DREYFUS BASIC MUNICIPAL MONEY MARKET PORTFOLIO
- -----------------------------------------------------------------------------
LETTER TO SHAREHOLDERS
Dear Shareholder:
We are pleased to report the performance for Dreyfus BASIC Municipal Money
Market Portfolio for the 12-month period ended August 31, 1998. Your Portfolio
produced a yield of 3.26% and, after taking into account the effect of
compounding, the effective yield was 3.31%.*
THE ECONOMY
Having consistently viewed inflation as the primary threat to our
strong-growth, low-unemployment economy, the Federal Reserve Board (the "Fed")
now has another factor to ponder in setting monetary policy: the risk of global
recession. The wave of economic uncertainty that shook stock markets and caused
currencies to devalue began in Thailand on July 2, 1997 (the onset of the Asian
financial crisis) and has since spread through Asia and around the world. By the
end of the reporting period, Russia had devalued its ruble. All this financial
tumult has underscored just how economically interrelated the world's nations
are. In fact, the fragility of global financial markets has been a key factor in
the Fed' s reluctance to raise interest rates in an economy now in its seventh
year of economic expansion. It feared that a rise in rates might threaten the
stability of other currencies.
There were additional economic factors that stayed the Fed's hand. Inflation
has remained tame, comfortably below 2% on the consumer level, and is minimal at
the production level of the economy as well. One reason for the low inflation
rate is the strong dollar, which keeps imports cheap; domestic producers are
constrained from raising prices by competition from cheaper foreign goods. This
has all been good news for consumers, who account for two thirds of all economic
activity. Bolstered by solid wage gains and abundant jobs, consumers have been a
driving positive force in the economy. By the end of the reporting period,
however, there were hints that this could change. The political and economic
instability in Russia jolted the U.S. stock market in August. The stock market
sell-off could cause consumers to grow less confident and curtail spending, even
though the larger-scale economic fundamentals for consumers remain positive: low
inflation and plentiful jobs (unemployment remains near its 28-year low of 4.5%)
. In response to the market's uncertainty, short-term rates moved sharply lower.
In addition, second-quarter economic growth lessened to 1.6%, the slowest rate
in three years and dramatically below the 5.5% rate reported for the first
quarter. Many market participants indicated that an ease by the Fed might be a
strong probability given the recent changes in economic conditions.
MARKET ENVIRONMENT/PORTFOLIO
While the Fed has left interest rates unchanged since March 1997, market
technicals nevertheless created fluctuations in rates on short-term municipal
securities in this reporting period. During the first weeks of January, the
demand in the municipal money market was particularly strong due to large cash
inflows, although the market remained in a trading range throughout most of the
first quarter of 1998. However, in April, money funds were tapped for income tax
payments, placing upward pressure on rates as funds experienced redemptions.
Supply conditions in late May reversed this trend as municipal fund managers
anticipated the effect of several billion dollars worth of notes leaving the
market at the end of June. July brought rate stability back to the market as new
supply eased the demand pressure that had existed.
<PAGE>
Unlike previous summer financing periods, this year's late summer calendar of
municipal notes (consisting mainly of California-exempt paper) was drastically
reduced by a combination of factors. Due to the strength of local and state
economies, several issuers reduced the amount of short-term borrowing needed.
Additionally, many issuers came to market with maturities outside of the
13-month maximum maturity allowable for money funds. In prior years, such issues
had shorter maturities and could be purchased by money funds. Other issues were
converted to a synthetic structure that is not currently permitted for purchase
in your Fund. The overall result was a lower yield for most one-year paper, both
national and state-specific. While we did participate in the one-year market
when attractive yield opportunities became available, we often utilized the
commercial paper market to keep average maturities from shortening
significantly. As autumn approaches, we may have additional buying opportunities
in the municipal note market. We expect to choose selectively among these issues
and to structure the Portfolio in an attempt to maximize current yield while
maintaining our commitment to high-quality tax-exempt investments.
