DREYFUS DISCIPLINED EQUITY INCOME FUND, 485APOS, 1996-12-30

DREYFUS DISCIPLINED EQUITY INCOME FUND
485APOS, 1996-12-30

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File No. 811-5270

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ X ]

Pre-Effective Amendment No. [ ]

Post-Effective Amendment No. 51 [ X ]

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ X ]

Amendment No. 51 [ X ]

(Check appropriate box or boxes.)

THE DREYFUS/LAUREL FUNDS, INC.
___________________________________________________
(Exact Name of Registrant as Specified in Charter)

c/o The Dreyfus Corporation
200 Park Avenue, New York, New York 10166
(Address of Principal Executive Offices) (Zip Code)

Registrant's Telephone Number, including Area Code: (212) 922-6000

John E. Pelletier
Secretary
The Dreyfus/Laurel Funds, Inc.
Municipal Funds
200 Park Avenue
New York, New York 10166
(Name and Address of Agent for Service)

It is proposed that this filing will become effective (check appropriate
box)

immediately upon filing pursuant to paragraph (b)
----
on (date) pursuant to paragraph (b)
----
X 60 days after filing pursuant to paragraph (a)(i)
----
on (date) pursuant to paragraph (a)(i)
----
75 days after filing pursuant to paragraph (a)(ii)
----
on (date) pursuant to paragraph (a)(ii) of Rule 485
----

If appropriate, check the following box:

this post-effective amendment designates a new effective date for
a previously filed post-effective amendment.
----

Registrant has registered an indefinite number of shares of beneficial
interest under the Securities Act of 1933 pursuant to Section 24(f) of the
Investment Company Act of 1940, Registrant's Rule 24f-2 Notice for fiscal
year ended October 31, 1996 was filed on or about _____________, 1996.

DREYFUS INTERNATIONAL EQUITY ALLOCATION FUND
PREMIER BALANCED FUND
PREMIER SMALL COMPANY STOCK FUND
Cross-Reference Sheet Pursuant to Rule 495(a)
________________________________________________________

Items in
Part A of Prospectus
Form N-1A Caption Caption
________ _______ __________

1 Cover Page Cover Page
Expense Summary

2 Synopsis Expense Summary

3 Condensed Financial Financial Highlights
Information

4 General Description of Investment Objective and
Registrant Policies; Further
Information About The Fund

5 Management of the Fund Further Information About
The Funds; Management

5(a) Management's Discussion Management's Discussion
of Fund's Performance of Fund's Performance

6 Capital Stock and Cover Page; Investor
Other Securities Line; Distribution; Taxes;

7 Purchase of Securities Expense Summary;
Being Offered Alternative Purchase Methods;
Special Shareholder Services;
How to invest in The
Dreyfus/Laurel Funds;
Distribution and Service
Plans; How to Exchange your
Investment From One
Fund to Another;

8 Redemption or How to Redeem Shares
Repurchase

9 Pending Legal N.A.
Proceedings

DREYFUS INTERNATIONAL EQUITY ALLOCATION FUND
PREMIER BALANCED FUND
PREMIER SMALL COMPANY STOCK FUND
Cross-Reference Sheet Pursuant to Rule 495(a) (Continued)
________________________________________________________

Items in
Part B of Statement of Additional
Form N-1A Information Caption
- ---------

10 Cover Page Cover

11 Table of Contents Table of Contents

12 General Information Management of the Trust
and History

13 Investment Objectives Investment Policies
and Policies

14 Management of the Fund Management of the Trust;
Trustees and Officers of the
Trust

15 Control Persons and Management of the Trust;
Principal Holders of
Securities

16 Investment Advisory Management of the Trust;
and Other Services Investment Manager;
Shareholder Services

17 Brokerage Allocation Investment Policies
and Other Practices Portfolio Transactions

18 Capital Stock and Description of the Trust;
Other Securities See Prospectus -- "Cover
Page"; "How to Redeem Fund
Shares"; "Further Information
About The Funds; The
Dreyfus/Laurel Tax Free
Municipal Funds"

Items in
Part B of Statement of Additional
Form N-1A Information Caption
- ---------

19 Purchase, Redemption Purchase of Shares;
and Pricing of Distribution and Service
Securities Being Offered Plans; Redemption of Shares;
Valuation of Shares

20 Tax Status Taxes

21 Underwriters Purchase of Shares;
Distribution and Service
Plans; Amounts Expended

22 Calculation of Performance Data
Performance Data

23 Financial Statements Financial Statements

24 Financial Statements and Exhibits C-1

25 Persons Controlled by or Under C-4
Common Control with Registrant

26 Number of Holders of Securities C-4

27 Indemnification C-4

28 Business and Other Connections of C-4
Investment Adviser

29 Principal Underwriters C-12

30 Location of Accounts and Records C-15

31 Management Services C-15

32 Undertakings C-15

- ------------------------------------------------------------------------------

PROSPECTUS MARCH 3, 1997
DREYFUS INTERNATIONAL EQUITY ALLOCATION FUND

- ------------------------------------------------------------------------------

DREYFUS INTERNATIONAL EQUITY ALLOCATION FUND (THE "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'S OBJECTIVE IS TO EXCEED THE TOTAL RETURN OF THE MORGAN
STANLEY CAPITAL INTERNATIONAL -- EUROPE AUSTRALASIA FAR EAST (MSCI EAFE)
INDEXRegistration Mark. THE FUND PURSUES ITS OBJECTIVE THROUGH AN INVESTMENT
PROCESS CONSISTING OF: (I) COUNTRY ALLOCATION; (II) STOCK SELECTION; (III)
CURRENCY ALLOCATION; AND (IV) PORTFOLIO CONSTRUCTION AND RISK MANAGEMENT.

BY THIS PROSPECTUS, THE FUND IS OFFERING INSTITUTIONAL SHARES AND
RETAIL SHARES. (INSTITUTIONAL AND RETAIL SHARES OF THE FUND WERE FORMERLY
CALLED INVESTOR AND CLASS R SHARES, RESPECTIVELY.) INSTITUTIONAL SHARES AND
RETAIL SHARES ARE IDENTICAL, EXCEPT AS TO THE SERVICES OFFERED TO AND THE
EXPENSES BORNE BY EACH CLASS. RETAIL SHARES ARE OFFERED TO ANY INVESTOR.
INSTITUTIONAL SHARES ARE OFFERED ONLY TO CLIENTS OF BANKS, SECURITIES BROKERS
OR DEALERS AND OTHER FINANCIAL INSTITUTIONS (COLLECTIVELY, "AGENTS") THAT
HAVE ENTERED INTO A SELLING AGREEMENT ("AGREEMENT") WITH PREMIER MUTUAL FUND
SERVICES, INC. (THE "DISTRIBUTOR") AND OMNIBUS ACCOUNTS HELD BY INSTITUTIONS
THAT PROVIDE SUB-ACCOUNTING OR RECORDKEEPING SERVICES TO THEIR CLIENTS. YOU
SHOULD CONSULT YOUR AGENT TO DETERMINE WHICH CLASS OF SHARES IS OFFERED BY
THE AGENT. UNLESS THE FUND IS OTHERWISE INSTRUCTED, NEW PURCHASES OR
EXCHANGES BY EXISTING SHAREHOLDERS WILL BE IN THE SAME CLASS OF SHARES THAT
THE SHAREHOLDER THEN HOLDS.
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 DATED MARCH 3, 1997 (THE
"SAI"), WHICH MAY BE 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 OF THE SAI, WRITE TO THE FUND AT 144 GLENN CURTISS BOULEVARD,
UNIONDALE, NEW YORK 11556-0144, OR CALL 1-800-645-6561. 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.
THE NET ASSET VALUE OF FUNDS OF THIS TYPE WILL FLUCTUATE FROM TIME TO TIME.
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)
SHARES OF THE FUND ARE SOLD WITHOUT A SALES LOAD. INSTITUTIONAL
SHARES OF THE FUND ARE SUBJECT TO DISTRIBUTION AND SHAREHOLDER SERVICING
FEES.
YOU CAN PURCHASE OR REDEEM FUND SHARES BY TELEPHONE USING THE DREYFUS
TELETRANSFER PRIVILEGE.

TABLE OF CONTENTS
EXPENSE SUMMARY................................. 4
FINANCIAL HIGHLIGHTS............................ 5
DESCRIPTION OF THE FUND......................... 6
MANAGEMENT OF THE FUND.......................... 12
HOW TO BUY FUND SHARES.......................... 14
SHAREHOLDER SERVICES............................ 17
HOW TO REDEEM FUND SHARES....................... 20
DISTRIBUTION PLAN (INSTITUTIONAL SHARES ONLY)... 23
DIVIDENDS, OTHER DISTRIBUTIONS AND TAXES........ 24
PERFORMANCE INFORMATION......................... 25
GENERAL INFORMATION............................. 26
Page 2

[This Page Intentionally Left Blank]
Page 3
<TABLE>

EXPENSE SUMMARY
INSTITUTIONAL SHARES RETAIL SHARES
<S> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES:
Maximum Sales Load Imposed on Purchases................ none none
Maximum Sales Load Imposed on Reinvestments............ none none
Deferred Sales Load.................................... none none
Redemption Fee......................................... none none
Exchange Fee........................................... none none
ESTIMATED ANNUAL FUND OPERATING EXPENSES:
(as a percentage of net assets)
Management Fee ........................................ 1.25% 1.25%
12b-1 Fee(1)........................................... 0.25% none
Other Expenses(2)...................................... 0.00% 0.00%
------ ------
Total Fund Operating Expenses ......................... 1.50% 1.25%
EXAMPLE:
An investor would pay the following expenses
on a $1,000 investment, assuming (1) a 5% annual
return and (2) redemption at the end of each
time period:
INSTITUTIONAL SHARES RETAIL SHARES
1 YEAR $ 15 $ 13
3 YEARS $ 47 $ 40
5 YEARS $ 82 $ 69
10 YEARS $179 $151
(1) See "Distribution Plan (Institutional Shares Only)" for a description of the Fund's Distribution Plan for Institutional
shares.
(2) Does not include fees and expenses of the non-interested Directors (including counsel). The investment manager is
contractually required to reduce its Management Fee in an amount equal to the Fund's allocable portion of such fees and
expenses, which are estimated to be .01% of the Fund's net assets. (See "Management of the Fund.")
</TABLE>

- ------------------------------------------------------------------------------
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. The information in the foregoing table has been restated to
reflect the reduction of the Fund's management fee from 1.50% to 1.25% of the
Fund's average daily net assets, effective as of August 5, 1996. Long-term
investors in Institutional 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. The information in the foregoing table does not reflect any fee
waivers or expense reimbursement arrangements that may be in effect. Certain
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 Plan
(Institutional Shares Only)."
The Company understands that Agents (including Mellon Bank and
its affiliates) may charge fees to their clients who are owners of the Fund's
Institutional 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 Agreement with 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 4

FINANCIAL HIGHLIGHTS

The tables below are based upon a single Institutional share or
Retail share outstanding throughout each fiscal 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, 1996 which is
incorporated by reference in the SAI. The financial statements included in
the Fund's Annual Report for the year ended October 31, 1996 have been
audited by ___________________________, 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>

DREYFUS INTERNATIONAL EQUITY ALLOCATION FUND
FOR AN INSTITUTIONAL SHARE OUTSTANDING THROUGHOUT EACH YEAR OR PERIOD.*
YEAR YEAR PERIOD
ENDED ENDED ENDED
10/31/96 10/31/95 10/31/94#
<S> <C> <C> <C>
Net asset value, beginning of period $10.06 $10.00
-------- --------- --------
Investment operations:
Net investment income (loss) 0.01 0.01
Net realized and unrealized gain on investments 0.06 0.05
-------- --------- --------
Total from investment operations 0.07 0.06
-------- --------- --------
Distributions:
Dividends from net investment income (0.02) ._-
-------- --------- --------
Dividends from net realized gain on investments ._- ._-
-------- --------- --------
Total Distributions (0.02) ._-
-------- --------- --------
Net asset value, end of period $10.11 $10.06
======== ========= ========
Total Return 0.67% 0.60%
Ratios to average net assets/Supplemental data:
Net Assets, end of period (in 000's) $4,088 $71
Ratio of expenses to average net assets 1.75% 0.39%##
Ratio of net investment income to average net assets 0.04% 0.44%##
Portfolio turnover rate 64.85% 0%
Average Commission rate paid .-- .--
* The Fund commenced operations on August 12, 1994. Effective July 15,
1996, the Fund's Investor shares were redesignated as Institutional shares.
+ Annualized.
++ Total return represents aggregate total return for the periods 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.
## Not annualized.
</TABLE>

Page 5

<TABLE>

DREYFUS INTERNATIONAL EQUITY ALLOCATION FUND
FOR A RETAIL SHARE OUTSTANDING THROUGHOUT EACH YEAR OR PERIOD.*
YEAR YEAR PERIOD
ENDED ENDED ENDED
10/31/96 10/31/95 10/31/94#
<S> <C> <C> <C>
Net asset value, beginning of period $10.06 $10.00
-------- --------- --------
Investment operations:
Net investment income (loss) 0.06 0.02
Net realized and unrealized gain on investments 0.02 0.04
-------- --------- --------
Total from investment operations 0.08 0.06
-------- --------- --------
Distributions:
Dividends from net investment income (0.02) ._
-------- --------- --------
Dividends from net realized gain on investments ._ ._
-------- --------- --------
Total Distributions (0.02) ._
-------- --------- --------
Net asset value, end of period $10.12 $10.06
======== ========= ========
Total Return 0.81% 0.60%
Ratios to average net assets/Supplemental data:
Net Assets, end of period (in 000's) $13,174 $11,844
Ratio of expenses to average net assets 1.50% 0.33%##
Ratio of net investment income to average net assets 0.52% 0.49%##
Portfolio turnover rate 64.85% 0%
Average Commission rate paid _ _
* The Fund commenced operations on August 12, 1994. Effective October 17,
1994, the Fund's Trust Shares were redesignated as Class R shares.
Effective July 15, 1996, the Fund's Class R shares were redesignated
as Retail shares.
+ Annualized.
++ Total return represents aggregate total return for the periods
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.
## Not annualized.
</TABLE>

DESCRIPTION OF THE FUND
GENERAL
By this Prospectus, the Fund is offering Institutional shares and
Retail shares. (Institutional and Retail shares of the Fund were formerly
called Investor and Class R shares, respectively.) Institutional shares and
Retail shares are identical, except as to the services offered to and the
expenses borne by each Class. Retail shares are offered to any investor.
Institutional shares are offered only to clients of Agents that have entered
into an Agreement with the Fund's Distributor and omnibus accounts held by
institutions that provide sub-accounting or recordkeeping services to their
clients. You should consult your Agent to determine which Class of shares is
offered by the Agent. Unless the Fund is otherwise instructed, new purchases
or exchanges by existing shareholders will be in the same Class of shares
that the shareholder then holds. All Agents have agreed to transmit
transaction requests to the Fund's transfer agent or to the Fund's
distributor. Distribution and shareholder servicing fees paid by
Institutional shares will cause Institutional shares to have a higher expense
ratio and pay lower dividends than Retail shares.
Page 6

INVESTMENT OBJECTIVE

The Fund's objective is to exceed the total return of the Morgan
Stanley Capital International--Europe Australasia Far East (MSCI EAFE)
IndexRegistration Mark (the "Benchmark"). The Fund pursues its objective
through country allocation, stock selection, currency allocation, and
portfolio construction and risk management. The Fund is not an index fund.
In addition to investing in securities in countries represented in the
Benchmark, the Fund may invest up to 20% of its total assets in securities
of issuers in emerging market countries. There can be no assurance that the
Fund will meet its investment objective. Under normal circumstances, the Fund
will invest at least 65% of its total assets in equity securities of issuers
in at least three countries outside of the United States.

