DREYFUS DISCIPLINED STOCK FUND
LETTER TO SHAREHOLDERS
Dear Shareholder:
<TABLE>
<CAPTION>
We are pleased to report that the performance of the Dreyfus Disciplined
Stock Fund kept pace with the strong results of the Standard & Poor's 500
Composite Stock Price Index ("S&P 500 Index") for the 12-month period ended
October 31, 1997, as shown in the following table:
Total Return*
____________
<S> <C>
Institutional Shares 32.12%
Retail Shares 32.32%
S&P 500 Index** 32.10%
</TABLE>
Economic Review
The U.S. economy has registered a step-up in growth in 1997 and 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 incoming 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,
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 of the
last week in 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 large capitalized
companies, 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 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
The Fund's strong performance for the fiscal year ended October 31, 1997
was achieved by adhering to a disciplined investment process which emphasizes
stocks that are undervalued and/or have improving earnings momentum. In
addition, this disciplined approach neutralizes unnecessary investment risks
by being sector and industry neutral and fully invested.
The five best performing stocks in the second half of this fiscal year
were Noble Drilling (+105%), Dell Computer (+91%), Compaq Computer (+87%),
Halliburton (+70%), and Guidant (+69%). However, it is equally important to
remember that with 181 names as of October 31, 1997, the portfolio remains
highly diversified and the top ten holdings account for less than 20% of
assets.
We thank you for entrusting us with assets to manage on your behalf. We
will maintain our disciplined approach in an effort to continue bringing you
rewarding returns.
Sincerely,
[Bert J. Mullins signature logo]
Bert J. Mullins
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 DISCIPLINED STOCK FUND
OCTOBER 31, 1997
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN DREYFUS DISCIPLINED
STOCK FUND RETAIL SHARES AND THE STANDARD & POOR'S 500 COMPOSITE STOCK
PRICE INDEX
$50,522
Dreyfus Disciplined
Stock Fund
(Retail Shares)
Dollars
$49,283
Standard & Poor's 500
Composite Stock
Price Index*
*Source: Lipper Analytical Services, Inc.
Average Annual Total Returns
<TABLE>
<CAPTION>
Institutional Shares Retail Shares
- --------------------------------------------------- -------------------------------------------------
Period Ended 10/31/97 Period Ended 10/31/97
- --------------------- ---------------------
<S> <C> <C> <C>
1 Year 32.12% 1 Year 32.32%
From Inception (4/6/94) 23.74 5 Years 19.98
From Inception (12/31/87) 17.89
</TABLE>
Past performance is not predictive of future performance.
The above graph compares a $10,000 investment made in Retail shares of
Dreyfus Disciplined Stock Fund on 12/31/87 (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.
Performance for Institutional shares will vary from the performance of Retail
shares shown above due to differences in charges and expenses.
The Dreyfus Disciplined Stock Fund seeks investment returns (including
capital appreciation and income) consistently superior to the Standard &
Poor's 500 Composite Stock Price Index by investing in a broadly diversified
list of equity securities generated by the application of quantitative
security selection and risk control techniques. 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.