Included in this report is a series of detailed statements about your Fund's
holdings and its financial condition. We hope they are informative. Please know
that we greatly appreciate your continued confidence in this Fund and in The
Dreyfus Corporation.
Very truly yours,
[Richard J. Moynihan signature logo]
Richard J. Moynihan
Director, Municipal Portfolio Management
The Dreyfus Corporation
September 18, 1998
New York, N.Y.
*Effective yield is based upon dividends declared daily and reinvested
monthly.
<PAGE>
<TABLE>
DREYFUS BASIC MUNICIPAL MONEY MARKET PORTFOLIO
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS AUGUST 31,1998
Principal
Tax Exempt Investments--98.7% Amount Value
- -------------------------------------------------------
_____________ _____________
<S> <C> <C>
California--6.5%
California Higher Education Loan Authority Inc., Student Loan Revenue:
Refunding 3.60%, Series A-1, 7/1/99 (LOC; Student Loan Marketing Association) . . . . . $ 11,000,000 $ 11,000,000
VRDN 3.35%, Series C (LOC; Student Loan Marketing Association) (a) . . . . . . . . . . . 19,000,000 19,000,000
California Public Capital Improvement Financing Authority, Revenue (Pooled
Project)
3.65%, Series C, 9/15/98 (LOC; National Westminster Bank) . . . . . . . . . . . . . . . 10,000,000 10,000,000
Colorado--2.4%
Colarado Student Obligation Bond Authority, Student Loan Revenue, VRDN
3.30%, Series A (LOC; Student Loan Marketing Association) (a) . . . . . . . . . . . . . 15,000,000 15,000,000
District of Cloumbia--3.4%
District of Columbia Housing Finance Agency, SFMR:
3.80%, Series B, 6/23/99 (LOC; American Insurance Group) . . . . . . . . . . . . . . . . 12,000,000 12,000,000
Refunding 4.05%, Series C, 9/1/98 (LOC; American Insurance Group) . . . . . . . . . . . 9,200,000 9,200,000
Florida--1.8%
Sunshine Governmental Finance Commission, Revenue, CP
3.55%, 11/13/98 (Liquidity Facility: Toronto-Dominion Bank and
Union Bank of Switzerland) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,000,000 11,000,000
Georgia--3.3%
Savannah Economic Development Authority, Exempt Facility Revenue,
VRDN (Home Depot Project)
3.45%, Series A (Corp. Guaranty; Home Depot) (a) . . . . . . . . . . . . . . . . . . . . 20,000,000 20,000,000
Idaho--1.6%
State of Idaho, TAN 4.50%, 6/30/99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,000,000 10,071,849
Illinois--3.4%
City of Chicago 3.55%, 10/29/98 (LOC; Morgan Guaranty Trust Co.) . . . . . . . . . . . . . 12,000,000 12,000,000
Illinois Housing Development Authority, Revenue (Homeowner Mortgage)
3.70%, Series D, 6/29/99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,000,000 9,000,000
Indiana--4.4%
Hammond Local Public Improvement Bond Bank, Revenue (Advance Funding Program)
4.30%, Series A-2, 1/7/99 (Liquidity Facility; Bank One) . . . . . . . . . . . . . . . . 10,000,000 10,016,879
Indiana Secondary Market Educational Loans Inc., Education Loan Revenue, VRDN
3.35%, Series B (Insured; AMBAC and LOC; Student Loan Marketing Association) (a) . . . . 7,000,000 7,000,000
Petersburg, SWDR, VRDN (Indiana Power and Light Co. Project)
