<PAGE>
Annual Report
- ------------------------------------------
Premier Balanced
Fund
- ------------------------------------------
October 31, 1995
[LOGO]
<PAGE>
Premier Balanced Fund
- ----------------------------------------------------------------------------
Letter to Shareholders
Dear Shareholder:
We are pleased to provide you with this report for the Premier
Balanced Fund for the fiscal year ended October 31, 1995. As shown later in
this letter, the year has been a rewarding one for the Fund. This letter
describes the economic and market background of the Fund's latest twelve
months, provides you with the year's results, and explains our investment
strategies.
Economic Environment
The much-desired soft landing for the U.S. economy that the Federal
Reserve Board has been striving to attain appears to have occurred. This is
the result of more than a year of moves by the Fed to tighten interest rates,
followed by a token loosening of the reins last summer.
Now that the economy has settled down a bit, the central bank must
concern itself with the possibility that the economy might slow down more
than would be desirable. However, the latest economic statistics do not
contain convincing evidence of that happening. The housing industry is doing
well, industrial orders continue to expand and gross domestic product keeps
on growing, albeit at a reduced rate.
In the meantime, the rate of inflation appears to be under firm
control. Consumer prices have advanced only at a very moderate pace, and
average wages have barely inched ahead. And unemployment hovers near the
so-called full employment level.
Retail spending has settled down, in part because consumers are
carrying large debit balances in mortgage and credit card debts. To what
extent this will affect holiday shopping remains to be seen.
Market Environment
As your Fund reached the end of its fiscal year, October 31, 1995,
stocks were not far below the record levels they had reached earlier in the
fall.
Among the factors accounting for this market strength were good
corporate profits and low interest rates. Third quarter profit reports from
leading corporations, while not universally favorable, were better than
earlier quarters. The extensive lean and mean corporate reorganizations of
the past few years appear to be paying off. Even though the pricing
environment for most corporate products is extremely competitive,
manufacturers and service providers appear able to squeeze out improved
profits.
How long that continuing improvement will last is an open question.
Many economists think that profit levels may flatten out over the coming
months. The recent record on that score, however, has been encouraging.
Interest rates also have buoyed stock prices. As the cost of
borrowing has steadily decreased, many corporations have benefitted. This
advantage has been particularly notable with public utilities.
Another factor in market strength has been the relentless advance of
technology, which has virtually forced corporations -- and now individual
households as well -- to reequip in order to keep up with technical progress.
The obvious result has been seen in record prices commanded during the year
by high technology stocks. While some disillusionment may set in, the market
clearly takes a very optimistic view of the long-range outlook for these
companies.
In addition, equities have been favorably affected by the very large
inflow of investment money, on a regular basis, from 401(k) and other
retirement plans. To be sure, money managers could at some point turn off
the spigot, and divert this cash flow into bonds or money market instruments.
During the past year, however, equity purchases by pension funds and other
retirement investors have provided a supportive background for stock prices.
Bond prices began to strengthen in the springtime as the growth rate
of the economy slowed. When the Federal Reserve Board cut interest rates in
July, it strengthened the bond market even more and that condition still
prevails.
Of course, there are some concerns. Perhaps the biggest has been the
struggle between Congress and the White House over how to reduce Government
spending and cut the burden of the Government's perennial deficit.
Hopefully, this impasse will be settled soon. In the meantime, the
uncertainties in Washington have been a source of worry to investors.
The fading value of the U.S. dollar has also been a question mark.
Yet, after hitting a low last spring, the dollar has gradually recovered some
lost ground. This dollar rebound reflects weakness in the economies of
Western Europe and Japan, but also the strengthening of economic activity
here at home.
<PAGE>
Portfolio Overview
Premier Balanced Fund Class R shares commenced operations on
September 15, 1993 and Class A shares began operations on April 14, 1994.
The inception date of Class B and Class C shares is December 19, 1994. For
the fiscal year that ended October 31, 1995, total return for Class R shares
was 21.46%, and for Class A shares was 21.17%. For the period from December
19, 1994 through October 31, 1995, total return for Class B shares was
23.19%, and for Class C shares was 23.29%.* For the year ended October 31,
1995 total return of the Standard & Poor's 500 Composite Stock Price Index
(S&P 500) was 26.41%** and of a hybrid Index, which consists 60% of the S&P
500 and 40% of the Lehman Brothers Intermediate Bond Index,*** was 20.86%.
Under normal circumstances, the Fund's total assets are allocated
approximately 60% to common stocks and 40% to bonds. 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.
In comparing performance figures, it should be borne in mind that
the S&P 500 Index is composed entirely of common stocks, while the Fund -- as
outlined in the Prospectus -- invests its assets in both equities and fixed
income securities. At the end of the fiscal year, your Fund was allocated
approximately three-quarters to equity issues and one-quarter to fixed
income.
The positive performance of the Fund was due in part to the asset
allocation, as well as to management of the equity and fixed income
portfolios.
Throughout the fiscal year , the Fund's fixed income allocation
investment strategy stressed holdings in quality corporate bonds as well as
enhanced portfolio structure. The strategy of emphasizing exposure to the
corporate bond sector enabled the Fund to realize the benefits of the strong
earnings environment that resulted in that sector outperforming Government
bonds.
In early 1995 when interest rates began to fall, the average maturity
of the fixed income component of the portfolio was increased by 0.20 years
from a neutral position. This enabled the portfolio to be positioned to seek
to take advantage of an improving bond market. Currently, the fixed income
position consists of approximately 60% government securities and 40%
investment grade corporate bonds.
In late 1994 and early 1995, as the Federal Reserve was tightening
credit, we reduced the allocation devoted to equities. Starting last spring,
as interest rates began to decrease, we enhanced the portfolio structure by
raising the percentage devoted to common stocks. Recently the equity share
has been held close to the maximum permitted by the Fund's investment
policies. This helped the Fund to benefit from the rise in the stock market
that has occurred in recent months.
The major equity sectors held by the Fund are, in order of market
capitalization, Capital Spending stocks, Interest Sensitive shares, Consumer
Cyclical and Discretionary issues, Consumer Staples, Utilities, Energy
Related and Health Care.
We consider it a privilege to be managing assets on your behalf. We
will continue our best efforts to help you obtain your investment goals.
Sincerely,
Ronald P. Gala
Laurie Carroll
Portfolio Managers
December 1, 1995
New York, N.Y.
