DREYFUS MASSACHUSETTS INTERMEDIATE MUNICIPAL BOND FUND
LETTER TO SHAREHOLDERS
Dear Shareholder:
We are pleased to provide you with this report on the Dreyfus
Massachusetts Intermediate Municipal Bond Fund. For its semi-annual reporting
period ended September 30, 1996, your portfolio achieved a total return of
2.08%, which includes share price changes and interest income.* Income
dividends exempt from Federal and Commonwealth of Massachusetts personal
income taxes of approximately $.290 per share were paid to shareholders.**
This is equivalent to an annualized tax-free distribution rate per share of
4.36%.***
THE ECONOMY
Low inflation in the face of ongoing strong growth in new jobs and low
unemployment remained the big economic story over the reporting period. On
September 24, the Federal Reserve Board's Open Market Committee ("the Fed")
again decided against raising interest rates. Despite what appeared to be a
sharp split within the Fed, the Central Bank kept the Fed Funds rate at
5.25%.
The potential resurgence in inflation has been a primary concern of the
Fed as the economic expansion continues. Yet inflation has remained subdued.
The Consumer Price Index has risen just 2.9% over the past twelve months.
Furthermore, indications of inflation at crude, intermediate and finished
goods levels, as measured by the Producer Price Index, remained well-behaved.
There appear to be few signs of inflation in the production pipeline.
The past inverse relationship between unemployment and inflation has so
far not prevailed during this economic expansion. Most recently, the
unemployment rate fell to 5.1%, its lowest level in seven years. Job growth
has continued to be robust. Yet despite signs of a tightening labor market,
wage gains, considered by many economists to be a harbinger of future
inflation, remained modest, as have virtually all measures of inflation.
Buoyed by such good news, consumers remained confident. The Conference
Board's Consumer Confidence Index has risen since the beginning of the year
and was near a six-year high by the end of the reporting period. Yet, there
were some signs that consumer spending was moderating from its strong pace in
the first half of the year. Retail sales remained subdued all summer.
Consumer borrowing rose over the reporting period, continuing the three-year
trend of steady increases in credit.
Industrial production has risen consistently since February and
businesses showed some signs of inventory accumulation by late summer.
Corporate pricing power still seems to be in check. In a survey of member
corporations released in mid-September, the National Federation of
Independent Business reported that only 20% of its respondents planned to
increase prices in coming months.
Despite all these favorable developments, we are alert for signs of
potential economic excess that could result in a resurgence in inflation.
THE MARKET
The municipal bond market, like its taxable counterparts, has been
buffeted by an unusual amount of price volatility during the past year. The
market continues to be preoccupied with the periodic releases of key economic
data, and this has resulted in large and dramatic swings in bond prices and
yields. At this juncture, it appears that for now the Fed will maintain a
hands-off policy toward interest rates. However, there continues to be no clear
consensus regarding the future direction of the economy or its strength, or of
inflation, as evidenced by a fairly equal division of opinion among economists.
The prevailing uncertain state of affairs has taken its toll on the psyche (not
to mention the profits) of many market traders as a sharp decline in prices one
day is quickly followed the next by a reverse move.
In view of the municipal bond market's price activity over the past year,
we reiterate our belief that investors should maintain a long-term
perspective and not be unduly influenced by short-term price swings. The
sharp market sell-off last winter, followed by a strong rally during the
summer, followed recently by yet another climb and then a subsequent fall in
yields, underscores this point.
THE PORTFOLIO
Over the past six months, the portfolio has been primarily weighted in
the 6-10 year sector of the curve, with a small percentage of discount paper
in the 15 year range. It is our belief that the major move to higher rates is
behind us.
Included in this report is a series of detailed statements about your
Fund's holdings and its financial condition. We hope they are informative.
Please know that we appreciate greatly your continued confidence in the Fund
and The Dreyfus Corporation.
Very truly yours,
[Richard J. Moynihan signature logo]
Richard J. Moynihan
Director, Municipal Portfolio Management
The Dreyfus Corporation
October 15, 1996
New York, N.Y.
* Total return includes reinvestment of dividends and any capital gains
paid.
