryland on August 6, 1987
under the name The Laurel Funds, Inc., and changed its name to The
Dreyfus/Laurel Funds, Inc. on October 17, 1994. The Company is registered
with the SEC under the 1940 Act, as an open-end
Page 37

management investment company. The Company has an authorized
capitalization of 25 billion shares of $0.001 par value stock with equal
voting rights. The Fund is a portfolio of the Company. The Fund's shares
are classified into four classes_Class A, Class B, Class C and Class R.
The Company's Articles of Incorporation permit the Board of Directors to
create an unlimited number of investment portfolios (each a "fund").
Each share (regardless of Class) has one vote. All shares of
all funds (and Classes thereof) vote together as a single class, except
as to any matter for which a separate vote of any fund or Class is
required by the 1940 Act, and except as to any matter which affects the
interests of one or more particular funds or Classes, in which case only
the shareholders of the affected fund or Class are entitled to vote, each
as a separate class. Only holders of Class A, B or C shares, as the case
may be, will be entitled to vote on matters submitted to shareholders
pertaining to the Distribution and/or Service Plan relating to that
Class.
Unless otherwise required by the 1940 Act, ordinarily it will
not be necessary for the Fund to hold annual meetings of shareholders. As
a result, Fund shareholders may not consider each year the election of
Directors or the appointment of auditors. However, the holders of at
least 10% of the shares outstanding and entitled to vote may require the
Company to hold a special meeting of shareholders for purposes of
removing a Director from office and for any other purpose. Company
shareholders may remove a Director by the affirmative vote of a majority
of the Company's outstanding voting shares. In addition, the Board of
Directors will call a meeting of shareholders for the purpose of electing
Directors if, at any time, less than a majority of the Directors then
holding office have been elected by shareholders.
The Transfer Agent maintains a record of your ownership and
will send you confirmations and statements of account.
Shareholder inquiries may be made by writing to the Fund at
144 Glenn Curtiss Boulevard, Uniondale, New York 11556-0144.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO
MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS
AND IN THE FUND'S OFFICIAL SALES LITERATURE IN CONNECTION WITH THE OFFER
OF THE FUND'S SHARES, AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
FUND. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER IN ANY STATE IN WHICH,
OR TO ANY PERSON TO WHOM, SUCH OFFERING MAY NOT LAWFULLY BE MADE.
PDB/P120196
Page 38

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Page 39

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Page 40

PREMIER SMALL COMPANY STOCK FUND

PROSPECTUS MARCH 1, 1996

AS REVISED DECEMBER 1, 1996

Registration Mark

Premier Small Company Stock Fund (the "Fund"), formerly called
the "Laurel Smallcap Stock Fund," is a separate, diversified portfolio of
The Dreyfus/Laurel Funds, Inc., an open-end management investment company
(the "Company"), known as a mutual fund. The Fund seeks to consistently
exceed the total return performance of the Russell 2500trademark Stock
Index while maintaining a similar level of risk. The Fund is neither
sponsored by nor affiliated with Frank Russell Company.
By this Prospectus, the Fund is offering four Classes of
shares_Class A, Class B, Class C and Class R.
The Dreyfus Corporation serves as the Fund's investment
manager. The Dreyfus Corporation is referred to as "Dreyfus."
This Prospectus sets forth concisely information about the
Fund that you should know before investing. It should be read carefully
before you invest and retained for future reference.

The Statement of Additional Information ("SAI") dated March
1, 1996, as revised December 1, 1996, which may be further revised from
time to time, provides a further discussion of certain areas in this
Prospectus and other matters which may be of interest to some investors.
It has been filed with the Securities and Exchange Commission ("SEC") and
is incorporated herein by reference. The SEC maintains a Web site
(http://www.sec.gov) that contains the SAI, material incorporated by
reference, and other information regarding the Fund. For a free copy,
write to the Fund at 144 Glenn Curtiss Boulevard, Uniondale, New York
11556-0144, or call 1-800-554-4611. When telephoning, ask for Operator
144.

MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR
GUARANTEED OR ENDORSED BY, ANY BANK, AND ARE NOT FEDERALLY INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY
OTHER AGENCY. ALL MUTUAL FUND SHARES INVOLVE CERTAIN INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
THE FEES TO WHICH THE FUND IS SUBJECT ARE SUMMARIZED IN THE
"EXPENSE SUMMARY" SECTION OF THE FUND'S PROSPECTUS. THE FUND PAYS AN
AFFILIATE OF MELLON BANK, N.A. ("MELLON BANK"), TO BE ITS INVESTMENT
MANAGER. MELLON BANK OR AN AFFILIATE MAY BE PAID FOR PERFORMING OTHER
SERVICES FOR THE FUND, SUCH AS CUSTODIAN, TRANSFER AGENT OR FUND
ACCOUNTANT SERVICES. THE FUND IS DISTRIBUTED BY PREMIER MUTUAL FUND
SERVICES, INC.
- ------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- ------------------------------------------------------------------------------

(Continued from page 1)
Class A shares are subject to a sales charge imposed at the
time of purchase. (Class A shares of the Fund were formerly called
Investor shares.) Class B shares are subject to a maximum 4% contingent
deferred sales charge imposed on redemptions made within six years of
purchase. Class C shares are subject to a 1% contingent deferred sales
charge imposed on redemptions made within the first year of purchase.
Class R shares are sold primarily to bank trust departments and other
financial service providers (including Mellon Bank and its affiliates)
("Banks") acting on behalf of customers having a qualified trust or
investment account or relationship at such institution, or to customers
who have received and hold shares of the Fund distributed to them by
virtue of such an account or relationship. (Class R shares of the Fund
were formerly called Trust shares.) Other differences between the Classes
include the services offered to and the expenses borne by each Class and
certain voting rights, as described herein. These alternatives are
offered so an investor may choose the method of purchasing shares that is
most beneficial given the amount of purchase, the length of time the
investor expects to hold the shares and other circumstances.
Each Class of shares may be purchased or redeemed by
telephone using the TELETRANSFER Privilege.

TABLE OF CONTENTS
Expense Summary.................................... 3
Financial Highlights............................... 4
Alternative Purchase Methods....................... 7
Description of the Fund............................ 8
Management of the Fund............................. 14
How to Buy Fund Shares............................. 15
Shareholder Services............................... 20
How to Redeem Fund Shares.......................... 24
Distribution Plans (Class A Plan and Class B and C Plan) 28
Dividends, Other Distributions and Taxes........... 28
Performance Information............................ 30
General Information................................ 31
Page 2

<TABLE>
<CAPTION>
EXPENSE SUMMARY
Class A Class B Class C Class R
_______ _______ _______ _______
<S> <C> <C> <C> <C>
Shareholder Transaction Expenses
Maximum Sales Load Imposed on Purchases
...... (as a percentage of offering price) 5.75% none none none
Maximum Deferred Sales Charge Imposed on Redemptions
(as a percentage of the amount subject to charge) none* 4.00% 1.00% none
Annual Fund Operating Expenses
(as a percentage of average daily net assets)
Management Fee.......................... 1.25% 1.25% 1.25% 1.25%
12b-1 Fee1.............................. .25% 1.00% 1.00% none
Other Expenses.......................... .00% .00% .00% .00%
_____ _____ _____ _____
Total Fund Operating Expenses........... 1.50% 2.25% 2.25% 1.25%
Example
You would pay the following expenses on a $1,000 investment,
assuming (1) a 5% annual return and (2) except where noted,
redemption
at the end of each time period:
1 YEAR $ 72 $ 63/232 $33/232 $ 13
3 YEARS $102 $100/702 $70 $ 40
5 YEARS $135 $140/1202 $120 $ 69
10 YEARS $226 $221** $258 $151
</TABLE>

* A contingent deferred sales charge of 1.00% may be imposed on
certain redemptions of Class A shares purchased without an initial sales
charge as part of an investment of $1 million or more. See "How to Buy
Fund Shares_Class A shares."

** Assumes conversion of Class B shares to Class A shares
approximately six years after the date of purchase and, therefore,
reflects Class A expenses for years seven through ten.
1 See "Distribution Plans (Class A Plan and Class B and C Plan)" for
a description of the Fund's Distribution Plan and Service Plan for Class
A, B and C shares.
2 Assuming no redemption of shares.
- ------------------------------------------------------------------------------
THE AMOUNTS LISTED IN THE EXAMPLE SHOULD NOT BE CONSIDERED
AS REPRESENTATIVE OF FUTURE EXPENSES AND ACTUAL EXPENSES MAY BE GREATER
OR LESS THAN THOSE INDICATED. MOREOVER, WHILE THE EXAMPLE ASSUMES A 5%
ANNUAL RETURN, THE FUND'S ACTUAL PERFORMANCE WILL VARY AND MAY RESULT IN
AN ACTUAL RETURN GREATER OR LESS THAN 5%.
- ------------------------------------------------------------------------------

The purpose of the foregoing table is to assist you in
understanding the various costs and expenses that investors will bear,
directly or indirectly, the payment of which will reduce investors'
return on an annual basis. Long-term investors in Class A, B or C shares
could pay more in 12b-1 fees than the economic equivalent of paying the
maximum front-end sales charges applicable to mutual funds sold by
members of the National Association of Securities Dealers, Inc. ("NASD").
The information in the foregoing table does not reflect any fee waivers
or expense reimbursement arrangements that may be in effect. Certain
banks, securities dealers and brokers ("Selected Dealers") or other
financial institutions (including Mellon Bank and its affiliates)
(collectively "Agents") may charge their clients direct fees for
effecting transactions in Fund shares; such fees are not reflected in the
foregoing table. See "Management of the Fund," "How to Buy Fund Shares"
and "Distribution Plans (Class A Plan and Class B and C Plan)."
The Company understands that Agents may charge fees to their
clients who are owners of the Fund's Class A, B or C shares for various
services provided in connection with a client's account. These fees would
be in addition to any amounts received by an Agent under its Selling
Page 3

Agreement ("Agreement") with Premier Mutual Fund Services, Inc. (the
"Distributor"). The Agreement requires each Agent to disclose to its
clients any compensation payable to such Agent by the Distributor and any
other compensation payable by the client for various services provided in
connection with their accounts.
FINANCIAL HIGHLIGHTS
The tables below are based upon a single Class A, Class B,
Class C and Class R share outstanding throughout the year or period and
should be read in conjunction with the financial statements and related
notes that appear in the Fund's Annual Report dated October 31, 1995
which is incorporated by reference in the SAI. The financial statements
included in the Fund's Annual Report for the year ended October 31, 1995
have been audited by KPMG Peat Marwick LLP, independent auditors, whose
report appears in the Fund's Annual Report. Further information about,
and management's discussion of, the Fund's performance is contained in
the Fund's Annual Report, which may be obtained without charge by writing
to the address or calling the number set forth on the cover page of this
Prospectus.
<TABLE>
<CAPTION>
PREMIER SMALL COMPANY STOCK FUND
FOR A CLASS A SHARE OUTSTANDING THROUGHOUT EACH YEAR OR PERIOD.
YEAR ENDED PERIOD ENDED
10/31/95 10/31/94*#
<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 investments 3.03 0.06
-------- --------
TOTAL FROM INVESTMENT OPERATIONS 3.05 0.07

-------- --------
Distributions
Dividends from net investment income (.03) ._
-------- --------
Net asset value, end of period $13.09 $10.07
======== ========
TOTAL RETURN 30.31% 0.70%
======== ========
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $1,359 $ 60
Ratio of operating expenses to average net assets 1.50% 1.50%
Ratio of net investment income to average net assets 0.10% 0.83%
Portfolio turnover rate 56% 8%
</TABLE>

*The Fund commenced selling Investor 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 period indicated.
#Prior to October 17, 1994, Mellon Bank served as the Fund's investment
manager. Effective October 17, 1994, Dreyfus began serving as the Fund's
investment manager.
Page 4
<TABLE>
<CAPTION>
PREMIER SMALL COMPANY STOCK FUND
FOR A CLASS B SHARE OUTSTANDING THROUGHOUT THE PERIOD.

PERIOD ENDED
10/31/95*
<S> <C>
Net asset value, beginning of period $9.49
--------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (0.03)
Net realized and unrealized gain on investments 3.59
--------
TOTAL FROM INVESTMENT OPERATIONS 3.56
--------
Net asset value, end of period $13.05
--------
--------
TOTAL RETURN 37.51%
========
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $1,025
Ratio of operating expenses to average net assets 2.25%**
Ratio of net investment income to average net assets (.65%)**
Portfolio turnover rate 56%

* The Fund commenced operations on September 2, 1994. The Fund commenced selling Class B shares on December 19, 1994.
Total represents aggregate total return for the period indicated.
** Annualized.
Page 5

PREMIER SMALL COMPANY STOCK FUND
FOR A CLASS C SHARE OUTSTANDING THROUGHOUT THE PERIOD.
PERIOD ENDED
10/31/95*
Net asset value, beginning of period $9.49
--------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (0.01)
Net realized and unrealized gain on investments 3.56
--------
TOTAL FROM INVESTMENT OPERATIONS 3.55
--------
DISTRIBUTIONS:
Dividends from net investment income --
--------
Net asset value, end of period $13.04
--------
--------
TOTAL RETURN 37.41%
========
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $147
Ratio of operating expenses to average net assets 2.25%**
Ratio of net investment income to average net assets (0.65%)**
Portfolio turnover rate 56%

* The Fund commenced operations on September 2, 1994. The Fund commenced offering Class C shares on December 19, 1994.
Total represents aggregate total return for the period indicated.
** Annualized.
</TABLE>
Page 6
<TABLE>
<CAPTION>
PREMIER SMALL COMPANY STOCK FUND
FOR A CLASS R SHARE OUTSTANDING THROUGHOUT EACH YEAR OR PERIOD.
FISCAL YEAR ENDED PERIOD ENDED
10/31/95 10/31/94*#
<S> <C> <C>
Net asset value, beginning of period $10.07 $10.00
-------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.04 0.02
Net realized and unrealized gain on investments 3.04 0.05
-------- --------
TOTAL FROM INVESTMENT OPERATIONS 3.08 0.07
-------- --------
Distributions
Dividends from net investment income (0.05) ._
Net asset value, end of period $13.10 $10.07
======== ========
TOTAL RETURN 30.70% 0.70%
======== ========
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $44,091 $10,747
Ratio of operating expenses to average net assets 1.25% 1.25%
Ratio of net investment income to average net assets 0.35% 1.08%
Portfolio turnover rate 56% 8%
</TABLE>

*The Fund 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 period indicated.
#Prior to October 17, 1994, Mellon Bank served as the Fund's investment
manager. Effective October 17, 1994, Dreyfus began serving as the Fund's
investment manager.
ALTERNATIVE PURCHASE METHODS
The Fund offers you four methods of purchasing Fund shares;
you may choose the Class of shares that best suits your needs, given the
amount of your purchase, the length of time you expect to hold your
shares and any other relevant circumstances. Each Fund share represents
an identical pro rata interest in the Fund's investment portfolio.

lower dividends than Class A. Approximately six years after the date of
purchase (or in the case of Class B shares of the Fund acquired through
exchange of Class B shares of another fund advised by Dreyfus,
the date of purchase of the original Class B shares of the
fund exchanged), Class B shares will automatically convert to Class A
shares, based on the relative net asset values for shares of each such
Class, and will no longer be subject to the service plan fee of Class B
shares and will be subject to the lower distribution fee of Class A
shares. (Such conversion is subject to suspension by the Board of
Directors if adverse tax consequences might result.) Class B shares that
have been acquired through the reinvestment of dividends and other
distributions will be converted on a pro rata basis together with other
Class B shares, in the proportion that a shareholder's Class B shares
converting to Class A shares bears to the total Class B shares not
acquired through the reinvestment of dividends and other distributions.

Class R shares generally may not be purchased directly by
individuals, although eligible institutions may purchase Class R shares
for accounts maintained by individuals. Class R shares are sold at net
asset value per share primarily to Banks acting on behalf of customers
having a qualified trust or investment account or relationship at such
institution, or to customers who have received and hold shares of the
Fund distributed to them by virtue of such an account or relationship.
Class A, Class B and Class C shares are primarily sold to retail
investors by Agents that have entered into Agreements with the
Distributor.

DESCRIPTION OF THE FUND
INVESTMENT OBJECTIVE
The Fund seeks to consistently exceed the total return
performance of the Russell 2500trademark Stock Index while maintaining a
similar level of risk. There can be no assurance that the Fund will meet
its stated investment objective.
Page 8

MANAGEMENT POLICIES
The Fund pursues its investment objective by investing in a
portfolio of small to medium sized primarily domestic companies which
offer above-average growth potential. Small to medium sized companies
will include those U.S. companies with market capitalization generally
ranging in value from $100 million to $1.5 billion. Investments in small
to medium sized companies may involve greater risks because the operating
and investment performance histories of these companies generally are
more limited than those of companies with larger capitalization, and
their securities often experience higher price volatility. The Fund will
normally invest at least 65% of its total assets in small to medium sized
domestic companies. The Fund may also invest in (1) securities of foreign
companies, (2) American Depository Receipts ("ADRs"), (3) stock index
futures and options contracts, (4) repurchase agreements, (5) reverse
repurchase agreements, (6) when-issued transactions, (7) commercial paper
and (8) initial public offerings.
Individual security selection is the foundation of the Fund's
investment approach. Consistency of returns which exceed the Russell
2500trademark Stock Index and stability of the Fund's asset value
relative to the Russell 2500trademark Stock Index are primary goals of the
investment process. Information from diverse sources is collected and used
to construct valuation models which are combined to form a comprehensive
computerized valuation ranking system identifying common stocks which
appear to be over or under valued. These models include measures of
actual and estimated earnings changes and relative value based on
dividend discount calculations, price to book, price to earnings and
return on equity ratios. The computerized ranking system incorporates
information from the most recent time period available to the system and
categorizes individual securities within each sector or industry
according to relative attractiveness. Dreyfus then applies fundamental
analysis to select the most attractive of the top-rated securities and to
determine those issues that should be sold.
This investment process utilizes disciplined control of fund
risk and a process of rigorous security selection. Risk is managed by
controlling the structure of the Fund so that characteristics of the
Fund's portfolio securities such as economic sector, industry exposure,
growth, size, volatility and quality are maintained similar to those of
the Russell 2500trademark Stock Index at all times. In addition, the
Fund's managers do not attempt to time the financial market, or use
sector or industry rotation techniques.
The Russell 2500trademark Stock Index, published by Frank
Russell Company, is comprised of the bottom 500 companies in the Russell
1000trademark Index as ranked by total market capitalization, and all
2,000 stocks in the Russell 2000trademark Index. The Russell 2000trademark
Index consists of the smallest 2,000 companies in the Russell Index
3000trademark, representing approximately 10% of the Russell 3000trademark
Index total market capitalization. The Russell 3000trademark Index is
composed of 3,000 large U.S. companies, as determined by market
capitalization. The Russell 1000trademark Index consists of the 1,000
largest companies in the Russell 3000trademark Index. Market
capitalization of the stocks contained in the Russell 2500trademark Index
typically ranges from $100 million to $1.5 billion.
INVESTMENT TECHNIQUES
In connection with its investment objective and policies, the
Fund may employ, among others, the following investment techniques:
BORROWING. The Fund is authorized, within specified limits,
to borrow money for temporary administrative purposes and to pledge its
assets in connection with such borrowings.
SECURITIES LENDING. To increase return on Fund securities,
the Fund may lend its portfolio securities to broker-dealers and other
institutional investors pursuant to agreements requiring that the loans
be continuously secured by collateral equal at all times in value to at
least the market value of the securities loaned. There may be risks of
delay in receiving additional collateral or in recovering the securities
loaned or even a loss of rights to the collateral should the borrower of
the securities fail financially. Securities loans, however, are made only
to borrow-
Page 9

ers deemed by Dreyfus to be of good standing and when, in its
judgment, the income to be earned from the loan justifies the attendant
risks.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS. To secure
advantageous prices or yields, the Fund may purchase U.S. Government
Securities on a when-issued basis or may purchase or sell securities for
delayed delivery. In such transactions, delivery of the securities occurs
beyond the normal settlement periods, but no payment or delivery is made
by the Fund prior to the actual delivery or payment by the other party to
the transaction. The purchase of securities on a when-issued or delayed
delivery basis involves the risk that, as a result of an increase in
yields available in the marketplace, the value of the securities
purchased will decline prior to the settlement date. The sale of
securities for delayed delivery involves the risk that the prices
available in the market on the delivery date may be greater than those
obtained in the sale transaction. The Fund will establish a segregated
account consisting of cash, U.S. Government Securities or other
high-grade debt obligations in an amount at least equal at all times to
the amounts of its when-issued and delayed delivery commitments.
MASTER/FEEDER OPTION. The Company may in the future seek to
achieve the Fund's investment objective by investing all of the Fund's
net investable assets in another investment company having the same
investment objective and substantially the same investment policies and
restrictions as those applicable to the Fund. Shareholders of the Fund
will be given at least 30 days prior notice of any such investment. Such
investment would be made only if the Company's Board of Directors
determines it to be in the best interest of the Fund and its
shareholders. In making that determination, the Board of Directors will
consider, among other things, the benefits to shareholders and/or the
opportunity to reduce costs and achieve operational efficiencies.
Although the Fund believes that the Board of Directors will not approve
an arrangement that is likely to result in higher costs, no assurance is
given that costs will be materially reduced if this option is
implemented.
FUTURES, OPTIONS AND OTHER DERIVATIVE INSTRUMENTS. The Fund
may purchase and sell various financial instruments ("Derivative
Instruments"), such as financial futures contracts (such as interest
rate, index and foreign currency futures contracts), options (such as
options on securities, indices, foreign currencies and futures
contracts), forward currency contracts and interest rate, equity index
and currency swaps, caps, collars and floors. The index Derivative
Instruments the Fund may use may be based on indices of U.S. or foreign
equity or debt securities. These Derivative Instruments may be used, for
example, to preserve a return or spread, to lock in unrealized market
value gains or losses, to facilitate or substitute for the sale or
purchase of securities, to manage the duration of securities, to alter
the exposure of a particular investment or portion of the Fund's
portfolio to fluctuations in interest rates or currency rates, to uncap a
capped security or to convert a fixed rate security into a variable rate
security or a variable rate security into a fixed rate security.
The Fund's ability to use these instruments may be limited by
market conditions, regulatory limits and tax considerations. The Fund
might not use any of these strategies and there can be no assurance that
any strategy that is used will succeed. See the SAI for more information
regarding these instruments and the risks relating thereto.
The Fund may not purchase put or call options that are traded
on a national stock exchange in an amount exceeding 5% of its net assets.
FOREIGN CURRENCY TRANSACTIONS. The Fund may engage in
currency exchange transactions on a spot or forward basis. The Fund may
exchange foreign currency on a spot basis at the spot rate then
prevailing for purchasing or selling foreign currencies in the foreign
exchange market.
The Fund may also enter into forward currency contracts for
the purchase or sale of a specified currency at a specified future date
either with respect to specific transactions or portfolio positions in
order to minimize the risk to the Fund from adverse changes in the
relationship between the U.S. dollar and foreign currencies. For example,
when the Fund anticipates purchasing or selling a security denominated in
a foreign currency, the Fund
Page 10

may enter into a forward contract in order to set the exchange rate at
which the transaction will be made. The Fund may also enter into a forward
contract to sell an amount of foreign currency approximating the value of
some or all of the Fund's securities positions denominated in that
currency.
Forward currency contracts may substantially change the
Fund's investment exposure to changes in currency exchange rates and
could result in losses if currencies do not perform as Dreyfus
anticipates. There is no assurance that Dreyfus' use of forward currency
contracts will be advantageous to the Fund or that it will hedge at an
appropriate time.
RISKS OF DERIVATIVE INSTRUMENTS. The use of Derivative
Instruments involves special risks, including: (1) possible imperfect or
no correlation between price movements of the portfolio investments (held
or intended to be purchased) involved in the transactions and price
movements of the Derivative Instruments involved in the transaction; (2)
possible lack of a liquid secondary market for any particular Derivative
Instrument at a particular time; (3) the need for additional portfolio
management skills and techniques; (4) losses due to unanticipated market
price movements; (5) the fact that, while such strategies can reduce the
risk of loss, they can also reduce the opportunity for gain, or even
result in losses, by offsetting favorable price movements in portfolio
investments; (6) incorrect forecasts by Dreyfus concerning interest or
currency exchange rates or direction of price fluctuations of the
investment involved in the transaction, which may result in the strategy
being ineffective; (7) loss of premiums paid by the Fund on options it
purchases; and (8) the possible inability of the Fund to purchase or
sell a portfolio security at a time when it would otherwise be favorable
for it to do so, or the need to sell a portfolio security at a
disadvantageous time, due to the need for the Fund to maintain "cover" or
to segregate securities in connection with such transactions and the
possible inability of the Fund to close out or liquidate its positions.
Dreyfus may use Derivative Instruments for hedging purposes
(to adjust the risk characteristics of the Fund's portfolio) and may use
these instruments to adjust the return characteristics of the Fund's
portfolio of investments. This can increase the investment risk. If
Dreyfus judges market conditions incorrectly or employs a strategy that
does not correlate well with the Fund's investments, these techniques
could result in a loss, regardless of whether the intent was to reduce
risk or increase return. These techniques may increase the volatility of
the Fund and may involve a small investment of cash relative to the
magnitude of the risk assumed. In addition, these techniques could result
in a loss if the counterparty to the transaction does not perform as
promised or if there is not a liquid secondary market to close out a
position that the Fund has entered into.
Options and futures transactions may increase portfolio
turnover rates, which results in correspondingly greater commission
expenses and transaction costs, and may result in certain tax
consequences.
CERTAIN PORTFOLIO SECURITIES
AMERICAN DEPOSITORY RECEIPTS. The Fund may invest in U.S.
dollar-denominated ADRs. ADRs typically are issued by an American bank or
trust company and evidence ownership of underlying securities issued by
foreign companies. ADRs are traded in the United States on national
securities exchanges or in the over-the-counter market.
COMMERCIAL PAPER. The Fund may invest in commercial paper.
These instruments are short-term obligations issued by banks and
corporations that have maturities ranging from 2 to 270 days. Each
instrument may be backed only by the credit of the issuer or may be
backed by some form of credit enhancement, typically in the form of a
guarantee by a commercial bank. Commercial paper backed by guarantees of
foreign banks may involve additional risk due to the difficulty of
obtaining and enforcing judgments against such banks and the generally
less restrictive regulations to which such banks are subject. The Fund
will only invest in commercial paper of U.S. and foreign companies rated
at the time of purchase at least A-1 by
Page 11

Standard & Poor's, Prime-1 by Moody's Investors Service, F-1 by Fitch
Investors Service, Inc., Duff 1 by Duff & Phelps, Inc., or A1 by IBCA,
Inc.
FOREIGN SECURITIES. The Fund may purchase securities of
foreign issuers and may invest in obligations of foreign branches of
domestic banks and domestic branches of foreign banks. Investment in
foreign securities presents certain risks, including those resulting from
fluctuations in currency exchange rates, revaluation of currencies,
adverse political and economic developments and the possible imposition
of currency exchange blockages or other foreign governmental laws or
restrictions, reduced availability of public information concerning
issuers, and the fact that foreign issuers are not generally subject to
uniform accounting, auditing and financial reporting standards or to
other regulatory practices and requirements comparable to those
applicable to domestic issuers. Moreover, securities of many foreign
issuers may be less liquid and their prices more volatile than those of
comparable domestic issuers. In addition, with respect to certain foreign
countries, there is the possibility of expropriation, confiscatory
taxation and limitations on the use or removal of funds or other assets of
the Fund, including withholding of dividends. Foreign securities may be
subject to foreign government taxes that would reduce the yield on such
securities.
ILLIQUID SECURITIES. The Fund will not knowingly invest more
than 15% of the value of its net assets in illiquid securities, including
time deposits and repurchase agreements having maturities longer than
seven days. Securities that have readily available market quotations are
not deemed illiquid for purposes of this limitation (irrespective of any
legal or contractual restrictions on resale.) The Fund may invest in
commercial obligations issued in reliance on the so-called "private
placement" exemption from registration afforded by Section 4(2) of the
Securities Act of 1933, as amended ("Section 4(2) paper"). The Fund may
also purchase securities that are not registered under the Securities Act
of 1933, as amended, but that can be sold to qualified institutional
buyers in accordance with Rule 144A under that Act ("Rule 144A
securities"). Liquidity determinations with respect to Section 4(2) paper
and Rule 144A securities will be made by the Board of Directors or by
Dreyfus pursuant to guidelines established by the Board of Directors. The
Board or Dreyfus will consider availability of reliable price information
and other relevant information in making such determinations. Section
4(2) paper is restricted as to disposition under the federal securities
laws, and generally is sold to institutional investors, such as the Fund,
that agree that they are purchasing the paper for investment and not with
a view to public distribution. Any resale by the purchaser must be
pursuant to registration or an exemption therefrom. Section 4(2) paper
normally is resold to other institutional investors like the Fund through
or with the assistance of the issuer or investment dealers who make a
market in the Section 4(2) paper, thus providing liquidity. Rule 144A
securities generally must be sold to other qualified institutional
buyers. If a particular investment in Section 4(2) paper or Rule 144A
securities is not determined to be liquid, that investment will be
included within the percentage limitation on investment in illiquid
securities. The ability to sell Rule 144A securities to qualified
institutional buyers is a recent development and it is not possible to
predict how this market will mature. Investing in Rule 144A securities
could have the effect of increasing the level of Fund illiquidity to the
extent that qualified institutional buyers become, for a time,
uninterested in purchasing these securities.
REPURCHASE AGREEMENTS. The Fund may enter into repurchase
agreements. A repurchase agreement involves the purchase of a security by
the Fund and a simultaneous agreement (generally with a bank or
broker-dealer) to repurchase that security from the Fund at a specified
price and date or upon demand. This technique offers a method of earning
income on idle cash. A risk associated with repurchase agreements is the
failure of the seller to repurchase the securities as agreed, which may
cause the Fund to suffer a loss if the market value of such securities
declines before they can be liquidated on the open market. Repurchase
agreements with a duration of more than seven days are considered
illiquid securities and are subject to the associated limits discussed
above.
Page 12

REVERSE REPURCHASE AGREEMENTS. The Fund may enter into
reverse repurchase agreements to meet redemption requests where the
liquidation of Fund securities is deemed by Dreyfus to be
disadvantageous. Under a reverse repurchase agreement, the Fund: (i)
transfers possession of fund securities to a bank or broker-dealer in
return for cash in an amount equal to a percentage of the securities'
market value; and (ii) agrees to repurchase the securities at a future
date by repaying the cash with interest. Cash or liquid high-grade debt
securities held by the Fund equal in value to the repurchase price
including any accrued interest will be maintained in a segregated account
while a reverse repurchase agreement is in effect.
INITIAL PUBLIC OFFERINGS ("IPOS"). The Fund may invest in an
IPO, a corporation's first offering of stock to the public. Shares are
given a market value reflecting expectations for the corporation's future
growth. Special rules of the NASD apply to the distribution of IPOs.
Corporations offering IPOs generally have a limited operating history and
may involve greater risk.
OTHER INVESTMENT COMPANIES. The Fund may invest in securities
issued by other investment companies to the extent that such investments
are consistent with the Fund's investment objective and policies and
permissible under the Investment Company Act of 1940, as amended (the
"1940 Act"). As a shareholder of another investment company, the Fund
would bear, along with other shareholders, its pro rata portion of the
other investment company's expenses, including advisory fees. These
expenses would be in addition to the advisory and other expenses that the
Fund bears directly in connection with its own operations.
U.S. GOVERNMENT SECURITIES. The Fund may invest in
obligations issued or guaranteed as to both principal and interest by the
U.S. Government or backed by the full faith and credit of the United
States ("U.S. Government Securities"). In addition to direct obligations
of the U.S. Treasury, U.S. Government Securities include securities
issued or guaranteed by the Federal Housing Administration, Farmers Home
Administration, Export-Import Bank of the United States, Small Business
Administration, General Services Administration and Maritime
Administration. Investments may also be made in U.S. Government
obligations that do not carry the full faith and credit guarantee, such
as those issued by the Federal National Mortgage Association, Federal
Home Loan Mortgage Corporation or other instrumentalities.
PORTFOLIO TURNOVER. While securities are purchased for the
Fund on the basis of potential for capital appreciation and not for
short-term trading profits, the Fund's turnover rate may exceed 100%. A
portfolio turnover rate of 100% would occur, for example, if all the
securities held by the Fund were replaced once in a period of one year. A
higher rate of portfolio turnover involves correspondingly greater
brokerage commissions and other expenses that must be borne directly by
the Fund and, thus, indirectly by its shareholders. In addition, a high
rate of portfolio turnover may result in the realization of larger
amounts of short-term capital gains that, when distributed to the Fund's
shareholders, are taxable to them as ordinary income. Nevertheless,
security transactions for the Fund will be based only upon investment
considerations and will not be limited by any other considerations when
Dreyfus deems it appropriate to make changes in the Fund's assets.
LIMITING INVESTMENT RISKS. The Fund is subject to a number of
investment limitations. Certain limitations are matters of fundamental
policy and may not be changed without the affirmative vote of the holders
of a majority of the Fund's outstanding shares. As a fundamental policy,
the Fund may not (i) borrow money in an amount exceeding 331/3% of the
Fund's total assets at the time of borrowing; (ii) make loans or lend
securities in excess of 331/3% of the Fund's total assets; (iii) purchase,
with respect to 75% of the Fund's total assets, securities of any one
issuer representing more than 5% of the Fund's total assets (other than
securities issued or guaranteed by the U.S. Government, its agencies and
instrumentalities) or more than 10% of that issuer's outstanding voting
securities; and (iv) invest more than 25% of the value of the Fund's
total assets in the securities of one or more issuers conducting their
principal activities in the same industry; provided that there shall be
no such limitation on investments in obligations of the U.S. Government,
state and municipal governments and their political
Page 13

subdivisions or investments in domestic banks, including U.S. branches of
foreign banks and foreign branches of U.S. banks. The SAI describes all of
the Fund's fundamental and non-fundamental restrictions.
The investment objective, policies, restrictions, practices
and procedures of the Fund, unless otherwise specified, may be changed
without shareholder approval. If the Fund's investment objective,
policies, restrictions, practices or procedures change, shareholders
should consider whether the Fund remains an appropriate investment in
light of the shareholder's then-current position and needs.
In order to permit the sale of the Fund's shares in certain
states, the Fund may make commitments more restrictive than the
investment policies and restrictions described in this Prospectus and the
SAI. Should the Fund determine that any such commitment is no longer in
the best interest of the Fund, it may consider terminating sales of its
shares in the states involved.
MANAGEMENT OF THE FUND

The Fund is managed by two portfolio managers, James
Wadsworth and Anthony Galise. Each individual is employed by Dreyfus as a
portfolio manager for the Fund.