* Total return includes reinvestment of dividends and any capital gains
paid, without taking into account the maximum initial sales charge in the
case of Class A shares, or the applicable contingent deferred sales charge
imposed on redemptions in the case of Class B and Class C shares.
** Source: Lipper Analytical Services, Inc. -- Standard & Poor's 500
Composite Stock Price Index is a widely accepted unmanaged index of stock
market performance.
***SOURCE: LIPPER ANALYTICAL SERVICES, INC. -- Lehman Brothers Intermediate
Government Corporate Bond Index is a widely accepted unmanaged index of
government and corporate bond market performance composed of U.S.
Government, Treasury and agency securities, fixed-income securities and
nonconvertible investment grade corporate debt, with an average maturity
of 1-10 years.
<PAGE>
Premier Balanced Fund October 31, 1995
- ----------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN PREMIER BALANCED FUND
CLASS R SHARES WITH THE STANDARD & POOR'S 500 COMPOSITE STOCK PRICE INDEX,
THE LEHMAN BROTHERS INTERMEDIATE GOVERNMENT/CORPORATE BOND INDEX AND
A HYBRID INDEX
[CHART]
- -------------------------------------------------------------------------
Premier Balanced Fund
(Class R Shares)
Standard & Poor's 500
Composite Stock
Price Index *
Lehman Brothers
Intermediate Government/
Corporate Bond Index **
Customized
Blended Index ***
- -------------------------------------------------------------------------
9/15/93 10,000 10,000 10,000 10,000
10/31/93 10,180 10,128 10,068 10,104
10/31/94 10,249 10,519 9,874 10,261
10/31/95 12,449 13,297 11,112 12,423
- -------------------------------------------------------------------------
*Source: Lipper Analytical Services, Inc.
**Source: Lehman Brothers
***Source: Lipper Analytical Services, Inc. and Lehman Brothers
<TABLE>
<CAPTION>
Average Annual Total Returns
- -------------------------------------------------------------------------------------------------------------------------------
Class A Shares Class R Shares
- -------------------------------------------------------------- -----------------------------------------------------------
% Return
Reflecting
% Return Without Maximum Initial
Period Ended 10/31/95 Sales Charge Sales Charge (4.5%) Period Ended 10/31/95
- --------------------- --------------- ------------------ ---------------------
<S> <C> <C> <C> <C>
1 Year 21.17% 15.77% 1 Year 21.46%
From Inception (4/14/94) 16.58 13.15 From Inception (9/15/93) 10.83
</TABLE>
<TABLE>
<CAPTION>
Actual Aggregate Total Returns
- -------------------------------------------------------------------------------------------------------------------------------
Class B Shares Class C Shares
- -------------------------------------------------------------- -------------------------------------------------------------
% Return Reflecting % Return Reflecting
Applicable Contingent Applicable Contingent
% Return Deferred Sales % Return Deferred Sales
Assuming No Charge Upon Assuming No Charge Upon
Period Ended 10/31/95 Redemption Redemption * Period Ended 10/31/95 Redemption Redemption**
- --------------------- ----------- ------------------ --------------------- ------------ --------------------
<S> <C> <C> <C> <C> <C>
From Inception (12/19/94) 23.19% 19.19% From Inception (12/19/94) 23.29% 22.29%
</TABLE>
Past performance is not predictive of future performance.
The above graph compares a $10,000 investment made in Class R shares of
Premier Balanced Fund on 9/15/93 (Inception Date) to a $10,000 investment
made in each of the Standard and Poor's 500 Composite Stock Price Index and
the Lehman Brothers Intermediate Government/Corporate Bond Index on that
date, as well as to a Hybrid Index as described below. For comparative
purposes, the values of the Indicies on 8/31/93 are used as the beginning
value on 9/15/93. All dividends and capital gain distributions are
reinvested. Performance for Class A shares, Class B shares and Class C
shares will vary from the performance of Class R shares shown above due to
differences in charges and expenses.
Premier Balanced Fund invests in common stocks and bonds. The Fund's
performance shown in the line graph takes into account all applicable fees
and expenses. The Standard & Poor's 500 Composite Stock Price Index is a
widely accepted, unmanaged index of overall stock market performance. The
Lehman Brothers Intermediate Government/Corporate Bond Index is a widely
accepted, unmanaged index of Government and corporate bond market performance
composed of U.S. Government, Treasury and agency securities, fixed- income
securities and nonconvertible investment grade corporate debt, with an
average maturity of 1 - 10 years. Both indicies do not take into account
charges, fees and other expenses. The Hybrid Index has been prepared by the
Fund for purposes of more accurate comparison to the Fund's general portfolio
composition. The Hybrid Index is composed of 60% Standard & Poor's 500
Composite Stock Price Index and 40% Lehman Brothers Intermediate
Government/Corporate Bond Index. Under normal circumstances, the Fund's
total assets are allocated approximately 60% to common stocks and 40% to
bonds, 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 The Dreyfus
Corporation. Further information relating to Fund performance, including
expense reimbursements, if applicable, is contained in the Financial
Highlights section of the Prospectus and elsewhere in this report.
*Maximum contingent deferred sales charge for Class B shares is 4% and is
reduced to 0% after six years.
**Maximum contingent deferred sales charge for Class C shares is 1% within
one year of the date of purchase.
