DREYFUS MONEY MARKET RESERVES
LETTER TO SHAREHOLDERS
Dear Shareholder:
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We are pleased to report the performance for Dreyfus Money Market
Reserves for the 12- month period ended October 31, 1997, as shown in the
following table:
Yield Effective Yield*
______________ _____________
<S> <C> <C>
Investor Shares........................ 4.93% 5.04%
Class R Shares......................... 5.13% 5.25%
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ECONOMIC ENVIRONMENT
Steady Growth, Low Inflation Continues
The U.S. economy maintained its ongoing strength during the 12-month
reporting period. While growth of the Gross Domestic Product (GDP) slowed
slightly during second-quarter 1997 to 3.3% from 4.9% in the first quarter,
most summer and fall statistics continued to indicate healthy growth. The
Index of Leading Economic Indicators rose solidly in July and August, as did
retail spending, construction spending, and industrial production. In fact,
despite the UPS strike - when some companies may have slowed output due to
nonshipment of parts needed for their production lines - recent production
gains have been vigorous enough to surpass the torrid pace of capacity
expansion. October's Index of Leading Economic Indicators was also up, for
the sixth straight month. While September did produce a spate of slightly
weaker economic indicators, most analysts view this as another of the short
lulls that have marked this expansion since it began.
In the past, robust economic growth has been a traditional harbinger of
higher inflation. However, this expansion has not followed suit, thus far.
Consumer prices - excluding food and energy costs, which fluctuate a lot -
have risen at a scant 2.2% annual rate this year, down from 2.6% last year.
However, there are hints that pressures may be building. Energy prices have
moved up and labor markets remain tight, with the nation's unemployment rate
in October hitting a 24-year low of 4.7%. On the one hand, these factors,
along with the labor-friendly UPS strike settlement, could push up inflation
and prompt the Federal Reserve Board (the "Fed") to tighten short-term
interest rates in response. On the other hand, the Asian financial crisis
could help keep inflation down.
The Fed Remains Patient: Inflation Stays Low
While volatility in the financial markets continues to reflect investor
sensitivity to inflationary pressures, the Fed has not raised short-term
interest rates since its March meeting. In April and May, the yields of money
market securities rose in expectation of another Fed hike, but the Fed failed
to act and rates fell to their current levels near the Federal Funds target
rate. Then, in his October 8 congressional testimony, Fed Chairman Alan
Greenspan warned that the nation's economy was still growing too fast,
implying that the Fed might need to raise short-term rates in order to cool
it off. In public comments following the onset of the Asian financial crisis
and the late-October stock market correction, however, Greenspan adopted a
more conciliatory tone, making it fairly clear that these developments have
lessened the chances of a Fed tightening for at least several months.
MARKET ENVIRONMENT
After rising sharply around the time of Fed Chairman Alan Greenspan's
February Humphrey-Hawkins Senate testimony and staying a bit higher during
early spring, interest rates on money market securities backed down to hover
near the Federal Funds rate for the remainder of the annual period. Rates
did fall slightly during the second and third quarters of 1997, due to a
growing investor perception that the Fed is comfortable with the current
inflation picture and willing to live with a strong economy for the time
being. For example, interest rates on 30-day commercial paper fell two basis
points during the third quarter of 1997, while 60-day and 90-day commercial
paper fell four basis points during the same time period.
PORTFOLIO OVERVIEW
In this environment of economic strength, low inflation, and strong money
market performance, your Fund retained a flexible posture for much of the
period. In terms of average portfolio maturity, this meant maintaining a
relatively neutral maturity during the period. As of October 31, 1997, that
maturity was 55 days, which is quite close to the average portfolio maturity
of approximately 61 days for comparable money market funds as measured by
IBC's Money Fund Report.
Essentially, management has been cautious yet opportunistic, keeping the
average portfolio maturity neutral so that the Fund can seek to take
advantage of interest rate changes, while capitalizing on yield opportunities
across the spectrum of money market securities. During the recent annual
period, we found many such opportunities among a diversified mix of floating
and variable-rate securities, which continued to offer better relative value
and higher yields than most fixed-rate money market securities. In fact, we
increased the Fund's position in these securities to approximately 55% of
assets, up from approximately 32% of assets at the start of the period.
