LETTER TO SHAREHOLDERS
Dear Shareholder:
Last year's bond market experience was volatile, and the losses
registered by fixed income securities during 1994 were unprecedented in
recent history. This turmoil resulted from the Federal Reserve Board's series
of short-term interest rate hikes. The hikes were precipitated by the Fed's
concern over the prospects for inflation. To date, the Fed has pushed
short-term rates 300 basis points higher since February of 1994 through a
series of seven rate hikes.
The resulting decline in the value of municipal bonds during 1994 was
intensified by other forces. In our view, the Omnibus Budget Reconciliation
Act of 1993, requiring the taxation of market discount gains as ordinary
income (as opposed to capital gains) accentuated the loss in value of
municipals. Furthermore, late in the calendar year many investors sold bond
mutual fund shares as well as individual bonds to create year-end tax losses.
This occurred on the heels of the Orange County, California municipal
bankruptcy which resulted from leveraged speculation on interest rates.
Municipal bond investors became concerned as the Orange County story
unfolded, and these worries intensified amidst speculation about similar
problems elsewhere. These factors combined to accentuate an already
tumultuous situation. Fortunately, the sharp decline in the issuance of new
municipal debt during the year helped mitigate the market's decline.
Late in the calendar year, the municipal bond market began to find
support as market fears regarding the economy and rising inflation moderated.
What has ensued is a strong market rally thus far in 1995. Long-term rates
have declined by over 70 basis points, thereby recouping a large portion of
the previous year's losses. In the case of Dreyfus Municipal Income, Inc.,
for the semi-annual period ending March 31, 1995, the Fund's net asset value
rose by over 1% while the stock price per share rose by over 7%, indicative
of the recent strong rebound in prices.
In spite of the volatility of prices, the Fund distributed a high level
of tax-free dividends. Shareholders received income dividends during the past
six months of $.345 per share, equating to a 7.26% annualized tax free
distribution rate per share based on the March 31, 1995 closing market price
of $9.50.* An individual investor in the maximum Federal income tax bracket
would have had to earn over 12% from a comparable taxable investment to
achieve the same return.
We have been, and currently are, strong advocates of maintaining a
disciplined, long-term approach to investing. This Fund is currently
structured to seek high current income and investment performance over the
long term. Abandoning such a strategy while attempting to time the market
during periods of weakness can be detrimental should one's timing not be
precise. Certainly, the market's behavior during the past year underscores
this fact. As mentioned previously, the strong rebound in prices since last
November has benefited those investors who elected to stay the course.
Going forward, we feel that 1995 could be a good year for the municipal
bond market. We believe that the weakness exhibited in certain key areas of
the economy such as housing and automobile sales should soon extend to other
sectors as well. Furthering our optimism is the dearth of new supply issuance
in the tax exempt market. We expect the sharp curtailment of bond issuance to
continue. As always, we will monitor the market to see what develops.
We appreciate your investment in the Fund, and look forward to serving
your investment needs in the future.
Very truly yours,
(logo signature)
Richard J. Moynihan
Director, Municipal Portfolio Management
The Dreyfus Corporation
April 10, 1995
New York, N.Y.
*Income may be subject to state and local taxes. Some income may be
subject to the Federal Alternative Minimum Tax (AMT) for certain
shareholders.
<TABLE>
<CAPTION>
DREYFUS MUNICIPAL INCOME, INC.
STATEMENT OF INVESTMENTS MARCH 31, 1995 (UNAUDITED)
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS--100.0% AMOUNT VALUE
------------ -----------
<S> <C> <C>
ARIZONA--1.5%
Tucson Airport Authority, Special Facility Revenue (Lockheed Aeromod Center
Inc.)
