<PAGE>
(R)Dreyfus
BASIC Municipal
Money Market Portfolio
Annual Report
August 31, 1997
<PAGE>
Dreyfus BASIC Municipal Money Market Portfolio
- --------------------------------------------------------------------------------
Letter to Shareholders
Dear Shareholder:
We are pleased to report performance for Dreyfus BASIC Municipal Money Market
Portfolio for its annual reporting period ended August 31, 1997. Your Fund
produced a yield of 3.26% and, after taking into account the effect of
compounding, the effective yield was 3.31%.*
THE ECONOMY
A surprisingly robust 3.6% economic growth rate was reported in the recently
revised Gross Domestic Product (GDP), far higher than the 2.2% rate estimated
earlier. This strength continued into the summer as the index of leading
economic indicators rose solidly in July, along with retail spending,
construction spending, and real merchandise exports, which advanced at a
resounding 24% pace over last year. Consumer confidence was up, too, climbing to
129.1 in August from 126.3 in July, nearly reaching the 28-year high seen in
June. That confidence was reflected in higher consumer spending, which rebounded
from an anemic 0.8% during the second quarter to an ebullient 3.5% clip over the
summer months.
Amid all this positive economic news, inflation still appears to be in
abeyance. However, there are hints of a turn: higher energy prices, a tighter
labor market and the potentially inflationary effect of the UPS strike
settlement. Market volatility shows that investors are sensitive to inflationary
pressures, although the Federal Reserve Board's Open Market Committee (FOMC) has
not raised the Federal Funds target rate since March. On the positive side, the
Asian currency crisis could blunt incipient U.S. inflation pressures by hurting
exports to the region and exporters' earnings, thereby muting any potential rise
in U.S. interest rates. Over recent months, interest rates in the money markets
have remained virtually unchanged for securities with maturities of three months
and under, while yields on maturities between nine months and one year have
trended up slightly in anticipation of a Fed interest-rate hike.
MARKET ENVIRONMENT/PORTFOLIO
Each year, as summer approaches, the short-term municipal market experiences
volatility that is reflective of the changing patterns of supply and demand
conditions during the period. These market "technicals" require adjustments to
portfolio strategy in anticipation of conditions such as an increase in
available securities due to fund redemptions (April tax season), a dearth of
supply of high quality issues (end of June maturities), and substantial new
money market issuance (mid-July financings). Our portfolio adjustments have
attempted to structure the Portfolio in such a way as to take advantage of these
changing conditions in an effort to enhance the Portfolio's yield while
maintaining our commitment to high quality holdings.
In response to the changes we anticipated in both cash flow and supply
conditions, we began preparations in early June for extending the average
maturities for the Portfolio. By creating a calendar of upcoming new issues
(both general market names and some of the larger California-exempt issues) and
by subjecting each new issue to rigorous in-house credit review, we were
positioned to take advantage of those notes which we believed would be
attractive holdings for the Portfolio. The result was a commitment to high
quality issues that lengthened the Portfolio's average maturity to the
60-day-plus range. We expect to continue to purchase notes selectively in the
coming months in seeking to maximize the Portfolio's yield. As we endeavor to
accomplish this, we will continue to commit to those issues which meet our high
quality investment guidelines and which provide the appropriate level of
liquidity for the Portfolio's needs. Please note that the higher commitment to
issues subject to the Alternative Minimum Tax (AMT) is designed to further
enhance the Portfolio's return. As we go forward, we will monitor any conditions
which affect our marketplace and adjust our * investment policy where necessary
to pursue competitive returns.
<PAGE>
Included in this report is a series of detailed statements about the
Portfolio's holdings and its financial condition. We hope they are informative.
Please know that we appreciate greatly your continued confidence in the
Portfolio and in The Dreyfus Corporation.
Very truly yours,
/s/ Richard J. Moynihan
Richard J. Moynihan
Director, Municipal Portfolio Management
The Dreyfus Corporation
September 17, 1997
New York, NY
* Effective yield is based upon dividends declared daily and reinvested monthly.