<PAGE>
Premier Balanced Fund
- -----------------------------------------------------------------------------
Statement of Investments October 31, 1995
<TABLE>
<CAPTION>
Shares COMMON STOCKS--62.2% Value
---------- ------------
<S> <C> <C>
Basic Industry--3.6%
11,100 Champion International Corporation....................................... $ 593,850
5,100 Cummins Engine Company, Inc.............................................. 179,138
4,800 Dow Chemical Company..................................................... 329,400
7,500 du Pont (E.I.) de Nemours & Company..................................... 467,813
12,600 Eastman Chemical......................................................... 749,700
2,700 Federal Paper Board Company, Inc......................................... 113,400
11,400 International Paper Company.............................................. 421,800
7,200 Lyondell Petrochemical................................................... 153,900
3,600 PPG Industries, Inc...................................................... 153,000
2,100 Temple-Inland, Inc....................................................... 95,550
5,100 Union Carbide Corporation................................................ 193,163
4,200 Wellman, Inc............................................................. 98,700
4,200 Weyerhaeuser Company..................................................... 185,325
------------
3,734,739
------------
Capital Spending--13.9%
4,800 3Com..................................................................... 225,600
6,000 Advanced Micro Devices, Inc. ............................................ 143,250
3,600 Alcan Aluminum LTD....................................................... 113,850
4,200 Applied Materials, Inc. +................................................ 210,525
3,000 Arrow Electonics, Inc. +................................................. 152,250
5,100 Avnet, Inc............................................................... 256,913
5,100 Cabletron System +....................................................... 400,988
1,500 Cabot Corporation........................................................ 71,250
10,700 Case Corporation......................................................... 407,938
9,900 Ceridian Corporation..................................................... 430,650
6,700 CISCO Sysytems, Inc. +................................................... 519,250
16,650 Computer Associates International, Inc................................... 915,750
1,700 Deere & Company.......................................................... 151,938
5,700 Dover Corporation........................................................ 225,150
12,000 Eaton Corporation........................................................ 615,000
16,200 General Electric Company................................................. 1,024,650
2,500 Harnischfeger Industries, Inc............................................ 78,750
11,700 Healthcare COMPARE +..................................................... 432,900
4,500 Hewlett Packard Company.................................................. 416,813
4,500 Illinois Tool Works...................................................... 261,563
9,500 Intel Corporation........................................................ 663,813
11,700 International Business Machines.......................................... 1,137,825
8,812 Lockheed Martin.......................................................... 600,318
4,800 Mallinckrodt, Inc........................................................ 166,800
5,700 MBNA Corp ............................................................... 210,188
3,300 McDonnell Douglas Corporation............................................ 269,775
3,600 Medtronic, Inc .......................................................... 207,900
5,200 Microsoft Corporation +.................................................. 520,000
9,800 Newell Corporation....................................................... 236,425
8,100 Oracle Systems Corporation+.............................................. 353,363
5,100 Parker - Hannifin Corporation............................................ 172,125
5,400 Premark International, Inc .............................................. 249,750
6,600 Raytheon Company ........................................................ 287,925
8,400 Rockwell International Corporation....................................... 373,800
</TABLE>
<PAGE>
Premier Balanced Fund
- -----------------------------------------------------------------------------
Statement of Investments (continued) October 31, 1995
<TABLE>
<CAPTION>
Shares COMMON STOCKS (continued) Value
---------- ------------
<S> <C> <C>
Capital Spending (continued)
6,000 Sun Microsystem, Inc. +.................................................. $ 468,000
3,600 Teradyne, Inc. +......................................................... 120,150
11,400 Texas Instruments, Inc................................................... 778,050
200 V.F. Corporation......................................................... 9,575
10,800 Wheelabrator Tech........................................................ 155,250
8,700 Whitman Corporation...................................................... 184,875
------------
14,220,885
------------
Consumer CYC / Discretionary--8.9%
6,600 American Greeting Corporation, Class A................................... 207,900
5,700 Capital Cities/ABC, Inc.................................................. 676,163
9,000 Chrysler Corporation..................................................... 464,625
17,700 Circuit City Stores, Inc................................................. 590,738
5,200 Disney (Walt) Productions................................................ 299,650
6,600 Eckerd Corporation +..................................................... 261,525
16,500 Ford Motor Company....................................................... 474,375
3,000 General Motors Corporation............................................... 131,250
2,700 Goodyear Tire & Rubber Corporation....................................... 102,600
3,600 H.B.O. & Company......................................................... 254,700
4,400 Harley - Davidson........................................................ 117,700
6,900 King World Productions, Inc. +........................................... 240,638
3,300 Magna International, Class A............................................. 142,725
6,375 Mattel, Inc.............................................................. 183,281
12,300 McDonald's Corporation................................................... 504,300
9,000 Mirage Resorts, Inc. +................................................... 294,750
9,900 New York Times Company................................................... 274,725
6,000 Nike Inc., Class B....................................................... 340,500
11,100 Philips Electronics N.V.................................................. 428,738
17,700 Public Service Enterprise Group.......................................... 519,938
6,900 Reynolds & Reynolds Company, Class A .................................... 245,813
11,700 Rite Aid Corporation..................................................... 315,900
12,000 Safeway, Inc.+........................................................... 567,000
15,900 Sears Roebuck & Company.................................................. 540,600
11,100 Tandy Corporation........................................................ 548,063
13,200 Walgreen Company......................................................... 376,200
------------
9,104,397
------------
Consumer Staples--8.2%
27,720 Archer Daniels Midland................................................... 446,985
20,100 Coca-Cola Company........................................................ 1,444,688
11,100 ConAgra, Inc............................................................. 428,738
9,300 CPC International, Inc................................................... 617,288
13,200 Gillette Company......................................................... 638,550
