YEAR 2000 ISSUES (UNAUDITED)
The fund could be adversely affected if the computer systems used by The
Dreyfus Corporation and the fund' s other service providers do not properly
process and calculate date-related information from and after January 1, 2000.
The Dreyfus Corporation is working to avoid Year 2000-related problems in its
systems and to obtain assurances from other service providers that they are
taking similar steps. In addition, issuers of securities in which the fund
invests may be adversely affected by Year 2000-related problems. This could have
an impact on the value of the fund's investments and its share price.
DREYFUS STRATEGIC GOVERNMENTS INCOME, INC.
- -----------------------------------------------------------------------------
LETTER TO SHAREHOLDERS
Dear Shareholders:
We are pleased to provide you with this report for Dreyfus Strategic
Governments Income, Inc. for the 12-month reporting period ended November 30,
1998. Your Fund produced a total return, including share price changes and
dividend income generated, of 6.73% .* During the reporting period, the Fund
produced income dividends of $1.125 per share, representing a distribution rate
per share of 13.36%.**
ECONOMIC REVIEW
During 1998, the main regions of the world 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
beginning in September. 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 level established by Germany, on the eve of currency
unification. Unlike the U.S., Europe has substantial excess capacity of
productive plants 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 drop
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 real income, a strong labor market and past
increases in the prices of assets they owned.
The negative effect of Asian weakness was felt in the industrial sector more
than 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 the 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.
Monetary policy has begun to ease in Europe as well as the U.S.
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. There appears to be a shift in the priorities of key policymakers from
fighting potential inflation to restimulating future world economic growth.
MARKET ENVIRONMENT
Over the past 12 months, the bond market experienced record volatility, with
sharp swings in interest rates. This volatility generated a flight to quality as
investors scrambled for a safe haven in 1998, propelling yields significantly
lower. The 30-year Treasury bond began the year yielding 5.925%, and ended the
year yielding 5.096% . At one point, yields on the 30-year Treasury issue
declined to 4.72% , at the peak of fear. Investors apparently were inclined to
accept these significantly lower yields for Treasuries in order to lessen
quality risk.
To put in perspective the amount of fear present during this tumultuous
market, we can look at "quality spreads." Quality spreads are the difference in
yields between Treasuries and other investment grade securities like corporate
bonds, mortgage-backed securities and agency securities. The quality spreads
between these securities reached levels during the reporting period that were
last seen in the early 1990s during a recession. At the end of the reporting
period, these securities recovered somewhat from the dramatically wide spread
levels reached during the month of October. The primary reason for the recovery
is that the Fed lowered interest rates three times during the reporting period
to provide liquidity in an effort to calm the markets.
PORTFOLIO OVERVIEW
Given the market environment, we kept the Fund with a longer-than-neutral
effective duration of six years during the Fund' s reporting period (in
comparison, the Salomon Global Government Bond Index(+) had a duration of 5.5
years for the same period) . We have normally tried to maintain a neutral
duration strategy and instead focus on sector selection, but over the last 12
months we lengthened the Fund's duration slightly in light of the drop in rates.
A longer effective duration is beneficial during a declining interest rate
environment, so our strategy worked well as rates did decline during the
reporting period. Going forward, we currently plan our duration strategy will be
neutral to the Index, with our belief of a more stable interest rate
environment.
Our allocation to generic mortgages was minimal for most of 1998. Mortgages in
general were under pressure throughout the year, since prepayment fears were
increasing as interest rates were dropping. We currently plan on increasing
exposure to mortgages as we believe the yield spread level is currently quite
attractive. Also, we feel that the likelihood that rates will drop dramatically
lower from the lows already set in October of 1998 is slim. Normally, homeowners
will wait to see how low rates will go before re-financing, so as rates begin to
make an upswing there is usually a massive rush to file re-financing
applications. We believe that the market has already seen that occur, with more
fear existing in the mortgage market now than there should be.
Agency securities were also hurt during the spread widening we mentioned
above. At the end of the Fund's fiscal year, Agency yields were attractive
compared to Treasuries. It is our belief that as markets settle down, prices on
Agency securities will start to gravitate back towards more reasonable levels,
so we currently plan on holding to or increasing our Agency exposure as
opportunities present themselves.
During the Fund' s fiscal year, the Treasury component of this Fund has been
allocated to, in market parlance, off-the-run (OTR) Treasuries -- these include
any Treasury security not recently issued in the auction process. In particular,
higher coupon OTR issues became dramatically cheaper during the peak of crisis
in October. There are a number of reasons for this: first, OTR issues are
considered generally less liquid than current-issued Treasuries so they will
tend to yield more. They are also used more often as collateral with
institutions like hedge funds. In essence, when some of these hedge funds came
under pressure to close down, the collateral held in their accounts was sold.
Last, when investors move out of other markets generally they randomly buy the
most current Treasury issued. All three of these events caused OTR Treasuries to
lose value, and because they happened simultaneously they in turn exacerbated
each other. Going forward, we currently plan on using OTR Treasuries as the
major component of our Treasury allocation. We believe they are quite
attractive, and should return to historic spread levels over time.
Also, within the Treasury market we should speak about the Treasury Inflation
Protected Securities (TIPS) market, which the Fund also owned during the
reporting period. These securities clearly did not perform as well as we thought
they would. While theoretically cheap, the marketplace could not focus on
inflation protection during what seemed to be deflationary crises looming
everywhere, and as a result these securities underperformed.
Our allocation to the nondollar sector was increased for 1998, and remained
relatively unchanged for most of the year. We are currently planning on
decreasing our nondollar exposure by about 15% going forward. This is due less
to bullishness towards the dollar but more to our belief that quality spreads
are more attractive, and some of the dollar-denominated emerging markets will
perform better than some of mainland Europe. We have used emerging market
securities in the past, and will continue to look for opportunities. This is one
area which we believe has worked out well for the last two years, but in 1998
caused the Fund some underperformance. While we believe our issue selection was
correct, we did not sufficiently anticipate the currency fluctuations that have
since occurred in some countries, and as a result some of these emerging market
securities declined in dollar terms.