Variable-rate securities provide yields that reset daily, weekly, monthly, or
quarterly tied to the rate at which a money market index changes, such as the
bank prime lending rate or LIBOR Index.** Floating-rate securities provide
for the automatic adjustment of their interest whenever a specified interest
rate changes.
As always, credit quality retained a position of paramount importance in
the Fund's investment strategy. The portfolio remains concentrated in higher
quality money market securities, and management continues to monitor the
creditworthiness of every holding and issuer to assure its continued
appropriateness for the Fund.
Looking ahead, management currently expects to retain its strategy of
flexibility and cautious opportunism. At present, the economy appears to be
growing at a solid pace and inflation remains low. Should economic growth
slow, management may become more aggressive through extending the average
maturity of the Fund in its pursuit of income.
We will continue to seek a competitive level of income by investing in a
diversified portfolio of high quality money market securities.
Sincerely,
[David Hertan signature logo]
David Hertan
Portfolio Manager
November 18, 1997
New York, N.Y.
* 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.
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DREYFUS MONEY MARKET RESERVES
STATEMENT OF INVESTMENTS October 31, 1997
Principal
Negotiable Bank Certificates of Deposit-20.0% Amount Value
_____________ _____________
ANZ Banking Group (London)
<S> <C> <C>
5.83%, 7/31/98............................................................ $ 10,000,000 $ 10,000,361
Bank of Tokyo-Mitsubishi
5.66%, 11/28/97........................................................... 10,000,000 10,000,000
Bayerische Hypothenken-und Wechsel-Bank AG (London)
5.90%, 10/14/98........................................................... 10,000,000 9,995,453
Canadian Imperial Bank of Commerce (Yankee)
5.82%, 3/2/98............................................................. 7,500,000 7,496,787
Commerzbank AG (Yankee)
5.63%, 12/23/97........................................................... 3,000,000 2,999,170
Generale Bank (Yankee)
5.92%, 7/22/98............................................................ 10,000,000 9,998,277
Industrial Bank of Japan LTD. (Yankee)
5.61%, 11/17/97........................................................... 10,000,000 10,000,000
Royal Bank of Canada
6.24%, 4/6/98............................................................. 8,000,000 7,998,683
Societe Generale (Yankee)
5.88%-5.90%, 3/3/98-9/30/98............................................... 10,000,000 9,998,516
Swiss Bank Corp. (Yankee)
5.99%, 6/12/98............................................................ 9,000,000 9,001,787
_____________
TOTAL NEGOTIABLE BANK CERTIFICATES OF DEPOSIT
(cost $87,489,034)........................................................ $ 87,489,034
=============
Commercial Paper-18.6%
BBL North America, Inc.
5.74%, 12/18/97........................................................... $ 9,000,000 $ 8,934,435
Countrywide Home Loans, Inc.
5.56%, 11/10/97........................................................... 8,000,000 7,988,920
Fleet Financial Group Inc.
5.55%, 11/10/97........................................................... 12,184,000 12,167,186
Household International Inc.
5.60%, 11/20/97........................................................... 20,000,000 19,941,206
Statoil (Den Norske Stats Oljeselskap A.S.)
5.75%, 11/3/97............................................................ 14,000,000 13,995,528
Svenska Handelsbanken Inc.
5.61%, 11/12/97........................................................... 9,345,000 9,329,210
Yorkshire Building Society
5.71%, 12/9/97............................................................ 9,000,000 8,947,085
_____________
TOTAL COMMERCIAL PAPER
(cost $81,303,570)........................................................ $ 81,303,570
=============
DREYFUS MONEY MARKET RESERVES
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1997
Principal
Corporate Notes-55.2% Amount Value
_____________ _____________
Abbey National PLC
5.62%, 2/20/98 (a)........................................................ $ 5,000,000 $ 4,998,981
American Express Centurion Bank
5.58%, 8/14/98 (a)........................................................ 5,000,000 5,000,000
Ameritech Capital Funding Corp.