3.40% Series A (Corp. Guaranty; Indiana Power and Light) (a) . . . . . . . . . . . . . . 10,000,000 10,000,000
Iowa--2.4%
Louisa County, PCR, Refunding, VRDN (Midwest Power System Inc. Project) 3.50% (a). . . . . 14,900,000 14,900,000
Kentucky--5.5%
City of Carroll, Collateralized Solid Waste Disposal Facilities Revenue, VRDN
(Utilities Co. Project) 3.50%, Series A (a) . . . . . . . . . . . . . . . . . . . . . . 23,700,000 23,700,000
Morgantown, IDR (Sumitomo Electric Wiring System)
4.25%, 10/1/98 (LOC; Sumitomo Bank) . . . . . . . . . . . . . . . . . . . . . . . . . . 10,000,000 10,000,000
<PAGE>
DREYFUS BASIC MUNICIPAL MONEY MARKET PORTFOLIO
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) AUGUST 31,1998
Principal
Tax Exempt Investments (continued) Amount Value
- -------------------------------------------------------
_____________ _____________
Louisiana--9.6%
Louisiana Housing Finance Agency, SFMR
3.75%, Series A-4, 10/22/98 (Escrowed in; U.S. Treasury Bills) . . . . . . . . . . . . . $ 7,750,000 $ 7,750,000
New Orleans Aviation Board, VRDN (Passenger Facility Charge Projects)
3.75% (LOC: Banque Paribas and Canadian Imperial Bank of Commerce) (a) . . . . . . . . . 11,000,000 11,000,000
Plaquemines Parish, Environmental Revenue, Refunding, VRDN
(British Petroleum Exploration and Oil) 3.50% (Corp. Guaranty; British Petroleum) (a) . 12,200,000 12,200,000
Plaquemines Port, Harbor and Terminal District, Port Facilities Revenue
(International Marine Terminal Project)
3.60%, Series B, 3/15/99 (LOC; Morgan Guaranty Trust Co.) . . . . . . . . . . . . . . . 5,775,000 5,775,000
West Baton Rouge Parish Industrial District Number 3, Revenue, VRDN
(Dow Chemical Co. Project) 3.55%, Series A (Corp. Guaranty; Dow Chemical Co.) (a) . . . 22,600,000 22,600,000
Maine--1.6%
Maine Housing Mortgage Authority 3.85%, Series A-3, 5/14/99 (LOC; FNMA). . . . . . . . . . 10,000,000 10,000,000
Michigan--1.5%
Grand Rapids Economic Development Corporation, Revenue, VRDN
(Amway/Grand Plaza Hotel Facility # 1) 3.30% (LOC; Old Kent Bank and Trust) (a) . . . . 4,000,000 4,000,000
Michigan Higher Education Student Loan Authority, Revenue, VRDN
3.25%, Series XII-F (Insured; AMBAC and Liquidity Agreement; Sumitomo Bank) (a) . . . . 5,000,000 5,000,000
Minnesota--2.3%
Minnesota Higher Education Coordinating Board, Revenue, VRDN
3.40% (LOC; Norwest Bank of Minnesota) (a) . . . . . . . . . . . . . . . . . . . . . . . 14,300,000 14,300,000
Missouri--1.5%
Missouri Higher Education Loan Authority, Student Loan Revenue, Refunding, VRDN
3.50%, Series B (Insured; MBIA and SBPA; NMB Post Bank Group) (a) . . . . . . . . . . . 9,500,000 9,500,000
Nevada--2.6%
Clark County, IDR, VRDN:
(Nevada Cogeneration Association 1)
3.40% (LOC; Canadian Imperial Bank of Commerce) (a) . . . . . . . . . . . . . . . . . 5,000,000 5,000,000
(Nevada Cogeneration Association 2)
3.50% (LOC; Union Bank of Switzerland) (a) . . . . . . . . . . . . . . . . . . . . . . 10,700,000 10,700,000
New Hampshire--2.4%
State of New Hampshire, PCR (New England Power Co.)
