DREYFUS INSTITUTIONAL U.S. TREASURY MONEY MARKET FUND
LETTER TO SHAREHOLDERS
Dear Shareholder:
We are pleased to report the performance for the Dreyfus Institutional
U.S. Treasury Money Market Fund, for its semi-annual reporting period ended
April 30, 1998. For the period, your Fund produced an annualized yield of
5.16% and after taking into account the effect of compounding, the annualized
effective yield was 5.29%.*
The Economy
The United States is now in the eighth consecutive year of economic
expansion. Inflation continues to rise at its slowest pace since 1964 and the
unemployment rate has fallen to a level not seen in 25 years. Not
surprisingly, consumer confidence has soared. Along with continued evidence
of the robustness of the economy have come heightened expectations that the
Federal Reserve Board (the "Fed") will raise interest rates in a preemptive
move to avoid a reignition of inflation. The last increase in short-term
rates came in March 1997 when the Federal Open Market Committee (the
policy-making arm of The Fed) hiked the target rates for Federal Funds by one
quarter of a percent to 5.5%. (The Federal Funds rate is the rate of interest
that banks charge one another for overnight loans.)
Inflation has remained benign on all fronts, even in the tight labor
market, an area closely watched by the Fed for signs of incipient inflation.
The Labor Department's Employment Cost Index (the "ECI"), a measure of wage,
salary and benefit costs, suggests that wage inflation so far is not a
problem. In fact, the first quarter increase in the ECI (0.7%) was its
smallest quarterly rise in two years. Another inflation gauge, the
broad-based Gross Domestic Product Price Deflator, rose at an annual rate of
only 0.9% in the first quarter, its lowest rate since 1964. Inflation as
measured by the Consumer Price Index has been similarly tame. Prices at the
consumer level rose at an annual rate of about 1.5% over the reporting
period. The lack of inflation has been even more dramatic at the production
level of the economy where prices have fallen: in the 12 months ended March
31, the Producer Price Index declined 1.8%. Such a generally tepid price
environment has been partly fostered by the economic problems in Asia which
have suppressed worldwide demand for commodities, particularly oil.
Reflecting a level of confidence not seen in three decades, consumers
increased their spending over the reporting period, the first-quarter rate
rising at the fastest pace in six years. Not surprisingly, the growth rate in
new home construction over the reporting period was the strongest in four
years. Plentiful and well-paying jobs (total wage and salary income is 7%
higher than a year ago), low interest rates, the absence of inflation and
investment market gains have resulted in a financially healthy consumer with
a corresponding propensity to spend. Strong domestic demand for lower-priced
imports has contributed further to the quiescent inflation environment while
offsetting the drag on the economy resulting from the Asian financial crisis.
It is still widely expected that the Asian economic slowdown will have a
further dampening effect on the U.S. economy. Although the surge in domestic
spending has masked the full impact of the fall in Asian demand, our trade
deficit has reached a ten-year high, a dramatic sign of deterioration.
Expectation of an economic slowdown is another reason why the Fed has been
reluctant to raise short-term interest rates.
The production side of the economy has remained robust. Factory
utilization has been high, production rates strong, and while exports to Asia
have fallen sharply, they are growing in the rest of the world. Such
resilience has been characteristic of one of the longest, most healthy
economic advances in our history. Yet we remain mindful that the concept of
an economic cycle is not dead, nor is inflation, and we are alert for
indications of a resurgence in price pressures.
The Market Environment/Portfolio Overview
Money market yields have been stable since the Fed increased the Fed
Funds rate on March 25, 1997 to 5.50% from 5.25%. The flat slope of the money
market yield curve seems to indicate that investors do not expect any change
in monetary policy by the Fed in the foreseeable future.
The Fund invests in U.S. Treasury securities and repurchase agreements
secured by Treasury obligations. Throughout the reporting period, the Fund's
average portfolio maturity was targeted at 40-55 days. We currently intend to
maintain this target range because we believe this is an appropriate strategy
in this stable yield environment.
The Fund held an allocation of 45.5% to U.S. Treasury securities and
54.5% to repurchase agreements. The Fund's average portfolio maturity at the
end of the reporting period was 49 days.
Included in this report is a series of detailed statements about your
Fund's holdings and its financial condition. We hope they are informative.
Please know that we appreciate greatly your continued confidence in the Fund
and in The Dreyfus Corporation.
Very truly yours,
[Laurie Carroll signature logo]
Laurie Carroll
Portfolio Manager
May 18, 1998
New York, N.Y.
*Annualized effective yield is based upon dividends declared daily and
reinvested monthly.