Some of the countries we think offer value and have invested in are as
follows: In Asia, we believe that Korea and the Philippines are attractive on a
relative value basis. With Korea making dramatic progress on financial reform,
we believe their bonds could be solid performers. We continue to like some of
the service-sector Latin American countries such as Uruguay and Panama. Other
countries we will currently continue to focus on and in which we see relative
value from the nondollar perspective are Italy, Spain and the United Kingdom.
Thank you for your investment with Dreyfus. We look forward to continuing to
serve your investment needs.
Very truly yours,
[Gerald E. Thunelius signature]
Gerald E. Thunelius
Portfolio Manager
December 15, 1998
New York, N.Y.
*Total return includes reinvestment of dividends and any capital gains paid,
based upon the net asset value per share.
**Distribution rate per share is based upon dividends per share paid from net
investment income during the period, divided by the market price per share at
the end of the period.
(+) The Salomon Brothers Government Bond Composite Index is comprised of
approximately 800 government bonds from 18 countries, with an average maturity
of seven years.
<TABLE>
DREYFUS STRATEGIC GOVERNMENTS INCOME, INC.
- -----------------------------------------------------------------------------
SELECTED INFORMATION NOVEMBER 30, 1998 (UNAUDITED)
Market Price per share November 30, 1998 . . . . $9 3/16
Shares Outstanding November 30, 1998 . . . . . . 14,640,617
New York Stock Exchange Ticker Symbol. . . . . . DSI
MARKET PRICE (NEW YORK STOCK EXCHANGE)
Fiscal Year Ended November 30,1998
__________________________________________________________________
Quarter Quarter Quarter Quarter
Ended Ended Ended Ended
February 28, 1998 May 31, 1998 August 31, 1998 November 30, 1998
________________ ____________________ __________________ __________________
<S> <C> <C> <C> <C>
High $9 13/16 $9 3/4 $9 9/16 $9 3/8
Low 9 1/8 9 3/4 9 1/16 8 15/16
Close 9 5/8 9 3/8 9 1/16 9 3/16
PERCENTAGE GAIN based on change in Market Price*
June 24, 1988 (commencement of operations) through November 30, 1998 . 105.04
December 1, 1988 through November 30, 1998 . . . . . . . . . 123.85
December 1, 1993 through November 30, 1998 . . . . . . . . . 36.09
December 1, 1997 through November 30, 1998 . . . . . . . . . 8.75
March 1, 1998 through November 30, 1998. . . . . . . . . . . 1.34
June 1, 1998 through November 30, 1998 . . . . . . . . . . . 2.02
September 1, 1998 through November 30, 1998. . . . . . . . . 3.46
NET ASSET VALUE PER SHARE
June 24, 1988 (commencement of operations) . . . . . . . . . . . . $11.11
November 30, 1997 . . . . . . . . . . . . . . . . . . . . . . . . . 10.81
February 28, 1998 . . . . . . . . . . . . . . . . . . . . . . . . . 10.65
May 31, 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.54
August 31, 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . 10.33
November 30, 1998 . . . . . . . . . . . . . . . . . . . . . . . . . 10.20
PERCENTAGE GAIN based on change in Net Asset Value*
June 24, 1988 (commencement of operations) through November 30, 1998 . 145.72
December 1, 1988 through November 30, 1998 . . . . . . . . . 132.70
December 1, 1993 through November 30, 1998 . . . . . . . . . 49.33
December 1, 1997 through November 30, 1998 . . . . . . . . . 6.73
March 1, 1998 through November 30, 1998. . . . . . . . . . . 1.62
June 1, 1998 through November 30, 1998 . . . . . . . . . . . .67
September 1, 1998 through November 30, 1998. . . . . . . . . .70
* WITH DIVIDENDS REINVESTED.
</TABLE>
<TABLE>
DREYFUS STRATEGIC GOVERNMENTS INCOME, INC.
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS NOVEMBER 30, 1998
Principal
Bonds and Notes--98.0% Amount Value
- ----------------------------------------------------- _____________ _____________
<S> <C> <C>
Banking and Finance--3.5% American International Group,
Bonds, 11.70%, 2001 . . . . . . . . . . . . . $ 1,788,376 (a) $ 2,188,771
Credit Local de France,
Bonds, 9.625%, 2000 . . . . . . . . . . . . . 652,316 (b) 698,813
KfW International Finance,
Gtd. Bonds, 6%, 1999 . . . . . . . . . . . . . 2,191,470 (c) 2,316,696
_____________
5,204,280
_____________
Cable--8.7% Cable & Wireless Communications,
Notes, 6.75%, 2008 . . . . . . . . . . . . . . 2,500,000 2,531,818
Comcast Cable Communications,
Notes, 6.20%, 2008 . . . . . . . . . . . . . . 5,000,000 5,084,470
Motorola,
Deb., 6.50%, 2028 . . . . . . . . . . . . . . 2,000,000 2,060,498
Qwest Communications International,
Sr. Notes, 7.50%, 2008 . . . . . . . . . . . . 3,300,000 (d) 3,399,000
_____________
13,075,786
_____________
Foreign--1.5% Korea Development Bank,
Floating Rate Notes, 10.172%, 2003 . . . . . . 2,000,000 (d,e) 1,745,000
Korea Electric Power,
Discount Notes, Zero Coupon, 2016 . . . . . . 5,256,000 (f) 504,198
_____________
2,249,198
_____________
Foreign/Governmental--43.1% Belguim Kingdom Bonds:
7.75%, 2000 . . . . . . . . . . . . . . . . . 2,287,675 (g) 2,480,671
9%, 2003 . . . . . . . . . . . . . . . . . . . 2,859,594 (g) 3,466,372
Canada Government Bonds:
9.75%, 2000 . . . . . . . . . . . . . . . . . 1,304,631 (b) 1,426,249
8.75%, 2005 . . . . . . . . . . . . . . . . . 1,304,631 (b) 1,594,859
Federative Republic of Brazil,
Global Bonds, 10.125%, 2027 . . . . . . . . . 4,000,000 3,025,000
France O.A.T., Deb.:
8.50%, 2003 . . . . . . . . . . . . . . . . . 2,288,813 (h) 2,742,532
8.50%, 2023 . . . . . . . . . . . . . . . . . 1,320,469 (h) 2,029,686
German Unity Bonds,
8.75%, 2001 . . . . . . . . . . . . . . . . . 2,950,201 (i) 3,354,945
Government of New Zealand,
Bonds, 8%, 2006 . . . . . . . . . . . . . . . 2,098,800 (j) 2,430,120
Hellenic Republic of Greece,
Bonds, 8.60%, 2008 . . . . . . . . . . . . . . 1,407,955 (k) 1,507,039
Kingdom of Denmark Bonds,
7%, 2007 . . . . . . . . . . . . . . . . . . . 2,172,564 (l) 2,588,884
Republic of Argentina,
Floating Rate Accrual Notes,
14.25%, 2002 . . . . . . . . . . . . . . . . . 4,000,000 (e) 4,010,000
Republic of Austria,
Deb., 6.25%, 2003 . . . . . . . . . . . . . . 3,408,953 (c) 4,305,784
DREYFUS STRATEGIC GOVERNMENTS INCOME, INC.
