DREYFUS BASIC MONEY MARKET FUND INC, 485BPOS, 1998-06-22

DREYFUS BASIC MONEY MARKET FUND INC
485BPOS, 1998-06-22

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File Nos. 33-46490
811-6604

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ X ]

Pre-Effective Amendment No. [ ]

Post-Effective Amendment No. 9 [ X ]

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ X ]

Amendment No. 9 [ X ]

(Check appropriate box or boxes.)

Dreyfus BASIC Money Market Fund, Inc.
(Exact Name of Registrant as Specified in Charter)

c/o The Dreyfus Corporation
200 Park Avenue, New York, New York 10166
(Address of Principal Executive Offices) (Zip Code)

Registrant's Telephone Number, including Area Code: (212) 922-6000

Mark N. Jacobs, Esq.
200 Park Avenue
New York, New York 10166
(Name and Address of Agent for Service)

It is proposed that this filing will become effective (check appropriate
box)

immediately upon filing pursuant to paragraph (b)
----
X on July 1, 1998 pursuant to paragraph (b)
----
60 days after filing pursuant to paragraph (a)(i)
----
on (date) pursuant to paragraph (a)(i)
----
75 days after filing pursuant to paragraph (a)(ii)
----
on (date) pursuant to paragraph (a)(ii) of Rule 485
----

If appropriate, check the following box:

this post-effective amendment designates a new effective date
for a previously filed post-effective amendment.
----

Dreyfus BASIC Money Market Fund, Inc.
Cross-Reference Sheet Pursuant to Rule 495(a)

Items in
Part A of
Form N-1A Caption Page
_________ _______ ____

1 Cover Page Cover

2 Synopsis 3

3 Condensed Financial Information 4

4 General Description of Registrant 5

5 Management of the Fund 7

5(a) Management's Discussion of Fund's Performance *

6 Capital Stock and Other Securities 15

7 Purchase of Securities Being Offered 9

8 Redemption or Repurchase 12

9 Pending Legal Proceedings *

Items in
Part B of
Form N-1A
- ---------

10 Cover Page Cover

11 Table of Contents Cover

12 General Information and History *

13 Investment Objectives and Policies B-2

14 Management of the Fund B-8

15 Control Persons and Principal B-12
Holders of Securities

16 Investment Advisory and Other B-14
Services

_____________________________________
NOTE: * Omitted since answer is negative or inapplicable.

Dreyfus BASIC Money Market Fund, Inc.
Cross-Reference Sheet Pursuant to Rule 495(a) (continued)

Items in
Part B of
Form N-1A Caption Page
_________ _______ _____

17 Brokerage Allocation B-22

18 Capital Stock and Other Securities B-21

19 Purchase, Redemption and Pricing B-14, B-16,
of Securities Being Offered B-21

20 Tax Status *

21 Underwriters B-13

22 Calculations of Performance Data B-22

23 Financial Statements B-24

Items in
Part C of
Form N-1A
_________

24 Financial Statements and Exhibits C-1

25 Persons Controlled by or Under C-3
Common Control with Registrant

26 Number of Holders of Securities C-3

27 Indemnification C-3, C-4

28 Business and Other Connections of C-4
Investment Adviser

29 Principal Underwriters C-10

30 Location of Accounts and Records C-13

31 Management Services C-13

32 Undertakings C-13

_____________________________________
NOTE: * Omitted since answer is negative or inapplicable.

- -----------------------------------------------------------------------------

COMBINED PROSPECTUS JULY 1, 1998

DREYFUS BASIC MONEY MARKET FUND, INC.
DREYFUS BASIC U.S. GOVERNMENT MONEY MARKET FUND
- -----------------------------------------------------------------------------
DREYFUS BASIC MONEY MARKET FUND, INC. AND DREYFUS BASIC U.S.
GOVERNMENT MONEY MARKET FUND (EACH, A "FUND" AND COLLECTIVELY, THE "FUNDS")
ARE EACH OPEN-END, DIVERSIFIED, MANAGEMENT INVESTMENT COMPANIES KNOWN AS
MONEY MARKET MUTUAL FUNDS. EACH FUND'S INVESTMENT OBJECTIVE IS TO PROVIDE YOU
WITH AS HIGH A LEVEL OF CURRENT INCOME AS IS CONSISTENT WITH THE PRESERVATION
OF CAPITAL AND THE MAINTENANCE OF LIQUIDITY. EACH FUND SEEKS TO MAINTAIN A
STABLE NET ASSET VALUE OF $1.00 PER SHARE AND IS DESIGNED TO BENEFIT
INVESTORS WHO DO NOT ENGAGE IN FREQUENT TRANSACTIONS IN FUND SHARES.
YOU CAN PURCHASE OR REDEEM SHARES BY TELEPHONE USING DREYFUS
TELETRANSFER.
THE DREYFUS CORPORATION PROFESSIONALLY MANAGES EACH FUND'S PORTFOLIO.
AN INVESTMENT IN EACH FUND IS NEITHER INSURED NOR GUARANTEED BY THE
U.S. GOVERNMENT. THERE CAN BE NO ASSURANCE THAT EITHER FUND WILL BE ABLE TO
MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.
DREYFUS BASIC MONEY MARKET FUND, INC. (THE "MONEY FUND") INVESTS IN
SHORT-TERM MONEY MARKET OBLIGATIONS INCLUDING U.S. GOVERNMENT SECURITIES,
CERTIFICATES OF DEPOSIT AND OTHER DOMESTIC AND FOREIGN BANK OBLIGATIONS,
REPURCHASE AGREEMENTS, COMMERCIAL PAPER, AND OTHER SHORT-TERM CORPORATE
OBLIGATIONS, AS MORE FULLY DESCRIBED HEREIN.
DREYFUS BASIC U.S. GOVERNMENT MONEY MARKET FUND (THE "GOVERNMENT MONEY FUND")
INVESTS IN U.S. GOVERNMENT SECURITIES AND REPURCHASE AGREEMENTS IN RESPECT OF
U.S. GOVERNMENT SECURITIES.
EACH FUND IS A SEPARATE ENTITY WITH A SEPARATE PORTFOLIO. THE
OPERATIONS AND RESULTS OF ONE FUND ARE UNRELATED TO THOSE OF THE OTHER FUND.
THIS COMBINED PROSPECTUS HAS BEEN PREPARED FOR YOUR CONVENIENCE TO PROVIDE
YOU THE OPPORTUNITY TO CONSIDER TWO INVESTMENT CHOICES IN ONE DOCUMENT.
THIS PROSPECTUS SETS FORTH CONCISELY INFORMATION ABOUT EACH FUND THAT
YOU SHOULD KNOW BEFORE INVESTING. IT SHOULD BE READ AND RETAINED FOR FUTURE
REFERENCE.

THE STATEMENT OF ADDITIONAL INFORMATION, DATED JULY 1, 1998, WHICH
MAY BE REVISED FROM TIME TO TIME, PROVIDES A FURTHER DISCUSSION OF CERTAIN
AREAS IN THIS PROSPECTUS AND OTHER MATTERS WHICH MAY BE OF INTEREST TO SOME
INVESTORS. IT HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION AND
IS INCORPORATED HEREIN BY REFERENCE. THE SECURITIES AND EXCHANGE COMMISSION
MAINTAINS A WEB SITE (HTTP://WWW.SEC.GOV) THAT CONTAINS THE STATEMENT OF
ADDITIONAL INFORMATION, MATERIAL INCORPORATED BY REFERENCE, AND OTHER
INFORMATION REGARDING THE FUND. FOR A FREE COPY OF THE STATEMENT OF
ADDITIONAL INFORMATION, WRITE TO THE FUND AT 144 GLENN CURTISS BOULEVARD,
UNIONDALE, NEW YORK 11556-0144, OR CALL 1-800-645-6561. WHEN TELEPHONING, ASK
FOR OPERATOR 144.

MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
OR ENDORSED BY, ANY BANK, AND ARE NOT FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER
AGENCY.
- -----------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
- -----------------------------------------------------------------------------

TABLE OF CONTENTS

FEE TABLE......................................... 3
CONDENSED FINANCIAL INFORMATION................... 4
YIELD INFORMATION................................. 5
DESCRIPTION OF THE FUNDS.......................... 5
MANAGEMENT OF THE FUNDS........................... 7
HOW TO BUY SHARES................................. 9
SHAREHOLDER SERVICES.............................. 10
HOW TO REDEEM SHARES.............................. 12
SHAREHOLDER SERVICES PLAN......................... 15
DIVIDENDS, DISTRIBUTIONS AND TAXES................ 15
GENERAL INFORMATION............................... 16
APPENDIX.......................................... 18

[Page 2]
<TABLE>
<CAPTION>

FEE TABLE
GOVERNMENT
MONEY MONEY
SHAREHOLDER TRANSACTION EXPENSES FUND FUND
________ ____________
<S> <C> <C>
Exchange Fee............................................................. $5.00 $5.00
Account Closeout Fee..................................................... $5.00 $5.00
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average daily net assets)

Management Fees (after expense reimbursement)............................ .26% .33%
Other Expenses........................................................... .19% .12%
Total Fund Operating Expenses (after expense reimbursement).............. .45% .45%

EXAMPLE (applicable to each Fund) 1 YEAR 3 YEARS 5 YEARS 10 YEARS
You would pay the following expenses
on a $1,000 investment, assuming (1) 5%
annual return and (2) redemption at the
end of each time period.............. $10 $19 $30 $62
</TABLE>
- ----------------------------------------------------------------------------
THE AMOUNTS LISTED IN THE EXAMPLE SHOULD NOT BE CONSIDERED AS
REPRESENTATIVE OF PAST OR FUTURE EXPENSES AND ACTUAL
EXPENSES MAY BE GREATER OR LESS THAN THOSE INDICATED. MOREOVER, WHILE THE
EXAMPLE ASSUMES A 5% ANNUAL RETURN, EACH FUND'S ACTUAL PERFORMANCE WILL VARY
AND MAY RESULT IN AN ACTUAL RETURN GREATER OR LESS THAN 5%.
- ----------------------------------------------------------------------------

The purpose of the foregoing table is to assist you in understanding
the costs and expenses borne by each Fund and investors, the payment of which
will reduce investors' annual return. The Dreyfus Corporation has agreed,
with respect to each Fund, until such time as it gives investors at least 90
days' notice to the contrary, that if in any fiscal year of the Fund certain
Fund expenses, including the management fee, exceed .45 of 1% of the value of
the Fund's average net assets for the fiscal year, such Fund may deduct from
the payment to be made to The Dreyfus Corporation under the Management
Agreement, or The Dreyfus Corporation will bear, such excess expense. No
modification or termination of this agreement currently is contemplated by
The Dreyfus Corporation. The Management Fees noted above, without
reimbursement, would be .50% for each Fund, and Total Fund Operating Expenses
would be .69% for the MONEY FUND, and .62% for the GOVERNMENT MONEY FUND. In
addition, unlike certain other funds in The Dreyfus Family of Funds, each
Fund will charge your account $2.00 for each redemption check you write, and
you also will be charged $5.00 for each exchange made out of the Fund and for
each redemption you make by wire or pursuant to the Dreyfus TELETRANSFER
Privilege, or if you otherwise closeout your account. However, these charges
will be waived if the closing balance in the shareholder's account on the
business day immediately preceding the effective date of such transaction is
$50,000 or more. Such charges, when paid, are paid to the Fund's transfer
agent and will reduce the transfer agency charges otherwise payable by each
Fund. See "Shareholder Services" and "How to Redeem Shares." In addition,
certain securities dealers, banks or other financial institutions may charge
their clients direct fees for effecting transactions in shares; such fees are
not reflected in the foregoing table. See "Management of the Funds" and
"Shareholder Services Plan."