** Some income may be subject to the Federal Alternative Minimum Tax (AMT)
for certain shareholders.
*** Distribution rate per share is based upon dividends per share paid from
net investment income during the period (annualized), divided by the net
asset value per share at the end of the period.
<TABLE>
<CAPTION>
DREYFUS MASSACHUSETTS INTERMEDIATE MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS SEPTEMBER 30, 1996 (UNAUDITED)
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS-93.0% AMOUNT VALUE
_______ ______
<S> <C> <C>
MASSACHUSETTS-91.1%
Arlington 5%, 8/15/2001..................................................... $ 200,000 $ 203,492
Attleboro:
5.50%, 1/15/2001........................................................ 400,000 410,556
5.70%, 1/15/2002........................................................ 400,000 413,220
5.90%, 1/15/2004........................................................ 325,000 338,790
6%, 1/15/2005........................................................... 345,000 360,766
Belchertown, Refunding:
4.80%, 10/15/2001 (Insured; MBIA)....................................... 240,000 242,940
5%, 10/15/2002 (Insured; MBIA).......................................... 400,000 407,820
Boston:
6.10%, 7/1/1999 (Insured; MBIA)......................................... 250,000 261,315
6.20%, 7/1/2002......................................................... 865,000 926,744
Refunding 5.20%, 2/1/2004 (Insured; AMBAC).............................. 500,000 508,655
Revenue, Refunding (Boston City Hospital):
5.45%, 2/15/2004 (Insured; FHA)....................................... 500,000 503,710
5.45%, 8/15/2004 (Insured; FHA)....................................... 210,000 211,558
5.55%, 2/15/2005 (Insured; FHA)....................................... 295,000 297,183
Brockton, Refunding:
5.60%, 6/1/2001 (Insured; AMBAC)........................................ 255,000 265,424
5.70%, 6/1/2002 (Insured; AMBAC)........................................ 260,000 272,462
Brookline 5.20%, 9/1/2003................................................... 500,000 511,785
Dartmouth 4.90%, 5/1/2002................................................... 200,000 202,870
Greater New Bedford Regional Refuse Management District:
4.75%, 5/1/1997......................................................... 815,000 816,997
5.10%, 5/1/2000......................................................... 240,000 237,900
Haverhill 6.30%, 6/15/2002.................................................. 100,000 104,510
Holyoke, Refunding:
6.10%, 11/1/1998........................................................ 190,000 196,325
6.20%, 11/1/1999........................................................ 100,000 104,333
Lawrence 4.625%, 2/15/2005.................................................. 1,190,000 1,146,684
Lowell 5.60%, 4/1/2005...................................................... 1,530,000 1,579,052
Ludlow 6.90%, 10/15/2003.................................................... 100,000 112,591
Lynn, Refunding:
4.90%, 1/15/2005 (Insured; FSA)......................................... 1,210,000 1,193,145
5%, 1/15/2006........................................................... 1,185,000 1,169,761
Massachusetts Bay Transportation Authority, Refunding
6%, 3/1/2005............................................................ 1,000,000 1,064,100
DREYFUS MASSACHUSETTS INTERMEDIATE MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS (CONTINUED) SEPTEMBER 30, 1996 (UNAUDITED)
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
_______ ______
MASSACHUSETTS (CONTINUED)
Massachusetts Commonwealth:
Consolidated Loan:
5.25%, 6/1/1998....................................................... $ 100,000 $ 101,807
5.75%, 5/1/2003....................................................... 500,000 524,655
6.20%, 6/1/2003....................................................... 85,000 91,247
5.30%, 7/1/2006....................................................... 1,750,000 1,767,780
4.875%, 10/1/2013..................................................... 2,500,000 2,281,125
Refunding 6%, 8/1/2010 (Insured; AMBAC)................................. 1,500,000 1,587,555
Massachusetts Convention Center Authority, Refunding