MANAGEMENT POLICIES
The Benchmark is a diversified, capitalization-weighted index of
equity securities of companies located in Australia and 14 countries of
Europe and 5 countries of the Far East. The countries represented in the
Benchmark are: Australia, Austria, Belgium, Denmark, Finland, France,
Germany, Hong Kong, Ireland, Italy, Japan, the Netherlands, New Zealand,
Norway, Singapore/Malaysia, Spain, Sweden, Switzerland and the United
Kingdom. The Fund may also invest in securities of issuers in other countries
added to the Benchmark from time to time. Stocks in the Benchmark are
selected to represent proportionally each country and each major industrial
sector within each country. Each stock in the Benchmark is weighted according
to its market value as a percentage of the total market value of all stock in
the Benchmark.
The investment process utilized by Dreyfus in structuring the
Fund has four basic components: (1) country allocation; (2) stock selection;
(3) currency allocation; and (4) portfolio construction and risk management.
The country and currency allocation components employ a combination of
quantitative research using proprietary financial models and fundamental
research.

Under normal circumstances, the Fund expects to be fully invested
in securities of issuers in countries included in the Benchmark, securities
of emerging market countries, and derivative securities, except for such
amounts as are needed to meet short-term cash needs and redemptions and
amounts pending investment. These amounts may be held as cash or temporarily
invested in repurchase agreements and in high quality short-term debt
instruments of the U.S. Government or foreign governments, their agencies or
instrumentalities. Generally, the Fund's assets are allocated to the
countries contained in the Benchmark, with the exception of Australia,
France, Germany, Hong Kong, Italy, Japan, the Netherlands,Switzerland and the
United Kingdom, approximately in proportion to the weightings of such
countries within the Benchmark (the "Tier One Country Allocation"). Dreyfus
uses its country allocation model to allocate the Fund's remaining assets
among Australia, France, Germany, Hong Kong, Italy, Japan, the Netherlands,
Switzerland and the United Kingdom, based generally on earning and dividend
forecasts of stocks in each of these countries (the "Tier Two Country
Allocation"). Dreyfus may, however, alter the amount of assets it allocates
between the Tier One Country Allocation and the Tier Two Country Allocation
if it believes it to be in the best interests of the Fund and may reduce the
amount of assets it allocates pursuant to the Tier One Country Allocation
and/or the Tier Two Country Allocation to enable it to invest in emerging
market countries and derivative securities and to enable it to maintain
amounts needed to meet short-term cash needs and redemptions and amounts
pending investment. No more than 20% of the Fund's total assets will be
invested in the securities of emerging market countries, including Argentina,
Brazil, Chile, People's Republic of China, Colombia, Czech Republic, Greece,
South Korea, Hungary, India, Indonesia, Israel, Jordan, Mexico, Pakistan,
Peru, Philippines, Poland, Portugal, Sri Lanka, Taiwan, Thailand, Turkey and
Venezuela, subject to the satisfaction of regulatory standards for the
custody of assets and securities clearance systems. The Fund may also invest
in securities of other emerging markets. Each emerging market country is
analyzed from a macroeconomic and financial perspective giving equal
Page 7

consideration to four factors: (1) the relative and historical market
valuation; (2) the currency risk; (3) the outlook for economic growth; and
(4) the country political risk.

Unless all of the stocks contained in the Benchmark can be
purchased on behalf of the Fund, Dreyfus will utilize statistical sampling
techniques to purchase a representative sample of stocks from each industry
sector included in the Benchmark in proportion to the industry weighting in
the Benchmark for the Fund's portfolio. Dreyfus employs an active process for
selecting stocks of emerging market countries for the Fund's portfolio.
The Fund may invest in forward foreign currency exchange
contracts, futures contracts, options on securities and on foreign
currencies, currency indices, futures contracts, and securities indices to
adjust its risk exposure relative to the Benchmark and to its investment in
emerging market countries. Dreyfus will manage currency exposure for the Fund
utilizing its proprietary currency allocation model, which is designed to
forecast the movement of foreign currencies based generally on differences in
real interest rates among countries. Dreyfus will manage and monitor the
total risk of the portfolio, including the country and currency exposure
resulting from the implementation of its country and currency models.

The Fund may invest more than 25% of its total assets in the
securities of issuers located in a single country. Investment in a particular
country of 25% or more of the Fund's assets will make the Fund's performance
more dependent on the political and economic circumstances of a particular
country than a mutual fund that is more widely diversified among issuers in
different countries. See "Certain Portfolio Securities -- Foreign
Securities." The country allocation model used by Dreyfus takes into account
a number of criteria in determining whether the Fund should invest more than
25% of its assets in issuers located in a particular country.

In no event will the Fund purchase securities which would cause
25% or more of the market value of the Fund's total assets to be invested in
securities of one or more issuers having their principal business activities
in the same industry. This limit does not apply with respect to the Fund's
investments in securities issued or guaranteed by the U.S. Government, its
agencies or instrumentalities. The Fund has a non-fundamental investment
limitation which provides that in no event will it purchase securities which
would cause more than 25% of the market value of its total assets to be
invested in securities issued or guaranteed by a single government or its
agencies and instrumentalities. The Fund may also invest in commercial paper
and may lend its portfolio securities. Under unusual circumstances, such as
drastic political or economic changes, severe social unrest or acts of war,
the Fund may be primarily invested in securities of U.S. companies, and
securities of the U.S. Government, its agencies, instrumentalities and
municipalities.
INVESTMENT TECHNIQUES
In connection with its investment objective and policies, the
Fund may employ, among others, the following investment techniques:

BORROWING; SHORT SETTLEMENT. The Fund is authorized, within
specified limits, to borrow money for temporary administrative purposes and
to pledge its assets in connection with such borrowings. Short settling is a
process whereby a trader of securities, such as the fund, negotiates with the
broker to execute and settle the securities transactions on a next day basis
instead of under the normal 3 day settlement process. The agent holding the
securities for the seller is directed to transfer the securities delivery vs.
payment for next day settlement, so that both the delivery of securities and
the sales proceeds are effected one day after trading. The commissions on the
transaction may be somewhat higher to accommodate the short settlement period
and to compensate the broker adequately for the early advancement of funds.
The ability to short settle is necessary to meet certain time sensitive
liquidity needs of the fund. Brokers may determine whether or not they are
willing to engage in short-selling on a transaction by transaction basis. The
practice will be negotiated on an as needed basis which is expected to be
infrequently. In certain instances, to accommodate net withdrawals the Fund
may utilize a line of credit provided by a third party lender, short settling
with unaffiliated brokers, or reverse repurchase agreements with independent
parties.

Page 8

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.
CURRENCY EXCHANGE TRANSACTIONS. The Fund may engage in currency
exchange transactions. Generally, the Fund's foreign currency exchange
transactions will be conducted on a spot basis at the spot rate then
prevailing for purchasing or selling currencies in the foreign exchange
market. The Fund may, to a limited extent, deal in forward foreign currency
exchange contracts involving currencies of the different countries in which
it will invest as a hedge against possible variations in the foreign exchange
rates between these currencies. This is accomplished through contractual
agreements to purchase or sell a specified currency at a specified future
date (up to one year) and price set at the time of the contract. The Fund's
dealings in forward foreign currency exchange contracts are limited to
hedging involving either specific transactions or portfolio positions.
Transaction hedging is the purchase or sale of forward foreign currency
exchange contracts with respect to specific receivables (including dividends)
or payables of the Fund accruing in connection with the ownership, purchase
and sale of its portfolio securities and the sale and redemption of shares of
the Fund. Position hedging is the sale of forward foreign currency contracts
with respect to portfolio security positions denominated or quoted in such
foreign currency. The Fund will not enter into or maintain a position in such
contracts if their consummation would obligate the Fund to deliver an amount
of foreign currency greater than the value of the Fund's assets denominated
or quoted in, or currency convertible into, such currency.
Forward contracts provide for the future sale by one party and
purchase by another party of a specified amount of a specified security or
securities index or currency at a specified future time and at a specified
price. Forward contracts differ from futures contracts as the terms of the
contract are not standardized and forward contracts are not traded on
regulated exchanges. Transactions are executed over the counter. If the
counterparty defaults, the Fund might incur a loss. Dreyfus seeks to minimize
the risk of loss through forward contracts by analyzing the creditworthiness
of the counterparty under forward contract agreements. The Fund's use of
forward contracts will be restricted to the purchase or sale of foreign
currency. The Fund will selectively employ currency forward contracts in
order to hedge currency risk allocated with investments in foreign equity
securities.
WHEN-ISSUED SECURITIES 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.

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,
Page 9

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 adjust its risk exposure relative to the
Benchmark, or to alter the exposure of a particular investment or portion of
the Fund's portfolio to fluctuations in interest rates or currency 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
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.
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 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
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
Page 10

at the time of purchase at least A-1 by Standard & Poor's, Prime-1 by Moody's
Investors Service, Inc., F-1 by Fitch Investors Service, Inc., Duff 1 by Duff
& Phelps, Inc., or A1 by IBCA, Inc.
FOREIGN SECURITIES. The Fund will 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.
Among the foreign securities in which the Fund may invest are
those issued by companies located in developing countries, which are
countries in the initial stages of their industrialization cycles. Investing
in the equity and debt markets of developing countries involves exposure to
economic structures that are generally less diverse and less mature, and to
political systems that can be expected to have less stability, than those of
developed countries. The markets of developing countries historically have
been more volatile than the markets of the more mature economies of developed
countries, but often have produced higher rates of return to investors.
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 ("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.
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 under "Certain Portfolio Securities _ Illiquid
Securities."
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. In addition to
direct obligations of the U.S. Treasury, these include securities issued or
guaranteed by the Federal Housing Administration, Farmers Home
Administration, Export-Import Bank of the United States, Small Business
Administration, Government National Mortgage Association, 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,
the Federal Home Loan Mortgage Corporation or other instrumentalities.
PORTFOLIO TURNOVER. While securities are purchased for the Fund
on the basis of potential for exceeding the total return of the Benchmark 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
Page 11

Fund were replaced once in a period of one year. A higher rate of portfolio
turnover (100% or more) 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, securities 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.
RISK FACTORS
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.

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 November 29, 1996, Dreyfus managed or
administered approximately $84 billion in assets for more than 1.7 million
investor accounts nationwide.

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, includ-
Page 12

ing $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.

Effective August 5, 1996, the Investment Management Agreement
between the Company, on behalf of the Fund, and Dreyfus was amended to
reflect a reduction in the annual management fee payable by the Fund to
Dreyfus from 1.50% to 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 (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. Although Dreyfus is not
obligated to pay the fees and expenses of the non-interested Trustees
(including counsel fees), Dreyfus is contractually required to reduce its
investment management fee in an amount equal to the Fund's allocable share of
such expenses. 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,
1996, the Fund paid Dreyfus at the effective annual rate of 1.25% of its
average daily net assets in investment management fees.

For the fiscal year ended October 31, 1996, total operating
expenses (excluding Rule 12b-1 fees) of the Fund were 1.25% of the average
daily net assets of each Class for both the Institutional and Retail shares,
which reflects the management fee of 1.50% of average daily net assets
payable by the Fund prior to August 5, 1996 and the management fee of 1.25%
of average daily net assets payable by the Fund thereafter pursuant to the
amended Investment Management Agreement.

The Fund's portfolio manager is Charles J. Jacklin. Mr. Jacklin
has managed the Fund since August 5, 1996 and is a portfolio manager at
Dreyfus. He is also a Senior Vice President and Director of Asset Allocation
Strategies for Mellon Capital Management ("MCM") since January 1994. He
manages and develops global asset allocation strategies, and implements MCM's
value-added investment strategies. Prior to joining MCM, Mr. Jacklin was an
Assistant Professor at Stanford University. He also has served as Senior
Staff Economist for Financial Markets and Banking for the President's Council
of Economic Advisors. He has published a number of articles on finance and
investment in academic research journals, and is an associate editor for the
Review of Quantitative Finance and Accounting. Mr. Jacklin holds a Ph.D. in
Finance from Stanford University.
Effective August 5, 1996, the investment sub-advisory agreement
among the Company, on behalf of the Fund, S.A.M. Finance, S.A. ("CCF S.A.M.")
and Dreyfus (the "Former Sub-Advisory Agreement") was terminated. CCF S.A.M.
provided investment advice and portfolio management services to the Fund in
its capacity as sub-adviser to the Fund and received a sub-advisory fee at
the annual rate of .25% of the Fund's average daily net assets from Dreyfus
pursuant to the Former Sub-Advisory Agreement. Payment of the fee was the
obligation of Dreyfus and not of the Fund.
For the fiscal year ended October 31, 1996, Dreyfus paid CCF
S.A.M. advisory fees of .25% of the Fund's average daily net assets.
In addition, Institutional shares may be subject to certain
distribution and shareholder servicing fees. See "Distribution Plan
(Institutional Shares Only)."
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.
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
man-
Page 13

aged, 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 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 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. Boston Safe Deposit and Trust Company (One Boston Place,
Boston, Massachusetts 02109), an indirect wholly-owned subsidiary of Mellon,
serves as the Fund's custodian. As custodian, Boston Safe Deposit and Trust
Company maintains possession of the Fund's investment securities and provides
portfolio recordkeeping services. Boston Safe Deposit and Trust Company is
authorized to deposit securities in securities depositories or to use the
services of subcustodians. 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. Retail shares are offered to any investor.
Institutional shares are offered only to clients of Agents that
have entered in an Agreement with the Distributor and omnibus accounts held
by institutions that provide sub-accounting or recordkeeping services to
their clients.
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.