[Page 3]

CONDENSED FINANCIAL INFORMATION

The information in the following tables has been audited by Ernst &
Young LLP, the Fund's independent auditors. Further financial data, related
notes and the report of independent auditors, as to each Fund, accompany the
Statement of Additional Information, available upon request.

FINANCIAL HIGHLIGHTS
MONEY FUND _ 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 year indicated. This
information has been derived from the Fund's financial statements.
<TABLE>
<CAPTION>

FISCAL YEAR ENDED FEBRUARY 28/29,
_____________________________________________________________________
PER SHARE DATA: 1993(1) 1994 1995 1996 1997 1998
_______ ______ _______ _______ _______ _______
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year........ $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
_______ ______ _______ _______ _______ _______
INVESTMENT OPERATIONS:
Investment income_net ................... .032 .033 .046 .058 .051 .053
_______ ______ _______ _______ _______ _______
DISTRIBUTIONS:
Dividends from investment income-net...... (.032) (.033) (.046) (.058) (.051) (.053)
_______ ______ _______ _______ _______ _______
Net asset value, end of year.............. $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
===== ===== ===== ===== ===== =====
TOTAL INVESTMENT RETURN....................... 3.80%(2) 3.40% 4.73% 5.97% 5.19% 5.38%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets .. __ .10% .18% .31% .45% .45%
Ratio of net investment income to
average net assets 3.66%(2) 3.33% 4.70% 5.82% 5.08% 5.28%
Decrease reflected in above expense ratios due to
undertakings by The Dreyfus Corporation. .71%(2) .55% .46% .31% .23% .24%
Net Assets, end of year (000's omitted)... $734,349 $1,217,032 $1,623,242 $2,098,292 $1,793,992 $1,724,971
(1) From April 24, 1992 (commencement of operations) to February 28, 1993.
(2) Annualized.

</TABLE>

GOVERNMENT MONEY FUND _ Contained below is per share operating performance
data for a share of beneficial interest outstanding,
total investment return, ratios to average net assets and other supplemental
data for each year indicated. This information has been derived from the
Fund's financial statements.

FISCAL YEAR ENDED FEBRUARY 28/29,
_____________________________________________________________________
PER SHARE DATA: 1993(1) 1994 1995 1996 1997 1998
_______ ______ _______ _______ _______ _______
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year........ $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
_______ ______ _______ _______ _______ _______
INVESTMENT OPERATIONS:
Investment income_net ................... .031 .032 .046 .058 .051 .052
_______ ______ _______ _______ _______ _______
DISTRIBUTIONS:
Dividends from investment income-net...... (.031) (.032) (.046) (.058) (.051) (.052)
_______ ______ _______ _______ _______ _______
Net asset value, end of year.............. $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
===== ===== ===== ===== ===== =====
TOTAL INVESTMENT RETURN....................... 3.69%(2) 3.30% 4.67% 5.94% 5.20% 5.33%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets .. __ .02% .17% .31% .45% .45%
Ratio of net investment income to
average net assets 3.58%(2) 3.24% 5.05% 5.79% 5.09% 5.22%
Decrease reflected in above expense ratios due to
undertakings by The Dreyfus Corporation. .75%(2) .64% .44% .36% .20% .17%
Net Assets, end of year (000's omitted)... $116,696 $265,691 $1,041,722 $1,366,056 $1,459,949 $1,308,647
(1) From April 24, 1992 (commencement of operations) to February 28, 1993.
(2) Annualized.

</TABLE>

[Page 4]

YIELD INFORMATION
From time to time, each Fund advertises its yield and effective
yield. Both yield figures are based on historical earnings and are not
intended to indicate future performance. It can be expected that each Fund's
yield will fluctuate substantially. A Fund's yield refers to the income
generated by an investment in such Fund over a seven-day period (which period
will be stated in the advertisement). This income is then annualized. That
is, the amount of income generated by the investment during that week is
assumed to be generated each week over a 52-week period and is shown as a
percentage of the investment. The effective yield is calculated similarly,
but, when annualized, the income earned by an investment in a Fund is assumed
to be reinvested. The effective yield will be slightly higher than the yield
because of the compounding effect of this assumed reinvestment. Each Fund's
yield and effective yield may reflect absorbed expenses pursuant to any
undertaking that may be in effect. See "Management of the Funds."
Yield information is useful in reviewing a Fund's performance, but
because yields will fluctuate, such information under certain conditions may
not provide a basis for comparison with domestic bank deposits, other
investments which pay a fixed yield for a stated period of time, or other
investment companies which may use a different method of computing yield.
Comparative performance information may be used from time to time in
advertising or marketing each Fund's shares, including data from Lipper
Analytical Services, Inc., Bank Rate Monitortrademark, N. Palm Beach, Florida
33408, IBC's Money Fund Reporttrademark, Morningstar, Inc. and other industry
publications.
DESCRIPTION OF THE FUNDS
INVESTMENT OBJECTIVE
Each Fund's investment objective is to provide you with as high a
level of current income as is consistent with the preservation of capital and
the maintenance of liquidity. It cannot be changed, as to a Fund, without
approval by the holders of a majority (as defined in the Investment Company
Act of 1940, as amended (the "1940 Act")) of such Fund's outstanding voting
shares. There can be no assurance that a Fund's investment objective will be
achieved. Each Fund pursues this objective in the manner described below.
Securities in which each Fund invests may not earn as high a level of current
income as long-term or lower quality securities which generally have less
liquidity, greater market risk and more fluctuation in market value.
MANAGEMENT POLICIES

Each Fund seeks to maintain a net asset value of $1.00 per share for
purchases and redemptions. To do so, each Fund uses the amortized cost method
of valuing its securities pursuant to Rule 2a-7 under the 1940 Act, which
Rule includes various maturity, quality and diversification requirements,
certain of which are summarized as follows. In accordance with Rule 2a-7,
each Fund is required to maintain a dollar-weighted average portfolio
maturity of 90 days or less, purchase only instruments having remaining
maturities of 13 months or less and invest only in U.S. dollar denominated
securities determined in accordance with procedures established by each
Fund's Board to present minimal credit risks and, with respect to the MONEY
FUND only, which are rated in one of the two highest rating categories for
debt obligations by at least two nationally recognized statistical rating
organizations (or one rating organization if the instrument was rated by only
one such organization), or, if unrated, are of comparable quality as
determined in accordance with procedures established by the MONEY FUND'S
Board. Moreover, the MONEY FUND will purchase only securities so rated in the
highest rating category or, if unrated, of comparable quality as determined
in accordance with such procedures. The nationally recognized statistical
rating organizations currently rating instruments
[Page 5]

of the type the MONEY FUND may purchase are Moody's Investors Service, Inc.,
Standard & Poor's Ratings Group, Duff & Phelps Credit Rating Co., Fitch IBCA,
Inc. and Thomson BankWatch, Inc., and their rating criteria are described in
the applicable "Appendix" to the Statement of Additional Information. This
discussion concerning investment ratings and rating organizations does not
apply to the GOVERNMENT MONEY FUND because it invests exclusively in U.S.
Government securities and repurchase agreements in respect thereof. For
further information regarding the amortized cost method of valuing
securities, see "Determination of Net Asset Value" in the Statement of
Additional Information. There can be no assurance that either Fund will be
able to maintain a stable net asset value of $1.00 per share.
MONEY FUND _ The Fund invests in short-term money market obligations,
including securities issued or guaranteed by the U.S. Government or its
agencies or instrumentalities, certificates of deposit, time deposits,
bankers' acceptances and other short-term obligations issued by domestic
banks, foreign subsidiaries or foreign branches of domestic banks, and
domestic and foreign branches of foreign banks, repurchase agreements,
asset-backed securities, municipal obligations, and high grade domestic and
foreign commercial paper and other short-term corporate obligations,
including those with floating or variable rates of interest. The Fund may
invest in U.S. dollar denominated obligations issued or guaranteed by one or
more foreign governments or any of their political subdivisions, agencies or
instrumentalities, including obligations of supranational entities. See
"Appendix _ Certain Portfolio Securities." In addition, the Fund is
permitted to lend portfolio securities and enter into reverse repurchase
agreements. See "Appendix _ Investment Techniques." During normal market
conditions, at least 25% of the Fund's assets will be invested in bank
obligations. See "Investment Considerations and Risks" below.
GOVERNMENT MONEY FUND _ The Fund invests in securities issued or guaranteed
as to principal and interest by the U.S. Government or its agencies or
instrumentalities, and repurchase agreements in respect of such securities.
See "Appendix _ Certain Portfolio Securities."

INVESTMENT CONSIDERATIONS AND RISKS

GENERAL _ Each Fund is designed to benefit investors who do not engage in
frequent redemptions or exchanges of the Fund's shares. Because charges may
apply to redemptions and exchanges of Fund shares in accounts with balances
of less than $50,000, neither Fund may be an appropriate investment for an
investor who does not maintain a $50,000 balance and intends to engage
frequently in such transactions.

Each Fund will attempt to increase yield by trading to take advantage
of short-term market variations. This policy is expected to result in high
portfolio turnover but should not adversely affect a Fund since neither Fund
usually pays brokerage commissions when it purchases portfolio securities.
The value of the portfolio securities held by each Fund will vary inversely
to changes in prevailing interest rates. Thus, if interest rates have
increased from the time a security was purchased, such security, if sold,
might be sold at a price less than its purchase cost. Similarly, if interest
rates have declined from the time a security was purchased, such security, if
sold, might be sold at a price greater than its purchase cost. In either
instance, if the security was purchased at face value and held to maturity,
no gain or loss would be realized.
Dividends and distributions attributable to interest from direct
obligations of the United States and paid by the GOVERNMENT MONEY FUND to
individuals currently are not subject to personal income tax in most states.
Dividends and distributions attributable to interest from other securities in
which the GOVERNMENT MONEY FUND may invest, such as repurchase agreements,
however, may be subject to state tax. See "Dividends, Distributions and
Taxes."

[Page 6]

FOREIGN SECURITIES (MONEY FUND ONLY) _ Because the Fund's portfolio may
contain U.S. dollar denominated securities issued by foreign governments, or
any of their political subdivisions, agencies or instrumentalities, and by
foreign subsidiaries and foreign branches of domestic banks, domestic and
foreign branches of foreign banks, and commercial paper issued by foreign
issuers, the Fund may be subject to additional investment risks with respect
to such securities that are different in some respects from those incurred by
a fund which invests only in debt obligations of U.S. domestic issuers,
although such obligations may be higher yielding when compared to the
securities of U.S. domestic issuers. Such risks include possible future
political and economic developments, seizure or nationalization of foreign
deposits, imposition of foreign withholding taxes on interest income payable
on the securities, establishment of exchange controls, or the adoption of
other foreign governmental restrictions which might adversely affect the
payment of principal and interest on these securities.

