DREYFUS PREMIER LIMITED TERM INCOME FUND
LETTER TO SHAREHOLDERS
Dear Shareholder:
<TABLE>
<CAPTION>
We are pleased to report the performance for the Dreyfus Premier Limited
Term Income Fund for its 12-month reporting period ended October 31, 1997,
as shown in the following table:
Income Dividends Distribution Rate
Total Return* (Approximate Per Share) (Per Share)**
___________ _____________________ _________________
<S> <C> <C> <C>
Class A Shares 7.80% $.631 5.59%
Class B Shares 7.56% $.568 5.16%
Class C Shares 6.49% $.564 5.20%
Class R Shares 8.09% $.660 6.02%
Lehman Bros. Aggregate Bond Index 8.89%
</TABLE>
THE ECONOMY
With the level of inflation as low as has been seen since 1964 and
unemployment still near a 23-year low, the economy continued its solid growth
over the reporting period. Gross Domestic Product (GDP) - the dollar total of
all goods and services produced in the United States - has grown in excess of
3% for the past four quarters, a level and consistency of gain unmatched
since 1984. This extraordinary economic performance has been fueled by huge
business investment in new plant and equipment as well as a renewed surge in
consumer spending over the summer. Consumers play a substantial role in
determining the course of the economy since their spending accounts for two
thirds of all economic activity. Retail sales rose through the summer and
into September, although there was some sign of deceleration as the third
quarter progressed.
The big economic story continued to be the lack of inflation in an
economy now in its seventh year of expansion. This remarkable price
stability, at a time in the business cycle when inflationary pressures would
usually be apparent, has enabled the Federal Reserve Board (the "Fed") to
refrain from tightening monetary policy. The Federal Open Market Committee
(FOMC), the policy-making arm of the Fed, has raised interest rates just once
in over two years, a period roughly coinciding with the surge of growth in
the economy. The last increase in short-term interest rates came on March 25,
1997 when the FOMC increased the Federal Funds rate by a modest one quarter
of a percentage point to 5.50%. (The Federal Funds rate is the rate of
interest that banks charge one another for overnight loans.)
Of course, the recent financial market turbulence arising from currency
devaluations in some of the economically weaker Southeast Asian countries has
added a cautionary note to any Fed monetary actions that might further roil
investment markets. The Southeast Asian economies have been cooling or in
outright recession for some time and represent a large share of the global
economy and the U.S. import/export market. The recent crisis has boosted the
value of the U.S. dollar and could further dampen the demand for U.S. exports
to this region. This bodes well for continued low inflation in the U.S. and
weakens the argument that we are on the brink of price acceleration.
In fact, various economic measures indicate that inflation remains in
check. The Implicit Price Deflator, an indicator of inflation that measures
the prices of all goods and services in the U.S., has risen at an annual rate
of less than 2% for the past two quarters. This favorable trend in prices has
been mirrored by both the Consumer Price and Producer Price Indices. The
Labor Department's Employment Cost Index, a broad measure of changes in wages
and benefits, has indicated relatively modest increases in labor costs.
Still, the labor market remains tight, with the unemployment rate at a level
unmatched in 23 years.
Whether the economy will slow without further monetary restraint by the
Fed remains an open question. Industrial production has been strong, and
operating rates, an indicator of possible future price pressures, have edged
to their highest level in two years. Of paramount concern to Fed Chairman
Alan Greenspan is the possibility that continuing strong economic growth will
drive the unemployment rate even lower, and a subsequent corresponding
upsurge in wage rates will reignite inflation. The performance of the
economy over the coming months appears crucial in determining whether the Fed
will actively restrain the economy. We remain alert to changes in economic
trends that would increase the risk of rising inflation and, consequently,
the prospect of higher interest rates.
THE MARKET AND THE PORTFOLIO
As the year progressed, fixed-income investors became comfortable with
the economic scenario of solid growth combined with low inflation. Long-term
interest rates peaked in April with the 30-year U.S. Treasury Bond yielding
7.17%. By October, the 30-year U.S. Treasury Bond had decreased in yield by
102 basis points to a level of 6.15%. The change in market sentiment,
particularly over the last month of the reporting period, was due not only to
low inflation prospects but also to concern over the currency devaluation in
some Southeast Asian economies.