<TABLE>
<CAPTION>
DREYFUS DISCIPLINED STOCK FUND
STATEMENT OF INVESTMENTS OCTOBER 31,1997
Common Stocks-98.9% Shares Value
_______________ _______________
<S> <C> <C>
Basic Industries-4.2% Cytec Industries 89,700 (a) $ 4,372,875
duPont (EI) de Nemours 136,000 7,735,000
FMC 56,300 (a) 4,549,744
Fort James 302,000 11,985,625
Great Lakes Chemical 79,900 3,755,300
Lubrizol 73,800 2,841,300
Mead 72,200 4,368,100
Morton International 144,800 4,778,400
Oakwood Homes 86,600 2,278,662
Owens-Illinois 66,400 (a) 2,290,800
Potash Corp. Saskatchewan 58,300 4,776,956
Praxair 102,900 4,482,581
Rohm & Haas 42,900 3,574,106
Sealed Air 47,100 (a) 2,428,594
_______________
64,218,043
_______________
Capital Spending-24.5% Adaptec 97,000 (a) 4,698,437
AlliedSignal 164,000 5,904,000
Altera 68,400 (a) 3,035,250
Applied Materials 108,100 (a) 3,607,838
BMC Software 57,500 (a) 3,471,562
Bay Networks 130,200 (a) 4,117,575
Browning-Ferris Industries 119,800 3,893,500
Cadence Design System 113,800 (a) 6,059,850
Case 94,100 5,628,356
Caterpillar 147,700 7,569,625
Cisco Systems 164,700 (a) 13,510,547
Compaq Computer 226,800 (a) 14,458,500
Computer Associates International 120,700 8,999,694
Cummins Engine 71,600 4,363,125
Dell Computer 71,800 (a) 5,752,975
EMC 113,400 (a) 6,350,400
Eaton 109,400 10,570,775
General Dynamics 49,200 3,994,425
General Electric 695,900 44,929,044
Grainger (W.W.) 34,300 2,999,106
Gulfstream Aerospace 135,500 (a) 3,929,500
HBO & Co. 115,900 5,041,650
Hewlett-Packard 92,800 5,724,600
Ingersoll-Rand 204,050 7,945,197
Intel 361,400 27,827,800
International Business Machines 234,300 22,976,044
Linear Technology 50,300 3,162,612
Lockheed Martin 94,127 8,947,948
Lucent Technologies 159,100 13,115,806
Maxim Integrated Products 71,700 (a) 4,750,125
Microsoft 238,100 (a) 30,953,000
Northrop Grumman 35,200 3,845,600
Omnicom Group 68,300 4,823,688
Oracle 281,400 (a) 10,068,844
DREYFUS DISCIPLINED STOCK FUND
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31,1997
Common Stocks (continued) Shares Value
_______________ _______________
Capital Spending (continued) Parametric Technology 126,500 (a) $ 5,581,813
Raychem 66,100 5,986,181
Raytheon 125,400 6,802,950
Storage Technology 88,200 (a) 5,176,237
Sun Microsystems 114,600 (a) 3,925,050
Tellabs 114,500 (a) 6,183,000
Texas Instruments 47,900 5,110,331
United Technologies 117,300 8,211,000
Xerox 123,400 9,787,163
_______________
373,790,723
_______________
Consumer Cyclical-11.7% American Greetings, Cl. A 65,500 2,272,031
Clear Channel Communications 58,200 (a) 3,841,200
Cox Communications, Cl A. 117,200 (a) 3,603,900
Dayton Hudson 120,700 7,581,469
Dillard's, Cl. A 127,800 4,904,325
Disney (Walt) 183,271 15,074,040
Federated Department Stores 292,300 (a) 12,861,200
Ford Motor 480,800 21,004,950
Gannett 90,600 4,762,163
Gap 208,900 11,110,869
Goodyear Tire & Rubber 56,800 3,557,100
Lear 76,300 (a) 3,667,169
Liz Claiborne 106,600 5,403,287
Magna International, Cl. A 68,900 4,538,787
Marriott International 97,600 6,807,600
New York Times, Cl. A. 157,000 8,595,750
Penney (J.C.) 153,700 9,020,269
Promus Hotel 73,400 (a) 2,880,950
Safeway 162,900 (a) 9,468,563
Sears, Roebuck 113,800 4,765,375
TJX Cos. 337,000 9,983,625
Time Warner 176,700 10,193,381
Wal-Mart Stores 374,100 13,140,262
_______________
179,038,265
_______________
Consumer Staples-11.2% Avon Products 60,800 3,982,400
CPC International 40,300 3,989,700
Clorox 88,400 6,188,000
Coca-Cola 396,700 22,413,550
Coca-Cola Enterprises 145,200 4,083,750
Colgate-Palmolive 126,000 8,158,500
ConAgra 286,100 8,618,763
Dole Food 101,500 4,497,719
Gillette 84,800 7,552,500
Hershey Foods 77,800 4,298,450
PepsiCo 523,500 19,271,344
Philip Morris Cos. 515,800 20,438,575
Procter & Gamble 391,100 26,594,800
DREYFUS DISCIPLINED STOCK FUND
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31,1997
Common Stocks (continued) Shares Value
_______________ _______________
Consumer Staples (continued) Quaker Oats 138,500 $ 6,630,687
Ralston-Purina Group 96,800 8,687,800
Unilever, N.V. 297,700 15,889,737
_______________
171,296,275
_______________
Energy-9.2% Baker Hughes 122,800 5,641,125
British Petroleum, ADS 106,470 9,342,743
Chevron 246,200 20,419,212
Coastal 102,300 6,150,788
Columbia Gas System 75,200 5,433,200
Exxon 380,500 23,376,969
Halliburton 101,000 6,022,125
Noble Drilling 123,000 (a) 4,374,187
