Dreyfus BASIC Municipal Money Market Portfolio
ANNUAL REPORT August 31, 2000
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the portfolio are subject to change at any time based on
market and other conditions.
* Not FDIC-Insured * Not Bank-Guaranteed * May Lose Value
Contents
THE PORTFOLIO
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2 Letter from the President
3 Discussion of Performance
6 Statement of Investments
13 Statement of Assets and Liabilities
14 Statement of Operations
15 Statement of Changes in Net Assets
16 Financial Highlights
17 Notes to Financial Statements
21 Report of Independent Auditors
22 Important Tax Information
FOR MORE INFORMATION
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Back Cover
The Portfolio
Dreyfus BASIC Municipal Money Market Portfolio
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this annual report for Dreyfus BASIC Municipal Money
Market Portfolio, covering the 12-month period from September 1, 1999 through
August 31, 2000. Inside, you' ll find valuable information about how the
portfolio was managed during the reporting period, including a discussion with
the portfolio manager, Colleen Meehan.
Tighter monetary policy adversely affected most -- but not all -- sectors of the
money markets over the past year. This was primarily a result of efforts by the
Federal Reserve Board (the "Fed") to forestall potential inflationary pressures
in a fast-growing economy. The Fed raised short-term interest rates four times
during the reporting period, following two interest-rate hikes implemented in
the months before the reporting period began.
Tax-exempt money market investments were also strongly influenced by their own
unique supply-and-demand factors, including a reduction in the supply of
tax-exempt money market instruments amid strengthening demand. These forces
helped constrain the rise in tax-exempt yields relative to comparable taxable
securities, especially during the second half of the reporting period.
We appreciate your confidence over the past year, and we look forward to your
continued participation in Dreyfus BASIC Municipal Money Market Portfolio.
Sincerely,
/s/Stephen E. Canter
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
September 15, 2000
DISCUSSION OF PERFORMANCE
Colleen Meehan, Portfolio Manager
How did Dreyfus BASIC Municipal Money Market Portfolio perform during the
period?
For the 12-month period ended August 31, 2000, the portfolio produced an
annualized yield of 3.41%. Taking into account the effects of compounding, the
portfolio provided an annualized effective yield of 3.46%.(1)
We attribute the portfolio' s performance to a strong economic environment,
rising interest rates and seasonal factors during most of the reporting period.
What is the portfolio's investment approach?
The portfolio seeks a high level of federally tax-exempt income while
maintaining a stable $1.00 share price. We are especially vigilant in our
efforts to preserve capital.
In pursuing this objective, we employ two primary strategies. First, we attempt
to add value by constructing a diverse portfolio of high quality, tax-exempt
money market instruments. Second, we actively manage the portfolio's average
maturity in anticipation of what we believe are interest-rate trends and
supply-and-demand changes in the short-term municipal marketplace.
For example, if we expect an increase in short-term supply, we may decrease the
average weighted maturity of the portfolio, which would enable us to purchase
new securities with higher yields. Yields tend to rise when there is an increase
in new-issue supply competing for investor interest. New securities are
generally issued with maturities in the one-year range, which if purchased,
usually tend to lengthen the portfolio' s average weighted maturity. If we
anticipate limited new-issue supply, we may extend the portfolio's average
maturity to maintain current yields for as long as practical. At other times, we
try to maintain an average weighted maturity that reflects our view of
short-term interest-rate trends and future supply-and-demand considerations.
The Portfolio
DISCUSSION OF PERFORMANCE (CONTINUED)
What other factors influenced the portfolio's performance?
The portfolio was positively influenced over the past year by robust U.S.
economic growth, rising interest rates, seasonal supply-and-demand factors and a
declining supply of newly issued securities.
When the reporting period began on September 1, 1999, it had become apparent
that the pace of economic growth in the United States was more rapid than many
analysts expected. Consumer confidence was high, oil prices were bouncing back
from earlier lows and employment remained strong. These economic forces sparked
concerns that long-dormant inflationary pressures might reemerge. In response,
the Federal Reserve Board raised short-term interest rates four times during the
reporting period, for an increase of 1.25%.
