<PAGE>
Disciplined
Stock Fund
Annual Report
October 31, 1995
<PAGE>
Letter to Shareholders
- ---------------------------------------------------------------------------
Dear Shareholder:
The fiscal year ended October 31, 1995 of Dreyfus Disciplined Stock Fund
was a rewarding one for shareholders. This letter describes the economic and
market background of the last 12 months, provides you with the year's
results, and explains our investment strategies.
ECONOMIC ENVIRONMENT
The much-desired soft landing for the U.S. economy that the Federal
Reserve Board has been striving to attain appears to have occurred. This is
the result of more than a year of moves by the Fed to tighten interest rates,
followed by a token loosening of the reins last summer.
Now that the economy has settled down a bit, the central bank must
concern itself with the possibility that the economy might slow down more
than would be desirable. However, the latest economic statistics do not
contain convincing evidence of that happening. The housing industry is doing
well, industrial orders continue to expand and gross domestic product keeps
on growing, albeit at a reduced rate.
In the meantime, the rate of inflation appears to be under firm control.
Consumer prices have advanced only at a very moderate pace, and average wages
have barely inched ahead. Unemployment is moderate and hovers near the
so-called full employment level.
Retail spending has settled down, in part because consumers are carrying
large debit balances in mortgage and credit card debts. To what extent this
will affect holiday shopping remains to be seen.
MARKET ENVIRONMENT
As your Fund reached the end of its fiscal year, October 31, 1995, stocks
were not far below the record levels they had reached earlier in the fall.
Among the factors accounting for this market strength were good corporate
profits and low interest rates. Third quarter profit reports from leading
corporations, while not universally favorable, were better than earlier
quarters. The extensive lean and mean corporate reorganizations of the past
few years appear to be paying off. Even though the pricing environment for
most corporate products is extremely competitive, manufacturers and service
providers appear able to squeeze out improved profits.
How long that continuing improvement will last is an open question. Many
economists think that profit levels may flatten out over the coming months.
The recent record on that score, however, has been encouraging.
Interest rates also have buoyed stock prices and sustained the bond
market. As the cost of borrowing has steadily decreased, many corporations
have benefited. This advantage has been particularly notable with public
utilities.
Another factor in market strength has been the relentless advance of
technology, which has virtually forced corporations - and now individual
households as well - to reequip in order to keep up with technical progress.
The obvious result has been seen in record prices commanded during the year
by high technology stocks. While some disillusionment may set in, the market
clearly takes a very optimistic view of the long-range outlook for these
companies.
In addition, equities have been favorably affected by the very large
inflow of investment money, on a regular basis, from 401(k) and other
retirement plans. To be sure, money managers could at some point turn off
the spigot, and divert this cash flow into bonds or money market instruments.
During the past year, however, equity purchases by pension funds and other
retirement investors have provided a supportive background for stock prices.
<PAGE>
Of course, there are some concerns. Perhaps the biggest has been the
struggle between Congress and the White House over how to reduce Government
spending and cut the burden of the Government's perennial deficit.
Hopefully, this impasse will be settled soon. In the meantime, the
uncertainties in Washington have been a source of worry to investors.
The fading value of the U.S. dollar has also been a question mark. Yet,
after hitting a low last spring, the dollar has gradually recovered some lost
ground. This dollar rebound reflects weakness in the economies of Western
Europe and Japan, but also the strengthening of economic activity here at
home.
PORTFOLIO OVERVIEW
In its latest fiscal year, Dreyfus Disciplined Stock Fund provided a
total return of 23.96% for Investor shares and 24.33% for Class R shares.*
This compares with a total return of 26.41% for the Standard & Poor's 500
Composite Stock Price Index.**
In late 1994 and early 1995, as the Fund's fiscal year began, the Federal
Reserve was in the midst of tightening credit, which dampened stock prices as
well as the economy. During that phase of the economic cycle, cyclical stocks
such as steel and auto did not fare well, though semiconductor stocks were
strong. Overall, however, the Fund lagged behind the general market for
several months.
With the coming of spring, and a decline in interest rates, equity
performance improved. By midsummer, after the Fed had made a small cut in
short-term rates, stocks began to rise impressively. By the end of October,
when the fiscal year ended, Dreyfus Disciplined Stock Fund had made up for
the earlier weakness.
As October came to a close, the industry sectors in which the Fund held
investments, in descending order of magnitude, were: Capital Spending,
Consumer Staples, Consumer Cyclical/Discretionary, Interest
Sensitive/Regulated, Utilities and Health Care.
The top-performing stocks of those we held for the full fiscal year were
Sun Microsystems, Inc., up 138%; Intel Corp., up 125.5%; Adaptec Inc., up
91.4%; Hewlett-Packard Co., up 91.3% and IBP Inc., which rose 76.4%.
We appreciate the opportunity to manage assets on your behalf. We will
continue to apply our investment disciplines in an effort to help you attain
your investment goals.
Sincerely,
Bert J. Mullins
Portfolio Manager
November 15, 1995
New York, N.Y.
