DREYFUS DISCIPLINED INTERMEDIATE BOND FUND
LETTER TO SHAREHOLDERS
Dear Shareholder:
We are pleased to provide you with this first report on the Dreyfus
Disciplined Intermediate Bond Fund since the Fund commenced operations on
November 1, 1995.
During the six-month period ended April 30, 1996, the bond market lost
ground due to fears that inflation might once again cause interest rates to
rise. In fact, as explained in the Economic Review section below,
inflationary pressures were quite modest. Nonetheless, interest rates reacted
to fears of potential future inflation, which adversely affected bond prices
during the period. In this market environment, the Fund produced total
returns, consisting of bond price changes and interest income, of -0.63% and
- -0.51% for its Investor shares and Class R shares, respectively, for the
semi-annual reporting period ended April 30, 1996.* Income dividends of
approximately $.337 for Investor shares and $.353 for Class R shares were
paid during this period. This amounts to an annualized distribution rate per
share of 5.60% and 5.85% for Investor shares and Class R shares,
respectively.**
ECONOMIC REVIEW
Concern that the economy was heading toward recession was eased by the
recent release of brighter-than-expected reports on employment and consumer
spending. Consequently, the Federal Reserve Board refrained from making any
further reductions in the Federal Funds rate between the last easing of this
benchmark interest rate, January 31, and April 30. In reaction to the more
optimistic economic news (and the related fears of a potential rekindling of
inflation), long-term interest rates as measured by 30-year Treasury bonds
have risen nearly one percentage point since February.
The rosier outlook for the economy was spearheaded by reports of large
gains in employment for two consecutive months (February and March).
Furthermore, personal income and expenditures data indicated that consumers
continued to spend, despite their present high level of installment credit.
Retail sales reports have correspondingly edged higher, confirming a modest
recovery in consumer spending from its year-end slump.
Supporting the growing consensus that the economy has picked up steam
were reports of slow but steady growth in the manufacturing sector. After
adjusting data for the 17-day General Motors strike, industrial output rose
modestly. New orders for durable goods, a closely watched indicator of future
hiring and production, also posted gains.
Despite the economy's apparent recovery from its year-end pause,
inflation has remained under control. Through March of this year, the
Consumer Price Index rose at an annual rate of 2.8%. Importantly, there
appear to be few signs of inflationary pressure in the economy. Factories are
running at a relatively comfortable rate of capacity (82.5%), markedly below
this expansion's peak of 85.1% reached over a year ago. With major industries
trying to reduce inventories, there is little to suggest that product pricing
will surge upwards. Reflecting this absence of so-called pipeline
inflationary pressure, price increases at both the wholesale and production
levels of the economy remained similarly under control. The cautionary stance
of the Federal Reserve Board regarding additional reductions in interest
rates, combined with the fiscal restraint from reduced government spending,
should serve as additional moderating forces against any resurgence in
inflation.
We are mindful, however, of several signals which prompt us to be alert
to a potential change in what has been a benign inflation picture. The recent
rise in oil prices, along with strength in other commodity
prices such as grain, is not to be dismissed lightly. While they may be
only aberrations of a temporary nature, they also could represent early
warning signs of a fundamental change in inflation which will be seen later
in the year.
MARKET ENVIRONMENT AND THE PORTFOLIO
Fixed-income investor sentiment changed considerably over the past six
months. Expectations of continued declines in interest rates were dashed with
reports of better-than-expected economic performance in the first quarter of
1996. Heavy selling by fixed-income managers, both in the U.S. and abroad,
resulted in rapid price changes.
The Lehman Brothers Aggregate Bond Index posted a total return of 0.53%
over the past six months.*** The corporate market (an overweighted sector in
the Fund), which was the best performing sector in 1995 (+22.5%),
underperformed the Lehman Brothers Aggregate Bond Index by 0.50% over this
period. Treasuries also lagged the Index by the same amount. The mortgage
sector was the best performing sector, outperforming the Index by more than
100 basis points.
