<PAGE>
Semi-Annual Report
-------------------------
Dreyfus Premier
Tax Managed
Growth Fund
-------------------------
April 30, 1998
[LION LOGO]
<PAGE>
Dreyfus Premier Tax Managed Growth Fund
- --------------------------------------------------------------------------------
Letter to Shareholders
Dear Shareholder:
It is a pleasure and privilege for me to introduce you to Fayez Sarofim, who
manages the Dreyfus Premier Tax Managed Growth Fund.
Mr. Sarofim is also the portfolio manager for the Dreyfus Appreciation Fund
and the Dreyfus Premier Worldwide Growth Fund, Inc. He is President, Chairman of
the Board and a Director of Fayez Sarofim & Co., which serves as the Fund's
sub-investment adviser.
Mr. Sarofim founded Fayez Sarofim & Co. in 1958. The Houston-based investment
firm currently manages approximately $39 billion for a number of clients.
Prior to establishing his own company, Mr. Sarofim was assistant to the
president of Anderson, Clayton & Co.
He earned his B.S. in food technology from the University of California and
his M.B.A from Harvard Business School. He is a Chartered Investment Counselor
and a member of the New York Society of Security Analysts and the Houston
Society of Financial Analysts.
Currently, Mr. Sarofim serves as a director of Unitrin, Inc., Argonaut Group,
EXOR Group and Imperial Holly Corporation. He is also on the board of directors
of The Texas Heart Institute and is a member of the Board of Overseers of
Memorial Sloan-Kettering Cancer Center.
We have full confidence in Mr. Sarofim's ability to manage your investment in
this Fund.
Sincerely,
/s/ Stephen E. Canter
Stephen E. Canter
Chief Investment Officer
The Dreyfus Corporation
May 20, 1998
New York, N.Y.
<PAGE>
Dreyfus Premier Tax Managed Growth Fund
- -------------------------------------------------------------------------------
Letter to Shareholders
Dear Shareholder:
We are pleased to provide you with this first semi-annual report for the
Dreyfus Premier Tax Managed Growth Fund. The Fund began operations on November
4, 1997, and completed its first six-month fiscal period on April 30, 1998. The
performance of the Fund's various classes of shares during that period is shown
below:
Total Return*
------------
Class A Shares 17.14%
Class B Shares 16.72%
Class C Shares 16.64%
Class T Shares 17.01%
Standard & Poor's 500 Composite
Stock Price Index** (from 10/31/97-- 4/30/98) 22.50%
As you know, the Fund is managed to seek to achieve growth of assets and to
minimize the impact of Federal income taxes, where possible. At the close of the
period, the Fund had 5.5% of its net assets in short-term Treasuries, and
industry emphasis on consumer staples, health care and financials. In favorable
market conditions and as investment opportunities arise, we will continue to
invest the short-term cash equivalent assets.
ECONOMIC OUTLOOK
We currently expect that average annual Gross Domestic Product (GDP) in the
U.S. will expand in a range of 2.5% to 3.0%, compared to 4.0% in 1997. We also
currently anticipate that annual Consumer Price Index (CPI) inflation should
decline to 1.5% or below, historically close to price stability. Against the
backdrop of a strong dollar and a budget surplus, we currently expect long-term
interest rates to decline to 5.5% or below by year end. Sound corporate
management and vigilant monetary policy have produced an environment where job
creation remains healthy and the economy can expand, while wage inflation can be
held in check. A secular increase in productivity and global competition are
also responsible for the positive backdrop for financial assets.
In our view, strong domestic demand will be tempered in the months ahead. We
see weakness and overcapacity in Asia continuing to negatively impact pricing
and employment in competitive industries. Clear price deflation in producer
prices has weakened the manufacturing sector. We also have seen deflation in
agricultural commodities and commodity products such as oil, paper, chemicals
and steel. Pricing weakness ultimately leads to profit margin contraction, and
it is our belief that maintaining corporate competitiveness will result in
incremental downsizing, where necessary. Continued merger and acquisition
activity should also undermine job creation in affected industries. Job security
may thus become more of an issue, and consumer confidence could moderate from
record levels. Higher interest rates, stock market volatility and inevitable
shocks related to the Asian crisis may well usher in a period of renewed
caution. However, constructive fundamentals in the U.S. economic activity,
driven by services versus exports and manufacturing, should insulate domestic
growth. A discernible pickup in demand from continental European markets is also
expected to have a positive impact.