BANK SECURITIES (MONEY FUND ONLY) _ To the extent the Fund's investments are
concentrated in the banking industry, the Fund will have correspondingly
greater exposure to the risk factors which are characteristic of such
investments. Sustained increases in interest rates can adversely affect the
availability or liquidity and cost of capital funds for a bank's lending
activities, and a deterioration in general economic conditions could increase
the exposure to credit losses. In addition, the value of the investment
return on the Fund's shares could be affected by economic or regulatory
developments in or related to the banking industry, and the effects of
competition within the banking industry as well as with other types of
financial institutions. The Fund, however, will seek to minimize its exposure
to such risks by investing only in debt securities which are determined to be
of the highest quality.

SIMULTANEOUS INVESTMENTS _ Investment decisions for each Fund are made
independently from those of other investment companies advised by The Dreyfus
Corporation. If, however, such other investment companies desire to invest
in, or dispose of, the same securities as a Fund, available investments or
opportunities for sales will be allocated equitably to each investment
company. In some cases, this procedure may adversely affect the size of the
position obtained for or disposed of by a Fund or the price paid or received
by a Fund.

Year 2000 Risks _ Like other mutual funds, financial and business
organizations and individuals around the world, each Fund could be adversely
affected if the computer systems used by The Dreyfus Corporation and the
Fund's other service providers do not properly process and calculate
date-related information and data from and after January 1, 2000. This is
commonly known as the "Year 2000 Problem." The Dreyfus Corporation is taking
steps to address the Year 2000 Problem with respect to the computer systems
that it uses and to obtain assurances that comparable steps are being taken
by the Funds' other major service providers. At this time, however, there can
be no assurance that these steps will be sufficient to avoid any adverse
impact on the Funds.

MANAGEMENT OF THE FUNDS

INVESTMENT ADVISER _ The Dreyfus Corporation, located at 200 Park Avenue,
New York, New York 10166, was formed in 1947 and serves as each Fund's
investment adviser. The Dreyfus Corporation is a wholly-owned subsidiary of
Mellon Bank, N.A., which is a wholly-owned subsidiary of Mellon Bank
Corporation ("Mellon"). As of May 31, 1998, The Dreyfus Corporation managed
or administered approximately $109 billion in assets for approximately 1.7
million investor accounts nationwide.

The Dreyfus Corporation supervises and assists in the overall
management of the affairs of each Fund under a separate Management Agreement
with each Fund, subject to the authority of the Fund's Board in accordance
with applicable law.

[Page 7]

Mellon is a publicly owned multibank holding company incorporated
under Pennsylvania law in 1971 and registered under the
Federal Bank Holding Company Act of 1956, as amended. Mellon provides a
comprehensive range of financial products and services in domestic and
selected international markets. Mellon is among the twenty-five largest bank
holding companies in the United States based on total assets. Mellon's
principal wholly-owned subsidiaries are Mellon Bank, N.A., Mellon Bank (DE)
National Association, Mellon Bank (MD), The Boston Company, Inc., AFCO Credit
Corporation and a number of companies known as Mellon Financial Services
Corporations. Through its subsidiaries, including The Dreyfus Corporation,
Mellon managed more than $328 billion in assets as of March 31, 1998,
including approximately $113 billion in proprietary mutual fund assets. As of
March 31, 1998, Mellon, through various subsidiaries, provided non-investment
services, such as custodial or administration services, for more than $1.666
trillion in assets, including approximately $67 billion in mutual fund
assets.

Under the terms of its respective Management Agreement, each Fund has
agreed to pay The Dreyfus Corporation a monthly fee at the annual rate of .50
of 1% of the value of the Fund's average daily net assets. For the fiscal
year ended February 28, 1998, the MONEY FUND and GOVERNMENT MONEY FUND paid
The Dreyfus Corporation a monthly management fee at the effective annual rate
of .26 of 1% and .33 of 1%, respectively, of the value of such Fund's average
daily net assets. From time to time, The Dreyfus Corporation may waive
receipt of its fees and/or voluntarily assume certain expenses of a Fund,
which would have the effect of lowering that Fund's expense ratio and
increasing yield to investors. Neither Fund will pay The Dreyfus Corporation
at a later time for any amounts it may waive, nor will either Fund reimburse
The Dreyfus Corporation for any amounts it may assume.

The Dreyfus Corporation has agreed, with respect to each Fund, until
such time as The Dreyfus Corporation gives shareholders at least 90 days'
notice to the contrary, that if in any fiscal year of the Fund its aggregate
expenses, exclusive of taxes, brokerage, interest on borrowings and (with the
prior written consent of the necessary state securities commissions)
extraordinary expenses, but including the management fee, exceed .45 of 1% of
the value of its average daily net assets for the fiscal year, the Fund may
deduct from the payment to be made to The Dreyfus Corporation under its
Management Agreement, or The Dreyfus Corporation will bear, such excess
expense.
In allocating brokerage transactions, TheDreyfus Corporation seeks to
obtain the best execution of orders at the most favorable price. Subject to
this determination, The Dreyfus Corporation may consider, among other things,
the receipt of research services and/or the sale of shares of a Fund or other
funds managed, advised or administered by The Dreyfus Corporation as factors
in the selection of broker-dealers to execute portfolio transactions for each
Fund. See "Portfolio Transactions" in the Statement of Additional
Information.
The Dreyfus Corporation may pay the Fund's distributor for
shareholder services from The Dreyfus Corporation's own assets, including
past profits but not including the management fee paid by the Fund. The
Fund's distributor may use part or all of such payments to pay securities
dealers, banks or other financial institutions in respect of these services.
DISTRIBUTOR _ The Fund's distributor is Premier Mutual Fund Services, Inc.
(the "Distributor"), located at 60 State Street, Boston, Massachusetts 02109.
The Distributor's ultimate parent is Boston Institutional Group, Inc.
TRANSFER AND DIVIDEND DISBURSING AGENT AND CUSTODIAN _ Dreyfus Transfer,
Inc., a wholly-owned subsidiary of The Dreyfus Corporation, P.O. Box 9671,
Providence, Rhode Island 02940-9671, is the
[Page 8]

Transfer and Dividend Disbursing Agent (the "Transfer Agent") for each Fund.
The Transfer Agent will receive the $5.00 exchange fee, the $5.00 account
closeout fee, the $5.00 wire and Dreyfus TELETRANSFER redemption fee, and
the $2.00 checkwriting charge, described below. A sufficient number of shares
will be redeemed automatically from an investor's account to pay these
amounts. These payments will reduce the transfer agency fee otherwise payable
by each Fund. By purchasing shares of a Fund, you are deemed to have
consented to this procedure. The Bank of New York, 90 Washington Street, New
York, New York 10286, is the Custodian for each Fund.
HOW TO BUY SHARES
Fund shares are sold without a sales charge. You may be charged a fee
if you effect transactions in Fund shares through a securities dealer, bank
or other financial institution. Share certificates are issued only upon your
written request. No certificates are issued for fractional shares. Each Fund
reserves the right to reject any purchase order.
The minimum initial investment in each Fund is $25,000. Subsequent
investments must be at least $1,000. The initial investment must be
accompanied by the Account Application.
You may purchase Fund shares by check or wire, or through the Dreyfus
TELETRANSFER Privilege described below. Checks should be made payable to "The
Dreyfus Family of Funds." Payments to open new accounts which are mailed
should be sent to The Dreyfus Family of Funds, P.O. Box 9387, Providence,
Rhode Island 02940-9387, together with your Account Application. For
subsequent investments, your Fund account number should appear on the check
and an investment slip should be enclosed and sent to The Dreyfus Family of
Funds, P.O. Box 105, Newark, New Jersey 07101-0105. Neither initial nor subseq
uent investments should be made by third party check. Purchase orders may be
delivered in person only to a Dreyfus Financial Center. THESE ORDERS WILL BE
FORWARDED TO THE RELEVANT FUND AND WILL BE PROCESSED ONLY UPON RECEIPT
THEREBY. For the location of the nearest Dreyfus Financial Center, please
call one of the telephone numbers listed under "General Information."
Wire payments may be made if your bank account is in a commercial
bank that is a member of the Federal Reserve System or any other bank having
a correspondent bank in New York City. Immediately available funds may be
transmitted by wire to The Bank of New York, together with the applicable
Fund's DDA# as shown below, for purchase of Fund shares in your name: DDA
#8900204419/Dreyfus BASIC Money Market Fund, Inc., or DDA #8900204427/Dreyfus
BASIC U.S. Government Money Market Fund. The wire must include your Fund
account number (for new accounts, your Taxpayer Identification Number ("TIN")
should be included instead), account registration and dealer number, if
applicable. If your initial purchase of Fund shares is by wire, please call
1-800-645-6561 after completing your wire payment to obtain your Fund account
number. Please include your Fund account number on the Account Application
and promptly mail the Account Application to the Fund, as no redemptions will
be permitted until the Account Application is received. You may obtain
further information about remitting funds in this manner from your bank. All
payments should be made in U.S. dollars and, to avoid additional fees and
delays, should be drawn only on U.S. banks. A charge will be imposed if any
check used for investment in your account does not clear. Each Fund makes
available to certain large institutions the ability to issue purchase
instructions through compatible computer facilities.
Shares of each Fund also may be purchased through IRA accounts and
other kinds of retirement accounts, such as Keogh Plans and SEP-IRA's,
provided the opening balance is at least $5,000. Subsequent
[Page 9]

investments in such retirement accounts must be at least $1,000. For details,
please contact Dreyfus Service Corporation by calling toll free
1-800-358-5566.
Subsequent investments also may be made by electronic transfer of
funds from an account maintained in a bank or other domestic financial
institution that is an Automated Clearing House member. You must direct the
institution to transmit immediately available funds through the Automated
Clearing House to The Bank of New York with instructions to credit your Fund
account. The instructions must specify your Fund account registration and
your Fund account number PRECEDED BY THE DIGITS "1111."

Shares of each Fund are sold on a continuous basis at the net asset
value per share next determined after an order in proper form is received by
the Transfer Agent or other entity authorized to receive orders on behalf of
the Fund. Net asset value per share is determined as of the close of trading
on the floor of the New York Stock Exchange (currently 4:00 p.m., New York
time) on each day the New York Stock Exchange or Transfer Agent, as to the
MONEY FUND, or the New York Stock Exchange, as to the Government Money Fund,
is open for business. Net asset value per share is computed by dividing the
value of the Fund's net assets (i.e., the value of its assets less
liabilities) by the total number of shares outstanding. See "Determination of
Net Asset Value" in the Statement of Additional Information.

Federal regulations require that you provide a certified TIN upon
opening or reopening an account. See "Dividends, Distributions and Taxes" and
the Account Application for further information concerning this requirement.
Failure to furnish a certified TIN to the Fund could subject you to a $50
penalty imposed by the Internal Revenue Service (the "IRS").
DREYFUS TELETRANSFER PRIVILEGE _ You may purchase shares (minimum $1,000,
maximum $150,000 per day) without charge by telephone if you have checked the
appropriate box and supplied the necessary information on the Account
Application or have filed a Shareholder Services Form with the Transfer
Agent. The proceeds will be transferred between the bank account designated
in one of these documents and your Fund account. Only a bank account
maintained in a domestic financial institution which is an Automated Clearing
House member may be so designated. The Fund may modify or terminate this
Privilege at any time. No fee is contemplated for purchases of Fund shares
pursuant to this Privilege.
If you have selected the Dreyfus TELETRANSFER Privilege, you may
request a Dreyfus TELETRANSFER purchase of shares by calling 1-800-645-6561
or, if you are calling from overseas, call 516-794-5452.
SHAREHOLDER SERVICES

FUND EXCHANGES _ You may purchase up to four times per calendar year, in
exchange for shares of your Fund, shares of certain other funds managed or
administered by The Dreyfus Corporation, to the extent such shares are
offered for sale in your state of residence. These funds have different
investment objectives which may be of interest to you. If you desire to use
this service, please call 1-800-645-6561 to determine if it is available and
whether any conditions are imposed on its use. You will be charged a $5.00 fee
for each exchange you make out of your Fund. This fee will be deducted from
your account and paid to the Transfer Agent; however, each Fund will waive
this fee if the closing balance in the shareholder's account on the business
day immediately preceding the effective date of such transaction is $50,000
or more.

