DREYFUS MONEY MARKET RESERVES
LETTER TO SHAREHOLDERS
Dear Shareholder:
We are pleased to report the performance for Dreyfus Money Market
Reserves for the six-month period ended April 30, 1998, as shown in the
following table:
<TABLE>
ANNUALIZED
ANNUALIZED YIELD EFFECTIVE YIELD*
______________ _____________
<S> <C> <C>
Investor Shares........................ 5.06% 5.18%
Class R Shares......................... 5.27% 5.40%
</TABLE>
THE ECONOMY
Growth Continues
While many analysts and economists continued to worry about potential
fallout from the Asian financial crisis, the U.S.
economy maintained a rather heady pace of expansion over the past six months.
Indeed, incoming U.S. economic data showed more positive impact than negative
consequences from the Asian tsunami, as weaker demand in Asia pushed down
worldwide commodities prices and long-term interest rates. It is true,
however, that multinational firms, especially in high tech, aerospace, and
electronics, experienced significant shortfalls in Asian business during the
period.
Isolated Asian-related pressures notwithstanding, most sectors and
regions of the U.S. economy continue to evidence strong growth. Real Gross
Domestic Product (GDP) rose at a robust 3.7% annual rate during the fourth
quarter of 1997 and this growth rate moved up another notch during the first
quarter of 1998 as real GDP grew 4.2%. The economy's growth may well continue
throughout the rest of the year, according to the Conference Board's Index of
Leading Economic Indicators, which rose 0.2% in March for its third straight
monthly increase. Consumers appear to be in excellent shape overall, with
strong employment and income gains helping to boost spending and consumer
confidence. In fact, retail sales rose 10.2% in April, the best monthly sales
gains in four years.
Inflation Stays Low, but Fed Warns of Action Ahead
While the economy continues to expand at a rate that would, in the
past, have been considered a harbinger of inflationary pressures, current
data shows virtually no signs of higher inflation. For example, the broadest
measure of inflation, the domestic purchases deflator (which tracks prices
paid by consumers for domestic goods) actually fell 0.1% during the first
quarter of 1998. Given such a benign environment, the Federal Reserve Board
kept its monetary policy on hold throughout the semi-annual period. In fact,
the Fed has not raised the Federal Funds rate, the benchmark rate on
overnight loans between banks, since March 1997, when policymakers feared
that strong economic demand at the time would result in increased inflation.
Although economic growth today is almost as strong as it was at the time of
the last rate hike, the specter of the Asian financial crisis has kept the
Fed on hold.
During the last weeks of April, however, many Fed policymakers appeared
to be thinking seriously of raising short-term interest rates if the economy
did not cool on its own. Apparently, although actual inflation numbers show
no uptick,
policymakers remain seriously concerned that the economy's continued
expansion, tight labor markets, and ongoing wage growth cannot continue
unchecked much longer if inflation is to stay contained. Still, the favorable
inflation numbers released at the end of the period may forestall Fed action
at least for the next few months.
MARKET ENVIRONMENT
Rates Relatively Unchanged as Investor Demand Remains Strong
Money market investments remained attractive throughout the past six
months, and the market continued to experience record inflows of investor
cash. Despite the period's spate of strong U.S. economic data, many investors
appeared to focus solely on the possibility of negative fallout from the
Asian financial crisis, preferring to concentrate on more conservative, high
quality investments like money market funds. More and more U.S. and foreign
investors are finding the liquidity, quality and yields of money market funds
attractive. As the Fed left short-term interest rates unchanged, yields on
money market securities fluctuated modestly during the period.