<TABLE>
<CAPTION>
<PAGE>
Dreyfus BASIC Municipal Money Market Portfolio
- --------------------------------------------------------------------------------
Statement of Investments August 31, 1997
Principal
Tax Exempt Investments--100.0% Amount Value
- --------------------------------------------------------------------------- --------------- ------------
<S> <C> <C>
Alaska--3.1%
Valdez Marine Terminal, Revenue, VRDN (Exxon Pipeline Co. Project)
3.70% (LOC; Exxon Corp.) (a,b)........................................... $ 21,300,000 $ 21,300,000
Arkansas--2.0%
Arkansas Development Finance Authority, SFMR (Mortgage Banking Securities Program)
4.05%, Series D, 7/1/98 (LOC; Canadian Imperial Bank of Commerce) (a).... 13,500,000 13,500,000
California--5.6%
California Higher Education Loan Authority Inc., Student Loan Revenue, VRDN
3.40%, Series C (LOC; Student Loan Marketing Association) (a,b).......... 19,000,000 19,000,000
California Public Capital Improvement Financing Authority, Revenue (Pooled Project)
3.85%, Series C, 9/15/97 (LOC; National Westminster Bank) (a)............ 10,000,000 10,000,000
Los Angeles County, TRAN 4.50%, Series A, 6/30/98.......................... 10,000,000 10,051,772
Colorado--2.2%
Colorado Student Obligation Bond Authority, Student Loan Revenue, VRDN
3.35%, Series A (LOC; Student Loan Marketing Association) (a,b).......... 15,000,000 15,000,000
Delaware--.2%
Delaware Health Facilities Authority, Revenue, VRDN (Pooled Loan Program)
3.30% (BPA; Morgan Guaranty Trust Co. and Insured; MBIA) (b)............. 1,300,000 1,300,000
District of Columbia--3.5%
District of Columbia Housing Finance Agency, SFMR:
4.15%, Series A, 7/1/98 (LOC; Assured Management Corp.) (a).............. 15,000,000 15,000,000
4.05%, Series C, 9/1/98 (LOC; American Insurance Group) (a).............. 9,200,000 9,200,000
Florida--1.8%
Putnam County Development Authority, PCR (Seminole Electric Coop)
3.60%, Series D, 12/15/97 (Corp. Guaranty; National Rural Utility Co-Op). 12,585,000 12,585,000
Georgia--4.0%
Rockdale County Development Authority, Industrial Revenue, VRDN (Liochem Inc. Project)
3.85% (LOC; Sanwa Bank) (a,b)............................................ 8,000,000 8,000,000
Savannah Economic Development Authority, Exempt Facility Revenue, VRDN
(Home Depot Project) 3.50%, Series A (Corp. Guaranty; Home Depot) (b).... 20,000,000 20,000,000
Illinois--2.9%
City of Chicago:
3.60%, 12/4/97 (LOC; Harris Trust and Savings Bank) (a).................. 8,000,000 8,000,000
3.65%, 2/5/98 (LOC; Morgan Guaranty Trust Co.) (a)....................... 12,000,000 12,000,000
Indiana--5.3%
Hammond Local Public Improvement Bond Bank, Revenue (Advance Funding Program)
4.20%, Series A-2, 1/8/98 (Liquidity Facility; Bank One)................. 10,000,000 10,017,011
Indiana Bond Bank Advanced Funding
4.25%, Series A-2, 1/21/98
(LOC: Indiana Bond Bank and Norwest Bank of Minnesota) (a)............... 10,000,000 10,020,673
</TABLE>
<TABLE>
<CAPTION>
<PAGE>
Dreyfus BASIC Municipal Money Market Portfolio
- ---------------------------------------------------------------------------
Statement of Investments (continued) August 31, 1997
Principal
Tax Exempt Investments (continued) Amount Value
- --------------------------------------------------------------------------- --------------- ------------
<S> <C> <C>
Indiana (continued)
Indiana Secondary Market Educational Loans Inc., Education Loan Revenue, VRDN
3.40%, Series B (Insured; AMBAC and LOC; Student Loan Marketing Association)
(a,b).................................................................... $ 7,000,000 $ 7,000,000