Phillips Petroleum 183,100 8,857,463
Royal Dutch Petroleum , ADR 341,100 17,950,388
Texaco 235,200 13,391,700
Tidewater 47,500 3,120,156
USX-Marathon Group 199,900 7,146,425
Valero Energy 139,700 4,208,462
YPF Sociedad Anonima, ADS 131,500 4,208,000
_______________
139,642,943
_______________
Health Care-11.0% American Home Products 176,100 (a) 13,053,413
Becton, Dickinson 97,600 4,495,700
Boston Scientific 65,700 (a) 2,989,350
Bristol-Myers Squibb 230,600 20,235,150
Columbia/HCA Healthcare 132,600 3,745,950
Elan, ADS 91,600 (a) 4,568,550
Guidant 100,400 5,773,000
Health Management Association 164,100 (a) 3,999,937
Johnson & Johnson 277,500 15,921,563
Lilly (Eli) 342,600 22,911,375
Merck & Co 113,900 10,165,575
Pfizer 265,400 18,777,050
PhyCor 82,500 (a) 1,902,656
Schering-Plough 284,400 15,944,175
SmithKline Beecham, ADS 73,300 3,490,912
United Healthcare 81,100 3,755,944
Warner-Lambert 91,400 13,087,338
Wellpoint Health Networks 51,700 2,365,275
_______________
167,182,913
_______________
Interest Sensitive-16.1% ACE Limited 69,900 6,496,331
Ahmanson (H F) & Co. 94,800 5,593,200
Allstate 166,730 13,828,169
Ambac Financial Group 99,600 4,208,100
Banc One 269,100 14,026,838
BankAmerica 313,500 22,415,250
BankBoston 80,380 6,515,804
DREYFUS DISCIPLINED STOCK FUND
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31,1997
Common Stocks (continued) Shares Value
_______________ _______________
Interest Sensitive(continued) Bankers Trust NY 60,700 $ 7,162,600
Bear Stearns Cos. 77,767 3,086,378
CIGNA 57,700 8,957,925
Chase Manhattan 189,040 21,810,490
Countrywide Credit Industries 114,700 3,935,644
Fannie Mae 317,500 15,378,906
First Chicago NBD 227,584 16,556,736
General Re 21,600 4,259,250
Hartford Financial Services Group 89,600 7,257,600
Lehman Brothers Holdings 86,500 4,070,906
Merrill Lynch 135,300 9,149,662
Old Republic International 97,350 3,480,263
PMI Group 64,000 3,868,000
PNC Bank 372,900 17,712,750
Providian Financial 79,700 2,948,900
Salomon 116,600 9,058,362
SouthTrust 153,400 7,363,200
Summit Bancorp 125,450 5,355,147
SunAmerica 152,250 5,471,484
Travelers Group 145,200 10,164,000
Union Planters 81,100 4,810,244
_______________
244,942,139
_______________
Mining & Metals-1.0% Alumax 50,900 (a) 1,654,250
Aluminum Co. of America 53,200 3,883,600
Freeport McMoRan Cooper & Gold, Cl. B. 170,100 4,061,138
Phelps Dodge 44,900 3,339,437
USX-U.S. Steel Group 85,500 2,907,000
_______________
15,845,425
_______________
Transportation-1.6% Canadian Pacific 309,700 9,232,931
Continental Airlines, Cl. B 151,200 (a) 6,539,400
Illinois Central 177,900 6,337,688
Northwest Airlines, Cl. A 59,200 (a) 2,664,000
_______________
24,774,019
_______________
Utilities-8.4% Ameritech 165,800 10,777,000
Bell Atlantic 250,005 19,969,149
BellSouth 345,500 16,346,469
CMS Energy 91,300 3,332,450
Cable & Wireless, ADS 100,400 2,459,800
Centerior Energy 274,500 3,568,500
Cincinnati Bell 146,700 3,960,900
Entergy 179,900 4,396,306
Florida Progress 199,200 6,486,450
GPU 204,600 7,403,963
llinova 152,100 3,384,225
LCI International 124,400 (a) 3,218,850
SBC Communications 252,400 16,058,950
DREYFUS DISCIPLINED STOCK FUND
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31,1997
Common Stocks (continued) Shares Value
_______________ _______________
Utilities (continued) Telefonos de Mexico, Cl. L, ADS 180,700 $ 7,815,275
Texas Utilities 272,100 9,761,588
WorldCom 269,500 (a) 9,061,937
_______________
128,001,812
_______________
TOTAL COMMON STOCKS
(cost $1,232,945,973) $ 1,508,732,557
===============
Principal
Short-Term Investments-1.3% Amount
_______________
Repurchase Agreements; Goldman Sachs & Company, Tri-Party
Repurchase Agreement, 5.67% dated
10/31/97 to be repurchased at $20,134,273
on 11/3/97, collateralized by $20,156,000
U.S. Treasury Notes, 57\8% due 7/31/99
(cost $20,124,764) $ 20,124,764 $ 20,124,764
===============
TOTAL INVESTMENTS (cost $1,253,070,737) 100.2% $ 1,528,857,321
===== ===============
LIABILITIES, LESS CASH AND RECEIVABLES.................................... (.2%) $ (3,063,667)
===== ===============
NET ASSETS................................................................ 100.0% $ 1,525,793,654
===== ===============
Notes to Statement of Investments:
(a) Non-income producing.
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS DISCIPLINED STOCK FUND