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) NOVEMBER 30, 1998
Principal
Bonds and Notes (continued) Amount Value
- ----------------------------------------------------- _____________ _____________
Foreign/Governmental (continued) Republic of Colombia,
Quarterly Adjusted Notes, 12.243%, 2005 . . . 2,500,000 (e) 2,331,250
Republic of Panama,
Bonds, 8.875%, 2027 . . . . . . . . . . . . . $ 2,500,000 $ 2,356,250
Republica Oriental del Uruguay, Bonds:
Ser. A, 6.75%, 2021 (Units) . . . . . . . . . 2,000,000 (m) 1,760,000
Ser. B, 6.75%, 2021 (Units) . . . . . . . . . 3,000,000 (m) 2,640,000
Spain Government, Deb.:
10.30%, 2002 . . . . . . . . . . . . . . . . . 2,776,814 (n) 3,387,033
10%, 2005 . . . . . . . . . . . . . . . . . . 3,123,915 (n) 4,158,509
Sweden Government,
Deb., 6%, 2005 . . . . . . . . . . . . . . . . 2,453,687 (o) 2,708,952
United Kingdom Gilt Edged Securities:
10.50%, 1999 . . . . . . . . . . . . . . . . . 825,200 (p) 841,711
9.50%, 2005 . . . . . . . . . . . . . . . . . 1,980,480 (p) 2,489,243
9%, 2011 . . . . . . . . . . . . . . . . . . . 2,475,600 (p) 3,477,509
United Mexican States,
Global Bonds, 11.50%, 2026 . . . . . . . . . . 3,000,000 3,232,500
_____________
64,345,098
_____________
Foreign/Supranational--8.1% European Investment Bank, Notes:
12.75%, 2000 . . . . . . . . . . . . . . . . . 2,384,501 (a) 2,636,480
12.20%, 2003 . . . . . . . . . . . . . . . . . 4,172,876 (a) 5,516,705
International Bank for Reconstruction
and Development, Notes:
5.25%, 2002 . . . . . . . . . . . . . . . . 1,866,807 (c) 2,160,926
6%, 2005 . . . . . . . . . . . . . . . . . 1,434,309 (q) 1,741,065
_____________
12,055,176
_____________
Publishing/Newspapers--.7% A.H. Belo,
Sr. Notes, 6.875%, 2002 . . . . . . . . . . . 1,000,000 1,029,218
_____________
U.S. Government
Agencies--22.9% Federal Farm Credit, Real Yield Securities,
2.403%, 2/14/2002 . . . . . . . . . . . . . . 1,000,000 (r) 970,820
Federal Home Loan Mortgage Corp.:
Gtd. REMIC Pass-Through Ctfs.,
Ser. 51, Cl. E, 10%, 7/15/2020 . . . . . . 5,939,454 6,393,882
REMIC Trust, Pass-Through Ctfs.
(Collateralized by FHLMC Pass-Through Ctfs.):
Ser. 1611, Cl. L, 7%, 11/15/2023
(Interest Only Obligation) . . . . . . 5,000,000 (s) 1,412,500
Ser. 1978, Cl. PJ, 7% 3/15/2026
(Interest Only Obligation) . . . . . . 5,130,500 (s) 937,189
Federal National Mortgage Association :
6%, 11/1/2013 . . . . . . . . . . . . . . . . 5,000,000 (t) 5,004,650
8%, 12/1/2025 . . . . . . . . . . . . . . . . 1,151,052 1,197,094
Gtd. REMIC Pass-Through Ctfs.,
Ser. 1988-16, Cl. B., 9.50%, 6/25/2018 . . 2,932,688 3,143,285
DREYFUS STRATEGIC GOVERNMENTS INCOME, INC.
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) NOVEMBER 30, 1998
Principal
Bonds and Notes (continued) Amount Value
- ----------------------------------------------------- _____________ _____________
U.S. Government
Agencies (continued) U.S. Government Gtd. Development,
Participation Ctfs.
(Gtd. by U.S. Small Business Administration):
Ser 1994-20K, 8.65%, 11/1/2014 . . . . . . $....4,625,194 $ 5,138,592
Ser 1994-20L, 8.40%, 12/1/2014 . . . . . . 7,518,631 8,266,735
Ser 1997-20J, 6.55%, 10/1/2017 . . . . . . 1,653,860 1,716,708
_____________
34,181,455
_____________
U.S. Government--9.5% U.S. Treasury Bonds:
4.75%, 11/15/2008 . . . . . . . . . . . . . . 4,000,000 4,006,200
5.25%, 11/15/2028 . . . . . . . . . . . . . . 10,000,000 10,275,500
_____________
14,281,700
_____________
TOTAL BONDS AND NOTES
(cost $147,973,801) . . . . . . . . . . . . . $146,421,911
_____________
Short-Term Investments--.3%
- -------------------------------------------------------
U.S. Treasury Bills; 4.39%, 12/24/1998
(cost $448,738) . . . . . . . . . . . . . . . $ 450,000 (u) $ 448,722
_____________
TOTAL INVESTMENTS (cost $148,422,539). . . . . . . . . . . . . . . . . . . . . . . . . 98.3% $146,870,633
_______ _____________
CASH AND RECEIVABLES (NET) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.7% $ 2,532,938
_______ _____________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.0% $149,403,571
_______ _____________
DREYFUS STRATEGIC GOVERNMENTS INCOME, INC.