Petersburg, SWDR, VRDN (Indiana Power and Light Co. Project)
3.50%, Series A (Corp. Guaranty; Indiana Power and Light Co.) (b)........ 10,000,000 10,000,000
Iowa--3.7%
Iowa School Cash Anticipation Program, School Corp., Warrant Certificates
4.50%, Series A, 6/26/98 (LOC; FSA) (a).................................. 11,000,000 11,052,717
Louisa County, PCR, Refunding, VRDN (Midwest Power System Inc. Project)
3.45% (b)................................................................ 14,900,000 14,900,000
Kentucky--4.9%
City of Carroll, Collateralized Solid Waste Disposal Facilities Revenue, VRDN
(Utilities Co. Project) 3.85%, Series A (b).............................. 23,700,000 23,700,000
Morgantown, IDR (Sumitomo Electric Wire System)
4%, 10/1/97 (LOC; Sumitomo Bank) (a)..................................... 10,000,000 10,000,000
Louisiana--8.0%
New Orleans Aviation Board, Revenue, VRDN (Passenger Facility Charge Projects)
3.55% (LOC: Banque Paribas and Canadian Imperial Bank of Commerce) (a,b). 11,000,000 11,000,000
Plaquemines Parish, Environmental Revenue, Refunding, VRDN
(British Petroleum Exploration and Oil) 3.85% (Corp. Guaranty; British
Petroleum) (b)........................................................... 12,200,000 12,200,000
Plaquemines Port, Harbor and Terminal District, Port Facilities Revenue
(International Marine Terminal Project)
3.75%, Series B, 3/15/98 (LOC; Morgan Guaranty Trust Co.) (a)............ 10,000,000 10,000,000
West Baton Rouge Parish Industrial District Number 3, Revenue, VRDN
(Dow Chemical Co. Project) 3.90%, Series A (Corp. Guaranty; Dow Chemical
Co.) (b)................................................................. 22,600,000 22,600,000
Michigan--3.5%
Detroit City School District 4.50%, 5/1/98................................. 10,000,000 10,038,529
Grand Rapids Economic Development Corporation, Revenue, VRDN
(Amway/Grand Plaza Hotel Facility #1) 3.40% (LOC; Old Kent Bank and
Trust) (a,b)............................................................. 4,000,000 4,000,000
Michigan Higher Education Student Loan Authority, Revenue, VRDN
3.35%, Series XII-F (Insured; AMBAC and Liquidity Agreement; Sumitomo
Bank) (b)................................................................ 5,000,000 5,000,000
Michigan Strategic Fund, LOR, Refunding, VRDN (Detroit Edison Co.)
3.70% (LOC; Barclays Bank) (a,b)......................................... 5,000,000 5,000,000
Minnesota--2.4%
Minnesota Higher Education Coordinating Board, Revenue, VRDN
3.45% (LOC; Norwest Bank of Minnesota) (a,b)............................. 17,000,000 17,000,000
Missouri--1.4%
Missouri Higher Education Loan Authority, Student Loan Revenue, Refunding, VRDN
3.40%, Series B (Insured; MBIA and SBPA; NMB Post Bank Group) (b)........ 9,500,000 9,500,000
Nebraska--1.8%
Nebraska Investment Finance Authority, SFHR
3.90%, Series C, 7/1/98 (LOC; Federal Home Loan Bank) (a)................ 12,500,000 12,500,000
</TABLE>
<TABLE>
<CAPTION>
<PAGE>
Dreyfus BASIC Municipal Money Market Portfolio
- ----------------------------------------------------------------------------
Statement of Investments (continued) August 31, 1997
Principal
Tax Exempt Investments (continued) Amount Value
- --------------------------------------------------------------------------- --------------- ------------
<S> <C> <C>
Nevada--1.4%
Clark County, IDR, Refunding, VRDN (Nevada Power Co. Project)
3.45%, Series B (LOC; Societe Generale) (a,b)............................ $ 10,000,000 $ 10,000,000
New Jersey--2.5%