Tax-exempt money markets continued to be influenced by the effects of a strong
U.S. economy. In general, yields for state-specific (California, New Jersey and
New York) tax-exempt money market instruments were generally low compared to
most taxable money market instruments. This was primarily because many states
and their municipalities experienced higher tax revenues during the reporting
period. As a result, their need to borrow was curtailed which resulted in a
reduced supply of securities. However, overall demand for tax-exempt money
market securities remained relatively strong because of new wealth created by a
strong economy and a rising stock market.
Despite these influences, during April and May of 2000, seasonal
supply-and-demand factors helped push tax-exempt money market yields to their
highest level since 1991. That' s because many taxpayers redeemed shares of
tax-exempt money market funds to pay their income tax obligations, reducing
demand and increasing supply temporarily. We took advantage of this short-lived
yield increase by reducing the portfolio's average weighted maturity before
seasonal tax selling began. Once yields were higher, we extended the portfolio's
average maturity to lock in higher prevailing yields.
Toward the end of the reporting period, tax-exempt money market yields began to
decline as signs of a potential economic slowdown emerged. Our maturity
management strategy was particularly beneficial during this time, because it
helped us to lock in higher yields as rates on one-year municipal notes fell.
What is the portfolio's current strategy?
Our strategy continues to involve active management of the portfolio's average
weighted maturity and asset mix according to our interest-rate and
supply-and-demand expectations. Accordingly, as of August 31, we maintained a
longer weighted average maturity than many other tax-exempt money market funds.
This strategy was designed to help us lock in what we believe were attractive
yields during periods of low supply for newly issued securities.
In addition, when we took advantage of temporary high yields during tax season,
we created a "laddered" portfolio of municipal notes and commercial paper, in
which maturities are staggered so that current holdings mature at different
times. The laddered portfolio generally was designed to maintain then prevailing
yields from certain portfolio securities if interest rates fall, while making
some cash available for reinvestment in case interest rates rise further. Of
course, portfolio composition is subject to change at any time.
September 15, 2000
(1) ANNUALIZED EFFECTIVE YIELD IS BASED UPON DIVIDENDS DECLARED DAILY AND
REINVESTED MONTHLY. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. YIELDS
FLUCTUATE. INCOME MAY BE SUBJECT TO STATE AND LOCAL TAXES, AND SOME INCOME MAY
BE SUBJECT TO THE FEDERAL ALTERNATIVE MINIMUM TAX (AMT) FOR CERTAIN INVESTORS.
AN INVESTMENT IN THE PORTFOLIO IS NOT INSURED OR GUARANTEED BY THE FDIC OR THE
U.S. GOVERNMENT. ALTHOUGH THE PORTFOLIO SEEKS TO PRESERVE THE VALUE OF YOUR
INVESTMENT AT $1.00 PER SHARE, IT IS POSSIBLE TO LOSE MONEY BY INVESTING IN THE
PORTFOLIO.
The Portfolio
STATEMENT OF INVESTMENTS
August 31, 2000
STATEMENT OF INVESTMENTS
<TABLE>
Principal
TAX EXEMPT INVESTMENTS-100.3% Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ALABAMA--5.1%
Decatur, IDB, SWDR, VRDN
(Trico Steel Co. LLC Project)
4.30% (LOC; Chase Manhattan Bank) 25,000,000 (a) 25,000,000
CALIFORNIA--2.0%
California Higher Education Loan Authority Inc.