4,500 Heinz (H.J.) Company..................................................... 209,250
7,500 IBP, Inc................................................................. 449,063
17,400 Johnson & Johnson........................................................ 1,418,100
11,100 Pepsico, Inc............................................................. 585,525
16,500 Philip Morris Companies, Inc............................................. 1,394,250
4,200 Procter & Gamble Comany.................................................. 340,200
1,800 Sara Lee Corporation..................................................... 52,875
3,000 Unilever N.V............................................................. 393,000
------------
8,418,512
------------
</TABLE>
<PAGE>
Premier Balanced Fund
- -----------------------------------------------------------------------------
Statement of Investments (continued) October 31, 1995
<TABLE>
<CAPTION>
Shares COMMON STOCKS (continued) Value
---------- ------------
<S> <C> <C>
Energy Related--5.7%
12,500 Amoco Corporation........................................................ $ 798,438
3,300 Atlantic Richfield....................................................... 352,275
3,600 Coastal Corporation...................................................... 116,550
15,600 EXXON Corporation........................................................ 1,191,450
9,300 Mobil Corporation........................................................ 936,975
11,400 Panhandle Eastern Corporation............................................ 287,850
11,600 Royal Dutch Petroleum Company............................................ 1,425,350
7,500 Smith International +.................................................... 120,000
7,800 Tidewater, Inc........................................................... 205,725
10,500 Williams Companies, Inc.................................................. 405,563
------------
5,840,176
------------
Heath Care--5.0%
13,200 Abbott Laboratories...................................................... 524,700
9,600 Amgen, Inc. +............................................................ 460,800
6,300 Becton Dickinson & Company............................................... 409,500
3,900 Boston Scientific Corporation +.......................................... 164,288
14,100 Columbia/HCA Heathcare Corporation....................................... 692,663
20,400 Merck & Company, Inc..................................................... 1,173,000
11,400 Pfizer, Inc.............................................................. 654,075
20,400 Schering-Plough Corporation.............................................. 1,093,950
------------
5,172,976
------------
Interest Sensitive / Regulated--8.3%
21,039 Allstate................................................................. 773,183
2,700 American National Insurance Company...................................... 153,900
10,500 BankAmerica Corporation.................................................. 603,750
7,800 Bank of New York Corporation............................................. 327,600
900 Bear, Stearns & Company Incorporated..................................... 17,870
11,700 Chemical Banking Corporation............................................. 665,438
6,600 Cigna Corporation........................................................ 654,225
15,300 Citicorp................................................................. 992,588
8,700 Dean Witter, Discover & Company.......................................... 432,825
8,400 EXEL Ltd................................................................. 449,400
6,900 First Chicago Corporation................................................ 468,338
3,900 First Interstate Bancorp................................................. 503,100
8,400 First U.S.A., Inc........................................................ 386,400
1,200 Loews.................................................................... 175,950
13,500 NationsBank Corporation.................................................. 887,625
900 Providian Corporation.................................................... 35,325
6,400 Signet Banking Corporation............................................... 152,000
3,300 Standard Fed Bancorp..................................................... 117,150
24 Transport Holdings, Inc. +............................................... 942
4,800 Travelers Group, Inc..................................................... 242,400
5,700 TRW, Inc................................................................. 374,775
5,400 USLIFE Corporation....................................................... 153,900
------------
8,568,684
------------
</TABLE>
<PAGE>
Premier Balanced Fund
- -----------------------------------------------------------------------------
Statement of Investments (continued) October 31, 1995
<TABLE>
<CAPTION>
Shares COMMON STOCKS (continued) Value
---------- ------------
<S> <C> <C>
Metals & Mining--.8%
8,400 ASARCO, Inc.............................................................. $ 270,900
7,800 Inland Steel Industries, Inc............................................. 182,325
3,600 Phelps Dodge Corporation................................................. 228,150
3,000 Reynolds Metal Company................................................... 151,125
------------
832,500
------------
Transportation--1.0%
1,500 AMR Corporation +........................................................ 99,000
3,900 Conrail, Inc............................................................. 268,125
3,300 CSX Corporation.......................................................... 276,375
2,100 Delta Air Lines, Inc..................................................... 137,813
5,100 Illinois Central Corporation............................................. 195,075
------------
976,388
------------
Utilities--6.8%
5,100 AllTel corp.............................................................. 156,188
28,800 Ameritech Corporation.................................................... 1,555,200
15,800 BellSouth Corporation.................................................... 1,208,700
16,800 Consolidated Edison Company, Inc......................................... 510,300
8,100 DQE, Inc. ............................................................... 222,750
15,000 General Public Ultilies Corporation...................................... 468,750
30,900 MCI Communications Corporation........................................... 770,569
3,600 NYNEX Corporation........................................................ 169,200
15,900 PECO Energy Company...................................................... 465,075
12,000 SBC Communications....................................................... 670,500
18,300 Sprint Corporation....................................................... 704,550
2,500 Worldcom, Inc. +......................................................... 81,563
------------
6,983,345
------------
TOTAL COMMON STOCKS
(Cost $46,913,459)................................................... $ 63,852,602
------------
</TABLE>
<PAGE>
Premier Balanced Fund
- -----------------------------------------------------------------------------
Statement of Investments (continued) October 31, 1995
<TABLE>
<CAPTION>
Annnualized
Principal Yield at the Maturity
Amount U.S. Treasury Obligations--16.0% Date of Purchase Date Value
----------- ---------------- -------- ------------
<S> <C> <C> <C> <C>
$ 500,000 U.S. Treasury Bills*................... 5.430% 1/18/96 $ 494,217
------------
Coupon
Rate
---------
100,000 U.S. Treasury Bond..................... 12.375 5/15/04 141,878
500,000 U.S. Treasury Bond..................... 11.625 11/15/04 691,985
700,000 U.S. Treasury Notes.................... 4.375 11/15/96 691,509
1,500,000 U.S. Treasury Notes.................... 7.500 1/31/97 1,533,750
1,500,000 U.S. Treasury Notes.................... 6.625 3/31/97 1,520,355
500,000 U.S. Treasury Notes.................... 6.750 5/31/97 508,185
1,000,000 U.S. Treasury Notes.................... 8.875 11/15/97 1,061,250