The minimum initial investment is $2,500, or $1,000 if you are a
client of an Agent which maintains an omnibus account in the Fund and has
made an aggregate minimum initial purchase for its customers of $2,500.
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. For 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, the
minimum initial investment for Retail shares is $1,000. For full-time or
part-time employees of Dreyfus or any of its affiliates or subsidiaries who
elect to have a portion of their pay directly deposited into their Fund
account, the minimum initial investment for Retail shares is $50. 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.

Page 14

Retail shares are also offered without regard to the minimum
initial investment requirements, through Dreyfus-AUTOMATIC Asset Builder,
Dreyfus Government Direct Deposit Privilege or Dreyfus Payroll Savings Plan
pursuant to the Dreyfus Step Program (described under "Shareholder
Services"). These services enable you to make regularly scheduled investments
and may provide you with a convenient way to invest for long-term financial
goals. You should be aware, however, that periodic investment plans do not
guarantee a profit and will not protect an investor against loss in a
declining market.
A "Retirement Plan" is a qualified or non-qualified employee
benefit plan or other program, including pension, profit-sharing and other
deferred compensation plans, whether established by corporations,
partnerships, non-profit entities or state and local governments. The
Internal Revenue Code of 1986, as amended (the "Code"), imposes various
limitations on the amount that may be contributed to 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.

You may purchase Fund shares by check or wire, or through the
Dreyfus 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 Dreyfus International Equity Allocation 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. Purchase orders of Retail shares may be delivered in
person only to a Dreyfus Financial Center. THESE ORDERS WILL BE FORWARDED TO
THE FUND AND WILL BE PROCESSED ONLY UPON RECEIPT THEREBY. For the location of
the nearest Dreyfus Financial Center, please call the telephone number listed
under "General Information."

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 # 044210/Dreyfus International Equity Allocation 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 you have
completed the wire payment in order to obtain your Fund account number. You
should 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.

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 to Boston Safe Deposit and Trust Company with instructions to credit your
Fund account. The instruc-
Page 15

tions must specify your Fund account registration and Fund account number
PRECEDED BY THE DIGITS "4480" for Institutional shares and "4470" for Retail
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 Institutional shares and Retail
shares 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:
Equity securities of the Fund listed or traded on a stock
exchange, except as otherwise noted, are valued at the latest sale price. If
no sale is reported, the current bid is used. An equity security which is
listed or traded on more than one exchange is valued at the quotation on the
exchange determined to be the primary market for such security by Dreyfus.
All other equity securities not so traded are valued at the last sales price
prior to the time of valuation.
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.
For purposes of determining the Fund's NAV, all assets and
liabilities initially expressed in foreign currency values will be converted
into U.S. dollar values at the mean between the bid and offered quotations of
such currencies against U.S. dollars as last quoted by any recognized dealer.
If an event were to occur after the value of a portfolio instrument was so
established but before the NAV is determined which is likely to materially
change the NAV, then the portfolio instrument would be valued using fair
value considerations established by the Company's Board of Directors. Because
of the need to obtain prices as of the close of trading of various worldwide
exchanges, the calculation of NAV does not take place contemporaneously with
the determination of the prices of the majority of the Fund's securities.
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 purchase orders made through the Dreyfus
TELETRANSFER Privilege, which are effective one business day after
Page 16

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
5:15p.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.
The public offering price of Institutional shares and Retail
shares, both of which are sold on a continuous basis, is the NAV of that
Class.
DREYFUS 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 Dreyfus TELETRANSFER Privilege, you may
request a Dreyfus 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
certain other eligible 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 FUND 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, you or 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 signed Shareholder Services Form available by
calling 1-800-645-6561 or, by oral request from any of the authorized
signatories on the account, also 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. If calling from overseas,
516-794-5452. See "How to
Page 17

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, Wire Redemption Privilege, Telephone Redemption
Privilege, Dreyfus TELETRANSFER Privilege and the dividends and distributions
payment option (except for Dreyfus 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 Fund shares into funds
sold with a sales load. If you are exchanging Fund 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 you must notify the Transfer Agent or 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.
DREYFUS AUTO-EXCHANGE PRIVILEGE
Dreyfus 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 certain other eligible funds in the Dreyfus
Family of Funds of which you are currently an investor. WITH RESPECT TO FUND
SHARES HELD BY RETIREMENT PLANS, EXCHANGES PURSUANT TO THE DREYFUS
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 Fund shares
into funds sold with a sales load. 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 The Dreyfus Family of Funds, P.O. Box 9671, Providence, Rhode
Island 02940-9671. 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 Dreyfus Family of
Funds eligible to participate in this Privilege, or to obtain a Dreyfus
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
Page 18

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 a Dreyfus-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 The Dreyfus Family of Funds, P.O. Box
9671, Providence, Rhode Island 02940-9671, or, if for Dreyfus Retirement Plan
accounts, to The Dreyfus Trust Company, Custodian, P.O. Box 6427, Providence,
Rhode Island 02940-6427, 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.
DREYFUS DIVIDEND OPTIONS

Dreyfus Dividend Sweep enables you to invest automatically
dividends or dividends and other distributions, if any, paid by the Fund in
shares of certain other eligible funds in 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. See
"Shareholder Services" in the SAI. Dreyfus 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
Dreyfus Dividend Options Form, please call toll free 1-800-645-6561. You may
cancel these privileges by mailing written notification to The Dreyfus Family
of Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671. 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 Dreyfus 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 Dreyfus Dividend Sweep.
DREYFUS GOVERNMENT DIRECT DEPOSIT PRIVILEGE
Dreyfus 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 Dreyfus 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.
DREYFUS PAYROLL SAVINGS PLAN
Dreyfus Payroll Savings Plan permits you to purchase Fund shares
(minimum of $100 per transaction) automatically on a regular basis. Depending
upon the direct deposit program of your employer, you may have part or all of
your paycheck transferred to your existing Dreyfus account electronically
through
Page 19

the ACH system at each pay period. To establish a Dreyfus Payroll Savings
Plan account, you must file an authorization form with your employer's
payroll department. Your employer must complete the reverse side
of the form and return it to The Dreyfus Family of Funds, P.O. Box 9671,
Providence, Rhode Island 02940-9671. You may obtain the necessary
authorization form by calling 1-800-645-6561. You may change the amount of
purchase or cancel the authorization only by written notification to your
employer. It is the sole responsibility of your employer, not the
Distributor, Dreyfus, the Fund, the Transfer Agent or any other person, to
arrange for transactions under the Dreyfus Payroll Savings Plan. The Fund may
modify or terminate this Privilege at any time or charge a service fee. No
such fee currently is contemplated.
DREYFUS STEP PROGRAM
Dreyfus Step Program enables you to purchase Retail shares without
regard to the Fund's minimum initial investment requirements through Dreyfus-
AUTOMATIC Asset Builder, Dreyfus Government Direct Deposit Privilege or
Dreyfus Payroll Savings Plan. To establish a Dreyfus Step Program account,
you must supply the necessary information on the Fund's Account Application
and file the required authorization form(s) with the Transfer Agent. For more
information concerning this Program, or to request the necessary
authorization form(s), please call toll free 1-800-782-6620. You may
terminate your participation in this Program at any time by discontinuing
your participation in Dreyfus-AUTOMATIC Asset Builder, Dreyfus Government
Direct Deposit Privilege or Dreyfus Payroll Savings Plan, as the case may be,
as provided under the terms of such Privilege(s). The Fund reserves the right
to redeem your account if you have terminated your participation in the
Program and your account's net asset value is $500 or less. See "How to
Redeem Fund Shares." The Fund may modify or terminate this Program at any
time. Investors who wish to purchase Retail shares through the Dreyfus Step
Program in conjunction with a Dreyfus-sponsored retirement plan may do so
only for IRAs, SEP-IRAs and IRA "Rollover Accounts."
AUTOMATIC WITHDRAWAL PLAN
The Automatic Withdrawal Plan permits you to request withdrawal
of a specified dollar amount (minimum of $50) on a monthly or quarterly 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 Fun
d 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.

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.
Page 20

The Fund imposes no charges 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 DREYFUS TELETRANSFER PRIVILEGE OR
THROUGH DREYFUS-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,
DREYFUS TELETRANSFER PURCHASE OR DREYFUS-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 DREYFUS
TELETRANSFER PRIVILEGE FOR A PERIOD OF EIGHT BUSINESS DAYS AFTER RECEIPT BY
THE TRANSFER AGENT OF THE PURCHASE CHECK, THE DREYFUS TELETRANSFER PURCHASE
OR THE DREYFUS-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.
PROCEDURES. You may redeem Fund shares by using the regular
redemption procedure through the Transfer Agent, the Wire Redemption
Privilege, the Telephone Redemption Privilege or through the Dreyfus
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 Institutional 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 Telephone Redemption
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 redemption or an exchange of Fund shares. In such cases, you should
consider using the other redemption procedures described herein. Use of these
other redemp-
Page 21

tion procedures may result in your redemption request being processed at a
later time than it would have been if telephone 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 The Dreyfus Family of
Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671, or if for the
Dreyfus retirement plan accounts to The Dreyfus Trust Company, Custodian,
P.O. Box 6427, Providence, Rhode Island 02940-6427. Redemption requests of
Retail shares may be delivered in person only to a Dreyfus Financial Center.
THESE REQUESTS WILL BE FORWARDED TO THE FUND AND WILL BE PROCESSED ONLY UPON
RECEIPT THEREBY. For the location of the nearest Dreyfus Financial Center,
please call the telephone number listed under "General Information."
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 the telephone number listed under "General
Information."
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.
WIRE REDEMPTION PRIVILEGE. You may request by wire or telephone
that redemption proceeds (minimum $1,000) be wired to your account at a bank
which is a member of the Federal Reserve System, or a correspondent bank if
your bank is not a member. To establish the Wire Redemption Privilege, you
must check the appropriate box and supply the necessary information on the
Fund's Account Application or file a Shareholder Services Form with the
Transfer Agent. You may direct that redemption proceeds be paid by check
(maximum $150,000 per day) made out to the owners of record and mailed to
your address. Redemption proceeds of less than $1,000 will be paid
automatically by check. Holders of jointly registered Fund or bank accounts
may have redemption proceeds of only up to $250,000 wired within any 30-day
period. You may telephone redemption requests by calling 1-800-645-6561 or,
if calling from overseas, 516-794-5452. The Fund reserves the right to refuse
any redemption request, including requests made shortly after a change of
address, and may limit the amount involved or the number of such requests.
This Privilege may be modified or terminated at anytime by the Transfer Agent
or the Fund. The Fund's SAI sets forth instructions for transmitting
redemption requests by wire. Shares held under Keogh Plans, IRAs or other
retirement plans, and shares for which certificates have been issued, are not
eligible for this Privilege.
TELEPHONE REDEMPTION PRIVILEGE. You may redeem Fund shares
(maximum $150,000 per day) by telephone if you checked the appropriate box on
the Fund's Account Application or have filed a Shareholder Services Form with
the Transfer Agent. The redemption proceeds will be paid by check and mailed
to your address. You may telephone redemption instructions by calling
1-800-645-6561 or, if calling from overseas, 516-794-5452. 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. This Privilege may be modified or terminated at any
time by the Transfer Agent or the Fund. Shares held under Keogh Plans, IRAs
or other retirement plans, and shares for which certificates have been
issued, are not eligible for this Privilege.
REDEMPTION THROUGH A SELECTED DEALER. If you are a customer of
certain banks, securities brokers or dealers ("Selected Dealers") you may
make redemption requests to your Selected Dealer. If the Selected Dealer
transmits the redemption request that is received by the Transfer Agent prior
to the
Page 22

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 is received in a timely manner. The proceeds of
the redemption are credited to your account with the Selected Dealer.
In addition, the Distributor will accept orders from Selected
Dealers with which it has sales agreements for the repurchase of Fund 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 Fund
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.
DREYFUS 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 a bank 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 Dreyfus
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 Dreyfus TELETRANSFER Privilege, you may
request a Dreyfus 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.

DISTRIBUTION PLAN
(INSTITUTIONAL SHARES ONLY)
Institutional shares are subject to a Distribution Plan (the
"Plan") adopted pursuant to Rule 12b-1 under the 1940 Act ("Rule 12b-1"). The
Institutional shares of the Fund bear some of the cost of selling those
shares under the Plan. The Plan allows the Fund to spend annually up to 0.25%
of its average daily net assets attributable to Institutional shares to
compensate Dreyfus Service Corporation, an affiliate of Dreyfus, for
shareholder servicing activities and the Distributor for shareholder
servicing activities and for activities or expenses primarily intended to
result in the sale of Institutional 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 Institutional 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.
Page 23

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.
DIVIDENDS, OTHER DISTRIBUTIONS AND TAXES

The Fund ordinarily pays dividends from its net investment income
and distributes net realized capital 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 capital gains unless all capital loss carryovers, if any, have been
utilized or have expired. All expenses are accrued daily and deducted before
declaration of dividends to investors. Dividends paid by each Class are
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
are borne exclusively by that Class. Institutional shares will receive lower
per share dividends than Retail shares because of the higher expenses borne
by the Institutional shares. See "Expense Summary."

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
at NAV, 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.

It is expected that the Fund will continue to 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 that its earnings and realized gains 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 are
taxable to U.S. shareholders, including certain non-qualified Retirement
Plans, as ordinary income to the extent of the Fund's earnings and profits
whether received in cash or reinvested in additional Fund shares. Distribution
s from the Fund's net capital gain (the excess of net long-term capital gain
over net short-term capital loss) are taxable to such shareholders as
long-term capital gains, regardless of how long the shareholders have held
their Fund shares and whether such distributions are received in cash or
reinvested in additional 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 will be 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. Capital gain distributions paid by the Fund
to a non-resident foreign investor, as well as the proceeds of any
redemptions by such an investor, regardless of the extent to which gain or
loss may be realized, generally are not 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
capital gain distributions, if any, paid during the year.

