DREYFUS BASIC S&P 500 STOCK INDEX FUND
LETTER TO SHAREHOLDERS
Dear Shareholder:
We are pleased to provide you with this annual report for the Dreyfus
BASIC S&P 500 Stock Index Fund for the 12-month period ended October 31,
1997. In spite of stock market weakness in late October, the Fund achieved
strong returns for its latest fiscal year. Over this period, your Fund
produced a total return of 31.87%,* which compares with a total return of
32.10% for the Standard & Poor's 500 Composite Stock Price Index ("S&P 500
Index") over the same period.** The difference is accounted for by transaction
fees and other Fund expenses.
Economic Review
The U.S. economy has registered a step-up in growth in 1997 and the
incoming evidence suggests that momentum is still building. Stronger growth
this year has helped keep corporate profits buoyant despite a substantially
tighter labor market. This is because nationwide shortages of labor have so
far not generated much wage inflation. Moreover, price inflation has
decelerated markedly during the year, suppressed by the strong dollar, import
competition and continued disinflation in health care.
Although the Federal Reserve Board (the "Fed") has held a tightening bias
since mid-1996, the central bank has raised interest rates only once this
year. Expectations for further hikes have been continually postponed. They
were first dampened by the surprising drop in this year's price inflation,
and more recently by unfolding crises in foreign economies. Both events have
helped to cap short-term rates and to pull long-term interest rates lower
since the spring.
Real Gross Domestic Product growth accelerated to about 4% this year from
3% in 1996. Virtually all economic sectors have been strong so far. Consumer
spending has been supported by rising real incomes. Capital spending has been
very robust and new orders imply continued strength. Even housing demand has
reached new highs. Most incoming signals support sustained growth. The
exception is that exporters' new orders have marginally slowed in recent
months, indicating that economic turmoil overseas may be impacting this
sector. By contrast, imports have been very robust and, if their growth is
sustained, could help mitigate the economic weakness abroad.
Overall corporate profits have continued to trend higher, although some
companies have been hurt by events overseas and the stronger dollar.
Domestically generated profits have typically remained solid, helped by
strong growth and contained wages.
Market Overview
Even though the equity markets stumbled badly in late October, the fiscal
year ended October 31, 1997 saw solid gains. For the same 12-month period, as
measured by price changes alone, excluding income, the Dow Jones Industrial
Average gained 23.58%, the S&P 500 Index 29.96%, the Nasdaq Composite 30.43%
and the Russell 2000 Index, 27.52%. These gains were after the drop that
occurred in the last week of October, and before counting the rebound that
occurred in the first week of November.
In retrospect, it is apparent that stock valuations had been riding for a
fall. There was weakness in March when the Fed raised interest rates for the
first time in two years. By early summer, equity prices recovered and soared
to new highs. Then, however, some nervousness set in, related mainly to
concern about high stock valuations and fears of another Fed move to cool off
the bubbling economy. Weakness was apparent mainly in companies with large
capitalization, while smaller companies, such as those listed in the Russell
2000 Index, gained ground.
As autumn leaves began to turn, the stock market as a whole regained its
wind-but not for long. The relatively high valuations that had prevailed were
vulnerable to any major unpleasant surprise. That came in late October from
an unexpected source-the Far East. Severe market setbacks in Hong Kong and
Southeast Asia, together with drops in their foreign exchange rates,
triggered the fall in the U.S. market.
Richard Hoey, Chief Economist for The Dreyfus Corporation, reviewing the
recent events, said that the U.S. stock market had a selling panic, followed
by a buying panic. The underlying logic of it all was valuation, he observed.
When the Dow Jones Index peaked at above 8200 in early August, the stock
market was simply discounting favorable U.S. fundamentals into high stock
prices, said Hoey. The financial crisis in Asia was the trigger for a
correction of the major problem for the U.S. stock market: high valuation.
The market drop in Asia was caused by serious fundamental problems of
excess productive capacity, overvalued real estate and a banking system
crisis. European markets, of course, reacted to the Asian weakness, but fell
less severely because their economies are more stable. In the U.S., the sharp
price drop, followed by a vigorous rebound, reflected an economy with much
greater underlying strength.
The influx of investors into stocks when prices dipped was a good augury
for the future. The American investing public appears to be convinced that
equities are a good place to put money for the long term, when their prices
are attractive, despite the recent volatility of the market averages.
Portfolio Focus
As discussed above, the year ended October 31, 1997 was an exceptional
period for U.S. equities. Large capitalization stocks, midcaps and small caps
all provided excellent returns. Large caps predominated for most of the year,
but small caps and midcaps rebounded strongly in the third quarter of 1997 to
pull even with large caps for the year.
It would be highly unusual if the year ahead matched or exceeded the 1997
record. Question marks are evident-the financial troubles in Asia, the threat
of eventual cost pressures in U.S. industry, the difficulties some companies
are encountering in maintaining profit levels. However, this past year was a
striking demonstration of the potential rewards of equity investments.
Sincerely,
[Steven A. Falci, CFA signature logo]
Steven A. Falci, CFA
Portfolio Manager
November 18, 1997
New York, N.Y.
* Total return includes reinvestment of dividends and any capital gains
paid.
**SOURCE: LIPPER ANALYTICAL SERVICES, INC. - Reflects the reinvestment of
income dividends and, where applicable, capital gain distributions. The
Standard & Poor's 500 Composite Stock Price Index is a widely accepted
unmanaged index of U.S. stock market performance.
DREYFUS BASIC S&P 500 STOCK INDEX FUND OCTOBER 31, 1997
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN DREYFUS BASIC S&P 500
STOCK INDEX FUND
AND THE STANDARD & POOR'S 500 COMPOSITE STOCK PRICE INDEX
[Exhibit A:
$21,964
Standard & Poor's 500
Composite Stock
Price Index*
Dollars
$21,732
Dreyfus BASIC S&P 500
Stock Index Fund
*Source: Lipper Analytical Services, Inc.]