PORTFOLIO OVERVIEW
In a semi-annual period featuring ongoing economic strength, benign
inflation, and solid money market performance, your Fund continued to take
advantage of opportunities to increase income while maintaining its focus on
high quality, capital preservation, and asset diversification. One of the key
aspects of our strategy was to keep the average portfolio maturity well-tuned
to capitalize on changes in interest rates on money market securities. For
example, when rates rose at the end of November, we extended the average
maturity a bit in order to capture additional income for the Fund. Toward the
end of January, rates fell and management shortened the average portfolio
maturity accordingly. Then in February, rates rose again and we extended
portfolio maturity once again. The average portfolio maturity remained
somewhat longer for the rest of the period and was approximately 70 days at
period end, as compared with an average portfolio maturity of approximately
55 days for comparable money market funds as measured by the IBC's Money Fund
Report.
In addition to adjusting average portfolio maturity, management also
structured the portfolio in a "barbell" configuration for much of the period.
We concentrated holdings in money market securities with maturities of one
month and one year. Yield opportunities generally were better among these
short and long ends of the money market securities maturity spectrum, and the
barbell structure enabled the Fund to capitalize on many yield advantages
available in the market throughout the period.
Floating rate securities also offered excellent yield opportunities
over the past six months. The Fund continued to maintain a solid position
among a diversified mix of these money market instruments. Floating rate
securities provide yields that reset daily, weekly, monthly, or quarterly
based on the rate at which a money market index changes, such as the prime
lending rate or LIBOR Index.**
As the semi-annual period drew to a close, the investment environment
continued to balance a strong domestic economy and low inflation against the
potential for a slowdown due to the Asian crisis. If it begins to appear that
the Fed might raise short-term interest rates at some point in order to
moderate economic growth, fund management may begin to temper the purchase of
longer, one-year fixed-rate securities while continuing to invest more
heavily in floating rate securities. This would position the portfolio more
defensively while helping to maintain the Fund's income stream. At the same
time, we would plan to bring the average portfolio maturity to a more neutral
position in order to remain flexible for what lies ahead.
Sincerely,
[David Herton signature logo]
David Hertan
Portfolio Manager
May 18, 1998
New York, N.Y.
* Annualized effective yield takes into account the effect of compounding
and is based upon dividends declared daily and reinvested monthly.
** The London Interbank Offered Rate ("LIBOR") is "the rate that most
creditworthy international banks dealing in Eurodollars charge each other for
large loans." - John Downes and Elliot Goodman, Dictionary of Finance and
Investment Terms (New York, Barron's, 1995), s.v.
<TABLE>
DREYFUS MONEY MARKET RESERVES
STATEMENT OF INVESTMENTS APRIL 30, 1998 (UNAUDITED)
Principal
Negotiable Bank Certificates of Deposit-19.1% Amount Value
_____________ ____________
<S> <C> <C>
ANZ Banking Group (London)
5.83%, 7/31/98............................................................ $ 10,000,000 $ 10,000,121
Bayerische Hypotheken-und Wechsel-Bank AG (London)
5.90%, 10/14/98........................................................... 10,000,000 9,997,825
Canadian Imperial Bank of Commerce (Yankee)
5.78%, 3/10/99............................................................ 10,250,000 10,240,779
Credit Agricole Indosuez S.A. (Yankee)
5.70%, 2/26/99............................................................ 10,000,000 9,997,233
Deutsche Bank AG (Yankee)
5.67%, 2/26/99............................................................ 7,000,000 6,997,233
Generale Bank (Yankee)
5.92%, 7/22/98............................................................ 10,000,000 9,999,463
Societe Generale (Yankee)
5.90%, 9/30/98............................................................ 2,500,000 2,499,651
Svenska Handelsbanken
5.75%-5.90%, 8/5/98-3/29/99 (Yankee)...................................... 12,000,000 11,992,308
Swiss Bank Corp. (Yankee)
5.99%, 6/12/98............................................................ 9,000,000 9,000,337
Westpac Banking Corp. (Yankee)
5.99% 12/11/98............................................................ 10,000,000 10,000,000
_____________
TOTAL NEGOTIABLE BANK CERTIFICATES OF DEPOSIT
(cost $90,724,950)........................................................ $ 90,724,950
=============
Commercial Paper-25.3%
Associates Corp. of North America
5.56%, 5/1/98............................................................. $ 20,000,000 $ 20,000,000
Centric Capital Corp.