*Total return includes reinvestment of dividends and any capital gains paid.
**SOURCE: LIPPER ANALYTICAL SERVICES, INC. - Reflects the reinvestment of
income dividends and, where applicable, capital gain distributions. The
Standard & Poor's 500 Composite Stock Price Index is a widely accepted
unmanaged index of stock market performance.
<PAGE>
Dreyfus Disciplined Stock Fund October 31, 1995
- --------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
DREYFUS DISCIPLINED STOCK FUND
CLASS R SHARES AND THE STANDARD & POOR'S 500 COMPOSITE STOCK PRICE INDEX
Disciplined Standard & Poor's
Stock Fund 500 Composite Stock
Period (Class R Shares) Price Index*
- --------------- --------------- -----------------
12/31/87 $10,000 $10,000
10/31/88 11,080 11,623
10/31/89 14,084 14,686
10/31/90 13,650 13,587
10/31/91 18,464 18,128
10/31/92 20,321 19,932
10/31/93 23,869 22,904
10/31/94 24,541 23,788
10/31/95 30,512 30,067
*Source: Lipper Analytical Services, Inc.
Average Annual Total Returns
<TABLE>
<CAPTION>
Investor Class Shares Class R Shares
- ------------------------------------------------- ---------------------------------------------
Period ended 10/31/95 Period ended 10/31/95
- ------------------------------------------------- ---------------------------------------------
<S> <C> <C> <C>
1 Year 23.96% 1 Year 24.33%
From Inception (4/6/94) 18.00 5 Years 17.42
From Inception (12/31/87) 15.29
</TABLE>
Past performance is not predictive of future performance.
The above graph compares a $10,000 investment made in Class R shares of
Dreyfus Disciplined Stock Fund on 12/31/87 (Inception Date) to a $10,000
investment made in the Standard & Poor's 500 Composite Stock Price Index on
that date. All dividends and capital gain distributions are reinvested.
Performance for Investor Class shares will vary from the performance of Class
R shares shown above due to differences in charges and expenses.
The Dreyfus Disciplined Stock Fund seeks investment returns (including
capital appreciation and income) consistently superior to the Standard &
Poor's 500 Composite Stock Price Index by investing in a broadly diversified
list of equity securities generated by the application of quantitative
security selection and risk control techniques. The Fund's performance shown
in the line graph takes into account all applicable fees and expenses. The
Standard & Poor's 500 Composite Stock Price Index is a widely accepted,
unmanaged index of overall stock market performance which does not take into
account charges, fees and other expenses. Further information relating to
Fund performance, including expense reimbursements, if applicable, is
contained in the Financial Highlights section of the Prospectus and elsewhere
in this report.
<PAGE>
Dreyfus Disciplined Stock Fund
- --------------------------------------------------------------------------------
Statement of Investments October 31, 1995
<TABLE>
<CAPTION>
Shares Common Stocks--97.5% Value
- -------------- -------------
<S> <C> <C>
Basic Industries--5.2%
21,900 Dow Chemical................................. $ 1,502,887
63,500 du Pont (E.I.) de Nemours & Company.......... 3,960,813
18,900 Eastman Chemical Corporation................. 1,124,550
48,300 Georgia-Pacific Corporation.................. 3,984,750
31,100 International Paper Company.................. 1,150,700
38,200 Morton International......................... 1,165,100
51,700 PPG Industries, Inc.......................... 2,197,250
91,700 Praxair, Inc................................. 2,475,900
13,300 Rohm & Haas.................................. 734,825
14,800 Temple-Inland................................ 673,400
39,900 Westvaco..................................... 1,107,225
36,900 Weyerhaeuser Company......................... 1,628,212
-------------
21,705,612
-------------
Consumer Cyclical--12.2%
49,400 Albertson's, Inc............................. 1,642,550
29,600 Capital Cities/ABC, Inc...................... 3,511,300
68,300 Circuit City Stores, Inc..................... 2,279,512
30,200 Disney (Walt) Company........................ 1,740,275
39,100 Echlin, Inc.................................. 1,397,825
24,200 Eckard +..................................... 958,925
87,900 Federated Department Stores, Inc.+........... 2,230,463
94,900 Ford Motor Company........................... 2,728,375
32,500 General Instruments Corporation+............. 617,500
115,400 General Motors Corporation................... 5,048,750
31,900 Goodyear Tire & Rubber Company............... 1,212,200
18,600 King World Productions, Inc.+................ 648,675
29,800 Kroger Co. +................................. 994,575
129,600 Limited, Inc................................. 2,381,400
93,300 Lowe's Companies, Inc........................ 2,519,100
34,700 Marriott International....................... 1,279,562
69,300 May Department Stores........................ 2,720,025
66,100 McDonald's Corporation....................... 2,710,100
95,700 News Corporation, Ltd., ADS.................. 1,902,038
28,700 Outback Steakhouse, Inc.+.................... 900,462