5.64%, 5/12/98 (a)........................................................ 8,000,000 8,003,331
AmSouth Bank of Alabama
5.58%, 10/9/98 (a)........................................................ 10,000,000 9,991,658
Asset Backed Capital Ltd.
5.63%, 8/17/98 (a)........................................................ 10,000,000 10,000,000
BankAmerica Corp.
5.91%, 3/18/98............................................................ 3,000,000 2,996,727
BankBoston Corp.
5.66%, 10/6/98 (a)........................................................ . 10,000,000 9,995,476
Bear Stearns Mortgage Capital Corp.
5.67%-5.69%, 11/7/97-9/15/98 (a).......................................... 10,000,000 10,000,000
Beneficial Corp.
5.67%, 5/28/98 (a)........................................................ 10,000,000 10,014,445
Caterpillar Financial Services Corp.
5.62%-5.66%, 11/3/97-6/9/98 (a)........................................... 9,500,000 9,502,453
Chase Manhattan Corp.
5.70%, 10/15/98 (a)....................................................... 2,000,000 2,000,945
CIT Group Holdings Inc.
5.70%-5.92%, 1/28/98-4/15/98 (a).......................................... 10,500,000 10,502,217
Comerica Bank
5.62%, 2/5/98 (a)......................................................... 7,500,000 7,498,745
Commonwealth Bank of Australia
5.82%, 7/15/98 (a)........................................................ 4,350,000 4,351,207
Corestates Bank
5.62%, 11/6/97 (a)........................................................ 5,000,000 5,000,000
Countrywide Funding Corp.
5.66%, 12/29/97 (a)....................................................... 11,350,000 11,355,270
Dauphin Deposit Bank & Trust Co.
5.64%, 8/5/98 (a)......................................................... 11,000,000 10,995,948
Den Danske Bank
5.65%, 6/2/98 (a)......................................................... 5,400,000 5,400,154
First USA Bank
5.60%-5.63%, 5/20/98-11/12/98 (a)......................................... 9,500,000 9,528,089
Ford Motor Credit Co.
5.63%-5.73%, 11/3/97-12/15/97 (a)......................................... 8,420,000 8,441,107
DREYFUS MONEY MARKET RESERVES
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1997
Principal
Corporate Notes (continued) Amount Value
_____________ _____________
General Motors Acceptance Corp.
5.68%-6.07%, 1/20/98-4/17/98 (a).......................................... $ 9,900,000 $ 9,926,080
Hewlett-Packard Finance Co.
6.07%, 12/5/97............................................................ 5,209,000 5,214,890
IBM Credit Corp.
5.67%, 8/28/98 (a)........................................................ 10,000,000 9,994,436
Key Bank of Washington
5.59%, 12/10/97 (a)....................................................... 7,500,000 7,499,493
Liberty Mutual Capital Corp.
5.66%-5.71%, 1/21/98-5/7/98 (a)........................................... 9,500,000 9,517,676
MBNA America Bank
5.68%, 2/9/98 (a)......................................................... 8,000,000 8,003,444
Merrill Lynch & Co.
5.64%, 5/19/98 (a)........................................................ 8,850,000 8,861,977
Morgan Stanley, Dean Witter, Discover & Co.
5.64%, 11/9/98 (a)........................................................ 2,000,000 2,001,173
Morgan Stanley Group
5.62%, 2/13/98 (a)........................................................ 8,500,000 8,500,000
NationsBank Corp.
5.62%, 3/27/98 (a)........................................................ 4,000,000 4,002,962
SMM Trust
5.63%, 1/15/98 (a)........................................................ 7,000,000 6,999,985
Wells Fargo & Co.
5.63%, 7/1/98 (a)......................................................... 5,000,000 5,003,327
_____________
TOTAL CORPORATE NOTES
(cost $241,102,196)....................................................... $241,102,196
=============
Short Term Bank Notes-1.6%
Westdeutsche Landesbank Girozentrale
5.67%, 3/6/98 (a)
(cost $6,998,387)......................................................... $ 7,000,000 $ 6,998,387
=============
DREYFUS MONEY MARKET RESERVES
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1997
Principal
Repurchase Agreements-2.6% Amount Value
_____________ _____________
Lehman Government Securities, Inc.