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
Page 24

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 "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 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 laws and regulations generally require the Fund to
withhold ("backup withholding") and remit to the U.S. Treasury 31% of
dividends, capital gain distributions and any redemption proceeds, 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 that a shareholder's TIN is
incorrect or that 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 Institutional shares should be expected to be lower than that of Retail
shares. 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 25

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 two Classes_Institutional shares and Retail
shares. The Company's Articles of Incorporation permit the Board of Directors
to create an unlimited number of investment portfolios (each a "fund"). The
Company may in the future seek to achieve the Fund's investment objective by
investing all of the Fund's 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.

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 Institutional shares will be entitled to vote on matters submitted
to shareholders pertaining to the Distribution Plan relating to that Class.
Page 26

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 proper 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 or by calling toll
free 1-800-645-6561.
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.
Page 27

International
Equity Allocation
Fund
Prospectus

Registration Mark

Copy Rights 1997 Dreyfus Service Corporation
323/723p030397
Page 28

PREMIER BALANCED FUND

PROSPECTUS MARCH 1, 1997

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, 1997, 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
* 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.
</TABLE>
- ------------------------------------------------------------------------------
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, 1996,
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 __________________, 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.

PREMIER BALANCED FUND
FOR A CLASS A SHARE OUTSTANDING THROUGHOUT EACH YEAR OR PERIOD.*
YEAR ENDED YEAR ENDED PERIOD ENDED
10/31/96 10/31/95 10/31/94#
----------- ----------- ------------
<S> <C> <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%

*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

PREMIER BALANCED FUND
FOR A CLASS B SHARE OUTSTANDING THROUGHOUT THE YEAR OR PERIOD.
YEAR ENDED PERIOD ENDED
10/31/96 10/31/95*
----------- ------------
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 YEAR OR PERIOD.
YEAR ENDED PERIOD ENDED
10/31/96 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.

Page 6

PREMIER BALANCED FUND
FOR A CLASS R SHARE OUTSTANDING THROUGHOUT EACH YEAR OR PERIOD.*
YEAR YEAR YEAR PERIOD
ENDED ENDED ENDED ENDED
10/31/96 10/31/95 10/31/94## 10/31/93

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% _

* 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.

</TABLE>
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 November 29, 1996, Dreyfus managed or
administered approximately $84 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
Page 18

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, 1996, 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, 1996, for Class A, Class B, Class C
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, Class B, Class C and Class R 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.
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 Balanced 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
Page 20

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.
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 "4130" for Class A shares, "4140" for Class B shares, "4150" for
Class C shares and "4160" 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
Page 21

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.
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
Page 28

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:
Year Since CDSC as a % of Amount
Purchase Payment Invested or Redemption
Was Made Proceeds
----------------- ------------------------
First......................... 4.00
Second........................ 4.00
Third......................... 3.00
Fourth........................ 3.00
Fifth......................... 2.00
Sixth......................... 1.00
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.
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
Page 33

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/P030197
Page 38
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Page 39

[This Page Intentionally Left Blank]
Page 40

PREMIER SMALL COMPANY STOCK FUND

PROSPECTUS MARCH 1, 1997

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, 1997, 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.

(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

EXPENSE SUMMARY
<TABLE>
<CAPTION>

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

* 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.
</TABLE>
- ------------------------------------------------------------------------------
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, 1996
which is incorporated by reference in the SAI. The financial statements
included in the Fund's Annual Report for the year ended October 31, 1996
have been audited by ______________, 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.

PREMIER SMALL COMPANY STOCK FUND
FOR A CLASS A SHARE OUTSTANDING THROUGHOUT EACH YEAR OR PERIOD.
YEAR YEAR PERIOD
ENDED ENDED ENDED
10/31/96 10/31/95 10/31/94*#
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <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%
- ---------------------------------------------------------------------------------------------------------------
*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

PREMIER SMALL COMPANY STOCK FUND
FOR A CLASS B SHARE OUTSTANDING THROUGHOUT THE YEAR OR PERIOD.
YEAR ENDED PERIOD ENDED
10/31/96 10/31/95*
- ----------------------------------------------------------------------------------------
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 YEAR OR PERIOD.
YEAR ENDED PERIOD ENDED
10/31/96 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.
Page 6

PREMIER SMALL COMPANY STOCK FUND
FOR A CLASS R SHARE OUTSTANDING THROUGHOUT EACH YEAR OR PERIOD.
YEAR YEAR PERIOD
ENDED ENDED ENDED
10/31/96 10/31/95 10/31/94*#
- ---------------------------------------------------------------------------------------------------------------
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%
- ---------------------------------------------------------------------------------------------------------------
*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.
</TABLE>

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 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.
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 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

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 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, 1996, 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, 1996, total operating
expenses (excluding Rule 12b-1 fees, as applicable) of the Fund for Class
A, Class B, Class C and Class R shares were 1.25%, of the average daily
net assets for each of the Fund's Class A, Class B, Class C and Class R
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.
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,
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.
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 rela-
Page 15

tionship. 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.
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.
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
Page 16

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.
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.
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.
Page 17

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
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:

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
Page 18

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 NAV, 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.
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 cer-
Page 19

tain 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 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.
Page 20

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
TouchRegistration 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
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 SHAREHOLD-
Page 21

ER'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
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 written notifi-
Page 22

cation 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.
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.
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:
Year Since CDSC as a % of Amount
Purchase Payment Invested or Redemption
Was Made Proceeds
------------------ ------------------------
First............................... 4.00
Second.............................. 4.00
Third............................... 3.00
Fourth.............................. 3.00
Fifth............................... 2.00
Sixth............................... 1.00
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.
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.
Page 26

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.
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.
Page 27

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.
PCSp030197
Page 32

DREYFUS INTERNATIONAL EQUITY ALLOCATION FUND
INSTITUTIONAL AND RETAIL SHARES
PART B
STATEMENT OF ADDITIONAL INFORMATION

MARCH 3, 1997

This Statement of Additional Information, which is not a prospectus,
supplements and should be read in conjunction with the current Prospectus of
the Dreyfus International Equity Allocation Fund (formerly, the Laurel
International Equity Allocation Fund) (the "Fund"), dated March 3, 1997, as it
may be revised from time to time. The 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. 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. ("Premier") 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 Plan. . . . . . . . . . . . . . . . . . . . . . . . . . . . B-24
Redemption of Fund Shares. . . . . . . . . . . . . . . . . . . . . . . . B-25
Shareholder Services . . . . . . . . . . . . . . . . . . . . . . . . . . B-27
Determination of Net Asset Value . . . . . . . . . . . . . . . . . . . . B-30
Dividends, Other Distributions and Taxes . . . . . . . . . . . . . . . . B-30
Portfolio Transactions . . . . . . . . . . . . . . . . . . . . . . . . . B-34
Performance Information. . . . . . . . . . . . . . . . . . . . . . . . . B-36
Information about the Fund . . . . . . . . . . . . . . . . . . . . . . . B-38
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."

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 of 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 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 of 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.
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 Board of Directors. No more than
5% of the Fund's net assets will be invested in repurchase agreements at any
one time.

When-Issued Securities. New issues of 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 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
obligation from then-available cash flow, the sale of segregated securities,
the sale of other securities, and/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, Dreyfus considers all relevant factors and circumstances including
the creditworthiness of the borrower.

Derivative Instruments. As discussed in the Prospectus, 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 adjust its risk exposure relative to the Benchmark,
or to alter the exposure of a particular investment or portion of the Fund's
portfolio to fluctuations in interest rates or currency 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 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."

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 the
ability of Dreyfus to predict movements of the overall securities, currency
and other 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 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.

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 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.

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 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'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 the 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.

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.

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, 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.

Master/Feeder Option. The company may in the future seek to
achieve the Fund's Investment objectives 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
Company's Board of Directors will consider, among other things, the benefits
to shareholders and/or the opportunity to reduce costs and achieve operational
efficiency. 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 risks will be materially reduced if this option is implemented.

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.

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 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).

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 the Fund may enter into
futures contracts and related options, forward currency contracts 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, 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 not 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 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 be extent otherwise permitted by the
1940 Act.

8. The Fund shall not purchase any security while borrowings
representing more than 5% of 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 Stock Exchange
("NYSE") 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 future contracts and
related options.

11. The Fund will not invest more than 25% of the market value of the
Fund's total assets in securities issued or guaranteed by a single government
or its agencies and instrumentalities.

As an operating policy, the Fund will not invest more the 25% of the value of
the Fund's 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 Board of Directors may change this operating policy without shareholder
approval. Notice will be given to shareholders if this policy is changed by
the Board of Directors.

MANAGEMENT OF THE FUND

PRINCIPAL SHAREHOLDERS

The following shareholder(s) owned of record 5% or more of the
Institutional shares of the Fund at , 1996:

The following shareholder(s) owned of record 5% or more of the Retail
shares of the Fund at , 1996:

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, as well as
Dreyfus' investment advisory activities, may raise issues under these
provisions. Mellon Bank has been advised by counsel that these 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 the Fund. If Mellon Bank or Dreyfus were prohibited from serving the
Fund in any of its present capacities, the 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 Fund 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").

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.; Director, Boston Mutual Insurance Company; Director,
Access Capital Strategic Community Investment Fund, Inc. - Bank
Portfolio; Director and vice Chairman of the Board of Home Owners
Federal Savings and Loan (prior to May 1990). 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 for
various funds in the Dreyfus Family of Funds. He also is Chairman of
the Board of Noel Group Inc., a venture capital company; Director,
Access Capital Strategic Community Investment Fund, Inc. - Bank
Portfolio and Institutional Investment Portfolio; and a director of the
Muscular Dystrophy Association, Staffing Resources, Inc., Health Plans
Services Corporation, Belding Heminway, Inc., and Curtis Industries,
Inc.. For more than five years prior to January 1995, he was President
and a director of Dreyfus and Executive Vice President 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.
Mr. DiMartino also is a Board member of 161 other funds in the Dreyfus
Family of Funds. Age: 53 years old. Address: 667 Madison
Avenue, 25th Floor, New York, New York 10021.

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, 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. Since May 1991, Mr. Goeschel
has served as Trustee of Sewickley Valley Hospital. Age: 74 years old.
Address: Way Hallow Road and Woodland Road, Sewickley, Pennsylvania
15143.

o + KENNETH A. HIMMEL. Director of the Company; Director, The Boston Company,
Inc. 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., 101
Federal Street, 22nd Floor, Boston, Massachusetts 02110.

o * ARCH S. JEFFERY. Director of the Company; Financial Consultant; Director,
Access Capital Strategic Community Investment Fund, Inc. - Institutional
Investment Portfolio. Age: 78 years old. Address: 1817 Foxcroft Lane,
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.; 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. Age: 64
years old. Address: 321 Gross Street, Pittsburgh, Pennsylvania 15224.

+ ROSLYN M. WATSON. Director of the Company; Principal, Watson Ventures, Inc.
Director, American Express Centurion Bank; Director, Harvard/Pilgrim
Community Health Care, Inc.; Director, Access Capital Strategic
Community Investment Fund, Inc. - Bank Portfolio; Director,
Massachusetts Electric Company; Director, The Hymans Foundations, 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 (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: 38 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 The Boston Company, Inc. 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 The Boston Company, Inc. 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. 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 1989 to July 1994,
Ms. Nelson was an Assistant Vice President and Client Manager for The
Boston Company, Inc. 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 (since July
1996) 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. and an officer of other investment companies advised
or administered by Dreyfus. From July 1988 to August 1994, he was
employed by The Boston Company, Inc. 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 the Fund's total shares outstanding as of , 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 $25,000 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, 1996, 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:

Total
Compensation
Aggregate From the Company
Compensation and Fund
From the Complex Paid to
Name of Board Member Company # Board Member

Ruth M. Adams $ $

Francis P. Brennan* $ $

Joseph S. DiMartino** $ $

James M. Fitzgibbons $ $

J. Tomlinson Fort** $ $

Arthur L. Goeschel $ $

Kenneth A. Himmel $ $

Arch S. Jeffery** $ $

Stephen J. Lockwood $ $

John J. Sciullo $ $

Roslyn M. Watson $ $

* Compensation of Francis Brennan includes $25,000 paid by the
Dreyfus/Laurel Funds to be Chairman of the Board. Effective May 1,
1996, the retainer was reduced annually from $75,000 to $25,000.

** 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, 1996, 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 $ , $ and $
, respectively, and for serving as a Board member of all funds in the
Dreyfus/Laurel Funds (including the Company) were $ , $ and $
, respectively. In addition, Dreyfus reimbursed Messrs. DiMartino,
Fort and Jeffery a total of $ for expenses attributable to the
Company's Board meetings ($ is not included in the $ above).

*** Estimated amounts for the fiscal year ending October 31, 1996.

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 services 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.

For the period from August 12, 1994 (commencement of operations) through
August 4, 1996, S.A.M. Finance, S.A. ("CCF SAM"), 115 Avenue des Champs-
Elysees, Paris, France 75008, served as investment sub-adviser for the Fund
pursuant to the former Sub-Advisory Agreement among the Company, on behalf of
the Fund, CCF SAM and Mellon Bank dated July 18, 1994 (the "Former Sub-
Advisory Agreement") transferred to Dreyfus effective as of October 17, 1994.
CCF SAM is a wholly-owned subsidiary of Credit Commercial de France, a French
bank. Under the Former Sub-Advisory Agreement, CCF SAM directed the
investments of substantially all of the Fund's assets in accordance with its
investment objective, policies and limitations. Effective August 5, 1996,
Dreyfus assumed responsibility for providing these services pursuant to the
Management Agreement.

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 the 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 outstanding voting
securities of the Fund on 60 days' written notice to Dreyfus. Dreyfus may
terminate the Management Agreement upon 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: W.
Keith Smith, Chairman of the Board; Christopher M. Condron, President, Chief
Executive Officer, 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; William T. Sandalls, Jr., Senior Vice
President and Chief Financial Officer; Elie M. Genadry, Vice President-
Institutional Sales; William F. Glavin, Jr., Vice President-Corporate
Development; Mark N. Jacobs, Vice President, General Counsel and Secretary;
Patrice M. Kozlowski, Vice President-Corporate Communications; Mary Beth
Leibig, Vice President-Human Resources; Jeffrey N. Nachman, Vice President-
Mutual Fund Accounting; Andrew S. Wasser, Vice President-Information Systems;
Elvira Oslapas, Assistant Secretary; and Mandell L. Berman, Fran V. Cahouet,
Alvin E. Friedman, Lawrence M. Greene and Julian M. Smerling, directors.

For the period from August 12, 1994 (commencement of operations) through
October 31, 1994, and for the fiscal years ended October 31, 1995 and 1996,
the Fund has had the following expenses:

For the Fiscal Year Ended October 31,
1996 1995 1994

Management fees (gross of waiver) $249,080 $29,370
Expense Reimbursement from
investment manager -- --
Management fees waived -- --

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 Dreyfus Family of Funds and for
certain other investment companies.

