DREYFUS DISCIPLINED SMALLCAP STOCK FUND
- -----------------------------------------------------------------------------
LETTER TO SHAREHOLDERS
Dear Shareholder:
It is my pleasure and privilege to introduce Gene F. Cervi, who manages the
Dreyfus Disciplined Smallcap Stock Fund. Gene is a portfolio manager of The
Dreyfus Corporation. He also is Director of Investment Research and an equity
portfolio manager/securities analyst for Laurel Capital Advisors, which, like
Dreyfus, is an affiliate of Mellon Bank.
Gene joined Mellon Bank in 1982 and is a vice president of the bank. Before
joining Mellon Bank, he was a securities analyst at Comerica, Inc. for 11 years.
He earned a Bachelor' s degree from The College of William and Mary and his
M.B.A. from Ohio State University. He is also a Chartered Financial Analyst.
We have great confidence in Gene Cervi's ability to manage money on behalf of
Dreyfus investors.
Sincerely,
Stephen E. Canter
Chief Investment Officer
The Dreyfus Corporation
November 30, 1998
New York, N.Y.
DREYFUS DISCIPLINED SMALLCAP STOCK FUND
- -----------------------------------------------------------------------------
LETTER TO SHAREHOLDERS
Dear Shareholder:
We are pleased to provide you with this report for the Dreyfus Disciplined
Smallcap Stock Fund, which commenced operations on September 30, 1998. During
its first month of operations, from September 30 through October 31, 1998, the
Fund produced a total return of 4.48%,* as the Fund benefited from small-cap
stocks staging a sharp recovery after their dramatic declines during much of the
August-September time frame. The performance of the Fund was similar to that of
its benchmark, the Standard & Poor' s SmallCap 600 Index, which had a total
return of 4.64% for the same period.**
At this time, it would be appropriate to comment briefly about the outlook for
small-cap stocks and to explain our investment process.
MARKET OVERVIEW AND PORTFOLIO FOCUS
Small-cap stocks (which we currently define as equities with market
capitalizations generally ranging from $100 million to $2 billion) have now
underperformed large-cap stocks for approximately the last five years, as
investors have generally favored some of the characteristics offered by
large-cap stocks: namely, more dependable growth and better liquidity. At this
point in time, the relative valuations of small-cap stocks are the most
attractive since the 1960s. Many of these stocks are down 40%-50% from their
12-month highs. As a result of this widening of the valuation gap between
small-cap stocks and large-cap stocks, we believe that small-cap stocks look
relatively attractive.
The Fund seeks total investment returns (capital appreciation and income) that
surpass the Standard & Poor's SmallCap 600 Index. Our investment approach is a
three-step process. The first step incorporates a sophisticated proprietary
computer model to quantitatively rank a universe of more than 2,500 stocks. The
computer model screens each stock for value, earnings momentum and financial
attributes relative to other stocks within its economic sector. Each stock is
then ranked according to its relative attractiveness. The second step utilizes
our extensive investment experience to conduct fundamental analysis in an
attempt to identify the most attractive high-ranked stocks within our computer
model. This process also seeks to isolate those issues within our portfolio that
should be sold. Rigorous risk management via portfolio construction techniques
is the third step in our investment process. The portfolio is structured so its
characteristics, such as economic sector, industry exposure, beta and growth
characteristics are similar to those of the S&P 600. This approach is designed
to manage investment risk and ensure that stock selection is the primary impetus
in our quest for favorable investment performance.
We would like to welcome our shareholders to this new Dreyfus fund.
Sincerely,
[Gene F. Cervi signature]
Gene F. Cervi
Portfolio Manager
November 30, 1998
New York, N.Y.
* Total return includes reinvestment of dividends and any capital gains paid,
exclusive of redemption fee.
** SOURCE: LIPPER ANALYTICAL SERVICES, INC. -- The Standard & Poor's SmallCap
600 Index is a broad-based, unmanaged index of 600 companies with market
capitalizations generally ranging from $50 million to $2 billion.
<TABLE>
<CAPTION>
DREYFUS DISCIPLINED SMALLCAP STOCK FUND
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STATEMENT OF INVESTMENTS OCTOBER 31, 1998
Common Stocks--91.1% Shares Value
- ------------------------------------------------------- ___________ ___________
<S> <C> <C> <C> <C>
Basic Industries--6.4% Catalytica . . . . . . . . . . . . . . . . . . . . . . (a) 2,900 $ 47,125
International Specialty Products . . . . . . . . . . . (a) 2,700 36,281
Lone Star Industries . . . . . . . . . . . . . . . . . 1,500 105,656
NCI Building Systems . . . . . . . . . . . . . . . . . (a) 3,500 75,688
Tredegar Industries . . . . . . . . . . . . . . . . . 1,900 42,869
Wausau-Mosinee Paper . . . . . . . . . . . . . . . . . 2,200 38,363
___________
345,982
___________
Capital Spending--15.0% CellStar . . . . . . . . . . . . . . . . . . . . . . . (a) 5,300 36,438
CHS Electronics . . . . . . . . . . . . . . . . . . . (a) 5,400 52,650
Dallas Semiconductor . . . . . . . . . . . . . . . . . 2,100 77,700
Davox . . . . . . . . . . . . . . . . . . . . . . . . 2,400 19,500
Esterline Technologies . . . . . . . . . . . . . . . . (a) 1,700 34,000
Howmet International . . . . . . . . . . . . . . . . . 2,800 42,000
Marshall Industries . . . . . . . . . . . . . . . . . (a) 2,300 66,125
Micrel . . . . . . . . . . . . . . . . . . . . . . . . (a) 1,400 46,025
Milacron . . . . . . . . . . . . . . . . . . . . . . . 2,300 44,563
OmniQuip International . . . . . . . . . . . . . . . . 3,000 40,125
Sanmina . . . . . . . . . . . . . . . . . . . . . . . (a) 3,700 151,700
SPS Technologies . . . . . . . . . . . . . . . . . . . (a) 1,000 49,500
Tech Data . . . . . . . . . . . . . . . . . . . . . . (a) 2,100 82,688
Terex . . . . . . . . . . . . . . . . . . . . . . . . (a) 1,400 30,450
Wyman-Gordon . . . . . . . . . . . . . . . . . . . . . (a) 2,800 40,250
___________
813,714
___________
Computer Software/Services--.6% software.net . . . . . . . . . . . . . . . . . . . . . 3,900 36,075
___________
Consumer Cyclical--16.9% Action Performance Cos. . . . . . . . . . . . . . . . (a) 3,000 89,625
CKE Restaurants . . . . . . . . . . . . . . . . . . . 2,500 65,781
Claire's Stores . . . . . . . . . . . . . . . . . . . 3,100 52,506
Cox Radio, Cl. A . . . . . . . . . . . . . . . . . . . (a) 1,800 67,388
Dress Barn . . . . . . . . . . . . . . . . . . . . . . (a) 2,700 38,138
Footstar . . . . . . . . . . . . . . . . . . . . . . . (a) 2,300 60,088
La-Z-Boy . . . . . . . . . . . . . . . . . . . . . . . 3,300 60,638
Mohawk Industries . . . . . . . . . . . . . . . . . . (a) 2,700 81,506
Richfood Holdings . . . . . . . . . . . . . . . . . . 3,300 58,575
Saks . . . . . . . . . . . . . . . . . . . . . . . . . (a) 3,500 79,625
Tower Automotive . . . . . . . . . . . . . . . . . . . (a) 3,200 71,200
Valassis Communication . . . . . . . . . . . . . . . . (a) 1,900 75,763
Williams-Sonoma . . . . . . . . . . . . . . . . . . . (a) 2,100 57,225
World Color Press . . . . . . . . . . . . . . . . . . (a) 1,900 57,713
___________
915,771
___________
Consumer Staples--3.8% Canandaigua Brands, Cl. A . . . . . . . . . . . . . . (a) 1,100 55,138
Earthgrains . . . . . . . . . . . . . . . . . . . . . 2,800 84,000
Michael Foods . . . . . . . . . . . . . . . . . . . . 2,800 67,200
___________
206,338
___________
DREYFUS DISCIPLINED SMALLCAP STOCK FUND
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1998
Common Stocks (continued) Shares Value
- ------------------------------------------------------- ___________ ___________
Energy--5.2% Barrett Resources . . . . . . . . . . . . . . . . . . (a) 700 $ 16,494
Devon Energy . . . . . . . . . . . . . . . . . . . . . 2,200 74,525
New Jersey Resources . . . . . . . . . . . . . . . . . 1,400 53,813
Veritas DGC . . . . . . . . . . . . . . . . . . . . . (a) 1,000 18,625
Vintage Petroleum . . . . . . . . . . . . . . . . . . 3,000 39,000
WICOR . . . . . . . . . . . . . . . . . . . . . . . . 3,200 78,000
___________
280,457
___________
Health Care--8.9% CONMED . . . . . . . . . . . . . . . . . . . . . . . . (a) 2,900 76,850
Cooper Cos. . . . . . . . . . . . . . . . . . . . . . (a) 1,200 28,500
Patterson Dental . . . . . . . . . . . . . . . . . . . (a) 2,800 115,500
PharMerica . . . . . . . . . . . . . . . . . . . . . . (a) 9,200 31,050
Schick Technologies . . . . . . . . . . . . . . . . . (a) 3,700 70,300
Twinlab . . . . . . . . . . . . . . . . . . . . . . . (a) 2,900 64,344
Universal Health Services, Cl. B . . . . . . . . . . . (a) 1,900 97,494
___________
484,038
___________
Interest Sensitive--15.3% Allied Capital . . . . . . . . . . . . . . . . . . . . 2,900 54,375
Banknorth Group . . . . . . . . . . . . . . . . . . . 2,600 82,875
Chartwell Re . . . . . . . . . . . . . . . . . . . . . 1,800 44,775
Commercial Federal . . . . . . . . . . . . . . . . . . 3,000 68,063
Cullen Frost Bankers . . . . . . . . . . . . . . . . . 2,000 106,500
Delphi Financial Group, Cl. A . . . . . . . . . . . . (a) 1,400 65,275
Eaton Vance . . . . . . . . . . . . . . . . . . . . . 1,300 29,088
Enhance Financial Services Group . . . . . . . . . . . 1,800 44,213
Financial Security Assurance Holdings . . . . . . . . 1,200 59,775
GBC Bancorp . . . . . . . . . . . . . . . . . . . . . 2,400 63,900
Legg Mason . . . . . . . . . . . . . . . . . . . . . . 2,200 58,438
Metris . . . . . . . . . . . . . . . . . . . . . . . . 1,000 32,875
RenaissanceRe Holdings . . . . . . . . . . . . . . . . 1,400 52,850
Webster Financial . . . . . . . . . . . . . . . . . . 2,700 66,656
___________
829,658
___________
Mining and Metals--2.5% AK Steel Holding . . . . . . . . . . . . . . . . . . . 2,400 41,550
Reliance Steel & Aluminum . . . . . . . . . . . . . . 2,300 71,156
RTI International Metals . . . . . . . . . . . . . . . (a) 1,700 25,288
___________
137,994
___________
Services--12.4% Alternative Living Services . . . . . . . . . . . . . (a) 2,400 62,700
Catalina Marketing . . . . . . . . . . . . . . . . . . 1,800 85,838
Documentum . . . . . . . . . . . . . . . . . . . . . . (a) 1,900 64,600
Education Management . . . . . . . . . . . . . . . . . (a) 3,000 110,250
Lernout & Hauspie Speech Products . . . . . . . . . . (a) 1,600 63,400
Mutual Risk Management . . . . . . . . . . . . . . . . 4,100 138,622
Ritchie Brothers Auctioneers . . . . . . . . . . . . . 1,900 47,500
Staffmark . . . . . . . . . . . . . . . . . . . . . . (a) 2,900 50,931
United Road Services . . . . . . . . . . . . . . . . . 3,200 51,200
___________
675,041
___________
DREYFUS DISCIPLINED SMALLCAP STOCK FUND
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1998
Common Stocks (continued) Shares Value
- ------------------------------------------------------- ___________ ___________
Transportation--2.4% Alaska Air Group . . . . . . . . . . . . . . . . . . . (a) 1,100 $ 39,531
Expeditors International of Washington . . . . . . . . 1,300 44,038
Varlen . . . . . . . . . . . . . . . . . . . . . . . . 1,500 44,813
___________
128,382
___________
Utilities--1.7% Sierra Pacific Resources . . . . . . . . . . . . . . . 1,100 40,081
TNP Enterprises . . . . . . . . . . . . . . . . . . . 1,600 54,000
___________
94,081
___________
TOTAL COMMON STOCKS
(cost $4,661,196) . . . . . . . . . . . . . . . . $4,947,531
___________
___________
Principal
Short-Term Investments--6.3% Amount
- ------------------------------------------------------- ____________
U.S. Treasury Bills: 4.15%, 1/7/1999 . . . . . . . . . . . . . . . . . . . $ 204,000 $ 202,458
3.83%, 1/21/1999 . . . . . . . . . . . . . . . . . . . 141,000 139,580
___________
TOTAL SHORT-TERM INVESTMENTS
(cost $342,251) . . . . . . . . . . . . . . . . . $ 342,038
___________
TOTAL INVESTMENTS (cost $5,003,447). . . . . . . . . . . . . . . . . . . . . . . . . . . . 97.4% $5,289,569
_______ ___________
CASH AND RECEIVABLES (NET) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.6% $ 139,096
_______ ___________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.0% $5,428,665
_______ ___________
Notes to Statement of Investments:
- -----------------------------------------------------------------------------
(a) Non-income producing.
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS DISCIPLINED SMALLCAP STOCK FUND
- -----------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES OCTOBER 31, 1998
Cost Value
__________ __________
ASSETS: Investments in securities--See Statement of Investments . . $5,003,447 $5,289,569
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . 121,363
Receivable for investment securities sold . . . . . . . . 22,794
Dividend and interest receivable . . . . . . . . . . . . 1,142
___________
5,434,868
___________
LIABILITIES: Due to The Dreyfus Corporation and affiliates . . . . . . 5,169
Due to Distributor . . . . . . . . . . . . . . . . . . . 1,034
___________
6,203
___________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $5,428,665
___________
REPRESENTED BY: Paid-in capital . . . . . . . . . . . . . . . . . . . . . $5,191,839
Accumulated net realized gain (loss) on investments . . . (49,296)
Accumulated net unrealized appreciation (depreciation)
on investments--Note 3 . . . . . . . . . . . . . . . . 286,122
___________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $5,428,665
___________
SHARES OUTSTANDING
(100 MILLION SHARES OF $.001 PAR VALUE COMMON STOCK AUTHORIZED). . . . . . . . . . . . . . 415,726
NET ASSET VALUE, offering and redemption price per share--Note 2(c). . . . . . . . . . . . $13.06
_______
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS DISCIPLINED SMALLCAP STOCK FUND
- -----------------------------------------------------------------------------
STATEMENT OF OPERATIONS
FROM SEPTEMBER 30, 1998 (COMMENCEMENT OF OPERATIONS) TO OCTOBER 31, 1998
INVESTMENT INCOME
INCOME: Interest . . . . . . . . . . . . . . . . . . . $ 3,768
Cash dividends . . . . . . . . . . . . . . . . . 1,424
_________
Total Income . . . . . . . . . . . . . . . . . $ 5,192
EXPENSES: Management fee--Note 2(a) . . . . . . . . . . . . 5,340
Distribution fees--Note 2(b) . . . . . . . . . . 1,068
_________
Total Expenses . . . . . . . . . . . . . . . . 6,408
_________
INVESTMENT (LOSS)--NET . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,216)
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--Note 3:
Net realized gain (loss) on investments . . . . . $(49,296)
Net unrealized appreciation (depreciation) on
investments . . . . . . . . . . . . . . . . . 286,122
_________
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS . . . . . . . . . . . . . . 236,826
_________
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS . . . . . . . . . . . . . . . $235,610
_________
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS DISCIPLINED SMALLCAP STOCK FUND
- -----------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
FROM SEPTEMBER 30, 1998 (COMMENCEMENT OF OPERATIONS) TO OCTOBER 31, 1998
OPERATIONS:
Investment (loss)--net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (1,216)
Net realized gain (loss) on investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (49,296)
Net unrealized appreciation (depreciation) on investments . . . . . . . . . . . . . . . . . . . . . . . . . . 286,122
___________
Net Increase (Decrease) in Net Assets Resulting from Operations . . . . . . . . . . . . . . . . . . . 235,610
___________
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold, representing increase (decrease) in Net Assets
from capital stock transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,193,055
___________
Total Increase (Decrease) in Net Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,428,665
NET ASSETS:
Beginning of Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . --
___________
End of Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $5,428,665
___________
Shares
___________
CAPITAL SHARE TRANSACTIONS:
Shares sold, representing net increase (decrease) in shares outstanding . . . . . . . . . . . . . . . . . . . 415,726
___________
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS DISCIPLINED SMALLCAP 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 the period from September 30, 1998 (commencement of
operations) to October 31, 1998. This information has been derived from the
Fund's financial statements.
PER SHARE DATA:
Net asset value, beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $12.50
_______
Net realized and unrealized gain (loss) on investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . .56
_______
Net asset value, end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $13.06
_______
TOTAL INVESTMENT RETURN(1,2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.48%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13%
Ratio of net investment (loss) to average net assets(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . (.02%)
Portfolio Turnover Rate(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.58%
Net Assets, end of period (000's Omitted) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $5,429
- -------------------
(1) Exclusive of redemption fee.
(2) Not annualized.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS DISCIPLINED SMALLCAP STOCK FUND
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES:
Dreyfus Disciplined Smallcap Stock 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, as amended (the "Act") as an open-end
management investment company and operates as a series company currently
offering nineteen series, including the Fund. The Fund's investment objective is
to seek investment returns (consisting of capital appreciation and income) that
surpass the Standard & Poor's SmallCap 600 Index. The Dreyfus Corporation (the
" Manager" ) serves as the Fund's investment adviser. The Manager is a direct
subsidiary of Mellon Bank, N.A. (" Mellon Bank" ) which is a wholly-owned
subsidiary of Mellon Bank Corporation. Premier Mutual Fund Services, Inc. (the
" Distributor" ) is the distributor of the Fund's shares, which are sold to the
public without a sales charge.
At October 31, 1998, MBC Investment Corp., an indirect subsidiary of Mellon
Bank Corporation, held 400,000 shares of the Fund.
The Fund' s financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management estimates
and assumptions. Actual results could differ from those estimates.
(A) PORTFOLIO VALUATION: Investments in securities (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.
(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
- -----------------------------------------------------------------------------
DREYFUS DISCIPLINED SMALLCAP STOCK FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
received or made to reflect daily unrealized gains or losses. When the
contracts are closed, the Fund recognized 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, 1998,
there were no open financial futures contracts.
(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 of 1986, as
amended (the "Code"). To the extent that net realized capital gain can be offset
by capital loss carryovers, it is the policy of the Fund not to distribute such
gain.
(F) 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 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 $49,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized susequent to October 31, 1998. If not
applied, the carryover expires in fiscal 2006.
During the period ended October 31, 1998, the Fund reclassified $1,216 from
accumulated net investment income (loss) to paid-in capital. Net assets were not
affected by this reclassification.
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 1.25% 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 $40,000 per
year, plus $5,000 for each joint Board meeting of The Dreyfus/Laurel Funds,
Inc., The Dreyfus/Laurel Tax-Free Municipal Funds, and The Dreyfus/Laurel Funds
Trust (the "Dreyfus/Laurel Funds" ) attended, $2,000 for separate committee
meetings attended which are not held in conjunction with a regularly scheduled
board meeting and $500 for Board meetings and separate committee meetings
attended that are conducted by telephone and is reimbursed for travel and
out-of-pocket expenses. The Chairman of the Board receives an additional 25% of
such compensation (with the exception of reimbursable amounts). In the event
that there is a joint committee meeting of the Dreyfus/Laurel Funds and the
Dreyfus High Yield Strategies Fund, the $2,000 fee will be allocated between the
Dreyfus/Laurel Funds and the 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.
DREYFUS DISCIPLINED SMALLCAP STOCK FUND
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(B) DISTRIBUTION PLAN: Under a 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 Fund's average daily net assets to compensate Mellon Bank, the Manager or
Dreyfus Service Corporation, an affiliate of the Manager, for shareholder
servicing activities and the Distributor for shareholder servicing activities
and expenses primarily intended to result in the sale of Fund shares. During the
period ended October 31, 1998, the Fund was charged $1,068 pursuant to the Plan
(C) A 1% redemption fee is charged and retained by the Fund on certain
redemptions of Fund shares (including redemption through use of the Fund
Exchange Service) where the redemption or exchange occurs within six months
following the date of issuance.
NOTE 3--SECURITIES TRANSACTIONS:
The aggregate amount of purchase and sales of investment securities, excluding
short-term securities and financial futures, during the period ended October 31,
1998 amounted to $4,838,659 and $127,787, respectively.
At October 31, 1998, accumulated net unrealized appreciation on investments
was $286,122 consisting of $441,244 gross unrealized appreciation and $155,122
gross unrealized depreciation.
At October 31, 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).
DREYFUS DISCIPLINED SMALLCAP STOCK 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 Disciplined Smallcap Stock
Fund of The Dreyfus/Laurel Funds, Inc. as of October 31, 1998, and the related
statement of operations, the statement of changes in net assets, and the
financial highlights for the period from September 30, 1998 (commencement of
operations) to October 31, 1998. 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 audit.
We conducted our audit 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, 1998 by correspondence with the custodian and brokers. As to
securities sold, but not 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 audit provides 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 Smallcap Stock Fund of The Dreyfus/Laurel Funds, Inc. as of
October 31, 1998, the results of its operations, changes in its net assets, and
the financial highlights for the period from September 30, 1998 to October 31,
1998, in conformity with generally accepted accounting principles.
New York, New York
December 15, 1998
[reg.tm logo]
(reg.tm)
DREYFUS DISCIPLINED SMALLCAP
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. 041AR9810
Disciplined
Smallcap
Stock Fund
Annual Report
October 31, 1998
DREYFUS DISCIPLINED INTERMEDIATE BOND FUND
- -----------------------------------------------------------------------------
LETTER TO SHAREHOLDERS
Dear Shareholder:
We are pleased to report the performance of the Dreyfus Disciplined
Intermediate Bond Fund for its annual reporting period ended October 31, 1998,
as shown in the following table:
<TABLE>
<CAPTION>
Income Dividends Distribution
Total Return* (Approximate Per Share) Rate Per Share**
___________ _____________________ _________________
<S> <C> <C> <C>
Investor Shares 8.80% $.722 5.61%
Restricted Shares 8.90% $.753 5.86%
Lehman Brothers
Aggregate Bond Index*** 9.34%
</TABLE>
The Economy
In the face of soaring consumer confidence and strong first-quarter economic
growth, the Federal Reserve Board earlier this year refrained from increasing
interest rates, partially to avoid further roiling international financial
markets. In addition, the Fed evidently felt then that the economic slowdown
overseas might curtail the U.S. economy to some degree, which would alleviate
the need for monetary restraint. The Fed's expectations have proven to be true,
and its judgment accurate. The U.S. balance of trade has worsened and there have
been increasing signs of a slowdown in export-related industries. On September
29, concerns about a weakening U.S. economy caused the Federal Open Market
Committee (the F.O.M.C. is the policy-making arm of the Fed) to pare the Federal
Funds target rate by 25 basis points, the first reduction since January 1996.
(The Federal Funds rate is the rate of interest that banks charge each other for
overnight loans.) Fed Chairman Alan Greenspan described the economic outlook for
the United States as having "weakened measurably." Two weeks later, on October
15, the F.O.M.C. again reduced its target rate by an additional quarter point,
putting the Federal Funds rate at 5.0%.
Despite the concerns of the Fed regarding an economic slowdown, aggregate
economic statistics showed a growing and resilient economy during the reporting
period. Low unemployment and negligible inflation, combined with car makers
rebuilding inventory after a long strike and rising consumer incomes, resulted
in solid economic growth (3.3% ) for the third quarter of this year. While a
significant portion of this gain was due to inventory replenishment after the
automobile strike, the overall results were still an improvement over
second-quarter economic growth of 1.8%. Inflation as measured by the Consumer
Price Index remained at levels not witnessed since 1963.
The Fed's responsibility is to enact monetary policy that is anticipatory of
future economic conditions. The U.S. trade deficit has continued to widen
because of the global economic slide. Slumping exports have weakened
manufacturing activity since midyear and there is concern that this slackness
could become more pronounced and widen into other sectors of the economy. While
the increase in imports also restrains domestic production, it has helped
contain inflation as well, since domestic producers are reluctant to raise
prices. This provides additional flexibility for the Fed to lower interest rates
still further. So far, economic problems overseas have not caused any measurable
reaction in the U.S. labor market. Only the growth rate in new jobs has eased
from its torrid pace earlier in the year. The unemployment rate has remained
near 30-year lows and worker inflation-adjusted take-home pay has been rising.
The condition of the labor market is a key determinant of consumer confidence
which, of course, relates directly to consumer spending, a force that accounts
for two thirds of all economic activity. Business spending has shown signs of
weakness, so the role of the consumer will be of even greater importance in the
future. It is significant that measures of consumer confidence have receded from
earlier record high levels, largely because of concerns about the volatility of
financial markets.
The Market and the Portfolio
<PAGE>
During the late summer months, U.S. Treasury securities were a safe haven for
investors as global and domestic equity markets experienced extraordinary price
volatility. As a result, interest rates on U.S. Treasury securities fell
sharply. The performance of corporate bonds lagged that of U.S. Treasuries.
Indeed, the Fund's underperformance versus its benchmark was attributable to its
modest overweighting in investment grade corporate bonds. We had believed that
the enormous global demand for U.S. Treasuries had caused their prices to move
beyond their intrinsic fundamental value. As a result, we reduced the Fund's
allocation to U.S. Treasury securities and increased positions in attractively
priced, investment grade, domestic and Yankee corporate obligations. Still, with
bond prices rising during the reporting period, the Fund's longer duration
strategy was a correct one, and the Fund continues to maintain a slightly longer
duration than the broader market. Our tactical interest rate management program
monitors the dynamics of the yield curve to determine the appropriate
implementation of shifts in the Fund's duration.
Of course, generating income is an important component of the Fund's overall
investment objective. In a low interest rate environment such as this one, the
temptation to stretch for extra yield emerges. We believe that mortgage-backed
securities and other callable issues make sense on a tactical basis. While
owning higher yielding bonds frequently means lower price stability during
volatile conditions, the Fund is well diversified and in a position to add to
its corporate, mortgage and callable bond positions. We do so with care,
however, always analyzing the performance potential of these instruments under a
range of possible interest rate scenarios.
We continue to remain constructive on the bond market; the longer-term trend
for interest rates still seems to be down. Yet by the end of the reporting
period, many U.S. Treasury issues were yielding less than the overnight Fed
Funds rate, and the market seemed to anticipate additional monetary easing.
Thus, our longer duration strategy is one that we closely and continuously
monitor. We believe that a risk for the immediate future is that bond investors
have little room for error in their general belief in continued moderation in
monetary policy by the Fed. Looking ahead, we will continue to employ our
tactical interest rate management and fundamental bottom up analysis. We
currently intend to focus on the non-Treasury sectors.
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,
[Daniel J. Fasciano signature logo]
Daniel J. Fasciano
Portfolio Manager
November 16, 1998
New York, N. Y.
* Total return includes reinvestment of dividends and any capital gains paid.
**Distribution rate per share is based upon dividends per share paid from net
investment income during the period, divided by the net asset value per share at
the end of the period.
***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 the reinvestment of dividends and capital gains.
<PAGE>
DREYFUS DISCIPLINED INTERMEDIATE BOND FUND OCTOBER 31, 1998
- -----------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN DREYFUS DISCIPLINED
INTERMEDIATE BOND FUND INVESTOR SHARES AND RESTRICTED SHARES AND THE LEHMAN
BROTHERS AGGREGATE BOND INDEX
[Exhibit A:
Dollars
$12,602
Lehman Brothers Aggregate Bond Index*
$12,340
Dreyfus Disciplined Intermediate Bond Fund (Restricted Shares)
$12,265
Dreyfus Disciplined Intermediate Bond Fund (Investor Shares)
*Source: Lehman Brothers ]
<TABLE>
<CAPTION>
Average Annual Total Returns
- -----------------------------------------------------------------------------
Investor Shares Restricted Shares
______________________________________________________ ______________________________________________________
Period Ended 10/31/98 Period Ended 10/31/98
_____________________ _____________________
<S> <C> <C> <C>
1 Year 8.80% 1 Year 8.90%
From Inception (11/1/95) 7.04 From Inception (11/1/95) 7.26
- ------------------------
</TABLE>
Past performance is not predictive of future performance.
The above graph compares a $10,000 investment made in each of the Investor
shares and Restricted shares of Dreyfus Disciplined Intermediate Bond Fund on
11/1/95 to a $10,000 investment made in the Lehman Brothers Aggregate Bond Index
on that date. All dividends and capital gain distributions are reinvested.
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, mortgaged-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.
<PAGE>
<TABLE>
<CAPTION>
DREYFUS DISCIPLINED INTERMEDIATE BOND FUND
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS OCTOBER 31, 1998
Principal
Bonds and Notes--98.4% Amount Value
- -------------------------------------------------------
_____________ _____________
Banking--2.7% First Union National Bank of Florida,
<S> <C> <C> <C>
Sub. Notes, 6.18%, 2006 . . . . . . . . . . . . . $....2,250,000 (a) $ 2,270,716
Fleet Financial Group,
Sub. Notes, 6.375%, 2008 . . . . . . . . . . . . . 2,250,000 2,327,697
_____________
4,598,413
_____________
Collateralized Mortgage
Obligations--.1% Countrywide Funding,
Ser. 1994-10, Cl. A5, 6%, 2009 . . . . . . . . . . 153,254 152,954
_____________
Commercial Mortgage
Pass-Through Ctfs.--3.5% Asset Securitization:
Ser. 1995-MD IV, Cl. A-1, 7.10%, 2029 . . . . . . 692,026 733,959
Ser. 1997-D4, Cl. A-CS1, 1.542%, 2029
(Interest Only Obligation) . . . . . . . . . . 16,425,270 (b,c) 508,157
GS Mortgage Securities II:
Ser. 1997-GLI, Cl. A-2B, 6.86%, 2030 . . . . . . . 1,500,000 1,569,844
Ser. 1998-GLII, Cl. A-2, 6.562%, 2031 . . . . . . 2,000,000 2,036,250
Merrill Lynch Mortgage Investors,
Ser. 1997-C1, Cl. A-3, 7.12%, 2029 . . . . . . . . 1,000,000 1,058,905
_____________
5,907,115
_____________
Finance--7.3% ERP Operating
Notes, 7.57%, 2006 . . . . . . . . . . . . . . . . 2,250,000 (d) 2,287,870
Ford Motor Credit,
Notes, 6.25%, 2005 . . . . . . . . . . . . . . . . 2,225,000 2,296,336
Green Tree Financial,
Medium-Term Notes, Ser. A, 6.50%, 2002 . . . . . . 1,425,000 1,437,275
Lehman Brothers,
Sr. Sub. Notes, 7.36%, 2003 . . . . . . . . . . . 2,250,000 2,315,129
Markel,
Notes, 7.25%, 2003 . . . . . . . . . . . . . . . . 360,000 387,345
NYNEX Capital Funding,
Gtd. Medium-Term Notes, 7.63%, 1999 . . . . . . . 2,250,000 (b,e) 2,604,569
Salomon,
Medium-Term Floating-Rate Notes,
Ser. D, 4.704%, 1999 . . . . . . . . . . . . . . . 1,230,000 (b) 1,228,250
_____________
12,556,774
_____________
Finance/Asset-Backed--3.3% American Airlines Pass-Through Trusts,
Pass-Through Ctfs., Ser. 1991-A, 9.71%, 2007 . . . 1,068,387 1,247,609
CitiBank Credit Card Master Trust I,
Ser. 1997-3, Cl. A, 6.839%, 2004 . . . . . . . . . 1,500,000 1,520,978
Green Tree Financial,
Manufactured Housing Contract
Pass-Through Ctfs.,
Ser. 1996-10, Cl. A5, 6.83%, 2028 . . . . . . . . 1,000,000 1,032,994
<PAGE>
DREYFUS DISCIPLINED INTERMEDIATE BOND FUND
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1998
Principal
Bonds and Notes (continued) Amount Value
- -------------------------------------------------------
_____________ _____________
Finance/Asset-Backed (continued) NationsBank Auto Grantor Trust 1995-A,
Cl. A, 5.85%, 2002 . . . . . . . . . . . . . . . . $.........20,791 $ 20,830
Premier Auto Trust 1996-2,
Cl. A-4, 6.575%, 2000 . . . . . . . . . . . . . . 1,000,000 1,008,690
WFS Financial Owner Trust,
Auto Receivable Backed Notes,
Ser. 1996-D, Cl. A3, 6.05%, 2001 . . . . . . . . . 729,229 736,449
_____________
5,567,550
_____________
Financial Services--.9% Associates, N.A.,
Deb., 6.95%, 2018 . . . . . . . . . . . . . . . . 1,500,000 1,517,820
_____________
Foods and Beverages--1.3% Dole Foods:
Notes, 6.375%, 2005 . . . . . . . . . . . . . . . 750,000 737,480
Notes, 6.75%, 2000 . . . . . . . . . . . . . . . . 1,500,000 1,519,760
_____________
2,257,240
_____________
Foreign/Yankee--10.0% ABN AMBRO Bank
Sub. Notes, 7.25%, 2005 . . . . . . . . . . . . . 2,250,000 2,404,179
Cable & Wireless Communications,
Notes, 6.625%, 2005 . . . . . . . . . . . . . . . 3,000,000 3,078,750
Hanson Overseas
Gtd. Sr. Notes, 7.375%, 2003 . . . . . . . . . . . 2,250,000 2,400,746
Midland Bank,
Sub. Notes, 7.65%, 2007 . . . . . . . . . . . . . 3,000,000 (f) 3,226,464
National Australia Bank,
Medium-Term Notes, 6.40%, 2007 . . . . . . . . . . 2,250,000 2,288,642
Province of Quebec,
Medium-Term Notes, 7.295%, 2006 . . . . . . . . . 1,000,000 (g) 1,063,842
Smurfit Capital Funding,
(Gtd. by Jefferson Smurfit Group)
Deb., 7.50%, 2025 . . . . . . . . . . . . . . . . 2,750,000 2,712,267
_____________
17,174,890
_____________
Healthcare--.4% Columbia/HCA Healthcare,
Notes, 6.91%, 2005 . . . . . . . . . . . . . . . . 625,000 589,624
_____________
Hotels/Motels--1.1% Hilton Hotels,
Notes, 7%, 2004 . . . . . . . . . . . . . . . . . 2,000,000 1,939,464
_____________
Industrial--8.0% Coca Cola Enterprises,
Notes, 6.375%, 2001 . . . . . . . . . . . . . . . 1,025,000 1,054,715
Crown Cork & Seal,
Notes, 8.375%, 2005 . . . . . . . . . . . . . . . 2,750,000 2,991,139
General Motors,
Notes, 6.75%, 2028 . . . . . . . . . . . . . . . . 1,500,000 1,498,140
IBM,
Deb., 6.50%, 2028 . . . . . . . . . . . . . . . . 1,500,000 1,546,125
<PAGE>
DREYFUS DISCIPLINED INTERMEDIATE BOND FUND
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1998
Principal
Bonds and Notes (continued) Amount Value
- -------------------------------------------------------
_____________ _____________
Industrial (continued) News America Holdings,
Gtd. Sr. Deb., 8%, 2016 . . . . . . . . . . . . . $....1,750,000 $ 1,817,055
Royal Caribbean Cruises,
Sr. Notes, 7.50%, 2027 . . . . . . . . . . . . . . 2,250,000 2,060,411
WMX Technologies,
Sr. Notes, 7.10%, 2003 . . . . . . . . . . . . . . 2,550,000 (d) 2,754,347
_____________
13,721,932
_____________
Municipal Obligations--.2% Atlanta & Fulton County, Ga. Recreation Authority,
Revenue Bonds, 7%, 2028 . . . . . . . . . . . . . 400,000 416,000
_____________
Telecommunications--1.3% GTE North,
Deb., 6.90%, 2008 . . . . . . . . . . . . . . . . 2,000,000 2,160,302
_____________
U.S. Government/
Agencies--8.5% Federal Home Loan Banks, Deb.,
5.925%, 2008 . . . . . . . . . . . . . . . . . . . 1,500,000 1,567,710
Federal Home Loan Mortgage Corp.,
Deb.:
6.375%, 3/9/2005 . . . . . . . . . . . . . . . 2,000,000 2,063,740
6.542%, 3/19/2008 . . . . . . . . . . . . . . . 2,000,000 2,060,120
Federal National Mortgage Association,
Medium-Term Notes:
6.18%, 2002 . . . . . . . . . . . . . . . . . . 2,435,000 2,500,599
6.36%, 2002 . . . . . . . . . . . . . . . . . . 2,500,000 2,579,250
6.16%, 2007 . . . . . . . . . . . . . . . . . . 2,000,000 2,129,000
6.56%, 2007 . . . . . . . . . . . . . . . . . . 1,500,000 1,588,470
_____________
14,488,889
_____________
U.S. Government Agencies/
Mortgage Backed--22.0% Federal Home Loan Mortgage Corp.,
Multiclass Mortgage Participation Ctfs.,
REMIC:
Ser. 1453, Cl. S, 7.323%, 2000 . . . . . . . 518,409 (h) 527,710
Ser. 1660, Cl. H, 6.50%, 2009 . . . . . . . 2,570,000 2,660,895
Ser. 2062, Cl. PG, 6.25%, 2026 . . . . . . . 2,000,000 1,987,500
Federal National Mortgage Association:
6.50%, 9/1/2028 . . . . . . . . . . . . . . . . . 2,529,943 2,550,486
7%, 6/1/2009 . . . . . . . . . . . . . . . . . . . 1,940,400 1,988,289
8%, 2/1/2013 . . . . . . . . . . . . . . . . . . . 3,388,920 3,495,874
REMIC Trust, Pass-Through Ctfs.
(collateralized by FNMA Pass-Through Ctfs.):
Ser. 1997-30, Cl. VG, 7%, 2012 . . . . . . . 2,000,000 2,110,676
Ser. 1998-M2, Cl. B, 6.247%, 2021 . . . . . 1,500,000 1,525,282
Government National Mortgage Association I:
6%, 10/15/2008-5/15/2009 . . . . . . . . . . . . . 2,989,528 3,030,634
6.50%, 2/15/2024-7/15/2024 . . . . . . . . . . . . 3,606,102 3,663,018
<PAGE>
DREYFUS DISCIPLINED INTERMEDIATE BOND FUND
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1998
Principal
Bonds and Notes (continued) Amount Value
- -------------------------------------------------------
_____________ _____________
U.S. Government Agencies/
Mortgage Backed (continued) Government National Mortgage Association I
(continued):
7%, 10/15/2023-6/15/2028 . . . . . . . . . . . . . $..10,483,548 $ 10,760,004
7.50%, 2/15/2028 . . . . . . . . . . . . . . . . . 2,549,375 2,628,227
8%, 2/15/2008 . . . . . . . . . . . . . . . . . . 785,362 828,800
_____________
37,757,395
_____________
U.S. Government--27.8% U.S. Treasury Bonds,
7.875%, 2/15/2021 . . . . . . . . . . . . . . . . 3,000,000 3,955,230
U.S. Treasury Notes:
5.625%, 5/15/2008 . . . . . . . . . . . . . . . . 4,350,000 4,687,129
6%, 8/15/2000 . . . . . . . . . . . . . . . . . . 5,300,000 5,462,021
6.125%, 8/15/2007 . . . . . . . . . . . . . . . . 8,750,000 9,664,725
6.50%, 8/31/2001 . . . . . . . . . . . . . . . . . 8,500,000 8,985,010
6.50%, 8/15/2005 . . . . . . . . . . . . . . . . . 5,250,000 5,864,145
6.625%, 4/30/2002 . . . . . . . . . . . . . . . . 8,250,000 8,841,278
_____________
47,459,538
_____________
TOTAL BONDS AND NOTES
(cost $164,680,690) . . . . . . . . . . . . . . . $168,265,900
_____________
Short-Term Investments--.2%
- -------------------------------------------------------
Repurchase Agreement; Salomon Smith Barney, 5.35%
Dated 10/30/1998, due 11/2/1998 in the
amount of $333,148 (fully collateralized by
$320,000 U.S. Treasury Notes, 7.75%,
12/31/1999 value $339,712)
(cost $333,000) . . . . . . . . . . . . . . . . . $.......333,000 $ 333,000
_____________
TOTAL INVESTMENTS (cost $165,013,690). . . . . . . . . . . . . . . . . . . . . . . . . . . 98.6% $168,598,900
_______ _____________
CASH AND RECEIVABLES (NET) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.4% $ 2,424,682
_______ _____________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.0% $171,023,582
_______ _____________
Notes to Statement of Investments:
- -----------------------------------------------------------------------------
(a)Reflects date security can be redeemed at holders' option; the stated
maturity date is 2/15/2036.
(b) Variable rate security--interest rate subject to periodic change.
(c) Reflects notional face.
(d)Reflects date security can be redeemed at holders' option; the stated
maturity date is 8/15/2026.
(e)Reflects date security can be redeemed at holders' option; the stated
maturity date is 10/15/2009.
(f)Reflects date security can be redeemed at holders' option; the stated
maturity date is 5/1/2025.
(g)Reflects date security can be redeemed at holders' option; the stated
maturity date is 7/22/2026.
(h) Inverse floater security--interest rate subject to periodic change.
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
DREYFUS DISCIPLINED INTERMEDIATE BOND FUND
- -----------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES OCTOBER 31, 1998
Cost Value
_____________ ______________
ASSETS: Investments in securities--See Statement of
Investments--Note 1(c) . . . . . . . . . . . . . . . . $165,013,690 $168,598,900
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . 918,213
Interest receivable . . . . . . . . . . . . . . . . . . . 2,428,071
Paydowns receivable . . . . . . . . . . . . . . . . . . . 149
_____________
171,945,333
_____________
LIABILITIES: Due to The Dreyfus Corporation and affiliates . . . . . . 80,205
Due to Distributor . . . . . . . . . . . . . . . . . . . 108
Payable for investment securities purchased . . . . . . . 841,438
_____________
921,751
_____________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $171,023,582
_____________
REPRESENTED BY: Paid-in capital . . . . . . . . . . . . . . . . . . . . . $165,175,346
Accumulated undistributed investment income--net . . . . 28,202
Accumulated net realized gain (loss) on investments . . . 2,234,824
Accumulated net unrealized appreciation (depreciation)
on investments--Note 3 . . . . . . . . . . . . . . . . 3,585,210
_____________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $171,023,582
_____________
NET ASSET VALUE PER SHARE
_____________________________
Investor Restricted
Shares Shares
_____________ _____________
Net Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,438,225 $169,585,357
Shares Outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111,724 13,193,037
NET ASSET VALUE PER SHARE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $12.87 $12.85
_______ _______
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
DREYFUS DISCIPLINED INTERMEDIATE BOND FUND
- -----------------------------------------------------------------------------
STATEMENT OF OPERATIONS YEAR ENDED OCTOBER 31, 1998
INVESTMENT INCOME
INCOME Interest Income . . . . . . . . . . . . . . . . . . . . . $ 9,733,876
EXPENSES: Management fee--Note 2(a) . . . . . . . . . . . . . . . . $ 823,224
Distribution fees (Investor shares)--Note 2(b) . . . . . 1,670
Loan commitment fees--Note 4 . . . . . . . . . . . . . . 705
____________
Total Expenses . . . . . . . . . . . . . . . . . . . . 825,599
____________
INVESTMENT INCOME--NET . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,908,277
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--Note 3:
Net realized gain (loss) on investments . . . . . . . . . $ 2,343,195
Net unrealized appreciation (depreciation) on investments . . 1,687,747
____________
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS . . . . . . . . . . . . . . . . . . 4,030,942
____________
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS . . . . . . . . . . . . . . . . . . . $12,939,219
____________
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
DREYFUS DISCIPLINED INTERMEDIATE BOND FUND
- -----------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
Year Ended Year Ended
October 31, 1998 October 31, 1997*
________________ ________________
OPERATIONS:
Investment income--net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 8,908,277 $ 4,886,568
Net realized gain (loss) on investments . . . . . . . . . . . . . . . . . . . . . 2,343,195 536,132
Net unrealized appreciation (depreciation) on investments . . . . . . . . . . . . 1,687,747 1,317,452
_____________ _____________
Net Increase (Decrease) in Net Assets Resulting from Operations . . . . . . . 12,939,219 6,740,152
_____________ _____________
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net:
Investor shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (37,690) (8,096)
Restricted shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (8,842,385) (4,880,158)
_____________ _____________
Total Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (8,880,075) (4,888,254)
_____________ _____________
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold:
Investor shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,363,480 219,869
Restricted shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77,712,955 54,972,784
Dividends reinvested:
Investor shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34,916 4,985
Restricted shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,916,055 2,057,870
Cost of shares redeemed:
Investor shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (294,657) (40,510)
Restricted shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (24,773,764) (8,653,765)
_____________ _____________
Increase (Decrease) in Net Assets from Capital Stock Transactions . . . . 57,958,985 48,561,233
_____________ _____________
Total Increase (Decrease) in Net Assets . . . . . . . . . . . . . . . . 62,018,129 50,413,131
NET ASSETS:
Beginning of Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109,005,453 58,592,322
_____________ _____________
End of Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $171,023,582 $109,005,453
_____________ _____________
UNDISTRIBUTED INVESTMENT INCOME--NET . . . . . . . . . . . . . . . . . . . . . . . . $ 28,202 $ --
_____________ _____________
CAPITAL SHARE TRANSACTIONS:
Shares Shares
_____________ _____________
Investor Shares
Shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106,920 17,954
Shares issued for dividends reinvested . . . . . . . . . . . . . . . . . . . . . 2,742 405
Shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (23,285) (3,304)
_____________ _____________
Net Increase (Decrease) in Shares Outstanding . . . . . . . . . . . . . . 86,377 15,055
_____________ _____________
Restricted Shares
Shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,153,064 4,463,067
Shares issued for dividends reinvested . . . . . . . . . . . . . . . . . . . . . 308,516 167,445
Shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,951,559) (702,920)
_____________ _____________
Net Increase (Decrease) in Shares Outstanding . . . . . . . . . . . . . . 4,510,021 3,927,592
_____________ _____________
- ------------------------
*Effective August 15, 1997, Institutional shares were redesignated as Investor shares and Retail shares were redesignated as
Restricted shares.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
DREYFUS DISCIPLINED INTERMEDIATE BOND 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.
<TABLE>
<CAPTION>
Investor Shares Restricted Shares
______________________________ ______________________________
Year Ended October 31, Year Ended October 31,
______________________________ ______________________________
PER SHARE DATA: 1998 1997(1) 1996(2,3) 1998 1997(1) 1996(2,3)
______ ______ ______ ______ ______ ______
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period . $12.52 $12.29 $12.50 $12.52 $12.29 $12.50
______ ______ ______ ______ ______ ______
Investment Operations:
Investment income--net . . . . . . . . .72 .74 .71 .76 .77 .74
Net realized and unrealized gain (loss)
on investments . . . . . . . . . . .35 .23 (.21) .32 .23 (.21)
______ ______ ______ ______ ______ ______
Total from Investment Operations . . . 1.07 .97 .50 1.08 1.00 .53
______ ______ ______ ______ ______ ______
Distributions:
Dividends from investment income--net . . (.72) (.74) (.71) (.75) (.77) (.74)
______ ______ ______ ______ ______ ______
Net asset value, end of period . . . . $12.87 $12.52 $12.29 $12.85 $12.52 $12.29
______ ______ ______ ______ ______ ______
TOTAL INVESTMENT RETURN. . . . . . . . . . 8.80% 8.21% 4.18% 8.90% 8.49% 4.45%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets . . .80% .80% .79% .55% .55% .55%
Ratio of net investment income
to average net assets . . . . . . . 5.68% 6.01% 5.61% 5.95% 6.31% 6.29%
Portfolio Turnover Rate . . . . . . . . 106.93% 143.91% 198.16% 106.93% 143.91% 198.16%
Net Assets, end of
period (000's Omitted) . . . . . . $1,438 $317 $126 $169,585 $108,688 $58,466
- ------------------------
(1)Effective August 15, 1997, Institutional shares were redesignated as
Investor shares and Retail shares were redesignated as Restricted shares.
(2) From November 1, 1995 (commencement of operations) to October 31, 1996.
(3)Effective July 15, 1996, Investor Class shares were redesignated as
Institutional shares and Class R shares were redesignated as Retail shares.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
DREYFUS DISCIPLINED INTERMEDIATE BOND FUND
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES:
Dreyfus Disciplined Intermediate Bond 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, as amended (the "Act") as
an open-end management investment company and operates as a series company
currently offering nineteen series, including the Fund. The Fund's investment
objective is to outperform the Lehman Brothers Aggregate Bond Index, while
maintaining a similar level of risk, by investing primarily in domestic and
foreign investment-grade debt securities and by actively managing bond market
and maturity exposure. The Dreyfus Corporation (the "Manager") serves as the
Fund' s investment adviser. The Manager is a direct subsidiary of Mellon Bank,
N.A.
Premier Mutual Fund Services, Inc. (the "Distributor") is the distributor of
the Fund's shares, which are sold to the public without a sales charge. The Fund
is authorized to issue 100 million of $.001 par value Capital Stock in each of
the following classes of shares: Investor and Restricted. Investor shares are
offered to any investor. Restricted shares are offered only to the clients of
banks, securities brokers or dealers and other financial institutions
(collectively, Service Agents) that have entered into selling agreements with
the Fund' s distributor. Other differences between the classes include the
services offered to and the expenses borne by each 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, other than U.S. Treasury Bills) 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.
Short-term investments, excluding U.S. Treasury Bills 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. 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.
<PAGE>
(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 DREYFUS DISCIPLINED INTERMEDIATE BOND FUND
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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
Fund' s 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) Dividends 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, if any, 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 of 1986, as
amended (the "Code"). To the extent that net realized capital gain can be offset
by capital loss carryovers, it is the policy of the Fund not to distribute such
gain.
(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 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 .55% 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) . Effective July 1, 1998, each
director receives $40,000 per year, plus $5,000 for each joint Board meeting of
The Dreyfus/Laurel Funds, Inc., The Dreyfus/Laurel Tax-Free Municipal Funds, and
The Dreyfus/Laurel Funds Trust (the "Dreyfus/Laurel Funds") attended, $2,000 for
separate committee meetings attended which are not held in conjunction with a
regularly scheduled board meeting and $500 for Board meetings and separate
committee meetings attended that are conducted by telephone and is reimbursed
for travel and out-of-pocket expenses. The Chairman of the Board receives an
additional 25% of such compensation (with the exception of reimbursable amounts)
.. In the event that there is a joint committee meeting of the Dreyfus/Laurel
Funds and the Dreyfus High Yield Strategies Fund, the $2,000 fee will be
allocated between the Dreyfus/Laurel Funds and the 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.
Prior to July 1, 1998 each director received $27,000 per year, $1,000 for
each Board meeting attended and $750 for each Audit Committee meeting attended
and were reimbursed for travel and out-of-pocket expenses. The Chairman of the
Board received an additional annual fee of $25,000 per year. These fees
pertained to the Dreyfus/Laurel Funds. (The $1,000 attendance fee and
reimbursement of meeting expenses were also borne pro rata by Dreyfus High Yield
Strategies Fund) . These fees and expenses were 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, were in fact paid directly by the
Manager to the non-interested Directors.
<PAGE>
DREYFUS DISCIPLINED INTERMEDIATE BOND 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 Investor shares to
compensate the Distributor and Dreyfus Service Corporation, an affiliate of the
Manager, for shareholder servicing activities and the Distributor for activities
primarily intended to result in the sale of Investor shares. The Restricted
shares bear no distribution fee. During the period ended October 31, 1998,
Investor shares were charged $1,670 pursuant to the Plan.
Under its terms, the Plan shall remain in effect from year to year, provided
such continuance is approved annually by a vote of majority of those Directors
who are not "interested persons" of the Company and who have no direct or
indirect financial interest in the operation of the Plan or in any agreement
related to the Plan.
NOTE 3--SECURITIES TRANSACTIONS:
The aggregate amount of purchase and sales (including paydowns) of investment
securities, excluding short-term securities, during the period ended October 31,
1998, amounted to $211,803,723 and $153,943,716, respectively.
At October 31, 1998, accumulated net unrealized appreciation on investments
was $3,585,210 consisting of $4,186,099 gross unrealized appreciation and
$600,889 gross unrealized depreciation.
At October 31, 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
October 31, 1998, the Fund did not borrow under the Facility.
<PAGE>
DREYFUS DISCIPLINED INTERMEDIATE BOND 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 Disciplined Intermediate Bond
Fund of The Dreyfus/Laurel Funds, Inc. as of October 31, 1998, 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 in the three-year period
then ended. 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 and financial highlights. Our procedures included
confirmation of securities owned as of October 31, 1998 by correspondence with
the custodian and brokers. As to securities purchased, but not received, 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 Intermediate Bond Fund of The Dreyfus/Laurel Funds, Inc. as of October
31, 1998, 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 the
financial highlights for each of the years or periods in the three-year period
then ended, in conformity with generally accepted accounting principles.
New York, New York
December 15, 1998
<PAGE>
(reg.tm)
(reg.tm)
DREYFUS DISCIPLINED INTERMEDIATE
BOND 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. 302/702AR9810
Disciplined
Intermediate
Bond Fund
Annual Report
October 31, 1998
<PAGE>
DREYFUS BOND MARKET INDEX FUND
- -----------------------------------------------------------------------------
LETTER TO SHAREHOLDERS
Dear Shareholder:
We are pleased to report the performance for the Dreyfus Bond Market Index
Fund for its annual reporting period ended October 31, 1998, as shown in the
following table:
<TABLE>
Income Dividends Distribution
Total Return* (Approx. Per Share) Rate Per Share**
___________ _____________________ _________________
<S> <C> <C> <C>
Investor Shares 9.43% $.589 5.71%
BASIC Shares 9.69% $.610 5.95%
</TABLE>
Lehman Brothers
Aggregate Bond Index*** 9.34%
Effective November 14, 1997, the Fund's investment objective changed from
seeking to replicate the Lehman Brothers Government/Corporate Bond Index (the
" Government Corporate Bond Index") to seeking to replicate the Lehman Brothers
Aggregate Bond Index.
The Economy
In the face of soaring consumer confidence and strong first-quarter economic
growth, the Federal Reserve Board earlier this year refrained from increasing
interest rates, partially to avoid further roiling international financial
markets. In addition, the Fed evidently felt then that the economic slowdown
overseas might curtail the U.S. economy to some degree, which would alleviate
the need for monetary restraint. The Fed's expectations have proven to be true,
and its judgment accurate. The U.S. balance of trade has worsened and there have
been increasing signs of a slowdown in export-related industries. On September
29, concerns about a weakening U.S. economy caused the Federal Open Market
Committee (the F.O.M.C. is the policy-making arm of the Fed) to pare the Federal
Funds target rate by 25 basis points, the first reduction since January 1996.
(The Federal Funds rate is the rate of interest that banks charge each other for
overnight loans.) Fed Chairman Alan Greenspan described the economic outlook for
the United States as having "weakened measurably." Two weeks later, on October
15, the F.O.M.C. again reduced its target rate by an additional quarter point,
putting the Federal Funds rate at 5.0%.
Despite the concerns of the Fed regarding an economic slowdown, aggregate
economic statistics showed a growing and resilient economy during the reporting
period. Low unemployment and negligible inflation, combined with car makers
rebuilding inventory after a long strike and rising consumer incomes, resulted
in solid economic growth (3.3% ) for the third quarter of this year. While a
significant portion of this gain was due to inventory replenishment after the
automobile strike, the overall results were still an improvement over
second-quarter economic growth of 1.8%. Inflation as measured by the Consumer
Price Index remained at levels not witnessed since 1963.
The Fed's responsibility is to enact monetary policy that is anticipatory of
future economic conditions. The U.S. trade deficit has continued to widen
because of the global economic slide. Slumping exports have weakened
manufacturing activity since midyear and there is concern that this slackness
could become more pronounced and widen into other sectors of the economy. While
the increase in imports also restrains domestic production, it has helped
contain inflation as well, since domestic producers are reluctant to raise
prices. This provides additional flexibility for the Fed to lower interest rates
still further. So far, economic problems overseas have not caused any measurable
reaction in the U.S. labor market. Only the growth rate in new jobs has eased
from its torrid pace earlier in the year. The unemployment rate has remained
near 30-year lows and worker inflation-adjusted take-home pay has been rising.
The condition of the labor market is a key determinant of consumer confidence
which, of course, relates directly to consumer spending, a force that accounts
for two thirds of all economic activity. Business spending has shown signs of
weakness, so the role of the consumer will be of even greater importance in the
future. It is significant that measures of consumer confidence have receded from
earlier record high levels, largely because of concerns about the volatility of
financial markets.
<PAGE>
The Market and the Portfolio
The reporting period was highlighted by an unprecedented bond market rally
from mid-August through early October. Over approximately two months, the
10-year U.S. Treasury Note, at a yield of 5.67% at the beginning, reached a low
of 4.16% by October 5 and ended the reporting period at 4.60%, a 107 basis-point
decline. The drop in yields of U.S. Treasury securities was particularly
pronounced during this period because of investor anxiety about the volatility
of world financial markets. As a result, investors aggressively purchased less
risky U.S. Treasury securities as a safe haven for their assets.
The sharp selloff in the stock market also affected the domestic corporate bond
market as uncertainty about the consequences of the overseas economic turmoil
for the U.S. economy caused yield spreads to widen versus government securities.
Quality spreads also widened since investors preferred to own higher quality,
less risky corporate securities. Over the reporting period, AA-rated corporate
securities outperformed BBB-rated corporate securities by 241 basis points
During the reporting period, mortage- and asset-backed securities
underperformed U.S. Treasury securities. As interest rates decline, prepayment
risk of mortgage securities increases and investors shy away from the mortgage
sector. As expected, the large decline in interest rates had a negative effect
on the performance of mortgage securities. Asset-backed securities were affected
by fears that an economic slowdown would result in an increase in delinquency
rates.
The Federal Reserve calmed some investor fears when it lowered the Fed Funds
rate in September and October. By this time, bond yields had reached multidecade
lows with the 30-year Treasury Bond trading at 4.72%, a historic low. As a
matter of policy, the Fund' s duration remains neutral to the Aggregate Bond
Index, and the Fund's sector allocation is kept in alignment with that index.
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 16, 1998
New York, N.Y.
* Total return includes reinvestment of dividends and any capital gains paid.
**Distribution rate per share is based upon dividends per share paid from net
investment income during the period, divided by the net asset value per share at
the end of the period, adjusted for capital gain distributions.
***SOURCE: LEHMAN BROTHERS --Reflects the reinvestment of dividends and
capital gains. 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 Lehman Brothers
Government/Corporate Bond Index is intended to measure the performance of the
domestic fixed-rate investment grade debt markets and is a widely accepted
unmanaged index of government and corporate bond market performance composed of
U.S. Government and agency securities, fixed-income securities and
nonconvertible investment-grade corporate debt.
<PAGE>
DREYFUS BOND MARKET INDEX FUND OCTOBER 31, 1998
- -----------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN DREYFUS BOND MARKET INDEX
FUND BASIC SHARES AND THE LEHMAN BROTHERS AGGREGATE BOND INDEX
[Exhibit A:
Dollars
$14,159
Lehman Brothers Aggregate Bond Index*
$13,846
<TABLE>
<CAPTION>
Dreyfus Bond Market Index Fund (BASIC Shares)
*Source: Lehman Brothers]
Average Annual Total Returns
- --------------------------------------------------------------------------------
Investor Shares BASIC Shares
_______________________________________________________ _______________________________________________________
<S> <C> <C>
Period Ended 10/31/98 Period Ended 10/31/98
_____________________ _____________________
</TABLE>
<TABLE>
<S> <C> <C> <C>
1 Year 9.43% 1 Year 9.69%
From Inception (4/28/94) 8.02 From Inception (11/30/93) 6.84
- --------------
</TABLE>
Past performance is not predictive of future performance.
The above graph compares a $10,000 investment made in BASIC shares of Dreyfus
Bond Market Index Fund on 11/30/93 (Inception Date) to a $10,000 investment made
in the Lehman Brothers Aggregate Bond Index on that date. All dividends and
capital gain distributions are reinvested. Performance for Investor shares will
vary from the performance of BASIC shares shown above due to differences in
charges and expenses.
Effective November 14, 1997, the Fund's investment objective changed to seeking
to replicate the total return of the Lehman Brothers Aggregate Bond Index. The
Fund' s investment policies also changed as of November 14, 1997 to permit the
Fund to invest in mortgage-backed and asset-backed securities in seeking to
replicate the Lehman Brothers Aggregate Bond Index. Prior to November 14, 1997,
the Funds objective was to seek to replicate the total return of the Lehman
Brothers Government/Corporate Bond Index. 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, mortgaged-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
<PAGE>
DREYFUS BOND MARKET INDEX FUND
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS OCTOBER 31, 1998
<TABLE> Principal
Bonds and Notes--98.9% Amount Value
- -------------------------------------------------------
____________ ____________
Aerospace and Aviation--.8% Boeing, Deb.:
<S> <C> <C> <C> <C>
8.10%, 2006 . . . . . . . . . . . . . . . . . . . $.......25,000 $ 28,850
85_8%, 2031 . . . . . . . . . . . . . . . . . . . 10,000 12,555
Lockheed,
Notes, 63_4%, 2003 . . . . . . . . . . . . . . . . 25,000 26,169
Raytheon, Notes:
6.45%, 2002 . . . . . . . . . . . . . . . . . . . 300,000 310,745
61_2%, 2005 . . . . . . . . . . . . . . . . . . . 25,000 26,219
Rockwell International,
Notes, 63_4%, 2002 . . . . . . . . . . . . . . . . 30,000 31,586
____________
436,124
____________
Automotive--.3% Chrysler,
Deb., 7.45%, 2027 . . . . . . . . . . . . . . . . 50,000 55,006
General Motors:
Deb.:
91_8%, 2001 . . . . . . . . . . . . . . . . . . 15,000 16,487
87_8%, 2003 . . . . . . . . . . . . . . . . . . 25,000 28,417
7.40%, 2025 . . . . . . . . . . . . . . . . . . 10,000 10,725
Notes, 7%, 2003 . . . . . . . . . . . . . . . . . 40,000 42,650
____________
153,285
____________
Banking--1.9% Banc One,
Sub. Notes, 97_8%, 2019 . . . . . . . . . . . . . 5,000 6,618
BankAmerica,
Sub. Notes, 73_4%, 2002 . . . . . . . . . . . . . 25,000 26,875
BankAmerica Capital II,
Gtd. Capital Securities, Ser. 2, 8%, 2026 . . . . 55,000 57,532
Bankers Trust New York,
Sub. Notes, 71_2%, 2015 . . . . . . . . . . . . . 75,000 69,757
Capital One Bank,
Sr. Notes, 63_8%, 2003 . . . . . . . . . . . . . . 200,000 202,832
Chase Manhattan:
Sub. Deb., 61_2%, 2009 . . . . . . . . . . . . . . 10,000 10,224
Sub. Notes, 73_4%, 1999 . . . . . . . . . . . . . 40,000 40,997
Chemical,
Sub. Notes, 61_8%, 2008 . . . . . . . . . . . . . 15,000 15,050
Citicorp,
Sub. Notes, 71_8%, 2003 . . . . . . . . . . . . . 20,000 21,210
FBS Capital I,
Gtd. Capital Securities, 8.09%, 2026 . . . . . . . 100,000 109,751
First Bank System,
Sub. Notes, 75_8%, 2005 . . . . . . . . . . . . . 55,000 61,086
First Chicago,
Sub. Notes, 97_8%, 2000 . . . . . . . . . . . . . 20,000 21,579
First Union,
Sub. Notes, 6.30%, 2008 . . . . . . . . . . . . . 100,000 101,487
Fleet Financial Group,
Sr. Notes, 71_8%, 2000 . . . . . . . . . . . . . . 40,000 41,095
<PAGE>
</TABLE>
<TABLE>
DREYFUS BOND MARKET INDEX FUND
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1998
Principal
Bonds and Notes (continued) Amount Value
- -------------------------------------------------------
____________ ____________
Banking (continued) Integra Financial,
<S> <C> <C> <C> <C>
Sub. Notes, 61_2%, 2000 . . . . . . . . . . . . . $.......15,000 $ 15,282
MBNA America Bank,
Sub. Notes, 63_4%, 2008 . . . . . . . . . . . . . 100,000 103,602
Morgan (J.P.),
Sub. Notes, 61_4%, 2009 . . . . . . . . . . . . . 20,000 19,996
NCNB,
Deb., 93_8%, 2009 . . . . . . . . . . . . . . . . 20,000 25,519
NationsBank, Sub. Notes:
67_8%, 2005 . . . . . . . . . . . . . . . . . . . 10,000 10,587
75_8%, 2005 . . . . . . . . . . . . . . . . . . . 30,000 32,995
Republic New York Corp.,
Sub. Notes, 57_8%, 2008 . . . . . . . . . . . . . 25,000 25,086
Wachovia,
Sub. Notes, 63_8%, 2003 . . . . . . . . . . . . . 15,000 15,712
Wells Fargo Capital,
Gtd. Capital Securities, 7.96%, 2026 . . . . . . . 30,000 31,972
____________
1,066,844
____________
Chemicals--.3% duPont (E.I.) de Nemours:
Deb., 61_2%, 2028 . . . . . . . . . . . . . . . . 100,000 103,212
Notes, 63_4%, 2002 . . . . . . . . . . . . . . . . 40,000 42,497
Eastman Chemical,
Notes, 63_8%, 2004 . . . . . . . . . . . . . . . . 30,000 30,101
Monsanto,
Deb., 8.20%, 2025 . . . . . . . . . . . . . . . . 20,000 21,207
Morton International,
Deb., 91_4%, 2020 . . . . . . . . . . . . . . . . 5,000 6,706
____________
203,723
____________
Consumer--.5% Clorox,
Deb., 8.80%, 2001 . . . . . . . . . . . . . . . . 10,000 10,947
Kimberly-Clark,
Deb., 67_8%, 2014 . . . . . . . . . . . . . . . . 5,000 5,704
Maytag,
Deb., 93_4%, 2002 . . . . . . . . . . . . . . . . 5,000 5,705
Procter & Gamble,
Deb., 8.70%, 2001 . . . . . . . . . . . . . . . . 30,000 32,901
Notes, 51_4%, 2003 . . . . . . . . . . . . . . . . 200,000 201,172
The Employee Stock
Ownership Trust of the Procter & Gamble
Profit Sharing Trust and Employee Stock
Ownership Plan,
Deb. (Gtd. by Procter & Gamble),
9.36%, 2021 . . . . . . . . . . . . . . . . . . . 10,000 12,997
Whirlpool,
Deb., 9%, 2003 . . . . . . . . . . . . . . . . . . 10,000 11,367
____________
280,793
____________
<PAGE>
</TABLE>
<TABLE>
DREYFUS BOND MARKET INDEX FUND
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1998
Principal
Bonds and Notes (continued) Amount Value
- -------------------------------------------------------
____________ ____________
Entertainment/Media--.4% Carnival,
<S> <C> <C>
Notes, 7.05%, 2005 . . . . . . . . . . . . . . . . $.......15,000 $ 16,154
Cox Communications,
Notes, 63_8%, 2000 . . . . . . . . . . . . . . . . 100,000 101,916
Disney (Walt),
Global Bonds, 63_4%, 2006 . . . . . . . . . . . . 20,000 21,728
News America Holdings,
Deb. (Gtd. by The News), 73_4%, 2024 . . . . . . . 15,000 14,835
Time Warner,
Notes (Gtd. by Time Warner), 6.95%, 2028 . . . . . 100,000 100,703
____________
255,336
____________
Financial Services--3.3% Aetna Services,
Notes (Gtd. by Aetna), 75_8%, 2026 . . . . . . . . 50,000 50,402
American Express Credit,
Sr. Notes, 61_8%, 2001 . . . . . . . . . . . . . . 40,000 40,979
American General Finance,
Sr. Notes, 81_8%, 2009 . . . . . . . . . . . . . . 10,000 11,702
Ameritech Capital Funding,
Notes, 61_8%, 2001 . . . . . . . . . . . . . . . . 200,000 207,998
Associates Corp. of North America:
Deb., 7.95%, 2010 . . . . . . . . . . . . . . . . 10,000 11,377
Sr. Notes:
6.10%, 2005 . . . . . . . . . . . . . . . . . . 200,000 201,951
65_8%, 2005 . . . . . . . . . . . . . . . . . . 10,000 10,406
Bear Stearns, Sr. Notes:
83_4%, 2004 . . . . . . . . . . . . . . . . . . . 10,000 11,075
71_4%, 2006 . . . . . . . . . . . . . . . . . . . 75,000 77,584
Beneficial,
Medium-Term Notes, 91_8%, 2001 . . . . . . . . . . 5,000 5,460
Cincinnati Financial,
Deb., 6.90%, 2028 . . . . . . . . . . . . . . . . 100,000 102,825
Citigroup,
Deb., 65_8%, 2028 . . . . . . . . . . . . . . . . 100,000 90,089
Commercial Credit Group, Notes:
6.70%, 1999 . . . . . . . . . . . . . . . . . . . 25,000 25,216
10%, 2008 . . . . . . . . . . . . . . . . . . . . 5,000 6,421
Dean Witter Discovery,
Notes, 61_4%, 2000 . . . . . . . . . . . . . . . . 30,000 30,379
FINOVA Capital,
Notes, 91_8%, 2002 . . . . . . . . . . . . . . . . 20,000 21,696
Ford Capital B.V.,
Deb., 97_8%, 2002 . . . . . . . . . . . . . . . . 25,000 28,580
Ford Motor Credit,
Notes, 63_4%, 2008 . . . . . . . . . . . . . . . . 20,000 21,251
GMAC,
Deb., 6%, 2011 . . . . . . . . . . . . . . . . . . 70,000 67,795
<PAGE>
</TABLE>
<TABLE>
DREYFUS BOND MARKET INDEX FUND
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1998
Principal
Bonds and Notes (continued) Amount Value
- -------------------------------------------------------
____________ ____________
Financial Services (continued) General Electric Capital,
<S> <C> <C> <C> <C>
Deb., 8.30%, 2009 . . . . . . . . . . . . . . . . $.......15,000 $ 18,169
General Electric Credit,
Deb., 51_2%, 2001 . . . . . . . . . . . . . . . . 10,000 9,998
Heller Financial,
Notes, 61_4%, 2001 . . . . . . . . . . . . . . . . 200,000 201,162
Household Finance,
Notes, 8%, 2004 . . . . . . . . . . . . . . . . . 15,000 16,454
International Lease Finance,
Medium-Term Notes, 61_4%, 2000 . . . . . . . . . . 40,000 40,581
MCN Investment,
Notes, 6.30%, 2001 . . . . . . . . . . . . . . . . 300,000 (a) 302,841
Merrill Lynch,
Notes, 8.30%, 2002 . . . . . . . . . . . . . . . . 15,000 16,441
Norwest Financial,
Sr. Notes, 7%, 2003 . . . . . . . . . . . . . . . 15,000 15,886
Pitney Bowes Credit,
Deb., 91_4%, 2008 . . . . . . . . . . . . . . . . 15,000 19,013
Salomon Brothers,
Sr. Notes, 71_4%, 2000 . . . . . . . . . . . . . . 10,000 10,227
Sears, Roebuck Acceptance, Notes:
7%, 2007 . . . . . . . . . . . . . . . . . . . . . 35,000 37,616
63_4%, 2028 . . . . . . . . . . . . . . . . . . . 100,000 98,730
Transamerica Financial,
Deb., 61_2%, 2011 . . . . . . . . . . . . . . . . 5,000 4,970
Travelers/Aetna Property & Casualty,
Notes, 63_4%, 2001 . . . . . . . . . . . . . . . . 60,000 62,337
U.S. Leasing International,
Sr. Notes, 65_8%, 2003 . . . . . . . . . . . . . . 30,000 31,299
____________
1,908,910
____________
Food and Beverages--1.3% Anheuser-Busch,
Deb., 9%, 2009 . . . . . . . . . . . . . . . . . . 5,000 6,365
Archer-Daniels-Midland:
Deb., 81_8%, 2012 . . . . . . . . . . . . . . . . 40,000 49,076
Zero Coupon, 2002 . . . . . . . . . . . . . . . . 5,000 4,186
Coca-Cola,
Deb., 65_8%, 2002 . . . . . . . . . . . . . . . . 35,000 36,305
Coca-Cola Enterprises:
Deb., 81_2%, 2022 . . . . . . . . . . . . . . . . 100,000 121,155
Notes, 77_8%, 2002 . . . . . . . . . . . . . . . . 15,000 16,213
Diageo,
Notes (Gtd. by Diageo), 61_8%, 2005 . . . . . . . 200,000 203,916
Dole Food,
Notes, 63_4%, 2000 . . . . . . . . . . . . . . . . 15,000 15,198
Heinz (H.J.),
Deb., 63_8%, 2028 . . . . . . . . . . . . . . . . 100,000 101,647
Hershey Foods,
Deb., 8.80%, 2021 . . . . . . . . . . . . . . . . 30,000 38,911
<PAGE>
</TABLE>
<TABLE>
DREYFUS BOND MARKET INDEX FUND
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1998
Principal
Bonds and Notes (continued) Amount Value
- -------------------------------------------------------
____________ ____________
Food and Beverages (continued) McDonald's,
<S> <C> <C> <C> <C>
Notes, 63_4%, 2003 . . . . . . . . . . . . . . . . $.......20,000 $ 20,428
Nabisco,
Deb., 7.55%, 2015 . . . . . . . . . . . . . . . . 40,000 38,529
Ralston-Purina Group,
Deb., 85_8%, 2022 . . . . . . . . . . . . . . . . 40,000 46,657
Seagram,
Deb., 8.35%, 2022 . . . . . . . . . . . . . . . . 10,000 10,783
Supervalu,
Notes, 7.80%, 2002 . . . . . . . . . . . . . . . . 15,000 16,204
Sysco,
Sr. Notes, 7%, 2006 . . . . . . . . . . . . . . . 25,000 27,423
____________
752,996
____________
Health Care--.0% Bristol-Myers Squibb,
Deb., 7.15%, 2023 . . . . . . . . . . . . . . . . 15,000 16,799
____________
16,799
____________
Industrial--2.0% Aluminum Co. of America,
Notes, 53_4%, 2001 . . . . . . . . . . . . . . . . 50,000 50,932
Bass America,
Notes, 81_8%, 2002 . . . . . . . . . . . . . . . . 15,000 16,260
Bowater,
Deb., 93_8%, 2021 . . . . . . . . . . . . . . . . 10,000 12,546
Browning-Ferris,
Deb., 7.40%, 2035 . . . . . . . . . . . . . . . . 10,000 9,936
Burlington Resources,
Deb., 67_8%, 2026 . . . . . . . . . . . . . . . . 70,000 68,531
Caterpillar, Deb.:
93_8%, 2000 . . . . . . . . . . . . . . . . . . . 5,000 5,333
93_8%, 2011 . . . . . . . . . . . . . . . . . . . 300,000 393,764
Comdisco,
Notes, 63_8%, 2001 . . . . . . . . . . . . . . . . 155,000 158,867
Crown Cork & Seal,
Bonds, 73_8%, 2026 . . . . . . . . . . . . . . . . 75,000 71,915
Dana,
Notes, 7%, 2028 . . . . . . . . . . . . . . . . . 100,000 100,864
Eaton,
Deb., 8.10%, 2022 . . . . . . . . . . . . . . . . 10,000 11,582
Emerson Electric,
Notes, 6.30%, 2005 . . . . . . . . . . . . . . . . 35,000 37,225
Illinois Tool Works,
Notes, 57_8%, 2000 . . . . . . . . . . . . . . . . 20,000 20,214
PPG Industries,
Notes, 73_8%, 2016 . . . . . . . . . . . . . . . . 45,000 49,783
Tenneco,
Deb., 10.20%, 2008 . . . . . . . . . . . . . . . . 15,000 19,349
<PAGE>
</TABLE>
<TABLE>
DREYFUS BOND MARKET INDEX FUND
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1998
Principal
Bonds and Notes (continued) Amount Value
- -------------------------------------------------------
____________ ____________
Industrial (continued) TRW,
<S> <C> <C> <C> <C>
Notes, 61_4%, 2010 . . . . . . . . . . . . . . . . $.....100,000 $ 102,175
WMX Technologies,
Notes, 63_8%, 2003 . . . . . . . . . . . . . . . . 30,000 30,657
____________
1,159,933
____________
Oil and Gas--.2% Atlantic Richfield,
Deb., 9%, 2021 . . . . . . . . . . . . . . . . . . 15,000 19,659
Mobil,
Deb., 85_8%, 2021 . . . . . . . . . . . . . . . . 15,000 19,312
Occidental Petroleum,
Sr. Notes, 101_8%, 2001 . . . . . . . . . . . . . 15,000 16,692
Phillips Petroleum,
Notes, 6.65%, 2003 . . . . . . . . . . . . . . . . 20,000 20,982
Texaco Capital,
Deb. (Gtd. by Texaco), 67_8%, 2023 . . . . . . . . 25,000 25,154
____________
101,799
____________
Paper Products--.1% Georgia-Pacific,
Deb., 95_8%, 2022 . . . . . . . . . . . . . . . . 25,000 28,532
International Paper,
Notes, 75_8%, 2007 . . . . . . . . . . . . . . . . 10,000 10,819
Weyerhaeuser,
Deb., 7.95%, 2025 . . . . . . . . . . . . . . . . 20,000 21,890
____________
61,241
____________
Retail--.7% Dayton Hudson,
Deb., 81_2%, 2022 . . . . . . . . . . . . . . . . 20,000 20,616
Federated Department Stores,
Deb., 7%, 2028 . . . . . . . . . . . . . . . . . . 100,000 96,275
Gap,
Notes, 6.90%, 2007 . . . . . . . . . . . . . . . . 80,000 86,903
Limited,
Deb., 71_2%, 2023 . . . . . . . . . . . . . . . . 10,000 10,114
May Department Stores,
Deb., 97_8%, 2002 . . . . . . . . . . . . . . . . 15,000 17,354
Penney (J.C.), Deb:
9.05%, 2001 . . . . . . . . . . . . . . . . . . . 80,000 86,284
81_4%, 2022 . . . . . . . . . . . . . . . . . . . 15,000 16,401
71_8%, 2023 . . . . . . . . . . . . . . . . . . . 15,000 14,966
Wal-Mart Stores:
Deb., 9.10%, 2000 . . . . . . . . . . . . . . . . 10,000 10,683
Notes, 57_8%, 2005 . . . . . . . . . . . . . . . . 25,000 25,847
____________
385,443
____________
<PAGE>
</TABLE>
<TABLE>
DREYFUS BOND MARKET INDEX FUND
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1998
Principal
Bonds and Notes (continued) Amount Value
- -------------------------------------------------------
____________ ____________
Technology--.3% Dell Computer,
<S> <S> <S>
Deb., 7.10%, 2028 . . . . . . . . . . . . . . . . $.....100,000 $ 98,118
IBM,
Deb., 7%, 2025 . . . . . . . . . . . . . . . . . . 20,000 21,799
United Technologies,
Global Notes, 83_4%, 2021 . . . . . . . . . . . . 50,000 64,486
Xerox,
Notes, 7.15%, 2004 . . . . . . . . . . . . . . . . 15,000 16,242
____________
200,645
____________
Telephone and Telegraph--2.5% AT&T:
Deb.:
51_8%, 2001 . . . . . . . . . . . . . . . . . . 50,000 49,905
8.35%, 2025 . . . . . . . . . . . . . . . . . . 5,000 5,666
Notes, 7%, 2005 . . . . . . . . . . . . . . . . . 15,000 16,335
Airtouch Communications,
Notes, 71_8%, 2001 . . . . . . . . . . . . . . . . 100,000 104,280
Bellsouth Telecommunications,
Deb., 63_8%, 2028 . . . . . . . . . . . . . . . . 100,000 102,382
GTE,
Deb., 9.10%, 2003 . . . . . . . . . . . . . . . . 35,000 40,666
Lucent Technologies,
Deb., 61_2%, 2028 . . . . . . . . . . . . . . . . 150,000 154,818
MCI Communications,
Sr. Notes, 61_4%, 1999 . . . . . . . . . . . . . . 75,000 75,234
MCI Worldcom,
Sr. Notes, 6.95%, 2028 . . . . . . . . . . . . . . 120,000 123,344
Michigan Bell Telephone,
Deb., 63_8%, 2005 . . . . . . . . . . . . . . . . 25,000 25,215
New Jersey Bell Telephone,
Deb., 8%, 2022 . . . . . . . . . . . . . . . . . . 25,000 30,262
New York Telephone,
Deb., 85_8%, 2010 . . . . . . . . . . . . . . . . 5,000 6,176
Northern Telecom,
Deb., 83_4%, 2001 . . . . . . . . . . . . . . . . 200,000 217,094
Pacific Bell Telephone, Deb.:
73_8%, 2025 . . . . . . . . . . . . . . . . . . . 75,000 78,300
71_8%, 2026 . . . . . . . . . . . . . . . . . . . 10,000 11,000
Pacific Telephone & Telegraph,
Deb., 45_8%, 1999 . . . . . . . . . . . . . . . . 70,000 69,829
Southwestern Bell Telephone,
Notes, 65_8%, 2005 . . . . . . . . . . . . . . . . 150,000 159,795
TCI Communications,
Sr. Deb., 83_4%, 2015 . . . . . . . . . . . . . . 100,000 121,987
U.S. West Communications,
Deb., 67_8%, 2033 . . . . . . . . . . . . . . . . 25,000 24,918
____________
1,417,206
____________
<PAGE>
</TABLE>
<TABLE>
DREYFUS BOND MARKET INDEX FUND
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1998
Principal
Bonds and Notes (continued) Amount Value
- -------------------------------------------------------
____________ ____________
Tobacco--.1% Fortune Brands,
<S> <C> <C> <C> <C>
Deb., 85_8%, 2021 . . . . . . . . . . . . . . . . $.........5,000 $ 6,313
Philip Morris, Deb.:
91_4%, 2000 . . . . . . . . . . . . . . . . . . . 40,000 42,016
6%, 2001 . . . . . . . . . . . . . . . . . . . . . 20,000 20,349
83_8%, 2017 . . . . . . . . . . . . . . . . . . . 11,000 11,991
____________
80,669
____________
Transportation--.2% Federal Express,
Notes, 97_8%, 2002 . . . . . . . . . . . . . . . . 15,000 17,088
Norfolk Southern, Deb.:
9%, 2021 . . . . . . . . . . . . . . . . . . . . . 10,000 12,858
7.80%, 2027 . . . . . . . . . . . . . . . . . . . 50,000 56,620
Ryder System,
Deb., 83_4%, 2017 . . . . . . . . . . . . . . . . 10,000 10,425
United Parcel Service,
Deb., 83_8%, 2030 . . . . . . . . . . . . . . . . 10,000 12,980
____________
109,971
____________
Utilities--1.6% Alabama Power,
First Mortgage, 6%, 2000 . . . . . . . . . . . . . 50,000 50,591
Baltimore Gas & Electric,
First and Refunding Mortgage:
71_2%, 2007 . . . . . . . . . . . . . . . . . . 10,000 11,152
71_2%, 2023 . . . . . . . . . . . . . . . . . . 33,000 33,900
Carolina Power & Light, First Mortgage,
8.20%, 2022 . . . . . . . . . . . . . . . . . . . 15,000 16,437
Commonwealth Edison,
Mortgage, 81_8%, 2007 . . . . . . . . . . . . . . 10,000 10,224
Duke Power, First and Refunding Mortgage:
71_2%, 1999 . . . . . . . . . . . . . . . . . . . 50,000 50,475
73_8%, 2023 . . . . . . . . . . . . . . . . . . . 15,000 15,414
Florida Power & Light, First Mortgage:
65_8%, 2003 . . . . . . . . . . . . . . . . . . . 30,000 30,436
73_4%, 2023 . . . . . . . . . . . . . . . . . . . 25,000 26,227
Gulf State Utilities,
First Mortgage, 6.41%, 2001 . . . . . . . . . . . 45,000 46,310
Houston Lighting & Power,
First Mortgage, 83_4%, 2022 . . . . . . . . . . . 150,000 167,358
Illinois Power,
First Mortgage, 83_4%, 2021 . . . . . . . . . . . .15,000 15,932
New York State Electric & Gas,
First Mortgage, 97_8%, 2020 . . . . . . . . . . . 10,000 10,973
Northern States Power,
First Mortgage, 71_8%, 2025 . . . . . . . . . . . 100,000 108,265
Pacific Gas & Electric,
First and Refunding Mortgage, 8.80%, 2024 . . . . 50,000 62,830
<PAGE>
</TABLE>
<TABLE>
DREYFUS BOND MARKET INDEX FUND
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1998
Principal
Bonds and Notes (continued) Amount Value
- -------------------------------------------------------
____________ ____________
Utilities (continued) Pennsylvania Power & Light, First Mortgage:
<S> <C> <C> <C> <C>
61_2%, 2005 . . . . . . . . . . . . . . . . . . . $.......20,000 $ 21,077
6.55%, 2006 . . . . . . . . . . . . . . . . . . . 25,000 26,452
Potomac Electric & Power,
First Mortgage, 57_8%, 2002 . . . . . . . . . . . 10,000 10,038
Public Service Electric & Gas,
First and Refunding Mortgage:
83_4%, 1999 . . . . . . . . . . . . . . . . . . 25,000 25,577
61_8%, 2002 . . . . . . . . . . . . . . . . . . 20,000 20,696
61_2%, 2004 . . . . . . . . . . . . . . . . . . 25,000 26,237
South Carolina Electric & Gas,
Mortgage, 9%, 2006 . . . . . . . . . . . . . . . . 20,000 24,050
Southern California Gas,
First Mortgage, 73_8%, 2023 . . . . . . . . . . . 20,000 20,840
Texas Utilities,
First Mortgage, 83_4%, 2023 . . . . . . . . . . . 35,000 38,894
Union Electric,
First Mortgage, 63_4%, 2008 . . . . . . . . . . . 25,000 27,051
Virginia Electric & Power,
First Mortgage, 75_8%, 2007 . . . . . . . . . . . 25,000 28,257
Wisconsin Electric & Power,
First Mortgage, 7.70%, 2027 . . . . . . . . . . . 20,000 21,596
____________
947,289
____________
Other--.1% Private Export Funding:
Deb., 9.45%, 1999 . . . . . . . . . . . . . . . . 5,000 5,255
Secured Notes (Gtd. by the Export-Import
Bank of the U.S.), 8.40%, 2001 . . . . . . . . . . 30,000 32,797
____________
38,052
____________
Foreign--2.1% African Development Bank,
Sub. Notes, 73_4%, 2001 . . . . . . . . . . . . . 15,000 16,076
Daimler-Benz of North America,
Medium-Term Notes (Gtd. by Daimler-Benz AG),
73_8%, 2006 . . . . . . . . . . . . . . . . . . . 120,000 130,918
Dresdner Bank-New York,
Sub. Deb., 71_4%, 2015 . . . . . . . . . . . . . . 40,000 40,188
European Investment Bank,
Deb., 101_8%, 2000 . . . . . . . . . . . . . . . . 20,000 21,910
Hydro-Quebec, Bonds,
(Gtd. by the Province of Quebec):
81_2%, 2029 . . . . . . . . . . . . . . . . . . 10,000 12,229
93_8%, 2030 . . . . . . . . . . . . . . . . . . 20,000 26,606
91_2%, 2030 . . . . . . . . . . . . . . . . . . 10,000 13,482
Italy Government Bonds,
67_8%, 2023 . . . . . . . . . . . . . . . . . . . 70,000 75,482
<PAGE>
</TABLE>
<TABLE>
DREYFUS BOND MARKET INDEX FUND
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1998
Principal
Bonds and Notes (continued) Amount Value
- -------------------------------------------------------
____________ ____________
Foreign (continued) KFW International Finance, Deb.:
(Gtd. by the Federal Republic of Germany),
<S> <C> <C> <C> <C>
91_8%, 2001 . . . . . . . . . . . . . . . . . . $.......10,000 $ 10,937
(Gtd. by KFW),
8%, 2010 . . . . . . . . . . . . . . . . . . . 35,000 42,675
Province of British Columbia:
Bonds, 61_2%, 2026 . . . . . . . . . . . . . . . . 25,000 25,273
Deb., 7%, 2003 . . . . . . . . . . . . . . . . . . 20,000 21,479
Province of Manitoba,
Bonds, 8.80%, 2020 . . . . . . . . . . . . . . . . 10,000 12,992
Province of New Brunswick,
Deb., 63_4%, 2013 . . . . . . . . . . . . . . . . 30,000 32,641
Province of Ontario:
Sr. Deb., 7%, 2005 . . . . . . . . . . . . . . . . 40,000 43,829
Sr. Unsub. Deb., 73_8%, 2003 . . . . . . . . . . . 30,000 32,981
Province of Quebec:
Bonds, 91_8%, 2000 . . . . . . . . . . . . . . . . 30,000 31,450
Deb., 71_2%, 2023 . . . . . . . . . . . . . . . . 50,000 54,993
Republic of Finland,
Bonds, 6.95%, 2026 . . . . . . . . . . . . . . . . 25,000 27,484
Republic of Ireland,
Notes, 77_8%, 2001 . . . . . . . . . . . . . . . . 150,000 161,788
Republic of Portugal,
Unsub. Notes, 53_4%, 2003 . . . . . . . . . . . . 100,000 102,621
Royal Bank of Scotland,
Sub. Notes, 63_8%, 2011 . . . . . . . . . . . . . 60,000 58,871
Santander Finance Issuances,
Unsecured Sub. Notes
(Gtd. by Banco Santander, S.A.),
71_4%, 2006 . . . . . . . . . . . . . . . . . . . 100,000 103,269
Saskatchewan C.D.A.,
Bonds, 91_8%, 2021 . . . . . . . . . . . . . . . . 10,000 13,318
Swiss Bank-New York,
Sub. Deb., 7%, 2015 . . . . . . . . . . . . . . . 70,000 69,516
____________
1,183,008
____________
U.S. Governments--41.8% U.S. Treasury Bonds:
113_4%, 2/15/2001 . . . . . . . . . . . . . . . . 155,000 179,820
153_4%, 11/15/2001 . . . . . . . . . . . . . . . . 15,000 19,808
103_4%, 2/15/2003 . . . . . . . . . . . . . . . . 1,030,000 1,280,949
103_4%, 5/15/2003 . . . . . . . . . . . . . . . . 115,000 144,563
117_8%, 11/15/2003 . . . . . . . . . . . . . . . . 10,000 13,290
115_8%, 11/15/2004 . . . . . . . . . . . . . . . . 185,000 253,041
103_4%, 8/15/2005 . . . . . . . . . . . . . . . . 765,000 1,034,311
75_8%, 2/15/2007 . . . . . . . . . . . . . . . . . 60,000 65,355
<PAGE>
</TABLE>
<TABLE>
DREYFUS BOND MARKET INDEX FUND
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1998
Principal
Bonds and Notes (continued) Amount Value
- -------------------------------------------------------
____________ ____________
U.S. Governments (continued) U.S. Treasury Bonds (continued):
<S> <C> <C> <C> <C>
83_4%, 11/15/2008 . . . . . . . . . . . . . . . . $.....225,000 $ 265,984
123_4%, 11/15/2010 . . . . . . . . . . . . . . . . 75,000 110,468
14%, 11/15/2011 . . . . . . . . . . . . . . . . . 30,000 48,167
12%, 8/15/2013 . . . . . . . . . . . . . . . . . . 45,000 69,456
121_2%, 8/15/2014 . . . . . . . . . . . . . . . . 40,000 65,043
111_4%, 2/15/2015 . . . . . . . . . . . . . . . . 25,000 41,749
71_4%, 5/15/2016 . . . . . . . . . . . . . . . . . 110,000 133,868
83_4%, 5/15/2017 . . . . . . . . . . . . . . . . . 300,000 419,430
83_4%, 5/15/2020 . . . . . . . . . . . . . . . . . 880,000 1,252,592
83_4%, 8/15/2020 . . . . . . . . . . . . . . . . . 290,000 413,511
77_8%, 2/15/2021 . . . . . . . . . . . . . . . . . 130,000 171,393
8%, 11/15/2021 . . . . . . . . . . . . . . . . . . 1,100,000 1,474,374
75_8%, 2/15/2025 . . . . . . . . . . . . . . . . . 1,200,000 1,578,612
U.S. Treasury Notes:
51_2%, 2/28/1999 . . . . . . . . . . . . . . . . . 30,000 30,103
63_4%, 5/31/1999 . . . . . . . . . . . . . . . . . 20,000 20,256
8%, 8/15/1999 . . . . . . . . . . . . . . . . . . 30,000 30,829
77_8%, 11/15/1999 . . . . . . . . . . . . . . . . 550,000 569,916
73_4%, 12/31/1999 . . . . . . . . . . . . . . . . 20,000 20,769
63_8%, 1/15/2000 . . . . . . . . . . . . . . . . . 1,100,000 1,126,609
73_4%, 1/31/2000 . . . . . . . . . . . . . . . . . 410,000 427,224
67_8%, 3/31/2000 . . . . . . . . . . . . . . . . . 1,305,000 1,349,866
51_2%, 4/15/2000 . . . . . . . . . . . . . . . . . 20,000 20,342
83_4%, 8/15/2000 . . . . . . . . . . . . . . . . . 80,000 86,118
61_8%, 9/30/2000 . . . . . . . . . . . . . . . . . 1,000,000 1,033,620
81_2%, 11/15/2000 . . . . . . . . . . . . . . . . 1,555,000 1,681,561
61_2%, 5/31/2001 . . . . . . . . . . . . . . . . . 300,000 315,846
77_8%, 8/15/2001 . . . . . . . . . . . . . . . . . 590,000 643,944
61_4%, 1/31/2002 . . . . . . . . . . . . . . . . . 1,335,000 1,410,454
63_8%, 8/15/2002 . . . . . . . . . . . . . . . . . 120,000 128,214
61_4%, 2/15/2003 . . . . . . . . . . . . . . . . . 530,000 568,939
53_4%, 4/30/2003 . . . . . . . . . . . . . . . . . 300,000 316,977
53_4%, 8/15/2003 . . . . . . . . . . . . . . . . . 680,000 (b) 720,977
67_8%, 5/15/2006 . . . . . . . . . . . . . . . . . 520,000 595,670
61_4%, 2/15/2007 . . . . . . . . . . . . . . . . . 1,500,000 1,663,335
65_8%, 5/15/2007 . . . . . . . . . . . . . . . . . 1,950,000 2,214,323
____________
24,011,676
____________
U.S. Government Agencies--38.4% Federal Farm Credit Banks,
6.33%, 11/6/2000 . . . . . . . . . . . . . . . . . .700,000 700,941
Federal Home Loan Banks:
8.60%, 1/25/2000 . . . . . . . . . . . . . . . . . 15,000 15,661
5.785%, 3/17/2003 . . . . . . . . . . . . . . . . 500,000 515,731
Federal Home Loan Mortgage Corp.:
6.34%, 11/12/2002 . . . . . . . . . . . . . . . . 500,000 507,191
5.90%, 2/14/2006 . . . . . . . . . . . . . . . . . 400,000 417,744
61_2%, 3/1/2011-8/1/2028 . . . . . . . . . . . . . 1,489,925 1,508,686
<PAGE>
</TABLE>
<TABLE>
DREYFUS BOND MARKET INDEX FUND
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1998
Principal
Bonds and Notes (continued) Amount Value
- -------------------------------------------------------
____________ ____________
U.S. Government
Agencies (continued) Federal Home Loan Mortgage Corp.:
<S> <C> <C>
7%, 9/1/2011-2/1/2028 . . . . . . . . . . . . . . $..1,832,996 $ 1,875,252
71_2%, 2/1/2023-8/1/2025 . . . . . . . . . . . . . 1,077,509 1,038,444
8%, 8/1/2026 . . . . . . . . . . . . . . . . . . . 301,383 312,026
6%, 8/1/2028 . . . . . . . . . . . . . . . . . . . 493,472 489,308
Federal National Mortgage Association:
8.70%, 6/10/1999 . . . . . . . . . . . . . . . . . 15,000 15,346
8.45%, 7/12/1999 . . . . . . . . . . . . . . . . . 15,000 15,367
8.35%, 11/10/1999 . . . . . . . . . . . . . . . . 25,000 25,846
6.06%, 1/13/2003 . . . . . . . . . . . . . . . . . 500,000 506,765
6.85%, 4/5/2004 . . . . . . . . . . . . . . . . . 145,000 157,333
7.40%, 7/1/2004 . . . . . . . . . . . . . . . . . 450,000 500,903
61_2%, 1/1/2005 . . . . . . . . . . . . . . . . . 427,059 432,662
53_4%, 6/15/2005 . . . . . . . . . . . . . . . . . 900,000 931,208
57_8%, 2/2/2006 . . . . . . . . . . . . . . . . . 125,000 130,375
53_4%, 2/15/2008 . . . . . . . . . . . . . . . . . 200,000 208,229
61_2%, 4/1/2028 . . . . . . . . . . . . . . . . . 497,156 501,506
6%, 6/1/2011 . . . . . . . . . . . . . . . . . . . 426,198 430,192
61_2%, 1/1/2011-9/1/2028 . . . . . . . . . . . . . 1,323,759 1,339,673
7%, 8/1/2008-4/1/2028 . . . . . . . . . . . . . . 1,976,860 2,023,931
71_2%, 3/1/2024-9/1/2027 . . . . . . . . . . . . . 701,416 724,043
8%, 5/1/2027-6/1/2027 . . . . . . . . . . . . . . 765,673 792,473
81_2%, 2/1/2025 . . . . . . . . . . . . . . . . . 387,474 406,605
Financing Corp., Bonds:
9.65%, 11/2/2018 . . . . . . . . . . . . . . . . . 10,000 14,850
8.60%, 9/26/2019 . . . . . . . . . . . . . . . . . 40,000 53,400
Government National Mortgage Association I:
6% . . . . . . . . . . . . . . . . . . . . . . . . 650,000 (c) 643,292
61_2%, 9/15/2008-6/15/2028 . . . . . . . . . . . . 1,283,554 1,306,802
7%, 10/15/2011-9/15/2028 . . . . . . . . . . . . . 1,587,619 1,633,101
71_2%, 12/15/2026-10/15/2027 . . . . . . . . . . . 765,864 790,801
8%, 8/15/2024 . . . . . . . . . . . . . . . . . . 339,220 353,424
81_2%, 10/15/2026 . . . . . . . . . . . . . . . . 325,424 344,745
Resolution Funding, Bonds:
87_8%, 7/15/2020 . . . . . . . . . . . . . . . . . 75,000 102,850
85_8%, 1/15/2030 . . . . . . . . . . . . . . . . . 15,000 20,654
Tennessee Valley Authority:
Deb.:
83_8%, 10/1/1999 . . . . . . . . . . . . . . . 15,000 15,492
7.85%, 6/15/2044 . . . . . . . . . . . . . . . 10,000 10,836
Global Bonds, 6%, 3/15/2013 . . . . . . . . . . . 200,000 209,304
____________
22,022,992
____________
TOTAL BONDS AND NOTES
(cost $54,554,107) . . . . . . . . . . . . . . . . $56,794,734
____________
<PAGE>
</TABLE>
<TABLE>
DREYFUS BOND MARKET INDEX FUND
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1998
Principal
Short-Term Investments--3.0% Amount Value
- -------------------------------------------------------
____________ ____________
Repurchase Agreement; Goldman, Sachs & Co. Tri-Party
Repurchase Agreement, 5.38%
dated 10/30/1998, due 11/2/1998 in the amount
of $1,715,292 (fully collateralized by
$1,681,000 U.S. Treasury Notes,
55_8%, due 10/31/1999, value $1,747,980)
(cost $1,714,523) . . . . . . . . . . . . . . . . $..1,714,523 $ 1,714,523
____________
<S> <C> <C>
TOTAL INVESTMENTS (cost $56,268,630) . . . . . . . . . . . . . . . . . . . . . . . . . . . 101.9% $58,509,257
_______ ____________
LIABILITIES, LESS CASH AND RECEIVABLES . . . . . . . . . . . . . . . . . . . . . . . . . . (1.9%) $ (1,105,420)
_______ ____________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.0% $57,403,837
_______ ____________
</TABLE>
Notes to Statement of Investments:
- -----------------------------------------------------------------------------
(a)Reflects date security can be redeemed at holders' option; the stated
maturity date is 4/2/2011.