Mr. Wadsworth has managed the Fund since its commencement of
operations and has been Chief Investment Officer for Laurel Capital
Advisors since October 1990. Mr. Wadsworth also is a First Vice President
for Mellon Bank, where he has been employed since 1977.

Anthony Galise is a Vice President and Senior Equity Analyst
at Mellon Bank. He also is a member of the Boston and Pittsburgh
Societies of Financial Analysts. Mr. Galise joined Mellon Bank in 1993.
Prior thereto, he was a Vice President for Alta Energy Corporation. Mr.
Galise is a CFA and holds a B.A. in history and an M.B.A in finance from
Suffolk University.

Mellon is a publicly owned multibank holding company
incorporated under Pennsylvania law in 1971 and registered under the Bank
Holding Company Act of 1956, as amended. Mellon provides a comprehensive
range of financial products and services in domestic and selected
international markets. Mellon is among the twenty-five largest bank
holding companies in the United States based on total assets. Mellon's
principal wholly-owned subsidiaries are Mellon Bank, Mellon Bank (DE)
National Association, Mellon Bank (MD), The Boston Company, Inc., AFCO
Credit Corporation and a number of companies known as Mellon Financial
Services Corporations. Through its subsidiaries, including Dreyfus,
Mellon managed approximately $226 billion in assets as of September 30,
1996, including $85 billion in mutual fund assets. As of September 30,
1996, Mellon, through various subsidiaries, provided non-investment
services, such as custodial or administration services, for more than
$905 billion in assets, including approximately $60 billion in mutual
fund assets.

Under the Investment Management Agreement, the Fund has
agreed to pay Dreyfus a monthly fee at the annual rate of 1.25% of the
value of the Fund's average daily net assets. Dreyfus pays all of the
Fund's expenses, except brokerage fees, taxes, interest, Rule 12b-1 fees
Page 14

(if applicable) and extraordinary expenses. In order to compensate
Dreyfus for paying virtually all of the Fund's expenses, the Fund's
investment management fee is higher than the investment advisory fees
paid by most investment companies. Most, if not all, such companies also
pay for additional non-investment advisory expenses that are not paid by
such companies' investment advisers. From time to time, Dreyfus may waive
(either voluntarily or pursuant to applicable state limitations) a portion
of the investment management fees payable by the Fund. For the fiscal year
ended October 31, 1995, the Fund paid Dreyfus 1.25% of its average daily
net assets in investment management fees, less fees and expenses of the
non-interested Directors (including counsel fees).
For the fiscal year ended October 31, 1995, total operating
expenses (excluding Rule 12b-1 fees, as applicable) of the Fund for Class
A and Class R shares were 1.25%, of the average daily net assets for each
of the Fund's Class A and Class R shares. For the period from December
19, 1994 through October 31, 1995, total operating expenses (excluding
Rule 12b-1 fees) of the Fund for Class B and Class C shares were 1.25%
(annualized) of the average daily net assets for the Fund's Class B and
Class C shares.
In addition, Class A, B and C shares may be subject to
certain distribution and shareholder servicing fees. See "Distribution
Plans (Class A Plan and Class B and C Plan)."
In allocating brokerage transactions for the Fund, Dreyfus
seeks to obtain the best execution of orders at the most favorable net
price. Subject to this determination, Dreyfus may consider, among other
things, the receipt of research services and/or the sale of shares of the
Fund or other funds managed, advised or administered by Dreyfus as
factors in the selection of broker-dealers to execute portfolio
transactions for the Fund. See "Portfolio Transactions" in the SAI.
Dreyfus may pay the Fund's distributor for shareholder
services from Dreyfus' own assets, including past profits but not
including the management fee paid by the Fund. The Fund's distributor may
use part or all of such payments to pay Agents in respect of these
services.
Dreyfus is authorized to allocate purchase and sale orders
for portfolio securities to certain financial institutions, including, in
the case of agency transactions, financial institutions that are
affiliated with Dreyfus or Mellon Bank or that have sold shares of the
Fund, if Dreyfus believes that the quality of the transaction and the
commission are comparable to what they would be with other qualified
brokerage firms. From time to time, to the extent consistent with its
investment objective, policies and restrictions, the Fund may invest in
securities of companies with which Mellon Bank has a lending
relationship.

CUSTODIAN; TRANSFER AND DIVIDEND DISBURSING AGENT; AND
SUB-ADMINISTRATOR -- Mellon Bank, One Mellon Bank Center, Pittsburgh,
Pennsylvania 15258 is the Fund's custodian. The Fund's transfer and
dividend disbursing agent is Dreyfus Transfer, Inc. (the "Transfer
Agent"), a wholly-owned subsidiary of Dreyfus, located at One American
Express Plaza, Providence, Rhode Island 02903. Premier Mutual Fund
Services, Inc. serves as the Fund's sub-administrator and, pursuant to a
Sub-Administration Agreement with Dreyfus, provides various
administrative and corporate secretarial services to the Fund.
HOW TO BUY FUND SHARES
GENERAL. Class A shares, Class B shares and Class C shares
may be purchased only by clients of Agents, except that full-time or
part-time employees or directors of Dreyfus or any of its affiliates or
subsidiaries, Board members of a fund advised by Dreyfus, including
members of the Company's Board, or the spouse or minor child of any of
the foregoing may purchase Class A shares directly through the
Distributor. Subsequent purchases may be sent directly to the Transfer
Agent or your Agent.
Page 15

You may purchase Fund shares by check or wire, or through the
TELETRANSFER Privilege described below. Checks should be made payable to
"The Dreyfus Family of Funds," or if for Dreyfus retirement plan
accounts, to "The Dreyfus Trust Company, Custodian." Payments which are
mailed should be sent to Premier Small Company Stock Fund, P.O. Box 6587,
Providence, Rhode Island 02940-6587. If you are opening a new account,
please enclose your Account Application indicating which Class of shares
is being purchased. For subsequent investments, your Fund account number
should appear on the check and an investment slip should be enclosed. For
Dreyfus retirement plan accounts, payments which are mailed should be
sent to The Dreyfus Trust Company, Custodian, P.O. Box 6427, Providence,
Rhode Island 02940-6427. Neither initial nor subsequent investments
should be made by third party check.

Wire payments may be made if your bank account is in a
commercial bank that is a member of the Federal Reserve System or any
other bank having a correspondent bank in New York City. Immediately
available funds may be transmitted by wire to Boston Safe Deposit and
Trust Company, together with the Fund's DDA #044350/Premier Small Company
Stock Fund and applicable class for purchase of Fund shares in your name.

Page 16

Subsequent investments also may be made by electronic
transfer of funds from an account maintained in a bank or other domestic
financial institution that is an Automated Clearing House ("ACH") member.
You must direct the institution to transmit immediately available funds
through the ACH System to Boston Safe Deposit and Trust Company with
instructions to credit your Fund account. The instructions must specify
your Fund account registration and Fund account number PRECEDED BY THE
DIGITS "4410" for Class A shares, "4420" for Class B shares, "4430" for
Class C shares and "4960" for Class R shares.
The Distributor may pay dealers a fee of up to 0.5% of the
amount invested through such dealers in Fund shares by employees
participating in qualified or non-qualified employee benefit plans or
other programs where (i) the employers or affiliated employers
maintaining such plans or programs have a minimum of 250 employees
eligible for participation in such plans or programs or (ii) such plan's
or program's aggregate investment in the Dreyfus Family of Funds or
certain other products made available by the Distributor to such plans or
programs exceeds one million dollars ("Eligible Benefit Plans"). The
determination of the number of employees eligible for participation in a
plan or program shall be made on the date Fund shares are first purchased
by or on behalf of employees participating in such plan or program and on
each subsequent January 1st. All present holdings of shares of funds in
the Dreyfus Family of Funds by Eligible Benefit Plans will be aggregated
to determine the fee payable with respect to each purchase of Fund
shares. The Distributor reserves the right to cease paying these fees at
any time. The Distributor will pay such fees from its own funds, other
than amounts received from the Fund, including past profits or any other
source available to it.
Federal regulations require that you provide a certified TIN
upon opening or reopening an account. See "Dividends, Other Distributions
and Taxes" and the Fund's Account Application for further information
concerning this requirement. Failure to furnish a certified TIN to the
Fund could subject you to a $50 penalty imposed by the Internal Revenue
Service (the "IRS").
NET ASSET VALUE PER SHARE ("NAV"). An investment portfolio's
NAV refers to the worth of one share. The NAV for shares of each Class of
the Fund is computed by adding, with respect to such Class of shares, the
value of the Fund's investments, cash and other assets attributable to
that Class, deducting liabilities of the Class and dividing the result by
number of shares of that Class outstanding. Shares of each Class of the
Fund are offered on a continuous basis. The valuation of assets for
determining NAV for the Fund may be summarized as follows:
The portfolio securities of the Fund, except as otherwise
noted, listed or traded on a stock exchange, are valued at the latest
sale price. If no sale is reported, the mean of the latest bid and asked
prices is used. Securities traded over-the-counter are priced at the mean
of the latest bid and asked prices but will be valued at the last sale
price if required by regulations of the SEC. When market quotations are
not readily available, securities and other assets are valued at a fair
value as determined in good faith in accordance with procedures
established by the Board of Directors.
Page 17

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.
NAV is determined on each day that the New York Stock
Exchange ("NYSE") is open (a "business day"), as of the close of business
of the regular session of the NYSE (usually
4 p.m. Eastern Time). Investments and requests to exchange or
redeem shares received by the Fund in proper form before such close of
business are effective on, and will receive the price determined on, that
day (except investments made by electronic funds transfer, which are
effective two business days after your call). Investment, exchange and
redemption requests received after such close of business are effective
on, and receive the share price determined on, the next business day.
Orders for the purchase of Fund shares received by dealers by
the close of trading on the floor of the NYSE on any business day and
transmitted to the Distributor or its designee by the close of its
business day (normally 5:15 p.m., New York time) will be based on the
public offering price per share determined as of the close of trading on
the floor of the NYSE on that day. Otherwise, the orders will be based on
the next determined public offering price. It is the dealer's
responsibility to transmit orders so that they will be received by the
Distributor or its designee before the close of its business day.

CLASS A SHARES. The public offering price of Class A shares
is the NAV of that Class, plus, except for shareholders beneficially
owning Class A shares on November 30, 1996, a sales load as shown below:

<TABLE>
<CAPTION>
Total Sales Load
--------------------------------------
As a % of As a % of Dealers' Reallowance
Offering Price Net Asset Value as a % of
Amount of Transaction Per Share Per Share Offering Price
----------------------- ---------------- ---------------- --------------------------
<S> <C> <C> <C>
Less than $50,000......... 5.75 6.10 5.00
$50,000 to less than $100,000 4.50 4.70 3.75
$100,000 to less than $250,000 3.50 3.60 2.75
$250,000 to less than $500,000 2.50 2.60 2.25
$500,000 to less than $1,000,000 2.00 2.00 1.75
$1,000,000 or more........ 0 0 0

Total Sales Load
--------------------------------------
As a % of As a % of Dealers' Reallowance
Offering Price Net Asset Value as a % of
Amount of Transaction Per Share Per Share Offering Price
----------------------- ---------------- ---------------- --------------------------
Less than $50,000......... 4.50 4.70 4.25
$50,000 to less than $100,000 4.00 4.20 3.75
$100,000 to less than $250,000 3.00 3.10 2.75
$250,000 to less than $500,000 2.50 2.60 2.25
$500,000 to less than $1,000,000 2.00 2.00 1.75
$1,000,000 or more........ 0 0 0
</TABLE>

the Fund's Prospectus entitled "How to Redeem Fund Shares _ Contingent
Deferred Sales Charge _ Class B" (other than the amount of the CDSC and
its time periods) and "How to Redeem Fund Shares_Waiver of CDSC" are
applicable to the Class A shares subject to a CDSC. Letter of Intent and
Right of Accumulation apply to such purchases of Class A shares.

Class A shares will be offered at NAV without a sales load to
employees participating in Eligible Benefit Plans. Class A shares also
may be purchased (including by exchange) at NAV without a sales load for
Dreyfus-sponsored IRA "Rollover Accounts" with the distribution proceeds
from a qualified retirement plan or a Dreyfus-sponsored 403(b)(7) plan,
provided that, at the time of such distribution, such qualified
retirement plan or Dreyfus-sponsored 403(b)(7) plan (a) met the
requirements of an Eligible Benefit Plan and all or a portion of such
plan's assets were invested in funds in the Dreyfus Family of Funds or
certain other products made available by the Distributor to such plans or
(b) invested all of its assets in certain funds in the Premier Family of
Funds or the Dreyfus Family of Funds or certain other products made
available by the Distributor to such plans.
Class A shares may be purchased at NAV through certain
broker-dealers and other financial institutions which have entered into
an agreement with the Distributor, which includes a requirement that such
shares be sold for the benefit of clients participating in a "wrap
account" or a similar program under which such clients pay a fee to such
broker-dealer or other financial institution.
Class A shares also may be purchased at NAV, subject to
appropriate documentation, through a broker-dealer or other financial
institution with the proceeds from the redemption of shares of a
registered open-end management investment company not managed by Dreyfus
or its affiliates. The purchase of Class A shares of the Fund must be
made within 60 days of such redemption and the shareholder must have
either (i) paid an initial sales charge or a CDSC or (ii) been obligated
to pay at any time during the holding period, but did not actually pay on
redemption, a deferred sales charge with respect to such redeemed shares.
Class A shares also may be purchased at NAV, subject to
appropriate documentation, by (i) qualified separate accounts maintained
by an insurance company pursuant to the laws of any State or territory
of the United States, (ii) a State, county or city or instrumentality
thereof, (iii) a charitable organization (as defined in Section 501(c)(3)
of the Code) investing $50,000 or more in Fund shares and (iv) a
charitable remainder trust (as defined in Section 501(c)(3) of the Code).
The dealer reallowance may be changed from time to time but
will remain the same for all dealers. The Distributor, at its expense,
may provide additional promotional incentives to dealers that sell shares
of funds advised by Dreyfus which are sold with a sales load, such as
Class A shares. In some instances, those incentives may be offered only
to certain dealers who have sold or may sell significant amounts of
shares. Dealers receive a larger percentage of the sales load from the
Distributor than they receive for selling most other funds.
Page 19

CLASS B SHARES. The public offering price for Class B shares
is the NAV of that Class. No initial sales charge is imposed at the time
of purchase. A CDSC is imposed, however, on certain redemptions of Class
B shares as described under "How to Redeem Fund Shares." The Distributor
compensates certain Agents for selling Class B shares at the time of
purchase from the Distributor's own assets. The proceeds of the CDSC and
the distribution fee, in part, are used to defray these expenses.
CLASS C SHARES. The public offering price for Class C shares
is the NAV of that Class. No initial sales charge is imposed at the time
of purchase. A CDSC is imposed, however, on redemptions of Class C shares
made within the first year of purchase. See "Class B shares" above and
"How to Redeem Fund Shares."
CLASS R SHARES. The public offering price for Class R shares
is the NAV of that Class.

RIGHT OF ACCUMULATION--CLASS A SHARES.--Reduced sales loads
apply to any purchase of Class A shares, shares of other funds in the
Premier Family of Funds, shares of certain other funds advised by Dreyfus
which are sold with a sales load and shares acquired by a previous
exchange of such shares (hereinafter referred to as "Eligible Funds"), by
you and any related "purchaser" as defined in the SAI, where the
aggregate investment, including such purchase, is $50,000 or more. If,
for example, you previously purchased and still hold Class A shares, or
shares of any other Eligible Fund or combination thereof, with an
aggregate current market value of $40,000 and subsequently purchase Class
A shares or shares of an Eligible Fund having a current value of $20,000,
the sales load applicable to the subsequent purchase would be reduced to
4.50% of the offering price. All present holdings of Eligible Funds may
be combined to determine the current offering price of the aggregate
investment in ascertaining the sales load applicable to each subsequent
purchase. Class A shares purchased by shareholders beneficially owning
Fund shares on November 30, 1996, but who opened their Fund accounts
after December 19, 1994, are subject to a different sales load schedule,
as described above under "Class A shares."

To qualify for reduced sales loads, at the time of purchase
you or your Agent must notify the Distributor if orders are made by wire,
or the Transfer Agent if orders are made by mail. The reduced sales load
is subject to confirmation of your holdings through a check of
appropriate records.
TELETRANSFER PRIVILEGE. You may purchase Fund shares (minimum
$500 and maximum $150,000 per day) by telephone if you have checked the
appropriate box and supplied the necessary information on the Fund's
Account Application or have filed a Shareholder Services Form with the
Transfer Agent. The proceeds will be transferred between the bank account
designated in one of these documents and your Fund account. Only a bank
account maintained in a domestic financial institution which is an ACH
member may be so designated. The Fund may modify or terminate this
privilege at any time or charge a service fee upon notice to
shareholders. No such fee currently is contemplated.

If you have selected the TELETRANSFER Privilege, you may
request a TeleTransfer purchase of Fund shares by calling 1-800-645-6561
or, if calling from overseas, 516-794-5452.

SHAREHOLDER SERVICES
The services and privileges described under this heading may
not be available to clients of certain Agents and some Agents may impose
certain conditions on their clients which are different from those
described in this Prospectus. You should consult your Agent in this
regard.
FUND EXCHANGES
You may purchase, in exchange for shares of a Class, shares
of the same Class of certain other funds managed or administered by
Dreyfus, to the extent such shares are offered for sale in your state of
residence. These funds have different investment objectives which may be
of interest to you. If you desire to use this service, please call
1-800-645-6561 to determine if it is available and whether any conditions
are imposed on its use. WITH RESPECT TO CLASS R SHARES
Page 20

HELD BY RETIREMENT PLANS, EXCHANGES MAY BE MADE ONLY BETWEEN A
SHAREHOLDER'S RETIREMENT PLAN ACCOUNT IN ONE FUND AND SUCH SHAREHOLDER'S
RETIREMENT PLAN ACCOUNT IN ANOTHER FUND.

To request an exchange, your Agent, acting on your behalf,
must give exchange instructions to the Transfer Agent in writing or by
telephone. Before any exchange, you must obtain and should review a copy
of the current prospectus of the fund into which the exchange is being
made. Prospectuses may be obtained by calling 1-800-645-6561. Except in
the case of personal retirement plans, the shares being exchanged must
have a current value of at least $500; furthermore, when establishing a
new account by exchange, the shares being exchanged must have a value of
at least the minimum initial investment required for the fund into which
the exchange is being made. The ability to issue exchange instructions by
telephone is given to all Fund shareholders automatically, unless you
check the relevant "No" box on the Account Application, indicating that
you specifically refuse this privilege. The Telephone Exchange Privilege
may be established for an existing account by written request, signed by
all shareholders on the account, or by a separate Shareholder Services
Form, available by calling 1-800-645-6561, or by oral request from any of
the authorized signatories on the account, by calling 1-800-645-6561. If
you previously have established the Telephone Exchange Privilege, you may
telephone exchange instructions (including over The Dreyfus Touch
Registration Mark Automated Telephone System) by calling 1-800-645-6561. If
calling from overseas, 516-794-5452. See "How to Redeem Fund Shares-
Procedures." Upon an exchange, the following shareholder services and
privileges, as applicable and where available, will be automatically carried
over to the fund into which the exchange is made: Telephone Exchange
Privilege, TELETRANSFER Privilege and the dividends and distributions
payment option (except for Dividend Sweep) selected by the investor.

Shares will be exchanged at the next determined NAV; however,
a sales load may be charged with respect to exchanges of Class A shares
into funds sold with a sales load. No CDSC will be imposed on Class B or
C shares at the time of an exchange; however, Class B or C shares
acquired through an exchange will be subject to the higher CDSC
applicable to the exchanged or acquired shares. The CDSC applicable on
redemption of the acquired Class B or C shares will be calculated from
the date of the initial purchase of the Class B or C shares exchanged, as
the case may be. If you are exchanging Class A shares into a fund that
charges a sales load, you may qualify for share prices which do not
include the sales load or which reflect a reduced sales load, if the
shares of the fund from which you are exchanging were: (a) purchased with
a sales load, (b) acquired by a previous exchange from shares purchased
with a sales load, or (c) acquired through reinvestment of dividends or
other distributions paid with respect to the foregoing categories of
shares. To qualify, at the time of the exchange your Agent must notify the
Distributor. Any such qualification is subject to confirmation of your
holdings through a check of appropriate records. See "Shareholder
Services" in the SAI. No fees currently are charged shareholders directly
in connection with exchanges, although the Fund reserves the right, upon
not less than 60 days written notice, to charge shareholders a nominal
fee in accordance with rules promulgated by the SEC. The Fund reserves
the right to reject any exchange request in whole or in part. The
availability of fund exchanges may be modified or terminated at any time
upon notice to shareholders.
The exchange of shares of one fund for shares of another is
treated for Federal income tax purposes as a sale of the shares given in
exchange by the shareholder and, therefore, an exchanging shareholder may
realize, or an exchange on behalf of a Retirement Plan which is not tax
exempt may result in, a taxable gain or loss.
AUTO-EXCHANGE PRIVILEGE
Auto-Exchange Privilege enables you to invest regularly (on a
semi-monthly, monthly, quarterly or annual basis), in exchange for shares
of the Fund, in shares of the same class of other funds in the Premier
Family of Funds or certain other funds in the Dreyfus Family of Funds of
Page 21

which you are currently an investor. WITH RESPECT TO CLASS R SHARES HELD
BY RETIREMENT PLANS, EXCHANGES PURSUANT TO THE AUTO-EXCHANGE PRIVILEGE
MAY BE MADE ONLY BETWEEN A SHAREHOLDER'S RETIREMENT PLAN ACCOUNT IN ONE
FUND AND SUCH SHAREHOLDER'S RETIREMENT PLAN ACCOUNT IN ANOTHER FUND. The
amount you designate, which can be expressed either in terms of a
specific dollar or share amount ($100 minimum), will be exchanged
automatically on the first and/or fifteenth day of the month according to
the schedule you have selected. Shares will be exchanged at the
then-current NAV; however, a sales load may be charged with respect to
exchanges of Class A shares into funds sold with a sales load. No CDSC
will be imposed on Class B or C shares at the time of an exchange;
however, Class B or C shares acquired through an exchange will be subject
to the higher CDSC applicable to the exchanged or acquired shares. The
CDSC applicable on redemption of the acquired Class B or C shares will be
calculated from the date of the initial purchase of the Class B or C
shares exchanged, as the case may be. See "Shareholder Services" in the
SAI. The right to exercise this Privilege may be modified or canceled by
the Fund or the Transfer Agent. You may modify or cancel your exercise of
this Privilege at any time by mailing written notification to Premier
Small Company Stock Fund, P.O. Box 6587, Providence, Rhode Island
02940-6587. The Fund may charge a service fee for the use of this
Privilege. No such fee currently is contemplated. The exchange of shares
of one fund for shares of another is treated for Federal income tax
purposes as a sale of the shares given in exchange by the shareholder
and, therefore, an exchanging shareholder may realize, or an exchange on
behalf of a Retirement Plan which is not tax exempt may result in, a
taxable gain or loss. For more information concerning this Privilege and
the funds in the Premier Family of Funds or the Dreyfus Family of Funds
eligible to participate in this Privilege, or to obtain an Auto-Exchange
Authorization Form, please call toll free 1-800-645-6561.
DREYFUS-AUTOMATIC ASSET BUILDERRegistration Mark
Dreyfus-AUTOMATIC Asset Builder permits you to purchase Fund
shares (minimum of $100 and maximum of $150,000 per transaction) at
regular intervals selected by you. Fund shares are purchased by
transferring funds from the bank account designated by you. At your
option, the bank account designated by you will be debited in the
specified amount, and Fund shares will be purchased, once a month, on
either the first or fifteenth day, or twice a month, on both days. Only
an account maintained at a domestic financial institution which is an ACH
member may be so designated. To establish an AUTOMATIC Asset Builder
account, you must file an authorization form with the Transfer Agent. You
may obtain the necessary authorization form by calling 1-800-645-6561.
You may cancel your participation in this Privilege or change the amount
of purchase at any time by mailing written notification to Premier Small
Company Stock Fund, P.O. Box 6587, Providence, Rhode Island 02940-6587,
and the notification will be effective three business days following
receipt. The Fund may modify or terminate this Privilege at any time or
charge a service fee. No such fee currently is contemplated.
DIVIDEND OPTIONS

Page 22

For more information concerning these Privileges, or to
request a Dividend Options Form, please call toll free 1-800-645-6561.
You may cancel these Privileges by mailing written notification to
Premier Small Company Stock Fund, P.O. Box 6587, Providence, Rhode Island
02940-6587. To select a new fund after cancellation, you must submit a
new Dividend Options Form. Enrollment in or cancellation of these
Privileges is effective three business days following receipt. These
Privileges are available only for existing accounts and may not be used
to open new accounts. Minimum subsequent investments do not apply for
Dividend Sweep. The Fund may modify or terminate these Privileges at any
time or charge a service fee. No such fee currently is contemplated.
Shares held under Keogh Plans, IRAs or other retirement plans are not
eligible for Dividend Sweep.
GOVERNMENT DIRECT DEPOSIT PRIVILEGE
Government Direct Deposit Privilege enables you to purchase
Fund shares (minimum of $100 and maximum of $50,000 per transaction) by
having Federal salary, Social Security, or certain veterans', military or
other payments from the Federal government automatically deposited into
your Fund account. You may deposit as much of such payments as you elect.
You should consider whether Direct Deposit of your entire payment into a
fund with fluctuating NAV, such as the Fund, may be appropriate for you.
To enroll in Government Direct Deposit, you must file with the Transfer
Agent a completed Direct Deposit Sign-Up Form for each type of payment
that you desire to include in this Privilege. The appropriate form may be
obtained by calling 1-800-645-6561. Death or legal incapacity will
terminate your participation in this Privilege. You may elect at any time
to terminate your participation by notifying in writing the appropriate
Federal agency. Further, the Fund may terminate your participation upon
30 days notice to you.
AUTOMATIC WITHDRAWAL PLAN
The Automatic Withdrawal Plan permits you to request
withdrawal of a specified dollar amount (minimum of $50) on either a
monthly or quarterly basis if you have a $5,000 minimum account.
Particular Retirement Plans, including Dreyfus-sponsored
Retirement Plans, may permit certain participants to establish an
automatic withdrawal plan from such Retirement Plans. Participants should
consult their Retirement Plan sponsor and tax adviser for details. Such a
withdrawal plan is different from the Automatic Withdrawal Plan. An
application for the Automatic Withdrawal Plan can be obtained by calling
1-800-645-6561. The Automatic Withdrawal Plan may be ended at any time by
the shareholder, the Fund or the Transfer Agent. Shares for which
certificates have been issued may not be redeemed through the Automatic
Withdrawal Plan.