3.65%, 9/24/98 (Corp. Guaranty; New England Power Co.) . . . . . . . . . . . . . . . . . 15,000,000 15,000,000
New Jersey--.7%
Monmouth County Improvement Authority, Revenue, VRDN
(Pooled Government Loan Program) 2.90% (LOC; Union Bank of Switzerland) (a) . . . . . . 4,000,000 4,000,000
New Mexico--1.6%
State of New Mexico, TRAN 4.25%, 6/30/99 . . . . . . . . . . . . . . . . . . . . . . . . . 10,000,000 10,051,914
<PAGE>
DREYFUS BASIC MUNICIPAL MONEY MARKET PORTFOLIO
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) AUGUST 31,1998
Principal
Tax Exempt Investments (continued) Amount Value
- -------------------------------------------------------
_____________ _____________
New York--1.4%
State of New York, CP 3.55%, Series U, 10/15/98 (LOC; Westdeutsche Landesbank) . . . . . . $ 5,250,000 $ 5,250,000
Port Authority of New York and New Jersey, VRDN
3.30%, Series 4 (LOC; Landesbank Hessen) (a) . . . . . . . . . . . . . . . . . . . . . . 3,300,000 3,300,000
North Carolina--2.0%
Wake County Industrial Facilities and Pollution Control Finance Authority,
Revenue, VRDN
(Carolina Power and Light Co. Project) 3.45% (LOC; First Union National Bank) (a) . . . 12,000,000 12,000,000
Ohio--4.1%
Montgomery County, HR, CP (Miami Valley Hospital)
3.60%, Series B, 12/15/98 (Liquidity Facility; Morgan Guaranty Trust Co.) . . . . . . . 15,000,000 15,000,000
Ohio Housing Finance Agency, Mortgage Revenue
3.80%, Series A-2, 3/1/99 (Corp. Guaranty; Trinity Funding Corp.) . . . . . . . . . . . 10,000,000 10,000,000
Oregon--1.6%
Klamath Falls, Electric Revenue (Salt Caves Hydroelectric)
3.80%, Series C, 5/3/99 (Escrowed in; U.S. Treasury Bills) . . . . . . . . . . . . . . . 10,000,000 10,000,000
Pennsylvania--2.4%
Pennsylvania Energy Development Authority, Energy Development Revenue, VRDN
(B & W Ebensburg Project) 3.25% (LOC; Union Bank of Switzerland) (a) . . . . . . . . . . 7,940,000 7,940,000
City of Philadelphia, TRAN 4.25%, Series A, 6/30/99. . . . . . . . . . . . . . . . . . . . 7,000,000 7,034,324
Rhode Island--1.3%
Rhode Island Student Loan Authority, Student Loan Revenue, VRDN
3.35%, Series 1 (LOC; National Westminster Bank) (a) . . . . . . . . . . . . . . . . . . 8,000,000 8,000,000
Texas--18.5%
Brazos River Navigation District, Harbor Revenue, VRDN:
(BASF Corp. Project) 3.40% (Corp. Guaranty; B.A.S.F. ) (a) . . . . . . . . . . . . . . . 8,500,000 8,500,000
(Dow Chemical Co. Project) 3.55% (Corp. Guaranty; Dow Chemical Co.) (a) . . . . . . . . 22,300,000 22,300,000
El Paso Industrial Development Authority Inc. IDR, VRDN
(El Paso School District Limited Project) 3.45% (LOC; Chase Manhattan Bank) (a) . . . . 2,800,000 2,800,000
Greater East Texas Higher Education Authority Inc., Student Loan Revenue
3.95%, Series B, 9/1/98 (LOC; Student Loan Marketing Association) . . . . . . . . . . . 9,200,000 9,200,000
Greater East Texas Student Loan Corporation, Student Loan Revenue, Refunding
3.60%, Series A, 3/1/99 (LOC; Student Loan Marketing Association) . . . . . . . . . . . 8,000,000 8,000,000
Gulf Coast Industrial Development Authority, SWDR, VRDN
(Citgo Petroleum Corp. Project) 3.55% (LOC; Wachovia Bank of Georgia) (a) . . . . . . . 9,100,000 9,100,000
Gulf Coast Waste Disposal Authority, SWDR, VRDN (Amoco Oil Co. Project)
3.45% (Corp. Guaranty; Amoco Credit Corp.) (a) . . . . . . . . . . . . . . . . . . . . . 15,300,000 15,300,000