(Hynes Convention Center) 5.90%, 9/1/1998............................... 250,000 257,703
Massachusetts Education Loan Authority, Education Loan Revenue:
7.40%, 6/1/1998 (LOC; Rabobank Nederland) (a)........................... 190,000 191,896
7.55%, 1/1/2002 (Insured; MBIA)......................................... 790,000 856,992
8%, 6/1/2002 (LOC; Rabobank Nederland) (a).............................. 85,000 87,326
Massachusetts Health and Educational Facilities Authority, Revenue:
(Bentley College) 5.50%, 7/1/2003 (Insured; MBIA)....................... 500,000 517,755
(Beth Israel Hospital) 5.10%, 7/1/2000 (Insured; AMBAC)................. 300,000 305,976
(Brigham and Womens Hospital) 4.90%, 7/1/2005........................... 1,840,000 1,803,200
(Cape Cod Health System) 5%, 11/15/2002
(Insured; College Construction Loan Insurance Association)............ 1,000,000 1,011,770
(Central New England Health System) 5.75%, 8/1/2003..................... 1,000,000 929,300
(New England Medical Center Hospitals):
5.60%, 7/1/1999 (Insured; FGIC)....................................... 100,000 103,006
4.90%, 7/1/2006 (Insured; MBIA)....................................... 1,365,000 1,334,997
(Refunding - Baystate Medical Center) 4.90%, 7/1/2005 (Insured; FGIC)... 1,000,000 985,460
(Refunding - Massachusetts General Hospital):
4.85%, 7/1/2004 (Insured; AMBAC)...................................... 1,000,000 985,210
6%, 7/1/2004 (Insured; AMBAC)......................................... 1,875,000 2,004,675
(Refunding - Melrose-Wakefield Hospital):
5.50%, 7/1/1999....................................................... 200,000 203,348
5.80%, 7/1/2001....................................................... 100,000 102,870
(Smith College) 5.75%, 7/1/2016......................................... 1,000,000 1,001,010
(University of Massachusetts Medical School Research Project)
5.30%, 7/1/2002 (Insured; College Construction Loan Insurance Association) 400,000 409,312
Massachusetts Housing Finance Agency:
(Holy Cross College-11) 6%, 11/1/2002................................... 100,000 106,671
Housing Projects, Refunding:
5.20%, 4/1/2000....................................................... 800,000 818,640
6.30%, 10/1/2013...................................................... 2,000,000 2,038,180
SFHR 6.90%, 12/1/2001................................................... 95,000 97,047
DREYFUS MASSACHUSETTS INTERMEDIATE MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS (CONTINUED) SEPTEMBER 30, 1996 (UNAUDITED)
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
_______ ______
MASSACHUSETTS (CONTINUED)
Massachusetts Industrial Finance Agency, Revenue:
(Museum of Fine Arts-Boston) 6.20%, 1/1/2000 (Insured; MBIA)............ $ 100,000 $ 102,600
(Refunding - Combined Jewish Philanthropies) 5.65%, 2/1/2003 (Insured; AMBAC) 795,000 830,385
(Refunding - Refusetech, Inc. Project) 6.15%, 7/1/2002.................. 1,800,000 1,850,148
Massachusetts Municipal Wholesale Electric Co., Power Supply Systems Revenue:
5.875%, 7/1/2003........................................................ 500,000 521,570
5%, 7/1/2017 (Insured; AMBAC)........................................... 1,450,000 1,336,378
Refunding:
6.30%, 7/1/2001....................................................... 100,000 105,863
6.40%, 7/1/2002....................................................... 100,000 106,812
5%, 7/1/2013 (Insured; MBIA).......................................... 1,890,000 1,751,142
Massachusetts Water Pollution Abatement Trust, Water Pollution Abatement
Revenue
(Pool Loan Program) 5.70%, 2/1/2012..................................... 2,260,000 2,277,176
Milford 5.10%, 12/15/2010................................................... 1,300,000 1,248,468
New Bedford 5.60%, 3/1/2003................................................. 600,000 607,056
New England Education Loan Marketing Corp., Student Loan Revenue:
6%, 3/1/2002............................................................ 500,000 520,810
6.60%, 9/1/2002......................................................... 100,000 107,523
6.90%, 11/1/2009........................................................ 1,000,000 1,090,700
Newton:
4.40%, 4/15/2002........................................................ 600,000 596,640
4.50%, 4/15/2003........................................................ 575,000 571,291
North Andover:
6.50%, 11/1/2004........................................................ 300,000 328,287
6.55%, 11/1/2005........................................................ 300,000 328,650
North Reading, Refunding 6.40%, 6/15/2002 (Insured; MBIA)................... 200,000 217,198
Pioneer Valley Transit Authority, COP 5.70%, 2/1/2003 (Insured; CGIC)....... 1,240,000 1,295,093
Plymouth County, COP 6.50%, 10/1/2001....................................... 200,000 213,590
Springfield:
4.90%, 1/15/2002 (Insured; MBIA)........................................ 850,000 856,834
Refunding:
6%, 9/1/2001.......................................................... 500,000 518,020
4.90%, 9/1/2002 (Insured; MBIA)....................................... 515,000 519,589
Swansea 6.60%, 1/15/2005.................................................... 100,000 108,573
Taunton 5.25%, 7/15/2002 (Insured; AMBAC)................................... 100,000 103,137
Webster 6.50%, 9/1/2005 (Insured; AMBAC).................................... 310,000 340,107
Westfield:
4.20%, 9/1/2000 (Insured; FSA).......................................... 500,000 493,045
Refunding 4.50%, 12/15/2003 (Insured; MBIA)............................. 960,000 937,133
DREYFUS MASSACHUSETTS INTERMEDIATE MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS (CONTINUED) SEPTEMBER 30, 1996 (UNAUDITED)
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
_______ ______
MASSACHUSETTS (CONTINUED)
Westford, Refunding 5%, 10/15/2004 (Insured; AMBAC)......................... $ 795,000 $ 804,166
Weymouth 6%, 6/15/2001...................................................... 100,000 104,567
Woods Hole, Marthas Vineyard & Nantucket 6.10%, 3/1/2005.................... 690,000 730,834
Worcester:
5.80%, 8/1/1998......................................................... 200,000 204,980
5.80%, 8/1/1999......................................................... 250,000 257,378
6%, 8/1/2003............................................................ 545,000 569,449
U. S. RELATED-1.9%
Guam Airport Authority, Revenue 6%, 10/1/2000............................... 1,100,000 1,130,635
Puerto Rico Commonwealth Highway and Transportation Authority,
Highway Revenue, Refunding 5.875%, 7/1/1999............................. 100,000 103,227
______
TOTAL LONG-TERM MUNICIPAL INVESTMENTS (cost $59,647,122).................... $60,360,255
======
SHORT-TERM MUNICIPAL INVESTMENTS -7.0%
MASSACHUSETTS-6.5%
Massachusetts Health and Educational Facilities Authority, Revenue, VRDN:
(Capital Assets Program) 3.75% (Insured; MBIA) (b)...................... $ 1,100,000 $ 1,100,000
(Saint Elizabeth's Hospital) 3.48% (Insured; FSA) (b)................... 1,150,000 1,150,000
Massachusetts Industrial Finance Agency, Revenue, VRDN (Showa Womens
Institute)
3.95% (LOC: Bank of America and Fuji Bank Limited) (a,b)................ 2,000,000 2,000,000
U.S. RELATED-.5%
Puerto Rico Electric Power Authority, Power Revenue 3.29% (Insured; FSA) (c) 300,000 300,000
______
TOTAL SHORT-TERM MUNICIPAL INVESTMENTS (cost $4,550,000).................... $ 4,550,000
======
TOTAL INVESTMENTS-100.0% (cost $64,197,122)................................. $64,910,255
======
</TABLE>
<TABLE>
<CAPTION>
DREYFUS MASSACHUSETTS INTERMEDIATE MUNICIPAL BOND FUND
SUMMARY OF ABBREVIATIONS
<S> <C> <S> <C>
AMBAC American Municipal Bond Assurance Corporation LOC Letter of Credit
CGIC Capital Guaranty Insurance Corporation MBIA Municipal Bond Investors Assurance
COP Certificate of Participation Insurance Corporation
FGIC Financial Guaranty Insurance Company SFHR Single Family Housing Revenue
FHA Federal Housing Administration VRDN Variable Rate Demand Notes
FSA Financial Security Assurance
</TABLE>
<TABLE>
<CAPTION>
SUMMARY OF COMBINED RATINGS (UNAUDITED)
FITCH (D) OR MOODY'S OR STANDARD & POOR'S PERCENTAGE OF VALUE
- ----- ----- --------------- ---------------
<S> <C> <S> <C>
AAA Aaa AAA 51.9%
AA Aa AA 3.6
A A A 27.5
BBB Baa BBB 10.8
BB Ba BB 1.4
F1+ & F1 MIG1, VMG1 & P1 SP1 & A1 4.8
____
100.0%
====
NOTES TO STATEMENT OF INVESTMENTS:
(a) Secured by letters of credit.