(b)Held by the custodian in a segregated account as collateral for securities
purchased on a forward commitment basis.
(c) Purchased on a forward commitment basis.
<TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
DREYFUS BOND MARKET INDEX FUND
- -----------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES OCTOBER 31, 1998
Cost Value
____________ ___________
<S> <C> <C> <C>
ASSETS: Investments in securities--See Statement of
Investments--Note 1(c) . . . . . . . . . . . . . . . . $56,268,630 $58,509,257
Interest receivable . . . . . . . . . . . . . . . . . . . 861,775
Receivable for investment securities sold . . . . . . . . 89,418
Receivable for shares of Capital Stock subscribed . . . . 56,800
____________
59,517,250
____________
LIABILITIES: Due to The Dreyfus Corporation and affiliates . . . . . . 7,533
Due to Distributor . . . . . . . . . . . . . . . . . . . 109
Cash overdraft due to Custodian . . . . . . . . . . . . . 1,405,237
Payable for investment securities purchased . . . . . . . 700,534
____________
2,113,413
____________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $57,403,837
____________
____________
REPRESENTED BY: Paid-in capital . . . . . . . . . . . . . . . . . . . . . $54,767,050
Accumulated net realized gain (loss) on investments . . . 396,160
Accumulated net unrealized appreciation (depreciation)
on investments--Note 3 . . . . . . . . . . . . . . . . 2,240,627
____________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $57,403,837
____________
</TABLE>
<TABLE>
NET ASSET VALUE PER SHARE
____________________________
Investor BASIC
Shares Shares
____________ ___________
<S> <C> <C>
Net Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,551,675 $55,852,162
Shares Outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151,279 5,439,251
NET ASSET VALUE PER SHARE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $10.26 $10.27
_______ _______
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
DREYFUS BOND MARKET INDEX FUND
- -----------------------------------------------------------------------------
STATEMENT OF OPERATIONS YEAR ENDED OCTOBER 31, 1998
INVESTMENT INCOME
<TABLE>
<S> <C> <C> <C> <C>
INCOME Interest Income . . . . . . . . . . . . . . . . . . . . . $2,881,196
EXPENSES: Management fee--Note 2(a) . . . . . . . . . . . . . . . $ 69,550
Distribution fees (Investor shares)--Note 2(b) . . . . . 2,346
Loan commitment fees--Note 4 . . . . . . . . . . . . . . 215
___________
Total Expenses . . . . . . . . . . . . . . . . . . 72,111
___________
INVESTMENT INCOME--NET . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,809,085
</TABLE>
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--Note 3:
<TABLE>
<S> <C> <C>
Net realized gain (loss) on investments . . . . . . . . $ 400,948
Net unrealized appreciation (depreciation)
on investments . . . . . . . . . . . . . . . . . . . . 1,107,949
___________
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS . . . . . . . . . . . . . . . . . . 1,508,897
___________
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS . . . . . . . . . . . . . . . . . . $4,317,982
___________
</TABLE>
<TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
DREYFUS BOND MARKET INDEX FUND
- -----------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
Year Ended Year Ended
October 31, 1998 October 31, 1997*
________________ ________________
OPERATIONS:
<S> <C> <C>
Investment income--net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,809,085 $ 2,000,295
Net realized gain (loss) on investments . . . . . . . . . . . . . . . . . . . . . . 400,948 199,887
Net unrealized appreciation (depreciation) on investments . . . . . . . . . . . . . 1,107,949 494,107
____________ ____________
Net Increase (Decrease) in Net Assets Resulting from Operations . . . . . . . . 4,317,982 2,694,289
____________ ____________
</TABLE>
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net:
<TABLE>
<S> <C> <C>
Investor shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (54,337) (1,995,878)
BASIC shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,754,748) (4,417)
Net realized gain on investments:
Investor shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,054) --------
BASIC shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (179,537) --------
____________ ____________
Total Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,991,676) (2,000,295)
____________ ____________
</TABLE>
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold:
<TABLE>
<S> <C> <C>
Investor shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,651,522 49,970
BASIC shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38,571,656 16,797,940
Dividends reinvested:
Investor shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56,335 4,125
BASIC shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,830,224 1,914,516
Cost of shares redeemed:
Investor shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (305,795) (16,579)
BASIC shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (20,080,253) (19,156,787)
____________ ____________
Increase (Decrease) in Net Assets from Capital Stock Transactions . . . . . . . 22,723,689 (406,815)
____________ ____________
Total Increase (Decrease) in Net Assets . . . . . . . . . . . . . . . . . . . 24,049,995 287,179
</TABLE>
NET ASSETS:
<TABLE>
<S> <C> <C>
Beginning of Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33,353,842 33,066,663
____________ ____________
End of Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $57,403,837 $33,353,842
____________ ____________
Shares Shares
____________ ____________
</TABLE>
CAPITAL SHARE TRANSACTIONS:
Investor Shares
_____________
<TABLE>
<S> <C> <C>
Shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 164,062 5,057
Shares issued for dividends reinvested . . . . . . . . . . . . . . . . . . . . . . . 5,580 422
Shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (30,352) (1,695)
____________ ____________
Net Increase (Decrease) in Shares Outstanding . . . . . . . . . . . . . . . . . 139,290 3,784
____________ ____________
BASIC Shares
____________
Shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,824,182 1,720,766
Shares issued for dividends reinvested . . . . . . . . . . . . . . . . . . . . . . . 280,347 195,856
Shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,988,458) (1,959,827)
____________ ____________
Net Increase (Decrease) in Shares Outstanding . . . . . . . . . . . . . . . . . 2,116,071 (43,205)
____________ ____________
- ------------------------
*Effective August 15, 1997, Institutional Class shares were redesignated as Investor shares and Retail shares were redesignated as
BASIC shares.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
DREYFUS BOND MARKET INDEX FUND
- -----------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share of
Capital Stock outstanding, total investment return, ratios to average net assets
and other supplemental data for each period indicated. This information has been
derived from the Fund's financial statements.
<TABLE>
Investor Shares
______________________________________________________
Year Ended October 31,
______________________________________________________
PER SHARE DATA: 1998 1997(1) 1996(2) 1995 1994(3,4)
______ ______ ______ ______ _______
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period . . . . . . . . . . $ 9.99 $ 9.78 $ 9.93 $ 9.15 $ 9.44
______ ______ ______ ______ ______
Investment Operations:
Investment income--net . . . . . . . . . . . . . . . . . .59 .57 .57 .55 .24
Net realized and unrealized gain (loss)
on investments . . . . . . . . . . . . . . . . . . . .32 .21 (.15) .78 (.28)
______ ______ ______ ______ ______
Total from Investment Operations . . . . . . . . . . . . .91 .78 .42 1.33 (.04)
______ ______ ______ ______ ______
Distributions:
Dividends from investment income--net . . . . . . . . . . (.59) (.57) (.57) (.55) (.25)
Dividends from net realized gain on investments . . . . . (.05) .-- .-- .-- .--
______ ______ ______ ______ ______
Total Distributions . . . . . . . . . . . . . . . . . . . (.64) (.57) (.57) (.55) (.25)
______ ______ ______ ______ ______
Net asset value, end of period . . . . . . . . . . . . . $10.26 $ 9.99 $ 9.78 $ 9.93 $ 9.15
______ ______ ______ ______ ______
TOTAL INVESTMENT RETURN. . . . . . . . . . . . . . . . . . . 9.43% 8.29% 4.36% 15.01% (.46%)
</TABLE>
RATIOS/SUPPLEMENTAL DATA:
<TABLE>
<S> <C> <C> <C> <C> <C>
Ratio of operating expenses to average net assets . . . . .40% .60% .65% .65% .65%(5)
Ratio of net investment income
to average net assets . . . . . . . . . . . . . . . . 5.79% 5.82% 5.80% 5.77% 4.81%(5)
Portfolio Turnover Rate . . . . . . . . . . . . . . . . . 43.39% 48.86% 42.65% 40.16% 188.00%
Net Assets, end of period (000's Omitted) . . . . . . . . $1,552 $120 $80 $207 $38
- ------------------------
(1) Effective August 15, 1997, Institutional shares were redesignated as Investor shares.
(2) Effective July 15, 1996, Investor shares were redesignated as Institutional shares.
(3) The Fund commenced selling Investor shares on April 28, 1994.
</TABLE>
(4)Effective October 17, 1994, The Dreyfus Corporation began serving as the
Fund' s investment manager. Prior to October 17, 1994, Mellon Bank, N.A. served
as the Fund's investment manager.
(5) Annualized
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
DREYFUS BOND MARKET INDEX 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.
<TABLE>
BASIC Shares
______________________________________________________
Year Ended October 31,
______________________________________________________
PER SHARE DATA: 1998 1997(1) 1996(2) 1995 1994(3)(4)
______ ______ ______ ______ _______
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period . . . . . . . . . . $10.00 $ 9.80 $ 9.94 $ 9.15 $10.00
______ ______ ______ ______ ______
Investment Operations:
Investment income--net . . . . . . . . . . . . . . . . . .61 .60 .59 .58 .49(5)
Net realized and unrealized gain (loss)
on investments . . . . . . . . . . . . . . . . . . . .32 .20 (.14) .79 (.85)
______ ______ ______ ______ ______
Total from Investment Operations . . . . . . . . . . . . .93 .80 .45 1.37 (.36)
______ ______ ______ ______ ______
Distributions:
Dividends from investment income--net . . . . . . . . . . (.61) (.60) (.59) (.58) (.49)
Dividends from net realized gain on investments . . . . . (.05) .-- .-- .-- .--
______ ______ ______ ______ ______
Total Distributions . . . . . . . . . . . . . . . . . . . (.66) (.60) (.59) (.58) (.49)
______ ______ ______ ______ ______
Net asset value, end of period . . . . . . . . . . . . . $10.27 $10.00 $ 9.80 $ 9.94 $ 9.15
______ ______ ______ ______ ______
TOTAL INVESTMENT RETURN. . . . . . . . . . . . . . . . . . . 9.69% 8.46% 4.69% 15.41% (3.68%)
</TABLE>
RATIOS/SUPPLEMENTAL DATA:
<TABLE>
<S> <C> <C> <C> <C> <C>
Ratio of expenses to average net assets . . . . . . . . . .15% .35% .40% .40% .40%(6)(7)
Ratio of net investment income
to average net assets . . . . . . . . . . . . . . . . 6.06% 6.12% 6.02% 6.10% 5.05%(6)
Portfolio Turnover Rate . . . . . . . . . . . . . . . . . 43.39% 48.86% 42.65% 40.16% 188.00%
Net Assets, end of period (000's Omitted) . . . . . . . . $55,852 $33,234 $32,986 $6,824 $4,464
- ------------------------
(1) Effective August 15, 1997, Retail shares were redesignated as BASIC shares.
(2) Effective July 15, 1996, R shares were redesignated as Retail shares.
</TABLE>
(3)Effective October 17, 1994, The Dreyfus Corporation began serving as the
Fund' s investment manager. Prior to October 17, 1994, Mellon Bank, N.A. served
as the Fund's investment manager.
(4)The Fund commenced operations on November 30, 1993. Effective April 28,
1994 the Fund began selling Investor shares and the shares existing prior to
April 28, 1994 were designated Trust shares. Effective October 17, 1994 the
Fund's Trust shares were redesignated Class R shares.
(5)Net investment income before reimbursement of expenses by the investment
adviser for the period ended ended October 31, 1994 was $0.39 per share.
(6) Annualized.
(7)Annualized expense ratio before reimbursement of expenses by investment
adviser for the period ended October 31, 1994 was 1.41%.
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
DREYFUS BOND MARKET INDEX FUND
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES:
Dreyfus Bond Market Index 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, as amended (the "Act") as an open-end management
investment company and operates as a series company currently offering nineteen
series including the Fund. The Fund' s investment objective is to seek to
replicate the total return of the Lehman Brothers Aggregate Bond Index. Prior to
November 14, 1997, the Fund's investment objective was to seek to replicate the
total return of the Lehman Brothers Government/Corporate Bond Index. The Dreyfus
Corporation (the "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 150 million of $.001 par
value Capital Stock. The Fund is currently authorized to issue two classes of
shares: Investor (50 million shares authorized) and BASIC (100 million shares
authorized) . Investor 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 Fund's distributor,
and BASIC shares are offered to any investor. Other differences between the two
classes include the services offered to and the expenses borne by each 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 other than U.S. Treasury Bills) 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.
Short-term investments, excluding U.S. Treasury Bills, 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. Cost of investments represents amortized cost.
<PAGE>
(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
counterparty 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 DREYFUS BOND MARKET INDEX FUND
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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 of 1986, as
amended (the "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 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 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 .15% 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) . Effective July 1, 1998, each
director receives $40,000 per year, plus $5,000 for each joint Board meeting of
The Dreyfus/Laurel Funds, Inc., The Dreyfus/Laurel Tax-Free Municipal Funds, and
The Dreyfus/Laurel Funds Trust (the "Dreyfus/Laurel Funds") attended, $2,000 for
separate committee meetings attended which are not held in conjunction with a
regularly scheduled board meeting and $500 for Board meetings and separate
committee meetings attended that are conducted by telephone and is reimbursed
for travel and out-of-pocket expenses. The Chairman of the Board receives an
additional 25% of such compensation (with the exception of reimbursable amounts)
.. In the event that there is a joint committee meeting of the Dreyfus/Laurel
Funds and the Dreyfus High Yield Strategies Fund, the $2,000 fee will be
allocated between the Dreyfus/Laurel Funds and the 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.
Prior to July 1, 1998, each director received $27,000 per year, $1,000 for
each Board meeting attended and $750 for each Audit Committee meeting attended
and was reimbursed for travel and out-of-pocket expenses. The Chairman of the
board received an additional annual fee of $25,000 per year. These fees
pertained to The Dreyfus/Laurel Funds. (The $1,000 attendance fee and
reimbursement of meeting expenses were also borne pro rata by Dreyfus High Yield
Strategies Fund) . These fees and expenses were 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, were in fact paid directly by the
Manager to the non-interested Directors.
<PAGE>
(b) Distribution plan: Under the Fund' s Distribution Plan (the "Plan")
adopted pursuant to Rule 12b-1 under the Act, Investor shares may pay annually
up to .25% of the value of the average daily net assets to compensate the
Distributor and Dreyfus Service Corporation, an affiliate of the Manager, for
shareholder servicing activities and the Distributor for activities DREYFUS BOND
MARKET INDEX FUND
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
primarily intended to result in the sale of Investor shares. The BASIC shares
bear no distribution fee. During the period ended October 31, 1998, the Investor
shares were charged $2,346 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 Investment 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 of investment securities,
excluding short-term securities, during the period ended October 31, 1998
amounted to $42,352,652 and $19,213,200 respectively.
At October 31, 1998, accumulated net unrealized appreciation on investments
was $2,240,627, consisting of $2,292,308 gross unrealized appreciation and
$51,681 gross unrealized depreciation.
At October 31, 1998, 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, 1998, the Fund did not borrow under the Facility.
<PAGE>
DREYFUS BOND MARKET INDEX FUND
- -----------------------------------------------------------------------------
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders
The Dreyfus/Laurel Funds, Inc.:
We have audited the accompanying statement of assets and liabilities,
including the statement of investments, of Dreyfus Bond Market Index Fund of The
Dreyfus/Laurel Funds, Inc. as of October 31, 1998, 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 in the five-year period then ended. 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 and financial highlights. Our procedures included
confirmation of securities owned as of October 31, 1998 by correspondence with
the custodian and brokers. 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 Bond Market Index Fund of The Dreyfus/Laurel Funds, Inc. as of October
31, 1998, 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 the
financial highlights for each of the years in the five-year period then ended,
in conformity with generally accepted accounting principles.
New York, New York
December 15, 1998
<PAGE>
DREYFUS BOND MARKET INDEX FUND
- -----------------------------------------------------------------------------
IMPORTANT TAX INFORMATION (UNAUDITED)
For federal tax purposes, the Fund hereby designates $.025 per share as a
long-term capital gain distribution of the $.052 per share paid on November 28,
1997.
<PAGE>
(reg.tm)
(reg.tm)
DREYFUS BOND MARKET INDEX FUND
200 Park Avenue
New York, NY 10166
MANAGER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
CUSTODIAN
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
TRANSFER AGENT &
DIVIDEND DISBURSING AGENT
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Printed in U.S.A. 310/710AR9810
Bond Market
Index Fund
Annual Report
October 31, 1998
<PAGE>
DREYFUS MONEY MARKET RESERVES
- -----------------------------------------------------------------------------
<TABLE>
LETTER TO SHAREHOLDERS
Dear Shareholder:
We are pleased to report the performance for Dreyfus Money Market Reserves
for the 12-month period ended October 31, 1998, as shown in the following table
YIELD EFFECTIVE YIELD*
___________ ____________
<S> <C> <C>
Investor Shares . . . . . . . . . . . . . . . . . . . 5.01% 5.13%
Class R Shares . . . . . . . . . . . . . . . . . . . . 5.22% 5.34%
</TABLE>
THE ECONOMY
In the face of soaring consumer confidence and strong first-quarter economic
growth, the Federal Reserve Board earlier this year refrained from increasing
interest rates, partially to avoid further roiling international financial
markets. In addition, the Fed evidently felt then that the economic slowdown
overseas might curtail the U.S. economy to some degree, which would alleviate
the need for monetary restraint. The Fed's expectations have proven to be true,
and its judgment accurate. The U.S. balance of trade has worsened and there have
been increasing signs of a slowdown in export-related industries. On September
29, concerns about a weakening U.S. economy caused the Federal Open Market
Committee (the F.O.M.C. is the policy-making arm of the Fed) to pare the Federal
Funds target rate by 25 basis points, the first reduction since January 1996.
(The Federal Funds rate is the rate of interest that banks charge each other for
overnight loans.) Fed Chairman Alan Greenspan described the economic outlook for
the United States as having "weakened measurably." Two weeks later, on October
15, the F.O.M.C. again reduced its target rate by an additional quarter point,
putting the Federal Funds rate at 5.0%.
Despite the concerns of the Fed regarding an economic slowdown, aggregate
economic statistics showed a growing and resilient economy during the reporting
period. Low unemployment and negligible inflation, combined with car makers
rebuilding inventory after a long strike and rising consumer incomes, resulted
in solid economic growth (3.3% ) for the third quarter of this year. While a
significant portion of this gain was due to inventory replenishment after the
automobile strike, the overall results were still an improvement over
second-quarter economic growth of 1.8%. Inflation as measured by the Consumer
Price Index remained at levels not witnessed since 1963.
The Fed's responsibility is to enact monetary policy that is anticipatory of
future economic conditions. The U.S. trade deficit has continued to widen
because of the global economic slide. Slumping exports have weakened
manufacturing activity since midyear and there is concern that this slackness
could become more pronounced and widen into other sectors of the economy. While
the increase in imports also restrains domestic production, it has helped
contain inflation as well, since domestic producers are reluctant to raise
prices. This provides additional flexibility for the Fed to lower interest rates
still further. So far, economic problems overseas have not caused any measurable
reaction in the U.S. labor market. Only the growth rate in new jobs has eased
from its torrid pace earlier in the year. The unemployment rate has remained
near 30-year lows and worker inflation-adjusted take-home pay has been rising.
The condition of the labor market is a key determinant of consumer confidence
which, of course, relates directly to consumer spending, a force that accounts
for two thirds of all economic activity. Business spending has shown signs of
weakness, so the role of the consumer will be of even greater importance in the
future. It is significant that measures of consumer confidence have receded from
earlier record high levels, largely because of concerns about the volatility of
financial markets.
MARKET ENVIRONMENT/PORTFOLIO ACTIVITY
<PAGE>
During the reporting period, money market rates moved lower, particularly
over the summer and early fall, as economic turmoil and volatile capital markets
overseas caused investors to seek a safe investment haven in short-term
obligations. A diversified position in floating rate securities provided
attractive relative yields over the reporting period and has been the Fund's
largest holding: approximately 38% -48% of the Fund' s assets have been so
invested over the past 12 months. Additionally, the Fund has purchased one-year
securities in order to maintain its average days to maturity in a generally
declining interest rate environment and help protect the Fund from reinvestment
rate risk. Such a risk affects the income stream in a portfolio since maturing
assets are reinvested at lower interest rates, thus reducing the overall yield.
Because yield opportunities were more attractive in both the very short
(one-month or less) and longer term (one-year) portions of the yield curve, the
Fund focused its purchase activity in these maturity segments.
Managing the Fund' s average maturity to seek to capitalize on changes in
interest rates and, accordingly, maintain a consistent and competitive stream of
income is a key aspect of our investment strategy. The Fund's average maturity
was adjusted opportunistically during the reporting period to adapt to shifts in
the money market yield curve. At the beginning of the year, the Fund
dramatically increased its average maturity from the 50-day range to
approximately 70 days, because of the reduced likelihood of any additional
tightening in monetary policy by the Fed because of the Asian economic crisis.
This proved to be a correct decision, as the crisis expanded into Russia and
South America. International markets became extremely volatile and short-term
rates fell. The Fund' s average maturity has remained in the 70-day range, a
decision that has helped maintain yield since rates had fallen further by the
end of the reporting period. This decline was hastened by the two separate
easings in the Fed Funds rate near the end of the reporting period. On October
31, 1998, the Fund' s average maturity was 71 days.
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,
[David Hertan signature logo]
David Hertan
Portfolio Manager
November 16, 1998
New York, N.Y.
*Effective yield takes into account the effect of compounding and is based
upon dividends declared daily and reinvested monthly.
<PAGE>
<TABLE>
<CAPTION>
DREYFUS MONEY MARKET RESERVES
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS OCTOBER 31, 1998
Principal
Negotiable Bank Certificates of Deposit--22.7% Amount Value
- -------------------------------------------------------
_____________ _____________
ANZ Banking Group(Yankee)
<S> <C> <C>
5.74%, 7/30/99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 12,000,000 $ 11,996,585
Bank of New York (Yankee)
5.80%, 5/14/99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,000,000 9,996,946
Barclays Bank PLC (Yankee)
5.32%, 6/4/99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,000,000 9,995,368
Bayerische Landesbank Girozentrale (Yankee)
5.72%, 7/23/99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,000,000 11,993,800
Canadian Imperial Bank of Commerce (Yankee)
5.78%, 3/10/99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,250,000 10,246,200
Credit Agricole USA Inc. (Yankee)
5.70%, 2/26/99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,000,000 9,998,925
Den Danske Bank A/S (Yankee)
5.70%, 7/12/99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,000,000 4,999,548
Deutsche Bank AG (Yankee)
5.67%, 2/26/99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,000,000 6,998,924
National Bank of Canada (Yankee)
5.72%, 7/8/99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,000,000 11,996,862
Paribas Finance Inc. (Yankee)
5.38% 11/13/98 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,800,000 18,801,000
Svenska Handelsbanken Inc. (Yankee)
5.71%-5.75%, 3/29/99-8/9/99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,000,000 7,998,206
Westpac Banking Corp. (Yankee)
5.99%, 12/11/98 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,000,000 10,000,000
_____________
TOTAL NEGOTIABLE BANK CERTIFICATES OF DEPOSIT
(cost $125,022,364) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $125,022,364
_____________
Commercial Paper--27.7%
- -------------------------------------------------------
Centric Capital Corp.
5.43%, 11/20/98 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 25,000,000 $ 24,928,750
Countrywide Home Loans, Inc.
5.77%, 11/2/98 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,000,000 24,995,993
Edison Asset Securitization LLC.
5.43%, 11/16/98 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,000,000 24,943,750
GTE Corp.
5.30%, 11/23/98 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,627,000 10,592,775
Generale Bank Inc.
5.42%, 12/14/98 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,000,000 24,840,243
Petrofina (DE) Inc.
5.39%, 11/9/98 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,500,000 17,479,156
<PAGE>
DREYFUS MONEY MARKET RESERVES
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1998
Principal
Commercial Paper (continued) Amount Value
- -------------------------------------------------------
_____________ _____________
Yorkshire Building Society
5.42%, 11/2/98 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 25,000,000 $ 24,996,250
_____________
TOTAL COMMERCIAL PAPER
(cost $152,776,917) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $152,776,917
_____________
Corporate Notes--45.9%
- -------------------------------------------------------
Abbey National PLC
5.39%, 6/1/99 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 11,400,000 $ 11,392,794
American General Finance Corp.
5.59%, 6/15/99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,005,000 1,021,412
Asset Backed Securities Investment Trust
5.41%, 8/16/99 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,000,000 10,000,000
Associates Corp. of North America
5.35%, 4/23/99 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,000,000 13,989,095
Baltimore Gas and Electric Co.
5.39%, 3/15/99 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,500,000 3,500,537
Bank of Scotland
5.42%, 8/17/99 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,000,000 9,994,992
Bear Stearns Companies
5.27-5.64%, 11/9/98-1/5/99 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,500,000 9,499,730
Caterpillar Financial Services Corp.
5.26%, 9/15/99 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,000,000 10,000,817
Chrysler Financial Corp.
5.18%, 3/12/99-5/19/99 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,000,000 2,000,280
Comerica Bank
5.53%, 6/10/99 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,000,000 10,995,426
Deere (John) Capital Corp.
5.59%-5.65%, 2/1/99-8/6/99 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,450,000 6,447,439
First Chicago Financial Corp.
5.26%, 6/5/99 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,000,000 5,003,736
First National Bank of Maryland
5.14%, 10/22/99 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,000,000 9,999,386
First Union National Bank
5.40%, 8/20/99 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,400,000 9,392,901
First USA Bank
5.57%, 11/12/98 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,000,000 5,000,579
Ford Motor Credit Corp.
5.56%, 6/1/99 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,000,000 12,020,980
<PAGE>
DREYFUS MONEY MARKET RESERVES
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1998
Principal
Corporate Notes (continued) Amount Value
- -------------------------------------------------------
_____________ _____________
GMAC Ltd.
5.65%, 5/7/99 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,500,000 $ 1,500,000
General Motors Acceptance Corp.
5.46%, 5/7/99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,000,000 10,031,660
Goldman Sachs Group L.P.
5.11%-5.44%, 1/25/99-3/26/99 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,000,000 13,002,301
Halifax Building Society
5.48%, 9/8/99 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,000,000 3,001,209
IBM Credit Corp.
5.63%, 6/1/99 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,000,000 9,989,745
International Lease Finance Corp.
5.24%, 7/15/99 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,000,000 2,003,375
Key Bank N.A.
5.39%, 2/24/99 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,000,000 13,994,180
Merrill Lynch & Co. Inc.
5.59%, 5/25/99 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,900,000 4,907,621
Morgan J.P. & Co. Inc.
5.75%, 3/10/99 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,000,000 10,000,000
Morgan Stanley, Dean Witter, Discover & Co.
5.39%-5.60%, 11/9/98-7/13/99 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,000,000 12,022,820
National Rural Utilities Corporation
5.23%, 11/23/99 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,000,000 10,000,000
Norwest Financial Inc.
5.47%, 4/15/99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 875,000 877,140
PNC Bank N.A
5.12%-5.15%, 1/19/99-1/29/99 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,000,000 10,999,317
Royal Bank of Canada
5.11%, 2/4/99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,000,000 9,998,230
Salomon Smith Barney Holdings Inc.
5.39%,11/19/98 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,000,000 3,000,836
Sara Lee Corp.
5.68%, 12/1/98 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000,000 999,753
U.S. Bank
5.18%, 8/18/99 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000,000 1,000,193
Walt Disney Co.
5.12%, 2/26/99 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,000,000 4,997,632
_____________
TOTAL CORPORATE NOTES
(cost $252,586,116) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $252,586,116
_____________
<PAGE>
DREYFUS MONEY MARKET RESERVES
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1998
Principal
Short-Term Bank Notes--1.8% Amount Value
- -------------------------------------------------------
_____________ _____________
Branch Banking & Trust Co.
5.27%, 9/15/99 (a)
(cost $10,074,619) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 10,000,000 $ 10,074,619
_____________
Time Deposit--1.0%
- -------------------------------------------------------
Brank Banking & Trust Co. (Grand Cayman)
5.50%, 11/2/98
(cost $5,293,000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5,293,000 $ 5,293,000
_____________
TOTAL INVESTMENTS
(cost $545,753,016) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99.1% $545,753,016
_______ _____________
CASH AND RECEIVABLES (NET) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9% $ 5,134,780
_______ _____________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.0% $550,887,796
_______ _____________
Notes To Statement of Investments:
- -----------------------------------------------------------------------------
(a) Variable interest rate--subject to periodic change.
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
DREYFUS MONEY MARKET RESERVES
- -----------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES OCTOBER 31, 1998
Cost Value
_____________ _____________
ASSETS: Investments in securities--See Statement of Investments . . $545,753,016 $545,753,016
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . 199,660
Interest receivable . . . . . . . . . . . . . . . . . . . 5,236,986
_____________
551,189,662
_____________
LIABILITIES: Due to The Dreyfus Corporation and affiliates . . . . . . 300,742
Due to Distributor . . . . . . . . . . . . . . . . . . . 1,124
_____________
301,866
_____________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $550,887,796
_____________
REPRESENTED BY: Paid-in capital . . . . . . . . . . . . . . . . . . . . . $550,910,250
Accumulated net realized gain (loss) on investments . . . (22,454)
_____________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $550,887,796
_____________
NET ASSET VALUE PER SHARE
____________________________
Investor Shares Class R Shares
_____________ _____________
Net Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $301,472,648 $249,415,148
Shares Outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 301,484,368 249,425,882
NET ASSET VALUE PER SHARE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1.00 $1.00
_____ _____
STATEMENT OF OPERATIONS YEAR ENDED OCTOBER 31, 1998
INVESTMENT INCOME
INCOME Interest Income . . . . . . . . . . . . . . . . . . . . . $28,647,663
EXPENSES: Management fee--Note 2(a) . . . . . . . . . . . . . . . . $ 2,507,548
Distribution fees (Investor Shares)--Note 2(b) . . . . . 506,009
_____________
Total Expenses . . . . . . . . . . . . . . . . . . 3,013,557
_____________
INVESTMENT INCOME--NET . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,634,106
NET REALIZED GAIN (LOSS) ON INVESTMENTS--Note 1(b) . . . . . . . . . . . . . . . . . . . . 84
_____________
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS . . . . . . . . . . . . . . . . . . . $25,634,190
_____________
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
DREYFUS MONEY MARKET RESERVES
- -----------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
Year Ended Year Ended
October 31, 1998 October 31, 1997
_________________ _________________
OPERATIONS:
Investment income--net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 25,634,106 $ 19,498,159
Net realized gain (loss) on investments . . . . . . . . . . . . . . . . . . . . . . . 84 (12,742)
______________ ______________
Net Increase (Decrease) in Net Assets Resulting from Operations . . . . . . . . . 25,634,190 19,485,417
______________ ______________
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net:
Investor shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (12,677,662) (8,759,151)
Class R shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (12,956,444) (10,739,008)
______________ ______________
Total Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (25,634,106) (19,498,159)
______________ ______________
CAPITAL STOCK TRANSACTIONS ($1.00 per share):
Net proceeds from shares sold:
Investor shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 808,775,870 680,251,955
Class R shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 511,465,128 466,716,451
Dividends reinvested:
Investor shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,280,513 8,650,590
Class R shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,738,120 6,408,875
Cost of shares redeemed:
Investor shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (724,433,279) (628,214,064)
Class R shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (500,821,747) (411,494,936)
______________ ______________
Increase (Decrease) in Net Assets from Capital Stock Transactions . . . . . . . . 114,004,605 122,318,871
______________ ______________
Total Increase (Decrease) in Net Assets . . . . . . . . . . . . . . . . . . . . 114,004,689 122,306,129
NET ASSETS:
Beginning of Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 436,883,107 314,576,978
______________ ______________
End of Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 550,887,796 $ 436,883,107
______________ ______________
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
DREYFUS MONEY MARKET RESERVES
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share of
Capital Stock outstanding, total investment return, ratios to average net assets
and other supplemental data for each period indicated. This information has been
derived from the Fund's financial statements.
Investor Shares
______________________________________________________
Year Ended October 31,
______________________________________________________
PER SHARE DATA: 1998 1997 1996 1995 1994(1,2)
______ ______ ______ ______ ______
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period . . . . . . . . . . $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
______ ______ ______ ______ ______
Investment Operations:
Investment income--net . . . . . . . . . . . . . . . . . .050 .049 .048 .052 .021
______ ______ ______ ______ ______
Distributions:
Dividends from investment income--net . . . . . . . . . . (.050) (.049) (.048) (.052) (.021)
______ ______ ______ ______ ______
Net asset value, end of period . . . . . . . . . . . . . $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
______ ______ ______ ______ ______
TOTAL INVESTMENT RETURN. . . . . . . . . . . . . . . . . . . 5.13% 5.04% 4.94% 5.28% 2.14%(3)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets . . . . . . . . . .70% .70% .70% .70% .71%(4)
Ratio of net investment income
to average net assets . . . . . . . . . . . . . . . . 5.01% 4.95% 4.84% 5.25% 3.31%(4)
Net Assets, end of period (000's Omitted) . . . . . . . . $301,473 $204,851 $144,168 $161,819 $3,611
- -----------------------------
(1) The Fund commenced selling Investor shares on April 6, 1994.
(2) Effective October 17, 1994, The Dreyfus Corporation began serving as the
Fund's investment manager. Prior to October 17, 1994, Mellon Bank, N.A. served
as the Fund's investment manager.
(3) Not annualized.
(4) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
DREYFUS MONEY MARKET RESERVES
- -----------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
Contained below is per share operating performance data for a share of
Capital Stock outstanding, total investment return, ratios to average net assets
and other supplemental data for each period indicated. This information has been
derived from the Fund's financial statements.
Class R Shares
______________________________________________________
Year Ended October 31,
______________________________________________________
PER SHARE DATA: 1998 1997 1996 1995 1994(1,2)
______ ______ ______ ______ ______
Net asset value, beginning of period . . . . . . . . . . $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
______ ______ ______ ______ ______
Investment Operations:
Investment income--net . . . . . . . . . . . . . . . . . .052 .051 .050 .053 .034(3)
______ ______ ______ ______ ______
Distributions:
Dividends from investment income--net . . . . . . . . . . (.052) (.051) (.050) (.053) (.034)
______ ______ ______ ______ ______
Net asset value, end of period . . . . . . . . . . . . . $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
______ ______ ______ ______ ______
TOTAL INVESTMENT RETURN. . . . . . . . . . . . . . . . . . . 5.34% 5.25% 5.16% 5.44% 3.52%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets . . . . . . . . . .50% .50% .50% .50% .51%(4)
Ratio of net investment income
to average net assets . . . . . . . . . . . . . . . . 5.21% 5.13% 5.01% 5.40% 3.51%
Net Assets, end of period (000's Omitted) . . . . . . . . $249,415 $232,032 $170,409 $139,787 $124,754
- ------------------------
(1)Effective October 17, 1994, The Dreyfus Corporation began serving as the
Fund' s investment manager. Prior to October 17, 1994, Mellon Bank, N.A. served
as the Fund's investment manager.
(2)The Fund commenced selling Investor shares on April 6, 1994. Those shares
outstanding prior to April 4, 1994 were redesignated as Trust shares. Effective
October 17, 1994, the Fund's Trust shares were redesignated as Class R shares.
(3)Net investment income before expenses reimbursed by the investment adviser
for the year ended October 31, 1994 was $.0331.
(4)Annualized expense ratio before expenses reimbursed by the investment
adviser for the year ended October 31, 1994 was 0.64%.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
DREYFUS MONEY MARKET RESERVES
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES:
Dreyfus Money Market Reserves (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, as amended (the "Act") as an open-end management
investment company and operates as a series company currently offering nineteen
series including the Fund. The Fund's investment objective is to seek a high
level of current income consistent with stability of principal by investing in
high-grade money market instruments. The Dreyfus Corporation (the "Manager")
serves as the Fund's investment adviser. The Manager is a direct subsidiary of
Mellon Bank, N.A. ("Mellon Bank").
Premier Mutual Fund Services, Inc. (the "Distributor") is the distributor of
the Fund's shares. The Fund is authorized to issue 2 billion of $.001 par value
Capital Stock in each of the following classes of shares: Investor and Class R.
Investor shares are sold primarily to retail investors and bear a distribution
fee. Class R shares are sold primarily to bank trust departments and other
financial service providers (including Mellon Bank and its affiliates) acting on
behalf of customers having a qualified trust or investment account or
relationship at such institution, and bear no distribution fee. Each class of
shares has identical rights and privileges, except with respect to the
distribution fee and voting rights on matters affecting a single class.
Investment income, net of expenses (other than class specific expenses) and
realized and unrealized gains and losses are allocated daily to each class of
shares based upon the relative proportion of net assets of each class.
The Fund' s financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management estimates
and assumptions. Actual results could differ from those estimates.
(A) PORTFOLIO VALUATION: Investments in securities are valued at amortized
cost in accordance with Rule 2a-7 of the Act, which has been determined by the
Fund's Board of Directors to represent the fair value of the Fund's investments
It is the Fund's policy to maintain a continuous net asset value per share of
$1.00 for the Fund; the Fund has adopted certain investment, portfolio valuation
and dividend and distribution policies to enable it to do so. There is no
assurance, however, that the Fund will be able to maintain a stable net asset
value per share of $1.00.
(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions
are recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Interest income,
adjusted for amortization of premiums and discounts on investments, is
recognized on the accrual basis. Cost of investments represents amortized cost.
(C) 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 Fund' s 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.
<PAGE>
DREYFUS MONEY MARKET RESERVES
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(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 of 1986, as
amended (the "Code"). To the extent that net realized capital gain can be offset
by capital loss carryovers, it is the policy of the Fund not to distribute such
gain.
(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 Code, and to make distributions of taxable income sufficient to relieve it
from substantially all Federal income and excise taxes.
The Fund has an unused capital loss carryover of approximately $23,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to October 31, 1998. If not
applied, $10,000 of the carryover expires in fiscal 2003 and $13,000 expires in
fiscal 2005.
At October 31, 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 2--INVESTMENT MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
(A) INVESTMENT MANAGEMENT FEE: Pursuant to an Investment Management agreement
with the Manager, the Manager provides or arranges for one or more third parties
and/or affiliates to provide investment advisory, administrative, custody, fund
accounting and transfer agency services to the Fund. The Manager also directs
the investments of the Fund in accordance with its investment objective,
policies and limitations. For these services, the Fund is contractually
obligated to pay the Manager a fee, calculated daily and paid monthly, at the
annual rate of .50% of the value of the Fund's average daily net assets. Out of
its fee, the Manager pays all of the expenses of the Fund except brokerage fees,
taxes, interest, Rule 12b-1 distribution fees and expenses, fees and expenses of
non-interested Directors (including counsel fees) and extraordinary expenses. In
addition, the Manager is required to reduce its fee in an amount equal to the
Fund' s allocable portion of fees and expenses of the non-interested Directors
(including counsel). Effective July 1, 1998, each director receives $40,000 per
year, plus $5,000 for each joint Board meeting of The Dreyfus/Laurel Funds,
Inc., The Dreyfus/Laurel Tax-Free Municipal Funds, and The Dreyfus/Laurel Funds
Trust (the "Dreyfus/Laurel Funds" ) attended, $2,000 for separate committee
meetings attended which are not held in conjunction with a regularly scheduled
board meeting and $500 for Board meetings and separate committee meetings
attended that are conducted by telephone and is reimbursed for travel and
out-of-pocket expenses. The Chairman of the Board receives an additional 25% of
such compensation (with the exception of reimbursable amounts). In the event
that there is a joint committee meeting of the Dreyfus/Laurel Funds and the
Dreyfus High Yield Strategies Fund, the $2,000 fee will be allocated between the
Dreyfus/Laurel Funds and the 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.
Prior to July 1, 1998 each director received $27,000 per year, $1,000 for
each Board meeting attended and $750 for each Audit Committee meeting attended
and was reimbursed for travel and out-of-pocket expenses. The Chairman of the
Board received an additional annual fee of $25,000 per year. These fees
pertained to the Dreyfus/Laurel Funds. (The $1,000 attendance fee and
reimbursement of meeting expenses was also borne pro rata by Dreyfus High Yield
Strategies Fund) . These fees and expenses were 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, were in fact paid directly by the
Manager to the non-interested Directors.
<PAGE>
DREYFUS MONEY MARKET RESERVES
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(B) DISTRIBUTION PLAN: The Fund has adopted a distribution plan (the "Plan")
pursuant to Rule 12b-1 under the Act relating to its Investor shares. Under the
Plan, the Fund may pay annually up to .25% of the value of the average daily net
assets attributable to its Investor shares to compensate the Distributor and
Dreyfus Service Corporation, an affiliate of the Manager, for shareholder
servicing activities and the Distributor for activities primarily intended to
result in the sale of Investor shares. The Class R shares bear no distribution
fee. During the period October 31, 1998, Investor shares were charged $506,009
pursuant to the Plan.
Under its terms, the Plan shall remain in effect from year to year, provided
such continuance is approved annually by a vote of majority of those Directors
who are not "interested persons" of the Company and who have no direct or
indirect financial interest in the operation of the Plan or in any agreement
related to the Plan.
NOTE 3--BANK LINE OF CREDIT:
The Fund participates with other Dreyfus-managed funds in a $100 million
unsecured line of credit primarily to be utilized for temporary or emergency
purposes, including the financing of redemptions. Interest is charged to the
Fund at rates which are related to the Federal Funds rate in effect at the time
of borrowings. During the period ended October 31, 1998, the Fund did not borrow
under the line of credit.
<PAGE>
DREYFUS MONEY MARKET RESERVES
- -----------------------------------------------------------------------------
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 Money Market Reserves of The
Dreyfus/Laurel Funds, Inc. as of October 31, 1998, 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 in the five-year period then ended.
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, 1998 by correspondence with the custodian and brokers. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Dreyfus Money Market Reserves of The Dreyfus/Laurel Funds, Inc. as of October
31, 1998, 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 the
financial highlights for each of the years or periods in the five-year period
then ended, in conformity with generally accepted accounting principles.
New York, New York
December 15, 1998
<PAGE>
(reg.tm)
(reg.tm)
DREYFUS MONEY MARKET RESERVES
200 Park Avenue
New York, NY 10166
MANAGER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
CUSTODIAN
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
TRANSFER AGENT &
DIVIDEND DISBURSING AGENT
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Printed in U.S.A. 317/717AR9810
Money Market
Reserves
Annual Report
October 31, 1998
<PAGE>
DREYFUS PREMIER LARGE COMPANY STOCK FUND
(FORMERLY DREYFUS DISCIPLINED EQUITY INCOME FUND)
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
LETTER TO SHAREHOLDERS
Dear Shareholder:
We are pleased to report the performance for the Dreyfus Premier Large
Company Stock Fund for the reporting period ended October 31, 1998, as shown in
the following table:
TOTAL RETURN* PERFORMANCE PERIOD
___________ ___________________
<S> <C> <C>
Class A Shares . . . . . . . . . . . . . . . . . . . . . . . . 19.85% 11/1/97 - 10/31/98
Class B Shares . . . . . . . . . . . . . . . . . . . . . . . . 13.76% 1/16/98 (inception)
- 10/31/98
Class C Shares . . . . . . . . . . . . . . . . . . . . . . . . 13.70% 1/16/98 (inception)
- 10/31/98
Class R Shares . . . . . . . . . . . . . . . . . . . . . . . . 20.10% 11/1/97 - 10/31/98
Standard & Poor' s 500 Composite
Stock Price Index (S&P 500)** . . . . . . . . . . . . 22.01%
</TABLE>
ECONOMIC REVIEW
So far in 1998, the main regions of the world have had very different
economic fundamentals. The U.S. entered the year with a strong economy near full
employment, with unemployment only slightly above 4%. The tight labor market led
the Federal Reserve Board (the "Fed") to contemplate a rise in interest rates
early in the year. The U.S. economy cooled enough over the months that the Fed
decided to stand pat. Evidence of economic cooling continued to accumulate and
worries about the world economy intensified. Financial stresses pushed the Fed
to ease credit in both late September and mid-October. After many years of
subpar economic growth, continental Europe moved into a sustained economic
expansion. The overall European economy benefited as interest rates in
peripheral countries such as Spain and Italy fell, approaching the lower levels
established by Germany, on the eve of currency unification. Unlike the U.S.,
Europe has substantial excess capacity of productive plant and labor. In Asia,
weak economies were pervasive as a result of the Asian financial crisis. The
Latin American economies weakened as the financial stresses spread throughout
that region.
A main influence on the U.S. economy this year was the foreign financial
crisis and cooling of the world economy. The positive effects hit first. Actual
inflation and expected inflation dropped, causing a decline in long-term
Treasury bond yields and mortgage rates. This caused a boom in housing. The fall
in inflation helped the consumer sector as more of the growth in consumer income
was left over after inflation to buy goods and services. Consumers benefited
from a combination of good growth in income after inflation, a strong labor
market and past increases in the price of assets they owned.
The negative effect of Asian weakness was felt in the industrial sector more
than in the consumer sector. Corporate profits weakened, especially in sectors
affected by the Asian crisis, such as world-traded commodities (oil, metals and
paper) and exports. One result of this industrial weakness was to cool off a
U.S. economy that had been growing rapidly.
The major change in the economic outlook over recent months has been a
downward shift in expectations for world economic growth. A credit crunch
developed in emerging countries and former communist countries, sharply reducing
the economic outlook for Asia and Latin America as well as for
commodity-exporting countries throughout the world. The effect on Europe and the
U.S. has been to lower expectations of profit growth and drive down bond yields
<PAGE>
Evidence of a weaker world economy accumulated as the financial stresses
continued. A worsened financial crisis occurred between the Russian default in
mid-August and the fallout from the Long-Term Capital Management (hedge fund)
crisis through early October. However, proactive steps were taken to stabilize
the Japanese banks, design a support package for Brazil and ease monetary
policy. The prospects for world economic weakness and monetary ease in the major
countries will be powerfully influenced by whether foreign financial stresses
calm down or intensify in the coming months. There appears to be a shift in the
priorities of key policymakers from fighting potential inflation to
restimulating future world economic growth.
MARKET OVERVIEW
The 12 months ended October 31, 1998, encompassed some very different market
phases. There was stock market strength during the early part of the period.
Then small-cap indices started to erode in the spring and were joined by
large-cap indices by midsummer. A sharp decline until the end of August was
followed by a brief rebound and then a renewed decline amid financial fears
until early October. The last few weeks of the fiscal year saw a strong rally in
response to the easing of monetary policy. Over the 12-month period, the total
return on the S&P 500 was 22.01%. Returns on mid-cap and small-cap stock indices
tended to be weaker than on large-caps, with a negative total return on
small-cap indices.
Three key trends influenced stock market behavior during the fiscal year.
First, the Federal Reserve kept the Federal Funds rate flat at 5.5% for nearly
11 months of the fiscal year, but then eased policy twice. Second, weakness in
emerging country economies contributed to declining commodity prices and a drop
in long-term Treasury bond yields to multidecade lows. Third, expectations for
corporate profits dropped, first in the sectors sensitive to Asian developments,
such as oil, basic materials and exports, and then for a broader list of stocks
The trigger for the sharp decline in stocks in August appeared to be the
Russian default in the summer of 1998. This resulted in deepening concerns about
weaker economic growth and corporate profits. There was also a global margin
call on risky assets held by hedge funds and financial institutions. This raised
the cost of debt financing for many corporations and many emerging countries.
Expectations for economic activity in emerging countries in Asia and Latin
America shifted down sharply while expectations for U.S. corporate profits
weakened somewhat. Despite the fall in Treasury bond yields, financial stocks
led the summer selloff due to concerns about financial contagion among emerging
countries and potential loan losses by financial institutions. However, in the
last few weeks of the fiscal year, these fears began to ebb and the stock market
rebounded.
The erosion of expectations about average corporate profit growth over the
last year contributed to an outperformance by a small group of super-cap growth
stocks for much of the fiscal year. Investors had more confidence in the
prospect for strong persistent earnings growth for this small group of stocks
than for the broad market. Value stocks, which often have greater cyclical
sensitivity to earnings fluctuations, lagged behind these super-growth stocks.
In addition, many of the financial stocks that fall into the value category fell
sharply following the Russian default and global margin call concerns.
The fiscal year ended October 31, 1998, was characterized by very different
performances of the various market sectors. Super-cap growth stocks did best,
followed by large-cap stocks in general with mid-cap and small-cap stocks
lagging behind. For example, the total return for the fiscal year on the Russell
1000 Index with a heavy large-cap representation was 19.71%, while the Russell
1000 Growth Index returned 24.64% and the Russell 1000 Value Index returned
14.83% . The return on the Russell Midcap Index was 4.46% while the small-cap
Russell 2000 Index return was -11.84%.***
PORTFOLIO FOCUS
As already noted, over the 12-month reporting period ended October 31, 1998,
the total return of the Fund trailed that of the S&P 500 benchmark. Three
factors contributed to the disappointing performance. First of all, a broadly
diversified portfolio like the Fund is generally more successful when returns
can be captured from a large number of stocks. Market returns this past year
have been extremely narrow. The S& P 500 has been a very difficult index to
exceed. In fact, in the nine months ended September 30, 1998, only two stocks
contributed 33% of the index's return. Only five stocks contributed over 50% of
the index's return and just 14 stocks contributed 99% of the index's return. If
a portfolio was not overweighted in those names that did well, it had no chance
of outperforming the index.
<PAGE>
Second, it has been reported that the volatility of stock prices in 1998 is
the highest in the past 50 years. In most cases, our investment process works
because the factors that help to identify outperforming stocks in one month are
given a higher weight and prove useful in identifying outperforming stocks in
the next month. This past fiscal year, the factor returns were volatile and
inconsistent from month to month. As a result, our quantitative model had a
below-average year in terms of its effectiveness.
Third, we were hurt by our exposure to mid-cap stocks and an underweighting
in several large-cap names that performed well, but were assigned a low priority
on our valuation model.
In closing, I want to point out that even though the Fund underperformed its
benchmark over the past fiscal year, our competitive ranking for that time
period in the Lipper Growth & Income Funds universe was in the eleventh
percentile in a universe of 457 funds. The three-year competitive ranking of our
Class A shares as of 10/31/98 was in the sixth percentile out of 457 funds. The
Fund' s Class R shares were in the fifth percentile for the same time period,
ranking 24 out of 457 funds.(+) Of course, past performance is no guarantee of
future results.
Your investment in this Dreyfus fund is appreciated. Please be assured that
our full resources are committed to bringing you rewarding returns.
Sincerely,
[Bert J. Mullins signature logo]
Bert J. Mullins
Portfolio Manager
November 16, 1998
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 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.
***SOURCE: LIPPER ANALYTICAL SERVICES, INC.--The Russell 2000 Index is
composed of the 2,000 smallest companies in the Russell 3000 Index. The Russell
3000 Index is composed of 3,000 of the largest U.S. companies by market
capitalization. The Russell 1000 Index measures the performance of the 1,000
largest companies in the Russell 3000 index. The Russell 1000 Growth Index
measures the performance of those Russell 1000 companies with higher
price-to-book ratios and higher forecasted growth values. The Russell 1000 Value
Index measures the performance of those Russell 1000 companies with lower
price-to-book ratios and lower forecasted growth values. The Russell Midcap
Index consists of the bottom 800 securities in the Russell 1000 Index as ranked
by total market capitalization and is a widely accepted measure of medium-cap
stock market performance. All indices are unmanaged and include reinvested
dividends.
(+)SOURCE: LIPPER ANALYTICAL SERVICES, INC.--As of 10/31/98, Class B and C
shares do not have a 1-year or a 3-year ranking. Lipper rankings do not reflect
sales loads. Had they been reflected, performance would have been lower.
<PAGE>
DREYFUS PREMIER LARGE COMPANY STOCK FUND OCTOBER 31, 1998
(FORMERLY DREYFUS DISCIPLINED EQUITY INCOME FUND)
- -----------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN DREYFUS PREMIER LARGE
COMPANY STOCK FUND CLASS R SHARES AND THE STANDARD AND POOR'S 500 COMPOSITE
STOCK PRICE INDEX
[Exhibit A:
Dollars
$25,216
Standard & Poor's 500 Composite Price Index*
$24,250
<TABLE>
<CAPTION>
Dreyfus Premier Large Company Stock Fund (Class R Shares)
*Source: Lipper Analytical Services, Inc.]
Average Annual Total Returns Actual Aggregate 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 10/31/98 Sales Charge Sales Charge (5.75%) Period Ended 10/31/98 Redemption Redemption*
_____________________ _______________ __________________ _____________________ ____________ __________________
<S> <C> <C> <C> <C> <C>
1 Year 19.85% 12.97% From Inception (1/16/98) 13.76% 9.76%
From Inception (9/14/94) 24.06 22.30
Actual Aggregate Total Returns Average Annual Total Returns
- -----------------------------------------------------------------------------------------------------------------------------------
Class C Shares Class R Shares
_______________________________________________________ _______________________________________________________
% Return Reflecting
Applicable Contingent
% Return Deferred Sales
Assuming No Charge Upon
Period Ended 10/31/98 Redemption Redemption** Period Ended 10/31/98
_____________________ _______________ __________________ _____________________
From Inception ( 1/16/98) 13.70% 12.70% 1 Year 20.10%
From Inception (9/2/94) 23.73
- ------------------------
</TABLE>
Effective January 16, 1998, the Fund changed its name from Dreyfus Disciplined
Equity Income Fund to Dreyfus Premier Large Company Stock Fund. Also, the
Fund' s Investor shares were redesignated as Class A shares and Class A shares
began to be offered with a maximum 5.75% front-end sales load and Restricted
shares were redesignated as Class R shares. Additionally, the Fund began
offering Class B and Class C shares.
Past performance is not predictive of future performance.
The above graph compares a $10,000 investment made in Class R shares of Dreyfus
Premier Large Company Stock Fund on 9/2/94 (Inception Date) to a $10,000
investment made in the Standard & Poor's 500 Composite Stock Price Index on that
date. For comparative purposes, the value of the Index on 8/31/94 is used as the
beginning value on 9/2/94. 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.
Effective January 16, 1998, the Dreyfus Premier Large Company Stock Fund's
investment objective changed to seeking investment returns (including capital
appreciation and income) consistently superior to the Standard & Poor's 500
Composite Stock Price Index. Prior to January 16, 1998, the Fund's investment
objective was to seek to provide above-average income along with moderate
long-term growth of principal and income by investing primarily in a diversified
portfolio of dividend-paying stocks. 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.
*The maximum contingent deferred sales charge for Class B shares is 4% and is
reduced to 0% after six years.
**The maximum contingent deferred sales charge for Class C shares is 1% for
shares redeemed within one year of the date of purchase.
<PAGE>
<TABLE>
<CAPTION>
DREYFUS PREMIER LARGE COMPANY STOCK FUND
(FORMERLY DREYFUS DISCIPLINED EQUITY INCOME FUND)
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS OCTOBER 31, 1998
Common Stocks--99.6% Shares Value
- -------------------------------------------------------
____________ ____________
<S> <C> <C>
Basic Industries--3.0% Bowater. . . . . . . . . . . . . . . . . . . . . . . . 2,600 $ 106,113
Dow Chemical . . . . . . . . . . . . . . . . . . . . . 1,900 177,887
duPont (E.I.) de Nemours & Co. . . . . . . . . . . . . 10,300 592,250
Fort James . . . . . . . . . . . . . . . . . . . . . . 5,500 221,719
Louisiana Pacific . . . . . . . . . . . . . . . . . . 6,000 106,500
Mead . . . . . . . . . . . . . . . . . . . . . . . . . 5,500 173,938
Owens-Illinois . . . . . . . . . . . . . . . . . . (a) 3,500 106,969
PPG Industries . . . . . . . . . . . . . . . . . . . . 3,800 217,312
Praxair . . . . . . . . . . . . . . . . . . . . . . . 3,400 136,850
Solutia . . . . . . . . . . . . . . . . . . . . . . . 5,600 122,850
Southdown . . . . . . . . . . . . . . . . . . . . . . 4,200 228,637
____________
2,191,025
____________
Capital Spending--19.7% Adtran . . . . . . . . . . . . . . . . . . . . . . (a) 3,000 76,031
Allied Waste Industries . . . . . . . . . . . . . (a) 8,900 192,462
AlliedSignal . . . . . . . . . . . . . . . . . . . . . 12,650 492,559
American Power Conversion . . . . . . . . . . . . (a) 4,900 207,944
Apple Computer . . . . . . . . . . . . . . . . . . (a) 5,800 215,325
Cisco Systems . . . . . . . . . . . . . . . . . . (a) 14,050 885,150
Compaq Computer . . . . . . . . . . . . . . . . . . . 6,829 215,967
Cooper Industries . . . . . . . . . . . . . . . . . . 6,900 304,462
Cordant Technologies . . . . . . . . . . . . . . . . . 4,200 170,887
Dell Computer . . . . . . . . . . . . . . . . . . (a) 9,900 649,688
EMC . . . . . . . . . . . . . . . . . . . . . . . (a) 7,200 463,500
General Electric . . . . . . . . . . . . . . . . . . . 26,150 2,288,125
Gulfstream Aerospace . . . . . . . . . . . . . . . (a) 5,100 225,675
Ingersoll-Rand . . . . . . . . . . . . . . . . . . . . 5,150 260,075
Intel . . . . . . . . . . . . . . . . . . . . . . . . 16,300 1,453,756
International Business Machines . . . . . . . . . . . 8,800 1,306,250
Lexmark International Group, Cl. A . . . . . . . . (a) 3,600 251,775
Linear Technology . . . . . . . . . . . . . . . . . . 3,900 232,537
Lucent Technologies . . . . . . . . . . . . . . . . . 12,000 962,250
Maxim Integrated Products . . . . . . . . . . . . (a) 9,000 321,187
Nokia, Cl. A, A.D.R. . . . . . . . . . . . . . . . . . 1,600 148,900
Pitney Bowes . . . . . . . . . . . . . . . . . . . . . 6,800 374,425
Qwest Communications . . . . . . . . . . . . . . . (a) 5,429 212,410
SCI Systems . . . . . . . . . . . . . . . . . . . (a) 3,000 118,500
Sun Microsystems . . . . . . . . . . . . . . . . . (a) 4,300 250,475
Tellabs . . . . . . . . . . . . . . . . . . . . . (a) 3,300 181,500
Tyco International . . . . . . . . . . . . . . . . . . 13,300 823,769
United Technologies . . . . . . . . . . . . . . . . . 6,300 600,075
Waste Management . . . . . . . . . . . . . . . . . . . 6,500 293,312
Xerox . . . . . . . . . . . . . . . . . . . . . . . . 2,050 198,594
____________
14,377,565
____________
Consumer Cyclical--12.3% American Greetings, Cl. A. . . . . . . . . . . . . . . 4,300 172,537
Carnival, Cl. A . . . . . . . . . . . . . . . . . . . 5,400 174,825
Chancellor Media, Cl. A . . . . . . . . . . . . . (a) 3,500 134,312
<PAGE>
DREYFUS PREMIER LARGE COMPANY STOCK FUND
(FORMERLY DREYFUS DISCIPLINED EQUITY INCOME FUND)
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1998
Common Stocks (continued) Shares Value
- -------------------------------------------------------
____________ ____________
Consumer Cyclical (continued) Federated Department Stores. . . . . . . . . . . . (a) 8,200 $ 315,187
Ford Motor . . . . . . . . . . . . . . . . . . . . . . 14,900 808,325
Gannett . . . . . . . . . . . . . . . . . . . . . . . 3,800 235,125
Gap . . . . . . . . . . . . . . . . . . . . . . . . . 10,925 656,866
General Motors . . . . . . . . . . . . . . . . . . . . 6,500 409,906
King World Productions . . . . . . . . . . . . . . (a) 5,300 139,125
Lear . . . . . . . . . . . . . . . . . . . . . . . (a) 4,300 138,137
Limited . . . . . . . . . . . . . . . . . . . . . . . 12,500 320,312
Magna International, Cl. A . . . . . . . . . . . . . . 2,900 179,981
McDonald's . . . . . . . . . . . . . . . . . . . . . . 5,200 347,750
New York Times, Cl. A . . . . . . . . . . . . . . . . 8,500 240,125
News Corp, A.D.R. . . . . . . . . . . . . . . . . . . 9,500 259,469
Safeway . . . . . . . . . . . . . . . . . . . . . (a) 11,000 525,938
Saks . . . . . . . . . . . . . . . . . . . . . . . (a) 8,700 197,925
Sears, Roebuck & Co. . . . . . . . . . . . . . . . . . 7,600 341,525
TJX . . . . . . . . . . . . . . . . . . . . . . . . . 20,900 395,794
Time Warner . . . . . . . . . . . . . . . . . . . . . 7,800 723,938
Tribune . . . . . . . . . . . . . . . . . . . . . . . 3,500 201,688
Valassis Communications . . . . . . . . . . . . . (a) 2,800 111,650
Viacom, Cl. B . . . . . . . . . . . . . . . . . . (a) 5,700 341,288
Wal-Mart Stores . . . . . . . . . . . . . . . . . . . 23,500 1,621,500
____________
8,993,228
____________
Consumer Staples--10.7% Anheuser-Busch . . . . . . . . . . . . . . . . . . . . 5,400 320,962
Avon Products . . . . . . . . . . . . . . . . . . . . 6,400 254,000
Bestfoods . . . . . . . . . . . . . . . . . . . . . . 3,300 179,850
Coca-Cola . . . . . . . . . . . . . . . . . . . . . . 22,300 1,508,038
Colgate-Palmolive . . . . . . . . . . . . . . . . . . 3,000 265,125
Dial . . . . . . . . . . . . . . . . . . . . . . . . . 10,400 286,650
Eastman Kodak . . . . . . . . . . . . . . . . . . . . 4,600 356,500
IBP . . . . . . . . . . . . . . . . . . . . . . . . . 3,400 92,013
Interstate Bakeries . . . . . . . . . . . . . . . . . 4,600 115,287
Newell . . . . . . . . . . . . . . . . . . . . . . . . 2,900 127,600
Philip Morris . . . . . . . . . . . . . . . . . . . . 24,150 1,234,669
Procter & Gamble . . . . . . . . . . . . . . . . . . . 13,800 1,226,475
Quaker Oats . . . . . . . . . . . . . . . . . . . . . 2,400 141,750
Ralston-Ralston Purina Group . . . . . . . . . . . . . 11,300 377,137
Sara Lee . . . . . . . . . . . . . . . . . . . . . . . 6,600 393,938
Suiza Foods . . . . . . . . . . . . . . . . . . . (a) 3,200 104,400
Unilever N.V. (New York Shares) . . . . . . . . . . . 11,100 835,275
____________
7,819,669
____________
Energy--7.4% Atlantic Richfield . . . . . . . . . . . . . . . . . . 4,800 330,600
British Petroleum, A.D.R. . . . . . . . . . . . . . . 4,900 433,344
Burlington Resources . . . . . . . . . . . . . . . . . 5,400 222,412
Chevron . . . . . . . . . . . . . . . . . . . . . . . 4,500 366,750
Coastal . . . . . . . . . . . . . . . . . . . . . . . 10,400 366,600
Columbia Energy Group . . . . . . . . . . . . . . . . 4,500 260,438
<PAGE>
DREYFUS PREMIER LARGE COMPANY STOCK FUND
(FORMERLY DREYFUS DISCIPLINED EQUITY INCOME FUND)
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1998
Common Stocks (continued) Shares Value
- -------------------------------------------------------
____________ ____________
Energy (continued) Diamond Offshore Drilling. . . . . . . . . . . . . . . 2,100 $ 64,444
El Paso Energy . . . . . . . . . . . . . . . . . . . . 2,800 99,225
Exxon . . . . . . . . . . . . . . . . . . . . . . . . 20,350 1,449,937
Halliburton . . . . . . . . . . . . . . . . . . . . . 4,300 154,531
Noble Drilling . . . . . . . . . . . . . . . . . . (a) 5,000 85,938
Phillips Petroleum . . . . . . . . . . . . . . . . . . 5,700 246,525
Royal Dutch Petroleum (New York Shares) . . . . . . . 6,200 305,350
Texaco . . . . . . . . . . . . . . . . . . . . . . . . 9,400 557,537
Tosco . . . . . . . . . . . . . . . . . . . . . . . . 5,600 157,150
USX-Marathon Group . . . . . . . . . . . . . . . . . . 9,600 313,800
____________
5,414,581
____________
Health Care--12.2% American Home Products . . . . . . . . . . . . . . . . 13,400 653,250
Amgen . . . . . . . . . . . . . . . . . . . . . . (a) 3,900 306,394
Becton, Dickinson & Co. . . . . . . . . . . . . . . . 6,200 261,175
Biogen . . . . . . . . . . . . . . . . . . . . . . (a) 2,200 152,900
Bristol-Myers Squibb . . . . . . . . . . . . . . . . . 9,750 1,077,984
Centocor . . . . . . . . . . . . . . . . . . . . . (a) 4,200 186,900
Elan, A.D.R. . . . . . . . . . . . . . . . . . . . (a) 3,800 266,238
Guidant . . . . . . . . . . . . . . . . . . . . . . . 4,100 313,650
Health Management Association . . . . . . . . . . (a) 8,100 144,281
Johnson & Johnson . . . . . . . . . . . . . . . . . . 7,050 574,575
Lilly (Eli) . . . . . . . . . . . . . . . . . . . . . 12,550 1,015,766
Medtronic . . . . . . . . . . . . . . . . . . . . . . 6,300 409,500
Merck & Co. . . . . . . . . . . . . . . . . . . . . . 4,900 662,725
Pfizer . . . . . . . . . . . . . . . . . . . . . . . . 11,700 1,255,556
Schering-Plough . . . . . . . . . . . . . . . . . . . 8,500 874,437
Warner-Lambert . . . . . . . . . . . . . . . . . . . . 9,650 756,319
____________
8,911,650
____________
Interest Sensitive--16.1% ACE. . . . . . . . . . . . . . . . . . . . . . . . . . 6,100 206,637
Allstate . . . . . . . . . . . . . . . . . . . . . . . 11,802 508,224
Ambac Financial Group . . . . . . . . . . . . . . . . 4,300 250,206
American General . . . . . . . . . . . . . . . . . . . 2,900 198,650
Banc One . . . . . . . . . . . . . . . . . . . . . . . 25,834 1,262,635
Chase Manhattan . . . . . . . . . . . . . . . . . . . 10,780 612,439
CIGNA . . . . . . . . . . . . . . . . . . . . . . . . 2,450 178,697
Citigroup . . . . . . . . . . . . . . . . . . . . . . 9,942 467,895
Countrywide Credit Industries . . . . . . . . . . . . 4,800 207,300
Edwards (A.G.) . . . . . . . . . . . . . . . . . . . . 4,700 162,444
Fannie Mae . . . . . . . . . . . . . . . . . . . . . . 12,200 863,912
First Security . . . . . . . . . . . . . . . . . . . . 4,200 85,838
First Union . . . . . . . . . . . . . . . . . . . . . 7,225 419,050
Fleet Financial Group . . . . . . . . . . . . . . . . 18,000 718,875
Hartford Financial Services Group . . . . . . . . . . 6,900 366,562
MBNA . . . . . . . . . . . . . . . . . . . . . . . . . 16,700 380,969
Morgan Stanley Dean Witter and Co. . . . . . . . . . . 11,400 738,150
Old Republic International . . . . . . . . . . . . . . 5,800 110,200
<PAGE>
DREYFUS PREMIER LARGE COMPANY STOCK FUND
(FORMERLY DREYFUS DISCIPLINED EQUITY INCOME FUND)
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1998
Common Stocks (continued) Shares Value
- -------------------------------------------------------
____________ ____________
Interest Sensitive (continued) PMI Group. . . . . . . . . . . . . . . . . . . . . . . 2,400 $ 121,050
PNC Bank . . . . . . . . . . . . . . . . . . . . . . . 13,850 692,500
Progressive, Ohio . . . . . . . . . . . . . . . . . . 2,400 353,400
SLM Holding . . . . . . . . . . . . . . . . . . . . . 7,900 316,494
SouthTrust . . . . . . . . . . . . . . . . . . . . . . 11,950 436,175
Summit Bancorp . . . . . . . . . . . . . . . . . . . . 7,250 275,047
SunAmerica . . . . . . . . . . . . . . . . . . . . . . 4,700 331,350
SunTrust Banks . . . . . . . . . . . . . . . . . . . . 4,000 278,750
Torchmark . . . . . . . . . . . . . . . . . . . . . . 5,400 236,250
Washington Mutual . . . . . . . . . . . . . . . . . . 6,752 252,778
Wells Fargo . . . . . . . . . . . . . . . . . . . . . 1,800 666,000
____________
11,698,477
____________
Mining & Metals--.8% Aluminum Company of America. . . . . . . . . . . . . . 5,150 408,137
Martin Marietta Materials . . . . . . . . . . . . . . 3,500 171,719
____________
579,856
____________
Services--6.2% America Online . . . . . . . . . . . . . . . . . . . . 1,400 177,888
Cadence Design Systems . . . . . . . . . . . . . . (a) 5,300 113,288
Ceridian . . . . . . . . . . . . . . . . . . . . . (a) 5,500 315,563
Compuware . . . . . . . . . . . . . . . . . . . . (a) 6,100 330,544
First Health Group . . . . . . . . . . . . . . . . (a) 4,600 106,088
HBO & Co. . . . . . . . . . . . . . . . . . . . . . . 9,200 241,500
Interpublic Group . . . . . . . . . . . . . . . . . . 2,800 163,800
Microsoft . . . . . . . . . . . . . . . . . . . . (a) 21,200 2,244,550
Omnicom Group . . . . . . . . . . . . . . . . . . . . 4,900 242,244
Oracle . . . . . . . . . . . . . . . . . . . . . . (a) 15,600 461,175
Quintiles Transnational . . . . . . . . . . . . . (a) 3,100 140,275
____________
4,536,915
____________
Transportation--1.0% Burlington Northern Santa Fe . . . . . . . . . . . . . 8,500 262,437
Canadian National Railway . . . . . . . . . . . . . . 2,900 146,269
US Airways Group . . . . . . . . . . . . . . . . . (a) 5,100 288,469
____________
697,175
____________
Utilities--10.2% Ameritech. . . . . . . . . . . . . . . . . . . . . . . 11,400 614,887
Bell Atlantic . . . . . . . . . . . . . . . . . . . . 17,778 944,456
BellSouth . . . . . . . . . . . . . . . . . . . . . . 10,450 834,041
CMS Energy . . . . . . . . . . . . . . . . . . . . . . 4,000 176,250
Energy East . . . . . . . . . . . . . . . . . . . . . 5,300 259,038
Florida Progress . . . . . . . . . . . . . . . . . . . 5,900 247,431
GPU . . . . . . . . . . . . . . . . . . . . . . . . . 8,200 353,625
GTE . . . . . . . . . . . . . . . . . . . . . . . . . 4,600 269,962
MCI WorldCom . . . . . . . . . . . . . . . . . . . (a) 19,100 1,055,275
PECO Energy . . . . . . . . . . . . . . . . . . . . . 7,700 297,894
Pinnacle West Capital . . . . . . . . . . . . . . . . 3,800 166,488
SBC Communications . . . . . . . . . . . . . . . . . . 20,600 954,037
<PAGE>
DREYFUS PREMIER LARGE COMPANY STOCK FUND
(FORMERLY DREYFUS DISCIPLINED EQUITY INCOME FUND)
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1998
Common Stocks (continued) Shares Value
- -------------------------------------------------------
____________ ____________
Telefonos de Mexico, Cl. L, A.D.R. . . . . . . . . . . 8,400 $ 443,625
Texas Utilities . . . . . . . . . . . . . . . . . . . 8,950 391,563
U S West . . . . . . . . . . . . . . . . . . . . . . . 7,000 401,625
____________
7,410,197
____________
TOTAL COMMON STOCKS
(cost $63,977,825) . . . . . . . . . . . . . . . . $72,630,338
____________
Principal
Short-Term Investments--.7% Amount
- -----------------------------------------------------------------------------------------
____________
Repurchase Agreement; Goldman Sachs & Co., Tri-Party Repurchase
Agreement, 5.38% dated 10/30/1998,
due 11/2/1998 in the amount of
$480,215 (fully collateralized
by $471,000 U.S. Treasury Notes,
5.625%, 10/31/1999, value $480,507)
(cost $480,000) . . . . . . . . . . . . . . . . . $.....480,000 $ 480,000
____________
TOTAL INVESTMENTS (cost $64,457,825) . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.3% $73,110,338
_______ ____________
LIABILITIES, LESS CASH AND RECEIVABLES . . . . . . . . . . . . . . . . . . . . . . . . . . (.3%) $ (192,511)
_______ ____________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.0% $72,917,827
_______ ____________
Notes to Statement of Investments:
- -----------------------------------------------------------------------------
(a) Non-income producing.