INVESTMENT STRATEGY
Our investment strategy is based on a three- to five-year economic outlook.
With an outlook for a secular trend of aging populations and moderate growth
among the industrialized countries, our current investment strategy favors those
sectors which we expect will benefit as this macroeconomic scenario continues to
unfold. The focus in the Fund currently is an emphasis on high quality, large
capitalization, global industry leaders in consumer staples, health care and
financial services. We attempt to identify companies that can generate stable
growth in earnings from mature markets, and more rapid growth from emerging
markets due to such companies' dominant brand names, proprietary technologies
and new
<PAGE>
products. Consumption should remain stable, spurred by increased
disposable income, due to low inflation and improving living standards, and a
trend of global deregulation in the private and public sectors.
We believe that U.S. corporate profits can grow at 8% in 1998, and at a
considerably higher rate in Europe. The large capitalization industry
bellwethers are likely to maintain market leadership, although there may be
periods of underperformance if markets become speculative and/or driven by
shorter term earnings expectations, rather than long-term consistency and
secular growth. Uncertainty about Asia and the direction of the U.S. economy may
also cause volatility in equity markets. Our strategy seeks to identify premier
global companies, which are expected to show less volatility in their earnings,
although markets can exhibit sharp swings in prices. The holdings in the Fund
are broadly diversified in their industries and geographical markets, and are
usually the number one or two player in their respective businesses. In our
view, they represent the highest quality managements and have strong balance
sheets. We believe these companies should provide the greatest immunity from
earnings disappointments, and thus continue to outperform in the respective
markets.
INVESTMENT HIGHLIGHTS
The Fund was in transition during the reporting period as we structured the
portfolio holdings according to the firm's investment strategy. The Fund did not
equal the overall market's performance during the reporting period due the
Fund's percentage of uninvested cash in the portfolio. The Fund's emphasis on
the financial services sector had the most positive impact on its results, led
by Associates First Capital, Chase Manhattan, Citicorp and BankAmerica. The
health care sector, which was the best performing sector in the S&P 500 Index,
had the second most positive impact on the Fund led by shares of Pfizer, Merck
and American Home Products. We continue to like the health care and consumer
staples sectors which are benefiting from demographics, new products and
dominant positions in their industries. Individual issues which positively
impacted results were Coca-Cola, General Electric, Hewlett-Packard, Exxon,
Microsoft, Gillette and DuPont (EI) de Nemours.
Sincerely,
/s/ Fayez Sarofim
Fayez Sarofim
Portfolio Manager
May 20, 1998
New York, NY
* 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 and Class T shares, or the applicable contingent
deferred sales charge imposed on redemptions in the case of Class B and Class
C shares.