RETIREMENT PLANS
The Fund offers a variety of pension and profit-sharing
plans, including Keogh Plans, IRAs, SEP-IRAs and IRA "Rollover Accounts,"
401(k) Salary Reduction Plans and 403(b)(7) Plans. Plan support services
also are available. You can obtain details on the various plans by
calling the following numbers toll free: for Keogh Plans, please call
1-800-358-5566; for IRAs and IRA "Rollover Accounts," please call
1-800-645-6561; for SEP-IRAs, 401(k) Salary Reduction Plans and 403(b)(7)
Plans, please call 1-800-322-7880.
Page 23

LETTER OF INTENT--CLASS A SHARES
By signing a Letter of Intent form, available from the
Distributor, you become eligible for the reduced sales load applicable to
the total number of Eligible Fund shares purchased in a 13-month period
pursuant to the terms and conditions set forth in the Letter of Intent. A
minimum initial purchase of $5,000 is required. To compute the applicable
sales load, the offering price of shares you hold (on the date of
submission of the Letter of Intent) in any Eligible Fund that may be used
toward "Right of Accumulation" benefits described above may be used as a
credit toward completion of the Letter of Intent. However, the reduced
sales load will be applied only to new purchases.
The Transfer Agent will hold in escrow 5% of the amount
indicated in the Letter of Intent for payment of a higher sales load if
you do not purchase the full amount indicated in the Letter of Intent.
The escrow will be released when you fulfill the terms of the Letter of
Intent by purchasing the specified amount. If your purchases qualify for
a further sales load reduction, the sales load will be adjusted to
reflect your total purchase at the end of 13 months. If total purchases
are less than the amount specified, you will be requested to remit an
amount equal to the difference between the sales load actually paid and
the sales load applicable to the aggregate purchases actually made. If
such remittance is not received within 20 days, the Transfer Agent, as
attorney-in-fact pursuant to the terms of the Letter of Intent, will
redeem an appropriate number of Class A shares of the Fund held in escrow
to realize the difference. Signing a Letter of Intent does not bind you
to purchase, or the Fund to sell, the full amount indicated at the sales
load in effect at the time of signing, but you must complete the intended
purchase to obtain the reduced sales load. At the time you purchase Class
A shares, you must indicate your intention to do so under a Letter of
Intent.
HOW TO REDEEM FUND SHARES
GENERAL--You may request redemption of your shares at any
time. Redemption requests should be transmitted to the Transfer Agent as
described below. When a request is received in proper form, the Fund will
redeem the shares at the next determined NAV as described below. If you
hold Fund shares of more than one Class, any request for redemption must
specify the Class of shares being redeemed. If you fail to specify the
Class of shares to be redeemed or if you own fewer shares of the Class
than specified to be redeemed, the redemption request may be delayed
until the Transfer Agent receives further instructions from you or your
Agent.
The Fund imposes no charges (other than any applicable CDSC)
when shares are redeemed directly through the Distributor. Agents or
other institutions may charge their clients a nominal fee for effecting
redemptions of Fund shares. Any certificates representing Fund shares
being redeemed must be submitted with the redemption request. The value
of the shares redeemed may be more or less than their original cost,
depending upon the Fund's then-current NAV.
The Fund ordinarily will make payment for all shares redeemed
within seven days after receipt by the Transfer Agent of a redemption
request in proper form, except as provided by the rules of the SEC.
HOWEVER, IF YOU HAVE PURCHASED FUND SHARES BY CHECK, BY THE TELETRANSFER
PRIVILEGE OR THROUGH AUTOMATIC ASSET BUILDER AND SUBSEQUENTLY SUBMIT A
WRITTEN REDEMPTION REQUEST TO THE TRANSFER AGENT, THE REDEMPTION PROCEEDS
WILL BE TRANSMITTED TO YOU PROMPTLY UPON BANK CLEARANCE OF YOUR PURCHASE
CHECK, TELETRANSFER PURCHASE OR AUTOMATIC ASSET BUILDER ORDER, WHICH MAY
TAKE UP TO EIGHT BUSINESS DAYS OR MORE. IN ADDITION, THE FUND WILL REJECT
REQUESTS TO REDEEM SHARES BY WIRE OR TELEPHONE OR PURSUANT TO THE
TELETRANSFER PRIVILEGE FOR A PERIOD OF EIGHT BUSINESS DAYS AFTER RECEIPT
BY THE TRANSFER AGENT OF THE PURCHASE CHECK, THE TELETRANSFER PURCHASE OR
THE AUTOMATIC ASSET BUILDER ORDER AGAINST WHICH SUCH REDEMPTION IS
REQUESTED. THESE PROCEDURES WILL NOT APPLY IF YOUR SHARES WERE PURCHASED
BY WIRE PAYMENT, OR IF YOU OTHERWISE HAVE A SUFFICIENT COLLECTED BALANCE
IN YOUR ACCOUNT TO COVER THE REDEMPTION REQUEST. PRIOR TO THE TIME ANY
REDEMPTION IS EFFECTIVE, DIVIDENDS ON SUCH SHARES WILL ACCRUE AND BE
PAYABLE, AND YOU WILL
Page 24

BE ENTITLED TO EXERCISE ALL OTHER RIGHTS OF BENEFICIAL OWNERSHIP. Fund
shares will not be redeemed until the Transfer Agent has received your
Account Application.
The Fund reserves the right to redeem your account at its
option upon not less than 45 days written notice if the net asset value
of your account is $500 or less and remains so during the notice period.
CONTINGENT DEFERRED SALES CHARGE--CLASS B SHARES--A CDSC
payable to the Distributor is imposed on any redemption of Class B shares
which reduces the current NAV of your Class B shares to an amount which
is lower than the dollar amount of all payments by you for the purchase
of Class B shares of the Fund held by you at the time of redemption. No
CDSC will be imposed to the extent that the NAV of the Class B shares
redeemed does not exceed (i) the current NAV of Class B shares acquired
through reinvestment of dividends or other distributions, plus (ii)
increases in the NAV of your Class B shares above the dollar amount of all
your payments for the purchase of Class B shares held by you at the time
of redemption.
If the aggregate value of Class B shares redeemed has
declined below their original cost as a result of the Fund's performance,
a CDSC may be applied to the then-current NAV rather than the purchase
price.
In circumstances where the CDSC is imposed, the amount of the
charge will depend on the number of years from the time you purchased the
Class B shares until the time of redemption of such shares. Solely for
purposes of determining the number of years from the time of any payment
for the purchase of Class B shares, all payments during a month will be
aggregated and deemed to have been made on the first day of the month.
The following table sets forth the rates of the CDSC:
<TABLE>
<CAPTION>
Year Since CDSC as a % of Amount
Purchase Payment Invested or Redemption
Was Made Proceeds
------------------ ------------------------
<S> <C>
First.................................................... 4.00
Second................................................... 4.00
Third.................................................... 3.00
Fourth................................................... 3.00
Fifth.................................................... 2.00
Sixth.................................................... 1.00
</TABLE>
In determining whether a CDSC is applicable to a redemption,
the calculation will be made in a manner that results in the lowest
possible rate. It will be assumed that the redemption is made first of
amounts representing shares acquired pursuant to the reinvestment of
dividends and other distributions; then of amounts representing the
increase in NAV of Class B shares above the total amount of payments for
the purchase of Class B shares made during the preceding six years; then
of amounts representing the cost of shares purchased six years prior to
the redemption; and finally, of amounts representing the cost of shares
held for the longest period of time within the applicable six-year period.
For example, assume an investor purchased 100 shares at $10
per share for a cost of $1,000. Subsequently, the shareholder acquired
five additional shares through dividend reinvestment. During the second
year after the purchase the investor decided to redeem $500 of his or her
investment. Assuming at the time of the redemption the NAV had
appreciated to $12 per share, the value of the investor's shares would be
$1,260 (105 shares at $12 per share). The CDSC would not be applied to
the value of the reinvested dividend shares and the amount which
represents appreciation ($260). Therefore, $240 of the $500 redemption
proceeds ($500 minus $260) would be charged at a rate of 4% (the
applicable rate in the second year after purchase) for a total CDSC of
$9.60.
For purposes of determining the applicable CDSC payable with
respect to redemption of Class B shares of the Fund where such shares
were acquired through exchange of Class B shares of another fund advised
by Dreyfus, the year since purchase payment was made is based on the date
of purchase of the original Class B shares of the fund exchanged.
Page 25

CONTINGENT DEFERRED SALES CHARGE--CLASS C SHARES--A CDSC of
1% payable to the Distributor is imposed on any redemption of Class C
shares within one year of the date of purchase. The basis for calculating
the payment of any such CDSC will be the method used in calculating the
CDSC for Class B shares. See "Contingent Deferred Sales Charge_Class B
shares" above.

WAIVER OF CDSC--The CDSC applicable to Class B and Class C
shares (and to certain Class A shares) will be waived in connection with
(a) redemptions made within one year after the death or disability, as
defined in Section 72(m)(7) of the Code, of the shareholder, (b)
redemptions by employees participating in Eligible Benefit Plans, (c)
redemptions as a result of a combination of any investment company with
the Fund by merger, acquisition of assets or otherwise, (d) a distribution
following retirement under a tax-deferred retirement plan or upon
attaining age 70 1\2 in the case of an IRA or Keogh plan or custodial
account pursuant to Section 403(b) of the Code, (e) with respect to
Class B shares, redemptions made pursuant to the Automatic Withdrawal
Plan, provided that amounts withdrawn under such plan do not exceed on an
annual basis 12% of the value of the shareholder's account at the time the
shareholder elects to participate in the plan, and (f) redemptions by such
shareholders as the SEC or its staff may permit. If the Company's
Directors determine to discontinue the waiver of the CDSC, the disclosure
in the Fund's prospectus will be revised appropriately. Any Fund shares
subject to a CDSC which were purchased prior to the termination of such
waiver will have the CDSC waived as provided in the Fund's prospectus at
the time of the purchase of such shares.

To qualify for a waiver of the CDSC, at the time of
redemption you must notify the Transfer Agent or your Agent must notify
the Distributor. Any such qualification is subject to confirmation of
your entitlement.
PROCEDURES--You may redeem Fund shares by using the regular
redemption procedure through the Transfer Agent, or through the
TELETRANSFER Privilege or, if you are a client of a Selected Dealer,
through the Selected Dealer. If you have given your Agent authority to
instruct the Transfer Agent to redeem shares and to credit the proceeds of
such redemptions to a designated account at your Agent, you may redeem
shares only in this manner and in accordance with the regular redemption
procedure described below. If you wish to use the other redemption
methods described below, you must arrange with your Agent for delivery of
the required application(s) to the Transfer Agent. Other redemption
procedures may be in effect for clients of certain Agents and
institutions. The Fund makes available to certain large institutions the
ability to issue redemption instructions through compatible computer
facilities.

You may redeem Fund shares by telephone if you have checked
the appropriate box on the Fund's Account Application or have filed a
Shareholder Services Form with the Transfer Agent. If you select the
TELETRANSFER Privilege or Telephone Exchange Privilege, which is granted
automatically unless you refuse it, you authorize the Transfer Agent to
act on telephone instructions (including over The Dreyfus TouchRegistration
Mark Automated Telephone System) from any person representing himself or
herself to be you, or a representative of your Agent, and reasonably
believed by the Transfer Agent to be genuine. The Fund will require the
Transfer Agent to employ reasonable procedures, such as requiring a form
of personal identification, to confirm that instructions are genuine and,
if it does not follow such procedures, the Fund or the Transfer Agent may
be liable for any losses due to unauthorized or fraudulent instructions.
Neither the Fund nor the Transfer Agent will be liable for following
telephone instructions reasonably believed to be genuine.

REGULAR REDEMPTION. Under the regular redemption procedure,
you may redeem your shares by written request mailed to Premier Small
Company Stock Fund, P.O. Box 6587, Providence, Rhode Island 02940-6587.
Redemption requests must be signed by each shareholder, including each
owner of a joint account, and each signature must be guaranteed. The
Transfer Agent has adopted standards and procedures pursuant to which
signature-guarantees in proper form generally will be accepted from
domestic banks, brokers, dealers, credit unions, national securities
exchanges, registered securities associations, clearing agencies and
savings associations, as well as from participants in the New York Stock
Exchange Medallion Signature Program, the Securities Transfer Agents
Medallion Program ("STAMP"), and the Stock Exchanges Medallion Program.
For more information with respect to signature-guarantees, please call
1-800-554-4611.
Redemption proceeds of at least $1,000 will be wired to any
member bank of the Federal Reserve System in accordance with a written
signature-guaranteed request.
TELETRANSFER PRIVILEGE. You may redeem Fund shares (minimum
$500 per day) by telephone if you have checked the appropriate box and
supplied the necessary information on the Fund's Account Application or
have filed a Shareholder Services Form with the Transfer Agent. The
proceeds will be transferred between your Fund account and the bank
account designated in one of these documents. Only such an account
maintained in a domestic financial institution which is an ACH member may
be so designated. Redemption proceeds will be on deposit in your account
at an ACH member bank ordinarily two days after receipt of the redemption
request or, at your request, paid by check (maximum $150,000 per day) and
mailed to your address. Holders of jointly registered Fund or bank
accounts may redeem through the TELETRANSFER Privilege for transfer to
their bank account only up to $250,000 within any 30-day period. The Fund
reserves the right to refuse any request made by telephone, including
requests made shortly after a change of address, and may limit the amount
involved or the number of such requests. The Fund may modify or terminate
this Privilege at any time or charge a service fee upon notice to
shareholders. No such fee currently is contemplated.

If you have selected the TELETRANSFER Privilege, you may
request a TELETRANSFER redemption of Fund shares by calling
1-800-645-6561 or, if calling from overseas, 1-516-794-5452. Shares held
under Keogh Plans, IRAs or other retirement plans, and shares issued in
certificate form, are not eligible for this Privilege.

REINVESTMENT PRIVILEGE. Upon written request, you may
reinvest up to the number of Class A or Class B shares you have redeemed,
within 45 days of redemption, at the then-prevailing NAV without a sales
load, or reinstate your account for the purpose of exercising Fund
Exchanges. Upon reinstatement, a Class B shareholder's account will be
credited with an amount equal to the CDSC previously paid upon redemption
of the Class B shares reinvested. The Reinvestment Privilege may be
exercised only once.

DISTRIBUTION PLANS
(CLASS A PLAN AND CLASS B AND C PLAN)
Class A shares are subject to a Distribution Plan adopted
pursuant to Rule 12b-1 under the 1940 Act ("Rule 12b-1"). Class B and C
shares are subject to a Distribution Plan and a Service Plan, each
adopted pursuant to Rule 12b-1. Potential investors should read this
Prospectus in light of the terms governing Agreements with their Agents.
An Agent entitled to receive compensation for selling and servicing the
Fund's shares may receive different compensation with respect to one
Class of shares over another.
DISTRIBUTION PLAN--CLASS A SHARES--The Class A shares of the
Fund bear some of the cost of selling those shares under the Distribution
Plan (the "Plan"). The Plan allows the Fund to spend annually up to 0.25%
of its average daily net assets attributable to Class A shares to
compensate Dreyfus Service Corporation, an affiliate of Dreyfus, for
shareholder servicing activities and the Distributor for shareholder
servicing activities and expenses primarily intended to result in the
sale of Class A shares of the Fund. The Plan allows the Distributor to
make payments from the Rule 12b-1 fees it collects from the Fund to
compensate Agents that have entered into Agreements with the Distributor.
Under the Agreements, the Agents are obligated to provide distribution
related services with regard to the Fund and/or shareholder services to
the Agent's clients that own Class A shares of the Fund.
The Fund and the Distributor may suspend or reduce payments
under the Plan at any time, and payments are subject to the continuation
of the Fund's Plan and the Agreements described above. From time to time,
the Agents, the Distributor and the Fund may agree to voluntarily reduce
the maximum fees payable under the Plan. See the SAI for more details on
the Plan.
DISTRIBUTION AND SERVICE PLANS--CLASS B AND C SHARES-- Under
a Distribution Plan adopted pursuant to Rule 12b-1, the Fund pays the
Distributor for distributing the Fund's Class B and C shares at an
aggregate annual rate of .75 of 1% of the value of the average daily net
assets of Class B and C. Under a Service Plan adopted pursuant to Rule
12b-1, the Fund pays Dreyfus Service Corporation or the Distributor for
the provision of certain services to the holders of Class B and C shares
a fee at the annual rate of .25 of 1% of the value of the average daily
net assets of Class B and C. The services provided may include personal
services relating to shareholder accounts, such as answering shareholder
inquiries regarding the Fund and providing reports and other information,
and providing services related to the maintenance of such shareholder
accounts. With regard to such services, each Agent is required to
disclose to its clients any compensation payable to it by the Fund and
any other compensation payable by their clients in connection with the
investment of their assets in Class B and C shares. The Distributor may
pay one or more Agents in respect of distribution and other services for
these Classes of shares. The Distributor determines the amounts, if any,
to be paid to Agents under the Distribution and Service Plans and the
basis on which such payments are made. The fees payable under the
Distribution and Service Plans are payable without regard to actual
expenses incurred.
DIVIDENDS, OTHER DISTRIBUTIONS AND TAXES
The Fund ordinarily declares and pays (on the first business
day of the following month) dividends four times yearly from its net
investment income and distributes net realized gains, if any, once a
year, but it may make distributions on a more frequent basis to comply
with the distribution requirements of the Code, in all events in a manner
consistent with the provisions of the 1940 Act. The Fund will not make
distributions from net realized gains unless capital loss
Page 28

carryovers, if any, have been utilized or have expired. Investors other
than qualified Retirement Plans may choose whether to receive dividends
and other distributions in cash, to receive dividends in cash and reinvest
other distributions in additional Fund shares; dividends and other
distributions paid to qualified Retirement Plans are reinvested
automatically in additional Fund shares at NAV. All expenses are accrued
daily and deducted before declaration of dividends to investors. Dividends
paid by each Class will be calculated at the same time and in the same
manner and will be in the same amount, except that the expenses
attributable solely to a particular Class will be borne exclusively by
that Class. Class B and C shares will receive lower per share dividends
than Class A shares which will receive lower per share dividends than
Class R shares, because of the higher expenses borne by the relevant
Class. See "Expense Summary."
It is expected that the Fund will qualify for treatment as a
"regulated investment company" under the Code so long as such
qualification is in the best interests of its shareholders. Such
qualification will relieve the Fund of any liability for Federal income
tax to the extent its earnings are distributed in accordance with
applicable provisions of the Code.
Dividends derived from net investment income, together with
distributions from net realized short-term capital gains and all or a
portion of any gains realized from the sale or other disposition of
certain market discount bonds (collectively, "Dividend Distributions"),
paid by the Fund will be taxable to U.S. shareholders, including certain
non-qualified Retirement Plans, as ordinary income whether received in
cash or reinvested in Fund shares. Distributions from the Fund's net
capital gain (the excess of net long-term capital gain over net
short-term capital loss) will be taxable to such shareholders as
long-term capital gains for federal income tax purposes, regardless of
how long the shareholders have held their Fund shares and whether such
distributions are received in cash or reinvested in Fund shares. The net
capital gain of an individual generally will not be subject to federal
income tax at a rate in excess of 28%. Dividends and other distributions
also may be subject to state and local taxes.
Dividend Distributions paid by the Fund to a non-resident
foreign investor generally are subject to U.S. withholding tax at the
rate of 30%, unless the non-resident foreign investor claims the benefit
of a lower rate specified in a tax treaty. Distributions from net capital
gain paid by the Fund to a non-resident foreign investor, as well as the
proceeds of any redemptions from a non-resident foreign investor's
account, regardless of the extent to which gain or loss may be realized,
generally will not be subject to U.S. withholding tax. However, such
distributions may be subject to backup withholding, as described below,
unless the foreign investor certifies his non-U.S. residency status.
Notice as to the tax status of your dividends and other
distributions will be mailed to you annually. You also will receive
periodic summaries of your account which will include information as to
dividends and distributions from net capital gain, if any, paid during
the year.
The Code provides for the "carryover" of some or all of the
sales load imposed on Class A shares if (1) an investor redeems those
shares or exchanges those shares for shares of another fund advised or
administered by Dreyfus within 91 days of purchase and (2) in the case of
a redemption, acquires other Fund Class A shares through exercise of the
Reinvestment Privilege or, in the case of an exchange, such other fund
reduces or eliminates its otherwise applicable sales load for the purpose
of the exchange. In this case, the amount of the sales load charged the
investor for the original Class A shares, up to the amount of the
reduction of the sales load pursuant to the Reinvestment Privilege or on
the exchange, as the case may be, is not included in the basis of such
shares for purposes of computing gain or loss on the redemption or the
exchange, and instead is added to the basis of the fund shares received
pursuant to the Reinvestment Privilege or the exchange.
Dividends and other distributions paid by the Fund to
qualified Retirement Plans ordinarily will not be subject to taxation
until the proceeds are distributed from the Retirement Plans. The Fund
will not report to the IRS distributions paid to such plans. Generally,
distributions
Page 29

from qualified Retirement Plans, except those representing
returns of non-deductible contributions thereto, will be taxable as
ordinary income and, if made prior to the time the participant reaches
age 591\2, generally will be subject to an additional tax equal to 10% of
the taxable portion of the distribution. If the distribution from such a
Retirement Plan (other than certain governmental or church plans) for any
taxable year following the year in which the participant reaches age 701\2
is less than the "minimum required distribution" for that taxable year, an
excise tax equal to 50% of the deficiency may be imposed by the IRS. The
administrator, trustee or custodian of such a Retirement Plan will be
responsible for reporting distributions from such plans to the IRS.
Moreover, certain contributions to a qualified Retirement Plan in excess
of the amounts permitted by law may be subject to an excise tax. If a
distributee of an "eligible rollover distribution" from a qualified
Retirement Plan does not elect to have the eligible rollover distribution
paid directly from the plan to an eligible retirement plan in a "direct
rollover," the eligible rollover distribution is subject to a 20% income
tax withholding.
With respect to individual investors and certain
non-qualified Retirement Plans, federal regulations generally require the
Fund to withhold ("backup withholding") and remit to the U.S. Treasury
31% of dividends, distributions from net capital gain and the proceeds of
any redemption, regardless of the extent to which gain or loss may be
realized, paid to a shareholder if such shareholder fails to certify that
the TIN furnished in connection with opening an account is correct and
that such shareholder has not received notice from the IRS of being
subject to backup withholding as a result of a failure to properly report
taxable dividend or interest income on a federal income tax return.
Furthermore, the IRS may notify the Fund to institute backup withholding
if the IRS determines a shareholder's TIN is incorrect or if a
shareholder has failed to properly report taxable dividend and interest
income on a federal income tax return.
A TIN is either the Social Security number or employer
identification number of the record owner of the account. Any tax
withheld as a result of backup withholding does not constitute an
additional tax imposed on the record owner of the account and may be
claimed as a credit on the record owner's federal income tax return.
The Fund may be subject to a non-deductible 4% excise tax,
measured with respect to certain undistributed amounts of taxable
investment income and capital gains.
You should consult your tax advisers regarding specific
questions as to federal, state or local taxes.
PERFORMANCE INFORMATION
For purposes of advertising, performance for each Class may
be calculated on the basis of average annual total return and/or total
return. These total return figures reflect changes in the price of the
shares and assume that any income dividends and/or capital gains
distributions made by the Fund during the measuring period were
reinvested in shares of the same Class. These figures also take into
account any applicable distribution and shareholder servicing fees. As a
result, at any given time, the performance of Class B and C should be
expected to be lower than that of Class A and the performance of Class A,
B and C should be expected to be lower than that of Class R. Performance
for each Class will be calculated separately.
Average annual total return is calculated pursuant to a
standardized formula which assumes that an investment was purchased with
an initial payment of $1,000 and that the investment was redeemed at the
end of a stated period of time, after giving effect to the reinvestment
of dividends and other distributions during the period. The return is
expressed as a percentage rate which, if applied on a compounded annual
basis, would result in the redeemable value of the investment at the end
of the period. Advertisements of the Fund's performance will include the
Fund's average annual total return for one, five and ten year periods, or
for shorter periods depending upon the length of time during which the
Fund has operated. Computations of average annual total return for
periods of less than one year represent an annualization of the Fund's
actual total return for the applicable period.
Page 30

Total return is computed on a per share basis and assumes the
reinvestment of dividends and other distributions. Total return generally
is expressed as a percentage rate which is calculated by combining the
income and principal changes for a specified period and dividing by the
NAV (or maximum offering price in the case of Class A shares) per share
at the beginning of the period. Advertisements may include the percentage
rate of total return or may include the value of a hypothetical
investment at the end of the period which assumes the application of the
percentage rate of total return. Total return also may be calculated by
using the NAV per share at the beginning of the period instead of the
maximum offering price per share at the beginning of the period for Class
A shares or without giving effect to any applicable CDSC at the end of
the period for Class B or C shares. Calculations based on the NAV per
share do not reflect the deduction of the sales load on the Fund's Class
A shares, which, if reflected, would reduce the performance quoted.
The Fund may also advertise the yield on a Class of shares.
The Fund's yield is calculated by dividing a Class of shares' annualized
net investment income per share during a recent 30-day (or one month)
period by the maximum public offering price per share of such Class on
the last day of that period. Since yields fluctuate, yield data cannot
necessarily be used to compare an investment in a Class of shares with
bank deposits, savings accounts, and similar investment alternatives
which often provide an agreed-upon or guaranteed fixed yield for a stated
period of time.
Performance will vary from time to time and past results are
not necessarily representative of future results. You should remember
that performance is a function of portfolio management in selecting the
type and quality of portfolio securities and is affected by operating
expenses. Performance information, such as that described above, may not
provide a basis for comparison with other investments or other investment
companies using a different method of calculating performance.
The Fund may compare the performance of its shares with
various industry standards of performance including Lipper Analytical
Services, Inc. Ratings, Standard and Poor's Composite Index of 500
Stocks, Russell 2500 Stock Index, CDA Technologies indexes, indexes
created by Lehman Brothers, the Consumer Price Index, and the Dow Jones
Industrial Average. Performance rankings as reported in CHANGING TIMES,
BUSINESS WEEK, INSTITUTIONAL INVESTOR, THE WALL STREET JOURNAL, MUTUAL
FUND FORECASTER, NO LOAD INVESTOR, MONEY MAGAZINE, MORNINGSTAR MUTUAL
FUND VALUES, U.S. NEWS AND WORLD REPORT, FORBES, FORTUNE, BARRON'S and
similar publications may also be used in comparing the Fund's
performance. Furthermore, the Fund may quote its shares' total returns
and yields in advertisements or in shareholder reports. The Fund may also
advertise non-standardized performance information, such as total return
for periods other than those required to be shown or cumulative
performance data. The Fund may advertise a quotation of yield or other
similar quotation demonstrating the income earned or distributions made
by the Fund.
GENERAL INFORMATION
The Company was incorporated in Maryland on August 6, 1987
under the name The Laurel Funds, Inc., and changed its name to The
Dreyfus/Laurel Funds, Inc. on October 17, 1994. The Company is registered
with the SEC under the 1940 Act, as an open-end management investment
company. The Company has an authorized capitalization of 25 billion
shares of $0.001 par value stock with equal voting rights. The Fund is a
portfolio of the Company. The Fund's shares are classified into four
Classes_Class A, Class B, Class C and Class R. The Company's Articles of
Incorporation permit the Board of Directors to create an unlimited number
of investment portfolios (each a "fund").
Each share (regardless of Class) has one vote. All shares of
all funds (and Classes thereof) vote together as a single Class, except
as to any matter for which a separate vote of any fund or Class is
required by the 1940 Act, and except as to any matter which affects the
interests of
Page 31

one or more particular funds or Classes, in which case only
the shareholders of the affected fund or Class are entitled to vote, each
as a separate Class. Only holders of Class A, B or C shares, as the case
may be, will be entitled to vote on matters submitted to shareholders
pertaining to the Distribution and/or Service Plan relating to that
Class.
Unless otherwise required by the 1940 Act, ordinarily it will
not be necessary for the Fund to hold annual meetings of shareholders. As
a result, Fund shareholders may not consider each year the election of
Directors or the appointment of auditors. However, the holders of at
least 10% of the shares outstanding and entitled to vote may require the
Company to hold a special meeting of shareholders for purposes of
removing a Director from office and for any other purpose. Company
shareholders may remove a Director by the affirmative vote of a majority
of the Company's outstanding voting shares. In addition, the Board of
Directors will call a meeting of shareholders for the purpose of electing
Directors if, at any time, less than a majority of the Directors then
holding office have been elected by shareholders.
The Transfer Agent maintains a record of your ownership and
will send you confirmations and statements of account.
Shareholder inquiries may be made by writing to the Fund at
144 Glenn Curtiss Boulevard, Uniondale, New York 11556-0144.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO
MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS
AND IN THE FUND'S OFFICIAL SALES LITERATURE IN CONNECTION WITH THE OFFER
OF THE FUND'S SHARES, AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
FUND. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER IN ANY STATE IN WHICH,
OR TO ANY PERSON TO WHOM, SUCH OFFERING MAY NOT LAWFULLY BE MADE.
PCSp120196
Page 32

PREMIER LIMITED TERM INCOME FUND
CLASS A, CLASS B, CLASS C AND CLASS R SHARES
PREMIER BALANCED FUND
CLASS A, CLASS B, CLASS C AND CLASS R SHARES
PART B
(STATEMENT OF ADDITIONAL INFORMATION)
MARCH 1, 1996
AS REVISED DECEMBER 1, 1996

This Statement of Additional Information ("SAI"), which is not a
prospectus, supplements and should be read in conjunction with the current
Prospectus of the Premier Limited Term Income Fund (formerly the Laurel
Intermediate Income Fund) dated March 1, 1996 and the current Prospectus of
the Premier Balanced Fund (formerly the Laurel Balanced Fund) (collectively,
the "Funds") dated March 1, 1996, as revised December 1, 1996, as they may be
revised from time to time. The Funds are separate, diversified portfolios of
The Dreyfus/Laurel Funds, Inc. (formerly The Laurel Funds, Inc.), an open-end
management investment company (the "Company"), known as a mutual fund. To
obtain a copy of a Fund's Prospectus, please write to the Fund at 144 Glenn
Curtiss Boulevard, Uniondale, New York 11556-0144, or call one of the
following numbers:

Call Toll Free 1-800-645-6561
In New York City -- Call 1-718-895-1206
On Long Island -- Call 516-794-5452

The Dreyfus Corporation ("Dreyfus") serves as the Funds' investment
manager.

Premier Mutual Fund Services, Inc. (the "Distributor") is the
distributor of the Funds' shares.
TABLE OF CONTENTS
Page

Investment Objectives and Management Policies B-2
Management of the Funds B-14
Management Arrangements B-20
Purchase of Fund Shares B-21
Distribution and Service Plans B-23
Redemption of Fund Shares B-25
Shareholder Services B-26
Determination of Net Asset Value B-29
Dividends, Other Distributions and Taxes B-30
Portfolio Transactions B-33
Performance Information B-35
Information About the Funds B-37
Custodian, Transfer and Dividend Disbursing Agent, Counsel
and Independent Auditors B-38
Financial Statements B-38
Appendix B-39

INVESTMENT OBJECTIVES AND MANAGEMENT POLICIES

The following information supplements and should be read in conjunction
with the section in each Fund's Prospectus entitled "Description of the
Fund."

Portfolio Securities

Floating Rate Securities. A floating rate security is one whose terms
provide for the automatic adjustment of interest rates whenever a specified
interest rate changes. The interest on floating rate securities is
ordinarily tied to and is a percentage of the prime rate of a specified bank
or some similar objective standard such as the 90-day U.S. Treasury bill rate
and may change daily. Generally, changes in interest rates on floating rate
securities will produce changes in the security's market value from the
original purchase price resulting in the potential for capital appreciation
or capital market depreciation being less than for fixed income obligations
with a fixed interest rate.

ECDs, ETDs, and Yankee CDs. The Funds may purchase Eurodollar
certificates of deposit ("ECDs"), which are U.S. dollar-denominated
certificates of deposit issued by foreign branches of domestic banks,
Eurodollar time deposits ("ETDs"), which are U.S. dollar denominated deposits
in a foreign branch of a domestic bank or foreign bank, and Yankee-Dollar
certificates of deposit ("Yankee CDs") which are certificates of deposit
issued by a domestic branch of a foreign bank denominated in U.S. dollars and
held in the United States. ECDs, ETDs, and Yankee CDs are subject to
somewhat different risks than domestic obligations of domestic banks. These
risks are discussed in each Fund's Prospectus.

Government Obligations. Each Fund may invest in a variety of U.S.
Treasury obligations, which differ only in their interest rates, maturities
and times of issuance: (a) U.S. Treasury bills have a maturity of one year or
less, (b) U.S. Treasury notes have maturities of one to ten years, and (c)
U.S. Treasury bonds generally have maturities of greater than ten years.

In addition to U.S. Treasury obligations, each Fund may invest in
obligations issued or guaranteed by U.S. Government agencies and
instrumentalities which are supported by any of the following: (a) the full
faith and credit of the U.S. Treasury (such as Government National Mortgage
Association ("GNMA") participation certificates), (b) the right of the issuer
to borrow an amount limited to a specific line of credit from the U.S.
Treasury, (c) the discretionary authority of the U.S. Government agency or
instrumentality, or (d) the credit of the instrumentality. (Examples of
agencies and instrumentalities are: Federal Land Banks, Federal Housing
Administration, Farmers Home Administration, Export-Import Bank of the United
States, Central Bank for Cooperatives, Federal Intermediate Credit Banks,
Federal Home Loan Banks, General Services Administration, Maritime
Administration, Tennessee Valley Authority, District of Columbia Armory
Board, Inter-American Development Bank, Asian-American Development Bank,
Student Loan Marketing Association, International Bank for Reconstruction and
Development and Federal National Mortgage Association ("FNMA")). No assurance
can be given that the U.S. Government will provide financial support to such
U.S. Government agencies or instrumentalities described in (b), (c) and (d)
in the future, other than as set forth above, since it is not obligated to do
so by law.

Repurchase Agreements. The Funds may enter into repurchase agreements
with U.S. Government securities dealers recognized by the Federal Reserve
Board, with member banks of the Federal Reserve System, or with such other
brokers or dealers that meet the credit guidelines of the Board of Directors.
In a repurchase agreement, the Fund buys a security from a seller that has
agreed to repurchase the same security at a mutually agreed upon date and
price. A Fund's resale price will be in excess of the purchase price,
reflecting an agreed upon interest rate. This interest rate is effective for
the period of time the Fund is invested in the agreement and is not related
to the coupon rate on the underlying security. Repurchase agreements may also
be viewed as a fully collateralized loan of money by the Fund to the seller.
The period of these repurchase agreements will usually be short, from
overnight to one week, and at no time will a Fund invest in repurchase
agreements for more than one year. A Fund will always receive as collateral
securities whose market value including accrued interest is, and during the
entire term of the agreement remains, at least equal to 100% of the dollar
amount invested by the Fund in each agreement, and the Fund will make payment
for such securities only upon physical delivery or upon evidence of book
entry transfer to the account of the Custodian. If the seller defaults, the
Fund might incur a loss if the value of the collateral securing the
repurchase agreement declines and might incur disposition costs in connection
with liquidating the collateral. In addition, if bankruptcy proceedings are
commenced with respect to the seller of a security which is the subject of a
repurchase agreement, realization upon the collateral by the Fund may be
delayed or limited. Dreyfus seeks to minimize the risk of loss through
repurchase agreements by analyzing the creditworthiness of the obligors under
repurchase agreements, in accordance with the credit guidelines of the
Company's Board of Directors.