- -----------------------------------------------------------------------------
Notes to Statements of Investments:
- -----------------------------------------------------------------------------
(a) Converted to U.S. Dollars from Italian Lire.
(b) Converted to U.S. Dollars from Canadian Dollars.
(c) Converted to U.S. Dollars from Japanese Yen.
(d) Securities exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At November 30, 1998
these securities amounted to $5,144,000 or 3.4% of net assests.
(e) Variable rate security--interest rate subject to periodic change.
(f) Zero coupon until year shown at which time a stated coupon rate becomes
effective.
(g) Converted to U.S. Dollars from Belgian Francs.
(h) Converted to U.S. Dollars from French Francs.
(i) Converted to U.S. Dollars from German Deutsche Marks.
(j) Converted to U.S. Dollars from New Zealand Dollars.
(k) Converted to U.S. Dollars from Greek Drachmas.
(l) Converted to U.S. Dollars from Danish Krone.
(m) With value recovery rights attached.
(n) Converted to U.S. Dollars from Spanish Pesetas.
(o) Converted to U.S. Dollars from Swedish Krona.
(p) Converted to U.S. Dollars from British Pounds.
(q) Converted to U.S. Dollars from Swiss Francs.
(r) Variable rate security-base interest rate shown-adjustment to interest rate
linked to the Consumer Price Index.
(s) Notional face amount shown.
(t) Purchased on a forward commitment basis.
(u) Held by the custodian in a segregated account as collateral for open
Financial Futures positions.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
DREYFUS STRATEGIC GOVERNMENTS INCOME, INC.
- -----------------------------------------------------------------------------
STATEMENT OF FINANCIAL FUTURES NOVEMBER 30,1998
Market Value Unrealized
Covered Appreciation
Financial Futures (Long) Contracts by Contracts Expiration at 11/30/98
_____________________ ____________ _______________ ______________ ______________
<S> <C> <C> <C> <C>
U.S. Treasury 5 Year Notes . . . . . . . . . . . . . . . 45 $ 5,101,172 December '98 $ 16,172
U.S. Treasury 5 Year Notes . . . . . . . . . . . . . . . 450 51,201,563 March '99 59,766
U.S. Treasury 10 Year Notes. . . . . . . . . . . . . . . 20 2,386,875 March '99 8,750
Bundesrepublic 10 Year Bonds . . . . . . . . . . . . . . 22 3,780,639 December '98 53,290
Spanish Government 10 Year Bonds . . . . . . . . . . . . 10 819,733 December '98 14,370
United Kingdom 15 Year Gilt. . . . . . . . . . . . . . . 5 971,170 March '99 7,757
_________
$160,105
_________
Market Value Unrealized
Covered (Depreciation)
Financial Futures (Short) Contracts by Contracts Expiration at 11/30/98
_____________________ ____________ _______________ ______________ ______________
U.S. Treasury 10 Year Notes. . . . . . . . . . . . . . . 80 $ 9,522,500 December '98 $ (37,344)
U.S. Treasury 30 Year Bonds. . . . . . . . . . . . . . . 19 2,467,031 December '98 (36,219)
_________
$ (73,563)
_________
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
DREYFUS STRATEGIC GOVERNMENTS INCOME, INC.
- -----------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES NOVEMBER 30, 1998
Cost Value
_____________ _____________
<S> <C> <C>
ASSETS: Investments in securities--See Statement of Investments . . $148,422,539 $146,870,633
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . 6,011,374
Receivable for investment securities sold . . . . . . . . 19,413,538
Interest receivable . . . . . . . . . . . . . . . . . . . 3,674,354
Receivable for futures variation margin--Note 3(a) . . . 330,473
Net unrealized appreciation on forward
currency exchange contracts--Note 3(a) . . . . . . . . 101,508
_____________
176,401,880
_____________
LIABILITIES: Due to The Dreyfus Corporation . . . . . . . . . . . . . 95,050
Payable for investment securities purchased . . . . . . . 25,839,106
Income dividend payable . . . . . . . . . . . . . . . . . 915,039
Accrued expenses and other liabilities . . . . . . . . . 149,114
_____________
26,998,309
_____________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $149,403,571
_____________
REPRESENTED BY: Paid-in capital . . . . . . . . . . . . . . . . . . . . . $161,164,920
Accumulated distributions in excess of investment
income--net . . . . . . . . . . . . . . . . . . . . . . (2,474,144)
Accumulated net realized gain (loss) on investments and
foreign currency transactions . . . . . . . . . . . . . (7,964,840)
Accumulated net unrealized appreciation (depreciation) on
investments and foreign currency transactions
(including $86,542 net unrealized appreciation
on financial futures)--Note 3(b) . . . . . . . . . . . (1,322,365)
_____________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $149,403,571
_____________
SHARES OUTSTANDING
(100 MILLION SHARES OF $.001 PAR VALUE COMMON STOCK AUTHORIZED). . . . . . . . . . . . . . 14,640,617
NET ASSET VALUE per share. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $10.20
_______
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
DREYFUS STRATEGIC GOVERNMENTS INCOME, INC.