For the reporting period, the Fund maintained a neutral duration relative
to its benchmark index, the Lehman Brothers Aggregate Bond Index. The Fund
maintained a relatively neutral allocation in Treasury securities (40% for
the Fund vs 43% for the Index). During the year, the Fund's mortgage
securities position was decreased to 32% at the end of the period from an
overweighting of 38.7% at the beginning of the period. The Lehman Brothers
Aggregate Bond Index weighting for mortgage securities was approximately 30%.
Market volatility as well as the dramatic decrease in long-term interest
rates restrained the performance of the Fund's mortgage allocation. The
Fund's overweighting of corporate securities (24% for the Fund vs 19% for the
Index) helped the performance as the Fund continued to take advantage of the
improving credit environment that has been enhanced by strong corporate
earnings.
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
November 18, 1997
New York, N.Y.
* Total return includes reinvestment of dividends and any capital gains
paid, and does not take into consideration the maximum initial sales charge
in the case of Class A shares or the contingent deferred sales charge imposed
on redemptions in the case of Class B and Class C shares.
** Distribution rate per share is based upon dividends per share paid from
net investment income during the period, divided by the maximum offering
price per share at the end of the period in the case of Class A shares or net
asset value per share at the end of the period in the case of Class B, Class
C and Class R shares.
***SOURCE: LEHMAN BROTHERS-The Lehman Brothers Aggregate Bond Index is a
widely accepted unmanaged index of corporate, government and government
agency debt instruments, mortgage-backed securities and asset-backed
securities. Reflects reinvestment of dividends and capital gains.
<TABLE>
<CAPTION>
DREYFUS PREMIER LIMITED TERM INCOME FUND OCTOBER 31, 1997
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN DREYFUS PREMIER
LIMITED TERM INCOME FUND CLASS R SHARES AND THE LEHMAN BROTHERS AGGREGATE
BOND INDEX
$16,859
Lehman Brothers
Aggregate Bond Index*
Dollars
$15,635
Dreyfus Premier
Limited Term Income
Fund (Class R Shares)
*Source: Lehman Brothers
Average Annual Total Returns
Class A Shares Class B Shares
_____________________________________________________________ __________________________________________________________________
% Return Reflecting
% Return Applicable Contingent
Reflecting % Return Deferred Sales
% Return Without Maximum Initial Assuming No Charge Upon
Period Ended 10/31/97 Sales Charge Sales Charge (3.0%) Period Ended 10/31/97 Redemption Redemption*
_____________________ _______________ __________________ _____________________ ____________ _________________
<S> <C> <C> <C> <C> <C>
1 Year 7.80% 4.60% 1 Year 7.56% 4.56%
From Inception (4/7/94) 6.82 5.92 From Inception (12/19/94) 8.06 7.45
Class C Shares Class R Shares
_____________________________________________________________ __________________________________________________________________
% Return Reflecting
Applicable Contingent
% Return Deferred Sales
Assuming No Charge Upon
Period Ended 10/31/97 Redemption Redemption** Period Ended 10/31/97
_____________________ _______________ _____________________ _____________________
1 Year 6.49% 5.74% 1 Year 8.09%
From Inception (12/19/94) 7.50 7.50 5 Years 6.32
From Inception (7/11/91) 7.34
</TABLE>
Past performance is not predictive of future performance.
The above graph compares a $10,000 investment made in Class R shares of
Dreyfus Premier Limited Term Income Fund on 7/11/91 (Inception Date) to a
$10,000 investment made in the Lehman Brothers Aggregate Bond Index on that
date. For comparative purposes, the value of the Index on 6/30/91 is used as
the beginning value on 7/11/91. All dividends and capital gain distributions
are reinvested. Performance for Class A, Class B and Class C shares will vary
from the performance of Class R shares shown above due to differences in
charges and expenses.
The Fund's performance shown in the line graph takes into account all
applicable fees and expenses. The Lehman Brothers Aggregate Bond Index is a
widely accepted, unmanaged index of corporate, government and government
agency debt instruments, mortgage-backed securities, and asset-backed
securities. The Index 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.