Reverse Repurchase Agreements. A Fund may enter into reverse repurchase
agreements to meet redemption requests where the liquidation of portfolio
securities is deemed by Dreyfus to be inconvenient or disadvantageous. A
reverse repurchase agreement is a transaction whereby a Fund transfers
possession of a portfolio security to a bank or broker-dealer in return for a
percentage of the portfolio security's market value. The Fund retains record
ownership of the security involved including the right to receive interest
and principal payments. At an agreed upon future date, the Fund repurchases
the security by paying an agreed upon purchase price plus interest. Cash or
liquid high-grade debt obligations of the Fund equal in value to the
repurchase price including any accrued interest will be maintained in a
segregated account while a reverse repurchase agreement is in effect.

When-Issued Securities. New issues of U.S. Treasury and Government
securities are often offered on a when-issued basis. This means that delivery
and payment for the securities normally will take place approximately 7 to 15
days after the date the buyer commits to purchase them. The payment
obligation and the interest rate that will be received on securities
purchased on a when-issued basis are each fixed at the time the buyer enters
into the commitment. Each Fund will make commitments to purchase such
securities only with the intention of actually acquiring the securities, but
the Fund may sell these securities or dispose of the commitment before the
settlement date if it is deemed advisable as a matter of investment strategy.
Cash or marketable high-grade debt securities equal to the amount of the
above commitments will be segregated on each Fund's records. For the purpose
of determining the adequacy of these securities the segregated securities
will be valued at market. If the market value of such securities declines,
additional cash or securities will be segregated on the Fund's records on a
daily basis so that the market value of the account will equal the amount of
such commitments by the Fund.

Securities purchased on a when-issued basis and the securities held by
each Fund are subject to changes in market value based upon the public's
perception of changes in the level of interest rates. Generally, the value of
such securities will fluctuate inversely to changes in interest rates --
i.e., they will appreciate in value when interest rates decline and decrease
in value when interest rates rise. Therefore, if in order to achieve higher
interest income each Fund remains substantially fully invested at the same
time that it has purchased securities on a "when-issued" basis, there will be
a greater possibility of fluctuation in the Fund's net asset value.

When payment for when-issued securities is due, each Fund will meet its
obligations from then-available cash flow, the sale of segregated securities,
the sale of other securities or, and although it would not normally expect to
do so, from the sale of the when-issued securities themselves (which may have
a market value greater or less than the Fund's payment obligation). The sale
of securities to meet such obligations carries with it a greater potential
for the realization of capital gains, which are subject to federal income
taxes.

Commercial Paper. The Funds may invest in commercial paper issued in
reliance on the so-called "private placement" exemption from registration
afforded by Section 4(2) of the Securities Act of 1933 ("Section 4(2)
paper"). Section 4(2) paper is restricted as to disposition under the federal
securities laws and generally is sold to investors who agree that they are
purchasing the paper for an investment and not with a view to public
distribution. Any resale by the purchaser must be in an exempt transaction.
Section 4(2) paper is normally resold to other investors through or with the
assistance of the issuer or investment dealers who make a market in Section
4(2) paper, thus providing liquidity. Pursuant to guidelines established by
the Company's Board of Directors, Dreyfus may determine that Section 4(2)
paper is liquid for the purposes of complying with the Fund's investment
restriction relating to investments in illiquid securities.

Management Policies

The Funds engage, except as noted, in the following practices in
furtherance of their investment objectives.

Loans of Fund Securities. Each Fund has authority to lend its portfolio
securities provided (1) the loan is secured continuously by collateral
consisting of U.S. Government securities or cash or cash equivalents adjusted
daily to make a market value at least equal to the current market value of
these securities loaned; (2) the Fund may at any time call the loan and
regain the securities loaned; (3) the Fund will receive any interest or
dividends paid on the loaned securities; and (4) the aggregate market value
of securities loaned will not at any time exceed one-third of the total
assets of the Fund. In addition, it is anticipated that a Fund may share with
the borrower some of the income received on the collateral for the loan or
that it will be paid a premium for the loan. In determining whether to lend
securities, Dreyfus considers all relevant factors and circumstances
including the creditworthiness of the borrower.

Derivative Instruments (Balanced Fund Only). The Fund may purchase and
sell various financial instruments ("Derivative Instruments"), such as
financial futures contracts (including interest rate and index futures
contracts) and options (including options on securities, indices, and futures
contracts). The index Derivative Instruments each Fund may use may be based
on indices of U.S. or foreign equity or debt securities. These Derivative
Instruments may be used, for example, to preserve a return or spread, to lock
in unrealized market value gains or losses, to facilitate or substitute for
the sale or purchase of securities, or to alter the exposure of a particular
investment or portion of a Fund's portfolio to fluctuations in interest
rates.

Hedging strategies can be broadly categorized as "short hedges" and
"long hedges." A short hedge is a purchase or sale of a Derivative
Instrument intended partially or fully to offset potential declines in the
value of one or more investments held in a Fund's portfolio. Thus, in a
short hedge a Fund takes a position in a Derivative Instrument whose price is
expected to move in the opposite direction of the price of the investment
being hedged.

Conversely, a long hedge is a purchase or sale of a Derivative
Instrument intended partially or fully to offset potential increases in the
acquisition cost of one or more investments that a Fund intends to acquire.
Thus, in a long hedge a Fund takes a position in a Derivative Instrument
whose price is expected to move in the same direction as the price of the
prospective investment being hedged. A long hedge is sometimes referred to
as an anticipatory hedge. In an anticipatory hedge transaction, a Fund does
not own a corresponding security and, therefore, the transaction does not
relate to a security the Fund owns. Rather, it relates to a security that
the Fund intends to acquire. If the Fund does not complete the hedge by
purchasing the security it anticipated purchasing, the effect on the Fund's
portfolio is the same as if the transaction were entered into for speculative
purposes.

Derivative Instruments on securities generally are used to hedge against
price movements in one or more particular securities positions that a Fund
owns or intends to acquire. Derivative Instruments on indices, in contrast,
generally are used to attempt to hedge against price movements in market
sectors in which a Fund has invested or expects to invest. Derivative
Instruments on debt securities may be used to hedge either individual
securities or broad debt market sectors.

The use of Derivative Instruments is subject to applicable regulations
of the Securities and Exchange Commission ("SEC"), the several options and
futures exchanges upon which they are traded, the Commodity Futures Trading
Commission ("CFTC") and various state regulatory authorities. In addition,
the ability to use Derivative Instruments will be affected by tax
considerations. See "Dividends, Other Distributions and Taxes."

In addition to the instruments, strategies and risks described below and
in the Prospectus, Dreyfus expects to discover additional opportunities in
connection with other Derivative Instruments. These new opportunities may
become available as Dreyfus develops new techniques, as regulatory
authorities broaden the range of permitted transactions and as new techniques
are developed. Dreyfus may utilize these opportunities to the extent that
they are consistent with the Fund's investment objective, and permitted by
the Fund's investment policies and applicable regulatory authorities.

Special Risks. The use of Derivative Instruments involves special
considerations and risks, certain of which are described below. Risks
pertaining to particular Derivative Instruments are described in the sections
that follow.

(1) Successful use of most Derivative Instruments depends upon Dreyfus'
ability to predict movements of the overall securities, currency and interest
rate markets, which requires different skills than predicting changes in the
prices of individual securities. There can be no assurance that any
particular strategy will succeed.

(2) There might be imperfect correlation, or even no correlation,
between price movements of a Derivative Instrument and price movements of the
investments being hedged. For example, if the value of a Derivative
Instrument used in a short hedge increased by less than the decline in value
of the hedged investment, the hedge would not be fully successful. Such a
lack of correlation might occur due to factors unrelated to the value of the
investments being hedged, such as speculative or other pressures on the
markets in which Derivative Instruments are traded. The effectiveness of
hedges using Derivative Instruments on indices will depend on the degree of
correlation between price movements in the index and price movements in the
securities being hedged.

Because there are a limited number of types of exchange-traded options
and futures contracts, it is likely that the standardized contracts available
will not match the Fund's current or anticipated investments exactly. The
Fund may invest in options and futures contracts based on securities with
different issuers, maturities, or other characteristics from the securities
in which it typically invests, which involves a risk that the options or
futures position will not track the performance of the Fund's other
investments.

Options and futures prices can also diverge from the prices of their
underlying instruments, even if the underlying instruments match the Fund's
investments well. Options and futures prices are affected by such factors as
current and anticipated short-term interest rates, changes in volatility of
the underlying instrument, and the time remaining until expiration of the
contract, which may not affect security prices the same way. Imperfect
correlation may also result from differing levels of demand in the options
and futures markets and the securities markets, from structural differences
in how options and futures and securities are traded, or from imposition of
daily price fluctuation limits or trading halts. The Fund may purchase or
sell options and futures contracts with a greater or lesser value than the
securities it wishes to hedge or intends to purchase in order to attempt to
compensate for differences in volatility between the contract and the
securities, although this may not be successful in all cases. If price
changes in the Fund's options or futures positions are poorly correlated with
its other investments, the positions may fail to produce anticipated gains or
result in losses that are not offset by gains in other investments.

(3) If successful, the above-discussed strategies can reduce risk of
loss by wholly or partially offsetting the negative effect of unfavorable
price movements. However, such strategies can also reduce opportunity for
gain by offsetting the positive effect of favorable price movements. For
example, if the Fund entered into a short hedge because Dreyfus projected a
decline in the price of a security in the Fund's portfolio, and the price of
that security increased instead, the gain from that increase might be wholly
or partially offset by a decline in the price of the Derivative Instrument.
Moreover, if the price of the Derivative Instrument declined by more than the
increase in the price of the security, the Fund could suffer a loss. In
either such case, the Fund would have been in a better position had it not
attempted to hedge at all.

(4) As described below, the Fund might be required to maintain assets
as "cover," maintain segregated accounts or make margin payments when it
takes positions in Derivative Instruments involving obligations to third
parties (i.e., Derivative Instruments other than purchased options). If the
Fund were unable to close out its positions in such Derivative Instruments,
it might be required to continue to maintain such assets or accounts or make
such payments until the position expired or matured. These requirements
might impair a Fund's ability to sell a portfolio security or make an
investment at a time when it would otherwise be favorable to do so, or
require that the Fund sell a portfolio security at a disadvantageous time.
The Fund's ability to close out a position in a Derivative Instrument prior
to expiration or maturity depends on the existence of a liquid secondary
market or, in the absence of such a market, the ability and willingness of
the other party to the transaction ("counterparty") to enter into a
transaction closing out the position. Therefore, there is no assurance that
any position can be closed out at a time and price that is favorable to the
Fund.

Cover for Derivative Instruments. Transactions using Derivative
Instruments may expose the Fund to an obligation to another party. The Fund
will not enter into any such transactions unless it owns either (1) an
offsetting ("covered") position in securities, futures, or options or (2)
cash and short-term liquid debt securities with a value sufficient at all
times to cover its potential obligations to the extent not covered as
provided in (1) above. The Fund will comply with SEC guidelines regarding
cover for Derivative Instruments and will, if the guidelines so require, set
aside cash, U.S. Government securities or other liquid, high-grade debt
securities in a segregated account with its custodian in the prescribed
amount.

Assets used as cover or held in a segregated account cannot be sold
while the position in the corresponding Derivative Instrument is open, unless
they are replaced with other appropriate assets. As a result, the commitment
of a large portion of the Fund's assets to cover or segregated accounts could
impede portfolio management or the Fund's ability to meet redemption requests
or other current obligations.

Options. A call option gives the purchaser the right to buy, and
obligates the writer to sell, the underlying investment at the agreed upon
exercise price during the option period. A put option gives the purchaser
the right to sell, and obligates the writer to buy, the underlying investment
at the agreed upon exercise price during the option period. A purchaser of
an option pays an amount, known as the premium, to the option writer in
exchange for rights under the option contract.

Options on indices are similar to options on securities or currencies
except that all settlements are in cash and gain or loss depends on changes
in the index in question rather than on price movements in individual
securities or currencies.

The purchase of call options can serve as a long hedge, and the purchase
of put options can serve as a short hedge. Writing put or call options can
enable a Fund to enhance income or yield by reason of the premiums paid by
the purchasers of such options. However, if the market price of the security
or other instrument underlying a put option declines to less than the
exercise price on the option, minus the premium received, the Fund would
expect to suffer a loss.

Writing call options can also serve as a limited short hedge because
declines in the value of the hedged investment would be offset to the extent
of the premium received for writing the option. However, if the investment
appreciates to a price higher than the exercise price of the call option, it
can be expected that the option will be exercised and the Fund will be
obligated to sell the investment at less than its market value.

Writing put options can serve as a limited long hedge because increases
in the value of the hedged investment would be offset to the extent of the
premium received for writing the option. However, if the investment
depreciates to a price lower than the exercise price of the put option, it
can be expected that the put option will be exercised and the Fund will be
obligated to purchase the investment at more than its market value.

The value of an option position will reflect, among other things, the
current market value of the underlying investment, the time remaining until
expiration, the relationship of the exercise price to the market price of the
underlying investment, the historical price volatility of the underlying
investment and general market conditions. Options that expire unexercised
have no value.

The Fund may effectively terminate its right or obligation under an
option by entering into a closing transaction. For example, the Fund may
terminate its obligation under a call or put option that it had written by
purchasing an identical call or put option; this is known as a closing
purchase transaction. Conversely, the Fund may terminate a position in a put
or call option it had purchased by writing an identical put or call option;
this is known as a closing sale transaction. Closing transactions permit a
Fund to realize profits or limit losses on an option position prior to its
exercise or expiration.

The Fund may purchase and sell both exchange-traded and over-the-counter
("OTC") options. Exchange-traded options in the United States are issued by
a clearing organization that, in effect, guarantees completion of every
exchange-traded option transaction. In contrast, OTC options are contracts
between a Fund and its counterparty (usually a securities dealer or a bank)
with no clearing organization guarantee. Thus, when the Fund purchases an
OTC option, it relies on the counterparty from whom it purchased the option
to make or take delivery of the underlying investment upon exercise of the
option. Failure by the counterparty to do so would result in the loss of any
premium paid by a Fund as well as the loss of any expected benefit of the
transaction. The Fund will enter into only those option contracts that are
listed on a national securities or commodities exchange or traded in the OTC
market for which there appears to be a liquid secondary market.

The Fund will not purchase or write OTC options if, as a result of such
transaction, the sum of (i) the market value of outstanding OTC options
purchased by the Fund, (ii) the market value of the underlying securities
covered by outstanding OTC call options written by the Fund, and (iii) the
market value of all other assets of the Fund that are illiquid or are not
otherwise readily marketable, would exceed 15% of the net assets of the Fund,
taken at market value. However, if an OTC option is sold by a Fund to a
primary U.S. Government securities dealer recognized by the Federal Reserve
Bank of New York and the Fund has the unconditional contractual right to
repurchase such OTC option from the dealer at a predetermined price, then the
Fund will treat as illiquid such amount of the underlying securities as is
equal to the repurchase price less the amount by which the option is "in-the-
money" (the difference between the current market value of the underlying
securities and the option's strike price). The repurchase price with primary
dealers is typically a formula price that is generally based on a multiple of
the premium received for the option plus the amount by which the option is
"in-the-money."

The Fund's ability to establish and close out positions in exchange-
listed options depends on the existence of a liquid market. However, there
can be no assurance that such a market will exist at any particular time.
Closing transactions can be made for OTC options only by negotiating directly
with the counterparty, or by a transaction in the secondary market if any
such market exists. Although the Fund will enter into OTC options only with
major dealers in unlisted options, there is no assurance that the Fund will
in fact be able to close out an OTC option position at a favorable price
prior to expiration. In the event of insolvency of the counterparty, the
Fund might be unable to close out an OTC option position at any time prior to
its expiration.

If the Fund were unable to effect a closing transaction for an option it
had purchased, it would have to exercise the option to realize any profit.
The inability to enter into a closing purchase transaction for a covered call
option written by the Fund could cause material losses because the Fund would
be unable to sell the investment used as cover for the written option until
the option expires or is exercised.

The Fund may write only covered call options on securities. A call
option is covered if a Fund owns the underlying security or a call option on
the same security with a lower strike price.

Futures Contracts and Options on Futures Contracts. When the Fund
purchases a futures contract, it incurs an obligation to take delivery of a
specified amount of the obligation underlying the futures contract at a
specified time in the future for a specified price. When the Fund sells a
futures contract, it incurs an obligation to deliver a specified amount of
the obligation underlying the futures contract at a specified time in the
future for an agreed upon price. With respect to index futures, no physical
transfer of the securities underlying the index is made. Rather, the parties
settle by exchanging in cash an amount based on the difference between the
contract price and the closing value of the index on the settlement date.

When the Fund writes an option on a futures contract, it becomes
obligated, in return for the premium paid, to assume a position in a futures
contract at a specified exercise price at any time during the term of the
option. If the Fund has written a call, it assumes a short futures position.
If the Fund has written a put, it assumes a long futures position. When the
Fund purchases an option on a futures contract, it acquires the right, in
return for the premium it pays, to assume a position in a futures contract (a
long position if the option is a call and a short position if the option is a
put).

The purchase of futures or call options on futures can serve as a long
hedge, and the sale of futures or the purchase of put options on futures can
serve as a short hedge. Writing call options on futures contracts can serve
as a limited short hedge, using a strategy similar to that used for writing
call options on securities or indices. Similarly, writing put options on
futures contracts can serve as a limited long hedge.

Futures strategies also can be used to manage the average duration of
the Fund's fixed-income portfolio. If Dreyfus wishes to shorten the average
duration of a Fund's fixed-income portfolio, the Fund may sell an interest
rate futures contract or a call option thereon, or purchase a put option on
that futures contract. If Dreyfus wishes to lengthen the average duration of
the Fund's fixed-income portfolio, the Fund may buy an interest rate futures
contract or a call option thereon, or sell a put option thereon.

No price is paid upon entering into a futures contract. Instead, at the
inception of a futures contract a Fund is required to deposit "initial
margin" consisting of cash or U.S. Government securities in an amount
generally equal to 10% or less of the contract value. Margin must also be
deposited when writing a call or put option on a futures contract, in
accordance with applicable exchange rules. Unlike margin in securities
transactions, initial margin on futures contracts does not represent a
borrowing, but rather is in the nature of a performance bond or good-faith
deposit that is returned to the Fund at the termination of the transaction if
all contractual obligations have been satisfied. Under certain
circumstances, such as periods of high volatility, the Fund may be required
by an exchange to increase the level of its initial margin payment.

Subsequent "variation margin" payments are made to and from the futures
broker daily as the value of the futures position varies, a process known as
"marking-to-market." Variation margin does not involve borrowing, but rather
represents a daily settlement of a Fund's obligations to or from a futures
broker. When the Fund purchases an option on a future, the premium paid plus
transaction costs is all that is at risk. In contrast, when the Fund
purchases or sells a futures contract or writes a call or put option thereon,
it is subject to daily variation margin calls that could be substantial in
the event of adverse price movements. If the Fund has insufficient cash to
meet daily variation margin requirements, it might need to sell securities at
a time when such sales are disadvantageous.

Purchasers and sellers of futures contracts and options on futures can
enter into offsetting closing transactions, similar to closing transactions
on options, by selling or purchasing, respectively, an instrument identical
to the instrument purchased or sold. Positions in futures and options on
futures may be closed only on an exchange or board of trade that provides a
secondary market. Although each Fund intends to enter into futures and
options on futures only on exchanges or boards of trade where there appears
to be a liquid secondary market, there can be no assurance that such a market
will exist for a particular contract at a particular time. In such event, it
may not be possible to close a futures contract or options position.

Under certain circumstances, futures exchanges may establish daily
limits on the amount that the price of a futures or an option on a futures
contract can vary from the previous day's settlement price; once that limit
is reached, no trades may be made that day at a price beyond the limit.
Daily price limits do not limit potential losses because prices could move to
the daily limit for several consecutive days with little or no trading,
thereby preventing liquidation of unfavorable positions.

If the Fund were unable to liquidate a futures or options on futures
position due to the absence of a liquid secondary market or the imposition of
price limits, it could incur substantial losses. The Fund would continue to
be subject to market risk with respect to the position. In addition, except
in the case of purchased options, the Fund would continue to be required to
make daily variation margin payments and might be required to maintain the
position being hedged by the future or option or to maintain cash or
securities in a segregated account.

To the extent that the Fund enters into futures contracts or options on
futures contracts on an exchange regulated by the CFTC, in each case other
than for bona fide hedging purposes (as defined by the CFTC), the aggregate
initial margin and premiums required to establish those positions (excluding
the amount by which options are "in-the-money" at the time of purchase) will
not exceed 5% of the liquidation value of the Fund's portfolio, after taking
into account unrealized profits and unrealized losses on any contracts the
Fund has entered into. This policy does not limit to 5% the percentage of
the Fund's assets that are at risk in futures contracts and options on
futures contracts.

Investment Restrictions

The following limitations have been adopted by each Fund. A Fund may not
change any of these fundamental investment limitations without the consent
of: (a) 67% or more of the shares present at a meeting of shareholders duly
called if the holders of more than 50% of the outstanding shares of a Fund
are present or represented by proxy; or (b) more than 50% of the outstanding
shares of a Fund, whichever is less. Each Fund may not:

1. Purchase any securities which would cause more than 25% of the
value of a Fund's total assets at the time of such purchase to be invested in
the securities of one or more issuers conducting their principal activities
in the same industry. (For purposes of this limitation, U.S. Government
securities, and state or municipal governments and their political
subdivisions are not considered members of any industry. ln addition, this
limitation does not apply to investments in domestic banks, including U.S.
branches of foreign banks and foreign branches of U.S. banks).

2. Borrow money or issue senior securities as defined in the
Investment Company Act of 1940, as amended (the "1940 Act") except that (a) a
Fund may borrow money in an amount not exceeding one-third of the Fund's
total assets at the time of such borrowings, and (b) a Fund may issue
multiple classes of shares. The purchase or sale of futures contracts and
related options shall not be considered to involve the borrowing of money or
issuance of securities.

3. Purchase with respect to 75% of a Fund's total assets securities of
any one issuer (other than securities issued or guaranteed by the U.S.
Government, its agencies or instrumentalities) if, as a result, (a) more than
5% of a Fund's total assets would be invested in the securities of that
issuer, or (b) a Fund would hold more than 10% of the outstanding voting
securities of that issuer.

4. Make loans or lend securities, if as a result thereof more than
one-third of the Fund's total assets would be subject to all such loans. For
purposes of this limitation debt instruments and repurchase agreements shall
not be treated as loans.

5. Purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent a
Fund from investing in securities or other instruments backed by real estate,
including mortgage loans, or securities of companies that engage in real
estate business or invest or deal in real estate or interests therein).

6. Underwrite securities issued by any other person, except to the
extent that the purchase of securities and later disposition of such
securities in accordance with the Fund's investment program may be deemed an
underwriting.

7. Purchase or sell commodities except that each Fund may enter into
futures contracts and related options, forward currency contacts and other
similar instruments.

Each Fund may, notwithstanding any other fundamental investment policy
or limitation, invest all of its investable assets in securities of a single
open-end management investment company with substantially the same investment
objectives, policies and limitations as the Fund.

Each Fund has adopted the following additional non-fundamental
restrictions. These non-fundamental restrictions may be changed without
shareholder approval, in compliance with applicable law and regulatory
policy.

1. No Fund shall sell securities short, unless it owns or has the
right to obtain securities equivalent in kind and amounts to the securities
sold short, and provided that transactions in futures contracts and options
are not deemed to constitute selling short.

2. No Fund shall purchase securities on margin, except that a Fund may
obtain such short-term credits as are necessary for the clearance of
transactions, and provided that margin payments in connection with futures
contracts and options shall not constitute purchasing securities on margin.

3. No Fund shall purchase oil, gas or mineral leases.

4. Each Fund will not purchase or retain the securities of any issuer
if the officers or Directors of the Fund, its advisers, or managers, owning
beneficially more than one half of one percent of the securities of such
issuer, together own beneficially more than 5% of such securities.

5. No Fund will purchase securities of issuers (other than securities
issued or guaranteed by domestic or foreign governments or political
subdivisions thereof), including their predecessors, that have been in
operation for less than three years, if by reason thereof, the value of such
Fund's investment in securities would exceed 5% of such Fund's total assets.
For purposes of this limitation, sponsors, general partners, guarantors and
originators of underlying assets may be treated as the issuer of a security.

6. No Fund will invest more than 15% of the value of its net assets in
illiquid securities, including repurchase agreements with remaining
maturities in excess of seven days, time deposits with maturities in excess
of seven days and other securities which are not readily marketable. For
purposes of this limitation, illiquid securities shall not include Section
4(2) Paper and securities which may be resold under Rule 144A under the
Securities Act of 1933, provided that the Board of Directors, or its
delegate, determines that such securities are liquid based upon the trading
markets for the specific security.

7. No Fund may invest in securities of other investment companies,
except as they may be acquired as part of a merger, consolidation or
acquisition of assets and except to the extent otherwise permitted by the
1940 Act.

8. No Fund shall purchase any security while borrowings representing
more than 5% of the Fund's total assets are outstanding.

9. No Fund will purchase warrants if at the time of such purchase: (a)
more than 5% of the value of such Fund's assets would be invested in
warrants, or (b) more than 2% of the value of the Fund's assets would be
invested in warrants that are not listed on the New York or American Stock
Exchange (for purposes of this undertaking, warrants acquired by a Fund in
units or attached to securities will be deemed to have no value).

10. No Fund will purchase puts, calls, straddles, spreads and any
combination thereof if by reason thereof the value of its aggregate
investment in such classes of securities would exceed 5% of its total assets
except that: (a) this limitation shall not apply to standby commitments, and
(b) this limitation shall not apply to a Fund's transactions in futures
contracts and related options.

As an operating policy, each Fund will not invest more than 25% of the
value of its total assets, at the time of such purchase in domestic banks,
including U.S. branches of foreign banks and foreign branches of U.S. banks.
The Company's Board of Directors may change this policy without shareholder
approval. Notice will be given to shareholders if this policy is changed by
the Board of Directors.

MANAGEMENT OF THE FUNDS

PRINCIPAL SHAREHOLDERS

The following shareholder(s) owned 5% or more of the outstanding voting
shares of Class A of Limited Term Income Fund at January 31, 1996:
Investment Corporation, 2 Mellon Bank Center, Pittsburgh, PA 15259, 7%
record.

The following shareholder(s) owned 5% or more of the outstanding voting
shares of Class B of Limited Term Income Fund at January 31, 1996: Everen
Clearing Corp. Trust, 5038 Ruby Ave., Racine, WI 53402-2241, 21% record;
Investment Corporation, 2 Mellon Bank Center, Pittsburgh, PA 15259, 8%
record.

The following shareholder(s) owned 5% or more of the outstanding voting
shares of Class R of Limited Term Income Fund: Mac & Co., P.O. Box 3198,
Pittsburgh, PA 15230-3198, 7% record.

The following shareholder(s) owned 5% or more of the outstanding voting
shares of Class A of Balanced Fund: David Thompson, 48 Broad Street, P.. Box
474, Glen Falls, NY 12801-0474, 7% record.

The following shareholder(s) owned 5% or more of the outstanding voting
shares of Class B of Balanced Fund: Jacki Anne Addisttee, 16041 Woodvale
Road, Encino, CA 91436-3496, 5% record.

The following shareholder(s) owned 5% or more of the outstanding voting
shares of Class R of Balanced Fund: Mac & Co., P.O. Box 3198, Pittsburgh, PA
15230-3198, 26% record; Mac & Co., c/o Mellon Bank, P.O. Box 3198,
Pittsburgh, PA 15230-3198, 14% record; Mac & Co. 180-174, P.O. Box 3198,
Pittsburgh, PA 15230-3190, 7% record.

FEDERAL LAW AFFECTING MELLON BANK

The Glass-Steagall Act of 1933 prohibits national banks from engaging in
the business of underwriting, selling or distributing securities and
prohibits a member bank of the Federal Reserve System from having certain
affiliations with an entity engaged principally in that business. The
activities of Mellon Bank, N.A. ("Mellon Bank") in informing its customers
of, and performing, investment and redemption services in connection with the
Funds, and in providing services to the Funds as custodian, as well as
Dreyfus' investment advisory activities, may raise issues under these
provisions. Mellon Bank has been advised by counsel that the activities are
consistent with its statutory and regulatory obligations.

Changes in either federal or state statutes and regulations relating to
the permissible activities of banks and their subsidiaries or affiliates, as
well as further judicial or administrative decisions or interpretations of
such future statutes and regulations, could prevent Mellon Bank or Dreyfus
from continuing to perform all or a part of the above services for its
customers and/or a Fund. If Mellon Bank or Dreyfus were prohibited from
serving a Fund in any of its present capacities, the Board of Directors would
seek an alternative provider(s) of such services.

DIRECTORS AND OFFICERS

The Company has a Board composed of eleven Directors which supervises
the Company's investment activities and reviews contractual arrangements with
companies that provide the Funds with services. The following lists the
Directors and officers and their positions with the Company and their present
and principal occupations during the past five years. Each Director who is
an "interested person" of the Company (as defined in the 1940 Act, is
indicated by an asterisk. Each of the Directors also serves as a Trustee of
The Dreyfus/Laurel Funds Trust and The Dreyfus/Laurel Tax-Free Municipal
Funds (collectively, with the Company, the "Dreyfus/Laurel Funds") and Mr.
DiMartino serves as a Board member for 93 other funds advised by Dreyfus.

o+RUTH MARIE ADAMS. Director of the Company; Professor of English and Vice
President Emeritus, Dartmouth College; Senator, United Chapters of Phi
Beta Kappa; Trustee, Woods Hole Oceanographic Institution; Director,
Access Capital Strategic Community Investment Fund, Inc. - Institutional
Investment Portfolio. Age: 81 years old. Address: 1026 Kendal Lyme
Road, Hanover, New Hampshire 03755.

o+FRANCIS P. BRENNAN. Chairman of the Board of Directors and Assistant
Treasurer of the Company; Director and Chairman, Massachusetts Business
Development Corp. and Director, Access Capital Strategic Community
Investment Fund, Inc. - Bank Portfolio. Age: 79 years old. Address:
Massachusetts Business Development Corp., One Liberty Square, Boston,
Massachusetts 02109.

o*JOSEPH S. DiMARTINO. Director of the Company since February 1995. Since
January 1995, Mr. DiMartino has served as Chairman of the Board of
various funds in the Dreyfus Family of Funds. Director, Access Capital
Strategic Community Investment Fund, Inc. - Institutional Investment
Portfolio and Bank Portfolio. He is also Chairman of the Board of Noel
Group, Inc., a venture capital company and a Director of the Muscular
Dystrophy Association, HealthPlan Services Corporation, Belding
Heminway, Inc., Curtis Industries, Inc., Simmons Outdoor Corporation and
Staffing Resources, Inc. Mr. DiMartino is also a Board member of 93
other funds in the Dreyfus Family of Funds. For more than five years
prior to January 1995, he was President and a director of Dreyfus and
Executive Vice President and a director of Dreyfus Service Corporation,
a wholly-owned subsidiary of Dreyfus. From August 1994 to December 31,
1994, he was a director of Mellon Bank Corporation. Age: 53 years old.
Address: 200 Park Avenue, New York, New York 10166.

o+JAMES M. FITZGIBBONS. Director of the Company; Chairman, Howes Leather
Company, Inc.; Director, Fiduciary Trust Company. Chairman, CEO and
Director, Fieldcrest-Cannon Inc.; Director, Lumber Mutual Insurance
Company; Director, Barrett Resources, Inc.; Director, Access Capital
Strategic Community Investment Fund, Inc. - Bank Portfolio. Age: 61
years old. Address: 40 Norfolk Road, Brookline, Massachusetts 02167.

o*J. TOMLINSON FORT. Director of the Company; Partner, Reed, Smith, Shaw &
McClay (law firm). Director, Access Capital Strategic Community
Investment Fund, Inc. - Bank Portfolio. Age: 68 years old. Address:
204 Woodcock Drive, Pittsburgh, Pennsylvania 15215.

o+ARTHUR L. GOESCHEL. Director of the Company; Chairman of the Board and
Director, Rexene Corporation; Director, Calgon Carbon Corporation;
Director, Cerex Corporation; Director, National Picture Frame
Corporation; Chairman of the Board and Director, Tetra Corporation 1991-
1993; Director, Medalist Corporation 1992-1993; Director, Access Capital
Strategic Community Investment Fund, Inc. - Institutional Investment
Portfolio. Age: 74 years old. Address: Way Hollow Road and Woodland
Road, Sewickley, Pennsylvania 15143.

o+KENNETH A. HIMMEL. Director of the Company; Director, The Boston Company,
Inc. ("TBC") and Boston Safe Deposit and Trust Company; President and
Chief Executive Officer, Himmel & Co., Inc.; Vice Chairman, Sutton Place
Gourmet, Inc.; Director, Access Capital Strategic Community Investment
Fund, Inc. - Bank Portfolio; Managing Partner, Franklin Federal
Partners. Age: 49 years old. Address: Himmel and Company, Inc., 399
Boylston St., 11th Floor, Boston, Massachusetts 02116.

o*ARCH S. JEFFERY. Director of the Company; Financial Consultant. Director,
Access Capital Strategies Community Investment Fund, Inc. -
Institutional Investment Portfolio. Age: 78 years old. Address: 1817
Foxcroft Lane, Unit 306, Allison Park, Pennsylvania 15101.

o+STEPHEN J. LOCKWOOD. Director of the Company; President and CEO, LDG
Management Company Inc.; CEO, LDG Reinsurance Underwriters, SRRF
Management Inc. and Medical Reinsurance Underwriters Inc.; Director,
Access Capital Strategic Community Investment Fund, Inc. - Institutional
Investment Portfolio. Age: 48 years old. Address: 401 Edgewater Place,
Wakefield, Massachusetts 01880.

o+JOHN J. SCIULLO. Director of the Company; Dean Emeritus and Professor of
Law, Duquesne University Law School; Director, Urban Redevelopment
Authority of Pittsburgh; Director, Access Capital Strategic Community
Investment Fund, Inc. - Institutional Investment Portfolio. Member of
Advisory Committee on Decendents' Estate Laws of Pennsylvania. Age: 64
years old. Address: 321 Gross Street, Pittsburgh, Pennsylvania 15224

o+ROSLYN M. WATSON. Director of the Company; Principal, Watson Ventures;
Director, American Express Centurion Bank; Director, Harvard/Pilgrim
Community Health Plan, Inc.; Director, Access Capital Strategic
Community Investment Fund, Inc. - Bank Portfolio; Director,
Massachusetts Electric Company; Director, The Hyams Foundation, Inc.,
prior to February, 1993; Real Estate Development Project Manager and
Vice President, The Gunwyn Company. Age: 46 years old. Address: 25
Braddock Park, Boston, Massachusetts 02116-5816.