Over the past six months, the portfolio has gradually diversified into
corporate and mortgage-backed securities. By the end of April, the
portfolio's allocation to these types of securities was 23% and 33%,
respectively. This shift in allocation resulted in the Fund more closely
tracking the Lehman Brothers Aggregate Bond Index over the past two months.
Going forward, we currently expect to further diversify out of lower-yielding
Treasuries and enhance income by concentrating new investments in mortgage
and corporate bond securities with coupon ranges of 7% to 8%. We believe that
the mortgage sector should continue to provide above-market returns during
1996 because of lower supply of mortgage issues and growing investor demand.
Furthermore, we expect corporate credits to perform well compared to
Treasuries as corporations continue to improve their balance sheets as their
earnings grow.
Included in this report is a series of detailed statements about your
Fund's holdings and its financial condition. We hope they are informative.
Please know that we greatly appreciate your continued confidence in the Fund
and in The Dreyfus Corporation.
Very truly yours,
[Ridgway H. Powell signature logo]
Ridgway H. Powell
Portfolio Manager
May 15, 1996
New York, N.Y.
* Total return includes reinvestment of dividends and any capital gains
paid.
**Annualized distribution rate per share is based upon dividends per share
paid from net investment income during the period, divided by the net asset
value per share at the end of the period.
***SOURCE: LIPPERANALYTICALSERVICES, INC. - The Lehman Brothers Aggregate
Bond Index is a widely accepted index of corporate, government and government
agency debt instruments.
<TABLE>
<CAPTION>
DREYFUS DISCIPLINED INTERMEDIATE BOND FUND
STATEMENT OF INVESTMENTS APRIL 30, 1996 (UNAUDITED)
PRINCIPAL
BONDS AND NOTES-97.4% AMOUNT VALUE
______ ______
<S> <C> <C>
AEROSPACE-.3% AMR,
Deb., 9%, 2012.................. $ 100,000 $ 106,632
____________
BANKING-1.7% First Union National Bank of North Carolina,
Sub. Notes, 6.18%, 2006......... 500,000 (a) 462,574
Fleet Financial Group,
Sub. Notes, 67/8%, 2003......... 150,000 147,752
____________
610,326
____________
COLLATERALIZED MORTGAGE
OBLIGATIONS-1.4% Countrywide Funding,
Mortgage Pass-Through Ctfs.,
Ser. 1994-10, Cl. A-5, 6%, 2009. 161,402 155,183
Home Mac Mortgage Securities,
Collateralized Mortgage Obligations,
Ser. 1986-5, Cl. C, 8.55%, 2008. 10,909 11,097
Residential Funding Mortgage Securities I,
Mortgage Pass-Through Ctfs.,
Ser. 1994-S10, Cl. A-6, 61/2%, 2009 389,824 371,580
____________
537,860
____________
COMMERCIAL MORTGAGE
OBLIGATIONS-1.9% Asset Securitization,
Commercial Mortgage Pass-Through Ctfs.,
Ser. 1995-MD IV, Cl. A-1, 7.10%, 2029 720,433 709,176
____________
CONSUMER-2.6% News America Holdings,
Gtd. Sr. Notes, 81/2%, 2005..... 895,000 943,670
____________
ENTERTAINMENT-3.4% Walt Disney,
Sr. Notes, 63/8%, 2001.......... 1,250,000 1,230,626
____________
FINANCE-10.4% Associates Corp. of North America,
Sr. Deb., 8.55%, 1999........... 675,000 (b) 743,784
First Colony,
Sr. Notes, 65/8%, 2003.......... 500,000 482,615
General Electric Capital,
Notes, 83/4%, 2007.............. 750,000 838,729
Health and Rehabilitation Properties Trust,
Sr. Floating-Rate Notes,
Ser. A, 6.5852%, 1999........... 300,000 (c) 298,769
NYNEX Capital Funding,
Gtd. Medium-Term Notes, 7.63%, 1999 100,000 (d,e) 105,458
Norwest,
Medium-Term Notes, Ser. G,
63/8%, 2002..................... 400,000 389,075
Salomon :
Medium-Term Floating-Rate Notes,
Ser. D, 5.799%, 1999 830,000 (c) 818,737
Sr. Notes, 71/8%, 1999.......... 120,000 119,859
____________
3,797,026