- -----------------------------------------------------------------------------
STATEMENT OF OPERATIONS YEAR ENDED NOVEMBER 30, 1998
INVESTMENT INCOME
<S> <C> <C>
INCOME Interest Income . . . . . . . . . . . . . . . . . . . . . $11,524,811
EXPENSES: Management fee--Note 2(a) . . . . . . . . . . . . . . . . $ 1,072,395
Professional fees . . . . . . . . . . . . . . . . . . . . 66,754
Directors' fees and expenses--Note 2(b) . . . . . . . . . 61,374
Shareholder servicing costs . . . . . . . . . . . . . . . 56,419
Custodian fees . . . . . . . . . . . . . . . . . . . . . 48,277
Shareholders' reports . . . . . . . . . . . . . . . . . . 47,621
Registration fees . . . . . . . . . . . . . . . . . . . . 24,260
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . 5,323
____________
Total Expenses . . . . . . . . . . . . . . . . . . 1,382,423
____________
INVESTMENT INCOME--NET . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,142,388
____________
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--Note 3:
Net realized gain (loss) on investments and foreign currency
transactions (including options written) . . . . . . . $ (3,845,031)
Net realized gain (loss) on financial futures . . . . . . 567,482
Net realized gain (loss) on forward currency
exchange contracts . . . . . . . . . . . . . . . . . . (1,123,853)
____________
Net Realized Gain (Loss) . . . . . . . . . . . . . (4,401,402)
Net unrealized appreciation (depreciation) on investments,
options written and foreign currency transactions
(including $133,653 net unrealized appreciation on
financial futures) . . . . . . . . . . . . . . . . . . 2,720,455
____________
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS . . . . . . . . . . . . . . . . . . (1,680,947)
____________
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS . . . . . . . . . . . . . . . . . . . $ 8,461,441
____________
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
DREYFUS STRATEGIC GOVERNMENTS INCOME, INC.
- -----------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
Year Ended Year Ended
November 30, 1998 November 30, 1997
__________________ __________________
<S> <C> <C>
OPERATIONS:
Investment income--net . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 10,142,388 $ 10,032,165
Net realized gain (loss) on investments . . . . . . . . . . . . . . . . . . . (4,401,402) 11,714,328
Net unrealized appreciation (depreciation) on investments . . . . . . . . . . 2,720,455 (8,903,962)
_____________ _____________
Net Increase (Decrease) in Net Assets Resulting from Operations . . . . . 8,461,441 12,842,531
_____________ _____________
DISTRIBUTIONS TO SHAREHOLDERS:
From investment income--net . . . . . . . . . . . . . . . . . . . . . . . . . (16,664,869) (9,891,371)
In excess of investment income--net . . . . . . . . . . . . . . . . . . . . . (720,868) (2,150,539)
_____________ _____________
Total Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . (17,385,737) (12,041,910)
_____________ _____________
Total Increase (Decrease) in Net Assets . . . . . . . . . . . . . . . . (8,924,296) 800,621
NET ASSETS:
Beginning of Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158,327,867 157,527,246
_____________ _____________
End of Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $149,403,571 $158,327,867
_____________ _____________
UNDISTRIBUTED INVESTMENT INCOME (DISTRIBUTIONS IN EXCESS OF INVESTMENT INCOME)--NET. . $ (2,474,144) $ 6,480,990
_____________ _____________
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
DREYFUS STRATEGIC GOVERNMENTS INCOME, INC.
- -----------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share of Common
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 and market price data for the
Fund's shares.
Six Months Ended Year Ended
Year Ended November 30, November 30, May 31,
_________________________________ _______________ __________
PER SHARE DATA: 1998 1997 1996 1995 1994(1) 1994
______ ______ ______ ______ ______ ______
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period . . . . . . . $10.81 $10.76 $10.66 $ 9.85 $10.30 $11.03
______ ______ ______ ______ ______ ______
Investment Operations:
Investment income--net . . . . . . . . . . . . . . .70(2) .69(2) .72(2) .71 .42 .89
Net realized and unrealized gain (loss)
on investments . . . . . . . . . . . . . . . . (.12) .18 .13 .82 (.44) (.70)
______ ______ ______ ______ ______ ______
Total from Investment Operations . . . . . . . . . .58 .87 .85 1.53 (.02) .19
______ ______ ______ ______ ______ ______
Distributions:
Dividends from investment income--net . . . . . . . (1.14) (.67) (.74) (.71) (.28) (.92)
Dividends in excess of investment
income--net . . . . . . . . . . . . . . . . . . (.05) (.15) (.01) (.01) -- --
Dividends from paid-in-capital . . . . . . . . . . -- -- -- -- (.15) --
______ ______ ______ ______ ______ ______
Total Distributions . . . . . . . . . . . . . . . . (1.19) (.82) (.75) (.72) (.43) (.92)
______ ______ ______ ______ ______ ______
Net asset value, end of period . . . . . . . . . . $10.20 $10.81 $10.76 $10.66 $ 9.85 $10.30
______ ______ ______ ______ ______ ______
Market Value, end of period . . . . . . . . . . . . $ 9 3/16 $ 9 9/16 $ 9 3/8 $ 9 1/8 $ 9 1/8 $ 10
______ ______ ______ ______ ______ ______
TOTAL INVESTMENT RETURN (3). . . . . . . . . . . . . . 8.75% 11.32% 11.37% 8.80% (8.98%)(4) (5.23%)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets . . . . . . .90% .92% .90% .94% .92%(4) .89%
Ratio of net investment income
to average net assets . . . . . . . . . . . . . 6.65% 6.48% 6.91% 7.56% 8.28%(4) 8.18%
Portfolio Turnover Rate . . . . . . . . . . . . . . 599.75% 337.41% 328.37% 91.27% 65.21%(5) 22.76%
Net Assets, end of period (000's Omitted) . . . . . $149,404 $158,328 $157,527 $156,083 $145,164 $154,140
- -----------------------------
(1) The Fund changed its fiscal year end from May 31 to November 30.
(2) Based on average shares outstanding.
(3) Calculated based on market value.
(4) Annualized.
(5) Not annualized.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
DREYFUS STRATEGIC GOVERNMENTS INCOME, INC.