To request an exchange, you must give exchange instructions to the
Transfer Agent in writing or by telephone. Before an exchange, you must
obtain and should review a copy of the current prospectus of the
[Page 10]

fund into which the exchange is being made. Prospectuses may be obtained by
calling 1-800-645-6561. Except in the case of personal retirement plans, the
shares being exchanged must have a current value of at least $1,000;
furthermore, when establishing a new account by exchange, the shares being
exchanged must have a value of at least the minimum initial investment
required for the fund into which the exchange is being made. The ability to
issue exchange instructions by telephone is given to all Fund shareholders
automatically, unless you check the applicable "No" box on the Account
Application, indicating that you specifically refuse this privilege. The
Telephone Exchange Privilege may be established for an existing account by
written request signed by all shareholders on the account, by a separate
signed Shareholder Services Form, available by calling 1-800-645-6561, or by
oral request from any of the authorized signatories on the account by calling
1-800-645-6561. If you have established the Telephone Exchange Privilege, you
may telephone exchange instructions (including over The Dreyfus Touch
Registration Mark automated telephone system) by calling 1-800-645-6561. If
you are calling from overseas, call 516-794-5452. See "How to Redeem Shares _
Procedures." Upon an exchange into a new account, the following shareholder
services and privileges, as applicable and where available, will be
automatically carried over to the fund into which the exchange is made:
Telephone Exchange Privilege, Check Redemption Privilege, Wire Redemption
Privilege, Telephone Redemption Privilege, Dreyfus TELETRANSFER Privilege and
the dividend/capital gain distribution option (except for Dreyfus Dividend
Sweep) selected by the investor.

Shares will be exchanged at the next determined net asset value;
however, a sales load may be charged with respect to exchanges into funds
sold with a sales load. If you are exchanging into a fund that charges a
sales load, you may qualify for share prices which do not include the sales
load or which reflect a reduced sales load, if the shares you are exchanging
were: (a) purchased with a sales load, (b) acquired by a previous exchange
from shares of the fund purchased with a sales load, or (c) acquired through
reinvestment of dividends or distributions paid with respect to the foregoing
categories of shares. To qualify, at the time of the exchange you must notify
the Transfer Agent. Any such qualification is subject to confirmation of your
holdings through a check of appropriate records. See "Shareholder Services"
in the Statement of Additional Information. Each Fund reserves the right to
reject any exchange request in whole or in part and will reject any request
to exchange out of one of the Funds in excess of four during any calendar
year. The availability of Fund Exchanges may be modified or terminated at any
time upon notice to shareholders. See "Dividends, Distributions and Taxes."
DREYFUS DIVIDEND SWEEP PRIVILEGE _ Dreyfus Dividend Sweep Privilege enables
you to invest automatically dividends or dividends and capital gain
distributions, if any, paid by the Fund in shares of another fund in the
Dreyfus Family of Funds of which you are a shareholder. Shares of the other
fund will be purchased at the then-current net asset value; however, a sales
load may be charged with respect to investments in shares of a fund sold with
a sales load. If you are investing in a fund that charges a sales load, you
may qualify for share prices which do not include the sales load or which
reflect a reduced sales load. If you are investing in a fund that charges a
contingent deferred sales charge, the shares purchased will be subject to the
contingent deferred sales charge, if any, applicable to the purchased shares.
See "Shareholder Services" in the Statement of Additional Information. For
more information concerning this Privilege or to request a Dividend Options
Form, please call toll free 1-800-645-6561. You may cancel your participation
in this Privilege by mailing written notification to The Dreyfus Family of
Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671. To select a new
fund after cancellation, you must submit a new Dividend Options Form.
Enrollment in or cancellation of this Privilege is effective three business
days fol
[Page 11]

lowing receipt. This Privilege is available only for existing accounts and
may not be used to open new accounts. Minimum subsequent investments do not
apply. Each Fund may modify or terminate this Privilege at any time or charge
a service fee. No such fee currently is contemplated.
HOW TO REDEEM SHARES
GENERAL

You may request redemption of your shares at any time. Redemption
requests should be transmitted to the Transfer Agent as described below. When
a request is received in proper form by the Transfer Agent or other entity
authorized to receive orders on behalf of the Fund, your Fund will redeem the
shares at the next determined net asset value.

YOU WILL BE CHARGED $5.00 WHEN YOU REDEEM ALL SHARES IN YOUR ACCOUNT
OR YOUR ACCOUNT IS OTHERWISE CLOSED OUT. The fee will be deducted from your
redemption proceeds and paid to the Transfer Agent. The account closeout fee
does not apply to exchanges out of the Fund or to wire or Dreyfus TELETRANSFER
redemptions which close out an account, for each of which a $5.00 fee may
apply; however, each Fund will waive the account closeout fee if the closing
balance in the shareholder's account on the business day immediately
preceding the effective date of such transaction is $50,000 or more.
Securities dealers, banks and other financial institutions may charge their
clients a fee for effecting redemptions of Fund shares. Any certificates
representing Fund shares being redeemed must be submitted with the redemption
request. The value of the shares redeemed may be more or less than their
original cost, depending upon the Fund's then-current net asset value.
Each Fund ordinarily will make payment for all shares redeemed within
seven days after receipt by the Transfer Agent of a redemption request in
proper form, except as provided by the rules of the Securities and Exchange
Commission. HOWEVER, IF YOU HAVE PURCHASED FUND SHARES BY CHECK OR BY THE
DREYFUS TELETRANSFER PRIVILEGE AND SUBSEQUENTLY SUBMIT A WRITTEN REDEMPTION
REQUEST TO THE TRANSFER AGENT, THE REDEMPTION WILL BE EFFECTIVE AND THE
REDEMPTION PROCEEDS WILL BE TRANSMITTED TO YOU PROMPTLY UPON BANK CLEARANCE
OF YOUR PURCHASE CHECK OR DREYFUS TELETRANSFER PURCHASE ORDER, WHICH MAY TAKE
UP TO EIGHT BUSINESS DAYS OR MORE. IN ADDITION, THE FUND WILL NOT HONOR
REDEMPTION CHECKS UNDER THE CHECK REDEMPTION PRIVILEGE, AND WILL REJECT REQUES
TS TO REDEEM SHARES BY WIRE OR TELEPHONE OR PURSUANT TO THE DREYFUS
TELETRANSFER PRIVILEGE, FOR A PERIOD OF EIGHT BUSINESS DAYS AFTER RECEIPT BY
THE TRANSFER AGENT OF THE PURCHASE CHECK OR THE DREYFUS TELETRANSFER PURCHASE
ORDER AGAINST WHICH SUCH REDEMPTION IS REQUESTED. THESE PROCEDURES WILL NOT
APPLY IF YOUR SHARES WERE PURCHASED BY WIRE PAYMENT, OR IF YOU OTHERWISE HAVE
A SUFFICIENT COLLECTED BALANCE IN YOUR ACCOUNT TO COVER THE REDEMPTION
REQUEST. PRIOR TO THE TIME ANY REDEMPTION IS EFFECTIVE, DIVIDENDS ON SUCH
SHARES WILL ACCRUE AND BE PAYABLE, AND YOU WILL BE ENTITLED TO EXERCISE ALL
OTHER RIGHTS OF BENEFICIAL OWNERSHIP. Fund shares will not be redeemed until
the Transfer Agent has received your Account Application.
Each Fund reserves the right to redeem your account at its option
upon not less than 45 days' written notice if your account's net asset value
is $10,000 or less and remains so during the notice period. The $5.00 account
closeout fee would be charged in such case.
PROCEDURES

You may redeem shares by using the regular redemption procedure
through the Transfer Agent, or through the Check Redemption Privilege or
Telephone Redemption Privilege, which are granted automatically unless you
specifically refuse them by checking the applicable "No" box on the Account
[Page 12]

Application. The Check Redemption Privilege and the Telephone Redemption
Privilege may be established for an existing account by a separate signed
Shareholder Services Form or, with respect to the Telephone Redemption
Privilege, by oral request from any of the authorized signatories on the
account by calling 1-800-645-6561. You also may redeem shares through the
Wire Redemption Privilege or the Dreyfus TeleTransfer Privilege, if you have
checked the appropriate box and supplied the necessary information on the
Account Application or have filed a Shareholder Services Form with the
Transfer Agent. Each Fund makes available to certain large institutions the
ability to issue redemption instructions through compatible computer
facilities. Each Fund reserves the right to refuse any request made by wire
or telephone, including requests made shortly after a change of address, and
may limit the amount involved or the number of such requests. Each Fund may
modify or terminate any redemption privilege at any time. Shares held under
Keogh Plans, IRAs or other retirement plans, and shares for which
certificates have been issued, are not eligible for the Check Redemption, Wire
Redemption, Telephone Redemption or Dreyfus TELETRANSFER Privilege.

The Telephone Redemption Privilege or Telephone Exchange Privilege
authorizes the Transfer Agent to act on telephone instructions (including
over The Dreyfus TouchRegistration Mark automated telephone system) from any
person representing himself or herself to be you and reasonably believed by
the Transfer Agent to be genuine. Each Fund will require the Transfer Agent
to employ reasonable procedures, such as requiring a form of personal
identification, to confirm that instructions are genuine and, if it does not
follow such procedures, the Fund or the Transfer Agent may be liable for any
losses due to unauthorized or fraudulent instructions. Neither the Fund nor
the Transfer Agent will be liable for following telephone instructions
reasonably believed to be genuine.

During times of drastic economic or market conditions, you may
experience difficulty in contacting the Transfer Agent by telephone to
request a redemption or exchange of Fund shares. In such cases, you should
consider using the other redemption procedures described herein. Use of these
other redemption procedures may result in your redemption request being
processed at a later time than it would have been if telephone redemption had
been used.
REGULAR REDEMPTION _ Under the regular redemption procedure, you may redeem
Fund shares by written request mailed to The Dreyfus Family of Funds, P.O.
Box 9671, Providence, Rhode Island 02940-9671. Redemption requests may be
delivered in person only to a Dreyfus Financial Center. THESE REQUESTS WILL
BE FORWARDED TO THE RELEVANT FUND AND WILL BE PROCESSED ONLY UPON RECEIPT
THEREBY. For the location of the nearest Dreyfus Financial Center, please
call one of the telephone numbers listed under "General Information."
Redemption requests must be signed by each shareholder, including each owner
of a joint account, and each signature must be guaranteed. The Transfer Agent
has adopted standards and procedures pursuant to which signature-guarantees
in proper form generally will be accepted from domestic banks, brokers,
dealers, credit unions, national securities exchanges, registered securities
associations, clearing agencies and savings associations, as well as from
participants in the New York Stock Exchange Medallion Signature Program, the
Securities Transfer Agents Medallion Program ("STAMP") and the Stock
Exchanges Medallion Program. If you have any questions with respect to
signature-guarantees, please call one of the telephone numbers listed under
"General Information."
Redemption proceeds of at least $5,000 will be wired to any member
bank of the Federal Reserve System in accordance with a written
signature-guaranteed request.