STATEMENT OF ASSETS AND LIABILITIES OCTOBER 31, 1997
Cost Value
_______________ _______________
ASSETS: Investments in securities-See Statement of Investments $ 1,253,070,737 $ 1,528,857,321
Cash....................................... 18,711,578
Receivable for investment securities sold.. 3,949,131
Receivable for shares of Capital Stock subscribed 2,948,572
Dividends and interest receivable 1,844,612
_______________
1,556,311,214
_______________
LIABILITIES: Due to The Dreyfus Corporation and affiliates 1,275,448
Due to Distributor......................... 4,016
Payable for investment securities purchased 22,178,608
Payable for shares of Capital Stock redeemed 7,059,488
_______________
30,517,560
_______________
NET ASSETS.................................................................. $ 1,525,793,654
===============
REPRESENTED BY: Paid-in capital............................ $ 1,088,518,803
Accumulated undistributed investment income-net 3,458,748
Accumulated net realized gain (loss) on investments 158,029,519
Accumulated net unrealized appreciation (depreciation) on
investments-Note 3 275,786,584
_______________
NET ASSETS.................................................................. $1,525,793,654
===============
NET ASSET VALUE PER SHARE
_____________________________
Institutional Retail
Shares Shares
_______________ _______________
Net Assets.................................................................. $ 43,617,285 $ 1,482,176,369
Shares Outstanding.......................................................... 1,329,789 45,214,062
NET ASSET VALUE PER SHARE................................................... $32.80 $32.78
===== =====
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS DISCIPLINED STOCK FUND
STATEMENT OF OPERATIONS YEAR ENDED OCTOBER 31, 1997
INVESTMENT INCOME
INCOME: Cash dividends (net of $222,197 foreign taxes
withheld at source).................... $ 20,021,214
Interest................................... 1,457,909
_______________
Total Income......................... $ 21,479,123
EXPENSES: Management fee-Note 2(a)................... 10,968,122
Distribution fees (Institutional shares)-Note 2(b) 104,558
Loan commitment fees-Note 4................ 12,469
_______________
Total Expenses....................... 11,085,149
_______________
INVESTMENT INCOME-NET....................................................... 10,393,974
_______________
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS-Note 3:
Net realized gain (loss) on investments.... $162,472,833
Net realized gain (loss) on financial futures (3,908,442)
_______________
Net Realized Gain (Loss)............. 158,564,391
Net unrealized appreciation (depreciation) on investments 147,563,021
_______________
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS...................... 306,127,412
_______________
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $316,521,386
===============
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS DISCIPLINED STOCK FUND
STATEMENT OF CHANGES IN NET ASSETS
Year Ended Year Ended
October 31, 1997 October 31, 1996*
________________ ________________
OPERATIONS:
Investment income-net................................................... $ 10,393,974 $ 7,354,549
Net realized gain (loss) on investments................................. 158,564,391 57,954,936
Net unrealized appreciation (depreciation) on investments............... 147,563,021 67,153,959
________________ ________________
Net Increase (Decrease) in Net Assets Resulting from Operations..... 316,521,386 132,463,444
________________ ________________
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income-net:
Institutional shares.................................................. (188,268) (255,975)
Retail shares......................................................... (9,067,989) (6,232,853)
Net realized gain on investments:
Institutional shares.................................................. (1,492,485) (515,099)
Retail shares......................................................... (55,278,901) (10,485,121)
________________ ________________
Total Dividends..................................................... (66,027,643) (17,489,048)
________________ ________________
CAPITAL STOCK TRANSACTIONS-Note 5:
Net proceeds from shares sold:
Institutional shares.................................................. 1,894,733,483 8,663,919