#ELIZABETH BACHMAN. Vice President and Assistant Secretary of the Company,
The Dreyfus/Laurel Funds Trust and The Dreyfus/Laurel Tax-Free Municipal
Funds (since January 1996); Counsel, Premier Mutual Fund Services, Inc.
Prior to September 1995, she was enrolled at the Fordham University
School of Law and received her J.D. in May 1995. Prior to September
1992, she was an Assistant at the National Association for Public
Interest Law. Age: 27 years old. Address: 200 Park Avenue, New York,
New York 10166.

#MARIE E. CONNOLLY. President and Treasurer of the Company, The
Dreyfus/Laurel Funds Trust and The Dreyfus/Laurel Tax-Free Municipal
Funds (since September 1994); Vice President of the Company, The
Dreyfus/Laurel Funds Trust and The Dreyfus/Laurel Tax-Free Municipal
Funds (March 1994 to September 1994); President, Funds Distributor, Inc.
(since 1992); Treasurer, Funds Distributor, Inc. (July 1993 to April
1994); COO, Funds Distributor, Inc. (since April 1994); Director, Funds
Distributor, Inc. (since July 1992); President, COO and Director,
Premier Mutual Fund Services, Inc. (since April 1994); Senior Vice
President and Director of Financial Administration, The Boston Company
Advisors, Inc. (December 1988 to May 1993). Age: 37 years old. Address:
60 State Street, Boston, Massachusetts 02109.

#DOUGLAS C. CONROY, Vice President and Assistant Secretary of the Company,
The Dreyfus/Laurel Funds Trust and The Dreyfus/Laurel Tax-Free Municipal
Funds (since July 1996). Supervisor of Treasury Services and
Administration of Funds Distributor, Inc. From April 1993 to January
1995, Mr. Conroy was a Senior Fund Accountant for Investors Bank & Trust
Company. From December 1991 to March 1993, Mr. Conroy was employed as a
Fund accountant at TBC. Prior to December 1991, Mr. Conroy attended
Merrimack College where he received a bachelors degree in Business
Administration. Age: 27 years old. Address: 60 State Street, Boston,
Massachusetts 02109.

#RICHARD W. INGRAM, Vice President and Assistant Treasurer of the Company,
The Dreyfus/Laurel Funds Trust and The Dreyfus/Laurel Tax-Free Municipal
Funds (since July 1996). Senior Vice President and Director of Client
Services and Treasury Operations of Funds Distributor, Inc. From March
1994 to November 1995, Mr. Ingram was Vice President and Division
Manager for First Data Investor Services Group. From 1989 to 1994, Mr.
Ingram was Vice President, Assistant Treasurer and Tax Director - Mutual
Funds of TBC. Age: 40 years old. Address: 60 State Street, Boston,
Massachusetts 02109.

#MARK A. KARPE, Vice President and Assistant Secretary of the Company, The
Dreyfus/Laurel Funds Trust and The Dreyfus/Laurel Tax-Free Municipal
Funds (since October 1996). Senior Paralegal of the Distributor. From
August 1993 to May 1996, he attended Hofstra University School of Law.
Prior to August 1993, he was employed as an Associate Examiner at the
National Association of Securities Dealers, Inc. Age: 27 years old.
Address: 200 Park Avenue, New York, New York 10166.

#MARY A. NELSON, Vice President and Assistant Treasurer of the Company, The
Dreyfus/Laurel Funds Trust and The Dreyfus/Laurel Tax-Free Municipal
Funds (since July 1996). Vice President and Manager of Treasury
Services and Administration of Funds Distributor, Inc. From September
1989 to July 1994, Ms. Nelson was an Assistant Vice President and Client
Manager for TBC. Age: 32 years old. Address: 60 State Street, Boston,
Massachusetts 02109.

#JOHN E. PELLETIER. Vice President and Secretary of the Company, The
Dreyfus/Laurel Funds Trust and The Dreyfus/Laurel Tax-Free Municipal
Funds (since September 1994); Senior Vice President, General Counsel and
Secretary, Funds Distributor, Inc. (since April 1994); Senior Vice
President, General Counsel and Secretary, Premier Mutual Fund Services,
Inc. (since August 1994); Counsel, The Boston Company Advisors, Inc.
(February 1992 to March 1994); Associate, Ropes & Gray (August 1990 to
February 1992); Associate, Sidley & Austin (June 1989 to August 1990).
Age: 31 years old. Address: 60 State Street, Boston, Massachusetts
02109.

#JOSEPH F. TOWER, III. Vice President and Assistant Treasurer of the
Company, The Dreyfus/Laurel Funds Trust and The Dreyfus/Laurel Tax-Free
Municipal Funds (since January 1996); Senior Vice President, Treasurer
and Chief Financial Officer of Premier Mutual Fund Services, Inc. From
1988 to August 1994, he was employed by TBC where he held various
management positions in the Corporate Finance and Treasury areas. Age:
33 years old. Address: 60 State Street, Boston, Massachusetts 02109.
____________________________
* "Interested person" of the Company, as defined in the 1940 Act.
o Member of the Audit Committee.
+ Member of the Nominating Committee.
# Officer also serves as an officer for other investment companies advised
by Dreyfus.

The officers and Directors of the Company as a group owned beneficially
less than 1% of each Fund's total shares outstanding as of January 31, 1996.

No officer or employee of Premier (or of any parent, subsidiary or
affiliate thereof) receives any compensation from the Company for serving as
an officer or Director of the Company. In addition, no officer or employee
of Dreyfus (or of any parent, subsidiary or affiliate thereof) serves as an
officer or Director of the Company. The Dreyfus/Laurel Funds pay each
Director/Trustee who is not an "interested person" of the Company (as defined
in the 1940 Act), $27,000 per annum (and an additional $75,000 for the
Chairman of the Board of Directors/Trustees of the Dreyfus/Laurel Funds). In
addition, the Dreyfus/Laurel Funds pay each Director/Trustee who is not an
"interested person" of the Company (as defined in the 1940 Act), $1,000 per
joint Dreyfus/Laurel Funds Board meeting attended, plus $750 per joint
Dreyfus/Laurel Funds Audit Committee meeting attended, and reimburses each
Director/Trustee who is not an "interested person" of the Company (as defined
in the 1940 Act), for travel and out-of-pocket expenses.

For the fiscal year ended October 31, 1995, the aggregate amount of fees
and expenses received by each current Director from the Company and all other
funds in the Dreyfus Family of Funds for which such person is a Board member
were as follows:
<TABLE>

Total
Pension or Compensation
Retirement From the
Benefits Estimated Company
Aggregate Accrued as Annual and Fund
Compensation Part of Benefits Complex Paid
From the the Company's Upon to Board
Name of Board Member Company # Expenses Retirement Member
- -------------------- ----------- ------------ ------------ ----------
<S> <C> <C> <C> <C>
Ruth M. Adams $27,800 None None $ 34,500

Francis P. Brennan* 86,683 None None 110,500

Joseph S. DiMartino** None None None $448,618***

James M. Fitzgibbons 27,795 None None 34,500

J. Tomlinson Fort** None None None None

Arthur L. Goeschel 27,604 None None 35,500

Kenneth A. Himmel 26,381 None None 32,750

Arch S. Jeffery** None None None None

Stephen J. Lockwood 26,387 None None 32,750

John J. Sciullo 27,800 None None 34,500

Roslyn M. Watson 27,795 None None 34,550

</TABLE>

# Amounts required to be paid by the Company directly to the non-
interested Directors, that would be applied to offset a portion of the
management fee payable to Dreyfus, are in fact paid directly by
Dreyfus to the non-interested Directors. Amount does not include
reimbursed expenses for attending Board meetings, which amounted to
$12,342 for the Company.
* Compensation of Francis Brennan includes $75,000 paid by the
Dreyfus/Laurel Funds to be Chairman of the Board.
** Joseph S. DiMartino, J. Tomlinson Fort and Arch S. Jeffery are paid
directly by Dreyfus for serving as Board members of the Company and
the funds in the Dreyfus/Laurel Funds. For the fiscal year ended
October 31, 1995, the aggregate amount of fees and expenses received
by Joseph DiMartino, J. Tomlinson Fort and Arch S. Jeffery from
Dreyfus for serving as a Board member of the Company were $17,563,
$28,604 and $27,800, respectively, and for serving as a Board member
of all funds in the Dreyfus/Laurel Funds (including the Company) were
$23,500, $35,500 and $35,500, respectively. In addition, Dreyfus
reimbursed Messrs. DiMartino, Fort and Jeffery a total of $3,186 for
expenses attributable to the Company's Board meetings ($3,186 is not
included in the $12,342 above).
*** Estimated amounts for the fiscal year ending October 31, 1995.

MANAGEMENT ARRANGEMENTS

The following information supplements and should be read in conjunction
with the section in each Fund's Prospectus entitled "Management of the Fund."

Management Agreement. Dreyfus serves as the investment manager for the
Funds pursuant to an Investment Management Agreement with the Company dated
April 4, 1994 (the "Management Agreement"), transferred to Dreyfus as of
October 17, 1994. Pursuant to the Management Agreement, Dreyfus provides, or
arranges for one or more third parties to provide, investment advisory,
administrative, custody, fund accounting and transfer agency services to each
Fund. As investment manager, Dreyfus manages the Funds by making investment
decisions based on each Fund's investment objective, policies and
restrictions. The Management Agreement is subject to review and approval at
least annually by the Board of Directors.

The current Management Agreement with Dreyfus provides for a "unitary
fee." Under the unitary fee structure, Dreyfus pays all expenses of the
Funds except: (i) brokerage commissions, (ii) taxes, interest and
extraordinary expenses (which are expected to be minimal), and (iii) the Rule
12b-1 fees described in this SAI. Under the unitary fee, Dreyfus provides,
or arranges for one or more third parties to provide, investment advisory,
administrative, custody, fund accounting and transfer agency services to each
Fund. For the provision of such services directly, or through one or more
third parties, Dreyfus receives as full compensation for all services and
facilities provided by it, a fee computed daily and paid monthly at the
annual rate set forth in each Fund's Prospectus, applied to the average daily
net assets of the Fund's investment portfolio. Previously, the payments to
the investment manager covered merely the provision of investment advisory
services (and payment for sub-advisory services) and certain specified
administrative services. Under this previous arrangement, each Fund also
paid for additional non-investment advisory expenses, such as custody and
transfer agency services, that were not paid by the investment adviser.

The Management Agreement will continue from year to year provided that a
majority of the Directors who are not interested persons of the Company or
Dreyfus and either a majority of all Directors or a majority of the
shareholders of the respective Fund approve its continuance. The Company may
terminate the Management Agreement, without prior notice to Dreyfus, upon the
vote of a majority of the Board of Directors or upon the vote of a majority
of the respective Fund's outstanding voting securities. Dreyfus may
terminate the Management Agreement upon sixty (60) days' written notice to
the Company. The Management Agreement will terminate immediately and
automatically upon its assignment.

The following persons are officers and/or directors of Dreyfus: Howard
Stein, Chairman of the Board and Chief Executive Officer; W. Keith Smith,
Vice Chairman of the Board; Christopher M. Condron, President, Chief
Operating Officer and a director, Stephen E. Canter, Vice Chairman, Chief
Investment Officer and a director; Lawrence S. Kash, Vice Chairman-
Distribution and a director; Philip L. Toia, Vice Chairman-Operations and
Administration and a director; Barbara E. Casey, Vice President-Dreyfus
President-Dreyfus Retirement Services; Diane M. Coffey, Vice President-
Corporate Communications; Elie M. Genadry, Vice President-Institutional
Sales; William T. Sandalls, Jr., Senior Vice President, Chief Financial
Officer and a director; William F. Glavin, Jr., Vice President-Corporate
Development; Andrew S. Wasser, Vice President-Information Services; Mark N.
Jacobs, Vice President-Fund Legal and Compliance and Secretary; Jeffrey N.
Nachman, Vice President-Mutual Fund Accounting; Maurice Bendrihem,
Controller; Elvira Oslapas; Assistant Secretary; Mandell L. Berman, Frank V.
Cahouet, Alvin E. Friedman, Lawrence M. Greene and Julian M. Smerling
directors.

For the last three fiscal years, each Fund had the following expenses:

For the Fiscal Years Ended October 31,
--------------------------------------------------
1995 1994 1993
____ ____ ____
Limited Term Income Fund
- ----------------------------
Advisory fees (gross of waiver) $446,781 $455,919 $118,161
Expense reimbursement from Adviser -- 8,622 142,319
Advisory fees waived -- -- --

Balanced Fund
- -------------------
Advisory fees (gross of waiver) $874,166 $601,694 $ 22,519 (1)
Expense reimbursement from Adviser -- 26,589 31,076 (1)
Advisory fees waived -- -- -- (1)

(1) For the period September 15, 1993 (commencement of operations) to
October 31, 1993.

PURCHASE OF FUND SHARES

The following information supplements and should be read in conjunction
with the section in each Fund's Prospectus entitled "How to Buy Fund Shares."

The Distributor. The Distributor serves as the Funds' distributor
pursuant to an agreement which is renewable annually. The Distributor also
acts as distributor for the other funds in the Premier Family of Funds, for
funds in the Dreyfus Family of Funds and for certain other investment
companies.

Sales Loads--Class A. The scale of sales loads applies to purchases of
Class A shares made by any "purchaser," which term includes an individual
and/or spouse purchasing securities for his, her or their own account or for
the account of any minor children, or a trustee or other fiduciary purchasing
securities for a single trust estate or a single fiduciary account (including
a pension, profit-sharing or other employee benefit trust created pursuant to
a plan qualified under Section 401 of the Internal Revenue Code of 1986, as
amended (the "Code")), although more than one beneficiary is involved; or a
group of accounts established by or on behalf of the employees of an employer
or affiliated employers pursuant to an employee benefit plan or other program
(including accounts established pursuant to Sections 403(b), 408(k), and 457
of the Code); or an organized group which has been in existence for more than
six months, provided that it is not organized for the purpose of buying
redeemable securities of a registered investment company and provided that
the purchases are made through a central administration or a single dealer,
or by other means which result in economy of sales effort or expense.

Set forth below is an example of the method of computing the offering
price of the Class A shares for each Fund. The example assumes a purchase of
Class A shares for each Fund aggregating less than $50,000 with respect to
Premier Balanced Fund and less than $100,000 with respect to Premier Limited
Term Income Fund subject to the schedule of sales charges set forth in each
Prospectus at a price based upon the net asset value of the Class A shares
for each Fund at the close of business on October 31, 1996.

For Premier Balanced Fund:

Net Asset Value per Share $13.71

Per Share Sales Charge - 5.75%*
of offering price (6.10% of
net asset value per share) $ 0.84

Per Share Offering Price to
the Public $14.55
__________________
* Class A shares purchased by shareholders beneficially owning Class A
shares on November 30, 1996, but who opened their accounts after
December 19, 1994, are subject to a different sales load schedule as
described under "How to Buy Fund Shares - Class A shares" in the Fund's
Prospectus.

For Premier Limited Term Income Fund:

Net Asset Value per Share $10.78

Per Share Sales Charge - 3.0%
of offering price (3.1% of
net asset value per share) $0.33

Per Share Offering Price to
the Public $11.11

TeleTransfer Privilege. TeleTransfer purchase orders may be made at any
time. Purchase orders received by 4:00 P.M., New York time, on any business
day that Dreyfus Transfer, Inc., each Fund's transfer and dividend disbursing
agent (the "Transfer Agent"), and the New York Stock Exchange ("NYSE") are
open for business will be credited to the shareholder's Fund account on the
next bank business day following such purchase order. Purchase orders made
after 4:00 P.M., New York time, on any business day the Transfer Agent and
the NYSE are open for business, or orders made on Saturday, Sunday or any
Fund holiday (e.g., when the NYSE is not open for business), will be credited
to the shareholder's Fund account on the second bank business day following
such purchase order.

Reopening an Account. An investor may reopen an account with a minimum
investment of $100 without filing a new Account Application during the
calendar year the account is closed or during the following calendar year,
provided the information on the old Account Application is still applicable.

In-Kind Purchases. If the following conditions are satisfied, the Fund
may at its discretion, permit the purchase of shares through an "in-kind"
exchange of securities. Any securities exchanged must meet the investment
objective, policies and limitations of the Fund, must have a readily
ascertainable market value, must be liquid and must not be subject to
restrictions on resale. The market value of any securities exchanged, plus
any cash, must be at least equal to $25,000. Shares purchased in exchange
for securities generally cannot be redeemed for fifteen days following the
exchange in order to allow time for the transfer to settle.

The basis of the exchange will depend upon the relative NAV of the
Shares purchased and securities exchanged. Securities accepted by the Fund
will be valued in the same manner as the Fund values its assets. Any
interest earned on the securities following their delivery to the Fund and
prior to the exchange will be considered in valuing the securities. All
interest, dividends, subscription or other rights attached to the securities
become the property of the Fund, along with the securities. For further
information about "in-kind" purchases, call 1-800-645-6561.

DISTRIBUTION AND SERVICE PLANS

The following information supplements and should be read in conjunction
with the section in each Fund's Prospectus entitled "Distribution Class A
Plan and Class B and C Plan and Service Plans)."

Class A, B and C shares are subject to annual fees for distribution and
shareholder services.

Distribution Plan--Class A Shares. The SEC has adopted Rule 12b-1 under
the 1940 Act ("Rule") regulating the circumstances under which investment
companies such as the Company may, directly or indirectly, bear the expenses
of distributing their shares. The Rule defines distribution expenses to
include expenditures for "any activity which is primarily intended to result
in the sale of fund shares." The Rule, among other things, provides that an
investment company may bear such expenses only pursuant to a plan adopted in
accordance with the Rule. With respect to the Class A shares of each Fund,
the Company has adopted a Distribution Plan ("Class A Plan"), and may enter
into Agreements with Agents pursuant to the Class A Plan.

Under the Class A Plan, Class A shares of a Fund may spend annually up
to 0.25% of the average of its net assets for costs and expenses incurred in
connection with the distribution of, and shareholder servicing with respect
to, Class A shares.

The Class A Plan provides that a report of the amounts expended under
the Class A Plan, and the purposes for which such expenditures were incurred,
must be made to the Company's Directors for their review at least quarterly.
In addition, the Class A Plan provides that it may not be amended to increase
materially the costs which a Fund may bear for distribution pursuant to the
Class A Plan without approval of a Fund's shareholders, and that other
material amendments of the Class A Plan must be approved by the vote of a
majority of the Directors and of the Directors who are not "interested
persons" of the Funds or Dreyfus (as defined in the 1940 Act) and who do not
have any direct or indirect financial interest in the operation of the Class
A Plan, cast in person at a meeting called for the purpose of considering
such amendments. The Class A Plan is subject to annual approval by the entire
Board of Directors and by the Directors who are neither interested persons
nor have any direct or indirect financial interest in the operation of the
Class A Plan, by vote cast in person at a meeting called for the purpose of
voting on the Plan. The Class A Plan is terminable, as to a Fund's Class A
shares, at any time by vote of a majority of the Directors who are not
interested persons and have no direct or indirect financial interest in the
operation of the Plan or by vote of the holders of a majority of the
outstanding shares of such class of the Fund.

Distribution and Service Plans -- Class B and C Shares. In addition to
the above described Class A Plan for Class A shares, the Company's Board of
Directors has adopted a Service Plan (the "Service Plan") under the Rule for
Class B and Class C shares, pursuant to which each Fund pays the Distributor
and Dreyfus Service Corporation, an affiliate of Dreyfus, for the provision
of certain services to the holders of Class B and Class C shares. The
Company's Board of Directors has also adopted a Distribution Plan pursuant to
the Rule with respect to Class B and Class C shares (the "Distribution
Plan"). The Company's Board of Directors believes that there is a reasonable
likelihood that the Distribution and Service Plans (the "Plans") will benefit
the Funds and the holders of Class B and Class C shares.

A quarterly report of the amounts expended under each Plan, and the
purposes for which such expenditures were incurred, must be made to the
Directors for their review. In addition, each Plan provides that it may not
be amended to increase materially the cost which holders of Class B or C
shares may bear pursuant to the Plan without the approval of the holders of
such Classes and that other material amendments of the Plan must be approved
by the Board of Directors and by the Directors who are not interested persons
of the Funds and have no direct or indirect financial interest in the
operation of the Plan or in any agreements entered into in connection with
the Plan, by vote cast in person at a meeting called for the purpose of
considering such amendments. Each Plan is subject to annual approval by such
vote of the Directors cast in person at a meeting called for the purpose of
voting on the Plan. Each Plan was so approved by the Directors at a meeting
held on October 25, 1995. Each Plan may be terminated at any time by vote of
a majority of the Directors who are not interested persons and have no direct
or indirect financial interest in the operation of the Plan or in any
agreements entered into in connection with the Plan or by vote of the holders
of a majority of Class B and C shares.

For the year ended October 31, 1995, the distribution and service fees
paid by the Funds were as follows:

Class A Class B Class C

Premier Balanced Fund(1) $5,584 $11,718 $29

Premier Limited Term
Income Fund(2) $2,638 $256 -

(1) Premier Balanced Fund commenced selling Class B and Class C shares on
December 20, 1994, respectively.

(2) Premier Limited Term Income Fund commenced selling Class B and Class C
shares on December 19, 1994 and April 30, 1995, respectively.

Class R shares bear no distribution or service fees.

REDEMPTION OF FUND SHARES

The following information supplements and should be read in conjunction
with the section in each Fund's Prospectus entitled "How to Redeem Fund
Shares."

Stock Certificates; Signatures. Any certificates representing Fund
shares to be redeemed must be submitted with the redemption request. Written
redemption requests must be signed by each shareholder, including each holder
of a joint account, and each signature must be guaranteed. Signatures on
endorsed certificates submitted for redemption also must be guaranteed. The
Transfer Agent has adopted standards and procedures pursuant to which
signature-guarantees in proper form generally will be accepted from domestic
banks, brokers, dealers, credit unions, national securities exchanges,
registered securities associations, clearing agencies and savings
associations as well as from participants in the NYSE Medallion Signature
Program, the Securities Transfer Agents Medallion Program ("STAMP") and the
Stock Exchanges Medallion Program. Guarantees must be signed by an
authorized signatory of the guarantor and "Signature-Guaranteed" must appear
with the signature. The Transfer Agent may request additional documentation
from corporations, executors, administrators, trustees or guardians, and may
accept other suitable verification arrangements from foreign investors, such
as consular verification. For more information with respect to signature-
guarantees, please call one of the telephone numbers listed on the cover.

TeleTransfer Privilege. Investors should be aware that if they have
selected the TeleTransfer Privilege, any request for a wire redemption will
be effected as a TeleTransfer transaction through the Automated Clearing
House system unless more prompt transmittal specifically is requested.
Redemption proceeds will be on deposit in the investor's account at an ACH
member bank ordinarily two business days after receipt of the redemption
request. See "Purchase of Fund Shares--TeleTransfer Privilege."

Redemption Commitment. Each Fund has committed itself to pay in cash
all redemption requests by any shareholder of record of the Fund, limited in
amount during any 90-day period to the lesser of $250,000 or 1% of the value
of the Fund's net assets at the beginning of such period. Such commitment is
irrevocable without the prior approval of the SEC. In the case of requests
for redemptions in excess of such amount, the Board of Directors reserves the
right to make payments in whole or in part in securities or other assets in
case of an emergency or any time a cash distribution would impair the
liquidity of the Fund to the detriment of the existing shareholders. In this
event, the securities would be valued in the same manner as each Fund's
portfolio is valued. If the recipient sold such securities, brokerage
charges would be incurred.

Suspension of Redemptions. The right of redemption may be suspended or
the date of payment postponed (a) during any period when the NYSE is closed
(other than customary weekend and holiday closings), (b) when trading in the
markets a Fund ordinarily utilizes is restricted, or when an emergency exists
as determined by the SEC so that disposal of a Fund's investments or
determination of its net asset value is not reasonably practicable, or (c)
for such other periods as the SEC by order may permit to protect a Fund's
shareholders.

SHAREHOLDER SERVICES

The following information supplements and should be read in conjunction
with the section in each Fund's Prospectus entitled "Shareholder Services."

Fund Exchanges. Shares of any Class of a Fund may be exchanged for
shares of the respective Class of certain other funds advised or administered
by Dreyfus. Shares of the same Class of such funds purchased by exchange
will be purchased on the basis of relative net asset value per share as
follows:

A. Exchanges for shares of funds that are offered without a sales
load will be made without a sales load.

B. Shares of funds purchased without a sales load may be
exchanged for shares of other funds sold with a sales load, and
the applicable sales load will be deducted.

C. Shares of funds purchased with a sales load may be exchanged
without a sales load for shares of other funds sold without a
sales load.

D. Shares of funds purchased with a sales load, shares of funds
acquired by a previous exchange from shares purchased with a
sales load and additional shares acquired through reinvestment
of dividends or other distributions of any such funds
(collectively referred to herein as "Purchased Shares") may be
exchanged for shares of other funds sold with a sales load
(referred to herein as "Offered Shares"), provided that, if the
sales load applicable to the Offered Shares exceeds the maximum
sales load that could have been imposed in connection with the
Purchased Shares (at the time the Purchased Shares were
acquired), without giving effect to any reduced loads, the
difference will be deducted.

E. Shares of funds subject to a contingent deferred sales charge
("CDSC") that are exchanged for shares of another fund will be
subject to the higher applicable CDSC of the two funds, and for
purposes of calculating CDSC rates and conversion periods, if
any, will be deemed to have been held since the date the shares
being exchanged were initially purchased.

To accomplish an exchange under item D above, shareholders must notify
the Transfer Agent of their prior ownership of fund shares and their account
number.

Exchanges of Class R shares held by a Retirement Plan may be made only
between the investor's Retirement Plan account in one fund and such
investor's Retirement Plan account in another fund.

To establish a personal retirement plan by exchange, shares of the fund
being exchanged must have a value of at least the minimum initial investment
required for the fund into which the exchange is being made. For Dreyfus-
sponsored Keogh Plans, IRAs and Simplified Employee Pension Plans ("SEP-
IRAs") with only one participant, the minimum initial investment is $750. To
exchange shares held in Corporate Plans, 403(b)(7) Plans and IRAs set up
under a SEP-IRA with more than one participant, the minimum initial
investment is $100 if the plan has at least $2,500 invested among the funds
in the Premier Family of Funds or the Dreyfus Family of Funds. To exchange
shares held in a personal retirement plan account, the shares exchanged must
have a current value of at least $100.

Auto-Exchange Privilege. The Dreyfus Auto-Exchange Privilege permits an
investor to purchase, in exchange for shares of a Fund, shares of the same
Class of another fund in the Premier Family of Funds or the Dreyfus Family of
Funds. This privilege is available only for existing accounts. With respect
to Class R shares held by a Retirement Plan, exchanges may be made only
between the investor's Retirement Plan account in one fund and such
investor's Retirement Plan account in another fund. Shares will be exchanged
on the basis of relative net asset value as described above under "Fund
Exchanges." Enrollment in or modification or cancellation of this privilege
is effective three business days following notification by the investor. An
investor will be notified if the investor's account falls below the amount
designated to be exchanged under this privilege. In this case, an investor's
account will fall to zero unless additional investments are made in excess of
the designated amount prior to the next Auto-Exchange transaction. Shares
held under IRA and other retirement plans are eligible for this privilege.
Exchanges of IRA shares may be made between IRA accounts and from regular
accounts to IRA accounts, but not from IRA accounts to regular accounts.
With respect to all other retirement accounts, exchanges may be made only
among those accounts.

Fund Exchanges and Dreyfus Auto-Exchange Privilege are available to
shareholders resident in any state in which shares of the fund being acquired
may legally be sold. Shares may be exchanged only between accounts having
identical names and other identifying designations.

Shareholder Services Forms and prospectuses of the other funds may be
obtained by calling 1-800-645-6561. The Funds reserve the right to reject
any exchange request in whole or in part. The Fund Exchange service or
Dreyfus Auto-Exchange Privilege may be modified or terminated at any time
upon notice to shareholders.

Automatic Withdrawal Plan. The Automatic Withdrawal Plan permits an
investor with a $5,000 minimum account to request withdrawal of a specified
dollar amount (minimum of $50) on either a monthly or quarterly basis.
Withdrawal payments are the proceeds from sales of Fund shares, not the yield
on the shares. If withdrawal payments exceed reinvested dividends and distri
butions, the investor's shares will be reduced and eventually may be
depleted. Automatic Withdrawal may be terminated at any time by the
investor, a Fund or the Transfer Agent. Shares for which certificates have
been issued may not be redeemed through the Automatic Withdrawal Plan.

Dividend Sweep. Dividend Sweep allows investors to invest automatically
their dividends or dividends and capital gain distributions, if any, from a
Fund in shares of the same Class of another fund in the Premier Family of
Funds or the Dreyfus Family of Funds of which the investor is a shareholder.
Shares of the same Class of other funds purchased pursuant to this privilege
will be purchased on the basis of relative net asset value per share as
follows:

A. Dividends and distributions paid by a fund may be invested
without imposition of a sales load in shares of other funds that
are offered without a sales load.

B. Dividends and distributions paid by a fund which does not
charge a sales load may be invested in shares of other funds
sold with a sales load, and the applicable sales load will be
deducted.

C. Dividends and distributions paid by a fund which charges a
sales load may be invested in shares of other funds sold with a
sales load (referred to herein as "Offered Shares"), provided
that, if the sales load applicable to the Offered Shares exceeds
the maximum sales load charged by the fund from which dividends
or distributions are being swept, without giving effect to any
reduced loads, the difference will be deducted.

D. Dividends and distributions paid by a fund may be invested in
shares of other funds that impose a CDSC and the applicable
CDSC, if any, will be imposed upon redemption of such shares.

Corporate Pension/Profit-Sharing and Retirement Plans. Each Fund makes
available to corporations a variety of prototype pension and profit-sharing
plans including a 401(k) Salary Reduction Plan. In addition, each Fund makes
available Keogh Plans, IRAs, including SEP-IRAs and IRA "Rollover Accounts,"
and 403(b)(7) Plans. Plan support services also are available.