Dreyfus TeleTransfer Privilege. Dreyfus 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 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 received 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 in which 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 PLAN

The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "Distribution Plan
(Institutional Shares Only)."

Institutional shares are subject to fees for distribution and
shareholder services.

Distribution Plan--Institutional Shares. The SEC has adopted Rule 12b-l
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 Institutional shares
of the Fund, the Company has adopted a Distribution Plan ("Plan"), and may
enter into Agreements with banks, security brokers or dealers and other
financial institutions ("Agents") pursuant to the Plan.

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

The Plan provides that a report of the amounts expended under the 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
Plan provides that it may not be amended to increase materially the costs
which the Fund may bear for distribution pursuant to the Plan without approval
of the Fund's shareholders, and that other material amendments of the 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 or Dreyfus (as
defined in the 1940 Act) and who do not have any direct or indirect financial
interest in the operation the Plan, cast in person at a meeting called for the
purpose of considering such amendments. The 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 Plan, by vote cast in person at a meeting called for the
purpose of voting on the Plan. The Plan is terminable, as to the Fund's
Institutional 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.

For the fiscal year ended October 31, 1996, the Fund paid $ of
which was paid to the Distributor and Dreyfus Service Corporation
respectively, pursuant to the Plan with respect to Institutional 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."

Wire Redemption Privilege. By using this Privilege, the investor
authorizes the Transfer Agent to act on wire or telephone redemption
instructions from any person representing himself or herself to be the
investor, or a representative of the investor's Agent, and reasonably believed
by the Transfer Agent to be genuine. Ordinarily, the Fund will initiate
payment for shares redeemed pursuant to this Privilege on the next business
day after receipt if the Transfer Agent receives the redemption request in
proper form. Redemption proceeds will be transferred by Federal Reserve wire
only to the commercial bank account specified by the investor on the Account
Application or Shareholder Services Form. Redemption proceeds, if wired, must
be in the amount of $1,000 or more and will be wired to the investor's account
at the bank of record designated in the investor's file at the Transfer Agent,
if the investor's bank is a member of the Federal Reserve System, or to a
correspondent bank if the investor's bank is not a member. Fees ordinarily
are imposed by such bank and usually are borne by the investor. Immediate
notification by the correspondent bank to the investor's bank is necessary to
avoid a delay in crediting the funds to the investor's bank account.

Investors with access to telegraphic equipment may wire redemption
requests to the Transfer Agent by employing the following transmittal code
which may be used for domestic or overseas transmissions:

Transfer Agent's
Transmittal Code Answer Back Sign

144295 144295 TSSG PREP

Investors who do not have direct access to telegraphic equipment may
have the wire transmitted by contracting a TRT Cables operator at 1-800-654-
7171, toll free. Investors should advise the operator that the above
transmittal code must be used and should also inform the operator of the
Transfer Agent's answer back sign.

To change the commercial bank or account designated to receive
redemption proceeds, a written request must be sent to the Transfer Agent.
This request must be signed by each shareholder, with each signature
guaranteed as described below under "Stock Certificates; Signatures."

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.

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
ACH 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 redemption 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
might 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 certain other eligible funds advised or administered by Dreyfus.
Shares of a 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.

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.

To request an exchange, an investor, or an investor's Service Agent
acting on the investor's behalf, must give exchange instructions to the
Transfer Agent in writing or by telephone. The ability to issue exchange
instructions by telephone is given to all Fund shareholders automatically,
unless the investor checks the applicable "No" box on the Account Application,
indicating that the investor specifically refuses this Privilege. By using
the Telephone Exchange Privilege, the investor authorizes the Transfer Agent
to act on telephonic instructions (including over The Dreyfus Touch(R) Automated
Telephone System) from any person representing himself or herself to be the
investor, or a representative of the investor's Service Agent, and reasonably
believed by the Transfer Agent to be genuine. Telephone exchanges may be
subject to limitations as to the amount involved or the number of telephone
exchanges permitted. Shares issued in certificate form are not eligible for
telephone exchange.

Exchanges of Fund 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 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.

Dreyfus Auto-Exchange Privilege. The Dreyfus Auto-Exchange Privilege
permits an investor to purchase, in exchange for shares of the Fund, shares of
certain other eligible funds in the Dreyfus Family of Funds. This Privilege
is available only for existing accounts. With respect to Fund 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 Dreyfus 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 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.
An Automatic Withdrawal Plan may be established by completing the appropriate
application available from the Distributor. 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.

Dreyfus Dividend Sweep. Dreyfus Dividend Sweep allows investors to
invest automatically their dividends or dividends and capital gain
distributions, if any, from the Fund in shares of certain other eligible funds
in the Dreyfus Family of Funds of which the investor is a shareholder. Shares
of a 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 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.

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 $2,500
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 the 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 Day and
Christmas Day.

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.

General. To qualify for treatment as a regulated investment company
("RIC") under the Internal Revenue Code of 1986, as amended ("Code"), the Fund
- -- which is treated as a separate corporation for federal tax purposes --(1)
must distribute to its shareholders for each taxable year at least 90% of its
investment company taxable income (generally consisting of net investment
income, net short-term capital gain 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 the sale or
other disposition of any of the following that are held for less than three
months - (i) securities, (ii) non-foreign currency options and futures and
foreign currencies (or (iii) foreign currency options, futures and forward
contacts) 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 at the close of each quarter of the Fund's taxable year, not more
than 25% of the value its total assets may be invested in securities (other
than U.S. government securities or securities of other RICs) of any one
issuer.

Any dividend or other distribution paid shortly after an investor's
purchase of shares may have the effect of reducing the net asset value of the
shares below the cost of his or her 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
sells shares of the Fund held for six months or less and receives 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 the shareholders for the year in which that
December 31 falls.

Foreign Taxes. 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 certain 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.
If more than 50% of the value of the Fund's total assets at the close of its
taxable year consists of securities of foreign corporations, it will be
eligible to, and may, file an election ("Election") with the Internal Revenue
Service that will enable its shareholders, in effect, to receive the benefit
of the foreign tax credit with respect to any foreign or U.S. possessions'
income taxes paid by it. Pursuant to the Election, the Fund would treat those
taxes as dividends paid to its shareholders and each shareholder would be
required to (1) include in gross income, and treat as paid by him or her, his
or her proportionate share of those taxes, (2) treat his or her share of those
taxes and of any dividend paid by the Fund that represents income from foreign
or U.S. possession sources as his or her own income from those sources and (3)
either deduct the taxes deemed paid by him or her in computing his or her
taxable income or, alternatively, use the foregoing information in calculating
the foreign tax credit against his or her federal income tax. No deduction
for foreign taxes may be claimed by a shareholder who does not itemize
deductions. Generally, a credit for foreign taxes may not exceed the
shareholder's federal income tax attributable to his total foreign source
taxable income. The Fund will report to its shareholders shortly after each
taxable year their respective shares of the income from sources within, and
taxes paid to, foreign countries and U.S. possessions if it makes the
Election.

Foreign Currency, Futures, Forwards and Hedging Transactions. Gains
from the sale or other disposition of foreign currencies (except certain gains
therefrom that may be excluded by future regulations), and gains from 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 limi-
tation. 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, forward contracts and foreign currency positions beyond the time when
it otherwise would be advantageous to do so, in order for the Fund to continue
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 gains or
losses from the disposition of foreign currencies and certain foreign-
currency-denominated instruments (including debt instruments and financial
forward, futures and option contracts) 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" that otherwise would be
treated as capital gain may be treated as ordinary income under Section 1258
of the Code. "Conversion transactions" are defined to include certain
straddle transactions, transactions marketed or sold as producing capital
gains and other transactions described in Treasury regulations to be issued in
the future.

Under Section 1256 of the Code, any gain or loss realized by the Fund
from certain futures, 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," which are defined to include "offsetting
positions" in actively traded personal property. The tax treatment of
straddles is governed by Sections 1092 and, to the extent noted above, 1258 of
the Code, which in certain circumstances override or modify Sections 1256 and
988. As a result, all or a portion of any capital gain from certain straddle
transactions may be recharacterized as 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.

Passive Foreign Investment Companies. The Fund may invest in the stock
of "passive foreign investment companies" ("PFICs"). A PFIC is a foreign
corporation that, in general, meets either of the following tests: (1) at
least 75% of its gross income is passive or (2) an average of at least 50% of
its assets produce, or are held for the production of, passive income. Under
certain circumstances, the Fund will be subject to federal income tax on a
portion of any "excess distribution" received on the stock of a PFIC or of any
gain on disposition of the stock (collectively "PFIC income"), plus interest
thereon, even if the Fund distributes the PFIC income as a taxable dividend to
its shareholders. The balance of the PFIC income will be included in the
Fund's investment company taxable income and, accordingly, will not be taxable
to it to the extent that income is distributed to its shareholders. If the
Fund invests in a PFIC and elects to treat the PFIC as "qualified electing
fund," then in lieu of the foregoing tax and interest obligation, the Fund
would be required to include in income each year its pro rata share of the
qualified electing fund's annual ordinary earnings and net capital gain (the
excess of net long-term capital gain over net short-term capital loss) --
which probably would have to be distributed to satisfy the Distribution
Requirement and avoid imposition of the 4% excise tax referred to in the
Fund's Prospectus under "Dividends, Other Distributions and Taxes" -- even if
those earnings and gain were not received by the Fund.

Pursuant to proposed regulations, open-end RICs, such as the Fund, would
be entitled to elect to "mark-to-market" their stock in certain PFICs.
"Marking-to-market," in this context, means recognizing as gain for each
taxable year the excess, as of the end of that year, of the fair market value
of each such PFIC's stock over the adjusted basis in that stock (including
mark-to-market gain for each prior year for which an election was in effect).

Foreign Currency Gains and Losses. Gains and losses attributable to
fluctuations in foreign currency exchange rates that occur between the time
the Fund accrues dividends, interest or other receivables, or expenses or
other liabilities, denominated in a foreign currency and the time the Fund
actually collects the receivables or pays the liabilities generally are
treated as ordinary income or ordinary loss. Similarly, on the disposition of
a debt security denominated in a foreign currency, or of an option or forward
contract on a foreign currency, gains or losses attributable to fluctuations
in the value of the foreign currency between the date of acquisition of the
security, option or contract and the date of disposition also are treated as
ordinary income or loss. These gains or losses may increase or decrease the
amount of the Fund's investment company taxable income to be distributed to
its shareholders.

State and Local Taxes. Depending on the Fund's activities in states and
localities in which it is deemed to be conducting business, it 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 - Income Not Effectively Connected. Dividends
distributed to a foreign shareholder whose ownership of Fund shares is not
effectively connected with a U.S. trade or business carried on by the foreign
shareholder generally will be subject to 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% from capital gain distributions and 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 Fund shares is effectively connected with a U.S.
trade or business carried on by the foreign shareholder, then all
distributions to that shareholder and any gains realized by that shareholder
on the disposition of Fund shares will be subject to U.S. federal income tax
at the graduated rates applicable to U.S. citizens or 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 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 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 obligations
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 adviser, 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 adviser to the Fund
outweighs any disadvantages that may be said to exist from exposure to
simultaneous transactions.

During the period from August 12, 1994 (commencement of operations) to
October 31, 1994, the Fund paid no brokerage commissions. During the fiscal
year ended October 31, 1995, the Fund paid brokerage commissions of $ .
During the fiscal year ended October 31, 1996, the Fund paid brokerage
commissions of $31,984.

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 Fund commenced
operations August 12, 1994, and its portfolio turnover rates for the period
ended October 31, 1995 and for the fiscal year ended October 31, 1996, were
64.85% and %, respectively.

PERFORMANCE INFORMATION

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

Average annual total return is calculated by determining the ending
redeemable value of an investment purchased 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.

The Fund's total return for the period September 15, 1994 (commencement
of operations) to October 31, 1996 for Institutional shares and Retail shares
was 14.05% and 14.40%, respectively. Total return is calculated by
subtracting the amount of the Fund's net asset value per share at the
beginning of a stated period from the net asset value per share at the end of
the period (after giving effect to the reinvestment of dividends and other
distributions during the period), and dividing the result by the net asset
value per share at the beginning of the period.

Average annual total return (expressed as a percentage) for
Institutional shares of the Fund for each of the periods noted was:

Average Annual Total Return for the
Periods Ended October 31, 1996

1 Year 5 Years 10 Years Inception

Institutional Shares 12.62% __ __ 6.37%
(9/15/94)

Inception date appears in parentheses following the average annual total
return since inception.

Average annual total return (expressed as a percentage) for Retail
shares of the Fund for each of the periods noted was:

Average Annual Total Return for the
Periods Ended October 31, 1996

1 Year 5 Years 10 Years Inception

Retail Shares 12.80% __ __ 6.52%
(9/15/94)

Inception date appears in parentheses following the average annual total
return since inception.

Performance information for the Fund may be compared, in reports and
promotional literature, to indexes including, but not limited to: (i) the
Morgan Stanley Capital International-Europe Australia Far East 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, 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 FUND

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

Each Fund share, 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.

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

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

Boston Safe Deposit and Trust Company, One Boston Place, Boston, MA
02109, 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 Fund, 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 Boston Safe Deposit and Trust Company, 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.

was appointed by the Directors to serve as the
Fund's independent auditors for the year ending October 31, 1997, 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, 1996,
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. The financial statements from the Annual Report are
incorporated herein by reference.

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, 1997

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, 1997 and the current Prospectus of
the Premier Balanced Fund (formerly the Laurel Balanced Fund)
(collectively, the "Funds") dated March 1, 1997, 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.

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.

(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).

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 Premier Limited Term Income Fund at
_____________, 1997:

The following shareholder(s) owned 5% or more of the outstanding
voting shares of Class B of Premier Limited Term Income Fund at
_____________, 1997:

The following shareholder(s) owned 5% or more of the outstanding
voting shares of Class R of Premier Limited Term Income Fund at
_____________, 1997:

The following shareholder(s) owned 5% or more of the outstanding
voting shares of Class A of Premier Balanced Fund at _____________, 1997:

The following shareholder(s) owned 5% or more of the outstanding
voting shares of Class B of Premier Balanced Fund at _____________, 1997:

The following shareholder(s) owned 5% or more of the outstanding
voting shares of Class R of Premier Balanced Fund at _____________, 1997:

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 Servic
es, 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
_____________, 1997.