** 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.
<PAGE>
Dreyfus Premier Tax Managed Growth Fund
- -------------------------------------------------------------------------------
Statement of Investments April 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
Common Stocks--95.8% Shares Value
- ------------------------------------------------------------------------------- ------------ ------------
<S> <C> <C> <C>
Auto/Related--5.4% Chrysler...................................... 30,000 $ 1,205,625
Ford Motor.................................... 40,000 1,832,500
General Motors................................ 15,000 1,010,625
------------
4,048,750
------------
Banking--7.7% BankAmerica................................... 30,000 2,550,000
Chase Manhattan............................... 11,000 1,524,188
Citicorp...................................... 11,000 1,655,500
------------
5,729,688
------------
Basic Materials--1.5% duPont (EI) de Nemours........................ 15,000 1,092,188
------------
Capital Goods--8.1% AlliedSignal.................................. 30,000 1,314,375
Boeing........................................ 20,000 1,001,250
Caterpillar................................... 10,000 569,375
Emerson Electric.............................. 12,000 763,500
General Electric.............................. 28,000 2,383,500
------------
6,032,000
------------
Communications Services--5.7% Bell Atlantic................................. 14,000 1,309,875
BellSouth..................................... 20,000 1,283,750
SBC Communications............................ 40,000 1,657,500
------------
4,251,125
------------
Computers--4.4% Compaq Computer............................... 25,000 (a) 701,563
Hewlett-Packard............................... 20,000 (a) 1,506,250
Microsoft..................................... 12,000 1,081,500
------------
3,289,313
------------
Electronics--2.9% Intel......................................... 27,000 2,181,937
------------
Energy--7.9% British Petroleum A.D.S....................... 20,000 1,890,000
Chevron....................................... 11,000 909,562
Exxon......................................... 20,000 1,458,750
Mobil......................................... 12,000 948,000
Royal Dutch Petroleum......................... 12,000 678,750
------------
5,885,062
------------
Financial--6.5% Associates First Capital, Cl. A............... 14,483 1,082,634
Federal National Mortgage Association......... 40,000 2,395,000
Merrill Lynch................................. 15,000 1,316,250
------------
4,793,884
------------
</TABLE>
<PAGE>
Dreyfus Premier Tax Managed Growth Fund
- -------------------------------------------------------------------------------
Statement of Investments (continued) April 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
Common Stocks (continued) Shares Value
- ------------------------------------------------------------------------------- ------------ ------------
<S> <C> <C> <C>
Food, Beverage & Tobacco--10.1% Coca-Cola..................................... 50,000 $ 3,793,750
PepsiCo....................................... 40,000 1,587,500
Philip Morris Cos............................. 58,000 2,164,125
------------
7,545,375
------------
Health Care--19.6% Abbott Laboratories........................... 18,000 1,316,250
American Home Products........................ 17,000 1,583,125
Bristol-Myers Squibb.......................... 17,000 1,799,875
Johnson & Johnson............................. 32,000 2,284,000
Merck......................................... 25,000 3,012,500
Pfizer........................................ 40,000 4,552,500
------------
14,548,250
------------
Insurance--2.0% Marsh & McLennan.............................. 16,000 1,458,000
------------
Media/Entertainment--1.8% McDonalds..................................... 15,000 928,125
Tricon Global Restaurants..................... 12,500 396,875
------------
1,325,000
------------
Personal Care--7.3% Colgate-Polmolive............................. 15,000 1,345,312
Gillette...................................... 19,000 2,193,313
Procter & Gamble.............................. 23,000 1,890,312
------------
5,428,937
------------
Publishing--.6% McGraw-Hill Cos............................... 6,000 464,625
------------
Retail--1.9% Walgreen...................................... 40,000 1,380,000
------------
Textiles-Apparel--1.1% Polo Ralph Lauren, Cl. A...................... 30,000 843,750
------------
Transportation--1.3% Norfolk Southern.............................. 30,000 1,003,125
------------
TOTAL COMMON STOCKS
(cost $65,016,284)......................... $71,301,009
============
</TABLE>
<PAGE>
Dreyfus Premier Tax Managed Growth Fund
- -------------------------------------------------------------------------------
Statement of Investments (continued) April 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
Principal
Short-Term Investments--5.5% Amount Value
- ------------------------------------------------------------------------------- ------------ ------------
<S> <C> <C> <C>
U.S. Treasury Bills: 5.04%, 5/28/1998.............................. 204,000 $ 203,302
4.97%, 7/2/1998............................... 892,000 884,561
4.93%, 7/23/1998.............................. 1,867,000 1,846,164
4.88%, 7/30/1998.............................. 1,205,000 1,190,384
------------
TOTAL SHORT-TERM INVESTMENTS
(cost $4,123,674).......................... $ 4,124,411
============
TOTAL INVESTMENTS (cost $69,139,958)........................................... 101.3% $ 75,425,420
====== ============
LIABILITIES, LESS CASH AND RECEIVABLES......................................... (1.3%) $ (1,006,640)
====== ============
NET ASSETS..................................................................... 100.0% $ 74,418,780
====== ============
</TABLE>
Notes to Statement of Investments:
- -------------------------------------------------------------------------------
(a) Non-income producing.
See notes to financial statements.