8.70%, 9/1/2019......................................................... $ 2,500,000 $ 2,823,275
COLORADO--6.2%
City and County of Denver, Airport Revenue:
8.25%, 11/15/2012....................................................... 6,500,000 6,947,265
8%, 11/15/2017.......................................................... 2,000,000 2,068,820
8.50%, 11/15/2023....................................................... 2,475,000 2,665,253
FLORIDA--11.1%
Leon County Educational Facilities Authority, COP (Southgate Residence Hall
Project):
3.75%, 12/1/1995(a)..................................................... 247,560 49,512
9%, 9/1/2014 (a,b)...................................................... 5,000,000 1,000,000
Orange County Health Facilities Authority, Revenue (Mental Health Services)
9.25%, 7/1/2020......................................................... 4,895,000 5,214,741
Palm Beach County, Solid Waste IDR:
(Okeelanta Power Limited Partnership Project)
6.85%, 2/15/2021...................................................... 7,450,000 7,153,490
(Osceola Power Limited Partnership Project)
6.95%, 1/1/2022....................................................... 2,700,000 2,613,735
Pinellas County Housing Finance Authority, SFMR (Multi-County Program)
6.70%, 2/1/2028......................................................... 5,000,000 5,052,250
GEORGIA--4.0%
Private Colleges and Universities Facilities Authority, Revenue,
Refunding (Clark Atlanta University Project) 8.25%, 1/1/2015............ 7,000,000 7,596,610
ILLINOIS--20.2%
Chicago O'Hare International Airport, Special Facility Revenue:
(American Airlines Inc. Project):
Refunding, 8.20%, 12/1/2024........................................... 1,000,000 1,100,090
7.875%, 11/1/2025..................................................... 2,000,000 2,091,880
(United Airlines Inc. Project):
8.40%, 5/1/2018....................................................... 8,385,000 8,960,043
8.50%, 5/1/2018....................................................... 2,000,000 2,147,360
Illinois Development Finance Authority, Revenue
(Community Rehabilitation Providers Facility Acquisition):
8.75%, 3/1/2010....................................................... 2,155,000 2,270,293
8.50%, 9/1/2010....................................................... 5,000,000 5,242,350
Illinois Health Facilities Authority, Revenue, Refunding (Galesburg Cottage
Hospital)
9.625%, 5/1/2011 (Prerefunded 5/1/1997) (c)............................. 5,000,000 5,579,000
Robbins, RRR, (Robbins Resource Recovery Partners)
9.25%, 10/15/2016....................................................... 10,000,000 10,854,100
INDIANA--3.1%
Fishers Economic Development, First Mortgage Revenue
(United Student Funds Inc.) 8.375%, 9/1/2014............................ 5,700,000 5,959,179
DREYFUS MUNICIPAL INCOME, INC.
STATEMENT OF INVESTMENTS (CONTINUED) MARCH 31, 1995 (UNAUDITED)
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
---------- -------------
KENTUCKY--1.8%
Perry County, SWDR (TJ International Project)
7%, 6/1/2024............................................................ $ 3,500,000 $ 3,469,410
MASSACHUSETTS--.3%
Massachusetts Housing Finance Agency, SFHR:
8.10%, 8/1/2023......................................................... 505,000 526,149
MICHIGAN--10.8%
Detroit Sewage Disposal System, Revenue
5.70%, 7/1/2023 (Insured; FGIC)......................................... 10,000,000 9,425,000
Michigan Hospital Finance Authority,
HR, Refunding (Genesys Health System Obligated Group) 8.125%, 10/1/2021. 7,670,000 7,984,930
Michigan Strategic Fund, SWDR, Refunding (Genesee Power Station Project)
7.50%, 1/1/2021......................................................... 3,000,000 2,957,430
MINNESOTA--1.1%
Minnesota Housing Finance Agency, SFMR 8%, 7/1/2029......................... 1,960,000 2,042,692
NEW HAMPSHIRE--2.7%
New Hampshire Industrial Development Authority, PCR