Student Loan Revenue
4.45%, Series C, 7/1/2001 (LOC; Student Loan
Marketing Association) 10,000,000 10,000,000
COLORADO--3.1%
Colorado Student Obligation Bond Authority
Student Loan Revenue, VRDN
4.35%, Series A (LOC; Student Loan Marketing Association) 15,000,000 (a) 15,000,000
DISTRICT OF COLUMBIA--1.0%
District of Columbia, Revenues, VRDN
(George Washington University)
4.25%, Series B (Insured; MBIA and Liquidity
Facility; Bank of America) 5,000,000 (a) 5,000,000
FLORIDA--4.1%
Miami-Dade County Housing Finance Authority
Home Ownership Mortgage, Housing Revenue
4.80%, Series A-2, 4/16/2001 (LOC; AIG Funding Inc.) 5,000,000 5,000,000
Orange County Health Facilities Authority, Revenues
VRDN (Florida Hospital Associates) 4.35%, Series A
(Insured; CDC Funding Corp. and Liquidity Facility:
The Bank of New York, Bank of Nova Scotia,
and Banque Paribas) 10,000,000 (a) 10,000,000
Sunshine State Governmental Finance Commission, Revenue
VRDN 4.20% (Insured; AMBAC and Liquidity Facility;
Credit Local de France) 5,000,000 (a) 5,000,000
GEORGIA--5.1%
Atlanta, Airport Revenue, VRDN
4.94% (Insured; FGIC and Liquidity Facility;
First Union National Bank) 5,070,000 (a) 5,070,000
Savannah Economic Development Authority, Exempt
Revenue, VRDN (Home Depot Project)
4.35%, Series A (Corp. Guaranty; Home Depot) 20,000,000 (a) 20,000,000
ILLINOIS--4.9%
Cook County, GO Notes
6.30%, 11/1/2000 (Insured; AMBAC) 3,000,000 3,010,896
Cook County Capital Improvement, Refunding, GAN
5%, 11/15/2000 (Insured; FGIC) 4,540,000 4,548,536
Principal
TAX EXEMPT INVESTMENTS (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS (CONTINUED)
Illinois Development Finance Authority, Revenue, Refunding
VRDN 4.30%, Series A (Amerncips Project) 7,000,000 (a) 7,000,000
Illinois Health Facilities Authority, Revenue
4.75%, 5/31/2001 (Evanston Northwestern Corp.) 4,000,000 4,000,000
Village of Lombard, MFHR (Clover Creek)
4.05%, 12/15/2000 (LOC; Bank One of Arizona) 4,800,000 4,800,000
INDIANA--3.7%
Indiana Bond Bank Advance Funding Program
4.75%, Series A-2, 1/18/2001
(LOC; Bank of America) 8,000,000 8,016,964
Petersburg, SWDR, VRDN
(Indiana Power and Light Co. Project)
4.25%, Series A (Corp. Guaranty; Indiana Power
and Light Co. Project) 10,000,000 (a) 10,000,000
IOWA--2.6%
Iowa Finance Authority, SWDR
VRDN (Cedar River Paper Company)
4.45%, Series A (LOC; Union Bank Of Switzerland) 3,000,000 (a) 3,000,000
Louisa County, PCR, Refunding, VRDN
(Midwest Power System Inc. Project) 4.40% 10,000,000 (a) 10,000,000
KANSAS--1.9%
Wichita, Water and Sewer Utility Revenue
6.50%, 10/1/2000 (Insured; FGIC) 1,850,000 1,853,474
Wyandotte County Government Temporary Notes
(Kansas City University):
4.30%, Series 8, 2/1/2001 4,015,000 4,015,000
4.40%, Series 5, 2/1/2001 1,262,500 1,262,500
4.40%, Series 6, 2/1/2001 2,095,750 2,095,750
KENTUCKY--1.7%
Kentucky Governmental Agencies
TRAN 5.30%, 6/29/2001 (LOC; Fifth Third Bank) 3,440,000 3,461,713
Kentucky Interlocal School Transportation Association