Average Annual Total Returns
One Year Ended From Inception (9/30/93)
October 31, 1997 to October 31, 1997
- ---------------------- -------------------------
31.87% 20.90%
Past performance is not predictive of future performance. All performance
information reflects the performance of the Fund's
previously existing Class R shares through September 14, 1995 and the Fund's
single class of shares from September 15, 1995 through October 31, 1997.
The above graph compares a $10,000 investment made in Dreyfus BASIC S&P 500
Stock Index Fund on 9/30/93 (Inception Date) to a $10,000 investment made in
the Standard & Poor's 500 Composite Stock Price Index on that date. All
dividends and capital gain distributions are reinvested.
The Fund seeks to replicate the total return performance of the Standard &
Poor's 500 Composite Stock Price Index. 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, which does not take into account
charges, fees and other expenses. 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.
DREYFUS BASIC S&P 500 STOCK INDEX FUND
STATEMENT OF INVESTMENTS OCTOBER 31, 1997
Shares COMMON STOCKS-97.2% Value
___________ ____________
Basic Industries-4%
$0,012,100(a) Air Products & Chemicals........ $ 919,600
4,500 Armstrong World Industries........ 299,531
11,392 Avery Dennison......... 453,544
3,300 Ball................... 115,500
5,800 Bemis.................. 221,125
6,114 Boise Cascade.......... 211,697
3,207 Centex................. 187,609
10,600 Champion International. 584,987
14,100 Crown Cork & Seal...... 635,381
25,125 Dow Chemical........... 2,280,093
124,500 duPont (E.I.) de Nemours & Co 7,080,937
8,626 Eastman Chemical....... 514,325
15,900 Engelhard.............. 276,262
4,100(a) ..FMC................. 331,331
9,189 Fluor.................. 377,897
20,800 Fort James............. 825,500
10,100 Georgia Pacific........ 856,606
8,000 Grace (W.R.)........... 544,000
6,603 Great Lakes Chemical... 310,341
10,900 Hercules............... 500,037
33,265 International Paper.... 1,496,925
4,300 Kaufman & Broad Home... 91,643
12,000 Louisiana Pacific...... 252,000
18,209 Masco.................. 798,919
5,827 Mead................... 352,533
64,900 Monsanto............... 2,774,475
15,40 0Morton International... 508,200
7,445 Nalco Chemical......... 297,800
15,400(a) ..Owens-Illinois...... 531,300
19,721 PPG Industries......... 1,116,701
3,200 Potlach................ 159,600
17,400 Praxair................ 757,987
6,811 Rohm & Haas............ 567,441
19,000 Sherwin-Williams....... 527,250
11,000 Sigma-Aldrich.......... 386,375
10,900 Stone Container........ 131,481
6,300 Temple-Inland.......... 361,462
18,700 Tenneco................ 840,331
7,600 Union Camp............. 411,825
13,722 Union Carbide.......... 626,923
11,200 Westvaco............... 367,500
22,000 Weyerhaeuser........... 1,050,500
12,200 Willamette Industries.. 403,362
____________
32,338,836
____________
Shares COMMON STOCKS (continued) Value
___________ ____________
Capital Goods- 23.1%
24,200 AMP.................... $ 1,089,000
8,000 Adobe Systems.......... 382,000
15,500(a) Advanced Micro Devices 356,500
3,100 Aeroquip-Vickers....... 161,393
19,367 Allegheny Teledyne..... 509,594
62,300 AlliedSignal........... 2,242,800
9,900(a) Andrew................ 229,556
14,000(a) Apple Computer........ 238,437
40,100(a) Applied Materials .... 1,338,337
5,300 Autodesk............... 196,100
32,200 Automatic Data Processing 1,646,225
21,900(a) Bay Networks.......... 692,587
110,244 Boeing................. 5,277,931
3,000 Briggs & Stratton...... 149,250
21,800 Browning-Ferris Industries 708,500
45,150(a) CUC International..... 1,331,925
17,400(a) Cabletron Systems..... 504,600
8,200 Case................... 490,462
41,400 Caterpillar............ 2,121,750
8,933(a) Ceridian.............. 348,945
4,400 Cincinnati Milacron.... 122,100
73,700(a) Cisco Systems......... 6,045,703
18,100 Cognizant.............. 709,293
83,250(a) Compaq Computer....... 5,307,187
40,100 Computer Associates
International............ 2,989,956
8,500(a) Computer Sciences..... 602,968
13,400 Cooper Industries...... 698,475
5,100 Crane.................. 211,968
4,247 Cummins Engine......... 258,801
12,900(a) DSC Communications.... 314,437
5,303(a) Data General.......... 102,082
27,800 Deere & Co............. 1,462,975
36,400(a) Dell Computer......... 2,916,550
9,100 Deluxe................. 298,025
16,800(a) Digital Equipment..... 841,050
12,200 Dover.................. 823,500
10,600 Dow Jones & Co......... 492,900
19,300 Dresser Industries..... 813,012
18,800 Dun & Bradstreet....... 536,975
5,016 EG&G................... 103,768
27,200(a) EMC................... 1,523,200
8,521 Eaton.................. 823,341
48,800 Emerson Electric....... 2,558,950
DREYFUS BASIC S&P 500 STOCK INDEX FUND
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1997
Shares COMMON STOCKS (continued) Value