Investors who wish to purchase Fund shares in conjunction with a Keogh
Plan, a 403(b)(7) Plan or an IRA, including an SEP-IRA, may request from the
Distributor forms for adoption of such plans.

The entity acting as custodian for Keogh Plans, 403(b)(7) Plans or IRAs
may charge a fee, payment of which could require the liquidation of shares.
All fees charged are described in the appropriate form.

Shares may be purchased in connection with these plans only by direct
remittance to the entity acting as custodian. Purchases for these plans may
not be made in advance of receipt of funds.

The minimum initial investment for corporate plans, Salary Reduction
Plans, 403(b)(7) Plans and SEP-IRAs with more than one participant, is $1,000
with no minimum on subsequent purchases. The minimum initial investment for
Dreyfus-sponsored Keogh Plans, IRAs, SEP-IRAs and 403(b)(7) Plans with only
one participant, is normally $750, with no minimum on subsequent purchases.
Individuals who open an IRA may also open a non-working spousal IRA with a
minimum investment of $250.

The investor should read the Prototype Retirement Plan and the
appropriate form of Custodial Agreement for further details on eligibility,
service fees and tax implications, and should consult a tax adviser.

DETERMINATION OF NET ASSET VALUE

The following information supplements and should be read in conjunction
with the section in each Fund's Prospectus entitled "How to Buy Fund Shares."

Restricted securities, as well as securities or other assets for which
market quotations are not readily available, or which are not valued by a
pricing service approved by the Board of Directors, are valued at fair value
as determined in good faith by the Board of Directors. The Board of
Directors will review the method of valuation on a current basis. In making
their good faith valuation of restricted securities, the Directors generally
will take the following factors into consideration: restricted securities
which are securities of the same class of securities for which a public
market exists usually will be valued at market value less the same percentage
discount at which purchased. This discount will be revised periodically by
the Board of Directors if the Directors believe that it no longer reflects
the value of the restricted securities. Restricted securities not of the
same class as securities for which a public market exists usually will be
valued initially at cost. Any subsequent adjustment from cost will be based
upon considerations deemed relevant by the Board of Directors.

New York Stock Exchange Closings. The holidays (as observed) on which
the NYSE is closed currently are: New Year's Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and
Christmas.

DIVIDENDS, OTHER DISTRIBUTIONS AND TAXES

The following information supplements and should be read in conjunction
with the section in each Fund's Prospectus entitled "Dividends, Other
Distributions and Taxes."

The term "regulated investment company" does not imply the supervision
of management or investment practices or policies by any government agency.

To qualify for treatment as a regulated investment company ("RIC") under
the Internal Revenue Code of 1986, as amended (the "Code"), each Fund
(1) must distribute to its shareholders each year at least 90% of its invest
ment company taxable income (generally consisting of net investment income,
net short-term capital gains and net gains from certain foreign currency
transactions) ("Distribution Requirement"), (2) must derive at least 90% of
its annual gross income from specified sources ("Income Requirement"), (3)
must derive less than 30% of its annual gross income from gain on the sale or
disposition of any of the following that are held for less than three months
- -- (i) securities, (ii) non-foreign-currency options and futures and
(iii) foreign currencies (or foreign currency options, futures and forward
contracts) that are not directly related to a Fund's principal business of
investing in securities (or options and futures with respect thereto) ("Short-
Short Limitation") -- and (4) must meet certain asset diversification and
other requirements.

Any dividend or other distribution paid shortly after an investor's
purchase may have the effect of reducing the net asset value of the shares
below the cost of his investment. Such a dividend or other distribution
would be a return on investment in an economic sense, although taxable as
stated in the Funds' Prospectus. In addition, if a shareholder holds shares
of the Fund for six months or less and has received a capital gain
distribution with respect to those shares, any loss incurred on the sale of
those shares will be treated as a long-term capital loss to the extent of the
capital gain distribution received.

Dividends and other distributions declared by a Fund in October,
November or December of any year and payable to shareholders of record on a
date in any of those months are deemed to have been paid by a Fund and
received by the shareholders on December 31 of that year if the distributions
are paid by a Fund during the following January. Accordingly, those
distributions will be taxed to shareholders for the year in which that
December 31 falls.

A portion of the dividends paid by a Fund, whether received in cash or
reinvested in additional Fund shares, may be eligible for the dividends-
received deduction allowed to corporations. The eligible portion may not
exceed the aggregate dividends received by a Fund from U.S. corporations.
However, dividends received by a corporate shareholder and deducted by it
pursuant to the dividends-received deduction are subject indirectly to the
alternative minimum tax.

Dividends and interest received by a Fund may be subject to income,
withholding or other taxes imposed by foreign countries and U.S. possessions
that would reduce the yield on its securities. Tax conventions between cer
tain countries and the United States may reduce or eliminate these foreign
taxes, however, and many foreign countries do not impose taxes on capital
gains in respect of investments by foreign investors.

Income from foreign currencies (except certain gains therefrom that may
be excluded by future regulations), and income from transactions in options,
futures and forward contracts derived by the Fund with respect to its
business of investing in securities or foreign currencies, will qualify as
permissible income under the Income Requirement. However, income from the
disposition of options and futures contracts (other than those on foreign
currencies) will be subject to the Short-Short Limitation if they are held
for less than three months. Income from the disposition of foreign
currencies, and options, futures and forward contracts thereon, that are not
directly related to a Fund's principal business of investing in securities
(or options and futures with respect to securities) also will be subject to
the Short-Short Limitation if they are held for less than three months.

If a Fund satisfies certain requirements, any increase in value of a
position that is part of a "designated hedge" will be offset by any decrease
in value (whether realized or not) of the offsetting hedging position during
the period of the hedge for purposes of determining whether a Fund satisfies
the Short-Short Limitation. Thus, only the net gain (if any) from the
designated hedge will be included in gross income for purposes of that limi
tation. Each Fund will consider whether it should seek to qualify for this
treatment for its hedging transactions. To the extent a Fund does not so
qualify, it may be forced to defer the closing out of certain options,
futures and forward contracts beyond the time when it otherwise would be
advantageous to do so, in order for such Fund to qualify as a RIC.

Ordinarily, gains and losses realized from portfolio transactions will
be treated as capital gain and loss. However, a portion of the gain or loss
from the disposition of foreign currencies and certain foreign currency
denominated securities (including debt instruments and certain financial
forward, futures and option contracts and preferred stock) may be treated as
ordinary income or loss under Section 988 of the Code. In addition, all or a
portion of any gain realized from the sale or other disposition of certain
market discount bonds will be treated as ordinary income. Moreover, all or a
portion of the gain realized from engaging in "conversion transactions" may
be treated as ordinary income under Section 1258 of the Code. "Conversion
transactions" are defined to include certain forward, futures, option and
straddle transactions, transactions marketed or sold to produce capital
gains, and transactions described in Treasury regulations to be issued in
the future.

Under Section 1256 of the Code, any gain or loss realized by a Fund from
certain futures and forward contracts and options transactions will be
treated as 60% long-term capital gain or loss and 40% short-term capital gain
or loss. Gain or loss will arise upon exercise or lapse of such contracts
and options as well as from closing transactions. In addition, any such
contracts or options remaining unexercised at the end of a Fund's taxable
year will be treated as sold for their then fair market value (a process
known as "marking to market"), resulting in additional gain or loss to the
Fund characterized in the manner described above.

Offsetting positions held by a Fund involving certain contracts or
options may constitute "straddles." "Straddles" are defined to include
"offsetting positions" in actively traded personal property. The tax
treatment of straddles is governed by Sections 1092 and 1258 of the Code,
which, in certain circumstances, override or modify Sections 1256 and 988.
As such, all or a portion of any capital gain from certain straddle
transactions may be recharacterized to ordinary income. If the Fund were
treated as entering into straddles by reason of its engaging in certain
forward contracts or options transactions, such straddles would be
characterized as "mixed straddles" if the forward contracts or options
transactions comprising a part of such straddles were governed by Section
1256. Each Fund may make one or more elections with respect to mixed
straddles. Depending on which election is made, if any, the results to a
Fund may differ. If no election is made, then to the extent the straddle and
conversion transactions rules apply to positions established by a Fund,
losses realized by a Fund will be deferred to the extent of unrealized gain
in the offsetting position. Moreover, as a result of the straddle rules,
short-term capital loss on straddle positions may be recharacterized as
long-term capital loss, and long-term capital gains may be treated as
short-term capital gains or ordinary income.

Investment by a Fund in securities issued or acquired at a discount (for
example, zero coupon securities) or providing for deferred interest or for
payment of interest in the form of additional obligations (for example, "pay-
in-kind" or "PIK" securities) could, under special tax rules, affect the
amount, timing and character of distributions to shareholders by causing the
Fund to recognize income prior to the receipt of cash payments. For example,
a Fund could be required to take into gross income annually a portion of the
discount (or deemed discount) at which the securities were issued and could
need to distribute such income to satisfy the Distribution Requirement and to
avoid the 4% excise tax referred to in each Fund's Prospectus under
"Dividends, Other Distributions and Taxes." In such case, the Fund may have
to dispose of securities it might otherwise have continued to hold in order
to generate cash to satisfy these requirements.

If a Fund invests in an entity that is classified as a "passive foreign
investment company" ("PFIC") for federal income tax purposes, the operation
of certain provisions of the Code applying to PFICs could result in the
imposition of certain federal income taxes on the Fund. In addition, gain
realized from the sale or other disposition of PFIC securities may be treated
as ordinary income under Section 1291 of the Code.

State and Local Taxes. Depending upon the extent of a Fund's activities
in states and localities in which it is deemed to be conducting business, the
Fund may be subject to the tax laws thereof. Shareholders are advised to
consult their tax advisers concerning the application of state and local
taxes.

Foreign Shareholders - U.S. Federal Income Taxation. U.S. federal income
taxation of a shareholder who, as to the United States, is a non-resident
alien individual, a foreign trust or estate, a foreign corporation or a
foreign partnership (a "foreign shareholder"), depends on whether the income
from a Fund is "effectively connected" with a U.S. trade or business carried
on by the shareholder, as discussed generally below. Special U.S. federal
income tax rules that differ from those described below may apply to certain
foreign persons who invest in the Fund, such as a foreign shareholder
entitled to claim the benefits of an applicable tax treaty. Foreign
shareholders are advised to consult their own tax advisers with respect to
the particular tax consequences to them of an investment in a Fund.

Foreign Shareholders - Income Not Effectively Connected. If the income
from the Fund is not effectively connected with a U.S. trade or business
carried on by the foreign shareholder, distributions of investment company
taxable income generally will be subject to a U.S. federal withholding tax of
30% (or lower treaty rate).

Capital gains realized by foreign shareholders on the sale of Fund
shares and distributions to them of net capital gain (the excess of net long-
term capital gain over net short-term capital loss) generally will not be
subject to U.S. federal income tax unless the foreign shareholder is a
non-resident alien individual and is physically present in the United States
for more than 182 days during the taxable year. In the case of certain
foreign shareholders, the Fund may be required to withhold U.S. federal
income tax at a rate of 31% of capital gain distributions and of the gross
proceeds from a redemption of Fund shares unless the shareholder furnishes
the Fund with a certificate regarding the shareholder's foreign status.

Foreign Shareholders - Effectively Connected Income. If a foreign
shareholder's ownership of a Fund's shares is effectively connected with a
U.S. trade or business carried on by a foreign shareholder, then all
distributions to that shareholder and any gains realized by that shareholder
on the disposition of the Fund shares will be subject to U.S. federal income
tax at the graduated rates applicable to U.S. citizens and domestic
corporations, as the case may be. Foreign shareholders also may be subject to
the branch profits tax.

Foreign Shareholders - Estate Tax. Foreign individuals generally are
subject to U.S. federal estate tax on their U.S. situs property, such as
shares of a Fund, that they own at the time of their death. Certain credits
against that tax and relief under applicable tax treaties may be available.

PORTFOLIO TRANSACTIONS

All portfolio transactions of each Fund are placed on behalf of each
Fund by Dreyfus. Debt securities purchased and sold by each Fund are
generally traded on a net basis (i.e., without commission) through dealers
acting for their own account and not as brokers, or otherwise involve
transactions directly with the issuer of the instrument. This means that a
dealer (the securities firm or bank dealing with a Fund) makes a market for
securities by offering to buy at one price and sell at a slightly higher
price. The difference between the prices is known as a spread. Other
portfolio transactions may be executed through brokers acting as agent. Each
Fund will pay a spread or commissions in connection with such transactions.
Dreyfus uses its best efforts to obtain execution of portfolio transactions
at prices which are advantageous to each Fund and at spreads and commission
rates, if any, which are reasonable in relation to the benefits received.
Dreyfus also places transactions for other accounts that it provides with
investment advice.

Brokers and dealers involved in the execution of portfolio transactions
on behalf of a Fund are selected on the basis of their professional
capability and the value and quality of their services. In selecting brokers
or dealers, Dreyfus will consider various relevant factors, including, but
not limited to, the size and type of the transaction; the nature and
character of the markets for the security to be purchased or sold; the
execution efficiency, settlement capability, and financial condition of the
broker-dealer; the broker-dealer's execution services rendered on a
continuing basis; and the reasonableness of any spreads (or commissions, if
any). Any spread, commission, fee or other remuneration paid to an affiliated
broker-dealer is paid pursuant to the Company's procedures adopted in
accordance with Rule 17e-1 of the 1940 Act.

Brokers or dealers may be selected who provide brokerage and/or research
services to a Fund and/or other accounts over which Dreyfus or its affiliates
exercise investment discretion. Such services may include advice concerning
the value of securities; the advisability of investing in, purchasing or
selling securities; the availability of securities or the purchasers or
sellers of securities; furnishing analyses and reports concerning issuers,
industries, securities, economic factors and trends, portfolio strategy and
performance of accounts; and effecting securities transactions and performing
functions incidental thereto (such as clearance and settlement).

The receipt of research services from broker-dealers may be useful to
Dreyfus in rendering investment management services to a Fund and/or its
other clients; and, conversely, such information provided by brokers or
dealers who have executed transaction orders on behalf of other clients of
Dreyfus may be useful to these organizations in carrying out their obligation
to the Fund. The receipt of such research services does not reduce these
organizations' normal independent research activities; however, it enables
these organizations to avoid the additional expenses which might otherwise be
incurred if these organizations were to attempt to develop comparable
information through their own staffs.

The Company's Board of Directors periodically review Dreyfus'
performance of its responsibilities in connection with the placement of
portfolio transactions on behalf of a Fund and review the prices paid by the
Fund over representative periods of time to determine if they are reasonable
in relation to the benefits to the Fund.

Although Dreyfus manages other accounts in addition to the Funds,
investment decisions for the Funds are made independently from decisions made
for these other accounts. It sometimes happens that the same security is held
by more than one of the accounts managed by Dreyfus. Simultaneous
transactions may occur when several accounts are managed by the same
investment manager, particularly when the same investment instrument is
suitable for the investment objective of more than one account.

When more than one account is simultaneously engaged in the purchase or
sale of the same investment instrument, the prices and amounts are allocated
in accordance with a formula considered by Dreyfus to be equitable to each
account. In some cases this system could have a detrimental effect on the
price or volume of the investment instrument as far as a particular Fund is
concerned. In other cases, however, the ability of a Fund to participate in
volume transactions will produce better executions for the Fund. While the
Directors will continue to review simultaneous transactions, it is their
present opinion that the desirability of retaining Dreyfus as investment
manager to a Fund outweighs any disadvantages that may be said to exist from
exposure to simultaneous transactions.

For the fiscal years ended October 31, 1995, 1994 and 1993, Premier
Limited Term Income Fund paid $5,763, $9,550 and $4,885, respectively, in
brokerage commissions. The Premier Limited Term Income Fund typically does
not pay a stated brokerage fee on transactions.

For the period September 15, 1993 (commencement of operations) to
October 31, 1993, and for the fiscal years ended October 31, 1995 and 1994,
the Premier Balanced Fund paid brokerage commissions amounting to $89,957 and
$24,670, respectively.

Portfolio Turnover. The portfolio turnover rate for each Fund is
calculated by dividing the lesser of the Fund's annual sales or purchases of
portfolio securities (exclusive of purchases and sales of securities whose
maturities at the time of acquisition were one year or less) by the monthly
average value of securities in the Fund during the year.

The portfolio turnover rates for the last two years of each Fund were:

Fiscal Year Ended October 31,
__________________________
1995* 1994
____ ____

Premier Limited Income Fund 73% 117%
Premier Balanced Fund 53.20% 83%

PERFORMANCE INFORMATION

The following information supplements and should be read in conjunction
with the section in each Fund's Prospectus entitled "Performance
Information."

The Premier Balanced Fund's average annual total return for the 1 and
1.551 year periods ended October 31, 1995 for Class A was 15.77% and 13.15%,
respectively. The Premier Balanced Fund's average annual total return for
Class R for the 1 and 2.129 year periods ended October 31, 1995 was 21.46%
and 10.83%, respectively. The Premier Balanced Fund's average annual total
return for Class B and Class C for the period December 19, 1994 (inception
date of Class B and Class C) through October 31, 1995 was 22.41% and 26.09%,
respectively.

The Premier Limited Term Income Fund's average annual total return for
the 1 and 1.570 year periods ended October 31, 1995 for Class A was 8.44% and
5.42%, respectively. The Premier Limited Term Income Fund's average annual
total return for class R for the 1 and 4.310 year periods ended October 31,
1995 was 12.11% and 7.6%, respectively. The Premier Limited Term Income
Fund's average annual total return for Class B and Class C for the period
December 19, 1994 (inception date of Class B and Class C) through October 31,
1995 was 9.64% and 12.27%, respectively.

Average annual total return is calculated by determining the ending
redeemable value of an investment purchased at net asset value (maximum
offering price in the case of Class A) per share with a hypothetical $1,000
payment made at the beginning of the period (assuming the reinvestment of
dividends and other distributions), dividing by the amount of the initial
investment, taking the "n"th root of the quotient (where "n" is the number of
years in the period) and subtracting 1 from the result. A Class average
annual total return figures calculated in accordance with such formula assume
that in the case of Class A the maximum sales load has been deducted from the
hypothetical initial investment at the time of purchase or in the case of
Class B or Class C the maximum applicable CDSC has been paid upon redemption
at the end of the period.

The Premier Balanced Fund's total return for the period September 15,
1993 (commencement of operations) to October 31, 1995 for Class R was 24.49%.
The Premier Balanced Fund's total return for Class A for the period April 14,
1994 (inception date of Class A) to October 31, 1995 was 21.11%. Based on
net asset value per share, the total return for Class A was 26.84% for this
period. The Premier Balanced Fund's total return for Class B and Class C for
the period from December 19, 1994 (inception date of Class B and Class C)
through October 31, 1995 was 19.19% and 22.29%, respectively. Without giving
effect to the applicable CDSC, total return for Class B and Class C was
23.19% and 23.29%, respectively. The Premier Limited Term Income Fund's
total return for the period July 11, 1991 (commencement of operations) to
October 31, 1995 for Class R was 37.61%. The Premier Limited Term Income
Fund's total return for Class A for the period April 7, 1994 (inception date
of Class A) to October 31, 1995 was 8.64%. Based on net asset value per
share, the total return for Class A was 11.95% for this period. The Premier
Limited Term Income Fund's total return for Class B and Class C for the
period from December 19, 1994 (inception date of Class B and Class C) through
October 31, 1995 was 8.32% and 10.57%, respectively. Without giving effect
to the applicable CDSC, total return for Class B and Class C was 11.32% and
11.32%, respectively.

Total return is calculated by subtracting the amount of a Fund's net
asset value (maximum offering price in the case of Class A) per share at the
beginning of a stated period from the net asset value (maximum offering price
in the case of Class A) per share at the end of the period (after giving
effect to the reinvestment of dividends and other distributions during the
period and any applicable CDSC), and dividing the result by the net asset
value (maximum offering price in the case of Class A) per share at the
beginning of the period. Total return also may be calculated based on the
net asset value per share at the beginning of the period instead of the
maximum offering price per share at the beginning of the period for Class A
shares or without giving effect to any applicable CDSC at the end of the
period for Class B or C shares. In such cases, the calculation would not
reflect the deduction of the sales load with respect to Class A shares or any
applicable CDSC with respect to Class B or C shares, which, if reflected
would reduce the performance quoted.

The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "Performance Information."

The Premier Limited Term Income Fund's current yield for the 30-day
period ended October 31, 1995 was 5.17%, 4.85%, 4.85% and 5.59% for its
Class A, Class B, Class C and Class R shares, respectively. Current yield is
computed pursuant to a formula which operates, with respect to each Class, as
follows: the amount of the Fund's expenses with respect to such Class
accrued for the 30-day period (net of reimbursements) is subtracted from the
amount of the dividends and interest earned (computed in accordance with
regulatory requirements) by the Fund with respect to such Class during the
period. That result is then divided by the product of: (a) the average
daily number of shares outstanding during the period that were entitled to
receive dividends, and (b) the maximum offering price per share in the case
of Class A or the net asset value per share in the case of Class B, Class C
and Class R on the last day of the period less any undistributed earned
income per share reasonably expected to be declared as a dividend shortly
thereafter. The quotient is then added to 1, and that sum is raised to the
6th power, after which 1 is subtracted. The current yield is then arrived at
by multiplying the result by 2.

Performance information for the Funds may be compared, in reports and
promotional literature, to indexes including, but not limited to: (i) the
Morgan Stanley European Index; (ii) the Standard & Poor's 500 Composite Stock
Price Index, the Dow Jones Industrial Average, or other appropriate unmanaged
domestic or foreign indices of performance of various types of investments so
that investors may compare the Fund's results with those of indices widely
regarded by investors as representative of the securities markets in general;
(iii) other groups of mutual funds tracked by Lipper Analytical Services, a
widely used independent research firm which ranks mutual funds by overall
performance, investment objectives and assets, or tracked by other services,
companies, publications, or persons who rank mutual funds on overall
performance or other criteria; (iv) the Consumer Price Index (a measure of
inflation) to assess the real rate of return from an investment in the Fund;
and (v) products managed by a universe of money managers with similar country
allocation and performance objectives. Unmanaged indices may assume the
reinvestment of dividends but generally do not reflect deductions or
administrative and management costs and expenses.

From time to time, Fund advertisements may include statistical data or
general discussions about the growth and development of Dreyfus Retirement
Services (in terms of new customers, assets under management, market shares,
etc.) and its presence in the defined contribution plan market.

From time to time, advertising material for the Fund may include
biographical information relating to its portfolio manager and may refer to,
or include commentary by the portfolio manager relating to investment
strategy, asset growth, current or past business, political, economic or
financial conditions and other matters of general interest to investors.

INFORMATION ABOUT THE FUNDS

The following information supplements and should be read in conjunction
with the section in each Fund's Prospectus entitled "General Information."

Each Fund share has one vote and, when issued and paid for in accordance
with the terms of the offering, is fully paid and non-assessable. Fund
shares have no preemptive or subscription rights and are freely transferable.

Each Fund will send annual and semi-annual financial statements to all
its shareholders.

CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT, COUNSEL
AND INDEPENDENT AUDITORS

Mellon Bank, One Mellon Bank Center, Pittsburgh, PA 15219, is the Funds'
custodian. Dreyfus Transfer, Inc., a wholly-owned subsidiary of Dreyfus, is
located at One American Express Plaza, Providence, Rhode Island 02903, and is
each Fund's transfer and dividend disbursing agent. Under a transfer agency
agreement with each Fund, the Transfer Agent arranges for the maintenance of
shareholder account records for the Fund, the handling of certain
communication between shareholders and the Fund and the payment of dividends
and distributions payable by each Fund. For these services, the Transfer
Agent receives a monthly fee computed on the basis of the number of
shareholder accounts it maintains for each Fund during the month, and is
reimbursed for certain out-of-pocket expenses. Dreyfus Transfer, Inc. and
Mellon Bank as custodian, have no part in determining the investment policies
of a Fund or which securities are to be purchased or sold by the Fund.

Kirkpatrick & Lockhart LLP, 1800 Massachusetts Avenue, N.W., Second
Floor, Washington, D.C. 20036, has passed upon the legality of the shares
offered by the Prospectuses and this Statement of Additional Information.

KPMG Peat Marwick LLP, One Mellon Bank Center, Pittsburgh, Pennsylvania
15219 was appointed by the Directors to serve as the Funds' independent
auditors for the year ending October 31, 1996, providing audit services
including (1) examination of the annual financial statements, (2) assistance,
review and consultation in connection with the SEC and (3) review of the
annual federal income tax return filed on behalf of each Fund.

FINANCIAL STATEMENTS

The financial statements for the fiscal year ended October 31, 1995,
including notes to the financial statements and supplementary information and
the Independent Auditors' Report are included in each Fund's Annual Report to
shareholders. A copy of each Fund's Annual Report accompanies this SAI. The
financial statements included in each Fund's Annual Report are incorporated
herein by reference.
APPENDIX

DESCRIPTION OF SECURITIES RATINGS

Debt Instruments Ratings

Moody's Investors Service, Inc. (Moody's):

Aaa _ Bonds rated Aaa are judged to be of the best quality. They carry
the smallest degree of investment risk and are generally referred to as
"gilt-edge." Interest payments are protected by a large or exceptionally
stable margin and principal is secure. While the various protective elements
are likely to change, such changes as can be visualized are most unlikely to
impair the fundamentally strong position of such issues.

Aa _ Bonds rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as high
grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa Securities or fluctuation of
protective elements may be of greater amplitude or there may be other
elements present which make the long-term risks appear somewhat larger than
in Aaa securities.

A _ Bonds rated A possess many favorable investment attributes and are
considered "upper medium grade obligations."

Baa _ Bonds rated Baa are considered medium-grade obligations, i.e. they
are neither highly protected nor poorly secured. Interest payments and
principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable on any great
length of time. Such bonds lack outstanding investment characteristics and
in fact have speculative characteristics as well.

Those Bonds in the Aa and A group which Moody's believes possess the
strongest investment attributes are designated by the symbols Aa 1 and A 1.

Standard & Poor's Ratings Group ("S&P"):

AAA _ This is the highest rating assigned by S&P to a debt obligation
and indicates an extremely strong capacity to pay principal and interest.

AA _ Bonds rated AA also qualify as high-quality debt obligations.
Capacity to pay principal and interest is very strong, and in the majority of
instances they differ from AAA issues only in small degree.

A _ Bonds rated A have a strong capacity to pay principal and interest,
although they are somewhat more susceptible to the adverse effects of changes
in circumstances and economic conditions.

BBB _ Bonds rated BBB are regarded as having an adequate capacity to pay
interest and repay principal. Whereas it instantly exhibits adequate
protection or changing circumstances are more likely to lead a weakened
capacity to pay interest and repay principal for debt in this category than
in higher rated categories.

Plus (+) or Minus (-): The AA rating may be modified by the addition of
a plus or minus sign to show relative standing within the AA rating category.

Commercial Paper Ratings

Moody's:

Commercial paper rated Prime by Moody's is based upon its evaluation of
many factors, including: (1) management of the issuer; (2) the issuer's
industry or industries and the speculative-type risks which may be inherent
in certain areas; (3) the issuer's products in relation to competition and
customer acceptance; (4) liquidity; (5) amount and quality of long-term debt;
(6) trend of earnings over a period of ten years; (7) financial strength of a
parent company and the relationships which exist with the issue; and (8)
recognition by the management of obligations which may be present or may
arise as a result of public interest questions and preparations to meet such
obligations. Relative differences in these factors determine whether the
issuer's commercial paper is rated Prime-l, Prime-2, or Prime-3.

Prime-1 indicates a superior capacity for repayment of short-term
promissory obligations. Prime-l repayment capacity will normally be evidenced
by the following characteristics: (1) leading market positions in well
established industries; (2) high rates of return on funds employed; (3)
conservative capitalization structures with moderate reliance on debt and
ample asset protection; (4) broad margins in earnings coverage of fixed
financial charges and high internal cash generation; and (5) well established
access to a range of financial markets and assured sources of alternative
liquidity.

S&P:

Commercial paper rated by S&P has the following characteristics:
liquidity ratios are adequate to meet cash requirements. Long-term senior
debt is rated A or better. The issuer has access to at least two additional
channels of borrowing. Basic earnings and cash flow have an upward trend with
allowance made for unusual circumstances. Typically, the issuer's industry is
well established and the issuer has a strong position within the industry.
The reliability and quality of management are unquestioned. Relative strength
or weakness of the above factors determine whether the issuer's commercial
paper is rated A-l, A-2, or A-3.

A-1 _ This designation indicates that the degree of safety regarding
timely payment is either overwhelming or very strong. Those issues determined
to possess overwhelming safety characteristics are denoted with a plus (+)
sign designation.

A-2 _ Capacity for timely payment on issues with this designation is
strong. However, the relative degree of safety is not as high as for issues
designated A- 1.

Fitch Investors Service. Inc. ("Fitch"):

Commercial paper rated by Fitch reflects Fitch's current appraisal of
the degree of assurance of timely payment of such debt. An appraisal results
in the rating of an issuer's paper as F-l, F-2, F-3, or F-4.

F-1 _ This designation indicates that the commercial paper is regarded
as having the strongest degree of assurance for timely payment.

Duff and Phelps, Inc.:

Duff & Phelps' short-term ratings are consistent with the rating
criteria utilized by money market participants. The ratings apply to all
obligations with maturities of under one year, including commercial paper,
the uninsured portion of certificates of deposit, unsecured bank loans,
master notes, bankers acceptances, irrevocable letters of credit, and current
maturities of long-term debt. Asset-backed commercial paper is also rated
according to this scale.

Emphasis is placed on liquidity which is defined as not only cash from
operations, but also access to alternative sources of funds including trade
credit, bank lines, and the capital markets. An important consideration is
the level of an obligor's reliance on short-term funds on an ongoing basis.

The distinguishing feature of Duff & Phelps' short-term ratings is the
refinement of the traditional '1' category. The majority of short-term debt
issuers carry the highest rating, yet quality differences exist within that
tier. As a consequence, Duff & Phelps has incorporated gradations of '1+'
(one plus) and '1-' (one minus) to assist investors in recognizing those
differences.

Duff 1+ _ Highest certainty of timely payment. Short-term liquidity,
including internal operating factors and/or access to alternative sources of
funds, is outstanding, and safety is just below risk-free U.S. Treasury
short-term obligations.

Duff 1 _ Very high certainty of timely payment. Liquidity factors are
excellent and supported by good fundamental protection factors. Risk factors
are minor.

Duff 1 _ High certainty of timely payment. Liquidity factors are strong
and supported by good fundamental protection factors. Risk factors are very
small.

IBCA, Inc.:

In addition to conducting a careful review of an institution's reports
and published figures, IBCA's analysts regularly visit the companies for
discussions with senior management. These meetings are fundamental to the
preparation of individual reports and ratings. To keep abreast of any changes
that may affect assessments, analysts maintain contact throughout the year
with the management of the companies they cover.

IBCA's analysts speak the languages of the countries they cover, which
is essential to maximize the value of their meetings with management and to
properly analyze a company's written materials. They also have a thorough
knowledge of the laws and accounting practices that govern the operations and
reporting of companies within the various countries.

Often, in order to ensure a full understanding of their position,
companies entrust IBCA with confidential data. While these data cannot be
disclosed in reports, they are taken into account when assigning our ratings.
Before dispatch to subscribers, a draft of the report is submitted to each
company to permit correction of any factual errors and to enable
clarification of issues raised.

IBCA's Rating Committees meet at regular intervals to review all ratings
and to ensure that individual ratings are assigned consistently for
institutions in all the countries covered. Following the Committee meetings,
ratings are issued directly to subscribers. At the same time, the company is
informed of the ratings as a matter of courtesy, but not for discussion.

A1+ _ Obligations supported by the highest capacity for timely
repayment.

A1 _ Obligations supported by a very strong capacity for timely
repayment.