* The maximum contingent deferred sales charge for Class B shares is 3% and
is reduced to 0% after five years.
**The maximum contingent deferred sales charge for Class C shares is .75% for
shares redeemed within one year of the date of purchase.
<TABLE>
<CAPTION>
DREYFUS PREMIER LIMITED TERM INCOME FUND
STATEMENT OF INVESTMENTS OCTOBER 31, 1997
Principal
Bonds and Notes-96.8% Amount Value
_________ _________
Banking-4.2% BankAmerica Capital II,
<S> <C> <C> <C>
Gtd. Capital Securities, Ser. 2, 8%, 2026 $ 2,000,000 $ 2,085,760
____________
Foods and Beverages-4.2% McDonald's,
Medium-Term Notes, 8 3/8%, 1999...... 2,000,000 2,094,278
____________
Industrial-7.5% ASARCO,
Deb., 8 1/2%, 2025................... 1,500,000 1,704,744
Goodyear Tire & Rubber,
Notes, 6 5/8%, 2006.................. 2,000,000 2,007,842
____________
3,712,586
____________
Oil and Gas-4.2% ENSERCH,
Notes, 8%, 1999...................... 2,000,000 2,029,798
____________
Utilities-4.3%........ Philadelphia Electric,
First and Refunding Mortgage, 7 3/4%, 2023 2,050,000 2,146,493
____________
U.S. Governments-40.3%.. U.S. Treasury Bonds:
8 1/8%, 8/15/2019.................... 500,000 611,797
6 1/2%, 11/15/2026................... 3,200,000 3,331,500
U.S. Treasury Notes:
9 1/4%, 8/15/1998.................... 1,000,000 1,027,812
7 1/8%, 9/30/1999.................... 4,000,000 4,107,500
8 7/8%, 5/15/2000.................... 2,000,000 2,150,313
6 1/4%, 10/31/2001................... 2,000,000 2,034,688
7 1/2%, 11/15/2001................... 1,000,000 1,061,875
5 7/8%, 11/15/2005................... 4,600,000 4,588,500
7%, 7/15/2006........................ 1,000,000 1,071,719
____________
19,985,704
____________
U.S. Government Agencies-32.1% Federal Home Loan Mortgage Corp.,
8%, 6/1/2012......................... 999,999 1,035,929
Federal National Mortgage Association,
8%, 5/1/2012......................... 1,000,000 1,035,311
Government National Mortgage Association I:
6 1/2%, 3/15/2024.................... 5,457,897 5,416,963
7%, 8/15/2008-2/15/2026.............. 4,475,077 4,536,111
7 1/2%, 5/15/2010-5/15/2023.......... 3,818,543 3,933,157
____________
15,957,471
____________
TOTAL BONDS AND NOTES
(cost $47,182,630)................... $48,012,090
============
DREYFUS PREMIER LIMITED TERM INCOME FUND
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1997
Principal
Short-Term Investments-.4% Amount Value
____________ ____________
Repurchase Agreement;... Goldman, Sachs & Co.