TRAN 5%, 6/29/2001 5,000,000 5,023,680
LOUISIANA--2.8%
New Orleans Finance Authority, SFMR
4.45%, Series A-2, 4/1/2001 (LOC; AIG Funding Inc.) 4,000,000 4,000,000
West Baton Rouge Parish, Industrial District Number 3
Revenue, VRDN (Dow Chemical Co. Project)
4.50%, Series A (Corp. Guaranty; Dow Chemical Co.) 10,000,000 (a) 10,000,000
The Portfolio
STATEMENT OF INVESTMENTS (CONTINUED)
Principal
TAX EXEMPT INVESTMENTS (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
MAINE--.6%
Cumberland County, GO Notes, Prerefunded
6.95%, 2/01/2001
(Escrowed in; U.S. Government Securities) 2,500,000 2,574,001
MASSACHUSETTS--2.3%
Northampton, BAN 5%, 10/27/2000 4,000,000 4,003,603
Pioneer Valley Transportation Authority
RAN 4.875%, 8/02/2001 4,000,000 4,011,446
Springfield, BAN 5%, 6/22/2001 3,350,000 3,362,907
MICHIGAN--6.0%
Grand Rapids Economic Development Corporation
IDR, VRDN
(Amway/Grand Plaza Hotel Facility # 1)
4.20% (LOC; Old Kent Bank and Trust Co.) 4,000,000 (a) 4,000,000
Michigan Hospital Finance Authority, Revenues
Hospital Equipment Loan Program, CP
4.50%, Series A, 9/11/2000
(Corp. Guaranty; Sarco Inc.) 5,800,000 5,800,000
Michigan Housing Development Authority
MFHR, Refunding,VRDN
(River Place Apartments)
4.45% (LOC; The Bank of New York) 8,000,000 (a) 8,000,000
Michigan South Central Power Agency, Power Supply
System Revenue, Refunding
5.20%, 11/1/2000 (Insured; MBIA) 5,510,000 5,520,203
Michigan Strategic Fund, LOR, VRDN
(Pierce Foundation Project)
4.20% (LOC; Michigan National Bank) 6,000,000 (a) 6,000,000
MINNESOTA--5.0%
Becker, PCR, CP
(Northern States Power Company)
4.30%, Series A, 10/13/2000 5,000,000 5,000,000
Minnesota Higher Education Coordinating Board, Revenue
VRDN 4.35% (LOC; Norwest Bank of Minnesota) 15,500,000 (a) 15,500,000
Southern Minnesota Municipal Power Agency, Revenue
CP (Power Supply System)
4.75%, 9/11/2000 (Liquidity Facility: ABN-Amro Bank,
Bank of Nova Scotia and Credit Agricole-Indosuez) 4,000,000 4,000,000
MISSOURI--1.9%
Missouri Higher Education Loan Authority, Student Loan
Revenue, Refunding, VRDN
4.40%, Series B (Insured; MBIA and SBPA; NMB Post
Bank Group) 9,500,000 (a) 9,500,000
Principal
TAX EXEMPT INVESTMENTS (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
NEVADA--1.5%
Clark County, VRDN:
EDR (Lutheran Secondary School Association Project)
4.40% (LOC; Allied Irish Banks) 4,000,000 (a) 4,000,000
IDR (Nevada Cogeneration)
4.45% (LOC; ABN-Amro Bank) 3,500,000 (a) 3,500,000
NEW HAMPSHIRE--5.6%
State of New Hampshire Business Finance Authority, PCR
CP (New England Power Co. Project)
4.30%, Series A, 9/15/2000 (Corp. Guaranty; New
England Power Co.) 21,000,000 21,000,000
Rockingham County, TAN 4.75%, 12/29/2000 6,500,000 6,509,185
OHIO--3.3%
Ohio Housing Finance Agency, Mortgage Revenue
(Residential):
4.15%, Series C, 9/1/2000 4,100,000 4,100,000
4.35%, Series C, 8/30/2001 5,000,000 5,000,000
Ohio Water Development Facility Authority
PCR, Refunding, VRDN
(Duquesne Light Co.)