PREMIER SMALL COMPANY STOCK FUND
CLASS A, CLASS B, CLASS C AND CLASS R SHARES
PART B
(STATEMENT OF ADDITIONAL INFORMATION)
March 1, 1996
AS REVISED DECEMBER 1, 1996

This Statement of Additional Information ("SAI"), which is not a
prospectus, supplements and should be read in conjunction with the current
Prospectus of the Premier Small Company Stock Fund (formerly the Laurel
Smallcap Stock Fund) (the "Fund"), dated March 1, 1996, as revised December
1, 1996, as it may be further revised from time to time. The Fund is a
separate, diversified portfolio of The Dreyfus/Laurel Funds, Inc. (formerly
The Laurel Funds, Inc.), an open-end management investment company (the
"Company"), known as a mutual fund. To obtain a copy of the Fund's
Prospectus, please write to the Fund at 144 Glenn Curtiss Boulevard,
Uniondale, New York 11556-0144, or call one of the following numbers:

Call Toll Free 1-800-645-6561
In New York City -- Call 1-718-895-1206
On Long Island -- Call 516-794-5452

The Dreyfus Corporation ("Dreyfus") serves as the Fund's investment
manager.

Premier Mutual Fund Services, Inc. (the "Distributor") is the
distributor of the Fund's shares.

TABLE OF CONTENTS

Page

Investment Objective and Management Policies B-2
Management of the Fund B-16
Management Arrangements B-22
Purchase of Fund Shares B-23
Distribution and Service Plans B-25
Redemption of Fund Shares B-26
Shareholder Services B-27
Determination of Net Asset Value B-30
Dividends, Other Distributions and Taxes B-31
Portfolio Transactions B-34
Performance Information B-36
Information About the Fund B-37
Custodian, Transfer and Dividend Disbursing Agent, Counsel
and Independent Auditors B-38
Financial Statements B-38
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES

The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "Description of the Fund."

Portfolio Securities

Government Obligations. The Fund may invest in a variety of U.S.
Treasury obligations, which differ only in their interest rates, maturities
and times of issuance: (a) U.S. Treasury bills have a maturity of one year or
less, (b) U.S. Treasury notes have maturities of one to ten years, and (c)
U.S. Treasury bonds generally have maturities of greater than ten years.

In addition to U.S. Treasury obligations, the Fund may invest in
obligations issued or guaranteed by U.S. Government agencies and
instrumentalities which are supported by any of the following: (a) the full
faith and credit of the U.S. Treasury (such as Government National Mortgage
Association ("GNMA") participation certificates), (b) the right of the issuer
to borrow an amount limited to a specific line of credit from the U.S.
Treasury, (c) the discretionary authority of the U.S. Government agency or
instrumentality, or (d) the credit of the instrumentality. (Examples of
agencies and instrumentalities are: Federal Land Banks, Federal Housing
Administration, Farmers Home Administration, Export-Import Bank of the United
States, Central Bank for Cooperatives, Federal Intermediate Credit Banks,
Federal Home Loan Banks, General Services Administration, Maritime
Administration, Tennessee Valley Authority, District of Columbia Armory
Board, Inter-American Development Bank, Asian-American Development Bank,
Student Loan Marketing Association, International Bank for Reconstruction and
Development and Federal National Mortgage Association ("FNMA")). No assurance
can be given that the U.S. Government will provide financial support to such
U.S. Government agencies or instrumentalities described in (b), (c) and (d)
in the future, other than as set forth above, since it is not obligated to do
so by law.

Repurchase Agreements. The Fund may enter into repurchase agreements
with U.S. Government securities dealers recognized by the Federal Reserve
Board, with member banks of the Federal Reserve System, or with such other
brokers or dealers that meet the credit guidelines of the Board of Directors.
In a repurchase agreement, the Fund buys a security from a seller that has
agreed to repurchase the same security at a mutually agreed upon date and
price. The Fund's resale price will be in excess of the purchase price,
reflecting an agreed upon interest rate. This interest rate is effective for
the period of time the Fund is invested in the agreement and is not related
to the coupon rate on the underlying security. Repurchase agreements may also
be viewed as a fully collateralized loan of money by the Fund to the seller.
The period of these repurchase agreements will usually be short, from
overnight to one week, and at no time will the Fund invest in repurchase
agreements for more than one year. The Fund will always receive as collateral
securities whose market value including accrued interest is, and during the
entire term of the agreement remains, at least equal to 100% of the dollar
amount invested by the Fund in each agreement, and the Fund will make payment
for such securities only upon physical delivery or upon evidence of book
entry transfer to the account of the Custodian. If the seller defaults, the
Fund might incur a loss if the value of the collateral securing the
repurchase agreement declines and might incur disposition costs in connection
with liquidating the collateral. In addition, if bankruptcy proceedings are
commenced with respect to the seller of a security which is the subject of a
repurchase agreement, realization upon the collateral by the Fund may be
delayed or limited. The Fund seeks to minimize the risk of loss through
repurchase agreements by analyzing the creditworthiness of the obligors under
repurchase agreements, in accordance with the credit guidelines of the
Company's Board of Directors.

Reverse Repurchase Agreements. The Fund may enter into reverse
repurchase agreements to meet redemption requests where the liquidation of
portfolio securities is deemed by the Fund to be inconvenient or
disadvantageous. A reverse repurchase agreement is a transaction whereby the
Fund transfers possession of a portfolio security to a bank or broker-dealer
in return for a percentage of the portfolio security's market value. The Fund
retains record ownership of the security involved including the right to
receive interest and principal payments. At an agreed upon future date, the
Fund repurchases the security by paying an agreed upon purchase price plus
interest. Cash or liquid high-grade debt obligations of the Fund equal in
value to the repurchase price including any accrued interest will be
maintained in a segregated account while a reverse repurchase agreement is in
effect.

When-Issued Securities. New issues of U.S. Treasury and Government
securities are often offered on a when-issued basis. This means that delivery
and payment for the securities normally will take place approximately 7 to 45
days after the date the buyer commits to purchase them. The payment
obligation and the interest rate that will be received on securities
purchased on a when-issued basis are each fixed at the time the buyer enters
into the commitment. The Fund will make commitments to purchase such
securities only with the intention of actually acquiring the securities, but
the Fund may sell these securities or dispose of the commitment before the
settlement date if it is deemed advisable as a matter of investment strategy.
Cash or marketable high-grade debt securities equal to the amount of the
above commitments will be segregated on the Fund's records. For the purpose
of determining the adequacy of these securities the segregated securities
will be valued at market. If the market value of such securities declines,
additional cash or securities will be segregated on the Fund's records on a
daily basis so that the market value of the account will equal the amount of
such commitments by the Fund.

Securities purchased on a when-issued basis and the securities held by
the Fund are subject to changes in market value based upon the public's
perception of changes in the level of interest rates. Generally, the value of
such securities will fluctuate inversely to changes in interest rates --
i.e., they will appreciate in value when interest rates decline and decrease
in value when interest rates rise. Therefore, if in order to achieve higher
interest income the Fund remains substantially fully invested at the same
time that it has purchased securities on a "when-issued" basis, there will be
a greater possibility of fluctuation in the Fund's net asset value.

When payment for when-issued securities is due, the Fund will meet its
obligations from then-available cash flow, the sale of segregated securities,
the sale of other securities or, and although it would not normally expect to
do so, from the sale of the when-issued securities themselves (which may have
a market value greater or less than the Fund's payment obligation). The sale
of securities to meet such obligations carries with it a greater potential
for the realization of capital gains, which are subject to federal income
taxes.

Commercial Paper. The Fund may invest in commercial paper issued in
reliance on the so-called "private placement" exemption from registration
afforded by Section 4(2) of the Securities Act of 1933 ("Section 4(2)
paper"). Section 4(2) paper is restricted as to disposition under the federal
securities laws and generally is sold to investors who agree that they are
purchasing the paper for an investment and not with a view to public
distribution. Any resale by the purchaser must be in an exempt transaction.
Section 4(2) paper is normally resold to other investors through or with the
assistance of the issuer or investment dealers who make a market in Section
4(2) paper, thus providing liquidity. Pursuant to guidelines established by
the Company's Board of Directors, Dreyfus may determine that Section 4(2)
paper is liquid for the purposes of complying with the Fund's investment
restriction relating to investments in illiquid securities.

Management Policies

The Fund engages, except as noted, in the following practices in
furtherance of its investment objective.

Loans of Fund Securities. The Fund has authority to lend its portfolio
securities provided (1) the loan is secured continuously by collateral
consisting of U.S. Government securities or cash or cash equivalents adjusted
daily to make a market value at least equal to the current market value of
these securities loaned; (2) the Fund may at any time call the loan and
regain the securities loaned; (3) the Fund will receive any interest or
dividends paid on the loaned securities; and (4) the aggregate market value
of securities loaned will not at any time exceed one-third of the total
assets of the Fund. In addition, it is anticipated that the Fund may share
with the borrower some of the income received on the collateral for the loan
or that it will be paid a premium for the loan. In determining whether to
lend securities, the Fund considers all relevant factors and circumstances
including the creditworthiness of the borrower.

Derivative Instruments. The Fund may purchase and sell various
financial instruments ("Derivative Instruments"), such as financial futures
contracts (such as interest rate, index and foreign currency futures
contracts), options (such as options on securities, indices, foreign
currencies and futures contracts), forward currency contracts and interest
rate, equity index and currency swaps, caps, collars and floors. The index
Derivative Instruments the Fund may use may be based on indices of U.S. or
foreign equity or debt securities. These Derivative Instruments may be used,
for example, to preserve a return or spread, to lock in unrealized market
value gains or losses, to facilitate or substitute for the sale or purchase
of securities, to manage the duration of securities, to alter the exposure of
a particular investment or portion of the Fund's portfolio to fluctuations in
interest rates or currency rates, to uncap a capped security or to convert a
fixed rate security into a variable rate security or a variable rate security
into a fixed rate security.

Hedging strategies can be broadly categorized as "short hedges" and
"long hedges." A short hedge is a purchase or sale of a Derivative
Instrument intended partially or fully to offset potential declines in the
value of one or more investments held in the Fund's portfolio. Thus, in a
short hedge the Fund takes a position in a Derivative Instrument whose price
is expected to move in the opposite direction of the price of the investment
being hedged.

Conversely, a long hedge is a purchase or sale of a Derivative
Instrument intended partially or fully to offset potential increases in the
acquisition cost of one or more investments that the Fund intends to acquire.
Thus, in a long hedge the Fund takes a position in a Derivative Instrument
whose price is expected to move in the same direction as the price of the
prospective investment being hedged. A long hedge is sometimes referred to
as an anticipatory hedge. In an anticipatory hedge transaction, the Fund
does not own a corresponding security and, therefore, the transaction does
not relate to a security the Fund owns. Rather, it relates to a security
that the Fund intends to acquire. If the Fund does not complete the hedge by
purchasing the security it anticipated purchasing, the effect on the Fund's
portfolio is the same as if the transaction were entered into for speculative
purposes.

Derivative Instruments on securities generally are used to hedge against
price movements in one or more particular securities positions that the Fund
owns or intends to acquire. Derivative Instruments on indices, in contrast,
generally are used to attempt to hedge against price movements in market
sectors in which the Fund has invested or expects to invest. Derivative
Instruments on debt securities may be used to hedge either individual
securities or broad debt market sectors.

The use of Derivative Instruments is subject to applicable regulations
of the Securities and Exchange Commission ("SEC"), the several options and
futures exchanges upon which they are traded, the Commodity Futures Trading
Commission ("CFTC") and various state regulatory authorities. In addition,
the Fund's ability to use Derivative Instruments will be limited by tax
considerations. See "Dividends, Other Distributions and Taxes."

(4) As described below, the Fund might be required to maintain assets
as "cover," maintain segregated accounts or make margin payments when it
takes positions in Derivative Instruments involving obligations to third
parties (i.e., Derivative Instruments other than purchased options). If the
Fund were unable to close out its positions in such Derivative Instruments,
it might be required to continue to maintain such assets or accounts or make
such payments until the position expired or matured. These requirements
might impair the Fund's ability to sell a portfolio security or make an
investment at a time when it would otherwise be favorable to do so, or
require that the Fund sell a portfolio security at a disadvantageous time.
The Fund's ability to close out a position in a Derivative Instrument prior
to expiration or maturity depends on the existence of a liquid secondary
market or, in the absence of such a market, the ability and willingness of
the other party to the transaction ("counterparty") to enter into a
transaction closing out the position. Therefore, there is no assurance that
any position can be closed out at a time and price that is favorable to the
Fund.

Cover for Derivative Instruments. Transactions using Derivative
Instruments may expose the Fund to an obligation to another party. The Fund
will not enter into any such transactions unless it owns either (1) an
offsetting ("covered") position in securities, futures, options, currencies
or forward contracts or (2) cash and short-term liquid debt securities with a
value sufficient at all times to cover its potential obligations to the
extent not covered as provided in (1) above. The Fund will comply with SEC
guidelines regarding cover for Derivative Instruments and will, if the
guidelines so require, set aside cash, U.S. Government securities or other
liquid, high-grade debt securities in a segregated account with its custodian
in the prescribed amount.

The purchase of call options can serve as a long hedge, and the purchase
of put options can serve as a short hedge. Writing put or call options can
enable the Fund to enhance income or yield by reason of the premiums paid by
the purchasers of such options. However, if the market price of the security
or other instrument underlying a put option declines to less than the
exercise price on the option, minus the premium received, the Fund would
expect to suffer a loss.

The Fund may effectively terminate its right or obligation under an
option by entering into a closing transaction. For example, the Fund may
terminate its obligation under a call or put option that it had written by
purchasing an identical call or put option; this is known as a closing
purchase transaction. Conversely, the Fund may terminate a position in a put
or call option it had purchased by writing an identical put or call option;
this is known as a closing sale transaction. Closing transactions permit the
Fund to realize profits or limit losses on an option position prior to its
exercise or expiration.

The Fund may purchase and sell both exchange-traded and over-the-counter
("OTC") options. Exchange-traded options in the United States are issued by
a clearing organization that, in effect, guarantees completion of every
exchange-traded option transaction. In contrast, OTC options are contracts
between the Fund and its counterparty (usually a securities dealer or a bank)
with no clearing organization guarantee. Thus, when the Fund purchases an
OTC option, it relies on the counterparty from whom it purchased the option
to make or take delivery of the underlying investment upon exercise of the
option. Failure by the counterparty to do so would result in the loss of any
premium paid by the Fund as well as the loss of any expected benefit of the
transaction. The Fund will enter into only those option contracts that are
listed on a national securities or commodities exchange or traded in the OTC
market for which there appears to be a liquid secondary market.

The Fund will not purchase or write OTC options if, as a result of such
transaction, the sum of (i) the market value of outstanding OTC options
purchased by the Fund, (ii) the market value of the underlying securities
covered by outstanding OTC call options written by the Fund, and (iii) the
market value of all other assets of the Fund that are illiquid or are not
otherwise readily marketable, would exceed 15% of the net assets of the Fund,
taken at market value. However, if an OTC option is sold by the Fund to a
primary U.S. Government securities dealer recognized by the Federal Reserve
Bank of New York and the Fund has the unconditional contractual right to
repurchase such OTC option from the dealer at a predetermined price, then the
Fund will treat as illiquid such amount of the underlying securities as is
equal to the repurchase price less the amount by which the option is "in-the-
money" (the difference between the current market value of the underlying
securities and the option's strike price). The repurchase price with primary
dealers is typically a formula price that is generally based on a multiple of
the premium received for the option plus the amount by which the option is
"in-the-money."

Generally, the OTC debt and foreign currency options used by the Fund
are European-style options. This means that the option is only exercisable
immediately prior to its expiration. This is in contrast to American-style
options, which are exercisable at any time prior to the expiration date of
the option.

The Fund may write only covered call options on securities. A call
option is covered if the Fund owns the underlying security or a call option
on the same security with a lower strike price.

Futures strategies also can be used to manage the average duration of
the Fund's fixed-income portfolio. If Dreyfus wishes to shorten the average
duration of the Fund's fixed-income portfolio, the Fund may sell an interest
rate futures contract or a call option thereon, or purchase a put option on
that futures contract. If Dreyfus wishes to lengthen the average duration of
the Fund's fixed-income portfolio, the Fund may buy an interest rate futures
contract or a call option thereon, or sell a put option thereon.

No price is paid upon entering into a futures contract. Instead, at the
inception of a futures contract the Fund is required to deposit "initial
margin" consisting of cash or U.S. Government securities in an amount
generally equal to 10% or less of the contract value. Margin must also be
deposited when writing a call or put option on a futures contract, in
accordance with applicable exchange rules. Unlike margin in securities
transactions, initial margin on futures contracts does not represent a
borrowing, but rather is in the nature of a performance bond or good-faith
deposit that is returned to the Fund at the termination of the transaction if
all contractual obligations have been satisfied. Under certain
circumstances, such as periods of high volatility, the Fund may be required
by an exchange to increase the level of its initial margin payment.

Subsequent "variation margin" payments are made to and from the futures
broker daily as the value of the futures position varies, a process known as
"marking-to-market." Variation margin does not involve borrowing, but rather
represents a daily settlement of the Fund's obligations to or from a futures
broker. When the Fund purchases an option on a future, the premium paid plus
transaction costs is all that is at risk. In contrast, when the Fund
purchases or sells a futures contract or writes a call or put option thereon,
it is subject to daily variation margin calls that could be substantial in
the event of adverse price movements. If the Fund has insufficient cash to
meet daily variation margin requirements, it might need to sell securities at
a time when such sales are disadvantageous.

Purchasers and sellers of futures contracts and options on futures can
enter into offsetting closing transactions, similar to closing transactions
on options, by selling or purchasing, respectively, an instrument identical
to the instrument purchased or sold. Positions in futures and options on
futures may be closed only on an exchange or board of trade that provides a
secondary market. Although the Fund intends to enter into futures and
options on futures only on exchanges or boards of trade where there appears
to be a liquid secondary market, there can be no assurance that such a market
will exist for a particular contract at a particular time. In such event, it
may not be possible to close a futures contract or options position.

To the extent that the Fund enters into futures contracts, options on
futures contracts, or options on foreign currencies traded on an exchange
regulated by the CFTC, in each case other than for bona fide hedging purposes
(as defined by the CFTC), the aggregate initial margin and premiums required
to establish those positions (excluding the amount by which options are "in-
the-money" at the time of purchase) will not exceed 5% of the liquidation
value of the Fund's portfolio, after taking into account unrealized profits
and unrealized losses on any contracts the Fund has entered into. This
policy does not limit to 5% the percentage of the Fund's assets that are at
risk in futures contracts and options on futures contracts.

Foreign Currency Strategies - Special Considerations. The Fund may use
Derivative Instruments on foreign currencies to hedge against movements in
the values of the foreign currencies in which the Fund's securities are
denominated. Such currency hedges can protect against price movements in a
security that the Fund owns or intends to acquire that are attributable to
changes in the value of the currency in which it is denominated. Such hedges
do not, however, protect against price movements in the securities that are
attributable to other causes.

The Fund might seek to hedge against changes in the value of particular
currency when no Derivative Instruments on that currency are available or
such Derivative Instruments are more expensive than certain other Derivative
Instruments. In such cases, the Fund may hedge against price movements in
that currency by entering into transactions using Derivative Instruments on
another currency or a basket of currencies, the values of which Dreyfus
believes will have a high degree of positive correlation to the value of the
currency being hedged. The risk that movements in the price of the
Derivative Instrument will not correlate perfectly with movements in the
price of the currency being hedged is magnified when this strategy is used.

The value of Derivative Instruments on foreign currencies depends on the
value of the underlying currency relative to the U.S. dollar. Because
foreign currency transactions occurring in the interbank market might involve
substantially larger amounts than those involved in the use of foreign
currency Derivative Instruments, the Fund could be disadvantaged by having to
deal in the odd lot market (generally consisting of transactions of less than
$1 million) for the underlying foreign currencies at prices that are less
favorable than for round lots.

There is no systematic reporting of last sale information for foreign
currencies or any regulatory requirement that quotations available through
dealers or other market sources be firm or revised on a timely basis.
Quotation information generally is representative of very large transactions
in the interbank market and thus might not reflect odd-lot transactions where
rates might be less favorable. The interbank market in foreign currencies is
a global, round-the-clock market.

Settlement of transactions involving foreign currencies might be
required to take place within the country issuing the underlying currency.
Thus, the Fund might be required to accept or make delivery of the underlying
foreign currency in accordance with any U.S. or foreign regulations regarding
the maintenance of foreign banking arrangements by U.S. residents and might
be required to pay any fees, taxes and charges associated with such delivery
assessed in the issuing country.

Forward Contracts. A forward foreign currency exchange contract
("forward contract") is a contract to purchase or sell a currency at a future
date. The two parties to the contract set the number of days and the price.
Forward contracts are used as a hedge against future movements in foreign
exchange rates. The Fund may enter into forward contracts to purchase or
sell foreign currencies for a fixed amount of U.S. dollars or other foreign
currency.

Forward contracts may serve as long hedges -- for example, the Fund may
purchase a forward contract to lock in the U.S. dollar price of a security
denominated in a foreign currency that the Fund intends to acquire. Forward
contracts may also serve as short hedges -- for example, the Fund may sell a
forward contract to lock in the U.S. dollar equivalent of the proceeds from
the anticipated sale of a security denominated in a foreign currency or from
anticipated dividend or interest payments denominated in a foreign currency.
Dreyfus may seek to hedge against changes in the value of a particular
currency by using forward contracts on another foreign currency or basket of
currencies, the value of which Dreyfus believes will bear a positive
correlation to the value of the currency being hedged.

The cost to the Fund of engaging in forward contracts varies with
factors such as the currency involved, the length of the contract period and
the market conditions then prevailing. Because forward contracts are usually
entered into a principal basis, no fees or commissions are involved. When
the Fund enters into a forward contract, it relies on the counterparty to
make or take delivery of the underlying currency at the maturity of the
contract. Failure by the counterparty to do so would result in the loss of
any expected benefit of the transaction.

Buyers and sellers of forward contracts can enter into offsetting
closing transactions by selling or purchasing, respectively, an instrument
identical to the instrument purchased or sold. Secondary markets generally
do not exist for forward contracts, with the result that closing transactions
generally can be made for forward contracts only by negotiating directly with
the counterparty. Thus, there can be no assurance that the Fund will in fact
be able to close out a forward contract at a favorable price prior to
maturity. In addition, in the event of insolvency of the counterparty, the
Fund might be unable to close out a forward contract at any time prior to
maturity. In either event, the Fund would continue to be subject to market
risk with respect to the position, and would continue to be required to
maintain a position in the securities or currencies that are the subject of
the hedge or to maintain cash or securities in a segregated account.

The precise matching of forward currency contract amounts and the value
of the securities involved generally will not be possible because the value
of such securities measured in the foreign currency will change after the
forward contract has been established. Thus, the Fund might need to purchase
or sell foreign currencies in the spot (cash) market to the extent such
foreign currencies are not covered by forward contracts. The projection of
short-term currency market movements is extremely difficult, and the
successful execution of a short-term hedging strategy is highly uncertain.

Swaps, Caps, Collars and Floors. Swap agreements, including interest
rate, equity index and currency swaps, caps, collars and floors, may be
individually negotiated and structured to include exposure to a variety of
different types of investments or market factors. Swaps involve two parties
exchanging a series of cash flows at specified intervals. In the case of an
interest rate swap, the parties exchange interest payments based on an agreed
upon principal amount (referred to as the "notional principal amount").
Under the most basic scenario, Party A would pay a fixed rate on the notional
principal amount to Party B, which would pay a floating rate on the same
notional principal amount to Party A. Depending on their structure, swap
agreements may increase or decrease the Fund's exposure to long or short-term
interest rates (in the U.S. or abroad), foreign currency values, mortgage
securities, corporate borrowing rates, or other factors. Swap agreements can
take many different forms and are known by a variety of names.

In a typical cap or floor agreement, one party agrees to make payments
only under specified circumstances, usually in return for payment of a fee by
the other party. For example, the buyer of an interest rate cap obtains the
right to receive payments to the extent that a specified interest rate
exceeds an agreed-upon level, while the seller of an interest rate floor is
obligated to make payments to the extent that a specified interest rate falls
below an agreed-upon level. An interest rate collar combines elements of
buying a cap and selling a floor.

The Fund will set aside cash or appropriate liquid assets to cover its
current obligations under swap transactions. If the Fund enters into a swap
agreement on a net basis (that is, the two payment streams are netted out,
with the Fund receiving or paying, as the case may be, only the net amount of
the two payments), the Fund will maintain cash or liquid assets with a daily
value at least equal to the excess, if any, of the Fund's accrued obligations
under the swap agreement over the accrued amount the Fund is entitled to
receive under the agreement. If the Fund enters into a swap agreement on
other than a net basis or writes a cap, collar or floor, it will maintain
cash or liquid assets with a value equal to the full amount of the Fund's
accrued obligations under the agreement.

The most important factor in the performance of swap agreements is the
change in the specific interest rate, currency or other factor(s) that
determine the amounts of payments due to and from the Fund. If a swap
agreement calls for payments by the Fund, the Fund must be prepared to make
such payments when due. In addition, if the counterparty's creditworthiness
declines, the value of a swap agreement would likely decline, potentially
resulting in losses.

The Fund will enter into swaps, caps, collars and floors only with banks
and recognized securities dealers believed by Dreyfus to present minimal
credit risks in accordance with guidelines established by the Board. If
there is a default by the other party to such a transaction, the Fund will
have to rely on its contractual remedies (which may be limited by bankruptcy,
insolvency or similar laws) pursuant to the agreement relating to the
transaction.

The Fund understands that it is the position of the staff of the SEC
that assets involved in swap transactions are illiquid and, therefore, are
subject to the limitations on illiquid investments.

Investment Restrictions

The following limitations have been adopted by the Fund. The Fund may
not change any of these fundamental investment limitations without the
consent of: (a) 67% or more of the shares present at a meeting of
shareholders duly called if the holders of more than 50% of the outstanding
shares of the Fund are present or represented by proxy; or (b) more than 50%
of the outstanding shares of the Fund, whichever is less. The Fund may not:

1. Purchase any securities which would cause more than 25% of the
value of the Fund's total assets at the time of such purchase to be invested
in the securities of one or more issuers conducting their principal
activities in the same industry. (For purposes of this limitation, U.S.
Government securities, and state or municipal governments and their political
subdivisions are not considered members of any industry. In addition, this
limitation does not apply to investments in domestic banks, including U.S.
branches of foreign banks and foreign branches of U.S. banks).

2. Borrow money or issue senior securities as defined in the
Investment Company Act of 1940, as amended (the "1940 Act") except that (a)
the Fund may borrow money in an amount not exceeding one-third of the Fund's
total assets at the time of such borrowings, and (b) the Fund may issue
multiple classes of shares. The purchase or sale of futures contracts and
related options shall not be considered to involve the borrowing of money or
issuance of senior securities.

3. Purchase with respect to 75% of the Fund's total assets securities
of any one issuer (other than securities issued or guaranteed by the U.S.
Government, its agencies or instrumentalities) if, as a result, (a) more than
5% of the Fund's total assets would be invested in the securities of that
issuer, or (b) the Fund would hold more than 10% of the outstanding voting
securities of that issuer.

5. Purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent the
Fund from investing in securities or other instruments backed by real estate,
including mortgage loans, or securities of companies that engage in real
estate business or invest or deal in real estate or interests therein).

7. Purchase or sell commodities except that the Fund may enter into
futures contracts and related options, forward currency contacts and other
similar instruments.

The Fund may, notwithstanding any other fundamental investment policy or
limitation, invest all of its investable assets in securities of a single
open-end management investment company with substantially the same investment
objective, policies and limitations as the Fund.

The Fund has adopted the following additional non-fundamental
restrictions. These non-fundamental restrictions may be changed without
shareholder approval, in compliance with applicable law and regulatory
policy.

1. The Fund shall not sell securities short, unless it owns or has the
right to obtain securities equivalent in kind and amounts to the securities
sold short, and provided that transactions in futures contracts and options
are not deemed to constitute selling short.

2. The Fund shall not purchase securities on margin, except that the
Fund may obtain such short-term credits as are necessary for the clearance of
transactions, and provided that margin payments in connection with futures
contracts and options shall not constitute purchasing securities on margin.

3. The Fund shall not purchase oil, gas or mineral leases.

4. The Fund will not purchase or retain the securities of any issuer
if the officers or, Directors of the Fund, its advisers, or managers, owning
beneficially more than one half of one percent of the securities of such
issuer, together own beneficially more than 5% of such securities.

5. The Fund will not purchase securities of issuers (other than
securities issued or guaranteed by domestic or foreign governments or
political subdivisions thereof), including their predecessors, that have been
in operation for less than three years, if by reason thereof, the value of
the Fund's investment in securities would exceed 5% of the Fund's total
assets. For purposes of this limitation, sponsors, general partners,
guarantors and originators of underlying assets may be treated as the issuer
of a security.

6. The Fund will invest no more than 15% of the value of its net
assets in illiquid securities, including repurchase agreements with remaining
maturities in excess of seven days, time deposits with maturities in excess
of seven days and other securities which are not readily marketable. For
purposes of this limitation, illiquid securities shall not include Section
4(2) Paper and securities which may be resold under Rule 144A under the
Securities Act of 1933, provided that the Board of Directors, or its
delegate, determines that such securities are liquid based upon the trading
markets for the specific security.

7. The Fund may not invest in securities of other investment
companies, except as they may be acquired as part of a merger, consolidation
or acquisition of assets and except to the extent otherwise permitted by the
1940 Act.

8. The Fund shall not purchase any security while borrowings
representing more than 5% of the Fund's total assets are outstanding.

9. The Fund will not purchase warrants if at the time of such
purchase: (a) more than 5% of the value of the Fund's assets would be
invested in warrants, or (b) more than 2% of the value of the Fund's assets
would be invested in warrants that are not listed on the New York or American
Stock Exchange (for purposes of this limitation, warrants acquired by the
Fund in units or attached to securities will be deemed to have no value).

10. The Fund will not purchase puts, calls, straddles, spreads and any
combination thereof if by reason thereof the value of its aggregate
investment in such classes of securities will exceed 5% of its total assets
except that: (a) this limitation shall not apply to standby commitments, and
(b) this limitation shall not apply to the Fund's transactions in futures
contracts and related options.

As an operating policy, the Fund will not invest more than 25% of the value
of its total assets, at the time of such purchase in domestic banks,
including U.S. branches of foreign banks and foreign branches of U.S. banks.
The Company's Board of Directors may change this policy without shareholder
approval. Notice will be given to shareholders if this policy is changed by
the Board.

MANAGEMENT OF THE FUND

PRINCIPAL SHAREHOLDERS

The following shareholder(s) owned 5% or more of the Class R shares of
the Fund at January 31, 1996: Mac & Co., 040-336, P.O. Box 3198, Pittsburgh,
PA 15230-3198, 11% record. The following shareholder(s) owned 5% or more of
Class A shares of the Fund at January 31, 1996: Merrill Lynch, Pierce, Fenner
& Smith, 4800 Deer Lake Drive, Jacksonville, FL 32246-6484, 5% record; BHC
Securities, Attn: Ken Myers, 2005 Market Street, Philadelphia, PA 19103-7042,
5% record.

FEDERAL LAW AFFECTING MELLON BANK

The Glass-Steagall Act of 1933 prohibits national banks from engaging in
the business of underwriting, selling or distributing securities and
prohibits a member bank of the Federal Reserve System from having certain
affiliations with an entity engaged principally in that business. The
activities of Mellon Bank, N.A. ("Mellon Bank") in informing its customers
of, and performing, investment and redemption services in connection with the
Fund, and in providing services to the Fund as custodian, as well as Dreyfus'
investment advisory activities, may raise issues under these provisions.
Mellon Bank has been advised by its counsel that the activities contemplated
under these arrangements are consistent with its statutory and regulatory
obligations.

Changes in either federal or state statutes and regulations relating to
the permissible activities of banks and their subsidiaries or affiliates, as
well as further judicial or administrative decisions or interpretations of
such future statutes and regulations, could prevent Mellon Bank from
continuing to perform all or a part of the above services for its customers
and/or the Fund. If Mellon Bank were prohibited from serving the Fund in any
of its present capacities, the Board of Directors would seek an alternative
provider(s) of such services.

DIRECTORS AND OFFICERS

The officers and Directors of the Company as a group owned beneficially
less than 1% of the total shares of the Fund outstanding as of January 31,
1996.