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
DREYFUS PREMIER LARGE COMPANY STOCK FUND
(FORMERLY DREYFUS DISCIPLINED EQUITY INCOME FUND)
- -----------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES OCTOBER 31, 1998
Cost Value
____________ ___________
ASSETS: Investments in securities--
See Statement of Investments--Note 1(c) . . . . . . . . $64,457,825 $73,110,338
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . 788,033
Receivable for investment securities sold . . . . . . . . 3,360,388
Receivable for shares of Capital Stock subscribed . . . . 209,533
Dividends and interest receivable . . . . . . . . . . . . 64,396
____________
77,532,688
____________
LIABILITIES: Due to The Dreyfus Corporation and affiliates . . . . . . 61,567
Due to Distributor . . . . . . . . . . . . . . . . . . . 8,250
Payable for investment securities purchased . . . . . . . 4,449,896
Payable for shares of Capital Stock redeemed . . . . . . 95,148
____________
4,614,861
____________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $72,917,827
____________
REPRESENTED BY: Paid-in capital . . . . . . . . . . . . . . . . . . . . . $59,911,590
Accumulated undistributed investment income--net . . . . 45,739
Accumulated net realized gain (loss) on investments . . . 4,307,985
Accumulated net unrealized appreciation (depreciation)
on investments--Note 3 . . . . . . . . . . . . . . . . 8,652,513
____________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $72,917,827
____________
</TABLE>
<TABLE>
<CAPTION>
NET ASSET VALUE PER SHARE
____________________________
Class A Class B Class C Class R
____________ ____________ ____________ ____________
<S> <C> <C> <C> <C>
Net Assets . . . . . . . . . . . . . . . . . . . . . . $25,421,247 $14,410,454 $ 3,153,547 $29,932,579
Shares Outstanding . . . . . . . . . . . . . . . . . . 1,243,354 706,916 154,720 1,464,761
NET ASSET VALUE PER SHARE. . . . . . . . . . . . . . . $20.45 $20.38 $20.38 $20.44
_______ _______ _______ _______
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
<TABLE>
<CAPTION>
DREYFUS PREMIER LARGE COMPANY STOCK FUND
(FORMERLY DREYFUS DISCIPLINED EQUITY INCOME FUND)
- -----------------------------------------------------------------------------
STATEMENT OF OPERATIONS YEAR ENDED OCTOBER 31, 1998
INVESTMENT INCOME
<S> <C> <C> <C>
INCOME: Cash dividends (net of $5,414 foreign taxes
withheld at source) . . . . . . . . . . . . . . . . . $ 850,536
Interest . . . . . . . . . . . . . . . . . . . . . . . . 41,021
___________
Total Income . . . . . . . . . . . . . . . . . . . $ 891,557
EXPENSES: Management fee--Note 2(a) . . . . . . . . . . . . . . . . 467,761
Distribution and service fees--Note 2(b) . . . . . . . . 96,879
Loan commitment fees--Note 4 . . . . . . . . . . . . . . 231
___________
Total Expenses . . . . . . . . . . . . . . . . . . 564,871
___________
INVESTMENT INCOME--NET . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 326,686
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--Note 3:
Net realized gain (loss) on investments . . . . . . . . . $4,316,638
Net unrealized appreciation (depreciation) on investments . . 2,622,112
___________
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS . . . . . . . . . . . . . . . . . . 6,938,750
___________
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS . . . . . . . . . . . . . . . . . . . $7,265,436
___________
___________
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
</TABLE>
<TABLE>
<CAPTION>
DREYFUS PREMIER LARGE COMPANY STOCK FUND
(FORMERLY DREYFUS DISCIPLINED EQUITY INCOME FUND)
- -----------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
Year Ended Year Ended
October 31, 1998(1,2) October 31, 1997(3)
_________________ _________________
OPERATIONS:
<S> <C> <C>
Investment income--net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 326,686 $ 355,134
Net realized gain (loss) on investments . . . . . . . . . . . . . . . . . . . . . 4,316,638 2,208,370
Net unrealized appreciation (depreciation) on investments . . . . . . . . . . . . 2,622,112 3,772,628
____________ ____________
Net Increase (Decrease) in Net Assets Resulting from Operations . . . . . . . . 7,265,436 6,336,132
____________ ____________
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net:
Class A shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (82,865) (63,272)
Class B shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,637) --------
Class C shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (746) --------
Class R shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (314,980) (259,347)
Net realized gain on investments:
Class A shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (402,127) (156,988)
Class R shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,808,389) (500,733)
____________ ____________
Total Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,612,744) (980,340)
____________ ____________
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold:
Class A shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,218,455 3,553,780
Class B shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,700,710 --------
Class C shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,224,367 --------
Class R shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,852,159 16,079,961
Dividends reinvested:
Class A shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 454,358 207,073
Class B shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,913 --------
Class C shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 346 --------
Class R shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,865,201 635,024
Cost of shares redeemed:
Class A shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6,787,604) (3,076,864)
Class B shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,148,312) --------
Class C shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (49,016) --------
Class R shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (8,747,836) (6,061,222)
____________ ____________
Increase (Decrease) in Net Assets from Capital Stock Transactions . . . . . . 33,585,741 11,337,752
____________ ____________
Total Increase (Decrease) in Net Assets . . . . . . . . . . . . . . . . . . 38,238,433 16,693,544
NET ASSETS:
Beginning of Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34,679,394 17,985,850
____________ ____________
End of Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $72,917,827 $34,679,394
____________ ____________
UNDISTRIBUTED INVESTMENT INCOME--NET . . . . . . . . . . . . . . . . . . . . . . . . $ 45,739 $ 121,281
____________ ____________
- -----------------------------
(1) Effective January 16, 1998, Investor shares and Restricted shares were redesignated Class A shares and Class R shares,
respectively.
(2) The Fund commenced selling Class B and Class C shares on January 16, 1998.
(3) Effective August 15, 1997, Institutional shares and Retail shares were redesignated Investor shares and Restricted shares,
respectively.
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
DREYFUS PREMIER LARGE COMPANY STOCK FUND
(FORMERLY DREYFUS DISCIPLINED EQUITY INCOME FUND)
- -----------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
Year Ended Year Ended
October 31, 1998(1,2) October 31, 1997(3)
_________________ _________________
CAPITAL SHARE TRANSACTIONS:
Class A
________
Shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,208,092 206,481
Shares issued for dividends reinvested . . . . . . . . . . . . . . . . . . . . . 24,814 14,114
Shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (343,737) (183,798)
__________ __________
Net Increase (Decrease) in Shares Outstanding . . . . 889,169 36,797
__________ __________
Class B
________
Shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 764,145 ------
Shares issued for dividends reinvested . . . . . . . . . . . . . . . . . . . . . 142 ------
Shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (57,371) ------
__________ __________
Net Increase (Decrease) in Shares Outstanding . . . . 706,916 ------
__________ __________
Class C
________
Shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157,154 ------
Shares issued for dividends reinvested . . . . . . . . . . . . . . . . . . . . . 16 ------
Shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,451) ------
__________ __________
Net Increase (Decrease) in Shares Outstanding . . . . 154,719 ------
__________ __________
Class R
________
Shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 251,556 950,520
Shares issued for dividends reinvested . . . . . . . . . . . . . . . . . . . . . 102,492 43,015
Shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (437,726) (368,789)
__________ __________
Net Increase (Decrease) in Shares Outstanding . . . . (83,678) 624,746
__________ __________
- -----------------------------
(1) Effective January 16, 1998, Investor shares and Restricted shares were redesignated Class A shares and Class R shares,
respectively.
(2) The Fund commenced selling Class B and Class C shares on January 16, 1998.
(3) Effective August 15, 1997, Institutional shares and Retail shares were redesignated Investor shares and Restricted shares,
respectively.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
<TABLE>
<CAPTION>
DREYFUS PREMIER LARGE COMPANY STOCK FUND
(FORMERLY DREYFUS DISCIPLINED EQUITY 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: 1998(1) 1997(2) 1996(3) 1995 1994(4,5)
______ ______ ______ ______ ______
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period . . . . . . . . . . $18.23 $14.49 $12.00 $ 9.95 $10.00
______ ______ ______ ______ ______
Investment Operations:
Investment income--net . . . . . . . . . . . . . . . . . .07 .20 .27 .22 .03
Net realized and unrealized gain (loss)
on investments . . . . . . . . . . . . . . . . . . . 3.39 4.26 2.54 2.05 (.08)
______ ______ ______ ______ ______
Total from Investment Operations . . . . . . . . . . . . 3.46 4.46 2.81 2.27 (.05)
______ ______ ______ ______ ______
Distributions:
Dividends from investment income--net . . . . . . . . . . (.15) (.20) (.20) (.22) .--
Dividends from net realized gain on investments . . . . . (1.09) (.52) (.12) .-- .--
______ ______ ______ ______ ______
Total Distributions . . . . . . . . . . . . . . . . . . . (1.24) (.72) (.32) (.22) .--
______ ______ ______ ______ ______
Net asset value, end of period . . . . . . . . . . . . . $20.45 $18.23 $14.49 $12.00 $ 9.95
______ ______ ______ ______ ______
TOTAL INVESTMENT RETURN (6). . . . . . . . . . . . . . . . . 19.85% 32.01% 23.87% 23.20% (.50%)(7)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets . . . . . . . . . 1.15% 1.15% 1.15% 1.15% .19%(7)
Ratio of net investment income
to average net assets . . . . . . . . . . . . . . . . .52% 1.23% 1.81% 2.32% .44%(7)
Portfolio Turnover Rate . . . . . . . . . . . . . . . . . 81.27% 37.17% 44.33% 37.57% 5.00%(7)
Net Assets, end of period (000's Omitted) . . . . . . . . $25,421 $6,456 $4,599 $1,714 $1
- -----------------------------
(1) Effective January 16, 1998, Investor shares were redesignated as Class A shares.
(2) Effective August 15, 1997, Institutional shares were redesignated as Investor shares.
(3) Effective July 15, 1996, Investor shares were redesignated as Institutional shares.
(4) The Fund commenced operations on September 2, 1994.
(5) Effective October 17, 1994, The Dreyfus Corporation began serving as the Fund's investment manager. Prior to October 17, 1994,
Mellon Bank, N.A. served as the Fund's investment manager.
(6) Exclusive of sales load.
(7) Not annualized.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
DREYFUS PREMIER LARGE COMPANY STOCK FUND
(FORMERLY DREYFUS DISCIPLINED EQUITY INCOME FUND)
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
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 Year Ended
October 31, October 31,
PER SHARE DATA: 1998(1) 1998(1)
_____________ _____________
<S> <C> <C>
Net asset value, beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . $17.93 $17.93
______ ______
Investment Operations:
Investment income (loss)--net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (.02) (.02)
Net realized and unrealized gain (loss)
on investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.48 2.48
______ ______
Total from Investment Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.46 2.46
______ ______
Distributions:
Dividends from investment income--net . . . . . . . . . . . . . . . . . . . . . . . . . (.01) (.01)
______ ______
Net asset value, end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . $20.38 $20.38
______ ______
TOTAL INVESTMENT RETURN (2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.76%(3) 13.70%(3)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets . . . . . . . . . . . . . . . . . . . . . . . . 1.51%(3) 1.51%(3)
Ratio of net investment income (loss)
to average net assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (.24%)(3) (.24%)(3)
Portfolio Turnover Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81.27% 81.27%
Net Assets, end of period (000's Omitted) . . . . . . . . . . . . . . . . . . . . . . . $14,410 $3,154
- -----------------------------
(1) From January 16, 1998 (commencement of initial offering) to October 31, 1998.
(2) Exclusive of sales load.
(3) Not annualized.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
<TABLE>
<CAPTION>
DREYFUS PREMIER LARGE COMPANY STOCK FUND
(FORMERLY DREYFUS DISCIPLINED EQUITY 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: 1998(1) 1997(2) 1996(3) 1995 1994(4,5,6)
______ ______ ______ ______ ________
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period . . . . . . . . . . $18.23 $14.49 $12.00 $ 9.95 $10.00
______ ______ ______ ______ ______
Investment Operations:
Investment income--net . . . . . . . . . . . . . . . . . .17 .23 .21 .28 .05
Net realized and unrealized gain (loss)
on investments . . . . . . . . . . . . . . . . . . . 3.33 4.27 2.63 2.02 (.10)
______ ______ ______ ______ ______
Total from Investment Operations . . . . . . . . . . . . 3.50 4.50 2.84 2.30 (.05)
______ ______ ______ ______ ______
Distributions:
Dividends from investment income--net . . . . . . . . . . (.20) (.24) (.23) (.25) .--
Dividends from net realized gain on investments . . . . . (1.09) (.52) (.12) .-- .--
______ ______ ______ ______ ______
Total Distributions . . . . . . . . . . . . . . . . . . . (1.29) (.76) (.35) (.25) .--
______ ______ ______ ______ ______
Net asset value, end of period . . . . . . . . . . . . . $20.44 $18.23 $14.49 $12.00 $ 9.95
______ ______ ______ ______ ______
TOTAL INVESTMENT RETURN. . . . . . . . . . . . . . . . . . . 20.10% 32.25% 24.18% 23.48% (.50%)(7)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets . . . . . . . . . .90% .90% .90% .90% .15%(7)
Ratio of net investment income
to average net assets . . . . . . . . . . . . . . . . .85% 1.46% 2.06% 2.57% .48%(7)
Portfolio Turnover Rate . . . . . . . . . . . . . . . . . 81.27% 37.17% 44.33% 37.57% 5.00%(7)
Net Assets, end of period (000's Omitted) . . . . . . . . $29,933 $28,224 $13,387 $4,509 $5,005
- -----------------------------
(1) Effective January 16, 1998, Restricted Class shares were redesignated as Class R shares.
(2) Effective August 15, 1997, Retail shares were redesignated as Restricted shares.
(3) Effective July 15, 1996, Class R shares were redesignated as Retail shares.
(4) The Fund commenced operations on September 2, 1994.
(5) Effective October 17, 1994, The Dreyfus Corporation began serving as the
Fund's investment manager. Prior to October 17, 1994, Mellon Bank, N.A. served
as the Fund's investment manager.
(6) Effective October 17, 1994, the Fund's Trust shares were redesignated Class
R shares.
(7) Not annualized.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
DREYFUS PREMIER LARGE COMPANY STOCK FUND
(FORMERLY DREYFUS DISCIPLINED EQUITY INCOME FUND)
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES:
Dreyfus Premier Large Company Stock 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, as amended (the "Act") as
an open-end management investment company and operates as a series company
currently offering nineteen 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 selections and risk control
techniques. The Dreyfus Corporation (the "Manager" ) serves as the Fund's
investment adviser. The Manager is a direct subsidiary of Mellon Bank, N.A.
("Mellon Bank").
On November 20, 1997, shareholders approved a reorganization, effective
January 16, 1998, in which the Fund's name was changed to Dreyfus Premier Large
Company Stock Fund. Former Investor shares have been redesignated as Class A
shares and former Restricted shares have been redesignated as Class R shares.
Premier Mutual Fund Services, Inc. (the "Distributor") is the distributor of
the Fund' s shares. The Fund is authorized to issue 100 million of $.001 par
value Capital Stock in each of the following classes of shares: Class A, Class
B, Class C and Class R shares. 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, (except that former holders of Investor shares will continue to be
eligible to purchase Class A shares at NAV, without an initial sales charge).
Class B and Class C shares are subject to a contingent deferred sales charge
(" CDSC"). 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 an investment account or
relationship at such institution, (except that holders of former Restricted
shares will continue to be eligible to purchase those shares) 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 and
privileges on matters affecting a single class
Prior to January 16, 1998, the Fund offered two classes of shares: Investor
(20 million shares authorized) and Restricted (30 million shares authorized).
Investor shares were offered to any investor and Restricted shares were limited
to purchases by bank trust departments and other financial services providers
(including Mellon Bank, N.A. and its affiliates) acting on behalf of customers
having a qualified trust or investment account or relationship at such
institution, or to customers who have received and hold shares of the Fund
distributed to them by virtue of such an account or relationship. Effective
December 1, 1997, the Fund no longer offers Restricted shares for new accounts.
Other differences between the classes included the services offered to and the
expenses borne by each class.
Investment income, net of expenses (other than class specific expenses) and
realized and unrealized gains and losses are allocated daily to each class of
shares based upon the relative proportion of net assets of each class.
The Fund' s financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management estimates
and assumptions. Actual results could differ from those estimates.
(A) PORTFOLIO VALUATION: Investments in securities are valued at 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.
<PAGE>
DREYFUS PREMIER LARGE COMPANY STOCK FUND
(FORMERLY DREYFUS DISCIPLINED EQUITY INCOME FUND)
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions
are recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Dividend income is
recognized on the ex-dividend date and interest income, including, where
applicable, amortization of discount on investments, is recognized on the
accrual basis.
(C) REPURCHASE AGREEMENTS: The Fund may engage in repurchase agreement
transactions. Under the terms of a typical repurchase agreement, the Fund,
through its custodian and sub-custodian, takes possession of an underlying debt
obligation subject to an obligation of the seller to repurchase, and the Fund to
resell, the obligation at an agreed-upon price and time, thereby determining the
yield during the Fund's holding period. This arrangement results in a fixed rate
of return that is not subject to market fluctuations during the Fund's holding
period. The value of the collateral is at least equal, at all times, to the
total amount of the repurchase obligation, including interest. In the event of a
counter party default, the Fund has the right to use the collateral to offset
losses incurred. There is potential loss to the Fund in the event the Fund is
delayed or prevented from exercising its rights to dispose of the collateral
securities, including the risk of a possible decline in the value of the
underlying securities during the period while the Fund seeks to assert its
rights. The Manager, acting under the supervision of the Board of Directors,
reviews the value of the collateral and the creditworthiness of those banks and
dealers with which the Fund enters into repurchase agreements to evaluate
potential risks.
(D) DISTRIBUTIONS TO SHAREHOLDERS: Dividends are recorded on the ex-dividend
date. Dividends from investment income-net, if any, 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 of
1986, as amended (the "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 6, 1998, the Board of Directors declared dividends from net
investment income for the Class A and Class R shares in the amount of $.0090 and
$.0224 per share, respectively, payable on November 9, 1998 to shareholders of
record on November 6, 1998.
(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 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:
<PAGE>
(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,
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). Effective July 1, 1998,
each director receives $40,000 per year, plus $5,000 for each joint Board
meeting of The Dreyfus/Laurel Funds, Inc., The Dreyfus/Laurel Tax-Free Municipal
Funds, and The Dreyfus/Laurel Funds Trust (the "Dreyfus/Laurel Funds") attended,
$2,000 for separate committee meetings attended which are not held in
conjunction with a regularly scheduled board DREYFUS PREMIER LARGE COMPANY STOCK
FUND
(FORMERLY DREYFUS DISCIPLINED EQUITY INCOME FUND)
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
meeting and $500 for Board meetings and separate committee meetings attended
that are conducted by telephone and is reimbursed for travel and out-of-pocket
expenses. The Chairman of the Board receives an additional 25% of such
compensation (with the exception of reimbursable amounts). In the event that
there is a joint committee meeting of the Dreyfus/Laurel Funds and the Dreyfus
High Yield Strategies Fund, the $2,000 fee will be allocated between the
Dreyfus/Laurel Funds and the 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.
Prior to July 1, 1998 each director received $27,000 per year, $1,000 for
each Board meeting attended and $750 for each Audit Committee meeting attended
and were reimbursed for travel and out-of-pocket expenses. The Chairman of the
Board received and additional annual fee of $25,000 per year. These fees
pertained to the The Dreyfus/Laurel Funds. (The $1,000 attendance fee and
reimbursement of meeting expenses were also borne pro rata by Dreyfus High Yield
Strategies Fund.) These fees and expenses were 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, were in fact paid directly by the
Manager to the non-interested Directors.
Dreyfus Service Corporation, a wholly-owned subsidiary of the Manager,
retained $9,227 during the period ended October 31, 1998 from commissions earned
on sales of the Fund shares.
(B) DISTRIBUTION AND SERVICE PLAN: Under the Distribution Plan ("Plan")
adopted pursuant to Rule 12b-1 under the Act, Class A shares may pay annually up
to .25% of their average daily net assets 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, Class B and
Class C shares may pay the Distributor for distributing shares at an aggregate
annual rate of .75% of the value of the average daily net assets of Class B and
Class C shares. Class B shares and Class C shares are also subject to a service
plan adopted pursuant to Rule 12b-1, under which Class B and Class C shares pay
Dreyfus Service Corporation or the Distributor for providing 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 from January 16,
1998 to October 31, 1998, Class A, Class B and Class C shares were charged
$32,153, $38,241 and $8,030, respectively, pursuant to the Plan and Class B and
Class C shares were charged $12,776 and $2,677, respectively, pursuant to the
service plan
Under its terms, the Plan and service 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 had no
direct or indirect financial interest in the operation of the Plan or in any
agreement related to the Plan.
Prior to January 16, 1998, under a previous Distribution Plan adopted
pursuant to Rule 12b-1 under the Act, the Investor shares paid 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 primarily intended to result in
the sale of Investor shares. The Restricted shares bore no distribution fee.
During the period from November 1, 1997 to January 15, 1998, Investor shares
were charged $3,002 pursuant to the Plan.
(C) BROKERAGE COMMISSIONS: During the period ended October 31, 1998, the Fund
incurred total brokerage commissions of $113,263, of which $27,084 was paid to
Dreyfus Investment Services Corporation, a subsidiary of Mellon Bank.
<PAGE>
DREYFUS PREMIER LARGE COMPANY STOCK FUND
(FORMERLY DREYFUS DISCIPLINED EQUITY INCOME FUND)
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
NOTE 3--SECURITIES TRANSACTIONS:
The aggregate amount of purchases and sales of investment securities,
excluding short-term securities, during the period ended October 31, 1998
amounted to $73,242,644 and $41,561,972, respectively.
At October 31, 1998, accumulated net unrealized appreciation on investments
was $8,652,513, consisting of $10,322,385 gross unrealized appreciation and
$1,669,872 gross unrealized depreciation.
At October 31, 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
October 31, 1998, the Fund did not borrow under the Facility.
<PAGE>
DREYFUS PREMIER LARGE COMPANY STOCK FUND
(FORMERLY DREYFUS DISCIPLINED EQUITY 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 Large Company Stock
Fund of The Dreyfus Laurel/Funds, Inc. as of October 31, 1998, 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 in the five-year period
then ended. 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 and financial highlights. Our procedures included
confirmation of securities owned as of October 31, 1998 by correspondence with
the custodian and brokers. 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 Large Company Stock Fund of
The Dreyfus/Laurel Funds, Inc. as of October 31, 1998, 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 the financial highlights for each
of the years or periods in the five-year period then ended, in conformity with
generally accepted accounting principles.
New York, New York
December 15, 1998
<PAGE>
DREYFUS PREMIER LARGE COMPANY STOCK FUND
(FORMERLY DREYFUS DISCIPLINED EQUITY INCOME FUND)
- -----------------------------------------------------------------------------
IMPORTANT TAX INFORMATION (UNAUDITED)
For Federal tax purposes, the Fund hereby designates $.8730 per share as a
long-term capital gain distribution of the amount paid on December 12, 1997.
The Fund also designates 77.98% of the ordinary dividends paid during the
fiscal year ended October 31, 1998 as qualifying for the corporate dividends
received deduction. Shareholders will receive notification in January 1999 of
the percentage applicable to the preparation of their 1998 income tax returns.
<PAGE>
DREYFUS PREMIER LARGE COMPANY
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. 318/718AR9810
ANNUAL REPORT
- -------------------------------------------------------------------------------
DREYFUS PREMIER
LARGE COMPANY
STOCK FUND
- -------------------------------------------------------------------------------
OCTOBER 31, 1998
(reg.tm)
<PAGE>
DREYFUS DISCIPLINED STOCK FUND
- -----------------------------------------------------------------------------
LETTER TO SHAREHOLDERS
Dear Shareholder:
We are pleased to provide you with this report for Dreyfus Disciplined Stock
Fund for the 12-month period ended October 31, 1998. Over this period, your Fund
produced a total return of 18.37%* compared to a total return of 22.01% for the
Standard & Poor's 500 Composite Stock Price Index for the same period.**
ECONOMIC REVIEW
So far in 1998, the main regions of the world have had very different economic
fundamentals. The U.S. entered the year with a strong economy near full
employment, with unemployment only slightly above 4%. The tight labor market led
the Federal Reserve Board to contemplate a rise in interest rates early in the
year. The U.S. economy cooled enough over the months that the Fed decided to
stand pat. Evidence of economic cooling continued to accumulate and worries
about the world economy intensified. Financial stresses pushed the Fed to ease
credit in both late September and mid-October. After many years of subpar
economic growth, continental Europe moved into a sustained economic expansion.
The overall European economy benefited as interest rates in peripheral countries
such as Spain and Italy fell, approaching the lower levels established by
Germany, on the eve of currency unification. Unlike the U.S., Europe has
substantial excess capacity of productive plant and labor. In Asia, weak
economies were pervasive as a result of the Asian financial crisis. The Latin
American economies weakened as the financial stresses spread throughout that
region.
A main influence on the U.S. economy this year was the foreign financial
crisis and cooling of the world economy. The positive effects hit first. Actual
inflation and expected inflation dropped, causing a decline in long-term
Treasury bond yields and mortgage rates. This caused a boom in housing. The fall
in inflation helped the consumer sector as more of the growth in consumer income
was left over after inflation to buy goods and services. Consumers benefited
from a combination of good growth in income after inflation, a strong labor
market and past increases in the price of assets they owned.
The negative effect of Asian weakness was felt in the industrial sector more
than in the consumer sector. Corporate profits weakened, especially in sectors
affected by the Asian crisis, such as world-traded commodities (oil, metals and
paper) and exports. One result of this industrial weakness was to cool off a
U.S. economy that had been growing rapidly.
The major change in the economic outlook over recent months has been a
downward shift in expectations for world economic growth. A credit crunch
developed in emerging countries and former communist countries, sharply reducing
the economic outlook for Asia and Latin America as well as for
commodity-exporting countries throughout the world. The effect on Europe and the
U.S. has been to lower expectations of profit growth and drive down bond yields
Evidence of a weaker world economy accumulated as the financial stresses
continued. A worsened financial crisis occurred between the Russian default in
mid-August and the fallout from the Long-Term Capital Management (hedge fund)
crisis through early October. However, proactive steps were taken to stabilize
the Japanese banks, design a support package for Brazil and ease monetary
policy. The prospects for world economic weakness and monetary ease in the major
countries will be powerfully influenced by whether foreign financial stresses
calm down or intensify in the coming months. There appears to be a shift in the
priorities of key policymakers from fighting potential inflation to
restimulating future world economic growth.
MARKET OVERVIEW
The 12 months ended October 31, 1998 encompassed some very different market
phases. There was stock market strength during the early part of the period.
Then small-cap indices started to erode in the spring and were joined by
large-cap indices by mid-summer. A sharp decline until the end of August was
followed by a brief rebound and then a renewed decline amid financial fears
until early October. The last few weeks of the fiscal year saw a strong rally in
response to the easing of monetary policy. Over the 12-month period, the total
return on the S & P 500 was 22.01%. Returns on mid-cap and small-cap stock
indices tended to be weaker than on large-caps, with a negative total return on
small-cap indices.
Three key trends influenced stock market behavior during the fiscal year.
First, the Federal Reserve kept the Federal Funds rate flat at 5.5% for nearly
11 months of the fiscal year, but then eased policy twice. Second, weakness in
emerging country economies contributed to declining commodity prices and a drop
in long-term Treasury bond yields to multidecade lows. Third, expectations for
corporate profits dropped, first in the sectors sensitive to Asian developments
such as oil, basic materials and exports and then for a broader list of stocks.
The trigger for the sharp decline in stocks in August appeared to be the
Russian default in the summer of 1998. This resulted in deepening concerns about
weaker economic growth and corporate profits. There was also a global margin
call on risky assets held by hedge funds and financial institutions. This raised
the cost of debt financing for many corporations and many emerging countries.
Expectations for economic activity in emerging countries in Asia and Latin
America shifted down sharply while expectations for U.S. corporate profits
weakened somewhat. Despite the fall in Treasury bond yields, financial stocks
led the summer selloff due to concerns about financial contagion among emerging
countries and potential loan losses by financial institutions. However, in the
last few weeks of the fiscal year, these fears began to ebb and the stock market
rebounded.
The erosion of expectations about average corporate profit growth over the
last year contributed to an outperformance by a small group of super-cap growth
stocks for much of the fiscal year. Investors had more confidence in the
prospect for strong persistent earnings growth for this small group of stocks
than for the broad market. Value stocks, which often have greater cyclical
sensitivity to earnings fluctuations, lagged behind these super-growth stocks.
In addition, many of the financial stocks that fall into the value category fell
sharply following the Russian default and global margin call concerns.
The fiscal year ended October 31, 1998 was characterized by very different
performances of the various market sectors. Super-cap growth stocks did best,
followed by large-cap stocks in general with mid-cap and small-cap stocks
lagging behind. For example, the total return for the fiscal year on the Russell
1000 Index with a heavy large-cap representation was 19.71%, while the Russell
1000 Growth Index returned 24.64% and the Russell 1000 Value Index returned
14.83% . The return on the Russell Midcap Index was 4.46% while the small-cap
Russell 2000 Index return was -11.84%.***
PORTFOLIO FOCUS
As already noted, over the 12-month reporting period ended October 31, 1998,
the total return of the Dreyfus Disciplined Stock Fund trailed that of the S&P
500 benchmark. Three factors contributed to the disappointing performance.
First, a broadly diversified portfolio like the Dreyfus Disciplined Stock Fund
is generally more successful when returns can be captured from a large number of
stocks. Market returns this past year have been extremely narrow. The S&P 500
was a very difficult index to exceed. In fact, in the nine months ended
September 30, 1998, only two stocks contributed 33% of the index's return, five
stocks contributed over 50% of the index's return and just 14 stocks contributed
99% of the index's return. If a portfolio was not overweighted in those names
that did well, it had no chance of outperforming the index.
Second, it has been reported that the volatility of stock prices in 1998 is
the highest in the past 50 years. For our investment process to work
effectively, the factors that are given a higher weight to help identify
outperforming stocks in one month need to prove useful in identifying
outperforming stocks in the next month. This past fiscal year, the factor
returns were volatile and inconsistent from month to month, which reduced the
effectiveness of our quantitative model.
Third, we were hurt by our exposure to mid-cap stocks and an underweighting in
several large-cap names that performed well, but were assigned a low priority on
our valuation model.
In closing, I want to point out that our competitive rankings are favorable.
For the one, three, five and 10-year periods ended October 31, 1998, the Dreyfus
Disciplined Stock Fund ranked securely in the top quartile of the Lipper Growth
& Income Funds category.(+)
Your investment in this Dreyfus fund is appreciated. Please be assured that
our resources are committed to seeking to bring you rewarding returns.
Sincerely,
[Bert J. Mullins signature]
Bert J. Mullins
Portfolio Manager
November 16, 1998
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.
***SOURCE: LIPPER ANALYTICAL SERVICES, INC. --- The Russell 1000 Index
measures the performance of the 1,000 largest companies in the Russell 3000
Index, which represents approximately 89% of the total market capitalization of
the Russell 3000 Index. The Russell 1000 Growth Index measures the performance
of those Russell 1000 companies with higher price-to-book ratios and higher
forecasted growth values. The Russell 1000 Value Index measures the performance
of those Russell 1000 companies with lower price-to-book ratios and lower
forecasted growth values. The Russell Midcap Index consists of the bottom 800
securities in the Russell 1000 Index as ranked by total market capitalization
and is a widely accepted measure of medium-cap stock market performance. The
Russell 2000 Index is composed of the 2,000 smallest companies in the Russell
3000 Index. The Russell 3000 Index is composed of 3,000 of the largest U.S.
companies by market capitalization. All indices are unmanaged and include
reinvested dividends.
(+) SOURCE: LIPPER ANALYTICAL SERVICES, INC. --- Dreyfus Disciplined Stock Fund
ranked #133 out of 723 for the 1-year, #28 out of 457 for the 3-year, #20 out of
296 for the 5-year and #5 out of 146 for the 10-year period ended October 31,
1998 in the growth and income fund category. Past performance is no guarantee of
future results.
DREYFUS DISCIPLINED STOCK FUND OCTOBER 31, 1998
- -----------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN DREYFUS DISCIPLINED STOCK
FUND AND THE STANDARD & POOR'S 500 COMPOSITE STOCK PRICE INDEX
Dollars
$60,132
Standard & Poor's 500 Composite Stock Price Index*
$59,807
Dreyfus Disciplined Stock Fund
*Source: Lipper Analytical Services, Inc.
<TABLE>
<CAPTION>
Average Annual Total Returns
- -----------------------------------------------------------------------------
One Year Ended Five Years Ended Ten Years Ended From Inception (12/31/87)
October 31, 1998 October 31, 1998 October 31, 1998 to October 31, 1998
____________________ ____________________ __________________________ __________________________
<S> <C> <C> <C>
18.37% 20.17% 18.36% 17.94%
- ------------------------
</TABLE>
Past performance is not predictive of future performance.
All performance information reflects the performance of the Fund's previously
existing Retail shares (which were not subject to any Rule 12b-1 fee) through
December 15, 1997 and the Fund's single class of shares (which are subject to a
10% Rule 12b-1 fee) from December 16, 1997 through October 31, 1998.
The above graph compares a $10,000 investment made in 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.
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 management 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, 1998
Common Stocks--100.3% Shares Value
- ------------------------------------------------------- ______________ _______________
<S> <C> <C> <C>
Basic Industries--3.0% Bowater . . . . . . . . . . . . . . . . . . . . . . . 85,300 $ 3,481,306
Dow Chemical . . . . . . . . . . . . . . . . . . . . . 64,000 5,992,000
duPont (E.I.) de Nemours . . . . . . . . . . . . . . . 351,100 20,188,250
Fort James . . . . . . . . . . . . . . . . . . . . . . 191,200 7,707,750
Louisiana Pacific . . . . . . . . . . . . . . . . . . 205,800 3,652,950
Mead . . . . . . . . . . . . . . . . . . . . . . . . . 193,900 6,132,088
Owens-Illinois . . . . . . . . . . . . . . . . . . . . (a) 109,200 3,337,425
PPG Industries . . . . . . . . . . . . . . . . . . . . 118,900 6,799,594
Praxair . . . . . . . . . . . . . . . . . . . . . . . 118,500 4,769,625
Solutia . . . . . . . . . . . . . . . . . . . . . . . 187,000 4,102,313
Southdown . . . . . . . . . . . . . . . . . . . . . . 137,500 7,485,156
_______________
73,648,457
_______________
Capital Spending--20.5% Allied Waste Industries . . . . . . . . . . . . . . . (a) 302,100 6,532,913
AlliedSignal . . . . . . . . . . . . . . . . . . . . . 407,500 15,867,031
American Power Conversion . . . . . . . . . . . . . . (a) 158,300 6,717,856
Apple Computer . . . . . . . . . . . . . . . . . . . . (a) 194,100 7,205,963
Cisco Systems . . . . . . . . . . . . . . . . . . . . (a) 477,875 30,106,125
Compaq Computer . . . . . . . . . . . . . . . . . . . 223,824 7,078,434
Computer Associates International . . . . . . . . . . 161,150 6,345,281
Cooper Industries . . . . . . . . . . . . . . . . . . 236,900 10,453,213
Cordant Technologies . . . . . . . . . . . . . . . . . 134,700 5,480,606
Dell Computer . . . . . . . . . . . . . . . . . . . . (a) 328,200 21,538,125
EMC . . . . . . . . . . . . . . . . . . . . . . . . . (a) 244,200 15,720,375
General Electric . . . . . . . . . . . . . . . . . . . 885,500 77,481,250
Gulfstream Aerospace . . . . . . . . . . . . . . . . . (a) 177,700 7,863,225
Ingersoll-Rand . . . . . . . . . . . . . . . . . . . . 165,750 8,370,375
Intel . . . . . . . . . . . . . . . . . . . . . . . . 492,600 43,933,763
International Business Machines . . . . . . . . . . . 325,700 48,346,094
Jabil Circuit . . . . . . . . . . . . . . . . . . . . (a) 157,300 7,284,956
Lexmark International Group, Cl. A . . . . . . . . . . (a) 116,200 8,126,738
Linear Technology . . . . . . . . . . . . . . . . . . 123,200 7,345,800
Lucent Technologies . . . . . . . . . . . . . . . . . 313,800 25,162,838
Maxim Integrated Products . . . . . . . . . . . . . . (a) 310,000 11,063,125
Nokia, Cl. A, A.D.R. . . . . . . . . . . . . . . . . . 54,300 5,053,294
Pitney Bowes . . . . . . . . . . . . . . . . . . . . . 236,800 13,038,800
Qwest Communications . . . . . . . . . . . . . . . . . (a) 181,666 7,107,682
SCI Systems . . . . . . . . . . . . . . . . . . . . . (a) 173,800 6,865,100
Sun Microsystems . . . . . . . . . . . . . . . . . . . (a) 141,700 8,254,025
Tellabs . . . . . . . . . . . . . . . . . . . . . . . (a) 155,300 8,541,500
Tyco International . . . . . . . . . . . . . . . . . . 440,400 27,277,275
United Technologies . . . . . . . . . . . . . . . . . 212,200 20,212,050
Waste Management . . . . . . . . . . . . . . . . . . . (a) 221,300 9,986,163
Xerox . . . . . . . . . . . . . . . . . . . . . . . . 143,400 13,891,875
_______________
498,251,850
_______________
DREYFUS DISCIPLINED STOCK FUND
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1998
Common Stocks (continued) Shares Value
- ------------------------------------------------------- ______________ _______________
Conglomerates--.4% Unocal . . . . . . . . . . . . . . . . . . . . . . . . 253,400 $ 8,599,763
_______________
Consumer Cyclical--12.4% American Greetings, Cl. A . . . . . . . . . . . . . . 144,200 5,786,025
Carnival . . . . . . . . . . . . . . . . . . . . . . . 182,900 5,921,388
Chancellor Media, Cl. A . . . . . . . . . . . . . . . 110,100 4,225,088
Cox Communications, Cl. A . . . . . . . . . . . . . . (a) 112,300 6,162,463
Federated Department Stores . . . . . . . . . . . . . (a) 274,900 10,566,469
Ford Motor . . . . . . . . . . . . . . . . . . . . . . 494,200 26,810,350
Gannett . . . . . . . . . . . . . . . . . . . . . . . 122,000 7,548,750
Gap . . . . . . . . . . . . . . . . . . . . . . . . . 368,450 22,153,056
General Motors . . . . . . . . . . . . . . . . . . . . 220,800 13,924,200
King World Productions . . . . . . . . . . . . . . . . 179,400 4,709,250
Lear . . . . . . . . . . . . . . . . . . . . . . . . . (a) 141,700 4,552,113
Limited . . . . . . . . . . . . . . . . . . . . . . . 440,700 11,292,938
Magna International, Cl. A . . . . . . . . . . . . . . 94,400 5,858,700
McDonald's . . . . . . . . . . . . . . . . . . . . . . 171,900 11,495,813
New York Times, Cl. A . . . . . . . . . . . . . . . . 277,100 7,828,075
News Corp, A.D.R. . . . . . . . . . . . . . . . . . . 347,300 9,485,631
Safeway . . . . . . . . . . . . . . . . . . . . . . . (a) 372,400 17,805,375
Saks . . . . . . . . . . . . . . . . . . . . . . . . . (a) 283,500 6,449,625
Sears, Roebuck & Co. . . . . . . . . . . . . . . . . . 255,500 11,481,531
Time Warner . . . . . . . . . . . . . . . . . . . . . 191,400 17,764,313
TJX Cos. . . . . . . . . . . . . . . . . . . . . . . . 714,100 13,523,269
Tribune . . . . . . . . . . . . . . . . . . . . . . . 108,800 6,269,600
Valassis Communication . . . . . . . . . . . . . . . . (a) 95,500 3,808,063
Viacom, Cl. B . . . . . . . . . . . . . . . . . . . . (a) 188,900 11,310,388
Wal-Mart Stores . . . . . . . . . . . . . . . . . . . 794,500 54,820,500
_______________
301,552,973
_______________
Consumer Staples--10.4% Anheuser-Busch . . . . . . . . . . . . . . . . . . . . 174,400 10,365,900
Avon Products . . . . . . . . . . . . . . . . . . . . 216,400 8,588,375
Bestfoods . . . . . . . . . . . . . . . . . . . . . . 109,200 5,951,400
Coca-Cola . . . . . . . . . . . . . . . . . . . . . . 759,400 51,354,425
Colgate-Palmolive . . . . . . . . . . . . . . . . . . 96,600 8,537,025
Dial . . . . . . . . . . . . . . . . . . . . . . . . . 348,600 9,608,288
Eastman Kodak . . . . . . . . . . . . . . . . . . . . 153,800 11,919,500
Hershey Foods . . . . . . . . . . . . . . . . . . . . 105,000 7,120,313
Interstate Bakeries . . . . . . . . . . . . . . . . . 154,100 3,862,131
Newell . . . . . . . . . . . . . . . . . . . . . . . . 97,700 4,298,800
Philip Morris Cos. . . . . . . . . . . . . . . . . . . 748,200 38,251,725
Procter & Gamble . . . . . . . . . . . . . . . . . . . 465,600 41,380,200
Ralston Purina Group . . . . . . . . . . . . . . . . . 365,800 12,208,575
Sara Lee . . . . . . . . . . . . . . . . . . . . . . . 136,700 8,159,281
Suiza Foods . . . . . . . . . . . . . . . . . . . . . (a) 107,300 3,500,663
Unilever, A.D.R. . . . . . . . . . . . . . . . . . . . 370,700 27,895,175
_______________
253,001,776
_______________
DREYFUS DISCIPLINED STOCK FUND
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1998
Common Stocks (continued) Shares Value
- ------------------------------------------------------- ______________ _______________
Energy--7.3% Amerada Hess . . . . . . . . . . . . . . . . . . . . . 122,600 $ 6,773,650
Ashland . . . . . . . . . . . . . . . . . . . . . . . 101,200 4,870,250
British Petroleum, A.D.R. . . . . . . . . . . . . . . 162,370 14,359,597
Chevron . . . . . . . . . . . . . . . . . . . . . . . 245,400 20,000,100
Coastal . . . . . . . . . . . . . . . . . . . . . . . 347,600 12,252,900
Columbia Energy Group . . . . . . . . . . . . . . . . 151,800 8,785,425
Diamond Offshore Drilling . . . . . . . . . . . . . . 78,800 2,418,175
El Paso Energy . . . . . . . . . . . . . . . . . . . . 105,600 3,742,200
Exxon . . . . . . . . . . . . . . . . . . . . . . . . 687,500 48,984,375
Halliburton . . . . . . . . . . . . . . . . . . . . . 135,500 4,869,531
Noble Drilling . . . . . . . . . . . . . . . . . . . . (a) 166,100 2,854,844
Phillips Petroleum . . . . . . . . . . . . . . . . . . 198,800 8,598,100
Royal Dutch Petroleum, A.D.R. . . . . . . . . . . . . 213,100 10,495,175
Texaco . . . . . . . . . . . . . . . . . . . . . . . . 313,800 18,612,263
USX-Marathon Group . . . . . . . . . . . . . . . . . . 334,000 10,917,625
_______________
178,534,210
_______________
Health Care--12.3% American Home Products . . . . . . . . . . . . . . . . 455,400 22,200,750
Amgen . . . . . . . . . . . . . . . . . . . . . . . . (a) 132,200 10,385,963
Becton, Dickinson & Co. . . . . . . . . . . . . . . . 200,700 8,454,488
Biogen . . . . . . . . . . . . . . . . . . . . . . . . (a) 73,700 5,122,150
Bristol-Myers Squibb . . . . . . . . . . . . . . . . . 331,500 36,651,469
Centocor . . . . . . . . . . . . . . . . . . . . . . . (a) 132,100 5,878,450
Elan, A.D.R. . . . . . . . . . . . . . . . . . . . . . (a) 123,200 8,631,700
Guidant . . . . . . . . . . . . . . . . . . . . . . . 135,400 10,358,100
Johnson & Johnson . . . . . . . . . . . . . . . . . . 235,000 19,152,500
Lilly (Eli) . . . . . . . . . . . . . . . . . . . . . 423,000 34,236,563
Medtronic . . . . . . . . . . . . . . . . . . . . . . 208,700 13,565,500
Merck & Co. . . . . . . . . . . . . . . . . . . . . . 165,000 22,316,250
Pfizer . . . . . . . . . . . . . . . . . . . . . . . . 396,700 42,570,869
Schering-Plough . . . . . . . . . . . . . . . . . . . 282,900 29,103,338
Warner-Lambert . . . . . . . . . . . . . . . . . . . . 323,800 25,377,825
Wellpoint Health Networks . . . . . . . . . . . . . . 70,500 5,190,563
_______________
299,196,478
_______________
Interest Sensitive--16.4% ACE . . . . . . . . . . . . . . . . . . . . . . . . . 211,500 7,164,563
Allstate . . . . . . . . . . . . . . . . . . . . . . . 402,360 17,326,628
Ambac Financial Group . . . . . . . . . . . . . . . . 134,000 7,797,125
American General . . . . . . . . . . . . . . . . . . . 99,600 6,822,600
Banc One . . . . . . . . . . . . . . . . . . . . . . . 938,818 45,884,734
BankAmerica . . . . . . . . . . . . . . . . . . . . . 479,295 27,529,553
Bear Stearns Cos. . . . . . . . . . . . . . . . . . . 105,467 3,763,854
CIGNA . . . . . . . . . . . . . . . . . . . . . . . . 83,100 6,061,106
Chase Manhattan . . . . . . . . . . . . . . . . . . . 366,980 20,849,051
Citigroup . . . . . . . . . . . . . . . . . . . . . . 342,433 16,115,753
Countrywide Credit Industries . . . . . . . . . . . . 154,900 6,689,744
Edwards (A.G.) . . . . . . . . . . . . . . . . . . . . 155,500 5,374,469
Fannie Mae . . . . . . . . . . . . . . . . . . . . . . 416,900 29,521,731
DREYFUS DISCIPLINED STOCK FUND
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1998
Common Stocks (continued) Shares Value
- ------------------------------------------------------- ______________ _______________
Interest Sensitive (continued) First Union . . . . . . . . . . . . . . . . . . . . . 236,676 $ 13,727,208
Fleet Financial Group . . . . . . . . . . . . . . . . 606,800 24,234,075
Hartford Financial Services Group . . . . . . . . . . 241,000 12,803,125
MBNA . . . . . . . . . . . . . . . . . . . . . . . . . 435,200 9,928,000
Morgan Stanley, Dean Witter, Discover & Co. . . . . . 393,000 25,446,750
Old Republic International . . . . . . . . . . . . . . 195,775 3,719,725
PMI Group . . . . . . . . . . . . . . . . . . . . . . 85,100 4,292,231
PNC Bank . . . . . . . . . . . . . . . . . . . . . . . 456,800 22,840,000
Progressive . . . . . . . . . . . . . . . . . . . . . 82,400 12,133,400
SLM Holding . . . . . . . . . . . . . . . . . . . . . 260,200 10,424,263
SouthTrust . . . . . . . . . . . . . . . . . . . . . . 403,150 14,714,975
Summit Bancorp . . . . . . . . . . . . . . . . . . . . 248,850 9,440,747
SunAmerica . . . . . . . . . . . . . . . . . . . . . . 153,650 10,832,325
SunTrust Banks . . . . . . . . . . . . . . . . . . . . 129,900 9,052,406
Torchmark . . . . . . . . . . . . . . . . . . . . . . 178,900 7,826,875
Washington Mutual . . . . . . . . . . . . . . . . . . 215,216 8,057,149
_______________
400,374,165
_______________
Mining and Metals--.8% Aluminum Co. of America . . . . . . . . . . . . . . . 174,300 13,813,275
Martin Marietta Materials . . . . . . . . . . . . . . 118,500 5,813,906
_______________
19,627,181
_______________
Services--5.6% America Online . . . . . . . . . . . . . . . . . . . . 49,400 6,276,888
Cadence Design System . . . . . . . . . . . . . . . . (a) 179,100 3,828,263
Ceridian . . . . . . . . . . . . . . . . . . . . . . . (a) 89,700 5,146,538
Compuware . . . . . . . . . . . . . . . . . . . . . . (a) 157,000 8,507,438
First Health Group . . . . . . . . . . . . . . . . . . (a) 160,400 3,699,225
HBO & Co. . . . . . . . . . . . . . . . . . . . . . . 312,600 8,205,750
Interpublic Group Cos. . . . . . . . . . . . . . . . . 90,400 5,288,400
Microsoft . . . . . . . . . . . . . . . . . . . . . . (a) 712,300 75,414,743
Omnicom Group . . . . . . . . . . . . . . . . . . . . 159,500 7,885,281
Oracle . . . . . . . . . . . . . . . . . . . . . . . . (a) 432,100 12,773,956
_______________
137,026,482
_______________
Transportation--.9% Burlington Northern Santa Fe . . . . . . . . . . . . . 282,800 8,731,450
Canadian National Railway . . . . . . . . . . . . . . 92,500 4,665,469
US Airways Group . . . . . . . . . . . . . . . . . . . (a) 164,700 9,315,844
_______________
22,712,763
_______________
Utilities--10.3% Ameritech . . . . . . . . . . . . . . . . . . . . . . 391,700 21,127,319
Bell Atlantic . . . . . . . . . . . . . . . . . . . . 604,310 32,103,969
BellSouth . . . . . . . . . . . . . . . . . . . . . . 342,400 27,327,800
CMS Energy . . . . . . . . . . . . . . . . . . . . . . 123,200 5,428,500
Energy East . . . . . . . . . . . . . . . . . . . . . 188,700 9,222,713
Florida Progress . . . . . . . . . . . . . . . . . . . 205,000 8,597,188
GPU . . . . . . . . . . . . . . . . . . . . . . . . . 275,700 11,889,563
DREYFUS DISCIPLINED STOCK FUND
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1998
Common Stocks (continued) Shares Value
- ------------------------------------------------------- ______________ _______________
Utilities (continued) GTE . . . . . . . . . . . . . . . . . . . . . . . . . 153,500 $ 9,008,531
MCI WorldCom . . . . . . . . . . . . . . . . . . . . . 648,600 35,835,150
PECO Energy . . . . . . . . . . . . . . . . . . . . . 261,800 10,128,388
Pinnacle West Capital . . . . . . . . . . . . . . . . 120,000 5,257,500
SBC Communications . . . . . . . . . . . . . . . . . . 682,700 31,617,544
Telefonos de Mexico, Cl. L, A.D.R. . . . . . . . . . . 285,600 15,083,250
Texas Utilities . . . . . . . . . . . . . . . . . . . 304,200 13,308,750
U S West . . . . . . . . . . . . . . . . . . . . . . . 239,100 13,718,363
_______________
249,654,528
_______________
TOTAL COMMON STOCKS
(cost $2,001,266,326) . . . . . . . . . . . . . . $2,442,180,626
_______________
Principal
Short-Term Investments--1.4% Amount
- ------------------------------------------------------- ______________
Repurchase Agreement; Goldman Sachs & Co., Tri-Party Repurchase
Agreement, 5.38% Dated 10/30/1998,
Due 11/2/1998 in the amount of
$34,815,602 (fully collateralized
by $29,464,000 U.S.Treasury Bonds,
6.50%, 11/15/2026, value $34,800,794)
(cost $34,800,000) . . . . . . . . . . . . . . . . $ 34,800,000 $ 34,800,000
_______________
TOTAL INVESTMENTS (cost $2,036,066,326). . . . . . . . . . . . . . . . . . . . . . . . . . 101.7% $2,476,980,626
______ _______________
LIABILITIES, LESS CASH AND RECEIVABLES . . . . . . . . . . . . . . . . . . . . . . . . . . (1.7%) $ (40,817,049)
______ _______________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.0% $2,436,163,577
______ _______________
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, 1998
Cost Value
_______________ _______________
ASSETS: Investments in securities--See Statement of
Investments--Note 1(c) . . . . . . . . . . . . . . . . $2,036,066,326 $2,476,980,626
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . 4,236,868
Dividends and interest receivable . . . . . . . . . . . . 2,183,868
Receivable for shares of Capital Stock subscribed . . . . 847,488
Receivable for investment securities sold . . . . . . . . 235,037
________________
2,484,483,887
________________
LIABILITIES: Due to The Dreyfus Corporation and affiliates . . . . . . 1,898,020
Due to Distributor . . . . . . . . . . . . . . . . . . . 54,389
Payable for shares of Capital Stock redeemed . . . . . . 46,367,034
Loan commitment fees payable . . . . . . . . . . . . . . 867
________________
48,320,310
________________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,436,163,577
________________
REPRESENTED BY: Paid-in capital . . . . . . . . . . . . . . . . . . . . . $1,883,642,168
Accumulated undistributed investment income--net . . . . 2,672,348
Accumulated net realized gain (loss) on investments . . . 108,934,761
Accumulated net unrealized appreciation (depreciation)
on investments--Note 3 . . . . . . . . . . . . . . . . 440,914,300
________________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,436,163,577
________________
SHARES OUTSTANDING
(245 MILLION SHARES OF $.001 PAR VALUE CAPITAL STOCK AUTHORIZED) . . . . . . . . . . . . . 70,246,176
NET ASSET VALUE, offering and redemption price per share . . . . . . . . . . . . . . . . . $34.68
_______
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS DISCIPLINED STOCK FUND
- -----------------------------------------------------------------------------
STATEMENT OF OPERATIONS YEAR ENDED OCTOBER 31, 1998
INVESTMENT INCOME
INCOME: Cash dividends (net of $234,825 foreign taxes
withheld at source) . . . . . . . . . . . . . $ 32,545,322
Interest . . . . . . . . . . . . . . . . . . . 983,889
______________
Total Income . . . . . . . . . . . . . . . $ 33,529,211
EXPENSES: Management fee--Note 2(a) . . . . . . . . . . . . 18,808,035
Distribution fees--Note 2(b) . . . . . . . . . . 1,912,132
Interest expense--Note 4 . . . . . . . . . . . . 11,856
Loan commitment fees--Note 4 . . . . . . . . . . 10,969
______________
Total Expenses . . . . . . . . . . . . . . 20,742,992
______________
INVESTMENT INCOME--NET . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,786,219
______________
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--Note 3:
Net realized gain (loss) on investments . . . . . $109,109,076
Net realized gain (loss) on financial futures . . 173,198
______________
Net Realized Gain (Loss) . . . . . . . . . 109,282,274
Net unrealized appreciation (depreciation)
on investments . . . . . . . . . . . . . . . . 165,127,716
______________
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS . . . . . . . . . . . . . . 274,409,990
______________
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS . . . . . . . . . . . . . . . $287,196,209
______________
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS DISCIPLINED STOCK FUND
- -----------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
Year Ended Year Ended
October 31, 1998* October 31, 1997
________________ ________________
OPERATIONS:
Investment income--net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 12,786,219 $ 10,393,974
Net realized gain (loss) on investments . . . . . . . . . . . . . . . . . . . . . 109,282,274 158,564,391
Net unrealized appreciation (depreciation) on investments . . . . . . . . . . . . 165,127,716 147,563,021
________________ ________________
Net Increase (Decrease) in Net Assets Resulting from Operations . . . . . 287,196,209 316,521,386
________________ ________________
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net:
Institutional shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . (43, 036) (188,268)
Retail shares and New Single Class . . . . . . . . . . . . . . . . . . . . . (13,529,583) (9,067,989)
Net realized gain on investments:
Institutional shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- (1,492,485)
Retail shares and New Single Class . . . . . . . . . . . . . . . . . . . . . (158,377,032) (55,278,901)
________________ ________________
Total Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (171,949,651) (66,027,643)
________________ ________________
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold:
Institutional shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26,000,037 1,894,733,483
Retail shares and New Single Class . . . . . . . . . . . . . . . . . . . . . 1,607,539,829 982,425,217
Dividends reinvested:
Institutional shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40,647 1,577,637
Retail shares and New Single Class . . . . . . . . . . . . . . . . . . . . . 156,406,066 56,777,928
Cost of shares redeemed:
Institutional shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . (33,343,597) (1,885,923,012)
Retail shares and New Single Class . . . . . . . . . . . . . . . . . . . . . (961,519,617) (603,753,842)
________________ ________________
Increase (Decrease) in Net Assets from Capital Stock Transactions . . . . 795,123,365 445,837,411
________________ ________________
Total Increase (Decrease) in Net Assets . . . . . . . . . . . . . . . . 910,369,923 696,331,154
NET ASSETS:
Beginning of Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,525,793,654 829,462,500
________________ ________________
End of Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,436,163,577 $1,525,793,654
________________ ________________
UNDISTRIBUTED INVESTMENT INCOME--NET . . . . . . . . . . . . . . . . . . . . . . . . $ 2,672,348 $ 3,458,748
________________ ________________
- ------------
(*)Effective December 15, 1997, Institutional shares and Retail shares were
eliminated and the Fund became a single class fund.
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS DISCIPLINED STOCK FUND
- -----------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
Shares
__________________________________
Year Ended Year Ended
October 31, 1998 October 31, 1997
_________________ ________________
CAPITAL SHARE TRANSACTIONS:
Institutional Shares Shares Shares
________________ ________________
Shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 766,388 62,998,458
Shares issued for dividends reinvested . . . . . . . . . . . . . . . . . . . . . 1,199 58,497
Shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (978,523) (62,544,960)
________________ ________________
Net Increase (Decrease) in Shares Outstanding . . . . . . . . . . . . . . (210,936) 511,995
________________ ________________
Retail Shares and New Single Class
Shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47,447,361 32,661,202
Shares issued for dividends reinvested . . . . . . . . . . . . . . . . . . . . . 5,125,076 2,097,579
Shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (28,659,176) (19,851,470)
________________ ________________
Net Increase (Decrease) in Shares Outstanding . . . . . . . . . . . . . . 23,913,261 14,907,311
________________ ________________
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<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(1)
_______________________________________________________
Year Ended October 31,
________________________________________________________
PER SHARE DATA: 1998(1) 1997 1996(2) 1995 1994(3,4)
_______ _______ _______ _______ _______
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period . . . . . . . . . . $32.80 $26.64 $22.08 $18.54 $17.86
_______ _______ _______ _______ _______
Investment Operations:
Investment income--net . . . . . . . . . . . . . . . . . (.07) .23 .24 .28 .16
Net realized and unrealized gain (loss)
on investments . . . . . . . . . . . . . . . . . . . 1.61 7.89 5.11 3.98 .66
_______ _______ _______ _______ _______
Total from Investment Operations . . . . . . . . . . . . 1.54 8.12 5.35 4.26 .82
_______ _______ _______ _______ _______
Distributions:
Dividends from investment income--net . . . . . . . . . . (.04) (.18) (.23) (.25) (.14)
Dividends from net realized gain on investments . . . . . -- (1.78) (.56) (.47) --
_______ _______ _______ _______ _______
Total Distributions . . . . . . . . . . . . . . . . . . . (.04) (1.96) (.79) (.72) (.14)
_______ _______ _______ _______ _______
Net asset value, end of period . . . . . . . . . . . . . -- $32.80 $26.64 $22.08 $18.54
_______ _______ _______ _______ _______
TOTAL INVESTMENT RETURN. . . . . . . . . . . . . . . . . . . 4.69%(5) 32.12% 24.84% 23.96% 4.62%(5)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets . . . . . . . . .. .14%(5) 1.15% 1.15% 1.15% .66%(5)
Ratio of net investment income to average
net assets . . . . . . . . . . . . . . . . . . . . . .08%(5) .68% 1.01% 1.36% .74%(5)
Portfolio Turnover Rate . . . . . . . . . . . . . . . . . 54.45% 68.87% 64.47% 60.00% 106.00%
Net assets, end of period (000's Omitted) . . . . . . . . $ -- $43,617 $21,783 $32,189 $19,580
- ---------
(1) Effective December 15, 1997, the Fund converted to a Single Class Fund, with
the existing Institutional shares and Retail shares converted into a new single
class of shares.
(2) Effective July 15, 1996, Investor shares were redesignated as Institutional
Shares.
(3) The Fund commenced selling Investor shares on April 6, 1994.
(4) Effective October 17, 1994, The Dreyfus Corporation began serving as the
Fund' s investment manager. Prior to October 17, 1994, Mellon Bank, N.A. served
as the Fund's investment manager.
(5) Not annualized.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS DISCIPLINED STOCK FUND
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
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 and New Single Class Shares(1)
_______________________________________________________
Year Ended October 31,
________________________________________________________
PER SHARE DATA: 1998(1) 1997 1996(2) 1995 1994(3,4)
_______ _______ _______ _______ _______
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period . . . . . . . . . . $32.78 $26.65 $22.09 $18.54 $18.69
_______ _______ _______ _______ _______
Investment Operations:
Investment income--net . . . . . . . . . . . . . . . . . .20 .25 .28 .30 .26(5)
Net realized and unrealized gain (loss)
on investments . . . . . . . . . . . . . . . . . . . 5.31 7.92 5.13 4.02 .25
_______ _______ _______ _______ _______
Total from Investment Operations . . . . . . . . . . . . 5.55 8.17 5.41 4.32 .51
_______ _______ _______ _______ _______
Distributions:
Dividends from investment income--net . . . . . . . . . . (.24) (.26) (.29) (.30) (.26)
Dividends from net realized gain on investments . . . . . (3.37) (1.78) (.56) (.47) (.40)
_______ _______ _______ _______ _______
Total Distributions . . . . . . . . . . . . . . . . . . . (3.65) (2.04) (.85) (.77) (.66)
_______ _______ _______ _______ _______
Net asset value, end of period . . . . . . . . . . . . . $34.68 $32.78 $26.65 $22.09 $18.54
_______ _______ _______ _______ _______
TOTAL INVESTMENT RETURN. . . . . . . . . . . . . . . . . . . 18.37% 32.32% 25.14% 24.33% 2.82%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets . . . . . . . . .. .99% .90% .90% .90% .90%(6)
Ratio of net investment income to average
net assets . . . . . . . . . . . . . . . . . . . . . .61% .87% 1.23% 1.61% 1.54%
Portfolio Turnover Rate . . . . . . . . . . . . . . . . . 54.45% 68.87% 64.47% 60.00% 106.00%
Net assets, end of period (000's Omitted) . . . . . . . . $2,436,164 $1,482,176 $807,680 $382,646 $239,069
- ---------
(1) Effective December 15, 1997, the Fund converted to a Single Class Fund, with
the existing Institutional shares and Retail shares converted into a new single
class of shares.
(2) Effective July 15, 1996, Class R shares were redesignated as Retail Shares.
(3) Effective October 17, 1994, the Fund's Trust shares were redesignated Class
R shares.
(4) Effective October 17, 1994, The Dreyfus Corporation began serving as the
Fund's investment manager. Prior to October 17, 1994, Mellon Bank, N.A. served
as the Fund's investment manager.
(5) Net investment income per share before reimbursement of expenses by the
investment adviser was $.25 for the year ended October 31, 1994.
(6) Expense ratio before reimbursement of expenses by the adviser was .96% for
the year ended October 31, 1994.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS DISCIPLINED STOCK FUND
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES:
Dreyfus Disciplined Stock 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, as amended (the "Act") as an open-end
management investment company and operates as a series company currently
offering nineteen series, including the Fund. The Fund's investment objective is
to seek investment returns (consisting of capital appreciation and income) that
are consistently superior to the Standard & Poor's 500 Composite Stock Price
Index. The Dreyfus Corporation (the "Manager") serves as the Fund's investment
adviser. The Manager is a direct subsidiary of Mellon Bank, N.A. ("Mellon Bank")
..
On December 2, 1997, shareholders approved a reorganization, effective
December 15, 1997, where Institutional class and Retail class converted into a
single class of shares. The performance history for the Retail shares, the most
relevant historical class, represents class outstanding through the year.
Premier Mutual Fund Services, Inc. (the "Distributor") is the distributor of
the Fund's shares, which are sold to the public without a sales charge. Prior to
December 15, 1997, the Fund was authorized to issue 245 million of $.001 par
value Capital Stock. The Fund offered two classes of shares: Institutional (80
million shares authorized) and Retail (165 million shares authorized). Retail
shares were offered to any investor and Institutional shares were offered only
to clients of banks, securities brokers or dealers and other financial
institutions (collectively, Service Agents) that had entered into selling
agreements with the Distributor. Other differences between the classes included
the services offered to and the expenses borne by each class.
Prior to the reorganization of the Fund to a single class fund, investment
income, net of expenses (other than class specific expenses) and realized and
unrealized gains and losses were 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 DREYFUS DISCIPLINED STOCK FUND
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
collateral is at least equal, at all times, to the total amount of the
repurchase obligation, including interest. In the event of a counter party
default, the Fund has the right to use the collateral to offset losses incurred.
There is potential loss to the Fund in the event the Fund is delayed or
prevented from exercising its rights to dispose of the collateral securities,
including the risk of a possible decline in the value of the underlying
securities during the period while the Fund seeks to assert its rights. The
Manager, acting under the supervision of the Board of Directors, reviews the
value of the collateral and the creditworthiness of those banks and dealers with
which the Fund enters into repurchase agreements to evaluate potential risks.
(D) FINANCIAL FUTURES: The Fund may invest in financial futures contracts in
order to gain exposure to or protect against changes in the market. The Fund is
exposed to market risk as a result of changes in the value of the underlying
financial instruments. 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 recognized 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, 1998,
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 of 1986, as
amended (the "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 6, 1998, the Board of Directors declared dividends from net
investment in the amount of $.037 per share, respectively, payable on November
9, 1998 to shareholders of record on November 6, 1998.
(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 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) . Effective July 1, 1998, each
director receives $40,000 per year, plus $5,000 for each joint Board meeting of
The Dreyfus/Laurel Funds, Inc., The Dreyfus/Laurel Tax-Free Municipal Funds and
The Dreyfus/Laurel Funds Trust (the "Dreyfus/Laurel Funds") attended, $2,000 for
separate DREYFUS DISCIPLINED STOCK FUND
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
committee meetings attended which are not held in conjunction with a regularly
scheduled board meeting and $500 for Board meetings and separate committee
meetings attended that are conducted by telephone and is reimbursed for travel
and out-of-pocket expenses. The Chairman of the Board receives an additional a
25% of such compensation (with the exception of reimbursable amounts). In the
event that there is a joint committee meeting of the Dreyfus/Laurel Funds and
the Dreyfus High Yield Strategies Fund, the $2,000 fee will be allocated between
the Dreyfus/Laurel Funds and the Dreyfus High Yield Stategies 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. Prior to July 1, 1998 each director received $27,000
per year, $1,000 for each Board meeting attended and $750 for each Audit
Committee meeting attended and was reimbursed for travel and out-of-pocket
expenses. The Chairman of the Board received an additional annual fee of $25,000
per year. These fees pertained to the Dreyfus/Laurel Funds. (The $1,000
attendance fee and reimbursement of meeting expenses was also borne pro rata by
Dreyfus High Yield Strategies Fund). These fees and expenses were 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, were in fact paid
directly by the Manager to the non-interested Directors.
(B) DISTRIBUTION PLAN: Effective December 15, 1997, under a new Distribution
Plan (the "Plan") adopted pursuant to Rule 12b-1 under the Act, the Fund may pay
annually up to .10% of the value of the Fund's average daily net assets to
compensate Mellon Bank, the Manager or Dreyfus Service Corporation, an affiliate
of the Manager, for shareholder servicing activities and the Distributor for
shareholder servicing activities and expenses primarily intended to result in
the sale of Fund shares. During the period from December 15, 1997 through
October 31, 1998, the Fund was charged $1,831,677 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 a 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 Distribution Plan or in any
agreement related to the Distribution Plan.
Under a prior Distribution Plan adopted pursuant to Rule 12b-1 under the Act,
the Institutional shares paid annually up to .25% of the value of the average
daily net assets to compensate the Distributor and Dreyfus Service Corporation
for shareholder servicing activities and the Distributor for activities
primarily intended to result in the sale of Institutional shares. The Retail
shares bore no distribution fee. During the period from November 1, 1997 through
December 14, 1997, Institutional shares were charged $80,455 pursuant to the
prior Distribution Plan.
(C) BROKERAGE COMMISSIONS: During the period ended October 31, 1998, the Fund
incurred total brokerage commissions of $2,861,837, of which $481,959 was paid
to Dreyfus Investment Services Corporation, a subsidiary of Mellon Bank.
NOTE 3--SECURITIES TRANSACTIONS:
The aggregate amount of purchase and sales of investment securities, excluding
short-term securities and financial futures, during the period ended October 31,
1998 amounted to $1,781,597,310 and $1,122,376,869, respectively.
At October 31, 1998, accumulated net unrealized appreciation on investments
was $440,914,300, consisting of $496,342,248 gross unrealized appreciation and
$55,427,948 gross unrealized depreciation.
At October 31, 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).
DREYFUS DISCIPLINED STOCK FUND
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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.
The average daily amount of borrowings outstanding during the period ended
October 31, 1998 was approximately $198,600 with a related weighted average
annualized interest rate of 5.97%.
NOTE 5--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 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 Disciplined Stock Fund of The
Dreyfus/Laurel Funds, Inc. as of October 31, 1998, and the related statement of
operation 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 in the five-year period then ended.
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 and financial highlights. Our procedures included
confirmation of securities owned as of October 31, 1998 by correspondence with
the custodian and brokers. As to securities sold, but not 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, 1998, 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 the
financial highlights for each of the years or periods in the five-year period
then ended, in conformity with generally accepted accounting principles.
New York, New York
December 15, 1998
DREYFUS DISCIPLINED STOCK FUND
- -----------------------------------------------------------------------------
IMPORTANT TAX INFORMATION (UNAUDITED)
For Federal tax purposes, the Fund hereby designates $2.664 per share as a
long-term capital gain distribution of the $3.425 per share paid on December 19,
1997.
The Fund also designates 54.83% of the ordinary dividends paid during the
fiscal year ended October 31, 1998 as qualifying for the corporate dividends
received reduction. Shareholders will receive notification in January 1999 of
the percentage applicable to the preparation of their 1998 income tax returns.
[reg.tm logo]
(reg.tm)
DREYFUS DISCIPLINED STOCK FUND
200 Park Avenue
New York, NY 10166
MANAGER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
CUSTODIAN
The Bank of New York
90 Washington Street
New York, NY 10286
TRANSFER AGENT &
DIVIDEND DISBURSING AGENT
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Printed in U.S.A. 328/728AR9810
Disciplined
Stock Fund
Annual Report
October 31, 1998
DREYFUS PREMIER LIMITED TERM INCOME FUND
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
LETTER TO SHAREHOLDERS
Dear Shareholder:
We are pleased to report the performance for Dreyfus Premier Limited Term
Income Fund for its 12-month period ended October 31, 1998, as shown in the
following table:
Income Dividends Distribution Rate**
Total Return* (Approximate Per Share) (Per Share)
___________ _____________________ _________________
<S> <C> <C> <C>
Class A Shares 8.73% $.580 4.98%
Class B Shares 8.14% $.523 4.61%
Class C Shares 8.25% $.512 4.57%
Class R Shares 9.02% $.610 5.39%
</TABLE>
These returns compare with a total return of 9.34 % for the Fund's benchmark
index, the Lehman Brothers Aggregate Bond Index.***
THE ECONOMY
In the face of soaring consumer confidence and strong first-quarter economic
growth, the Federal Reserve Board (the "Fed") earlier this year refrained from
increasing interest rates, partially to avoid further roiling international
financial markets. In addition, the Fed evidently felt then that the economic
slowdown overseas might curtail the U.S. economy to some degree, which would
alleviate the need for monetary restraint. The Fed's expectations have proven to
be true, and its judgment accurate. The U.S. balance of trade has worsened and
there have been increasing signs of a slowdown in export-related industries. On
September 29, concerns about a weakening U.S. economy caused the Federal Open
Market Committee (the F.O.M.C., the policy-making arm of the Fed) to pare the
Federal Funds target rate by 25 basis points, the first reduction since January
1996. (The Federal Funds rate is the rate of interest that banks charge each
other for overnight loans.) Fed Chairman Alan Greenspan described the economic
outlook for the United States as having "weakened measurably." Two weeks later,
on October 15, the F.O.M.C. again reduced its target rate by an additional
quarter point, putting the Federal Funds rate at 5.0%.
Despite the concerns of the Fed regarding an economic slowdown, aggregate
economic statistics showed a growing and resilient economy during the reporting
period. Low unemployment and negligible inflation, combined with car makers
rebuilding inventory after a long strike and rising consumer incomes, resulted
in solid economic growth (3.3% ) for the third quarter of this year. While a
significant portion of this gain was due to inventory replenishment after the
automobile strike, the overall results were still an improvement over
second-quarter economic growth of 1.8%. Inflation as measured by the Consumer
Price Index remained at levels not witnessed since 1963.
The Fed's responsibility is to enact monetary policy that anticipates future
economic conditions. The U.S. trade deficit has continued to widen because of
the global economic slide. Slumping exports have weakened manufacturing activity
since midyear and there is concern that this slackness could become more
pronounced and widen into other sectors of the economy. While the increase in
imports also restrains domestic production, it has helped contain inflation as
well, since domestic producers are reluctant to raise prices. This provides
additional flexibility for the Fed to lower interest rates still further. So
far, economic problems overseas have not caused any measurable reaction in the
U.S. labor market. Only the growth rate in new jobs has eased from its torrid
pace earlier in the year. The unemployment rate has remained near 30-year lows
and worker inflation-adjusted take-home pay has been rising. The condition of
the labor market is a key determinant of consumer confidence which, of course,
relates directly to consumer spending, a force that accounts for two thirds of
all economic activity. Business spending has shown signs of weakness, so the
role of the consumer will be of even greater importance in the future. It is
significant that measures of consumer confidence have receded from earlier
record high levels, largely because of concerns about the volatility of
financial markets.
<PAGE>
THE MARKET AND THE PORTFOLIO
The reporting period was highlighted by an unprecedented bond market rally
from mid-August through early October. Over approximately two months, the
10-year U.S. Treasury Note, at a yield of 5.67% at the beginning, reached a low
of 4.16% by October 5. It ended the reporting period at 4.60%, a 107 basis-point
decline. The drop in yields of U.S. Treasury securities was particularly
pronounced during this period because of investor anxiety about the volatility
of world financial markets. As a result, investors aggressively purchased less
risky U.S. Treasury securities as a safe haven for their assets.
The sharp selloff in the stock market also affected the domestic corporate
bond market. Uncertainty about the consequences of the overseas economic turmoil
for the U.S. economy caused yield spreads to widen versus government securities.
Quality spreads also widened since investors preferred to own higher quality,
less risky corporate securities. Over the reporting period, AA-rated corporate
securities outperformed BBB-rated corporate securities by 241 basis points.
The Federal Reserve calmed some investor fears when it lowered the Fed Funds
rate in September and October. By this time, bond yields had reached multidecade
lows with the 30-year Treasury Bond trading at 4.72% , a historic low.
By the middle of August, volatility in the global financial markets had
provided a bullish backdrop for the domestic bond market. At that time, the
target duration of the Fund was increased to 4.60 years versus the 4.45 year
duration of its benchmark index. Earlier in the year, the income component of
the Fund was enhanced by increasing holdings of high quality asset-backed
securities to 5% . During August, the sensitivity or dollar duration of the
Fund' s position in corporate securities was reduced to less than the exposure
for the benchmark index (5.75 years for the Fund versus 5.90 years for the
Lehman Brothers Aggregate Bond Index) .
For the reporting period the Fund had average neutral sector weightings for
all market sectors. A neutral allocation relative to the index would consist of
31% mortgages, 47% government and agency and 22% in corporate securities. From
time to time each market sector weighting was adjusted to be over or
underweighted relative to the index depending on market conditions. The Fund's
performance was most affected by the Fund's corporate and Treasury holdings
during the reporting period.
<PAGE>
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 16, 1998
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 applicable 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 the net asset
value per share 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.
<PAGE>
DREYFUS PREMIER LIMITED TERM INCOME FUND OCTOBER 31, 1998
- -----------------------------------------------------------------------------
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:
Dollars
$18,433
Lehman Brothers Aggregate Bond Index*
$17,045
<TABLE>
<CAPTION>
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 10/31/98 Sales Charge Sales Charge (3.0%) Period Ended 10/31/98 Redemption Redemption*
_____________________ _______________ __________________ _____________________ ____________ __________________
<S> <C> <C> <C> <C> <C>
1 Year 8.73% 5.46% 1 Year 8.14% 5.14%
From Inception (4/7/94) 7.23 6.53 From Inception (12/19/94) 8.08 7.66
</TABLE>
<TABLE>
<CAPTION>
Class C Shares Class R Shares
_______________________________________________________ _______________________________________________________
% Return Reflecting
Applicable Contingent
% Return Deferred Sales
Assuming No Charge Upon
Period Ended 10/31/98 Redemption Redemption** Period Ended 10/31/98
_____________________ _______________ __________________ _____________________
<S> <C> <C> <C> <C>
1 Year 8.25% 7.50% 1 Year 9.02%
From Inception (12/19/94) 7.70 7.70 5 Years 6.26
From Inception (7/11/91) 7.57
- --------------
</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.
<PAGE>
<TABLE>
<CAPTION>
DREYFUS PREMIER LIMITED TERM INCOME FUND
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS OCTOBER 31, 1998
Principal
Bonds and Notes--96.0% Amount Value
- -------------------------------------------------------
____________ ____________
Asset-Backed Securities--4.8% American Express Credit Account Master Trust,
<S> <C> <C>
Ser. 1997-1, Cl. A, 6.40%, 2005 . . . . . . . . . $..1,000,000 $ 1,043,299
Citibank Credit Card Master Trust I,
Ser. 1998-1, Cl. A, , 53_4%, 2003 . . . . . . . . 1,500,000 1,518,653
____________
2,561,952
____________
Banking--1.0% Washington Mutual Capital I,
Gtd. Capital Securities, 83_8%, 2027 . . . . . . . 500,000 529,684
____________
Financial Services--2.8% GMAC,
Sr. Global Notes, 61_8%, 2008 . . . . . . . . . . 1,000,000 1,024,290
Household Finance,
Notes, 63_4%, 2000 . . . . . . . . . . . . . . . . 500,000 509,530
____________
1,533,820
____________
Foods and Beverages--2.9% Archer-Daniels-Midland,
Deb., 63_4%, 2027 . . . . . . . . . . . . . . . . 1,000,000 1,032,853
Campbell Soup,
Notes, 6.15%, 2002 . . . . . . . . . . . . . . . . 500,000 519,783
____________
1,552,636
____________
Industrial--3.8% AlliedSignal,
Notes, 6.20%, 2008 . . . . . . . . . . . . . . . . 2,000,000 2,058,090
____________
Oil and Gas--4.0% BP America,
Deb. (Gtd. by British Petroleum), 93_8%, 2000 . . 2,000,000 2,173,178
____________
Other--2.0% Private Export Funding,
Secured Notes, 7.30%, 2002 . . . . . . . . . . . . 1,000,000 1,074,131
____________
Telecommunications--1.0% MCI WorldCom,
Sr. Notes, 6.40%, 2005 . . . . . . . . . . . . . . 500,000 520,430
____________
U.S. Governments--44.7% U.S. Treasury Bonds:
117_8%, 11/15/2003 . . . . . . . . . . . . . . . . 1,250,000 1,661,187
123_8%, 5/15/2004 . . . . . . . . . . . . . . . . 500,000 690,130
81_8%, 8/15/2019 . . . . . . . . . . . . . . . . . 1,000,000 1,337,770
67_8%, 8/15/2025 . . . . . . . . . . . . . . . . . 1,750,000 2,121,630
63_8%, 8/15/2027 . . . . . . . . . . . . . . . . . 2,170,000 2,505,156
U.S. Treasury Notes:
87_8%, 5/15/2000 . . . . . . . . . . . . . . . . . 2,000,000 2,135,400
61_2%, 5/31/2001 . . . . . . . . . . . . . . . . . 500,000 526,410
61_4%, 10/31/2001 . . . . . . . . . . . . . . . . 800,000 842,472
71_2%, 11/15/2001 . . . . . . . . . . . . . . . . 1,000,000 1,088,050
65_8%, 4/30/2002 . . . . . . . . . . . . . . . . . 1,000,000 1,071,670
71_2%, 5/15/2002 . . . . . . . . . . . . . . . . . 1,000,000 1,101,130
61_4%, 2/15/2003 . . . . . . . . . . . . . . . . . 1,000,000 1,073,470
57_8%, 2/15/2004 . . . . . . . . . . . . . . . . . 1,000,000 1,070,260
71_4%, 8/15/2004 . . . . . . . . . . . . . . . . . 1,500,000 1,709,550
71_2%, 2/15/2005 . . . . . . . . . . . . . . . . . 500,000 580,980
7%, 7/15/2006 . . . . . . . . . . . . . . . . . . 1,000,000 1,151,960
61_4%, 2/15/2007 . . . . . . . . . . . . . . . . . 500,000 554,445
<PAGE>
DREYFUS PREMIER LIMITED TERM INCOME FUND
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1998
Principal
Bonds and Notes (continued) Amount Value
- -------------------------------------------------------
____________ ____________
U.S. Governments (continued) U.S. Treasury Notes (continued):
65_8%, 5/15/2007 . . . . . . . . . . . . . . . . . $..1,000,000 $ 1,135,550
55_8%, 5/15/2008 . . . . . . . . . . . . . . . . . 1,600,000 1,724,128
____________
24,081,348
____________
U.S. Government
Agencies--29.0% Federal Home Loan Mortgage Corp.:
6%, 6/1/2012 . . . . . . . . . . . . . . . . . . . 466,714 471,381
61_2%, 11/1/2004-11/1/2027 . . . . . . . . . . . 1,870,046 1,892,413
7%, 3/1/2012-12/1/2027 . . . . . . . . . . . . . 2,385,464 2,439,363
71_2%, 12/1/2024 . . . . . . . . . . . . . . . . . 625,728 643,517
Federal National Mortgage Association:
6%, 5/1/2008-3/1/2027 . . . . . . . . . . . . . . 1,604,981 1,658,272
61_2%, 3/1/2011-7/1/2028 . . . . . . . . . . . . . 1,778,342 1,800,793
7%, 2/1/2027 . . . . . . . . . . . . . . . . . . . 1,169,041 1,197,531
71_2%, 3/1/2012-11/1/2027 . . . . . . . . . . . . 1,414,418 1,452,876
8%, 6/1/2025-9/1/2027 . . . . . . . . . . . . . . 381,993 396,497
Government National Mortgage Association I:
61_2%, 6/15/2028 . . . . . . . . . . . . . . . . . 492,882 498,580
7%, 12/15/2026 . . . . . . . . . . . . . . . . . . 645,041 662,779
71_2%, 12/15/2026 . . . . . . . . . . . . . . . . 720,393 744,252
8%, 12/15/2026-12/15/2027 . . . . . . . . . . . . 1,233,826 1,282,989
9%, 10/15/2027 . . . . . . . . . . . . . . . . . . 410,796 438,139
____________
15,579,382
____________
TOTAL BONDS AND NOTES
(cost $50,141,459) . . . . . . . . . . . . . . . . $51,664,651
____________
Short-Term Investments--.9%
- -------------------------------------------------------
Repurchase Agreement; Goldman, Sachs & Co. TriParty
Repurchase Agreement, 5.38%
dated 10/30/1998, due 11/2/1998 in the
amount of $495,076 (fully collateralized by
$486,000 U.S. Treasury Notes, 55_8%
due 10/31/1999, value $505,365)
(cost $494,854) . . . . . . . . . . . . . . . . . $.....494,854 $ 494,854
____________
TOTAL INVESTMENTS (cost $50,636,313) . . . . . . . . . . . . . . . . . . . . . . . . . . . 96.9% $52,159,505
_______ ____________
CASH AND RECEIVABLES (NET) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1% $ 1,644,405
_______ ____________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.0% $53,803,910
_______ ____________
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
DREYFUS PREMIER LIMITED TERM INCOME FUND
- -----------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES OCTOBER 31, 1998
Cost Value
____________ ____________
ASSETS: Investments in securities--See Statement of
Investments--Note 1(c) . . . . . . . . . . . . . . . . $50,636,313 $52,159,505
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . 75,874
Interest receivable . . . . . . . . . . . . . . . . . . . 926,731
Receivable for investment securities sold . . . . . . . . 552,132
Receivable for shares of Capital Stock subscribed . . . . 124,942
____________
53,839,184
____________
LIABILITIES: Due to The Dreyfus Corporation and affiliates . . . . . . 28,273
Due to Distributor . . . . . . . . . . . . . . . . . . . 4,001
Payable for shares of Capital Stock redeemed . . . . . . 3,000
____________
35,274
____________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $53,803,910
____________
REPRESENTED BY: Paid-in capital . . . . . . . . . . . . . . . . . . . . . $52,942,686
Accumulated net realized gain (loss) on investments . . . (661,968)
Accumulated net unrealized appreciation (depreciation)
on investments--Note 3 . . . . . . . . . . . . . . . . 1,523,192
____________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $53,803,910
____________
</TABLE>
<TABLE>
<CAPTION>
NET ASSET VALUE PER SHARE
____________________________
Class A Class B Class C Class R
____________ ____________ ____________ ____________
<S> <C> <C> <C> <C>
Net Assets . . . . . . . . . . . . . . . . . . . . . . $5,348,766 $5,391,175 $1,075,924 $41,988,045
Shares Outstanding . . . . . . . . . . . . . . . . . . 472,834 475,072 96,082 3,711,491
NET ASSET VALUE PER SHARE. . . . . . . . . . . . . . . $11.31 $11.35 $11.20 $11.31
_______ _______ _______ _______
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
<TABLE>
<CAPTION>
DREYFUS PREMIER LIMITED TERM INCOME FUND
- -----------------------------------------------------------------------------
STATEMENT OF OPERATIONS YEAR ENDED OCTOBER 31, 1998
INVESTMENT INCOME
<S> <C> <C> <C>
INCOME Interest Income . . . . . . . . . . . . . . . . . . . . . $3,145,784
EXPENSES: Management fee--Note 2(a) . . . . . . . . . . . . . . . . $ 309,714
Distribution and service fees--Note 2(b) . . . . . . . . 27,544
Loan commitment fees--Note 4 . . . . . . . . . . . . . . 284
___________
Total Expenses . . . . . . . . . . . . . . . . . . 337,542
___________
INVESTMENT INCOME--NET . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,808,242
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--Note 3:
Net realized gain (loss) on investments . . . . . . . . . $1,033,599
Net unrealized appreciation (depreciation) on investments . . 693,732
___________
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS . . . . . . . . . . . . . . . . . . 1,727,331
___________
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS . . . . . . . . . . . . . . . . . . . $4,535,573
___________
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
DREYFUS PREMIER LIMITED TERM INCOME FUND
- -----------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
Year Ended Year Ended
October 31, 1998 October 31, 1997
________________ ________________
OPERATIONS:
Investment income--net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,808,242 $ 3,040,177
Net realized gain (loss) on investments . . . . . . . . . . . . . . . . . . . . . . 1,033,599 270,293
Net unrealized appreciation (depreciation) on investments . . . . . . . . . . . . . 693,732 587,912
____________ ____________
Net Increase (Decrease) in Net Assets Resulting from Operations . . . . . . . . 4,535,573 3,898,382
____________ ____________
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net:
Class A shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (203,232) (62,894)
Class B shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (79,961) (12,995)
Class C shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (27,190) (10,942)
Class R shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,497,614) (2,993,247)
____________ ____________
Total Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,807,997) (3,080,078)
____________ ____________
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold:
Class A shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,830,588 480,351
Class B shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,356,694 643,507
Class C shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 991,778 372,836
Class R shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,394,506 16,660,760
Dividends reinvested:
Class A shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114,018 28,678
Class B shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48,757 8,915
Class C shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,311 9,961
Class R shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,699,048 2,275,410
Cost of shares redeemed:
Class A shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,905,104) (360,387)
Class B shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,623,857) (264,910)
Class C shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (306,783) (43,101)
Class R shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (20,137,744) (21,846,124)
____________ ____________
Increase (Decrease) in Net Assets from Capital Stock Transactions . . . . . . . 2,484,212 (2,034,104)
____________ ____________
Total Increase (Decrease) in Net Assets . . . . . . . . . . . . . . . . . . . 4,211,788 (1,215,800)
NET ASSETS:
Beginning of Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49,592,122 50,807,922
____________ ____________
End of Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 53,803,910 $ 49,592,122
____________ ____________
DISTRIBUTIONS IN EXCESS OF INVESTMENT INCOME--NET. . . . . . . . . . . . . . . . . . . -------- $ (229)
____________ ____________
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
DREYFUS PREMIER LIMITED TERM INCOME FUND
- -----------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
Shares
__________________________________
Year Ended Year Ended
October 31, 1998 October 31, 1997
________________ ________________
CAPITAL SHARE TRANSACTIONS:
Class A
_______
Shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 527,494 44,584
Shares issued for dividends reinvested . . . . . . . . . . . . . . . . . . . . . . . 10,267 2,666
Shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (171,553) (33,504)
___________ ___________
Net Increase (Decrease) in Shares Outstanding . 366,208 13,746
___________ ___________
Class B
_______
Shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 566,970 59,458
Shares issued for dividends reinvested . . . . . . . . . . . . . . . . . . . . . . . 4,366 827
Shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (145,521) (24,332)
___________ ___________
Net Increase (Decrease) in Shares Outstanding . 425,815 35,953
___________ ___________
Class C
_______
Shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89,566 35,301
Shares issued for dividends reinvested . . . . . . . . . . . . . . . . . . . . . . . 2,032 931
Shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (27,716) (4,034)
___________ ___________
Net Increase (Decrease) in Shares Outstanding . 63,882 32,198
___________ ___________
Class R
_______
Shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,035,268 1,548,384
Shares issued for dividends reinvested . . . . . . . . . . . . . . . . . . . . . . . 153,444 211,514
Shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,813,570) (2,030,683)
___________ ___________
Net Increase (Decrease) in Shares Outstanding . (624,858) (270,785)
___________ ___________
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
</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: 1998 1997 1996 1995 1994(1,2)
______ ______ ______ ______ _______
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period . . . . . . . . . . $10.96 $10.78 $10.84 $10.22 $10.49
______ ______ ______ ______ ______
Investment Operations:
Investment income--net . . . . . . . . . . . . . . . . . .58 .62 .58 .56 .28
Net realized and unrealized gain (loss)
on investments . . . . . . . . . . . . . . . . . . . .35 .19 (.07) .62 (.27)
______ ______ ______ ______ ______
Total from Investment Operations . . . . . . . . . . . . .93 .81 .51 1.18 .01
______ ______ ______ ______ ______
Distributions:
Dividends from investment income--net . . . . . . . . . . (.58) (.63) (.57) (.56) (.28)
______ ______ ______ ______ ______
Net asset value, end of period . . . . . . . . . . . . . $11.31 $10.96 $10.78 $10.84 $10.22
______ ______ ______ ______ ______
TOTAL INVESTMENT RETURN(3) . . . . . . . . . . . . . . . . . 8.73% 7.80% 4.85% 11.83% .11%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets . . . . . . . . . .85% .85% .85% .85% .83%(4)
Ratio of net investment income
to average net assets . . . . . . . . . . . . . . . . 5.20% 5.80% 5.38% 5.33% 4.47%(4)
Portfolio Turnover Rate . . . . . . . . . . . . . . . . . 149.08% 129.94% 153.63% 73.00% 117.00%
Net Assets, end of period (000's Omitted) . . . . . . . . $5,349 $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 began serving 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.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
<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
____________________________________________
Year Ended October 31,
____________________________________________
PER SHARE DATA: 1998 1997 1996 1995(1)
______ ______ ______ ______
<S> <C> <C> <C> <C>
Net asset value, beginning of period . . . . . . . . . . . . . . . $11.00 $10.78 $10.84 $10.15
______ ______ ______ ______
Investment Operations:
Investment income--net . . . . . . . . . . . . . . . . . . . . . . .52 .56 .52 .47
Net realized and unrealized gain (loss)
on investments . . . . . . . . . . . . . . . . . . . . . . . . .35 .23 (.07) .69
______ ______ ______ ______
Total from Investment Operations . . . . . . . . . . . . . . . . . .87 .79 .45 1.16
______ ______ ______ ______
Distributions:
Dividends from investment income--net . . . . . . . . . . . . . . . (.52) (.57) (.51) (.47)
______ ______ ______ ______
Net asset value, end of period . . . . . . . . . . . . . . . . . . $11.35 $11.00 $10.78 $10.84
______ ______ ______ ______
TOTAL INVESTMENT RETURN. . . . . . . . . . . . . . . . . . . . . . . . 8.14% 7.56% 4.33% 11.32%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets . . . . . . . . . . . . . . 1.35% 1.35% 1.35% 1.35%(2)
Ratio of net investment income
to average net assets . . . . . . . . . . . . . . . . . . . . . 4.49% 5.06% 4.86% 4.85%(2)
Portfolio Turnover Rate . . . . . . . . . . . . . . . . . . . . . . 149.08% 129.94% 153.63% 73.00%
Net Assets, end of period (000's Omitted) . . . . . . . . . . . . . $5,391 $542 $143 $78
- -----------------------------
(1) The Fund commenced selling Class B shares on December 19, 1994.