North Texas Higher Education Authority Inc., Student Loan Revenue, VRDN
3.35%, Series A (LOC; Student Loan Marketing Association) (a) . . . . . . . . . . . . . 10,500,000 10,500,000
Panhandle Plains Higher Education Authority Inc., Student Loan Revenue, VRDN
3.30%, Series A (LOC; Student Loan Marketing Association) (a) . . . . . . . . . . . . . 26,000,000 26,000,000
<PAGE>
DREYFUS BASIC MUNICIPAL MONEY MARKET PORTFOLIO
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) AUGUST 31,1998
Principal
Tax Exempt Investments (continued) Amount Value
- -------------------------------------------------------
_____________ _____________
Texas (continued)
Port Development Corporation, Marine Terminal Revenue, VRDN
(Pasadena Terminal Co. Inc., Project) 3.55% (LOC; ABN-Amro Bank) (a) . . . . . . . . . . $ 2,420,000 $ 2,420,000
Utah--2.9%
Utah Board of Regents, Student Loan Revenue, Refunding, VRDN
3.35%, Series A (LOC; Student Loan Marketing Association) (a) . . . . . . . . . . . . . 17,500,000 17,500,000
Virginia--6.0%
Peninsula Port Authority, Revenue, Refunding, VRDN (Port Facility Zelgler Coal)
3.50% (LOC; Bank of America) (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,950,000 18,950,000
Richmond Industrial Development Authority, Revenue, VRDN
(Cogentrix of Richmond Project):
3.80% Series A (LOC; Banque Paribas) (a) . . . . . . . . . . . . . . . . . . . . . . . 8,300,000 8,300,000
3.80% Series B (LOC; Banque Paribas) (a) . . . . . . . . . . . . . . . . . . . . . . . 6,000,000 6,000,000
Exempt Facilities 3.80%, Series A (LOC; Banque Paribas) (a) . . . . . . . . . . . . . . 3,400,000 3,400,000
_____________
TOTAL INVESTMENTS (cost $607,559,966). . . . . . . . . . . . . . . . . . . . . . . . . . . 98.7% $ 607,559,966
======= =============
CASH AND RECEIVABLES (NET) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.3% $ 7,909,171
======= =============
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.0% $ 615,469,137
======= =============
<PAGE>
</TABLE>
<TABLE>
DREYFUS BASIC MUNICIPAL MONEY MARKET PORTFOLIO
- -----------------------------------------------------------------------------
Summary of Abbreviations
- -----------------------------------------------------------------------------
<S> <C> <C> <C>
AMBAC American Municipal Bond Assurance Corporation PCR Pollution Control Revenue
CP Commercial Paper SBPA Standby Bond Purchase Agreement
FNMA Federal National Mortgage Association SFMR Single Family Mortgage Revenue
HR Hospital Revenue SWDR Solid Waste Disposal Revenue
IDR Industrial Development Revenue TAN Tax Anticipation Notes
LOC Letter of Credit TRAN Tax and Revenue Anticipation Notes
MBIA Municipal Bond Investors Assurance VRDN Variable Rate Demand Notes
Insurance Corporation
</TABLE>
<TABLE>
Summary of Combined Ratings (Unaudited)
- -----------------------------------------------------------------------------
Fitch or Moody's or Standard & Poor's Percentage of Value
____ ________ _________________ ___________________
<S> <C> <C>
F1+/F1 VMIG1/MIG1,P1 SP1+/SP1, A1+/A1 95.7%
AAA/AA (b) Aaa/Aa (b) AAA/AA (b) 1.4
Not Rated (c) Not Rated (c) Not Rated (c) 2.9
_______
100.0%
=======
</TABLE>
Notes to Statement of Investments:
- -----------------------------------------------------------------------------
(a) Securities payable on demand. Variable interest rate--subject to periodic
change.