___________ ____________
Capital Goods (continued)
16,600 Equifax................ $ 515,637
48,800 First Data............. 1,418,250
4,500 Foster Wheeler......... 147,656
6,900 General Dynamics....... 560,193
360,400 General Electric....... 23,268,325
5,500 General Signal......... 220,687
19,800 Genuine Parts.......... 619,987
6,000 Goodrich (B.F.)........ 267,375
5,500 Grainger (W.W.)........ 480,906
17,500(a) HFS................... 1,233,750
5,400 Harnischfeger Industries 212,625
8,806 Harris................. 384,161
114,500 Hewlett-Packard........ 7,063,218
14,000 Honeywell.............. 952,875
13,000 ITT Industries......... 410,312
14,600 Ikon Office Solutions.. 413,362
27,500 Illinois Tool Works.... 1,352,656
18,350 Ingersoll-Rand......... 714,503
179,800 Intel.................. 13,844,724
108,100 International Business Machines 10,600,556
13,700 Interpublic Group Cos.. 650,750
9,228 Johnson Controls....... 414,106
9,200(a) KLA-Tencor............ 404,225
15,591(a) LSI Logic............. 340,078
21,400 Lockheed Martin........ 2,034,337
70,564 Lucent Technologies.... 5,817,119
6,100 McDermott International 221,506
23,200(a) Micron Technology..... 622,050
131,900(a) Microsoft............. 17,147,000
45,700 Minnesota Mining
& Manufacturing.......... 4,181,550
65,500 Motorola............... 4,044,625
16,000(a) National Semiconductor 576,000
5,000 National Service Industries...... 221,250
28,900 Northern Telecommunications...... 2,591,968
7,300 Northrop Grumman....... 797,525
38,400(a) Novell................ 324,000
107,900(a) Oracle................ 3,860,796
5,900 Owens-Corning.......... 202,075
14,003 Pall................... 289,687
14,000(a) Parametric Technology.... 617,750
12,340 Parker-Hannifin........ 515,966
4,800 Perkin-Elmer........... 300,000
15,903 Pitney Bowes........... 1,261,306
4,800 Raychem................ 434,700
26,000 Raytheon............... 1,410,500
23,000 Rockwell International. 1,127,000
Shares COMMON STOCKS (continued) Value
___________ ____________
Capital Goods (continued)
8,600 Ryder System........... $ 301,000
6,400 Safety-Kleen........... 141,600
8,500 Scientific-Atlanta..... 157,781
26,900(a) Seagate Technology.... 729,662
27,700 Service Corp. International.... 843,118
2,700 Shared Medical Systems. 147,825
19,500(a) Silicon Graphics...... 286,406
6,700 Snap-On................ 288,100
9,827 Stanley Works.......... 415,190
40,600(a) Sun Microsystems...... 1,390,550
37,900(a) 3COM.................. 1,570,481
3,706 Tektronix.............. 219,117
19,900(a) Tellabs............... 1,074,600
21,100 Texas Instruments...... 2,251,106
18,200 Textron................ 1,052,187
16,500(a). Thermo Electron...... 615,656
6,141 Thomas & Betts......... 305,514
6,900 Timken................. 231,150
58,600 Tyco International..... 2,212,150
19,200(a) Unisys................ 255,600
25,914 United Technologies.... 1,813,980
49,900 Waste Management....... 1,166,412
35,824 Xerox.................. 2,841,291
____________
185,973,211
____________
Consumer Cyclical-11.4%
27,100 Albertson's............ 999,312
8,300 American Greetings, Cl. A 287,906
30,000 American Stores........ 770,625
16,600(a) AutoZone.............. 490,737
10,400 Black & Decker......... 395,850
10,900 Brunswick.............. 367,875
18,909 CVS.................... 1,159,358
11,600(a) Charming Shoppes...... 60,175
74,200 Chrysler............... 2,615,550
10,818 Circuit City Stores.... 431,367
38,400 Comcast, Cl. A......... 1,056,000
8,703 Cooper Tire and Rubber. 184,394
23,400(a) Costco Cos........... 900,900
11,500 Dana................... 538,343
16,800 Darden Restaurants..... 191,100
24,000 Dayton Hudson.......... 1,507,500
12,300 Dillard's, Cl. A....... 472,012
74,300 Disney (Walt).......... 6,111,175
16,100 Donnelley (R.R.) & Sons 525,262
6,900 Echlin................. 225,975
23,000(a) Federated Department Stores 1,012,000
DREYFUS BASIC S&P 500 STOCK INDEX FUND
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1997
Shares COMMON STOCKS (continued) Value
___________ ____________
Consumer Cyclical (continued)
4,000 Fleetwood Enterprises.. $ 121,250
4,190 Fleming Cos............ 70,706
131,500 Ford Motor............. 5,744,906
8,100(a) Fruit of the Loom, Cl. A 211,106
31,200 Gannett................ 1,639,950
29,500 Gap.................... 1,569,031
80,300 General Motors......... 5,154,256
6,600 Giant Food, Cl. A...... 202,125
17,200 Goodyear Tire & Rubber. 1,077,150
4,243 Great Atlantic & Pacific 130,207
7,800 Harcourt General....... 390,487
3,441 Harland (John H.)...... 77,207
11,094(a) Harrah's Entertainment 218,413
14,050 Hasbro................. 407,450
27,500 Hilton Hotel........... 847,343
80,400 Home Depot............. 4,472,250
12,800(a) ITT................... 956,000
4,322 Jostens................ 100,756
53,600(a) K mart................ 706,850
3,962 King World Productions. 187,204