(2) Annualized.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
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.
<TABLE>
<CAPTION>
Class C Shares
____________________________________________
Year Ended October 31,
____________________________________________
___________
PER SHARE DATA: 1998 1997 1996 1995(1)
______ ______ ______ ______
<S> <C> <C> <C> <C>
Net asset value, beginning of period . . . . . . . . . . . . . . . $10.84 $10.73 $10.84 $10.15
______ ______ ______ ______
Investment Operations:
Investment income (loss)--net . . . . . . . . . . . . . . . . . . . .52 (1.98) 3.05 .48
Net realized and unrealized gain (loss)
on investments . . . . . . . . . . . . . . . . . . . . . . . . .35 2.65 (2.65) .69
______ ______ ______ ______
Total from Investment Operations . . . . . . . . . . . . . . . . . .87 .67 .40 1.17
______ ______ ______ ______
Distributions:
Dividends from investment income--net . . . . . . . . . . . . . . . (.51) (.56) (.51) (.48)
______ ______ ______ ______
Net asset value, end of period . . . . . . . . . . . . . . . . . . $11.20 $10.84 $10.73 $10.84
______ ______ ______ ______
TOTAL INVESTMENT RETURN. . . . . . . . . . . . . . . . . . . . . . . . 8.25% 6.49% 3.83% 11.32%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets . . . . . . . . . . . . . . 1.35% 1.35% 1.41% --
Ratio of net investment income
to average net assets . . . . . . . . . . . . . . . . . . . . . 4.61% 4.98% 5.50% --
Portfolio Turnover Rate . . . . . . . . . . . . . . . . . . . . . . 149.08% 129.94% 153.63% 73.00%
Net Assets, end of period (000's Omitted) . . . . . . . . . . . . . $1,076 $349 -- --
- -----------------------------
(1) The Fund commenced selling Class C shares on December 19, 1994.
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
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: 1998 1997 1996 1995 1994(1,2)
______ ______ ______ ______ ______
Net asset value, beginning of period . . . . . . . . . . . . . . $10.96 $10.78 $10.84 $10.22 $11.07
______ ______ ______ ______ ______
Investment Operations:
Investment income--net . . . . . . . . . . . . . . . . . . . . . .61 .65 .60 .58 .49(3)
Net realized and unrealized gain (loss) on investments . . . . . .35 .19 (.06) .62 (.75)
______ ______ ______ ______ ______
Total from Investment Operations . . . . . . . . . . . . . . . . .96 .84 .54 1.20 (.26)
______ ______ ______ ______ ______
Distributions:
Dividends from investment income--net . . . . . . . . . . . . . . (.61) (.66) (.60) (.58) (.53)
Dividends from net realized gain on investments . . . . . . . . . .-- .-- .-- .-- (.06)
______ ______ ______ ______ ______
Total Distributions . . . . . . . . . . . . . . . . . . . . . . . (.61) (.66) (.60) (.58) (.59)
______ ______ ______ ______ ______
Net asset value, end of period . . . . . . . . . . . . . . . . . $11.31 $10.96 $10.78 $10.84 $10.22
______ ______ ______ ______ ______
TOTAL INVESTMENT RETURN. . . . . . . . . . . . . . . . . . . . . . . 9.02% 8.09% 5.12% 12.11% (2.46%)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets . . . . . . . . . . . . . .60% .60% .60% .60% .60%(4)
Ratio of net investment income to average net assets . . . . . . 5.51% 6.06% 5.62% 5.58% 4.70%
Portfolio Turnover Rate . . . . . . . . . . . . . . . . . . . . . 149.08% 129.94% 153.63% 73.00% 117.00%
Net Assets, end of period (000's Omitted) . . . . . . . . . . . . $41,988 $47,532 $49,664 $69,924 $82,406
- ------------------------
(1)Effective October 17, 1994, The Dreyfus Corporation began serving as the
Fund' s investment manager. Prior to October 17, 1994, Mellon Bank, N.A. served
as the Fund's investment manager.
(2)Any shares outstanding prior to April 4, 1994 were designated as Trust
shares. Effective October 17, 1994, the Fund's Trust shares were redesignated as
Class R shares.
(3)Net investment income before reimbursement of expenses by the investment
adviser was $.49 per share for the year ended October 31, 1994.
(4)Expense ratio before reimbursement of expenses by the investment adviser
was .60% for the year ended October 31, 1994.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
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 separate
diversified series of The Dreyfus/Laurel Funds, Inc. (the "Company") which is
registered under the Investment Company Act of 1940, as amended (the "Act") as
an open-end management investment company and operates as a series company
currently offering nineteen 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 (the "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 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 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 other than U.S. Treasury Bills) 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.
Short-term investments excluding U.S. Treasury Bills 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.
<PAGE>
(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 DREYFUS PREMIER LIMITED TERM INCOME FUND
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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 of 1986, as
amended (the "Code"). To the extent that net realized capital gain can be offset
by capital loss carryovers, it is the policy of the Fund not to distribute such
gain.
(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 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 $618,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to October 31, 1998. If not
applied, $344,000 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,
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) . Effective July 1, 1998, each
director receives $40,000 per year, plus $5,000 for each joint Board meeting of
The Dreyfus/Laurel Funds, Inc., The Dreyfus/Laurel Tax-Free Municipal Funds and
The Dreyfus/Laurel Funds Trust (the "Dreyfus/Laurel Funds") attended, $2,000 for
separate committee meetings attended which are not held in conjunction with a
regularly scheduled board meeting and $500 for Board meetings and separate
committee meetings attended that are conducted by telephone and is reimbursed
for travel and out-of-pocket expenses. The Chairman of the Board receives an
additional 25% of such compensation (with the exception of reimbursable amounts)
.. In the event that there is a joint committee meeting of the Dreyfus/Laurel
Funds and the Dreyfus High Yield Strategies Fund, the $2,000 fee will be
allocated between the Dreyfus/Laurel Funds and the 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.
<PAGE>
DREYFUS PREMIER LIMITED TERM INCOME FUND
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Prior to July 1, 1998 each director received $27,000 per year, $1,000 for
each Board meeting attended and $750 for each Audit Committee meeting attended
and was reimbursed for travel and out-of-pocket expenses. The Chairman of the
Board received an additional annual fee of $25,000 per year. These fees
pertained to the Dreyfus/Laurel Funds. (The $1,000 attendance fee and
reimbursement of meeting expenses were also borne pro rata by Dreyfus High Yield
Strategies Fund) . These fees and expenses were 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, were in fact paid directly by the
Manager to the non-interested Directors.
(B) DISTRIBUTION AND SERVICE PLAN: Under the Distribution Plan (the "Plan")
adopted pursuant to Rule 12b-1 under the Act, Class A shares may pay annually up
to .25% of the value of its average daily net assets 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,
Class B and Class C shares may pay the Distributor for distributing 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 Class B and Class C
shares pay 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, 1998, Class A, Class B and Class C shares were charged $9,771,
$8,882 and $2,967, respectively, pursuant to the Plan and Class B and Class C
shares were charged $4,441 and $1,483, 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,
1998, amounted to $75,795,432 and $73,567,563, respectively.
At October 31, 1998, accumulated net unrealized appreciation on investments
was $1,523,192, consisting of $1,551,484 gross unrealized appreciation and
$28,292 gross unrealized depreciation.
At October 31, 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
October 31, 1998, the Fund did not borrow under the Facility.
<PAGE>
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, 1998, 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 in the five-year period
then ended. 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, 1998 by correspondence with the custodian and brokers. As to
securities sold, but not 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, 1998, 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
the financial highlights for each of the years or periods in the five-year
period then ended, in conformity with generally accepted accounting principles.
New York, New York
December 15, 1998
<PAGE>
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. 345/645/655/745AR9810
ANNUAL REPORT
- -------------------------------------------------------------------------------
DREYFUS PREMIER
LIMITED TERM
INCOME FUND
- -------------------------------------------------------------------------------
OCTOBER 31, 1998
(reg.tm)
<PAGE>
DREYFUS BASIC S&P 500 STOCK INDEX FUND
- -----------------------------------------------------------------------------
LETTER TO SHAREHOLDERS
Dear Shareholder:
We are pleased to provide you with this annual report for the Dreyfus BASIC S&
P 500 Stock Index Fund for the 12-month period ended October 31, 1998. As you
know, it was a turbulent year in the stock market. Nonetheless, your Fund
produced a total return of 21.68% for the 12-month period.* This compares with a
total return of 22.01% for the Standard & Poor's 500 Composite Stock Price Index
for the same period.** The difference is accounted for by transaction costs and
other Fund operating expenses.
ECONOMIC REVIEW
So far in 1998, the main regions of the world have had very different economic
fundamentals. The U.S. entered the year with a strong economy near full
employment, with unemployment only slightly above 4%. The tight labor market led
the Federal Reserve Board to contemplate a rise in interest rates early in the
year. The U.S. economy cooled enough over the months that the Fed decided to
stand pat. Evidence of economic cooling continued to accumulate and worries
about the world economy intensified. Financial stresses pushed the Fed to ease
credit in both late September and mid-October. After many years of subpar
economic growth, continental Europe moved into a sustained economic expansion.
The overall European economy benefited as interest rates in peripheral countries
such as Spain and Italy fell, approaching the lower levels established by
Germany, on the eve of currency unification. Unlike the U.S., Europe has
substantial excess capacity of productive plant and labor. In Asia, weak
economies were pervasive as a result of the Asian financial crisis. The Latin
American economies weakened as the financial stresses spread throughout that
region.
A main influence on the U.S. economy this year was the foreign financial
crisis and cooling of the world economy. The positive effects hit first. Actual
inflation and expected inflation dropped, causing a decline in long-term
Treasury bond yields and mortgage rates. This caused a boom in housing. The fall
in inflation helped the consumer sector as more of the growth in consumer income
was left over after inflation to buy goods and services. Consumers benefited
from a combination of good growth in income after inflation, a strong labor
market and past increases in the price of assets they owned.
The negative effect of Asian weakness was felt in the industrial sector more
than in the consumer sector. Corporate profits weakened, especially in sectors
affected by the Asian crisis such as world-traded commodities (oil, metals and
paper) and exports. One result of this industrial weakness was to cool off a
U.S. economy that had been growing rapidly.
The major change in the economic outlook over recent months has been a
downward shift in expectations for world economic growth. A credit crunch
developed in emerging countries and former communist countries, sharply reducing
the economic outlook for Asia and Latin America as well as for
commodity-exporting countries throughout the world. The effect on Europe and the
U.S. has been to lower expectations of profit growth and drive down bond yields
Evidence of a weaker world economy accumulated as the financial stresses
continued. A worsened financial crisis occurred between the Russian default in
mid-August and the fallout from the Long-Term Capital Management (hedge fund)
crisis through early October. However, proactive steps were taken to stabilize
the Japanese banks, design a support package for Brazil and ease monetary
policy. The prospects for world economic weakness and monetary ease in the major
countries will be powerfully influenced by whether foreign financial stresses
calm down or intensify in the coming months. There appears to be a shift in the
priorities of key policymakers from fighting potential inflation to
restimulating future world economic growth.
MARKET OVERVIEW
The 12 months ended October 31, 1998 encompassed some very different market
phases. There was stock market strength during the early part of the period.
Then small-cap indices started to erode in the spring and were joined by
large-cap indices by mid-summer. A sharp decline until the end of August was
followed by a brief rebound and then a renewed decline amid financial fears
until early October. The last few weeks of the fiscal year saw a strong rally in
response to the easing of monetary policy. Returns on mid-cap and small-cap
stock indices tended to be weaker than on large-caps, with a negative total
return on small-cap indices.
Three key trends influenced stock market behavior during the fiscal year.
First, the Federal Reserve kept the Federal Funds rate flat at 5.5% for nearly
11 months of the fiscal year, but then eased policy twice. Second, weakness in
emerging country economies contributed to declining commodity prices and a drop
in long-term Treasury bond yields to multidecade lows. Third, expectations for
corporate profits dropped, first in the sectors sensitive to Asian developments
such as oil, basic materials and exports and then for a broader list of stocks.
The trigger for the sharp decline in stocks in August appeared to be the
Russian default in the summer of 1998. This resulted in deepening concerns about
weaker economic growth and corporate profits. There was also a global margin
call on risky assets held by hedge funds and financial institutions. This raised
the cost of debt financing for many corporations and many emerging countries.
Expectations for economic activity in emerging countries in Asia and Latin
America shifted down sharply while expectations for U.S. corporate profits
weakened somewhat. Despite the fall in Treasury bond yields, financial stocks
led the summer selloff due to concerns about financial contagion among emerging
countries and potential loan losses by financial institutions. However, in the
last few weeks of the fiscal year, these fears began to ebb and the stock market
rebounded.
The erosion of expectations about average corporate profit growth over the
last year contributed to an outperformance by a small group of super-cap growth
stocks for much of the fiscal year. Investors had more confidence in the
prospect for strong persistent earnings growth for this small group of stocks
than for the broad market. Value stocks, which often have greater cyclical
sensitivity to earnings fluctuations, lagged behind these super-growth stocks.
In addition, many of the financial stocks that fall into the value category
dropped sharply following the Russian default and global margin call concerns.
The fiscal year ended October 31, 1998 was characterized by very different
performances of the various market sectors. Super-cap growth stocks did best,
followed by large-cap stocks in general with mid-cap and small-cap stocks
lagging behind. For example, the total return for the fiscal year on the Russell
1000 Index with a heavy large-cap representation was 19.71%, while the Russell
1000 Growth Index returned 24.64% and the Russell 1000 Value Index returned
14.83% . The return on the Russell Midcap Index was 4.46% while the small-cap
Russell 2000 Index return was -11.84%.***
PORTFOLIO FOCUS
The Dreyfus BASIC S&P 500 Stock Index Fund is designed to provide returns in
line with the large-capitalization U.S. equity market as represented by the S&P
500 Index. As noted earlier, large-capitalization stocks outperformed both
mid-capitalization stocks and small-capitalization stocks over the last year
with the larger names in the S& P 500 dominating returns in that index.
Basically, this was due to the decision of many investors, when the broad market
for equities declined, to seek relative safety in large-cap names.
We thank you for being an investor in this Dreyfus-managed fund.
Sincerely,
[Steven A. Falci signature]
Steven A. Falci
Portfolio Manager
November 24, 1998
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.
***SOURCE: LIPPER ANALYTICAL SERVICES, INC.--The Russell 1000 Index measures
the performance of the 1,000 largest companies in the Russell 3000 Index, which
represent approximately 89% of the total market capitalization of the Russell
3000 Index. The Russell 1000 Growth Index measures the performance of those
Russell 1000 companies with higher price-to-book ratios and higher forecasted
growth values. The Russell 1000 Value Index measures the performance of those
Russell 1000 companies with lower price-to-book ratios and lower forecasted
growth values. The Russell Midcap Index consists of the bottom 800 securities in
the Russell 1000 Index as ranked by total market capitalization, and is a widely
accepted measure of medium-cap stock market performance. The Russell 2000 Index
is composed of the 2,000 smallest companies in the Russell 3000 Index. The
Russell 3000 Index is composed of 3,000 of the largest U.S. companies by market
capitalization. All indices are unmanaged and include reinvested dividends.
DREYFUS BASIC S&P 500 STOCK INDEX FUND OCTOBER 31, 1998
- ------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN DREYFUS BASIC S&P 500
STOCK INDEX FUND AND THE STANDARD & POOR'S 500 COMPOSITE STOCK PRICE INDEX
$26,798
Standard & Poor's 500 Composite Stock Price Index*
<TABLE>
<CAPTION>
Dollars
$26,444
Dreyfus BASIC S&P 500 Stock Index Fund
*Source: Lipper Analytical Services, Inc.
Average Annual Total Returns
- --------------------------------------------------------------------------------
One Year Ended Five Years Ended From Inception (9/30/93)
October 31, 1998 October 31, 1998 to October 31, 1998
------------------ ----------------- --------------------------
<S> <C> <C>
21.68% 20.92% 21.05%
- --------------
</TABLE>
Past performance is not predictive of future performance.
The above graph compares a $10,000 investment made in Dreyfus BASIC S&P 500
Stock Index Fund on 9/30/93 (Inception Date) to a $10,000 investment made in the
Standard & Poor' s 500 Composite Stock Price Index on that date. All dividends
and capital gain distributions are reinvested.
The Fund seeks to replicate the total return performance of the Standard &
Poor's 500 Composite Stock Price Index. The Fund's performance shown in the line
graph takes into account all applicable fees and expenses. The Standard & Poor's
500 Composite Stock Price Index is a widely accepted, unmanaged index of overall
stock market performance, which does not take into account charges, fees and
other expenses. Further information relating to Fund performance, including
expense reimbursements, if applicable, is contained in the Financial Highlights
section of the Prospectus and elsewhere in this report.
<TABLE>
<CAPTION>
DREYFUS BASIC S&P 500 STOCK INDEX FUND
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS OCTOBER 31, 1998
Shares COMMON STOCKS--97.4% _________________ Basic Industries--3.0%
<S> <C> <C> <C>
28,900 Air Products & Chemicals . . . . . . . . . . . . . . . . . . . $ 1,090,975
5,000 Armstrong World Industries . . . . . . . . . . . . . . . . . . 310,000
14,592 Avery Dennison . . . . . . . . . . . . . . . . . . . . . . . . 604,656
3,800 Ball . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160,313
6,700 Bemis . . . . . . . . . . . . . . . . . . . . . . . . . . . . 248,738
7,014 (a) Boise Cascade . . . . . . . . . . . . . . . . . . . . . . . . 196,392
7,414 Centex . . . . . . . . . . . . . . . . . . . . . . . . . . . . 248,369
11,900 Champion International . . . . . . . . . . . . . . . . . . . . 380,056
15,500 Crown Cork & Seal . . . . . . . . . . . . . . . . . . . . . . 494,063
27,925 Dow Chemical . . . . . . . . . . . . . . . . . . . . . . . . . 2,614,478
141,100 duPont (E.I.) de Nemours & Co. 8,113,250
9,926 Eastman Chemical . . . . . . . . . . . . . . . . . . . . . . . 583,153
18,000 Engelhard . . . . . . . . . . . . . . . . . . . . . . . . . . 378,000
4,300 (a) FMC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 219,569
9,889 Fluor . . . . . . . . . . . . . . . . . . . . . . . . . . . . 383,817
27,500 Fort James . . . . . . . . . . . . . . . . . . . . . . . . . . 1,108,594
21,571 Fortune Brands . . . . . . . . . . . . . . . . . . . . . . . . 713,191
5,100 Foster Wheeler . . . . . . . . . . . . . . . . . . . . . . . . 80,963
11,600 Georgia Pacific . . . . . . . . . . . . . . . . . . . . . . . 600,300
9,500 Grace (W.R.) & Co. . . . . . . . . . . . . . . . . . . . . . . 165,063
7,403 Great Lakes Chemical . . . . . . . . . . . . . . . . . . . . . 308,150
11,800 Hercules . . . . . . . . . . . . . . . . . . . . . . . . . . . 393,088
38,365 International Paper . . . . . . . . . . . . . . . . . . . . . 1,781,575
5,000 Kaufman & Broad Home . . . . . . . . . . . . . . . . . . . . . 142,813
13,700 Louisiana Pacific . . . . . . . . . . . . . . . . . . . . . . 243,175
42,418 Masco . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,195,657
12,954 Mead . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 409,670
16,300 Morton International . . . . . . . . . . . . . . . . . . . . . 405,463
8,245 Nalco Chemical . . . . . . . . . . . . . . . . . . . . . . . . 255,080
44,000 Occidental Petroleum . . . . . . . . . . . . . . . . . . . . . 874,500
6,700 Owens-Corning . . . . . . . . . . . . . . . . . . . . . . . . 243,294
19,400 (a) Owens-Illinois . . . . . . . . . . . . . . . . . . . . . . . . 592,913
3,600 Potlach . . . . . . . . . . . . . . . . . . . . . . . . . . . 131,400
22,121 PPG Industries . . . . . . . . . . . . . . . . . . . . . . . . 1,265,045
19,700 Praxair . . . . . . . . . . . . . . . . . . . . . . . . . . . 792,925
22,233 Rohm & Haas . . . . . . . . . . . . . . . . . . . . . . . . . 750,364
10,431 Sealed Air . . . . . . . . . . . . . . . . . . . . . . . . . . 369,649
21,600 Sherwin-Williams . . . . . . . . . . . . . . . . . . . . . . . 544,050
12,500 Sigma-Aldrich . . . . . . . . . . . . . . . . . . . . . . . . 386,328
13,100 (a) Stone Container . . . . . . . . . . . . . . . . . . . . . . . 125,269
6,900 Temple-Inland . . . . . . . . . . . . . . . . . . . . . . . . 335,081
21,200 Tenneco . . . . . . . . . . . . . . . . . . . . . . . . . . . 643,950
8,600 Union Camp . . . . . . . . . . . . . . . . . . . . . . . . . . 369,800
16,822 Union Carbide . . . . . . . . . . . . . . . . . . . . . . . . 647,647
12,600 Westvaco . . . . . . . . . . . . . . . . . . . . . . . . . . . 310,275
24,800 Weyerhaeuser . . . . . . . . . . . . . . . . . . . . . . . . . 1,160,950
13,900 Willamette Industries . . . . . . . . . . . . . . . . . . . . 430,900
_______________
33,802,951
_______________
Capital Goods--24.1%
27,300 AMP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,121,006
8,400 Adobe Systems . . . . . . . . . . . . . . . . . . . . . . . . 311,850
17,900 (a) Advanced Micro Devices . . . . . . . . . . . . . . . . . . . . . 403,869
3,500 Aeroquip-Vickers . . . . . . . . . . . . . . . . . . . . . . . . . . . 110,250
24,567 Allegheny Teledyne . . . . . . . . . . . . . . . . . . . . . . . . . . 505,159
70,000 AlliedSignal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,625
10,700 (a) Andrew . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 175,213
16,800 (a) Apple Computer . . . . . . . . . . . . . . . . . . . . . . . . . 623,700
45,700 (a) Applied Materials . . . . . . . . . . . . . . . . . . . . . . . 1,585,219
26,900 (a) Ascend Communications . . . . . . . . . . . . . . . . . . . . . 1,297,925
5,900 Autodesk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 184,006
37,500 Automatic Data Processing . . . . . . . . . . . . . . . . . . . . . . 2,917,969
25,700 (a) BMC Software . . . . . . . . . . . . . . . . . . . . . . . . . . 1,235,206
126,044 Boeing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,726,650
3,000 Briggs & Stratton . . . . . . . . . . . . . . . . . . . . . . . . . . 141,000
21,700 Browning-Ferris Industries . . . . . . . . . . . . . . . . . . . . . . 768,994
20,500 (a) Cabletron Systems . . . . . . . . . . . . . . . . . . . . . . . 233,188
9,300 Case . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 204,600
45,500 Caterpillar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,047,500
106,986 (a) Cendant . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,223,652
9,033 (a) Ceridian . . . . . . . . . . . . . . . . . . . . . . . . . . . . 518,268
193,900 (a) Cisco Systems . . . . . . . . . . . . . . . . . . . . . . . . . 12,215,700
208,349 Compaq Computer . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,589,037
69,950 Computer Associates
International . . . . . . . . . . . . . . . . . . . . . . . . . 2,754,281
19,700 Computer Sciences . . . . . . . . . . . . . . . . . . . . . . . . . . 1,039,175
14,500 Cooper Industries . . . . . . . . . . . . . . . . . . . . . . . . . . 639,813
8,550 Crane . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 246,347
4,847 Cummins Engine . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165,404
6,203 (a) Data General . . . . . . . . . . . . . . . . . . . . . . . . . . 105,451
30,500 Deere & Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,078,938
157,900 (a) Dell Computer . . . . . . . . . . . . . . . . . . . . . . . . . 10,362,188
10,100 Deluxe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 326,988
27,800 Dover . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 882,650
21,300 Dun & Bradstreet . . . . . . . . . . . . . . . . . . . . . . . . . . . 604,388
5,716 EG&G . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143,615
62,300 (a) EMC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,010,563
8,921 Eaton . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 603,840
61,400 Electronic Data Systems . . . . . . . . . . . . . . . . . . . . . . . 2,498,213
54,900 Emerson Electric . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,623,400
18,500 Equifax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 715,719
55,700 First Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,476,050
19,400 (a) Gateway 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . 1,082,763
15,800 General Dynamics . . . . . . . . . . . . . . . . . . . . . . . . . . . 935,163
405,800 General Electric . . . . . . . . . . . . . . . . . . . . . . . . . . . 35,507,444
22,300 Genuine Parts . . . . . . . . . . . . . . . . . . . . . . . . . . . . 702,450
9,200 Goodrich (B.F.) . . . . . . . . . . . . . . . . . . . . . . . . . . . 331,200
12,200 Grainger (W.W.) . . . . . . . . . . . . . . . . . . . . . . . . . . . 561,963
12,600 H&R Block . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 564,638
53,800 HBO & Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,412,250
6,000 Harnischfeger Industries . . . . . . . . . . . . . . . . . . . . . . . 56,625
10,006 Harris . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 350,835
129,600 Hewlett-Packard . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,800,300
15,700 Honeywell . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,254,038
DREYFUS BASIC S&P 500 STOCK INDEX FUND
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1998
Value
Shares COMMON STOCKS (continued) _________________
Capital Goods (continued)
16,900 Ikon Office Solutions . . . . . . . . . . . . . . . . . . . . $ 159,494
31,200 Illinois Tool Works . . . . . . . . . . . . . . . . . . . . . 2,000,700
20,700 IMS Health . . . . . . . . . . . . . . . . . . . . . . . . . . 1,376,550
20,650 Ingersoll-Rand . . . . . . . . . . . . . . . . . . . . . . . . 1,042,825
209,500 Intel . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,684,781
116,400 International Business Machines 17,278,125
17,000 Interpublic Group Cos. . . . . . . . . . . . . . . . . . . . . 994,500
14,800 ITT Industries . . . . . . . . . . . . . . . . . . . . . . . . 529,100
10,800 (a) KLA-Tencor . . . . . . . . . . . . . . . . . . . . . . . . . . 398,250
24,400 Lockheed Martin . . . . . . . . . . . . . . . . . . . . . . . 2,717,550
17,591 (a) LSI Logic . . . . . . . . . . . . . . . . . . . . . . . . . . 266,064
164,028 Lucent Technologies . . . . . . . . . . . . . . . . . . . . . 13,152,995
7,400 McDermott International . . . . . . . . . . . . . . . . . . . 216,913
26,600 (a) Micron Technology . . . . . . . . . . . . . . . . . . . . . . 1,010,800
307,300 (a) Microsoft . . . . . . . . . . . . . . . . . . . . . . . . . . 32,535,388
4,900 (a) Milacron . . . . . . . . . . . . . . . . . . . . . . . . . . . 94,938
5,500 Millipore . . . . . . . . . . . . . . . . . . . . . . . . . . 135,438
50,400 Minnesota Mining & Manufacturing 4,032,000
74,600 Motorola . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,879,200
20,500 (a) National Semiconductor . . . . . . . . . . . . . . . . . . . . 260,094
81,320 Northern Telecommunications . . . . . . . . . . . . . . . . . 3,481,513
8,600 Northrop Grumman . . . . . . . . . . . . . . . . . . . . . . . 685,850
44,100 (a) Novell . . . . . . . . . . . . . . . . . . . . . . . . . . . . 655,988
21,200 Omnicom Group . . . . . . . . . . . . . . . . . . . . . . . . 1,048,075
121,400 (a) Oracle . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,588,888
15,503 Pall . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 391,451
34,000 (a) Parametric Technology . . . . . . . . . . . . . . . . . . . . 565,250
13,840 Parker-Hannifin . . . . . . . . . . . . . . . . . . . . . . . 494,780
20,300 Paychex . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,009,925
27,500 (a) PeopleSoft . . . . . . . . . . . . . . . . . . . . . . . . . . 582,656
6,100 Perkin-Elmer . . . . . . . . . . . . . . . . . . . . . . . . . 514,306
34,206 Pitney Bowes . . . . . . . . . . . . . . . . . . . . . . . . . 1,883,468
10,500 Raychem . . . . . . . . . . . . . . . . . . . . . . . . . . . 320,906
42,300 Raytheon, Cl. B . . . . . . . . . . . . . . . . . . . . . . . 2,456,044
23,800 Rockwell International . . . . . . . . . . . . . . . . . . . . 977,288
9,100 Ryder System . . . . . . . . . . . . . . . . . . . . . . . . . 224,088
9,800 Scientific-Atlanta . . . . . . . . . . . . . . . . . . . . . . 146,388
30,300 (a) Seagate Technology . . . . . . . . . . . . . . . . . . . . . . 799,163
32,100 Service Corp. International . . . . . . . . . . . . . . . . . 1,143,563
3,300 Shared Medical Systems . . . . . . . . . . . . . . . . . . . . 164,588
23,500 (a) Silicon Graphics . . . . . . . . . . . . . . . . . . . . . . . 264,375
7,400 Snap-On . . . . . . . . . . . . . . . . . . . . . . . . . . . 262,238
11,027 Stanley Works . . . . . . . . . . . . . . . . . . . . . . . . 330,810
47,200 (a) Sun Microsystems . . . . . . . . . . . . . . . . . . . . . . . 2,749,400
44,800 (a) 3COM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,615,600
6,259 Tektronix . . . . . . . . . . . . . . . . . . . . . . . . . . 111,880
24,200 (a) Tellabs . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,331,000
48,700 Texas Instruments . . . . . . . . . . . . . . . . . . . . . . 3,113,756
20,400 Textron . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,517,250
20,700 (a) Thermo Electron . . . . . . . . . . . . . . . . . . . . . . . 412,706
7,041 Thomas & Betts . . . . . . . . . . . . . . . . . . . . . . . . . . . . 314,645
7,800 Timken . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138,938
80,302 Tyco International . . . . . . . . . . . . . . . . . . . . . . . . . .. 4,973,705
31,700 (a) Unisys . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 844,013
28,414 United Technologies . . . . . . . . . . . . . . . . . . . . . . . . . 2,706,434
71,342 Waste Management . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,219,308
41,024 Xerox . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,974,200
_______________
273,482,419
_______________
Consumer Cyclical--12.3%
30,700 Albertson's . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,705,769
8,800 American Greetings, Cl. A . . . . . . . . . . . . . . . . . . . . . . 353,100
34,200 American Stores . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,113,638
19,000 (a) AutoZone . . . . . . . . . . . . . . . . . . . . . . . . . . . . 499,938
11,600 Black & Decker . . . . . . . . . . . . . . . . . . . . . . . . . . . . 599,575
12,400 Brunswick . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 241,025
89,300 CBS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,494,819
48,518 CVS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,216,666
80,700 Chrysler . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,883,688
12,518 Circuit City Stores . . . . . . . . . . . . . . . . . . . . . . . . . 452,995
31,000 (a) Clear Channel Communications. . . . . . . . . . . . . . . . .. . . . . 1,412,438
46,000 Comcast, Cl. A . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,271,250
13,600 (a) Consolidated Stores . . . . . . . . . . . . . . . . . . . . . . 223,550
9,703 Cooper Tire and Rubber . . . . . . . . . . . . . . . . . . . . . . . . 161,312
27,000 (a) Costco Cos. . . . . . . . . . . . . . . . . . . . . . . . . . . 1,532,250
20,599 Dana . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 861,296
17,400 Darden Restaurants . . . . . . . . . . . . . . . . . . . . . . . . . . 287,100
54,800 Dayton Hudson . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,322,150
13,800 Dillard's, Cl. A . . . . . . . . . . . . . . . . . . . . . . . . . . . 428,663
255,500 Disney (Walt) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,882,531
23,050 Dollar General . . . . . . . . . . . . . . . . . . . . . . . . . . . . 550,319
17,400 Donnelley (R.R.) & Sons . . . . . . . . . . . . . . . . . . . . . . . 750,375
11,700 Dow Jones & Co . . . . . . . . . . . . . . . . . . . . . . . . . . . . 536,006
26,300 (a) Federated Department Stores . . . . . . . . . . . . . . . . . . 1,010,906
4,300 Fleetwood Enterprises . . . . . . . . . . . . . . . . . . . . . . . . 138,675
151,100 Ford Motor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,197,175
19,200 (a) Meyer (Fred) . . . . . . . . . . . . . . . . . . . . . . . . . . 1,023,600
9,000 (a) Fruit of the Loom, Cl. A . . . . . . . . . . . . . . . . . . . . 137,250
35,500 Gannett . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,196,563
49,000 Gap . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,946,125
18,800 (a) General Instrument . . . . . . . . . . . . . . . . . . . . . . . 482,925
82,600 General Motors . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,208,963
19,600 Goodyear Tire & Rubber . . . . . . . . . . . . . . . . . . . . . . . . 1,055,950
4,743 Great Atlantic & Pacific . . . . . . . . . . . . . . . . . . . . . . . 111,461
8,800 Harcourt General . . . . . . . . . . . . . . . . . . . . . . . . . . . 428,450
12,594 (a) Harrah's Entertainment . . . . . . . . . . . . . . . . . . . . . 177,890
16,450 Hasbro . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 576,778
32,500 Hilton Hotel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 652,031
183,300 Home Depot . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,973,550
10,528 Johnson Controls . . . . . . . . . . . . . . . . . . . . . . . . . . . 592,200
DREYFUS BASIC S&P 500 STOCK INDEX FUND
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1998
Value
Shares COMMON STOCKS (continued) _________________
Consumer Cyclical (continued)
4,622 Jostens . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 104,284
61,400 (a) K mart . . . . . . . . . . . . . . . . . . . . . . . . . . . . 867,275
9,124 (a) King World Productions . . . . . . . . . . . . . . . . . . . . 239,505
9,800 Knight-Ridder . . . . . . . . . . . . . . . . . . . . . . . . 499,188
19,700 (a) Kohl's . . . . . . . . . . . . . . . . . . . . . . . . . . . . 941,906
32,000 (a) Kroger . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,776,000
28,400 Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . 727,750
8,200 Liz Claiborne . . . . . . . . . . . . . . . . . . . . . . . . 240,875
4,838 Longs Drug Stores . . . . . . . . . . . . . . . . . . . . . . 188,984
43,900 Lowes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,478,881
31,200 Marriott International, Cl. A . . . . . . . . . . . . . . . . 838,500
36,500 Mattel . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,309,438
28,800 May Department Stores . . . . . . . . . . . . . . . . . . . . 1,756,800
11,400 Maytag . . . . . . . . . . . . . . . . . . . . . . . . . . . . 563,588
85,400 McDonald's . . . . . . . . . . . . . . . . . . . . . . . . . . 5,711,125
12,400 McGraw-Hill Cos. . . . . . . . . . . . . . . . . . . . . . . . 1,115,225
76,000 (a) MediaOne Group . . . . . . . . . . . . . . . . . . . . . . . . 3,215,750
6,560 Meredith . . . . . . . . . . . . . . . . . . . . . . . . . . . 242,720
22,400 (a) Mirage Resorts . . . . . . . . . . . . . . . . . . . . . . . . 379,400
11,002 Moore . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124,460
8,400 (a) Navistar International . . . . . . . . . . . . . . . . . . . . 175,350
23,636 New York Times, Cl. A . . . . . . . . . . . . . . . . . . . . 667,717
35,900 NIKE, Cl. B . . . . . . . . . . . . . . . . . . . . . . . . . 1,568,381
18,600 Nordstrom . . . . . . . . . . . . . . . . . . . . . . . . . . 508,013
9,722 PACCAR . . . . . . . . . . . . . . . . . . . . . . . . . . . . 424,122
31,600 Penney (J.C.) . . . . . . . . . . . . . . . . . . . . . . . . 1,501,000
8,000 Pep Boys-Manny, Moe & Jack . . . . . . . . . . . . . . . . . . 125,000
7,015 (a) Reebok International . . . . . . . . . . . . . . . . . . . . . 116,624
32,200 Rite Aid . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,277,938
4,514 Russell . . . . . . . . . . . . . . . . . . . . . . . . . . . 110,875
48,900 Sears, Roebuck & Co. . . . . . . . . . . . . . . . . . . . . . 2,197,444
2,300 Springs Industries, Cl. A . . . . . . . . . . . . . . . . . . 81,363
35,800 (a) Staples . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,167,975
15,100 Supervalu . . . . . . . . . . . . . . . . . . . . . . . . . . 362,400
42,104 Sysco . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,134,177
39,600 TJX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 749,925
15,200 TRW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 865,450
12,476 Tandy . . . . . . . . . . . . . . . . . . . . . . . . . . . . 618,342
65,300 (a) Tele-Communications, Cl. A,
TCI Group . . . . . . . . . . . . . . . . . . . . . . . . . 2,750,763
74,700 Time Warner . . . . . . . . . . . . . . . . . . . . . . . . . 6,933,094
10,839 Times Mirror, Cl. A . . . . . . . . . . . . . . . . . . . . . 600,887
32,600 (a) Toys R Us . . . . . . . . . . . . . . . . . . . . . . . . . . 637,738
15,222 Tribune . . . . . . . . . . . . . . . . . . . . . . . . . . . 877,168
15,100 V.F . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 631,369
16,900 (a) Venator Group . . . . . . . . . . . . . . . . . . . . . . . . 142,594
44,600 Viacom, Cl. B . . . . . . . . . . . . . . . . . . . . . . . . 2,670,425
278,800 Wal-Mart Stores . . . . . . . . . . . . . . . . . . . . . . . 19,237,200
62,000 Walgreen . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,018,625
15,847 Wendy's International . . . . . . . . . . . . . . . . . . . . 332,787
9,500 Whirlpool . . . . . . . . . . . . . . . . . . . . . . . . . . 486,875
18,500 Winn-Dixie Stores . . . . . . . . . . . . . . . . . . . . . . . . . . 627,844
_______________
139,612,064
_______________
Consumer Staples--10.4%
6,844 Alberto-Culver, Cl. B . . . . . . . . . . . . . . . . . . . . . . . . 181,794
60,100 Anheuser-Busch . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,572,194
74,710 Archer Daniels Midland . . . . . . . . . . . . . . . . . . . . . . . . 1,246,723
32,836 Avon Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,303,179
35,800 Bestfoods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,951,100
8,600 Brown-Forman, Cl. B . . . . . . . . . . . . . . . . . . . . . . . . . 584,263
56,000 Campbell Soup . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,985,500
13,000 Clorox . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,420,250
307,500 Coca-Cola . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,794,688
50,300 Coca-Cola Enterprises . . . . . . . . . . . . . . . . . . . . . . . . 1,813,944
36,900 Colgate-Palmolive . . . . . . . . . . . . . . . . . . . . . . . . . . 3,261,038
60,832 ConAgra . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,851,574
4,515 Coors (Adolph), Cl. B . . . . . . . . . . . . . . . . . . . . . . . . 225,750
40,300 Eastman Kodak . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,123,250
16,200 Ecolab . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 483,975
19,300 General Mills . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,418,550
140,000 Gillette . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,291,250
45,200 Heinz (H.J.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,627,250
17,800 Hershey Foods . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,207,063
13,400 International Flavors &
Fragrances . . . . . . . . . . . . . . . . . . . . . . . . . . . 501,663
50,800 Kellogg . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,676,400
68,300 Kimberly-Clark . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,295,475
1,022 NACCO Industries, Cl. A . . . . . . . . . . . . . . . . . . . . . . . 94,024
5,200 National Service Industries . . . . . . . . . . . . . . . . . . . . . 186,550
20,300 Newell . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 893,200
183,700 PepsiCo . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,199,875
303,300 Philip Morris . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,506,213
30,100 Pioneer Hi-Bred International . . . . . . . . . . . . . . . . . . . . 842,800
5,500 Polaroid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146,094
167,200 Procter & Gamble . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,859,900
17,000 Quaker Oats . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,004,063
38,900 Ralston Purina Group . . . . . . . . . . . . . . . . . . . . . . . . . 1,298,288
40,500 RJR Nabisco Holdings . . . . . . . . . . . . . . . . . . . . . . . . . 1,156,781
18,748 Rubbermaid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 622,199
58,300 Sara Lee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,479,781
43,200 Seagram . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,420,200
19,030 Tricon Global Restaurants . . . . . . . . . . . . . . . . . . . . . . 827,805
7,200 Tupperware . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112,050
79,800 Unilever . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,004,950
23,200 UST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 788,800
14,500 Wrigley, (Wm) Jr . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,173,594
_______________
118,434,040
_______________
Energy--7.5%
11,300 Amerada Hess . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 624,325
119,000 Amoco . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,678,875
DREYFUS BASIC S&P 500 STOCK INDEX FUND
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1998
Value
Shares COMMON STOCKS (continued) __________
Energy (continued)
15,000 Anadarko Petroleum . . . . . . . . . . . . . . . . . . . . . . $ 508,125
12,300 Apache . . . . . . . . . . . . . . . . . . . . . . . . . . . . 348,244
9,500 Ashland . . . . . . . . . . . . . . . . . . . . . . . . . . . 457,188
40,100 Atlantic Richfield . . . . . . . . . . . . . . . . . . . . . . 2,761,888
39,620 Baker Hughes . . . . . . . . . . . . . . . . . . . . . . . . . 874,116
22,106 Burlington Resources . . . . . . . . . . . . . . . . . . . . . 910,491
81,600 Chevron . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,650,400
26,520 Coastal . . . . . . . . . . . . . . . . . . . . . . . . . . . 934,830
10,400 Columbia Energy Group . . . . . . . . . . . . . . . . . . . . 601,900
11,931 Consolidated Natural Gas . . . . . . . . . . . . . . . . . . . 630,106
2,818 Eastern Enterprises . . . . . . . . . . . . . . . . . . . . . 115,714
41,100 Enron . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,168,025
304,100 Exxon . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,667,125
54,700 Halliburton . . . . . . . . . . . . . . . . . . . . . . . . . 1,965,781
6,310 Helmerich & Payne . . . . . . . . . . . . . . . . . . . . . . 150,257
5,940 Kerr-McGee . . . . . . . . . . . . . . . . . . . . . . . . . . 236,858
97,500 Mobil . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,379,531
6,000 Nicor . . . . . . . . . . . . . . . . . . . . . . . . . . . . 254,250
3,882 ONEOK . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132,959
13,200 (a) Oryx Energy . . . . . . . . . . . . . . . . . . . . . . . . . 184,800
6,000 Pennzoil . . . . . . . . . . . . . . . . . . . . . . . . . . . 215,250
4,370 Peoples Energy . . . . . . . . . . . . . . . . . . . . . . . . 161,144
32,200 Phillips Petroleum . . . . . . . . . . . . . . . . . . . . . . 1,392,650
10,610 (a) Rowan Cos. . . . . . . . . . . . . . . . . . . . . . . . . . . 154,508
267,400 Royal Dutch Petroleum, A.D.R. . . . . . . . . . . . . . . . . 13,169,450
67,900 Schlumberger . . . . . . . . . . . . . . . . . . . . . . . . . 3,564,750
30,042 Sempra Energy . . . . . . . . . . . . . . . . . . . . . . . . 781,092
13,700 Sonat . . . . . . . . . . . . . . . . . . . . . . . . . . . . 415,281
11,668 Sun . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 400,358
66,800 Texaco . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,962,075
31,307 Union Pacific Resources Group . . . . . . . . . . . . . . . . 406,991
30,100 Unocal . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,021,519
36,200 USX-Marathon Group . . . . . . . . . . . . . . . . . . . . . . 1,183,288
53,000 Williams Cos. . . . . . . . . . . . . . . . . . . . . . . . . 1,454,188
_______________
84,518,332
_______________
Health Care--12.3%
192,000 Abbott Laboratories . . . . . . . . . . . . . . . . . . . . . 9,012,000
8,200 Allergan . . . . . . . . . . . . . . . . . . . . . . . . . . . 511,988
10,800 (a) ALZA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 517,050
164,100 American Home Products . . . . . . . . . . . . . . . . . . . . 7,999,875
31,680 (a) Amgen . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,488,860
7,000 Bard (C.R.) . . . . . . . . . . . . . . . . . . . . . . . . . 298,813
6,964 Bausch & Lomb . . . . . . . . . . . . . . . . . . . . . . . . 290,312
35,600 Baxter International . . . . . . . . . . . . . . . . . . . . . 2,133,775
30,800 Becton, Dickinson & Co. . . . . . . . . . . . . . . . . . . . 1,297,450
14,000 Biomet . . . . . . . . . . . . . . . . . . . . . . . . . . . . 475,125
24,400 (a) Boston Scientific . . . . . . . . . . . . . . . . . . . . . . 1,328,275
124,100 Bristol-Myers Squibb . . . . . . . . . . . . . . . . . . . . . . . . . 13,720,806
16,600 Cardinal Health . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,569,738
80,500 Columbia/HCA Healthcare . . . . . . . . . . . . . . . . . . . . . . . 1,690,500
18,800 Guidant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,438,200
12,900 (a) HCR Manor Care . . . . . . . . . . . . . . . . . . . . . . . . . 419,250
52,700 (a) HEALTHSOUTH . . . . . . . . . . . . . . . . . . . . . . . . . . 638,988
20,800 (a) Humana . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 393,900
167,700 Johnson & Johnson . . . . . . . . . . . . . . . . . . . . . . . . . . 13,667,550
137,400 Lilly (Eli) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,120,813
9,100 Mallinckrodt Group . . . . . . . . . . . . . . . . . . . . . . . . . . 259,350
58,500 Medtronic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,802,500
148,500 Merck & Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,084,625
74,900 Monsanto . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,042,813
163,000 Pfizer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,491,938
63,400 Pharmacia & Upjohn . . . . . . . . . . . . . . . . . . . . . . . . . . 3,356,238
91,500 Schering-Plough . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,413,063
10,800 (a) St. Jude Medical . . . . . . . . . . . . . . . . . . . . . . . . 305,100
38,400 Tenet Healthcare . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,072,800
24,400 United Healthcare . . . . . . . . . . . . . . . . . . . . . . . . . . 1,062,925
102,400 Warner-Lambert . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,025,600
_______________
138,930,220
_______________
Interest Sensitive--15.8%
18,027 Aetna . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,345,265
103,300 Allstate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,448,356
56,900 American Express . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,028,538
31,538 American General . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,160,353
130,975 American International Group . . . . . . . . . . . . . . . . . . . . . 11,165,619
21,100 Aon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,308,200
43,211 Associates First Capital, Cl. A . . . . . . . . . . . . . . . . . . . 3,046,376
35,700 BB&T . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,274,044
36,700 BANKBOSTON . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,351,019
146,098 BancOne . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,140,540
93,228 Bank of New York . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,942,509
216,705 BankAmerica . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,446,973
12,000 Bankers Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . 753,750
14,200 Bear Stearns Cos. . . . . . . . . . . . . . . . . . . . . . . . . . . 506,763
26,500 CIGNA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,932,844
8,200 Capital One Financial . . . . . . . . . . . . . . . . . . . . . . . . 834,350
106,782 Chase Manhattan . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,066,552
20,700 Chubb . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,273,050
20,800 Cincinnati Financial . . . . . . . . . . . . . . . . . . . . . . . . . 776,100
285,158 Citigroup . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,420,248
19,350 Comerica . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,248,075
38,971 Conseco . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,351,807
13,900 Countrywide Credit Industries . . . . . . . . . . . . . . . . . . . . 600,306
129,300 Federal National Mortgage
Association . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,156,056
DREYFUS BASIC S&P 500 STOCK INDEX FUND
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1998
Shares COMMON STOCKS (continued) Value
-------------
Interest Sensitive (continued)
33,425 Fifth Third Bancorp . . . . . . . . . . . . . . . . . . . . . $ 2,214,406
120,834 First Union . . . . . . . . . . . . . . . . . . . . . . . . . 7,008,372
70,800 Fleet Financial Group . . . . . . . . . . . . . . . . . . . . 2,827,575
31,600 Franklin Resources . . . . . . . . . . . . . . . . . . . . . . 1,194,875
84,600 Federal Home Loan Mortgage . . . . . . . . . . . . . . . . . . 4,864,500
9,458 General Re . . . . . . . . . . . . . . . . . . . . . . . . . . 2,077,804
7,200 Golden West Financial . . . . . . . . . . . . . . . . . . . . 652,950
29,100 Hartford Financial Services Group 1,545,938
61,441 Household International . . . . . . . . . . . . . . . . . . . 2,246,437
26,370 Huntington Bancshares . . . . . . . . . . . . . . . . . . . . 758,138
13,200 Jefferson Pilot . . . . . . . . . . . . . . . . . . . . . . . 801,900
54,900 Keycorp . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,664,156
14,800 Lehman Brothers Holdings . . . . . . . . . . . . . . . . . . . 561,475
12,500 Lincoln National . . . . . . . . . . . . . . . . . . . . . . . 948,438
14,300 Loews . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,343,306
12,400 MBIA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 757,950
93,713 MBNA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,137,816
31,850 Marsh & McLennan . . . . . . . . . . . . . . . . . . . . . . . 1,767,675
32,500 Mellon Bank . . . . . . . . . . . . . . . . . . . . . . . . . 1,954,063
19,000 Mercantile Bancorp . . . . . . . . . . . . . . . . . . . . . . 868,063
43,400 Merrill Lynch & Co. . . . . . . . . . . . . . . . . . . . . . 2,571,450
14,100 MGIC Investment . . . . . . . . . . . . . . . . . . . . . . . 549,900
22,000 Morgan (J.P.) . . . . . . . . . . . . . . . . . . . . . . . . 2,073,500
73,055 Morgan Stanley, Dean Witter,
Discover and Co. . . . . . . . . . . . . . . . . . . . . . . 4,730,311
41,100 National City . . . . . . . . . . . . . . . . . . . . . . . . 2,643,244
13,900 Northern Trust . . . . . . . . . . . . . . . . . . . . . . . . 1,025,125
95,500 Norwest . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,551,406
37,600 PNC Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,880,000
9,100 Progressive . . . . . . . . . . . . . . . . . . . . . . . . . 1,339,975
16,900 Provident Cos. . . . . . . . . . . . . . . . . . . . . . . . . 491,156
11,900 Providian Financial . . . . . . . . . . . . . . . . . . . . . 944,563
5,398 Pulte . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138,999
26,700 Regions Financial . . . . . . . . . . . . . . . . . . . . . . 987,900
13,500 Republic New York . . . . . . . . . . . . . . . . . . . . . . 564,469
17,600 Safeco . . . . . . . . . . . . . . . . . . . . . . . . . . . . 762,300
33,300 Schwab (Charles) . . . . . . . . . . . . . . . . . . . . . . . 1,596,319
20,900 SLM Holding . . . . . . . . . . . . . . . . . . . . . . . . . 837,306
29,492 St. Paul Companies . . . . . . . . . . . . . . . . . . . . . . 976,923
20,100 State Street . . . . . . . . . . . . . . . . . . . . . . . . . 1,253,738
21,700 Summit Bancorp . . . . . . . . . . . . . . . . . . . . . . . . 823,244
25,800 SunAmerica . . . . . . . . . . . . . . . . . . . . . . . . . . 1,818,900
26,100 SunTrust Banks . . . . . . . . . . . . . . . . . . . . . . . . 1,818,844
32,800 Synovus Financial . . . . . . . . . . . . . . . . . . . . . . 760,550
17,516 Torchmark . . . . . . . . . . . . . . . . . . . . . . . . . . 766,325
7,793 Transamerica . . . . . . . . . . . . . . . . . . . . . . . . . 810,472
17,264 UNUM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 767,169
92,651 U.S. Bancorp . . . . . . . . . . . . . . . . . . . . . . . . . 3,381,762
15,800 Union Planters . . . . . . . . . . . . . . . . . . . . . . . . 733,713
25,800 Wachovia . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,344,575
73,858 Washington Mutual . . . . . . . . . . . . . . . . . . . . . . 2,765,056
10,648 Wells Fargo . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,939,760
_______________
179,422,484
_______________
Mining and Metals--.7%
4,900 ASARCO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105,044
28,400 Alcan Aluminium . . . . . . . . . . . . . . . . . . . . . . . . . . . 718,875
23,300 Aluminum Co. of America . . . . . . . . . . . . . . . . . . . . . . . 1,846,525
13,500 (a) Armco . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64,125
46,500 Barrick Gold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 993,938
28,700 Battle Mountain Gold . . . . . . . . . . . . . . . . . . . . . . . . . 156,056
16,200 (a) Bethlehem Steel . . . . . . . . . . . . . . . . . . . . . . . . 145,800
11,708 Cyprus Amax Minerals . . . . . . . . . . . . . . . . . . . . . . . . . 145,618
22,600 Freeport-McMoRan Copper, Cl. B 278,263
26,300 Homestake Mining . . . . . . . . . . . . . . . . . . . . . . . . . . . 312,313
20,700 Inco . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 221,231
20,774 Newmont Mining . . . . . . . . . . . . . . . . . . . . . . . . . . . . 441,448
11,000 Nucor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 498,438
7,290 Phelps Dodge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 420,086
31,200 Placer Dome . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 491,400
9,000 Reynolds Metals . . . . . . . . . . . . . . . . . . . . . . . . . . . 539,438
11,000 USX-U.S. Steel . . . . . . . . . . . . . . . . . . . . . . . . . . . . 255,750
12,100 Worthington Industries . . . . . . . . . . . . . . . . . . . . . . . . 164,106
_______________
7,798,454
_______________
Transportation--1.0%
22,700 (a) AMR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,520,900
59,017 Burlington Northern Santa Fe . . . . . . . . . . . . . . . . . . . . . 1,822,150
27,300 CSX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,071,525
9,400 Delta Air Lines . . . . . . . . . . . . . . . . . . . . . . . . . . . 992,288
18,396 (a) FDX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 966,940
41,100 Laidlaw . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 387,881
47,300 Norfolk Southern . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,557,944
41,875 Southwest Airlines . . . . . . . . . . . . . . . . . . . . . . . . . . 887,227
30,800 Union Pacific . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,466,850
11,700 (a) USAir Group . . . . . . . . . . . . . . . . . . . . . . . . . . 661,781
_______________
11,335,486
_______________
Utilities--10.3%
21,400 (a) AES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 876,063
34,200 ALLTEL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,600,988
225,300 AT&T . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,024,925
71,600 (a) Airtouch Communications . . . . . . . . . . . . . . . . . . . . 4,009,600
17,100 Ameren . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 682,931
23,800 American Electric Power . . . . . . . . . . . . . . . . . . . . . . . 1,164,713
137,500 Ameritech . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,416,406
18,500 Baltimore Gas & Electric . . . . . . . . . . . . . . . . . . . . . . . 580,438
193,772 Bell Atlantic . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,294,138
122,700 BellSouth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,792,994
18,856 Carolina Power & Light . . . . . . . . . . . . . . . . . . . . . . . . 865,019
26,500 Central & Southwest . . . . . . . . . . . . . . . . . . . . . . . . . 737,031
DREYFUS BASIC S&P 500 STOCK INDEX FUND
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1998
Shares COMMON STOCKS (continued) Value
---------
Utilities (continued)
19,800 CINergy . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 683,100
29,200 Consolidated Edison . . . . . . . . . . . . . . . . . . . . . 1,463,650
28,900 Corning . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,049,431
24,500 Dominion Resources . . . . . . . . . . . . . . . . . . . . . . 1,131,594
18,100 DTE Energy . . . . . . . . . . . . . . . . . . . . . . . . . . 771,513
45,061 Duke Power . . . . . . . . . . . . . . . . . . . . . . . . . . 2,914,883
44,600 Edison International . . . . . . . . . . . . . . . . . . . . . 1,176,325
30,800 Entergy . . . . . . . . . . . . . . . . . . . . . . . . . . . 885,500
29,600 FirstEnergy . . . . . . . . . . . . . . . . . . . . . . . . . 888,000
22,600 FPL Group . . . . . . . . . . . . . . . . . . . . . . . . . . 1,413,913
21,400 Frontier . . . . . . . . . . . . . . . . . . . . . . . . . . . 643,338
16,000 GPU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 690,000
120,200 GTE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,054,238
36,944 Houston Industries . . . . . . . . . . . . . . . . . . . . . . 1,147,573
221,468 MCI WorldCom . . . . . . . . . . . . . . . . . . . . . . . . . 12,236,107
35,600 (a) NEXTEL Communications, Cl. A 645,250
23,400 (a) Niagara Mohawk Power . . . . . . . . . . . . . . . . . . . . . 342,225
18,900 Northern States Power . . . . . . . . . . . . . . . . . . . . 510,300
47,600 PG&E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,448,825
18,900 PP&L Resources . . . . . . . . . . . . . . . . . . . . . . . . 512,663
37,100 PacifiCorp . . . . . . . . . . . . . . . . . . . . . . . . . . 707,219
27,800 PECO Energy . . . . . . . . . . . . . . . . . . . . . . . . . 1,075,513
28,900 Public Service Enterprise Group 1,098,200
243,902 SBC Communications . . . . . . . . . . . . . . . . . . . . . . 11,295,711
87,000 Southern . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,452,313
53,600 Sprint . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,113,800
34,820 Texas Utilities . . . . . . . . . . . . . . . . . . . . . . . 1,523,375
27,100 UniCom . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,021,331
62,554 U S West . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,589,036
_______________
116,530,172
_______________
TOTAL COMMON STOCKS
(cost $798,623,556) . . . . . . . . . . . . . . . . . . . . . . . . $1,103,866,622
_______________
Principal SHORT-TERM
Amount INVESTMENTS--2.4%
___________
U.S. Treasury Bills--.3%
$ 2,850,000(b) 4.39%, 12/10/1998 . . . . . . . . . . . . . . . . . . . . . . $ 2,838,230
</TABLE>
<TABLE>
<CAPTION>
Repurchase Agreement--2.1%
<S> <C> <C> <C>
23,670,000 Goldman Sachs & Co.Tri-Party,
Repurchase Agreement, 5.38%
dated 10/30/1998,
due 11/2/1998 in the amount
of $23,680,612 (fully
collateralized by $23,079,000
U.S. Treasury Notes, 6.25%
8/31/2000, value
$24,143,868) . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 23,670,000
_______________
TOTAL SHORT-TERM
INVESTMENTS
(cost $24,143,868) . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 26,508,230
_______________
TOTAL INVESTMENTS
(cost $825,130,329). . . . . . . . . . . . . . . . . . . . . . . . . . . 99.8% $1,130,374,852
_______ _______________
CASH AND RECEIVABLES (NET) . . . . . . . . . . . . . . . . . . . . . . . . .2% $ 2,771,700
_______ _______________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.0% $1,133,146,552
_______ _______________
NOTES TO STATEMENT OF INVESTMENTS:
- -----------------------------------------------------------------------------
(a) Non-income producing.
(b) Held by the custodian in a segregated account as collateral for open
financial futures positions.
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF FINANCIAL FUTURES OCTOBER 31, 1998
Financial Futures Purchased
- ---------------------
Market Value Unrealized
Covered Appreciation
Contracts by Contracts Expiration at 10/31/98
________ __________ ____________ ___________
<S> <C> <C> <C> <C>
Standard & Poor's 500. . . . . . . . . . . . . . . . . . 103 $28,458,900 December '98 $ 864,125
__________
__________
</TABLE>
<TABLE>
<CAPTION>
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS BASIC S&P 500 STOCK INDEX FUND
- -----------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES OCTOBER 31, 1998
Cost Value
______________ _______________
<S> <C> <C> <C>
ASSETS: Investments in securities--See Statement of
Investments--Note 1(c) . . . . . . . . . . . . . . $ 825,130,329 $1,130,374,852
Cash . . . . . . . . . . . . . . . . . . . . . . . . 1,777,297
Dividends and interest receivable . . . . . . . . . . 1,090,152
Receivable for futures variation margin--Note 1(d) . 191,025
Receivable for investment securities sold . . . . . . 61,985
Receivable for shares of Capital Stock subscribed . . 893
_______________
1,133,496,204
_______________
LIABILITIES: Due to The Dreyfus Corporation . . . . . . . . . . . 179,028
Payable for investment securities purchased . . . . . 98,829
Payable for shares of Capital Stock redeemed . . . . 71,795
_______________
349,652
_______________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,133,146,552
_______________
REPRESENTED BY: Paid-in capital . . . . . . . . . . . . . . . . . . . $ 820,557,444
Accumulated undistributed investment income--net . . 3,826,896
Accumulated net realized gain (loss) on investments . 2,653,564
Accumulated net unrealized appreciation (depreciation)
on investments (including $864,125 unrealized
appreciation on financial futures)--Note 3 . . . . 306,108,648
_______________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,133,146,552
_______________
SHARES OUTSTANDING
(70 MILLION SHARES OF $.001 PAR VALUE CAPITAL STOCK AUTHORIZED). . . . . . . . . . . . 48,544,975
NET ASSET VALUE, offering and redemption price per share . . . . . . . . . . . . . . . $23.34
______
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS BASIC S&P 500 STOCK INDEX FUND
- -----------------------------------------------------------------------------
STATEMENT OF OPERATIONS YEAR ENDED OCTOBER 31, 1998
INVESTMENT INCOME
INCOME: Cash dividends (net of $92,924 foreign taxes
withheld at source) . . . . . . . . . . . . . $15,575,406
Interest . . . . . . . . . . . . . . . . . . . 1,906,719
____________
Total Income . . . . . . . . . . . . . . . . . $17,482,125
EXPENSES: Management fee--Note 2 . . . . . . . . . . . . . 2,119,347
Loan commitment fees--Note 4 . . . . . . . . . . 4,802
____________
Total Expenses . . . . . . . . . . . . . . . . 2,124,149
____________
INVESTMENT INCOME--NET . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,357,976
____________
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--Note 3:
Net realized gain (loss) on investments . . . . . $ 771,260
Net realized gain (loss) on financial futures . . 2,580,650
____________
Net Realized Gain (Loss) . . . . . . . . . . . 3,351,910
Net unrealized appreciation (depreciation) on
investments (including $1,109,175 net unrealized
appreciation on financial futures . . . . . . 80,759,022
____________
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS . . . . . . . . . . . . . . 84,110,932
____________
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS . . . . . . . . . . . . . . . $99,468,908
____________
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS BASIC S&P 500 STOCK INDEX FUND
- -----------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
Year Ended Year Ended
October 31, 1998 October 31, 1997
_______________ _______________
OPERATIONS:
Investment income--net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 15,357,976 $ 10,711,536
Net realized gain (loss) on investments . . . . . . . . . . . . . . . . . . . . . . . 3,351,910 11,500,547
Net unrealized appreciation (depreciation) on investments . . . . . . . . . . . . . . 80,759,022 139,249,216
________________ ________________
Net Increase (Decrease) in Net Assets Resulting from Operations . . . . . . . . . . 99,468,908 161,461,299
________________ ________________
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (14,638,843) (9,360,467)
Net realized gain on investments . . . . . . . . . . . . . . . . . . . . . . . . . . . (12,006,581) (5,619,611)
________________ ________________
Total Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (26,645,424) (14,980,078)
________________ ________________
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . 796,141,077 469,295,068
Dividends reinvested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26,303,252 14,757,143
Cost of shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (565,263,383) (276,514,308)
________________ ________________
Increase (Decrease) in Net Assets from Capital Stock Transactions . . . . . . . . . 257,180,946 207,537,903
________________ ________________
Total Increase (Decrease) in Net Assets . . . . . . . . . . . . . . . . . . . . . 330,004,430 354,019,124
NET ASSETS:
Beginning of Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 803,142,122 449,122,998
________________ ________________
End of Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,133,146,552 $ 803,142,122
________________ ________________
UNDISTRIBUTED INVESTMENT INCOME--NET . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,826,896 $ 3,107,763
________________ ________________
Shares Shares
________________ ________________
CAPITAL SHARE TRANSACTIONS:
Shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35,271,108 25,506,327
Shares issued for dividends reinvested . . . . . . . . . . . . . . . . . . . . . . . . 1,249,129 861,946
Shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (28,686,916) (14,850,933)
________________ ________________
Net Increase (Decrease) in Shares Outstanding . . . . . . . . . . . . . . . . . . . 7,833,321 11,517,340
</TABLE>
<TABLE>
<CAPTION>
________________ ________________
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS BASIC S&P 500 STOCK INDEX FUND
- -----------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share of Capital
Stock outstanding, total investment return, ratios to average net assets and
other supplemental data for each period indicated. This information has been
derived from the Fund's financial statement.
Year Ended October 31,
___________________________________________________
PER SHARE DATA: 1998 1997 1996 1995(1) 1994(2,3)
______ ______ _______ _______ ________
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period . . . . . . . . . . $19.73 $15.38 $12.75 $10.42 $10.23
______ ______ _______ _______ _______
Investment Operations:
Investment income--net . . . . . . . . . . . . . . . . . .31 .30 .29 .26 .21(4)
Net realized and unrealized gain (loss) on investments . 3.89 4.52 2.69 2.37 .14
______ ______ _______ _______ _______
Total from Investment Operations . . . . . . . . . . . . 4.20 4.82 2.98 2.63 .35
______ ______ _______ _______ _______
Distributions:
Dividends from investment income--net . . . . . . . . . . (.31) (.28) (.30) (.26) (.16)
Dividends from net realized gain on investments . . . . . (.28) (.19) (.05) (.04) (.00)(5)
______ ______ _______ _______ _______
Total Distributions . . . . . . . . . . . . . . . . . . . (.59) (.47) (.35) (.30) (.16)
______ ______ _______ _______ _______
Net asset value, end of period . . . . . . . . . . . . . $23.34 $19.73 $15.38 $12.75 $10.42
______ ______ _______ _______ _______
TOTAL INVESTMENT RETURN. . . . . . . . . . . . . . . . . . . 21.68% 31.87% 23.78% 25.75% 3.50%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets . . . . . . . . . .20% .20% .20% .37% .40%(6)
Ratio of net investment income to average
net assets . . . . . . . . . . . . . . . . . . . . . 1.45% 1.72% 2.16% 2.36% 2.38%
Portfolio Turnover Rate . . . . . . . . . . . . . . . . . 16.76% 3.75% 4.75% 1.03% 13.00%
Net Assets, end of period (000's Omitted) . . . . . . . . $1,133,147 $803,142 $449,123 $204,278 $123,994
- --------------
(1) Effective September 15, 1995, the Fund's Investor and Class R designations
were eliminated and the Fund became a single class Fund.
(2) Effective October 17, 1994, The Dreyfus Corporation began serving as the
Fund' s investment manager. Prior to October 17, 1994, Mellon Bank, N.A. served
as the Fund's investment manager.
(3) The Fund commenced operations on September 30, 1993. The Fund commenced
selling Investor shares on April 18, 1994. Those shares outstanding prior to
April 4, 1994 were designated Trust shares. Effective October 17, 1994, The
Fund's Trust shares were redesignated as Class R shares.
(4) Net investment income before reimbursement of expenses by the investment
adviser for the year ended October 31, 1994 was $0.21.
(5) Amount represents less than $0.01.
(6) Annualized expense ratio before voluntary reimbursement of expenses by the
investment adviser for the year ended October 31, 1994 was 0.45%.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS BASIC S&P 500 STOCK INDEX FUND
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES:
Dreyfus BASIC S&P 500 Stock Index Fund (the "Fund") is a separate diversified
series of The Dreyfus/Laurel Funds, Inc. (the "Company") which is registered
under the Investment Company Act of 1940, as amended (the "Act") as an open-end
management investment company and operates as a series company currently
offering nineteen series including the Fund. The Fund's investment objective is
to replicate the total return of the Standard & Poor's 500 Composite Stock Price
Index primarily through investments in equity securities. The Dreyfus
Corporation (the "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. is the distributor of the Fund's shares.
The Fund' s financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management estimates
and assumptions. Actual results could differ from those estimates.
(A) PORTFOLIO VALUATION: Investments in securities are valued at the last
sales price on the securities exchange on which such securities are primarily
traded or at the last sales price on the national securities market. Securities
not listed on an exchange or the national securities market, or securities for
which there were no transactions, are valued to the average of the most recent
bid and asked prices. Bid price is used when no asked price is available.
Securities for which there are no such valuations are valued at fair value as
determined in good faith under the direction of the Board of Directors.
(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Dividend income is
recognized on the ex-dividend date and interest income, including, where
applicable, amortization of discount on investments, is recognized on the
accrual basis.
(C) REPURCHASE AGREEMENTS: The Fund may engage in repurchase agreement
transactions. Under the terms of a typical repurchase agreement, the Fund,
through its custodian and sub-custodian, takes possession of an underlying debt
obligation subject to an obligation of the seller to repurchase, and the Fund to
resell, the obligation at an agreed-upon price and time, thereby determining the
yield during the Fund's holding period. This arrangement results in a fixed rate
of return that is not subject to market fluctuations during the Fund's holding
period. The value of the collateral is at least equal, at all times, to the
total amount of the repurchase obligation, including interest. In the event of a
counter party default, the Fund has the right to use the collateral to offset
losses incurred. There is potential loss to the Fund in the event the Fund is
delayed or prevented from exercising its rights to dispose of the collateral
securities, including the risk of a possible decline in the value of the
underlying securities during the period while the Fund seeks to assert its
rights. The Manager, acting under the supervision of the Board of Directors,
reviews the value of the collateral and the creditworthiness of those banks and
dealers with which the Fund enters into repurchase agreements to evaluate
potential risks.
(D) FINANCIAL FUTURES: The Fund may invest in financial futures contracts in
order to gain exposure to or protect against changes in the market. The Fund is
exposed to market risk as a result of changes in the value of the underlying
financial instruments. Investments in financial futures require the Fund to
"mark to market" on a daily basis, which reflects the change in the market value
of the contract at the close of each day's trading. Typically, variation margin
payments are received or made to reflect daily unrealized gains or losses. When
the contracts are closed, the Fund recognizes a realized gain or loss. These
investments require initial margin deposits with a custodian, which consist of
cash or cash equivalents, up to approximately 10% of the contract amount. The
amount of these deposits is determined by the exchange or Board of Trade on
which the contract is traded and is subject to change. Contracts open at October
31, 1998, are set forth in the Statement of Financial Futures.
DREYFUS BASIC S&P 500 STOCK INDEX FUND
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(E) DISTRIBUTIONS TO SHAREHOLDERS: Dividends are recorded on the ex-dividend
date. Dividends from investment income-net are declared and paid on a quarterly
basis. Dividends from net realized capital gain are normally declared and paid
annually, but the Fund may make distributions on a more frequent basis to comply
with the distribution requirements of the Internal Revenue Code of 1986, as
amended (the "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 6, 1998, the Board of Directors declared dividends from net
investment income in the amount of $.08 per share payable on November 9, 1998 to
shareholders of record on November 9, 1998.
(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 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 and/or
affiliates parties to provide investment advisory, administrative, custody, fund
accounting and transfer agency services to the Fund. The Manager also directs
the investments of the Fund in accordance with its investment objective,
policies and limitations. For these services, the Fund is contractually
obligated to pay the Manager a fee, calculated daily and paid monthly, at the
annual rate of .20 of 1% of the value of the Fund's average daily net assets.
Out of its fee, the Manager pays all of the expenses of the Fund except
brokerage fees, taxes, interest, commitment fees, fees and expenses of
non-interested Directors (including counsel fees) and extraordinary expenses. In
addition, the Manager is required to reduce its fee in an amount equal to the
Fund' s allocable portion of fees and expenses of the non-interested Directors
(including counsel). Effective July 1, 1998, each director receives $40,000 per
year, plus $5,000 for each joint Board meeting of The Dreyfus/Laurel Funds,
Inc., The Dreyfus/Laurel Tax-Free Municipal Funds, and The Dreyfus/Laurel Funds
Trust (the "Dreyfus/Laurel Funds" ) attended, $2,000 for separate committee
meetings attended which are not held in conjunction with a regularly scheduled
board meeting and $500 for Board meetings and separate committee meetings
attended that are conducted by telephone and is reimbursed for travel and
out-of-pocket expenses. The Chairman of the Board receives an additional 25% of
such compensation (with the exception of reimbursable amounts). In the event
that there is a joint committee meeting of the Dreyfus/Laurel Funds and the
Dreyfus High Yield Strategies Fund, the $2,000 fee will be allocated between the
Dreyfus/Laurel Funds and the 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.
Prior to July 1, 1998, each director received $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 received an additional annual fee of $25,000 per year. These fees
pertained to the Dreyfus/Laurel Funds. (The $1,000 attendance fee and
reimbursement of meeting expenses were also borne pro rata by Dreyfus High Yield
Strategies Fund) . These fees and expenses were 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.
DREYFUS BASIC S&P 500 STOCK INDEX FUND
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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, 1998 amounted to $323,672,330 and $170,182,817, respectively.
At October 31, 1998, accumulated net unrealized appreciation on investments
and financial futures was $306,108,648, consisting of $329,571,451 gross
unrealized appreciation and $23,462,803 gross unrealized depreciation.
At October 31, 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
October 31, 1998, the Fund did not borrow under the Facility.
NOTE 5--CAPITAL SHARES REDEMPTION-IN-KIND:
A significant shareholder requested a Redemption-in-kind and received a
proportion in each of the securities held in the Fund at the date of the
transaction.
DREYFUS BASIC S&P 500 STOCK INDEX FUND
- -----------------------------------------------------------------------------
INDEPENDENT AUDITORS' REPORT
THE BOARD OF DIRECTORS AND SHAREHOLDERS
THE DREYFUS/LAUREL FUNDS, INC.:
We have audited the accompanying statement of assets and liabilities,
including the statement of investments, of Dreyfus BASIC S&P 500 Stock Index
Fund of The Dreyfus/Laurel Funds, Inc. as of October 31, 1998, 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 in the five-year period then ended.
These financial statement 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 and financial highlights. Our procedures included
confirmation of securities owned as of October 31, 1998 by correspondence with
the custodian and brokers. As to securities purchased and sold, but not received
or delivered, we performed other appropriate auditing procedures. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Dreyfus BASIC S&P 500 Stock Index Fund of The Dreyfus/Laurel Funds, Inc. as of
October 31, 1998, 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
the financial highlights for each of the years in the five-year period then
ended, in conformity with generally accepted accounting principles.
New York, New York
December 15, 1998
DREYFUS BASIC S&P 500 STOCK INDEX FUND
- -----------------------------------------------------------------------------
IMPORTANT TAX INFORMATION (UNAUDITED)
For Federal tax purposes, the Fund hereby designates $.2350 per share as a
long-term capital gain distribution of the $.3225 paid on December 23, 1997. The
Fund also designates $.0079 per share as a long-term capital gain distribution
of the $.1011 per share paid on May 6, 1998.
The Fund also designates 88.78% of the ordinary dividends paid during the
fiscal year ended October 31, 1998 as qualifying for the corporate dividends
received deduction. Shareholders will receive notification in January 1999 of
the percentage applicable to the preparation of their 1998 income tax returns.
[reg.tm logo]
(reg.tm)
DREYFUS BASIC S& P 500
STOCK INDEX FUND
200 Park Avenue
New York, NY 10166
MANAGER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
CUSTODIAN
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
TRANSFER AGENT &
DIVIDEND DISBURSING AGENT
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02904
Printed in U.S.A. 713AR9810
BASIC S&P 500
Stock Index Fund
Annual Report
October 31, 1998
DREYFUS INSTITUTIONAL GOVERNMENT MONEY MARKET FUND
- -----------------------------------------------------------------------------
LETTER TO SHAREHOLDERS
Dear Shareholder:
We are pleased to report the performance for the Dreyfus Institutional
Government Money Market Fund for the 12-month period ended October 31, 1998.
During the period, your Fund produced a yield of 5.23%, and after taking into
account the effect of compounding, the effective yield was 5.36% .
THE ECONOMY
In the face of soaring consumer confidence and strong first-quarter economic
growth, the Federal Reserve Board (the "Fed") earlier this year refrained from
increasing interest rates, partially to avoid further roiling international
financial markets. In addition, the Fed evidently felt then that the economic
slowdown overseas might curtail the U.S. economy to some degree, which would
alleviate the need for monetary restraint. The Fed's expectations have proven
to be true, and its judgment accurate. The U.S. balance of trade has worsened
and there have been increasing signs of a slowdown in export-related industries.
On September 29, concerns about a weakening U.S. economy caused the Federal Open
Market Committee (the F.O.M.C. is the policy-making arm of the Fed) to pare the
Federal Funds target rate by 25 basis points, the first reduction since January
1996. (The Federal Funds rate is the rate of interest that banks charge each
other for overnight loans.) Fed Chairman Alan Greenspan described the economic
outlook for the United States as having "weakened measurably." Two weeks later,
on October 15, the F.O.M.C. again reduced its target rate by an additional
quarter point, putting the Federal Funds rate at 5.0%.
Despite the concerns of the Fed regarding an economic slowdown, aggregate
economic statistics showed a growing and resilient economy during the reporting
period. Low unemployment and negligible inflation, combined with car makers
rebuilding inventory after a long strike and rising consumer incomes, resulted
in solid economic growth (3.3%) for the third quarter of this year. While a
significant portion of this gain was due to inventory replenishment after the
automobile strike, the overall results were still an improvement over
second-quarter economic growth of 1.8%. Inflation as measured by the Consumer
Price Index remained at levels not witnessed since 1963.
The Fed' s responsibility is to enact monetary policy that is anticipatory of
future economic conditions. The U.S. trade deficit has continued to widen
because of the global economic slide. Slumping exports have weakened
manufacturing activity since midyear and there is concern that this slackness
could become more pronounced and widen into other sectors of the economy. While
the increase in imports also restrains domestic production, it has helped
contain inflation as well, since domestic producers are reluctant to raise
prices. This provides additional flexibility for the Fed to lower interest
rates still further. So far, economic problems overseas have not caused any
measurable reaction in the U.S. labor market. Only the growth rate in new jobs
has eased from its torrid pace earlier in the year. The unemployment rate has
remained near 30-year lows and worker inflation-adjusted take-home pay has been
rising. The condition of the labor market is a key determinant of consumer
confidence which, of course, relates directly to consumer spending, a force that
accounts for two thirds of all economic activity. Business spending has shown
signs of weakness, so the role of the consumer will be of even greater
importance in the future. It is significant that measures of consumer
confidence have receded from earlier record high levels, largely because of
concerns about the volatility of financial markets.
THE MARKET AND THE PORTFOLIO
During the reporting period, money market rates moved lower, particularly over
the summer and early fall as economic turmoil overseas and volatile capital
markets caused investors to seek a safer investment haven in short-term
obligations. The decline in rates was hastened near the end of the reporting
period when the Fed lowered the Fed Funds rate from 5.50% to 5.00% with two
separate 25 basis-point reductions on September 29 and October 15. The Fed also
lowered the discount rate to 4.75% from 5.00% on October 15. The second
reduction in the Fed Funds rate came as a surprise to the market since the
policy move did not coincide with the regularly scheduled meeting of the
F.O.M.C. We expect additional easing in monetary policy in the future if the
economy shows additional signs of weakness.
A key aspect of the Fund' s investment strategy is the management of its
average maturity to seek to capitalize on changes in interest rates. This can
help maintain a consistent and competitive stream of income. The Fund's average
maturity was adjusted opportunistically within a target average maturity range
of 30-60 days during the reporting period to adapt to shifts in the money market
yield curve. We feel this target range is appropriate in an environment where
further interest rate reductions are expected. The Fund's average maturity at
the end of the reporting period was 37 days.
The Fund invests in securities issued or guaranteed by the U.S. Government and
its agencies and instrumentalities and repurchase agreements. At the end of the
reporting period, the Fund held an allocation of approximately 90% U.S. Agency
securities and approximately 10% in repurchase agreements.
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]
Laurie Carroll
Portfolio Manager
November 16, 1998
New York, N.Y.
*Effective yield is based upon dividends declared daily and reinvested monthly.
<TABLE>
<CAPTION>
DREYFUS INSTITUTIONAL GOVERNMENT MONEY MARKET FUND
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS OCTOBER 31, 1998
Annualized
Yield on
Date of Principal
U.S. Government Agencies--94.1% Purchase Amount Value
____________________________________________________________________ ________ ____________ _____________
Federal Farm Credit Banks, Discount Notes
<S> <C> <C> <C>
11/2/98 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.40% $30,000,000 $ 29,995,500
11/20/98 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.13 10,000,000 9,973,136
Federal Farm Credit Banks, Notes
1/4/99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.32 10,000,000 10,000,000
2/1/99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.74 5,000,000 5,000,000
5/3/99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.54 10,000,000 10,000,000
Federal Home Loan Banks, Discount Notes
11/2/98 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.40 50,000,000 49,992,500
12/4/98 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.36 15,000,000 14,927,263
12/30/98 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.06 5,000,000 4,959,028
Federal Home Loan Mortgage Corp., Discount Notes
11/2/98 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.42 50,000,000 49,992,472
11/4/98 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.48 10,000,000 9,995,483
11/12/98 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.17 10,000,000 9,984,294
12/9/98 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.47 10,000,000 9,943,211
12/28/98 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.13 10,000,000 9,919,725
2/16/99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.75 10,000,000 9,860,900
Federal Home Loan Mortgage Corp., Floating Rate Notes
2/5/99 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.25 24,750,000 24,722,009
Federal National Mortgage Association, Discount Notes
1/8/99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.09 10,000,000 9,905,178
1/25/99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.80 10,000,000 9,888,083
3/5/99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.48 15,000,000 14,726,683
Federal National Mortgage Association, Floating Rate Notes
5/28/99 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.26 20,000,000 19,991,087
Tennessee Valley Authority, Discount Note
12/17/98 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.75 10,000,000 9,939,690
_____________
TOTAL U.S. GOVERNMENT AGENCIES
(cost $323,716,242) . . . . . . . . . . . . . . . . . . . . . . . . . . . $323,716,242
_____________
Repurchase Agreements--10.1%
____________________________________________________________________
Goldman, Sachs & Co., Tri-Party Repurchase Agreement,
dated 10/30/98, due 11/2/98 in the amount
of $34,892,874 (fully collateralized by $29,529,000
U.S. Treasury Bonds 6.50%, due 11/15/2026, value $35,575,119)
(cost $34,877,237) . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.38% $34,877,237 $ 34,877,237
_____________
TOTAL INVESTMENTS (cost $358,593,479). . . . . . . . . . . . . . 104.2% $358,593,479
_______ _____________
LIABILITIES, LESS CASH AND RECEIVABLES . . . . . . . . . . . . . (4.2%) $ (14,605,367)
_______ _____________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.0% $343,988,112
_______ _____________
</TABLE>
Notes to Statement of Investments:
- -----------------------------------------------------------------------------
(a) Variable interest rate--subject to periodic change.
SEE NOTES TO FINANCIAL STATEMENTS.