(b) Notes which are not F, MIG or SP rated are represented by bond ratings of
the issuers.
(c) Securities which, while not rated by Fitch, Moody's or Standard & Poor's,
have been determined by the Manager to be of comparable quality to those
rated securities in which the Fund may invest.
(d) At August 31, 1998, the Fund had $162,800,000 (26.5% of net assets)
invested in securities whose payment of prinicpal and interest is dependent
upon revenues generated from educational projects.
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
<TABLE>
DREYFUS BASIC MUNICIPAL MONEY MARKET PORTFOLIO
- -----------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES AUGUST 31, 1998
Cost Value
_____________ _____________
<S> <C> <C>
ASSETS: Investments in securities--See Statement of Investments . . $607,559,966 $607,559,966
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . 3,981,482
Interest receivable . . . . . . . . . . . . . . . . . . . 4,161,572
Prepaid expenses . . . . . . . . . . . . . . . . . . . . 31,246
_____________
615,734,266
_____________
LIABILITIES: Due to The Dreyfus Corporation and affiliates . . . . . . 213,014
Accrued expenses and other liabilities . . . . . . . . . 52,115
_____________
265,129
_____________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $615,469,137
=============
REPRESENTED BY: Paid-in capital . . . . . . . . . . . . . . . . . . . . . $615,596,875
Accumulated net realized gain (loss) on investments . . . (127,738)
_____________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $615,469,137
=============
SHARES OUTSTANDING
(3 BILLION SHARES OF $.001 PAR VALUE COMMON STOCK AUTHORIZED). . . . . . . . . . . . . . . 615,596,875
NET ASSET VALUE, offering and redemption price per share . . . . . . . . . . . . . . . . . $1.00
=======
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
<TABLE>
DREYFUS BASIC MUNICIPAL MONEY MARKET PORTFOLIO
- -----------------------------------------------------------------------------
STATEMENT OF OPERATIONS AUGUST 31, 1998
INVESTMENT INCOME
<S> <C> <C>
INCOME Interest Income . . . . . . . . . . . . . . . . . . . . . $23,718,640
EXPENSES: Management fee--Note 2(a) . . . . . . . . . . . . . . . . $3,194,542
Shareholder servicing costs--Note 2(b) . . . . . . . . . 563,666
Registration fees . . . . . . . . . . . . . . . . . . . . 86,286
Custodian fees . . . . . . . . . . . . . . . . . . . . . 46,485
Professional fees . . . . . . . . . . . . . . . . . . . . 45,422
Prospectus and shareholders' reports . . . . . . . . . . 12,710
Directors' fees and expenses--Note 2(c) . . . . . . . . . 12,636
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . 15,756
____________
Total Expenses . . . . . . . . . . . . . . . . . . 3,977,503
Less--reduction in management fee due to
undertaking--Note 2(a) . . . . . . . . . . . . . . . . (1,101,681)
____________
Net Expenses . . . . . . . . . . . . . . . . . . . 2,875,822
____________
INVESTMENT INCOME--NET . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,842,818
NET REALIZED GAIN (LOSS) ON INVESTMENTS--Note 1(b) . . . . . . . . . . . . . . . . . . . . (12,147)
____________
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS . . . . . . . . . . . . . . . . . . . $20,830,671
============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
<TABLE>
DREYFUS BASIC MUNICIPAL MONEY MARKET PORTFOLIO
- -----------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
Year Ended Year Ended
August 31, 1998 August 31, 1997
_______________ ________________
OPERATIONS:
<S> <C> <C>
Investment income--net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 20,842,818 $ 24,320,710
Net realized gain (loss) on investments . . . . . . . . . . . . . . . . . . . . . (12,147) (423)
Net unrealized appreciation (depreciation) on investments . . . . . . . . . . . . -- (3,937)
______________ _______________
Net Increase (Decrease) in Net Assets Resulting from Operations . . . . . . . 20,830,671 24,316,350
______________ _______________
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (20,842,818) (24,320,710)
______________ _______________
CAPITAL STOCK TRANSACTIONS ($1.00 per share):
Net proceeds from shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . 562,832,805 875,141,536
Dividends reinvested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,675,953 22,940,782
Cost of shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (650,589,800) (1,018,772,663)