5.57%, 5/11/98............................................................ 10,000,000 9,984,583
Commerzbank AG
5.55%, 5/1/98............................................................. 20,000,000 20,000,000
Countrywide Home Loans, Inc.
5.56%-5.58%, 5/13/98-5/22/98.............................................. 12,000,000 11,975,058
Edison Asset Securitization L.L.C.
5.58%, 6/2/98............................................................. 11,205,000 11,149,722
Great Lakes Chemical Corp.
6.02%, 5/1/98............................................................. 579,000 579,000
Household Finance Corp.
5.56%, 5/1/98............................................................. 15,000,000 15,000,000
Lehman Brothers Holding Inc.
5.59%, 5/4/98............................................................. 18,000,000 17,991,660
Dreyfus Money Market Reserves
Statement of Investments (continued) April 30, 1998 (Unaudited)
Principal
Commercial Paper (continued) Amount Value
_____________ ____________
Yorkshire Building Society
5.55%-5.56%, 5/5/98-7/6/98................................................ $ 13,000,000 $ 12,944,659
_____________
TOTAL COMMERCIAL PAPER
(cost $119,624,682)....................................................... $119,624,682
=============
Corporate Notes-50.3%
American Express Centurion Bank
5.62%, 8/14/98 (a)........................................................ $ 5,000,000 $ 5,000,000
Ameritech Capital Funding Corp.
5.55%, 5/12/98 (a)........................................................ 8,000,000 8,000,191
Amsouth Bank of Alabama
5.61%, 10/9/98 (a)........................................................ 10,000,000 9,996,073
AssetBacked Securities Investment Trust
5.66%, 8/17/98 (a)........................................................ 10,000,000 10,000,000
BankBoston N.A.
5.45%, 10/6/98 (a)........................................................ 10,000,000 9,997,891
Bear Stearns Companies Inc.
5.58%-5.64%, 9/15/98-11/9/98 (a).......................................... 10,000,000 10,000,000
Beneficial Corp.
5.62%, 5/28/98 (a)........................................................ 10,000,000 10,001,875
Caterpillar Financial Services Corp.
5.59%, 6/9/98 (a)......................................................... 2,000,000 2,000,453
Chase Manhattan Corp.
5.60%, 10/15/98 (a)....................................................... 2,000,000 2,000,453
Chrysler Financial Corp.
5.61%, 3/12/99-5/19/99 (a)................................................ 2,000,000 2,000,573
Comerica Bank
5.58%, 5/1/99............................................................. 1,250,000 1,296,95
Commonwealth Bank of Australia
5.43%, 7/15/98............................................................ 4,350,000 4,350,354
Compass Bank
5.77%, 7/16/98 (a)........................................................ 3,000,000 2,999,145
Corestates Bank
5.65%, 10/19/98(a)........................................................ 9,250,000 9,250,000
Countrywide Home Loans, Inc.
5.60%, 8/28/98 (a)........................................................ 10,350,000 10,357,157
Dauphin Deposit BAnk & Trust Co.
5.58%, 8/5/98 (a)......................................................... 11,000,000 10,998,596
Deere (John) Capital Corp.
5.58%-5.65%, 9/14/98-2/1/99 (a)........................................... 10,450,000 10,452,111
Den Danske Bank
5.61%, 6/2/98 (a)......................................................... 5,400,000 5,400,023
Dreyfus Money Market Reserves
Statement of Investments (continued) April 30, 1998 (Unaudited)
Principal
Corporate Notes (continued) Amount Value
_____________ ____________
First Union National Bank
5.59%, 5/15/99............................................................ $ 4,400,000 $ 4,576,850
First USA Bank
5.52%-5.53%, 5/20/98-11/12/98 (a)....................................... 9,500,000 9,511,059
Ford Motor Credit Corp.