[Page 13]

CHECK REDEMPTION PRIVILEGE _ You may write Redemption Checks drawn on your
Fund account. Redemption Checks may be made payable to the order of any
person in the amount of $1,000 or more. Redemption Checks should not be used
to close your account. Your account will be charged $2.00 for each Redemption
Check you write; however, each Fund will waive this fee if the closing
balance in the shareholder's account on the business day immediately
preceding the effective date of such transaction is $50,000 or more. The
Transfer Agent also will impose a fee for stopping payment of a Redemption
Check upon your request or if the Transfer Agent cannot honor the Redemption
Check due to insufficient funds or other valid reason. Such a fee is not
subject to waiver based on account balance or other factors. You should date
your Redemption Checks with the current date when you write them. Please do
not postdate your Redemption Checks. If you do, the Transfer Agent will
honor, upon presentment, even if presented before the date of the check, all p
ostdated Redemption Checks which are dated within six months of presentment
for payment, if they are otherwise in good order. The Fund may return an
unpaid Redemption Check that would draw your account balance below $5.00 and
you may be subject to extra charges. If you hold shares in a Dreyfus-sponsored
IRA account, you may be permitted to make withdrawals from your IRA account
using checks furnished to you by TheDreyfus Trust Company. The Check Redemption
Privilege is granted automatically unless you refuse it.

WIRE REDEMPTION PRIVILEGE _ You may request by wire, telephone or letter
that redemption proceeds (minimum $5,000) be wired to your account at a bank
which is a member of the Federal Reserve System, or a correspondent bank if
your bank is not a member.You will be charged a $5.00 fee for each wire
redemption, which will be deducted from your account and paid to the Transfer
Agent; however, each Fund will waive this fee if the closing balance in the
shareholder's account on the business day immediately preceding the effective
date of such transaction is $50,000 or more. Holders of jointly registered
Fund or bank accounts may have redemption proceeds of not more than $250,000
wired within any 30-day period. You may telephone redemption requests by
calling 1-800-645-6561 or, if you are calling from overseas, call
516-794-5452. The Statement of Additional Information sets forth instructions
for transmitting redemption requests by wire.

TELEPHONE REDEMPTION PRIVILEGE _ You may request by telephone that
redemption proceeds (maximum $150,000 per day) be paid by check and mailed to
your address. You may telephone redemption instructions by calling
1-800-645-6561 or, if you are calling from overseas, call 516-794-5452. The
Telephone Redemption Privilege is granted automatically unless you refuse it.
DREYFUS TELETRANSFER PRIVILEGE _ You may request by telephone that
redemption proceeds (minimum $1,000 per day) be transferred between your Fund
account and your bank account . Only a bank account maintained in a domestic
financial institution which is an Automated Clearing House member may be
designated. Redemption proceeds will be on deposit in your account at an
Automated Clearing House member bank ordinarily two days after receipt of the
redemption request. Holders of jointly registered Fund or bank accounts may
redeem through the Dreyfus TELETRANSFER Privilege for transfer to their bank
account not more than $250,000 within any 30-day period. You will be charged
a $5.00 fee for each Dreyfus TELETRANSFER redemption, which will be deducted
from your account and paid to the Transfer Agent; however, each Fund will
waive this fee if the closing balance in the shareholder's account on the
business day immediately preceding the effective date of such transaction is
$50,000 or more.
If you have selected the Dreyfus TELETRANSFER Privilege, you may
request a Dreyfus TELETRANSFER redemption of shares by calling 1-800-645-6561
or, if you are calling from overseas, call 516-794-5452.

[Page 14]

SHAREHOLDER SERVICES PLAN
Each Fund has adopted a Shareholder Services Plan pursuant to which
the Fund reimburses Dreyfus Service Corporation, a wholly-owned subsidiary of
The Dreyfus Corporation, 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.

DIVIDENDS, DISTRIBUTIONS AND TAXES

Ordinarily, dividends are declared from net investment income on each
day the New York Stock Exchange and Transfer Agent, as to the MONEY FUND, or
the New York Stock Exchange, as to the GOVERNMENT MONEY FUND, is open for
business. Each Fund's earnings for Saturdays, Sundays and holidays are
declared as dividends on the next business day. Dividends for each Fund
usually are paid on the last calendar day of each month, and are
automatically reinvested in additional Fund shares at net asset value or, at
your option, paid in cash. If you redeem all shares in your account at any
time during the month, all dividends to which you are entitled will be paid
to you along with the proceeds of the redemption. If you are an omnibus
accountholder and indicate in a partial redemption request that a portion of
any accrued dividends to which such account is entitled belongs to an
underlying accountholder who has redeemed all shares in his or her account,
such portion of the accrued dividends will be paid to you along with the
proceeds of the redemption, after the deduction of any fees. Distributions
from net realized securities gains, if any, generally are declared and paid
once a year, but either 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"), in all events in a manner consistent with the
provisions of the 1940 Act. Neither Fund will make distributions from net
realized securities gains unless capital loss carryovers, if any, have been
utilized or have expired. You may choose whether to receive distributions in
cash or to reinvest in additional Fund shares at net asset value. If you
elect to receive dividends and distributions in cash, and your dividend or
distribution check is returned to the Fund as undeliverable or remains
uncashed for six months, the Fund reserves the right to reinvest such
dividend or distribution and all future dividends and distributions payable
to you in additional Fund shares at net asset value. No interest will accrue
on amounts represented by uncashed distribution or redemption checks. All
expenses are accrued daily and deducted before declaration of dividends to
investors.

Dividends derived from net investment income, together with
distributions from any net realized short-term securities gains and all or a
portion of any gains realized from the sale or other disposition of certain
market discount bonds, paid by the Fund will be taxable to U.S. shareholders
as ordinary income, whether received in cash or reinvested in additional Fund
shares. No dividend paid by a Fund will qualify for the dividends received
deduction allowable to certain U.S. corporations. Distributions from net
realized long-term securities gains of a Fund, if any, will be taxable to
U.S. shareholders as long-term capital gains for Federal income tax purposes
regardless of how long you have held your Fund shares and whether such
distributions are received in cash or reinvested in additional Fund shares.
Dividends and distributions may be subject to certain state and local taxes.
Dividends derived from net investment income, together with
distributions from net realized short-term securities gains and all or a
portion of any gains realized from the sale or other disposition of certain
market
[Page 15]

discount bonds, paid by the Fund to a foreign investor generally are subject
to U.S. nonresident withholding taxes at the rate of 30%, unless the foreign
investor claims the benefit of a lower rate specified in a tax treaty.
Distributions from net realized long-term securities gains paid by a Fund to
a foreign investor generally will not be subject to U.S. nonresident
withholding tax. However, such distributions may be subject to backup
withholding, as described below, unless the foreign investor certifies his
non-U.S. residency status.
Notice as to the tax status of your dividends and distributions will
be mailed to you annually. You also will receive periodic summaries of your
account which will include information as to dividends and distributions from
securities gains, if any, paid during the year. Dividends and distributions
attributable to interest from direct obligations of the United States and
paid by a Fund to individuals currently are not subject to tax in most
states. Dividends and distributions attributable to interest from other
securities in which each Fund may invest may be subject to state tax. The GOVE
RNMENT MONEY FUND intends to provide shareholders with a statement which sets
forth the percentage of dividends and distributions paid by such Fund that is
attributable to interest income from direct obligations of the United States.
The exchange of shares of one fund for shares of another is treated
for Federal income tax purposes as a sale of the shares given in exchange by
the shareholder and, therefore, an exchanging shareholder may realize a
taxable gain or loss.
Federal regulations generally require each Fund to withhold ("backup
withholding") and remit to the U.S. Treasury 31% of dividends and
distributions from net realized securities gains paid to a shareholder if
such shareholder fails to certify either that the TIN furnished in connection
with opening an account is correct, or that such shareholder has not received
notice from the IRS of being subject to backup withholding as a result of a
failure to properly report taxable dividend or interest income on a Federal
income tax return. Furthermore, the IRS may notify a Fund to institute backup
withholding if the IRS determines a shareholder's TIN is incorrect or if a
shareholder has failed to properly report taxable dividend and interest
income on a Federal income tax return.

A TIN is either the Social Security number, IRS individual taxpayer
identification number, or employer identification number of the record owner
of the account. Any tax withheld as a result of backup withholding does not
constitute an additional tax imposed on the record owner of the account, and
may be claimed as a credit on the record owner's Federal income tax return.

Management of each Fund believes that such Fund has qualified for the
fiscal year ended February 28, 1998 as a "regulated investment company" under
the Code. Each Fund intends to continue to so qualify as long as such
qualification is in the best interests of its shareholders. Such
qualification relieves a Fund of any liability for Federal income tax to the
extent its earnings are distributed in accordance with applicable provisions
of the Code. Each Fund is subject to a non-deductible 4% excise tax, measured
with respect to certain undistributed amounts of taxable investment income
and capital gains.

You should consult your tax adviser regarding specific questions as
to Federal, state or local taxes.
GENERAL INFORMATION

The Money Fund was incorporated under Maryland law on March 17, 1992,
and commenced operations on April 24, 1992. The Money Fund is authorized to
issue 3 billion shares of Common Stock, par value $.001 per share. Each share
has one vote.

The Government Money Fund was organized as an unincorporated business
trust under the laws of the Commonwealth of Massachusetts pursuant to an
Agreement and Declaration of Trust dated
[Page 16]

September 12, 1990, and commenced operations on April 24, 1992. The
Government Money Fund is authorized to issue an unlimited number of shares of
beneficial interest, par value $.001 per share. Each share has one vote.

Unless otherwise required by the 1940 Act, ordinarily it will not be
necessary for the Funds to hold annual meetings of shareholders. As a result,
Fund shareholders may not consider each year the election of Board members or
the appointment of auditors. However, the holders of at least 10% of the
shares outstanding and entitled to vote may require the Fund to hold a
special meeting of shareholders for purposes of removing a Board member from
office and for any other purpose. Fund shareholders may remove a Board member
by the affirmative vote of a majority, in the case of the Money Fund, or
two-thirds, in the case of the Government Money Fund, of the Fund's
outstanding voting shares. In addition, the Fund's Board will call a meeting
of shareholders for the purpose of electing Board members if, at any time,
less than a majority of the Board members then holding office have been
elected by shareholders.

Under Massachusetts law, shareholders of the Government Money Fund
could, under certain circumstances, be held personally liable for the
obligations of the Fund. However, the Government Money Fund's Agreement and
Declaration of Trust (the "Trust Agreement") disclaims shareholder liability
for acts or obligations of the Fund and requires that notice of such
disclaimer be given in each agreement, obligation or instrument entered into
or executed by the Government Money Fund or a Trustee. The Trust Agreement
provides for indemnification from the Government Money Fund's property for
all losses and expenses of any shareholder held personally liable for the
obligations of the Fund. Thus, the risk of a shareholder incurring financial
loss on account of shareholder liability is limited to circumstances in which
the Government Money Fund itself would be unable to meet its obligations, a
possibility which management believes is remote. Upon payment of any
liability incurred by the Government Money Fund, the shareholder paying such
liability will be entitled to reimbursement from the general assets of the
Fund. The Government Money Fund intends to conduct its operations in such a
way as to avoid, as far as possible, ultimate liability of the shareholders
for liabilities of the Fund.