____________
DREYFUS DISCIPLINED INTERMEDIATE BOND FUND
STATEMENT OF INVESTMENTS (CONTINUED) APRIL 30, 1996 (UNAUDITED)
PRINCIPAL
BONDS AND NOTES (CONTINUED) AMOUNT VALUE
______ ______
FINANCE/ASSET BACKED-4.4% NationsBank Auto Grantor Trust 1995-A,
Asset Backed Ctfs., Cl. A, 5.85%, 2002 $ 123,242 $ 121,892
Standard Credit Card Master Trust I,
Credit Card Participation Ctfs.,
Ser. 1995-1, Cl. A, 81/4%, 2007. 450,000 481,694
WFS Financial Owner Trust,
Auto Receivable Backed Notes,
Ser. 1996-A, Cl. A-3, 6.05%, 2000 1,000,000 992,550
____________
1,596,136
____________
INDUSTRIAL-.6% Coastal,
Sr. Deb., 93/4%, 2003........... 100,000 113,111
Hoechst Celanese,
Notes, 61/8%, 2004.............. 100,000 93,875
____________
206,986
____________
FOREIGN-6.0% ABN AMRO Bank N.V.,
Sub. Notes, 71/4%, 2005......... 485,000 484,555
Hanson Overseas B.V.,
Gtd. Sr. Notes, 73/8%, 2003..... 500,000 502,929
KfW International Finance,
Gtd. Notes, 91/8%, 2001......... 310,000 341,383
Midland Bank plc,
Sub. Notes, 7.65%, 2007......... 425,000 (f) 438,053
Royal Bank of Scotland Group plc.,
Sub. Notes, 63/8%, 2011......... 500,000 446,250
____________
2,213,170
____________
U.S. GOVERNMENT
AND AGENCIES-64.7% Federal Home Loan Mortgage Corp.:
6.42%, 12/1/2005................ 179,399 170,765
Multiclass Mortgage Participation Ctfs.:
Ser. 1453, Cl. S, 6.9725%, 2000 574,683 (g) 561,753
Ser. 1279, Cl. PH, 71/4%, 2020 400,000 397,120
Federal National Mortgage Association:
6%, 10/1/2010-1/1/2011.......... 1,045,258 990,383
6%, 11/1/2025-3/1/2026.......... 1,624,539 1,480,862
61/2%, 12/1/2002................ 246,710 242,931
7%, 7/1/2000.................... 980,000 980,304
71/2%, 8/1/2025-9/1/2025........ 1,382,876 1,367,748
Real Estate Mortgage Investment
Conduit Trust, Pass-Through Ctfs.
(collateralized by FNMA
Pass-Through Ctfs.):
Ser. 1992-98, Cl. PM, 8%,2021... 500,000 504,230
Ser. 235, Cl. 2, 8%, 8/1/2023
(Interest Only Obligation)...... (h) 118,723
Series 1989-43, Cl. E, Zero Coupon,
10/25/2017
(Principal Only Obligation) (i) 198,000
DREYFUS DISCIPLINED INTERMEDIATE BOND FUND
STATEMENT OF INVESTMENTS (CONTINUED) APRIL 30, 1996 (UNAUDITED)
PRINCIPAL
BONDS AND NOTES (CONTINUED) AMOUNT VALUE
______ ______
U.S. GOVERNMENT
AND AGENCIES (CONTINUED) Government National Mortgage Association I:
61/2%, 10/15/2023............... $ 706,999 $ 662,148
71/2%, 6/15/2024-1/15/2026...... 1,272,062 1,257,751
8%, 5/15/2022-1/15/2026......... 2,322,211 2,353,751
91/2%, 4/15/2018................ 62,465 66,936
Government National Mortgage Association II:
6%, 1/20/2024-11/20/2025........ 413,983 415,903
U.S. Treasury Bonds,
71/8%, 2/15/2023................ 925,000 930,203
U.S. Treasury Notes:
5%, 2/15/1999................... 5,000,000 4,851,562
63/8%, 8/15/2002................ 4,500,000 4,465,547
61/2%, 5/15/2005................ 1,700,000 1,677,688
____________
23,694,308
____________
TOTAL BONDS AND NOTES
(cost $36,552,967).............. $35,645,916
==============
SHORT-TERM INVESTMENTS-3.2%
REPURCHASE AGREEMENT; Salomon Brothers, 5.32%
Dated 4/30/1996, due 5/1/1996 in the
amount of $1,159,171 (fully collateralized
by $1,126,000 U.S.Treasury Notes,
71/4%, 8/15/2004 value $1,200,358)
(cost $1,159,000)............... $1,159,000 $ 1,159,000
==============
TOTAL INVESTMENTS (cost $37,711,968).................................... 100.6% $36,804,916
========= ==============
LIABILITES, LESS CASH AND RECEIVABLES.................................... (.6%) $ (202,424)
========= ==============
NET ASSETS ................................................................. 100.0% $36,602,492
========= ==============
NOTES TO STATEMENT OF INVESTMENTS:
(a) Reflects date security can be redeemed at holders' option; the stated
maturity date is 2/15/2036.
(b) Reflects date security can be redeemed at holders' option; the stated
maturity date is 7/15/2009.
(c) Variable rate security-interest rate subject to periodic change.
(d) Reflects date security can be redeemed at holders' option; the stated
maturity date is 10/15/2009.
(e) Interest rate is 7.63% until 10/15/1999, date on which the interest rate
increases to 8.23% until stated maturity.
(f) Reflects date security can be redeemed at holders' option; the stated
maturity date is 5/1/2025.
(g) Inverse floater security-interest rate subject to periodic change.
(h) Notional face $394,100.
(i) Notional face $360,000.
See notes to financial statements.
DREYFUS DISCIPLINED INTERMEDIATE BOND FUND
STATEMENT OF ASSETS AND LIABILITIES APRIL 30, 1996 (UNAUDITED)
ASSETS:
Investments in securities, at value (cost $37,711,968)-see Statement
of Investments (including a repurchase agreement of $1,159,000)....... $36,804,916
Cash.................................................................... 572,327
Interest receivable..................................................... 440,029
Other receivables....................................................... 470
_____________
37,817,742
LIABILITIES:
Due to The Dreyfus Corporation.......................................... $ 28,012
Payable for investment securities purchased............................. 1,062,247
Payable for Capital Stock redeemed...................................... 100,000
Directors' fees payable-Note 2(c)....................................... 795
Other liabilities....................................................... 24,196 1,215,250
__________ ____________
NET ASSETS.................................................................. $36,602,492
==============
REPRESENTED BY:
Paid-in capital......................................................... $37,607,250
Accumulated net realized (loss) on investments.......................... (97,706)
Accumulated net unrealized (depreciation) on investments-Note 3......... (907,052)
_____________
NET ASSETS at value......................................................... $36,602,492
==============
NET ASSET VALUE, per share:
Investor Shares
(100 million shares of $.001 par value Capital Stock authorized)
($1,712,104 3 141,646 shares of Capital Stock outstanding).............. $12.09
========
Class R Shares
(100 million shares of $.001 par value Capital Stock authorized)
($34,890,388 3 2,886,507 shares of Capital Stock outstanding)........... $12.09
========
STATEMENT OF OPERATIONS
FROM NOVEMBER 1, 1995 (COMMENCEMENT OF OPERATIONS) TO APRIL 30, 1996 (UNAUDITED)
INVESTMENT INCOME:
INTEREST INCOME......................................................... $ 546,760
EXPENSES:
Management fee-Note 2(a).............................................. $ 45,976
Distribution fees-Note 2(b)........................................... 2,078
Directors' fees and expenses-Note 2(c)................................ 795
__________
TOTAL EXPENSES................................................... 48,849
___________
INVESTMENT INCOME-NET............................................. 497,911
REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS-Note 3:
Net realized (loss) on investments...................................... $ (97,706)
Net unrealized (depreciation) on investments............................ (907,052)
__________
NET REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS................. (1,004,758)
___________
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS...................... $ (506,847)
==============
See notes to financial statements.