800,000 U.S. Treasury Notes.................... 5.625 1/31/98 799,336
200,000 U.S. Treasury Notes.................... 5.125 11/30/98 196,726
200,000 U.S. Treasury Notes.................... 5.125 12/31/98 196,636
400,000 U.S. Treasury Notes.................... 7.000 4/15/99 415,200
1,000,000 U.S. Treasury Notes.................... 6.875 7/31/99 1,036,320
2,000,000 U.S. Treasury Notes.................... 7.500 10/31/99 2,119,819
400,000 U.S. Treasury Notes.................... 6.375 1/15/00 408,476
800,000 U.S. Treasury Notes.................... 6.250 2/15/03 813,904
500,000 U.S. Treasury Notes.................... 5.750 8/15/03 493,170
600,000 U.S. Treasury Notes.................... 7.250 5/15/04 649,140
2,000,000 U.S. Treasury Notes.................... 7.250 8/15/04 2,164,480
500,000 U.S. Treasury Notes.................... 8.875 8/31/97 503,220
------------
15,945,339
------------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $15,919,038).................... $ 16,439,556
------------
CORPORATE BONDS AND NOTES -13.4%
Basic Industry--1.1%
$ 100,000 Aluminum Company of America............ 5.750% 2/1/01 $ 98,250
1,000,000 0CSX Corporation....................... 8.400 8/1/96 1,016,250
------------
1,114,500
------------
Consumer Basics--1.1%
100,000 Heinz (H.J.) Company................... 6.875 1/15/03 103,375
1,000,000 Philip Morris Inc...................... 6.000 11/15/99 987,500
------------
1,090,875
------------
Energy--1.7%
200,000 Emerson Electric....................... 6.300 11/1/05 197,750
500,000 Texaco Capital, Inc.................... 6.875 7/15/99 511,250
1,000,000 WMX Technologies....................... 8.125 2/1/98 1,041,250
------------
1,750,250
------------
Financial Services--8.0%
250,000 American General Finance............... 6.625 6/1/97 252,188
100,000 Associates Corporation of N.A. ........ 7.500 5/15/99 104,000
190,000 AVCO Financial Services, In............ 7.500 11/15/96 193,088
500,000 BP North America....................... 9.875 3/15/04 605,000
500,000 Chemical Banking Corporation........... 8.625 5/1/02 553,750
1,000,000 Chrysler Financial Corporation......... 5.625 1/15/99 978,750
75,000 Commercial Credit Group................ 6.700 8/1/99 75,750
800,000 First Chicago MTN...................... 6.830 9/8/97 812,000
150,000 First Chicago Corporation.............. 9.875 8/15/00 171,563
100,000 Ford Motor Credit Corporation.......... 5.625 12/15/98 98,375
500,000 General Motors Acceptance Corporation.. 7.750 1/15/99 521,250
</TABLE>
<PAGE>
Premier Balanced Fund
- -----------------------------------------------------------------------------
Statement of Investments (continued) October 31, 1995
<TABLE>
<CAPTION>
Principal Coupon Maturity
Amount Rate Date Value
----------- ---------------- -------- ------------
<S> <C> <C> <C> <C>
Financial Services (continued)
$ 700,000 Pepsico Inc........................... 7.625% 11/1/98 $ 728,875
700,000 Province of Ontario.................... 7.000 8/4/05 718,375
100,000 International Lease Finance............ 4.750 1/15/97 98,625
150,000 Norwest Financial, Inc................. 7.000 1/15/03 154,500
1,000,000 Republic New York Corporation.......... 9.750 12/1/00 1,147,500
500,000 Republic New York Corporation.......... 7.750 5/15/02 534,375
500,000 Wells Fargo & Company.................. 6.125 11/1/03 479,375
------------
8,227,339
------------
Retail--0.3%
175,000 Sears Roebuck Company.................. 6.250 1/15/04 170,844
150,000 Wal-Mart Stores, Inc................... 5.500 3/1/98 148,312
------------
319,156
------------
Utilities--1.2%
150,000 Consolidated Edison Company............ 6.375 4/1/03 149,250
125,000 Duke Power Company..................... 7.500 4/1/99 130,156
500,000 Duke Power Company..................... 6.125 7/22/03 490,000
500,000 Virginia Electric & Power C............ 7.250 3/1/97 508,750
------------
1,278,156
------------
TOTAL CORPORATE BONDS AND NOTES
(Cost $13,609,966).................. $ 13,780,276
------------
U.S. AGENCY OBLIGATIONS--1.4%
500,000 Federal Home Loan Mortgage............. 5.400 11/1/00 480,530
1,000,000 Federal National Mortgage Association.. 5.300 12/10/98 979,790
------------
TOTAL U.S. AGENCY OBLIGATIONS
(Cost $1,357,813)................... 1,460,320
------------
REPURCHASE AGREEMENT--6.7%
$6,883,681 Agreement with Goldman Sachs, dated 10/31/95
bearing 5.880%, to be repurchased at $6,894,805 on
11/01/95, collateralized by $6,884,476 U.S. Treasury
Notes, 5.875%
due 7/31/97 (Cost $6,883,681).......... 6,883,681
------------
TOTAL INVESTMENTS (Cost $88,436,696)... 99.8% $102,416,435
CASH AND RECEIVABLES (NET)............. 0.2% $ 238,011
------ ------------
NET ASSETS............................. 100.0% $102,654,446
------ ------------
------ ------------
<FN>
Notes to Statement of Investments:
- -------------------------------------------------------------------------
+ Non-income producing.
* Partially held by the custodian in a segregated account as collateral for
open financial futures positions.
</TABLE>
<TABLE>
<CAPTION>
Statement of Financial Futures October 31, 1995
Unrealized
Market Value Appreciation
Number of Covered (Depreciation)
Issuer Contracts by Contracts Expiration at 10/31/95
- ------ --------- ------------ ----------- --------------
<S> <C> <C> <C> <C>
Standard & Poor's 500 (long)................. 37 $10,801,225 December '95 $94,350
5 Year U.S. Treasury Note (short)............ 58 6,283,032 December '95 (70,687)
-------
$23,663
-------
-------
</TABLE>
See notes to financial statements.
<PAGE>
Premier Balanced Fund
- -----------------------------------------------------------------------
Statement of Assets and Liabilities October 31, 1995
<TABLE>
<S> <C> <C>
ASSETS:
Investments in securities, at value (cost $88,436,696)--see statement of
investments (including repurchase agreement of $6,883,681)............ $102,416,435
Cash.................................................................... 6,136
Dividends and interest receivable....................................... 661,792
Receivable for investment securities sold............................... 226,596
Receivable for Capital Stock sold....................................... 142,345
------------
103,453,304
LIABILITIES:
Due to The Dreyfus Corporation.......................................... $128,270
Payable for investment securities purchased............................. 590,846
Payable for futures variation margin.................................... 54,538
Directors' fee payable-Note 2(c)........................................ 19,675
Distribution fee payable-Note 2(b)...................................... 2,856
Payable for Capital Stock redeemed...................................... 2,673
---------
798,858
------------
NET ASSETS.................................................................. $102,654,446
------------
------------
REPRESENTED BY:
Paid-in capital......................................................... $ 87,322,636
Accumulated undistributed investment income-net......................... 690,127
Accumulated net realized gain on investments............................ 638,281
Accumulated net unrealized appreciation on investments (including $23,663
net unrealized appreciation of financial futures)-Note 3.............. 14,003,402
------------
NET ASSETS at value......................................................... $102,654,446
------------
------------
NET ASSET VALUE per share:
Class A Shares
(50 million shares of $.001 par value Capital Stock authorized)
($1,649,870 / 138,547 shares)......................................... $11.91
------
------
Class B Shares
(50 million shares of $.001 par value Capital Stock authorized)
($3,117,867 / 262,182 shares).......................................... $11.89
------
------
Class C Shares
(50 million shares of $.001 par value Capital Stock authorized)
($6,152 / 517 shares).................................................. $11.90
------
------
Class R Shares
(50 million shares of $.001 par value Capital Stock authorized)
($97,880,557 / 8,213,782 shares)...................................... $11.92
------
------
</TABLE>
See notes to financial statements.