Although each Fund is offering only its own shares, it is possible
that one Fund might become liable for any misstatement in this Prospectus
about the other Fund. The respective Boards of the Funds have considered this
factor in approving the use of this single combined Prospectus.
The Transfer Agent maintains a record of your ownership and will send
confirmations and statements of account. Each Fund sends an annual and
semi-annual financial report to all its shareholders.
Shareholder inquiries may be made by writing to your Fund at 144
Glenn Curtiss Boulevard, Uniondale, New York 11556-0144, or by calling toll
free 1-800-645-6561; in New York City, call 1-718-895-1206; outside the U.
S., call 516-794-5452.

[Page 17]

APPENDIX
INVESTMENT TECHNIQUES
BORROWING MONEY _ The MONEY FUND may borrow money, including in connection
with the entry into reverse repurchase agreements described below, provided
that it maintains continuous asset coverage (that is, total assets including
borrowings, less liabilities exclusive of borrowings) of 300% of the amount
borrowed. The GOVERNMENT MONEY FUND may borrow money, but only for temporary
or emergency (not leveraging) purposes, in an amount up to 15% of the value
of its total assets (including the amount borrowed) valued at the lesser of
cost or market, less liabilities (not including the amount borrowed) at the
time the borrowing is made. As to each Fund, while borrowings exceed 5% of
the Fund's total assets, the Fund will not make any additional investments.
REVERSE REPURCHASE AGREEMENTS (MONEY FUND ONLY) _ The Fund may enter into
reverse repurchase agreements with banks, brokers or dealers. Reverse
repurchase agreements involve the transfer by the Fund of an underlying debt
instrument in return for cash proceeds based on a percentage of the value of
the security. At an agreed upon future date, the Fund repurchases the
security, at principal, plus accrued interest. As a result of these
transactions, the Fund is exposed to greater potential fluctuations in the
value of its assets and its net asset value per share. These transactions
will be subject to interest costs which may or may not be recovered by
appreciation of the securities purchased; in certain cases, interest costs on
the money borrowed may exceed the return received on the securities purchased.
The Fund's Board has considered the risks to the Fund and its shareholders
which may result from the entry into reverse repurchase agreements and has
determined that the entry into such agreements is consistent with the Fund's
investment objective and management policies.

FORWARD COMMITMENTS (MONEY FUND ONLY) _ The Fund may purchase securities on
a forward commitment or when-issued basis, which means that delivery and
payment take place a number of days after the date of the commitment to
purchase. The payment obligation and the interest rate receivable on a
forward commitment or when-issued security are fixed when the Fund enters
into the commitment, but the Fund does not make payment until it receives
delivery from the counterparty. The Fund will commit to purchase such
securities only with the intention of actually acquiring the securities, but
the Fund may sell these securities before the settlement date if it is deemed
advisable. The Fund will not accrue income in respect of a security purchased
on a forward commitment basis prior to its stated delivery date. The Fund
will set aside in a segregated account permissible liquid assets at least
equal at all times to the amount of the forward commitments.

LENDING PORTFOLIO SECURITIES (MONEY FUND ONLY) _ The Fund may lend
securities from its portfolio to brokers, dealers and other institutional
investors needing to borrow securities to complete certain transactions. The
Fund continues to be entitled to payments in amounts equal to the interest or
other distributions payable on the loaned securities which affords the Fund
an opportunity to earn interest on the amount of the loan and on the loaned
securities' collateral. Loans of portfolio securities may not exceed 331\3%
of the value of the Fund's total assets, and the Fund will receive collateral
consisting of cash, U.S. Government securities or irrevocable letters of
credit which will be maintained at all times in an amount equal to at least
100% of the current market value of the loaned securities. Such loans are
terminable at any time upon specified notice. The Fund might experience risk
of loss if the institution with which it has engaged in a portfolio loan
transaction breaches its agreement with the Fund.

[Page 18]

PORTFOLIO SECURITIES
U.S. GOVERNMENT SECURITIES _ Each Fund may invest in U.S. Treasury
securities and other securities issued or guaranteed by the U.S. Government
or its agencies or instrumentalities. These securities differ in their
interest rates, maturities, and time of issuance. Some obligations issued or
guaranteed by U.S. Government agencies and instrumentalities are supported by
the full faith and credit of the U.S. Treasury; others by the right of the
issuer to borrow from the Treasury; others by discretionary authority of the
U.S. Government to purchase certain obligations of the agency or
instrumentality; and others only by the credit of the agency or
instrumentality. These securities bear fixed, floating or variable rates of
interest. Interest may fluctuate based on generally recognized reference
rates or the relationship of rates. While the U.S. Government provides
financial support to such U.S. Government-sponsored agencies or
instrumentalities, no assurance can be given that it will always do so, since
it is not so obligated by law.
REPURCHASE AGREEMENTS _ Each Fund may enter into repurchase agreements with
certain banks or non-bank dealers. In a repurchase agreement, the Fund buys,
and the seller agrees to repurchase, a security at a mutually agreed upon
time and price (usually within seven days). The repurchase agreement thereby
determines the yield during the purchaser's holding period, while the
seller's obligation to repurchase is secured by the value of the underlying
security. Repurchase agreements could involve risks in the event of a default
or insolvency of the other party to the agreement, including the possible
delays or restrictions upon the Fund's ability to dispose of the underlying
securities.
BANK OBLIGATIONS (MONEY FUND ONLY) _ The Fund may purchase certificates of
deposit, time deposits, bankers' acceptances and other short-term obligations
issued by domestic banks, foreign subsidiaries or foreign branches of
domestic banks and domestic and foreign branches of foreign banks. With
respect to such securities issued by foreign subsidiaries or foreign branches
of domestic banks, and domestic and foreign branches of foreign banks, the
Fund may be subject to additional investment risks that are different in some
respects from those incurred by a fund which invests only in debt obligations
of U.S. domestic issuers. See "Description of the Funds _ Investment
Considerations and Risks _ Foreign Securities."
Certificates of deposit are negotiable certificates evidencing the
obligation of a bank to repay funds deposited with it for a specified period
of time.
Time deposits are non-negotiable deposits maintained in a banking
institution for a specified period of time (in no event longer than seven
days) at a stated interest rate.
Bankers' acceptances are credit instruments evidencing the obligation
of a bank to pay a draft drawn on it by a customer. These instruments reflect
the obligation both of the bank and of the drawer to pay the face amount of
the instrument upon maturity. The other short-term obligations may include
uninsured, direct obligations bearing fixed, floating or variable interest
rates.
COMMERCIAL PAPER (MONEY FUND ONLY) _ The Fund may purchase commercial paper
consisting of short-term, unsecured promissory notes issued to finance
short-term credit needs. The commercial paper purchased by the Fund will
consist only of direct obligations issued by domestic and foreign entities.
The other corporate obligations in which the Fund may invest consist of high
quality, U.S. dollar denominated short-term bonds and notes (including
variable amount master demand notes) issued by domestic and foreign
corporations, including banks.
FLOATING AND VARIABLE RATE OBLIGATIONS (MONEY FUND ONLY) _ The Fund may
purchase floating and variable rate demand notes and bonds, which are
obligations ordinarily having stated maturities in excess of
[Page 19]

13 months, but which permit the holder to demand payment of principal at any
time, or at specified intervals not exceeding 13 months, in each case upon
not more than 30 days' notice. Variable rate demand notes include master
demand notes which are obligations that permit the Fund to invest fluctuating
amounts, at varying rates of interest, pursuant to direct arrangements
between the Fund, as lender, and the borrower. These obligations permit daily
changes in the amount borrowed. Because these obligations are direct lending
arrangements between the lender and borrower, it is not contemplated that
such instruments generally will be traded, and there generally is no
established secondary market for these obligations, although they are
redeemable at face value, plus accrued interest. Accordingly, where these
obligations are not secured by letters of credit or other credit support
arrangements, the Fund's right to redeem is dependent on the ability of the
borrower to pay principal and interest on demand.
PARTICIPATION INTERESTS (MONEY FUND ONLY) _ The Fund may purchase from
financial institutions participation interests in securities in which the
Fund may invest. A participation interest gives the Fund an undivided
interest in the security in the proportion that the Fund's participation
interest bears to the total principal amount of the security. These
instruments may have fixed, floating or variable rates of interest, with
remaining maturities of 13 months or less. If the participation interest is
unrated, or has been given a rating below that which is permissible for
purchase by the Fund, the participation interest will be backed by an
irrevocable letter of credit or guarantee of a bank, or the payment
obligation otherwise will be collateralized by U.S. Government securities,
or, in the case of unrated participation interests, The Dreyfus Corporation
must have determined that the instrument is of comparable quality to those
instruments in which the Fund may invest. For certain participation
interests, the Fund will have the right to demand payment, on not more than
seven days' notice, for all or any part of the Fund's participation interest
in the security, plus accrued interest. As to these instruments, the Fund
intends to exercise its right to demand payment only upon a default under the
terms of the security, as needed to provide liquidity to meet redemptions, or
to maintain or improve the quality of its investment portfolio.
Asset-Backed Securities (Money Fund only) _ The Fund may purchase
asset-backed securities, which are securities issued by special purpose
entities whose primary assets consist of a pool of mortgages, loans,
receivables or other assets. Payment of principal and interest may depend
largely on the cash flows generated by the assets backing the securities and,
in certain cases, supported by letters of credit, surety bonds or other forms
of credit or liquidity enhancements. The value of these asset-backed
securities also may be affected by the creditworthiness of the servicing
agent for the pool of assets, the originator of the loans or receivables or
the financial institution providing the credit support.

Municipal Obligations (Money Fund only) _ The Fund may purchase municipal
obligations which are debt obligations issued by states, territories and
possessions of the United States and the District of Columbia and their
political subdivisions, agencies and instrumentalities, or multistate agencies
or authorities. Municipal obligations bear fixed, floating or variable rates
of interest. While, in general, municipal obligations are tax exempt
securities having relatively low yields as compared to taxable, non-municipal
obligations of similar quality, certain municipal obligations are taxable
obligations, offering yields comparable to, and in some cases greater than,
the yields available on other permissible Fund investments. Taxable municipal
obligations may include "private activity bonds" that are issued by or on
behalf of states or political subdivisions thereof to finance facilities for
charitable institutions or privately-owned or operated facilities. The
payment of the principal and interest on private activity bonds is not backed
by a pledge of tax revenues and is dependent solely on the ability of the
facility's user to meet its financial obligations. Taxable
[Page 20]

municipal obligations also may include remarketed certificates of
participation. Dividends received by shareholders on Fund shares which are
attributable to interest income received by the Fund from municipal
obligations, the ratings of which correspond with the ratings of other
permissible Fund investments. The Fund currently intends to invest no more
than 25% of its total assets in municipal obligations. However, this
percentage may be varied from time to time without shareholder approval.