Monmouth County Improvement Authority, Revenue, VRDN
(Pooled Government Loan Program) 3% (LOC; Union Bank of Switzerland) (a,b) 4,000,000 4,000,000
New Jersey Turnpike Authority, Turnpike Revenue, Refunding, VRDN
2.65%, Series D (Insured; FGIC and Liquidity Facility; Society Generale) (b) 13,700,000 13,700,000
New York--6.0%
City of New York, VRDN 3.75%, Sub Series E-2 (LOC; Morgan Guaranty Trust
Co.) (a,b)............................................................... 9,700,000 9,700,000
New York City Municipal Water Finance Authority, Water and Sewer System, Revenue,
VRDN 3.75%, Series C (Insured; FGIC and LOC; FGIC) (a,b)................. 5,000,000 5,000,000
New York State Energy Research and Development Authority, PCR, VRDN
(Niagara Mohawk) 3.65%, Series A (LOC; Toronto-Dominion Bank) (a,b)...... 22,300,000 22,300,000
Port Authority of New York and New Jersey, Special Obligation Revenue, VRDN
(Versatile Structure) 3.65%, Series 2 (LOC; Morgan Guaranty Trust Co.) (a,b) 5,000,000 5,000,000
Ohio--1.5%
Ohio Housing Financing Agency, Mortgage Revenue (Residential)
3.65%, Series A-2, 3/2/98 (LOC; American Insurance Group) (a)............ 7,000,000 7,000,000
Student Loan Funding Corporation, Student Loan Revenue, VRDN
3.20%, Series A-3 (LOC; National Westminster Bank) (a,b)................. 3,400,000 3,400,000
Pennsylvania--6.3%
Delaware Valley Regional Finance Authority, Local Government Revenue, VRDN
3.25%, Series D (LOC; Credit Suisse) (a,b)............................... 10,300,000 10,300,000
Lehigh County General Purpose Authority, HR, VRDN (Lehigh Valley Hospital)
3.70%, Series A (Insured; AMBAC and Liquidity Facility; Chase Manhattan
Bank) (b)................................................................ 10,000,000 10,000,000
Pennsylvania Energy Development Authority, Energy Development Revenue, VRDN
(B & W Ebensburg Project) 3.35% (LOC; Swiss Bank Corp.) (a,b)............ 8,240,000 8,240,000
City of Philadelphia, TRAN 4.50%, Series A, 6/30/98........................ 7,000,000 7,027,837
City of Philadelphia Redevelopment Authority (Southwark Plaza Project)
3.85%, 12/30/97 (LOC; FGIC) (a).......................................... 8,300,000 8,300,000
Rhode Island--1.1%
Rhode Island Student Loan Authority, Student Loan Revenue, VRDN
3.40%, Series 1 (LOC; National Westminster Bank) (a,b)................... 8,000,000 8,000,000
Texas--18.4%
Brazos River Harbor Navigation District, Harbor Revenue, VRDN
(Dow Chemical Co. Project) 3.90% (Corp. Guaranty; Dow Chemical Co.) (b).. 22,300,000 22,300,000
El Paso Industrial Development Authority Inc., IDR, VRDN
(El Paso School District Limited Project) 3.40% (LOC; Chase Manhattan
Bank) (a,b).............................................................. 3,200,000 3,200,000
Greater East Texas Higher Education Authority Inc., Student Loan Revenue
4.15%, Series B, 9/1/97 (LOC; Student Loan Marketing Association) (a).... 10,500,000 10,500,000
Greater East Texas Student Loan Corporation, Student Loan Revenue, Refunding
3.70%, Series A, 3/1/98 (LOC; Student Loan Marketing Association) (a).... 8,250,000 8,250,000
</TABLE>
<TABLE>
<CAPTION>
<PAGE>
Dreyfus BASIC Municipal Money Market Portfolio
- ----------------------------------------------------------------------------
Statement of Investments (continued) August 31, 1997
Principal
Tax Exempt Investments (continued) Amount Value
- --------------------------------------------------------------------------- --------------- ------------
<S> <C> <C>
Texas (continued)
Gulf Coast Industrial Development Authority, VRDN:
Marine Terminal Revenue (Amoco Oil Co. Project)