9,700 Knight-Ridder.......... 506,825
28,000(a) Kroger................ 913,500
29,900 Limited................ 704,518
7,700 Liz Claiborne.......... 390,293
4,338 Longs Drug Stores...... 108,721
19,100 Lowes.................. 795,037
14,000 Marriott International. 976,500
32,000 Mattel................. 1,244,000
25,60 0May Department Stores.. 1,379,200
10,900 Maytag................. 363,787
75,700 McDonald's............. 3,392,306
10,900 McGraw-Hill Cos........ 712,587
4,000 Mercantile Stores...... 235,750
5,860 Meredith............... 199,606
19,700(a) Mirage Resorts....... 492,500
9,802 Moore.................. 158,669
31,800 NIKE, Cl. B............ 1,494,600
8,000(a) Navistar International 185,500
10,618 New York Times, Cl. A.. 581,335
16,200(a) Nextlevel Systems..... 218,700
8,500 Nordstrom.............. 520,625
8,622 PACCAR................. 388,528
27,400 Penney (J.C.).......... 1,608,037
7,000 Pep Boys-Manny, Moe & Jack 176,312
6,215(a) Reebok International.. 229,178
13,500 Rite Aid............... 801,562
4,014 Russell................ 117,911
Shares COMMON STOCKS (continued) Value
___________ ____________
Consumer Cyclical (continued)
43,100 Sears, Roebuck & Co.... $ 1,804,812
2,200 Springs Industries..... 102,025
6,700 Supervalu.............. 245,387
19,202 Sysco.................. 768,080
18,000 TJX.................... 533,250
13,600 TRW.................... 778,600
11,776 Tandy.................. 404,800
55,700(a) Tele-Communications, Cl. A 1,277,618
61,600 Time Warner............ 3,553,550
10,539 Times Mirror, Cl. A.... 570,423
31,400(a) Toys R Us............. 1,069,562
13,522 Tribune................ 745,400
6,900 V.F.................... 616,687
38,800(a) Viacom, Cl. B......... 1,173,700
249,300 Wal-Mart Stores........ 8,756,662
54,200 Walgreen............... 1,524,375
14,547 Wendy's International.. 305,487
77,700 Westinghouse Electric.. 2,054,193
8,200 Whirlpool.............. 497,125
16,400 Winn-Dixie Stores...... 608,850
14,900(a) Woolworth............. 283,100
____________
91,157,836
____________
Consumer Staples-11.2%
6,244 Alberto-Culver, Cl. B.. 188,490
54,100 Anheuser-Busch......... 2,160,618
61,677 Archer Daniels Midland. 1,372,318
14,568 Avon Products.......... 954,204
7,600 Brown-Forman, Cl. B.... 373,825
15,800 CPC International...... 1,564,200
50,600 Campbell Soup.......... 2,609,062
11,400 Clorox................. 798,000
273,000 Coca-Cola.............. 15,424,500
32,600 Colgate-Palmolive...... 2,110,850
52,132 ConAgra................ 1,570,476
4,115 Coors (Adolph), Cl. B.. 145,310
25,400 Corning................ 1,146,175
35,900 Eastman Kodak.......... 2,149,512
7,100 Ecolab................. 337,693
18,871 Fortune Brands......... 623,922
17,600 General Mills.......... 1,161,600
61,600 Gillette............... 5,486,250
40,700 Heinz (H.J.)........... 1,890,006
16,100 Hershey Foods.......... 889,525
12,000 International Flavors
& Fragrances............. 580,500
45,400 Kellogg................ 1,955,037
DREYFUS BASIC S&P 500 STOCK INDEX FUND
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1997
Shares COMMON STOCKS (continued) Value
___________ ____________
Consumer Staples (continued)
61,300 Kimberly-Clark......... $ 3,183,768
922 NACCO Industries, Cl. A 94,966
17,500 Newell................. 671,562
168,500 PepsiCo................ 6,202,906
266,700 Philip Morris Cos...... 10,567,987
7,500 Pioneer Hi-Bred International 687,187
5,000 Polaroid............... 224,687
148,700 Procter & Gamble....... 10,111,600
15,100 Quaker Oats............ 722,912
11,70 0Ralston-Ralston Purina Group 1,050,075
16,548 Rubbermaid............. 398,186
52,900 Sara Lee............... 2,704,512
40,800 Seagram................ 1,374,450
16,830(a) Tricon Global Restaurants 510,159
6,700 Tupperware............. 167,918
20,200 UST.................... 604,737
70,400 Unilever............... 3,757,600
11,200 Whitman................ 294,000
12,800 Wrigley, (Wm) Jr....... 926,400
____________
89,747,685
____________
Energy-9.4%
10,100 Amerada Hess........... 620,518
54,000 Amoco.................. 4,951,125
6,600 Anadarko Petroleum..... 483,450
9,900 Apache................. 415,800
8,200 Ashland................ 391,037
35,300 Atlantic Richfield..... 2,905,631
18,600 Baker Hughes........... 854,437
19,406 Burlington Resources... 949,730
72,100 Chevron................ 5,979,793
11,710 Coastal................ 704,063
6,100 Columbia Gas System.... 440,725
10,531 Consolidated Natural Gas 569,332
2,218 Eastern Enterprises.... 86,917
33,700 Enron.................. 1,280,600
272,400 Exxon.................. 16,735,575
27,90 0Halliburton............ 1,663,537
2,705 Helmerich & Payne...... 218,259
5,240 Kerr-McGee............. 354,027
86,500 Mobil.................. 6,298,281
5,300 Nicor.................. 204,381
36,500 Occidental Petroleum... 1,017,437
3,082 Oneok.................. 105,751
11,600(a) Oryx Energy........... 319,725