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, 1996, 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:

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

Ruth M. Adams None None

Francis P. Brennan* None None

Joseph S. DiMartino** None None ***

James M. Fitzgibbons None None

J. Tomlinson Fort** None None

Arthur L. Goeschel None None

Kenneth A. Himmel None None

Arch S. Jeffery** None None

Stephen J. Lockwood None None

John J. Sciullo None None

Roslyn M. Watson None None

# 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 $ for the Company.
* Compensation of Francis Brennan includes $25,000 paid by the Dreyfus/Laurel
Funds to be Chairman of the Board. Effective May 1, 1996, the retainer was
reduced from $75,000 to $25,000 annually.
** 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 $ , $ and $ ,
respectively, and for serving as a Board member of all funds in the
Dreyfus/Laurel Funds (including the Company) were $ , $ and
$ , respectively. In addition, Dreyfus reimbursed Messrs. DiMartino,
Fort and Jeffery a total of $ for expenses attributable to the
Company's Board meetings ($ is not included in the $ above).
*** Estimated amounts for the fiscal year ending October 31, 1996.

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: W. Keith
Smith, Chairman of the Board; Christopher M. Condron, President, Chief Executive
Officer, Chief Operating 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; William T. Sandalls, Jr., Senior Vice President and Chief Financial
Officer; Elie M. Genadry, Vice President-Institutional Sales; William F. Glavin,
Jr., Vice President-Corporate Development; Mark N. Jacobs, Vice President,
General Counsel and Secretary; Patrice M. Kozlowski, Vice President-Corporate
Communications; Mary Beth Leibig, Vice President-Human Resources; Jeffrey N.
Nachman, Vice President-Mutual Fund Accounting; Andrew S. Wasser, Vice
President-Information Services; Elvira Oslapas; Assistant Secretary; and 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,
--------------------------------------------------
1996 1995 1994
____ ____ ____
Limited Term Income Fund
- ----------------------------
Advisory fees (gross of waiver) $446,781 $455,919
Expense reimbursement from Adviser -- 8,622
Advisory fees waived -- --

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

(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, 1996, the distribution and service fees paid
by the Funds were as follows:

Class A Class B Class C

Premier Balanced Fund(1) $ $ $

Premier Limited Term
Income Fund(2) $ $ -

(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.

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
distributions, 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 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 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 certain
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 limitation. 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, 1996, 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 fiscal years ended October 31, 1996 and 1995, the Premier Balanced
Fund paid brokerage commissions amounting to $______ and $89,957, 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,
__________________________
1996 1995*
____ ____

Premier Limited Income Fund 73%
Premier Balanced Fund 53.20%

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 2.551
year periods ended October 31, 1996 for Class A was 13.38% and 15.30%,
respectively. The Premier Balanced Fund's average annual total return for Class
R for the 1 and 3.129 year periods ended October 31, 1996 was 18.99% and 13.38%,
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, 1996 was 20.23% and 22.13%, respectively.

The Premier Limited Term Income Fund's average annual total return for the
1 and 2.570 year periods ended October 31, 1996 for Class A was 1.66% and 5.20%,
respectively. The Premier Limited Term Income Fund's average annual total
return for Class R for the 1 and 5.310 year periods ended October 31, 1996 was
5.12% and 7.20%, 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, 1996 was 6.83% and
8.06%, 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, 1996 for Class R was 13.38%. The
Premier Balanced Fund's total return for Class A for the period April 14, 1994
(inception date of Class A) to October 31, 1996 was 15.30%. Based on net asset
value per share, the total return for Class A was 13.38% 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,
1996 was 20.23% and 22.13%, respectively. Without giving effect to the
applicable CDSC, total return for Class B and Class C was 45.07% and 45.28%,
respectively.

The Premier Limited Term Income Fund's total return for the period July 11,
1991 (commencement of operations) to October 31, 1996 for Class R was 7.20%.
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, 1996 was 5.20%. Based
on net asset value per share, the total return for Class A was 13.91% 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, 1996 was 13.15% and 15.58%, respectively. Without
giving effect to the applicable CDSC, total return for Class B and Class C was
16.13% and 15.58%, 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, 1996 was 5.50%, 5.17%, 5.17% and 5.92% 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.

was appointed by the Directors to serve as the Funds' independent auditors for
the year ending October 31, 1997, 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, 1996,
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, 1997

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, 1997, 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.

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.

(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 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.

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 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.

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 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."

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 the 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 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.

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, 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.

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
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.

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 shares of the
Fund at 1997:

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 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+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 Descendants' Estate Laws of Pennsylvania. Age:
64 years old. Address: 321 Gross Street, Pittsburgh, Pennsylvania
15224

#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.

#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 Servic
es, 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.

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
, 1997.

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, 1996, 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:

Ruth M. Adams $ None None $

Francis P. Brennan* None None

Joseph S. DiMartino** None None $ ***

James M. Fitzgibbons None None

J. Tomlinson Fort** None None None

Arthur L. Goeschel None None

Kenneth A. Himmel None None

Arch S. Jeffery** None None None

Stephen J. Lockwood None None

John J. Sciullo None None

Roslyn M. Watson None None

# 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 $ for the Company.
* Compensation of Francis Brennan includes $25,000 paid by the Dreyfus/Laurel
Funds to be Chairman of the Board. Effective May 1, 1996, the retainer was
reduced from $75,000 to $25,000 annually.
** 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,
1996, the aggregate amount of fees and expenses received by Joseph
DiMartino, J. Tomlinson Fort and Arch S. Jeffery fromDreyfus for serving
as a Board member of the Company were $ , $ and $ ,
respectively, and for serving as a Board member of all funds in the
Dreyfus/Laurel Funds (including the Company) were $ , $ and
$ , respectively. In addition, Dreyfus reimbursed Messrs. DiMartino,
Fort and Jeffery a total of $______ for expenses attributable to the
Company's Board meetings ($______ is not included in the $______ above).
*** Estimated amounts for the fiscal year ending October 31, 1996.

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 278,375 and $ for the fiscal
years ended October 31, 1995 and October 31, 1996, 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 the Manager:
W. Keith Smith, Chairman of the Board; Christopher M. Condron, President,
Chief Executive Officer, 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; William T. Sandalls,
Jr., Senior Vice President and Chief Financial Officer; Elie M. Genadry,
Vice President-Institutional Sales; William F. Glavin, Jr., Vice President-
Corporate Development; Mark N. Jacobs, Vice President, General Counsel and
Secretary; Patrice M. Kozlowski, Vice President-Corporate Communications;
Mary Beth Leibig, Vice President-Human Resources; Jeffrey N. Nachman, Vice
President-Mutual Fund Accounting; Andrew S. Wasser, Vice President-
Information Systems; Elvira Oslapas, Assistant Secretary; and Mandell L.
Berman, Fran 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.

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 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, 1996, 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) 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."

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.

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.

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 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.

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.

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 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 distributions, 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.

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.

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.

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."

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.

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 certain 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.

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 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 - 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 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.

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 fiscal year ended October 31, 1995 and October 31, 1996, the
Fund paid brokerage fees of $65,341 and , respectively.

The portfolio turnover rates for the fiscal year ended October 31,
1995 and October 31, 1996 were 56% and %, 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 2.164 year
periods ended October 31, 1996 for Class A was 13.82% and 20.39%, respec-
tively. The Fund's average annual total return for Class R for the 1 and
2.164 year periods ended October 31, 1996 was 19.43% and 23.24%,
respectively. The Fund's average annual total return for the 1 and 1.868
year periods ended October 31, 1996 for Class B was 14.17% and 27.96%,
respectively. The Fund's average annual total return for the 1 and 1.868
year periods ended October 31, 1996 for Class C was 17.27% and 29.68%,
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 Fund's total return for the period September 2, 1994 to October
31, 1996 for Class R was 37.18%. The Fund's total return for Class A for
the period September 2, 1994 to October 31, 1996 was 49.41%. Based on net
asset value per share, the total return for Class A was 56.43% 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, 1996 was 58.50% and 62.50%, respectively. Without giving
effect to the applicable CDSC, total return for Class B and Class C was
62.50% and 62.50%, 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.

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.

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 FUND

The following information supplements and should be read in
conjunction with the section in the 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.

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.

, 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, 1997, 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, 1996,
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.

THE DREYFUS/LAUREL FUNDS, INC.
(formerly, The Laurel Funds, Inc.)

PART C
OTHER INFORMATION

Item 24. Financial Statements and Exhibits

(a) Financial Statements:

Included in Part A:

Financial Highlights for each of the periods indicated.

Included in Part B:

The following are incorporated by reference to the Registrant's
Annual Reports to Shareholders for the period ended October 31,
1996 filed on ___________, 1997.

- Report of Independent Auditors

- Portfolio of Investments

- Statements of Assets and Liabilities

- Statements of Operations

- Statements of Changes in Net Assets

- Notes to Financial Statements

(b) Exhibits:

1(a) Articles of Incorporation dated July 31, 1987. Filed
herewith.

1(b) Articles Supplementary dated October 15, 1993 increasing
authorized capital stock. Incorporated by reference to
Post-Effective Amendment No. 39 to the Registrant's
Registration Statement on Form N-1A ("Post-Effective
Amendment No. 39") filed on September 22, 1995.

1(c) Articles of Amendment dated March 31, 1994. Filed
herewith.

1(d) Articles Supplementary dated March 31, 1994 reclassifying
shares. Filed herewith.

1(e) Articles Supplementary dated May 24, 1994 designating and
classifying shares. Incorporated by reference to Post
Effective Amendment No. 39.

1(f) Articles of Amendment dated October 17, 1994. Incorporated
by reference to Post-Effective Amendment No. 31 filed on
December 13, 1994.

1(g) Articles Supplementary dated December 19, 1994 designating
classes. Incorporated by reference to Post-Effective
Amendment No. 32 filed on December 19, 1994.

1(h) Articles of Amendment dated June 9, 1995. Incorporated by
reference to Post-Effective Amendment No. 39.

1(i) Articles of Amendment dated August 30, 1995. Incorporated
by reference to Post-Effective Amendment No. 39.

1(j) Articles Supplementary dated August 31, 1995 reclassifying
shares. Incorporated by reference to Post-Effective
Amendment No. 39.

1(k) Articles of Amendment dated October 31, 1995 designating and
classifying shares. Filed herewith.

1(1) Articles of Amendment dated November 22, 1995 designating
and reclassifying shares filed herewith.

2 Bylaws. Incorporated by reference to Pre-Effective
Amendment No. 1 to the Registrant's Registration Statement
on Form N-1A filed on August 6, 1987 -- Registration No.
33-16338 ("Registration Statement").

3 Not Applicable.

4 Specimen security. To be filed by amendment.

5(a) Investment Sub-Advisory Agreement among Mellon Bank, N.A.,
S.A.M. Finance S.A. and the Registrant for the European
Fund. Incorporated by reference to Post-Effective Amendment
No. 22 filed on September 3, 1993.

5(b) Investment Management Agreement between Mellon Bank, N.A.
and the Registrant. Filed herewith.

5(c) Investment Sub-Advisory Agreement among Mellon Bank, N.A.,
S.A.M. Finance S.A. and the Registrant for the International
Equity Allocation Fund. Incorporated by reference to
Post-Effective Amendment No. 31 filed on December 13, 1994.

5(d) Assignment and Assumption Agreement among Mellon Bank, N.A.,
The Dreyfus Corporation and the Registrant (relating to
Investment Management Agreement). Incorporated by reference
to Post-Effective Amendment No. 31 filed on December 13,
1994.

5(e) Assignment Agreement among Mellon Bank, N.A., The Dreyfus
Corporation, S.A.M. Finance S.A. and the Registrant
(relating to Investment Sub-Advisory Agreement for the
European Fund). To be filed by amendment.

5(f) Assignment Agreement among Mellon Bank, N.A., The Dreyfus
Corporation, S.A.M. Finance S.A. and the Registrant
(relating to Investment Sub-Advisory Agreement for the
International Equity Allocation Fund). To be filed by
amendment.

6 Distribution Agreement between Premier Mutual Fund Services,
Inc. and the Registrant. Incorporated by reference to
Post-Effective Amendment No. 31 filed on December 13, 1994.

7 Not Applicable.

8(a) Custody Agreement with Boston Safe Deposit and Trust Company
with respect to the European Fund. Incorporated by
reference to Post-Effective Amendment No. 23 filed on
December 30, 1993.

8(b) Custody Agreement between the Registrant and Mellon Bank,
N.A. Filed herewith.

8(c) Supplement to Custody Agreement with Boston Safe Deposit and
Trust Company with respect to the European Fund.
Incorporated by reference to Post-Effective Amendment No. 29
filed on May 19, 1994.

8(d) Custody Agreement with Boston Safe Deposit and Trust Company
with respect to the International Equity Allocation Fund.
To be filed by amendment.

8(e) Sub-Custodian Agreement between Mellon Bank, N.A. and Boston
Safe Deposit and Trust Company. Filed herewith.

10 Opinion of counsel is incorporated by reference to the
Registration Statement and to Post-Effective Amendment No.
32 filed on December 19, 1994. Consent of counsel is filed
herewith.

11 Not Applicable.

12 Not Applicable.

13 Letter of Investment Intent. Incorporated by reference to
the Registration Statement.

14 Not Applicable.

15(a) Restated Distribution Plan (relating to Investor Shares and
Class A Shares). Incorporated by reference to
Post-Effective Amendment No. 31 filed on December 13, 1994.

15(b) Form of Distribution and Service Plans (relating to Class B
Shares and Class C Shares). Incorporated by reference to
Post-Effective Amendment No. 32 filed on December 19, 1994.

16 Schedule for Computation of Performance Calculation for
Dreyfus Disciplined Intermediate Bond Fund is incorporated
by reference to Post-Effective amendment No. 44 filed on
April 30, 1996. Schedule for Computation of Performance
Calculation for other funds is also incorporated by
reference to Post-Effective Amendment No. 26 filed on March
1, 1994.

18 Rule 18f-3 Plans, as revised for Premier Balanced Fund,
Premier Limited Term Income Fund and Premier Small Company
Stock Fund are incorporated by reference to Post-Effective
Amendment No. 50 filed on November 1, 1996.

25 Powers of Attorney of the Directors and Officers dated April
5, 1995. Incorporated by reference to Post-Effective
Amendment No. 35 filed on April 7, 1995.

Item 25. Persons Controlled by or Under Common Control with Registrant

Not Applicable.