3.80% (Corp. Guaranty; Amoco Credit Corp.) (b)......................... $ 12,700,000 $ 12,700,000
SWDR (Citgo Petroleum Corp. Project)
3.90% (LOC; Wachovia Bank of Georgia) (a,b).......................... 9,100,000 9,100,000
Gulf Coast Waste Disposal Authority, VRDN:
Environmental Facilities Revenue (Bayer Corp. Project)
3.75% (Corp. Guaranty; Bayer Corp.) (b)................................ 7,000,000 7,000,000
SWDR (Amoco Oil Co. Project)
3.80% (Corp. Guaranty; Amoco Credit Corp.) (b)......................... 16,100,000 16,100,000
North Texas Higher Education Authority Inc., Student Loan Revenue, Refunding, VRDN
3.40%, Series A (LOC; Student Loan Marketing Association) (a,b).......... 10,500,000 10,500,000
Panhandle Plains Higher Education Authority Inc., Student Loan Revenue, VRDN
3.35%, Series A, (LOC; Student Loan Marketing Association) (a,b)......... 26,000,000 26,000,000
Port Development Corporation, Marine Terminal Revenue, VRDN
(Pasadena Terminal Co. Inc., Project) 3.60% (LOC; ABN-Amro Bank) (a,b)... 2,420,000 2,420,000
Utah--4.0%
Intermountain Power Agency, Power Supply, Revenue
3.80%, Series E, 6/15/98 (LOC; Morgan Guaranty Trust Co.) (a)............ 10,000,000 10,000,000
Utah Board of Regents, Student Loan Revenue, Refunding, VRDN
3.40%, Series A (LOC; Student Loan Marketing Association) (a,b).......... 17,500,000 17,500,000
Virginia--2.5%
Richmond Industrial Development Authority, Revenue, VRDN
(Cogentrix of Richmond Project):
4.10%, Series A (LOC; Banque Paribas) (a,b)............................ 8,300,000 8,300,000
4.10%, Series B (LOC; Banque Paribas) (a,b)............................ 6,000,000 6,000,000
Exempt Facilities 4.10%, Series A (LOC; Banque Paribas) (a,b).......... 3,400,000 3,400,000
-------------
TOTAL INVESTMENTS (cost $695,703,539)...................................... $695,703,539
=============
</TABLE>
<TABLE>
<CAPTION>
<PAGE>
Dreyfus BASIC Municipal Money Market Portfolio
- ----------------------------------------------------------------------------
Summary of Abbreviations
- ----------------------------------------------------------------------------
<S> <C> <C> <C>
AMBAC American Municipal Bond Assurance Corporation MBIA Municipal Bond Investors Assurance
BPA Bond Purchase Agreement Insurance Corporation
FGIC Financial Guaranty Insurance Company PCR Pollution Control Revenue
FSA Financial Security Assurance SBPA Standby Bond Purchase Agreement
HR Hospital Revenue SFHR Single Family Housing Revenue
IDR Industrial Development Revenue SFMR Single Family Mortgage Revenue
LOC Letter of Credit SWDR Solid Waste Disposal Revenue
LOR Limited Obligation Revenue TRAN Tax and Revenue Anticipation Notes
VRDN Variable Rate Demand Notes
</TABLE>
<TABLE>
<CAPTION>
Summary of Combined Ratings (Unaudited)
- ------------------------------------------------------------------------
Fitch (c) or Moody's or Standard & Poor's Percentage of Value
- --------- ------- ----------------- -------------------
<S> <C> <C> <C> <C> <C>
F1+/F1 VMIG1/MIG1, P1 SP1+/SP1, A1+/A1 94.2%
AAA/AA (d) Aaa/Aa (d) AAA/AA (d) 1.8
Not Rated (e) Not Rated (e) Not Rated (e) 4.0
-------
100.0%
=======
<FN>
Notes to Statement of Investments:
- ---------------------------------------------------------------------------
(a) Secured by letters of credit. At August 31, 1997, 63.3% of the Fund's net
assets are backed by letters of credit issued by domestic banks, foreign
banks, government agencies and corporations, of which Student Loan Marketing
Association provided letters of credit to 16.6% of the Fund's net assets.
