August 2, 1994
DREYFUS BASIC MUNICIPAL FUND
SUPPLEMENT TO PROSPECTUS
DATED MARCH 15, 1994
I. PROPOSED MERGER OF THE DREYFUS CORPORATION
The Fund's adviser, The Dreyfus Corporation ("Dreyfus"), has entered
into an Agreement and Plan of Merger providing for the merger (the
"Merger") of Dreyfus with a subsidiary of Mellon Bank, N.A. ("Mellon").
Following the Merger, it is planned that Dreyfus will be a direct
subsidiary of Mellon. Closing of the Merger is subject to a number of
contingencies, including approvals of the stockholders of Dreyfus
and of Mellon. The Merger is expected to occ ur in late August 1994,
but could occur significantly later.
The Merger will result in the automatic termination of the Fund's
current investment advisory agreement with Dreyfus, as required by
the Investment Company Act of 1940, as amended.
II. RESULTS OF FUND SHAREHOLDER VOTES
THE FOLLOWING INFORMATION SUPPLEMENTS AND SUPERSEDES ANY CONTRARY
INFORMATION CONTAINED IN THE FUND'S PROSPECTUS.
On August 2, 1994, the shareholders of each Series of the Fund voted
(a) to approve a new investment advisory agreement with Dreyfus, to
become effective upon consummation of the Merger; and (b) as to Dreyfus
BASIC Municipal Money Market Fund onl y, to make such Fund's fundamental
policy and investment restriction which limits investment in illiquid
securities to 10% of the Fund's net assets non-fundamental.
BMF/stkr080294
August 2, 1994
DREYFUS BASIC MUNICIPAL FUND
Supplement to the Statement of Additional Information
Dated March 15, 1994
At a meeting of Fund shareholders held on August 2, 1994,
shareholders of the Dreyfus BASIC Municipal Money Market Fund approved a
new Investment Restriction number 6, identified as such in the Fund's
Statement of Additional Information entitled "Investment Objective and
Management Policies--Investment Restrictions", as a non-fundamental policy
that may be changed by vote of a majority of the Fund's Board of Directors
at any time. The Money Market Fund may not:
6. Enter into repurchase agreements providing for settlement in more
than seven days after notice or purchase securities which are illiquid
(which securities could include participation interests (including
municipal lease/purchase agreements) that are not subject to the demand
feature described in the Fund's Prospectus and floating and variable rate
demand notes and bonds as to which the Fund cannot exercise the demand
feature described in the Fund's Prospectus on less than seven days' notice
and as to which there is not secondary market) if, in the aggregate, more
than 10% of the value of the Fund's net assets would be so invested.
The following information supplements and should be read in
conjunction with the section in the Fund's Statement of Additional
Information entitled "Investment Objective and Management Policies", and
applies to the Money Market Fund only.
Illiquid Securities. When purchasing securities that have not been
registered under the Securities Act of 1933, as amended, and are not
readily marketable, the Fund will endeavor to obtain the right to
registration at the expense of the issuer. Generally, there will be a
lapse of time between the Fund's decision to sell any such security and
the registration of the security permitting sale. During any such period,
the price of the securities will be subject to market fluctuations.
However, if a substantial market of qualified institutional buyers
develops pursuant to Rule 144A under the Securities Act of 1933, as
amended, for certain unregistered securities held by the Fund, the Fund
intends to treat such securities as liquid securities in accordance with
procedures approved by the Fund's Board. Because it is not possible to
predict with assurance how the market for restricted securities pursuant
to Rule 144A will develop, the Fund's Board has directed the Manager to
monitor carefully the Fund's investments in such securities with
particular regard to trading activity, availability of reliable price
information and other relevant information. To the extent that, for a
period of time, qualified institutional buyers cease purchasing restricted
securities pursuant to Rule 144A, the Fund's investing in such securities
may have the effect of increasing the level of illiquidity in the Fund's
portfolio during such period.