(Public Service Company of New Hamphire ) 7.65%, 5/1/2021............... 5,000,000 5,191,500
NEW YORK--3.7%
New York City, GO:
8.25%, 11/15/2010....................................................... 1,555,000 1,697,967
8.25%, 11/15/2010 (Prerefunded 11/15/2001) (c).......................... 1,445,000 1,727,916
New York City Industrial Development Agency, Special Facility Revenue
(American Airlines Inc. Project) 7.75%, 7/1/2019........................ 3,390,000 3,522,685
NEVADA--1.6%
Clark County, IDR (Southwest Gas Corp.) 7.50%, 9/1/2032..................... 3,000,000 3,089,400
NORTH DAKOTA--.7%
North Dakota Housing Finance Agency, SFMR 8.30%, 1/1/2012................... 1,189,000 1,232,838
PENNSYLVANIA--6.8%
Huntingdon County Industrial Development Authority, First Mortgage Revenue
(Presbyterian Homes-Woodland Retirement Center Project) 8%, 12/1/2020... 3,000,000 3,152,280
Lancaster County Hospital Authority, Health Care Revenue
(United Church Homes Project) 9.125%, 10/1/2014 (Prerefunded 10/1/1999) (c) 2,000,000 2,359,040
Montgomery County Higher Education and Health Authority, HR
(United Hospital Inc.- Saint Christopher) 8.50%, 11/1/2017.............. 4,865,000 4,987,939
Pennsylvania Economic Development Financing Authority, RRR
(Northampton Generating-A) 6.60%, 1/1/2019.............................. 2,500,000 2,282,650
TENNESSEE--4.0%
Tennessee Housing Development Agency (Homeownership Program)
8.125%, 7/1/2021........................................................ 7,150,000 7,623,759
TEXAS--14.8%
Alliance Airport Authority Inc., Special Facilities Revenue (American
Airlines Inc. Project)
7.50%, 12/1/2029........................................................ 2,375,000 2,432,879
DREYFUS MUNICIPAL INCOME, INC.
STATEMENT OF INVESTMENTS (CONTINUED) MARCH 31, 1995 (UNAUDITED)
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
------------- --------------
TEXAS (CONTINUED)
Austin, Convention Center Revenue 8.25%, 11/15/2014 (Prerefunded 11/15/1999)(c) $ 5,500,000 $ 6,356,186
Bell County Health Facilities Development Corp., Revenue
(Southern Healthcare-Southview) 10.50%, 3/1/2020........................ 4,895,000 5,404,178
Montgomery County Health Facilities Development Corp., Hospital Mortgage
Revenue (Woodlands Medical Center Project) 8.85%, 8/15/2014................. 5,330,000 5,717,864
Texas Housing Agency, SFMR:
9.375%, 9/1/2016........................................................ 3,945,000 4,062,245
8.40%, 7/1/2020......................................................... 1,665,000 1,749,532
8.40%, 1/1/2021......................................................... 2,240,000 2,353,725
UTAH--4.0%
Carbon County, SWDR, Refunding (Sunnyside Cogeneration)
9.25%, 7/1/2018......................................................... 7,000,000 7,568,890
WYOMING--1.6%
Sweetwater County, SWDR (FMC Corp. Project)
7%, 6/1/2024............................................................ 3,000,000 3,034,320
----------
TOTAL INVESTMENTS
(cost $183,474,696)..................................................... $189,342,650
============
</TABLE>
<TABLE>
<CAPTION>
SUMMARY OF ABBREVIATIONS
<S> <C> <S> <C>
COP Certificate of Participation PCR Pollution Control Revenue
FGIC Financial Guaranty Insurance Company RRR Resources Recovery Revenue
GO General Obligation SFHR Single Family Housing Revenue
HR Hospital Revenue SFMR Single Family Mortgage Revenue
IDR Industrial Development Revenue SWDR Solid Waste Disposal Revenue
</TABLE>
<TABLE>
<CAPTION>
SUMMARY OF COMBINED RATINGS
FITCH (d) OR MOODY'S OR STANDARD & POOR'S PERCENTAGE OF VALUE
- --------- --------- -------------------- -----------------------
<S> <C> <C> <C>
AAA Aaa AAA 10.6%
AA Aa AA 10.1
A A A 3.3
BBB Baa BBB 31.4
BB Ba BB 2.6
Not Rated (e) Not Rated (e) Not Rated (e) 42.0
------
100.0%
=======
</TABLE>
NOTES TO STATEMENT OF INVESTMENTS:
(a) The valuation of this security has been determined in good faith
under the direction of the Board of Directors.