<TABLE>
DREYFUS INSTITUTIONAL U.S. TREASURY MONEY MARKET FUND
STATEMENT OF INVESTMENTS APRIL 30, 1998 (UNAUDITED)
Annualized
Yield on
Date of Principal
U.S. Treasury Notes-44.9% Purchase Amount Value
_____________ _____________ _____________
<S> <C> <C> <C>
5.375%, 5/31/98............................................ 5.29% $ 20,000,000 $ 19,999,763
6%, 5/31/98................................................ 5.30 45,000,000 45,013,520
5.125%, 6/30/98............................................ 5.17 15,000,000 14,995,864
6.25%, 6/30/98............................................. 5.18 25,000,000 25,037,165
5.25%, 7/31/98............................................. 5.40 15,000,000 14,988,341
6.25%, 7/31/98............................................. 5.30 15,000,000 15,033,243
5.875%, 8/15/98............................................ 5.36 20,000,000 20,027,811
4.75%, 8/31/98............................................. 5.47 15,000,000 14,961,937
6.125%, 8/31/98............................................ 5.13 15,000,000 15,035,471
4.75%, 9/30/98............................................. 5.21 15,000,000 14,964,778
6%, 9/30/98................................................ 5.25 20,000,000 20,051,174
7.125%, 10/15/98........................................... 5.26 15,000,000 15,118,306
5.875%, 10/31/98........................................... 5.23 20,000,000 20,038,542
5.50%, 11/15/98............................................ 5.23 10,000,000 10,001,116
5.625%, 11/30/98........................................... 5.16 10,000,000 10,013,431
_____________
TOTAL U.S. TREASURY NOTES (cost $275,280,462).................. $275,280,462
=============
Repurchase Agreements-53.9%
Barclays De Zoette Wedd Securities, Inc.
dated 4/30/98, due 5/1/98 in the amount of $25,003,819
(fully collateralized by $24,877,000 U. S. Treasury Notes,
5.50% due 11/15/98, value $25,500,542)..................... 5.50% $ 25,000,000 $ 25,000,000
Donaldson, Lufkin & Jenrette Securities, Inc.
dated 4/30/98, due 5/1/98 in the amount of $140,021,389
(fully collateralized by $95,434,000 U. S. Treasury Notes,
3.375% to 8%, due from 12/31/98 to 1/15/2007, $38,436,000
U.S. Treasury Bonds, 6.125% to 13.25%, due from 5/15/2001
to 11/15/2027, and $2,500,000 U. S. Treasury Bills,
2/4/99, value $142,800,563)................................ 5.50 140,000,000 140,000,000
First Boston Corp.
dated 4/30/98, due 5/1/98 in the amount of $25,003,611
(fully collateralized by $26,170,000 U.S. Treasury Bills
due 9/24/98, value $25,624,539)............................ 5.20 25,000,000 25,000,000
Dreyfus Institutional U.S. Treasury Money Market Fund
Statement of Investments (continued) April 30, 1998 (Unaudited)
Annualized
Yield on
Date of Principal
Repurchase Agreements (continued) Purchase Amount Value
_____________ _____________ _____________
Goldman, Sachs & Co.
dated 4/30/98, due 5/1/98 in the amount of $140,242,288
(fully collateralized by $142,751,000 U.S. Treasury Notes,
5.375% due 2/15/2001, value $143,025,877).................. 5.52% $140,220,787 $140,220,787
_____________
TOTAL REPURCHASE AGREEMENTS (cost $330,220,787)................ $330,220,787
=============
TOTAL INVESTMENTS (cost $605,501,249).............. 98.8% $605,501,249
======= =============
CASH AND RECEIVABLES (NET)......................... 1.2% $ 7,308,784
======= =============
NET ASSETS......................................... 100.0% $612,810,033
======= =============
SEE NOTES TO FINANCIAL STATEMENT.
</TABLE>
<TABLE>
DREYFUS INSTITUTIONAL U.S. TREASURY MONEY MARKET FUND
STATEMENT OF ASSETS AND LIABILITIES APRIL 30, 1998 (UNAUDITED)
Cost Value
_____________ _____________
<S> <C> <C>
ASSETS: Investments in securities-See Statement of Investments
(including Repurchase Agreements
of $330,220,787) -Note 1(c) $605,501,249 $605,501,249
Cash....................................... 3,405,721
Interest receivable........................ 4,009,626
_____________
612,916,596
_____________
LIABILITIES: Due to The Dreyfus Corporation and affiliates 31,990
Due to Distributor......................... 74,573
_____________
106,563
_____________
NET ASSETS.................................................................. $612,810,033
=============
REPRESENTED BY: Paid-in capital............................ $612,784,490
Accumulated net realized gain (loss) on investments 25,543
_____________
NET ASSETS.................................................................. $612,810,033
=============
SHARES OUTSTANDING
(2 billion shares of $.001 par value Capital Stock authorized).............. 612,784,490
NET ASSET VALUE, offering and redemption price per share.................... $1.00
=====
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
DREYFUS INSTITUTIONAL U.S. TREASURY MONEY MARKET FUND
STATEMENT OF OPERATIONS SIX MONTHS ENDED APRIL 30, 1998 (UNAUDITED)
INVESTMENT INCOME
<S> <C> <C>
INCOME Interest Income................................ $20,135,071
EXPENSES: Management fee-Note 2(a)....................... $ 554,120
Shareholder servicing costs-Note2(b)........... 554,121
____________
Total Expenses 1,108,241
____________
INVESTMENT INCOME-NET....................................................... 19,026,830
NET REALIZED GAIN (LOSS) ON INVESTMENTS-Note 1(b)........................... 25,543
____________
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $19,052,373
============
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
DREYFUS INSTITUTIONAL U.S. TREASURY MONEY MARKET FUND
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.................................................... $ 19,026,830 $ 36,885,435
Net realized gain (loss) on investments.................................. 25,543 48,004
________________ ________________
Net Increase (Decrease) in Net Assets Resulting from Operations.... 19,052,373 36,933,439