5.65%, dated 10/31/97, due 11/3/97 in the amount
of $11,263,301 (fully collateralized by
$11,490,000 U.S. Treasury Notes, 5.625%, due
10/31/99, value $11,493,591)
(cost $11,258,000)........................................................ $ 11,258,000 $ 11,258,000
=============
TOTAL INVESTMENTS
(cost $428,151,187)....................................................... 98.0% $ 428,151,187
==== =============
CASH AND RECEIVABLES (NET).................................................. 2.0% $ 8,731,920
==== =============
NET ASSETS.................................................................. 100.0% $ 436,883,107
==== =============
Notes To Statement of Investments:
(a) Variable interest-rates are subject to periodic change.
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS MONEY MARKET RESERVES
STATEMENT OF ASSETS AND LIABILITIES OCTOBER 31, 1997
Cost Value
_____________ _____________
ASSETS: Investments in securities-See Statement of Investments $428,151,187 $428,151,187
Cash....................................... 4,676,919
Interest receivable........................ 4,276,718
_____________
437,104,824
_____________
LIABILITIES: Due to The Dreyfus Corporation and affiliates 221,500
Due to Distributor......................... 217
_____________
221,717
_____________
NET ASSETS.................................................................. $436,883,107
=============
REPRESENTED BY: Paid-in capital............................ $436,905,645
Accumulated net realized gain (loss) on investments (22,538)
_____________
NET ASSETS.................................................................. $436,883,107
=============
NET ASSET VALUE PER SHARE
_________________________
Investor Shares Class R Shares
_______________ _______________
Net Assets.................................................................. $204,850,722 $232,032,385
Shares Outstanding.......................................................... 204,861,264 232,044,381
NET ASSET VALUE PER SHARE................................................... $1.00 $1.00
==== ====
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS MONEY MARKET RESERVES
STATEMENT OF OPERATIONS YEAR ENDED OCTOBER 31, 1997
INVESTMENT INCOME
INCOME Interest Income............................ $21,783,461
EXPENSES: Management fee-Note 2(a)................... $ 1,931,340
Distribution fees (Investor Shares)-Note 2(b).. 353,962
_______________
Total Expenses 2,285,302
_______________
INVESTMENT INCOME-NET....................................................... 19,498,159
NET REALIZED GAIN (LOSS) ON INVESTMENTS-Note 1(b)........................... (12,742)
_______________
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $19,485,417
===============
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS MONEY MARKET RESERVES
STATEMENT OF CHANGES IN NET ASSETS
Year Ended Year Ended
October 31, 1997 October 31, 1996
________________ ________________
OPERATIONS:
Investment income-net................................................... $ 19,498,159 $ 16,551,791
Net realized gain (loss) on investments................................. (12,742) 1,082
________________ ________________
Net Increase (Decrease) in Net Assets Resulting from Operations..... 19,485,417 16,552,873
________________ ________________
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income-net:
Investor shares....................................................... (8,759,151) (6,902,288)
Class R shares........................................................ (10,739,008) (9,649,503)
________________ ________________
Total Dividends..................................................... (19,498,159) (16,551,791)
________________ ________________
CAPITAL STOCK TRANSACTIONS ($1.00 per share):
Net proceeds from shares sold:
Investor shares....................................................... 680,251,955 159,934,479
Class R shares........................................................ 466,716,451 716,962,318
Dividends reinvested:
Investor shares....................................................... 8,650,590 6,757,305
Class R shares........................................................ 6,408,875 5,233,636
Cost of shares redeemed:
Investor shares....................................................... (628,214,064) (184,344,018)
Class R shares........................................................ (411,494,936) (691,573,952)
________________ ________________
Increase (Decrease) in Net Assets from Capital Stock Transactions... 122,318,871 12,969,768
________________ ________________
Total Increase (Decrease) in Net Assets........................... 122,306,129 12,970,850
NET ASSETS:
Beginning of Period..................................................... 314,576,978 301,606,128
________________ ________________
End of Period........................................................... $ 436,883,107 $ 314,576,978
================ ================
SEE NOTES TO FINANCIAL STATEMENTS.