<PAGE>
Premier Balanced Fund
- -------------------------------------------------------------------------
Statement of Operations Year ended October 31, 1995
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Income:
Interest.............................................................. $2,018,535
Cash dividends........................................................ 1,454,951
----------
Total Income...................................................... $ 3,473,486
Expenses:
Management fee--Note 2(a)............................................. 874,166
Distribution and service fee-Note 2(b)................................ 17,331
Directors' fees and expenses-Note 2(c)................................ 15,345
----------
Total Expenses.................................................... 906,842
-----------
INVESTMENT INCOME--NET............................................ 2,566,644
REALIZED AND UNREALIZED GAIN ON INVESTMENTS-Note 3:
Net realized gain on investments........................................ $2,305,179
Net realized gain on financial futures.................................. 554,117
----------
Net Realized Gain..................................................... 2,859,296
Net unrealized appreciation on investments (including
$23,663 net unrealized appreciation on financial futures)............. 12,325,435
-----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS....................... 15,184,731
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $17,751,375
-----------
-----------
</TABLE>
See notes to financial statements.
<PAGE>
Premier Balanced Fund
- -------------------------------------------------------------------------
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended October 31,
------------------------------
1995 1994
------------ ------------
<S> <C> <C>
OPERATIONS:
Investment income--net............................................... $ 2,566,644 $ 1,412,756
Net realized gain (loss) on investments and financial futures........ 2,859,296 (2,221,015)
Net unrealized appreciation on investments for the year.............. 12,325,435 1,375,144
------------ ------------
Net Increase In Net Assets Resulting From Operations............... 17,751,375 566,885
------------ ------------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net:
Class A Shares..................................................... (54,581) (4,401)
Class B Shares..................................................... (15,467) --
Class C Shares..................................................... (63) --
Class R Shares..................................................... (2,292,181) (971,670)
------------ ------------
Total Dividends.................................................. (2,362,292) (976,071)
------------ ------------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold:
Class A Shares..................................................... 5,596,014 1,814,520
Class B Shares..................................................... 2,919,383 --
Class C Shares..................................................... 5,416 --
Class R Shares..................................................... 22,961,009 58,817,291
Dividends reinvested:
Class A Shares..................................................... 48,751 3,242
Class B Shares..................................................... 15,934 --
Class C Shares..................................................... 63 --
Class R Shares..................................................... 2,284,969 969,095
Cost of shares redeemed:
Class A Shares..................................................... (6,049,079) (36,563)
Class B Shares..................................................... (67,410) --
Class C Shares..................................................... -- --
Class R Shares..................................................... (17,974,028) (12,538,163)
------------ ------------
Increase In Net Assets From Capital Stock Transactions........... 9,741,022 49,029,422
------------ ------------
Total Increase In Net Assets................................... 25,130,105 48,620,236
NET ASSETS:
Beginning of year.................................................... 77,524,341 28,904,105
------------ ------------
End of year (including undistributed investment income--net:
$690,127 and $485,775, respectively)............................... $102,654,446 $ 77,524,341
------------ ------------
------------ ------------
</TABLE>
<TABLE>
<CAPTION>
Shares
-------------------------------------------------------------------------------
Class A Class B Class C Class R
---------------------- ---------- ---------- -----------------------
Year Ended Year Ended
Year Ended October 31, October 31, October 31, Year Ended October 31,
---------------------- ---------- ---------- -----------------------
1995 1994(1) 1995(2) 1995(2) 1995 1994(3)
-------- ------- ------- ------ --------- ---------
<S> <C> <C> <C> <C> <C> <C>
CAPITAL SHARE TRANSACTIONS:
Shares sold............ 566,013 181,775 266,500 511 2,189,828 5,842,428
Shares issued for dividends
reinvested........... 4,833 328 1,443 6 217,471 97,922
Shares redeemed........ (610,712) (3,690) (5,761) -- (1,700,811) (1,272,959)
-------- ------- ------- ------ --------- ---------
Net Increase (Decrease) in
Shares Outstanding. (39,866) 178,413 262,182 517 706,488 4,667,391
-------- ------- ------- ------ --------- ---------
-------- ------- ------- ------ --------- ---------
<FN>
(1) On April 14, 1994, the Fund commenced selling Investor shares.
On October 17, 1994 Investor shares were redesigned as Class A
Shares.
(2) The Fund commenced selling Class B and Class C shares on December 20,
1994.
(3) On April 14, 1994, the Fund commenced selling Investor shares. Those
shares outstanding prior to April 14, 1994 were redesignated Trust shares.
Effective October 17, 1994, Trust shares were redesignated as Class R shares.
</TABLE>
See notes to financial statements.
<PAGE>
Premier Balanced Fund
- ------------------------------------------------------------------
Financial Highlights
Contained below is per share performance data for a share of
Capital Stock outstanding, total investment return, ratios to
average net assets and other supplemental data for each period indicated.
This information has been derived from the Fund's financial statements.
<TABLE>
<CAPTION>
Class B Class C
Class A Shares Shares Shares Class R Shares
--------------------- -------- --------- ------------------------------
Period Period
Ended Ended Period Ended
Year Ended October 31, October 31, October 31, Year Ended October 31,
--------------------- -------- --------- ------------------------------
PER SHARE DATA: 1995 1994(1)(2) 1995(3) 1995(3) 1995 1994(2) 1993(4)
------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $10.08 $ 9.73 $ 9.76 $ 9.76 $10.09 $10.18 $10.00
------ ------ ------ ------ ------ ------ ------
Investment Operations:
Investment income--net......... .28 .11 .14 .11 .31 .20(5) .02
Net realized and unrealized gain
(loss) on investments....... 1.82 .34 2.11 2.15 1.81 (.13) .16
------ ------ ------ ------ ------ ------ ------
Total from Investment
Operations.............. 2.10 .45 2.25 2.26 2.12 .07 .18
------ ------ ------ ------ ------ ------ ------
Distributions;
Dividends from investment
income--net.................. (.27) (.10) (.12) (.12) (.29) (.16) --
------ ------ ------ ------ ------ ------ ------
Net asset value, end of year.. $11.91 $10.08 $11.89 $11.90 $11.92 $10.09 $10.18
------ ------ ------ ------ ------ ------ ------
------ ------ ------ ------ ------ ------ ------
TOTAL INVESTMENT RETURN........... 21.17% 4.68% 23.19% 23.29% 21.46% .68% 1.80%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average
net assets.................. 1.25% 1.29%(6) 2.00%(6) 2.00%(6) 1.00% 1.04%(7) 1.15%(6)(8)
Ratio of net investment income to
average net assets.......... 2.65% 1.98%(6) 2.50%(6) 2.50%(6) 2.89% 2.23% 1.96%(6)
Portfolio Turnover Rate....... 53.20% 83.00% 53.20% 53.20% 53.20% 83% --
Net Assets, end of year
(000's Omitted)............. $1,650 $1,798 $3,118 $6 $97,881 $75,720 $28,904
<FN>
- ----------------
(1) The Fund commenced selling Investor Shares on April 14, 1994. On October
17, 1994, Investor shares were redesignated as Class A Shares.