24,200 Reynolds & Reynolds, Cl. A................... 862,125
34,000 Safeway Inc.+................................ 1,606,500
13,000 Scholastic Corporation +..................... 802,750
108,600 Sears, Roebuck & Company..................... 3,692,400
64,900 Viacom Cl.B +................................ 3,245,000
21,900 Viking Office Products +..................... 974,550
-------------
50,606,937
-------------
Consumer Services--21.1%
17,400 3Com +....................................... 817,800
29,800 Adaptec Inc.+................................ 1,326,100
14,200 Arrow Electronics +..........................$ 720,650
15,900 Autodesk, Inc................................ 540,600
37,900 Avnet, Inc................................... 1,909,213
17,400 BMC Software, Inc. +......................... 619,875
22,200 Bay Networks +............................... 1,470,750
9,150 Cadence Design System +...................... 295,088
54,000 Case Corporation............................. 2,058,750
15,600 Ceridian Corporation +....................... 678,600
31,800 cisco Systems +.............................. 2,464,500
14,900 Compaq Computer Corporation+................. 830,675
51,600 Computer Associates International, Inc....... 2,838,000
43,400 Compuware Corporation+....................... 987,350
16,600 Deere & Company.............................. 1,483,625
30,000 Eaton Corporation............................ 1,537,500
16,200 Emerson Electric............................. 1,154,250
182,500 General Electric Company..................... 11,543,125
18,800 General Motors Corporation, Cl. E ........... 885,950
40,000 General Motors Corporation, Cl. H ........... 1,680,000
33,700 Harnischfeger Industry, Inc.................. 1,061,550
21,100 Harsco Corp.................................. 1,113,025
49,900 Hewlett-Packard Company...................... 4,621,988
20,900 Illinois Tool Works.......................... 1,214,813
75,300 Intel Corporation............................ 5,261,587
50,300 International Business Machines.............. 4,891,675
46,827 Lockheed Martin.............................. 3,190,089
37,500 Manpower..................................... 1,017,187
23,100 McDonnell Douglas Corporation ............... 1,888,425
31,900 Microsoft +.................................. 3,190,000
33,600 Motorola, Inc................................ 2,205,000
12,500 Omnicom Group................................ 798,437
79,700 Oracle Systems Corporation+.................. 3,476,912
50,200 Raytheon Company............................. 2,189,975
19,500 Sun Microsystems, Inc.+...................... 1,521,000
43,300 Texas Instruments............................ 2,955,225
40,400 Textron, Inc................................. 2,777,500
32,800 Thermo Electron Corporation+................. 1,508,800
31,600 United Technologies.......................... 2,804,500
32,300 Varity Corporation+.......................... 1,170,875
21,500 Xerox Corporation............................ 2,789,625
-------------
87,490,589
-------------
Consumer Staples--12.1%
36,300 CPC International, Inc....................... 2,409,413
132,000 Coca-Cola Company............................ 9,487,500
54,600 ConAgra, Inc................................. 2,108,925
</TABLE>
<PAGE>
Dreyfus Disciplined Stock Fund
- --------------------------------------------------------------------------------
Statement of Investments (continued) October 31, 1995
<TABLE>
<CAPTION>
Shares Common Stocks--(continued) Value
- -------------- -------------
<S> <C> <C>
Consumer Staples (continued)
46,000 Eastman Kodak Company....................... $ 2,880,750
67,600 Gillette Company............................ 3,270,150
34,600 IBP, Inc.................................... 2,071,675
28,600 Kellogg..................................... 2,066,350
97,100 PepsiCo, Inc................................ 5,122,025
91,100 Philip Morris Companies, Inc................ 7,697,950
42,600 Pioneer Hi-Bred International............... 2,114,025
81,900 Procter & Gamble Company.................... 6,633,900
71,600 Sara Lee Corporation........................ 2,103,250
57,100 Seagram Co., Ltd............................ 2,055,600
-------------
50,021,513
-------------
Energy--9.1%
79,000 Amoco Corporation........................... 5,046,125
30,600 Atlantic Richfield.......................... 3,266,550
47,000 British Petroleum, ADR...................... 4,147,750
148,400 Exxon Corporation........................... 11,334,050
51,500 Halliburton................................. 2,137,250
32,300 Pacific Enterprises......................... 799,425
34,500 Pogo Producing Company...................... 694,313
61,500 Royal Dutch Petroleum, N.V.................. 7,556,812
38,900 Sonat, Inc.................................. 1,118,375
90,000 USX-Marathon Group.......................... 1,597,500
-------------
37,698,150
-------------
Health Care--10.1%
99,400 Abbott Laboratories......................... 3,951,150
41,900 American Home Products Corporation.......... 3,713,388
58,004 Columbia/HCA Healthcare Corporation......... 2,849,446
25,300 Guidant..................................... 809,600