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES:
Dreyfus Strategic Governments Income, Inc. (the "Fund") is registered under
the Investment Company Act of 1940, as amended (the "Act"), as a non-diversified
closed-end management investment company. The Fund's investment objective is to
maximize current income to the extent consistent with the preservation of
capital. The Dreyfus Corporation ("Investment Adviser") serves as the Fund's
investment adviser. The Investment Adviser is a direct subsidiary of Mellon
Bank, N.A. (" Mellon" ). Sinopia Asset Management serves as the Fund' s
sub-investment adviser.
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, options and financial futures) are
valued each business day by an independent pricing service ("Service") approved
by the Board of Trustees. Investments for which quoted bid prices are readily
available and are representative of the 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 Trustees. Short-term investments, excluding U.S.
Treasury Bills, are carried at amortized cost, which approximates value.
Financial futures and options 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 on each business day. 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 the 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 amount of
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 at fiscal year end, 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. Interest income,
including, where applicable, amortization of discount on investments, is
recognized on the accrual basis. Under the terms of the custody agreement, the
Fund receives net earnings credits based on available cash balances left on
deposit.
DREYFUS STRATEGIC GOVERNMENTS INCOME, INC.
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(D) DIVIDENDS TO SHAREHOLDERS: Dividends are recorded on the ex-dividend
date. Dividends from investment income-net are normally declared and 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" ). This may result in distributions that are in excess of
investment income-net and net realized gain on a fiscal year basis. 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.
For shareholders who elect to receive their distributions in additional
shares of the Fund, in lieu of cash, such distributions will be reinvested at
the lower of the market price or net asset value per share (but not less than
95% of the market price) based on the record date's respective prices. If the
net asset value per share on the record date is lower than the market price per
share, shares will be issued by the Fund at the record date's net asset value on
the payable date of the distribution. If net asset value per share is less than
95% of market value, shares will be issued by the Fund at 95% of market value.
If the market price is lower than the net asset value per share on the record
date, Mellon will purchase Fund shares in the open market commencing on the
payable date and reinvest those shares accordingly. As a result of purchasing
Fund shares in the open market, Fund shares outstanding will not be affected by
this form of reinvestment.
On November 25, 1998, the Board of Directors declared a cash dividend of
$.0625 per share from investment income-net, payable on December 24, 1998 to
shareholders of record as of the close of business on December 10, 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.
The Fund has an unused capital loss carryover of approximately $6,044,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to November 30, 1998. The
carryover does not include net realized securities losses from November 1, 1998
through November 30, 1998 which are treated, for federal income tax purposes, as
arising in fiscal 1999. If not applied, $4,384,000 of the carryover expires in
fiscal 2002, $18,000 expires in fiscal 2003, $831,000 expires in fiscal 2004 and
$811,000 expires in fiscal 2006.
During the period ended November 30, 1998, the Fund reclassified $1,711,785
from accumulated net realized (loss) on investments to accumulated distributions
in excess of investment income-net.
NOTE 2--MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
(A) Pursuant to a management agreement with the Investment Adviser, the
management fee is computed at the annual rate of .70 of 1% of the value of the
Fund's average weekly net assets and is payable monthly.
Pursuant to a Sub-Investment Advisory Agreement between the Investment
Adviser and Sinopia Asset Management, the sub-advisory fee is computed at the
annual rate of .20 of 1% of the value of the Fund's average weekly net assets
and is payable monthly by the Investment Adviser.
DREYFUS STRATEGIC GOVERNMENTS INCOME, INC.
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The Fund compensates Mellon, an affiliate of the Investment Adviser, under a
transfer agency agreement for providing personnel and facilities to perform
transfer agency services for the Fund. During the period ended November 30,
1998, the Fund was charged $33,620 pursuant to the transfer agency agreement.
(B) Each director who is not an "affiliated person" as defined in the Act
receives from the Fund an annual fee of $4,500 and an attendance fee of $500 per
meeting. The Chairman of the Board receives an additional 25% of such
compensation.
NOTE 3--SECURITIES TRANSACTIONS:
(A) The aggregate amount of purchases and sales of investment securities
(including paydowns) , excluding short-term securities, financial futures,
forward currency exchange contracts and options transactions, during the period
ended November 30, 1998, amounted to $900,095,866 and $903,193,309,
respectively.
In addition, the following summarizes open forward currency exchange
contracts at November 30, 1998:
<TABLE>
Foreign Unrealized
Currency Appreciation
Forward Currency Exchange Contracts Amount Proceeds Value (Depreciation)
_________________________________ _______________ ____________ ____________ ___________
<S> <C> <C> <C> <C>
Sales:
Belgian Francs, expiring 1/28/99 . . . . . . . . . . 218,000,000 $ 6,210,826 $ 6,234,101 $ (23,275)
British Pounds, expiring 1/28/99 . . . . . . . . . . 4,200,000 6,955,200 6,915,589 39,611
Canadian Dollars, expiring 1/28/99 . . . . . . . . . 6,000,000 3,870,968 3,916,202 (45,234)
Danish Krone, expiring 1/28/99 . . . . . . . . . . . 16,800,000 2,596,600 2,611,242 (14,642)
French Francs, expiring 1/28/99 . . . . . . . . . . . 28,140,000 4,938,575 4,968,828 (30,253)
German Deutsche Marks, expiring 1/28/99 . . . . . . . 5,850,000 3,443,202 3,461,372 (18,170)
Greek Drachmas, expiring 1/28/99 . . . . . . . . . . 450,000,000 1,592,920 1,569,086 23,834
Italian Lire, expiring 1/28/99 . . . . . . . . . . . 18,950,000,000 11,259,655 11,327,490 (67,835)
Japanese Yen, expiring 1/28/99 . . . . . . . . . . . 1,125,000,000 9,422,111 9,208,999 213,112
New Zealand Dollars, expiring 1/28/99 . . . . . . . . 4,700,000 2,520,140 2,471,492 48,648
Spanish Pesetas, expiring 1/28/99 . . . . . . . . . . 1,150,000,000 7,952,974 7,983,549 (30,575)
Swedish Krona, expiring 1/28/99 . . . . . . . . . . . 23,150,000 2,868,649 2,848,469 20,180
Swiss Francs, expiring 1/28/99 . . . . . . . . . . . 2,460,000 1,760,916 1,774,809 (13,893)
________
Total . . . . . . . . . . . . . . . . . . . . . . $101,508
________
</TABLE>
The Fund enters into forward currency exchange contracts in order to hedge
its exposure to changes in foreign currency exchange rates on its foreign
portfolio holdings. When executing forward currency exchange contracts, the Fund
is obligated to buy or sell a foreign currency at a specified rate on a certain
date in the future. With respect to sales of forward currency exchange
contracts, the Fund would incur a loss if the value of the contract increases
between the date the forward contract is opened and the date the forward
contract is closed. The Fund realizes a gain if the value of the contract
decreases between those dates. With respect to purchases of forward currency
exchange contracts, the Fund would incur a loss if the value of the contract
decreases between the date the forward contract is opened and the date the
forward contract is closed. DREYFUS STRATEGIC GOVERNMENTS INCOME, INC.