4.40%, Series A (Insured; AMBAC and Liquidity
Facility; The Bank of New York) 7,000,000 (a) 7,000,000
OREGON--.4%
Oregon Health , Housing, Educational and Cultural Facility
Authority, Revenues, CP
4.25%, 10/24/2000
(LOC; Canadian Imperial Bank of Commerce) 2,000,000 2,000,000
PENNSYLVANIA--7.7%
Emmaus General Authority, Revenue, VRDN:
4.25% (Insured; FSA and Liquidity Facility; First Union
National Bank) 15,000,000 (a) 15,000,000
4.25%, Subseries E-11 (LOC; Canadian Imperial Bank
of Commerce) 5,000,000 (a) 5,000,000
4.30%, Series E (LOC; Goldman Sachs and Company) 5,000,000 (a) 5,000,000
4.30%, Series D (LOC; Goldman Sachs and Company) 5,800,000 (a) 5,800,000
Pennsylvania Energy Development Authority, Energy
Development Revenue, VRDN
(B & W Ebensburg Project)
4.35% (LOC; Landesbank Hessen) 6,985,000 (a) 6,985,000
SOUTH CAROLINA--1.2%
Florence County Solid Waste Disposal, Waste Water
Treatment Facilities Revenue, VRDN
(Roche Carolina Inc. Project)
4.45% (LOC; Deutsche Bank) 4,400,000 (a) 4,400,000
The Portfolio
STATEMENT OF INVESTMENTS (CONTINUED)
Principal
TAX EXEMPT INVESTMENTS (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
SOUTH CAROLINA (CONTINUED)
Lexington County Health Services District Inc.
Hospital Improvement Revenue, Refunding
4.25%, 11/1/2000 (Insured; FSA) 1,665,000 1,665,250
TENNESSEE--3.3%
Sevier County Public Building Authority, Local Government
Public Improvement Revenue, VRDN
4.30%, Series II-C-5 (Insured; AMBAC and LOC;
Landesbank Hessen) 6,000,000 (a) 6,000,000
Shelby County Health Educational and Housing Facilities Board
HR (Baptist Memorial Hospital):
4.60%, 11/22/2000 (LOC; Bank of America) 5,000,000 5,000,000
4.30%, 12/22/2000 (LOC; Bank of America) 5,000,000 5,000,000
TEXAS--13.5%
Brazos River Harbor Navigation District, Harbor Revenue
VRDN (Dow Chemical Co. Project)
4.50% (Corp. Guaranty; Dow Chemical Co.) 22,300,000 (a) 22,300,000
El Paso Industrial Development Authority Inc., IDR
VRDN (El Paso School District Limited Project)
4.40% (LOC; Chase Manhattan Bank) 2,000,000 (a) 2,000,000
Gulf Coast Waste Disposal Authority, VRDN:
Environment Facilities Revenue
(Amoco Oil Company Project)
4.45% (LOC; BP Amoco PLC) 1,700,000 (a) 1,700,000
SWDR, Refunding
(Amoco Oil Company Project)
4.45% (LOC; BP Amoco PLC) 2,000,000 (a) 2,000,000
Harris County Health Facilities Development Corporation
HR, VRDN (Texas Children's Hospital)
4.30%, Series B-1 (Insured; MBIA and Liquidity Facility;
Morgan Guaranty Trust Co.) 5,000,000 (a) 5,000,000
Panhandle Plains Higher Education Authority Inc., Student
Loan Revenue, VRDN
4.35%, Series A (LOC; Student Loan Marketing
Association) 20,000,000 (a) 20,000,000
Port Development Corporation, Marine Terminal Revenue
VRDN (Pasadena Terminal Co. Inc. Project)
4.45% (LOC; ABN-Amro Bank) 2,420,000 (a) 2,420,000
State of Texas, TRAN 5.25%, 8/31/2001 5,000,000 5,046,622
Texas Public Finance Authority, Revenue
4.20%, Series A, 10/18/2000 5,000,000 5,000,000