41,300 Humana Inc.+................................ 872,463
80,600 Johnson & Johnson........................... 6,568,900
41,200 Lilly (Eli)................................. 3,980,950
132,100 Merck & Company, Inc........................ 7,595,750
14,100 PacifiCare Health System, Cl. B +........... 1,025,775
85,100 Pfizer, Inc................................. 4,882,612
31,400 Schering-Plough Corporation................. 1,683,825
34,000 SmithKline Beecham ADS...................... 1,763,750
41,500 United Healthcare Corporation............... 2,204,688
-------------
41,902,297
-------------
Interest Sensitive--12.1%
90,279 Allstate.................................... 3,317,753
50,400 American General Corporation ............... 1,656,900
22,800 Bank of Boston Corporation ................. 1,014,600
109,200 Bank of New York, Inc....................... $ 4,586,400
81,900 BankAmerica Corporation..................... 4,709,250
27,400 CIGNA Corporation........................... 2,716,025
67,300 Chase Manhattan Corporation................. 3,836,100
64,500 Citicorp.................................... 4,184,437
34,100 CoreStates Financial Corporation............ 1,240,388
40,600 Dean Witter, Discover & Company............. 2,019,850
16,700 Federal National Mortgage Association....... 1,751,413
35,200 First Bank System, Inc...................... 1,751,200
34,300 First Chicago............................... 2,328,113
7,600 First Interstate Bancorp.................... 980,400
23,800 First USA, Inc.............................. 1,094,800
26,300 MBNA Corporation............................ 969,812
29,600 Old Republic International Corporation...... 847,300
36,300 Providian Corporation....................... 1,424,775
26,800 SAFECO Corporation.......................... 1,720,225
40,100 St. Paul Companies.......................... 2,035,075
17,100 Standard Federal Bank....................... 607,050
104,900 Travelers Group, Inc........................ 5,297,450
-------------
50,089,316
-------------
Mining and Metals--1.9%
71,100 Aluminum Company of America................. 3,626,100
64,800 Barrick Gold................................ 1,498,500
17,700 Phelps Dodge Corporation.................... 1,121,738
25,400 Potash Corporation Saskatchewan, Inc........ 1,768,475
-------------
8,014,813
-------------
Transportation--1.5%
13,800 AMR Corporation+............................ 910,800
41,600 Conrail, Inc................................ 2,860,000
17,000 Delta Air Lines, Inc........................ 1,115,625
32,100 Illinois Central Corporation................ 1,227,825
505 Transport Holdings, Cl. A................... 19,821
-------------
6,134,071
-------------
Utilities--12.3%
157,700 AT&T Corporation............................ 10,092,800
112,100 Ameritech Corporation....................... 6,053,400
35,900 Bell Atlantic Corporation................... 2,284,137
32,300 Boston Edison............................... 884,213
47,000 CMS Energy Corporation...................... 1,298,375
60,500 Consolidated Edison Company, Inc............ 1,837,687
84,900 Entergy Corporation......................... 2,419,650
</TABLE>
<PAGE>
Dreyfus Disciplined Stock Fund
- --------------------------------------------------------------------------------
Statement of Investments (continued) October 31, 1995
<TABLE>
<CAPTION>
Shares Common Stocks--(continued) Value
- -------------- -------------
<S> <C> <C>
Utilities (continued)
31,700 FPL Group, Inc.............................. $ 1,327,438
116,200 GTE Corporation............................. 4,793,250
29,800 Illinova Corporation........................ 845,575
112,700 MCI Communications Corporation.............. 2,810,456
39,100 Pacific Telesis Group....................... 1,187,662
31,900 Pinnacle West Capital Corporation........... 877,250
103,100 SBC Communications.......................... 5,760,713
66,500 Southern Company............................ 1,587,688
60,200 Texas Utilities............................. 2,212,350
65,100 Unicom Corporation.......................... 2,132,025
74,200 Worldcom +.................................. 2,420,776
--------------
50,825,445
--------------
TOTAL COMMON STOCKS
(cost $344,531,157)....................... $404,488,743
--------------
Principal
Amount Value
- -------------- -------------
REPURCHASE
AGREEMENT--3.3%
$13,664,876 Agreement with Goldman
Sachs & Company Tri-Party
Repurchase Agreement,
5.88% dated 10/31/95,
to be repurchased at
$13,667,108 on 11/1/95,
collaterized by $13,664,932
U.S. Treasury Notes,
5.375% due 5/31/98
(Cost $13,664,876)........... $ 13,664,876
-------------
TOTAL INVESTMENTS
(cost $358,196,033)............................... 100.8% $418,153,619
LIABILITIES, LESS CASH AND
RECEIVABLES....................................... (.8%) $ (3,318,591)
-------- -------------
NET ASSETS.......................................... 100.0% $414,835,028
-------- -------------
-------- -------------
<FN>
Note to Statement of Investments;
- --------------------------------------------------------------------------------
+ Non-income producing security.