Retail shares......................................................... 982,425,217 528,257,385
Dividends reinvested:
Institutional shares.................................................. 1,577,637 604,405
Retail shares......................................................... 56,777,928 14,311,078
Cost of shares redeemed:
Institutional shares.................................................. (1,885,923,012) (23,996,494)
Retail shares......................................................... (603,753,842) (228,187,217)
________________ ________________
Increase (Decrease) in Net Assets from Capital Stock Transactions... 445,837,411 299,653,076
________________ ________________
Total Increase (Decrease) in Net Assets........................... 696,331,154 414,627,472
NET ASSETS:
Beginning of Period..................................................... 829,462,500 414,835,028
________________ ________________
End of Period........................................................... $ 1,525,793,654 $ 829,462,500
================ ================
Undistributed investment income-net....................................... $ 3,458,748 $ 2,321,031
________________ ________________
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS DISCIPLINED STOCK FUND
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
Shares
_________________________________________
Year Ended Year Ended
October 31, 1997 October 31, 1996*
________________ ________________
CAPITAL SHARE TRANSACTIONS-Note 5:
Institutional Shares
___________________
Shares sold............................................................ 62,998,458 359,313
Shares issued for dividends reinvested................................. 58,497 26,498
Shares redeemed........................................................ (62,544,960) (1,025,776)
________________ ________________
Net Increase (Decrease) in Shares Outstanding 511,995 (639,965)
================ ================
Retail Shares
_____________
Shares sold............................................................ 32,661,202 21,523,328
Shares issued for dividends reinvested................................. 2,097,579 622,751
Shares redeemed........................................................ (19,851,470) (9,160,744)
________________ ________________
Net Increase (Decrease) in Shares Outstanding 14,907,311 12,985,335
================ ================
*Effective July 15, 1996, Investor Class shares were redesignated as
Institutional shares and Class R shares were redesignated as Retail shares.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS DISCIPLINED STOCK 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.
Institutional Shares
_____________________________________________
Year Ended October 31,
_____________________________________________
PER SHARE DATA: 1997 1996(1) 1995 1994(2,3)
_____ _____ _____ _____
<S> <C> <C> <C> <C>
Net asset value, beginning of period.................. $26.64 $22.08 $18.54 $17.86
_____ _____ _____ _____
Investment Operations:
Investment income-net................................. .23 .24 .28 .16
Net realized and unrealized gain (loss)
on investments...................................... 7.89 5.11 3.98 .66
_____ _____ _____ _____
Total from Investment Operations...................... 8.12 5.35 4.26 .82
_____ _____ _____ _____
Distributions:
Dividends from investment income-net.................. (.18) (.23) (.25) (.14)
Dividends from net realized gain on investments....... (1.78) (.56) (.47) -
_____ _____ _____ _____
Total Distributions................................... (1.96) (.79) (.72) (.14)
_____ _____ _____ _____
Net asset value, end of period........................ $32.80 $26.64 $22.08 $18.54
===== ===== ===== =====
TOTAL INVESTMENT RETURN................................... 32.12% 24.84% 23.96% 4.62%(4)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets............... 1.15% 1.15% 1.15% .66%(4)
Ratio of net investment income
to average net assets............................... .68% 1.01% 1.36% .74%(4)
Portfolio Turnover Rate............................... 68.87% 64.47% 60.00% 106.00%
Average commission rate paid (5)...................... $.0558 $.0485 - -
Net Assets, end of period (000's Omitted)............. $43,617 $ 21,783 $ 32,189 $19,580
(1) Effective July 15, 1996, Investor Class shares were redesignated as
Institutional shares.