(b) Non-income producing security; interest payment in default.
(c) Bonds which are prerefunded are collateralized by U.S. Government
securities which are held in escrow and are used to pay principal and
interest on the municipal issue and to retire bonds in full at the
earliest refunding date.
(d) Fitch currently provides creditworthiness information for a limited
number of investments.
(e) Securities which, while not rated by Fitch, Moody's or Standard &
Poor's have been determined by the Fund's Board of Directors to be of
comparable quality to those rated securities in which the Fund may
invest.
See independent accountants' review report and notes to financial statements.
<TABLE>
<CAPTION>
DREYFUS MUNICIPAL INCOME, INC.
STATEMENT OF ASSETS AND LIABILITIES MARCH 31, 1995 (UNAUDITED)
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $183,474,696)_see statement..................................... $189,342,650
Receivable for investment securities sold............................... 4,622,056
Interest receivable..................................................... 3,828,369
--------------
197,793,075
LIABILITIES:
Due to The Dreyfus Corporation.......................................... $ 113,192
Due to Custodian........................................................ 641,521
Payable for investment securities purchased............................. 5,329,038
Accrued expenses........................................................ 149,325 6,233,076
------------ --------------
NET ASSETS ................................................................ $191,559,999
=============
REPRESENTED BY:
Paid-in capital......................................................... $187,005,400
Accumulated undistributed investment income_net......................... 1,348,105
Accumulated net realized (loss) on investments.......................... (2,661,460)
Accumulated net unrealized appreciation on investments_Note 3........... 5,867,954
------------
NET ASSETS at value applicable to 20,083,550 outstanding shares of
Common Stock, equivalent to $9.54 per share
(110 million shares of $.001 par value authorized)...................... $191,559,999
=============
</TABLE>
See independent accountants' review report and notes to financial statements.
<TABLE>
<CAPTION>
DREYFUS MUNICIPAL INCOME, INC.
STATEMENT OF OPERATIONS SIX MONTHS ENDED MARCH 31, 1995 (UNAUDITED)
<S> <C> <C>
INVESTMENT INCOME:
INTEREST INCOME......................................................... $7,327,522
EXPENSES:
Management fee_Note 2(a).............................................. $ 644,778
Shareholder servicing costs........................................... 47,587
Shareholders' reports................................................. 46,225
Professional fees..................................................... 33,366
Directors' fees and expenses_Note 2(b)................................ 19,203
Custodian fees........................................................ 10,385
Miscellaneous......................................................... 6,635
------------
TOTAL EXPENSES.................................................... 808,179
------------
INVESTMENT INCOME--NET............................................ 6,519,343
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized (loss) on investments_Note 3............................... $(1,918,258)
Net unrealized appreciation on investments.............................. 4,907,079
------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS................... 2,988,821
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $9,508,164
=============
See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS MUNICIPAL INCOME, INC.