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Disciplined Stock Fund
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities October 31, 1995
<TABLE>
<S> <C> <C>
ASSETS:
Investments in securities, at value (cost $358,196,033)-see Statement of
Investments (including repurchase agreement of $13,664,876)........... $418,153,619
Cash.................................................................... 5,971
Receivable for investment securities sold............................... 12,496,665
Receivable for Capital Stock sold....................................... 1,286,719
Dividends and interest receivable....................................... 538,152
--------------
432,481,126
LIABILITIES:
Due to The Dreyfus Corporation-Note 2(a)................................ $ 569,288
Due to Distributor-Note 2(b)............................................ 6,846
Payable for investment securities purchased............................. 13,714,391
Payable for Capital Stock redeemed...................................... 3,288,122
Directors' fees payable-Note 2(c)....................................... 67,451 17,646,098
------------- --------------
NET ASSETS.................................................................. $414,835,028
--------------
--------------
REPRESENTED BY:
Paid-in capital......................................................... $343,028,316
Accumulated undistributed investment income-net......................... 1,455,310
Accumulated undistributed net realized gain on investments.............. 10,393,816
Accumulated net unrealized appreciation on investments-Note 3........... 59,957,586
--------------
NET ASSETS at value......................................................... $414,835,028
--------------
--------------
NET ASSET VALUE, offering and redemption price per share:
Investor Shares
(80 million shares of $.001 par value Capital Stock authorized)
($32,189,212 / 1,457,759 shares of Capital Stock outstanding)......... $22.08
-------
-------
Class R Shares
(165 million shares of $.001 par value Capital Stock authorized)
($382,645,816 / 17,321,416 shares of Capital Stock outstanding)....... $22.09
-------
-------
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Disciplined Stock Fund
- ----------------------------------------------------------------------------
Statement of Operations Year ended October 31, 1995
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Income:
Cash dividends........................................................ $ 7,185,876
Interest.............................................................. 594,559
-------------
Total Income...................................................... $ 7,780,435
Expenses:
Management fee-Note 2(a).............................................. 2,739,876
Distribution fee (Investor shares)-Note 2(b).......................... 68,850
Directors' fees and expenses-Note 2(c)................................ 52,429
-------------
Total Expenses.................................................... 2,861,155
-------------
INVESTMENT INCOME-NET............................................. 4,919,280
REALIZED AND UNREALIZED GAIN ON INVESTMENTS-Note 3:
Net realized gain on investments........................................ $10,544,076
Net unrealized appreciation on investments.............................. 54,555,889
-------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS................... 65,099,965
-------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $70,019,245
-------------
-------------
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Disciplined Stock Fund
- ------------------------------------------------------------------------------
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended October 31,
--------------------------------
1995 1994
-------------- -------------
<S> <C> <C>
OPERATIONS:
Investment income-net................................................ $ 4,919,280 $ 3,269,818
Net realized gain on investments..................................... 10,544,076 7,508,638
Net unrealized appreciation (depreciation) on investments for the year 54,555,889 (2,678,128)
-------------- -------------
Net Increase In Net Assets Resulting From Operations............... 70,019,245 8,100,328
-------------- -------------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income-net:
Investor Shares.................................................... (323,712) (31,895)
Class R Shares..................................................... (4,170,807) (2,567,476)
Net realized gain on investments:
Investor Shares.................................................... (607,507) --
Class R Shares..................................................... (5,904,735) (4,454,514)
-------------- -------------
Total Dividends.................................................. (11,006,761) (7,053,885)
-------------- -------------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold:
Investor Shares.................................................... 31,801,974 19,823,569
Class R Shares..................................................... 205,045,630 200,565,074
Dividends reinvested:
Investor Shares.................................................... 227,141 10,293
Class R Shares..................................................... 7,292,203 5,583,366
Cost of shares redeemed:
Investor Shares.................................................... (24,904,167) (779,735)
Class R Shares..................................................... (122,289,547) (60,554,414)
-------------- -------------
Increase In Net Assets From Capital Stock Transactions............. 97,173,234 164,648,153
-------------- -------------
Total Increase In Net Assets..................................... 156,185,718 165,694,596
NET ASSETS:
Beginning of year.................................................... 258,649,310 92,954,714
-------------- -------------
End of year (including undistributed investment income-net:
$1,455,310 in 1995 and $1,030,549 in 1994)......................... $414,835,028 $258,649,310
-------------- -------------
-------------- -------------
</TABLE>
<TABLE>
<CAPTION>
Shares
--------------------------------------------------------------
Inventor Shares Class R Shares
--------------------------- ---------------------------
Year Ended October 31, Year Ended October 31,
--------------------------- ---------------------------
1995 1994* 1995 1994*
---------- --------- ---------- ----------
<S> <C> <C> <C> <C>
CAPITAL SHARE TRANSACTIONS:
Shares sold........................... 1,765,427 1,098,681 10,432,849 10,921,206
Shares issued for dividends reinvested 12,685 575 406,003 308,851
Shares redeemed....................... (1,376,660) (42,949) (6,410,071) (3,310,422)
---------- --------- ---------- ----------
Net Increase In Shares Outstanding.. 401,452 1,056,307 4,428,781 7,919,635
---------- --------- ---------- ----------
---------- --------- ---------- ----------
<FN>
* The Fund commenced selling Investor shares on April 6, 1994. Any shares
outstanding prior to April 4, 1994 were designated Trust shares. Effective
October 17, 1994, the Fund's Trust shares were redesignated Class R shares.