______________ _______________
Increase (Decrease) in Net Assets from Capital Stock Transactions . . . . . . (68,081,042) (120,690,345)
______________ _______________
Total Increase (Decrease) in Net Assets . . . . . . . . . . . . . . . . . (68,093,189) (120,694,705)
NET ASSETS:
Beginning of Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 683,562,326 804,257,031
______________ _______________
End of Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 615,469,137 $ 683,562,326
============== ===============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
<TABLE>
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: 1998 1997 1996 1995 1994
______ ______ ______ ______ ______
<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 .033 .034 .037 .026
______ ______ ______ ______ ______
Distributions:
Dividends from investment income--net . . . . . . . . . . (.033) (.033) (.034) (.037) (.026)
______ ______ ______ ______ ______
Net asset value, end of period . . . . . . . . . . . . . $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN. . . . . . . . . . . . . . . . . . . 3.31% 3.31% 3.42% 3.80% 2.60%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets . . . . . . . . . .45% .45% .38% .14% .09%
Ratio of net investment income
to average net assets . . . . . . . . . . . . . . . . 3.26% 3.26% 3.40% 3.73% 2.58%
Decrease reflected in above expense ratios
due to undertakings by the Manager . . . . . . . . . .17% .15% .22% .45% .50%
Net Assets, end of period (000's Omitted) . . . . . . . . $615,469 $683,562 $804,257 $1,099,434 $1,027,377
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
DREYFUS BASIC MUNICIPAL MONEY MARKET PORTFOLIO
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NOTES TO FINANCIAL STATEMENTS
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES:
Dreyfus BASIC Municipal Money Market Portfolio (the "Fund") is a separate
non-diversified series of Dreyfus BASIC Municipal Fund, Inc. (the "Company")
which is registered under the Investment Company Act of 1940, as amended (the
" Act" ) as an 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 (the "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 in securities 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. Under the terms of the custodian agreement, the Fund
receives net earnings credits based on available cash balances left on deposit.
(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 of 1986, as
amended (the "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 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 $116,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to August 31, 1998. The
carryover does not include net realized securities losses from November 1, 1997
through August 31, 1998, which are treated, for Federal income tax purposes, as
arising in fiscal 1999. If not applied, $1,700 of the carryover expires in
fiscal 2001, $2,000 expires in fiscal 2002, $50,300 expires in fiscal 2003,
$36,000 expires in fiscal 2004, $25,000 expires in fiscal 2005 and $1,000
expires in fiscal 2006.
At August 31, 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).
<PAGE>
DREYFUS BASIC MUNICIPAL MONEY MARKET PORTFOLIO
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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 $1,101,681 during the period ended August 31, 1998
(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, 1998, the Fund was charged $457,978 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. During the period
ended August 31, 1998, the Fund was charged $73,083 pursuant to the transfer
agency agreement.
(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, 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 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, 1998 by correspondence with the custodian. 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, 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
each of the indicated years, in conformity with generally accepted accounting
principles.
New York, New York
October 2, 1998
<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, 1998 as "exempt-interest dividends" (not generally subject to regular
Federal income tax).
<PAGE>
Dreyfus lion "d" logo (reg.tm)
Dreyfus logo (reg.tm)
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. 122AR988
BASIC Municipal
Money Market
Portfolio
Annual Report
August 31, 1998
<PAGE>