<TABLE>
<CAPTION>
DREYFUS INSTITUTIONAL GOVERNMENT MONEY MARKET FUND
- -----------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES OCTOBER 31, 1998
Cost Value
_____________ _____________
<S> <C> <C> <C>
ASSETS: Investments in securities--See Statement of Investments
(including Repurchase Agreements
of $34,877,237)--Note 1(c) . . . . . . . . . . . . . . $358,593,479 $358,593,479
Interest receivable . . . . . . . . . . . . . . . . . . . 549,967
______________
359,143,446
______________
LIABILITIES: Due to The Dreyfus Corporation and affiliates . . . . . . 24,573
Due to Distributor . . . . . . . . . . . . . . . . . . . 35,335
Cash overdraft due to Custodian . . . . . . . . . . . . . 95,426
Payable for investments securities purchased . . . . . . 15,000,000
______________
15,155,334
______________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $343,988,112
______________
______________
REPRESENTED BY: Paid-in capital . . . . . . . . . . . . . . . . . . . . . $344,070,535
Accumulated net realized gain (loss) on investments . . . (82,423)
______________
NET ASSETS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $343,988,112
______________
SHARES OUTSTANDING
(2 BILLION SHARES OF $.001 PAR VALUE CAPITAL STOCK AUTHORIZED) . . . . . . . . . . . . . . 344,070,535
NET ASSET VALUE, offering and redemption price per share . . . . . . . . . . . . . . . . . $1.00
______
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS INSTITUTIONAL GOVERNMENT MONEY MARKET FUND
- -----------------------------------------------------------------------------
STATEMENT OF OPERATIONSYEAR ENDED OCTOBER 31, 1998
INVESTMENT INCOME
INCOME Interest Income . . . . . . . . . . . . . . . . . $12,185,329
EXPENSES: Management fee--Note 2(a) . . . . . . . . . . . . $ 331,234
Shareholder servicing costs--Note 2(b) . . . . . 331,234
____________
Total Expenses . . . . . . . . . . . . . . . . 662,468
_____________
INVESTMENT INCOME--NET . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,522,861
NET REALIZED GAIN (LOSS) ON INVESTMENTS--Note 1(b) . . . . . . . . . . . . . . . . (68,460)
_____________
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS . . . . . . . . . . . . . . . $11,454,401
_____________
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS INSTITUTIONAL GOVERNMENT MONEY MARKET FUND
- -----------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
Year Ended Year Ended
October 31, 1998 October 31, 1997
________________ _________________
OPERATIONS:
Investment income--net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 11,522,861 $ 13,082,534
Net realized gain (loss) on investments . . . . . . . . . . . . . . . . . . . . . (68,460) (13,963)
________________ ________________
Net Increase (Decrease) in Net Assets Resulting from Operations . . . . . . . 11,454,401 13,068,571
________________ ________________
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (11,522,861) (13,082,534)
Net realized gain on investments . . . . . . . . . . . . . . . . . . . . . . . . -- (3,935)
________________ ________________
Total Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (11,522,861) (13,086,469)
________________ ________________
CAPITAL STOCK TRANSACTIONS ($1.00 per share):
Net proceeds from shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . 2,124,520,629 1,950,330,327
Dividends reinvested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 618,577 1,858,350
Cost of shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,972,935,967) (2,055,751,566)
________________ ________________
Increase (Decrease) in Net Assets from Capital Stock Transactions . . . . . . 152,203,239 (103,562,889)
________________ ________________
Total Increase (Decrease) in Net Assets . . . . . . . . . . . . . . . . . 152,134,779 (103,580,787)
NET ASSETS:
Beginning of Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191,853,333 295,434,120
________________ ________________
End of Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 343,988,112 $ 191,853,333
________________ ________________
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS INSTITUTIONAL GOVERNMENT MONEY MARKET 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.(1)
Year Ended October 31,
______________________________________________________
PER SHARE DATA: 1998 1997 1996 1995 1994(2)
_______ _______ _______ _______ _______
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period . . . . . . . . . . $1.00 $1.00 $1.00 $1.00 $1.00
_______ _______ _______ _______ _______
Investment Operations:
Investment income--net . . . . . . . . . . . . . . . . . .052 .052 .051 .056 .036
_______ _______ _______ _______ _______
Distributions:
Dividends from investment income--net . . . . . . . . . . (.052) (.052) (.051) (.056) (.036)
_______ _______ _______ _______ _______
Net asset value, end of period . . . . . . . . . . . . . $1.00 $1.00 $1.00 $1.00 $1.00
_______ _______ _______ _______ _______
TOTAL INVESTMENT RETURN. . . . . . . . . . . . . . . . . . . 5.36% 5.28% 5.25% 5.71% 3.63%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets . . . . . . . . . .30% .30% .30% .30% .30%(
Ratio of net investment income to average net assets . . 5.22% 5.14% 5.14% 5.55% 3.60%
Net Assets, end of period (000's Omitted) . . . . . . . . $343,988 $191,853 $295,434 $515,812 $470,007
- ---------
(1)Prior to October 31, 1995, shares of the Fund were designated Class I
shares. Effective November 1, 1995, the Fund's Class I and Class II designations
were eliminated and the Fund became a single class Fund.
(2)Effective October 17, 1994, The Dreyfus Corporation began serving as the
Fund's investment manager. Prior to October 17, 1994,
Mellon Bank, N.A. served as the Fund's investment manager.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS INSTITUTIONAL GOVERNMENT MONEY MARKET FUND
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES:
Dreyfus Institutional Government Money Market 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, as amended (the "Act") as
an open-end management investment company and operates as a series company
currently offering nineteen series including the Fund. The Fund's investment
objective is to seek a high level of current income consistent with stability of
principal and conservative investment risk by investing principally in high
grade money market instruments issued or guaranteed by the U.S. Government and
its agencies and instrumentalities. The Dreyfus Corporation (the "Manager")
serves as the Fund's investment adviser. The Manager is a direct subsidiary of
Mellon Bank, N.A. Premier Mutual Fund Services, Inc. is the distributor of the
Fund's shares.
The Fund' s financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management estimates
and assumptions. Actual results could differ from those estimates.
(A) PORTFOLIO VALUATION: Investments in securities are valued at amortized
cost in accordance with Rule 2a-7 of the Act, which has been determined by the
Fund's Board of Directors to represent the fair value of the Fund's investments
It is the Fund's policy to maintain a continuous net asset value per share of
$1.00 for the Fund; the Fund has adopted certain investment, portfolio valuation
and dividend and distribution policies to enable it to do so. There is no
assurance, however, that the Fund will be able to maintain a stable net asset
value per share of $1.00.
(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Interest income is
recognized on the accrual basis. Cost of investments represents amortized cost.
(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 Fund' s 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, if any, 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 of 1986, as
amended (the "Code"). To the extent that net realized capital gain can be offset
by capital loss carryovers, it is the policy of the Fund not to distribute such
gain.
(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 Code, and to make distributions of taxable income sufficient to relieve it
from substantially all Federal income and excise taxes.
DREYFUS INSTITUTIONAL GOVERNMENT MONEY MARKET FUND
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The Fund has an unused capital loss carryover of approximately $82,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to October 31, 1998. If not
applied, $14,000 of the carryover expires in fiscal 2005 and $68,000 expires in
fiscal 2006.
At October 31, 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 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 .15% 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, shareholder servicing 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) . Effective July 1, 1998, each
director receives $40,000 per year, plus $5,000 for each joint Board meeting of
The Dreyfus/Laurel Funds, Inc., The Dreyfus/Laurel Tax-Free Municipal Funds, and
The Dreyfus/Laurel Funds Trust (the "Dreyfus/Laurel Funds") attended, $2,000 for
separate committee meetings attended which are not held in conjunction with a
regularly scheduled board meeting and $500 for Board meetings and separate
committee meetings attended that are conducted by telephone and is reimbursed
for travel and out-of-pocket expenses. The Chairman of the Board receives an
additional 25% of such compensation (with the exception of reimbursable amounts)
.. In the event that there is a joint committee meeting of the Dreyfus/Laurel
Funds and the Dreyfus High Yield Strategies Fund, the $2,000 fee will be
allocated between the Dreyfus/Laurel Funds and the 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.
Prior to July 1, 1998 each director received $27,000 per year, $1,000 for each
Board meeting attended and $750 for each Audit Committee meeting attended and
was reimbursed for travel and out-of-pocket expenses. The Chairman of the Board
received an additional annual fee of $25,000 per year. These fees pertained to
the Dreyfus/Laurel Funds. (The $1,000 attendance fee and reimbursement of
meeting expenses were also borne pro rata by Dreyfus High Yield Strategies Fund)
.. These fees and expenses were 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, were in fact paid directly by the Manager
to the non-interested Directors.
(B) SHAREHOLDER SERVICING PLAN: Under the Shareholder Servicing Plan (the
" Plan" ), the Fund may pay up to .15% of the value of the average daily net
assets annually to compensate certain banks, brokers, dealers or other financial
institutions for shareholder services. During the period ended October 31, 1998,
the Fund was charged $331,234 pursuant to the Plan.
DREYFUS INSTITUTIONAL GOVERNMENT MONEY MARKET FUND
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Under its terms, the Plan shall remain in effect from year to year, provided
such continuance is approved annually by a vote of a 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 any agreement
related to the Plan.
NOTE 3--BANK LINE OF CREDIT:
The Fund participates with other Dreyfus-managed funds in a $100 million
unsecured line of credit primarily to be utilized for temporary or emergency
purposes, including the financing of redemptions. Interest is charged to the
Fund at rates which are related to the Federal Funds rate in effect at the time
of borrowings. During the period ended October 31, 1998, the Fund did not borrow
under the line of credit.
DREYFUS INSTITUTIONAL GOVERNMENT MONEY MARKET 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 Institutional Government
Money Market Fund of The Dreyfus/Laurel Funds, Inc. as of October 31, 1998, 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 in the five-year period then
ended. 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 and financial highlights. Our procedures included
confirmation of securities owned as of October 31, 1998 by correspondence with
the custodian and brokers. As to securities purchased, but not received, 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 Institutional Government Money Market Fund of The Dreyfus/Laurel Funds,
Inc. as of October 31, 1998, 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 the financial highlights for each of the years in the five-year
period then ended, in conformity with generally accepted accounting principles.
New York, New York
December 15, 1998
[reg.tm logo]
(reg.tm)
DREYFUS INSTITUTIONAL GOVERNMENT
MONEY MARKET 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. 919AR9810
Institutional
Government
Money Market Fund
Annual Report
October 31, 1998
DREYFUS INSTITUTIONAL PRIME MONEY MARKET FUND
- -----------------------------------------------------------------------------
LETTER TO SHAREHOLDERS
Dear Shareholder:
We are pleased to report the performance for the Dreyfus Institutional Prime
Money Market Fund for the 12-month period ended October 31, 1998. During the
period, your Fund produced a yield of 5.34%, and after taking into account the
effect of compounding, the effective yield was 5.47% .*
THE ECONOMY
In the face of soaring consumer confidence and strong first-quarter economic
growth, the Federal Reserve Board (the "Fed") earlier this year refrained from
increasing interest rates, partially to avoid further roiling international
financial markets. In addition, the Fed evidently felt then that the economic
slowdown overseas might curtail the U.S. economy to some degree, which would
alleviate the need for monetary restraint. The Fed's expectations have proven to
be true, and its judgment accurate. The U.S. balance of trade has worsened and
there have been increasing signs of a slowdown in export-related industries. On
September 29, concerns about a weakening U.S. economy caused the Federal Open
Market Committee (the F.O.M.C. is the policy-making arm of the Fed) to pare the
Federal Funds target rate by 25 basis points, the first reduction since January
1996. (The Federal Funds rate is the rate of interest that banks charge each
other for overnight loans.) Fed Chairman Alan Greenspan described the economic
outlook for the United States as having "weakened measurably." Two weeks later,
on October 15, the F.O.M.C. again reduced its target rate by an additional
quarter point, putting the Federal Funds rate at 5.0%.
Despite the concerns of the Fed regarding an economic slowdown, aggregate
economic statistics showed a growing and resilient economy during the reporting
period. Low unemployment and negligible inflation, combined with car makers
rebuilding inventory after a long strike and rising consumer incomes, resulted
in solid economic growth (3.3% ) for the third quarter of this year. While a
significant portion of this gain was due to inventory replenishment after the
automobile strike, the overall results were still an improvement over
second-quarter economic growth of 1.8%. Inflation as measured by the Consumer
Price Index remained at levels not witnessed since 1963.
The Fed' s responsibility is to enact monetary policy that is anticipatory of
future economic conditions. The U.S. trade deficit has continued to widen
because of the global economic slide. Slumping exports have weakened
manufacturing activity since midyear and there is concern that this slackness
could become more pronounced and widen into other sectors of the economy. While
the increase in imports also restrains domestic production, it has helped
contain inflation as well, since domestic producers are reluctant to raise
prices. This provides additional flexibility for the Fed to lower interest rates
still further. So far, economic problems overseas have not caused any measurable
reaction in the U.S. labor market. Only the growth rate in new jobs has eased
from its torrid pace earlier in the year. The unemployment rate has remained
near 30-year lows and worker inflation-adjusted take-home pay has been rising.
The condition of the labor market is a key determinant of consumer confidence
which, of course, relates directly to consumer spending, a force that accounts
for two thirds of all economic activity. Business spending has shown signs of
weakness, so the role of the consumer will be of even greater importance in the
future. It is significant that measures of consumer confidence have receded from
earlier record high levels, largely because of concerns about the volatility of
financial markets.
THE MARKET AND THE PORTFOLIO
<PAGE>
During the reporting period, money market rates moved lower, particularly over
the summer and early fall as economic turmoil overseas and volatile capital
markets caused investors to seek a safer investment haven in short-term
obligations. The decline in rates was hastened near the end of the reporting
period when the Fed lowered the Fed Funds rate from 5.50% to 5.00%, with two
separate 25 basis-point reductions on September 29 and October 15. The Fed also
lowered the discount rate to 4.75% from 5.00% on October 15. The second
reduction in the Fed Funds rate came as a surprise to the market since the
policy move did not coincide with the regularly scheduled meeting of the
F.O.M.C. We expect additional easing in monetary policy in the future if the
economy shows additional signs of weakness.
A key aspect of the Fund' s investment strategy is the management of its
average maturity to seek to capitalize on changes in interest rates. This can
help maintain a consistent and competitive stream of income. The Fund's average
maturity was adjusted opportunistically within a target average maturity range
of 30-60 days during the reporting period to adapt to shifts in the money market
yield curve. We feel this target range is appropriate in an environment where
further interest rate reductions are expected. The Fund's average maturity at
the end of the reporting period was 49 days.
The Fund invests in high-grade money market instruments such as commercial
paper, floating rate notes and repurchase agreements. At the end of the
reporting period, the Fund held allocations of 49% in commercial paper, 24% in
floating rate agreements, 25% in repurchase agreements and 2% in certificates of
deposit.
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 16, 1998
New York, N.Y.
*Effective yield is based upon dividends declared daily and reinvested monthly.
<PAGE>
<TABLE>
<CAPTION>
DREYFUS INSTITUTIONAL PRIME MONEY MARKET FUND
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS OCTOBER 31, 1998
Principal
Negotiable Bank Certificates of Deposit--2.1% Amount Value
- -------------------------------------------------------
_____________ _____________
Deutsche Bank AG
5.62%, 1/12/99
<S> <C> <C>
(cost $9,999,053) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 10,000,000 $ 9,999,053
_____________
Commercial Paper--48.9%
- -------------------------------------------------------
Aetna Services Inc.
5.37%, 11/3/98 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 10,000,000 $ 9,997,028
Air Products & Chemicals Inc.
5.34%, 3/26/99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,000,000 19,581,917
BTR Dunlop Finance Inc.
5.64%, 1/8/99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,000,000 14,844,733
CSC Enterprises
5.56%, 12/3/98 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,000,000 19,902,578
CSR Finance Ltd.
5.60%, 11/13/98 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,000,000 14,972,300
Coca-Cola Enterprises Inc.
5.68%, 1/15/99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,000,000 19,770,417
Dupont (E.I.) De Nemours & Co.
5.20%, 12/22/98 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,000,000 9,927,183
General Electric Capital Corp.
5.15%, 12/30/98 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,000,000 9,916,581
Goldman Sachs Group L.P.
5.61%, 11/25/98 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,000,000 14,945,100
May Department Stores Co.
5.52%, 1/21/99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,000,000 19,757,000
New York Life Capital Corp.
5.58%, 12/8/98 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,000,000 14,915,979
Rio Tinto America Inc.
5.64%, 11/9/98 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,600,000 17,578,528
Safeco Credit Co. Inc.
5.29%, 12/11/98 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,000,000 8,947,600
Siebe PLC
5.21%, 2/12/99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,000,000 9,853,511
<PAGE>
DREYFUS INSTITUTIONAL PRIME MONEY MARKET FUND
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1998
Principal
Commercial Paper (continued) Amount Value
- -------------------------------------------------------
_____________ _____________
Toyota Motor Credit Corp.
5.16%-5.19%, 1/8/99-2/5/99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 15,000,000 $ 14,816,444
UBS Finance (DE) Inc.
5.59%, 12/15/98 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,000,000 14,899,900
_____________
TOTAL COMMERCIAL PAPER
(cost $234,626,799) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $234,626,799
_____________
Corporate Notes--24.0%
- -------------------------------------------------------
Abbey National PLC
5.34%, 7/15/99 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 15,000,000 $ 14,993,394
Bank One Corp.
5.55%, 10/1/99 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,000,000 14,997,302
Bear Stearns Companies Inc.
5.63%, 8/24/99 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,000,000 15,000,000
Household Finance Corp.
5.63%, 3/30/99 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,000,000 14,996,411
Key Bank N.A.
5.37%, 1/29/99 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,000,000 19,996,659
National Rural Utilities Cooperative Finance Corp.
5.61%, 9/21/99 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,000,000 15,000,000
Paccar Financial Corp.
5.16%, 3/26/99 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,000,000 19,994,519
_____________
TOTAL CORPORATE NOTES
(cost $114,978,285) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $114,978,285
_____________
Repurchase Agreements--24.9%
- -------------------------------------------------------
Barclays De Zoette Wedd, Tri-Party Repurchase Agreement,
5.40% dated 10/30/98, due 11/2/98 in the
amount of $40,018,000 (fully collateralized
by $39,469,000 U.S.Treasury Notes 5.625% due 12/31/99
value $40,800,135) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 40,000,000 $ 40,000,000
Donaldson, Lufkin & Jenrette Securities Inc., Tri-Party Repurchase Agreement,
5.42% dated 10/30/98, due 11/2/98 in the
amount of $40,018,067 (fully collateralized
by $30,430,000 U.S.Treasury Bonds 6.375%-7.625% due
2/15/2025 to 8/15/2027 value $40,800,525) . . . . . . . . . . . . . . . . . . . . . . . 40,000,000 40,000,000
<PAGE>
DREYFUS INSTITUTIONAL PRIME MONEY MARKET FUND
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1998
Principal
Repurchase Agreements (continued) Amount Value
- -------------------------------------------------------
_____________ _____________
Goldman, Sachs & Co., Tri-Party Repurchase Agreement,
5.38% dated 10/30/98, due 11/2/98 in the
amount of $39,678,538 (fully collateralized
by $26,905,000 U.S.Treasury Bonds 9.125% due
5/15/2018 value $40,454,563) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 39,660,757 $ 39,660,757
_____________
TOTAL REPURCHASE AGREEMENTS
(cost $119,660,757) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $119,660,757
_____________
TOTAL INVESTMENTS
(cost $479,264,894) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99.9% $479,264,894
_______ _____________
CASH AND RECEIVABLES (NET) . . . . . . . . . . . . . . . . . . . . . . . . . . .1% $ 601,117
_______ _____________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.0% $479,866,011
_______ _____________
Notes to Statement of Investments:
- -----------------------------------------------------------------------------
(a) Variable interest rate-subject to periodic change.
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
DREYFUS INSTITUTIONAL PRIME MONEY MARKET FUND
- -----------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES OCTOBER 31, 1998
Cost Value
_____________ _____________
ASSETS: Investments in securities--See Statement of Investments
(including Repurchase Agreements
of $119,660,757)--Note 1(c) . . . . . . . . . . . . . . $479,264,894 $479,264,894
Interest receivable . . . . . . . . . . . . . . . . . . . 1,017,448
_____________
480,282,342
_____________
LIABILITIES: Due to The Dreyfus Corporation and affiliates . . . . . . 66,029
Due to Distributor . . . . . . . . . . . . . . . . . . . 60,279
Cash overdraft due to Custodian . . . . . . . . . . . . . 41,954
Payable for shares of Common Stock redeemed . . . . . . . 248,069
_____________
416,331
_____________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $479,866,011
_____________
REPRESENTED BY: Paid-in capital . . . . . . . . . . . . . . . . . . . . . $479,876,323
Accumulated net realized gain (loss) on investments . . . (10,312)
_____________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $479,866,011
_____________
SHARES OUTSTANDING
(4 BILLION SHARES OF $.001 PAR VALUE CAPITAL STOCK AUTHORIZED) . . . . . . . . . . . . . . 479,876,323
NET ASSET VALUE, offering and redemption price per share . . . . . . . . . . . . . . . . . $1.00
_____
STATEMENT OF OPERATIONS YEAR ENDED OCTOBER 31, 1998
INVESTMENT INCOME
INCOME Interest Income . . . . . . . . . . . . . . . . . . . . . $ 33,776,133
EXPENSES: Management fee--Note 2(a) . . . . . . . . . . . . . . . . $ 897,957
Shareholder servicing costs--Note 2(b) . . . . . . . . . 897,957
_____________
Total Expenses . . . . . . . . . . . . . . . . . . . . 1,795,914
_____________
INVESTMENT INCOME--NET . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31,980,219
NET REALIZED GAIN (LOSS) ON INVESTMENTS--Note 1(b) . . . . . . . . . . . . . . . . . . . . (773)
_____________
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS . . . . . . . . . . . . . . . . . . . $ 31,979,446
_____________
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
DREYFUS INSTITUTIONAL PRIME MONEY MARKET FUND
- -----------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
Year Ended Year Ended
October 31, 1998 October 31, 1997
________________ ________________
OPERATIONS:
Investment income--net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 31,980,219 $ 29,848,238
Net realized gain (loss) on investments . . . . . . . . . . . . . . . . . . . . . . (773) (9,373)
______________ ______________
Net Increase (Decrease) in Net Assets Resulting from Operations . . . . . . . . . 31,979,446 29,838,865
______________ ______________
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (31,980,219) (29,848,238)
______________ ______________
CAPITAL STOCK TRANSACTIONS ($1.00 per share):
Net proceeds from shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,359,541,323 3,040,713,948
Dividends reinvested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,987,063 11,533,601
Cost of shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,421,815,994) (3,094,783,808)
______________ ______________
Increase (Decrease) in Net Assets from Capital Stock Transactions . . . . . . . . (53,287,608) (42,536,259)
______________ ______________
Total Increase (Decrease) in Net Assets . . . . . . . . . . . . . . . . . . . . (53,288,381) (42,545,632)
NET ASSETS:
Beginning of Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 533,154,392 575,700,024
______________ ______________
End of Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 479,866,011 $ 533,154,392
______________ ______________
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
<TABLE>
<CAPTION>
DREYFUS INSTITUTIONAL PRIME MONEY MARKET 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.(1)
Year Ended October 31,
________________________________________________________
PER SHARE DATA: 1998 1997 1996 1995 1994(2)
______ ______ ______ ______ ______
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period . . . . . . . . . . $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
______ ______ ______ ______ ______
Investment Operations:
Investment income--net . . . . . . . . . . . . . . . . . .053 .053 .052 .056 .035
______ ______ ______ ______ ______
Distributions:
Dividends from investment income--net . . . . . . . . . . (.053) (.053) (.052) (.056) (.035)
______ ______ ______ ______ ______
Net asset value, end of period . . . . . . . . . . . . . $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
______ ______ ______ ______ ______
TOTAL INVESTMENT RETURN. . . . . . . . . . . . . . . . . . . 5.47% 5.42% 5.33% 5.77% 3.67%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets . . . . . . . . . .30% .30% .30% .30% .29%
Ratio of net investment income
to average net assets . . . . . . . . . . . . . . . . 5.34% 5.27% 5.25% 5.61% 3.58%
Net Assets, end of period (000's Omitted) . . . . . . . . $479,866 $533,154 $575,700 $773,602 $681,781
- ------------------------
(1)Prior to October 31, 1995, shares of the Fund were designated Class I
shares. Effective November 1, 1995, the Fund's Class I and Class II designations
were eliminated and the Fund became a single class Fund.
(2)Effective October 17, 1994, The Dreyfus Corporation began serving as the
Fund' s investment manager. Prior to October 17, 1994, Mellon Bank, N.A. served
as the Fund's investment manager.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
DREYFUS INSTITUTIONAL PRIME MONEY MARKET FUND
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
NOTE 1 -- SIGNIFICANT ACCOUNTING POLICIES:
Dreyfus Institutional Prime Money Market 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, as amended (the "Act") as
an open-end management investment company and operates as a series company
currently offering nineteen series including the Fund. The Fund's investment
objective is to seek a high level of current income consistent with stability of
principal by investing in high grade money market instruments. The Dreyfus
Corporation (the "Manager") serves as the Fund's investment adviser. The Manager
is a direct subsidiary of Mellon Bank, N.A. Premier Mutual Fund Services, Inc.
is the distributor of the Fund's shares.
The Fund' s financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management estimates
and assumptions. Actual results could differ from those estimates.
(A) PORTFOLIO VALUATION: Investments in securities are valued at amortized
cost in accordance with Rule 2a-7 of the Act, which has been determined by the
Fund's Board of Directors to represent the fair value of the Fund's investments
It is the Fund's policy to maintain a continuous net asset value per share of
$1.00 for the Fund; the Fund has adopted certain investment, portfolio valuation
and dividend and distribution policies to enable it to do so. There is no
assurance, however, that the Fund will be able to maintain a stable net asset
value per share of $1.00.
(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions
are recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Interest income is
recognized on the accrual basis. Cost of investments represents amortized cost.
(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, if any, 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 of 1986, as
amended (the "Code"). To the extent that net realized capital gain can be offset
by capital loss carryovers, it is the policy of the Fund not to distribute such
gain.
(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 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 $10,313
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to October 31, 1998. If not
applied, $167 of the carryover expires in fiscal 2004, $9,373 expires in fiscal
2005 and $773 expires in fiscal 2006.
<PAGE>
DREYFUS INSTITUTIONAL PRIME MONEY MARKET FUND
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
At October 31, 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 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 .15% 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, shareholder servicing 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). Effective July 1, 1998, each director receives $40,000 per
year, plus $5,000 for each joint Board meeting of The Dreyfus/Laurel Funds,
Inc., The Dreyfus/Laurel Tax-Free Municipal Funds, and The Dreyfus/Laurel Funds
Trust (the "Dreyfus/Laurel Funds" ) attended, $2,000 for separate committee
meetings attended which are not held in conjunction with a regularly scheduled
board meeting and $500 for Board meetings and separate committee meetings
attended that are conducted by telephone and is reimbursed for travel and
out-of-pocket expenses. The Chairman of the Board receives an additional 25% of
such compensation (with the exception of reimbursable amounts). In the event
that there is a joint committee meeting of the Dreyfus/Laurel Funds and the
Dreyfus High Yield Strategies Fund, the $2,000 fee will be allocated between the
Dreyfus/Laurel Funds and the Dreyfus High Yield Strategies Fund. These fees and
expenses are allocated to each series based on net assets. Amounts required to
be paid by the Company directly to 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.
Prior to July 1, 1998 each director received $27,000 per year, $1,000 for
each Board meeting attended and $750 for each Audit Committee meeting attended
and was reimbursed for travel and out-of-pocket expenses. The Chairman of the
Board received an additional annual fee of $25,000 per year. These fees
pertained to the Dreyfus/Laurel Funds. (The $1,000 attendance fee and
reimbursement of meeting expenses were also borne pro rata by Dreyfus High Yield
Strategies Fund) . These fees and expenses were 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, were in fact paid directly by the
Manager to the non-interested Directors.
(B) SHAREHOLDER SERVICING PLAN: Under the Shareholder Servicing Plan (the
" Plan" ), the Fund may pay up to .15% of the value of the average daily net
assets annually to compensate certain banks, brokers, dealers or other financial
institutions for shareholder services. During the period ended October 31, 1998,
the Fund was charged $897,957 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 a 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 any agreement
related to the Plan.
NOTE 3--BANK LINE OF CREDIT:
The Fund participates with other Dreyfus-managed funds in a $100 million
unsecured line of credit primarily
to be utilized for temporary or emergency purposes, including the financing of
redemptions. Interest is charged to the Fund at rates which are related to the
Federal Funds rate in effect at the time of borrowings. During the period ended
October 31, 1998, the Fund did not borrow under the line of credit.
<PAGE>
DREYFUS INSTITUTIONAL PRIME MONEY MARKET 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 Institutional Prime Money
Market Fund of The Dreyfus/Laurel Funds, Inc. as of October 31, 1998, 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 in the five-year period then
ended. 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 and financial highlights. Our procedures included
confirmation of securities owned as of October 31, 1998 by correspondence with
the custodian and brokers. 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 Institutional Prime Money Market Fund of The Dreyfus/Laurel Funds, Inc.
as of October 31, 1998, 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 the financial highlights for each of the years in the five-year
period then ended, in conformity with generally accepted accounting principles.
New York, New York
December 15, 1998
<PAGE>
(reg.tm)
(reg.tm)
DREYFUS INSTITUTIONAL PRIME
MONEY MARKET 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. 922AR9810
Institutional Prime
Money Market Fund
Annual Report
October 31, 1998
<PAGE>
DREYFUS INSTITUTIONAL U.S. TREASURY MONEY MARKET FUND
- -----------------------------------------------------------------------------
LETTER TO SHAREHOLDERS
Dear Shareholder:
We are pleased to report the performance for the Dreyfus Institutional U.S.
Treasury Money Market Fund for the 12-month period ended October 31, 1998.
During the period, your Fund produced a yield of 5.10%, and after taking into
account the effect of compounding, the effective yield was 5.22%.*
The Economy
In the face of soaring consumer confidence and strong first-quarter economic
growth, the Federal Reserve Board (the "Fed") earlier this year refrained from
increasing interest rates, partially to avoid further roiling international
financial markets. In addition, the Fed evidently felt then that the economic
slowdown overseas might curtail the U.S. economy to some degree, which would
alleviate the need for monetary restraint. The Fed's expectations have proven
to be true, and its judgment accurate. The U.S. balance of trade has worsened
and there have been increasing signs of a slowdown in export-related industries.
On September 29, concerns about a weakening U.S. economy caused the Federal Open
Market Committee (the F.O.M.C. is the policy-making arm of the Fed) to pare the
Federal Funds target rate by 25 basis points, the first reduction since January
1996. (The Federal Funds rate is the rate of interest that banks charge each
other for overnight loans.) Fed Chairman Alan Greenspan described the economic
outlook for the United States as having "weakened measurably." Two weeks later,
on October 15, the F.O.M.C. again reduced its target rate by an additional
quarter point, putting the Federal Funds rate at 5.0%.
Despite the concerns of the Fed regarding an economic slowdown, aggregate
economic statistics showed a growing and resilient economy during the reporting
period. Low unemployment and negligible inflation, combined with car makers
rebuilding inventory after a long strike and rising consumer incomes, resulted
in solid economic growth (3.3%) for the third quarter of this year. While a
significant portion of this gain was due to inventory replenishment after the
automobile strike, the overall results were still an improvement over
second-quarter economic growth of 1.8%. Inflation as measured by the Consumer
Price Index remained at levels not witnessed since 1963.
The Fed' s responsibility is to enact monetary policy that is anticipatory of
future economic conditions. The U.S. trade deficit has continued to widen
because of the global economic slide. Slumping exports have weakened
manufacturing activity since midyear and there is concern that this slackness
could become more pronounced and widen into other sectors of the economy. While
the increase in imports also restrains domestic production, it has helped
contain inflation as well, since domestic producers are reluctant to raise
prices. This provides additional flexibility for the Fed to lower interest
rates still further. So far, economic problems overseas have not caused any
measurable reaction in the U.S. labor market. Only the growth rate in new jobs
has eased from its torrid pace earlier in the year. The unemployment rate has
remained near 30-year lows and worker inflation-adjusted take-home pay has been
rising. The condition of the labor market is a key determinant of consumer
confidence which, of course, relates directly to consumer spending, a force that
accounts for two thirds of all economic activity. Business spending has shown
signs of weakness, so the role of the consumer will be of even greater
importance in the future. It is significant that measures of consumer
confidence have receded from earlier record high levels, largely because of
concerns about the volatility of financial markets.
The Market and the Portfolio
During the reporting period, money market rates moved lower, particularly over
the summer and early fall as economic turmoil overseas and volatile capital
markets caused investors to seek a safer investment haven in short-term
obligations. The decline in rates was hastened near the end of the reporting
period when the Fed lowered the Fed Funds rate from 5.50% to 5.00% with two
separate 25 basis-point reductions on September 29 and October 15. The Fed also
lowered the discount rate to 4.75% from 5.00% on October 15. The second
reduction in the Fed Funds rate came as a surprise to the market since the
policy move did not coincide with the regularly scheduled meeting of the
F.O.M.C. We expect additional easing in monetary policy in the future if the
economy shows additional signs of weakness.
A key aspect of the Fund' s investment strategy is the management of its
average maturity to seek to capitalize on changes in interest rates. This can
help maintain a consistent and competitive stream of income. The Fund's average
maturity was adjusted opportunistically within a target average maturity range
of 30-60 days during the reporting period to adapt to shifts in the money market
yield curve. We feel this target range is appropriate in an environment where
further interest rate reductions are expected. The Fund's average maturity at
the end of the reporting period was 46 days.
The Fund invests in U. S. Treasury securities and repurchase agreements. At
the end of the reporting period, the Fund held allocations of 58.2% in U.S.
Treasury securities and 40.7% in repurchase agreements.
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]
Laurie Carroll
Portfolio Manager
November 16, 1998
New York, N.Y.
*Effective yield is based upon dividends declared daily and reinvested monthly.
<TABLE>
<CAPTION>
DREYFUS INSTITUTIONAL U.S. TREASURY MONEY MARKET FUND
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS OCTOBER 31, 1998
Annualized
Yield on
Date of Principal
U.S. Treasury Notes--58.2% Purchase Amount Value
____________________________________________________________________ ________ ____________ _____________
<S> <C> <C> <C>
5.50%, 11/15/98 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.33% $ 25,000,000 $ 25,000,203
8.875%, 11/15/98 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.04 25,000,000 25,036,146
5.125%, 11/30/98 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.34 25,000,000 24,996,123
5.625%, 11/30/98 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.17 25,000,000 25,006,147
5.125%, 12/31/98 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.09 25,000,000 24,992,298
5.75%, 12/31/98 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.99 25,000,000 25,024,014
6.375%, 1/15/99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.34 100,000,000 100,377,995
5.00%, 1/31/99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.17 25,000,000 24,979,291
5.875%, 1/31/99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.04 25,000,000 25,042,839
5.00%, 2/15/99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.81 50,000,000 50,005,267
5.50%, 2/28/99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.20 10,000,000 10,040,483
6.00%, 6/30/99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.29 15,000,000 15,149,453
_____________
TOTAL U.S. TREASURY NOTES (cost $375,650,259). . . . . . . . . . . . . . . . $375,650,259
_____________
Repurchase Agreements--40.7%
____________________________________________________________________
Barclays De Zoette Wedd Securities, Inc., Tri-Party Repurchase Agreement,
dated 10/30/98, due 11/2/98 in the amount of $85,038,250
(fully collateralized by $89,861,000 U. S. Treasury Bills
due 9/16/99, value $86,700,049) . . . . . . . . . . . . . . . . . . . . . 5.40% $ 85,000,000 $ 85,000,000
Donaldson, Lufkin & Jenrette Securities, Tri-Party Repurchase Agreement,
dated 10/30/98, due 11/2/98 in the amount of $85,038,392
(fully collateralized by $82,583,000 U. S. Treasury Notes,
5.125% to 6.25%, due from 11/30/98 to 8/31/2002, $1,282,000,
U.S. Treasury Bonds, 8.75%, due 5/17/2017, value $86,700,182) . . . . . . 5.42 85,000,000 85,000,000
Goldman, Sachs & Co., Tri-Party Repurchase Agreement,
dated 10/30/98, due 11/2/98 in the amount of $92,905,300
(fully collateralized by $22,738,000 U.S. Treasury Notes,
6.5% due 10/15/2006, and $71,735,000 U.S. Treasury Bills due
10/14/99, value $94,721,889) . . . . . . . . . . . . . . . . . . . . . . 5.38 92,863,666 92,863,666
_____________
TOTAL REPURCHASE AGREEMENTS (cost $262,863,666). . . . . . . . . . . . . . . $262,863,666
_____________
TOTAL INVESTMENTS (cost $638,513,925). . . . . . . . . . . . . . 98.9% $638,513,925
_______ _____________
CASH AND RECEIVABLES (NET) . . . . . . . . . . . . . . . . . . . 1.1% $ 6,783,573
_______ _____________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.0% $645,297,498
_______ _____________
</TABLE>
<TABLE>
<CAPTION>
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS INSTITUTIONAL U.S. TREASURY MONEY MARKET FUND
- -----------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES OCTOBER 31, 1998
Cost Value
_____________ _____________
<S> <C> <C> <C>
ASSETS: Investments in securities--See Statement of Investments
(including Repurchase Agreements
of $262,863,666)--Note 1(c) . . . . . . . . . . . . . . $638,513,925 $638,513,925
Interest receivable . . . . . . . . . . . . . . . . . . . 7,301,066
______________
645,814,991
______________
LIABILITIES: Due to The Dreyfus Corporation and affiliates . . . . . . 80,352
Cash overdraft due to Custodian . . . . . . . . . . . . . 356,923
Due to Distributor . . . . . . . . . . . . . . . . . . . 80,218
______________
517,493
______________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $645,297,498
______________
REPRESENTED BY: Paid-in capital . . . . . . . . . . . . . . . . . . . . . $645,136,754
Accumulated net realized gain (loss) on investments . . . 160,744
______________
NET ASSETS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $645,297,498
______________
SHARES OUTSTANDING
(2 BILLION SHARES OF $.001 PAR VALUE CAPITAL STOCK AUTHORIZED) . . . . . . . . . . . . . . 645,136,754
NET ASSET VALUE, offering and redemption price per share . . . . . . . . . . . . . . . . . $1.00
______
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS INSTITUTIONAL U.S. TREASURY MONEY MARKET FUND
- -----------------------------------------------------------------------------
STATEMENT OF OPERATIONSYEAR ENDED OCTOBER 31, 1998
INVESTMENT INCOME
INCOME Interest Income . . . . . . . . . . . . . . . . . $36,879,410
EXPENSES: Management fee--Note 2(a) . . . . . . . . . . . . $ 1,025,270
Shareholder servicing costs--Note 2(b) . . . . . 1,025,271
____________
Total Expenses . . . . . . . . . . . . . . . . 2,050,541
_____________
INVESTMENT INCOME--NET . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34,828,869
NET REALIZED GAIN (LOSS) ON INVESTMENTS--Note 1(b) . . . . . . . . . . . . . . . . 160,744
_____________
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS . . . . . . . . . . . . . . . $34,989,613
_____________
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS INSTITUTIONAL U.S. TREASURY MONEY MARKET FUND
- -----------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
Year Ended Year Ended
October 31, 1998 October 31, 1997
________________ _________________
OPERATIONS:
Investment income--net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 34,828,869 $ 36,885,435
Net realized gain (loss) on investments . . . . . . . . . . . . . . . . . . . . . 160,744 48,004
________________ ________________
Net Increase (Decrease) in Net Assets Resulting from Operations . . . . . . . 34,989,613 36,933,439
________________ ________________
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (34,828,869) (36,885,435)
Net realized gain on investments . . . . . . . . . . . . . . . . . . . . . . . . (45,754) ---
________________ ________________
Total Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (34,874,623) (36,885,435)
________________ ________________
CAPITAL STOCK TRANSACTIONS ($1.00 per share):
Net proceeds from shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . 5,042,928,785 5,047,750,868
Dividends reinvested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,151,415 914,971
Cost of shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5,182,623,861) (4,938,347,456)
________________ ________________
Increase (Decrease) in Net Assets from Capital Stock Transactions . . . . . . (131,543,661) 110,318,383
________________ ________________
Total Increase (Decrease) in Net Assets . . . . . . . . . . . . . . . . . (131,428,671) 110,366,387
NET ASSETS:
Beginning of Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 776,726,169 666,359,782
________________ ________________
End of Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 645,297,498 $ 776,726,169
________________ ________________
</TABLE>
<TABLE>
<CAPTION>
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS INSTITUTIONAL U.S. TREASURY MONEY MARKET 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.(1)
Year Ended October 31,
______________________________________________________
PER SHARE DATA: 1998 1997 1996 1995 1994(2)
_______ _______ _______ _______ _______
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period . . . . . . . . . . $1.00 $1.00 $1.00 $1.00 $1.00
______ ______ ______ ______ ______
Investment Operations:
Investment income--net . . . . . . . . . . . . . . . . . .051 .050 .051 .054 .035(3)
______ ______ ______ ______ ______
Distributions:
Dividends from investment income--net . . . . . . . . . . (.051) (.050) (.051) (.054) (.035)
______ ______ ______ ______ ______
Net asset value, end of period . . . . . . . . . . . . . $1.00 $1.00 $1.00 $1.00 $1.00
______ ______ ______ ______ ______
TOTAL INVESTMENT RETURN. . . . . . . . . . . . . . . . . . . 5.22% 5.16% 5.17% 5.57% 3.55%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets . . . . . . . . . .30% .30% .30% .30% .30%(4)
Ratio of net investment income to average net assets . . 5.10% 5.04% 5.06% 5.44% 3.55%
Net Assets, end of period (000's Omitted) . . . . . . . . $645,297 $776,726 $666,360 $767,948 $586,778
- ---------------
(1) Prior to October 31, 1995, shares of the Fund were designated Class I
shares. Effective November 1, 1995, the Fund's Class I and Class II designations
were eliminated and the Fund became a single class Fund.
(2) Effective October 17, 1994, The Dreyfus Corporation began serving as the
Fund' s investment manager. Prior to October 17, 1994, Mellon Bank, N.A. served
as the Fund's investment manager.
(3) Net investment income before reimbursement of expenses by the investment
manager for the year ended October 31, 1994 was $.0350 per share.
(4) Annualized expense ratio before reimbursement of expenses by the investment
manager for the year ended October 31, 1994 was .31%.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS INSTITUTIONAL U.S. TREASURY MONEY MARKET FUND
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES:
Dreyfus Institutional U.S. Treasury Money Market 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, as amended (the
" Act" ) as an open-end management investment company and operates as a series
company currently offering nineteen series including the Fund. The Fund's
investment objective is to seek a high level of current income consistent with
stability of principal and conservative investment risk by investing in direct
obligations of the U.S. Treasury and repurchase agreements secured by such
obligations. The Dreyfus Corporation (the "Manager" ) serves as the Fund's
investment adviser. The Manager is a direct subsidiary of Mellon Bank, N.A.
Premier Mutual Fund Services, Inc. is the distributor of the Fund's shares.
The Fund' s financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management estimates
and assumptions. Actual results could differ from those estimates.
(A) PORTFOLIO VALUATION: Investments in securities are valued at amortized
cost in accordance with Rule 2a-7 of the Act, which has been determined by the
Fund's Board of Directors to represent the fair value of the Fund's investments
It is the Fund's policy to maintain a continuous net asset value per share of
$1.00 for the Fund; the Fund has adopted certain investment, portfolio valuation
and dividend and distribution policies to enable it to do so. There is no
assurance, however, that the Fund will be able to maintain a stable net asset
value per share of $1.00.
(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Interest income is
recognized on the accrual basis. Cost of investments represents amortized cost.
(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 of 1986, as
amended (the "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 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 Code, and to make distributions of taxable income sufficient to relieve it
from substantially all Federal income and excise taxes.
DREYFUS INSTITUTIONAL U.S. TREASURY MONEY MARKET FUND
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
At October 31, 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 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 .15% 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, shareholder servicing 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). Effective July 1, 1998, each director receives $40,000 per
year, plus $5,000 for each joint Board meeting of The Dreyfus/Laurel Funds,
Inc., The Dreyfus/Laurel Tax-Free Municipal Funds, and The Dreyfus/Laurel Funds
Trust (the "Dreyfus/Laurel Funds" ) attended, $2,000 for separate committee
meetings attended which are not held in conjunction with a regularly scheduled
board meeting and $500 for Board meetings and separate committee meetings
attended that are conducted by telephone and is reimbursed for travel and
out-of-pocket expenses. The Chairman of the Board receives an additional 25% of
such compensation (with the exception of reimbursable amounts). In the event
that there is a joint committee meeting of the Dreyfus/Laurel Funds and the
Dreyfus High Yield Strategies Fund, the $2,000 fee will be allocated between the
Dreyfus/Laurel Funds and the Dreyfus High Yield Strategies Fund. These fees and
expenses are allocated to each series based on net assets. Amounts required to
be paid by the Company directly to 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.
Prior to July 1, 1998 each director received $27,000 per year, $1,000 for each
Board meeting attended and $750 for each Audit Committee meeting attended and
was reimbursed for travel and out-of-pocket expenses. The Chairman of the Board
received an additional annual fee of $25,000 per year. These fees pertained to
the Dreyfus/Laurel Funds. (The $1,000 attendance fee and reimbursement of
meeting expenses were also borne pro rata by Dreyfus High Yield Strategies Fund)
.. These fees and expenses were 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, were in fact paid directly by the Manager
to the non-interested Directors.
(B) SHAREHOLDER SERVICING PLAN: Under the Shareholder Servicing Plan (the
"Plan), the Fund may pay up to .15% of the value of the average daily net assets
annually to compensate certain banks, brokers, dealers or other financial
institutions for shareholder services. During the period ended October 31, 1998,
the Fund was charged $1,025,271 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 a 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 any agreement
related to the Plan.
DREYFUS INSTITUTIONAL U.S. TREASURY MONEY MARKET FUND
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 3--BANK LINE OF CREDIT:
The Fund participates with other Dreyfus-managed funds in a $100 million
unsecured line of credit primarily to be utilized for temporary or emergency
purposes, including the financing of redemptions. Interest is charged to the
Fund at rates which are related to the Federal Funds rate in effect at the time
of borrowings. During the period ended October 31, 1998, the Fund did not borrow
under the line of credit.
DREYFUS INSTITUTIONAL U.S. TREASURY MONEY MARKET 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 Institutional U.S. Treasury
Money Market Fund of The Dreyfus/Laurel Funds, Inc. as of October 31, 1998, and
the related statement of operations for the year then ended, the statement of
changes in net assets for each of the years in the two year period then ended,
and financial highlights for each of the years in the five-year period then
ended. 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 and financial highlights. Our procedures included
confirmation of securities owned as of October 31, 1998, by correspondence with
the custodian and brokers. 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 Institutional U.S. Treasury Money Market Fund of The Dreyfus/Laurel
Funds, Inc. as of October 31, 1998, the results of its operations for the year
then ended, the 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 in the
five-year period then ended, in conformity with generally accepted accounting
principles.
New York, New York
December 15, 1998
(reg.tm)
(reg.tm)
DREYFUS INSTITUTIONAL U.S. TREASURY
MONEY MARKET 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. 930AR9810
Institutional
U.S. Treasury
Money Market Fund
Annual Report
October 31, 1998
DREYFUS PREMIER TAX MANAGED GROWTH FUND
- -----------------------------------------------------------------------------
LETTER TO SHAREHOLDERS
Dear Shareholders:
We are pleased to provide you with this report for the Dreyfus Premier Tax
Managed Growth Fund for the period from November 4, 1997 (commencement of
operations) through October 31, 1998. The Fund's performance during this period
is shown in the following table:
Total Return*
____________
Class A Shares 18.26%**
Class B Shares 17.36%**
Class C Shares 17.36%**
Class T Shares 17.97%**
Standard & Poor's 500 Composite
Stock Price Index (S&P 500)(+) 22.01%
- ---------------
** Since Inception 11/4/97.
ECONOMIC REVIEW
So far in 1998, the main regions of the world have had very different economic
fundamentals. The U.S. entered the year with a strong economy near full
employment, with unemployment only slightly above 4%. The tight labor market led
the Federal Reserve Board (the "Fed") to contemplate a rise in interest rates
early in the year. The U.S. economy cooled enough over the months that the Fed
decided to stand pat. Evidence of economic cooling continued to accumulate and
worries about the world economy intensified. Financial stresses pushed the Fed
to ease credit in both late September and mid-October. After many years of
subpar economic growth, continental Europe moved into a sustained economic
expansion. The overall European economy benefited as interest rates in
peripheral countries such as Spain and Italy fell, approaching the lower levels
established by Germany, on the eve of currency unification. Unlike the U.S.,
Europe has substantial excess capacity of productive plant and labor. In Asia,
weak economies were pervasive as a result of the Asian financial crisis. The
Latin American economies weakened as the financial stresses spread throughout
that region.
A main influence on the U.S. economy this year was the foreign financial
crisis and cooling of the world economy. The positive effects hit first. Actual
inflation and expected inflation dropped, causing a decline in long-term
Treasury bond yields and mortgage rates. This caused a boom in housing. The fall
in inflation helped the consumer sector as more of the growth in consumer income
was left over after inflation to buy goods and services. Consumers benefited
from a combination of good growth in income after inflation, a strong labor
market and past increases in the price of assets they owned.
The negative effect of Asian weakness was felt in the industrial sector more
than in the consumer sector. Corporate profits weakened, especially in sectors
affected by the Asian crisis such as world-traded commodities (oil, metals and
paper) and exports. One result of this industrial weakness was to cool off a
U.S. economy that had been growing rapidly.
The major change in the economic outlook over recent months has been a
downward shift in expectations for world economic growth. A credit crunch
developed in emerging countries and former communist countries, sharply reducing
the economic outlook for Asia and Latin America as well as for
commodity-exporting countries throughout the world. The effect on Europe and the
U.S. has been to lower expectations of profit growth and drive down bond yields.
Evidence of a weaker world economy accumulated as the financial stresses
continued. A worsened financial crisis occurred between the Russian default in
mid-August and the fallout from the Long-Term Capital Management (hedge fund)
crisis through early October. However, proactive steps were taken to stabilize
the Japanese banks, design a support package for Brazil and ease monetary
policy. The prospects for world economic weakness and monetary ease in the major
countries will be powerfully influenced by whether foreign financial stresses
calm down or intensify in the coming months. There appears to be a shift in the
priorities of key policymakers from fighting potential inflation to
restimulating future world economic growth.
MARKET OVERVIEW
The 12 months ended October 31, 1998 encompassed some very different market
phases. There was stock market strength during the early part of the period.
Then small-cap indices started to erode in the spring and were joined by
large-cap indices by mid-summer. A sharp decline until the end of August was
followed by a brief rebound and then a renewed decline amid financial fears
until early October. The last few weeks of the fiscal year saw a strong rally in
response to the easing of monetary policy. Over the 12-month period, the total
return on the Standard & Poor's Stock Price Index was 22.01%. Returns on mid-cap
and small-cap stock indices tended to be weaker than on large-caps, with a
negative total return on small-cap indices.
Three key trends influenced stock market behavior during the fiscal year.
First, the Federal Reserve kept the Federal Funds rate flat at 5.5% for nearly
11 months of the fiscal year, but then eased policy twice. Second, weakness in
emerging country economies contributed to declining commodity prices and a drop
in long-term Treasury bond yields to multidecade lows. Third, expectations for
corporate profits dropped, first in the sectors sensitive to Asian developments
such as oil, basic materials and exports and then for a broader list of stocks.
The trigger for the sharp decline in stocks in August appeared to be the
Russian default in the summer of 1998. This resulted in deepening concerns about
weaker economic growth and corporate profits. There was also a global margin
call on risky assets held by hedge funds and financial institutions. This raised
the cost of debt financing for many corporations and many emerging countries.
Expectations for economic activity in emerging countries in Asia and Latin
America shifted down sharply while expectations for U.S. corporate profits
weakened somewhat. Despite the fall in Treasury bond yields, financial stocks
led the summer selloff due to concerns about financial contagion among emerging
countries and potential loan losses by financial institutions. However, in the
last few weeks of the fiscal year, these fears began to ebb and the stock market
rebounded.
The erosion of expectations about average corporate profit growth over the
last year contributed to an outperformance by a small group of super-cap growth
stocks for much of the fiscal year. Investors had more confidence in the
prospect for strong persistent earnings growth for this small group of stocks
than for the broad market. Value stocks, which often have greater cyclical
sensitivity to earnings fluctuations, lagged behind these super-growth stocks.
In addition, many of the financial stocks that fall into the value category fell
sharply following the Russian default and global margin call concerns.
The fiscal year ended October 31, 1998 was characterized by very different
performances of the various market sectors. Super-cap growth stocks did best,
followed by large-cap stocks in general with mid-cap and small-cap stocks
lagging behind. For example, the total return for the fiscal year on the Russell
1000 Index with a heavy large-cap representation was 19.71%, while the Russell
1000 Growth Index returned 24.64% and the Russell 1000 Value Index returned
14.83% . The return on the Russell Midcap Index was 4.46% while the small-cap
Russell 2000 Index return was negative 11.84%.(+)(+)
PORTFOLIO FOCUS
During the reporting period, the Fund underperformed the S&P 500. The primary
reason for this was because we were underweight in the technology sector. In
addition, during the fiscal year, we also experienced a period of global and
economic uncertainty which caused many of the multinational companies to
underperform. The high-quality pharmaceuticals represented in the health care
sector had the most positive impact on the Fund's performance, led by shares of
Pfizer, Merck, Johnson & Johnson, Abbott Laboratories and American Home
Products. Consumer staples had the second most positive impact, due to good
issue selection and emphasis, and was led by shares of Philip Morris Cos.,
Walgreen, Procter & Gamble, Coca-Cola and McDonald's. The consumer cyclicals and
technology holdings also contributed to the Fund's performance with notable
strength in shares of Ford Motor, Chrysler, Cisco Systems, Intel and Microsoft.
At the close of the period, the Fund had 6.7% of its net assets in short-term
Treasuries, and emphasized investments in the consumer staples, health care and
financial sectors. We will continue to invest the short-term cash equivalent
assets, as investment opportunities arise, in favorable market conditions.
Sincerely,
[Signature logo Fayez Sarofim]
Fayez Sarofim
Portfolio Manager
November 23, 1998
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 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.
(+)(+) SOURCE: LIPPER ANALYTICAL SERVICES, INC. The Russell 1000 Index measures
the performance of the 1,000 largest companies in the Russell 3000 index, which
represents approximately 89% of the total market capitalization of the Russell
3000 Index. The Russell 1000 Growth Index measures the performance of those
Russell 1000 companies with higher price-to-book ratios and higher forecasted
growth values. The Russell 1000 Value Index measures the performance of those
Russell 1000 companies with lower price-to-book ratios and lower forecasted
growth values. The Russell Midcap Index consists of the bottom 800 securities in
the Russell 1000 Index as ranked by total market capitalization and is a widely
accepted measure of medium-cap stock market performance. The Russell 2000 Index
is composed of the 2,000 smallest companies in the Russell 3000 Index. The
Russell 3000 Index is composed of 3,000 of the largest U.S. Companies by market
capitalization. All indices are unmanaged and include reinvested dividends.
DREYFUS PREMIER TAX MANAGED GROWTH FUND OCTOBER 31, 1998
- -----------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN DREYFUS PREMIER TAX
MANAGED GROWTH FUND CLASS A SHARES, CLASS B SHARES, CLASS C SHARES AND CLASS T
SHARES AND THE STANDARD & POOR'S 500 COMPOSITE STOCK PRICE INDEX
Dollars
$12,201
Standard & Poor's 500 Composite Stock Price Index*
$11,636
Dreyfus Premier Tax Managed Growth Fund (Class C Shares)
$11,336
Dreyfus Premier Tax Managed Growth Fund (Class B Shares)
$11,265
Dreyfus Premier Tax Managed Growth Fund (Class T Shares)
$11,148
Dreyfus Premier Tax Managed Growth Fund (Class A Shares)
*Source: Lipper Analytical Services, Inc.
<TABLE>
<CAPTION>
Actual Aggregate 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 10/31/98 Sales Charge Sales Charge (5.75%) Period Ended 10/31/98 Redemption Redemption*
_____________________ _______________ __________________ _____________________ ____________ __________________
<S> <C> <C> <C> <C> <C>
From Inception (11/4/97) 18.26% 11.48% From Inception (11/4/97) 17.36% 13.36%
Class C Shares Class T Shares
_______________________________________________________________ _____________________________________________________________
% Return Reflecting
Applicable Contingent % Return
% Return Deferred Sales Reflecting
Assuming No Charge Upon % Return Without Maximim Initial
Period Ended 10/31/98 Redemption Redemption** Period Ended 10/31/98 Sales Charge Sales Charge (4.5%)
_____________________ _______________ __________________ _____________________ ____________ __________________
From Inception (11/4/97) 17.36% 16.36% From Inception (11/4/97) 17.97% 12.65%
- ------------------------
</TABLE>
Past performance is not predictive of future performance.
The above graph compares a $10,000 investment made in each of the Class A, Class
B, Class C and Class T shares of Dreyfus Premier Tax Managed Growth Fund on
11/4/97 (Inception Date) to a $10,000 investment made in the Standard & Poor's
500 Composite Stock Price Index on that date. For comparative purposes, the
value of the Index on 10/31/97 is used as the beginning value on 11/4/97. All
dividends and capital gain distributions are reinvested.
The Fund' s performance shown in the line graph takes into account the maximum
initial sales charge on Class A and Class T shares, the maximum contingent
deferred sales charge on Class B and Class C shares and all other applicable
fees and expenses on all classes. 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.
*The maximum contingent deferred sales charge for Class B shares is 4% and is
reduced to 0% after six years.
**The maximum contingent deferred sales charge for Class C shares is 1% for
shares redeemed within one year of the date of purchase.
<TABLE>
<CAPTION>
DREYFUS PREMIER TAX MANAGED GROWTH FUND
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTSOCTOBER 31, 1998
Common Stocks--93.7% Shares Value
- -------------------------------------------------------
____________ _____________
<S> <C> <C>
Aerospace & Electronics--.1% Rockwell International . . . . . . . . . . . . . . . . 3,300 $ 135,506
_____________
Auto Related--3.6% Chrysler . . . . . . . . . . . . . . . . . . . . . . . 35,000 1,684,375
Ford Motor . . . . . . . . . . . . . . . . . . . . . . 55,000 2,983,750
_____________
4,668,125
_____________
Banking--5.9% BankAmerica . . . . . . . . . . . . . . . . . . . . . 33,948 1,949,888
Chase Manhattan . . . . . . . . . . . . . . . . . . . 55,000 3,124,688
SunTrust Banks . . . . . . . . . . . . . . . . . . . . 35,000 2,439,062
_____________
7,513,638
_____________
Basic Materials--.7% duPont (EI) de Nemours . . . . . . . . . . . . . . . . 15,000 862,500
_____________
Capital Goods--6.0% AlliedSignal . . . . . . . . . . . . . . . . . . . . . 40,000 1,557,500
Boeing . . . . . . . . . . . . . . . . . . . . . . . . 25,000 937,500
Caterpillar . . . . . . . . . . . . . . . . . . . . . 10,000 450,000
Emerson Electric . . . . . . . . . . . . . . . . . . . 20,000 1,320,000
General Electric . . . . . . . . . . . . . . . . . . . 40,000 3,500,000
_____________
7,765,000
_____________
Communications--6.0% Bell Atlantic . . . . . . . . . . . . . . . . . . . . 35,000 1,859,375
BellSouth . . . . . . . . . . . . . . . . . . . . . . 30,000 2,394,375
SBC Communications . . . . . . . . . . . . . . . . . . 75,000 3,473,438
_____________
7,727,188
_____________
Computers--6.5% Cisco Systems . . . . . . . . . . . . . . . . . . . . 35,000 (a) 2,205,000
Compaq Computer . . . . . . . . . . . . . . . . . . . 25,000 (a) 790,625
Hewlett-Packard . . . . . . . . . . . . . . . . . . . 30,000 1,805,625
Microsoft . . . . . . . . . . . . . . . . . . . . . . 33,000 (a) 3,493,875
_____________
8,295,125
_____________
Consumer Durables--.7% General Motors . . . . . . . . . . . . . . . . . . . . 15,000 945,937
_____________
Electronics--3.5% Intel . . . . . . . . . . . . . . . . . . . . . . . . 50,000 4,459,375
_____________
Energy--7.8% British Petroleum A.D.S. . . . . . . . . . . . . . . . 30,000 2,653,125
Chevron . . . . . . . . . . . . . . . . . . . . . . . 20,000 1,630,000
Exxon . . . . . . . . . . . . . . . . . . . . . . . . 40,000 2,850,000
Mobil . . . . . . . . . . . . . . . . . . . . . . . . 30,000 2,270,625
Royal Dutch Petroleum, A.D.R. . . . . . . . . . . . . 12,000 591,000
_____________
9,994,750
_____________
Finance-misc.--5.1% Associates First Capital, Cl. A . . . . . . . . . . . 25,083 1,768,352
Federal National Mortgage Association . . . . . . . . 50,000 3,540,625
Merrill Lynch . . . . . . . . . . . . . . . . . . . . 20,000 1,185,000
_____________
6,493,977
_____________
DREYFUS PREMIER TAX MANAGED GROWTH FUND
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED)OCTOBER 31, 1998
Common Stocks (continued) Shares Value
- -------------------------------------------------------
____________ _____________
Food & Drugs--1.9% Walgreen . . . . . . . . . . . . . . . . . . . . . . . 50,000 $ 2,434,375
_____________
Food, Beverage & Tobacco--10.2% Coca-Cola . . . . . . . . . . . . . . . . . . . . . . 90,000 6,086,250
PepsiCo . . . . . . . . . . . . . . . . . . . . . . . 50,000 1,687,500
Philip Morris Cos. . . . . . . . . . . . . . . . . . . 105,000 5,368,125
_____________
13,141,875
_____________
Health Care--18.2% Abbott Laboratories . . . . . . . . . . . . . . . . . 50,000 2,346,875
American Home Products . . . . . . . . . . . . . . . . 65,000 3,168,750
Bristol-Myers Squibb . . . . . . . . . . . . . . . . . 28,000 3,095,750
Johnson & Johnson . . . . . . . . . . . . . . . . . . 40,000 3,260,000
Merck . . . . . . . . . . . . . . . . . . . . . . . . 30,000 4,057,500
Pfizer . . . . . . . . . . . . . . . . . . . . . . . . 70,000 7,511,875
_____________
23,440,750
_____________
Insurance--7.0% Citigroup . . . . . . . . . . . . . . . . . . . . . . 75,000 3,529,688
General Re . . . . . . . . . . . . . . . . . . . . . . 15,000 3,295,312
Marsh & McLennan . . . . . . . . . . . . . . . . . . . 40,000 2,220,000
_____________
9,045,000
_____________
Media/Entertainment--1.2% McDonald's . . . . . . . . . . . . . . . . . . . . . . 15,000 1,003,125
Tricon Global Restaurants . . . . . . . . . . . . . . 12,500 543,750
_____________
1,546,875
_____________
Personal Care--6.4% Colgate-Palmolive . . . . . . . . . . . . . . . . . . 20,000 1,767,500
Gillette . . . . . . . . . . . . . . . . . . . . . . . 65,000 2,920,938
Procter & Gamble . . . . . . . . . . . . . . . . . . . 40,000 3,555,000
_____________
8,243,438
_____________
Publishing--.8% McGraw-Hill Cos. . . . . . . . . . . . . . . . . . . . 12,000 1,079,250
_____________
Textiles-Apparel--.6% Polo Ralph Lauren, Cl. A . . . . . . . . . . . . . . . 35,000 728,437
_____________
Transportation--1.5% Norfolk Southern . . . . . . . . . . . . . . . . . . . 60,000 1,976,250
_____________
TOTAL COMMON STOCKS
(cost $113,238,945) . . . . . . . . . . . . . . . $120,497,371
=============
Principal
Short-Term Investments--6.7% Amount
- -------------------------------------------------------
____________
U.S. Treasury Bills: 4.94%, 11/5/98 . . . . . . . . . . . . . . . . . . . . $ 860,000 $ 859,690
4.90%, 11/12/98 . . . . . . . . . . . . . . . . . . . 1,678,000 1,676,221
4.91%, 11/19/98 . . . . . . . . . . . . . . . . . . . 257,000 256,561
4.85%, 11/27/98 . . . . . . . . . . . . . . . . . . . 910,000 907,834
4.49%, 12/17/98 . . . . . . . . . . . . . . . . . . . 297,000 295,548
4.25%, 12/24/98 . . . . . . . . . . . . . . . . . . . 932,000 926,473
DREYFUS PREMIER TAX MANAGED GROWTH FUND
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED)OCTOBER 31, 1998
Principal
Short-Term Investments (continued) Amount Value
- -------------------------------------------------------
____________ _____________
U.S. Treasury Bills (continued) 4.20%, 12/31/98 . . . . . . . . . . . . . . . . . . . $ 516,000 $ 512,533
3.76%, 1/14/99 . . . . . . . . . . . . . . . . . . . . 2,176,000 2,157,591
3.84%, 1/21/99 . . . . . . . . . . . . . . . . . . . . 333,000 329,647
4.11%, 1/28/99 . . . . . . . . . . . . . . . . . . . . 633,000 626,543
_____________
TOTAL SHORT-TERM INVESTMENTS
(cost $8,547,996) . . . . . . . . . . . . . . . . $ 8,548,641
=============
TOTAL INVESTMENTS (cost $121,786,941) . . . . . . . . . . . . . . . . . . . . . . . . . . 100.4% $ 129,046,012
======= =============
LIABILITIES, LESS CASH AND RECEIVABLES . . . . . . . . . . . . . . . . . . . . . . . . . (.4%) $ (525,452)
======= =============
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.0% $ 128,520,560
======= =============
Notes to Statement of Investments:
- -----------------------------------------------------------------------------
(a) Non-income producing.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS PREMIER TAX MANAGED GROWTH FUND
- -----------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES OCTOBER 31, 1998
Cost Value
______________ ______________
<S> <C> <C> <C>
ASSETS: Investments in securities--See Statement of Investments . . $121,786,941 $129,046,012
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . 381,995
Receivable for shares of Capital Stock subscribed . . . . 876,443
Dividends receivable . . . . . . . . . . . . . . . . . . 195,289
______________
130,499,739
______________
LIABILITIES: Due to The Dreyfus Corporation and affiliates . . . . . . 113,139
Due to Distributor . . . . . . . . . . . . . . . . . . . 78,477
Payable for investment securities purchased . . . . . . . 1,699,394
Payable for shares of Capital Stock redeemed . . . . . . 88,139
Loan commitment fees payable . . . . . . . . . . . . . . 30
______________
1,979,179
______________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $128,520,560
=============
REPRESENTED BY: Paid-in capital . . . . . . . . . . . . . . . . . . . . . $121,261,489
Accumulated net unrealized appreciation (depreciation)
on investments--Note 3 . . . . . . . . . . . . . . . . 7,259,071
______________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $128,520,560
=============
</TABLE>
<TABLE>
<CAPTION>
NET ASSET VALUE PER SHARE
--------------------
Class A Class B Class C Class T
_____________ ______________ _____________ _____________
<S> <C> <C> <C> <C>
Net Assets . . . . . . . . . . . . . . . . . . . . . . $30,428,154 $72,346,716 $21,244,415 $ 4,501,275
Shares Outstanding . . . . . . . . . . . . . . . . . . 2,059,946 4,930,999 1,448,666 305,364
NET ASSET VALUE PER SHARE. . . . . . . . . . . . . . . $14.77 $14.67 $14.66 $14.74
======= ======= ======= =======
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS PREMIER TAX MANAGED GROWTH FUND
- -----------------------------------------------------------------------------
STATEMENT OF OPERATIONS
FROM NOVEMBER 4, 1997 (COMMENCEMENT OF OPERATIONS) TO OCTOBER 31, 1998
INVESTMENT INCOME
<S> <C> <C> <C>
INCOME: Cash dividends (net of $8,302 foreign taxes
withheld at source) . . . . . . . . . . . . . $1,069,707
Interest . . . . . . . . . . . . . . . . . . . . 195,932
____________
Total Income . . . . . . . . . . . . . . . . . $1,265,639
EXPENSES: Management fee--Note 2(a) . . . . . . . . . . . . 753,307
Distribution and service fees--Note 2(b) . . . . 542,406
Interest expense--Note 4 . . . . . . . . . . . . 3,135
Loan commitment fees--Note 4 . . . . . . . . . . 189
____________
Total Expenses . . . . . . . . . . . . . . . . 1,299,037
___________
INVESTMENT (LOSS). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (33,398)
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--Note 3:
Net realized gain (loss) on investments . . . . . $ 3,024
Net unrealized appreciation (depreciation)
on investments . . . . . . . . . . . . . . . . 7,259,071
____________
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS . . . . . . . . . . . . . . 7,262,095
___________
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS . . . . . . . . . . . . . . . $7,228,697
===========
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS PREMIER TAX MANAGED GROWTH FUND
- -----------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
FROM NOVEMBER 4, 1997 (COMMENCEMENT OF OPERATIONS) TO OCTOBER 31, 1998
OPERATIONS:
<S> <C>
Investment (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (33,398)
Net realized gain (loss) on investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,024
Net unrealized appreciation (depreciation) on investments . . . . . . . . . . . . . . . . . . . . . . . . . 7,259,071
_____________
Net Increase (Decrease) in Net Assets Resulting from Operations . . . . . . . . . . . . . . . . . . 7,228,697
_____________
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34,492,581
Class B shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73,204,923
Class C shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,099,641
Class T shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,773,293
Dividends reinvested:
Class A shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
Class T shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Cost of shares redeemed:
Class A shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6,539,758)
Class B shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4,239,951)
Class C shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,717,671)
Class T shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (773,423)
_____________
Increase (Decrease) in Net Assets from Capital Stock Transactions . . . . . . . . . . . . . . . . . 121,299,741
_____________
Total Increase (Decrease) in Net Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128,520,560
NET ASSETS:
Beginning of Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . --
_____________
End of Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $128,520,560
=============
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS PREMIER TAX MANAGED GROWTH FUND
- -----------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
FROM NOVEMBER 4, 1997 (COMMENCEMENT OF OPERATIONS) TO OCTOBER 31, 1998
CAPITAL SHARE TRANSACTIONS:
<S> <C>
Class A
_______
Shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,507,883
Shares issued for dividends reinvested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (447,944)
__________
Net Increase (Decrease) in Shares Outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,059,946
==========
Class B
_______
Shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,230,565
Shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (299,566)
__________
Net Increase (Decrease) in Shares Outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,930,999
==========
Class C
_______
Shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,569,748
Shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (121,082)
__________
Net Increase (Decrease) in Shares Outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,448,666
==========
Class T
Shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 358,322
Shares issued for dividends reinvested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (52,960)
__________
Net Increase (Decrease) in Shares Outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 305,364
==========
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS PREMIER TAX MANAGED GROWTH 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 the period from November 4, 1997 (commencement of
operations) to October 31, 1998. This information has been derived from the
Fund's financial statements.
Class A Class B Class C Class T
<S> <C> <C> <C> <C>
PER SHARE DATA: Shares Shares Shares Shares
_______ _______ _______ _______
Net asset value, beginning of period . . . . . . . . . . . . . . . . . $12.50 $12.50 $12.50 $12.50
_______ _______ _______ _______
Investment Operations:
Investment income (loss)--net . . . . . . . . . . . . . . . . . . . . . .05 (.02) (.02) .03
Net realized and unrealized gain (loss) on investments . . . . . . . . 2.23 2.19 2.18 2.22
_______ _______ _______ _______
Total from Investment Operations . . . . . . . . . . . . . . . . . . . 2.28 2.17 2.16 2.25
_______ _______ _______ _______
Distributions:
Dividends from investment income--net . . . . . . . . . . . . . . . . . (.01) -- -- (.01)
_______ _______ _______ _______
Net asset value, end of period . . . . . . . . . . . . . . . . . . . . $14.77 $14.67 $14.66 $14.74
======= ======= ======= =======
TOTAL INVESTMENT RETURN(1,2) . . . . . . . . . . . . . . . . . . . . . . . 18.26% 17.36% 17.36% 17.97%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets(2) . . . . . . . . . . . . . . 1.34% 2.09% 2.09% 1.59%
Ratio of net investment income (loss) to average net assets(2) . . . . .52% (.27%) (.26%) .25%
Portfolio Turnover Rate(2) . . . . . . . . . . . . . . . . . . . . . . .05% .05% .05% .05%
Net Assets, end of period (000's Omitted) . . . . . . . . . . . . . . . $30,428 $72,347 $21,244 $4,501
- ------------------------
(1) Exclusive of sales load.
(2) Not annualized.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
DREYFUS PREMIER TAX MANAGED GROWTH FUND
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
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, as amended (the "Act") as an open-end
management investment company and operates as a series company currently
offering nineteen 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 (the "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.
Investment income, net of expenses (other than class specific expenses) and
realized and unrealized gains and losses are allocated daily to each class of
shares based upon the relative proportion of net assets of each class.
The Fund' s financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management estimates
and assumptions. Actual results could differ from those estimates.
(A) PORTFOLIO VALUATION: Investments in securities are valued at 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.
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.
DREYFUS PREMIER TAX MANAGED GROWTH FUND
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (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 of 1986, as amended (the "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 Code, and
to make distributions of taxable income sufficient to relieve it from
substantially all Federal income and excise taxes.
As of October 31, 1998, the Fund reclassified certain components of net
assets. The reclassification resulted in a net increase to accumulated net
investment income (loss) of $41,276, a decrease in accumulated net realized gain
(loss) on investments of $3,024 and a decrease in paid-in capital of $38,252.
Net assets were not affected by these reclassifications.
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 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,
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) . Effective July 1, 1998, each
director receives $40,000 per year, plus $5,000 for each joint Board meeting of
The Dreyfus/Laurel Funds Trust, Inc. The Dreyfus/Laurel Tax-Free Municipal Funds
and The Dreyfus/Laurel Funds Trust (the "Dreyfus/Laurel Funds") attended, $2,000
for separate committee meetings attended which are not held in conjunction with
a regularly scheduled board meeting and $500 for Board meetings and separate
committee meetings attended that are conducted by telephone and is reimbursed
for travel and out-of-pocket expenses. The Chairman of the Board receives an
additional 25% of such compensation (with the exception of reimbursable amounts)
.. In the event that there is a joint committee meeting of the Dreyfus/Laurel
Funds and the Dreyfus High Yield Strategies Fund, the $2,000 fee will be
allocated between the Dreyfus/Laurel Funds and the Dreyfus High Yield Strategies
DREYFUS PREMIER TAX MANAGED GROWTH FUND
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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 to the
non-interested Directors.
Prior to July 1, 1998, each director received $27,000 per year, $1,000 for
each Board meeting attended and $750 for each Audit Committee meeting attended
and was reimbursed for travel and out-of-pocket expenses. The Chairman of the
Board received an additional annual fee of $25,000 per year. These fees
pertained to the Dreyfus/Laurel Funds. (The $1,000 attendance fee and
reimbursement of meeting expenses were also borne pro rata by Dreyfus High Yield
Strategies Fund) . These fees and expenses were 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, were 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 $21,766 during the period ended October 31, 1998 from commissions
earned on sales of the Fund's shares.
(B) DISTRIBUTION AND SERVICE PLAN: Under the Distribution Plan (the "Plan")
adopted pursuant to Rule 12b-1 under the Act, Class A shares may pay annually up
to .25% of the value of its 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 October 31, 1998, Class A, Class B, Class C and Class T shares were
charged $41,727, $284,416, $78,165 and $8,619, respectively, pursuant to the
Plan. During the period ended October 31, 1998, Class B, Class C and Class T
shares were charged $94,805, $26,055 and $8,619, 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 October 31, 1998,
amounted to $113,272,896 and $33,157, respectively.
At October 31, 1998, accumulated net unrealized appreciation on investments
was $7,259,071, consisting of $10,444,087 gross unrealized appreciation and
$3,185,016 gross unrealized depreciation.
DREYFUS PREMIER TAX MANAGED GROWTH FUND
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
At October 31, 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.
The average daily amount of borrowings outstanding during the period ended
October 31, 1998 was approximately $53,400 with a related weighted average
annualized interest rate of 5.79%.
DREYFUS PREMIER TAX MANAGED GROWTH 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 Tax Managed Growth
Fund of The Dreyfus/Laurel Funds, Inc. as of October 31, 1998, and the related
statement of operations, the statement of changes in net assets, and the
financial highlights for the period from November 4, 1997 (commencement of
operations) to October 31, 1998. 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 audit.
We conducted our audit 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, 1998 by correspondence with the custodian and brokers. As to
securities purchased, but not received, 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 audit provides 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 Tax Managed Growth Fund of The Dreyfus/Laurel Funds, Inc. as of
October 31, 1998, the results of its operations, changes in its net assets, and
its financial highlights for the period from November 4, 1997 to October 31,
1998, in conformity with generally accepted accounting principles.
New York, New York
December 15, 1998
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. 149AR9810
ANNUAL REPORT
- -------------------------------------------------------------------------------
DREYFUS PREMIER
TAX MANAGED
GROWTH FUND
- -------------------------------------------------------------------------------
OCTOBER 31, 1998
[logo] (reg.tm)
DREYFUS U.S. TREASURY RESERVES
- -----------------------------------------------------------------------------
LETTER TO SHAREHOLDERS
Dear Shareholder:
We are pleased to report the performance for Dreyfus U.S. Treasury Reserves
for the 12-month period ended October 31, 1998, as shown in the following table
<TABLE>
<CAPTION>
ANNUALIZED YIELD EFFECTIVE YIELD*
______________ ____________
<S> <C> <C>
Investor Shares . . . . . . . . . . . . . . . . . . . 4.84% 4.95%
Class R Shares . . . . . . . . . . . . . . . . . . . . 5.04% 5.15%
</TABLE>
THE ECONOMY
In the face of soaring consumer confidence and strong first-quarter economic
growth, the Federal Reserve Board earlier this year refrained from increasing
interest rates, partially to avoid further roiling international financial
markets. In addition, the Fed evidently felt then that the economic slowdown
overseas might curtail the U.S. economy to some degree, which would alleviate
the need for monetary restraint. The Fed's expectations have proven to be true,
and its judgment accurate. The U.S. balance of trade has worsened and there have
been increasing signs of a slowdown in export-related industries. On September
29, concerns about a weakening U.S. economy caused the Federal Open Market
Committee (the F.O.M.C. is the policy-making arm of the Fed) to pare the Federal
Funds target rate by 25 basis points, the first reduction since January 1996.
(The Federal Funds rate is the rate of interest that banks charge each other for
overnight loans.) Fed Chairman Alan Greenspan described the economic outlook for
the United States as having "weakened measurably." Two weeks later, on October
15, the F.O.M.C. again reduced its target rate by an additional quarter point,
putting the Federal Funds rate at 5.0%.
Despite the concerns of the Fed regarding an economic slowdown, aggregate
economic statistics showed a growing and resilient economy during the reporting
period. Low unemployment and negligible inflation, combined with car makers
rebuilding inventory after a long strike and rising consumer incomes, resulted
in solid economic growth (3.3% ) for the third quarter of this year. While a
significant portion of this gain was due to inventory replenishment after the
automobile strike, the overall results were still an improvement over
second-quarter economic growth of 1.8%. Inflation as measured by the Consumer
Price Index remained at levels not witnessed since 1963.
The Fed' s responsibility is to enact monetary policy that is anticipatory of
future economic conditions. The U.S. trade deficit has continued to widen
because of the global economic slide. Slumping exports have weakened
manufacturing activity since midyear and there is concern that this slackness
could become more pronounced and widen into other sectors of the economy. While
the increase in imports also restrains domestic production, it has helped
contain inflation as well, since domestic producers are reluctant to raise
prices. This provides additional flexibility for the Fed to lower interest rates
still further. So far, economic problems overseas have not caused any measurable
reaction in the U.S. labor market. Only the growth rate in new jobs has eased
from its torrid pace earlier in the year. The unemployment rate has remained
near 30-year lows and worker inflation-adjusted take-home pay has been rising.
The condition of the labor market is a key determinant of consumer confidence
which, of course, relates directly to consumer spending, a force that accounts
for two thirds of all economic activity. Business spending has shown signs of
weakness, so the role of the consumer will be of even greater importance in the
future. It is significant that measures of consumer confidence have receded from
earlier record high levels, largely because of concerns about the volatility of
financial markets.
MARKET ENVIRONMENT/PORTFOLIO FOCUS
During the reporting period, money market rates moved lower, particularly over
the summer and early fall as economic turmoil and volatile capital markets
overseas caused investors to seek a safer investment haven in short-term
obligations. For the past year, repurchase agreements (repos) , fully
collateralized by U.S. Treasury obligations, maintained a significant yield
advantage over Treasury Bills. Accordingly, investment in these higher yielding
repos was a preferable strategy compared to the direct ownership of Treasury
obligations, and a growing percentage of the Fund's assets were so invested.
This strategy enhanced the income stream of the Fund. The remaining assets were
invested in Treasury Bills and Notes, purchased opportunistically when their
yields seemed particularly attractive.
A key aspect of our investment strategy is the management of the Fund's
average maturity in order to seek to capitalize on changes in interest rates
and, accordingly, maintain a consistent and competitive stream of income. The
Fund' s average maturity was adjusted opportunistically during the reporting
period to adapt to shifts in the U.S. Treasury yield curve. At the beginning of
the year, the Fund dramatically increased its average maturity from the 25-day
range to approximately 50 days because of the reduced likelihood of any
additional tightening in monetary policy by the Fed because of the Asian
economic crisis. This proved to be a correct decision because the crisis
expanded into Russia and South America, international markets became extremely
volatile, and short-term rates fell. The overall decline in interest rates was
hastened by the two separate easings in the Fed Funds rate near the end of the
reporting period. On October 31, 1998, the Fund's average maturity was 53 days.
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,
[David Hertan signature]
David Hertan
Portfolio Manager
November 16, 1998
New York, N.Y.
*Effective yield takes into account the effect of compounding and is based upon
dividends declared daily and reinvested monthly.
<TABLE>
<CAPTION>
DREYFUS U.S. TREASURY RESERVES
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS OCTOBER 31, 1998
Annualized
Yield on
Date of Principal
U.S. Treasury Bills--36.0% Purchase Amount Value
____________________________________________________________________ ________ _____________ _____________
<S> <C> <C> <C>
11/5/98 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.55% $ 65,000,000 $ 64,974,361
1/21/99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.36 200,000,000 198,057,126
_____________
TOTAL U.S. TREASURY BILLS
(cost $263,031,487) . . . . . . . . . . . . . . . . . . . . . . . . . . . $263,031,487
_____________
U.S. Treasury Notes--18.6%
____________________________________________________________________
5.50%, 11/15/98 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.35% $ 15,000,000 $ 14,999,622
5.125%, 11/30/98 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.54 10,000,000 9,995,941
5.625%, 11/30/98 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.61 10,000,000 9,999,143
5.50%, 2/28/99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.25 15,000,000 15,002,090
5.875%, 2/28/99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.36 25,000,000 25,027,354
6.50%, 4/30/99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.53 10,000,000 10,042,573
6.25%, 5/31/99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.46 30,000,000 30,111,213
6.00%, 8/15/99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.33 20,000,000 20,075,959
_____________
TOTAL U.S. TREASURY NOTES
(cost $135,253,895) . . . . . . . . . . . . . . . . . . . . . . . . . . . $135,253,895
_____________
Repurchase Agreements--45.1%
____________________________________________________________________
Dean Witter Reynolds Inc.
Dated 10/30/98, due 11/2/98 in the amount
of $170,077,350 (fully collateralized by
$140,673,000 U.S. Treasury Bonds
5.625% to 12.375%, due from 10/31/99 to
5/15/2021, value $172,282,250) . . . . . . . . . . . . . . . . . . . . . 5.46% $170,000,000 $170,000,000
First National Bank of Boston
Dated 10/30/98, due 11/2/98 in the amount of
$158,983,510 (fully collateralized by
$104,865,000 U.S. Treasury Bonds
10.625% to 12%, due from 5/15/2005 to
8/15/2005, value $161,429,466) . . . . . . . . . . . . . . . . . . . . . 5.40 158,912,000 158,912,000
_____________
TOTAL REPURCHASE AGREEMENTS
(cost $328,912,000) . . . . . . . . . . . . . . . . . . . . . . . . . . . $328,912,000
_____________
TOTAL INVESTMENTS (cost $727,197,382). . . . . . . . . . . . . . 99.7% $727,197,382
_______ _____________
CASH AND RECEIVABLES (NET) . . . . . . . . . . . . . . . . . . . .3% $ 2,478,027
_______ _____________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.0% $729,675,409
_______ _____________
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS U.S. TREASURY RESERVES
- -----------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES OCTOBER 31, 1998
Cost Value
_____________ _____________
<S> <C> <C> <C>
ASSETS: Investments in securities--See Statement of Investments
(including Repurchase Agreements
of $328,912,000--Note 1(c) . . . . . . . . . . . . . . $727,197,382 $727,197,382
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . 391,757
Interest receivable . . . . . . . . . . . . . . . . . . . 2,393,538
______________
729,982,677
______________
LIABILITIES: Due to The Dreyfus Corporation and affiliates . . . . . . 307,199
Due to Distributor . . . . . . . . . . . . . . . . . . . 69
______________
307,268
______________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $729,675,409
______________
REPRESENTED BY: Paid-in capital . . . . . . . . . . . . . . . . . . . . . $729,714,296
Accumulated net realized gain (loss) on investments . . . (38,887)
______________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $729,675,409
______________
NET ASSET VALUE PER SHARE
--------------------
Investor Shares Class R Shares
_______________ ______________
Net Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $115,622,407 $614,053,002
Shares Outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115,631,174 614,082,551
NET ASSET VALUE PER SHARE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1.00 $1.00
______ ______
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS U.S. TREASURY RESERVES
- -----------------------------------------------------------------------------
STATEMENT OF OPERATIONSYEAR ENDED OCTOBER 31, 1998
<S> <C> <C> <C>
INVESTMENT INCOME
INCOME Interest Income . . . . . . . . . . . . . . . . . $38,763,515
EXPENSES: Management fee--Note 2(a) . . . . . . . . . . . . $ 3,499,709
Distribution fees (Investor Shares)--Note 2(b) . 293,493
____________
Total Expenses . . . . . . . . . . . . . . . . 3,793,202
_____________
INVESTMENT INCOME--NET . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34,970,313
NET REALIZED GAIN (LOSS) ON INVESTMENTS--Note 1(b) . . . . . . . . . . . . . . . . (38,887)
_____________
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS . . . . . . . . . . . . . . . $34,931,426
_____________
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS U.S. TREASURY RESERVES
- -----------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
Year Ended Year Ended
October 31, 1998 October 31, 1997
________________ _________________
<S> <C> <C>
OPERATIONS:
Investment income--net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 34,970,313 $ 25,549,554
Net realized gain (loss) on investments . . . . . . . . . . . . . . . . . . . . . (38,887) 23,365
________________ ________________
Net Increase (Decrease) in Net Assets Resulting from Operations . . . . . . . 34,931,426 25,572,919
________________ ________________
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net:
Investor shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7,119,905) (1,814,464)
Class R shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (27,850,408) (23,735,090)
Net realized gain on investments:
Investor shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4,910) --
Class R shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (18,455) --
________________ ________________
Total Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (34,993,678) (25,549,554)
CAPITAL STOCK TRANSACTIONS ($1.00 per share):
Net proceeds from shares sold:
Investor shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 771,417,738 475,560,884
Class R shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,786,812,396 1,621,140,656
Dividends reinvested:
Investor shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,712,741 1,416,396
Class R shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,906,286 21,156,189
Cost of shares redeemed:
Investor shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (771,398,333) (385,904,562)
Class R shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,719,791,151) (1,584,443,908)
________________ ________________
Increase (Decrease) in Net Assets from Capital Stock Transactions . . . . 94,659,677 148,925,655
________________ ________________
Total Increase (Decrease) in Net Assets . . . . . . . . . . . . . . . . 94,597,425 148,949,020
NET ASSETS:
Beginning of Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 635,077,984 486,128,964
________________ ________________
End of Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 729,675,409 $ 635,077,984
________________ ________________
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS U.S. TREASURY RESERVES
- -----------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share of Capital
Stock outstanding, total investment return, ratios to average net assets and
other supplemental data for each period indicated. This information has been
derived from the Fund's financial statements.
Investor Shares
______________________________________________________
Year Ended October 31,
______________________________________________________
PER SHARE DATA: 1998 1997 1996 1995 1994(1)(2)
_______ _______ _______ _______ _______
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period . . . . . . . . . . $1.00 $1.00 $1.00 $1.00 $1.00
_______ _______ _______ _______ _______
Investment Operations:
Investment income--net . . . . . . . . . . . . . . . . . .048 .048 .046 .049 .020
_______ _______ _______ _______ _______
Distributions:
Dividends from investment income--net . . . . . . . . . . (.048) (.048) (.046) (.049) (.020)
_______ _______ _______ _______ _______
Net asset value, end of period . . . . . . . . . . . . . $1.00 $1.00 $1.00 $1.00 $1.00
_______ _______ _______ _______ _______
TOTAL INVESTMENT RETURN. . . . . . . . . . . . . . . . . . . 4.95% 4.89% 4.74% 5.02% 1.96%(3)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets . . . . . . . . . .70% .70% .70% .70% .70%(4)
Ratio of net investment income to average net assets . . 4.85% 4.81% 4.64% 4.92% 3.42%(4)
Net Assets, end of period (000's Omitted) . . . . . . . . $115,622 $112,900 $21,826 $21,386 $1,324
- ---------------
(1) The Fund commenced selling Investor shares on April 18, 1994.