5.70%, 8/26/98 (a)........................................................ 2,300,000 2,301,289
General Motors Acceptance Corp.
5.46%, 5/7/99 (a)......................................................... 10,000,000 10,062,812
Goldman Sachs Group L.P.
5.69%, 3/26/99 (a)........................................................ 10,000,000 10,000,000
IBM Credit Corp.
5.61%, 8/28/98 (a)........................................................ 10,000,000 9,997,793
Liberty Mutual Capital Corp.
5.55%, 5/7/98 (a)......................................................... 3,500,000 3,500,279
Merrill Lynch & Co.
5.53%-5.61%, 5/19/98-5/25/99 (a).......................................... 13,750,000 13,765,545
Morgan, (J.P.) & Co. Inc.
5.75%, 3/9/99............................................................. 10,000,000 10,000,000
Morgan Stanley, Dean Witter, Discover & Co.
5.54%-5.58%, 11/9/98-11/20/98 (a)......................................... 10,000,000 10,000,604
Norwest Financial Inc.
5.65%, 8/15/98............................................................ 1,340,000 1,349,654
PNC Bank N.A.
5.62%-5.64%, 1/19/99-1/29/99 (a).......................................... 11,000,000 10,997,998
Royal Bank of Canada
5.61%, 2/4/99 (a)......................................................... 10,000,000 9,994,802
Smith Barney Holdings Inc.
5.36%, 11/19/98 (a)....................................................... 3,000,000 3,009,380
Wells Fargo & Co.
5.59%, 7/1/98 (a)......................................................... 5,000,000 5,000,839
_____________
TOTAL CORPORATE NOTES
(cost $238,170,754)....................................................... $238,170,754
=============
Short-Term Bank Notes-2.7%
Huntington National Bank
5.60%, 9/22/98............................................................ $ 2,000,000 $ 2,000,473
Key Bank N.A.
5.88%, 9/17/98............................................................ 10,000,000 9,997,749
Morgan Guaranty Trust Co.
5.56%, 8/21/98 (a)........................................................ 650,000 649,804
_____________
TOTAL SHORT-TERM BANK NOTES
(cost $12,648,026)........................................................ $ 12,648,026
=============
Dreyfus Money Market Reserves
Statement of Investments (continued) April 30, 1998 (Unaudited)
Principal
Repurchase Agreements-1.4% Amount Value
_____________ ____________
First Boston Corp.
5.52%, dated 4/30/98, due 5/1/98 in the amount
of $6,475,993 (fully collateralized by
$6,475,000 U.S. Treasury Bonds, 6.75%, due
4/30/2000, value $6,608,547)
( cost $6,475,000)........................................................ $ 6,475,000 $ 6,475,000
=============
TOTAL INVESTMENTS
(cost $467,643,412)............................................. 98.8% $467,643,412
======= =============
CASH AND RECEIVABLES (NET)........................................ 1.2% $ 5,855,458
======= =============
NET ASSETS........................................................ 100.0% $473,498,870
======= =============
Notes to Statement of Investments:
(a) Variable interest-rates are subject to periodic change.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
DREYFUS MONEY MARKET RESERVES
STATEMENT OF ASSETS AND LIABILITIES APRIL 30, 1998 (UNAUDITED)
Cost Value
____________ ____________
<S> <C> <C>
ASSETS: Investments in securities-See Statement of Investments $467,643,412 $467,643,412
Cash....................................... 415,240
Interest receivable........................ 5,674,946
____________
473,733,598
____________
LIABILITIES: Due to The Dreyfus Corporation and affiliates 234,498
Due to Distributor......................... 230
____________
234,728
____________
NET ASSETS.................................................................. $473,498,870
============
REPRESENTED BY: Paid-in capital............................ $473,521,723
Accumulated net realized gain (loss) on investments (22,853)
____________
NET ASSETS.................................................................. $473,498,870
============
NET ASSET VALUE PER SHARE
_____________________________
Investor Shares Class R Shares
____________ ___________
Net Assets.................................................................. $240,033,318 $233,465,552
Shares Outstanding.......................................................... 240,044,022 233,477,701
NET ASSET VALUE PER SHARE................................................... $1.00 $1.00
===== =====
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
DREYFUS MONEY MARKET RESERVES