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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
__________________________________________________
Year Ended October 31,
__________________________________________________
PER SHARE DATA: 1997 1996 1995 1994(1,2)
____ ____ ____ ____
<S> <C> <C> <C> <C>
Net asset value, beginning of period.................. $ 1.00 $ 1.00 $ 1.00 $ 1.00
____ ____ ____ ____
Investment Operations:
Investment income-net................................. .049 .048 .052 .021
____ ____ ____ ____
Distributions:
Dividends from investment income-net.................. (.049) (.048) (.052) (.021)
____ ____ ____ ____
Net asset value, end of period........................ $ 1.00 $ 1.00 $ 1.00 $ 1.00
==== ==== ==== ====
TOTAL INVESTMENT RETURN................................... 5.04% 4.94% 5.28% 2.14%(3)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets............... .70% .70% .70% .71%(4)
Ratio of net investment income
to average net assets............................... 4.95% 4.84% 5.25% 3.31%(4)
Net Assets, end of period (000's Omitted)............. $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.
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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
______________________________________________________
Year Ended October 31,
______________________________________________________
PER SHARE DATA: 1997 1996 1995 1994(1,2) 1993
____ ____ ____ ____ ____
<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........................ .051 .050 .053 .034(3) .028(4)
____ ____ ____ ____ ____
Distributions:
Dividends from investment income-net......... (.051) (.050) (.053) (.034) (.028)
____ ____ ____ ____ ____
Net asset value, end of period............... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
==== ==== ==== ==== ====
TOTAL INVESTMENT RETURN.......................... 5.25% 5.16% 5.44% 3.52% 2.84%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets...... .50% .50% .50% .51%(5) .50%
Ratio of net investment income
to average net assets........................ 5.13% 5.01% 5.40% 3.51% 2.80%
Net Assets, end of period (000's Omitted).... $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 years 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%.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
DREYFUS MONEY MARKET RESERVES
NOTES TO FINANCIAL STATEMENTS
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES:
Dreyfus Money Market Reserves (the "Fund") is a series of The
Dreyfus/Laurel Funds, Inc. (the "Company") which is registered under the
Investment Company Act of 1940 ("Act") as a diversified open-end management
investment company and operates as a series company currently offering
seventeen series including the 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 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, adjusted for amortization of premiums and discounts on investments,
is recognized on the accrual basis. Cost of investments represents amortized
cost.
(c) 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.
(d) 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.
DREYFUS MONEY MARKET RESERVES
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
At October 31, 1997, 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
the following funds: The Dreyfus/Laurel Funds, Inc., The Dreyfus/Laurel
Tax-Free Municipal Funds, and The Dreyfus/Laurel Funds Trust. 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: Under the distribution plan (the "Plan") adopted
pursuant to Rule 12b-1 under the Act, 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 October 31, 1997,
the Fund was charged $353,962 for the Investor shares 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 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. For the period ended October 31, 1997, the Fund did not
borrow under the line of credit.
DREYFUS MONEY MARKET RESERVES
REPORT OF INDEPENDENT AUDITORS
The Board of Directors and Shareholders
The Dreyfus/Laurel Funds, Inc.:
We have audited the accompanying statement of assets and liabilities,
including the statement of investments, of Dreyfus Money Market Reserves of
The Dreyfus/Laurel Funds, Inc. as of October 31, 1997, and the related
statement of operations for the year then ended, the statements of changes in
net assets for each of the years in the two-year period then ended, and the
financial highlights for each of the years or 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 also
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, 1997, by correspondence
with the custodian. 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 Dreyfus Money Market Reserves of The Dreyfus/Laurel Funds, Inc.
as of October 31, 1997, the results of its operations for the year then
ended, changes in its net assets for each of the years in the two-year period
then ended and its financial highlights for each of the years or periods
indicated herein, in conformity with generally accepted accounting principles.
New York, New York
December 17, 1997
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. 317/717AR9710
Registration Mark
[Dreyfus logo]
Money Market
Reserves
Annual Report
October 31, 1997