9,200 Pacific Enterprises.... 300,725
5,200 Pennzoil............... 384,800
3,870 Peoples Energy......... 138,352
Shares COMMON STOCKS (continued) Value
___________ ____________
Energy (continued)
29,000 Phillips Petroleum..... $ 1,402,875
9,510(a) Rowan Cos............. 369,701
236,100 Royal Dutch Petroleum, A.D.R 12,424,762
54,500 Schlumberger........... 4,768,750
9,400 Sonat.................. 431,812
7,968 Sun ................... 319,218
58,100 Texaco................. 3,308,068
31,700 USX-Marathon Group..... 1,133,275
27,907 Union Pacific Resources Group 687,209
27,200 Unocal................. 1,122,000
5,900(a) Western Atlas......... 508,506
17,550 Williams Cos........... 893,953
____________
75,744,137
____________
Health Care-10.8%
9,400(a) ALZA.................. 244,987
84,700 Abbott Laboratories.... 5,193,168
7,100 Allergan............... 233,856
71,400 American Home Products. 5,292,525
29,180 Amgen.................. 1,437,115
6,300 Bard (C.R.)............ 174,825
6,064 Bausch & Lomb.......... 238,012
30,800 Baxter International... 1,424,500
13,400 Becton, Dickinson & Co. 617,237
12,100(a) Beverly Enterprises... 180,743
12,200 Biomet................. 304,237
21,400(a) Boston Scientific..... 973,700
109,700 Bristol-Myers Squibb... 9,626,175
11,900 Cardinal Health........ 883,575
72,000 Columbia/HCA Healthcare 2,034,000
16,300 Guidant................ 937,250
21,000 HBO & Co............... 913,500
42,700(a) HEALTHSOUTH........... 1,091,518
18,000(a). Humana............... 378,000
146,500 Johnson & Johnson...... 8,405,437
122,500 Lilly (Eli)............ 8,192,187
8,100 Mallinckrodt Group..... 303,750
7,000 Manor Care............. 240,187
51,500 Medtronic.............. 2,240,250
133,000 Merck & Co............. 11,870,250
4,800 Millipore.............. 187,800
142,300 Pfizer................. 10,067,725
55,900 Pharmacia & Upjohn..... 1,774,825
10,100 St. Jude Medical....... 306,156
80,700 Schering-Plough........ 4,524,243
33,300(a) Tenet Healthcare...... 1,017,731
8,100 U.S. Surgical.......... 218,193
20,600 United Healthcare...... 954,037
DREYFUS BASIC S&P 500 STOCK INDEX FUND
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1997
Shares COMMON STOCKS (continued) Value
___________ ____________
Health Care (continued)
29,900 Warner-Lambert......... $ 4,281,306
____________
86,763,000
____________
Interest Sensitive-16.1%
16,527 Aetna.................. 1,174,449
10,719 Ahmanson (H.F.) & Co... 632,421
47,900 Allstate............... 3,972,706
51,600 American Express....... 4,024,800
27,338 American General....... 1,394,238
77,250 American International Group 7,884,328
18,400 Aon.................... 992,450
16,000 BANKBOSTON............. 1,297,000
64,200 Banc One............... 3,346,425
41,764 Bank of New York....... 1,965,518
76,900 BankAmerica............ 5,498,350
11,000 Bankers Trust New York. 1,298,000
21,948 Barnett Banks.......... 1,514,412
5,900 Beneficial............. 452,456
8,100 CIGNA.................. 1,257,525
46,641 Chase Manhattan........ 5,381,205
19,000 Chubb.................. 1,258,750
50,400 Citicorp............... 6,303,150
11,600 Comerica............... 917,125
20,700 Conseco................ 903,037
22,300 CoreStates Financial... 1,622,325
11,800 Countrywide Credit Industries 404,887
116,800 Federal National
Mortgage Association..... 5,657,500
17,050 Fifth Third Bancorp.... 1,093,331
32,500 First Chicago NBD...... 2,364,375
61,800 First Union............ 3,032,062
27,500 Fleet Financial Group.. 1,768,593
76,500 Federal Home Loan Mortgage 2,897,437
8,758 General Re............. 1,726,968
6,200 Golden West Financial.. 537,850
15,000 Green Tree Financial... 631,875
11,500 H&R Block.............. 425,500
13,000 Hartford Financial
Services Group........... 1,053,000
11,823 Household International 1,338,954
21,000 Huntington Bancshares.. 678,562
7,800 Jefferson Pilot........ 603,037
23,900 Keycorp................ 1,462,381
11,200 Lincoln National....... 770,000
12,700 Loews.................. 1,418,431
9,800 MBIA................... 585,550
55,175 MBNA................... 1,451,792
Shares COMMON STOCKS (continued) Value
___________ ____________
Interest Sensitive (continued)
12,600 MGIC Investment........ $ 759,937
18,500 Marsh & McLennan....... 1,313,500
27,700 Mellon Bank............ 1,428,281
36,500 Merrill Lynch & Co..... 2,468,312
19,700 Morgan (J.P.) & Co..... 2,162,075
64,555 Morgan Stanley, Dean Witter,
Discover and Co.......... 3,163,195
23,700 National City.......... 1,416,075
78,434 NationsBank............ 4,696,235
82,500 Norwest................ 2,645,156
33,800 PNC Bank............... 1,605,500
7,900 Progressive............ 823,575
10,300 Providian Financial.... 381,100
2,299 Pulte.................. 85,925
6,000 Republic New York...... 634,875
9,200 St. Paul Cos........... 735,425
16,700 Safeco................. 795,337
11,800 Salomon................ 916,712