STATEMENT OF OPERATIONS SIX MONTHS ENDED APRIL 30, 1998 (UNAUDITED)
INVESTMENT INCOME
<S> <C> <C>
INCOME Interest Income................................ $13,443,244
EXPENSES: Management fee-Note 2(a)....................... $ 1,165,929
Distribution fees (Investor Shares)-Note 2(b).. 231,809
____________
Total Expenses 1,397,738
____________
INVESTMENT INCOME-NET ............................................... 12,045,506
NET REALIZED GAIN (LOSS) ON INVESTMENTS-Note 1(b)........................... (315)
____________
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $12,045,191
============
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
DREYFUS MONEY MARKET RESERVES
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
April 30, 1998 Year Ended
(Unaudited) October 31, 1997
________________ ________________
<S> <C> <C>
OPERATIONS:
Investment income-net................................................... $ 12,045,506 $ 19,498,159
Net realized gain (loss) on investments................................. (315) (12,742)
________________ ________________
Net Increase (Decrease) in Net Assets Resulting from Operations... 12,045,191 19,485,417
________________ ________________
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income-net:
Investor shares....................................................... (5,870,887) (8,759,151)
Class R shares........................................................ (6,174,619) (10,739,008)
________________ ________________
Total Dividends................................................... (12,045,506) (19,498,159)
________________ ________________
CAPITAL STOCK TRANSACTIONS ($1.00 per share):
Net proceeds from shares sold:
Investor shares....................................................... 382,590,707 680,251,955
Class R shares........................................................ 209,238,288 466,716,451
Dividends reinvested:
Investor shares....................................................... 5,664,040 8,650,590
Class R shares........................................................ 3,394,076 6,408,875
Cost of shares redeemed:
Investor shares....................................................... (353,071,989) (628,214,064)
Class R shares........................................................ (211,199,044) (411,494,936)
________________ ________________
Increase (Decrease) in Net Assets from Capital Stock Transactions. 36,616,078 122,318,871
________________ ________________
Total Increase (Decrease) in Net Assets....................... 36,615,763 122,306,129
NET ASSETS:
Beginning of Period..................................................... 436,883,107 314,576,978
________________ ________________
End of Period........................................................... $473,498,870 $436,883,107
================ ================
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
DREYFUS MONEY MARKET RESERVES
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share of
Capital Stock outstanding, total investment return, ratios to average net
assets and other supplemental data for each period indicated. This
information has been derived from the Fund's financial statements.
Investor Shares
________________________________________________________
Six Months Ended
April 30, 1998 Year Ended October 31,
____________________________________
PER SHARE DATA: (Unaudited) 1997 1996 1995 1994(1,2)
__________ ______ ______ ______ ______
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period......... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
______ ______ ______ ______ ______
Investment Operations:
Investment income-net........................ .025 .049 .048 .052 .021
______ ______ ______ ______ ______
Distributions:
Dividends from investment income-net......... (.025) (.049) (.048) (.052) (.021)
______ ______ ______ ______ ______
Net asset value, end of period............... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN.......................... 5.12%(4) 5.04% 4.94% 5.28% 2.14%(3)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets...... .70%(4) .70% .70% .70% .71%(4)
Ratio of net investment income
to average net assets...................... 5.07%(4) 4.95% 4.84% 5.25% 3.31%(4)
Net Assets, end of period (000's Omitted).... $240,033 $204,851 $144,168 $161,819 $3,611
(1) The Fund commenced selling Investor shares on April 6, 1994.
(2) Effective October 17, 1994, The Dreyfus Corporation serves as the Fund's investment manager. Prior to October 17, 1994,
Mellon Bank, N.A. served as the Fund's investment manager.