TriParty Repurchase Agreement, 5.67%
dated 10/31/1997, due 11/3/1997 in the
amount of $199,671 (fully collateralized by
$214,000 U.S. Treasury Bills,
due 9/17/1998, value $204,356)
(cost $199,577)...................... $ 199,577 $ 199,577
============
TOTAL INVESTMENTS (cost $47,382,207)........................................ 97.2% $48,211,667
===== ============
===== ============
CASH AND RECEIVABLES (NET).................................................. 2.8% $ 1,380,455
===== ============
NET ASSETS.................................................................. 100.0% $49,592,122
===== ============
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS PREMIER LIMITED TERM INCOME FUND
STATEMENT OF ASSETS AND LIABILITIES OCTOBER 31, 1997
Cost Value
___________ ____________
ASSETS: Investments in securities-See Statement of Investments $47,382,207 $48,211,667
Cash....................................... 76,599
Interest receivable........................ 847,422
Receivable for investment securities sold.. 533,492
Receivable for shares of Capital Stock subscribed 100
____________
49,669,280
____________
LIABILITIES: Due to The Dreyfus Corporation and affiliates 26,711
Due to Distributor......................... 127
Payable for shares of Capital Stock redeemed 50,320
____________
77,158
____________
NET ASSETS.................................................................. $49,592,122
============
REPRESENTED BY: Paid-in capital............................ $50,458,458
Accumulated distributions in excess of
....................... investment income-net (229)
Accumulated net realized gain (loss) on investments (1,695,567)
Accumulated net unrealized appreciation (depreciation)
....................... on investments-Note 3 829,460
____________
NET ASSETS.................................................................. $49,592,122
============
</TABLE>
<TABLE>
<CAPTION>
NET ASSET VALUE PER SHARE
_____________________________
Class A Class B Class C Class R
_________ _________ _________ ________
<S> <C> <C> <C> <C>
Net Assets................................. $1,168,841 $541,594 $349,190 $47,532,497
Shares Outstanding......................... 106,626 49,257 32,200 4,336,349
NET ASSET VALUE PER SHARE.................. $10.96 $11.00 $10.84 $10.96
========== ========== ========== ==========
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS PREMIER LIMITED TERM INCOME FUND
STATEMENT OF OPERATIONS YEAR ENDED OCTOBER 31, 1997
INVESTMENT INCOME
<S> <C> <C> <C>
INCOME Interest Income............................ $3,348,744
EXPENSES: Management fee-Note 2(a)................... $ 301,794
Distribution and service fees-Note 2(b).... 6,205
Loan commitment fees-Note 4................ 568
___________
Total Expenses....................... 308,567
___________
INVESTMENT INCOME-NET....................................................... 3,040,177
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS-Note 3:
Net realized gain (loss) on investments.... $ 270,293
Net unrealized appreciation (depreciation) on investments 587,912
___________
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS...................... 858,205
___________
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $3,898,382
===========
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS PREMIER LIMITED TERM INCOME FUND
STATEMENT OF CHANGES IN NET ASSETS
Year Ended Year Ended
October 31, 1997 October 31, 1996
________________ ________________
OPERATIONS:
<S> <C> <C>
Investment income-net..................................................... $ 3,040,177 $ 3,346,323
Net realized gain (loss) on investments................................... 270,293 213,628
Net unrealized appreciation (depreciation) on investments................. 587,912 (695,719)
____________ ____________
Net Increase (Decrease) in Net Assets Resulting from Operations....... 3,898,382 2,864,232
____________ ____________
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income-net:
Class A shares.......................................................... (62,894) (55,899)
Class B shares.......................................................... (12,995) (6,186)
Class C shares.......................................................... (10,942) (47)
Class R shares.......................................................... (2,993,247) (3,244,519)
____________ ____________
Total Dividends....................................................... (3,080,078) (3,306,651)
____________ ____________
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold:
Class A shares.......................................................... 480,351 73,664
Class B shares.......................................................... 643,507 73,604
Class C shares.......................................................... 372,836 16,607
Class R shares.......................................................... 16,660,760 10,953,081
Dividends reinvested:
Class A shares.......................................................... 28,678 23,900
Class B shares.......................................................... 8,915 4,451
Class C shares.......................................................... 9,961 24
Class R shares.......................................................... 2,275,410 2,447,188
Cost of shares redeemed:
Class A shares.......................................................... (360,387) (239,578)
Class B shares.......................................................... (264,910) (11,612)
Class C shares.......................................................... (43,101) (16,722)
Class R shares.......................................................... (21,846,124) (28,225,985)