(2) The Fund commenced selling Investor shares on April 6, 1994.
(3) 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.
(4) Not annualized.
(5) For fiscal years beginning on November 1, 1995, the Fund is required to
disclose its average commission rate paid per share for purchases and
sales of investment securities.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS DISCIPLINED STOCK 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.
Retail Shares
___________________________________________________
Year Ended October 31,
___________________________________________________
PER SHARE DATA: 1997 1996(1) 1995 1994(2,3) 1993
_____ _____ _____ _____ _____
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period......... $26.65 $22.09 $ 18.54 $ 18.69 $17.21
_____ _____ _____ _____ _____
Investment Operations:
Investment income-net........................ .25 .28 .30 .26(4) .30(5)
Net realized and unrealized gain (loss)
on investments............................. 7.92 5.13 4.02 .25 2.56
_____ _____ _____ _____ _____
Total from Investment Operations............. 8.17 5.41 4.32 .51 2.86
_____ _____ _____ _____ _____
Distributions:
Dividends from investment income-net......... (.26) (.29) (.30) (.26) (.31)
Dividends from net realized gain on investments (1.78) (.56) (.47) (.40) (1.07)
_____ _____ _____ _____ _____
Total Distributions.......................... (2.04) (.85) (.77) (.66) (1.38)
_____ _____ _____ _____ _____
Net asset value, end of period............... $32.78 $26.65 $22.09 $ 18.54 $18.69
===== ===== ===== ===== =====
TOTAL INVESTMENT RETURN.......................... 32.32% 25.14% 24.33% 2.82% 17.46%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets...... .90% .90% .90% .90%(6) .90%
Ratio of net investment income
to average net assets...................... .87% 1.23% 1.61% 1.54% 1.82%
Portfolio Turnover Rate...................... 68.87% 64.47% 60.00% 106.00% 64.00%
Average commission rate paid (7)............. $.0558 $.0485 - - -
Net Assets, end of period (000's Omitted).... $1,482,176 $ 807,680 $ 382,646 $ 239,069 $92,955
(1) Effective July 15, 1996, Class R shares were redesignated as Retail shares.
(2) Effective October 17, 1994, the Fund's Trust shares were redesignated
Class R shares.
(3) 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.
(4) Net investment income per share before reimbursement of expenses by the
investment adviser was $.25 for the year ended October 31, 1994.
(5) Net investment income per share before reimbursement of expenses by the
investment adviser was $.24 for the year ended October 31, 1993.
(6) Expense ratio before reimbursement of expenses by the adviser was .96%
for the year ended October 31, 1994.
(7) For fiscal years beginning on November 1, 1995, the Fund is required to
disclose its average commission rate paid per share for purchases and
sales of investment securities.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
DREYFUS DISCIPLINED STOCK FUND
NOTES TO FINANCIAL STATEMENTS
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES:
Dreyfus Disciplined Stock 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
seek investment returns (including capital appreciation and income)
consistently superior to the Standard & Poor's 500 Composite Stock Price
Index by investing in a broadly diversified list of equity securities
generated by the application of quantitative security selection and risk
control techniques. The Dreyfus Corporation ("Manager") serves as the Fund's
investment adviser. The Manager is a direct subsidiary of Mellon Bank, N.A.
("Mellon Bank").
Premier Mutual Fund Services, Inc. (the "Distributor") is the distributor
of the Fund's shares. The Fund is authorized to issue 245 million of $.001
par value Capital Stock. The Fund currently offers two classes of shares:
Institutional (80 million shares authorized) and Retail (165 million shares
authorized). Retail shares are offered to any investor and Institutional
shares are offered only to clients of banks, securities brokers or dealers
and other financial institutions (collectively, Service Agents) that have
entered into selling agreements with the Distributor. Other differences
between the classes include the services offered to and the expenses borne by
each class.
On December 2, 1997, shareholders approved a reorganization, effective
December 15, 1997, where Institutional class and Retail class will be
eliminated and the Fund will become a single class Fund.
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 (including financial
futures) 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 at 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.
DREYFUS DISCIPLINED STOCK FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(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. 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.
At October 31, 1997, there were no financial futures contracts outstanding.