Total
Pension or Compensation
Retirement From the
Benefits Estimated Company
Aggregate Accrued as Annual and Fund
Compensation Part of Benefits Complex Paid
From the the Company's Upon to Board
Name of Board Member Company # Expenses Retirement Member
- ------------------- ---------- ------------ ---------- -----------
<S> <C> <C> <C> <C>
Ruth M. Adams $27,800 None None $ 34,500

Francis P. Brennan* 86,683 None None 110,500

Joseph S. DiMartino** None None None $448,618***

James M. Fitzgibbons 27,795 None None 34,500

J. Tomlinson Fort** None None None None

Arthur L. Goeschel 27,604 None None 35,500

Kenneth A. Himmel 26,381 None None 32,750

Arch S. Jeffery** None None None None

Stephen J. Lockwood 26,387 None None 32,750

John J. Sciullo 27,800 None None 34,500

Roslyn M. Watson 27,795 None None 34,550
</TABLE>

MANAGEMENT ARRANGEMENTS

The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "Management of the Fund."

Management Agreement. Dreyfus serves as the investment manager for the
Fund pursuant to an Investment Management Agreement with the Company dated
April 4, 1994 (the "Management Agreement"), transferred to Dreyfus as of
October 17, 1994. Pursuant to the Management Agreement, Dreyfus provides, or
arranges for one or more third parties to provide, investment advisory,
administrative, custody, fund accounting and transfer agency service to the
Fund. As investment manager, Dreyfus manages the Fund by making investment
decisions based on the Fund's investment objective, policies and
restrictions. The Management Agreement is subject to review and approval at
least annually by the Board of Directors.

The current Management Agreement with Dreyfus provides for a "unitary
fee." Under the unitary fee structure, Dreyfus pays all expenses of the Fund
except: (i) brokerage commissions, (ii) taxes, interest and extraordinary
expenses (which are expected to be minimal), and (iii) the Rule 12b-1 fees
described in this Statement of Additional Information. Under the unitary
fee, Dreyfus provides, or arranges for one or more third parties to provide,
investment advisory, administrative, custody, fund accounting and transfer
agency services to the Fund. For the provision of such services directly, or
through one or more third parties, Dreyfus receives as full compensation for
all services and facilities provided by it, a fee computed daily and paid
monthly at the annual rate set forth in the Fund's Prospectus, applied to the
average daily net assets of the Fund's investment portfolio. Previously, the
payments to the investment manager covered merely the provision of investment
advisory services (and payment for sub-advisory services) and certain
specified administrative services. Under this previous arrangement, the Fund
also paid for additional non-investment advisory expenses, such as custody
and transfer agency services, that were not paid by the investment advisor.

The Fund paid management fees of $21,306 and $278,575 during the period
from September 1, 1994 (commencement of operations) to October 31, 1994 and
for the fiscal year ended October 31, 1995, respectively.

The Management Agreement will continue from year to year provided that a
majority of the Directors who are not interested persons of the Company and
either a majority of all Directors or a majority of the shareholders of the
Fund approve their continuance. The Company may terminate the Management
Agreement, without prior notice to Dreyfus, upon the vote of a majority of
the Board of Directors or upon the vote of a majority of the Fund's
outstanding voting securities. Dreyfus may terminate the Management
Agreement upon sixty (60) days' written notice to the Company. The
Management Agreement will terminate immediately and automatically upon its
assignment.

The following persons are officers and/or directors of Dreyfus:
Howard Stein, Chairman of the Board and Chief Executive Officer; W. Keith
Smith, Vice Chairman of the Board; Christopher M. Condron, President, Chief
Operating Officer and a director, Stephen E. Canter, Vice Chairman, Chief
Investment Officer and a director; Lawrence S. Kash, Vice Chairman-
Distribution and a director; Philip L. Toia, Vice Chairman-Operations and
Administration and a director; Barbara E. Casey, Vice President-Dreyfus
President-Dreyfus Retirement Services; Diane M. Coffey, Vice President-
Corporate Communications; Elie M. Genadry, Vice President-Institutional
Sales; William T. Sandalls, Jr., Senior Vice President, Chief Financial
Officer and a director; William F. Glavin, Jr., Vice President-Corporate
Development; Andrew S. Wasser, Vice President-Information Services; Mark N.
Jacobs, Vice President-Fund Legal and Compliance and Secretary; Jeffrey N.
Nachman, Vice President-Mutual Fund Accounting; Maurice Bendrihem,
Controller; Elvira Oslapas; Assistant Secretary; Mandell L. Berman, Frank V.
Cahouet, Alvin E. Friedman, Lawrence M. Greene and Julian M. Smerling
directors.

PURCHASE OF FUND SHARES

The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "How to Buy Fund Shares."

The Distributor. The Distributor serves as the Fund's distributor
pursuant to an agreement which is renewable annually. The Distributor also
acts as distributor for the other funds in the Premier Family of Funds, for
funds in the Dreyfus Family of Funds and for certain other investment
companies.

Sales Loads--Class A. The scale of sales loads applies to purchases of
Class A shares made by any "purchaser," which term includes an individual
and/or spouse purchasing securities for his, her or their own account or for
the account of any minor children, or a trustee or other fiduciary purchasing
securities for a single trust estate or a single fiduciary account (including
a pension, profit-sharing or other employee benefit trust created pursuant to
a plan qualified under Section 401 of the Internal Revenue Code of 1986, as
amended the ("the Code") although more than one beneficiary is involved; or a
group of accounts established by or on behalf of the employees of an employer
or affiliated employers pursuant to an employee benefit plan or other program
(including accounts established pursuant to Sections 403(b), 408(k), and 457
of the Code); or an organized group which has been in existence for more than
six months, provided that it is not organized for the purpose of buying
redeemable securities of a registered investment company and provided that
the purchases are made through a central administration or a single dealer,
or by other means which result in economy of sales effort or expense.

Set forth below is an example of the method of computing the offering
price of the Fund's Class A shares. The example assumes a purchase of Class
A shares of the Fund aggregating less than $50,000 subject to the schedule of
sales charges set forth in the Fund's Prospectus at a price based upon the
net asset value of the Fund's Class A shares at the close of business on
October 31, 1996.

Net Asset Value per Share $15.13

Per Share Sales Charge - 5.75%*
of offering price (6.10% of
net asset value per share) $ 0.92

Per Share Offering Price to
the Public $16.05

__________________________________________

* Class A shares purchased by shareholders beneficially owning Class A
shares on November 30, 1996, but who opened their accounts after
December 19, 1994, are subject to a different sales load schedule as
described under "How to Buy Fund Shares - Class A Shares" in the Fund's
Prospectus.

TeleTransfer Privilege. TeleTransfer purchase orders may be made at any
time. Purchase orders received by 4:00 P.M., New York time, on any business
day that Dreyfus Transfer, Inc., the Fund's transfer and dividend disbursing
agent (the "Transfer Agent"), and the New York Stock Exchange ("NYSE") are
open for business will be credited to the shareholder's Fund account on the
next bank business day following such purchase order. Purchase orders made
after 4:00 P.M., New York time, on any business day the Transfer Agent and
the NYSE are open for business, or orders made on Saturday, Sunday or any
Fund holiday (e.g., when the NYSE is not open for business), will be credited
to the shareholder's Fund account on the second bank business day following
such purchase order.

DISTRIBUTION AND SERVICE PLANS

The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "Distribution Plans (Class
A Plan and Class B and C Plan)."

Class A, B and C shares are subject to annual fees for distribution and
shareholder services.

Distribution Plan--Class A Shares. The Securities and Exchange
Commission ("SEC") has adopted Rule 12b-1 under the 1940 Act ("Rule")
regulating the circumstances under which investment companies such as the
Company may, directly or indirectly, bear the expenses of distributing their
shares. The Rule defines distribution expenses to include expenditures for
"any activity which is primarily intended to result in the sale of fund
shares." The Rule, among other things, provides that an investment company
may bear such expenses only pursuant to a plan adopted in accordance with the
Rule. With respect to the Class A shares of the Fund, the Company has
adopted a Distribution Plan ("Class A Plan"), and may enter into Agreements
with Agents pursuant to the Class A Plan.

Under the Class A Plan, Class A shares of the Fund may spend annually up
to 0.25% of the average of its daily net assets for costs and expenses
incurred in connection with the distribution of, and shareholder servicing
with respect to, Fund shares.

The Class A Plan provides that a report of the amounts expended under
the Class A Plan, and the purposes for which such expenditures were incurred,
must be made to the Company's Directors for their review at least quarterly.
In addition, the Class A Plan provides that it may not be amended to increase
materially the costs which the Fund may bear for distribution pursuant to the
Class A Plan without approval of the Fund's shareholders, and that other
material amendments of the Class A Plan must be approved by the vote of a
majority of the Directors and of the Directors who are not "interested
persons" of the Company (as defined in the 1940 Act) and who do not have any
direct or indirect financial interest in the operation of the Class A Plan,
cast in person at a meeting called for the purpose of considering such
amendments. The Class A Plan is subject to annual approval by the entire
Board of Directors and by the Directors who are neither interested persons
nor have any direct or indirect financial interest in the operation of the
Class A Plan, by vote cast in person at a meeting called for the purpose of
voting on the Class A Plan. The Class A Plan is terminable, as to the Fund's
Class A shares, at any time by vote of a majority of the Directors who are
not interested persons and have no direct or indirect financial interest in
the operation of the Class A Plan or by vote of the holders of a majority of
the outstanding shares of such class of the Fund.

Distribution and Service Plans -- Class B and C Shares. In addition to
the above described Plan for Class A shares, the Company's Board of Directors
has adopted a Service Plan (the "Service Plan") under the Rule for Class B
and Class C shares, pursuant to which the Fund pays the Distributor and
Dreyfus Service Corporation for the provision of certain services to the
holders of Class B and C shares. The Company's Board of Directors has also
adopted a Distribution Plan pursuant to the Rule with respect to Class B and
C shares (the "Distribution Plan"). The Company's Board of Directors
believes that there is a reasonable likelihood that the Distribution and
Service Plans (the "Plans") will benefit the Fund and the holders of Class B
and C shares.

For the year ended October 31, 1995, the distribution and service fees
paid by the Fund were as follows:

Class A Class B Class C

Premier Small Company
Stock Fund (1) $1,521 $3,239 $112

(1) The Fund commenced selling Class B and Class C shares on December 19,
1994 and April 30, 1995, respectively.

Class R shares bear no distribution or service fees.

A quarterly report of the amounts expended under each Plan, and the
purposes for which such expenditures were incurred, must be made to the
Directors for their review. In addition, each Plan provides that it may not
be amended to increase materially the cost which holders of Class B or C
shares may bear pursuant to the Plan without the approval of the holders of
such Classes and that other material amendments of the Plan must be approved
by the Board of Directors and by the Directors who are not interested persons
of the Fund and have no direct or indirect financial interest in the
operation of the Plan or in any agreements entered into in connection with
the Plan, by vote cast in person at a meeting called for the purpose of
considering such amendments. Each Plan is subject to annual approval by such
vote of the Directors cast in person at a meeting called for the purpose of
voting on the Plan. Each Plan was so approved by the Directors at a meeting
held on October 25, 1995. Each Plan may be terminated at any time by vote of
a majority of the Directors who are not interested persons and have no direct
or indirect financial interest in the operation of the Plan or in any
agreements entered into in connection with the Plan or by vote of the holders
of a majority of Class B and C shares.

REDEMPTION OF FUND SHARES

The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "How to Redeem Fund
Shares."

Dreyfus TeleTransfer Privilege. Investors should be aware that if they
have selected the Dreyfus TeleTransfer Privilege, any request for a wire
redemption will be effected as a Dreyfus TeleTransfer transaction through the
Automated Clearing House system unless more prompt transmittal specifically
is requested. Redemption proceeds will be on deposit in the investor's
account at an ACH member bank ordinarily two business days after receipt of
the redemption request. See "Purchase of Fund Shares--Dreyfus TeleTransfer
Privilege."

Redemption Commitment. The Fund has committed itself to pay in cash all
redemption requests by any shareholder of record of the Fund, limited in
amount during any 90-day period to the lesser of $250,000 or 1% of the value
of the Fund's net assets at the beginning of such period. Such commitment is
irrevocable without the prior approval of the SEC. In the case of requests
for redemptions in excess of such amount, the Board of Directors reserves the
right to make payments in whole or in part in securities or other assets in
case of an emergency or any time a cash distribution would impair the
liquidity of the Fund to the detriment of the existing shareholders. In this
event, the securities would be valued in the same manner as the Fund's
portfolio is valued. If the recipient sold such securities, brokerage
charges would be incurred.

Suspension of Redemptions. The right of redemption may be suspended or
the date of payment postponed (a) during any period when the NYSE is closed
(other than customary weekend and holiday closings), (b) when trading in the
markets the Fund ordinarily utilizes is restricted, or when an emergency
exists as determined by the SEC so that disposal of the Fund's investments or
determination of its net asset value is not reasonably practicable, or (c)
for such other periods as the SEC by order may permit to protect the Fund's
shareholders.

SHAREHOLDER SERVICES

The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "Shareholder Services."

Fund Exchanges. Shares of any Class of the Fund may be exchanged for
shares of the respective Class of certain other funds advised or administered
by Dreyfus. Shares of the same Class of such funds purchased by exchange
will be purchased on the basis of relative net asset value per share as
follows:

A. Exchanges for shares of funds that are offered without a sales
load will be made without a sales load.

B. Shares of funds purchased without a sales load may be
exchanged for shares of other funds sold with a sales load, and
the applicable sales load will be deducted.

C. Shares of funds purchased with a sales load may be exchanged
without a sales load for shares of other funds sold without a
sales load.

[C] To accomplish an exchange under item D above, shareholders must notify
the Transfer Agent of their prior ownership of fund shares and their account
number.

Exchanges of Class R shares held by a Retirement Plan may be made only
between the investor's Retirement Plan account in one fund and such
investor's Retirement Plan account in another fund.

Dreyfus Auto-Exchange Privilege. The Dreyfus Auto-Exchange Privilege
permits an investor to purchase, in exchange for shares of the Fund, shares
of the same Class of another fund in the Premier Family of Funds or the
Dreyfus Family of Funds. This privilege is available only for existing
accounts. With respect to Class R shares held by a Retirement Plan,
exchanges may be made only between the investor's Retirement Plan account in
one fund and such investor's Retirement Plan account in another fund. Shares
will be exchanged on the basis of relative net asset value as described above
under "Fund Exchanges." Enrollment in or modification or cancellation of
this privilege is effective three business days following notification by the
investor. An investor will be notified if the investor's account falls below
the amount designated to be exchanged under this privilege. In this case, an
investor's account will fall to zero unless additional investments are made
in excess of the designated amount prior to the next Auto-Exchange
transaction. Shares held under IRA and other retirement plans are eligible
for this privilege. Exchanges of IRA shares may be made between IRA accounts
and from regular accounts to IRA accounts, but not from IRA accounts to
regular accounts. With respect to all other retirement accounts, exchanges
may be made only among those accounts.

Shareholder Services Forms and prospectuses of the other funds may be
obtained by calling 1-800-645-6561. The Fund reserves the right to reject
any exchange request in whole or in part. The Fund Exchange service or
Dreyfus Auto-Exchange Privilege may be modified or terminated at any time
upon notice to shareholders.

Automatic Withdrawal Plan. The Automatic Withdrawal Plan permits an
investor with a $5,000 minimum account to request withdrawal of a specified
dollar amount (minimum of $50) on either a monthly or quarterly basis.
Withdrawal payments are the proceeds from sales of Fund shares, not the yield
on the shares. If withdrawal payments exceed reinvested dividends and distri
butions, the investor's shares will be reduced and eventually may be
depleted. Automatic Withdrawal may be terminated at any time by the
investor, the Fund or the Transfer Agent. Shares for which certificates have
been issued may not be redeemed through the Automatic Withdrawal Plan.

Dividend Sweep. Dividend Sweep allows investors to invest automatically
their dividends or dividends and capital gain distributions, if any, from the
Fund in shares of the same Class of another fund in the Premier Family of
Funds or the Dreyfus Family of Funds of which the investor is a shareholder.
Shares of the same Class of other funds purchased pursuant to this privilege
will be purchased on the basis of relative net asset value per share as
follows:

A. Dividends and distributions paid by a fund may be invested
without imposition of a sales load in shares of other funds that
are offered without a sales load.

B. Dividends and distributions paid by a fund which does not
charge a sales load may be invested in shares of other funds
sold with a sales load, and the applicable sales load will be
deducted.

D. Dividends and distributions paid by a fund may be invested in
shares of other funds that impose a contingent deferred sales
charge ("CDSC") and the applicable CDSC, if any, will be imposed
upon redemption of such shares.

Corporate Pension/Profit-Sharing and Retirement Plans. The Fund makes
available to corporations a variety of prototype pension and profit-sharing
plans including a 401(k) Salary Reduction Plan. In addition, the Fund makes
available Keogh Plans, IRAs, including SEP-IRAs and IRA "Rollover Accounts,"
and 403(b)(7) Plans. Plan support services also are available.

Investors who wish to purchase Fund shares in conjunction with a Keogh
Plan, a 403(b)(7) Plan or an IRA, including an SEP-IRA, may request from the
Distributor forms for adoption of such plans.

Shares may be purchased in connection with these plans only by direct
remittance to the entity acting as custodian. Purchases for these plans may
not be made in advance of receipt of funds.

DETERMINATION OF NET ASSET VALUE

The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "How to Buy Fund Shares."

DIVIDENDS, OTHER DISTRIBUTIONS AND TAXES

The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "Dividends, Other
Distributions and Taxes."

The term "regulated investment company" does not imply the supervision
of management or investment practices or policies by any government agency.

To qualify for treatment as a regulated investment company ("RIC") under
the Internal Revenue Code of 1986, as amended (the "Code"), the Fund (1) must
distribute to its shareholders each year at least 90% of its investment
company taxable income (generally consisting of net investment income, net
short-term capital gains and net gains from certain foreign currency
transactions) ("Distribution Requirement"), (2) must derive at least 90% of
its annual gross income from specified sources ("Income Requirement"), (3)
must derive less than 30% of its annual gross income from gain on the sale or
disposition of any of the following that are held for less than three months
- -- (i) securities, (ii) non-foreign-currency options and futures and
(iii) foreign currencies (or foreign currency options, futures and forward
contracts) that are not directly related to the Fund's principal business of
investing in securities (or options and futures with respect thereto) ("Short-
Short Limitation") -- and (4) must meet certain asset diversification and
other requirements.

Any dividend or other distribution paid shortly after an investor's
purchase may have the effect of reducing the net asset value of the shares
below the cost of his investment. Such a dividend or other distribution
would be a return on investment in an economic sense, although taxable as
stated in the Fund's Prospectus. In addition, if a shareholder holds shares
of the Fund for six months or less and has received a capital gain
distribution with respect to those shares, any loss incurred on the sale of
those shares will be treated as a long-term capital loss to the extent of the
capital gain distribution received.

Dividends and other distributions declared by the Fund in October,
November or December of any year and payable to shareholders of record on a
date in any of those months are deemed to have been paid by the Fund and
received by the shareholders on December 31 of that year if the distributions
are paid by the Fund during the following January. Accordingly, those
distributions will be taxed to shareholders for the year in which that
December 31 falls.

A portion of the dividends paid by the Fund, whether received in cash or
reinvested in additional Fund shares, may be eligible for the dividends-
received deduction allowed to corporations. The eligible portion may not
exceed the aggregate dividends received by the Fund from U.S. corporations.
However, dividends received by a corporate shareholder and deducted by it
pursuant to the dividends-received deduction are subject indirectly to the
alternative minimum tax.

Dividends and interest received by the Fund may be subject to income,
withholding or other taxes imposed by foreign countries and U.S. possessions
that would reduce the yield on its securities. Tax conventions between cer
tain countries and the United States may reduce or eliminate these foreign
taxes, however, and many foreign countries do not impose taxes on capital
gains in respect of investments by foreign investors.

Income from foreign currencies (except certain gains therefrom that may
be excluded by future regulations), and income from transactions in options,
futures and forward contracts derived by the Fund with respect to its
business of investing in securities or foreign currencies, will qualify as
permissible income under the Income Requirement. However, income from the
disposition of options and futures contracts (other than those on foreign
currencies) will be subject to the Short-Short Limitation if they are held
for less than three months. Income from the disposition of foreign
currencies, and options, futures and forward contracts thereon, that are not
directly related to the Fund's principal business of investing in securities
(or options and futures with respect to securities) also will be subject to
the Short-Short Limitation if they are held for less than three months.

If the Fund satisfies certain requirements, any increase in value of a
position that is part of a "designated hedge" will be offset by any decrease
in value (whether realized or not) of the offsetting hedging position during
the period of the hedge for purposes of determining whether the Fund
satisfies the Short-Short Limitation. Thus, only the net gain (if any) from
the designated hedge will be included in gross income for purposes of that
limitation. The Fund will consider whether it should seek to qualify for
this treatment for its hedging transactions. To the extent the Fund does not
so qualify, it may be forced to defer the closing out of certain options,
futures and forward contracts beyond the time when it otherwise would be
advantageous to do so, in order for the Fund to qualify as a RIC.

Under Section 1256 of the Code, any gain or loss realized by the Fund
from certain futures and forward contracts and options transactions will be
treated as 60% long-term capital gain or loss and 40% short-term capital gain
or loss. Gain or loss will arise upon exercise or lapse of such contracts
and options as well as from closing transactions. In addition, any such
contracts or options remaining unexercised at the end of the Fund's taxable
year will be treated as sold for their then fair market value (a process
known as "marking to market"), resulting in additional gain or loss to the
Fund characterized in the manner described above.

Offsetting positions held by the Fund involving certain contracts or
options may constitute "straddles." "Straddles" are defined to include
"offsetting positions" in actively traded personal property. The tax
treatment of straddles is governed by Sections 1092 and 1258 of the Code,
which, in certain circumstances, override or modify Sections 1256 and 988.
As such, all or a portion of any capital gain from certain straddle
transactions may be recharacterized to ordinary income. If the Fund were
treated as entering into straddles by reason of its engaging in certain
forward contracts or options transactions, such straddles would be
characterized as "mixed straddles" if the forward contracts or options
transactions comprising a part of such straddles were governed by Section
1256. The Fund may make one or more elections with respect to mixed
straddles. Depending on which election is made, if any, the results to the
Fund may differ. If no election is made, then to the extent the straddle and
conversion transactions rules apply to positions established by the Fund,
losses realized by the Fund will be deferred to the extent of unrealized gain
in the offsetting position. Moreover, as a result of the straddle rules,
short-term capital loss on straddle positions may be recharacterized as
long-term capital loss, and long-term capital gains may be treated as
short-term capital gains or ordinary income.

Investment by the Fund in securities issued or acquired at a discount
(for example, zero coupon securities) or providing for deferred interest or
for payment of interest in the form of additional obligations (for example,
"pay-in-kind" or "PIK" securities) could, under special tax rules, affect the
amount, timing and character of distributions to shareholders by causing the
Fund to recognize income prior to the receipt of cash payments. For example,
the Fund could be required to take into gross income annually a portion of
the discount (or deemed discount) at which the securities were issued and
could need to distribute such income in order to satisfy the Distribution
Requirement and to avoid the 4% excise tax referred to in the Fund's
Prospectus under "Dividends, Other Distributions and Taxes." In such case,
the Fund may have to dispose of securities it might otherwise have continued
to hold in order to generate cash to satisfy these requirements.

If the Fund invests in an entity that is classified as a "passive
foreign investment company" ("PFIC") for federal income tax purposes, the
operation of certain provisions of the Code applying to PFICs could result in
the imposition of certain federal income taxes on the Fund. In addition,
gain realized from the sale or other disposition of PFIC securities may be
treated as ordinary income under Section 1291 of the Code.

State and Local Taxes. Depending upon the extent of the Fund's
activities in states and localities in which it is deemed to be conducting
business, the Fund may be subject to the tax laws thereof. Shareholders are
advised to consult their tax advisers concerning the application of state and
local taxes.

Foreign Shareholders - U.S. Federal Income Taxation. U.S. federal income
taxation of a shareholder who, as to the United States, is a non-resident
alien individual, a foreign trust or estate, a foreign corporation or a
foreign partnership (a "foreign shareholder"), depends on whether the income
from the Fund is "effectively connected" with a U.S. trade or business
carried on by the shareholder, as discussed generally below. Special U.S.
federal income tax rules that differ from those described below may apply to
certain foreign persons who invest in the Fund, such as a foreign shareholder
entitled to claim the benefits of an applicable tax treaty. Foreign
shareholders are advised to consult their own tax advisers with respect to
the particular tax consequences to them of an investment in the Fund.

Foreign Shareholders - Effectively Connected Income. If a foreign
shareholder's ownership of the Fund's shares is effectively connected with a
U.S. trade or business carried on by a foreign shareholder, then all
distributions to that shareholder and any gains realized by that shareholder
on the disposition of the Fund shares will be subject to U.S. federal income
tax at the graduated rates applicable to U.S. citizens and domestic
corporations, as the case may be. Foreign shareholders also may be subject to
the branch profits tax.

Foreign Shareholders - Estate Tax. Foreign individuals generally are
subject to U.S. federal estate tax on their U.S. situs property, such as
shares of the Fund, that they own at the time of their death. Certain credits
against that tax and relief under applicable tax treaties may be available.

PORTFOLIO TRANSACTIONS

All portfolio transactions of the Fund are placed on behalf of the Fund
by Dreyfus. Debt securities purchased and sold by the Fund are generally
traded on a net basis (i.e., without commission) through dealers acting for
their own account and not as brokers, or otherwise involve transactions
directly with the issuer of the instrument. This means that a dealer (the
securities firm or bank dealing with the Fund) makes a market for securities
by offering to buy at one price and sell at a slightly higher price. The
difference between the prices is known as a spread. Other portfolio
transactions may be executed through brokers acting as agent. The Fund will
pay a spread or commissions in connection with such transactions. Dreyfus
uses its best efforts to obtain execution of portfolio transactions at prices
which are advantageous to the Fund and at spreads and commission rates, if
any, which are reasonable in relation to the benefits received. Dreyfus also
places transactions for other accounts that it provides with investment
advice.

Brokers and dealers involved in the execution of portfolio transactions
on behalf of the Fund are selected on the basis of their professional
capability and the value and quality of their services. In selecting brokers
or dealers, Dreyfus will consider various relevant factors, including, but
not limited to, the size and type of the transaction; the nature and
character of the markets for the security to be purchased or sold; the
execution efficiency, settlement capability, and financial condition of the
broker-dealer; the broker-dealer's execution services rendered on a
continuing basis; and the reasonableness of any spreads (or commissions, if
any). Any spread, commission, fee or other remuneration paid to an affiliated
broker-dealer is paid pursuant to the Company's procedures adopted in
accordance with Rule 17e-1 of the 1940 Act.

Brokers or dealers may be selected who provide brokerage and/or research
services to the Fund and/or other accounts over which Dreyfus or its
affiliates exercise investment discretion. Such services may include advice
concerning the value of securities; the advisability of investing in,
purchasing or selling securities; the availability of securities or the
purchasers or sellers of securities; furnishing analyses and reports
concerning issuers, industries, securities, economic factors and trends,
portfolio strategy and performance of accounts; and effecting securities
transactions and performing functions incidental thereto (such as clearance
and settlement).

The receipt of research services from broker-dealers may be useful to
Dreyfus in rendering investment management services to the Fund and/or its
other clients; and, conversely, such information provided by brokers or
dealers who have executed transaction orders on behalf of other clients of
Dreyfus may be useful to these organizations in carrying out their obligation
to the Fund. The receipt of such research services does not reduce these
organizations' normal independent research activities; however, it enables
these organizations to avoid the additional expenses which might otherwise be
incurred if these organizations were to attempt to develop comparable
information through their own staffs.

The Company's Board of Directors periodically reviews Dreyfus'
performance of its responsibilities in connection with the placement of
portfolio transactions on behalf of the Fund and reviews the prices paid by
the Fund over representative periods of time to determine if they are
reasonable in relation to the benefits to the Fund.

Although Dreyfus manages other accounts in addition to the Fund,
investment decisions for the Fund are made independently from decisions made
for these other accounts. It sometimes happens that the same security is
held by more than one of the accounts managed by Dreyfus. Simultaneous
transactions may occur when several accounts are managed by the same
investment manager, particularly when the same investment instrument is
suitable for the investment objective of more than one account.

When more than one account is simultaneously engaged in the purchase or
sale of the same investment instrument, the prices and amounts are allocated
in accordance with a formula considered by Dreyfus to be equitable to each
account. In some cases this system could have a detrimental effect on the
price or volume of the investment instrument as far as the Fund is concerned.
In other cases, however, the ability of the Fund to participate in volume
transactions will produce better executions for the Fund. While the Directors
will continue to review simultaneous transactions, it is their present
opinion that the desirability of retaining Dreyfus as investment manager to
the Fund outweighs any disadvantages that may be said to exist from exposure
to simultaneous transactions.

For the period from September 1, 1994 (commencement of operations) to
October 31, 1994 and for the fiscal year ended October 31, 1995, the Fund
paid brokerage fees of $13,899 and $65,341, respectively.

Portfolio Turnover. The portfolio turnover rate for the Fund is
calculated by dividing the lesser of the Fund's annual sales or purchases of
portfolio securities (exclusive of purchases and sales of securities whose
maturities at the time of acquisition were one year or less) by the monthly
average value of securities in the Fund during the year.

The portfolio turnover rates for the period from September 1, 1994
(commencement of operations) to October 31, 1994 and for the fiscal year
ended October 31, 1995 were 8% and 56%, respectively.

PERFORMANCE INFORMATION

The following information supplements and should be read in conjunction
with the section in each Fund's Prospectus entitled "Performance
Information."

The Fund's average annual total return for the 1 and 1.164 year periods
ended October 31, 1995 for Class A was 24.50% and 21.49%, respectively. The
Fund's average annual total return for Class R for the 1 and 1.164 year
periods ended October 31, 1995 was 30.70% and 26.72%, respectively. The
Fund's average annual total return for Class B and Class C for the period
December 19, 1994 (inception date of Class B and Class C) through October 31,
1995 was 39.51% and 43.01%, respectively.

The Fund's total return for the period September 11, 1994 to October 31,
1995 for Class R was 31.62%. The Fund's total return for Class A for the
period April 14, 1994 to October 31, 1995 was 25.33%. Based on net asset
value per share, the total return for Class A was 31.22% for this period.
The Fund's total return for Class B and Class C for the period from December
19, 1994 (inception date of Class B and Class C) through October 31, 1995 was
33.51% and 36.41%, respectively. Without giving effect to the applicable
CDSC, total return for Class B and Class C was 37.51% and 37.41%,
respectively.

From time to time, Fund advertisements may include statistical data or
general discussions about the growth and development of Dreyfus Retirement
Services (in terms of new customers, assets under management, market share,
etc.) and its presence in the defined contribution plan market.

INFORMATION ABOUT THE FUND

The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "General Information."

The Fund will send annual and semi-annual financial statements to all
its shareholders.

CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT, COUNSEL
AND INDEPENDENT AUDITORS

Mellon Bank, One Mellon Bank Center, Pittsburgh, PA 15219, is the Fund's
custodian. Dreyfus Transfer, Inc., a wholly-owned subsidiary of Dreyfus, is
located at One American Express Plaza, Providence, Rhode Island 02903, and
serves as the Fund's transfer and dividend disbursing agent. Under a
transfer agency agreement with the Company, the Transfer Agent arranges for
the maintenance of shareholder account records for the Fund, the handling of
certain communications between shareholders and the Fund and the payment of
dividends and distributions payable by the Fund. For these services, the
Transfer Agent receives a monthly fee computed on the basis of the number of
shareholder accounts it maintains for the Fund during the month, and is
reimbursed for certain out-of-pocket expenses. Dreyfus Transfer, Inc. and
Mellon Bank, as custodian, have no part in determining the investment
policies of the Fund or which securities are to be purchased or sold by the
Fund.

Kirkpatrick & Lockhart LLP, 1800 Massachusetts Avenue, N.W., Second
Floor, Washington, D.C. 20036, has passed upon the legality of the shares
offered by the Prospectus and this Statement of Additional Information.

KPMG Peat Marwick LLP, One Mellon Bank Center, Pittsburgh, PA 15219, was
appointed by the Directors to serve as the Fund's independent auditors for
the year ending October 31, 1996, providing audit services including (1)
examination of the annual financial statements (2) assistance, review and
consultation in connection with the SEC and (3) review of the annual federal
income tax return filed on behalf of the Fund.

FINANCIAL STATEMENTS

The financial statements for the fiscal year ended October 31, 1995,
including notes to the financial statements and supplementary information and
the Independent Auditors' Report are included in the Annual Report to
Shareholders. A copy of the Annual Report accompanies this Statement of
Additional Information and is incorporated herein by reference.