29,100 Schwab (Charles)....... 993,037
17,700 State Street........... 986,775
21,500 SunAmerica............. 772,656
23,500 SunTrust Banks......... 1,523,093
15,216 Torchmark.............. 606,738
7,093 Transamerica........... 715,949
70,566 Travelers Group........ 4,939,620
12,200 USF&G.................. 247,050
26,917 U.S. Bancorp........... 2,737,122
15,364 UNUM................... 748,995
17,600 Wachovia............... 1,325,500
27,560 Washington Mutual...... 1,886,137
9,748 Wells Fargo............ 2,840,323
____________
129,346,965
____________
Mining and Metals-1%
11,800(a) ARMCO................. 67,850
4,600 ASARCO................. 125,925
25,000 Alcan Aluminium........ 714,062
19,100 Aluminum Co. of America 1,394,300
41,000 Barrick Gold........... 843,062
25,300 Battle Mountain Gold... 154,962
12,400(a) Bethlehem Steel....... 124,000
10,308 Cyprus Amax Minerals... 215,823
15,300 Echo Bay Mines......... 62,156
21,900 Freeport-McMoRan Copper, Cl. B 522,862
16,200 Homestake Mining....... 200,475
18,400 Inco................... 379,500
5,400 Inland Steel Industries 105,975
DREYFUS BASIC S&P 500 STOCK INDEX FUND
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1997
Shares COMMON STOCKS (continued) Value
___________ ____________
Mining and Metals (continued)
17,174 Newmont Mining......... $ 601,090
9,700 Nucor.................. 506,825
6,590 Phelps Dodge........... 490,131
26,400 Placer Dome............ 409,200
8,100 Reynolds Metals........ 493,593
9,400 USX-U.S. Steel......... 319,600
10,600 Worthington Industries. 219,287
____________
7,950,678
____________
Transportation-1.3%
10,100(a) AMR................... 1,176,018
17,139 Burlington Northern Santa Fe 1,628,205
24,000 CSX.................... 1,312,500
4,300 Caliber System......... 224,137
8,100 Delta Air Lines........ 816,075
12,696(a) Federal Express....... 847,458
36,200 Laidlaw................ 511,325
41,500 Norfolk Southern....... 1,333,187
16,100 Southwest Airlines..... 525,262
10,000(a) USAir Group........... 468,750
27,200 Union Pacific.......... 1,666,000
____________
10,508,917
____________
Utilities-8.9%
178,800 AT&T................... 8,750,025
20,600 ALLTEL................. 728,725
55,500(a) Airtouch Communications 2,143,687
20,800 American Electric Power 982,800
60,500 Ameritech.............. 3,932,500
16,300 Baltimore Gas & Electric 447,231
85,536 Bell Atlantic.......... 6,832,188
109,100 BellSouth.............. 5,161,793
17,400 CINergy................ 574,200
16,656 Carolina Power & Light. 595,452
23,400 Central & Southwest.... 504,562
10,800(a) Clear Channel Communications 712,800
25,900 Consolidated Edison.... 887,075
16,000 DTE Energy............. 492,000
20,500 Dominion Resources..... 762,343
39,561 Duke Power............. 1,908,818
43,700 Edison International... 1,119,812
26,600 Entergy................ 650,037
20,000 FPL Group.............. 1,033,750
18,100 Frontier............... 391,412
13,300 GPU.................... 481,293
105,300 GTE.................... 4,468,668
Shares COMMON STOCKS (continued) Value
___________ ____________
Utilities (continued)
31,444 Houston Industries..... $ 683,907
76,200 MCI Communications..... 2,705,100
15,900(a) Niagara Mohawk Power.. 154,031
8,100 Northern States Power.. 408,037
16,800 Ohio Edison............ 415,800
48,300 PG&E................... 1,234,668
18,200 PP&L Resources......... 393,575
24,500 PECO Energy............ 555,843
32,600 PacifiCorp............. 707,012
25,500 Public Service Enterprise Group 661,406
100,551 SBC Communications..... 6,397,557
75,400 Southern............... 1,729,487
47,400 Sprint................. 2,464,800
26,520 Texas Utilities........ 951,405
52,800 US West................ 2,102,100
66,800(a) US West Media Group.. 1,686,700
23,800 UniCom................. 666,400
11,200 Union Electric......... 422,100
99,300(a) WorldCom.............. 3,338,962
____________
71,240,061
____________
TOTAL COMMON STOCKS
(cost $555,176,049)...... $780,771,326
============
Principal
Amount
___________
SHORT-TERM INVESTMENTS-2.6%
$1,550,000(b) U.S. Treasury Bills-.2%
4.81%, 12/18/1997........ $1,540,080
____________
Repurchase Agreement-2.4%
18,852,693 Goldman Sachs & Co., 5.67%
dated 10/31/1997, due
11/3/1997 in the amount of
$18,861,601 (fully
collateralized by $18,882,000
U.S. Treasury Notes, 5.875%
7/31/1999, value
$19,230,231)............. 18,852,693
____________
TOTAL SHORT-TERM INVESTMENTS
(cost $20,393,374)....... $20,392,773
============
TOTAL INVESTMENTS
(cost $575,569,423)....... 99.8% $801,164,099
======= ==============
CASH AND RECEIVABLES (NET).. .2% $ 1,978,023
======= ==============
NET ASSETS.................. 100.0% $803,142,122
======= ==============
DREYFUS BASIC S&P 500 STOCK INDEX FUND
Notes to Statement of Investments:
(a) Non-income producing.
(b) Partially held by the custodian in a segregated account as
collateral for open financial futures positions.