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED SIX MONTHS ENDED
SEPTEMBER 30, MARCH 31, 1995
1994 (UNAUDITED)
--------------- --------------
<S> <C> <C>
OPERATIONS:
Investment income_net................................................ $ 13,397,733 $ 6,519,343
Net realized (loss) on investments................................... (733,724) (1,918,258)
Net unrealized appreciation (depreciation) on investments for the period (17,910,279) 4,907,079
--------------- --------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS.... (5,246,270) 9,508,164
--------------- --------------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income_net................................................ (13,971,942) (6,920,012)
Net realized gain on investments..................................... (1,517,848) --
--------------- --------------
TOTAL DIVIDENDS.................................................... (15,489,790) (6,920,012)
--------------- --------------
CAPITAL STOCK TRANSACTIONS;
Dividends reinvested_Note 1(c)....................................... 2,466,951 241,835
--------------- --------------
TOTAL INCREASE (DECREASE) IN NET ASSETS............................ (18,269,109) 2,829,987
NET ASSETS:
Beginning of period.................................................. 206,999,121 188,730,012
--------------- --------------
End of period (including undistributed investment income_net:
$1,748,774 in 1994 and $1,348,105 in 1995)......................... $188,730,012 $191,559,999
============= ============
SHARES SHARES
--------------- --------------
CAPITAL SHARE TRANSACTIONS;
INCREASE IN SHARES OUTSTANDING AS A RESULT OF DIVIDENDS REINVESTED... 243,882 25,537
============= ============
See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS MUNICIPAL 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 financial statements and market price
data for the Fund's shares.
YEAR ENDED SEPTEMBER 30, SIX MONTHS ENDED
--------------------------------------------------- MARCH 31, 1995
PER SHARE DATA: 1990 1991 1992 1993 1994 (UNAUDITED)
------- ------ ------ ------- ------ --------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period.. $ 9.52 $ 9.34 $ 9.83 $10.06 $10.45 $ 9.41
------- ------ ------ ------- ------ -------
INVESTMENT OPERATIONS:
Investment income--net................ .73 .72 .71 .71 .67 .32
Net realized and unrealized gain (loss)
on investments...................... (.19) .49 .30 .44 (.93) .15
------- ------ ------ ------- ------ -------
TOTAL FROM INVESTMENT OPERATIONS.... .54 1.21 1.01 1.15 (.26) .47
------- ------ ------ ------- ------ -------
DISTRIBUTIONS:
Dividends from investment income--net. (.70) (.68) (.70) (.70) (.70) (.34)
Dividends from net realized gain on investments (.02) (.04) (.08) (.06) (.08) --
------- ------ ------ ------- ------ -------
TOTAL DISTRIBUTIONS................. (.72) (.72) (.78) (.76) (.78) (.34)
------- ------ ------ ------- ------ -------
Net asset value, end of period........ $ 9.34 $ 9.83 $10.06 $10.45 $ 9.41 $ 9.54
======= ======= ====== ======= ======== ========
Market Value, end of period........... $ 9 1/4 $10 $10 1/2 $10 3/4 $ 8 7/8 $ 9 1/2
======= ======= ====== ======= ======== ========
TOTAL INVESTMENT RETURN(1)................ (.21%) 16.61% 13.61% 10.30% (10.77%) 22.30%(2)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets .85% .88% .86% .83% .84% .88%(2)
Ratio of net investment income to average
net assets.......................... 7.73% 7.61% 7.20% 7.01% 6.76% 7.08%(2)
Portfolio Turnover Rate............... 27.11% 36.40% 22.75% 11.94% 14.41% 24.00%(3)
Net Assets, end of period (000's Omitted) $176,356 $188,441 $195,991 $206,999 $188,730 $191,560
(1) Calculated based on market value.
(2) Annualized.
(3) Not annualized.
See independent accountants' review report and notes to financial statements.
</TABLE>
DREYFUS MUNICIPAL INCOME, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES:
The Fund is registered under the Investment Company Act of 1940 ("Act")
as a non-diversified closed-end management investment company. The Dreyfus
Corporation ("Manager") serves as the Fund's investment adviser. The Manager
is a direct subsidiary of Mellon Bank, N.A.
(A) PORTFOLIO VALUATION: Investments in municipal debt securities
(excluding options and financial futures on municipal and U.S. treasury
securities) are valued on the last business day of each week and month 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 municipal securities of
comparable quality, coupon, maturity and type; indications as to values from
dealers; and general market conditions. Options and financial futures on
municipal and U.S. treasury 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 on the last business
day of each week and month. Investments 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.