(2) Effective October 17, 1994, The Dreyfus Corporation serves as the Fund's
investment manager. Prior to October 17, 1994, Mellon Bank N.A. served as
the Fund's investment manager.
(3) The Fund commenced selling Class B and Class C shares on December 20,
1994.
(4) 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 as Trust Shares. On October 17, 1994,
Trust Shares were redesignated as Class R shares.
(5) Net invesment 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 losses in the portfolio securities
for the period because of the timing of purchases and withdrawals of shares
in relation to th fluctuations market values of the portfolio.
(6) Annualized.
(7) Expense ratio before voluntary reimbursement of expenses by the
investment adviser for the year ended October 31, 1994 was 1.09%.
(8) For the period September 30, 1993 (commencement of operations) to October
31, 1993, the investment adviser reimbursed expenses of the Fund amounting
to $0.0109.
</TABLE>
See notes to financial statements.
Premier Balanced Fund
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
NOTE 1--Significant Accounting Policies:
The Dreyfus/Laurel Funds, Inc. (the "Company") is registered under the
Investment Company Act of 1940 ("Act") as a diversified open-end management
investment company and operates as a series company currently offering sixteen
Series including the Premier Balanced Fund (the "Fund"). The Dreyfus
Corporation ("Manager") serves as the Fund's investment adviser. The Manager
is a direct subsidiary of Mellon Bank, N.A. ("Mellon Bank").
Premier Mutual Fund Services, Inc. (the "Distributor") acts as the
distributor of the Fund's shares. The Distributor, located at One Exchange
Place, Boston, Massachusetts 02109, is a wholly-owned subsidiary of FDI
Distribution Services, Inc., a provider of mutual fund administration
services, which in turn is a wholly-owned subsidiary of FDI Holdings, Inc.,
the parent company of which is Boston Institutional Group, Inc.
The Fund currently offers four classes of shares: Class A, Class B, Class
C and Class R shares. Class A, Class B and Class C shares are sold primarily
to retail investors through financial intermediaries and bear a distribution
fee and/or service fee. Class A shares are sold with a front-end sales
charge, while Class B and Class C shares are subject to a contingent deferred
sales charge ("CDSC") and a service fee. Class R shares are sold primarily to
bank trust departments and other financial service providers (including
Mellon Bank and its affiliates) acting on behalf of customers having a
qualified trust or investment account or relationship at such institution,
and bear no distribution fee or service fee. Class R shares are offered
without a front-end sales load or CDSC. Each class of shares has identical
rights and privileges, except with respect to distribution fees and voting
rights on matters affecting a single class. The Company has the authority to
issue 25 billion shares of capital stock with a par value of $.001.
Investment Income, net of expenses (other than class specific expenses)
and realized and unrealized gains and losses are allocated daily to each
class of shares based upon the relative proportion of net assets of each
class.
(a) Portfolio Valuation: Investments in securities are valued at the last
sales price on the securities exchange on which such securities are primarily
traded or at the last sales price on the national securities market.
Securities not listed on an exchange or the national securities market, or
securities for which there were no transactions, are valued to the average of
the most recent bid and asked prices. Bid price is used when no asked price
is available. Securities for which there are no such valuations are valued at
fair value as determined in good faith under the direction of the Board of
Directors.
(b) Securities Transactions and Investment Income: Securities
transactions are recorded on a trade date basis. Interest income, adjusted
for amortization of premiums and original issue discounts on investments, is
earned from settlement date and recognized on the accrual basis. Realized
gain and loss from securities transactions are recorded on the identified
cost basis.
(c) Repurchase Agreements: The Fund may engage in repurchase agreement
transactions. Under the terms of a typical repurchase agreement, the Fund,
through its custodian and sub-custodian, takes possession of an underlying
debt obligation subject to an obligation of the seller to repurchase, and the
Fund to resell, the obligation at an agreed-upon price and time, thereby
determining the yield during the Fund's holding period. This arrangement
results in a fixed rate of return that is not subject to market fluctuations
during the Fund's holding period. The value of the collateral is at least
equal, at all times, to the total amount of the repurchase obligations,
including interest. In the event of a counterparty default, the
<PAGE>
Premier Balanced Fund
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
Fund has the right to use the collateral to offset losses incurred. There
is potential loss to the Fund in the event the Fund is delayed or prevented
from exercising its rights to dispose of the collateral securities, including
the risk of a possible decline in the value of the underlying securities
during the period while the Fund seeks to assert its rights. The Fund's
manager, acting under the supervision of the Board of Directors, reviews the
value of the collateral and the creditworthiness of those banks and dealers
with which the Fund enters into repurchase agreements to evaluate potential
risks.
(d) Financial Futures: The Fund may invest in trading financial futures
contracts in order to gain exposure to or protect against changes in the
market. The Fund is exposed to market risk as a result of changes in the
value of the underlying financial instruments. Investments in financial
futures require the Fund to "mark to market" on a daily basis, which reflects
the change in the market value of the contract at the close of each day's
trading. Accordingly, variation margin payments are made or received to
reflect daily unrealized gains or losses. When the contracts are closed, the
Fund recognizes a realized gain or loss. These investments require initial
margin deposits with a custodian, which consist of cash or cash equivalents,
up to approximately 10% of the contract amount. The amount of these deposits
is determined by the exchange or Board of Trade on which the contract is
traded and is subject to change.