(3) Not annualized.
(4) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
DREYFUS MONEY MARKET RESERVES
FINANCIAL HIGHLIGHTS (CONTINUED)
Contained below is per share operating performance data for a share of
Capital Stock outstanding, total investment return, ratios to average net
assets and other supplemental data for each period indicated. This
information has been derived from the Fund's financial statements.
Class R Shares
_____________________________________________________________________________
Six Months Ended
April 30, 1998 Year Ended October 31,
__________________________________________________________
PER SHARE DATA: (Unaudited) 1997 1996 1995 1994(1,2) 1993
_________ ______ ______ ______ ______ ______
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period.. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
______ ______ ______ ______ ______ ______
Investment Operations:
Investment income-net................. .026 .051 .050 .053 .034(3) .028(4)
______ ______ ______ ______ ______ ______
Distributions:
Dividends from investment income-net.. (.026) (.051) (.050) (.053) (.034) (.028)
______ ______ ______ ______ ______ ______
Net asset value, end of period........ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
====== ====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN................... 5.32%(6) 5.25% 5.16% 5.44% 3.52% 2.84%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets .50%(6) .50% .50% .50% .51%(5) .50%
Ratio of net investment income
to average net assets............... 5.26%(6) 5.13% 5.01% 5.40% 3.51% 2.80%
Net Assets, end of period (000's Omitted) $233,466 $232,032 $170,409 $139,787 $124,754 $103,760
(1) 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.
(2) The Fund commenced selling Investor shares on April 6, 1994. Those shares outstanding prior to April 4, 1994 were
redesignated as Trust shares. Effective October 17, 1994, the Fund's Trust
shares were reclassified as Class R shares.
(3) Net investment income before expenses reimbursed by the investment adviser for the year ended October 31, 1994 was $.0331.
(4) For the year ended October 31, 1993, the investment adviser reimbursed expenses of the Fund amounting to $.0036 per share.
(5) Annualized expense ratio before expenses reimbursed by the investment adviser for the year ended October 31, 1994 was
0.64%.
(6) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
DREYFUS MONEY MARKET RESERVES
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1-Significant Accounting Policies:
Dreyfus Money Market Reserves (the "Fund") is a separate diversified
series of The Dreyfus/Laurel Funds, Inc. (the "Company") which is registered
under the Investment Company Act of 1940 ("Act") as an open-end management
investment company and operates as a series company currently offering
eighteen series including the Fund. The Fund's investment objective is to
seek a high level of current income consistent with stability of principal by
investing in high-grade money market instruments. 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") is the distributor
of the Fund's shares. The Fund is authorized to issue 2 billion of $.001 par
value Capital Stock in each of the following classes of shares: Investor and
Class R. Investor shares are sold primarily to retail investors and bear a
distribution fee. Class R shares are sold primarily to bank trust departments
and other financial service providers (including Mellon Bank and its
affiliates) acting on behalf of customers having a qualified trust or
investment account or relationship at such institution, and bear no
distribution fee. Each class of shares has identical rights and privileges,
except with respect to the distribution fee and voting rights on matters
affecting a single class.
Investment income, net of expenses (other than class specific expenses)
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.
The Fund's financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management
estimates and assumptions. Actual results could differ from those estimates.
(a) Portfolio valuation: Investments are valued at amortized cost in
accordance with Rule 2a-7 of the Act, which has been determined by the Fund's
Board of Directors to represent the fair value of the Fund's investments.
It is the Fund's policy to maintain a continuous net asset value per
share of $1.00 for the Fund; the Fund has adopted certain investment,
portfolio valuation and dividend and distribution policies to enable it to do
so. There is no assurance, however, that the Fund will be able to maintain a
stable net asset value per share of $1.00.