(2) Effective October 17, 1994, The Dreyfus Corporation began serving as the
Fund's investment manager. Prior to October 17, 1994, Mellon Bank, N.A. served
as the Fund's investment manager.
(3) Not annualized.
(4) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS U.S. TREASURY RESERVES
- -----------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share of Capital
Stock outstanding, total investment return, ratios to average net assets and
other supplemental data for each period indicated. This information has been
derived from the Fund's financial statements.
Class R Shares
______________________________________________________
Year Ended October 31,
______________________________________________________
PER SHARE DATA: 1998 1997 1996 1995 1994(1)(2)
_______ _______ _______ _______ _______
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period . . . . . . . . . . $1.00 $1.00 $1.00 $1.00 $1.00
_______ _______ _______ _______ _______
Investment Operations:
Investment income--net . . . . . . . . . . . . . . . . . .050 .050 .048 .051 .033(3)
_______ _______ _______ _______ _______
Distributions:
Dividends from investment income--net . . . . . . . . . . (.050) (.050) (.048) (.051) (.033)
_______ _______ _______ _______ _______
Net asset value, end of period . . . . . . . . . . . . . $1.00 $1.00 $1.00 $1.00 $1.00
_______ _______ _______ _______ _______
TOTAL INVESTMENT RETURN. . . . . . . . . . . . . . . . . . . 5.16% 5.10% 4.94% 5.23% 3.37%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets . . . . . . . . . .50% .50% .50% .50% .50%(4)
Ratio of net investment income to average net assets . . 5.03% 4.98% 4.79% 5.14% 3.62%
Net Assets, end of period (000's Omitted) . . . . . . . . $614,053 $522,178 $464,303 $399,873 $228,797
</TABLE>
- ---------------
(1) Effective October 17, 1994, The Dreyfus Corporation began serving as the
Fund's investment manager. Prior to October 17, 1994, Mellon Bank, N.A. served
as the Fund's investment manager.
(2) The Fund commenced selling Investor shares on April 18, 1994. Those shares
outstanding prior to April 4, 1994 were designated as Trust shares. Effective
October 17, 1994, the Fund's Trust shares were reclassified as Class R shares.
(3) Net investment income before expenses reimbursed by the investment adviser
for the year ended October 31, 1994 was $0.0323.
(4) Annualized expense ratio before expenses reimbursed by the investment
adviser for the year ended October 31, 1994 was 0.59%.
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS U.S. TREASURY RESERVES
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES:
Dreyfus U.S. Treasury Reserves (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, as amended (the "Act") as an open-end management
investment company and operates as a series company currently offering nineteen
series including the Fund. The Fund's investment objective is to seek a high
level of current income consistent with stability of principal by investing in
high-grade money market instruments. The Dreyfus Corporation (the "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 1 billion of $.001 par value
Capital Stock in each of the following classes of shares: Investor and Class R.
Investor shares are sold primarily to retail investors and bear a distribution
fee. Class R shares are sold primarily to bank trust departments and other
financial service providers (including Mellon Bank and its affiliates) acting on
behalf of customers having a qualified trust or investment account or
relationship at such institution, and bear no distribution fee. Each class of
shares has identical rights and privileges, except with respect to the
distribution fee and voting rights on matters affecting a single class.
Investment income, net of expenses (other than class specific expenses) and
realized and unrealized gains and losses are allocated daily to each class of
shares based upon the relative proportion of net assets of each class.
The Fund' s financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management estimates
and assumptions. Actual results could differ from those estimates.
(A) PORTFOLIO VALUATION: Investments are valued at amortized cost in
accordance with Rule 2a-7 of the Act, which has been determined by the Fund's
Board of Directors to represent the fair value of the Fund's investments.
It is the Fund's policy to maintain a continuous net asset value per share of
$1.00 for the Fund; the Fund has adopted certain investment, portfolio valuation
and dividend and distribution policies to enable it to do so. There is no
assurance, however, that the Fund will be able to maintain a stable net asset
value per share of $1.00.
(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Interest income,
adjusted for amortization of premiums and discounts on investments, is
recognized on the accrual basis. Cost of investments represents amortized cost.
(C) 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 U.S. TREASURY RESERVES
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(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 of 1986, as
amended (the "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 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 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 $39,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to October 31 1998. If not
applied, the carryover expires in fiscal 2006.
At October 31, 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 2--INVESTMENT MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
(A) INVESTMENT MANAGEMENT FEE: Pursuant to an Investment Management agreement
with the Manager, the Manager provides or arranges for one or more third parties
and/or affiliates to provide investment advisory, administrative, custody, fund
accounting and transfer agency services to the Fund. The Manager also directs
the investments of the Fund in accordance with its investment objective,
policies and limitations. For these services, the Fund is contractually
obligated to pay the Manager a fee, calculated daily and paid monthly, at the
annual rate of .50% of the value of the Fund's average daily net assets. Out of
its fee, the Manager pays all of the expenses of the Fund except brokerage fees,
taxes, interest, Rule 12b-1 distribution fees, service 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) . Effective July 1, 1998, each
director receives $40,000 per year, plus $5,000 for each joint Board meeting of
The Dreyfus/Laurel Funds, Inc., The Dreyfus/Laurel Tax-Free Municipal Funds, and
The Dreyfus/Laurel Funds Trust (the "Dreyfus/Laurel Funds") attended, $2,000 for
separate committee meetings attended which are not held in conjunction with a
regularly scheduled board meeting and $500 for Board meetings and separate
committee meetings attended that are conducted by telephone and is reimbursed
for travel and out-of-pocket expenses. The Chairman of the Board receives an
additional 25% of such compensation (with the exception of reimbursable amounts)
.. In the event that there is a joint committee meeting of the Dreyfus/Laurel
Funds and the Dreyfus High Yield Strategies Fund, the $2,000 fee will be
allocated between the Dreyfus/Laurel Funds and the 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.
Prior to July 1, 1998, each director received $27,000 per year, $1,000 for
each Board meeting attended and $750 for each Audit Committee meeting attended
and was reimbursed for travel and out-of-pocket expenses. The Chairman of the
Board received an additional annual fee of $25,000 per year. These fees
pertained to the Dreyfus/Laurel Funds. (The $1,000 attendance fee and
reimbursement of meeting expenses was also borne pro rata by Dreyfus High Yield
Strategies Fund) . These fees and expenses were charged and allocated to each
series based on net assets. Amounts DREYFUS U.S. TREASURY RESERVES
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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, were in fact paid directly by the Manager to the non-interested
Directors.
(B) DISTRIBUTION PLAN: Under the Fund's Distribution Plan (the "Plan") adopted
pursuant to Rule 12b-1 under the Act relating to its Investor shares, the Fund
may pay annually up to .25% of the value of the average daily net assets
attributable to its Investor shares to compensate the Distributor and Dreyfus
Service Corporation, an affiliate of the Manager, for shareholder servicing
activities and the Distributor for activities primarily intended to result in
the sale of Investor shares. The Class R shares bear no distribution fee. During
the period October 31, 1998, Investor shares were charged $293,493 pursuant to
the Plan.
Under its terms, the Plan shall remain in effect from year to year, provided
such continuance is approved annually by a vote of majority of those Directors
who are not "interested persons" of the Company and who have no direct or
indirect financial interest in the operation of the Plan or in any agreement
related to the Plan.
NOTE 3--BANK LINE OF CREDIT:
The Fund participates with other Dreyfus-managed funds in a $100 million
unsecured line of credit primarily to be utilized for temporary or emergency
purposes, including the financing of redemptions. Interest is charged to the
Fund at rates which are related to the Federal Funds rate in effect at the time
of borrowings. During the period ended October 31, 1998, the Fund did not borrow
under the line of credit.
DREYFUS U.S. TREASURY RESERVES
- -----------------------------------------------------------------------------
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 U.S. Treasury Reserves of The
Dreyfus/Laurel Funds, Inc. as of October 31, 1998, 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 in the five-year period then ended.
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, 1998 by correspondence with the custodian and brokers. 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 U.S. Treasury Reserves of The Dreyfus/Laurel Funds, Inc. as of October
31, 1998, 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 the
financial highlights for each of the years or periods in the five-year period
then ended, in conformity with generally accepted accounting principles.
New York, New York
December 15, 1998
DREYFUS U.S. TREASURY RESERVES
- -----------------------------------------------------------------------------
IMPORTANT TAX INFORMATION (UNAUDITED)
For State individual income tax purposes, the Fund hereby designates 27.92% of
the ordinary income dividends paid during its fiscal year ended October 31, 1998
as attributable to interest income from direct obligations of the United States.
Such dividends are currently exempt from taxation for individual income tax
purposes in most states, including New York, California and the District of
Columbia.
[dreyfus "d" logo reg.tm]
[dreyfus logo reg.tm]
DREYFUS U.S. TREASURY RESERVES
200 Park Avenue
New York, NY 10166
MANAGER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
CUSTODIAN
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
TRANSFER AGENT &
DIVIDEND DISBURSING AGENT
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Printed in U.S.A. 326/726AR9810
U.S. Treasury
Reserves
Annual Report
October 31, 1998
DREYFUS PREMIER SMALL CAP VALUE FUND
- -----------------------------------------------------------------------------
LETTER TO SHAREHOLDERS
Dear Shareholder:
We are pleased to provide you with this report for Dreyfus Premier Small Cap
Value Fund. Your Fund, which began operations April 1, 1998, completed its first
fiscal reporting period on October 31, 1998. The intervening seven months were a
difficult period for the equities market in general, and for small cap stocks in
particular.
The Fund's portfolio outperformed its benchmark, the Russell 2000 Value Index,
for the fiscal period. The Russell 2000 Value Index, however, underperformed the
general market as represented by the Standard & Poor's 500 Composite Stock Price
Index.
During the seven-month period, your Fund had total returns for its various
classes of shares, as shown below:
<TABLE>
TOTAL RETURN* INCEPTION DATE***
___________ _______________
<S> <C> <C>
Class A Shares . . . . . . . . . . . . . . . . . . . . -16.40% April 1, 1998
Class B Shares . . . . . . . . . . . . . . . . . . . . -16.72% April 1, 1998
Class C Shares . . . . . . . . . . . . . . . . . . . . -16.72% April 1, 1998
Class R Shares . . . . . . . . . . . . . . . . . . . . -16.24% April 1, 1998
Russell 2000 Value Index** . . . . . . . . . . . . . . -18.49%
Standard & Poor's 500 Composite
Stock Price Index*** . . . . . . . . . . . . . . . . .62%
</TABLE>
Economic Review
So far in 1998, the main regions of the world have had very different economic
fundamentals. The U.S. entered the year with a strong economy near full
employment, with unemployment only slightly above 4%. The tight labor market led
the Federal Reserve Board (the "Fed") to contemplate a rise in interest rates
early in the year. The U.S. economy cooled enough over the months that the Fed
decided to stand pat. Evidence of economic cooling continued to accumulate and
worries about the world economy intensified. Financial stresses pushed the Fed
to ease credit in both late September and mid-October. After many years of
subpar economic growth, continental Europe moved into a sustained economic
expansion. The overall European economy benefited as interest rates in
peripheral countries such as Spain and Italy fell, approaching the lower levels
established by Germany, on the eve of currency unification. Unlike the U.S.,
Europe has substantial excess capacity of productive plant and labor. In Asia,
weak economies were pervasive as a result of the Asian financial crisis. The
Latin American economies weakened as the financial stresses spread throughout
that region.
A main influence on the U.S. economy this year was the foreign financial
crisis and cooling of the world economy. The positive effects hit first. Actual
inflation and expected inflation dropped, causing a decline in long-term
Treasury bond yields and mortgage rates. This caused a boom in housing. The fall
in inflation helped the consumer sector as more of the growth in consumer income
was left over after inflation to buy goods and services. Consumers benefited
from a combination of good growth in income after inflation, a strong labor
market and past increases in the price of assets they owned.
The negative effect of Asian weakness was felt in the industrial sector more
than in the consumer sector. Corporate profits weakened, especially in sectors
affected by the Asian crisis such as world-traded commodities (oil, metals and
paper) and exports. One result of this industrial weakness was to cool off a
U.S. economy that had been growing rapidly.
The major change in the economic outlook over recent months has been a
downward shift in expectations for world economic growth. A credit crunch
developed in emerging countries and former communist countries, sharply reducing
the economic outlook for Asia and Latin America as well as for
commodity-exporting countries throughout the world. The effect on Europe and the
U.S. has been to lower expectations of profit growth and drive down bond yields.
Evidence of a weaker world economy accumulated as the financial stresses
continued. A worsened financial crisis occurred between the Russian default in
mid-August and the fallout from the Long-Term Capital Management (hedge fund)
crisis through early October. However, proactive steps were taken to stabilize
the Japanese banks, design a support package for Brazil and ease monetary
policy. The prospects for world economic weakness and monetary ease in the major
countries will be powerfully influenced by whether foreign financial stresses
calm down or intensify in the coming months. There appears to be a shift in the
priorities of key policymakers from fighting potential inflation to
restimulating future world economic growth.
Market Overview
The 12 months ended October 31, 1998, encompassed some very different market
phases. There was stock market strength during the early part of the period.
Then small-cap indices started to decline in the spring and were joined by
large-cap indices by midsummer. A sharp decline through August was followed by a
brief rebound and then a renewed decline amid financial fears until early
October. The last few weeks of the fiscal year saw a strong rally in response to
the easing of monetary policy. Over the 12-month period, the total return on the
S& P 500 was 22.01%. Returns of mid-cap and small-cap stock indices tended to be
weaker than on large-caps, with a negative total return on small-cap indices.
Three key trends influenced stock market behavior during the fiscal year.
First, the Federal Reserve kept the Federal Funds rate flat at 5.5% for nearly
11 months of the fiscal year, but then eased policy twice. Second, weakness in
emerging country economies contributed to declining commodity prices and a drop
in long-term Treasury bond yields to multidecade lows. Third, expectations for
corporate profits dropped, particularly in sectors sensitive to Asian
developments such as oil, basic materials and exports.
The trigger for the sharp decline in stocks in August appeared to be the
Russian default in the summer of 1998. This resulted in deepening concerns about
weaker economic growth and corporate profits. There was also a global margin
call on risky assets held by hedge funds and financial institutions. This raised
the cost of debt financing for many corporations and many emerging countries.
Expectations for economic activity in emerging countries in Asia and Latin
America shifted down sharply while expectations for U.S. corporate profits
weakened somewhat. Despite the fall in Treasury bond yields, financial stocks
led the summer selloff due to concerns about financial contagion among emerging
countries and potential loan losses by financial institutions. However, in the
last few weeks of the fiscal year, these fears began to ebb and the stock market
rebounded.
The erosion of expectations about average corporate profit growth over the
last year contributed to an outperformance by a small group of super-cap growth
stocks for much of the fiscal year. Investors had more confidence in the
prospect for strong persistent earnings growth for this small group of stocks
than for the broad market. Value stocks, which often have greater cyclical
sensitivity to earnings fluctuations, lagged behind these super-cap stocks. For
example, financial stocks fell sharply following the Russian default and global
margin call concerns.
The one-year period ended October 31, 1998, was characterized by very
different performances of the various market sectors. Super-cap growth stocks
did best, followed by large-cap stocks in general with mid-cap and small-cap
stocks lagging behind. For example, the total return for the fiscal year on the
Russell 1000 Index with a heavy large-cap representation was 19.71%, while the
Russell 1000 Growth Index returned 24.64% and the Russell 1000 Value Index
returned 14.83% . The return on the Russell Midcap Index was 4.46%, while the
small-cap Russell 2000 Index return was -11.84% .(+)
Portfolio Focus
As you know, the Fund seeks total investment returns that outperform the
Russell 2000 Value Index. To pursue its investment objective, the Fund invests
primarily in common stocks of small-capitalization companies, while maintaining
investment characteristics and a risk profile that, in the aggregate, are
similar to those of the Russell 2000 Value Index.
Not only were small-cap stocks particularly weak during the reporting period,
but value stocks also lagged the broad market indices. Even so, a number of
stocks in the portfolio materially added to performance since April 1998. These
included Citrix Systems, Lone Star Industries and Marquette Medical Systems.
These three largest contributors to performance span the technology,
construction and healthcare industries. Citrix Systems is a software company
providing products for computer networking. Lone Star Industries is a cement
company that is benefiting from a relatively strong domestic economy and
virtually no exposure to the weak international economy. Marquette Medical
performed well as a result of its announced acquisition by GE Medical.
On the other side of the coin, performance was weakened by Capstead Mortgage,
which reacted negatively to the decline in interest rates and their impact on
the company's mortgage servicing portfolio, and by Genesco, a shoe retailer that
was hurt by price competition and relatively weak same-store sales.
Thank you for being a shareholder in this Dreyfus-managed Fund.
Sincerely,
[signature logo William P. Rydell]
William P. Rydell
Portfolio Manager
November 16, 1998
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 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 Russell
2000 Value Index is an unmanaged index comprised of the companies in the Russell
2000 Index with lower price-to-book ratios and lower forecasted growth rates.
***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.
(+)SOURCE: LIPPER ANALYTICAL SERVICES, INC.--The Russell 2000 Index is
composed of the 2,000 smallest companies in the Russell 3000 Index. The Russell
3000 Index is composed of 3,000 of the largest U.S. companies by market
capitalization. The Russell 1000 Index measures the performance of the 1,000
largest companies in the Russell 3000 index, which represents approximately 89%
of the total market capitalization of the Russell 3000 Index. The Russell 1000
Growth Index measures the performance of those Russell 1000 companies with
higher price-to-book ratios and higher forecasted growth values. The Russell
1000 Value Index measures the performance of those Russell 1000 companies with
lower price-to-book ratios and lower forecasted growth values. The Russell
Midcap Index consists of the bottom 800 securities in the Russell 1000 Index as
ranked by total market capitalization and is a widely accepted measure of
medium-cap stock market performance. All indices are unmanaged and include
reinvested dividends.
<TABLE>
DREYFUS PREMIER SMALL CAP VALUE FUND OCTOBER 31, 1998
- -----------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN DREYFUS PREMIER SMALL CAP
VALUE FUND CLASS A SHARES,
CLASS B SHARES, CLASS C SHARES AND CLASS R SHARES AND THE RUSSELL 2000 VALUE
INDEX
Dollars
$8,376
Dreyfus Premier Small Cap Value Fund (Class R Shares)
$8,245
Dreyfus Premier Small Cap Value Fund (Class C Shares)
$8,151
Russell 2000 Value Index*
$7,995
Dreyfus Premier Small Cap Value Fund (Class B Shares)
$7,881
Dreyfus Premier Small Cap Value Fund (Class A Shares)
*Source: Lipper Analytical Services, Inc.
Actual Aggregate Total Returns
- --------------------------------------------------------------------------------
Class A Shares Class B Shares
_______________________________________________________ _______________________
<S> <C> <C> <C> <C>
% Return Reflecting
% Return Applicable Contingent
Reflecting % Return Deferred Sales
% Return Without Maximum Initial Assuming No Charge Upon
Period Ended 10/31/98 Sales Charge Sales Charge (5.75%) Period Ended 10/31/98 Redemption Redemption*
_____________________ _______________ __________________ _____________________ ____________ __________________
From Inception (4/1/98) (16.40)% (21.19)% From Inception (4/1/98) (16.72)% (20.05)%
Class C Shares Class R Shares
_______________________________________________________ _______________________________________________________
% Return Reflecting
Applicable Contingent
% Return Deferred Sales
Assuming No Charge Upon
Period Ended 10/31/98 Redemption Redemption** Period Ended 10/31/98
_____________________ _______________ __________________ _____________________
From Inception (4/1/98) (16.72)% (17.55)% From Inception (4/1/98) (16.24)%
- ------------------------
</TABLE>
Past performance is not predictive of future performance.
The above graph compares a $10,000 investment made in each of the Class A, Class
B, Class C and Class R shares of Dreyfus Premier Small Cap Value Fund on 4/1/98
(Inception Date) to a $10,000 investment made in the Russell 2000 Value Index on
that date. All dividends and capital gain distributions are reinvested.
The Fund' s performance shown in the line graph takes into account the maximum
initial sales charge on Class A shares, the maximum contingent deferred sales
charge on Class B and Class C shares and all other applicable fees and expenses
on all classes. The Russell 2000 Value Index is an unmanaged index comprised of
securities in the Russell 2000 Index with less than average growth orientation.
Companies within the Russell 2000 Value Index generally have low price-to-book
and price-earnings ratios. The Russell 2000 Index is an unmanaged index and is
composed of the 2,000 smallest companies in the Russell 3000 Index. The Russell
3000 Index is composed of 3,000 of the largest U.S. companies by market
capitalization. The Russell 2000 Value 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 4% and is
reduced to 0% after six years.
**The maximum contingent deferred sales charge for Class C shares is 1% for
shares redeemed within one year of the date of purchase.
<TABLE>
DREYFUS PREMIER SMALL CAP VALUE FUND
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTSOCTOBER 31, 1998
Common Stocks--86.8% Shares Value
- -------------------------------------------------------
____________ ____________
<S> <C> <C>
Banking--12.1% BancorpSouth . . . . . . . . . . . . . . . . . . . . . 1,500 $ 29,812
Banknorth Group . . . . . . . . . . . . . . . . . . . 500 15,937
CVB Financial . . . . . . . . . . . . . . . . . . . . 1,400 32,200
Chittenden . . . . . . . . . . . . . . . . . . . . . . 500 14,937
City National . . . . . . . . . . . . . . . . . . . . 600 20,512
Commercial Federal . . . . . . . . . . . . . . . . . . 2,200 49,912
Corus Bankshares . . . . . . . . . . . . . . . . . . . 300 11,648
Cullen/Frost Bankers . . . . . . . . . . . . . . . . . 1,200 63,900
Dain Rauscher . . . . . . . . . . . . . . . . . . . . 200 6,800
Downey Financial . . . . . . . . . . . . . . . . . . . 1,200 28,125
Eaton Vance . . . . . . . . . . . . . . . . . . . . . 1,600 35,800
First Citizen BancShares . . . . . . . . . . . . . . . 100 8,925
Harbor Florida Bancshares . . . . . . . . . . . . . . 900 9,844
MAF Bancorp . . . . . . . . . . . . . . . . . . . . . 750 18,375
North Fork Bancorp . . . . . . . . . . . . . . . . . . 1,400 27,825
Peoples Heritage Financial Group . . . . . . . . . . . 2,700 48,600
Queens County Bancorp . . . . . . . . . . . . . . . . 600 17,887
Resource Bancshares Mortgage Group . . . . . . . . . . 3,000 44,250
St. Paul Bancorp . . . . . . . . . . . . . . . . . . . 1,800 37,013
Washington Federal . . . . . . . . . . . . . . . . . . 800 21,350
Westamerica Bancorp . . . . . . . . . . . . . . . . . 1,300 43,225
___________
586,877
___________
Basic Industries--7.2% Ball . . . . . . . . . . . . . . . . . . . . . . . . . 800 33,750
Buckeye Technologies . . . . . . . . . . . . . . . . . 1,200 (a) 24,000
GenCorp . . . . . . . . . . . . . . . . . . . . . . . 1,900 42,037
Lennar . . . . . . . . . . . . . . . . . . . . . . . . 400 8,100
Lone Star Industries . . . . . . . . . . . . . . . . . 1,100 77,481
Millennium Chemicals . . . . . . . . . . . . . . . . . 500 12,188
Mississippi Chemical . . . . . . . . . . . . . . . . . 1,200 17,325
Potash Corp. of Saskatchewan . . . . . . . . . . . . . 200 13,875
Rock-Tenn, Cl. A . . . . . . . . . . . . . . . . . . . 1,200 13,200
Southdown . . . . . . . . . . . . . . . . . . . . . . 1,400 76,212
Terra Industries . . . . . . . . . . . . . . . . . . . 4,100 30,750
___________
348,918
___________
Capital Spending--11.3% Anixter International . . . . . . . . . . . . . . . . 1,000 (a) 15,438
Applied Micro Circuits . . . . . . . . . . . . . . . . 700 (a) 16,800
CHS Electronics . . . . . . . . . . . . . . . . . . . 2,100 (a) 20,475
CTS . . . . . . . . . . . . . . . . . . . . . . . . . 800 23,700
California Water Service Group . . . . . . . . . . . . 2,400 63,300
Catalina Marketing . . . . . . . . . . . . . . . . . . 300 (a) 14,306
Chemed . . . . . . . . . . . . . . . . . . . . . . . . 400 12,650
Citrix Systems . . . . . . . . . . . . . . . . . . . . 800 (a) 56,700
Cohu . . . . . . . . . . . . . . . . . . . . . . . . . 600 10,312
Cordant Technologies . . . . . . . . . . . . . . . . . 300 12,206
Cummins Engine . . . . . . . . . . . . . . . . . . . . 300 10,238
Gallagher (Arthur J.) & Co . . . . . . . . . . . . . . 300 12,713
Graco . . . . . . . . . . . . . . . . . . . . . . . . 500 13,187
DREYFUS PREMIER SMALL CAP VALUE FUND
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED)OCTOBER 31, 1998
Common Stocks (continued) Shares Value
- -------------------------------------------------------
____________ ____________
Capital Spending (continued) Ingram Micro, Cl. A . . . . . . . . . . . . . . . . . 300 (a) $ 13,650
Innovex . . . . . . . . . . . . . . . . . . . . . . . 500 7,000
Kaydon . . . . . . . . . . . . . . . . . . . . . . . . 600 21,075
Kimball International, Cl. B . . . . . . . . . . . . . 800 14,825
Lincoln Electric, Cl. A . . . . . . . . . . . . . . . 2,700 59,231
Marshall Industries . . . . . . . . . . . . . . . . . 700 (a) 20,125
NeoMagic . . . . . . . . . . . . . . . . . . . . . . . 1,200 (a) 20,100
Regal Beloit . . . . . . . . . . . . . . . . . . . . . 600 12,638
SPS Technologies . . . . . . . . . . . . . . . . . . . 1,000 (a) 49,500
Terex . . . . . . . . . . . . . . . . . . . . . . . . 900 (a) 19,575
Thomas Industries . . . . . . . . . . . . . . . . . . 1,500 27,187
___________
546,931
___________
Consumer Cyclical--13.0% ANTEC . . . . . . . . . . . . . . . . . . . . . . . . 1,000 (a) 16,625
Arvin Industries . . . . . . . . . . . . . . . . . . . 1,000 39,625
BJ's Wholesale Club . . . . . . . . . . . . . . . . . 700 (a) 25,156
Borg-Warner Automotive . . . . . . . . . . . . . . . . 1,000 46,875
Burlington Coat Factory Warehouse . . . . . . . . . . 2,200 33,000
Consolidated Graphics . . . . . . . . . . . . . . . . 400 (a) 18,975
Department 56 . . . . . . . . . . . . . . . . . . . . 600 (a) 18,713
Ethan Allen Interiors . . . . . . . . . . . . . . . . 1,000 34,375
Fossil . . . . . . . . . . . . . . . . . . . . . . . . 600 (a) 10,988
Franklin Covey . . . . . . . . . . . . . . . . . . . . 900 (a) 17,775
Furniture Brands International . . . . . . . . . . . . 1,100 (a) 23,650
Hollinger International, Cl. A . . . . . . . . . . . . 1,000 13,000
IHOP . . . . . . . . . . . . . . . . . . . . . . . . . 400 (a) 15,700
Interface, Cl. A . . . . . . . . . . . . . . . . . . . 1,800 22,162
Kellwood . . . . . . . . . . . . . . . . . . . . . . . 1,500 40,875
King World Productions . . . . . . . . . . . . . . . . 1,400 (a) 36,750
Mikasa . . . . . . . . . . . . . . . . . . . . . . . . 2,000 21,125
Neiman-Marcus Group . . . . . . . . . . . . . . . . . 600 (a) 13,275
Richfood Holdings . . . . . . . . . . . . . . . . . . 500 8,875
Ross Stores . . . . . . . . . . . . . . . . . . . . . 1,300 42,250
Ryan's Family Steak House . . . . . . . . . . . . . . 4,800 (a) 51,600
Safeskin . . . . . . . . . . . . . . . . . . . . . . . 400 (a) 8,850
Springs Industries, Cl. A . . . . . . . . . . . . . . 800 28,300
Standard Register . . . . . . . . . . . . . . . . . . 800 22,950
Zale . . . . . . . . . . . . . . . . . . . . . . . . . 900 21,319
___________
632,788
___________
Consumer Staples--3.7% Coors (Adolph), Cl. B . . . . . . . . . . . . . . . . 200 10,000
IDEX . . . . . . . . . . . . . . . . . . . . . . . . . 1,400 36,225
J & J Snack Foods . . . . . . . . . . . . . . . . . . 800 (a) 18,000
Riviana Foods . . . . . . . . . . . . . . . . . . . . 1,400 27,431
Triarc Cos., Cl. A . . . . . . . . . . . . . . . . . . 800 (a) 12,500
Universal . . . . . . . . . . . . . . . . . . . . . . 1,500 55,688
Universal Foods . . . . . . . . . . . . . . . . . . . 800 17,350
___________
177,194
___________
DREYFUS PREMIER SMALL CAP VALUE FUND
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED)OCTOBER 31, 1998
Common Stocks (continued) Shares Value
- -------------------------------------------------------
____________ ____________
Energy--8.2% Atmos Energy . . . . . . . . . . . . . . . . . . . . . 1,300 $ 38,594
Cliffs Drilling . . . . . . . . . . . . . . . . . . . 300 (a) 6,863
Devon Energy . . . . . . . . . . . . . . . . . . . . . 1,200 40,650
Energen . . . . . . . . . . . . . . . . . . . . . . . 1,700 30,600
Helmerich & Payne . . . . . . . . . . . . . . . . . . 2,400 57,150
ONEOK . . . . . . . . . . . . . . . . . . . . . . . . 900 30,825
St. Mary Land & Exploration . . . . . . . . . . . . . 1,200 25,200
Tesoro Petroleum . . . . . . . . . . . . . . . . . . . 2,500 (a) 37,031
WICOR . . . . . . . . . . . . . . . . . . . . . . . . 2,200 53,625
Washington Gas Light . . . . . . . . . . . . . . . . . 2,900 76,669
___________
397,207
___________
Health Care--3.2% ALPHARMA, Cl. A . . . . . . . . . . . . . . . . . . . 300 8,306
Arterial Vascular Engineering . . . . . . . . . . . . 800 (a) 24,600
Bindley Western Industries . . . . . . . . . . . . . . 500 18,125
Curative Health Services . . . . . . . . . . . . . . . 600 (a) 16,350
Mariner Post-Acute Network . . . . . . . . . . . . . . 1,000 (a) 5,813
Marquette Medical Systems . . . . . . . . . . . . . . 1,000 (a) 44,562
NovaCare . . . . . . . . . . . . . . . . . . . . . . . 1,200 (a) 4,950
Serologicals . . . . . . . . . . . . . . . . . . . . . 1,350 (a) 30,544
___________
153,250
___________
Insurance--6.5% Ambac Financial Group . . . . . . . . . . . . . . . . 700 40,731
Amerin . . . . . . . . . . . . . . . . . . . . . . . . 600 (a) 12,825
Capital Re . . . . . . . . . . . . . . . . . . . . . . 1,000 18,313
EXEL Limited, Cl. A . . . . . . . . . . . . . . . . . 512 39,136
Financial Security Assurance Holdings . . . . . . . . 800 39,850
Harleysville Group . . . . . . . . . . . . . . . . . . 1,200 25,650
Orion Capital . . . . . . . . . . . . . . . . . . . . 1,200 41,025
PartnerRe . . . . . . . . . . . . . . . . . . . . . . 600 23,850
Presidential Life . . . . . . . . . . . . . . . . . . 1,600 29,000
Protective Life . . . . . . . . . . . . . . . . . . . 1,200 44,475
___________
314,855
___________
Mining and Metals--3.4% AK Steel Holding . . . . . . . . . . . . . . . . . . . 3,800 65,788
Cleveland-Cliffs . . . . . . . . . . . . . . . . . . . 700 27,781
Commercial Metals . . . . . . . . . . . . . . . . . . 1,100 29,288
National Steel, Cl. B . . . . . . . . . . . . . . . . 1,400 9,013
RTI International Metals . . . . . . . . . . . . . . . 900 (a) 13,388
Reliance Steel & Aluminum . . . . . . . . . . . . . . 700 21,656
___________
166,914
___________
Real Estate--9.8% D. R. Horton . . . . . . . . . . . . . . . . . . . . . 3,700 58,738
Franchise Finance Corp. of America . . . . . . . . . . 1,400 34,825
M.D.C. Holdings . . . . . . . . . . . . . . . . . . . 1,200 21,075
Pulte . . . . . . . . . . . . . . . . . . . . . . . . 3,300 84,975
Rouse . . . . . . . . . . . . . . . . . . . . . . . . 1,500 42,094
Simon Property Group . . . . . . . . . . . . . . . . . 400 11,975
Standard Pacific . . . . . . . . . . . . . . . . . . . 1,400 13,563
DREYFUS PREMIER SMALL CAP VALUE FUND
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED)OCTOBER 31, 1998
Common Stocks (continued) Shares Value
- -------------------------------------------------------
____________ ____________
Real Estate (continued) Toll Brothers . . . . . . . . . . . . . . . . . . . . 3,000 (a) $ 69,562
U.S. Home . . . . . . . . . . . . . . . . . . . . . . 2,000 (a) 63,250
Webb (Del) . . . . . . . . . . . . . . . . . . . . . . 3,200 75,200
___________
475,257
___________
Transportation--2.8% Alaska Air Group . . . . . . . . . . . . . . . . . . . 900 (a) 32,344
Arnold Industries . . . . . . . . . . . . . . . . . . 1,700 21,675
Continental Airlines, Cl. B . . . . . . . . . . . . . 1,300 (a) 51,513
SEACOR Smit . . . . . . . . . . . . . . . . . . . . . 400 (a) 19,125
USFreightways . . . . . . . . . . . . . . . . . . . . 500 12,531
___________
137,188
___________
Utilities--5.6% Aliant Communications . . . . . . . . . . . . . . . . 1,000 28,219
BEC Energy . . . . . . . . . . . . . . . . . . . . . . 1,200 47,625
Calpine . . . . . . . . . . . . . . . . . . . . . . . 1,600 (a) 35,600
Cleco . . . . . . . . . . . . . . . . . . . . . . . . 600 20,287
Commonwealth Energy Systems . . . . . . . . . . . . . 800 29,850
Conectiv . . . . . . . . . . . . . . . . . . . . . . . 900 20,587
Idacorp . . . . . . . . . . . . . . . . . . . . . . . 500 15,625
Public Service Company of New Mexico . . . . . . . . . 1,900 41,919
Rochester Gas & Electric . . . . . . . . . . . . . . . 300 8,738
TNP Enterprises . . . . . . . . . . . . . . . . . . . 700 23,625
___________
272,075
___________
TOTAL COMMON STOCKS
(cost $4,960,352) . . . . . . . . . . . . . . . . $4,209,454
===========
Principal
Short-Term Investments--13.1% Amount
- -------------------------------------------------------
____________
U.S. Treasury Bills: 3.55%, 11/5/98 . . . . . . . . . . . . . . . . . . . . $ 11,000 $ 10,996
3.75%, 11/12/98 . . . . . . . . . . . . . . . . . . . 10,000 9,989
3.30%, 11/19/98 . . . . . . . . . . . . . . . . . . . 13,000 12,978
4.82%, 11/27/98 . . . . . . . . . . . . . . . . . . . 33,000 32,921
3.50%, 12/17/98 . . . . . . . . . . . . . . . . . . . 55,000 54,731
3.80%, 12/31/98 . . . . . . . . . . . . . . . . . . . 13,000 12,913
3.50%, 1/7/99 . . . . . . . . . . . . . . . . . . . . 1,000 992
3.88%, 1/14/99 . . . . . . . . . . . . . . . . . . . . 15,000 14,873
4.30%, 1/21/99 . . . . . . . . . . . . . . . . . . . . 271,000 268,271
4.20%, 1/28/99 . . . . . . . . . . . . . . . . . . . . 217,000 214,787
___________
TOTAL SHORT-TERM INVESTMENTS
(cost $633,700) . . . . . . . . . . . . . . . . . $ 633,451
===========
TOTAL INVESTMENTS (cost $5,594,052). . . . . . . . . . . . . . . . . . . . . . . . . . . . 99.9% $ 4,842,905
======= ===========
CASH AND RECEIVABLES (NET) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1% $ 6,211
======= ===========
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.0% $ 4,849,116
======= ===========
Notes to Statement of Investments:
- -----------------------------------------------------------------------------
(a) Non-income producing.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
DREYFUS PREMIER SMALL CAP VALUE FUND
- -----------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES OCTOBER 31, 1998
Cost Value
___________ ___________
<S> <C> <C>
ASSETS: Investments in securities--See Statement of Investments . . $5,594,052 $4,842,905
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . 5,731
Dividends receivable . . . . . . . . . . . . . . . . . . 6,615
___________
4,855,251
___________
LIABILITIES: Due to The Dreyfus Corporation and affiliates . . . . . . 5,384
Due to Distributor . . . . . . . . . . . . . . . . . . . 751
___________
6,135
___________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $4,849,116
===========
REPRESENTED BY: Paid-in capital . . . . . . . . . . . . . . . . . . . . . $5,709,227
Accumulated undistributed investment income--net . . . . 7,466
Accumulated net realized gain (loss) on investments . . . (116,430)
Accumulated net unrealized appreciation (depreciation)
on investments--Note 3 . . . . . . . . . . . . . . . . (751,147)
___________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $4,849,116
===========
NET ASSET VALUE PER SHARE
--------------------
Class A Class B Class C Class R
___________ ____________ ____________ ____________
Net Assets . . . . . . . . . . . . . . . . . . . . . . $3,168,910 $ 639,268 $ 620,770 $ 420,168
Shares Outstanding . . . . . . . . . . . . . . . . . . 303,157 61,406 59,631 40,126
NET ASSET VALUE PER SHARE. . . . . . . . . . . . . . . $10.45 $10.41 $10.41 $10.47
======= ======= ======= =======
STATEMENT OF OPERATIONS
FROM APRIL 1, 1998 (COMMENCEMENT OF OPERATIONS) TO OCTOBER 31, 1998
INVESTMENT INCOME
INCOME: Cash dividends (net of $24 foreign taxes
withheld at source) . . . . . . . . . . . . . $ 43,561
Interest . . . . . . . . . . . . . . . . . . . . 10,206
___________
Total Income . . . . . . . . . . . . . . . . . $ 53,767
EXPENSES: Management fee--Note 2(a) . . . . . . . . . . . . 35,219
Distribution and service fees--Note 2(b) . . . . 11,082
___________
Total Expenses . . . . . . . . . . . . . . . . 46,301
___________
INVESTMENT INCOME--NET . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,466
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--Note 3:
Net realized gain (loss) on investments . . . . . $ (116,430)
Net unrealized appreciation (depreciation)
on investments . . . . . . . . . . . . . . . . (751,147)
___________
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS . . . . . . . . . . . . . . (867,577)
___________
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS . . . . . . . . . . . . . . $ (860,111)
===========
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
DREYFUS PREMIER SMALL CAP VALUE FUND
- -----------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
FROM APRIL 1, 1998 (COMMENCEMENT OF OPERATIONS) TO OCTOBER 31, 1998
<S> <C> <C>
OPERATIONS:
Investment income--net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 7,466
Net realized gain (loss) on investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (116,430)
Net unrealized appreciation (depreciation) on investments . . . . . . . . . . . . . . . . . . . . . . . . . . (751,147)
___________
Net Increase (Decrease) in Net Assets Resulting from Operations . . . . . . . . . . . . . . . . . . . (860,111)
___________
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold:
Class A shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,776,717
Class B shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 757,342
Class C shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 711,811
Class R shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 501,500
Cost of shares redeemed:
Class A shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (18,415)
Class B shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (19,532)
Class C shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (196)
___________
Increase (Decrease) in Net Assets from Capital Stock Transactions . . . . . . . . . . . . . . . . . . 5,709,227
___________
Total Increase (Decrease) in Net Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,849,116
NET ASSETS:
Beginning of Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . --
___________
End of Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $4,849,116
___________
___________
UNDISTRIBUTED INVESTMENT INCOME--NET . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 7,466
___________
CAPITAL SHARE TRANSACTIONS:
Class A
________
Shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 304,913
Shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,756)
___________
Net Increase (Decrease) in Shares Outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . 303,157
===========
Class B
________
Shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63,366
Shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,960)
___________
Net Increase (Decrease) in Shares Outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61,406
===========
Class C
________
Shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59,648
Shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (17)
___________
Net Increase (Decrease) in Shares Outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59,631
===========
Class R
________
Shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40,126
===========
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
DREYFUS PREMIER SMALL CAP VALUE 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 the period from April 1, 1998 (commencement of
operations) to October 31, 1998. This information has been derived from the
Fund's financial statements.
Class A Class B Class C Class R
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--net . . . . . . . . . . . . . . . . . . . . . . . . .03 (.02) (.02) .04
Net realized and unrealized gain (loss) on investments . . . . . . . . (2.08) (2.07) (2.07) (2.07)
_______ _______ _______ _______
Total from Investment Operations . . . . . . . . . . . . . . . . . . . (2.05) (2.09) (2.09) (2.03)
_______ _______ _______ _______
Net asset value, end of period . . . . . . . . . . . . . . . . . . . . $10.45 $10.41 $10.41 $10.47
======= ======= ======= =======
TOTAL INVESTMENT RETURN(1) . . . . . . . . . . . . . . . . . . . . . . . . (16.40%)(2) (16.72%)(2) (16.72%)(2) (16.24%)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets(1) . . . . . . . . . . . . . . .88% 1.32% 1.32% .73%
Ratio of net investment income to average net assets(1) . . . . . . . . .24% (.20%) (.19%) .38%
Portfolio Turnover Rate(1) . . . . . . . . . . . . . . . . . . . . . . 19.72% 19.72% 19.72% 19.72%
Net Assets, end of period (000's Omitted) . . . . . . . . . . . . . . . $3,169 $639 $621 $420
- ------------------------
(1) Not annualized.
(2) Exclusive of sales load.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
DREYFUS PREMIER SMALL CAP VALUE FUND
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES:
Dreyfus Premier Small Cap Value 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, as amended (the "Act") as an open-end
management investment company and operates as a series company currently
offering nineteen series, including the Fund. The Fund's investment objective is
to provide investors with total investment returns that consistently outperform
the Russell 2000 Value Index. The Dreyfus Corporation (the "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.
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: Class A, Class
B, Class C and Class R. 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.
As of October 31, 1998, MBC Investment Corp., an indirect subsidiary of Mellon
Bank Corporation, held the following shares:
Class A...........................................280,000
Class C............................................40,000
Class B............................................40,000
Class R............................................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. 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 denominated in foreign
currencies are translated to U.S. dollars at the prevailing rates of exchange.
(B) 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.
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 DREYFUS PREMIER SMALL CAP VALUE FUND
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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.
(C) 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.
(D) DIVIDENDS TO SHAREHOLDERS: Dividends are recorded on the ex-dividend date.
Dividends from investment income-net and dividends from net realized capital
gain, if any, 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 of 1986, as amended (the "Code"). To
the extent that net realized capital gain can be offset by capital loss
carryovers it is the policy of the Fund not to distribute such gain.
(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 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 $116,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to October 31, 1998. If not
applied, the carryover expires in fiscal 2006.
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 1.25% 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) . Effective July 1, 1998, each
director receives $40,000 per year, plus $5,000 for each joint Board meeting of
The Dreyfus/Laurel Funds, Inc., The Dreyfus/Laurel Tax-Free Municipal Funds and
The Dreyfus/Laurel Funds Trust (the "Dreyfus/Laurel Funds") attended, $2,000 for
separate committee meetings attended which are not held in conjunction with a
regularly scheduled board meeting and $500 for Board meetings and separate
committee meetings attended that are conducted by telephone and is reimbursed
for travel and out-of-pocket expenses. The Chairman of the Board receives an
additional 25% of such compensation (with the exception of reimbursable amounts)
.. In the event that there is a joint committee meeting of the Dreyfus/Laurel
Funds and the Dreyfus High Yield Strategies Fund, the $2,000 fee will be
allocated between the Dreyfus/Laurel Funds and the 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 to the
non-interested Directors.
DREYFUS PREMIER SMALL CAP VALUE FUND
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Prior to July 1, 1998, each director received $27,000 per year, $1,000 for
each Board meeting attended and $750 for each Audit Committee meeting attended
and was reimbursed for travel and out-of-pocket expenses. The Chairman of the
Board received an additional annual fee of $25,000 per year. These fees
pertained to the Dreyfus/Laurel Funds. (The $1,000 attendance fee and
reimbursement of meeting expenses were also borne pro rata by Dreyfus High Yield
Strategies Fund) . These fees and expenses were 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, were in fact paid directly by the
Manager to the non-interested Directors.
Dreyfus Service Corporation, a wholly owned subsidiary of the Manager,
retained $1,456 during the period ended Ocotber 31, 1998 from commissions earned
on sales of the Fund's shares.
(B) DISTRIBUTION AND SERVICE PLAN: Under the Distribution Plan (the "Plan")
adopted pursuant to Rule 12b-1 under the Act, 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, 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, Class B and Class C shares pay the Distributor for
distributing shares at an aggregate annual rate of .75% 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 Class B and Class C shares pay 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, 1998, Class A, Class B and
Class C shares were charged $4,806, $2,499 and $2,208, respectively, pursuant to
the Plan and Class B and Class C shares were charged $833 and $736,
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 a 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 October 31, 1998,
amounted to $5,960,476 and $883,714, respectively.
At October 31, 1998, accumulated net unrealized depreciation on investments
was $751,147, consisting of $83,452 gross unrealized appreciation and $834,599
gross unrealized depreciation.
At October 31, 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).
DREYFUS PREMIER SMALL CAP VALUE 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 Small Cap Value Stock
Fund of The Dreyfus/Laurel Funds, Inc. as of October 31, 1998, and the related
statement of operations, the statement of changes in net assets, and the
financial highlights for the period from April 1, 1998 (commencement of
operations) to October 31, 1998. 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 audit.
We conducted our audit 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, 1998 by correspondence with the custodian and brokers. 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 audit provides 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 Small Cap Value Stock Fund of The Dreyfus/Laurel Funds, Inc. as
of October 31, 1998, the results of its operations, changes in its net assets,
and its financial highlights for the period from April 1, 1998 to October 31,
1998, in conformity with generally accepted accounting principles.
New York, New York
December 15, 1998
DREYFUS PREMIER SMALL CAP
VALUE 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. 148/158/168/188AR9810
ANNUAL REPORT
- -------------------------------------------------------------------------------
DREYFUS PREMIER
SMALL CAP
VALUE FUND
- -------------------------------------------------------------------------------
OCTOBER 31, 1998
[logo] (reg.tm)
DREYFUS MUNICIPAL RESERVES
- -----------------------------------------------------------------------------
LETTER TO SHAREHOLDERS
Dear Shareholder:
We are pleased to report the performance for the Dreyfus Municipal Reserves
for the 12-month period ended October 31, 1998, as shown in the following table
<TABLE>
YIELD EFFECTIVE YIELD*
___________ ____________
<S> <C> <C>
Investor Shares . . . . . . . . . . . . . . . . . . . 2.93% 2.97%
Class R Shares . . . . . . . . . . . . . . . . . . . . 3.13% 3.18%
</TABLE>
THE ECONOMY
In the face of soaring consumer confidence and strong first-quarter economic
growth, the Federal Reserve Board earlier this year refrained from increasing
interest rates, partially to avoid further roiling international financial
markets. In addition, the Fed evidently felt then that the economic slowdown
overseas might curtail the U.S. economy to some degree, which would alleviate
the need for monetary restraint. The Fed's expectations have proven to be true,
and its judgment accurate. The U.S. balance of trade has worsened and there have
been increasing signs of a slowdown in export-related industries. On September
29, concerns about a weakening U.S. economy caused the Federal Open Market
Committee (the F.O.M.C. is the policy-making arm of the Fed) to pare the Federal
Funds target rate by 25 basis points, the first reduction since January 1996.
(The Federal Funds rate is the rate of interest that banks charge each other for
overnight loans.) Fed Chairman Alan Greenspan described the economic outlook for
the United States as having "weakened measurably." Two weeks later, on October
15, the F.O.M.C. again reduced its target rate by an additional quarter point,
putting the Federal Funds rate at 5.0%.
Despite the concerns of the Fed regarding an economic slowdown, aggregate
economic statistics showed a growing and resilient economy during the reporting
period. Low unemployment and negligible inflation, combined with car makers
rebuilding inventory after a long strike and rising consumer incomes, resulted
in solid economic growth (3.3% ) for the third quarter of this year. While a
significant portion of this gain was due to inventory replenishment after the
automobile strike, the overall results were still an improvement over
second-quarter economic growth of 1.8%. Inflation as measured by the Consumer
Price Index remained at levels not witnessed since 1963.
The Fed' s responsibility is to enact monetary policy that is anticipatory of
future economic conditions. The U.S. trade deficit has continued to widen
because of the global economic slide. Slumping exports have weakened
manufacturing activity since midyear and there is concern that this slackness
could become more pronounced and widen into other sectors of the economy. While
the increase in imports also restrains domestic production, it has helped
contain inflation as well, since domestic producers are reluctant to raise
prices. This provides additional flexibility for the Fed to lower interest rates
still further. So far, economic problems overseas have not caused any measurable
reaction in the U.S. labor market. Only the growth rate in new jobs has eased
from its torrid pace earlier in the year. The unemployment rate has remained
near 30-year lows and worker inflation-adjusted take-home pay has been rising.
The condition of the labor market is a key determinant of consumer confidence
which, of course, relates directly to consumer spending, a force that accounts
for two thirds of all economic activity. Business spending has shown signs of
weakness, so the role of the consumer will be of even greater importance in the
future. It is significant that measures of consumer confidence have receded from
earlier record high levels, largely because of concerns about the volatility of
financial markets.
MARKET ENVIRONMENT/PORTFOLIO ACTIVITY
The municipal money marketplace was very active during the reporting period as
participants reacted to the changes in monetary policy. Yields on one-year
tax-exempt notes declined by more than 50 basis points from a high of 3.60% to
below 3.00% at the end of the reporting period. Much of the decline in yields
was directly attributable to the 50 basis point cut in the Federal Funds rate.
However, demand for tax-exempt money market securities accelerated during the
period as many investors sought a safe haven from the extreme volatility in the
financial markets. Correspondingly, the total amount of assets held industrywide
in tax-exempt money funds increased from $164 billion to nearly $182 billion.
The Fund' s weighted average maturity drifted slightly lower during the
reporting period as the relative advantage of holding longer maturity securities
diminished. The yields attainable on shorter maturity tax-exempt money market
securities actually were much higher than on six-month to one-year tax-exempt
money market securities as of the end of the reporting period as participants
anticipated additional monetary easing by the Federal Reserve.
In the months ahead, we expect our strategy will be to optimistically extend
the maturity when the relative value of fixed rate securities adjusts to
empirically normal levels. We believe the Federal Reserve will most likely adopt
a patient stance toward monetary policy, allowing for events to unfold before
dramatically lowering rates in the months ahead. Consequently, we will adhere to
our conservative investment approach with its focus on traditional money market
securities and average maturity management.
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 greatly appreciate your continued confidence in the Fund and in The
Dreyfus Corporation.
Very truly yours,
[John Flahive signature]
John Flahive
Portfolio Manager
November 16, 1998
New York, N.Y.
* Effective yield takes into account the effect of compounding and is based upon
dividends declared daily and reinvested monthly.
<TABLE>
DREYFUS MUNICIPAL RESERVES
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS OCTOBER 31, 1998
Principal
Tax Exempt Investments--99.7% Amount Value
- ------------------------------------------------------- _____________ _____________
<S> <C> <C>
ALABAMA--.7%
State of Alabama, Refunding 5.90%, 3/1/99. . . . . . . . . . . . . . . . . . . . . . . . . $ 1,485,000 $ 1,495,692
Phenix City Industrial Development Board, Environmental Improvement Revenue, VRDN
(Mead Coated Board Project)
3.75%, Series A (LOC; Toronto-Dominion Bank) (a) . . . . . . . . . . . . . . . . . . . . 200,000 200,000
ALASKA--2.6%
Alaska Industrial Development Authority, Revenue, VRDN (Providence Medical Office Building)
3.20% (LOC; Kredietbank) (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,545,000 3,545,000
Alaska Industrial Development and Export Authority, Exempt Facilities Revenue, VRDN
(Fairbanks Gold Mining)
3.25% (LOC; Union Bank of Switzerland) (a) . . . . . . . . . . . . . . . . . . . . . . . 800,000 800,000
Anchorage, Higher Education Revenue, Refunding, VRDN (Alaska Pacific University)
3.20% (LOC; Seattle First National Bank) (a) . . . . . . . . . . . . . . . . . . . . . . 2,300,000 2,300,000
ARIZONA--1.7%
Maricopa County Pollution Control Corporation, PCR, Refunding, VRDN
(Arizona Public Service Co.) 3.70%, Series E (LOC; Bank of America) (a) . . . . . . . . 2,000,000 2,000,000
Pinal County Industrial Development Authority, PCR, Refunding, VRDN
(Magma Copper Co. Project)
3.10% (LOC; Banque Nationale de Paris) (a) . . . . . . . . . . . . . . . . . . . . . . . 2,400,000 2,400,000
ARKANSAS--1.1%
Clark County, SWDR, VRDN (Reynolds Metal Co. Project)
3.25% (LOC; Sun Trust Bank) (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,800,000 2,800,000
CALIFORNIA--1.0%
California Higher Education Loan Authority, Student Loan Revenue
3.80%, Series E-5, 6/1/99 (LOC; Student Loan Marketing Association) . . . . . . . . . . 2,000,000 2,000,000
Fairfield Industrial Development Authority, IDR, VRDN (R. Dakin and Co. Project)
3.15% (LOC; Bank of America) (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 600,000 600,000
COLORADO--3.4%
Colorado Health Facilities Authority, Revenue, VRDN (North Colorado Medical Center)
3% (BPA; Credit Suisse and Insured; MBIA) (a) . . . . . . . . . . . . . . . . . . . . . 1,200,000 1,200,000
Dove Valley Metropolitan District of Arapohoe County, Revenue, Refunding:
4.05%, Series B, 11/1/98 (LOC; Banque Nationale de Paris) . . . . . . . . . . . . . . . 1,000,000 1,000,000
3.375%, Series B, 11/1/99 (LOC; Banque Nationale de Paris) . . . . . . . . . . . . . . . 1,000,000 1,000,000
Interstate South Metropolitan District, Refunding:
4.05%, Series B, 11/1/98 (LOC; Banque Nationale de Paris) . . . . . . . . . . . . . . . 975,000 975,000
3.375%, Series B, 11/1/99 (LOC; Banque Nationale de Paris) . . . . . . . . . . . . . . . 975,000 975,000
Regional Transportation District of Colorado, COP, VRDN (Transit Vehicles Project)
3.20%, Series A (LOC; State Street Bank and Trust) (a) 1,960,000 1,960,000
SBC Metropolitan District 3.65%, 12/1/98 (LOC; U.S. Bank of Washington). . . . . . . . . . 1,560,000 1,560,000
CONNECTICUT--.6%
State of Connecticut, Economic Recovery Notes, Refunding 5%, 12/15/98. . . . . . . . . . . 1,500,000 1,502,540
DREYFUS MUNICIPAL RESERVES
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1998
Principal
Tax Exempt Investments (continued) Amount Value
- ------------------------------------------------------- _____________ _____________
FLORIDA--4.0%
Alachua County Health Facilities Authority, Health Facilities Revenue, VRDN
(Shands Teaching Hospital) 3.15%, Series B (BPA; Suntrust Bank and Insured; MBIA) (a) . $ 1,600,000 $ 1,600,000
Florida Multi-Family Housing Finance Agency, Refunding, VRDN
3.25%, Series E (LOC; Comerica Bank) (a) . . . . . . . . . . . . . . . . . . . . . . . . 1,200,000 1,200,000
Greater Orlando Aviation Authority, Special Purpose Revenue (Signature Flight)
3.90%, 12/1/98 (LOC; Bayerische Landesbank) . . . . . . . . . . . . . . . . . . . . . . 1,375,000 1,375,000
Miami Health Facilities Authority, Health Facilities Revenue, Refunding, VRDN
(Mercy Hospital Project) 3.10% (LOC; Bank of America) (a) . . . . . . . . . . . . . . . 2,000,000 2,000,000
Pinellas County Educational Facilities Authority, Revenue, CP
(Pooled Independent Higher Education)
3.30%, 11/30/98 (BPA; Credit Suisse and Insured; MBIA) . . . . . . . . . . . . . . . . . 4,000,000 4,000,000
GEORGIA--2.2%
Georgia Municipal Electric Authority, Power Revenue, Prerefunded
7.40%, Series R, 1/1/99 (Escrowed in; U.S. Government Securities) . . . . . . . . . . . 3,400,000 3,488,795
Municipal Electric Authority, VRDN (Project One)
3%, Series E (LOC; ABN-Amro Bank) (a) . . . . . . . . . . . . . . . . . . . . . . . . . 2,000,000 2,000,000
ILLINOIS--8.6%
Burbank, IDR, VRDN (Service Merchandise Co. Inc.)
3.40% (LOC; Canadian Imperial Bank of Commerce) (a) . . . . . . . . . . . . . . . . . . 300,000 300,000
City of Chicago, VRDN 3%, Series B (LOC; Canadian Imperial Bank of Commerce) (a) . . . . . 1,800,000 1,800,000
Chicago Midway Airport, Special Facility Revenue (Signature Flight)
3.90%, 12/1/98 (LOC; Bayerische Landesbank) . . . . . . . . . . . . . . . . . . . . . . 3,500,000 3,500,000
Chicago O'Hare International Airport, General Airport Revenue, VRDN (Second Lien):
3.15%, Series B (LOC; Societe Generale) (a) . . . . . . . . . . . . . . . . . . . . . . 1,580,000 1,580,000
3.25%, Series B (LOC; Bayerische Landesbank) (a) . . . . . . . . . . . . . . . . . . . . 500,000 500,000
Du Page County, Alternate Revenue (Stormwater Project)
5.80%, 1/1/99 (Escrowed in; U.S. Government Securities) . . . . . . . . . . . . . . . . 1,000,000 1,003,666
Illinois Development Finance Authority, VRDN:
IDR (Columbia Graphics Corp. Project)
3.15% (LOC; Harris Trust and Savings Bank) (a) . . . . . . . . . . . . . . . . . . . . 1,700,000 1,700,000
Revenue:
(Council for Jewish Elderly) 3.15% (LOC; LaSalle National Bank) (a) . . . . . . . . . 1,200,000 1,200,000
(Institute of Gas Technology Project)
3.05% (LOC; Harris Trust and Savings Bank) (a) . . . . . . . . . . . . . . . . . . . 500,000 500,000
(Residential Rental-F.C. Harris Pavilion Project)
3.10% (LOC; FNMA) (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,100,000 1,100,000
(Uhlich Childrens Home Project) 3.15% (LOC; American National Bank of Chicago) (a) . . 1,595,000 1,595,000
City of Naperville, IDR, VRDN (Service Merchandise Co.,Inc. Project)
3.40% (LOC; Canadian Imperial Bank of Commerce) (a) . . . . . . . . . . . . . . . . . . 1,800,000 1,800,000
City of New Lenox, IDR, VRDN (Panduit Corp. Project)
3.15% (LOC; Commerzbank) (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,300,000 1,300,000
DREYFUS MUNICIPAL RESERVES
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1998
Principal
Tax Exempt Investments (continued) Amount Value
- ------------------------------------------------------- _____________ _____________
ILLINOIS (CONTINUED)
Saint Clair County, Highway Revenue 4.50%, 1/1/99 (Insured; FSA) . . . . . . . . . . . . . $ 1,185,000 $ 1,185,993
City of Zion, VRDN (H & M Enterprises LLC Project)
3.25%, Series A (LOC; Federal Home Loan Bank) (a) . . . . . . . . . . . . . . . . . . . 2,955,000 2,955,000
INDIANA--13.6%
City of Auburn, EDR, VRDN (RJ Tower Corp. Project)
3.30% (LOC; Comerica Bank) (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 175,000 175,000
Indiana Development Finance Authority, Exempt Facility Revenue, VRDN
(Mid-America Project) 3.35% (LOC; ABN-Amro Bank) (a) . . . . . . . . . . . . . . . . . . 1,700,000 1,700,000
Indiana Health Facility Financing Authority, Revenue, VRDN:
(Capital Asset Designated Bank):
3.20% (LOC; Bank One) (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,800,000 2,800,000
3.20% (LOC; Comerica) (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,800,000 2,800,000
(St. Anthony's Medical Center, Inc.) 3.10% (LOC; Rabobank Nederland) (a) . . . . . . . . 800,000 800,000
Indiana Housing Financer Authority, MFHR, VRDN (Pedcor Investments):
3.25%, Series A (LOC; FNMA) (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,600,000 5,600,000
3.25%, Series B (LOC; FNMA) (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 700,000 700,000
City of Indianapolis, EDR, VRDN (Jewish Federal Campus)
3.20% (LOC; National Bank of Detroit) (a) . . . . . . . . . . . . . . . . . . . . . . . 3,120,000 3,120,000
Mount Vernon, Pollution Control and Solid Waste Disposal Revenue, Refunding, CP
(General Electric Co. Project)
3.30%, Series A, 11/4/98 (LOC; General Electric Co.) . . . . . . . . . . . . . . . . . . 2,000,000 2,000,000
City of Portage, EDR, VRDN (Pedcor Investments)
3.25%, Series A (LOC; Federal Home Loan Banks) (a) . . . . . . . . . . . . . . . . . . . 6,253,000 6,253,000
Perdue University, University Revenues, VRDN (Student Fees)
3.10%, Series E (LOC; Perdue University) (a) . . . . . . . . . . . . . . . . . . . . . . 1,000,000 1,000,000
City of Rockport, PCR, Refunding, VRDN (AEP Generation Co. Project)
3.75%, Series B (BPA; The Bank of New York and Insured; AMBAC) (a) . . . . . . . . . . . 1,200,000 1,200,000
City of Seymour, EDR, VRDN (Pedcor Investments-Sycamore Springs Apartments Project)
3.40%, Series A (LOC; FNMA) (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,100,000 4,100,000
Whiting, PCR, (Amoco Project-Standard Oil)
3.65%, 2/15/99 (Corp. Guaranty; Amoco Credit Corp.) . . . . . . . . . . . . . . . . . . 2,500,000 2,500,699
IOWA--.4%
Iowa Higher Education Loan Authority, Revenue, Refunding (Private College Facilities)
5%, 8/1/99 (Insured; MBIA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 980,000 990,350
KANSAS--.1%
City of Wichita, Revenue 4.25%, 6/1/99 . . . . . . . . . . . . . . . . . . . . . . . . . . 200,000 200,846
KENTUCKY--.4%
Mayfield, Multi-City Lease Revenue, VRDN (League of Cities Funding Trust)
3.25% (LOC; PNC Bank) (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000,000 1,000,000
DREYFUS MUNICIPAL RESERVES
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1998
Principal
Tax Exempt Investments (continued) Amount Value
- ------------------------------------------------------- _____________ _____________
LOUISIANA--3.5%
Louisiana Public Facilities Authority, MFMR, Refunding, VRDN (Emberwood)
3% (LOC; General Electric Co.) (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,000,000 $ 1,000,000
City of New Orleans and Home Mortgage Authority, SFMR
3.55%, Series C-2, 3/1/99 (Insured; GNMA and LOC; FNMA) . . . . . . . . . . . . . . . . 3,000,000 3,000,000
Saint James Parish, PCR, Refunding, CP (Texaco Project)
3.20%, Series A, 11/24/98 (LOC; Texaco Inc.) . . . . . . . . . . . . . . . . . . . . . . 5,000,000 5,000,000
MARYLAND--.4%
Maryland Department of Transportation, Prerefunded (Consolidated Transportation)
6.90%, Second Issue, 11/15/98 (Escrowed in; U.S. Government Securities) . . . . . . . . 1,000,000 1,021,107
MICHIGAN--1.4%
Flint Hospital Building Authority, Revenue, VRDN (Hurley Medical Center)
3.15%, Series B (LOC; LaSalle National Bank) (a) . . . . . . . . . . . . . . . . . . . . 100,000 100,000
Meridian Economic Development Corporation, LOR, VRDN (Service Merchandice Co., Inc. Project)
3.40% (LOC; Canadian Imperial Bank of Commerce) (a) . . . . . . . . . . . . . . . . . . 600,000 600,000
Michigan Building Authority, Revenue, CP
3.30%, Series 1, 2/9/99 (LOC; Canadian Imperial Bank of Commerce) . . . . . . . . . . . 2,800,000 2,800,000
MINNESOTA--.4%
City of Cohasset, Revenue, Refunding, VRDN (Minnesota Power and Light Co. Project)
3.65%, Series A (LOC; ABN-Amro Bank) (a) . . . . . . . . . . . . . . . . . . . . . . . . 300,000 300,000
Owatonna Independent School District Number 761, Revenue
5.10%, 2/1/99 (State Guaranty; State of Minnesota) . . . . . . . . . . . . . . . . . . . 620,000 622,401
MISSISSIPPI--1.0%
Jackson County, Water Systems, Refunding 3.55%, 2/1/99 (LOC; Chevron USA, Inc.). . . . . . 2,500,000 2,500,000
MISSOURI--1.3%
Kansas City Industrial Development Authority, Revenue, VRDN
3.70%, Series A (Ewing Marrion Kauffman) (a) . . . . . . . . . . . . . . . . . . . . . . 700,000 700,000
Missouri Higher Education Loan Authority, Student Loan Revenue, VRDN:
3.10%, Series A (LOC; National Westminster Bank) (a) . . . . . . . . . . . . . . . . . . 1,000,000 1,000,000
3.10%, Series B (LOC; National Westminster Bank) (a) . . . . . . . . . . . . . . . . . . 1,500,000 1,500,000
MONTANA--2.8%
Butte-Silver Bow, PCR, Refunding, VRDN (Rhone-Poulenc Inc. Project)
3.10% (LOC; Banque Nationale de Paris) (a) . . . . . . . . . . . . . . . . . . . . . . . 1,705,000 1,705,000
Montana Health Facilities Authority, Health Care Revenue, VRDN (Pooled Loan Program)
3.10%, Series A (BPA; Norwest Bank and Insured; FGIC) (a) . . . . . . . . . . . . . . . 5,500,000 5,500,000
NEVADA--1.6%
Las Vegas Valley Water District, CP
3.20%, Series A, 12/8/98 (LOC: Union Bank of Switzerland and Westdeutsche Landesbank) . 4,000,000 4,000,000
NEW HAMPSHIRE--1.4%
New Hampshire Higher Educational and Health Facilities Authority, Revenue
(Dartmouth Educational Loan Corp.) 3.90%, 6/1/99 (Guaranteed by; Dartmouth College) . . 3,500,000 3,500,000
DREYFUS MUNICIPAL RESERVES
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1998
Principal
Tax Exempt Investments (continued) Amount Value
- ------------------------------------------------------- _____________ _____________
NEW MEXICO--1.4%
City of Santa Fe, Gross Receipts Tax Revenue, VRDN (Wastewater Systems)
3.20%, Series B (LOC; Canadian Imperial Bank of Commerce) (a) . . . . . . . . . . . . . $ 3,500,000 $ 3,500,000
NORTH CAROLINA--2.3%
Halifax County Industrial Development Authority, IDR, VRDN (Annin and Co. Project)
3.25% (LOC; Chase Manhattan Bank) (a) . . . . . . . . . . . . . . . . . . . . . . . . 1,875,000 1,875,000
Halifax County Industrial Facilities and Pollution Control Financing Authority, Exempt Facilities
Revenue, VRDN (Westmoreland) 3.85% (LOC; Credit Suisse) (a) . . . . . . . . . . . . . 4,100,000 4,100,000
NORTH DAKOTA--.8%
Grand Forks, Hospital Facilities Revenue, VRDN (United Hospital Obligation Group Project)
3.65% (LOC; LaSalle National Bank) (a) . . . . . . . . . . . . . . . . . . . . . . . . . 2,100,000 2,100,000
OHIO--.7%
Cuyahoga County, IDR, VRDN (Allen Group, Inc. Project)
2.95% (LOC; Dresdner Bank) (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,700,000 1,700,000
OKLAHOMA--.7%
Oklahoma Turnpike Authority, Turnpike Revenue, Prerefunded
7.875%, 1/1/99 (Escrowed in; U.S. Government Securities) . . . . . . . . . . . . . . . . 1,745,000 1,791,616
OREGON--.7%
Port Astoria, Prerefunded 6.20%, 2/1/99. . . . . . . . . . . . . . . . . . . . . . . . .
6.20%, 2/1/99 (Escrowed in; U.S. Government Securities and Insured; MBIA) . . . . . . . 410,000 412,698
Port of Portland, PCR, VRDN (Reynolds Metals)
3.65% (LOC; Bank of Nova Scotia) (a) . . . . . . . . . . . . . . . . . . . . . . . . . . 1,400,000 1,400,000
PENNSYLVANIA--6.2%
Allegheny County, Revenue, Prerefunded
4.80%, Series C-43, 9/15/99 (Escrowed in; U.S. Government Securities) . . . . . . . . . 1,495,000 1,517,349
Allegheny County Hospital Development Authority, VRDN (Health Center Presbyterian)
3.15% (BPA; PNC Bank and Insured; MBIA) (a) . . . . . . . . . . . . . . . . . . . . . . 1,100,000 1,100,000
Allegheny County Industrial Development Authority, VRDN (Longwood at Oakmont, Inc.)
3.65%, Series D (LOC; Dresdner Bank) (a) . . . . . . . . . . . . . . . . . . . . . . . . 1,100,000 1,100,000
Beaver County Industrial Development Authority, PCR, CP (Duquense Light Co.)
3.05%, 1/22/99 (LOC; Union Bank of Switzerland) . . . . . . . . . . . . . . . . . . . . 2,000,000 2,000,000
Bucks County Industrial Development Authority, Revenue, VRDN (SHV Real Estate Inc.)
3.15% (LOC; ABN-Amro Bank) (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200,000 200,000
Chartiers Valley Industrial and Commercial Development Authority,
Commercial Development Revenue, VRDN (William Penn Place Project)
3.70% (LOC; PNC Bank) (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 900,000 900,000
Jeannette Health Service Authority, HR, VRDN (Jeanette District Memorial Hospital Project)
3.15% (LOC; PNC Bank) (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 600,000 600,000
Lancaster County Solid Waste Management Authority, Resource Recovery Systems Revenue
4.25%, Series A, 12/15/98 (Insured; AMBAC) . . . . . . . . . . . . . . . . . . . . . . . 3,310,000 3,312,614
DREYFUS MUNICIPAL RESERVES
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1998
Principal
Tax Exempt Investments (continued) Amount Value
- ------------------------------------------------------- _____________ _____________
PENNSYLVANIA (CONTINUED)
Lancaster County and Vo-Tech School Authority, Lease Revenue
5.60%, 2/15/99 (Insured; FGIC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 750,000 $ 754,436
Lehigh County Industrial Development Authority, PCR, VRDN (Allegheny Electric Co-Op)
3.50% (LOC; Rabobank Nederland) (a) . . . . . . . . . . . . . . . . . . . . . . . . . . 120,000 120,000
Moon Industrial Development Authority, IDR, VRDN (Executive Office Association Project)
3.15% (LOC; PNC Bank) (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,250,000 1,250,000
Northampton County and Higher Education Authority, Revenue, VRDN (Lafayette College Project)
3.15% (LOC; Landesbank Hessen) (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . 500,000 500,000
Quakertown General Authority, Revenue, VRDN (Pooled Financing Program)
3.10%, Series A (LOC; PNC Bank) (a) . . . . . . . . . . . . . . . . . . . . . . . . . . 540,000 540,000
State Public School Building Authority, College Revenue, Prerefunded
(Harrisburg Area Community College)
6.90%, 10/1/99 (Escrowed in; U.S. Government Securities) . . . . . . . . . . . . . . . . 1,000,000 1,043,351
Washington County Lease Revenue Authority, Revenue, VRDN (Eye and Ear)
3.15%, Series B-1, Subseries C (LOC; PNC Bank) (a) . . . . . . . . . . . . . . . . . . . 850,000 850,000
SOUTH CAROLINA--3.4%
South Carolina Job-Economic Development Authority, EDR, VRDN (Wellman Inc. Project)
3.85% (LOC; Wachovia Bank and Trust Co.) (a) . . . . . . . . . . . . . . . . . . . . . . 8,775,000 8,775,000
TENNESSEE--3.8%
Johnson City Health and Educational Facilities Board, Revenue, VRDN (Acquis-Johnson)
3.20%, Series A (BPA; Credit Suisse and Insured; MBIA) (a) . . . . . . . . . . . . . . . 5,000,000 5,000,000
Knox County, Refunding 3.65%, 3/1/99 . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,500,000 2,500,000
Knox County Industrial Development Board, Industrial Revenue, VRDN
(Service Merchandise Co., Inc.)
3.40% (LOC; Canadian Imperial Bank of Commerce) (a) . . . . . . . . . . . . . . . . . . 1,500,000 1,500,000
Metropolitan Government of Nashville and Davidson Counties, IDR, VRDN
(Chimney Top II-Oxford Association Limited Project)
3.15% (LOC; Bank of America) (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 700,000 700,000
TEXAS--9.1%
City of Austin, Travis and Williamson Counties, CP (Combined Utilities)
3.05%, 2/4/99 (LOC; Morgan Guaranty Trust Co.) . . . . . . . . . . . . . . . . . . . . . 2,550,000 2,550,000
Brownsville, Utility Systems Revenue, CP
3.05%, Series A, 2/16/99 (LOC; Toronto-Dominion Bank) . . . . . . . . . . . . . . . . . 975,000 975,000
Comal County and Health Facilities Development Corporating, Health Care Systems Revenue,
VRDN (Mc Kenna) 3.15% (LOC; Chase Manhattan Bank) (a) . . . . . . . . . . . . . . . . . 2,000,000 2,000,000
Dallas Area Rapid Transportation, Sales Tax Revenue, CP
3.05%, Series A, 2/16/99 (LOC: Bayerische Landesbank, Union Bank of Switzerland
and WestDeutsche Landesbank) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,000,000 3,000,000
Dallas Industrial Development Corporation, IDR, VRDN (Sealed Power Corp.)
3.60% (LOC; National Bank of Detroit) (a) . . . . . . . . . . . . . . . . . . . . . . . 1,100,000 1,100,000
DREYFUS MUNICIPAL RESERVES
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1998
Principal
Tax Exempt Investments (continued) Amount Value
- ------------------------------------------------------- _____________ _____________
TEXAS (CONTINUED)
Killeen Independent School District, Refunding
4.20%, 2/15/99 (LOC; Permanent School Fund Guaranty) . . . . . . . . . . . . . . . . . . $ 1,075,000 $ 1,076,646
Lone Star Airport Improvement Authority, Revenue, VRDN (American Airlines):
3.65%, Series A-2 (LOC; Royal Bank of Canada) (a) . . . . . . . . . . . . . . . . . . . 1,200,000 1,200,000
3.65%, Series A-4 (LOC; Royal Bank of Canada) (a) . . . . . . . . . . . . . . . . . . . 1,400,000 1,400,000
North Texas Higher Education Authority, Student Loan Revenue, Refunding, VRDN
3.10%, Series A (BPA; Student Loan Marketing Association and Insured; AMBAC) (a) . . . . 2,000,000 2,000,000
Nueces County Health Facilities Development Corporation, Revenue, VRDN
(Driscoll Childrens Foundation) 3.20% (LOC; Bank One) (a) . . . . . . . . . . . . . . . 2,395,000 2,395,000
Port of Port Aurthur Naval District, PCR, Refunding, VRDN (Texaco Inc. Project)
3.70% (LOC; Texaco Inc.) (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,000,000 2,000,000
Rockwall Industrial Development Corporation, IDR, VRDN (Columbia Extrusion Corp.)
3.55% (LOC; U.S. National Bank of Oregon) (a) . . . . . . . . . . . . . . . . . . . . . 2,485,000 2,485,000
Texas Turnpike Authority, Dallas North Thruway Revenue, Prerefunded. . . . . . . . . . .
7.125%, 1/1/99 (Escrowed in; U.S. Government Securities and Insured; AMBAC) . . . . . . 1,000,000 1,025,175
UTAH--3.3%
State of Utah, CP 3.50%, Series 97B, 11/10/98 (LOC; Toronto-Dominion Bank) . . . . . . . . 6,000,000 6,000,000
City of West Jordan, RAN 3.90%, 6/30/99. . . . . . . . . . . . . . . . . . . . . . . . . . 2,500,000 2,500,000
VIRGINIA--7.1%
Campbell County Industrial Development Authority, Exempt Facility Revenue, VRDN
(Hadson Power 12) 3.85%, Series A (LOC; Barclays Bank) (a) . . . . . . . . . . . . . . . 5,200,000 5,200,000
Hopewell Industrial Development Authority, Exempt Facility Revenue, VRDN (Hadson Power 13)
3.85%, Series A (LOC; Credit Suisse) (a) . . . . . . . . . . . . . . . . . . . . . . . . 4,500,000 4,500,000
Peninsula Ports Authority, Coal Terminal Revenue, VRDN (Dominion Terminal Project)
3.70%, Series D (LOC; Barclays Bank) (a) . . . . . . . . . . . . . . . . . . . . . . . . 2,500,000 2,500,000
Southhampton County Industrial Development Authority, Revenue, VRDN (Hadson Power 11)
3.85%, Series A (LOC; Credit Suisse) (a) . . . . . . . . . . . . . . . . . . . . . . . . 4,300,000 4,300,000
Virginia Small Business Financing Authority, IDR, VRDN (Coral Graphic)
3.25% (LOC; Chase Manhattan Bank) (a) . . . . . . . . . . . . . . . . . . . . . . . . . 1,700,000 1,700,000
WASHINGTON--2.1%
Port Seattle Industrial Development Corporation, Refunding, VRDN
(Sysco Food Service Project) 3.20% (a) . . . . . . . . . . . . . . . . . . . . . . . . . 1,000,000 1,000,000
City of Seattle, Water Systems Revenue, VRDN 3.15% (LOC; Bayerische Landesbank) (a). . . . 2,300,000 2,300,000
Washington Health Care Facilities Authority, Multi-Care Health Systems Revenue
4%, 8/15/99 (Insured; MBIA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,230,000 1,232,818
Washington Community Economic Revitalization Board, Economic Revenue, VRDN
3.65%, Series 3 (LOC; Bank of America) (a) . . . . . . . . . . . . . . . . . . . . . . . 900,000 900,000
DREYFUS MUNICIPAL RESERVES
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1998
Principal
Tax Exempt Investments (continued) Amount Value
- ------------------------------------------------------- _____________ _____________
WEST VIRGINIA--1.1%
West Virginia Public Energy Authority, Energy Revenue, CP
(Morgantown Association Project)
3.65%, Series A, 11/10/98 (LOC; Swiss Bank Corp.) . . . . . . . . . . . . . . . . . . . $ 2,800,000 $ 2,800,000
WISCONSIN--1.1%
City of Milwaukee, Promisory Notes 4.25%, Series A-8, 3/1/99 . . . . . . . . . . . . . . . 2,660,000 2,665,944
WYOMING--1.7%
Lincoln County, PCR, VRDN (Exxon Project) 3.70%, Series B (LOC; Exxon Corp.) (a) . . . . . 2,000,000 2,000,000
Sublette County, PCR, VRDN (Exxon Project) 3.80%, Series A (LOC; Exxon Corp.) (a). . . . . 1,800,000 1,800,000
Uinta County, PCR, Refunding, VRDN (Chevron USA, Inc. Project)
3.70% (LOC; Chevron USA, Inc.) (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . 540,000 540,000
______________
TOTAL INVESTMENTS (cost $254,072,736). . . . . . . . . . . . . . . . . . . . . . . . . . . 99.7% $254,072,736
_______ ______________
CASH AND RECEIVABLES (NET) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3% $ 867,292
_______ ______________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.0% $254,940,028
_______ ______________
DREYFUS MUNICIPAL RESERVES
- -----------------------------------------------------------------------------
Summary of Abbreviations
- -----------------------------------------------------------------------------
AMBAC American Municipal Bond Assurance Corporation LOC Letter of Credit
BPA Bond Purchase Agreement LOR Limited Obligation Revenue
COP Certificate of Participation MBIA Municipal Bond Investors Assurance
CP Commercial Paper Insurance Corporation
EDR Economic Development Revenue MFHR Multi-Family Housing Revenue
FGIC Financial Guaranty Insurance Company MFMR Multi-Family Mortgage Revenue
FNMA Federal National Mortgage Association PCR Pollution Control Revenue
FSA Financial Security Assurance RAN Revenue Anticipation Notes
GNMA Government National Mortgage Association SFMR Single Family Mortgage Revenue
HR Hospital Revenue SWDR Solid Waste Disposal Revenue
IDR Industrial Development Revenue VRDN Variable Rate Demand Notes
Summary of Combined Ratings (Unaudited)
- -----------------------------------------------------------------------------
Fitch (c) or Moody's or Standard & Poor's Percentage of Value
______ _______ ________________ _________________
F1+/F1 VMIG1/MIG1, P1 SP1+/SP1, A1+/A1 72.4%
AAA/AA (b) Aaa/Aa (b) AAA/AA (b) 25.9
Not Rated (c) Not Rated (c) Not Rated (c) 1.7
_______
100.0%
_______
Notes to Statement of Investments:
- -----------------------------------------------------------------------------
(a) Securities payable on demand. Variable interest rate--subject to periodic
change.
(b) Notes which are not F, MIG or SP rated are represented by bond ratings of
the issuers.
(c) Securities which, while not rated by Fitch, Moody's and Standard & Poor's
have been determined by the Manager to be of comparable quality to those
rated securities in which the Fund may invest.
(d) At October 31, 1998, the Fund had $77,253,000 (30.3% of net assets) invested
in securities whose payment of principal and interest is dependent upon
revenues generated from industry.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
DREYFUS MUNICIPAL RESERVES
- -----------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES OCTOBER 31, 1998
Cost Value
_____________ _____________
<S> <C> <C>
ASSETS: Investments in securities--See Statement of Investments . . $254,072,736 $254,072,736
Interest receivable . . . . . . . . . . . . . . . . . . . 1,261,626
Receivable for investment securities sold . . . . . . . . 2,202,782
_____________
257,537,144
_____________
LIABILITIES: Due to The Dreyfus Corporation and affiliates . . . . . . 110,020
Due to Distributor . . . . . . . . . . . . . . . . . . . 50
Payable for investment securities purchased . . . . . . . 1,975,185
Cash overdraft due to Custodian . . . . . . . . . . . . . 511,382
Interest payable--Note 3 . . . . . . . . . . . . . . . . 479
_____________
2,597,116
_____________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $254,940,028
_____________
REPRESENTED BY: Paid-in capital . . . . . . . . . . . . . . . . . . . . . $254,948,375
Accumulated net realized gain (loss) on investments . . . (8,347)
_____________
NET ASSETS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $254,940,028
_____________
NET ASSET VALUE PER SHARE
----------------------------------------
Investor Shares Class R Shares
_____________ _____________
Net Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 27,301,238 $227,638,790
Shares Outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27,303,248 227,644,524
NET ASSET VALUE PER SHARE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1.00 $1.00
_____ _____
STATEMENT OF OPERATIONSYEAR ENDED OCTOBER 31, 1998
INVESTMENT INCOME
INCOME Interest Income . . . . . . . . . . . . . . . . . $ 8,651,129
EXPENSES: Management fee--Note 2(a) . . . . . . . . . . . . $ 1,197,439
Distribution fees (Investor Shares)--Note 2(b) . 48,896
Interest expense--Note 3 . . . . . . . . . . . . 5,049
_____________
Total Expenses . . . . . . . . . . . . . . . . 1,251,384
_____________
INVESTMENT INCOME--NET, representing net increase in net assets resulting
from operations . . . . . . . . . . . . . . . . . $ 7,399,745
_____________
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
DREYFUS MUNICIPAL RESERVES
- -----------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
Year Ended Year Ended
October 31, 1998 October 31, 1997
________________ ________________
<S> <C> <C>
OPERATIONS:
Investment income--net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 7,399,745 $ 6,775,146
Net realized gain (loss) on investments . . . . . . . . . . . . . . . . . . . . . -- (8,347)
Net unrealized appreciation (depreciation) on investments . . . . . . . . . . . . -- (1,423)
______________ _____________
Net Increase (Decrease) in Net Assets Resulting from Operations . . . . . 7,399,745 6,765,376
______________ _____________
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net:
Investor shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (715,181) (521,578)
Class R shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6,723,392) (6,145,132)
Net realized gain on investments:
Investor shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6,024) (8,836)
Class R shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (62,009) (126,412)
______________ _____________
Total Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7,506,606) (6,801,958)
______________ _____________
CAPITAL STOCK TRANSACTIONS ($1.00 per share):
Net proceeds from shares sold:
Investor shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109,466,877 38,468,521
Class R shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 631,394,198 741,371,690
Dividends reinvested:
Investor shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 681,448 518,619
Class R shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,649,472 1,517,481
Cost of shares redeemed:
Investor shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (102,321,618) (33,577,469)
Class R shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (599,466,760) (769,871,228)
______________ _____________
Increase (Decrease) in Net Assets from Capital Stock Transactions . . . . 41,403,617 (21,572,386)
______________ _____________
Total Increase (Decrease) in Net Assets . . . . . . . . . . . . . . . . 41,296,756 (21,608,968)
NET ASSETS:
Beginning of Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 213,643,272 235,252,240
______________ _____________
End of Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $254,940,028 $213,643,272
______________ _____________
UNDISTRIBUTED INVESTMENT INCOME--NET . . . . . . . . . . . . . . . . . . . . . . . . -- $ 106,861
______________ _____________
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
DREYFUS MUNICIPAL RESERVES
- -----------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share of Capital
Stock outstanding, total investment return, ratios to average net assets and
other supplemental data for each period indicated. This information has been
derived from the Fund's financial statements.
Investor Shares
_____________________________________________________
Year Ended October 31,
_____________________________________________________
PER SHARE DATA: 1998 1997 1996 1995 1994(1,2)
_____ _____ ______ ______ _______
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period . . . . . . . . . . $1.00 $1.00 $1.00 $1.00 $1.00
_____ _____ ______ ______ ______
Investment Operations:
Investment income--net . . . . . . . . . . . . . . . . . .029 .030 .029 .032 .012
_____ _____ ______ ______ ______
Distributions:
Dividends from investment income--net . . . . . . . . . . (.029) (.029) (.029) (.032) (.012)
Dividends from net realized gain
on investments . . . . . . . . . . . . . . . . . . . (.000)(3) (.001) -- -- --
_____ _____ ______ ______ ______
Total Distributions . . . . . . . . . . . . . . . . . . . (.029) (.030) (.029) (.032) (.012)
_____ _____ ______ ______ ______
Net asset value, end of period . . . . . . . . . . . . . $1.00 $1.00 $1.00 $1.00 $1.00
_____ _____ ______ ______ ______
TOTAL INVESTMENT RETURN. . . . . . . . . . . . . . . . . . . 3.00% 3.00% 2.96% 3.28% 1.23%(4)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets . . . . . . . . . .70% .72% .70% .70% .70%(5)
Ratio of net investment income to average
net assets . . . . . . . . . . . . . . . . . . . . . 2.90% 2.92% 2.92% 3.33% 2.11%(5)
Net Assets, end of period (000's Omitted) . . . . . . . . $27,301 $19,486 $14,074 $17,764 $1,161
- -----------
(1) Effective October 17, 1994, The Dreyfus Corporation began serving as the
Fund' s investment manager. Prior to October 17, 1994, Mellon Bank, N.A.
served as the Fund's investment manager.