DREYFUS DISCIPLINED INTERMEDIATE BOND FUND
STATEMENT OF CHANGES IN NET ASSETS
FROM NOVEMBER 1, 1995 (COMMENCEMENT OF OPERATIONS) TO APRIL 30, 1996 (UNAUDITED)
OPERATIONS:
Investment income-net................................................................ $ 497,911
Net realized (loss) on investments................................................... (97,706)
Net unrealized (depreciation) on investments for the period.......................... (907,052)
_____________
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS........................... (506,847)
____________
DIVIDENDS TO SHAREHOLDERS FROM;
Investment income-net:
Investor Shares.................................................................... (45,445)
Class R Shares..................................................................... (452,466)
____________
TOTAL DIVIDENDS.................................................................. (497,911)
_____________
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold:
Investor Shares.................................................................... 1,860,482
Class R Shares..................................................................... 38,538,427
Dividends reinvested:
Investor Shares.................................................................... 43,192
Class R Shares..................................................................... 267,053
Cost of shares redeemed:
Investor Shares.................................................................... (132,223)
Class R Shares..................................................................... (2,969,681)
_____________
INCREASE IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS........................... 37,607,250
_____________
TOTAL INCREASE IN NET ASSETS................................................... 36,602,492
NET ASSETS:
Beginning of period.................................................................. -
_____________
End of period........................................................................ $36,602,492
============
</TABLE>
<TABLE>
<CAPTION>
SHARES
______________________________________
INVESTOR SHARES CLASS R SHARES
_______________ _______________
<S> <C> <C>
CAPITAL SHARE TRANSACTIONS:
Shares sold.......................................................... 148,708 3,104,817
Shares issued for dividends reinvested............................... 3,474 21,683
Shares redeemed...................................................... (10,536) (239,993)
_______________ _______________
NET INCREASE IN SHARES OUTSTANDING............................... 141,646 2,886,507
============== ===============
See notes to financial statements.
</TABLE>
DREYFUS DISCIPLINED INTERMEDIATE BOND FUND
FINANCIAL HIGHLIGHTS (UNAUDITED)
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 the period November 1, 1995
(commencement of operations) to April 30, 1996. This information has been
derived from the Fund's financial statements.
<TABLE>
<CAPTION>
PER SHARE DATA: INVESTOR SHARES CLASS R SHARES
_______________ ______________
<S> <C> <C>
Net asset value, beginning of period................................. $12.50 $12.50
________ ________
INVESTMENT OPERATIONS:
Investment income-net................................................ .34 .35
Net realized and unrealized (loss) on investments.................... (.41) (.41)
________ ________
TOTAL FROM INVESTMENT OPERATIONS................................... (.07) (.06)
________ ________
DISTRIBUTIONS;
Dividends from investment income-net................................. (.34) (.35)
________ ________
Net asset value, end of period....................................... $12.09 $12.09
======= ========
TOTAL INVESTMENT RETURN(1)............................................... (1.26%) (1.02%)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets(1)........................... .79% .55%
Ratio of net investment income to average net assets(1).............. 5.45% 5.88%
Portfolio Turnover Rate(2)........................................... 109.10% 109.10%
Net Assets, end of period (000's Omitted)............................ $1,712 $34,890
(1) Annualized.
(2) Not annualized.
</TABLE>
See notes to financial statements.
(1) From December 29, 1993 (commencement of operations) to October 31, 1994.
(2) Not annualized.
See notes to financial statements.
DREYFUS DISCIPLINED INTERMEDIATE BOND FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
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 seventeen Series including the Dreyfus Disciplined
Intermediate Bond Fund (the "Fund") which commenced operations on November 1,
1995. The Fund's investment objective is to outperform the Lehman Brothers
Aggregate Bond Index, while maintaining a similar level of risk, by investing
primarily in domestic and foreign investment-grade debt securities and by
actively managing bond market and maturity exposure. The Dreyfus Corporation
("Manager") serves as the Fund's investment adviser. The Manager is a direct
subsidiary of Mellon Bank, N.A.