(b) Securities transactions and investment income: Securities
transactions are recorded on a trade date basis. Realized gain and loss from
securities transactions are recorded on the identified cost basis. Interest
income, adjusted for amortization of premiums and discounts on investments,
is recognized on the accrual basis. Cost of investments represents amortized
cost.
(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 obligation,
including interest. In the event of a counter party default, the Fund has the
right to use the collateral to offset losses incurred. There is potential
loss to the Fund in the event the Fund is delayed or prevented from
exercising its rights to dispose of the collateral securities, including the
risk of a possible decline in the value of the underlying securities during
the period while the Fund seeks to assert its rights. The Fund's manager
acting under the supervision of the Board of Directors, reviews the value of
the collateral and the creditworthiness of those banks and dealers with which
the Fund enters into repurchase agreements to evaluate potential risks.
DREYFUS MONEY MARKET RESERVES
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
(d) Distributions to shareholders: It is the policy of the Fund to
declare dividends daily from investment income-net; such
dividends are paid monthly. Dividends from net realized capital gain are
normally declared and paid annually, but the Fund may make distributions on a
more frequent basis to comply with the distribution requirements of the
Internal Revenue Code. To the extent that net realized capital gain can be
offset by capital loss carryovers, it is the policy of the Fund not to
distribute such gain.
(e) Federal income taxes: It is the policy of the Fund to continue to
qualify as a regulated investment company, if such qualification is in the
best interests of its shareholders, by complying with the applicable
provisions of the Internal Revenue Code, and to make distributions of taxable
income sufficient to relieve it from substantially all Federal income and
excise taxes.
The Fund has an unused capital loss carryover of approximately $23,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to October 31, 1997. If not
applied, $10,000 of the carryover expires in fiscal 2003 and $13,000 expires
in fiscal 2005.
At April 30, 1998, 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).
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 .50% 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). Each director receives $27,000 per year, $1,000 for each Board
meeting attended and $750 for each Audit Committee meeting attended and is
reimbursed for travel and out-of-pocket expenses. The Chairman of the Board
receives an additional annual fee of $25,000 per year. These fees pertain to
thefollowing funds: The Dreyfus/Laurel Funds, Inc., The Dreyfus/Laurel
Tax-Free Municipal Funds, and The Dreyfus/Laurel Funds Trust. (The $1,000
attendance fee and reimbursement of meeting expenses are also borne pro rata
by Dreyfus High Yield Strategies Fund.) These fees and expenses are charged
and allocated to each series based on net assets. 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 the Manager, are
in fact paid directly to the non-interested Directors.
(b) Distribution plan: The Fund has adopted a distribution plan (the
"Plan") pursuant to Rule 12b-1 under the 1940 Act relating to its Investor
shares. Under the Plan, the Fund may pay annually up to .25% of the value of
the average daily net assets attributable to its Investor shares to
compensate the Distributor and Dreyfus Service Corporation, an affiliate of
the Manager, for shareholder servicing activities and the Distributor for
activities primarily intended to result in the sale of Investor shares. The
Class R shares bear no distribution fee. During the period April 30, 1998,
Investor shares were charged $231,809 pursuant to the Plan.
Dreyfus Money Market Reserves
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
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.
NOTE 3-Bank Line of Credit:
The Fund participates with other Dreyfus-managed funds in a $100 million
unsecured line of credit primarily to be utilized for temporary or emergency
purposes, including the financing of redemptions. Interest is charged to the
Fund at rates which are related to the Federal Funds rate in effect at the
time of borrowings. During the period ended April 30, 1998, the Fund did not
borrow under the line of credit.
Registration Mark
[Dreyfus lion "d" logo]
DREYFUS MONEY MARKET RESERVES
200 Park Avenue
New York, NY 10166
MANAGER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
CUSTODIAN
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
TRANSFER AGENT &
DIVIDEND DISBURSING AGENT
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Printed in U.S.A. 317/717SA984
Registration Mark
[Dreyfus logo]
Money Market
Reserves
Semi-Annual
Report
April 30, 1998