West Texas Municipal Power Agency, Electric Revenue
4.20%, 2/15/2001 (Insured; MBIA) 1,000,000 999,987
Principal
TAX EXEMPT INVESTMENTS (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
UTAH--1.3%
Utah Housing Finance Agency, MFHR
Refunding, VRDN (Candlestick)
4.30% (LOC; Bank One Corp.) 6,400,000 (a) 6,400,000
VIRGINIA--4.0%
Hopewell Industrial Development Authority, Exempt
Facilities Revenue, VRDN (Hadson Power 13)
4.40%, Series A (LOC; Credit Suisse) 2,000,000 (a) 2,000,000
Richmond Industrial Development Authority, IDR
VRDN (Cogentrix of Richmond Project):
4.60%, Series A (LOC; Banque Paribas) 8,300,000 (a) 8,300,000
4.60%, Series B (LOC; Banque Paribas) 6,000,000 (a) 6,000,000
Exempt Facilities 4.60%, Series A
(LOC; Banque Paribas) 3,400,000 (a) 3,400,000
WASHINGTON--1.9%
Washington Finance Commission, MFHR
Refunding, VRDN
(Avalon Ridge Apartments Project) 4.35% (LOC; FNMA) 9,255,000 (a) 9,255,000
WEST VIRGINIA--1.0%
West Virginia State Hospital Finance Authority, Revenue
VRDN (WVHA Pooled Finance Program)
4.39% (Insured; Bank of America and Liquidity
Facility: Bank of Nova Scotia and Banque Paribas) 5,000,000 (a) 5,000,000
WISCONSIN--1.0%
Green Bay Area Public School District, BAN 4.90%,
4/30/2001 5,000,000 5,000,810
WYOMING--.8%
Wyoming Community Development Authority,
Housing Revenue 3.60%, Series 4, 12/1/2000 4,000,000 3,988,792
------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $492,182,829) 100.3% 492,201,319
LIABILITIES, LESS CASH AND RECEIVABLES (.3%) (1,237,091)
NET ASSETS 100.0% 490,964,228
The Portfolio
STATEMENT OF INVESTMENTS (CONTINUED)
Summary of Abbreviations
AMBAC American Municipal Bond
Assurance Corporation
BAN Bond Anticipation Notes
CP Commercial Paper
EDR Economic Development Revenue
FGIC Financial Guaranty
Insurance Company
FNMA Federal National Mortgage
Association
FSA Financial Security Assurance
GAN Grant Anticipation Notes
GO General Obligation
HR Hospital Revenue
IDB Industrial Development Board
IDR Industrial Development Revenue
LOC Letter of Credit
LOR Limited Obligation Revenue
MBIA Municipal Bond Investors Assurance
Insurance Corporation
MFHR Multi-Family Housing Revenue
PCR Pollution Control Revenue
RAN Revenue Anticipation Notes
SBPA Standby Bond Purchase Agreement
SFMR Single Family Mortgage Revenue
SWDR Solid Waste Disposal Revenue
TAN Tax Anticipation Notes
TRAN Tax and Revenue Anticipation Notes
VRDN Variable Rate Demand Notes
Summary of Combined Ratings (Unaudited)
Fitch or Moody's or Standard & Poor's Value (%)
------------------------------------------------------------------------------------------------------------------------------------
F1+/F1 VMIG1/MIG1, P1 SP1+/SP1, A1+/A1 89.9
AAA/AA (b) Aaa/Aa (b) AAA/AA (b) 5.0
Not Rated (c) Not Rated (c) Not Rated (c) 5.1
100.0
(A) SECURITIES PAYABLE ON DEMAND. VARIABLE INTEREST RATE--SUBJECT TO PERIODIC
CHANGE.
(B) NOTES WHICH ARE NOT F, MIG OR SP RATED ARE REPRESENTED BY BOND RATINGS OF
THE ISSUERS.