ILLIQUID SECURITIES (MONEY FUND ONLY) _ The Fund may invest up to 10% of the
value of its net assets in securities as to which a liquid trading market
does not exist, provided such investments are consistent with the Fund's
investment objective. Such securities may include securities that are not
readily marketable, such as certain securities that are subject to legal or
contractual restrictions on resale, and repurchase agreements providing for
settlement in more than seven days after notice. By investing in these
securities, the Fund is subject to a risk that should the Fund desire to sell
them when a ready buyer is not available at a price the Fund deems
representative of their value, the value of the Fund's net assets could be
adversely affected.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND IN EACH
FUND'S OFFICIAL SALES LITERATURE IN CONNECTION WITH THE OFFER OF SUCH FUND'S
SHARES, AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY A FUND. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER IN ANY STATE IN WHICH, OR TO ANY PERSON TO WHOM, SUCH
OFFERING MAY NOT LAWFULLY BE MADE.

[Page 21]

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[Page 22]

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[Page 23]

Combined
Prospectus for
BASIC Money Market Fund, Inc.
BASIC U.S. Government
Money Market
Fund
Registration Mark
Copy Rights1998 Dreyfus Service Corporation
123/124p070198
[Page 24]

DREYFUS BASIC MONEY MARKET FUND, INC.
DREYFUS BASIC U.S. GOVERNMENT MONEY MARKET FUND
COMBINED STATEMENT OF ADDITIONAL INFORMATION
JULY 1, 1998

This Statement of Additional Information, which is not a prospectus,
supplements and should be read in conjunction with the current Combined
Prospectus of Dreyfus BASIC Money Market Fund, Inc. (the "Money Fund") and
Dreyfus BASIC U.S. Government Money Market Fund (the "Government Money
Fund")(collectively, the "Funds"), dated July 1, 1998, as it may be revised
from time to time. To obtain a copy of the Funds' Prospectus, please write
to the Funds at 144 Glenn Curtiss Boulevard, Uniondale, New York 11556-0144,
or call the following numbers:

Call Toll Free 1-800-645-6561
In New York City -- Call 1-718-895-1206
Outside the U.S. -- Call 516-794-5452

The Dreyfus Corporation (the "Manager") serves as each Fund's
investment adviser.

Premier Mutual Fund Services, Inc. (the "Distributor") is the
distributor of each Fund's shares.

Each Fund is a separate entity with a separate portfolio. The
operations and investment results of one Fund are unrelated to those of the
other Fund. This combined Statement of Additional Information has been
prepared for an investor's convenience to provide each investor the
opportunity to consider two investment choices in one document.

TABLE OF CONTENTS
Page

Investment Objective and Management Policies ..................B-2
Management of the Funds .......................................B-8
Management Agreements .........................................B-12
Purchase of Shares ............................................B-14
Shareholder Services Plan .....................................B-16
Redemption of Shares ..........................................B-16
Shareholder Services ..........................................B-19
Determination of Net Asset Value ..............................B-21
Portfolio Transactions ........................................B-21
Dividends, Distributions and Taxes ............................B-22
Yield Information .............................................B-22
Information About the Funds ...................................B-23
Transfer and Dividend Disbursing Agent, Custodian,
Counsel and Independent Auditors ............................B-24
Financial Statements and Reports of Independent Auditors ......B-24
Appendices ....................................................B-25

INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES

The following information supplements and should be read in conjunction
with the sections in the Funds' Prospectus entitled "Description of the
Funds" and "Appendix."

Portfolio Securities

Repurchase Agreements. Each Fund's custodian or sub-custodian will
have custody of, and will hold in a segregated account, securities acquired
by such Fund under a repurchase agreement. Repurchase agreements are
considered by the staff of the Securities and Exchange Commission to be
loans by the Fund entering into them. In an attempt to reduce the risk of
incurring a loss on a repurchase agreement, the Funds will enter into
repurchase agreements only with domestic banks with total assets in excess
of $1 billion dollars, or primary government securities dealers reporting to
the Federal Reserve Bank of New York, with respect to securities of the type
in which the Fund may invest or government securities, and will require that
additional securities be deposited with it if the value of the securities
purchased should decrease below resale price.

The following applies only to the Money Fund.

Bank Obligations. Domestic commercial banks organized under Federal
law are supervised and examined by the Comptroller of the Currency and are
required to be members of the Federal Reserve System and to have their
deposits insured by the Federal Deposit Insurance Corporation (the "FDIC").
Domestic banks organized under state law are supervised and examined by
state banking authorities but are members of the Federal Reserve System only
if they elect to join. In addition, state banks whose certificates of
deposit ("CDs") may be purchased by the Fund are insured by the FDIC
(although such insurance may not be of material benefit to the Fund,
depending upon the principal amount of the CDs of each bank held by the
Fund) and are subject to Federal examination and to a substantial body of
Federal law and regulation. As a result of Federal or state laws and
regulations, domestic banks, among other things, generally are required to
maintain specified levels of reserves, limited in the amounts which they can
loan to a single borrower and subject to other regulations designed to
promote financial soundness. However, not all of such laws and regulations
apply to the foreign branches of domestic banks.

Obligations of foreign subsidiaries or foreign branches of domestic
banks, and domestic and foreign branches of foreign banks, such as CDs and
time deposits ("TDs"), may be general obligations of the parent banks in
addition to the issuing branch, or may be limited by the terms of specific
obligations and governmental regulation. Such obligations are subject to
different risks than are those of domestic banks. These risks include
foreign economic and political developments, foreign governmental
restrictions that may adversely affect payment of principal and interest on
the obligations, foreign exchange controls and foreign withholding and other
taxes on interest income. These foreign branches and subsidiaries are not
necessarily subject to the same or similar regulatory requirements that
apply to domestic banks, such as mandatory reserve requirements, loan
limitations, and accounting, auditing and financial recordkeeping
requirements. In addition, less information may be publicly available about
a foreign branch of a domestic bank or about a foreign bank than about a
domestic bank.

Obligations of United States branches of foreign banks may be general
obligations of the parent bank in addition to the issuing branch, or may be
limited by the terms of a specific obligation and by Federal or state
regulation as well as governmental action in the country in which the
foreign bank has its head office. A domestic branch of a foreign bank with
assets in excess of $1 billion may be subject to reserve requirements
imposed by the Federal Reserve System or by the state in which the branch is
located if the branch is licensed in that state.

In addition, Federal branches licensed by the Comptroller of the
Currency and branches licensed by certain states ("State Branches") may be
required to: (1) pledge to the regulator, by depositing assets with a
designated bank within the state, a certain percentage of their assets as
fixed from time to time by the appropriate regulatory authority; and (2)
maintain assets within the state in an amount equal to a specified
percentage of the aggregate amount of liabilities of the foreign bank
payable at or through all of its agencies or branches within the state. The
deposits of Federal and State Branches generally must be insured by the FDIC
if such branches take deposits of less than $100,000.

In view of the foregoing factors associated with the purchase of CDs
and TDs issued by foreign branches of domestic banks, or by foreign branches
or domestic branches of foreign banks, the Manager carefully evaluates such
investments on a case-by-case basis.

Municipal Obligations. Municipal obligations generally include debt
obligations issued to obtain funds for various public purposes as well as
certain industrial development bonds issued by or on behalf of public
authorities. Municipal obligations are classified as general obligation
bonds, revenue bonds and notes. General obligation bonds are secured by the
issuer's pledge of its faith, credit and taxing power for the payment of
principal and interest. Revenue bonds are payable from the revenue derived
from a particular facility or class of facilities or, in some cases, from
the proceeds of a special excise or other specific revenue source, but not
from the general taxing power. Industrial development bonds, in most cases,
are revenue bonds and generally do not carry the pledge of the credit of the
issuing municipality, but generally are guaranteed by the corporate entity
on whose behalf they are issued. Notes are short-term instruments which are
obligations of the issuing municipalities or agencies and are sold in
anticipation of a bond sale, collection of taxes or receipt of other
revenues. Municipal obligations include municipal lease/purchase agreements
of which are similar to installment purchase contracts for property or
equipment issued by municipalities.

Foreign Government Obligations; Securities of Supranational Entities.
The Fund may invest in obligations issued or guaranteed by one or more
foreign governments or any of their political subdivisions, agencies or
instrumentalities that are determined by the Manager to be of comparable
quality to the other obligations in which the Fund may invest. Such
securities also include debt obligations of supranational entities.
Supranational entities include international organizations designated or
supported by governmental entities to promote economic reconstruction or
development and international banking institutions and related government
agencies. Examples include the International Bank for Reconstruction and
Development (the World Bank), the European Coal and Steel Community, the
Asian Development Bank and the InterAmerican Development Bank.

Illiquid Securities. Where a substantial market of qualified
institutional buyers develops for certain restricted securities purchased by
the Fund pursuant to Rule 144A under the Securities Act of 1933, as amended,
the Fund intends to treat such securities as liquid securities in accordance
with procedures approved by the Fund's Board. Because it is not possible to
predict with assurance how the market for restricted securities pursuant to
Rule 144A will develop, the Fund's Board has directed the Manager to monitor
carefully the Fund's investments in such securities with particular regard
to trading activity, availability of reliable price information and other
relevant information. To the extent that, for a period of time, qualified
institutional buyers cease purchasing such restricted securities pursuant to
Rule 144A, the Fund's investment in such securities may have the effect of
increasing the level of illiquidity in its portfolio during such period.

Management Policies

The following applies only to the Money Fund.

Reverse Repurchase Agreements. To the extent the Fund enters into
reverse repurchase agreements, the Fund will maintain in a segregated
account permissible liquid assets equal to the aggregate amount of its
reverse repurchase obligations, plus accrued interest, in certain cases, in
accordance with releases promulgated by the Securities and Exchange
Commission. The Securities and Exchange Commission views reverse repurchase
agreement transactions as collateralized borrowings by the Fund.

Forward Commitments. Securities purchased on a forward commitment or
when-issued basis are subject to changes in value (generally changing in the
same way, i.e., appreciating when interest rates decline and depreciating
when interest rates rise) based upon the public's perception of the
creditworthiness of the issuer and changes, real or anticipated, in the
level of interest rates. Securities purchased on a forward commitment or
when-issued basis may expose the Fund to risks because they may experience
such fluctuations prior to their actual delivery. Purchasing securities on
a when-issued basis can involve the additional risk that the yield available
in the market when the delivery takes place actually may be higher than that
obtained in the transaction itself. Purchasing securities on a forward
commitment or when-issued basis when the Fund is fully or almost fully
invested may result in greater potential fluctuation in the value of the
Fund's net assets and its net asset value per share.

Lending Portfolio Securities. In connection with its securities
lending transactions, the Fund may return to the borrower and/or a third
party which is unaffiliated with the Fund, and which is acting as a "placing
broker," a part of the interest earned from the investment of collateral
received for securities loaned.

The Securities and Exchange Commission currently requires that the
following conditions must be met whenever portfolio securities are loaned by
the Fund: (1) the Fund must receive at least 100% cash collateral from the
borrower; (2) the borrower must increase such collateral whenever the market
value of the securities rises above the level of such collateral; (3) the
Fund must be able to terminate the loan at any time; (4) the Fund must
receive reasonable interest on the loan, as well as any interest or other
distributions payable on the loaned securities, and any increase in market
value; and (5) the Fund may pay only reasonable custodian fees in connection
with the loan.

Investment Restrictions

Money Fund. The Fund has adopted investment restrictions numbered 1
through 7 as fundamental policies, which cannot be changed without approval
by the holders of a majority (as defined in the Investment Company Act of
1940, as amended (the "1940 Act"), of the Fund's outstanding voting shares.
Investment restrictions numbered 8 through 14 are not fundamental policies
and may be changed by vote of a majority of the Fund's Board members at any
time. The Fund may not:

1. Borrow money, except to the extent the Fund maintains continuous

asset coverage (that is, total borrowings, less liabilities exclusive of
borrowings) of 300% of the amount borrowed.