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Disciplined Stock Fund
- ------------------------------------------------------------------------
Financial Highlights
Contained below is per share operating performance data for a share of
Capital Stock outstanding, total investment return,
ratios to average net assets and other supplemental data for each period
indicated. This information has been derived from the Fund's financial
statements.
<TABLE>
<CAPTION>
Investor Shares
-----------------------
Year Ended October 31,
<S> <C> <C>
PER SHARE DATA: 1995 1994(1)(2)
------ ------
Net asset value, beginning of year............................. $18.54 $17.86
------ ------
Investment Operations:
Investment income-net.......................................... .28 .16
Net realized and unrealized gain on investments................ 3.98 .66
------ ------
Total from Investment Operations............................. 4.26 .82
------ ------
Distributions:
Dividends from investment income-net........................... (.25) (.14)
Dividends from net realized gain on investments................ (.47) --
------ ------
Total Distributions.......................................... (.72) (.14)
------ ------
Net asset value, end of year................................... $22.08 $18.54
------ ------
------ ------
TOTAL INVESTMENT RETURN............................................ 23.96% 4.62%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets........................ 1.15% 1.15%(3)
Ratio of net investment income to average net assets........... 1.36% 1.29%(3)
Portfolio Turnover Rate........................................ 60.00% 106.00%
Net Assets, end of year (000's Omitted)........................ $32,189 $19,580
<FN>
- -----------------------
(1) The Fund commenced selling Investor shares on April 6, 1994.
(2) Effective October 17, 1994, The Dreyfus Corporation serves as the Fund's
investment mananger. Prior to October 17, 1994, Mellon Bank, N.A. served as
the Fund's investment manager
(3) Annualized.
</TABLE>
See notes to financial statments.
<PAGE>
Dreyfus Disciplined Stock Fund
- ----------------------------------------------------------------------
Financial Highlights (continued)
Contained below is per share operating performance data for a share
of Capital Stock outstanding, total investment return,
ratios to average net assets and other supplemental data for each period
indicated. This information has been derived from the Fund's financial
statements.
<TABLE>
<CAPTION>
Class R Shares
------------------------------------------------------
Year Ended October 31,
------------------------------------------------------
PER SHARE DATA: 1995 1994(1)(2) 1993 1992 1991
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year............ $18.54 $18.69 $17.21 $16.40 $12.41
------ ------ ------ ------ ------
Investment Operations:
Investment income-net......................... .30 .26(3) .30 .27 .27
Net realized and unrealized gain on investments 4.02 .25 2.56 1.33 4.04
------ ------ ------ ------ ------
Total from Investment Operations............ 4.32 .51 2.86 1.60 4.31
------ ------ ------ ------ ------
Distributions:
Dividends from investment income-net.......... (.30) (.26) (.31) (.27) (.27)
Dividends from net realized gain on investments (.47) (.40) (1.07) (.52) (.05)
------ ------ ------ ------ ------
Total Distributions......................... (.77) (.66) (1.38) (.79) (.32)
------ ------ ------ ------ ------
Net asset value, end of year.................. $22.09 $18.54 $18.69 $17.21 $16.40
------ ------ ------ ------ ------
TOTAL INVESTMENT RETURN........................... 24.33% 2.82% 17.46% 10.06% 35.27%
------ ------ ------ ------ ------
------ ------ ------ ------ ------
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets(4).... .90% .90%(5) .90% .90% .90%
Ratio of net investment income to average net assets 1.61% 1.54% 1.82% 1.73% 1.92%
Portfolio Turnover Rate....................... 60.00% 106.00% 64.00% 84.00% 69.00%
Net Assets, end of year (000's Omitted)....... $382,646 $239,069 $92,955 $43,742 $25,931
<FN>
- ---------------
(1) The Fund commenced selling Investor Shares on April 6, 1994. Those
shares outstanding prior to April 4, 1994 were designated Trust Shares.
Effective October 17, 1994, the Fund's Trust Shares were redesignated Class R
Shares.
(2) Effective October 17, 1994, The Dreyfus Corporation serves as the Fund's
investment manager. Prior to October 17, 1994, Mellon Bank, N.A. served as
the Fund's investment manager.
(3) Net investment income per share before reimbursement of expenses by the
investment adviser was $.25 for the year ended October 31, 1994.
(4) For the years ended October 31, 1993, 1992 and 1991, the investment
adviser reimbursed expenses of the Fund amounting to $.0627, $.0981 and
$.1721 per share, respectively.
(5) Expense ratio before reimbursement of expenses by the adviser was .96%
for the year ended October 31, 1994.
</TABLE>
See notes to financial statments.