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The Fund realizes a gain if the value of the contract increases between those
dates. The Fund is also exposed to credit risk associated with counter party
nonperformance on these forward currency exchange contracts which is typically
limited to the unrealized gain on each open contract.
In addition, the following table summarizes the Fund's call/put options
written for the period ended November 30, 1998:
<TABLE>
Options Terminated
____________________
Net
Number of Premiums Realized
Contracts Received Cost Gain (Loss)
__________ __________ __________ __________
<S> <C> <C> <C> <C>
OPTIONS WRITTEN:
Contracts outstanding November 30, 1997. . . . . . ......... 500 $ 600,000
Contracts written. ................................................. 1,500 1,040,949
_____ __________
Contracts terminated:
Closed......................................................... 1,600 1,462,824 $1,567,249 ($104,425)
Expired . ................................................... .400 178,125 -- 178,125
_____ __________ __________ __________
Total contracts terminated ......................... 2,000 1,640,949 $1,567,249 $ 73,700
_____ __________ __________ __________
Contracts outstanding November 30, 1998. ................... ----- ---------- ---------- ----------
</TABLE>
The Fund may purchase and write (sell) put and call options in order to gain
exposure to or protect against changes in the market.
As a writer of call options, the Fund receives a premium at the outset and
then bears the market risk of unfavorable changes in the price of the financial
instrument underlying the option. Generally, the Fund would incur a gain, to the
extent of the premium, if the price of the underlying financial instrument
decreases between the date the option is written and the date on which the
option is terminated. Generally, the Fund would realize a loss, if the price of
the financial instrument increases between those dates.
As a writer of put options, the Fund receives a premium at the outset and then
bears the market risk of unfavorable changes in the price of the financial
instrument underlying the option. Generally, the Fund would incur a gain, to the
extent of the premium, if the price of the underlying financial instrument
increases between the date the option is written and the date on which the
option is terminated. Generally, the Fund would realize a loss, if the price of
the financial instrument decreases between those dates.
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 DREYFUS STRATEGIC
GOVERNMENTS INCOME, INC.
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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 November 30, 1998 are set forth in the Statement of Financial Futures.
(B) At November 30, 1998, accumulated net unrealized depreciation on
investments, financial futures, and forward currency exchange contracts was
$1,363,856, consisting of $3,721,817 gross unrealized appreciation and
$5,085,673 gross unrealized depreciation.
At November 30, 1998, the cost of investments for Federal income tax purposes
was substantially the same as the cost for financial reporting purposes (see the
Statement of Investments).
DREYFUS STRATEGIC GOVERNMENTS INCOME, INC.
- -----------------------------------------------------------------------------
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF DIRECTORS
DREYFUS STRATEGIC GOVERNMENTS INCOME, INC.
We have audited the accompanying statement of assets and liabilities of
Dreyfus Strategic Governments Income, Inc., including the statements of
investments and financial futures, as of November 30, 1998 and the related
statement of operations for the year then ended, the statement of changes in net
assets for each of the two years in the period then ended, and financial
highlights for the periods indicated therein. 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 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 Strategic Governments Income, Inc., at November 30, 1998, the results of
its operations for the year then ended, the changes in its net assets for each
of the two years in the period then ended, and the financial highlights for the
periods indicated therein, in conformity with generally accepted accounting
principles.
New York, New York
January 12, 1999
DREYFUS STRATEGIC GOVERNMENTS INCOME, INC.
- -----------------------------------------------------------------------------
DIVIDEND REINVESTMENT AND CASH PURCHASE PLAN (UNAUDITED)
The Fund generally distributes net investment income and any net realized
short-term capital gains monthly, and net realized long-term capital gains at
least annually.
Under the Fund's Dividend Reinvestment and Cash Purchase Plan (the "Plan"), a
shareholder who has Fund shares registered in his own name will have all
distributions reinvested automatically by Mellon, as Plan agent (the "Agent"),
in additional shares of the Fund' s Common Stock at the lower of prevailing
market price or net asset value (but not less than 95% of market value at the
time of valuation) unless such shareholder elects to receive cash as provided
below. If market price is equal to or exceeds net asset value, shares will be
issued at net asset value. If net asset value exceeds market price or if a
dividend or other distribution payable only in cash is declared, the Agent, as
agent for the Plan participants, will buy shares of the Fund's Common Stock in
the open market. A Plan participant is not relieved of any income tax that may
be payable on such dividends or distributions.
A shareholder who owns Fund shares registered in the name of his
broker/dealer or other nominee (i.e., in "street name") may not participate in
the Plan, but may elect to have cash dividend distributions reinvested by his
broker/dealer or other nominee in additional shares of the Fund if such service
is provided by the broker/dealer or other nominee; otherwise such distributions
will be treated like any other cash dividend.
