PROSPECTUS
Dreyfus Massachusetts Municipal Money Market Fund
Investing in short-term, high quality municipal obligations for current income
exempt from federal and Massachusetts state income taxes
PROSPECTUS June 1, 1999
As revised, September 30, 1999
This prospectus is to be used only by asset management account clients of
HAMBRECHT & QUIST LLC
As with all mutual funds, the Securities and Exchange Commission has not
approved or disapproved these securities or passed upon the adequacy of this
prospectus. Any representation to the contrary is a criminal offense.
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Contents
THE FUND
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2 Goal/Approach
3 Main Risks
4 Past Performance
5 Expenses
6 Management
7 Financial Highlights
YOUR INVESTMENT
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8 Account Policies
11 Distributions and Taxes
FOR MORE INFORMATION
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Back Cover
What every investor should know about the fund
Information for managing your fund account
Where to learn more about this and other Dreyfus funds
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The Fund
Dreyfus Massachusetts Municipal Money Market Fund
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Ticker Symbol: DMAXX
GOAL/APPROACH
The fund seeks as high a level of current income -- exempt from federal and
Massachusetts state income taxes -- as is consistent with the preservation of
capital and the maintenance of liquidity. As a money market fund, the fund is
subject to maturity, quality and diversification requirements designed to help
it maintain a stable share price.
To pursue this goal, the fund normally invests substantially all of its assets
in short-term municipal obligations that provide income exempt from federal and
Massachusetts state personal income taxes. When the fund manager believes that
acceptable Massachusetts municipal obligations are unavailable for investment,
the fund may invest in securities that may be subject to Massachusetts state
income tax, but are free from federal income tax. Municipal obligations are
typically of two types:
* GENERAL OBLIGATION BONDS, which are secured by the
full faith and credit of the issuer and its taxing power
* REVENUE BONDS, which are payable from the revenues
derived from a specific revenue source, such as charges for water and sewer
service or highway tolls
MORE INFORMATION ON THE FUND CAN BE FOUND IN THE CURRENT ANNUAL/SEMIANNUAL
REPORT (SEE BACK COVER).
Concepts to understand
MONEY MARKET FUND: a specific type of fund that seeks to maintain a $1.00 price
per share. Money market funds are subject to strict federal requirements and
must:
* maintain an average dollar-weighted portfolio maturity of 90 days or
less
* buy individual securities that have remaining maturities of 13 months
or less
* invest only in high-quality dollar-denominated obligations
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MAIN RISKS
The fund's yield will fluctuate as market conditions and interest rates change
and as the short-term securities in its portfolio mature, and the proceeds are
reinvested in securities with different interest rates.
An investment in the fund is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. Although the fund seeks to
preserve the value of your investment at $1.00 per share, it is possible to lose
money by investing in the fund.
While the fund has maintained a constant share price since inception, and will
continue to try to do so, the following factors could reduce the fund's income
level and/or share price:
* interest rates could rise sharply, causing the
fund's share price to drop
* Massachusetts's economy and revenues underlying its
municipal obligations may decline
* the fund is non-diversified, meaning that its
portfolio securities may be more sensitive to risks that are specific to
investing primarily in a single state
* any of the fund's holdings could have its credit
rating downgraded or could default
Although the fund's objective is to generate income exempt from federal and
Massachusetts state income taxes, interest from some of its holdings may be
subject to the federal alternative minimum tax. In addition, the fund
temporarily may invest in municipal obligations that pay income exempt only from
federal personal income tax, or in high quality taxable money market
instruments.
Concepts to understand
CREDIT RATING: a measure of the issuer's expected ability to make all required
interest and principal payments in a timely manner.
An issuer with the highest credit rating has a very strong degree of certainty
(or safety) with respect to making all payments. An issuer with the
second-highest credit rating still has a strong capacity to make all payments,
although the degree of safety is somewhat less.
Generally, the fund is required to invest at least 95% of its assets in the
securities of issuers with the highest credit rating or the unrated equivalent
as determined by Dreyfus, with the remainder invested in securities with the
second-highest credit rating.
The Fund
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PAST PERFORMANCE
The tables below show some of the risks of investing in the fund. The first
table shows the changes in the fund's performance from year to year. The second
table averages the fund's performance over time. Both tables assume reinvestment
of dividends. Of course, past performance is no guarantee of future results.
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Year-by-year total return AS OF 12/31 EACH YEAR (%)
2.94 2.14 2.60 3.35 2.87 3.00 2.82
89 90 91 92 93 94 95 96 97 98
BEST QUARTER: Q2 '95 +0.89%
WORST QUARTER: Q1 '94 +0.49%
The fund's 7-day yield on 12/31/98 was 2.90%. For the fund's current yield, call
toll-free 1-800-645-6561.