(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 original issue discounts on
investments is earned from settlement date and recognized on the accrual
basis. Securities purchased or sold on a when issued or delayed-delivery
basis may be settled a month or more after the trade date.
(C) DIVIDENDS TO SHAREHOLDERS: Dividends are recorded on the ex-dividend
date. Dividends from investment income-net are declared and paid monthly.
Dividends from net realized capital gain, if any, are declared and paid at
least annually. 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.
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 the 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 Bank, N.A. 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 March 30, 1995, the Board of Directors declared a cash dividend of
$.0575 per share from investment income-net, payable on April 28, 1995 to
shareholders of record as of the close of business on April 13, 1995.
DREYFUS MUNICIPAL INCOME, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
(D) QUARTERLY RESULTS OF OPERATIONS:
<TABLE>
<CAPTION>
NET INCREASE
NET REALIZED & (DECREASE)
UNREALIZED IN NET ASSETS
TOTAL INVESTMENT NET NVESTMENT GAIN (LOSS) RESULTING FROM
INCOME INCOME ON INVESTMENTS OPERATIONS
----------------- ----------------- ----------------- -----------------
(000'S) PER (000'S) PER (000'S) PER (000'S) PER
QUARTER ENDED OMITTED SHARE OMITTED SHARE OMITTED SHARE OMITTED SHARE
------ ------ ------- ------ ------- ------ ------ --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
December 31, 1993.............. $ 3,857 $ 0.19 $ 3,415 $ 0.17 $(691) $(0.03) $ 2,724 $ 0.14
March 31, 1994................. 3,810 0.19 3,398 0.17 (13,072) (0.65) (9,674) (0.48)
June 30, 1994.................. 3,725 0.19 3,316 0.17 (1,564) (0.08) 1,752 0.09
September 30, 1994............. 3,673 0.18 3,269 0.16 (3,317) (0.17) (48) (0.01)
------ ------ ------- ------ ------- ------ ------ --------
TOTAL...................... $15,065 $ 0.75 $13,398 $ 0.67 $(18,644) $(0.93) $(5,246) $(0.26)
------ ------ ------- ------ ------- ------ ------ --------
December 31, 1994.............. $ 3,662 $ 0.18 $ 3,267 $ 0.16 $ (6,326) $(0.31) $(3,059) $(0.15)
March 31, 1995................. 3,666 0.18 3,252 0.16 9,315 0.46 12,567 0.62
------ ------ ------- ------ ------- ------ ------ --------
TOTAL...................... $ 7,328 $ 0.36 $ 6,519 $ 0.32 $ 2,989 $ 0.15 $ 9,508 $ 0.47
------ ------ ------- ------ ------- ------ ------ --------
</TABLE>
(E) 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 Internal
Revenue Code, and to make distributions of income and net realized capital
gain sufficient to relieve it from substantially all Federal income and
excise taxes.
NOTE 2--MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
(A) Pursuant to a management agreement ("Agreement") with the Manager,
the management fee is computed at the annual rate of .70 of 1% of the average
weekly value of the Fund's net assets and is payable monthly. The Agreement
provides for an expense reimbursement from the Manager should the Fund's
aggregate expenses, exclusive of taxes, interest on borrowings, brokerage and
extraordinary expenses, exceed the expense limitation of any state having
jurisdiction over the Fund for any full fiscal year. There was no expense
reimbursement for the six months ended March 31, 1995.
(B) Prior to August 24, 1994, certain officers and directors, and prior
to February 1, 1995, certain officers, of the Fund were "affiliated persons,"
as defined in the Act, of the Manager and/or Dreyfus Service Corporation.
Each director who is not an "affiliated person" receives an annual fee of
$2,500 and an attendance fee of $250 per meeting. The Chairman of the Board
receives an additional 25% of such compensation.