(C) SECURITIES WHICH, WHILE NOT RATED BY FITCH, MOODY'S AND STANDARD & POOR'S
HAVE BEEN DETERMINED BY THE MANAGER TO BE OF COMPARABLE QUALITY TO THOSE
RATED SECURITIES IN WHICH THE PORTFOLIO MAY INVEST.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
STATEMENT OF ASSETS AND LIABILITIES
August 31, 2000
Cost Value
--------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of
Investments 492,182,829 492,201,319
Cash 5,398,237
Interest receivable 3,529,652
Prepaid expenses 9,282
501,138,490
--------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 119,839
Payable for investment securities purchased 10,000,000
Accrued expenses and other liabilities 54,423
10,174,262
--------------------------------------------------------------------------------
NET ASSETS ($) 490,964,228
--------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 491,070,395
Accumulated net realized gain (loss) on investments (124,657)
Accumulated gross unrealized appreciation on investments 18,490
--------------------------------------------------------------------------------
NET ASSETS ($) 490,964,228
--------------------------------------------------------------------------------
SHARES OUTSTANDING
(3 billion shares of $.001 par value Common Stock authorized) 491,070,395
NET ASSET VALUE, offering and redemption price per share ($) 1.00
SEE NOTES TO FINANCIAL STATEMENTS.
The Portfolio
STATEMENT OF OPERATIONS
Year Ended August 31, 2000
--------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INTEREST INCOME 20,554,324
EXPENSES:
Management fee--Note 2(a) 2,672,310
Shareholder servicing costs--Note 2(b) 361,362
Custodian fees 52,973
Professional fees 48,935
Registration fees 25,785
Prospectus and shareholders' reports 14,190
Directors' fees and expenses--Note 2(c) 7,959
Miscellaneous 12,111
TOTAL EXPENSES 3,195,625
Less--reduction in management fee due to
undertaking--Note 2(a) (790,166)
NET EXPENSES 2,405,459
INVESTMENT INCOME--NET 18,148,865
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 1(B) ($):
Net realized gain (loss) on investments 2,551
Net unrealized appreciation (depreciation) on investments 18,490
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS 21,041
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 18,169,906
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF CHANGES IN NET ASSETS
Year Ended August 31,
-----------------------------------
2000 1999
--------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 18,148,865 17,754,729
Net realized gain (loss) from investments 2,551 530
Net unrealized appreciation
(depreciation) of investments 18,490 --
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 18,169,906 17,755,259
--------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
INVESTMENT INCOME--NET (18,148,865) (17,754,729)
--------------------------------------------------------------------------------
CAPITAL STOCK TRANSACTIONS ($1.00 PER SHARE):
Net proceeds from shares sold 406,174,145 511,053,083
Dividends reinvested 17,151,512 16,884,847
Cost of shares redeemed (541,914,355) (533,875,712)
INCREASE (DECREASE) IN NET ASSETS
FROM CAPITAL STOCK TRANSACTIONS (118,588,698) (5,937,782)
TOTAL INCREASE (DECREASE) IN NET ASSETS (118,567,657) (5,937,252)
--------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 609,531,885 615,469,137
END OF PERIOD 490,964,228 609,531,885
SEE NOTES TO FINANCIAL STATEMENTS.
The Portfolio
FINANCIAL HIGHLIGHTS
The following table describes the performance for the fiscal periods indicated.
Total return shows how much your investment in the portfolio would have
increased (or decreased) during each period, assuming you had reinvested all
dividends and distributions. These figures have been derived from the
portfolio's financial statements.
<TABLE>
Year Ended August 31,
--------------------------------------------------------------
2000 1999 1998 1997 1996
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value, beginning of period 1.00 1.00 1.00 1.00 1.00
Investment Operations:
Investment income--net .034 .029 .033 .033 .034
Distributions:
Dividends from investment income--net (.034) (.029) (.033) (.033) (.034)
Net asset value, end of period 1.00 1.00 1.00 1.00 1.00
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) 3.47 2.90 3.31 3.31 3.42
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses
to average net assets .45 .45 .45 .45 .38
Ratio of net investment income
to average net assets 3.39 2.86 3.26 3.26 3.40
Decrease reflected in above
expense ratios due to undertakings
by The Dreyfus Corporation .15 .15 .17 .15 .22
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 490,964 609,532 615,469 683,562 804,257
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
NOTES TO FINANCIAL STATEMENTS
NOTE 1--Significant Accounting Policies:
Dreyfus BASIC Municipal Money Market Portfolio (the "portfolio") is a separate
non-diversified series of Dreyfus BASIC Municipal Fund, Inc. (the "Fund") 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 portfolio. The portfolio' 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 portfolio's investment adviser. The Manager is a direct subsidiary
of Mellon Bank, N.A., which is a wholly-owned subsidiary of Mellon Financial
Corporation. Effective March 22, 2000, Dreyfus Service Corporation ("DSC"), a
wholly-owned subsidiary of the Manager, became the distributor of the
portfolio's shares which are sold to the public without a sales charge. Prior to
March 22, 2000, Premier Mutual Fund Services, Inc. was the distributor.