(b) Securities payable on demand. The interest rate, which is subject to
change, is based upon bank prime rates or an index of market interest
rates.
(c) Inverse floater security - the interest rate is subject to change
periodically.
(d) Fitch currently provides creditworthiness information for a limited
number of investments.
</TABLE>
See independent accountants' review report and notes to financial statements.
<TABLE>
<CAPTION>
DREYFUS MASSACHUSETTS INTERMEDIATE MUNICIPAL BOND FUND
STATEMENT OF ASSETS AND LIABILITIES SEPTEMBER 30, 1996 (UNAUDITED)
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $64,197,122)-see statement...................................... $64,910,255
Interest receivable..................................................... 944,334
Receivable for shares of Beneficial Interest subscribed................. 2,500
Prepaid expenses........................................................ 6,083
______
65,863,172
LIABILITIES:
Due to The Dreyfus Corporation and affiliates........................... $ 31,472
Due to Custodian........................................................ 506,936
Accrued expenses and other liabilities.................................. 40,519 578,927
____ ______
NET ASSETS ................................................................ $65,284,245
======
REPRESENTED BY:
Paid-in capital......................................................... $67,526,206
Accumulated net realized (loss) on investments.......................... (2,955,094)
Accumulated net unrealized appreciation on investments-Note 3........... 713,133
______
NET ASSETS at value applicable to 4,975,945 shares outstanding (unlimited
number of $.001 par value shares of Beneficial Interest authorized)..... $65,284,245
======
NET ASSET VALUE, offering and redemption price per share
($65,284,245 / 4,975,945 shares)........................................ $13.12
======
See independent accountants' review report and notes to financial statements.
DREYFUS MASSACHUSETTS INTERMEDIATE MUNICIPAL BOND FUND
STATEMENT OF OPERATIONS SIX MONTHS ENDED SEPTEMBER 30, 1996 (UNAUDITED)
INVESTMENT INCOME:
INTEREST INCOME......................................................... $1,721,864
EXPENSES:
Management fee-Note 2(a).............................................. $ 199,445
Shareholder servicing costs-Note 2(b)................................. 58,602
Professional fees..................................................... 13,580
Trustees' fees and expenses-Note 2(c)................................. 10,155
Custodian fees........................................................ 3,657
Registration fees..................................................... 2,293
Prospectus and shareholders' reports.................................. 1,000
Miscellaneous......................................................... 13,267
____
TOTAL EXPENSES.................................................... 301,999
Less-reduction in management fee due to undertaking-Note 2(a)......... 36,072
____
NET EXPENSES...................................................... 265,927
_____
INVESTMENT INCOME-NET............................................. 1,455,937
REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS-Note 3:
Net realized (loss) on investments...................................... $ (17,944)
Net unrealized (depreciation) on investments............................ (113,667)
____
NET REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS................. (131,611)
_____
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $1,324,326
=====
See independent accountants' review report and notes to financial statements.