<PAGE>
Dreyfus Disciplined Stock Fund
- --------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
NOTE 1-Significant Accounting Policies:
The Dreyfus/Laurel Funds, Inc. (the "Company") is registered under
the Investment Company Act of 1940 ("Act") as a diversified open-end
management investment company and operates as a series company currently
offering sixteen Series including the Dreyfus Disciplined Stock Fund (the
"Fund"). The Dreyfus Corporation ("Manager") serves as the Fund's investment
adviser. The Manager is a direct subsidiary of Mellon Bank, N.A. ("Mellon
Bank").
Premier Mutual Fund Services, Inc. (the "Distributor") acts as the
distributor of the Fund's shares. The Distributor, located at One Exchange
Place, Boston, Massachusetts 02109, 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.
The Fund is currently authorized to issue two classes of shares: Investor
shares and Class R Shares. Investor shares are sold primarily to retail
investors and bear a distribution fee. Class R shares are sold primarily to
bank trust departments and other financial service providers (including
Mellon Bank and its affiliates) acting on behalf of customers having a
qualified trust or investment account or relationship at such institution,
and bear no distribution fee. Each class of shares has identical rights and
privileges, except with respect to the distribution fee and voting rights on
matters affecting a single class. The Company has the authority to issue 25
billion shares of capital stock with a par value of $.001.
Investment income, net of expenses (other than class specific expenses)
and realized and unrealized gains and losses are allocated daily to each
class of shares based upon the relative proportion of net assets of each
class.
(a) Portfolio Valuation: Investments in securities are valued at the last
sales price on the securities exchange on which such securities are primarily
traded or at the last sales price on the national securities market.
Securities not listed on an exchange or the national securities market, or
securities for which there were no transactions, are valued at the average of
the most recent bid and asked prices. Bid price is used when no asked price
is available. Securities for which there are no such valuations are valued at
fair value as determined in good faith under the direction of the Board of
Directors.
(b) Securities Transactions and Investment Income: Securities
transactions are recorded on a trade date basis. Realized gain and loss from
securities transactions are recorded on the identified cost basis. Dividend
income is recognized on the ex-dividend date and interest income, including,
where applicable, amortization of discount on investments, is recognized on
the accrual basis.
(c) Repurchase Agreements: The Fund may engage in repurchase agreement
transactions. Under the terms of a typical repurchase agreement, the Fund,
through its custodian, and sub-custodian takes possession of an underlying
debt obligation subject to an obligation of the seller to repurchase, and the
Fund to resell, the obligation at an agreed-upon price and time, thereby
determining the yield during the Fund's holding period. This arrangement
results in a fixed rate of return that is not subject to market fluctuations
during the Fund's holding period. The value of the collateral is at least
equal, at all times, to the total amount of the rights. The Fund's manager,
acting under the supervision of the Board of Directors,
<PAGE>
Dreyfus Disciplined Stock Fund
- ---------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
reviews the value of the collateral and the creditworthiness of those
banks and dealers with which the Fund enters into repurchase agreements to
evaluate potential risks.
(d) Distributions to Shareholders: Dividends are recorded on the
ex-dividend date. Dividends from investment income-net are declared and paid
on a quarterly basis. Dividends from net realized capital gain are normally
declared and paid annually, but the Fund may make distributions on a more
frequent basis to comply with the distribution requirements of the Internal
Revenue Code. To the extent that net realized capital gain can be offset
capital loss carryovers, if any, it is the policy of the Fund not to
distribute such gain.
On November 2, 1995, the Board of Directors declared dividends from net
investment income for the Investor shares and Class R shares in the amount of
$0.0640 per share and $0.0782 per share, respectively, payable on November 3,
1995 to shareholders of record on November 2, 1995.
(e) Federal Income Taxes: It is the policy of the Fund to continue to
qualify as a regulated investment company, if such qualification is in the
best interests of its shareholders, by complying with the applicable
provisions of the Internal Revenue Code, and to make distributions of taxable
income sufficient to relieve it from substantially all Federal income and
excise taxes.
NOTE 2 - Investment Management Fee and Other Transactions with Affiliates:
(a) Investment Management Fee: Pursuant to an Investment Management
agreement with the Manager, the Manager provides or arranges for one or more
third parties and or affiliates to provide investment advisory,
administrative, custody, fund accounting and transfer agency services to the
Fund. The Manager also directs the investments of the Fund in accordance with
its investment objective, policies and limitations. For these services, the
Fund is contractually obligated to pay the Manager a fee, calculated daily
and paid monthly, at the annual rate of .90% of the value of the Fund's
average daily net assets. Out of its fee, the Manager pays all of the
expenses of the Fund except brokerage fees, taxes, interest, Rule 12b-1
distribution fees and expenses, fees and expenses of non-interested Directors
(including counsel fees) and extraordinary expenses. In addition, the Manager
is required to reduce its fee in an amount equal to the Fund's allocable
portion of fees and expenses of the non-interested Directors (including
counsel).