(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 November 4, 1997, the Board of Directors declared dividends from net
investment income for the Institutional shares and Retail shares in the
amount of $.039 per share and $.059 per share, respectively, payable on
November 5, 1997 to shareholders of record on November 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:
(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 .90% 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, 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 DISCIPLINED STOCK FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(b) Distribution plan: Under the Distribution Plan (the "Plan") adopted
pursuant to Rule 12b-1 under the Act, the Fund may pay annually up to .25% of
the value of the average daily net assets attributable to its Institutional
shares to compensate the Distributor and Dreyfus Service Corporation, an
affiliate of the Manager, for shareholder servicing activities and the
Distributor for activities primarily intended to result in the sale of
Institutional shares. The Retail shares bear no distribution fee. During the
period ended October 31, 1997, the Fund was charged $104,558 for the
Institutional shares pursuant to the Plan.
Under its terms, the Plan shall remain in effect from year to year,
provided such continuance is approved annually by a vote of majority of those
Directors who are not "interested persons" of the Company and who have no
direct or indirect financial interest in the operation of the Plan or in any
agreement related to the Plan.
As disclosed in NOTE 1, the shareholders approved a reorganization of the
Fund in which the Fund became a single class fund effective December 15,
1997. Under the revised Distribution Plan, Fund shares will be charged .10%
of the value of the Fund's average daily net assets to compensate the
Distributor and Dreyfus Service Corporation for shareholder servicing
activities and the Distributor for activities primarily intended for the sale
of Fund shares.
(c) Brokerage commissions: During the period ended October 31, 1997, the
Fund incurred total brokerage commissions of $1,995,335, of which $232,780
was paid to Dreyfus Investment Services Corporation, a subsidiary of Mellon
Bank.
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 $1,198,662,787 and $807,580,633,
respectively.
At October 31, 1997, accumulated net unrealized appreciation on
investments was $275,786,584 consisting of $289,465,638 gross unrealized
appreciation and $13,679,054 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.
NOTE 5-ACQUISITION OF COMMON TRUST ASSETS:
On March 22, 1996, the Fund acquired all of the assets of the TBC Pooled
Employee Equity Fund, a trust advised by a subsidiary of Mellon Bank. The
acquisition was accomplished by an exchange of 538,998 Retail shares of the
Fund's Capital Stock for cash, securities and assumption of liabilities of
the trust totaling $13,097,649 which is included in net proceeds from shares
sold on the Statement of Changes in Net Assets.
NOTE 6-LITIGATION:
The Fund, along with certain related parties, are defendants in a class
action lawsuit. Former retail class shareholders have asserted that the
adoption of a distribution plan pursuant to Rule 12b-1 under the Act, with
respect to the Fund's retail class, was in violation of the Act and common
law. Although it is difficult to predict the ultimate outcome of this case,
management believes, based on discussions with counsel, that any ultimate
liability will not materially affect the financial position of the Fund.
DREYFUS DISCIPLINED STOCK FUND
INDEPENDENT AUDITOR'S 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 Disciplined Stock 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 Disciplined Stock 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
IMPORTANT TAX INFORMATION (UNAUDITED)
For Federal tax purposes the Fund hereby designates $1.508 per share as a
long-term capital gain distribution paid on December 26, 1996. The Fund also
designates 58.90% 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 DISCIPLINED STOCK 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. 328/728AR9710
Registration Mark
[Dreyfus logo]
Disciplined Stock
Fund
Annual Report
October 31, 1997
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
DREYFUS DISCIPLINED STOCK FUND RETAIL SHARES AND THE
STANDARD & POOR'S 500 COMPOSITE STOCK PRICE INDEX
EXHIBIT A:
DREYFUS STANDARD
DISCIPLINED & POOR'S 500
PERIOD STOCK FUND COMPOSITE STOCK
(RETAIL SHARES) PRICE INDEX *
12/31/87 10,000 10,000
10/31/88 11,080 11,623
10/31/89 14,084 14,686
10/31/90 13,650 13,587
10/31/91 18,464 18,128
10/31/92 20,321 19,932
10/31/93 23,869 22,904
10/31/94 24,541 23,788
10/31/95 30,512 30,067
10/31/96 38,182 37,308
10/31/97 50,522 49,283
* Source: Lipper Analytical Services, Inc.