<TABLE>
<CAPTION>
STATEMENT OF FINANCIAL FUTURES OCTOBER 31, 1997
Market Value Unrealized
Covered (Depreciation)
Issuer Contracts by Contracts Expiration at 10/31/97
<S> <C> <C> <C> <C>
_____ ____________ _____________ _____________ _____________
Standard & Poor's 500........................ 48 $22,176,000 December '97 ($245,050)
==========
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS BASIC S&P 500 STOCK INDEX FUND
STATEMENT OF ASSETS AND LIABILITIES OCTOBER 31, 1997
Cost Value
<S> <C> <C> <C>
_____________ _____________
ASSETS: Investments in securities-See Statement of Investments $575,569,423 $801,164,099
Cash....................................... 611,389
Dividends and interest receivable.......... 899,521
Receivable for futures variation margin-Note 1(d) 501,600
Receivable for shares of Capital Stock subscribed 236,830
_____________
803,413,439
_____________
LIABILITIES: Due to The Dreyfus Corporation............. 139,663
Payable for investment securities purchased 123,953
Payable for shares of Capital Stock redeemed 7,234
Loan commitment fees payable-Note 4........ 467
_____________
271,317
_____________
NET ASSETS.................................................................. $803,142,122
=============
REPRESENTED BY: Paid-in capital............................ $563,376,498
Accumulated undistributed investment income-net3,107,763
Accumulated net realized gain (loss) on investments 11,308,235
Accumulated net unrealized appreciation (depreciation) on
investments [including ($245,050) net unrealized
. (depreciation) on financial futures]-Note 3 225,349,626
_____________
NET ASSETS.................................................................. $803,142,122
=============
SHARES OUTSTANDING
(70 million shares of $.001 par value Capital Stock authorized)............. 40,711,654
NET ASSET VALUE, offering and redemption price per share.................... $19.73
=======
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS BASIC S&P 500 STOCK INDEX FUND
STATEMENT OF OPERATIONS YEAR ENDED OCTOBER 31, 1997
INVESTMENT INCOME
<S> <C> <C> <C>
INCOME: Cash dividends (net of $66,698 foreign taxes
withheld at source).................... $ 10,918,917
Interest................................... 1,047,582
_____________
Total Income......................... $ 11,966,499
EXPENSES: Management fee-Note 2...................... 1,246,259
Loan commitment fees-Note 4................ 6,428
Interest expense-Note 4.................... 2,276
_____________
Total Expenses....................... 1,254,963
_____________
INVESTMENT INCOME-NET....................................................... 10,711,536
_____________
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS-Note 3:
Net realized gain (loss) on investments.... $ 7,745,611
Net realized gain (loss) on financial futures 3,754,936
_____________
Net Realized Gain (Loss)............. 11,500,547
Net unrealized appreciation (depreciation) on investments
[including ($209,200) net unrealized (depreciation) on
financial futures]..................... 139,249,216
_____________
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS...................... 150,749,763
_____________
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $161,461,299
==============
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS BASIC S&P 500 STOCK INDEX FUND
STATEMENT OF CHANGES IN NET ASSETS
Year Ended Year Ended
October 31, 1997 October 31, 1996
_______________ _________________
OPERATIONS:
<S> <C> <C>
Investment income-net.................................................. $ 10,711,536 $ 6,855,433
Net realized gain (loss) on investments................................ 11,500,547 5,196,283
Net unrealized appreciation (depreciation) on investments.............. 139,249,216 52,593,574
______________ ______________
Net Increase (Decrease) in Net Assets Resulting from Operations...... 161,461,299 64,645,290
______________ ______________
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income-net.................................................. (9,360,467) (6,203,176)
Net realized gain on investments....................................... (5,619,611) (857,577)
______________ ______________
Total Dividends...................................................... (14,980,078) (7,060,753)
______________ ______________
CAPITAL STOCK TRANSACTIONS-Note 5:
Net proceeds from shares sold.......................................... 469,295,068 270,339,224
Dividends reinvested................................................... 14,757,143 6,961,370
Cost of shares redeemed................................................ (276,514,308) (90,040,231)
______________ ______________
Increase (Decrease) in Net Assets from Capital Stock Transactions.... 207,537,903 187,260,363
______________ ______________
Total Increase (Decrease) in Net Assets............................ 354,019,124 244,844,900
NET ASSETS
Beginning of Period.................................................... 449,122,998 204,278,098
______________ ______________
End of Period.......................................................... $ 803,142,122 $ 449,122,998
============== ==============
Undistributed investment income-net...................................... $ 3,107,763 $ 1,756,694
______________ ______________
Shares Shares
______________ ______________
CAPITAL SHARE TRANSACTIONS-Note 5:
Shares sold............................................................ 25,506,327 19,010,939
Shares issued for dividends reinvested................................. 861,946 506,046
Shares redeemed........................................................ (14,850,933) (6,345,352)
______________ ______________
Net Increase (Decrease) in Shares Outstanding........................ 11,517,340 13,171,633
============== ==============
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS BASIC S&P 500 STOCK INDEX 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.
Year Ended October 31,
______________________________________________________
PER SHARE DATA: 1997 1996 1995(1) 1994(2)(3) 1993(3)
<S> <C> <C> <C> <C> <C>
______ ______ ______ ________ ______
Net asset value, beginning of period........ $15.38 $12.75 $10.42 $10.23 $10.00
______ ______ ______ ______ ______
Investment Operations:
Investment income-net....................... .30 .29 .26 .21(4) .01(5)
Net realized and unrealized gain(loss)
on investments............................ 4.52 2.69 2.37 .14 .22
______ ______ ______ ______ ______
Total from Investment Operations............ 4.82 2.98 2.63 .35 .23
______ ______ ______ ______ ______
Distributions:
Dividends from investment income-net........ (.28) (.30) (.26) (.16) .-
Dividends from net realized gain on investments (.19) (.05) (.04) (.00)(6) .-
______ ______ ______ ______ ______
Total Distributions......................... (.47) (.35) (.30) (.16) .-
______ ______ ______ ______ ______
Net asset value, end of period.............. $19.73 $15.38 $12.75 $10.42 $10.23
====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN......................... 31.87% 23.78% 25.75% 3.50% 2.30%(7)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets..... .20% .20% .37% .40%(8) .04%(7)
Ratio of net investment income
to average net assets..................... 1.72% 2.16% 2.36% 2.38% .12%(7)
Portfolio Turnover Rate..................... 3.75% 4.75% 1.03% 13.00% 22.00%(9)
Average commission rate paid (10)........... $.0299 $.0297 .- .- .-
Net Assets, end of period (000's Omitted)... $803,142 $449,123 $204,278 $123,994 $24,004
(1) Effective September 15, 1995, the Fund's Investor and Class R designates were eliminated and the Fund became a single class
Fund.
(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 operations on September 30,
1993. Effective October 17, 1994, the Fund's Trust shares were redesignated
as Class R shares.
(4) Net investment income before reimbursement of expenses by the investment adviser for the year ended October 31, 1994
was $0.21.