THE FUND'S YEAR-TO-DATE TOTAL RETURN AS OF 3/31/99 WAS 0.58%.
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Average annual total return AS OF 12/31/98
Since
inception
1 Year 5 Years (3/1/91)
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2.82% 2.93% 2.99%
What this fund is -- and isn't
This fund is a mutual fund: a pooled investment that is professionally managed
and gives you the opportunity to participate in financial markets. It strives to
reach its stated goal, although as with all mutual funds, it cannot offer
guaranteed results.
An investment in this fund is not a bank deposit. It is not insured or
guaranteed by the FDIC or any other government agency. It is not a complete
investment program. You could lose money in this fund, but you also have the
potential to make money.
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EXPENSES
As an investor, you pay certain fees and expenses in connection with the fund,
which are described in the table below. Annual fund operating expenses are paid
out of fund assets, so their effect is included in the share price. The fund has
no sales charge (load) or Rule 12b-1 distribution fees.
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Fee table
ANNUAL FUND OPERATING EXPENSES
% OF AVERAGE DAILY NET ASSETS
Management fees 0.50%
Shareholder services fee 0.05%
Other expenses 0.09%
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TOTAL 0.64%
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Expense example
1 Year 3 Years 5 Years 10 Years
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$65 $205 $357 $798
This example shows what you could pay in expenses over time. It uses the same
hypothetical conditions other funds use in their prospectuses: $10,000 initial
investment, 5% total return each year and no changes in expenses. The figures
shown would be the same whether you sold your shares at the end of a period or
kept them. Because actual return and expenses will be different, the example is
for comparison only.
Concepts to understand
MANAGEMENT FEE: the fee paid to Dreyfus for managing the fund's portfolio and
assisting in all aspects of the fund's operations.
SHAREHOLDER SERVICES FEE: a fee of up to 0.25% used to reimburse Dreyfus Service
Corporation for shareholder account service and maintenance.
OTHER EXPENSES: fees paid by the fund for miscellaneous items such as transfer
agency, custody, professional and registration fees.
The Fund
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MANAGEMENT
The investment adviser for the fund is The Dreyfus Corporation, 200 Park Avenue,
New York, New York 10166. Founded in 1947, Dreyfus manages more than $120
billion in over 160 mutual fund portfolios. The fund pays Dreyfus an annual
management fee of 0.50% of the fund's average net assets. Dreyfus is the primary
mutual fund business of Mellon Bank Corporation, a broad-based financial
services company with a bank at its core. With more than $426 billion of assets
under management, and $2.0 trillion of assets under administration and custody,
Mellon provides a full range of banking, investment and trust products and
services to individuals, businesses and institutions. Mellon is headquartered in
Pittsburgh, Pennsylvania.
Dreyfus has a personal securities trading policy (the "Policy") which restricts
the personal securities transactions of its employees. Its primary purpose is to
ensure that personal trading by Dreyfus employees does not disadvantage any
Dreyfus-managed fund. Dreyfus portfolio managers and other investment personnel
who comply with the Policy's preclearance and disclosure procedures may be
permitted to purchase, sell or hold certain types of securities which also may
be or are held in the fund(s) they advise.
Concepts to understand
YEAR 2000 ISSUES: the fund could be adversely affected if the computer systems
used by Dreyfus and the fund's other service providers do not properly process
and calculate date-related information from and after January 1, 2000.
Dreyfus 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.
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FINANCIAL HIGHLIGHTS
This table describes the fund's performance for the fiscal periods indicated.
"Total return" shows how much your investment in the fund would have increased
(or decreased) during each period, assuming you had reinvested all dividends and
distributions. These figures have been independently audited by Ernst & Young
LLP, whose report, along with the fund's financial statements, is included in
the annual report.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
YEAR ENDED JANUARY 31,
1999 1998 1997 1996 1995
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PER-SHARE DATA ($)
Net asset value,
beginning of period 1.00 1.00 1.00 1.00 1.00
Investment operations:
Investment income -- net .028 .030 .028 .033 .027
Distributions:
Dividends from investment
income -- net (.028) (.030) (.028) (.033) (.027)
Net asset value, end of period 1.00 1.00 1.00 1.00 1.00
Total return (%) 2.79 3.01 2.86 3.34 2.70
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RATIOS/SUPPLEMENTAL DATA
Ratio of expenses to
average net assets (%) .64 .63 .60 .46 .28
Ratio of net investment income
to average net assets (%) 2.75 2.97 2.82 3.28 2.73
Decrease reflected in above
expense ratios due to
actions by Dreyfus (%) -- .01 .06 .19 .46
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Net assets, end of period ($ x 1,000) 205,284 179,663 191,996 155,055 150,811
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The Fund
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Your Investment
ACCOUNT POLICIES
Buying shares
TO PURCHASE FUND SHARES, contact your financial representative. You pay no sales
charges to invest in this fund. Your price for fund shares is the fund's net
asset value per share (NAV), which is generally calculated as of 12:00 noon
Eastern time on every day the New York Stock Exchange is open. Your order will
be priced at the next NAV calculated after your order is accepted by the fund's
transfer agent or other authorized entity. The fund's portfolio securities are
valued at amortized cost, which does not take into account unrealized gains or
losses. As a result, portfolio securities are valued at their acquisition cost,
adjusted for discounts or premiums reflected in their purchase price. This
method of valuation is designed for the fund to be able to price its shares at
$1.00 per share. Because the fund seeks tax-exempt income, it is not recommended
for purchase in IRAs or other qualified retirement plans.