(2) The Fund commenced selling Investor shares on April 20, 1994. Those shares
outstanding prior to April 4, 1994 were designated as Trust shares.
Effective October 17, 1994, the Fund's Trust shares were reclassified as
Class R shares.
(3) Amount represents less than $.001 per share.
(4) Not annualized.
(5) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS MUNICIPAL RESERVES
- -----------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
Contained below is per share operating performance data for a share of Capital
Stock outstanding, total investment return, ratios to average net assets and
other supplemental data for each period indicated. This information has been
derived from the Fund's financial statements.
Class R Shares
_____________________________________________________
Year Ended October 31,
_____________________________________________________
PER SHARE DATA: 1998 1997 1996 1995 1994(1,2)
_____ _____ ______ ______ _______
Net asset value, beginning of period . . . . . . . . . . $1.00 $1.00 $1.00 $1.00 $1.00
_____ _____ ______ ______ ______
Investment Operations:
Investment income--net . . . . . . . . . . . . . . . . . .031 .032 .031 .034 .023(3)
_____ _____ ______ ______ ______
Distributions:
Dividends from investment income--net . . . . . . . . . . (.031) (.031) (.031) (.034) (.023)
Dividends from net realized gain
on investments . . . . . . . . . . . . . . . . . . . (.000)(4) (.001) -- -- --
_____ _____ ______ ______ ______
Total Distributions . . . . . . . . . . . . . . . . . . . (.031) (.032) (.031) (.034) (.023)
_____ _____ ______ ______ ______
Net asset value, end of period . . . . . . . . . . . . . $1.00 $1.00 $1.00 $1.00 $1.00
_____ _____ ______ ______ ______
TOTAL INVESTMENT RETURN. . . . . . . . . . . . . . . . . . . 3.21% 3.21% 3.17% 3.48% 2.29%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets . . . . . . . . . .50% .52% .50% .50% .51%(5)
Ratio of net investment income to average net assets . . 3.11% 3.10% 3.11% 3.41% 2.30%
Net Assets, end of period (000's Omitted) . . . . . . . . $227,639 $194,158 $221,178 $205,373 $205,105
- ---------
(1) Effective October 17, 1994, The Dreyfus Corporation began serving as the
Fund' s investment manager. Prior to October 17, 1994, Mellon Bank, N.A.
served as the Fund's investment manager.
(2) The Fund commenced selling Investor shares on April 20, 1994. Those shares
outstanding prior to April 4, 1994 were designated as Trust shares.
Effective October 17, 1994, the Fund's Trust shares were reclassified as
Class R shares.
(3) Net investment income before expenses reimbursed by the investment adviser
for the year ended October 31, 1994 was $.0218.
(4) Amount represents less than $.001 per share.
(5) Annualized expense ratio before expenses reimbursed by the investment
adviser for the year ended October 31, 1994 was .61%.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
DREYFUS MUNICIPAL RESERVES
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES:
Dreyfus Municipal Reserves (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, as
amended (the "Act") as an open-end management investment company and operates as
a series company currently offering nineteen series including the Fund. The
Fund' s investment objective is to seek income exempt from federal income tax
consistent with stability of principal by investing in tax-exempt municipal
obligations. The Dreyfus Corporation (the "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 1 billion shares of $.001 par
value Capital Stock in each of the following classes of shares: Investor Class
and Class R. Investor shares are sold primarily to retail investors and bear a
distribution fee. Class R shares are sold primarily to bank trust departments
and other financial service providers (including Mellon Bank and its affiliates)
acting on behalf of customers having a qualified trust or investment account or
relationship at such institution, and bear no distribution fee. Each class of
shares has identical rights and privileges, except with respect to the
distribution fee and voting rights on matters affecting a single class.
Investment income, net of expenses (other than class specific expenses) and
realized and unrealized gains and losses are allocated daily to each class of
shares based upon the relative proportion of net assets of each class.
The Fund' s financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management estimates
and assumptions. Actual results could differ from those estimates.
(A) PORTFOLIO VALUATION: Investments in securities are valued at amortized
cost in accordance with Rule 2a-7 of the Act, which has been determined by the
Fund's Board of Directors to represent the fair value of the Fund's investments
It is the Fund's policy to maintain a continuous net asset value per share of
$1.00 for the Fund; the Fund has adopted certain investment, portfolio valuation
and dividend and distribution policies to enable it to do so. There is no
assurance, however, that the Fund will be able to maintain a stable net asset
value per share of $1.00.
(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Interest income is
recognized on the accrual basis. Cost of investments represents amortized cost.
(C) DISTRIBUTIONS TO SHAREHOLDERS: It is the policy of the Fund to declare
dividends daily from investment income-net; such dividends are paid monthly.
Dividends from net realized capital gain are normally declared and paid
annually, but the Fund may make distributions on a more frequent basis to comply
with the distribution requirements of the Internal Revenue Code of 1986, as
amended (the "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.
(D) FEDERAL INCOME TAXES: It is the policy of the Fund to continue to qualify
as a regulated investment company, which can distribute tax exempt dividends, by
complying with the applicable provisions of the 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 $8,300
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to October 31, 1998. If not
applied, the carryover expires in 2005.
At October 31, 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).
DREYFUS MUNICIPAL RESERVES
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 2--INVESTMENT MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
(A) Investment management fee: Pursuant to an Investment Management agreement
with the Manager, the Manager provides or arranges for one or more third parties
and/or affiliates to provide investment advisory, administrative, custody, fund
accounting and transfer agency services to the Fund. The Manager also directs
the investments of the Fund in accordance with its investment objective,
policies and limitations. For these services, the Fund is contractually
obligated to pay the Manager a fee, calculated daily and paid monthly, at the
annual rate of .50% of the value of the Fund's average daily net assets. Out of
its fee, the Manager pays all of the expenses of the Fund except brokerage fees,
taxes, interest, 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) . Effective July 1, 1998, each
director receives $40,000 per year, plus $5,000 for each joint Board meeting of
The Dreyfus/Laurel Funds, Inc., The Dreyfus/Laurel Tax-Free Municipal Funds, and
The Dreyfus/Laurel Funds Trust (the "Dreyfus/Laurel Funds") attended, $2,000 for
separate committee meetings attended which are not held in conjunction with a
regularly scheduled board meeting and $500 for Board meetings and separate
committee meetings attended that are conducted by telephone and is reimbursed
for travel and out-of-pocket expenses. The Chairman of the Board receives an
additional 25% of such compensation (with the exception of reimbursable
amounts). In the event that there is a joint committee meeting of the
Dreyfus/Laurel Funds and the Dreyfus High Yield Strategies Fund, the $2,000 fee
will be allocated between the Dreyfus/Laurel Funds and the 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.
Prior to July 1, 1998 each director received $27,000 per year, $1,000 for each
Board meeting attended and $750 for each Audit Committee meeting attended and
was reimbursed for travel and out-of-pocket expenses. The Chairman of the Board
received an additional annual fee of $25,000 per year. These fees pertained to
the Dreyfus/Laurel Funds. (The $1,000 attendance fee and reimbursement of
meeting expenses were also borne pro rata by Dreyfus High Yield Strategies
Fund). These fees and expenses were 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, were in fact paid directly by the Manager
to the non-interested Directors.
(B) DISTRIBUTION PLAN: Under the Distribution Plan (the "Plan") adopted
pursuant to Rule 12b-1 under the Act, Investor shares may pay annually up to
25% of the value of the average daily net assets attributable to its Investor
shares to compensate the Distributor and Dreyfus Service Corporation, an
affiliate of the Manager, for shareholder servicing activities and the
Distributor for activities primarily intended to result in the sale of Investor
shares. The Class R shares bear no distribution fee. During the period October
31, 1998, the Investor shares were charged $48,896 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.
DREYFUS MUNICIPAL RESERVES
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 3--BANK LINE OF CREDIT:
The Fund participates with other Dreyfus-managed funds in a $100 million
unsecured line of credit primarily to be utilized for temporary or emergency
purposes, including the financing of redemptions. Interest is charged to the
Fund at rates which are related to the Federal Funds rate in effect at the time
of borrowings.
The average daily amount of borrowings outstanding during the period ended
October 31, 1998 was approximately $83,700 with a related weighted average
annualized interest rate of 6.03%.
DREYFUS MUNICIPAL RESERVES
- -----------------------------------------------------------------------------
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 Municipal Reserves of The
Dreyfus/Laurel Funds, Inc. as of October 31, 1998, 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 in the five-year period then ended.
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 and financial highlights. Our procedures included
confirmation of securities owned as of October 31, 1998 by correspondence with
the custodian and brokers. 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 Municipal Reserves of The Dreyfus/Laurel Funds, Inc. as of October 31,
1998, 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 the
financial highlights for each of the years or periods in the five-year period
then ended, in conformity with generally accepted accounting principles.
New York, New York
December 15, 1998
IMPORTANT TAX INFORMATION (UNAUDITED)
In accordance with Federal tax law, the Fund hereby designates all the
dividends paid from investment income-net during the period ended October 31,
1998 as "exempt-interest dividends" (not generally subject to regular Federal
income tax).
[Dreyfus lion "d" logo]
[dreyfus lion logo]
DREYFUS MUNICIPAL RESERVES
200 Park Avenue
New York, NY 10166
MANAGER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
CUSTODIAN
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
TRANSFER AGENT &
DIVIDEND DISBURSING AGENT
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Printed in U.S.A. 324/724AR9810
Municipal Reserves
Annual Report
October 31, 1998
DREYFUS PREMIER MIDCAP STOCK FUND (FORMERLY DREYFUS DISCIPLINED MIDCAP STOCK
FUND)
- -----------------------------------------------------------------------------
LETTER TO SHAREHOLDERS
Dear Shareholder:
Dreyfus Premier Midcap Stock Fund completed its fiscal year ended October 31,
1998 with performance results that reflected the stock market's extraordinary
volatility during the period. The Fund's performance during the period, compared
with its benchmark index, is shown below:
Total Return*
____________
Class A Shares -2.16%
Class B Shares -3.41%**
Class C Shares -3.28%**
Class R Shares -1.88%
Standard & Poor's MidCap 400 Index (S&P 400)(+) 6.71%
- ---------------
**Since Inception 1/16/98.
A major portion of the underperformance occurred during the highly volatile
August to October time period, and obviously these returns were disappointing.
ECONOMIC REVIEW
So far in 1998, the main regions of the world have had very different economic
fundamentals. The U.S. entered the year with a strong economy near full
employment, with unemployment only slightly above 4%. The tight labor market led
the Federal Reserve Board (the "Fed") to contemplate a rise in interest rates
early in the year. The U.S. economy cooled enough over the months that the Fed
decided to stand pat. Evidence of economic cooling continued to accumulate and
worries about the world economy intensified. Financial stresses pushed the Fed
to ease credit in both late September and mid-October. After many years of
subpar economic growth, continental Europe moved into a sustained economic
expansion. The overall European economy benefited as interest rates in
peripheral countries such as Spain and Italy fell, approaching the lower levels
established by Germany, on the eve of currency unification. Unlike the U.S.,
Europe has substantial excess capacity of productive plant and labor. In Asia,
weak economies were pervasive as a result of the Asian financial crisis. The
Latin American economies weakened as the financial stresses spread throughout
that region.
A main influence on the U.S. economy this year was the foreign financial
crisis and cooling of the world economy. The positive effects hit first. Actual
inflation and expected inflation dropped, causing a decline in long-term
Treasury bond yields and mortgage rates. This caused a boom in housing. The fall
in inflation helped the consumer sector as more of the growth in consumer income
was left over after inflation to buy goods and services. Consumers benefited
from a combination of good growth in income after inflation, a strong labor
market and past increases in the price of assets they owned.
The negative effect of Asian weakness was felt in the industrial sector more
than in the consumer sector. Corporate profits weakened, especially in sectors
affected by the Asian crisis such as world-traded commodities (oil, metals and
paper) and exports. One result of this industrial weakness was to cool off a
U.S. economy that had been growing rapidly.
The major change in the economic outlook over recent months has been a
downward shift in expectations for world economic growth. A credit crunch
developed in emerging countries and former communist countries, sharply reducing
the economic outlook for Asia and Latin America as well as for
commodity-exporting countries throughout the world. The effect on Europe and the
U.S. has been to lower expectations of profit growth and drive down bond yields.
Evidence of a weaker world economy accumulated as the financial stresses
continued. A worsened financial crisis occurred between the Russian default in
mid-August and the fallout from the Long-Term Capital Management (hedge fund)
crisis through early October. However, proactive steps were taken to stabilize
the Japanese banks, design a support package for Brazil and ease monetary
policy. The prospects for world economic weakness and monetary ease in the major
countries will be powerfully influenced by whether foreign financial stresses
calm down or intensify in the coming months. There appears to be a shift in the
priorities of key policymakers from fighting potential inflation to
restimulating future world economic growth.
MARKET OVERVIEW
The 12 months ended October 31, 1998 encompassed some very different market
phases. There was stock market strength during the early part of the period.
Then small-cap indices started to erode in the spring and were joined by
large-cap indices by mid-summer. A sharp decline until the end of August was
followed by a brief rebound and then a renewed decline amid financial fears
until early October. The last few weeks of the fiscal year saw a strong rally in
response to the easing of monetary policy. Over the 12-month period, the total
return on the Standard & Poor's Stock Price Index was 22.01%. Returns on mid-cap
and small-cap stock indices tended to be weaker than on large-caps, with a
negative total return on small-cap indices.
Three key trends influenced stock market behavior during the fiscal year.
First, the Federal Reserve kept the Federal Funds rate flat at 5.5% for nearly
11 months of the fiscal year, but then eased policy twice. Second, weakness in
emerging country economies contributed to declining commodity prices and a drop
in long-term Treasury bond yields to multidecade lows. Third, expectations for
corporate profits dropped, first in the sectors sensitive to Asian developments
such as oil, basic materials and exports and then for a broader list of stocks.
The trigger for the sharp decline in stocks in August appeared to be the
Russian default in the summer of 1998. This resulted in deepening concerns about
weaker economic growth and corporate profits. There was also a global margin
call on risky assets held by hedge funds and financial institutions. This raised
the cost of debt financing for many corporations and many emerging countries.
Expectations for economic activity in emerging countries in Asia and Latin
America shifted down sharply while expectations for U.S. corporate profits
weakened somewhat. Despite the fall in Treasury bond yields, financial stocks
led the summer selloff due to concerns about financial contagion among emerging
countries and potential loan losses by financial institutions. However, in the
last few weeks of the fiscal year, these fears began to ebb and the stock market
rebounded.
The erosion of expectations about average corporate profit growth over the
last year contributed to an outperformance by a small group of super-cap growth
stocks for much of the fiscal year. Investors had more confidence in the
prospect for strong persistent earnings growth for this small group of stocks
than for the broad market. Value stocks, which often have greater cyclical
sensitivity to earnings fluctuations, lagged behind these super-growth stocks.
In addition, many of the financial stocks that fall into the value category fell
sharply following the Russian default and global margin call concerns.
The fiscal year ended October 31, 1998 was characterized by very different
performances of the various market sectors. Super-cap growth stocks did best,
followed by large-cap stocks in general with mid-cap and small-cap stocks
lagging behind. For example, the total return for the fiscal year on the Russell
1000 Index with a heavy large-cap representation was 19.71%, while the Russell
1000 Growth Index returned 24.64% and the Russell 1000 Value Index returned
14.83% . The return on the Russell Midcap Index was 4.46% while the small-cap
Russell 2000 Index return was negative 11.84%.(+)(+)
PORTFOLIO FOCUS
The quantitative process used in the management of the Fund attempts to
analyze equity market forces, and then move the portfolio to take advantage of
these trends. In the volatile equity market that we have just witnessed, this
quantitative process caused the Fund to perform below its long-term trend, and
also led to the Fund's below-benchmark performance.
A more detailed examination of investment performance for the period under
review would show that it was negatively impacted by the Fund having an average
market capitalization that was slightly below the performance benchmark. This
modest exposure was important because of the wide differences in equity returns
based on market capitalization. We have just been through a time period where
the larger market capitalization companies meaningfully outperformed middle and
smaller capitalization firms. Thus, even a modestly below-benchmark average
capitalization penalized return.
The other factor that hurt performance was stock selection, with most of this
occurring in the last three months of the period under review. Among the
individual stocks that negatively impacted performance during this shorter time
period were Bowne & Co., FIRSTPLUS Financial Group, and TJX Cos. Some stocks
that positively contributed to return during the fiscal year include Waters,
Danaher and Biogen.
We will continue to use our disciplined investment process to select stocks
for the Fund. This process has provided strong returns for the Fund in the past.
Sincerely,
[signature logo, John O'Toole]
John O'Toole
Portfolio Manager
November 24, 1998
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 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 MidCap 400 Index is a broad-based index of 400 companies with market
capitalization generally ranging from $50 million to $10 billion and is a widely
accepted, unmanaged index of overall mid-cap stock market performance.
(+)(+) SOURCE: LIPPER ANALYTICAL SERVICES, INC. The Russell 1000 Index measures
the performance of the 1,000 largest companies in the Russell 3000 index, which
represents approximately 89% of the total market capitalization of the Russell
3000 Index. The Russell 1000 Growth Index measures the performance of those
Russell 1000 companies with higher price-to-book ratios and higher forecasted
growth values. The Russell 1000 Value Index measures the performance of those
Russell 1000 companies with lower price-to-book ratios and lower forecasted
growth values. The Russell Midcap Index consists of the bottom 800 securities in
the Russell 1000 Index as ranked by total market capitalization and is a widely
accepted measure of medium-cap stock market performance. The Russell 2000 Index
is composed of the 2,000 smallest companies in the Russell 3000 Index. The
Russell 3000 Index is composed of 3,000 of the largest U.S. Companies by market
capitalization. All indices are unmanaged and include reinvested dividends.
<TABLE>
DREYFUS PREMIER MIDCAP STOCK FUND OCTOBER 31, 1998
(FORMERLY DREYFUS DISCIPLINED MIDCAP STOCK FUND)
- -----------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN DREYFUS PREMIER MIDCAP
STOCK FUND CLASS R SHARES AND THE STANDARD & POOR'S MIDCAP 400 INDEX
Dollars
$20,942
Dreyfus Premier Midcap Stock Fund (Class R Shares)
$20,616
Standard & Poor's MidCap 400 Index*
*Source: Lipper Analytical Services, Inc.
Average Annual Total Returns Actual Aggregate 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 10/31/98 Sales Charge Sales Charge (5.75%) Period Ended 10/31/98 Redemption Redemption*
_____________________ _______________ __________________ _____________________ ____________ ______________________
<S> <C> <C> <C> <C> <C>
1 Year (2.16)% (7.79)% From Inception (1/16/98) (3.41)% (7.28)%
From Inception (4/6/94) 17.22 15.71
Actual Aggregate Total Returns Average Annual Total Returns
- ---------------------------------------------------------------------------------------------------------------------------------
Class C Shares Class R Shares
_______________________________________________________ _______________________________________________________
% Return Reflecting
Applicable Contingent
% Return Deferred Sales
Assuming No Charge Upon
Period Ended 10/31/98 Redemption Redemption** Period Ended 10/31/98
_____________________ _______________ __________________ _____________________
From Inception ( 1/16/98) (3.28)% (4.24)% 1 Year (1.88)%
From Inception (11/12/93) 16.04
- ------------------------
</TABLE>
Effective January 16, 1998, the Fund changed its name from Dreyfus Disciplined
Midcap Stock Fund to Dreyfus Premier Midcap Stock Fund. Also, the Fund's
Investor shares were redesignated as Class A shares and Class A shares began to
be offered with a maximum 5.75% front-end sales load and Restricted shares were
redesignated as Class R shares. Additionally, the Fund began offering Class B
and Class C shares.
Past performance is not predictive of future performance.
The above graph compares a $10,000 investment made in Class R shares of Dreyfus
Premier Midcap Stock Fund on 11/12/93 (Inception Date) to a $10,000 investment
made in the Standard & Poor's MidCap 400 Index on that date. For comparative
purposes, the value of the Index on 10/31/93 is used as the beginning value on
11/12/93. 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 Dreyfus Premier Midcap Stock Fund seeks investment returns (including
capital appreciation and income) consistently superior to the Standard & Poor's
MidCap 400 Index. While the midcap market is the Fund's main focus, the Fund can
also invest in other areas, such as stocks of smaller and larger corporations.
The Fund's performance shown in the line graph takes into account all applicable
fees and expenses. The Standard & Poor's MidCap 400 Index is a broad-based index
of 400 companies with market capitalizations generally ranging from $50 million
to $10 billion and is a widely accepted, unmanaged index of overall midcap 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.
*The maximum contingent deferred sales charge for Class B shares is 4% and is
reduced to 0% after six years.
**The maximum contingent deferred sales charge for Class C shares is 1% for
shares redeemed within one year of the date of purchase.
<TABLE>
DREYFUS PREMIER MIDCAP STOCK FUND
(FORMERLY DREYFUS DISCIPLINED MIDCAP STOCK FUND)
- -------------------------------------------------------
STATEMENT OF INVESTMENTS OCTOBER 31,1998
Common Stocks--97.5% Shares Value
- -------------------------------------------------------
____________ _____________
<S> <C> <C>
Basic Industries--6.4% AptarGroup . . . . . . . . . . . . . . . . . . . . . . 20,300 $ 543,025
Ball . . . . . . . . . . . . . . . . . . . . . . . . . 23,200 978,750
Caraustar Industries . . . . . . . . . . . . . . . . . 41,100 976,125
Centex Construction Products . . . . . . . . . . . . . 21,400 719,575
Crompton & Knowles . . . . . . . . . . . . . . . . . . 46,800 751,725
Cytec Industries . . . . . . . . . . . . . . . . . . . 29,800 (a) 715,200
International Specialty Products . . . . . . . . . . . 32,100 (a) 431,344
Rohm & Haas . . . . . . . . . . . . . . . . . . . . . 38,200 1,289,250
Solutia . . . . . . . . . . . . . . . . . . . . . . . 37,400 820,462
_____________
7,225,456
_____________
Capital Spending--23.0% America Online . . . . . . . . . . . . . . . . . . . . 30,100 (a) 3,824,581
American Power Conversion . . . . . . . . . . . . . . 14,200 (a) 602,612
Apple Computer . . . . . . . . . . . . . . . . . . . . 15,700 (a) 582,862
Ascend Communications . . . . . . . . . . . . . . . . 17,200 (a) 829,900
BMC Software . . . . . . . . . . . . . . . . . . . . . 25,300 (a) 1,215,981
Cadence Design Systems . . . . . . . . . . . . . . . . 43,900 (a) 938,363
Computer Task Group . . . . . . . . . . . . . . . . . 19,400 594,125
Compuware . . . . . . . . . . . . . . . . . . . . . . 36,100 (a) 1,956,169
Cort Business Services . . . . . . . . . . . . . . . . 28,600 (a) 561,275
DST Systems . . . . . . . . . . . . . . . . . . . . . 10,100 (a) 505,000
Danaher . . . . . . . . . . . . . . . . . . . . . . . 17,900 714,881
Gartner Group, Cl. A . . . . . . . . . . . . . . . . . 25,500 (a) 506,813
Graco . . . . . . . . . . . . . . . . . . . . . . . . 20,200 532,775
Gulfstream Aerospace . . . . . . . . . . . . . . . . . 23,300 (a) 1,031,025
Harte-Hanks Communications . . . . . . . . . . . . . . 20,700 503,269
Hertz, Cl. A . . . . . . . . . . . . . . . . . . . . . 31,100 1,113,769
Ingram Micro, Cl. A . . . . . . . . . . . . . . . . . 20,500 (a) 932,750
J D Edwards . . . . . . . . . . . . . . . . . . . . . 12,800 (a) 419,200
Kaydon . . . . . . . . . . . . . . . . . . . . . . . . 14,800 519,850
Leggett & Platt . . . . . . . . . . . . . . . . . . . 32,100 750,338
NCR . . . . . . . . . . . . . . . . . . . . . . . . . 17,400 (a) 585,075
Network Associates . . . . . . . . . . . . . . . . . . 20,000 (a) 850,000
Paychex . . . . . . . . . . . . . . . . . . . . . . . 19,100 950,225
Premark International . . . . . . . . . . . . . . . . 19,000 602,063
SABRE Group Holdings, Cl. A . . . . . . . . . . . . . 35,900 (a) 1,352,981
Snyder Communications . . . . . . . . . . . . . . . . 33,100 (a) 1,181,256
Sterling Software . . . . . . . . . . . . . . . . . . 30,400 (a) 796,100
Trinity Industries . . . . . . . . . . . . . . . . . . 25,100 931,838
_____________
25,885,076
_____________
Consumer Cyclical--13.0% Best Buy . . . . . . . . . . . . . . . . . . . . . . . 11,800 (a) 566,400
Bowne & Co. . . . . . . . . . . . . . . . . . . . . . 54,200 728,312
Dollar Tree Stores . . . . . . . . . . . . . . . . . . 19,600 (a) 755,825
Federal-Mogul . . . . . . . . . . . . . . . . . . . . 7,900 428,081
Furniture Brands International . . . . . . . . . . . . 40,700 (a) 875,050
Harley-Davidson . . . . . . . . . . . . . . . . . . . 23,700 918,375
DREYFUS PREMIER MIDCAP STOCK FUND
(FORMERLY DREYFUS DISCIPLINED MIDCAP STOCK FUND)
- -------------------------------------------------------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1998
Common Stocks (continued) Shares Value
- ------------------------------------------------------------------------------------------
____________ _____________
Consumer Cyclical (continued) IHOP . . . . . . . . . . . . . . . . . . . . . . . . . 18,000 (a) $ 706,50
King World Productions . . . . . . . . . . . . . . . . 15,600 (a) 409,500
McClatchy Newspapers, Cl. A . . . . . . . . . . . . . 17,200 583,725
Meritor Automotive . . . . . . . . . . . . . . . . . . 26,400 493,350
Nautica Enterprises . . . . . . . . . . . . . . . . . 22,700 (a) 469,606
Payless ShoeSource . . . . . . . . . . . . . . . . . . 12,100 (a) 567,944
Pulitzer Publishing . . . . . . . . . . . . . . . . . 12,200 963,800
Ross Stores . . . . . . . . . . . . . . . . . . . . . 32,700 1,062,750
Saks . . . . . . . . . . . . . . . . . . . . . . . . . 38,900 (a) 884,975
TJX Cos. . . . . . . . . . . . . . . . . . . . . . . . 76,700 1,452,506
V.F. . . . . . . . . . . . . . . . . . . . . . . . . . 28,800 1,204,200
Washington Post, Cl. B . . . . . . . . . . . . . . . . 400 212,400
Whole Foods Market . . . . . . . . . . . . . . . . . . 14,000 (a) 560,875
Zale . . . . . . . . . . . . . . . . . . . . . . . . . 34,000 (a) 805,375
_____________
14,649,549
_____________
Consumer Staples--5.0% Dial . . . . . . . . . . . . . . . . . . . . . . . . . 29,600 815,850
Earthgrains . . . . . . . . . . . . . . . . . . . . . 17,300 519,000
International Home Foods . . . . . . . . . . . . . . . 32,800 (a) 582,200
Interstate Bakeries . . . . . . . . . . . . . . . . . 38,500 964,906
Lancaster Colony . . . . . . . . . . . . . . . . . . . 21,700 651,000
Lauder (Estee), Cl. A . . . . . . . . . . . . . . . . 10,900 714,631
Universal Foods . . . . . . . . . . . . . . . . . . . 63,400 1,374,987
_____________
5,622,574
_____________
Electronics--6.3% Altera . . . . . . . . . . . . . . . . . . . . . . . . 30,800 (a) 1,282,050
Linear Technology . . . . . . . . . . . . . . . . . . 9,000 536,625
Maxim Integrated Products . . . . . . . . . . . . . . 35,200 (a) 1,256,200
QUALCOMM . . . . . . . . . . . . . . . . . . . . . . . 3,900 (a) 216,937
Solectron . . . . . . . . . . . . . . . . . . . . . . 10,300 (a) 589,675
Tellabs . . . . . . . . . . . . . . . . . . . . . . . 26,500 (a) 1,457,500
Vitesse Semiconductor . . . . . . . . . . . . . . . . 21,800 (a) 703,050
Waters . . . . . . . . . . . . . . . . . . . . . . . . 14,300 (a) 1,051,050
_____________
7,093,087
_____________
Energy--6.9% Cliffs Drilling . . . . . . . . . . . . . . . . . . . 19,300 (a) 441,487
El Paso Energy . . . . . . . . . . . . . . . . . . . . 27,900 988,706
Helmerich & Payne . . . . . . . . . . . . . . . . . . 28,000 666,750
National Fuel Gas . . . . . . . . . . . . . . . . . . 24,900 1,176,525
Noble Drilling . . . . . . . . . . . . . . . . . . . . 40,400 (a) 694,375
Questar . . . . . . . . . . . . . . . . . . . . . . . 35,500 698,906
Rowan Cos. . . . . . . . . . . . . . . . . . . . . . . 30,900 (a) 449,981
Sun . . . . . . . . . . . . . . . . . . . . . . . . . 41,200 1,413,675
Vastar Resources . . . . . . . . . . . . . . . . . . . 26,200 1,252,687
_____________
7,783,092
_____________
DREYFUS PREMIER MIDCAP STOCK FUND (FORMERLY DREYFUS DISCIPLINED MIDCAP STOCK
FUND)
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED)OCTOBER 31, 1998
Common Stocks (continued) Shares Value
- -------------------------------------------------------
____________ _____________
Health Care--9.2% Arterial Vascular Engineering . . . . . . . . . . . . 22,500 (a) $ 691,875
Biogen . . . . . . . . . . . . . . . . . . . . . . . . 30,700 (a) 2,133,650
Biomet . . . . . . . . . . . . . . . . . . . . . . . . 32,700 1,109,756
Elan, A.D.S. . . . . . . . . . . . . . . . . . . . . . 10,000 (a) 700,625
Lincare Holdings . . . . . . . . . . . . . . . . . . . 24,500 (a) 978,469
McKesson . . . . . . . . . . . . . . . . . . . . . . . 9,900 762,300
Rexall Sundown . . . . . . . . . . . . . . . . . . . . 23,800 (a) 426,912
STERIS . . . . . . . . . . . . . . . . . . . . . . . . 60,000 (a) 1,380,000
Watson Pharmaceuticals . . . . . . . . . . . . . . . . 39,200 (a) 2,180,500
_____________
10,364,087
_____________
Interest Sensitive--13.8% AFLAC . . . . . . . . . . . . . . . . . . . . . . . . 22,700 865,437
CMAC Investment . . . . . . . . . . . . . . . . . . . 14,500 607,188
Centura Banks . . . . . . . . . . . . . . . . . . . . 9,500 655,500
City National . . . . . . . . . . . . . . . . . . . . 36,200 1,237,588
Cullen/Frost Bankers . . . . . . . . . . . . . . . . . 17,300 921,225
Dime Bancorp . . . . . . . . . . . . . . . . . . . . . 18,200 433,388
Edwards (A.G.) . . . . . . . . . . . . . . . . . . . . 13,900 480,419
First Tennessee National . . . . . . . . . . . . . . . 34,900 1,105,894
Imperial Bancorp . . . . . . . . . . . . . . . . . . . 25,600 (a) 355,200
Mercantile Bankshares . . . . . . . . . . . . . . . . 28,300 923,287
Nationwide Financial Services, Cl. A . . . . . . . . . 21,200 879,800
Old Kent Financial . . . . . . . . . . . . . . . . . . 28,900 1,215,606
Old Republic International . . . . . . . . . . . . . . 40,800 775,200
PMI Group . . . . . . . . . . . . . . . . . . . . . . 18,200 917,963
Regions Financial . . . . . . . . . . . . . . . . . . 32,100 1,187,700
RenaissanceRe Holdings . . . . . . . . . . . . . . . . 8,500 320,875
T. Rowe Price Associates . . . . . . . . . . . . . . . 32,500 1,155,781
Wilmington Trust . . . . . . . . . . . . . . . . . . . 6,200 341,388
Zions Bancorporation . . . . . . . . . . . . . . . . . 20,800 1,103,700
_____________
15,483,139
_____________
Mining and Metals--.6% Cleveland-Cliffs . . . . . . . . . . . . . . . . . . . 5,700 226,219
General Cable . . . . . . . . . . . . . . . . . . . . 23,400 462,150
_____________
688,369
_____________
Transportation--1.6% Alaska Air Group . . . . . . . . . . . . . . . . . . . 14,200 (a) 510,313
Coach USA . . . . . . . . . . . . . . . . . . . . . . 18,200 (a) 487,988
UAL . . . . . . . . . . . . . . . . . . . . . . . . . 12,100 (a) 785,744
_____________
1,784,045
_____________
Utilities--11.7% BEC Energy . . . . . . . . . . . . . . . . . . . . . . 44,100 1,750,219
Century Telephone Enterprises . . . . . . . . . . . . 39,500 2,244,094
Cincinnati Bell . . . . . . . . . . . . . . . . . . . 12,600 326,812
Commonwealth Energy Systems . . . . . . . . . . . . . 52,500 1,958,906
IPALCO Enterprises . . . . . . . . . . . . . . . . . . 28,800 1,321,200
DREYFUS PREMIER MIDCAP STOCK FUND
(FORMERLY DREYFUS DISCIPLINED MIDCAP STOCK FUND)
- -------------------------------------------------------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED)OCTOBER 31, 1998
Common Stocks (continued) Shares Value
- ------------------------------------------------------------------------------------------
____________ _____________
Utilities (continued) Montana Power . . . . . . . . . . . . . . . . . . . . 23,500 $ 1,017,844
Pinnacle West Capital . . . . . . . . . . . . . . . . 34,900 1,529,056
SCANA . . . . . . . . . . . . . . . . . . . . . . . . 44,200 1,494,514
Sierra Pacific Resources . . . . . . . . . . . . . . . 21,700 790,694
TECO Energy . . . . . . . . . . . . . . . . . . . . . 24,200 668,525
_____________
13,101,864
_____________
TOTAL COMMON STOCKS
(cost $108,395,296) . . . . . . . . . . . . . . . $109,680,338
=============
Principal
Short-Term Investments--11.7% Amount
- -------------------------------------------------------
____________
Repurchase Agreements; Goldman Sachs & Co.,
Tri-Party Repurchase Agreement, 5.38%
dated 10/30/1998 to be repurchased
at $13,176,154 on 11/2/98,
collateralized by $11,962,000 U.S.
Treasury Notes, 6.125% due
8/15/2007, value $13,433,810
(cost $13,170,249) . . . . . . . . . . . . . . . . $13,170,249 $ 13,170,249
=============
TOTAL INVESTMENTS (cost $121,565,545). . . . . . . . . . . . . . . . . . . . . . . . . . . 109.2% $ 122,850,587
======= =============
LIABILITIES, LESS CASH AND RECEIVABLES . . . . . . . . . . . . . . . . . . . . . . . . . . (9.2%) $ (10,342,491)
======= =============
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.0% $ 112,508,096
======= =============
Notes to Statement of Investments:
- -----------------------------------------------------------------------------
(a) Non-income producing.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
DREYFUS PREMIER MIDCAP STOCK FUND (FORMERLY DREYFUS DISCIPLINED MIDCAP STOCK
FUND)
- -----------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES OCTOBER 31, 1998
Cost Value
____________ ____________
<S> <C> <C>
ASSETS: Investments in securities--See Statement of
Investments (including Repurchase
agreements $13,170,249)--Note 1(c) . . . . . . . . . . $121,565,545 $122,850,587
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . 2,068,640
Dividends and interest receivable . . . . . . . . . . . . 100,234
Receivable for shares of Capital Stock subscribed . . . . 80,456
_____________
125,099,917
_____________
LIABILITIES: Due to The Dreyfus Corporation and affiliates . . . . . . 99,308
Due to Distributor . . . . . . . . . . . . . . . . . . . 8,053
Payable for investment securities purchased . . . . . . . 12,277,951
Payable for shares of Capital Stock redeemed . . . . . . 206,484
Loan commitment fees payable . . . . . . . . . . . . . . 25
_____________
12,591,821
_____________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $112,508,096
=============
REPRESENTED BY: Paid-in capital . . . . . . . . . . . . . . . . . . . . . $114,303,373
Accumulated net realized gain (loss) on investments . . . (3,080,319)
Accumulated net unrealized appreciation (depreciation)
on investments--Note 3 . . . . . . . . . . . . . . . . 1,285,042
_____________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $112,508,096
=============
NET ASSET VALUE PER SHARE
--------------------------
Class A Class B Class C Class R
_____________ _____________ _____________ _____________
Net Assets . . . . . . . . . . . . . . . . . . . . . . $38,267,105 $16,867,428 $3,485,413 $53,888,150
Shares Outstanding . . . . . . . . . . . . . . . . . . 2,686,558 1,191,571 245,989 3,774,027
NET ASSET VALUE PER SHARE. . . . . . . . . . . . . . . $14.24 $14.16 $14.17 $14.28
======= ======= ======= =======
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
DREYFUS PREMIER MIDCAP STOCK FUND (FORMERLY DREYFUS DISCIPLINED MIDCAP STOCK
FUND)
- -----------------------------------------------------------------------------
STATEMENT OF OPERATIONS YEAR ENDED OCTOBER 31, 1998
INVESTMENT INCOME
<S> <C> <C>
INCOME: Cash dividends . . . . . . . . . . . . . . . . . $ 667,231
Interest . . . . . . . . . . . . . . . . . . . . 153,568
____________
Total Income . . . . . . . . . . . . . . . $ 820,799
EXPENSES: Management fee--Note 2(a) . . . . . . . . . . . . 783,685
Distribution and service fees--Note 2(b) . . . . 120,111
Loan commitment fees--Note 4 . . . . . . . . . . 223
Interest expense--Note 4 . . . . . . . . . . . . 202
____________
Total Expenses . . . . . . . . . . . . . . 904,221
____________
INVESTMENT (LOSS)--NET . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (83,422)
____________
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--Note 3:
Net realized gain (loss) on investments . . . . . $ (3,075,357)
Net realized gain (loss) on financial futures . . (60,737)
____________
Net Realized Gain (Loss) . . . . . . . . . (3,136,094)
Net unrealized appreciation (depreciation)
on investments (including $56,175 net
unrealized appreciation on financial futures) . (5,105,472)
____________
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS . . . . . . . . . . . . . . (8,241,566)
____________
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS . . . . . . . . . . . . . . $ (8,324,988)
============
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
DREYFUS PREMIER MIDCAP STOCK FUND (FORMERLY DREYFUS DISCIPLINED MIDCAP STOCK
FUND)
- -----------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
Year Ended Year Ended
October 31, 1998(1,2) October 31, 1997(3)
__________________ ___________________
OPERATIONS:
<S> <C> <C>
Investment income (loss)--net . . . . . . . . . . . . . . . . . . . . . . . . . . $ (83,422) $ 110,541
Net realized gain (loss) on investments . . . . . . . . . . . . . . . . . . . . . (3,136,094) 5,918,597
Net unrealized appreciation (depreciation) on investments . . . . . . . . . . . . (5,105,472) 3,500,980
______________ _____________
Net Increase (Decrease) in Net Assets Resulting from Operations . . . . . (8,324,988) 9,530,118
______________ _____________
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net:
Class A shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4,238) (1,586)
Class R shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (64,231) (62,895)
Net realized gain on investments:
Class A shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,209,970) (493,147)
Class R shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4,651,856) (2,268,268)
______________ _____________
Total Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5,930,295) (2,825,896)
______________ _____________
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold:
Class A shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40,740,337 5,620,898
Class B shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,859,177 --
Class C shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,197,511 --
Class R shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66,281,293 93,962,959
Dividends reinvested:
Class A shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,166,625 477,790
Class R shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,473,465 2,107,559
Cost of shares redeemed:
Class A shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7,916,760) (3,018,397)
Class B shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (863,005) --
Class C shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (189,956) --
Class R shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (39,601,301) (86,087,710)
______________ _____________
Increase (Decrease) in Net Assets from Capital Stock Transactions . . . . 88,147,386 13,063,099
______________ _____________
Total Increase (Decrease) in Net Assets . . . . . . . . . . . . . . . . 73,892,103 19,767,321
NET ASSETS:
Beginning of Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38,615,993 18,848,672
______________ ______________
End of Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 112,508,096 $ 38,615,993
============== ==============
UNDISTRIBUTED INVESTMENT INCOME--NET . . . . . . . . . . . . . . . . . . . . . . . . -- $ 61,954
______________ _____________
- ------------------
(1) Effective January 16, 1998, Investor shares and Restricted shares were
redesignated Class A shares and Class R shares, respectively.
(2) The Fund commenced selling Class B and Class C shares on January 16, 1998.
(3) Effective August 15, 1997, Institutional shares and Retail shares were
redesignated Investor shares and Restricted shares, respectively.
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS PREMIER MIDCAP STOCK FUND (FORMERLY DREYFUS DISCIPLINED MIDCAP STOCK
FUND)
- -----------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
Shares
______________________________________
Year Ended Year Ended
October 31, 1998(1,2) October 31, 1997(3)
__________________ ___________________
CAPITAL SHARE TRANSACTIONS:
Class A
________
Shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,705,902 331,624
Shares issued for dividends reinvested . . . . . . . . . . . . . . . . . . . . . . 82,408 37,543
Shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (504,168) (189,963)
__________ __________
Net Increase (Decrease) in Shares Outstanding . . . . . . . . . . . . . . . 2,284,142 179,204
========== ==========
Class B
________
Shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,253,924 --
Shares issued for dividends reinvested . . . . . . . . . . . . . . . . . . . . . . -- --
Shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (62,353) --
__________ __________
Net Increase (Decrease) in Shares Outstanding . . . . . . . . . . . . . . . 1,191,571 --
========== ==========
Class C
________
Shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 259,755 --
Shares issued for dividends reinvested . . . . . . . . . . . . . . . . . . . . . . -- --
Shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (13,766) --
__________ __________
Net Increase (Decrease) in Shares Outstanding . . . . . . . . . . . . . . . 245,989 --
========== ==========
Class R
________
Shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,094,892 5,925,097
Shares issued for dividends reinvested . . . . . . . . . . . . . . . . . . . . . . 331,341 165,161
Shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,517,205) (5,314,562)
__________ __________
Net Increase (Decrease) in Shares Outstanding . . . . . . . . . . . . . . . 1,909,028 775,696
========== ==========
- ------------
(1) Effective January 16, 1998, Investor shares and Restricted shares were
redesignated Class A shares and Class R shares, respectively.
(2) The Fund commenced selling Class B and Class C shares on January 16, 1998.
(3) Effective August 15, 1997, Institutional shares and Retail shares were
redesignated Investor shares and Restricted shares, respectively.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
DREYFUS PREMIER MIDCAP STOCK FUND (FORMERLY DREYFUS DISCIPLINED MIDCAP 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.
Class A Shares
_______________________________________________________________
Year Ended October 31,
_______________________________________________________________
PER SHARE DATA: 1998(1) 1997(2) 1996(3) 1995 1994(4,5)
_______ _______ _______ _______ _______
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period . . . . . . . . . . . $17.02 $14.36 $11.92 $ 9.75 $10.00
_______ _______ _______ _______ _______
Investment Operations:
Investment income (loss)--net . . . . . . . . . . . . . . . (.01) .02 .04 .09 .05
Net realized and unrealized gain (loss) on investments . . (.29) 4.79 2.98 2.17 (.26)
_______ _______ _______ _______ _______
Total from Investment Operations . . . . . . . . . . . . . (.30) 4.81 3.02 2.26 (.21)
_______ _______ _______ _______ _______
Distributions:
Dividends from investment income--net . . . . . . . . . . . (.01) (.01) (.05) (.09) (.04)
Dividends from net realized gain on investments . . . . . . (2.47) (2.14) (.53) -- --
_______ _______ _______ _______ _______
Total Distributions . . . . . . . . . . . . . . . . . . . . (2.48) (2.15) (.58) (.09) (.04)
_______ _______ _______ _______ _______
Net asset value, end of period . . . . . . . . . . . . . $14.24 $17.02 $14.36 $11.92 $ 9.75
======= ======= ======= ======= =======
TOTAL INVESTMENT RETURN(6) . . . . . . . . . . . . . . . . . . (2.16%) 38.40% 26.29% 23.39% (2.06%)(7)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets . . . . . . . . . . 1.35% 1.35% 1.35% 1.35% .80%(7)
Ratio of net investment income (loss) to average net assets . . (.19%) .16% .28% .86% .42%(7)
Portfolio Turnover Rate . . . . . . . . . . . . . . . . . . 78.02% 81.87% 90.93% 71.00% 83.00%(7)
Net Assets, end of period (000's Omitted) . . . . . . . . . $38,267 $6,847 $3,205 $1,417 $54
- ------------------------
(1) Effective January 16, 1998, Investor shares were redesignated as Class A
shares.
(2) Effective August 15, 1997, Institutional shares were redesignated as
Investor shares.
(3) Effective July 15, 1996, Investor shares were redesignated as Institutional
shares.
(4) The Fund commenced selling Investor shares on April 6, 1994.
(5) Effective October 17, 1994, The Dreyfus Corporation began serving as the
Fund's investment manager. Prior to October 17, 1994, Mellon Bank, N.A.
served as the Fund's investment manager.
(6) Exclusive of sales load.
(7) Not annualized.
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS PREMIER MIDCAP STOCK FUND (FORMERLY DREYFUS DISCIPLINED MIDCAP 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.
Class B Shares Class C Shares
________________ ________________
Year Ended Year Ended
PER SHARE DATA: October 31, 1998(1) October 31, 1998(1)
__________________ __________________
Net asset value, beginning of period . . . . . . . . . . . . $14.65 $14.65
_______ _______
Investment Operations:
Investment income (loss)--net . . . . . . . . . . . . . . . . (.06) (.06)
Net realized and unrealized gain (loss)
on investments . . . . . . . . . . . . . . . . . . . . . (.43) (.42)
_______ _______
Total from Investment Operations . . . . . . . . . . . . . . (.49) (.48)
_______ _______
Net asset value, end of period . . . . . . . . . . . . . . . $14.16 $14.17
======= =======
TOTAL INVESTMENT RETURN(2) . . . . . . . . . . . . . . . . . . . (3.41%)(3) (3.28%)(3)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets . . . . . . . . . . . 1.66%(3) 1.66%(3)
Ratio of net investment (loss) to average net assets . . . . (.77%)(3) (.77%)(3)
Portfolio Turnover Rate . . . . . . . . . . . . . . . . . . . 78.02%(3) 78.02%(3)
Net Assets, end of period (000's Omitted) . . . . . . . . . . $16,867 $3,485
- ------------------------
(1) From January 16, 1998 (commencement of initial offering) to October 31, 1998.
(2) Exclusive of sales load.
(3) Not annualized.
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS PREMIER MIDCAP STOCK FUND (FORMERLY DREYFUS DISCIPLINED MIDCAP 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.
Class R Shares
______________________________________________________________
Year Ended October 31,
______________________________________________________________
PER SHARE DATA: 1998(1) 1997(2) 1996(3) 1995 1994(4,5)
_______ _______ _______ _______ _______
Net asset value, beginning of period . . . . . . . . . . . $17.03 $14.36 $11.92 $ 9.76 $10.00
_______ _______ _______ _______ _______
Investment Operations:
Investment income--net . . . . . . . . . . . . . . . . . . .01 .05 .07 .12 .09(6)
Net realized and unrealized gain (loss) on investments . . (.26) 4.80 2.98 2.16 (.27)
_______ _______ _______ _______ _______
Total from Investment Operations . . . . . . . . . . . . . (.25) 4.85 3.05 2.28 (.18)
_______ _______ _______ _______ _______
Distributions:
Dividends from investment income--net . . . . . . . . . . . (.03) (.04) (.08) (.12) (.06)
Dividends from net realized gain on investments . . . . . . (2.47) (2.14) (.53) -- --
_______ _______ _______ _______ _______
Total Distributions . . . . . . . . . . . . . . . . . . . . (2.50) (2.18) (.61) (.12) (.06)
_______ _______ _______ _______ _______
Net asset value, end of period . . . . . . . . . . . . . $14.28 $17.03 $14.36 $11.92 $ 9.76
======= ======= ======= ======= =======
TOTAL INVESTMENT RETURN. . . . . . . . . . . . . . . . . . . . (1.88%) 38.88% 26.61% 23.57% (1.77%)(7)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets . . . . . . . . . . 1.10% 1.10% 1.10% 1.10% 1.13%(7,8)
Ratio of net investment income to average net assets . . . .05% .42% .57% 1.11% . 95%(7)
Portfolio Turnover Rate . . . . . . . . . . . . . . . . . . 78.02% 81.87% 90.93% 71.00% 83.00%(7)
Net Assets, end of period (000's Omitted) . . . . . . . . . $53,888 $31,769 $15,644 $12,129 $18,169
- -------------------------
(1) Effective January 16, 1998, Restricted shares were redesignated as Class R
shares.
(2) Effective August 15, 1997, Retail shares were redesignated as Restricted
shares.
(3) Effective July 15, 1996, Class R shares were redesignated as Retail shares.
(4) Effective October 17, 1994, The Dreyfus Corporation began serving as the
Fund' s investment manager. Prior to October 17, 1994, Mellon Bank, N.A.
served as the Fund's investment manager.
(5) The Fund commenced operations on November 12, 1993. Any shares outstanding
prior to April 4, 1994 were designated as Trust shares. Effective
October 17, 1994, the Fund's Trust shares were redesignated as Class R
shares.
(6) Net investment income before reimbursement of expenses by investment adviser
for the period ended October 31, 1994 was $.06.
(7) Not annualized.
(8) Net annualized expense ratio before voluntary reimbursement of expenses by
the investment adviser for the period ended October 31, 1994 was 1.48%.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
DREYFUS PREMIER MIDCAP STOCK FUND (FORMERLY DREYFUS DISCIPLINED MIDCAP STOCK
FUND)
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES:
Dreyfus Premier Midcap Stock 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, as amended (the "Act") as an open-end
management investment company and operates as a series company currently
offering nineteen series, including the Fund. The Fund's investment objective is
to seek total investment returns (including capital appreciation and income)
which consistently outperform the Standard & Poor' s 400 Midcap Index. The
Dreyfus Corporation (the "Manager") serves as the Fund's investment adviser.
The Manager is a direct subsidiary of Mellon Bank, N.A. ("Mellon Bank").
On November 20, 1997, shareholders approved a reorganization, effective
January 16, 1998, in which the Fund's name was changed to Dreyfus Premier Midcap
Stock Fund. Former Investor shares have been redesignated as Class A shares,
former Restricted shares have been redesignated as Class R shares and the Fund
added Class B and Class C shares.
Premier Mutual Fund Services, Inc. (the "Distributor") is the distributor of
the Fund' s shares. The Fund is authorized to issue 288 million of $.001 par
value Capital Stock. The Fund currently offers four classes of shares: Class A
(22 million shares authorized), Class B (100 million shares authorized), Class C
(100 million shares authorized) and Class R shares (66 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, (except that
former holders of Investor shares will continue to be eligible to purchase Class
A shares at NAV, without an initial sales charge). Class B and Class C shares
are subject to a contingent deferred sales charge ("CDSC"). 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 an investment account or relationship at such institution,
(except that holders of former Restricted shares will continue to be eligible to
purchase those shares) 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.
Prior to January 16, 1998, the Fund offered two classes of shares: Investor
(22 million shares authorized) and Restricted (66 million shares authorized).
Investor shares were offered to any investor and Resticted shares were limited
to purchases by bank trust departments and other financial services providers
(including Mellon Bank, N.A. and its affiliates) acting on behalf of customers
having a qualified trust or investment account or relationship at such
institutions, or to customers who had received and held shares of the Fund
distributed to them by virtue of such an account or relationship. Effective
December 1, 1997, the Fund no longer offers Restricted shares for new accounts.
Other differences between the classes included the services offered to and the
expenses borne by each 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 (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 DREYFUS PREMIER MIDCAP STOCK FUND (FORMERLY DREYFUS DISCIPLINED
MIDCAP STOCK FUND)
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
price is available. Securities for which there are no such valuations are
valued at fair value as determined in good faith under the direction of the
Board of Directors.
(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Dividend income is
recognized on the ex-dividend date and interest income, including, where
applicable, amortization of discount on investments, is recognized on the
accrual basis.
(C) REPURCHASE AGREEMENTS: The Fund may engage in repurchase agreement
transactions. Under the terms of a typical repurchase agreement, the Fund,
through its custodian and sub-custodian, takes possession of an underlying debt
obligation subject to an obligation of the seller to repurchase, and the Fund to
resell, the obligation at an agreed-upon price and time, thereby determining the
yield during the Fund's holding period. This arrangement results in a fixed rate
of return that is not subject to market fluctuations during the Fund's holding
period. The value of the collateral is at least equal, at all times, to the
total amount of the repurchase obligation, including interest. In the event of a
counter party default, the Fund has the right to use the collateral to offset
losses incurred. There is potential loss to the Fund in the event the Fund is
delayed or prevented from exercising its rights to dispose of the collateral
securities, including the risk of a possible decline in the value of the
underlying securities during the period while the Fund seeks to assert its
rights. The Manager, acting under the supervision of the Board of Directors,
reviews the value of the collateral and the creditworthiness of those banks and
dealers with which the Fund enters into repurchase agreements to evaluate
potential risks.
(D) FINANCIAL FUTURES: The Fund may invest in financial futures contracts in
order to gain exposure to or protect against changes in the market. The Fund is
exposed to market risk as a result of changes in the value of the underlying
financial instruments. 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 contracts 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, 1998,
there were no financial futures contracts outstanding.
(E) DISTRIBUTIONS 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 of 1986, as amended (the "Code"). To
the extent that net realized capital gain can be offset by capital loss
carryovers, it is the policy of the Fund not to distribute such gain.
(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 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 $2,977,000
available for Federal income tax purposes to be applied against future net
security profits, if any, realized subsequent to October 31, 1998. If not
applied, the carryover expires in fiscal 2006.
DREYFUS PREMIER MIDCAP STOCK FUND (FORMERLY DREYFUS DISCIPLINED MIDCAP STOCK
FUND)
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
During the period ended October 31, 1998, the Fund reclassified $89,937 from
accumulated investment loss to paid-in-capital. Net assets were not affected by
this reclassification.
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 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). Effective July 1, 1998,
each director receives $40,000 per year, plus $5,000 for each joint Board
meeting of The Dreyfus/Laurel Funds, Inc., The Dreyfus/Laurel Tax-Free Municipal
Funds, and The Dreyfus/Laurel Funds Trust (the"Dreyfus/Laurel Funds") attended,
$2,000 for separate committee meetings attended which are not held in
conjunction with a regularly scheduled board meeting and $500 for Board meetings
and separate committee meetings attended that are conducted by telephone and is
reimbursed for travel and out-of-pocket expenses. The Chairman of the Board
receives an additional 25% of such compensation (with the exception of
reimbursable amounts) . In the event that there is a joint committee meeting of
the Dreyfus/Laurel Funds and the Dreyfus High Yield Strategies Fund, the $2,000
fee will be allocated between the Dreyfus/Laurel Funds and the Dreyfus High
Yield Strategies Fund. These fees and expenses were 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, were in fact paid directly
by the Manager to the non-interested Directors.
Prior to July 1, 1998 each director received $27,000 per year, $1,000 for each
Board meeting attended and $750 for each Audit Committee meeting attended and
was reimbursed for travel and out-of-pocket expenses. The Chairman of the Board
received an additional annual fee of $25,000 per year. These fees pertained to
the Dreyfus/Laurel Funds, Inc. (The $1,000 attendance fee and reimbursement of
meeting expenses were also borne pro rata by Dreyfus High Yield Strategies
Fund.) . These fees and expenses were 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, were in fact paid directly by the Manager
to the non-interested Directors.
Dreyfus Service Corporation, a wholly-owned subsidiary of the Manager,
retained 13,831 during the period ended October 31, 1998 from commissions earned
on sales of the Fund's shares.
(B) DISTRIBUTION AND SERVICE PLAN: Under the Fund's Distribution Plan (the
" Plan" ) adopted pursuant to Rule 12b-1 under the Act, Class A shares may pay
annually up to .25% of the value of the 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 and Class C shares
may pay the Distributor for distributing their shares at an aggregate annual
rate of .75% of the value of the average daily net assets of Class B and Class C
shares. Class B shares and Class C shares are also subject to a service plan
adopted pursuant to Rule 12b-1, under which the Class B and Class C shares pay
Dreyfus Service Corporation or the Distributor for DREYFUS PREMIER MIDCAP STOCK
FUND (FORMERLY DREYFUS DISCIPLINED MIDCAP STOCK FUND)
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
providing 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 January 16, 1998 through October 31, 1998, Class A, Class B and Class C
shares were charged $33,211, $51,095 and $10,843, respectively, pursuant to the
Plan and Class B and Class C shares were charged $17,032 and $3,614,
respectively, pursuant to the service plan.
Under its terms, the Plan and service plan shall remain in effect from year to
year, provided such continuance is approved annually by a vote of a 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.
Prior to January 16, 1998, under a previous Distribution Plan adopted pursuant
to Rule 12b-1 under the Act, the Investor shares paid 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 primarily intended to result in the sale of Investor
shares. The Restricted shares bore no distribution fee. During the period from
November 1, 1997 to January 15, 1998, Investor shares were charged $4,316
pursuant to the Plan.
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, 1998, amounted to $135,566,404 and $53,292,409, respectively.
At October 31, 1998, accumulated net unrealized appreciation on investments
was $1,285,042, consisting of $9,321,496 gross unrealized appreciation and
$8,036,454 gross unrealized depreciation.
At October 31, 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.
The average daily amount of borrowings outstanding during the period ended
October 31, 1998 was approximately $3,600, with a related weighted average
annualized interest rate of 5.67%.
DREYFUS PREMIER MIDCAP STOCK FUND (FORMERLY DREYFUS DISCIPLINED MIDCAP STOCK
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 Midcap Stock Fund of
The Dreyfus Laurel/Funds, Inc. as of October 31, 1998, 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 in the five-year period then ended.
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 and financial highlights. Our procedures included
confirmation of securities owned as of October 31, 1998 by correspondence with
the custodian and brokers. As to securities purchased, but not received, 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 Midcap Stock Fund of The Dreyfus/Laurel Funds, Inc. as of
October 31, 1998, 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
the financial highlights for each of the years or periods in the five-year
period then ended, in conformity with generally accepted accounting principles.
New York, New York
December 15, 1998
DREYFUS PREMIER MIDCAP STOCK FUND (FORMERLY DREYFUS DISCIPLINED MIDCAP STOCK
FUND)
- -----------------------------------------------------------------------------
IMPORTANT TAX INFORMATION (UNAUDITED)
For Federal tax purposes, the Fund hereby designates $1.773 per share as a
long-term capital gain distribution paid on December 15, 1997.
The Fund also designates 19.565% of the ordinary dividends paid during the
fiscal year ended October 31, 1998 as qualifying for the corporate dividends
received deductions. Shareholders will receive notification in January 1999 of
the percentage applicable to the preparation of their 1998 income tax returns.
DREYFUS PREMIER MIDCAP
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. 330/730AR9810
ANNUAL REPORT
- -------------------------------------------------------------------------------
DREYFUS PREMIER
MIDCAP
STOCK FUND
- -------------------------------------------------------------------------------
OCTOBER 31, 1998
[Logo] (reg.tm)
DREYFUS PREMIER BALANCED FUND
- -----------------------------------------------------------------------------
LETTER TO SHAREHOLDERS
Dear Shareholder:
We are pleased to provide you with this report for the Dreyfus Premier
Balanced Fund for the 12-month period ended October 31, 1998. During this
period, your Fund provided positive total returns, even though general market
conditions were very difficult in late summer and early fall. The Fund's
performance for each share class during the reporting period is shown in the
following table:
Total Return*
____________
Class A Shares 16.06%
Class B Shares 15.20%
Class C Shares 15.24%
Class R Shares 16.37%
Hybrid Index ** 16.86%
The Fund' s Hybrid Index is composed of 60% Standard & Poor's 500 Composite
Stock Price Index (S& P 500) and 40% Lehman Brothers Intermediate Government/
Corporate Bond Index. The total returns for the S&P 500 Index and the Lehman
Brothers Intermediate Government/Corporate Bond Index for the same period were
22.01% and 9.12%, respectively.***
The Fund's returns were favorable relative to its peer group, and every share
class for the Fund was ranked in the top 10% of all Balanced Funds in the Lipper
Universe for the one-year period ended October 31, 1998. Of course, past
performance is no guarantee of future results.(+)
ECONOMIC REVIEW
So far in 1998, the main regions of the world have had very different economic
fundamentals. The U.S. entered the year with a strong economy near full
employment, with unemployment only slightly above 4%. The tight labor market led
the Federal Reserve Board (the "Fed") to contemplate a rise in interest rates
early in the year. The U.S. economy cooled enough over the months that the Fed
decided to stand pat. Evidence of economic cooling continued to accumulate and
worries about the world economy intensified. Financial stresses pushed the Fed
to ease credit in both late September and mid-October. After many years of
subpar economic growth, continental Europe moved into a sustained economic
expansion. The overall European economy benefited as interest rates in
peripheral countries such as Spain and Italy fell, approaching the lower levels
established by Germany, on the eve of currency unification. Unlike the U.S.,
Europe has substantial excess capacity of productive plant and labor. In Asia,
weak economies were pervasive as a result of the Asian financial crisis. The
Latin American economies weakened as the financial stresses spread throughout
that region.
A main influence on the U.S. economy this year was the foreign financial
crisis and cooling of the world economy. The positive effects hit first. Actual
inflation and expected inflation dropped, causing a decline in long-term
Treasury bond yields and mortgage rates. This caused a boom in housing. The fall
in inflation helped the consumer sector as more of the growth in consumer income
was left over after inflation to buy goods and services. Consumers benefited
from a combination of good growth in income after inflation, a strong labor
market and past increases in the price of assets they owned.
The negative effect of Asian weakness was felt in the industrial sector more
than in the consumer sector. Corporate profits weakened, especially in sectors
affected by the Asian crisis such as world-traded commodities (oil, metals and
paper) and exports. One result of this industrial weakness was to cool off a
U.S. economy that had been growing rapidly.
The major change in the economic outlook over recent months has been a
downward shift in expectations for world economic growth. A credit crunch
developed in emerging countries and former communist countries, sharply reducing
the economic outlook for Asia and Latin America as well as for
commodity-exporting countries throughout the world. The effect on Europe and the
U.S. has been to lower expectations of profit growth and drive down bond yields
Evidence of a weaker world economy accumulated as the financial stresses
continued. A worsened financial crisis occurred between the Russian default in
mid-August and the fallout from the Long-Term Capital Management (hedge fund)
crisis through early October. However, proactive steps were taken to stabilize
the Japanese banks, design a support package for Brazil and ease monetary
policy. The prospects for world economic weakness and monetary ease in the major
countries will be powerfully influenced by whether foreign financial stresses
calm down or intensify in the coming months. There appears to be a shift in the
priorities of key policymakers from fighting potential inflation to
restimulating future world economic growth.
MARKET OVERVIEW
The 12 months ended October 31, 1998 encompassed some very different market
phases. There was stock market strength during the early part of the period.
Then small-cap indices started to erode in the spring and were joined by
large-cap indices by mid-summer. A sharp decline until the end of August was
followed by a brief rebound and then a renewed decline amid financial fears
until early October. The last few weeks of the fiscal year saw a strong rally in
response to the easing of monetary policy. Over the 12-month period, the total
return on the S&P 500 Index was 22.01%. Returns on mid-cap and small-cap stock
indices tended to be weaker than on large-caps, with a negative total return on
small-cap indices.
Three key trends influenced stock market behavior during the fiscal year.
First, the Federal Reserve kept the Federal Funds rate flat at 5.5% for nearly
11 months of the fiscal year, but then eased policy twice. Second, weakness in
emerging country economies contributed to declining commodity prices and a drop
in long-term Treasury bond yields to multidecade lows. Third, expectations for
corporate profits dropped, first in the sectors sensitive to Asian developments
such as oil, basic materials and exports and then for a broader list of stocks.
The trigger for the sharp decline in stocks in August appeared to be the
Russian default in the summer of 1998. This resulted in deepening concerns about
weaker economic growth and corporate profits. There was also a global margin
call on risky assets held by hedge funds and financial institutions. This raised
the cost of debt financing for many corporations and many emerging countries.
Expectations for economic activity in emerging countries in Asia and Latin
America shifted down sharply while expectations for U.S. corporate profits
weakened somewhat. Despite the fall in Treasury bond yields, financial stocks
led the summer selloff due to concerns about financial contagion among emerging
countries and potential loan losses by financial institutions. However, in the
last few weeks of the fiscal year, these fears began to ebb and the stock market
rebounded.
The erosion of expectations about average corporate profit growth over the
last year contributed to an outperformance by a small group of super-cap growth
stocks for much of the fiscal year. Investors had more confidence in the
prospect for strong persistent earnings growth for this small group of stocks
than for the broad market. Value stocks, which often have greater cyclical
sensitivity to earnings fluctuations, lagged behind these super-growth stocks.
In addition, many of the financial stocks that fall into the value category fell
sharply following the Russian default and global margin call concerns.
The fiscal year ended October 31, 1998 was characterized by very different
performances of the various market sectors. Super-cap growth stocks did best,
followed by large-cap stocks in general with mid-cap and small-cap stocks
lagging behind. For example, the total return for the fiscal year on the Russell
1000 Index with a heavy large-cap representation was 19.71%, while the Russell
1000 Growth Index returned 24.64% and the Russell 1000 Value Index returned
14.83% . The return on the Russell Midcap Index was 4.46% while the small-cap
Russell 2000 Index return was -11.84%.(+)(+)
With respect to the fixed-income market, the reporting period was highlighted
by an unprecedented bond market rally from mid-August through early October. The
10-year U.S. Treasury note, which began the period with a yield of 5.67%,
reached a low of 4.16% by October 5. In spite of the increase in yield during
the latter part of October, the yield on the 10-year U.S. Treasury Note ended
the reporting period a full 107 basis points lower with a yield of 4.60%. The
pronounced drop in yields of U.S. Treasury securities during this period was due
to an event known as investor "flight to quality." This phenomenon occurred
because investors were fearful of the volatile financial markets throughout the
world and purchased U.S. Treasury securities as a safe haven investment.
The sharp selloff in the stock market affected the corporate bond market as
well. Uncertainty as to how a slowdown in global economic growth would effect
prospects for the U.S. economy drove yield spreads on corporate securities
wider. Quality spreads among corporate securities increased most dramatically as
investors sought to buy higher quality securities with less risk of
underperformance in a volatile market environment. For the reporting period,
corporate securities with a AA rating had a total return of 4.87%, outperforming
corporate securities with a BBB rating, which only returned 2.46%
In a surprise announcement on October 15, the Federal Reserve lowered the Fed
Funds rate from 5.25% to 5.00% . With this announcement investor fears were
calmed and subsequently the bond market gave up some of its flight-to-quality
gains. In spite of the end-of-period selloff, the bond yields had reached
multiyear lows. Importantly, the benchmark 30-year bond established new
historical lows, trading as low as 4.72%.
PORTFOLIO FOCUS -- EQUITIES
The Fund was underweighted in equities in relation to its normal 60% position
during the August stock market downturn. In September and again in October, the
Fund increased its equity exposure in recognition of the subsequent attractive
valuation levels. As of October 31, the effective asset mix was 51.9% equity,
39.7% fixed income, and 8.4% cash equivalents. The Fund's strategic asset class
shifts made during the quarter provided investment returns well above those of
the benchmark.
For the fiscal year, the equity component of the Fund modestly lagged the
performance of the S&P 500 as the market's returns were highly concentrated in
large capitalization growth stocks. The utility and health care sectors provided
the highest returns for the Fund as high levels of market volatility caused a
rotation into these defensive areas of the market. The returns of the energy
sector detracted from performance due to the uncertainty surrounding oil prices.
As market volatility continues, we are maintaining our equity emphasis on a
broadly diversified, large capitalization approach with exposure to all economic
sectors.
PORTFOLIO FOCUS -- FIXED-INCOME
The duration of the Fund's fixed-income securities was neutral to that of the
Lehman Brothers Intermediate Government/Corporate Bond Index throughout the
reporting period. Earlier in the year we enhanced the income component of the
Fund by increasing the Fund's holding of high quality asset backed securities to
5% . During August the sensitivity of the Fund's overall position in corporate
securities was pared back to 18% from 25% of the portfolio versus an overall
corporate exposure of 25% for the benchmark. Our efforts to reposition the
Fund' s corporate allocation to be more defensive and of a higher quality than
the benchmark index proved fruitful.
Sincerely,
[Ronald P. GalaLaurie Carroll signature]
Ronald P. GalaLaurie Carroll
Portfolio Managers
November 25, 1998
New York, N.Y.
*Under normal circumstances, the Fund invests approximately 60% of its assets
in common stocks and 40% of its assets in bonds. However, the Fund is permitted
to invest up to 75%, and as little as 40%, of its total assets in common stocks
and up to 60% , and as little as 25%, of its total assets in bonds, as deemed
advisable by The Dreyfus Corporation.
**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 applicable contingent deferred sales charge
imposed on redemptions in the case of Class B and Class C shares.
***SOURCE: (1) LIPPER ANALYTICAL SERVICES -- The Standard & Poor's 500
Composite Stock Price Index is a widely accepted unmanaged index of U.S. stock
market performance. (2) LEHMAN BROTHERS -- The Lehman Brothers Intermediate
Government/Corporate Bond Index is a widely accepted unmanaged index of
government and corporate bond market performance composed of U.S. Government,
Treasury and agency securities, fixed-income securities and nonconvertible
investment-grade corporate debt, with an average maturity of 1 - 10 years.
Reflects reinvestment of dividends and capital gains.
(+) SOURCE: LIPPER ANALYTICAL SERVICES. For the one-year period ended 10/31/98,
there were 393 funds in the Lipper Balanced Funds category. The Fund's Class A,
Class B, Class C and Class R shares were ranked 30, 40, 38 and 26, respectively.
For the three-year period ended 10/31/98, the Fund's Class A, Class B, Class C
and Class R shares were ranked 7, 18, 16 and 6, respectively, out of 277 funds.
Performance shown does not reflect sales loads. Had they been reflected,
performance would have been lower.
(+)(+)SOURCE: LIPPER ANALYTICAL SERVICES, INC. -- The Russell 2000 Index is a
widely accepted unmanaged index composed of the 2,000 smallest companies in the
Russell 3000 Index. The Russell 3000 Index is composed of 3,000 of the largest
U.S. companies by market capitalization. The Russell 1000 Index measures the
performance of the 1,000 largest companies in the Russell 3000 index, which
represents approximately 89% of the total market capitalization of the Russell
3000 Index. The Russell 1000 Growth Index measures the performance of those
Russell 1000 companies with higher price-to-book ratios and higher forecasted
growth values. The Russell 1000 Value Index measures the performance of those
Russell 1000 companies with lower price-to-book ratios and lower forecasted
growth values. The Russell Midcap Index consists of the bottom 800 securities in
the Russell 1000 Index as ranked by total market capitalization and is a widely
accepted measure of medium-cap stock market performance. All indices are
unmanaged and include reinvested dividends.
DREYFUS PREMIER BALANCED FUND OCTOBER 31, 1998
- -----------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN DREYFUS PREMIER BALANCED
FUND CLASS R SHARES WITH THE STANDARD & POOR'S 500 COMPOSITE STOCK PRICE INDEX,
THE LEHMAN BROTHERS INTERMEDIATE GOVERNMENT/CORPORATE BOND INDEX, THE LIPPER
BALANCED FUNDS INDEX AND A HYBRID INDEX
Dollars
$26,593
Standard & Poor's 500 Composite Stock Price Index*
$21,644
Dreyfus Premier Balanced Fund (Class R Shares)
$20,687
Hybrid Index***
$18,044
Lipper Balanced Funds Index*
$13,791
Lehman Brothers Intermediate Government/Corporate Bond Index**
* Source: Lipper Analytical Services, Inc.
** Source: Lehman Brothers
*** Source: Lipper Analytical Services, Inc. and Lehman Brothers
- ---------------
Past performance is not predictive of future performance.
The above graph compares a $10,000 investment made in Class R shares of Dreyfus
Premier Balanced Fund on 9/15/93 (Inception Date) to a $10,000 investment made
on that date in each of the Standard & Poor's 500 Composite Stock Price Index,
the Lehman Brothers Intermediate Government/Corporate Bond Index, the Lipper
Balanced Funds Index and a Hybrid Index, which are described below. For
comparative purposes, the value of each Index on 8/31/93 is used as the
beginning value on 9/15/93. All dividends and capital gain distributions are
reinvested. The Hybrid Index is calculated on a year-to-year basis. 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.
Dreyfus Premier Balanced Fund invests in common stocks and bonds. 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. The Lehman
Brothers Intermediate Government/Corporate Bond Index is a widely accepted,
unmanaged index of Government and corporate bond market performance composed of
U.S. Government, Treasury and agency securities, fixed-income securities and
nonconvertible investment grade corporate debt, with an average maturity of 1-10
years. The Lipper Balanced Funds Index is an equally-weighted performance index,
adjusted for capital gain distributions and income dividends of the largest
qualifying funds in this investment objective. The Indices do not take into
account charges, fees and other expenses. The Hybrid Index is composed of 60%
Standard & Poor' s 500 Composite Stock Price Index and 40% Lehman Brothers
Intermediate Government/Corporate Bond Index. Under normal circumstances, the
Fund' s total assets are allocated approximately 60% to common stocks and 40% to
bonds; however, the Fund is permitted to invest up to 75%, and as little as 40%,
of its total assets in common stocks and up to 60%, and as little as 25%, of its
total assets in bonds, as deemed advisable by The Dreyfus Corporation. 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>
DREYFUS PREMIER BALANCED FUND OCTOBER 31, 1998
- -----------------------------------------------------------------------------
Average Annual Total Returns
- -----------------------------------------------------------------------------
Class A Shares
__________________________________________________________________________________________________________________
% Return
Reflecting
% Return Without Maximum Initial
Period Ended 10/31/98 Sales Charge Sales Charge (5.75%)
_____________________ _______________ ____________________
<S> <C> <C>
1 Year 16.06% 9.36%
From Inception (4/14/94) 18.79 17.26
Class B Shares
__________________________________________________________________________________________________________________
% Return Reflecting
Applicable
Contingent
% Return Deferred Sales
Assuming No Charge Upon
Period Ended 10/31/98 Redemption Redemption*
_____________________ ____________________ ____________________
1 Year 15.20% 11.28%
From Inception (12/19/94) 20.79 20.33
Class C Shares
__________________________________________________________________________________________________________________
% Return Reflecting
Applicable
Contingent
% Return Deferred Sales
Assuming No Charge Upon
Period Ended 10/31/98 Redemption Redemption**
_____________________ ____________________ ____________________
1 Year 15.24% 14.26%
From Inception (12/19/94) 20.87 20.87
Class R Shares
__________________________________________________________________________________________________________________
Period Ended 10/31/98
_____________________
1 Year 16.37%
5 Years 16.28
From Inception (9/15/93) 16.24
*The maximum contingent deferred sales charge for Class B shares is 4% and is
reduced to 0% after six years.
**The maximum contingent deferred sales charge for Class C shares is 1% for
shares redeemed within one year of the date of purchase.
</TABLE>
<TABLE>
DREYFUS PREMIER BALANCED FUND
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS OCTOBER 31, 1998
Common Stocks--51.9% Shares Value
- ------------------------------------------------------- ___________ _____________
<S> <C> <C>
Basic Industries--2.1% AlliedSignal . . . . . . . . . . . . . . . . . . . . . 29,700 $ 1,156,444
Dow Chemical . . . . . . . . . . . . . . . . . . . . . 15,600 1,460,550
Fort James . . . . . . . . . . . . . . . . . . . . . . 30,900 1,245,656
PPG Industries . . . . . . . . . . . . . . . . . . . . 20,700 1,183,781
Rohm & Haas . . . . . . . . . . . . . . . . . . . . . 26,700 901,125
Southdown . . . . . . . . . . . . . . . . . . . . . . 6,600 359,287
USG . . . . . . . . . . . . . . . . . . . . . . . . . 9,000 429,188
_____________
6,736,031
_____________
Capital Spending--12.7% America Online . . . . . . . . . . . . . . . . . . . . 9,000 1,143,562
Caterpillar . . . . . . . . . . . . . . . . . . . . . 34,200 1,539,000
Cisco Systems . . . . . . . . . . . . . . . . . . (a) 28,800 1,814,400
Dell Computer . . . . . . . . . . . . . . . . . . (a) 36,000 2,362,500
EMC . . . . . . . . . . . . . . . . . . . . . . . (a) 36,300 2,336,813
General Electric . . . . . . . . . . . . . . . . . . . 34,200 2,992,500
HBO & Co . . . . . . . . . . . . . . . . . . . . . . . 22,500 590,625
Honeywell . . . . . . . . . . . . . . . . . . . . . . 6,600 527,175
Ingersoll-Rand . . . . . . . . . . . . . . . . . . . . 48,900 2,469,450
Intel . . . . . . . . . . . . . . . . . . . . . . . . 46,500 4,147,219
International Business Machines . . . . . . . . . . . 23,400 3,473,437
Lexmark International Group, Cl. A . . . . . . . . (a) 21,000 1,468,688
Lucent Technologies . . . . . . . . . . . . . . . . . 24,600 1,972,612
Microsoft . . . . . . . . . . . . . . . . . . . . (a) 51,000 5,399,625
Oracle . . . . . . . . . . . . . . . . . . . . . . (a) 99,900 2,953,294
Sun Microsystems . . . . . . . . . . . . . . . . . (a) 28,200 1,642,650
Sundstrand . . . . . . . . . . . . . . . . . . . . . . 4,000 187,750
Tellabs . . . . . . . . . . . . . . . . . . . . . (a) 27,900 1,534,500
Tyco International . . . . . . . . . . . . . . . . . . 27,900 1,728,056
_____________
40,283,856
_____________
Consumer Cyclical--6.3% American Greetings, Cl. A . . . . . . . . . . . . . . 9,600 385,200
Carnival . . . . . . . . . . . . . . . . . . . . . . . 18,900 611,887
Chrysler . . . . . . . . . . . . . . . . . . . . . . . 25,500 1,227,188
Clear Channel Communications . . . . . . . . . . . (a) 35,100 1,599,244
Federal-Mogul . . . . . . . . . . . . . . . . . . . . 11,700 633,994
Federated Department Stores . . . . . . . . . . . (a) 35,700 1,372,219
Ford Motor . . . . . . . . . . . . . . . . . . . . . . 35,700 1,936,725
Gannett . . . . . . . . . . . . . . . . . . . . . . . 16,200 1,002,375
Gap . . . . . . . . . . . . . . . . . . . . . . . . . 22,500 1,352,813
K mart . . . . . . . . . . . . . . . . . . . . (a) 39,000 550,875
Promus Hotel . . . . . . . . . . . . . . . . . . . . . 12,300 392,062
Safeway . . . . . . . . . . . . . . . . . . . . . (a) 37,500 1,792,969
Sears, Roebuck & Co . . . . . . . . . . . . . . . . . 17,400 781,913
TJX . . . . . . . . . . . . . . . . . . . . . . . . 64,800 1,227,150
Time Warner . . . . . . . . . . . . . . . . . . . . . 12,600 1,169,437
Tommy Hilfiger . . . . . . . . . . . . . . . . . . (a) 11,700 543,319
Wal-Mart Stores . . . . . . . . . . . . . . . . . . . 51,900 3,581,100
_____________
20,160,470
_____________
DREYFUS PREMIER BALANCED FUND
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1998
Common Stocks (continued) Shares Value
- ------------------------------------------------------- ___________ _____________
Consumer Staples--5.4% Coca-Cola . . . . . . . . . . . . . . . . . . . . . . 32,700 $ 2,211,337
Dial . . . . . . . . . . . . . . . . . . . . . . . . . 27,600 760,725
Eastman Kodak . . . . . . . . . . . . . . . . . . . . 19,500 1,511,250
General Mills . . . . . . . . . . . . . . . . . . . . 22,500 1,653,750
Interstate Bakeries . . . . . . . . . . . . . . . . . 10,500 263,156
Newell . . . . . . . . . . . . . . . . . . . . . . 27,000 1,188,000
Philip Morris . . . . . . . . . . . . . . . . . . . . 44,700 2,285,288
Procter & Gamble . . . . . . . . . . . . . . . . . . . 36,600 3,252,825
Ralston-Ralston Purina Group . . . . . . . . . . . . . 40,800 1,361,700
Sara Lee . . . . . . . . . . . . . . . . . . . . . . . 11,400 680,437
Unilever N.V . . . . . . . . . . . . . . . . . . . . . 19,500 1,467,375
Wrigley, (Wm.) Jr . . . . . . . . . . . . . . . . . . 5,100 412,781
_____________
17,048,624
_____________
Energy--3.9% Ashland . . . . . . . . . . . . . . . . . . . . . . . 11,400 548,625
Coastal . . . . . . . . . . . . . . . . . . . . . . . 32,400 1,142,100
Columbia Energy Group . . . . . . . . . . . . . . . . 15,300 885,487
Diamond Offshore Drilling . . . . . . . . . . . . . . 14,400 441,900
El Paso Energy . . . . . . . . . . . . . . . . . . . . 20,400 722,925
Exxon . . . . . . . . . . . . . . . . . . . . . . . 58,800 4,189,500
Phillips Petroleum . . . . . . . . . . . . . . . . . . 28,800 1,245,600
Sun . . . . . . . . . . . . . . . . . . . . . . . . . 20,400 699,975
Texaco . . . . . . . . . . . . . . . . . . . . . . 34,800 2,064,075
Tosco . . . . . . . . . . . . . . . . . . . . . . . 13,800 387,263
_____________
12,327,450
_____________
Health Care--6.6% Abbott Laboratories . . . . . . . . . . . . . . . . . 73,800 3,463,987
American Home Products . . . . . . . . . . . . . . . . 14,400 702,000
Amgen . . . . . . . . . . . . . . . . . . . . . . (a) 24,000 1,885,500
Biomet . . . . . . . . . . . . . . . . . . . . . . 21,000 712,688
Bristol-Myers Squibb . . . . . . . . . . . . . . . . . 22,800 2,520,825
Guidant . . . . . . . . . . . . . . . . . . . . . . . 13,800 1,055,700
Johnson & Johnson . . . . . . . . . . . . . . . . . . 36,000 2,934,000
Lilly (Eli) . . . . . . . . . . . . . . . . . . . . . 20,100 1,626,844
Schering-Plough . . . . . . . . . . . . . . . . . . . 31,800 3,271,425
Warner-Lambert . . . . . . . . . . . . . . . . . . . . 38,100 2,986,087
_____________
21,159,056
_____________
Interest Sensitive--8.6% Allstate . . . . . . . . . . . . . . . . . . . . . . . 36,600 1,576,087
Ambac Financial Group . . . . . . . . . . . . . . . . 18,300 1,064,831
American Express . . . . . . . . . . . . . . . . . . . 13,800 1,219,575
Bank One . . . . . . . . . . . . . . . . . . . . . . . 38,400 1,876,800
BankAmerica . . . . . . . . . . . . . . . . . . . . . 52,098 2,992,358
Bear Stearns . . . . . . . . . . . . . . . . . . . . . 27,300 974,269
Chase Manhattan . . . . . . . . . . . . . . . . . . . 49,500 2,812,219
CIGNA . . . . . . . . . . . . . . . . . . . . . . . . 10,500 765,844
Citigroup . . . . . . . . . . . . . . . . . . . . . . 25,500 1,200,094
Comerica . . . . . . . . . . . . . . . . . . . . . . . 24,900 1,606,050
DREYFUS PREMIER BALANCED FUND
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1998
Common Stocks (continued) Shares Value
- ------------------------------------------------------- ___________ _____________
Interest Sensitive (continued) Edwards (A.G.) . . . . . . . . . . . . . . . . . . . . 12,300 $ 425,119
EXEL, Cl. A . . . . . . . . . . . . . . . . . . . . . 24,000 1,834,500
Fannie Mae . . . . . . . . . . . . . . . . . . . . . . 19,800 1,402,088
Fleet Financial Group . . . . . . . . . . . . . . . . 46,200 1,845,112
Golden West Financial . . . . . . . . . . . . . . . . 8,100 734,569
MGIC Investment . . . . . . . . . . . . . . . . . . . 13,500 526,500
SLM Holding . . . . . . . . . . . . . . . . . . . . . 37,200 1,490,325
SunAmerica . . . . . . . . . . . . . . . . . . . . . . 24,300 1,713,150
SunTrust Banks . . . . . . . . . . . . . . . . . . . . 18,900 1,317,094
_____________
27,376,584
_____________
Mining and Metals--.4% Aluminum Company of America . . . . . . . . . . . . . 10,500 832,125
USX-U.S. Steel Group . . . . . . . . . . . . . . . . . 16,800 390,600
_____________
1,222,725
_____________
Transportation--.6% AMR . . . . . . . . . . . . . . . . . . . . . . . (a) 15,000 1,005,000
Burlington Northern Santa Fe . . . . . . . . . . . . . 31,800 981,825
_____________
1,986,825
_____________
Utilities--5.3% AT&T . . . . . . . . . . . . . . . . . . . . . . . . . 46,500 2,894,625
AirTouch Communications . . . . . . . . . . . . . (a) 31,800 1,780,800
Ameritech . . . . . . . . . . . . . . . . . . . . . . 66,300 3,576,056
BellSouth . . . . . . . . . . . . . . . . . . . . . . 35,400 2,825,362
Consolidated Edison . . . . . . . . . . . . . . . . . 23,700 1,187,962
FPL Group . . . . . . . . . . . . . . . . . . . . . . 26,400 1,651,650
FirstEnergy . . . . . . . . . . . . . . . . . . . . . 20,400 612,000
MCI WorldCom . . . . . . . . . . . . . . . . . . . . . 30,900 1,707,225
Pinnacle West Capital . . . . . . . . . . . . . . . . 11,400 499,463
_____________
16,735,143
_____________
TOTAL COMMON STOCKS
(cost $137,195,979) . . . . . . . . . . . . . . . $165,036,764
_____________
Principal
Bonds & Notes--39.7% Amount
- ------------------------------------------------------- ____________
Finance--4.8% ABN Amro Bank, Sub. Notes,
7.55%, 6/28/2006 . . . . . . . . . . . . . . . . . $ 700,000 $ 759,299
American Express Credit Account Master Trust,
Asset Backed Ctfs., Ser. 1997-1, Cl. A,
6.40%, 4/15/2005 . . . . . . . . . . . . . . . . . 2,500,000 2,608,247
Citibank Credit Card Master Trust,
Asset Backed Ctfs., Ser. 1998-1, Cl. A,
5.75%, 1/15/2003 . . . . . . . . . . . . . . . . . 4,500,000 4,555,957
Citicorp, Sr. Notes,
6.60%, 8/1/2000 . . . . . . . . . . . . . . . . . 2,000,000 2,035,590
General Motors Acceptance, Notes,
6.625%, 10/1/2002 . . . . . . . . . . . . . . . . 2,000,000 2,092,500
DREYFUS PREMIER BALANCED FUND
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1998
Principal
Bonds & Notes (continued) Amount Value
- ------------------------------------------------------- ___________ _____________
Finance (continued) Household Finance, Notes,
6.75%, 6/1/2000 . . . . . . . . . . . . . . . . . $ 2,000,000 $ 2,034,233
Republic New York, Deb.,
9.75%, 12/1/2000 . . . . . . . . . . . . . . . . . 1,000,000 1,092,577
_____________
15,178,403
_____________
Industrial--4.1% Aesop Funding, Notes,
6.40%, 10/20/2003 . . . . . . . . . . . . . . . . 2,000,000 2,065,672
Amoco, Notes,
6.25%, 10/15/2004 . . . . . . . . . . . . . . . . 1,500,000 1,584,304
Campbell Soup, Bonds,
6.15%, 12/1/2002 . . . . . . . . . . . . . . . . . 3,000,000 3,118,695
duPont (E.I.) de Nemours & Co., Notes,
6.50%, 9/1/2002 . . . . . . . . . . . . . . . . . 3,000,000 3,164,088
Norfolk Southern, Notes,
6.70%, 5/1/2000 . . . . . . . . . . . . . . . . . 2,000,000 2,044,406
Procter & Gamble, Deb.,
8.00%, 11/15/2003 . . . . . . . . . . . . . . . . 1,000,000 1,131,583
_____________
13,108,748
_____________
Utilities--.4% MCI WorldCom, Sr. Notes,
6.40%, 8/15/2005 . . . . . . . . . . . . . . . . . 1,250,000 1,301,075
_____________
U.S. Government &
Agencies--30.4% Federal Home Loan Banks;
5.61%, 6/22/2001 . . . . . . . . . . . . . . . . . 7,700,000 7,865,573
Federal Home Loan Mortgage;
5.40%, 11/1/2000 . . . . . . . . . . . . . . . . . 500,000 500,000
Federal National Mortgage Association:
5.30%, 12/10/1998 . . . . . . . . . . . . . . . . 1,000,000 1,000,031
6.64%, 7/2/2007 . . . . . . . . . . . . . . . . . 2,000,000 2,180,134
U.S. Treasury Bonds:
11.625%, 11/15/2002 . . . . . . . . . . . . . . . 500,000 631,375
12.375%, 5/15/2004 . . . . . . . . . . . . . . . . 5,000,000 6,901,300
U.S. Treasury Notes:
8.00%, 8/15/1999 . . . . . . . . . . . . . . . . . 1,800,000 1,849,716
5.875%, 2/15/2000 . . . . . . . . . . . . . . . . 3,300,000 3,365,703
8.50%, 2/15/2000 . . . . . . . . . . . . . . . . . 5,000,000 5,256,750
6.875%, 3/31/2000 . . . . . . . . . . . . . . . . 3,000,000 3,103,140
6.25%, 8/31/2000 . . . . . . . . . . . . . . . . . 5,710,000 5,906,139
5.75%, 10/31/2000 . . . . . . . . . . . . . . . . 1,200,000 1,233,600
5.625%, 11/30/2000 . . . . . . . . . . . . . . . . 2,900,000 2,975,429
5.50%, 12/31/2000 . . . . . . . . . . . . . . . . 1,400,000 1,434,790
6.25%, 10/31/2001 . . . . . . . . . . . . . . . . 4,300,000 4,528,287
5.875%, 11/30/2001 . . . . . . . . . . . . . . . . 5,300,000 5,531,716
6.625%, 3/31/2002 . . . . . . . . . . . . . . . . 5,000,000 5,350,050
6.25%, 8/31/2002 . . . . . . . . . . . . . . . . . 4,500,000 4,789,845
DREYFUS PREMIER BALANCED FUND
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1998
Principal
Bonds & Notes (continued) Amount Value
- ------------------------------------------------------- ___________ _____________
U.S. Government & U.S. Treasury Notes (continued):
Agencies (continued) 5.50%, 2/28/2003 . . . . . . . . . . . . . . . . . $ 6,000,000 $ 6,269,040
7.25%, 5/15/2004 . . . . . . . . . . . . . . . . . 1,000,000 1,136,010
7.50%, 2/15/2005 . . . . . . . . . . . . . . . . . 3,000,000 3,485,880
7.00%, 7/15/2006 . . . . . . . . . . . . . . . . . 5,000,000 5,759,800
6.25%, 2/15/2007 . . . . . . . . . . . . . . . . . 3,700,000 4,102,893
6.625%, 5/15/2007 . . . . . . . . . . . . . . . . 3,500,000 3,974,425
6.125%, 8/15/2007 . . . . . . . . . . . . . . . . 1,200,000 1,325,448
5.625%, 5/15/2008 . . . . . . . . . . . . . . . . 6,000,000 6,465,480
_____________
96,922,554
_____________
TOTAL BONDS & NOTES
(cost $122,154,737) . . . . . . . . . . . . . . . $126,510,780
_____________
Short-Term Investments--7.8%
- -------------------------------------------------------
Repurchase Agreement--6.9% Goldman Sachs & Co.,Tri-Party Repurchase
Agreement, 5.38% dated 10/30/1998,
due 11/2/1998 in the amount of
$21,898,712 (fully collateralized by
$8,946,000 U.S. Treasury Notes, 6.25%,
8/31/2000, and $11,548,000 U.S.Treasury Notes,
6.125%, 8/15/2007, value $22,327,641) . . . . . . $21,888,898 $ 21,888,898
_____________
U.S. Treasury Bill--.9% 4.75%, 12/10/1998 . . . . . . . . . . . . . . . . (b) 3,000,000 2,987,610
_____________
TOTAL SHORT-TERM INVESTMENTS
(cost $24,873,825) . . . . . . . . . . . . . . . . $ 24,876,508
_____________
TOTAL INVESTMENTS (cost $284,224, 541) . . . . . . . . . . . . . . . . . . . . . . . . . 99.4% $316,424,052
_______ _____________
CASH AND RECEIVABLES (NET) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6% $ 1,815,674
_______ _____________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.0% $318,239,726
_______ _____________
Notes to Statement of Investments:
- -----------------------------------------------------------------------------
(a) Non-income producing.