(5) For the period September 30, 1993 (commencement of operations) to October 31, 1993, net investment income before reimbursement
of expenses by the investment adviser was $0.00.
(6) Amount represents less than $0.01.
(7) Not annualized.
(8) Annualized expense ratio before voluntary reimbursement of expenses by the investment adviser for the year ended October 31,
1994 was 0.45%.
(9) Turnover calculation does not include in-kind purchases amounting to $22,472,314.
(10) For fiscal years beginning November 1, 1995, the Fund is required to disclose its average commission rate paid per share for
purchases and sales of investment securities.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS BASIC S&P 500 STOCK INDEX FUND
NOTES TO FINANCIAL STATEMENTS
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES:
Dreyfus BASIC S&P 500 Stock Index Fund (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
replicate the total return of the Standard & Poor's 500 Composite Stock Price
Index primarily through investments in equity securities. 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.
On July 31, 1997 the Fund's Directors approved a change of the Fund's
name, effective August 15, 1997, from Dreyfus Institutional S&P 500 Stock
Index Fund to Dreyfus BASIC S&P 500 Stock Index Fund.
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 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. Realized gain and loss from
securities transactions are recorded on the identified cost basis. Dividend
income is recognized on the ex-dividend date and interest income, including,
where applicable, amortization of discount on investments, is recognized on
the accrual 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 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) Financial futures: The Fund may invest in 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 (see Statement of Financial Futures).
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. Typically, variation margin payments are
received or made 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. Contracts open at
October 31, 1997, and their related unrealized depreciation are set forth in
the Statement of Financial Futures.
DREYFUS BASIC S&P 500 STOCK INDEX FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(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. 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.
On August 4, 1997, the Board of Directors declared dividends from net
investment income in the amount of $.08 per share payable on August 5, 1997
to shareholders of record on August 4, 1997.
(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.
NOTE 2-INVESTMENT MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
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 .20 of 1% 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, commitment fees,
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 by the Manager to the non-interested Directors.
NOTE 3-SECURITIES TRANSACTIONS:
The aggregate amount of purchases and sales of investment securities,
excluding short-term securities and financial futures, during the period
ended October 31, 1997 amounted to $219,424,909 and $22,397,639,
respectively.
At October 31, 1997, accumulated net unrealized appreciation on
investments and financial futures was $225,349,626, consisting of
$232,792,101 gross unrealized appreciation and $7,442,475 gross unrealized
depreciation.
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 4-BANK LINE OF CREDIT:
The Fund participates with other Dreyfus-managed funds in a $600 million
redemption credit facility ("Facility") to be utilized for temporary or
emergency purposes, including the financing of redemptions. In connection
therewith, the Fund has agreed to pay commitment fees on its pro rata portion
of the Facility. Interest is charged to the Fund at rates based on prevailing
market rates in effect at the time of borrowings. At October 31, 1997, there
were no outstanding borrowings under the Facility.
DREYFUS BASIC S&P 500 STOCK INDEX FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The average daily amount of borrowings outstanding under a previous line of
credit during the period ended October 31, 1997
was approximately $40,000, with a related weighted average annualized
interest rate of 5.77%. The maximum amount borrowed at any time during the
period ended October 31, 1997 was $3.6 million.
NOTE 5-ACQUISITION OF COMMON TRUST ASSETS:
On April 2, 1997, the Fund acquired a portion of the assets of the MCM EB
Funds, a trust advised by a subsidiary of Mellon Bank. The acquisition was
accomplished by an exchange of 4,447,760 shares of the Fund's Capital Stock
for cash and securities of the trust totaling $71,920,286 which is included
in net proceeds for shares sold on the Statement of Changes in Net Assets.
On May 10, 1996, the Fund acquired a portion of the assets of the EB
Stock Index Fund, a trust advised by a subsidiary of Mellon Bank, N.A. The
acquisition was accomplished by an exchange of 7,652,013 Class R shares of
the Fund's Capital Stock for cash, securities and assumption of liabilities
of the trust totaling $108,505,537 which is included in net proceeds from
shares sold on the Statement of Changes in Net Assets.
DREYFUS BASIC S&P 500 STOCK INDEX 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,
including the statement of investments and statement of financial futures, of
Dreyfus BASIC S&P 500 Stock Index Fund 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 custodi
an. As to securities purchased and sold, but not received or delivered, we
performed other appropriate auditing procedures. 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 BASIC S&P 500 Stock Index Fund 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.
[KPMG Peat Marwick LLP signature logo]
New York, New York
December 17, 1997
IMPORTANT TAX INFORMATION (UNAUDITED)
For Federal tax purposes the Fund hereby designates $.165 per share as a
long-term capital gain distribution of the $.250 per share paid on December
27, 1996.
The Fund also designates 86.76% of the ordinary dividends paid during the
fiscal year ended October 31, 1997 as qualifying for the corporate dividends
received deduction. Shareholders will receive notification in January 1998 of
the percentage applicable to the preparation of their 1997 income tax
returns.
Registration Mark
[Dreyfus lion "d" logo]
DREYFUS BASIC S&P 500
STOCK INDEX 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. 713AR9710
BASIC
S&P 500
Stock Index Fund
Annual Report
October 31, 1997
Registration Mark
[Dreyfus logo]
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
DREYFUS BASIC S&P 500 STOCK INDEX FUND AND THE
STANDARD & POOR'S 500 COMPOSITE STOCK PRICE INDEX
EXHIBIT A:
DREYFUS STANDARD
BASIC & POOR'S 500
S&P 500 COMPOSITE
PERIOD STOCK STOCK
INDEX FUND PRICE INDEX *
9/30/93 10,000 10,000
10/31/93 10,230 10,207
10/31/94 10,588 10,601
10/31/95 13,314 13,401
10/31/96 16,480 16,628
10/31/97 21,732 21,964
* Source: Lipper Analytical Services, Inc.