2. Purchase or sell real estate, real estate investment trust
securities, commodities or commodity contracts, or oil and gas interests,
except that the Fund may purchase or sell futures contracts, including those
relating to indices, and options on futures contracts and indices.

3. Act as underwriter of securities of other issuers, except to the
extent the Fund may be deemed an underwriter under the Securities Act of
1933, as amended, by virtue of disposing of portfolio securities.

4. Make loans to others, except through the purchase of debt
obligations or the entry into repurchase agreements. However, the Fund may
lend its portfolio securities in an amount not to exceed 33-1/3% of the
value of its total assets. Any loans of portfolio securities will be made
according to guidelines established by the Securities and Exchange
Commission and the Fund's Board.

5. Invest more than 5% of its assets in the obligations of any
single issuer, except that up to 25% of the value of the Fund's total assets
may be invested without regard to any such limitation.

6. Invest less than 25% of its total assets in securities issued by
banks or invest more than 25% of its assets in the securities of issuers in
any other industry, provided that there shall be no limitation on the
purchase of obligations issued or guaranteed by the U.S. Government, its
agencies or instrumentalities. Notwithstanding the foregoing, for temporary
defensive purposes the Fund may invest less than 25% of its assets in bank
obligations.

7. Issue any senior security (as such term is defined in Section
18(f) of the 1940 Act), except to the extent that the activities permitted
in Investment Restriction Nos. 1, 2 and 10 may be deemed to give rise to a
senior security.

8. Purchase common stocks, preferred stocks, warrants or other
equity securities, or purchase corporate bonds or debentures (except through
the purchase of debt obligations referred to above and in the Prospectus).

9. Invest in securities of other investment companies, except
as they may be acquired as part of a merger, consolidation or acquisition of
assets.

10. Pledge, hypothecate, mortgage or otherwise encumber its assets,
except to the extent necessary to secure permitted borrowings and to the
extent related to the deposit of assets in escrow in connection with
portfolio transactions, such as in connection with writing covered options
and the purchase of securities on a when-issued or forward commitment basis
and collateral and initial or variation margin arrangements with respect to
options, futures contracts, including those relating to indices, and options
on futures contracts or indices.

11. Sell securities short or purchase securities on margin.

12. Write or purchase put or call options or combinations thereof.

13. Enter into repurchase agreements providing for settlement in more
than seven days after notice or purchase securities which are illiquid, if,
in the aggregate, more than 10% of the value of its net assets would be so
invested.

14. Invest in companies for the purpose of exercising control.

* * *

Government Money Fund. The Fund has adopted investment restrictions
numbered 1 through 6 as fundamental policies, which cannot be changed
without approval by the holders of a majority (as defined in the 1940 Act)
of the Fund's outstanding voting shares. Investment restrictions numbered 7
through 12 are not fundamental policies and may be changed by vote of a
majority of the Fund's Board members at any time. The Fund may not:

1. Borrow money, except for temporary or emergency (not leveraging)
purposes in an amount up to 15% of the value of the Fund's total assets
(including the amount borrowed) based on the lesser of cost or market, less
liabilities (not including the amount borrowed) at the time the borrowing is
made. While borrowings exceed 5% of the value of the Fund's total assets,
the Fund will not make any additional investments.

3. Act as underwriter of securities of other issuers.

4. Make loans to others, except through the purchase of debt
obligations or the entry into repurchase agreements.

5. Invest more than 25% of its assets in the securities of issuers in
any single industry, provided that there shall be no limitation on the
purchase of obligations issued or guaranteed by the U.S. Government, its
agencies or instrumentalities.

6. Issue any senior security (as such term is defined in Section
18(f) of the 1940 Act), except to the extent the activities permitted in
Investment Restriction Nos. 1, 2 and 9 may be deemed to give rise to a
senior security.

7. Purchase common stocks, preferred stocks, warrants or other equity
securities, or purchase corporate bonds or debentures, state bonds,
municipal bonds or industrial revenue bonds.

8. Invest in securities of other investment companies, except as they
may be acquired as part of a merger, consolidation or acquisition of assets.

9. Pledge, hypothecate, mortgage or otherwise encumber its assets,
except to the extent necessary to secure permitted borrowings.

10. Sell securities short or purchase securities on margin.

11. Write or purchase put or call options or combinations thereof.

12. Enter into repurchase agreements providing for settlement in more
than seven days after notice or purchase securities which are illiquid, if,
in the aggregate, more than 10% of its net assets would be so invested.

* * *

With respect to each Fund, if a percentage restriction is adhered to at
the time of investment, a later increase or decrease in percentage resulting
from a change in values or assets will not constitute a violation of such
restriction.

Each Fund may make commitments more restrictive than the respective
restrictions listed above so as to permit the sale of such Fund's shares in
certain states. Should a Fund determine that a commitment is no longer in
the best interests of the Fund and its shareholders, such Fund reserves the
right to revoke the commitment by terminating the sale of its shares in the
state involved.

MANAGEMENT OF THE FUNDS

Board members and officers of each Fund, together with information as
to their principal business occupations during at least the last five years,
are shown below.

Board Members of each Fund

JOSEPH S. DiMARTINO, Chairman of the Board. Since January 1995, Chairman of
the Board of various funds in the Dreyfus Family of Funds. He also is
a director of Noel Group , Inc., a venture capital company (for which,
from February 1995 until November 1997, he was Chairman of the Board),
The Muscular Dystrophy Association, HealthPlan Services Corporation, a
provider of marketing, administrative and risk management services to
health and other benefit programs, Carlyle Industries, Inc. (formerly,
Belding Heminway Company, Inc.), a button packager and distributor,
Century Business Services, Inc., a provider of various outsourcing
functions for small and medium sized companies, and Career Blazers Inc.
(formerly, Staffing Resources), a temporary placement firm. For more
than five years prior to January 1995, he was President, a director
and, until August 1994, Chief Operating Officer of the Manager and
Executive Vice President and a director of Dreyfus Service Corporation,
a wholly-owned subsidiary of the Manager and, until August 24, 1994,
the Funds' distributor. From August 1994 until December 31, 1994, he
was a director of Mellon Bank Corporation. He is 54 years old and his
address is 200 Park Avenue, New York, New York 10166.

DAVID W. BURKE, Board Member. Chairman of the Broadcasting Board of
Governors, an independent board within the United States Information
Agency, since August 1995. From August 1994 through December 31, 1994,
Mr. Burke was a Consultant to the Manager and, from October 1990 to
August 1994, he was Vice President and Chief Administrative Officer of
the Manager. From 1977 to 1990, Mr. Burke was involved in the
management of national television news, as Vice President and Executive
Vice President of ABC News, and subsequently as President of CBS News.
He is 62 years old and his address is Box 654, Eastham, Massachusetts
02642.

DIANE DUNST, Board Member. Since January 1992, President of Diane Dunst
Promotion, Inc., a full service promotion agency. From January 1989 to
January 1992, Director of Promotion Services, Lear's Magazine. From
1985 to January 1989, she was Sales Promotion Manager of ELLE Magazine.
She is 58 years old and her address is 1172 Park Avenue, New York, New
York 10128.

ROSALIND GERSTEN JACOBS, Board Member. Director of Merchandise and
Marketing for Corporate Property Investors, a real estate investment
company. From 1974 to 1976, she was owner and manager of a merchandise
and marketing consulting firm. Prior to 1974, she was a Vice President
of Macy's, New York. She is 73 years old and her address is c/o
Corporate Property Investors, 305 East 47th Street, New York, New York
10017.

JAY I. MELTZER, Board Member. Physician engaged in private practice
specializing in internal medicine. He is also a member of the Advisory
Board of the Section of Society and Medicine, College of Physicians and
Surgeons, Columbia University and a Clinical Professor of Medicine,
Department of Medicine, Columbia University College of Physicians and
Surgeons. He is 69 years old and his address is 903 Park Avenue, New
York, New York 10021.

DANIEL ROSE, Board Member. President and Chief Executive Officer of Rose
Associates, Inc., a New York based real estate development and
management firm. Pursuant to a Presidential appointment in July 1994,
Mr. Rose serves as a Director of the Baltic-American Enterprise Fund,
which makes equity investments and loans, and provides technical
business assistance to new business concerns in the Baltic States. He
also is Chairman of the Housing Committee of The Real Estate Board of
New York, Inc., and a trustee of Corporate Property Investors, a real
estate investment company. He is 68 years old and his address is c/o
Rose Associates, Inc., 200 Madison Avenue, New York, New York 10016.

WARREN B. RUDMAN, Board Member. Since January 1993, Partner in the law firm
Paul, Weiss, Rifkind, Wharton & Garrison and since May 1995, a director
of Collins & Aikman Corporation. Also, since January 1993, Mr. Rudman
has served as a director of Chubb Corporation and of the Raytheon
Company, and as a trustee of Boston College. He is also a member of
the President's Foreign Intelligence Advisory Board (as Vice Chairman
through February 1998 and currently as Chairman). Mr. Rudman also
serves as a member of the Senior Advisory Board of the Institute of
Politics of the Kennedy School of Government at Harvard University.
From January 1981 to January 1993, Mr. Rudman served as a United States
Senator from the State of New Hampshire. From January 1993 to December
1994, Mr. Rudman served as Chairman of the Federal Reserve Bank of
Boston. He is 68 years old and his address is c/o Paul, Weiss,
Rifkind, Wharton & Garrison, 1615 L Street, N.W., Suite 1300,
Washington D.C. 20036.

SANDER VANOCUR, Board Member. Since January 1992, President of Old Owl
Communications, a full-service communications firm. From May 1995 to
June 1996, he was a Professional in Residence at the Freedom Forum in
Arlington, VA and from January 1994 to May 1997, he served as a
Visiting Professional Scholar at the Freedom Forum First Amendment
Center at Vanderbilt University. From November 1989 to November 1995,
he was a Director of the Damon Runyon-Walter Winchell Cancer Research
Fund. From June 1986 to December 1991, he was a Senior Correspondent
of ABC News and, from October 1977 to December 1991, he was Anchor of
the ABC News program "Business World," a weekly business program on the
ABC television network. He is 70 years old and his address is 2928 P
Street, N.W., Washington, D.C. 20007.

For so long as each Fund's plan described in the section captioned
"Shareholder Services Plan" remains in effect, the Board members of each
Fund who are not "interested persons" of such Fund, as defined in the 1940
Act, will be selected and nominated by the Board members who are not
"interested persons" of such Fund.

Each Fund typically pays its Board members an annual retainer and a per
meeting fee and reimburses them for their expenses. The Chairman of the
Board receives an additional 25% of such compensation. Emeritus Board
members are entitled to receive an annual retainer and a per meeting fee of
one-half the amount paid to them as Board members. The aggregate amount of
fees and expenses paid to Board members by each Fund for the fiscal year
ended February 28, 1998, and by all other funds in the Dreyfus Family of
Funds for which such person is a Board member (the number of which is set
forth in parenthesis next to each Board member's total compensation) for the
year ended December 31, 1997, were as follows:

Total
Compensation from
Aggregate each Fund and Fund
Name of Board Compensation from Complex Paid
Member each Fund* to Board
Member

Joseph S. DiMartino $597,128 (94)

Money Fund $3,438
Government Money Fund $3,438

David W. Burke $239,000 (52)