________________ ________________
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income-net.................................................... (19,026,830) (36,885,435)
Net realized gain on investments......................................... (45,754) --
________________ ________________
Total Dividends.................................................... (19,072,584) (36,885,435)
________________ ________________
CAPITAL STOCK TRANSACTIONS ($1.00 per share):
Net proceeds from shares sold............................................ 2,812,651,691 5,047,750,868
Dividends reinvested..................................................... 4,482,008 914,971
Cost of shares redeemed.................................................. (2,981,029,624) (4,938,347,456)
________________ ________________
Increase (Decrease) in Net Assets from Capital Stock Transactions.. (163,895,925) 110,318,383
________________ ________________
Total Increase (Decrease) in Net Assets........................ (163,916,136) 110,366,387
NET ASSETS:
Beginning of period...................................................... 776,726,169 666,359,782
________________ ________________
End of period............................................................ $ 612,810,033 $ 776,726,169
================ ================
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
DREYFUS INSTITUTIONAL U.S. TREASURY MONEY MARKET FUND
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share of
Capital Stock outstanding, total investment return, ratios to average net
assets and other supplemental data for each period indicated. This
information has been derived from the Fund's financial statements.
Six Months Ended
April 30, 1998 Year Ended October 31,
__________________________________________________
PER SHARE DATA: (Unaudited) 1997 1996 1995 1994(1) 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 .050 .051 .054 .035(2) .029(3)
______ ______ ______ _____ ______ ______
Distributions:
Dividends from investment income-net.. (.026) (.050) (.051) (.054) (.035) (.029)
______ ______ ______ _____ ______ ______
Net asset value, end of period........ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
______ ______ ______ _____ ______ ______
TOTAL INVESTMENT RETURN................... 5.22%(5) 5.16% 5.17% 5.57% 3.55% 2.91%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets .30%(5) .30% .30% .30% .30%(4) .30%
Ratio of net investment income
to average net assets............... 5.15%(5) 5.04% 5.06% 5.44% 3.55% 2.87%
Net assets, end of period (000's Omitted) $612,810 $776,726 $666,360 $767,948 $586,778 $500,653
(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) Net investment income before reimbursement of expenses by the investment manager for the year ended October 31, 1994 was
$.0350 per share.
(3) For the year ended October 31, 1993 the investment adviser reimbursed expenses of the Fund amounting to $.0004 per share.
(4) Annualized expense ratio before reimbursement of expenses by the investment manager for the year ended October 31, 1994
was .31%.
(5) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
DREYFUS INSTITUTIONAL U.S. TREASURY MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1-Significant Accounting Policies:
Dreyfus Institutional U.S. Treasury Money Market Fund (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 and conservative investment risk by investing in direct
obligations of the U.S. Treasury and repurchase agreements secured by such
obligations. The Dreyfus Corporation ("Manager") serves as the Fund's
investment adviser. The Manager is a direct subsidiary of Mellon Bank, N.A.
Premier Mutual Fund Services, Inc. is the distributor of the Fund's shares.
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 in securities 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 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 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) 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, if any, it is the policy of the Fund not to distribute such gain.
(e) Federal income taxes: It is the policy of the Fund to 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.
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).
Dreyfus Institutional U.S. Treasury Money Market Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
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 .15% 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 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.
(The $1,000 attendance fee and reimbursement of meeting expenses are also born
e pro rata by Dreyfus High Yield Strategies Fund.) These fees and expenses
are allocated to each series based on net assets. Amounts required to be paid
by the Company directly to non-interested Directors, that would be applied to
offset a portion of the management fee payable to the Manager, are in fact
paid directly by the Manager to the non-interested Directors.
(b) Shareholder servicing plan: Under the Shareholder Servicing Plan (the
"Plan"), the Fund may pay up to .15% of the value of the average daily net
assets annually to compensate certain banks, brokers, dealers or other
financial institutions for shareholder services. During the period ended
April 30, 1998, the Fund was charged $554,121 pursuant to the Plan.
Under its terms, the Plan shall remain in effect from year to year,
provided such continuance is approved annually by a vote of a 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 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 INSTITUTIONAL U.S. TREASURY
MONEY MARKET FUND
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. 930SA984
Registration Mark
[Dreyfus logo]
Institutional
U.S. Treasury
Money Market Fund
Semi-Annual
Report
April 30, 1998