NOTE 3--SECURITIES TRANSACTIONS:
The aggregate amount of purchases and sales of investment securities
amounted to $69,622,644 and $68,062,908, respectively, for the six months
ended March 31, 1995, and consisted entirely of long-term and short-term
municipal investments.
At March 31, 1995, accumulated net unrealized appreciation on investments
was $5,867,954, consisting of $10,800,427 gross unrealized appreciation and
$4,932,473 gross unrealized depreciation.
At March 31, 1995, the cost of investments for Federal income tax
purposes was substantially the same as the cost for financial reporting
purposes (see Statement of Investments).
DREYFUS MUNICIPAL INCOME, INC.
REVIEW REPORT OF ERNST & YOUNG LLP, INDEPENDENT ACCOUNTANTS
SHAREHOLDERS AND BOARD OF DIRECTORS
DREYFUS MUNICIPAL INCOME, INC.
We have reviewed the accompanying statement of assets and liabilities of
Dreyfus Municipal Income, Inc., including the statement of investments, as of
March 31, 1995, and the related statements of operations and changes in net
assets and financial highlights for the six month period ended March 31,
1995. These financial statements and financial highlights are the
responsibility of the Fund's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures
to financial data, and making inquiries of persons responsible for financial
and accounting matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing standards, which
will be performed for the full year with the objective of expressing an
opinion regarding the financial statements and financial highlights taken as
a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the interim financial statements and financial highlights
referred to above for them to be in conformity with generally accepted
accounting principles.
We have previously audited, in accordance with generally accepted
auditing standards, the statement of changes in net assets for the year ended
September 30, 1994 and financial highlights for each of the five years in the
period ended September 30, 1994 and in our report dated November 4, 1994, we
expressed an unqualified opinion on such statement of changes in net assets
and financial highlights.
(logo signature)
New York, New York
May 5, 1995
OFFICERS AND DIRECTORS
DREYFUS MUNICIPAL INCOME, INC.
200 Park Avenue
New York, NY 10166
DIRECTORS
Lucy Wilson Benson
David W. Burke
Joseph S. DiMartino
Martin D. Fife
Whitney I. Gerard
Robert R. Glauber
Arthur A. Hartman
George L. Perry
Paul Wolfowitz
OFFICERS
President and Treasurer
Marie E. Connolly
Vice President and Secretary
John E. Pelletier
Vice President and Assistant Treasurer
Frederick C. Dey
Vice President and Assistant Secretary
Eric B. Fischman
Assistant Treasurer
John J. Pyburn
Assistant Treasurer
Joseph F. Tower, III
Assistant Secretary
Paul D.Furcinito
Assistant Secretary
Ruth Leibert
PORTFOLIO MANAGERS:
Joseph P. Darcy
A. Paul Disdier
Karen M. Hand
Stephen C. Kris
Richard J. Moynihan
Jill C. Shaffro
L. Lawrence Troutman
Samuel J. Weinstock
Monica S. Wieboldt
INVESTMENT ADVISER
The Dreyfus Corporation
CUSTODIAN
The Bank of New York
COUNSEL
Stroock & Stroock & Lavan
TRANSFER AGENT,
DIVIDEND DISTRIBUTION AGENT
AND REGISTRAR
Mellon Bank, N.A.
STOCK EXCHANGE LISTING
AMEX Symbol: DMF
INITIAL SEC EFFECTIVE DATE
10/21/88
The Net Asset Value appears in the
following publications: Barron's,
Closed-End Bond Funds section
under the heading "Municipal
Bond Funds" every Monday; Wall
Street Journal, Mutual Funds
section under the heading
"Closed-End Bond Funds" every
Monday; New York Times,
Business section under the
heading "Closed-End Bond Funds"
every Monday.
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.
Printed in U.S.A. 856SA953
DREYFUS
MUNICIPAL
INCOME, INC.
SEMI-ANNUAL REPORT
MARCH 31, 1995