____________ ____________
Increase (Decrease) in Net Assets from Capital Stock Transactions..... (2,034,104) (14,901,378)
____________ ____________
Total Increase (Decrease) in Net Assets............................. (1,215,800) (15,343,797)
NET ASSETS:
Beginning of Period....................................................... 50,807,922 66,151,719
____________ ____________
End of Period............................................................. $49,592,122 $50,807,922
============ ============
Undistributed investment income (distributions in excess of investment income)-net $ (229) $ 39,672
____________ ____________
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS PREMIER LIMITED TERM INCOME FUND
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
Shares
__________________________________________
Year Ended Year Ended
October 31, 1997 October 31, 1996
________________ ________________
CAPITAL SHARE TRANSACTIONS:
Class A
_______
Shares sold............................................................ 44,584 6,946
Shares issued for dividends reinvested................................. 2,666 2,231
Shares redeemed........................................................ (33,504) (22,392)
_________ _________
Net Increase (Decrease) in Shares Outstanding 13,746 (13,215)
========= =========
Class B
_______
Shares sold............................................................ 59,458 6,818
Shares issued for dividends reinvested................................. 827 417
Shares redeemed........................................................ (24,332) (1,081)
_________ _________
Net Increase (Decrease) in Shares Outstanding 35,953 6,154
========= =========
Class C
_______
Shares sold............................................................ 35,301 1,585
Shares issued for dividends reinvested................................. 931 2
Shares redeemed........................................................ (4,034) (1,587)
_________ _________
Net Increase (Decrease) in Shares Outstanding 32,198 --
- -
========= =========
Class R
_______
Shares sold............................................................ 1,548,384 1,019,945
Shares issued for dividends reinvested................................. 211,514 228,591
Shares redeemed........................................................ (2,030,683) (2,631,091)
_________ _________
Net Increase (Decrease) in Shares Outstanding (270,785) (1,382,555)
========= =========
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS PREMIER LIMITED TERM INCOME 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.
Class A 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.................. $10.78 $10.84 $10.22 $10.49
____ ____ ____ ____
Investment Operations:
Investment income-net................................. .62 .58 .56 .28
Net realized and unrealized gain (loss)
on investments...................................... .19 (.07) .62 (.27)
____ ____ ____ ____
Total from Investment Operations...................... .81 .51 1.18 .01
____ ____ ____ ____
Distributions:
Dividends from investment income-net.................. (.63) (.57) (.56) (.28)
____ ____ ____ ____
Net asset value, end of period........................ $10.96 $10.78 $10.84 $10.22
==== ==== ==== ====
TOTAL INVESTMENT RETURN(3)................................ 7.80% 4.85% 11.83% .11%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets............... .85% .85% .85% .83%(4)
Ratio of net investment income
to average net assets............................... 5.80% 5.38% 5.33% 4.47%(4)
Portfolio Turnover Rate............................... 129.94% 153.63% 73.00% 117.00%
Net Assets, end of period (000's Omitted)............. $1,169 $1,001 $1,150 $932
(1) The Fund commenced selling Investor shares on April 7, 1994. Effective October 17, 1994, the Fund's Investor shares were
redesignated as Class A shares.
(2) Effective October 17, 1994, The Dreyfus Corporation serves as the Fund's investment manager. Prior to October 17, 1994,
Mellon Bank, N.A. served as the Fund's investment manager.
(3) Exclusive of sales load.
(4) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS PREMIER LIMITED TERM INCOME FUND
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 B Shares Class C Shares
______________________________ __________________________
Year Ended October 31, Year Ended October 31,
______________________________ __________________________
PER SHARE DATA: 1997 1996 1995(1) 1997 1996 1995(1)
____ ____ ____ ____ ____ ____
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period....... $10.78 $10.84 $10.15 $10.73 $10.84 $10.15
____ ____ ____ ____ ____ ____
Investment Operations:
Investment income (loss)-net............... .56 .52 .47 (1.98) 3.05 .48
Net realized and unrealized gain (loss)
on investments........................... .23 (.07) .69 2.65 (2.65) .69
____ ____ ____ ____ ____ ____
Total from Investment Operations........... .79 .45 1.16 .67 .40 1.17
____ ____ ____ ____ ____ ____
Distributions:
Dividends from investment income-net....... (.57) (.51) (.47) (.56) (.51) (.48)
____ ____ ____ ____ ____ ____
Net asset value, end of period............. $11.00 $10.78 $10.84 $10.84 $10.73 $10.84
==== ==== ==== ==== ==== ====
TOTAL INVESTMENT RETURN........................ 7.56% 4.33% 11.32% 6.49% 3.83% 11.32%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets.... 1.35% 1.35% 1.35%(2) 1.35% 1.41% -
Ratio of net investment income
to average net assets.................... 5.06% 4.86% 4.85%(2) 4.98% 5.50% -
Portfolio Turnover Rate.................... 129.94% 153.63% 73.00% 129.94% 153.63% 73.00%
Net Assets, end of period (000's Omitted).. $542 $143 $78 $349 - -
(1) The Fund commenced selling Class B and Class C shares on December 19, 1994.