A shareholder who has Fund shares registered in his name may elect to
withdraw from the Plan at any time for a $5.00 fee and thereby elect to receive
cash in lieu of shares of the Fund. Changes in elections must be in writing,
sent to Mellon Bank, N.A., c/o ChaseMellon Shareholder Services, P.O. Box 3338,
South Hackensack, NJ 07606-1938, should include the shareholder's name and
address as they appear on the Agent's records and will be effective only if
received more than fifteen days prior to the record date for any distribution.
A Plan participant who has Fund shares registered in his name has the option
of making additional cash payments to the Agent, semi-annually, in any amount
from $100 to $500, for investment in the Fund's shares in the open market on or
about January 15 and July 15. Any voluntary cash payments received more than 30
days prior to these dates will be returned by the Agent, and interest will not
be paid on any uninvested cash payments. A participant may withdraw a voluntary
cash payment by written notice, if the notice is received by the Agent not less
than 48 hours before the payment is to be invested. A shareholder who owns Fund
shares registered in street name should consult his broker/dealer to determine
whether an additional cash purchase option is available through his
broker/dealer.
The Agent maintains all shareholder accounts in the Plan and furnishes
written confirmations of all transactions in the account. Shares in the account
of each Plan participant will be held by the Agent in non-certificated form in
the name of the participant, and each such participant's proxy will include
those shares purchased pursuant to the Plan.
Plan participants pay an Agent's fee of $.50 per reinvestment of dividends
and distributions, a pro rata share of brokerage commissions incurred with
respect to the Agent's open market purchases and purchases from voluntary cash
payments, and a $3.00 fee for each purchase made from a voluntary cash payment.
The Fund reserves the right to amend or terminate the Plan as applied to any
voluntary cash payments made and any dividend or distribution paid subsequent to
written notice of the change sent to Plan participants at least 90 days before
the record date for such dividend or distribution. The Plan also may be amended
or terminated by the Agent on at least 90 days' written notice to Plan
participants.
DREYFUS STRATEGIC GOVERNMENTS INCOME, INC.
- -----------------------------------------------------------------------------
PROXY RESULTS (UNAUDITED)
During the fiscal year ended November 30, 1998, stockholders voted on the
following proposals presented at the annual stockholders' meeting held on June
5, 1998. The description of each proposal and the number of shares voted are as
follows:
<TABLE>
Shares
________________________________________________________
For Against Abstained
____________ ____________ ____________
<S> <C> <C> <C>
1. To consider a proposal to convert the Fund
from a closed-end investment company
to an open-end investment company. . . . . . . . . . . . . . . 2,641,837 4,845,096 485,985
2. To ratify the selection of Ernst & Young LLP
as independent auditors of the Fund. . . . . . . . . . . . . . 12,604,319 129,089 186,264
For Authority Withheld
___________________ ___________________
3. To elect two Class III Directors:*
Diane Dunst . . . . . . . . . . . . . . . . . . . . . . 12,213,593 706,079
Rosalind Gersten Jacobs . . . . . . . . . . . . . . . . 12,205,831 713,841
- -----------------------------
</TABLE>
* The terms of these Class III Directors expire in 2001.
OFFICERS AND DIRECTORS
DREYFUS STRATEGIC GOVERNMENTS INCOME, INC.
200 Park Avenue
New York, NY 10166
Directors
Joseph S. DiMartino, Chairman
David W. Burke
Diane Dunst
Rosalind Gersten Jacobs
Jay I. Meltzer
Daniel Rose
Warren B. Rudman
Sander Vanocur
Officers
President and Treasurer
Marie E. Connolly
Vice President and Secretary
Margaret W. Chambers
Vice President and Assistant Treasurer
Mary A. Nelson
Vice President, Assistant Treasurer and Assistant Secretary
Michael S. Petrucelli
Vice President, Assistant Treasurer and Assistant Secretary
Stephanie Pierce
Vice President and Assistant Treasurer
George A. Rio
Vice President and Assistant Treasurer
Joseph F. Tower, III
Vice President and Assistant Secretary
Douglas C. Conroy
Vice President and Assistant Secretary
Christopher J. Kelley
Vice President and Assistant Secretary
Kathleen K. Morrisey
Vice President and Assistant Secretary
Elba Vasquez
Portfolio Managers
Kevin McClintock
Gerald Thunelius
Jean Charles Bertrand
Michel-Andre Levy
Thierry Mirabe
Jacques Sikarov
Investment Adviser
The Dreyfus Corporation
Sub-Investment Adviser
Sinopia Asset Management
Custodian
The Bank of New York
Counsel
Stroock & Stroock & Lavan LLP
Transfer Agent, Dividend Distribution Agent and Registrar Mellon Bank, N.A.
Stock Exchange Listing
NYSE Symbol: DSI
Initial SEC Effective Date
June 23, 1988
The Net Asset Value appears in the following publications: Barron's, Closed-End
Funds section under the heading "World Income Funds" every Monday; Wall Street
Journal, Mutual Funds section under the heading "Closed-End Funds World Income
Funds" every Monday; New York Times, Business Section under the heading
"Closed-End Funds World Income Funds" every Sunday.
Notice is hereby given in accordance with Section 23(c) of the Investment
Company Act of 1940, as amended, that the Fund may purchase shares of its common
stock in the open market when it can do so at prices below the then current net
asset value per share.
- --------------------------------------------------------------------------------
[reg.tm logo]
(reg.tm)
DREYFUS STRATEGIC GOVERNMENTS
INCOME, INC.
200 Park Avenue
New York, NY 10166
INVESTMENT ADVISER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
SUB-INVESTMENT ADVISER
Sinopia Asset Management
66 Rue de la Chaussee d'Antin
Paris, France 75009
CUSTODIAN
The Bank of New York
90 Washington Street
New York, NY 10286
TRANSFER AGENT,
DIVIDEND DISBURSING AGENT
& REGISTRAR
Mellon Bank, N.A.
85 Challenger Road
Ridgefield Park, NJ 07660
Printed in U.S.A. 429AR9811
Strategic
Governments
Income, Inc.
Annual Report
November 30, 1998