<PAGE>
Dreyfus Premier Tax Managed Growth Fund
- -------------------------------------------------------------------------------
Statement of Assests and Liabilities April 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
- ------------------------------------------------------------------------------- ------------ ------------
<S> <C> <C> <C>
ASSETS: Investments in securities--See Statement of Investments $69,139,958 $75,425,420
Cash............................................. 590,301
Receivable for shares of Capital Stock subscribed 1,679,443
Dividends receivable............................. 105,808
------------
77,800,972
------------
LIABILITIES: Due to The Dreyfus Corporation and affiliates.... 62,317
Due to Distributor............................... 42,813
Payable for investment securities purchased...... 3,223,266
Payable for shares of Capital Stock redeemed..... 53,796
------------
3,382,192
------------
NET ASSETS..................................................................... $74,418,780
============
REPRESENTED BY: Paid-in capital.................................. $68,127,612
Accumulated undistributed investment income--net.. 8,487
Accumulated net realized gain (loss) on investments (2,781)
Accumulated net unrealized appreciation (depreciation)
on investments--Note 3.......................... 6,285,462
------------
NET ASSETS..................................................................... $74,418,780
============
</TABLE>
NET ASSET VALUE PER SHARE
--------------------------
<TABLE>
Class A Class B Class C Class T
------------- ------------- -------------- ------------
<S> <C> <C> <C> <C>
Net Assets..................................... $18,961,367 $40,416,009 $10,624,755 $ 4,416,649
Shares Outstanding............................. 1,296,053 2,770,206 728,603 302,117
NET ASSET VALUE PER SHARE...................... $14.63 $14.59 $14.58 $14.62
======= ======= ======= =======
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Premier Tax Managed Growth Fund
- -------------------------------------------------------------------------------
Statement of Operations
from November 4, 1997 (commencement of operations) to April 30, 1998 (Unaudited)
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME
INCOME: Cash dividends (net of $1,328 foreign taxes
withheld at source)...................... $ 288,638
Interest................................... 60,762
------------
Total Income............................. $ 349,400
EXPENSES: Management fee--Note 2(a).................. 199,826
Distribution and service fees--Note 2(b)... 133,183
Loan commitment fees--Note 4............... 26
------------
Total Expenses........................... 333,035
-----------
INVESTMENT INCOME-NET.................................................... 16,365
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--Note 3:
Net realized gain (loss) on investments.... $ (2,781)
Net unrealized appreciation (depreciation)
on investments........................... 6,285,462
------------
NET REALIZED AND UNREALIZED GAIN (LOSS)ON INVESTMENTS.................... 6,282,681
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS..................... $6,299,046
==========
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Premier Tax Managed Growth Fund
- -------------------------------------------------------------------------------
Statement of Changes in Net Assets
from November 4, 1997 (commencement of operations) to April 30, 1998 (Unaudited)
<TABLE>
<S> <C>
OPERATIONS:
Investment income--net............................................................... $ 16,365
Net realized gain (loss) on investments.............................................. (2,781)
Net unrealized appreciation (depreciation) on investments............................ 6,285,462
-----------
Net Increase (Decrease) in Net Assets Resulting from Operations................ 6,299,046
-----------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net:
Class A shares.................................................................... (7,111)
Class T shares.................................................................... (767)
-----------
Total Dividends................................................................ (7,878)
-----------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold:
Class A shares.................................................................... 17,387,039
Class B shares.................................................................... 37,663,751
Class C shares.................................................................... 10,132,699
Class T shares.................................................................... 3,945,080
Dividends reinvested:
Class A shares.................................................................... 84
Class T shares.................................................................... 22
Cost of shares redeemed:
Class A shares.................................................................... (368,044)
Class B shares.................................................................... (380,605)
Class C shares.................................................................... (252,414)
-----------
Increase (Decrease) in Net Assets from Capital Stock Transactions.............. 68,127,612
-----------
Total Increase (Decrease) in Net Assets..................................... 74,418,780
NET ASSETS:
Beginning of Period.................................................................. --
-----------
End of Period........................................................................ $74,418,780
===========
Undistributed investment income--net.................................................... $ 8,487
-----------
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Premier Tax Managed Growth Fund
- -------------------------------------------------------------------------------
Statement of Changes in Net Assets (continued)
from November 4, 1997 (commencement of operations) to April 30, 1998 (Unaudited)
<TABLE>
CAPITAL SHARE TRANSACTIONS:
Class A
-------
<S> <C>
Shares sold.......................................................................... 1,322,232
Shares issued for dividends reinvested............................................... 7
Shares redeemed...................................................................... (26,186)
----------
Net Increase (Decrease) in Shares Outstanding................................... 1,296,053
==========
Class B
-------
Shares sold.......................................................................... 2,796,911
Shares redeemed...................................................................... (26,705)
----------
Net Increase (Decrease) in Shares Outstanding................................... 2,770,206
==========
Class C
-------
Shares sold.......................................................................... 747,110
Shares redeemed...................................................................... (18,507)
----------
Net Increase (Decrease) in Shares Outstanding................................... 728,603
==========
Class T
-------
Shares sold.......................................................................... 302,115
Shares issued for dividends reinvested............................................... 2
----------
Net Increase (Decrease) in Shares Outstanding................................... 302,117
==========
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Premier Tax Managed Growth Fund
- -------------------------------------------------------------------------------
Financial Highlights (Unaudited)
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 the period from November 4, 1997 (commencement
of operations) to April 30, 1998. This information has been derived from the
Fund's financial statements.
<TABLE>
<CAPTION>
Class A Class B Class C Class T
PER SHARE DATA: Shares Shares Shares Shares
------- ------- ------- -------
<S> <C> <C> <C> <C>
Net asset value, beginning of period....................... $12.50 $12.50 $12.50 $12.50
------- ------- ------- -------
Investment Operations:
Investment income (loss)--net.............................. .03 (.01) (.01) .02
Net realized and unrealized gain (loss) on investments..... 2.11 2.10 2.09 2.11
------- ------- ------- -------
Total from Investment Operations........................... 2.14 2.09 2.08 2.13
------- ------- ------- -------
Distributions:
Dividends from investment income--net...................... (.01) -- -- (.01)
------- ------- ------- -------
Net asset value, end of period............................. $14.63 $14.59 $14.58 $14.62
======= ======= ======= =======
TOTAL INVESTMENT RETURN(1,2).................................. 17.14% 16.72% 16.64% 17.01%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets(2)................. .66% 1.03% 1.03% .78%
Ratio of net investment income (loss) to average net assets(2) .30% (.10%) (.09%) .16%
Portfolio Turnover Rate(2)................................. .08% .08% .08% .08%
Average commission rate paid(3)............................ $.0552 $.0552 $.0552 $.0552
Net Assets, end of period (000's Omitted).................. $18,961 $40,416 $10,625 $4,417
- --------------------------
<FN>
(1) Exclusive of sales load.
(2) Not annualized.
(3) The Fund is required to disclose its average commission rate paid per share
for purchases and sales of investment securities.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Premier Tax Managed Growth Fund
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus Premier Tax Managed Growth Fund (the "Fund") is a separate
diversified series of The Dreyfus/Laurel Funds, Inc. (the "Company") which is
registered under the Investment Company Act of 1940 ("Act") as an open-end
management investment company and operates as a series company currently
offering eighteen series, including the Fund. The Fund's investment objective is
to provide investors with long-term capital appreciation consistent with
minimizing realized capital gains and taxable current income. The Dreyfus
Corporation ("Manager") serves as the Fund's investment adviser. The Manager is
a direct subsidiary of Mellon Bank, N.A., which is a wholly-owned subsidiary of
Mellon Bank Corporation. Fayez Sarofim & Co. ("Sarofim") serves as the Fund's
sub-investment adviser.
Premier Mutual Fund Services, Inc. (the "Distributor") is the distributor of
the Fund's shares. The Company is authorized to issue 100 million shares of
$.001 par value Capital Stock in each of the following classes of shares: Class
A, Class B, Class C and Class T. Class A, Class B, Class C and Class T 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 and a distribution and service
fee. Class T shares are sold with a front-end sales charge and bear a
distribution and service fee. 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.