(b) Securities payable on demand. The interest rate, which is subject to change,
is based upon bank prime rates or an index of market interest rates.
(c) Fitch currently provides creditworthiness information for a limited number
of investments.
(d) Notes which are not F, MIG or SP rated are represented by bond ratings of
the issuers.
(e) Securities which, while not rated by Fitch, Moody's and Standard & Poor's
have been determined by the Manager to be of comparable quality to those
rated securities in which the Fund may invest.
(f) At August 31, 1997, the Fund had $180,941,246 (26.5% of net assets) invested
in securities whose payment of principal and interest is dependent upon
revenues generated from educational projects.
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
<PAGE>
Dreyfus BASIC Municipal Money Market Portfolio
- -----------------------------------------------------------------------------
Statement of Assets and Liabilities August 31, 1997
Cost Value
------------ -------------
<S> <C> <C> <C>
ASSETS: Investments in securities--See Statement of Investments. $695,703,539 $695,703,539
Cash................................................... 1,451,773
Interest receivable.................................... 4,660,674
Prepaid expenses and other assets...................... 53,862
------------
701,869,848
------------
LIABILITIES: Due to The Dreyfus Corporation and affiliates.......... 338,603
Payable for investment securities purchased............ 17,900,000
Accrued expenses and other liabilities................. 68,919
------------
18,307,522
------------
NET ASSETS..................................................................... $683,562,326
============
REPRESENTED BY: Paid-in capital........................................ $683,677,917
Accumulated net realized gain (loss) on investments.... (115,591)
------------
NET ASSETS .................................................................... $683,562,326
============
SHARES OUTSTANDING
(3 billion shares of $.001 par value Common Stock authorized).................. 683,677,917
NET ASSET VALUE, offering and redemption price per share ...................... $1.00
=====
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
<PAGE>
Dreyfus BASIC Municipal Money Market Portfolio
- -------------------------------------------------------------------------------
Statement of Operations August 31, 1997
INVESTMENT INCOME
<S> <C> <C> <C>
INCOME Interest Income........................................ $27,683,218
EXPENSES: Management fee--Note 2(a).............................. $3,735,343
Shareholder servicing costs--Note 2(b)................. 537,227
Custodian fees......................................... 71,878
Professional fees...................................... 61,895
Registration fees...................................... 57,695
Directors' fees and expenses--Note 2(c)................ 16,507
Prospectus and shareholders' reports................... 10,887
Miscellaneous.......................................... 26,658
----------
Total Expenses................................... 4,518,090
Less--reduction in management fee due to
undertaking--Note 2(a).............................. (1,155,582)
----------
Net Expenses..................................... 3,362,508
-----------
INVESTMENT INCOME--NET......................................................... 24,320,710
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--Note 1(b):
Net realized gain (loss) on investments................ $ (423)
Net unrealized appreciation (depreciation) on investments (3,937)
----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS......................... (4,360)
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................... $24,316,350
===========
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
<PAGE>
Dreyfus BASIC Municipal Money Market Portfolio
- --------------------------------------------------------------------------------
Statement of Changes in Net Assets
Year Ended Year Ended
August 31, 1997 August 31, 1996
---------------- ----------------
<S> <C> <C>
OPERATIONS:
Investment income--net............................................... $ 24,320,710 $ 33,767,778
Net realized gain (loss) on investments.............................. (423) (23,748)
Net unrealized appreciation (depreciation) on investments............ (3,937) 3,937
-------------- --------------
Net Increase (Decrease) in Net Assets Resulting from Operations.... 24,316,350 33,747,967
-------------- --------------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net............................................... (24,320,710) (33,767,778)
-------------- --------------
CAPITAL STOCK TRANSACTIONS ($1.00 per share):
Net proceeds from shares sold........................................ 875,141,536 1,301,637,332
Dividends reinvested................................................. 22,940,782 31,816,712
Cost of shares redeemed.............................................. (1,018,772,663) (1,628,610,840)
-------------- --------------
Increase (Decrease) in Net Assets from Capital Stock Transactions.. (120,690,345) (295,156,796)
-------------- --------------
Total Increase (Decrease) in Net Assets.......................... (120,694,705) (295,176,607)
NET ASSETS:
Beginning of Period.................................................. 804,257,031 1,099,433,638
-------------- --------------
End of Period........................................................ $ 683,562,326 $ 804,257,031
============== ==============
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
<PAGE>
Dreyfus BASIC Municipal Money Market Portfolio
- ---------------------------------------------------------------------
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.