Concepts to understand
NET ASSET VALUE (NAV): a mutual fund's share price on a given day. A fund's NAV
is calculated by dividing the value of its net assets by the number of existing
shares.
To help the fund maintain a $1 share price, investments are valued at cost, and
any discount or premium created by market movements is amortized to maturity.
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Selling shares
YOU MAY SELL (REDEEM) SHARES AT ANY TIME. Your shares will be sold at the next
NAV calculated after your order is accepted by the fund's transfer agent or
other authorized entity.
BEFORE SELLING OR WRITING A CHECK FOR RECENTLY PURCHASED SHARES, please note
that if the fund has not yet collected payment for the shares you are selling,
it may delay sending the proceeds for up to eight business days or until it has
collected payment.
Your Investment
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ACCOUNT POLICIES (CONTINUED)
General policies
UNLESS YOU DECLINE TELEPHONE PRIVILEGES on your application, you may be
responsible for any fraudulent telephone order as long as Dreyfus takes
reasonable measures to verify that the order is from a representative of your
financial institution.
THE FUND RESERVES THE RIGHT TO:
* change or discontinue its exchange privilege, or temporarily suspend
this privilege during unusual market conditions
* change its minimum investment amounts
* delay sending out redemption proceeds for up to seven days (generally
applies only in cases of very large redemptions, excessive trading or during
unusual market conditions)
The fund also reserves the right to make a "redemption in kind" -- payment in
portfolio securities rather than cash -- if the amount you are redeeming is
large enough to affect fund operations (for example, if it represents more than
1% of the fund's assets).
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DISTRIBUTIONS AND TAXES
THE FUND USUALLY PAYS ITS SHAREHOLDERS dividends from its net investment income
once a month, and distributes any net securities gains it has realized once a
year. Your distributions will be reinvested in the fund unless you instruct the
fund otherwise. There are no fees or sales charges on reinvestments or
withdrawals.
THE FUND ANTICIPATES THAT SUBSTANTIALLY ALL OF ITS DIVIDENDS WILL BE EXEMPT from
federal and Massachusetts state income taxes. However, any dividends from
taxable investments and any capital gain distributions are taxable as ordinary
income or capital gains, whether or not you reinvested them. The tax status of
any distribution is the same regardless of how long you have been in the fund
and whether you reinvest your distributions or take them in cash.
The tax status of your dividends and distributions will be detailed in your
annual tax statement from the fund.
Because everyone's tax situation is unique, always consult your tax professional
about federal, state and local tax consequences.
Concepts to understand
DIVIDENDS: income or interest paid by the investments in the fund's portfolio.
DISTRIBUTIONS: income, net of expenses, passed on to fund shareholders. These
are calculated on a per-share basis: each share earns the same rate of return,
so the more fund shares you own, the higher your distribution.
Your Investment
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NOTES
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For More Information
Dreyfus Massachusetts Municipal Money Market Fund
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SEC file number: 811-6273
More information on this fund is available free upon
request, including the following:
Annual/Semiannual Report
Describes the fund's performance and lists portfolio
holdings.
Statement of Additional Information (SAI)
Provides more details about the fund and its policies. A
current SAI is on file with the Securities and Exchange
Commission (SEC) and is incorporated by reference (is
legally considered part of this prospectus).
To obtain information:
BY TELEPHONE Call your Hambrecht & Quist Representative or 1-800-227-3958.
ON THE INTERNET Text-only versions of fund documents can be viewed online or
downloaded from:
SEC
http://www.sec.gov
You can also obtain copies by visiting the SEC's Public Reference Room in
Washington, DC (phone 1-800-SEC-0330) or by sending your request and a
duplicating fee to the SEC's Public Reference Section, Washington, DC
20549-6009.
(c) 1999 Dreyfus Service Corporation
639P0999-HQ