As of April 30, 1998, MBIC Investment Corp., an indirect subsidiary of Mellon
Bank Corporation, held the following shares:
Class A ......... 280,227 Class C ......... 40,000
Class B ......... 40,000 Class T ......... 40,000
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 options and
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. Investments denominated in foreign currencies
are translated to U.S. dollars at the prevailing rates of exchange.
(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) Foreign currency transactions: The Fund does not isolate that portion of
the results of operations resulting from changes in foreign exchange rates on
investments from the fluctuations arising from changes in market prices of
securities held. Such fluctuations are included with the net realized and
unrealized gain or loss from investments.
<PAGE>
Dreyfus Premier Tax Managed Growth Fund
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
Net realized foreign exchange gains or losses arise from sales and maturities
of short-term securities, sales of foreign currencies, currency gains or losses
realized on securities transactions and the difference between the amounts of
dividends, interest and foreign withholding taxes recorded on the Fund's books
and the U.S. dollar equivalent of the amounts actually received or paid. Net
unrealized foreign exchange gains and losses arise from changes in the value of
assets and liabilities other than investments in securities, resulting from
changes in exchange rates. Such gains and losses are included with net realized
and unrealized gain or loss on investments.
(d) Dividends to shareholders: Dividends are recorded on the ex-dividend
date. Dividends from investment income-net and dividends from net realized
capital gain are normally declared and paid annually, but the Fund may make
distributions on a more frequent basis to comply with the distribution
requirements of the Internal Revenue Code. To the extent that net realized
capital gain can be offset by capital loss carryovers, if any, it is the policy
of the Fund not to distribute such gain.
(e) Federal income taxes: It is the policy of the Fund to 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 Transfer 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 1.10% 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. (The $1,000 attendance fee and reimbursement of meeting expenses are also
borne pro rata by Dreyfus High Yield Strategies Fund.) 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.
Pursuant to a Sub-Investment Advisory Agreement between the Manager and
Sarofim, the Manager has agreed to pay Sarofim an annual fee of .30 of 1% of the
value of the Fund's average daily net assets, payable monthly.
Dreyfus Service Corporation, a wholly-owned subsidiary of the Manager,
retained $1,324 during the period ended April 30, 1998 from commissions earned
on sales of Fund shares.
<PAGE>
Dreyfus Premier Tax Managed Growth Fund
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
(b) Distribution and service plan: Under the Distribution Plan (the "Plan")
adopted pursuant to Rule 12b-1 under the Act, the Class A shares may pay
annually up to .25% of the value of their average daily net assets to compensate
the Distributor and Dreyfus Service Corporation 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, Class B, Class C and Class
T shares pay the Distributor for distributing their shares at an aggregate
annual rate of .75%, .75% and .25% of the value of the average daily net assets
of Class B, Class C and Class T shares, respectively. Class B, Class C and Class
T shares are also subject to a service plan adopted pursuant to Rule 12b-1,
under which Class B, Class C and Class T shares pay Dreyfus Service Corporation
or the Distributor for providing certain services to the holders of Class B,
Class C and Class T shares a fee at the annual rate of .25% of the value of the
average daily net assets of Class B, Class C and Class T shares. During the
period ended April 30, 1998, Class A, Class B, Class C and Class T shares were
charged $13,945, $68,053, $16,392 and $3,322, respectively, pursuant to the
Plan. During the period ended April 30, 1998, Class B, Class C and Class T
shares were charged $22,685, $5,464 and $3,322, 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 purchases and sales of investment securities,
excluding short-term securities, during the period ended April 30, 1998,
amounted to $65,050,201 and $33,124, respectively.
At April 30, 1998, accumulated net unrealized appreciation on investments was
$6,285,462, consisting of $6,762,132 gross unrealized appreciation and $476,670
gross unrealized depreciation.
At April 30, 1998, the cost of investments for Federal income tax purposes
was substantially the same as the cost for financial reporting purposes (see the
Statement of Investments).
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. During the period ended April
30, 1998, the Fund did not borrow under the Facility.
<PAGE>
Dreyfus Premier Tax Managed
Growth Fund
200 Park Avenue
New York, NY 10166
Investment Adviser
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Sub-Investment Adviser
Fayez Sarofim & Co.
Two Houston Center
Suite 2907
Houston, TX 77010
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. 149/159SA984