Year Ended August 31,
-----------------------------------------------------------
PER SHARE DATA: 1997 1996 1995 1994 1993
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period .... $1.00 $1.00 $1.00 $1.00 $1.00
----- ----- ----- ----- -----
Investment Operations:
Investment income--net................... .033 .034 .037 .026 .027
----- ----- ----- ----- -----
Distributions:
Dividends from investment income--net.... (.033) (.034) (.037) (.026) (.027)
----- ----- ----- ----- -----
Net asset value, end of period .......... $1.00 $1.00 $1.00 $1.00 $1.00
===== ===== ===== ===== =====
TOTAL INVESTMENT RETURN..................... 3.31% 3.42% 3.80% 2.60% 2.73%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets.. .45% .38% .14% .09% .02%
Ratio of net investment income
to average net assets.................. 3.26% 3.40% 3.73% 2.58% 2.64%
Decrease reflected in above expense ratios
due to undertakings by the Manager..... .15% .22% .45% .50% .64%
Net Assets, end of period
(000's Omitted)........................ $683,562 $804,257 $1,099,434 $1,027,377 $685,540
See notes to financial statements.
</TABLE>
<PAGE>
Dreyfus BASIC Municipal Money Market Portfolio
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
NOTE 1--Significant Accounting Policies:
Dreyfus BASIC Municipal Money Market Portfolio (the "Fund") is a series of
Dreyfus BASIC Municipal Fund, Inc. (the "Company") which is registered under the
Investment Company Act of 1940 ("Act") as a non-diversified open-end management
investment company and operates as a series company currently offering four
series, including the Fund. The Fund's investment objective is to provide
investors with as high a level of current income exempt from Federal income tax
as is consistent with the preservation of capital and maintenance of liquidity.
The Dreyfus Corporation ("Manager") serves as the Fund's investment adviser. The
Manager is a direct subsidiary of Mellon Bank, N.A. Premier Mutual Fund
Services, Inc. is the distributor of the Fund's shares, which are sold to the
public without a sales charge.
The Company accounts separately for the assets, liabilities and operations
of each fund. Expenses directly attributable to each fund are charged to that
fund's operations; expenses which are applicable to all funds are allocated
among them on a pro rata basis.
It is the Fund's policy to maintain a continuous net asset value per share
of $1.00; the Fund has adopted certain investment, portfolio valuation and
dividend and distribution policies to enable it to do so. There is no assurance,
however, that the Fund will be able to maintain a stable net asset value per
share of $1.00.
The Fund's financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management estimates
and assumptions. Actual results could differ from those estimates.
(A) PORTFOLIO VALUATION: Investments are valued at amortized cost, which
has been determined by the Company's Board of Directors to represent the fair
value of the Fund's investments.
(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions
are recorded on a trade date 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. Realized gain and loss from
securities transactions are recorded on the identified cost basis. Cost of
investments represents amortized cost.
(C) DIVIDENDS TO SHAREHOLDERS: It is the policy of the Fund to declare
dividends daily from investment income-net. Such dividends are paid monthly.