(b) Held by the custodian in a segregated account as collateral for open
financial futures positions.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
DREYFUS PREMIER BALANCED FUND
- -----------------------------------------------------------------------------
STATEMENT OF FINANCIAL FUTURES OCTOBER 31, 1998
Unrealized
Market Value Appreciation
Covered (Depreciation)
Financial Futures Sold Contracts by Contracts Expiration at 10/31/98
________ ___________ _________ ____________
<S> <C> <C> <C> <C>
5 Year U.S. Treasury Notes . . . . . . . . . . . . . . . 296 $(33,933,625) December '98 $ (110,921)
Financial Futures Purchased
Standard & Poor's 500. . . . . . . . . . . . . . . . . . 166 45,865,800 December '98 3,740,475
___________
$3,629,554
___________
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
DREYFUS PREMIER BALANCED FUND
- -----------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES OCTOBER 31, 1998
Cost Value
_____________ ______________
<S> <C> <C>
ASSETS: Investments in securities--See Statement of
Investments--Note 1(c) . . . . . . . . . . . . . . . . $284,224,541 $316,424,052
Dividends and interest receivable . . . . . . . . . . . . 2,486,664
Receivable for shares of Capital Stock subscribed . . . . 740,304
Receivable for futures variation margin--Note 1(d) . . . 564,550
______________
320,215,570
______________
LIABILITIES: Due to The Dreyfus Corporation and affiliates . . . . . . 261,945
Due to Distributor . . . . . . . . . . . . . . . . . . . 57,768
Cash overdraft due to Custodian . . . . . . . . . . . . . 1,604,149
Payable for shares of Capital Stock redeemed . . . . . . 51,982
______________
1,975,844
______________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $318,239,726
______________
REPRESENTED BY: Paid-in capital . . . . . . . . . . . . . . . . . . . . . $262,795,912
Accumulated undistributed investment income--net . . . . 1,757,367
Accumulated net realized gain (loss) on investments . . . 17,857,382
Accumulated net unrealized appreciation (depreciation)
on investments (including $3,629,554 net unrealized
appreciation on financial futures)--Note 3 . . . . . . 35,829,065
______________
NET ASSETS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $318,239,726
______________
NET ASSET VALUE PER SHARE
------------------------------------------------------------
Class A Class B Class C Class R
______________ _______________ ______________ ______________
Net Assets . . . . . . . . . . . . . . . . . . . . . . $ 40,779,669 $ 62,323,963 $ 8,004,307 $207,131,787
Shares Outstanding . . . . . . . . . . . . . . . . . . 2,741,238 4,203,938 538,184 13,919,577
NET ASSET VALUE PER SHARE. . . . . . . . . . . . . . . $14.88 $14.83 $14.87 $14.88
_______ _______ _______ _______
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
DREYFUS PREMIER BALANCED FUND
- -----------------------------------------------------------------------------
STATEMENT OF OPERATIONS YEAR ENDED OCTOBER 31, 1998
INVESTMENT INCOME
<S> <C> <C>
INCOME: Interest . . . . . . . . . . . . . . . . . . . . $ 7,536,043
Cash dividends (net of $5,306 foreign taxes
withheld at source . . . . . . . . . . . . . 1,714,799
____________
Total Income . . . . . . . . . . . . . . . $ 9,250,842
EXPENSES: Management fee--Note 2(a) . . . . . . . . . . . . 2,497,384
Distribution and service fees--Note 2(b) . . . . 552,563
Loan commitment fees--Note 4 . . . . . . . . . . 1,057
____________
Total Expenses . . . . . . . . . . . . . . 3,051,004
_____________
INVESTMENT INCOME--NET . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,199,838
_____________
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--Note 3:
Net realized gain (loss) on investments . . . . . $14,953,788
Net realized gain (loss) on financial futures . . 3,217,033
____________
Net Realized Gain (Loss) . . . . . . . . . 18,170,821
Net unrealized appreciation (depreciation) on
investments (including $3,394,116 net
unrealized appreciation on financial futures) . 12,885,989
____________
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS . . . . . . . . . . . . . . 31,056,810
_____________
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS . . . . . . . . . . . . . . . $37,256,648
_____________
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
DREYFUS PREMIER BALANCED FUND
- -----------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
Year Ended Year Ended
October 31, 1998 October 31, 1997
________________ ______________
<S> <C> <C>
OPERATIONS:
Investment income--net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 6,199,838 $ 3,919,760
Net realized gain (loss) on investments . . . . . . . . . . . . . . . . . . . . . 18,170,821 27,525,071
Net unrealized appreciation (depreciation) on investments . . . . . . . . . . . . 12,885,989 5,329,817
______________ _____________
Net Increase (Decrease) in Net Assets Resulting from Operations . . . . . 37,256,648 36,774,648
______________ _____________
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net:
Class A shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (533,044) (154,567)
Class B shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (701,190) (141,872)
Class C shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (70,788) (5,342)
Class R shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4,618,084) (2,982,255)
Net realized gain on investments:
Class A shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,098,834) (682,485)
Class B shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4,236,067) (971,412)
Class C shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (300,306) (32,594)
Class R shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (20,836,393) (12,818,245)
______________ _____________
Total Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (33,394,706) (17,788,772)
______________ _____________
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold:
Class A shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26,608,304 7,863,931
Class B shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32,650,743 18,369,500
Class C shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,817,624 1,756,607
Class R shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104,742,971 69,950,474
Dividends reinvested:
Class A shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,423,236 760,627
Class B shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,051,465 871,660
Class C shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 282,986 31,235
Class R shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,416,979 15,788,268
Cost of shares redeemed:
Class A shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,869,815) (1,580,413)
Class B shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4,536,684) (1,697,888)
Class C shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (415,387) (167,194)
Class R shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (73,043,662) (82,080,975)
______________ _____________
Increase (Decrease) in Net Assets from Capital Stock Transactions . . . . 120,128,760 29,865,832
______________ _____________
Total Increase (Decrease) in Net Assets . . . . . . . . . . . . . . . . 123,990,702 48,851,708
NET ASSETS:
Beginning of Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 194,249,024 145,397,316
______________ _____________
End of Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $318,239,726 $194,249,024
______________ _____________
UNDISTRIBUTED INVESTMENT INCOME--NET . . . . . . . . . . . . . . . . . . . . . . . . $ 1,757,367 $ 1,480,635
______________ _____________
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS PREMIER BALANCED FUND
- -----------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
Shares
______________________________
Year Ended Year Ended
October 31, 1998 October 31, 1997
________________ _______________
CAPITAL SHARE TRANSACTIONS:
Class A
________
Shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,865,888 562,517
Shares issued for dividends reinvested . . . . . . . . . . . . . . . . . . . . . . . 179,977 60,307
Shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (272,801) (112,372)
__________ ___________
Net Increase (Decrease) in Shares Outstanding . . . . . 1,773,064 510,452
__________ ___________
Class B
________
Shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,307,420 1,295,362
Shares issued for dividends reinvested . . . . . . . . . . . . . . . . . . . . . . . 302,337 69,418
Shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (319,296) (119,340)
__________ ___________
Net Increase (Decrease) in Shares Outstanding . . . . . 2,290,461 1,245,440
__________ ___________
Class C
________
Shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 413,223 124,488
Shares issued for dividends reinvested . . . . . . . . . . . . . . . . . . . . . . . 20,986 2,483
Shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (29,104) (11,240)
__________ ___________
Net Increase (Decrease) in Shares Outstanding . . . . . 405,105 115,731
__________ ___________
Class R
________
Shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,480,245 5,165,821
Shares issued for dividends reinvested . . . . . . . . . . . . . . . . . . . . . . . 1,891,491 1,252,558
Shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5,243,539) (6,084,742)
__________ ___________
Net Increase (Decrease) in Shares Outstanding . . . . . 4,128,197 333,637
__________ ___________
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
DREYFUS PREMIER BALANCED 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: 1998 1997 1996 1995 1994(1,2)
_______ _______ _______ _______ _______
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period . . . . . . . . . . $15.17 $13.71 $11.91 $10.08 $ 9.73
_______ _______ _______ _______ _______
Investment Operations:
Investment income--net . . . . . . . . . . . . . . . . . .33 .34 .31 .28 .11
Net realized and unrealized gain (loss) on investments . 1.81 2.77 1.88 1.82 .34
_______ _______ _______ _______ _______
Total from Investment Operations . . . . . . . . . . . . 2.14 3.11 2.19 2.10 .45
_______ _______ _______ _______ _______
Distributions:
Dividends from investment income--net . . . . . . . . . . (.37) (.28) (.31) (.27) (.10)
Dividends from net realized gain on investments . . . . . (2.06) (1.37) (.08) -- --
_______ _______ _______ _______ _______
Total Distributions . . . . . . . . . . . . . . . . . . . (2.43) (1.65) (.39) (.27) (.10)
_______ _______ _______ _______ _______
Net asset value, end of period . . . . . . . . . . . . . $14.88 $15.17 $13.71 $11.91 $10.08
_______ _______ _______ _______ _______
TOTAL INVESTMENT RETURN(3) . . . . . . . . . . . . . . . . . 16.06% 25.24% 18.71% 21.17% 4.68%(4)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets . . . . . . . . . 1.25% 1.25% 1.25% 1.25% .71%(4)
Ratio of net investment income to average net assets . . 2.44% 2.21% 2.39% 2.65% 1.09%(4)
Portfolio Turnover Rate . . . . . . . . . . . . . . . . . 69.71% 98.88% 85.21% 53.20% 83.00%
Net Assets, end of period (000's Omitted) . . . . . . . . $40,780 $14,687 $6,275 $1,650 $1,798
- ---------------
(1) The Fund commenced selling Investor shares on April 14, 1994. On October
17, 1994, Investor shares were redesignated as Class A shares.
(2) Effective October 17, 1994, The Dreyfus Corporation began serving 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) Not annualized.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
DREYFUS PREMIER BALANCED 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 B Shares
_____________________________________________
Year Ended October 31,
_____________________________________________
PER SHARE DATA: 1998 1997 1996 1995(1)
______ _______ _______ _______
<S> <C> <C> <C> <C>
Net asset value, beginning of period . . . . . . . . . . . . . . . . . $15.12 $13.68 $11.89 $ 9.76
______ _______ _______ _______
Investment Operations:
Investment income--net . . . . . . . . . . . . . . . . . . . . . . . . .24 .23 .21 .14
Net realized and unrealized gain (loss) on investments . . . . . . . . 1.79 2.77 1.87 2.11
______ _______ _______ _______
Total from Investment Operations . . . . . . . . . . . . . . . . . . . 2.03 3.00 2.08 2.25
______ _______ _______ _______
Distributions:
Dividends from investment income--net . . . . . . . . . . . . . . . . . (.26) (.19) (.21) (.12)
Dividends from net realized gain on investments . . . . . . . . . . . . (2.06) (1.37) (.08) --
______ _______ _______ _______
Total Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . (2.32) (1.56) (.29) (.12)
______ _______ _______ _______
Net asset value, end of period . . . . . . . . . . . . . . . . . . . . $14.83 $15.12 $13.68 $11.89
______ _______ _______ _______
TOTAL INVESTMENT RETURN(2) . . . . . . . . . . . . . . . . . . . . . . . . 15.20% 24.27% 17.76% 23.19%(3)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets . . . . . . . . . . . . . . . . 2.00% 2.00% 2.00% 1.73%(3)
Ratio of net investment income to average net assets . . . . . . . . . 1.70% 1.47% 1.65% 2.16%(3)
Portfolio Turnover Rate . . . . . . . . . . . . . . . . . . . . . . . . 69.71% 98.88% 85.21% 53.20%
Net Assets, end of period (000's Omitted) . . . . . . . . . . . . . . . $62,324 $28,940 $9,141 $3,118
- ------------------------
(1) The Fund commenced selling Class B shares on December 20, 1994.
(2) Exclusive of sales load.
(3) Not annualized.
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS PREMIER BALANCED 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 C Shares
_____________________________________________
Year Ended October 31,
_____________________________________________
PER SHARE DATA: 1998 1997 1996 1995(1)
______ _______ _______ _______
Net asset value, beginning of period . . . . . . . . . . . . . . . . . $15.16 $13.70 $11.90 $ 9.76
______ _______ _______ _______
Investment Operations:
Investment income--net . . . . . . . . . . . . . . . . . . . . . . . . .22 .24 .25 .11
Net realized and unrealized gain (loss) on investments . . . . . . . . 1.81 2.78 1.84 2.15
______ _______ _______ _______
Total from Investment Operations . . . . . . . . . . . . . . . . . . . 2.03 3.02 2.09 2.26
______ _______ _______ _______
Distributions:
Dividends from investment income--net . . . . . . . . . . . . . . . . . (.26) (.19) (.21) (.12)
Dividends from net realized gain on investments . . . . . . . . . . . . (2.06) (1.37) (.08) --
______ _______ _______ _______
Total Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . (2.32) (1.56) (.29) (.12)
______ _______ _______ _______
Net asset value, end of period . . . . . . . . . . . . . . . . . . . . $14.87 $15.16 $13.70 $11.90
______ _______ _______ _______
TOTAL INVESTMENT RETURN(2) . . . . . . . . . . . . . . . . . . . . . . . . 15.24% 24.41% 17.83% 23.29%(3)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets . . . . . . . . . . . . . . . . 2.00% 2.00% 2.00% 1.73%(3)
Ratio of net investment income to average net assets . . . . . . . . . 1.69% 1.47% 1.62% 2.16%(3)
Portfolio Turnover Rate . . . . . . . . . . . . . . . . . . . . . . . . 69.71% 98.88% 85.21% 53.20%
Net Assets, end of period (000's Omitted) . . . . . . . . . . . . . . . $8,004 $2,017 $237 $6
- ------------------------
(1) The Fund commenced selling Class C shares on December 20, 1994.
(2) Exclusive of sales load.
(3) Not annualized.
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS PREMIER BALANCED 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: 1998 1997 1996 1995 1994(1,2)
_______ _______ _______ _______ _______
Net asset value, beginning of period . . . . . . . . . . $15.18 $13.72 $11.92 $10.09 $10.18
_______ _______ _______ _______ _______
Investment Operations:
Investment income--net . . . . . . . . . . . . . . . . . .38 .36 .34 .31 .20(3)
Net realized and unrealized gain (loss) on investments . 1.79 2.79 1.88 1.81 (.13)
_______ _______ _______ _______ _______
Total from Investment Operations . . . . . . . . . . . . 2.17 3.15 2.22 2.12 .07
_______ _______ _______ _______ _______
Distributions:
Dividends from investment income--net . . . . . . . . . . (.41) (.32) (.34) (.29) (.16)
Dividends from net realized gain on investments . . . . . (2.06) (1.37) (.08) -- --
_______ _______ _______ _______ _______
Total Distributions . . . . . . . . . . . . . . . . . . . (2.47) (1.69) (.42) (.29) (.16)
_______ _______ _______ _______ _______
Net asset value, end of period . . . . . . . . . . . . . $14.88 $15.18 $13.72 $11.92 $10.09
_______ _______ _______ _______ _______
TOTAL INVESTMENT RETURN. . . . . . . . . . . . . . . . . . . 16.37% 25.56% 18.99% 21.46% .68%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets . . . . . . . . . 1.00% 1.00% 1.00% 1.00% 1.04%(4)
Ratio of net investment income to average net assets . . 2.71% 2.44% 2.68% 2.89% 2.23%
Portfolio Turnover Rate . . . . . . . . . . . . . . . . . 69.71% 98.88% 85.21% 53.20% 83.00%
Net Assets, end of period (000's Omitted) . . . . . . . . $207,132 $148,605 $129,744 $97,881 $75,720
- ------------------------
(1) Effective October 17, 1994, The Dreyfus Corporation began serving as the
Fund' s investment manager. Prior to October 17, 1994, Mellon Bank, N.A.
served as the Fund's investment manager.
(2) On April 14, 1994, the Fund commenced selling Investor shares. Those shares
outstanding prior to April 14, 1994 were designated as Trust shares. On
October 17, 1994, Trust shares were redesignated as Class R shares.
(3) Net investment income before reimbursement of expenses by the investment
adviser for the year ended October 31, 1994 was $.2031. The amount shown in
this caption for each share outstanding throughout the period may not
accord with the change in the aggregate gains and losses in the
portfolio securities for the period because of the timing of purchases
and withdrawals of shares in relation to the fluctuations of market values
of the portfolio.
(4) Expense ratio before voluntary reimbursement of expenses by the investment
adviser for the year ended October 31, 1994 was 1.09%.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
DREYFUS PREMIER BALANCED FUND
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES:
Dreyfus Premier Balanced 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, as amended (the "Act" ) as an open-end
management investment company and operates as a series company currently
offering nineteen series including the Fund. The Fund's investment objective is
to outperform a hybrid index, 60% of which is the Standard & Poor's 500
Composite Stock Price Index and 40% of which is the Lehman Brothers Intermediate
Government/Corporate Bond Index, by investing in common stocks and bonds in
proportions consistent with their expected returns and risks as determined by
the Fund's investment manager. The Dreyfus Corporation (the "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 50 million shares of $.001
par value Capital Stock in each of the following classes of shares: Class A,
Class B, Class C and Class R. 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 fee or service fee.
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
fees and voting rights on matters affecting a single class.
Investment income, net of expenses (other than class specific expenses),
realized and unrealized gains and losses are allocated daily to each class of
shares based upon the relative proportion of net assets of each class.
The Fund' s financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management estimates
and assumptions. Actual results could differ from those estimates.
(A) PORTFOLIO VALUATION: Investments in securities are valued at 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 DREYFUS PREMIER BALANCED FUND
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
the Fund in the event the Fund is delayed or prevented from exercising its
rights to dispose of the collateral securities, including the risk of a possible
decline in the value of the underlying securities during the period while the
Fund seeks to assert its rights.The Manager, acting under the supervision of the
Board of Directors, reviews the value of the collateral and the creditworthiness
of those banks and dealers with which the Fund enters into repurchase agreements
to evaluate potential risks.
(D) FINANCIAL FUTURES: The Fund may invest in financial futures contracts in
order to gain exposure to or protect against changes in the market. The Fund is
exposed to market risk as a result of changes in the value of the underlying
financial instruments (see Statement of Financial Futures). Investments in
financial futures require the fund to "mark to market" on a daily basis, which
reflects the change in the market value of the contract at the close of each
day' s trading. Typically, variation margin payments are received or made to
reflect daily unrealized gains or losses. When the contracts are closed, the
Fund recognizes a realized gain or loss. These investments require initial
margin deposits with a custodian, which consist of cash or cash equivalents, up
to approximately 10% of the contract amount. The amount of these deposits is
determined by the exchange or Board of Trade on which the contract is traded and
is subject to change. Contracts open at October 31, 1998 are set forth in the
Statement of Financial Futures.
(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 of 1986, as
amended (the "Code"). This may result in distributions that are in excess of the
net realized gains on the fiscal year basis. 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.
(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 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 1.00% 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). Effective July 1, 1998,
each director receives $40,000 per year, plus $5,000 for each joint Board
meeting of The Dreyfus/Laurel Funds, Inc., The Dreyfus/Laurel Tax-Free Municipal
Funds, and The Dreyfus/Laurel Funds Trust (the "Dreyfus/Laurel Funds") attended,
$2,000 for separate committee meetings attended which are not held in
conjunction with a regularly scheduled board meeting and $500 for Board meetings
and separate committee meetings attended that are conducted by telephone and is
reimbursed for travel and out-of-pocket expenses. The Chairman of the Board
receives an additional 25% of such compensation (with the DREYFUS PREMIER
BALANCED FUND
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
exception of reimbursable amounts) . In the event that there is a joint
committee meeting of the Dreyfus/Laurel Funds and the Dreyfus High Yield
Strategies Fund, the $2,000 fee will be allocated between the Dreyfus/Laurel
Funds and the 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.
Prior to July 1, 1998 each director received $27,000 per year, $1,000 for each
Board meeting attended and $750 for each Audit Committee meeting attended and
was reimbursed for travel and out-of-pocket expenses. The Chairman of the Board
received an additional annual fee of $25,000 per year. These fees pertained to
the Dreyfus/Laurel Funds. (The $1,000 attendance fee and reimbursement of
meeting expenses were also borne pro rata by Dreyfus High Yield Strategies Fund)
.. These fees and expenses were 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, were in fact paid directly by the Manager
to the non-interested Directors.
Dreyfus Service Corporation, a wholly-owned subsidiary of the Manager,
retained $8,246 during the period ended October 31, 1998, from commissions
earned on sales of the Fund's shares.
(B) DISTRIBUTION AND SERVICE PLAN: Under the Distribution Plan (the "Plan")
adopted pursuant to Rule 12b-1 under the Act, Class A may pay annually up to
.. 25% of the value of its average daily net assets 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, Class B and
Class C shares may pay the Distributor for distributing shares at an aggregate
annual rate of .75% 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, 1998, Class A,
Class B and Class C shares were charged $61,671, $331,614 and $36,555,
respectively, pursuant to the Plan. During the period ended October 31, 1998,
Class B and Class C shares were charged $110,538 and $12,185, respectively,
pursuant to the service plan.
Under its terms, the Plan and service 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 and financial futures, during the period ended
October 31, 1998 amounted to $247,122,725 and $157,888,801, respectively.
At October 31, 1998, accumulated net unrealized appreciation on investments
and financial futures was $35,829,065, consisting of $38,168,357 gross
unrealized appreciation and $2,339,292 gross unrealized depreciation.
At October 31, 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).
DREYFUS PREMIER BALANCED FUND
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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
October 31, 1998, the Fund did not borrow under the Facility.
DREYFUS PREMIER BALANCED 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 Balanced Fund of The
Dreyfus Laurel/Funds, Inc. as of October 31, 1998, 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 in the five-year period then ended.
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 and financial highlights. Our procedures included
confirmation of securities owned as of October 31, 1998 by correspondence with
the custodian and brokers. 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 Balanced Fund of The Dreyfus/Laurel Funds, Inc. as of October
31, 1998, 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 the
financial highlights for each of the years or periods in the five year period
then ended, in conformity with generally accepted accounting principles.
New York, New York
December 15, 1998
DREYFUS PREMIER BALANCED FUND
- -----------------------------------------------------------------------------
IMPORTANT TAX INFORMATION (UNAUDITED)
For Federal tax purposes, the Fund hereby designates $1.545 per share as
long-term capital gain distribution paid on December 18, 1997.
The Fund also designates 15.49% of the ordinary dividends paid during the
fiscal year ended October 31, 1998 as qualifying for the corporate dividends
received deduction. Shareholders will receive notification in January 1999 of
the percentage applicable to the preparation of their 1998 income tax returns.
DREYFUS PREMIER BALANCED 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. 342/642AR9810
Annual Report
- -------------------------------------------------------------------------------
DREYFUS PREMIER
BALANCED FUND
- -------------------------------------------------------------------------------
October 31, 1998
[lion logo reg.tm]
DREYFUS PREMIER SMALL COMPANY STOCK FUND
- -----------------------------------------------------------------------------
LETTER TO SHAREHOLDERS
Dear Shareholder:
Dreyfus Premier Small Company Stock Fund completed its fiscal year ended
October 31, 1998 with performance results that were significantly affected by
the stock market's extraordinary volatility during that period.
During the 12-month period, your Fund's performance for its various classes of
shares is shown below:
Total Return*
____________
Class A -15.42%
Class B -16.10%
Class C -16.08%
Class R -15.31%
Russell 2500 Index** -7.70%
The Fund' s Class R shares, which represent approximately 85% of the Fund's
total assets, performed below the Russell 2500 benchmark by a disappointing
7.61% in fiscal 1998. However, over the Fund's past three fiscal years, the
Fund's Class R shares ranked in the top half of the Lipper Small Cap universe of
149 funds. The three-year competitive ranking of our Class A shares as of
10/31/98 was also in the top half of the Lipper Small Cap universe of 158 funds.
The Fund' s Class B and Class C shares were in the third quartile for the same
time period, out of 188 and 186 funds respectively.(+)
At the start of the fiscal year in late 1997, concerns about the Asian
financial crisis impacted the market for smaller stocks and Class R shares
declined 6.11% in value by January 12, 1998. When those concerns abated, the
Fund' s Class R shares rallied 17.72% by April 21, which also marked the high
point for the year in terms of net asset value, at $19.93 per share. The worst
was yet to come, however, for the Fund's Class R shares declined a steep 36.88%,
and reached a low point for the year on October 8 of $12.58 per share. Then, in
the final three weeks of the month and of the Fund's fiscal year, the Class R
shares advanced 21.38%.
ECONOMIC REVIEW
So far in 1998, the main regions of the world have had very different economic
fundamentals. The U.S. entered the year with a strong economy near full
employment, with unemployment only slightly above 4%. The tight labor market led
the Federal Reserve Board to contemplate a rise in interest rates early in the
year. The U.S. economy cooled enough over the months that the Fed decided to
stand pat. Evidence of economic cooling continued to accumulate and worries
about the world economy intensified. Financial stresses pushed the Fed to ease
credit in both late September and mid-October. After many years of subpar
economic growth, continental Europe moved into a sustained economic expansion.
The overall European economy benefited as interest rates in peripheral countries
such as Spain and Italy fell, approaching the lower levels established by
Germany, on the eve of currency unification. Unlike the U.S., Europe has
substantial excess capacity of productive plant and labor. In Asia, weak
economies were pervasive as a result of the Asian financial crisis. The Latin
American economies weakened as the financial stresses spread throughout that
region.
A main influence on the U.S. economy this year was the foreign financial
crisis and cooling of the world economy. The positive effects hit first. Actual
inflation and expected inflation dropped, causing a decline in long-term
Treasury bond yields and mortgage rates. This caused a boom in housing. The fall
in inflation helped the consumer sector as more of the growth in consumer income
was left over after inflation to buy goods and services. Consumers benefited
from a combination of good growth in income after inflation, a strong labor
market and past increases in the price of assets they owned.
The negative effect of Asian weakness was felt in the industrial sector more
than in the consumer sector. Corporate profits weakened, especially in sectors
affected by the Asian crisis such as world-traded commodities (oil, metals and
paper) and exports. One result of this industrial weakness was to cool off a
U.S. economy that had been growing rapidly.
The major change in the economic outlook over recent months has been a
downward shift in expectations for world economic growth. A credit crunch
developed in emerging countries and former communist countries, sharply reducing
the economic outlook for Asia and Latin America as well as for
commodity-exporting countries throughout the world. The effect on Europe and the
U.S. has been to lower expectations of profit growth and drive down bond yields
Evidence of a weaker world economy accumulated as the financial stresses
continued. A worsened financial crisis occurred between the Russian default in
mid-August and the fallout from the Long-Term Capital Management (hedge fund)
crisis through early October. However, proactive steps were taken to stabilize
the Japanese banks, design a support package for Brazil and ease monetary
policy. The prospects for world economic weakness and monetary ease in the major
countries will be powerfully influenced by whether foreign financial stresses
calm down or intensify in the coming months. There appears to be a shift in the
priorities of key policymakers from fighting potential inflation to
restimulating future world economic growth.
MARKET OVERVIEW
The 12 months ended October 31, 1998 encompassed some very different market
phases. There was stock market strength during the early part of the period.
Then small-cap indices started to erode in the spring and were joined by
large-cap indices by mid-summer. A sharp decline until the end of August was
followed by a brief rebound and then a renewed decline amid financial fears
until early October. The last few weeks of the fiscal year saw a strong rally in
response to the easing of monetary policy. Over the 12-month period, the total
return on the Standard & Poor' s 500 Composite Stock Price Index was 22.01%.
Returns on mid-cap and small-cap stock indices tended to be weaker than on
large-caps, with a negative total return on small-cap indices.
Three key trends influenced stock market behavior during the fiscal year.
First, the Federal Reserve kept the Federal Funds rate flat at 5.5% for nearly
11 months of the fiscal year, but then eased policy twice. Second, weakness in
emerging country economies contributed to declining commodity prices and a drop
in long-term Treasury bond yields to multidecade lows. Third, expectations for
corporate profits dropped, first in the sectors sensitive to Asian developments
such as oil, basic materials and exports and then for a broader list of stocks.
The trigger for the sharp decline in stocks in August appeared to be the
Russian default in the summer of 1998. This resulted in deepening concerns about
weaker economic growth and corporate profits. There was also a global margin
call on risky assets held by hedge funds and financial institutions. This raised
the cost of debt financing for many corporations and many emerging countries.
Expectations for economic activity in emerging countries in Asia and Latin
America shifted down sharply while expectations for U.S. corporate profits
weakened somewhat. Despite the fall in Treasury bond yields, financial stocks
led the summer selloff due to concerns about financial contagion among emerging
countries and potential loan losses by financial institutions. However, in the
last few weeks of the fiscal year, these fears began to ebb and the stock market
rebounded.
The erosion of expectations for average corporate profit growth over the last
year contributed to an outperformance by a small group of super-cap growth
stocks for much of the fiscal year. Investors had more confidence in the
prospect for strong persistent earnings growth for this small group of stocks
than for the broad market. Value stocks, which often have greater cyclical
sensitivity to earnings fluctuations, lagged behind these super-growth stocks.
In addition, many of the financial stocks that fall into the value category fell
sharply following the Russian default and global margin call concerns.
The fiscal year ended October 31, 1998 was characterized by very different
performances of the various market sectors. Super-cap growth stocks did best,
followed by large-cap stocks in general with mid-cap and small-cap stocks
lagging behind. For example, the total return for the fiscal year on the Russell
1000 Index(+) (+) with a heavy large-cap representation was 19.71%, while the
Russell 1000 Growth Index(+) (+) returned 24.64% and the Russell 1000 Value
Index(+) (+) returned 14.83%. The return on the Russell Midcap Index(+)(+) was
4.46% while the small-cap Russell 2000 Index** return was negative 11.84%.
PORTFOLIO FOCUS
Since the Fund's inception, in which we have been managing its portfolio using
our three-step process of quantitative screening, fundamental analysis and
portfolio risk management, we have never performed below our benchmark by as
much as we have in the past year. The main reasons follow:
First, our quantitative model was not as successful in identifying issues to
buy and sell as it was in the past. There has been a constant style shift
between growth and value. Our process can be effective in identifying sustained
trends, but less so in periods of daily price volatility.
Second, even with about 165 names in the portfolio, disappointing stock
developments had a much greater impact on overall performance than in a more
diversified portfolio or the Russell 2500 Index.** Nearly all of the shortfall
can be attributed to the 10 worst performers in the portfolio. Some of those
stocks were Sirrom Capital and Philip Services which were hurt by questionable
accounting practices. Silicon Valley Group and Adaptec were affected by the
slowdown in semiconductor orders and PC sales. AGCO and ESC Medical Systems
suffered from the considerable weakness in their foreign markets. All of these
stocks were eliminated from the portfolio.
Third, the liquidity costs of buying and selling positions were much higher
than normal, especially when companies announced disappointing results.
Our decision to realize some capital losses late in the year worked to offset
previous capital gains. Therefore, no capital gain distributions will be paid
for 1998, and shareholders will not incur any tax liability from the Fund this
year. The portfolio turnover rate of 47% for the 1998 fiscal year was right in
line with the 48% average for the prior three years.
Be assured that we are making every effort in seeking to improve the Fund's
performance. We are evaluating new data to better determine the sources of
investment success. We have expanded our analytical staff. In addition, steps
have been taken to expedite the execution of trades with the growth in assets.
In the meantime, we believe the relative valuations of smaller cap stocks are
now the most attractive they have ever been and we believe this smaller asset
class should start performing better.
Sincerely,
[Anthony J. Galise signature] [James C. Wadsworth signature]
Anthony J. Galise James C. Wadsworth
Portfolio Managers
November 16, 1998
Pittsburgh, PA
*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 applicable contingent deferred sales charge
imposed on redemptions in the case of Class B and Class C shares.
**SOURCE: THE FRANK RUSSELL COMPANY -- Reflects the reinvestment of income
dividends and where applicable capital gain distributions. The Russell 2500
Index is a widely accepted measure of small-cap stock performance, and is
composed of the 2,500 smallest companies in the Russell 3000 Index. The Russell
3000 Index is composed of 3,000 of the largest U.S. companies by market
capitalization.
(+)SOURCE: LIPPER ANALYTICAL SERVICES, INC. As of 10/31/98, the one-year
competitive rankings of our Class A, Class B, Class C, and Class R shares were
in the third quartile out of 345, 370, 369 and 342 funds respectively. Lipper
rankings do not reflect sales loads. Had they been reflected, performance would
have been lower.
(+)(+) SOURCE: LIPPER ANALYTICAL SERVICES, INC. The Russell 1000 Index measures
the performance of the 1,000 largest companies in the Russell 3000 index, which
represents approximately 89% of the total market capitalization of the Russell
3000 Index. The Russell 1000 Growth Index measures the performance of those
Russell 1000 companies with higher price-to-book ratios and higher forecasted
growth values. The Russell 1000 Value Index measures the performance of those
Russell 1000 companies with lower price-to-book ratios and lower forecasted
growth values. The Russell Midcap Index consists of the bottom 800 securities in
the Russell 1000 Index as ranked by total market capitalization and is a widely
accepted measure of medium-cap stock market performance. All indices are
unmanaged and include reinvested dividends.
<TABLE>
DREYFUS PREMIER SMALL COMPANY STOCK FUND OCTOBER 31, 1998
- -----------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN DREYFUS PREMIER SMALL
COMPANY STOCK FUND CLASS A SHARES AND CLASS R SHARES AND THE RUSSELL 2500 INDEX
Dollars
$17,444
Dreyfus Premier Small Company Stock Fund (Class R Shares)
$17,036
Russell 2500 Index*
$16,303
Dreyfus Premier Small Company Stock Fund (Class A Shares)
*Source: The Frank Russell Company
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 10/31/98 Sales Charge Sales Charge (5.75%) Period Ended 10/31/98 Redemption Redemption*
_____________________ _______________ __________________ _____________________ ____________ __________________
<S> <C> <C> <C> <C> <C>
1 Year (15.42)% (20.28)% 1 Year (16.10)% (19.28)%
From Inception (9/2/94) 14.08 12.47 From Inception (12/19/94) 15.88 15.37
Class C Shares Class R Shares
_______________________________________________________ _______________________________________________________
% Return Reflecting
Applicable Contingent
% Return Deferred Sales
Assuming No Charge Upon
Period Ended 10/31/98 Redemption Redemption** Period Ended 10/31/98
_____________________ _______________ __________________ _____________________
1 Year (16.08)% (16.88)% 1 Year (15.31)%
From Inception (12/19/94) 15.90 15.90 From Inception (9/2/94) 14.31
- ------------------------
</TABLE>
Past performance is not predictive of future performance.
The above graph compares a $10,000 investment made in each of the Class A shares
and Class R shares of Dreyfus Premier Small Company Stock Fund on 9/2/94
(Inception Date) to a $10,000 investment made in the Russell 2500 Index on that
date. For comparative purposes, the value of the Index on 8/31/94 is used as the
beginning value on 9/2/94. All dividends and capital gain distributions are
reinvested. Performance for Class B and Class C shares will vary from the
performance of both Class A and Class R shares shown above due to differences in
charges and expenses.
The Fund' s performance shown in the line graph takes into account the maximum
initial sales charge on Class A shares and all other applicable fees and
expenses on Class A and Class R shares. The Russell 2500 Index is an unmanaged
index and is composed of the 2,500 smallest companies in the Russell 3000 Index.
The Russell 3000 Index is composed of 3,000 of the largest U.S. companies by
market capitalization. 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 4% and is
reduced to 0% after six years.
**The maximum contingent deferred sales charge for Class C shares is 1% for
shares redeemed within one year of the date of purchase.
<TABLE>
DREYFUS PREMIER SMALL COMPANY STOCK FUND
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS OCTOBER 31, 1998
Common Stocks--96.9% Shares Value
- ------------------------------------------------------- ____________ _____________
<S> <C> <C>
Basic Industries--7.1% ACX Technologies . . . . . . . . . . . . . . . . . . . (a) 73,650 $ 1,058,719
Agrium . . . . . . . . . . . . . . . . . . . . . . . . 110,700 1,162,350
American Buildings . . . . . . . . . . . . . . . . . . (a) 28,310 679,440
AptarGroup . . . . . . . . . . . . . . . . . . . . . . 58,920 1,576,110
Cabot . . . . . . . . . . . . . . . . . . . . . . . . 78,780 2,210,764
Caraustar Industries . . . . . . . . . . . . . . . . . 41,370 982,538
Clayton Homes . . . . . . . . . . . . . . . . . . . . 107,666 1,662,094
Comfort Systems USA . . . . . . . . . . . . . . . . . (a) 41,000 779,000
Crompton & Knowles . . . . . . . . . . . . . . . . . . 86,800 1,394,225
Cytec Industries . . . . . . . . . . . . . . . . . . . (a) 61,890 1,485,360
Jacobs Engineering Group . . . . . . . . . . . . . . . (a) 32,780 1,069,448
Louisiana Pacific . . . . . . . . . . . . . . . . . . 47,600 844,900
Mail-Well . . . . . . . . . . . . . . . . . . . . . . (a) 143,000 1,867,938
Southdown . . . . . . . . . . . . . . . . . . . . . . 31,539 1,716,904
Sybron International . . . . . . . . . . . . . . . . . (a) 56,800 1,405,800
_____________
19,895,590
_____________
Capital Spending--15.7% Allied Waste Industries . . . . . . . . . . . . . . . (a) 54,600 1,180,725
Altron . . . . . . . . . . . . . . . . . . . . . . . . (a) 62,260 1,128,463
Apple Computer . . . . . . . . . . . . . . . . . . . . (a) 68,100 2,528,213
Applied Power, Cl. A . . . . . . . . . . . . . . . . . 46,600 1,284,413
CellStar . . . . . . . . . . . . . . . . . . . . . . . (a) 107,700 740,438
Cognex . . . . . . . . . . . . . . . . . . . . . . . . (a) 43,740 677,970
Cordant Technologies . . . . . . . . . . . . . . . . . 28,680 1,166,918
Dallas Semiconductor . . . . . . . . . . . . . . . . . 44,540 1,647,980
Duke Realty Investments . . . . . . . . . . . . . . . 71,900 1,716,613
ECI Telecommunications . . . . . . . . . . . . . . . . 82,680 2,738,775
Electronics For Imaging . . . . . . . . . . . . . . . (a) 72,000 1,732,500
FORE Systems . . . . . . . . . . . . . . . . . . . . . (a) 134,800 2,106,250
Fairchild, Cl. A . . . . . . . . . . . . . . . . . . . (a) 45,800 618,300
Gulfstream Aerospace . . . . . . . . . . . . . . . . . (a) 29,700 1,314,225
Jabil Circuit . . . . . . . . . . . . . . . . . . . . (a) 35,900 1,662,619
Kennametal . . . . . . . . . . . . . . . . . . . . . . 43,170 895,778
Neomagic . . . . . . . . . . . . . . . . . . . . . . . (a) 107,100 1,793,925
OmniQuip International . . . . . . . . . . . . . . . . 87,600 1,171,650
Plantronics . . . . . . . . . . . . . . . . . . . . . (a) 57,820 3,292,126
PMC-Sierra . . . . . . . . . . . . . . . . . . . . . . (a) 32,600 1,462,925
SMART Modular Technologies . . . . . . . . . . . . . . (a) 100,200 2,104,200
SPX . . . . . . . . . . . . . . . . . . . . . . . . . (a) 23,500 1,279,281
Sanmina . . . . . . . . . . . . . . . . . . . . . . . (a) 42,800 1,754,800
Tech Data . . . . . . . . . . . . . . . . . . . . . . (a) 69,290 2,728,294
Uniphase . . . . . . . . . . . . . . . . . . . . . . . (a) 24,500 1,212,750
Waters . . . . . . . . . . . . . . . . . . . . . . . . (a) 31,200 2,293,200
Zebra Technologies, Cl. A . . . . . . . . . . . . . . (a) 59,690 1,954,848
_____________
44,188,179
_____________
Consumer Cyclical--14.9% Abercrombie & Fitch, Cl. A . . . . . . . . . . . . . . (a) 38,200 1,516,063
Action Performance Cos. . . . . . . . . . . . . . . . (a) 40,100 1,197,988
Black Box . . . . . . . . . . . . . . . . . . . . . . (a) 55,100 1,838,963
Borg-Warner Automotive . . . . . . . . . . . . . . . . 43,240 2,026,875
DREYFUS PREMIER SMALL COMPANY STOCK FUND
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1998
Common Stocks (continued) Shares Value
- ------------------------------------------------------- ____________ _____________
Consumer Cyclical (continued) CKE Restaurants . . . . . . . . . . . . . . . . . . . 28,200 $ 742,013
CompUSA . . . . . . . . . . . . . . . . . . . . . . . (a) 90,500 1,255,688
Darden Restaurants . . . . . . . . . . . . . . . . . . 71,000 1,171,500
Ethan Allen Interiors . . . . . . . . . . . . . . . . 44,300 1,522,813
Fingerhut Cos. . . . . . . . . . . . . . . . . . . . . 73,240 617,963
Footstar . . . . . . . . . . . . . . . . . . . . . . . (a) 64,500 1,685,063
General Nutrition . . . . . . . . . . . . . . . . . . (a) 41,950 610,890
Heftel Broadcasting, Cl. A . . . . . . . . . . . . . . (a) 36,200 1,488,725
Hollinger International, Cl. A . . . . . . . . . . . . 102,100 1,327,300
Interface, Cl. A . . . . . . . . . . . . . . . . . . . 137,580 1,693,954
King World Productions . . . . . . . . . . . . . . . . (a) 60,400 1,585,500
Lear . . . . . . . . . . . . . . . . . . . . . . . . . (a) 22,600 726,025
Michaels Stores . . . . . . . . . . . . . . . . . . . (a) 74,800 1,496,000
Promus Hotel . . . . . . . . . . . . . . . . . . . . . (a) 42,015 1,339,228
Richfood Holdings . . . . . . . . . . . . . . . . . . 41,815 742,216
Ryan's Family Steak House . . . . . . . . . . . . . . (a) 175,420 1,885,765
Sinclar Broadcast Group, Cl. A . . . . . . . . . . . . (a) 161,600 2,100,800
Speedway Motorsports . . . . . . . . . . . . . . . . . (a) 54,900 1,152,900
Tommy Hilfiger . . . . . . . . . . . . . . . . . . . . (a) 34,640 1,608,595
Tower Automotive . . . . . . . . . . . . . . . . . . . (a) 87,900 1,955,775
United Natural Foods . . . . . . . . . . . . . . . . . (a) 46,600 1,298,975
Valassis Communication . . . . . . . . . . . . . . . . (a) 28,300 1,128,463
Wallace Computer Services . . . . . . . . . . . . . . 64,920 1,420,125
Warnaco Group, Cl. A . . . . . . . . . . . . . . . . . 60,250 1,540,141
World Color Press . . . . . . . . . . . . . . . . . . (a) 26,300 798,863
Zale . . . . . . . . . . . . . . . . . . . . . . . . . (a) 92,290 2,186,119
Ziff-Davis . . . . . . . . . . . . . . . . . . . . . . 67,600 447,850
_____________
42,109,138
_____________
Consumer Staples--3.2% Canandaigua Brands, Cl. A . . . . . . . . . . . . . . (a) 23,800 1,192,975
Central Garden & Pet . . . . . . . . . . . . . . . . . (a) 71,000 1,402,250
Dial . . . . . . . . . . . . . . . . . . . . . . . . . 89,800 2,475,113
Interstate Bakeries . . . . . . . . . . . . . . . . . 40,500 1,015,031
Ralcorp Holdings . . . . . . . . . . . . . . . . . . . (a) 55,400 976,425
Suiza Foods . . . . . . . . . . . . . . . . . . . . . (a) 63,587 2,074,526
_____________
9,136,320
_____________
Energy--5.3% BJ Services . . . . . . . . . . . . . . . . . . . . . (a) 59,300 1,211,944
Devon Energy . . . . . . . . . . . . . . . . . . . . . 50,500 1,710,688
Holly . . . . . . . . . . . . . . . . . . . . . . . . 33,040 507,990
KN Energy . . . . . . . . . . . . . . . . . . . . . . 46,340 2,302,519
Newfield Exploration . . . . . . . . . . . . . . . . . (a) 57,100 1,388,244
Noble Affiliates . . . . . . . . . . . . . . . . . . . 37,500 1,228,125
R&B Falcon . . . . . . . . . . . . . . . . . . . . . . 77,400 1,049,738
Sempra Energy . . . . . . . . . . . . . . . . . . . . 86,873 2,258,698
Ultramar Diamond Shamrock . . . . . . . . . . . . . . 52,700 1,419,606
WICOR . . . . . . . . . . . . . . . . . . . . . . . . 70,480 1,717,950
_____________
14,795,502
_____________
DREYFUS PREMIER SMALL COMPANY STOCK FUND
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1998
Common Stocks (continued) Shares Value
- ------------------------------------------------------- ____________ _____________
Health Care--8.1% AmeriSource Health, Cl. A . . . . . . . . . . . . . . (a) 40,890 $ 2,144,169
Genzyme . . . . . . . . . . . . . . . . . . . . . . . 53,900 2,267,169
Lincare Holdings . . . . . . . . . . . . . . . . . . . (a) 66,980 2,675,014
Orthodontic Centers of America . . . . . . . . . . . . (a) 133,200 2,522,475
PharMerica . . . . . . . . . . . . . . . . . . . . . . (a) 154,600 521,775
PSS World Medical . . . . . . . . . . . . . . . . . . (a) 132,300 2,927,138
Quorum Health Group . . . . . . . . . . . . . . . . . (a) 76,250 1,105,625
STERIS . . . . . . . . . . . . . . . . . . . . . . . . (a) 42,500 977,500
Total Renal Care Holdings . . . . . . . . . . . . . . (a) 76,500 1,874,250
Universal Health Services, Cl. B . . . . . . . . . . . (a) 41,940 2,152,046
Watson Pharmaceuticals . . . . . . . . . . . . . . . . (a) 66,160 3,680,136
_____________
22,847,297
_____________
Interest Sensitive--19.9% Ambac Financial Group . . . . . . . . . . . . . . . . 50,600 2,944,288
AmeriCredit . . . . . . . . . . . . . . . . . . . . . (a) 87,900 1,175,663
Amerin . . . . . . . . . . . . . . . . . . . . . . . . (a) 60,400 1,291,050
Apartment Investment & Management, Cl. A . . . . . . . 49,500 1,729,406
Bank United, Cl. A . . . . . . . . . . . . . . . . . . 52,810 2,104,148
Boston Properties . . . . . . . . . . . . . . . . . . 89,300 2,545,050
Camden Property Trust . . . . . . . . . . . . . . . . 57,600 1,548,000
City National . . . . . . . . . . . . . . . . . . . . 86,410 2,954,142
CMAC Investment . . . . . . . . . . . . . . . . . . . 49,820 2,086,213
Equity Office Properties Trust . . . . . . . . . . . . 70,415 1,689,960
EVEREN Capital . . . . . . . . . . . . . . . . . . . . 82,920 1,689,495
FelCor Lodging Trust . . . . . . . . . . . . . . . . . 40,600 956,638
Franchise Finance Corp. of America . . . . . . . . . . (a) 54,230 1,348,971
Hambrecht & Quist Group . . . . . . . . . . . . . . . (a) 32,300 619,756
Health Care Property Investors . . . . . . . . . . . . 44,750 1,504,719
Hibernia, Cl. A . . . . . . . . . . . . . . . . . . . 132,200 2,206,088
Highwoods Properties . . . . . . . . . . . . . . . . . 47,100 1,315,856
Life Re . . . . . . . . . . . . . . . . . . . . . . . 22,500 2,099,531
M&T Bank . . . . . . . . . . . . . . . . . . . . . . . 5,256 2,620,116
Mack-Cali Realty . . . . . . . . . . . . . . . . . . . 54,570 1,616,636
Mercantile Bankshares . . . . . . . . . . . . . . . . 75,800 2,472,975
Metris Cos. . . . . . . . . . . . . . . . . . . . . . 23,302 766,053
Old Kent Financial . . . . . . . . . . . . . . . . . . 80,660 3,392,761
Pacific Gulf Properties . . . . . . . . . . . . . . . 77,900 1,543,394
People's Bank . . . . . . . . . . . . . . . . . . . . 54,360 1,389,578
Peoples Heritage Financial Group . . . . . . . . . . . 121,800 2,192,400
Protective Life . . . . . . . . . . . . . . . . . . . 63,300 2,346,056
Reliance Group Holdings . . . . . . . . . . . . . . . 138,970 1,936,894
Sovereign Bancorp . . . . . . . . . . . . . . . . . . 102,060 1,339,538
TCF Financial . . . . . . . . . . . . . . . . . . . . 80,400 1,894,425
Waddell & Reed Financial, Cl. A . . . . . . . . . . . 42,300 885,656
_____________
56,205,456
_____________
Mining And Metals--2.2% Cable Design Technologies . . . . . . . . . . . . . . (a) 58,915 972,098
General Cable . . . . . . . . . . . . . . . . . . . . 31,500 622,125
DREYFUS PREMIER SMALL COMPANY STOCK FUND
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1998
Common Stocks (continued) Shares Value
- ------------------------------------------------------- ____________ _____________
Mining And Metals (continued) IMCO Recycling . . . . . . . . . . . . . . . . . . . . 71,980 $ 994,224
Texas Industries . . . . . . . . . . . . . . . . . . . 37,400 1,105,638
Titanium Metals . . . . . . . . . . . . . . . . . . . 64,700 675,306
USEC . . . . . . . . . . . . . . . . . . . . . . . . . 117,300 1,715,513
_____________
6,084,904
_____________
Services--11.3% Analysts International . . . . . . . . . . . . . . . . 44,080 774,155
Avis Rent A Car . . . . . . . . . . . . . . . . . . . (a) 62,100 1,265,288
Cognos . . . . . . . . . . . . . . . . . . . . . . . . (a) 70,500 1,414,406
Excite . . . . . . . . . . . . . . . . . . . . . . . . (a) 22,000 848,375
First Health Group . . . . . . . . . . . . . . . . . . (a) 91,300 2,105,606
Galilieo International . . . . . . . . . . . . . . . . 68,400 2,594,925
Gallagher (Arthur J.) . . . . . . . . . . . . . . . . 18,800 796,650
Hummingbird Communications . . . . . . . . . . . . . . (a) 59,010 929,408
Intuit . . . . . . . . . . . . . . . . . . . . . . . . (a) 72,200 3,646,100
Keane . . . . . . . . . . . . . . . . . . . . . . . . (a) 33,700 1,120,525
Mutual Risk Management . . . . . . . . . . . . . . . . 79,160 2,676,598
Pittston Brinks Group . . . . . . . . . . . . . . . . 71,010 2,112,548
Rental Service . . . . . . . . . . . . . . . . . . . . (a) 72,600 1,615,350
Sotheby's Holdings, Cl. A . . . . . . . . . . . . . . 87,710 1,896,729
Sterling Commerce . . . . . . . . . . . . . . . . . . (a) 62,560 2,205,240
Sterling Software . . . . . . . . . . . . . . . . . . (a) 86,920 2,276,218
SunGuard Data Systems . . . . . . . . . . . . . . . . (a) 83,460 2,816,775
Young & Rubicam . . . . . . . . . . . . . . . . . . . 27,500 718,438
_____________
31,813,334
_____________
Transportation--1.9% Air Express International . . . . . . . . . . . . . . 42,665 895,965
Airborne Freight . . . . . . . . . . . . . . . . . . . 49,300 1,155,469
Comair Holdings . . . . . . . . . . . . . . . . . . . 41,700 1,370,888
Teekay Shipping . . . . . . . . . . . . . . . . . . . 39,800 696,500
Wisconsin Central Transportation . . . . . . . . . . . (a) 87,100 1,317,388
_____________
5,436,210
_____________
Utilities--7.3% CalEnergy . . . . . . . . . . . . . . . . . . . . . . (a) 83,440 2,284,170
Calpine . . . . . . . . . . . . . . . . . . . . . . . (a) 108,400 2,411,900
DQE . . . . . . . . . . . . . . . . . . . . . . . . . 65,270 2,574,086
MidAmerican Energy Holdings . . . . . . . . . . . . . 99,054 2,575,404
Montana Power . . . . . . . . . . . . . . . . . . . . 53,100 2,299,894
New England Electric System . . . . . . . . . . . . . 33,500 1,363,031
NIPSCO Industries . . . . . . . . . . . . . . . . . . 91,400 2,736,288
Pacific Gateway Exchange . . . . . . . . . . . . . . . (a) 38,100 1,100,138
Transaction Network Services . . . . . . . . . . . . . (a) 119,700 3,276,788
_____________
20,621,699
_____________
TOTAL COMMON STOCKS
(cost $277,285,451) . . . . . . . . . . . . . . . $273,133,629
_____________
DREYFUS PREMIER SMALL COMPANY STOCK FUND
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1998
Principal
Short-Term Investments--2.2% Amount Value
- ------------------------------------------------------- ___________ _____________
Repurchase Agreement; Goldman Sachs & Co., 5.38% Tri-Party Repurchase
Agreement dated 10/30/98, due 11/2/1998
in the amount of $6,212,784 (fully collateralized
by $6,088,000 U.S. Treasury Notes, 5.625%
10/31/99, value $6,210,889)
(cost $6,210,000) . . . . . . . . . . . . . . . . $ 6,210,000 $ 6,210,000
_____________
TOTAL INVESTMENTS (cost $283,495,451). . . . . . . . . . . . . . . . . . . . . . . . . . . 99.1% $279,343,629
_______ _____________
CASH AND RECEIVABLES (NET) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9% $ 2,577,686
_______ _____________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.0% $281,921,315
_______ _____________
NOTES TO STATEMENT OF INVESTMENTS:
- -----------------------------------------------------------------------------
(a) Non-income producing.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
DREYFUS PREMIER SMALL COMPANY STOCK FUND
- -----------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES OCTOBER 31, 1998
Cost Value
_____________ _____________
<S> <C> <C>
ASSETS: Investments in securities--See Statement of
Investments--Note 1(c) . . . . . . . . . . . . . . . . $283,495,451 $279,343,629
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . 1,404,868
Receivable for investment securities sold . . . . . . . . 1,228,048
Receivable for shares of Capital Stock subscribed . . . . 204,713
Dividends and interest receivable . . . . . . . . . . . . 148,190
______________
282,329,448
______________
LIABILITIES: Due to The Dreyfus Corporation and affiliates . . . . . . 276,618
Due to Distributor . . . . . . . . . . . . . . . . . . . 23,091
Payable for shares of Capital Stock redeemed . . . . . . 108,361
Loan commitment fees payable . . . . . . . . . . . . . . 63
______________
408,133
______________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $281,921,315
______________
REPRESENTED BY: Paid-in capital . . . . . . . . . . . . . . . . . . . . . $290,029,768
Accumulated net realized gain (loss) on investments . . . (3,956,631)
Accumulated net unrealized appreciation (depreciation)
on investments--Note 3 . . . . . . . . . . . . . . . . (4,151,822)
______________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $281,921,315
______________
NET ASSET VALUE PER SHARE
------------------------------------------------------------
Class A Class B Class C Class R
_____________ ______________ ______________ ______________
Net Assets . . . . . . . . . . . . . . . . . . . . . . $ 13,462,245 $ 25,183,092 $ 4,322,701 $238,953,277
Shares Outstanding . . . . . . . . . . . . . . . . . . 886,578 1,707,700 292,981 15,644,205
NET ASSET VALUE PER SHARE. . . . . . . . . . . . . . . $15.18 $14.75 $14.75 $15.27
_______ _______ _______ _______
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
DREYFUS PREMIER SMALL COMPANY STOCK FUND
- -----------------------------------------------------------------------------
STATEMENT OF OPERATIONS YEAR ENDED OCTOBER 31, 1998
INVESTMENT INCOME
<S>
INCOME: Cash dividends (net of $3,660 foreign taxes <C> <C>
withheld at source) . . . . . . . . . . . . . $ 3,297,260
Interest . . . . . . . . . . . . . . . . . . . . 263,863
____________
Total Income . . . . . . . . . . . . . . . . . $ 3,561,123
EXPENSES: Management fee--Note 2(a) . . . . . . . . . . . . 3,780,009
Distribution and service fees--Note 2(b) . . . . 323,034
Interest expense--Note 4 . . . . . . . . . . . . 4,163
Loan commitment fees--Note 4 . . . . . . . . . . 1,188
_____________
Total Expenses . . . . . . . . . . . . . . . . 4,108,394
_____________
INVESTMENT (LOSS). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (547,271)
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--Note 3:
Net realized gain (loss) on investments . . . . . $ (4,033,890)
Net unrealized appreciation (depreciation)
on investments . . . . . . . . . . . . . . . . (49,605,457)
_____________
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS . . . . . . . . . . . . . . (53,639,347)
_____________
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS . . . . . . . . . . . . . . $(54,186,618)
_____________
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
DREYFUS PREMIER SMALL COMPANY STOCK FUND
- -----------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
Year Ended Year Ended
October 31, 1998 October 31, 1997
_________________ _________________
<S> <C> <C>
OPERATIONS:
Investment (loss)--net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (547,271) $ (111,253)
Net realized gain (loss) on investments . . . . . . . . . . . . . . . . . . . . . (4,033,890) 13,719,411
Net unrealized appreciation (depreciation) on investments . . . . . . . . . . . . (49,605,457) 35,272,690
______________ ______________
Net Increase (Decrease) in Net Assets Resulting from Operations . . . . . (54,186,618) 48,880,848
______________ ______________
DIVIDENDS TO SHAREHOLDERS FROM:
Net realized gain on investments:
Class A shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (462,818) (199,136)
Class B shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,024,452) (233,749)
Class C shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (203,973) (29,222)
Class R shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (11,961,021) (5,553,471)
______________ ______________
Total Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (13,652,264) (6,015,578)
______________ ______________
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold:
Class A shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,635,640 7,756,378
Class B shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,236,324 13,645,665
Class C shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,534,921 3,378,302
Class R shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99,604,995 109,886,175
Dividends reinvested:
Class A shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 420,621 176,180
Class B shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 860,498 213,766
Class C shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102,849 12,117
Class R shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,814,653 4,568,652
Cost of shares redeemed:
Class A shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,002,178) (4,230,344)
Class B shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4,968,357) (1,446,495)
Class C shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,905,628) (502,107)
Class R shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (56,959,110) (21,178,571)
______________ ______________
Increase (Decrease) in Net Assets from Capital Stock Transactions . . . . 73,375,228 112,279,718
______________ ______________
Total Increase (Decrease) in Net Assets . . . . . . . . . . . . . . . . 5,536,346 155,144,988
NET ASSETS:
Beginning of Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 276,384,969 121,239,981
______________ ______________
End of Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $281,921,315 $276,384,969
______________ ______________
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS PREMIER SMALL COMPANY STOCK FUND
- -----------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
Shares
___________________________________
Year Ended Year Ended
October 31, 1998 October 31, 1997
________________ _________________
CAPITAL SHARE TRANSACTIONS:
Class A
________
Shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 545,657 466,115
Shares issued for dividends reinvested . . . . . . . . . . . . . . . . . . . . . . . 24,015 11,606
Shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (169,516) (248,004)
____________ ____________
Net Increase (Decrease) in Shares Outstanding . . . . . 400,156 229,717
____________ ____________
Class B
________
Shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 922,997 802,692
Shares issued for dividends reinvested . . . . . . . . . . . . . . . . . . . . . . . 50,219 14,270
Shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (305,600) (86,680)
____________ ____________
Net Increase (Decrease) in Shares Outstanding . . . . . 667,616 730,282
____________ ____________
Class C
________
Shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 202,040 191,557
Shares issued for dividends reinvested . . . . . . . . . . . . . . . . . . . . . . . 6,003 809
Shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (111,940) (29,834)
____________ ____________
Net Increase (Decrease) in Shares Outstanding . . . . . 96,103 162,532
____________ ____________
Class R
________
Shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,542,571 6,439,905
Shares issued for dividends reinvested . . . . . . . . . . . . . . . . . . . . . . . 558,142 300,569
Shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,342,921) (1,260,471)
____________ ____________
Net Increase (Decrease) in Shares Outstanding . . . . . 2,757,792 5,480,003
____________ ____________
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
DREYFUS PREMIER SMALL COMPANY 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.
Class A Shares
_______________________________________________________
Year Ended October 31,
_______________________________________________________
PER SHARE DATA: 1998 1997 1996 1995 1994(1)(2)
_______ _______ _______ _______ _______
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period . . . . . . . . . . $18.89 $15.13 $13.09 $10.07 $10.00
_______ _______ _______ _______ _______
Investment Operations:
Investment income (loss)--net . . . . . . . . . . . . . . (.02) (.04) (.02) .02 .01
Net realized and unrealized gain (loss)
on investments . . . . . . . . . . . . . . . . . . . (2.78) 4.52 2.48 3.03 .06
_______ _______ _______ _______ _______
Total from Investment Operations . . . . . . . . . . . . (2.80) 4.48 2.46 3.05 .07
_______ _______ _______ _______ _______
Distributions:
Dividends from investment income--net . . . . . . . . . . -- -- -- (.03) --
Dividends from net realized gain on investments . . . . . (.91) (.72) (.42) -- --
_______ _______ _______ _______ _______
Total Distributions . . . . . . . . . . . . . . . . . . . (.91) (.72) (.42) (.03) --
_______ _______ _______ _______ _______
Net asset value, end of period . . . . . . . . . . . . . ($15.18) $18.89 $15.13 $13.09 $10.07
_______ _______ _______ _______ _______
TOTAL INVESTMENT RETURN(3) . . . . . . . . . . . . . . . . . (15.42%) 30.73% 19.22% 30.31% .70%(4)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets . . . . . . . . .. 1.50% 1.50% 1.50% 1.50% .25%(4)
Ratio of net investment income (loss) to average
net assets . . . . . . . . . . . . . . . . . . . . . (.32%) (.35%) (.16%) .10% .14%(4)
Portfolio Turnover Rate . . . . . . . . . . . . . . . . . 47.44% 39.18% 49.03% 56.00% 8.00%(4)
Net assets, end of period (000's Omitted) . . . . . . . . $13,462 $9,190 $3,884 $1,359 $60
- ---------
(1) The Fund commenced operations and commenced selling Investor shares on
September 2, 1994. Effective October 17, 1994, the Fund's Investor shares
were redesignated as Class A shares.
(2) Effective October 17, 1994, The Dreyfus Corporation began serving 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) Not annualized.
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS PREMIER SMALL COMPANY 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.
Class B Shares
___________________________________________
Year Ended October 31,
___________________________________________
PER SHARE DATA: 1998 1997 1996 1995(1)
________ _______ _______ _______
Net asset value, beginning of period . . . . . . . . . . . . . . . . $18.51 $14.95 $13.05 $ 9.49
_______ _______ _______ _______
Investment Operations:
Investment income (loss)--net . . . . . . . . . . . . . . . . . . . . (.11) (.03) (.07) (.03)
Net realized and unrealized gain (loss) on investments . . . . . . . (2.74) 4.31 2.39 3.59
_______ _______ _______ _______
Total from Investment Operations . . . . . . . . . . . . . . . . . . (2.85) 4.28 2.32 3.56
_______ _______ _______ _______
Distributions:
Dividends from net realized gain on investments . . . . . . . . . . . (.91) (.72) (.42) --
_______ _______ _______ _______
Net asset value, end of period . . . . . . . . . . . . . . . . . . . $14.75 $18.51 $14.95 $13.05
_______ _______ _______ _______
TOTAL INVESTMENT RETURN(2) . . . . . . . . . . . . . . . . . . . . . . . . (16.10%) 29.72% 18.17% 37.51%(3)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets . . . . . . . . . . . . . . . . 2.25% 2.25% 2.24% .1.95%(3)
Ratio of net investment income (loss) to average net assets . . . . . . (1.07%) (1.02%) (.93%) (.56%)(3)
Portfolio Turnover Rate . . . . . . . . . . . . . . . . . . . . . . . . 47.44% 39.18% 49.03% 56.00%(3)
Net Assets, end of period (000's Omitted) . . . . . . . . . . . . . . . $25,183 $19,257 $4,633 $1,025
- ----------
(1) The Fund commenced selling Class B shares on December 19, 1994.
(2) Exclusive of sales load.
(3) Not annualized.
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS PREMIER SMALL COMPANY 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.
Class C Shares
___________________________________________
Year Ended October 31,
___________________________________________
PER SHARE DATA: 1998 1997 1996 1995(1)
________ _______ _______ _______
Net asset value, beginning of period . . . . . . . . . . . . . . . . . $18.52 $14.95 $13.04 $ 9.49
_______ _______ _______ _______
Investment Operations:
Investment income (loss)--net . . . . . . . . . . . . . . . . . . . . . (.14) .01 (.09) (.01)
Net realized and unrealized gain (loss) on investments . . . . . . . . (2.72) 4.28 2.42 3.56
_______ _______ _______ _______
Total from Investment Operations . . . . . . . . . . . . . . . . . . . (2.86) 4.29 2.33 3.55
_______ _______ _______ _______
Distributions:
Dividends from net realized gain on investments . . . . . . . . . . . . (.91) (.72) (.42) --
_______ _______ _______ _______
Net asset value, end of period . . . . . . . . . . . . . . . . . . . . $14.75 $18.52 $14.95 $13.04
_______ _______ _______ _______
TOTAL INVESTMENT RETURN(2) . . . . . . . . . . . . . . . . . . . . . . . . (16.08%) 29.79% 18.27% 37.41%(3)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets . . . . . . . . . . . . . . . . 2.25% 2.25% 2.25% 1.14%(3)
Ratio of net investment income (loss) to average net assets . . . . . . (1.08%) (1.01%) (.93%) (.33%)(3)
Portfolio Turnover Rate . . . . . . . . . . . . . . . . . . . . . . . . 47.44% 39.18% 49.03% 56.00%(3)
Net Assets, end of period (000's Omitted) . . . . . . . . . . . . . . . $4,323 $3,647 $514 $147
- ---------
(1) The Fund commenced selling Class C shares on April 30, 1995.
(2) Exclusive of sales load.
(3) Not annualized.
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS PREMIER SMALL COMPANY 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.
Class R Shares
___________________________________________
Year Ended October 31,
___________________________________________
PER SHARE DATA: 1998 1997 1996 1995 1994(1)(2)
_______ _______ _______ _______ _______
Net asset value, beginning of period . . . . . . . . . . $18.96 $15.15 $13.10 $10.07 $10.00
_______ _______ _______ _______ _______
Investment Operations:
Investment income--net . . . . . . . . . . . . . . . . . (.01) -- .01 .04 .02
Net realized and unrealized gain (loss)
on investments . . . . . . . . . . . . . . . . . . . (2.77) 4.53 2.48 3.04 .05
_______ _______ _______ _______ _______
Total from Investment Operations . . . . . . . . . . . . (2.78) 4.53 2.49 3.08 .07
_______ _______ _______ _______ _______
Distributions:
Dividends from investment income--net . . . . . . . . . . -- -- (.02) (.05) --
Dividends from net realized gain on investments . . . . . (.91) (.72) (.42) -- --
_______ _______ _______ _______ _______
Total Distributions . . . . . . . . . . . . . . . . . . . (.91) (.72) (.44) (.05) --
_______ _______ _______ _______ _______
Net asset value, end of period . . . . . . . . . . . . . ($15.27) $18.96 $15.15 $13.10 $10.07
_______ _______ _______ _______ _______
TOTAL INVESTMENT RETURN. . . . . . . . . . . . . . . . . . . (15.31%) 31.04% 19.43% 30.70% .70%(3)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets . . . . . . . . .. 1.25% 1.25% 1.25% 1.25% .21%(3)
Ratio of net investment income (loss) to average
net assets . . . . . . . . . . . . . . . . . . . . . (.07%) .02% .09% .35% .18%(3)
Portfolio Turnover Rate . . . . . . . . . . . . . . . . . 47.44% 39.18% 49.03% 56.00% 8.00%
Net assets, end of period (000's Omitted) . . . . . . . . $238,953 $244,292 $112,209 $44,091 $10,747
- ---------
(1) The Fund commenced operations and commenced selling Trust shares on
September 2, 1994. Effective October 17, 1994, the Fund's Trust shares
were redesignated as Class R shares.
(2) Effective October 17, 1994, The Dreyfus Corporation began serving as the
Fund' s investment manager. Prior to October 17, 1994, Mellon Bank, N.A.
served as the Fund's investment manager.
(3) Not annualized.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
DREYFUS PREMIER SMALL COMPANY STOCK FUND
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES:
Dreyfus Premier Small Company Stock 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, as amended (the "Act") an
open-end management investment company and operates as a series company
currently offering nineteen series including the Premier Small Company Stock
Fund (the "Fund"). The Fund's investment objective is to consistently exceed the
total return performance of the Russell 2500(tm)( Stock Index while maintaining
a similar level of risk. The Dreyfus Corporation (the "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 168 million of $.001 par
value Capital Stock. The Fund currently offers four classes of shares: Class A
(27 million shares authorized), Class B (50 million shares authorized), Class C
(50 million shares authorized) and Class R (41 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, while Class B and Class C shares
are subject to a contingent deferred sales charge ("CDSC") and a 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),
realized and unrealized gains and losses are allocated daily to each class of
shares based upon the relative proportion of net assets of each class.
The Fund' s financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management estimates
and assumptions. Actual results could differ from those estimates.
(A) PORTFOLIO VALUATION: Investments in securities are valued at 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 DREYFUS
PREMIER SMALL COMPANY STOCK FUND
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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 counterparty 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 Fund' s 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.
During the period ended October 31, 1998, the Fund decreased paid-in capital
$694,611 and increased accumulated investment loss and accumulated net realized
loss on investments $683,407 and $11,204, respectively. Net assets were not
affected by these reclassifications.
(D) DISTRIBUTIONS 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 of 1986, as amended (the "Code"). To
the extent that net realized capital gain can be offset by capital loss
carryovers, it is the policy of the Fund not to distribute such gain.
(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 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 $2,362,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to October 31, 1998. If not
applied, the carryover expires in fiscal 2006.
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 1.25% of the value of the Fund' 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, service 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). Effective July 1, 1998, each
director receives $40,000 per year, plus $5,000 for each joint Board meeting of
The Dreyfus/Laurel Funds, Inc., The Dreyfus/Laurel Tax-Free Municipal Funds, and
The Dreyfus/Laurel Funds Trust (the "Dreyfus/Laurel Funds") attended, $2,000 for
separate committee meetings attended which are not held in conjunction with a
regularly scheduled board meeting and $500 for Board meetings and separate
committee meetings attended that are conducted by telephone and is reimbursed
for travel and out-of-pocket expenses. The Chairman of the Board receives an
additional DREYFUS PREMIER SMALL COMPANY STOCK FUND
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
25% of such compensation (with the exception of reimbursable amounts). In the
event that there is a joint committee meeting of the Dreyfus/Laurel Funds and
the Dreyfus High Yield Strategies Fund, the $2,000 fee will be allocated between
the Dreyfus/Laurel Funds and the 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.
Prior to July 1, 1998 each director received $27,000 per year, $1,000 for each
Board meeting attended and $750 for each Audit Committee meeting attended and
was reimbursed for travel and out-of-pocket expenses. The Chairman of the Board
received an additional annual fee of $25,000 per year. These fees pertained to
the Dreyfus/Laurel Funds. (The $1,000 attendance fee and reimbursement of
meeting expenses were also borne pro rata by Dreyfus High Yield Strategies Fund)
.. These fees and expenses were 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, were in fact paid directly by the Manager
to the non-interested Directors.
Dreyfus service Corporation, a wholly-owned subsidiary of the Manager,
retained $15,415 during the period ended October 31, 1998 from commissions
earned on sales of the Fund's shares.
(B) DISTRIBUTION AND SERVICE PLAN: The Fund has adopted a Distribution Plan
(the "Plan") pursuant to Rule 12b-1 under the 1940 Act relating to its Class A,
B and C shares. Under the Plan, 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 .75% 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, 1998, the distribution fee for Class A, Class B and
Class C shares was $28,718, $187,216 and $33,521, respectively. During the
period ended October 31, 1998, the service fee for Class B shares and Class C
shares was $62,405 and $11,174, respectively.
Under its terms, the Plan and service plan shall remain in effect from year to
year, provided such continuance is approved annually by a vote of the 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 of investment securities, excluding
short-term securities, during the period ended October 31, 1998, amounted to
$197,195,408 and $140,192,473, respectively.
At October 31, 1998, accumulated net unrealized depreciation on investments
was $4,151,822, consisting of $35,600,272 gross unrealized appreciation and
$39,752,094 gross unrealized depreciation.
DREYFUS PREMIER SMALL COMPANY STOCK FUND
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
At October 31, 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 the borrowings.
The average daily amount of borrowings outstanding during the period ended
October 31, 1998 was approximately $70,411, with a related weighted average
annualized interest rate of 5.91%.
DREYFUS PREMIER SMALL COMPANY STOCK 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 Small Company Stock
Fund of The Dreyfus Laurel/Funds, Inc. as of October 31, 1998, 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 in the five year period
then ended. 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 and financial highlights. Our procedures included
confirmation of securities owned as of October 31, 1998 by correspondence with
the custodian and brokers. As to securities sold, but not 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 Small Company Stock Fund of The Dreyfus/Laurel Funds, Inc. as of
October 31, 1998, 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
the financial highlights for each of the years or periods indicated herein, in
conformity with generally accepted accounting principles.
New York, New York
December 15, 1998
IMPORTANT TAX INFORMATION (UNAUDITED)
For Federal tax purposes, the Fund hereby designates $.819 per share as a
long-term capital gain distribution of the $.905 per share paid on December 17,
1997. The Fund also designates $.0010 per share as a long- term capital gain
distribution of the $.0020 per share paid on May 6, 1998.
The Fund also designates 100% of the ordinary dividends paid during the fiscal
year ended October 31, 1998 as qualifying for the corporate dividends received
deduction. Shareholders will receive notification in January 1999 of the
percentage applicable to the preparation of their 1998 income tax returns.
DREYFUS PREMIER SMALL COMPANY
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. 385/685AR9810
ANNUAL REPORT
- -------------------------------------------------------------------------------
DREYFUS PREMIER
SMALL COMPANY
STOCK FUND
- -------------------------------------------------------------------------------
OCTOBER 31, 1998
[lion logo reg.tm]
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
DREYFUS DISCIPLINED INTERMEDIATE BOND FUND INVESTOR
SHARES AND RESTRICTED SHARES AND THE LEHMAN BROTHERS
AGGREGATE BOND INDEX
EXHIBIT A:
DREYFUS DREYFUS
DISCIPLINED DISCIPLINED
INTERMEDIATE INTERMEDIATE
BOND FUND BOND FUND LEHMAN BROTHERS
PERIOD (INVESTOR (RESTRICTED AGGREGATE
SHARES) SHARES) BOND INDEX*
11/1/95 10,000 10,000 10,000
10/31/96 10,418 10,445 10,585
10/31/97 11,273 11,331 11,526
10/31/98 12,265 12,340 12,602
* Source: Lehman Brothers
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
DREYFUS BOND MARKET INDEX FUND BASIC SHARES AND THE
LEHMAN BROTHERS AGGREGATE BOND INDEX
EXHIBIT A:
DREYFUS BOND
MARKET LEHMAN BROTHERS
PERIOD INDEX FUND AGGREGATE
(BASIC SHARES) BOND INDEX *
11/30/93 10,000 10,000
10/31/94 9,632 9,716
10/31/95 11,116 11,236
10/31/96 11,638 11,893
10/31/97 12,623 12,950
10/31/98 13,846 14,159
* Source: Lehman Brothers
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN DREYFUS
PREMIER LARGE COMPANY STOCK FUND CLASS R SHARES AND THE
STANDARD AND POOR'S 500 COMPOSITE STOCK PRICE INDEX
EXHIBIT A:
DREYFUS STANDARD &
PREMIER LARGE POOR'S 500
PERIOD COMPANY STOCK F COMPOSITE STOCK
(CLASS R SHARES PRICE INDEX*
9/2/94 10,000 10,000
10/31/94 9,950 9,975
10/31/95 12,286 12,609
10/31/96 15,257 15,645
10/31/97 20,192 20,667
10/31/98 24,250 25,216
* Source: Lipper Analytical Services, Inc.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
DREYFUS DISCIPLINED STOCK FUND AND THE STANDARD
& POOR'S 500 COMPOSITE STOCK PRICE INDEX
EXHIBIT A:
STANDARD
DREYFUS & POOR'S 500
PERIOD DISCIPLINED COMPOSITE STOCK
STOCK FUND 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
10/31/98 59,807 60,132
* Source: Lipper Analytical Services, Inc.
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
LIMITED TERM LEHMAN 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
10/31/98 17,045 18,433
*Source: Lehman Brothers
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
DREYFUS BASIC S&P 500 STOCK INDEX FUND AND THE
STANDARD & POOR'S 500 COMPOSITE STOCK PRICE INDEX
EXHIBIT A:
DREYFUS
BASIC STANDARD
S&P 500 & POOR'S 500
PERIOD STOCK COMPOSITE STOCK
INDEX FUND PRICE INDEX *
9/30/93 10,000 10,000
10/31/93 10,230 10,207
10/31/94 10,588 10,601
10/31/95 13,314 13,401
10/31/96 16,480 16,628
10/31/97 21,732 21,964
10/31/98 26,444 26,798
* Source: Lipper Analytical Services, Inc.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN DREYFUS
PREMIER TAX MANAGED GROWTH FUND CLASS A SHARES, CLASS B SHARES,
CLASS C SHARES AND CLASS T SHARES AND THE STANDARD & POOR'S 500
COMPOSITE STOCK PRICE INDEX
EXHIBIT A:
DREYFUS DREYFUS DREYFUS DREYFUS
PREMIER PREMIER PREMIER PREMIER
TAX TAX TAX TAX
STANDARD MANAGED MANAGED MANAGED MANAGED
& POOR'S 500 GROWTH GROWTH GROWTH GROWTH
PERIOD COMPOSITE FUND FUND FUND FUND
STOCK (CLASS A (CLASS B (CLASS C (CLASS R
PRICE INDEX* SHARES) SHARES) SHARES) SHARES)
11/4/97 10,000 9,427 10,000 10,000 9,549
1/31/98 10,760 9,797 10,376 10,376 9,920
4/30/98 12,250 11,042 11,672 11,664 11,173
7/31/98 12,396 11,344 11,968 11,960 11,471
10/31/98 12,201 11,148 11,336 11,636 11,265
* Source: Lipper Analytical Services, Inc.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN DREYFUS
PREMIER SMALL CAP VALUE FUND CLASS A SHARES, CLASS B SHARES,
CLASS C SHARES AND CLASS R SHARES AND THE RUSSELL 2000 VALUE
INDEX
EXHIBIT A:
DREYFUS DREYFUS DREYFUS DREYFUS
PREMIER PREMIER PREMIER PREMIER
SMALL SMALL SMALL SMALL
CAP CAP CAP CAP
RUSSELL VALUE VALUE VALUE VALUE
PERIOD 2000 FUND FUND FUND FUND
VALUE (CLASS A (CLASS B (CLASS C (CLASS R
INDEX* SHARES) SHARES) SHARES) SHARES)
4/1/98 10,000 9,427 10,000 10,000 10,000
4/30/98 10,049 9,457 10,024 10,024 10,032
7/31/98 8,883 8,582 9,080 9,080 9,112
10/31/98 8,151 7,881 7,995 8,245 8,376
* Source: Lipper Analytical Services, Inc.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
DREYFUS PREMIER MIDCAP STOCK FUND CLASS R SHARES AND
THE STANDARD & POOR'S MIDCAP 400 INDEX
EXHIBIT A:
DREYFUS
PREMIER STANDARD
MIDCAP & POOR'S
PERIOD STOCK FUND MIDCAP 400
(CLASS R SHARES) INDEX *
11/12/93 10,000 10,000
10/31/94 9,823 10,238
10/31/95 12,139 12,410
10/31/96 15,368 14,563
10/31/97 21,343 19,320
10/31/98 20,942 20,616
* Source: Lipper Analytical Services, Inc.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
DREYFUS PREMIER BALANCED FUND CLASS R SHARES WITH THE
STANDARD & POOR'S 500 COMPOSITE STOCK PRICE INDEX, THE
LEHMAN BROTHERS INTERMEDIATE GOVERNMENT / CORPORATE
BOND INDEX, THE LIPPER BALANCED FUNDS INDEX AND A HYBRID
INDEX
EXHIBIT A:
DREYFUS STANDARD LEHMAN
PREMIER & POOR'S 500 BROTHERS
BALANCED COMPOSITE INTERMEDIATE LIPPER
FUND STOCK GOVERNMENT / BALANCED
PERIOD (CLASS R PRICE CORPORATE HYBRID FUNDS
SHARES) INDEX* BOND INDEX** INDEX*** INDEX*
9/15/93 10,000 10,000 10,000 10,000 10,000
10/31/93 10,180 10,128 10,068 10,104 10,125
10/31/94 10,249 10,519 9,874 10,260 10,063
10/31/95 12,449 13,297 11,112 12,400 11,833
10/31/96 14,813 16,499 11,758 14,480 13,549
10/31/97 18,599 21,795 12,639 17,703 16,293
10/31/98 21,644 26,593 13,791 20,687 18,044
*Source: Lipper Analytical Services, Inc.
**Source: Lehman Brothers
***Source: Lipper Analytical Services, Inc. and Lehman Brothers
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
IN DREYFUS PREMIER SMALL COMPANY STOCK FUND CLASS A
SHARES AND CLASS R SHARES AND THE RUSSELL 2500 INDEX
EXHIBIT A:
DREYFUS PREMIER DREYFUS PREMIER
SMALL COMPANY SMALL COMPANY
PERIOD STOCK FUND STOCK FUND RUSSELL 2500
(CLASS A SHARES) (CLASS R SHARES) INDEX*
9/2/94 9,425 10,000 10,000
10/31/94 9,491 10,070 9,915
10/31/95 12,368 13,162 12,033
10/31/96 14,744 15,719 14,294
10/31/97 19,275 20,597 18,457
10/31/98 16,303 17,444 17,036
*Source: The Frank Russell Company
January 7, 1999
Office of Records
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, NW
Washington, DC 20549
Re: The Dreyfus/Laurel Funds, Inc.
File No. 811-5270
Dear Sir/Madam:
Enclosed is one (1) copy of the Annual Report to
Shareholders for the above referenced Fund for the annual
fiscal year ended October 31, 1998 filed in compliance with
the provisions of Section 30 of the Investment Company Act
of 1940, as amended.
Sincerely yours,
Shari Confalone
Paralegal
enc.