Premier Mutual Fund Services, Inc. (the "Distributor") acts as the
distributor of the Fund's shares, which are sold to the public without a
sales charge. 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.
Investment income, net of expenses (other than class specific
expenses), 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: The Fund's investments (excluding short-term
investments and U.S. Government obligations) are valued each business day by
an independent pricing service ("Service") approved by the Board of
Directors. Investments for which quoted bid prices are readily available and
are representative of the bid side of the market in the judgment of the
Service are valued at the mean between the quoted bid prices (as obtained by
the Service from dealers in such securities) and asked prices (as calculated
by the Service based upon its evaluation of the market for such securities).
Other investments (which constitute a majority of the portfolio securities)
are carried at fair value as determined by the Service, based on methods
which include consideration of: yields or prices of securities of comparable
quality, coupon, maturity and type; indications as to values from dealers;
and general market conditions. Securities for which there are no such
valuations are valued at fair value as determined in good faith under the dire
ction of the Board of Directors. Investments in U.S. Government obligations
are valued at the mean between quoted bid and asked prices. Short-term
investments are carried at amortized cost, which approximates value.
(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. 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, 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
DREYFUS DISCIPLINED INTERMEDIATE BOND FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
holding period. This arrangement results in a fixed rate of return
that is not subject to market fluctuations during the Fund's holding period.
The value of the collateral is at least equal, at all times, to the total
amount of the repurchase obligation, including interest. In the event of a
counterparty default, the Fund has the right to use the collateral to offset
losses incurred. There is potential loss to the Fund in the event the Fund is
delayed or prevented from exercising its rights to dispose of the collateral
securities, including the risk of a possible decline in the value of the
underlying securities during the period while the Fund seeks to assert its
rights. The Fund's manager, acting under the supervision of the Board of
Directors, reviews the value of the collateral and the creditworthiness of
those banks and dealers with which the Fund enters into repurchase agreements
to evaluate potential risks.
(D) DIVIDENDS TO SHAREHOLDERS: It is the policy of the Fund to
declare dividends daily from investment income-net. Such dividends are paid
monthly. Dividends from net realized capital gain, if any, 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 by
capital loss carryovers, if any, it is the policy of the Fund not to
distribute such gain.
(E) FEDERAL INCOME TAXES: It is the policy of the Fund 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 .55% of the value of the Fund's
average daily net assets. Out of its fee, the Manager pays all of the
expenses of the Fund except brokerage fees, taxes, interest, Rule 12b-1
distribution fees and expenses, fees and expenses of non-interested Directors
(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 period ended April 30, 1996,
the distribution fee for the Investor shares was $2,078.
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
DREYFUS DISCIPLINED INTERMEDIATE BOND FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
Company and who have no direct or indirect financial interest in the
operation of the Plan or in any agreement related to the Plan.
(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 meeting 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.
NOTE 3-SECURITIES TRANSACTIONS:
The aggregate amount of purchase and sales of investment securities,
excluding short-term securities, during the period ended April 30, 1996,
amounted to $54,712,252 and $18,066,310, respectively.
At April 30, 1996, accumulated net unrealized depreciation on
investments was $907,052, consisting of $29,913 gross unrealized appreciation
and $936,965 gross unrealized depreciation.
At April 30, 1996, 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).
[Dreyfus lion "d" logo]
DREYFUS DISCIPLINED INTERMEDIATE BOND 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, PA 15258
TRANSFER AGENT &
DIVIDEND DISBURSING AGENT
Dreyfus Transfer, Inc.
One American Express Plaza
Providence, RI 02903
Further information is contained in the Prospectus,
which must precede or accompany this report.
Printed in U.S.A. 302/702SA964
[Dreyfus logo]
Disciplined Intermediate
Bond Fund
Semi-Annual Report
April 30, 1996