Dividends from net realized capital gain, if any, are normally declared and paid
annually, but the Fund may make distributions on a more frequent basis to comply
with the distribution requirements of the Internal Revenue Code. 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.
(D) FEDERAL INCOME TAXES: It is the policy of the Fund to continue to
qualify as a regulated investment company, which can distribute tax exempt
dividends, by complying with the applicable provisions of the 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.
The Fund has an unused capital loss carryover of approximately $115,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to August 31, 1997. The
carryover does not include net realized securities losses from November 1, 1996
through August 31, 1997, which are treated, for Federal income tax purposes, as
arising in fiscal 1998. If not applied, $1,700 of the carryover
<PAGE>
Dreyfus BASIC Municipal Money Market Portfolio
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
expires in fiscal 2001, $2,000 expires in fiscal 2002, $50,300 expires in
fiscal 2003, $36,000 expires in fiscal 2004 and $25,000 expires in fiscal 2005.
At August 31, 1997, the cost of investments for Federal income tax purposes
was substantially the same as the cost for financial reporting purposes (see the
Statement of Investments).
NOTE 2--Management Fee and Other Transactions With Affiliates:
(A) Pursuant to a management agreement with the Manager, the management fee
is computed at the annual rate of .50 of 1% of the value of the Fund's average
daily net assets and is payable monthly. The Manager has undertaken, until such
time as it gives shareholders at least 90 days' notice to the contrary, to
reduce the management fee paid by the Fund, to the extent that the Fund's
aggregate expenses, exclusive of taxes, brokerage, interest on borrowings and
extraordinary expenses, exceed an annual rate of .45 of 1% of the value of the
Fund's average daily net assets. The reduction in management fee, pursuant to
the undertaking, amounted to $1,155,582 during the period ended August 31, 1997.
(B) Under the Shareholder Services Plan, the Fund reimburses Dreyfus
Service Corporation, a wholly-owned subsidiary of the Manager, an amount not to
exceed an annual rate of .25 of 1% of the value of the Fund's average daily net
assets for certain allocated expenses of providing personal services and/or
maintaining shareholder accounts. The services provided may include personal
services relating to shareholder accounts, such as answering shareholder
inquiries regarding the Fund and providing reports and other information, and
services related to the maintenance of shareholder accounts. During the period
ended August 31, 1997, the Fund was charged an aggregate of $408,721 pursuant to
the Shareholder Services Plan.
The Fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of
the Manager, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the Fund. Such compensation
amounted to $85,361 during the period ended August 31, 1997.
(C) Each director who is not an "affiliated person" as defined in the Act
receives from the Company an annual fee of $1,000 and an attendance fee of $250
per meeting. The Chairman of the Board receives an additional 25% of such
compensation.
<PAGE>
Dreyfus BASIC Municipal Money Market Portfolio
- --------------------------------------------------------------------------------
Report of Ernst & Young LLP, Independent Auditors
Shareholders and Board of Directors
Dreyfus BASIC Municipal Money Market Portfolio
We have audited the accompanying statement of assets and liabilities,
including the statement of investments, of Dreyfus BASIC Municipal Money Market
Portfolio (one of the Series constituting Dreyfus BASIC Municipal Fund, Inc.) as
of August 31, 1997, 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 each of the years 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 August 31, 1997 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 BASIC Municipal Money Market Portfolio at August 31, 1997, 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
each of the indicated years, in conformity with generally accepted accounting
principles.
Ernst & Young LLP
New York, New York
October 3, 1997
<PAGE>
Dreyfus BASIC Municipal Money Market Portfolio
- --------------------------------------------------------------------------------
Important Tax Information (Unaudited)
In accordance with Federal tax law, the Fund hereby designates all the
dividends paid from investment income-net during the fiscal year ended August
31, 1997 as "exempt-interest dividends" (not generally subject to regular
Federal income tax).
<PAGE>
[LOGO]
Dreyfus BASIC Municipal
Money Market Portfolio
200 Park Avenue
New York, NY 10166
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Custodian
The Bank of New York
90 Washington Street
New York, NY 10286
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Printed in U.S.A. 122AR978