(b) Distribution Plan: The Fund has adopted a distribution plan (the
"Plan") pursuant to Rule 12b-1 under the 1940 Act relating to its Investor
shares. Under the Plan, the Fund may pay annually up to .25% of the value of
the average daily net assets attributable to its Investor shares to
compensate the Distributor and Dreyfus Service Corporation, an affiliate of
the Manager, for shareholder servicing activities and the Distributor for
activities primarily intended to result in the sale of Investor shares. The
Class R shares bear no distribution fee. For the year ended October 31, 1995,
the distribution fee for the Investor shares was $68,850.
Under its terms, the Plan shall remain in effect from year to year,
provided such continuance is approved annually by a vote of majority of those
Directors who are not "interested persons" of the Investment Company and who
have no direct or indirect financial interest in the operation of the Plan or
in any agreement related to the Plan.
<PAGE>
Dreyfus Disciplined Stock Fund
- ---------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
(c) Directors' Fees: Each director who is not an "interested
person" as defined in the Act receives $27,000 per year, $1,000 for each
Board meeting attended and $750 for each Audit Committee attended and is
reimbursed for travel and out-of-pocket expenses. These expenses are paid in
total by the following funds: the Dreyfus/Laurel Funds, Inc., the
Dreyfus/Laurel Tax-Free Municipal Funds, and the Dreyfus/Laurel Funds Trust.
In addition the Chairman of the Board receives an annual fee of $75,000 per
year. These fees and expenses are charged and allocated to each series based
on net assets.
(d) Brokerage Commissions: For the year ended October 31, 1995, the Fund
incurred total brokerage commissions of $572,664, of which $92,515 was paid
to InvestNet Corporation, a subsidiary of Mellon Bank Corporation.
NOTE 3 - Securities Transactions:
The aggregate amount of purchase and sales of investment securities,
other than short-term securities, during the year ended October 31, 1995,
amounted to $269,394,941 and $180,564,850, respectively.
At October 31, 1995, accumulated net unrealized appreciation on
investments was $59,957,586, consisting of $66,712,703 gross unrealized
appreciation and $6,755,117 gross unrealized depreciation.
At October 31, 1995, the cost of investments for Federal income tax
purposes was substantially the same as the cost for financial reporting
purposes (see the Statement of Investments).
<PAGE>
Dreyfus Disciplined Stock Fund
- -------------------------------------------------------------------------
Independent Auditors' Report
The Board of Directors and Shareholders
The Dreyfus/Laurel Funds, Inc.:
We have audited the accompanying statement of assets and liabilities of
the Dreyfus Disciplined Stock Fund of The Dreyfus/Laurel Funds, Inc.,
including the statement of investments, as of October 31, 1995, and the
related statement of operations for the year then ended, the statement of
changes in net assets for each of the two years in the period then ended, and
the financial highlights for each of the periods indicated herein. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of October 31, 1995, by correspondence with the custodian
and brokers. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide
a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of the Dreyfus Disciplined Stock Fund of The Dreyfus/Laurel Funds,
Inc., as of October 31, 1995, the results of its operations for the year the
ended, the changes in its net assets for each of the two years in the period
then ended, and the financial highlights for each of the periods indicated
herein, in conformity with generally accepted accounting principles.
KPMG Peat Marwick LLP
Pittsburgh, Pennsylvania
December 15, 1995
<PAGE>
Dreyfus Disciplined Stock Fund
- -----------------------------------------------------------------------------
Important Tax Information (Unaudited)
For Federal tax purposes the Fund hereby designates $.2884 per share as a
long-term capital gain distribution paid on December 29, 1994.
<PAGE>
Dreyfus Disciplined Stock Fund
200 Park Avenue
New York, NY 10166
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Custodian
Mellon Bank
One Mellon Bank Center
Pittsburgh, Pennsylvania 15258
Transfer Agent &
Dividend Disbursing Agent
First Data Investor Services Group, Inc.
P.O. Box 9671
Providence, RI 02940
Further information is contained in the Prospectus,
which must precede or accompany this report.
Printed in U.S.A. 328/728AR9510
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
DREYFUS DISCIPLINED STOCK FUND CLASS R SHARES AND THE
STANDARD & POOR'S 500 COMPOSITE STOCK PRICE INDEX
EXHIBIT A:
_______________________________________________
| | DISCIPLINED | STANDARD |
| | STOCK | & POOR'S 500 |
| PERIOD | FUND |COMPOSITE STOCK |
| |(CLASS R SHARES) | PRICE INDEX * |
|-----------|-----------------|----------------|
| 12/31/87 | 10,000 | 10,000 |
| 10/31/88 | 11,080 | 11,623 |
| 10/31/89 | 14,084 | 14,686 |
| 10/31/90 | 13,650 | 13,587 |
| 10/31/91 | 18,464 | 18,128 |
| 10/31/92 | 20,321 | 19,932 |
| 10/31/93 | 23,869 | 22,904 |
| 10/31/94 | 24,541 | 23,788 |
| 10/31/95 | 30,512 | 30,067 |
|-----------|-----------------|----------------|
* Source: Lipper Analytical Services, Inc.