(2) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS PREMIER LIMITED TERM INCOME FUND
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) 1993
____ ____ ____ ____ ____
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period......... $10.78 $10.84 $10.22 $11.07 $10.71
____ ____ ____ ____ ____
Investment Operations:
Investment income- net....................... .65 .60 .58 .49(2) .51
Net realized and unrealized gain (loss)
on investments............................. .19 (.06) .62 (.75) .46
____ ____ ____ ____ ____
Total from Investment Operations............. .84 .54 1.20 (.26) .97
____ ____ ____ ____ ____
Distributions:
Dividends from investment income-net......... (.66) (.60) (.58) (.53) (.52)
Dividends from net realized gain on investments - - - (.06) (.09)
____ ____ ____ ____ ____
Total Distributions.......................... (.66) (.60) (.58) (.59) (.61)
____ ____ ____ ____ ____
Net asset value, end of period............... $10.96 $10.78 $10.84 $10.22 $11.07
==== ==== ==== ==== ====
TOTAL INVESTMENT RETURN.......................... 8.09% 5.12% 12.11% (2.46%) 9.33%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets...... .60% .60% .60% .60%(3) .60%
Ratio of net investment income
to average net assets...................... 6.06% 5.62% 5.58% 4.70% 4.81%(4)
Portfolio Turnover Rate...................... 129.94% 153.63% 73.00% 117.00% 112.00%
Net Assets, end of period (000's Omitted).... $47,532 $49,664 $69,924 $82,406 $59,534
(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 adviser was $.49 per share for the year ended
October 31, 1994.
(3) Expense ratio before reimbursement of expenses by the investment adviser was .60% for the year ended October 31, 1994.
(4) For the year ended October 31, 1993, the investment adviser reimbursed expenses of the Fund amounting to $.0509 per share.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
DREYFUS PREMIER LIMITED TERM INCOME FUND
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES:
Dreyfus Premier Limited Term Income 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 obtain as high a level of current
income as is consistent with safety of principal and maintenance of liquidity
by investing in fixed income obligations with average maturities not in
excess of ten years. The Dreyfus Corporation ("Manager") serves as the Fund's
investment adviser. The Manager is a direct subsidiary of Mellon Bank, N.A.
("Mellon Bank").
On January 31, 1997, the Fund's Directors approved a change to the Fund's
name, effective March 1, 1997, from "Premier Limited Term Income Fund" to
"Dreyfus Premier Limited Term Income Fund."
Premier Mutual Fund Services, Inc. (the "Distributor") is the distributor
of the Fund's shares. The Fund is authorized to issue 250 million of $.001
par value Capital Stock. The Fund currently offers four classes of shares:
Class A (50 million shares authorized), Class B (50 million shares
authorized), Class C (50 million shares authorized) and Class R (100 million
shares authorized). Class A, Class B and Class C shares are sold primarily to
retail investors through financial intermediaries and bear a distribution fee
and/or service fee. Class A shares are sold with a front-end sales charge and
bear a distribution fee, while Class B and Class C shares are subject to a
contingent deferred sales charge ("CDSC") and a distribution and service fee.
Class R shares are sold primarily to bank trust departments and other
financial service providers (including Mellon Bank and its affiliates) acting
on behalf of customers having a qualified trust or investment account or
relationship at such institution, and bear no distribution or service fees.
Class R shares are offered without a front-end sales load or CDSC. Each class
of shares has identical rights and privileges, except with respect to
distribution and service fees 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 (excluding short-term
investments and U.S. Government obligations) are valued each business day by
an independent pricing service ("Service") approved by the Board of
Directors. Investments for which quoted bid prices are readily available and
are representative of the bid side of the market in the judgment of the
Service are valued at the mean between the quoted bid prices (as obtained by
the Service from dealers in such securities) and asked prices (as calculated
by the Service based upon its evaluation of the market for such securities).