Item 26. Number of Holders of Securities
-------------------------------

Set forth below are the number of recordholders of
securities of each series of the Registrant as of
___________, 1997:

Class A Class B Class C Class R Institutional Retail
Title of Class Shares Shares Shares Shares Shares Shares
- -------------- ------ ------- ------- ------- ------------ ------
<S> <C> <C> <C> <C> <C> <C>

</TABLE>

Item 27. Indemnification
---------------

Under a provision of the Registrant's Second Amended and Restated
Agreement and Declaration of Trust (the "Declaration of Trust"), any past
or present Trustee or officer of the Registrant is indemnified to the
fullest extent permitted by law against liability and all expenses
reasonably incurred by him/her in connection with any action, suit or
proceeding to which he/she may be a party or otherwise involved by reason
of his/her being or having been a Trustee or officer of the Registrant.

This provision does not authorize indemnification against any
liability to the Registrant or its shareholders to which such Trustee or
officer would otherwise be subject by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of his/her duties. Moreover,
this provision does not authorize indemnification where such Trustee or
officer is finally adjudicated not to have acted in good faith in the
reasonable belief that his/her actions were in or not opposed to the best
interests of the Registrant. Expenses may be paid by the Registrant in
advance of the final disposition of any action, suit or proceeding upon
receipt of an undertaking by such Trustee or officer to repay such expenses
to the Registrant if it is ultimately determined that indemnification of
such expenses is not authorized under the Declaration of Trust.

Item 28. Business and Other Connections of Investment Adviser
----------------------------------------------------

Investment Adviser -- The Dreyfus Corporation

The Dreyfus Corporation ("Dreyfus") and subsidiary companies
comprise a financial service organization whose business consists primarily
of providing investment management services as the investment adviser,
manager and distributor for sponsored investment companies registered under
the Investment Company Act of 1940 and as an investment adviser to
institutional and individual accounts. Dreyfus also serves as
sub-investment adviser to and/or administrator of other investment
companies. Dreyfus Service Corporation, a wholly-owned subsidiary of
Dreyfus, serves primarily as a registered broker-dealer of shares of
investment companies sponsored by Dreyfus and of other investment companies
for which Dreyfus acts as investment adviser, sub-investment adviser or
administrator. Dreyfus Management, Inc., another wholly-owned subsidiary,
provides investment management services to various pension plans,
institutions and individuals.

Item 28. Business and Other Connections of Investment Adviser (continued)
________ ________________________________________________________________

Officers and Directors of Investment Adviser
____________________________________________

Name and Position
with Dreyfus Other Businesses
_________________ ________________

MANDELL L. BERMAN Real estate consultant and private investor
Director 29100 Northwestern Highway, Suite 370
Southfield, Michigan 48034;
Past Chairman of the Board of Trustees:
Skillman Foundation;
Member of The Board of Vintners Intl.

FRANK V. CAHOUET Chairman of the Board, President and
Director Chief Executive Officer:
Mellon Bank Corporation****;
Mellon Bank, N.A.****
Director:
Avery Dennison Corporation
150 North Orange Grove Boulevard
Pasadena, California 91103;
Saint-Gobain Corporation
750 East Swedesford Road
Valley Forge, Pennsylvania 19482;
Teledyne, Inc.
1901 Avenue of the Stars
Los Angeles, California 90067

ALVIN E. FRIEDMAN Senior Adviser to Dillon, Read & Co. Inc.
Director 535 Madison Avenue
New York, New York 10022;
Director and Member of the Executive
Committee of Avnet, Inc.**

LAWRENCE M. GREENE None
Director

JULIAN M. SMERLING None
Director

W. KEITH SMITH Chairman and Chief Executive Officer:
Chairman of the Board The Boston Company*****;
Vice Chairman of the Board:
Mellon Bank Corporation****;
Mellon Bank, N.A.****;
Director:
Dentsply International, Inc.
570 West College Avenue
York, Pennsylvania 17405

CHRISTOPHER M. CONDRON Vice Chairman:
President, Chief Mellon Bank Corporation****;
Executive Officer, The Boston Company*****;
Chief Operating Deputy Director:
Officer and a Mellon Trust****;
Director Chief Executive Officer:
The Boston Company Asset Management,
Inc.*****;
President:
Boston Safe Deposit and Trust
Company*****

STEPHEN E. CANTER Director:
Vice Chairman and The Dreyfus Trust Company++;
Chief Investment Officer, Formerly, Chairman and Chief Executive
and a Director Officer: Kleinwort Benson Investment
Management Americas Inc.*

LAWRENCE S. KASH Chairman, President and Chief
Vice Chairman-Distribution Executive Officer:
and a Director The Boston Company Advisors, Inc.
53 State Street
Exchange Place
Boston, Massachusetts 02109
Executive Vice President and Director:
Dreyfus Service Organization, Inc.***;
Director:
Dreyfus America Fund
The Dreyfus Consumer Credit
Corporation*;
The Dreyfus Trust Company++;
Dreyfus Service Corporation*;
President:
The Boston Company*****;
Laurel Capital Advisors****;
Boston Group Holdings, Inc.;
Executive Vice President:
Mellon Bank, N.A.****;
Boston Safe Deposit and Trust
Company*****;

PHILIP L. TOIA Chairman of the Board and Trust Investment
Vice Chairman-Operations Officer:
and Administration The Dreyfus Trust Company++;
and a Director Chairman of the Board and Chief Operating
Officer:
Major Trading Corporation*;
Chairman and Director:
Dreyfus Transfer, Inc.
One American Express Plaza
Providence, Rhode Island 02903
Director:
Dreyfus Precious Metals, Inc.*;
Dreyfus Service Corporation*;
Seven Six Seven Agency, Inc.*;
President and Director:
Dreyfus Acquisition Corporation*;
The Dreyfus Consumer Credit
Corporation*;
Dreyfus-Lincoln, Inc.*;
Dreyfus Management, Inc.*;
Dreyfus Personal Management, Inc.*;
Dreyfus Partnership Management, Inc.+;
Dreyfus Service Organization, Inc.***;
The Truepenny Corporation*;
Formerly, Senior Vice President:
The Chase Manhattan Bank, N.A. and
The Chase Manhattan Capital Markets
Corporation
One Chase Manhattan Plaza
New York, New York 10081

WILLIAM T. SANDALLS, JR. Director:
Senior Vice President and Dreyfus Partnership Management, Inc.*;
Chief Financial Officer Seven Six Seven Agency, Inc.*;
President and Director:
Lion Management, Inc.*;
Executive Vice President and Director:
Dreyfus Service Organization, Inc.*;
Vice President, Chief Financial Officer and
Director:
Dreyfus Acquisition Corporation*;
Dreyfus America Fund
Vice President and Director:
The Dreyfus Consumer Credit
Corporation*;
The Truepenny Corporation*;
Treasurer, Financial Officer and Director:
The Dreyfus Trust Company++;
Treasurer and Director:
Dreyfus Management, Inc.*;
Dreyfus Personal Management, Inc.*;
Dreyfus Service Corporation*;
Major Trading Corporation*;
Formerly, President and Director:
Sandalls & Co., Inc.

WILLIAM F. GLAVIN, JR. Executive Vice President:
Vice President-Corporate Dreyfus Service Corporation*;
Development Senior Vice President:
The Boston Company Advisors, Inc.
53 State Street
Exchange Place
Boston, Massachusetts 02109

MARK N. JACOBS Vice President, Secretary and Director:
Vice President, Lion Management, Inc.*;
General Counsel Secretary:
and Secretary The Dreyfus Consumer Credit
Corporation*;
Dreyfus Management, Inc.*;
Assistant Secretary:
Dreyfus Service Organization, Inc.***;
Major Trading Corporation*;
The Truepenny Corporation*

PATRICE M. KOZLOWSKI None
Vice President-
Corporate Communications

MARY BETH LEIBIG None
Vice President-
Human Resources

JEFFREY N. NACHMAN President and Director:
Vice President-Mutual Fund Dreyfus Transfer, Inc.
Accounting One American Express Plaza
Providence, Rhode Island 02903

ANDREW S. WASSER Vice President:
Vice President-Information Mellon Bank Corporation****
Services

ELVIRA OSLAPAS Assistant Secretary:
Assistant Secretary Dreyfus Service Corporation*;
Dreyfus Management, Inc.*;
Dreyfus Acquisition Corporation, Inc.*;
The Truepenny Corporation+

______________________________________

* The address of the business so indicated is 200 Park Avenue, New
York, New York 10166.
** The address of the business so indicated is 80 Cutter Mill Road,
Great Neck, New York 11021.
*** The address of the business so indicated is 131 Second Street,
Lewes, Delaware 19958.
**** The address of the business so indicated is One Mellon Bank Center,
Pittsburgh, Pennsylvania 15258.
***** The address of the business so indicated is One Boston Place,
Boston, Massachusetts 02108.
+ The address of the business so indicated is Atrium Building, 80
Route 4 East, Paramus, New Jersey 07652.
++ The address of the business so indicated is 144 Glenn Curtiss
Boulevard, Uniondale, New York 11556-0144.

Item 29. Principal Underwriters
________ ______________________

(a) Other investment companies for which Registrant's principal
underwriter (exclusive distributor) acts as principal underwriter or
exclusive distributor:

1) Comstock Partners Funds, Inc.
2) Dreyfus A Bonds Plus, Inc.
3) Dreyfus Appreciation Fund, Inc.
4) Dreyfus Asset Allocation Fund, Inc.
5) Dreyfus Balanced Fund, Inc.
6) Dreyfus BASIC GNMA Fund
7) Dreyfus BASIC Money Market Fund, Inc.
8) Dreyfus BASIC Municipal Fund, Inc.
9) Dreyfus BASIC U.S. Government Money Market Fund
10) Dreyfus California Intermediate Municipal Bond Fund
11) Dreyfus California Tax Exempt Bond Fund, Inc.
12) Dreyfus California Tax Exempt Money Market Fund
13) Dreyfus Cash Management
14) Dreyfus Cash Management Plus, Inc.
15) Dreyfus Connecticut Intermediate Municipal Bond Fund
16) Dreyfus Connecticut Municipal Money Market Fund, Inc.
17) Dreyfus Florida Intermediate Municipal Bond Fund
18) Dreyfus Florida Municipal Money Market Fund
19) The Dreyfus Fund Incorporated
20) Dreyfus Global Bond Fund, Inc.
21) Dreyfus Global Growth Fund
22) Dreyfus GNMA Fund, Inc.
23) Dreyfus Government Cash Management
24) Dreyfus Growth and Income Fund, Inc.
25) Dreyfus Growth and Value Funds, Inc.
26) Dreyfus Growth Opportunity Fund, Inc.
27) Dreyfus Income Funds
28) Dreyfus Institutional Money Market Fund
29) Dreyfus Institutional Short Term Treasury Fund
30) Dreyfus Insured Municipal Bond Fund, Inc.
31) Dreyfus Intermediate Municipal Bond Fund, Inc.
32) Dreyfus International Funds, Inc.
33) Dreyfus Investment Grade Bond Funds, Inc.
34) The Dreyfus/Laurel Funds, Inc.
35) The Dreyfus/Laurel Funds Trust
36) The Dreyfus/Laurel Tax-Free Municipal Funds
37) Dreyfus LifeTime Portfolios, Inc.
38) Dreyfus Liquid Assets, Inc.
39) Dreyfus Massachusetts Intermediate Municipal Bond Fund
40) Dreyfus Massachusetts Municipal Money Market Fund
41) Dreyfus Massachusetts Tax Exempt Bond Fund
42) Dreyfus MidCap Index Fund
43) Dreyfus Money Market Instruments, Inc.
44) Dreyfus Municipal Bond Fund, Inc.
45) Dreyfus Municipal Cash Management Plus
46) Dreyfus Municipal Money Market Fund, Inc.
47) Dreyfus New Jersey Intermediate Municipal Bond Fund
48) Dreyfus New Jersey Municipal Bond Fund, Inc.
49) Dreyfus New Jersey Municipal Money Market Fund, Inc.
50) Dreyfus New Leaders Fund, Inc.
51) Dreyfus New York Insured Tax Exempt Bond Fund
52) Dreyfus New York Municipal Cash Management
53) Dreyfus New York Tax Exempt Bond Fund, Inc.
54) Dreyfus New York Tax Exempt Intermediate Bond Fund
55) Dreyfus New York Tax Exempt Money Market Fund
56) Dreyfus 100% U.S. Treasury Intermediate Term Fund
57) Dreyfus 100% U.S. Treasury Long Term Fund
58) Dreyfus 100% U.S. Treasury Money Market Fund
59) Dreyfus 100% U.S. Treasury Short Term Fund
60) Dreyfus Pennsylvania Intermediate Municipal Bond Fund
61) Dreyfus Pennsylvania Municipal Money Market Fund
62) Dreyfus S&P 500 Index Fund
63) Dreyfus Short-Intermediate Government Fund
64) Dreyfus Short-Intermediate Municipal Bond Fund
65) The Dreyfus Socially Responsible Growth Fund, Inc.
66) Dreyfus Stock Index Fund, Inc.
67) Dreyfus Tax Exempt Cash Management
68) The Dreyfus Third Century Fund, Inc.
69) Dreyfus Treasury Cash Management
70) Dreyfus Treasury Prime Cash Management
71) Dreyfus Variable Investment Fund
72) Dreyfus Worldwide Dollar Money Market Fund, Inc.
73) General California Municipal Bond Fund, Inc.
74) General California Municipal Money Market Fund
75) General Government Securities Money Market Fund, Inc.
76) General Money Market Fund, Inc.
77) General Municipal Bond Fund, Inc.
78) General Municipal Money Market Fund, Inc.
79) General New York Municipal Bond Fund, Inc.
80) General New York Municipal Money Market Fund
81) Premier Insured Municipal Bond Fund
82) Premier California Municipal Bond Fund
83) Premier Equity Funds, Inc.
84) Premier Global Investing, Inc.
85) Premier GNMA Fund
86) Premier Growth Fund, Inc.
87) Premier Municipal Bond Fund
88) Premier New York Municipal Bond Fund
89) Premier State Municipal Bond Fund
90) Premier Strategic Growth Fund
91) Premier Value Fund

(b)
Positions and
Name and principal Positions and offices with offices with
business address the Distributor Registrant
__________________ ___________________________ _____________

Marie E. Connolly+ Director, President, Chief President and
Executive Officer and Compliance Treasurer
Officer

Joseph F. Tower, III+ Senior Vice President, Treasurer Vice President
and Chief Financial Officer and Assistant
Treasurer

John E. Pelletier+ Senior Vice President, General Vice President
Counsel, Secretary and Clerk and Secretary

Roy M. Moura+ First Vice President None

Dale F. Lampe+ Vice President None

Mary A. Nelson+ Vice President Vice President
and Assistant
Treasurer

Paul Prescott+ Vice President None

Elizabeth A. Bachman++ Assistant Vice President Vice President
and Assistant
Secretary

Jean M. O'Leary+ Assistant Secretary and None
Assistant Clerk

John W. Gomez+ Director None

William J. Nutt+ Director None

________________________________
+ Principal business address is One Exchange Place, Boston, Massachusetts
02109.
++ Principal business address is 200 Park Avenue, New York, New York 10166.