The fund accounts separately for the assets, liabilities and operations of each
series. Expenses directly attributable to each series are charged to that
series' operations; expenses which are applicable to all series 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.
The Portfolio
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(a) Portfolio valuation: Investments in securities are valued at amortized cost,
which has been determined by the Fund's Board of Directors to represent the fair
value of the portfolio'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 custody agreement, the
portfolio received net earnings credits of $31,173 during the period ended
August 31, 2000 based on available cash balances left on deposit. Income earned
under this arrangement is included in interest income.
(c) Dividends to shareholders: It is the policy of the portfolio to declare
dividends daily from investment income-net. Such dividends are paid monthly.
Dividends from net realized capital gain are normally declared and paid
annually, but the portfolio 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 portfolio not to
distribute such gain.
(d) Federal income taxes: It is the policy of the portfolio 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 portfolio has an unused capital loss carryover of approximately $125,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to August 31, 2000. If not
applied, $1,200 of the carryover expires in fiscal 2002, $50,300 expires in
fiscal 2003, $36,000 expires in fiscal 2004, $25,000 expires in fiscal 2005,
$500 expires in fiscal 2006 and $12,000 expires in fiscal 2007.
At August 31, 2000, 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 portfolio'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 portfolio, to the extent that the
portfolio' s aggregate expenses, exclusive of taxes, brokerage fees, interest on
borrowings and extraordinary expenses, exceed an annual rate of .45 of 1% of the
value of the portfolio's average daily net assets. The reduction in management
fee, pursuant to the undertaking, amounted to $790,166 during the period ended
August 31, 2000.
(b) Under the Shareholder Services Plan, the fund reimburses DSC an amount not
to exceed an annual rate of .25 of 1% of the value of the portfolio's average
daily net assets for certain allocated expenses of pro
The PortfoliO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
viding 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 portfolio and providing reports
and other information, and services related to the maintenance of shareholder
accounts. During the period ended August 31, 2000, the portfolio was charged
$281,205 pursuant to the Shareholder Services Plan.
The portfolio 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, 2000, the portfolio was charged $52,592 pursuant to the
transfer agency agreement.
(c) Each director who is not an "affiliated person" as defined in the Act
receives from the Fund 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.
REPORT OF 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, 2000, 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
Portfolio'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 auditing standards generally accepted
in the United States. 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, 2000 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, 2000, 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 auditing standards generally
accepted in the United States.
New York, New York /s/Ernst & Young LLP
October 9, 2000
The Portfolio
IMPORTANT TAX INFORMATION (Unaudited)
In accordance with Federal tax law, the portfolio hereby designates all the
dividends paid from investment income--net during the fiscal year ended August
31, 2000 as "exempt-interest dividends" (not generally subject to regular
Federal income tax).
NOTES
For More Information
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
100 Church Street
New York, NY 10286
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166
To obtain information:
BY TELEPHONE
Call 1-800-645-6561
BY MAIL Write to:
The Dreyfus Family of Funds
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
BY E-MAIL Send your request
to [email protected]
ON THE INTERNET Information can be viewed online or downloaded from:
http://www.dreyfus.com
(c) 2000 Dreyfus Service Corporation 122AR008