Other investments (which constitute a majority of the portfolio securities)
are carried at fair value as determined by the Service, based on methods
which include consideration of: yields or prices of securities of comparable
quality, coupon, maturity and type; indications as to values from dealers;
and general market conditions. 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. Investments in U.S. Government
obligations are valued at the mean between quoted bid and asked prices.
Short-term investments are carried at amortized cost, which approximates
value.
(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.
DREYFUS PREMIER LIMITED TERM INCOME FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(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, it the policy of the Fund not to distribute such gain.
(e) Federal income taxes: It is the policy of the Fund to continue to
qualify as a regulated investment company, if such qualification is in the
best interests of its shareholders, by complying with the applicable
provisions of the Internal Revenue Code, and to make distributions of taxable
income sufficient to relieve it from substantially all Federal income and
excise taxes.
The Fund has an unused capital loss carryover of approximately $1,637,000
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, $1,363,000 of the carryover expires in fiscal 2002 and $274,000
expires in fiscal 2003.
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 .60% 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,
Rule 12b-1 distribution fees and expenses, service 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 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.
DREYFUS PREMIER LIMITED TERM INCOME FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(b) Distribution and service 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 its average daily net assets attributable to its Class A
shares to compensate the Distributor and Dreyfus Service Corporation, an
affiliate of the Manager, for shareholder servicing activities and the
Distributor for activities and expenses primarily intended to result in the
sale of Class A shares. Under the Plan, the Fund may pay the Distributor for
distributing the Fund's Class B and Class C shares at an aggregate annual rate
of .50% of the value of the average daily net assets of Class B and Class C
shares. Class B and Class C shares are also subject to a service plan adopted
pursuant to Rule 12b-1, under which the Fund pays Dreyfus Service Corporation
or the Distributor for providing certain services to the holders of Class B
and Class C shares a fee at the annual rate of .25% of the value of the
average daily net assets of Class B and Class C shares. Class R shares bear no
service or distribution fee. During the period ended October 31, 1997, the
Fund was charged $2,681, $1,275 and $1,074, for Class A, Class B and Class C
shares, respectively pursuant to the distribution plan. During the period
ended October 31, 1997, the Fund was charged $638 and $537, respectively, for
Class B and Class C shares, respectively, pursuant to the service 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-SECURITIES TRANSACTIONS:
The aggregate amount of purchase and sales (including paydowns) of
investment securities, excluding short-term securities, during the period
ended October 31, 1997 amounted to $62,625,158 and $63,607,258, respectively.
At October 31, 1997, accumulated net unrealized appreciation on
investments was $829,460, consisting of $835,999 gross unrealized
appreciation and $6,539 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. For the period ended
October 31, 1997, the Fund did not borrow under the Facility.
DREYFUS PREMIER LIMITED TERM INCOME 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, of Dreyfus Premier Limited Term
Income 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 Premier Limited Term Income 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.
New York, New York
December 17, 1997
Registration Mark
[Dreyfus lion "d" logo]
DREYFUS PREMIER LIMITED TERM
INCOME 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. 345/645AR9710
Registration Mark
[Dreyfus logo]
Annual Report
Dreyfus Premier
Limited Term
Income Fund
October 31, 1997
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
IN DREYFUS PREMIER LIMITED TERM INCOME FUND CLASS R
SHARES AND THE LEHMAN BROTHERS AGGREGATE BOND INDEX
EXHIBIT A:
DREYFUS
PREMIER LEHMAN
LIMITED TERM BROTHERS
PERIOD INCOME FUND AGGREGATE
(CLASS R SHARES) BOND INDEX*
7/11/91 10,000 10,000
10/31/91 10,550 10,686
10/31/92 11,511 11,736
10/31/93 12,584 13,130
10/31/94 12,275 12,648
10/31/95 13,761 14,627
10/31/96 14,466 15,482
10/31/97 15,635 16,859
*Source: Lehman Brothers