(e) Distributions to Shareholders: Dividends are recorded on the
ex-dividend date. Dividends from investment income-net are declared and paid
on a quarterly basis. Dividends from net realized capital gain are normally
declared and paid annually, but the Fund may make distributions on a more
frequent basis to comply with the distribution requirements of the Internal
Revenue Code. This may result in distributions that are in excess of the net
realized gains on the fiscal year basis. To the extent that net realized
capital gain can be offset capital loss carryovers, if any, it is the policy
of the Fund not to distribute such gain.
(f) Federal Income Taxes: It is the policy of the Fund to continue to
qualify as a regulated investment company, if such qualification is in the
best interests of its shareholders, by complying with the applicable
provisions of the Internal Revenue Code, and to make distributions of taxable
income sufficient to relieve it from substantially all Federal income and
excise taxes.
On November 2, 1995, the Board of Directors declared dividends from net
investment income for the Class A, Class B, Class C and Class R shares in the
amount of $0.0738, $0.0510, $0.0510 and $0.0813 per share, respectively,
payable on November 3, 1995 to shareholders of record on November 2, 1995.
NOTE 2--Investment Management Fee and Other Transactions with Affiliates:
(a) Investment Management Fee: Pursuant to an Investment Management
agreement with the Manager, the Manager provides or arranges for one or more
third parties and or affiliates to provide investment advisory,
administrative, custody, fund accounting and transfer agency services to the
Fund. The Manager also directs the investments of the Fund in accordance with
its investment objective, policies and limitations. For these services, the
Fund is contractually obligated to pay the Manager a fee, calculated daily
and paid monthly, at the annual rate of 1.00% of the value of the Fund's
average daily net assets. Out of its fee, the Manager pays all of the
expenses of the Fund except brokerage fees, taxes, interest, Rule 12b-1
distribution fees and expenses, fees and expenses of non-interested Directors
(including counsel fees) and extraordinary expenses. In addition, the Manager
is required to reduce its fee in an amount equal to the Fund's allocable
portion of fees and expenses of the non-interested Directors (including
counsel).
(b) Distribution and Service Plan: The Fund has adopted a distribution
plan (the "Plan") pursuant to
<PAGE>
Premier Balanced Fund
- ----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
Rule 12b-1 under the 1940 Act relating to its Class A, B and C shares.
Under the Plan, the Fund may pay annually up to .25% of the value of its
average daily net assets attributable to its Class A shares to compensate the
Distributor and Dreyfus Service Corporation, an affiliate of the Manager, for
shareholder servicing activities and the Distributor for activities and
expenses primarily intended to result in the sale of Class A shares. Under
the Plan, the Fund may pay the Distributor for distributing the Fund's Class
B and Class C shares at an aggregate annual rate of 1.00% of the value of the
average daily net assets of Class B and Class C shares. Class B and Class C
shares are also subject to a service plan adopted pursuant to Rule 12b-1,
pursuant to which the Fund pays Dreyfus Service Corporation or the
Distributor for providing certain services to the holders of Class B and
Class C shares a fee at the annual rate of .25% of the value of the average
daily net assets of Class B and Class C shares. Class R shares bear no
service or distribution fee. For the year ended October 31, 1995, the service
fee for Class B and C was $2,930 and $7, respectively. For the year ended
October 31, 1995, the distribution fee for Class A, Class B and Class C
shares was $5,584, $8,788 and $22, respectively.
Under its terms, the Plan shall remain in effect from year to year,
provided such continuance is approved annually by a vote of majority of those
Directors who are not "interested persons" of the Company and who have no
direct or indirect financial interest in the operation of the Plan or in any
agreement related to the Plan.
(c) Directors' Fees: Each director who is not an "interested person" as
defined in the Act receives $27,000 per year, $1,000 for each Board meeting
attended and $750 for each Audit Committee attended and is reimbursed for
travel and out-of-pocket expenses. These expenses are paid in total by the
following funds: the Dreyfus/Laurel Funds, Inc., The Dreyfus/Laurel Tax-Free
Municipal Funds, and the Dreyfus/Laurel Funds Trust. In addition the
Chairman of the Board receives an annual fee of $75,000 per year. These fees
and expenses are charged and allocated to each series based on net assets.
NOTE 3--Securities Transactions:
The aggregate amount of purchase and sales of investment securities,
other than short-term securities, during the year ended October 31, 1995,
amounted to $38,786,009 and $38,635,096, respectively.
At October 31, 1995, accumulated net unrealized appreciation on
investments was $14,003,402, consisting of $14,870,267 gross unrealized
appreciation and $866,865 gross unrealized depreciation.
At October 31, 1995, the cost of investments for Federal income tax
purposes was substantially the same as the cost for financial reporting
purposes (see the Statement of Investments).
<PAGE>
Premier Balanced Fund
- -----------------------------------------------------------------------------
Independent Auditors' Report
The Board of Directors and Shareholders
The Dreyfus/Laurel Funds, Inc.:
We have audited the accompanying statement of assets and liabilities of
the Premier Balanced Fund of The Dreyfus/Laurel Funds, Inc., including the
statement of investments and statement of financial futures, as of October
31, 1995, and the related statement of operations for the year then ended,
the statement of changes in net assets for each of the two years in the
period then ended, and the financial highlights for each of the periods
indicated herein. These financial statements and financial highlights are
the responsibility of the Fund's management. Our responsibility is to
express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of October 31, 1995, by correspondence with the custodian
and brokers. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide
a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of the Premier Balanced Fund of The Dreyfus/Laurel Funds, Inc., as
of October 31, 1995, and the results of its operations for the year then
ended, the changes in its net assets for each of the two years in the period
then ended, and the financial highlights for each of the periods indicated
herein, in conformity with generally accepted accounting principles.
KPMG Peat Marwick LLP
Pittsburgh, Pennsylvania
December 15, 1995
<PAGE>
Premier Balanced Fund
200 Park Avenue
New York, NY 10166
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Custodian
Mellon Bank
One Mellon Bank Center
Pittsburgh, Pennsylvania 15258
Transfer Agent &
Dividend Disbursing Agent
First Data Investor Services Group, Inc.
P.O. Box 9671
Providence, RI 02940
Further information is contained
in the Prospectus, which must
precede or accompany this report.
Printed in U.S.A. PDBARAR9510