Item 30. Location of Accounts and Records
________________________________

1. First Data Investor Services Group, Inc.,
a subsidiary of First Data Corporation
P.O. Box 9671
Providence, Rhode Island 02940-9671

2. The Bank of New York
90 Washington Street
New York, New York 10286

3. Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, Rhode Island 02940-9671

4. The Dreyfus Corporation
200 Park Avenue
New York, New York 10166

Item 31. Management Services
_______ ___________________

Not Applicable

Item 32. Undertakings
________ ____________

(1) To call a meeting of shareholders for the purpose of voting upon
the question of removal of a Board member or Board members when
requested in writing to do so by the holders of at least 10% of
the Registrant's outstanding shares and in connection with such
meeting to comply with the provisions of Section 16(c) of the
Investment Company Act of 1940 relating to shareholder
communications.

(2) To furnish each person to whom a prospectus is delivered with a
copy of the Fund's latest Annual Report to Shareholders, upon
request and without charge.

SIGNATURES
__________

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this
Amendment to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, and State
of New York on the 30th day of December 1996.

THE DREYFUS/LAUREL FUNDS, INC.

BY: /s/Marie E. Connolly*
______________________________________
Marie E. Connolly, President

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, this Amendment to the Registration
Statement has been signed below by the following persons in the capacities
and on the dates indicated.

Signatures Title Date
________________________ ______________________________ __________

/s/Marie E. Connolly* President, Treasurer 12/30/96
- ---------------------------
Marie E. Connolly

/s/Francis P. Brennan* Director, 12/30/96
- --------------------------- Chairman of the Board
Francis P. Brennan

/s/Ruth Marie Adams* Director 12/30/96
- ---------------------------
Ruth Marie Adams

/s/Joseph S. DiMartino* Director 12/30/96
- ---------------------------
Joseph S. DiMartino

/s/James M. Fitzgibbons* Director 12/30/96
- ---------------------------
James M. Fitzgibbons

/s/Kenneth A. Himmel* Director 12/30/96
- ---------------------------
Kenneth A. Himmel

/s/Stephen J. Lockwood* Director 12/30/96
- ---------------------------
Stephen J. Lockwood

/s/Roslyn M. Watson* Director 12/30/96
- ---------------------------
Roslyn M. Watson

/s/J. Tomlinson Fort* Director 12/30/96
- ---------------------------
J. Tomlinson Fort

/s/Arthur L. Goeschel* Director 12/30/96
- ---------------------------
Arthur L. Goeschel

/s/Arch S. Jeffery* Director 12/30/96
- ---------------------------
Arch S. Jeffery

/s/John Sciullo* Director 12/30/96
- ---------------------------
John Sciullo

*By: /s/Elizabeth Bachman
---------------------------
Attorney-in-Fact

THE DREYFUS FAMILY OF FUNDS
(Premier Family of Funds - Equity Funds Included in Exhibit I)

Rule 18f-3 Plan

Rule 18f-3 under the Investment Company Act of 1940, as amended
(the "1940 Act"), requires that the Board of an investment company desiring
to offer multiple classes of shares pursuant to said Rule adopt a plan
setting forth the differences among the classes with respect to shareholder
services, distribution arrangements, expense allocations and any related
conversion features or exchange privileges.
The Board, including a majority of the non-interested Board
members, of each of the investment companies, or series thereof, listed on
Exhibit I attached hereto (each, a "Fund") which desires to offer multiple
classes has determined that the following plan is in the best interests of
each class individually and the Fund as a whole:
1. Class Designation: Fund shares shall be divided into
Class A, Class B, Class C and Class R.
2. Differences in Availability: Class A shares, Class B
shares and Class C shares shall be available only to clients of banks,
brokers, dealers and other financial institutions, except that full-time or
part-time employees or directors of The Dreyfus Corporation ("Dreyfus") or
any of its affiliates or subsidiaries, Board members or a fund advised by
Dreyfus, including members of the Fund's Board, or the spouse or minor child
of any of the foregoing may purchase Class A shares directly through the
Fund's Distributor.
Class R shares shall be sold primarily to bank trust departments
and other financial service providers 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.
3. Differences in Services: Other than shareholder services
provided under the Distribution Plan for Class A shares and the Service
Plans for Class B and Class C shares, the services offered to shareholders
of each Class shall be substantially the same, except that Right of
Accumulation, Letter of Intent and Reinvestment Privilege shall be
applicable only to holders of Class A shares.
4. Differences in Distribution Arrangements: Class A shares
shall be offered with a front-end sales charge, as such term is defined in
Article III, Section 26(b), of the Rules of Fair Practice of the National
Association of Securities Dealers, Inc., and a deferred sales charge (a
"CDSC"), as such term is defined in said Section 26(b), may be assessed on
certain redemptions of Class A shares purchased without an initial sales
charge as part of an investment of $1 million or more. The amount of the
sales charge and the amount of and provisions relating to the CDSC
pertaining to the Class A shares are set forth on Schedule A hereto. Class
A shares shall be subject to a Distribution Plan adopted pursuant to Rule
12b-1 under the 1940 Act. The Distribution Plan for Class A shares 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 Fund's
Distributor for shareholder servicing activities and for activities or
expenses primarily intended to result in the sale of Class A shares.
Class B shares shall not be subject to a front-end sales charge,
but shall be subject to a CDSC. The amount of and provisions relating to
the CDSC are set forth on Schedule B hereto. Class B shares shall be
subject to a Distribution Plan and Service Plan each adopted pursuant to
Rule 12b-1 under the 1940 Act. Under the Distribution Plan for Class B
shares, the Fund pays the Distributor for distributing the Fund's Class B
shares at an aggregate annual rate of .75 of 1% of the value of the average
daily net assets of Class B. Under the Service Plan for Class B shares, the
Fund pays Dreyfus Service Corporation or the Distributor for the provision
of certain services to the holders of Class B shares a fee at the annual
rate of .25 of 1% of the value of the average daily net assets of Class B.
Class C shares shall not be subject to a front-end sales charge,
but shall be subject to a CDSC. The amount of and provisions relating to
the CDSC are set forth on Schedule C hereto. Class C shares shall be
subject to a Distribution Plan and Service Plan each adopted pursuant to
Rule 12b-1 under the 1940 Act. Under the Distribution Plan for Class C
shares, the Fund pays the Distributor for distributing the Fund's Class C
shares at an aggregate annual rate of .75 of 1% of the value of the average
daily net assets of Class C. Under the Service Plan for Class C shares, the
Fund pays Dreyfus Service Corporation or the Distributor for the provision
of certain services to the holders of Class C shares a fee at the annual
rate of .25 of 1% of the value of the average daily net assets of Class C.
Class R shares shall not be subject to a front-end sales charge,
CDSC, distribution plan or service plan.
5. Expense Allocation. The following expenses shall be
allocated, to the extent practicable, on a Class-by-Class basis: (a) fees
under the Distribution Plans and Service Plans; (b) printing and postage
expenses payable by the Fund related to preparing and distributing
materials, such as proxies, to current shareholders of a specific Class; and
(c) litigation or other legal expenses relating solely to a specific Class.
6. Conversion Features. Class B shares shall automatically
convert to Class A shares after a specified period of time after the date of
purchase, based on the relative net asset value of each such Class without
the imposition of any sales charge, fee or other charge, as set forth on
Schedule D hereto. No other Class shall be subject to any automatic
conversion feature.
7. Exchange Privileges. Class A shares shall be exchangeable
only for (a) Class A shares (however the same may be named) of other funds
managed or administered by Dreyfus which are generally subject to an initial
sales charge, but which, on purchases of $1 million or more, are not subject
to an initial front-end sales charge but are subject to a CDSC if shares are
redeemed within one year of purchase; (b) Investor shares (however the same
may be named) of other funds managed or administered by Dreyfus; (c)
Institutional shares (however the same may be named) of other funds managed
or administered by Dreyfus (except Dreyfus Core Value Fund); (d) shares of
funds managed or administered by Dreyfus which do not have separate share
classes; and (e) shares of certain other funds, as specified from time to
time.
Class B shares shall be exchangeable only for (a) Class B shares
(however the same may be named) of other funds managed or administered by
Dreyfus with the same CDSC structure as the Fund; and (b) shares of certain
other funds, as specified from time to time.
Class C shares shall be exchangeable only for (a) Class C shares
(however the same may be named) of other funds managed or administered by
Dreyfus with the same CDSC structure as the Fund; and (b) shares of certain
other funds, as specified from time to time.
Class R shares shall be exchangeable only for (a) Class R shares
(however the same may be named) of other funds managed or administered by
Dreyfus; (b) Retail shares (however the same may be named) of other funds
managed or administered by Dreyfus; (c) shares of funds managed or
administered by Dreyfus which do not have separate share classes; and (d)
shares of certain other funds, as specified from time to time.
Dated: April 26, 1995
Revised as of: December 1, 1996

EXHIBIT I

The Dreyfus/Laurel Funds, Inc. -
Premier Balanced Fund
Premier Small Company Stock Fund

SCHEDULE A

Front-End Sales Charge--Class A Shares--Effective December 1, 1996, the
public offering price for Class A shares, except as set forth below, shall
be the net asset value per share of that Class plus a sales load as shown
below:
Total Sales Load
As a % of As a % of
offering net asset
price per value per
Amount of Transaction share share

Less than $50,000 . . . . . . . . . . . . . . 5.75 6.10

$50,000 to less than $100,000 . . . . . . . . 4.50 4.70

$100,000 to less than $250,000. . . . . . . . 3.50 3.60

$250,000 to less than $500,000. . . . . . . . 2.50 2.60

$500,000 to less than $1,000,000. . . . . . . 2.00 2.00

$1,000,000 or more. . . . . . . . . . . . . . -0- -0-

Front-End Sales Charge--Class A Shares--Shareholders Beneficially Owning
Shares on November 30, 1996--For shareholders who beneficially owned Class A
shares held in a Fund account on November 30, 1996, the public offering
price for Class A shares shall be the net asset value per share of Class A
plus a sales load as shown below:

Total Sales Load
As a % of As a % of
offering net asset
price per value per
Amount of Transaction share share

Less than $50,000 . . . . . . . . . . . . . 4.50 4.70

$50,000 to less than $100,000 . . . . . . . 4.00 4.20

$100,000 to less than $250,000. . . . . . . 3.00 3.10

$250,000 to less than $500,000. . . . . . . 2.50 2.60

$500,000 to less than $1,000,000. . . . . . 2.00 2.00

$1,000,000 or more. . . . . . . . . . . . . -0- -0-

Contingent Deferred Sales Charge--Class A Shares--A CDSC of 1% shall be
assessed at the time of redemption of Class A shares purchased without an
initial sales charge as part of an investment of at least $1,000,000 and
redeemed within one year after purchase. The terms contained in Schedule C
pertaining to the CDSC assessed on redemptions of Class B shares (other than
the amount of the CDSC and its time periods), including the provisions for
waiving the CDSC, shall be applicable to the Class A shares subject to a
CDSC. Letter of Intent and Right of Accumulation shall apply to such
purchases of Class A shares.

SCHEDULE B

Contingent Deferred Sales Charge--Class B Shares--A CDSC payable to the
Fund's Distributor shall be imposed on any redemption of Class B shares
which reduces the current net asset value of such Class B shares to an
amount which is lower than the dollar amount of all payments by the
redeeming shareholder for the purchase of Class B shares of the Fund held by
such shareholder at the time of redemption. No CDSC shall 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 capital gain distributions, plus (ii) increases
in the net asset value of the shareholder's Class B shares above the dollar
amount of all payments for the purchase of Class B shares of the Fund held
by such shareholder at the time of redemption.

If the aggregate value of the 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 shall depend on the number of years from the time the shareholder
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
shall 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:

CDSC as a % of
Year Since Amount Invested
Purchase Payment or Redemption
Was Made Proceeds

First . . . . . . . . . . . . . . . . . 4.00
Second. . . . . . . . . . . . . . . . . 4.00
Third . . . . . . . . . . . . . . . . . 3.00
Fourth. . . . . . . . . . . . . . . . . 3.00
Fifth . . . . . . . . . . . . . . . . . 2.00
Sixth . . . . . . . . . . . . . . . . . 1.00

In determining whether a CDSC is applicable to a redemption, the
calculation shall be made in a manner that results in the lowest possible
rate. Therefore, it shall be assumed that the redemption is made first of
amounts representing shares acquired pursuant to the reinvestment of
dividends and 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 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.

Waiver of CDSC--The CDSC shall 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 Internal Revenue Code of 1986, as amended (the "Code"), of
the shareholder, (b) redemptions 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
Fund's Distributor exceeds one million dollars, (c) redemptions as a result
of a combination of any investment company with the Fund by merger,
acquisition of assets or otherwise, and (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. Any Fund shares subject to a CDSC which were purchased
prior to the termination of such waiver shall have the CDSC waived as
provided in the Fund's prospectus at the time of the purchase of such
shares.

SCHEDULE C

Contingent Deferred Sales Charge--Class C Shares--A CDSC of 1.00% payable to
the Fund's Distributor shall be 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 shall be the method used in calculating the CDSC
for Class B shares. In addition, the provisions for waiving the CDSC shall
be those set forth for Class B shares.

SCHEDULE D

Conversion of Class B Shares--Class B shares shall automatically convert to
Class A shares on the first Fund business day of the month in which the
sixth anniversary of the date of purchase occurs (unless otherwise specified
by the Board), based on the relative net asset values for shares of each
such Class, and shall be subject to the Distribution Plan for Class A shares
but shall no longer be subject to the Distribution Plan and Service Plan
applicable to Class B shares. (Such conversion is subject to suspension by
the Board members if adverse tax consequences might result.) At that time,
Class B shares that have been acquired through the reinvestment of dividends
and distributions ("Dividend Shares") shall be converted in the proportion
that a shareholder's Class B shares (other than Dividend Shares) converting
to Class A shares bears to the total Class B shares then held by the
shareholder which were not acquired through the reinvestment of dividends
and distributions.