DREYFUS MASSACHUSETTS INTERMEDIATE MUNICIPAL BOND FUND
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED SIX MONTHS ENDED
MARCH 31, SEPTEMBER 30, 1996
1996 (UNAUDITED)
_______ __________
OPERATIONS:
Investment income-net............................................... $ 3,135,420 $ 1,455,937
Net realized (loss) on investments.................................. (316,507) (17,944)
Net unrealized appreciation (depreciation) on investments for the period 2,125,130 (113,667)
______ ______
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.............. 4,944,043 1,324,326
______ ______
DIVIDENDS TO SHAREHOLDERS FROM;
Investment income-net............................................... (3,119,181) (1,472,176)
______ ______
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold....................................... 12,306,338 3,960,290
Dividends reinvested................................................ 2,284,138 1,075,520
Cost of shares redeemed............................................. (16,789,097) (7,732,578)
______ ______
(DECREASE) IN NET ASSETS FROM BENEFICIAL INTEREST TRANSACTIONS.... (2,198,621) (2,696,768)
______ ______
TOTAL (DECREASE) IN NET ASSETS................................ (373,759) (2,844,618)
NET ASSETS:
Beginning of period................................................. 68,502,622 68,128,863
______ ______
End of period (including undistributed investment income-net;
$16,239 on March 31, 1996)........................................ $68,128,863 $65,284,245
====== ======
SHARES SHARES
______ ______
CAPITAL SHARE TRANSACTIONS:
Shares sold......................................................... 933,252 303,503
Shares issued for dividends reinvested.............................. 172,921 82,318
Shares redeemed..................................................... (1,271,693) (592,493)
______ ______
NET (DECREASE) IN SHARES OUTSTANDING.............................. (165,520) (206,672)
====== ======
See independent accountants' review report and notes to financial statements.
</TABLE>
DREYFUS MASSACHUSETTS INTERMEDIATE MUNICIPAL BOND FUND
FINANCIAL HIGHLIGHTS
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 period indicated. This
information has been derived from the Fund's financial statements.
<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED MARCH 31, SEPTEMBER 30, 1996
----------------------------------------
PER SHARE DATA: 1993(1) 1994 1995 1996 (UNAUDITED)
---- ---- ---- ---- ______
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period......... $12.50 $13.15 $12.91 $12.81 $13.15
___ ___ ___ ___ ___
INVESTMENT OPERATIONS:
Investment income-net........................ .57 .67 .61 .59 .29
Net realized and unrealized gain (loss) on
investments................................ .65 (.24) (.08) .34 (.03)
___ ___ ___ ___ ___
TOTAL FROM INVESTMENT OPERATIONS........... 1.22 .43 .53 .93 .26
___ ___ ___ ___ ___
DISTRIBUTIONS:
Dividends from investment income-net......... (.57) (.67) (.61) (.59) (.29)
Dividends from net realized gain on investments -- -- (.02) -- --
___ ___ ___ ___ ___
TOTAL DISTRIBUTIONS........................ (.57) (.67) (.63) (.59) (.29)
___ ___ ___ ___ ___
Net asset value, end of period............... $13.15 $12.91 $12.81 $13.15 $13.12
=== === === === ===
TOTAL INVESTMENT RETURN.......................... 12.05%(2) 3.18% 4.23% 7.22% 4.15%(2)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets...... -- .06% .49% .75% .80%(2)
Ratio of net investment income to average
net assets................................. 5.17%(2) 4.90% 4.82% 4.45% 4.38%(2)
Decrease reflected in above expense ratios due to
undertakings by the Manager................ 1.59%(2) .92% .42% .14% .11%(2)
Portfolio Turnover Rate...................... 9.66%(3) 4.64% 9.41% 31.81% 2.89%(3)
Net Assets, end of period (000's Omitted).... $34,951 $91,248 $68,503 $68,129 $65,284
(1) From May 28, 1992 (commencement of operations) to March 31, 1993.
(2) Annualized.
(3) Not annualized.
</TABLE>
See independent accountants' review report and notes to financial statements.
DREYFUS MASSACHUSETTS INTERMEDIATE MUNICIPAL BOND FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES:
Dreyfus Massachusetts Intermediate Municipal Bond Fund (the "Fund") is
registered under the Investment Company Act of 1940 ("Act") as a
non-diversified open-end management investment company. The Fund's investment
objective is to provide investors with as high a level of current income
exempt from Federal and Massachusetts income taxes as is consistent with the
preservation of capital. The Dreyfus Corporation ("Manager") serves as the
Fund's investment adviser. The Manager is a direct subsidiary of Mellon Bank,
N.A. Premier Mutual Fund Services, Inc. acts as the distributor of the Fund's
shares, which are sold to the public without a sales charge.
The Fund's financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management
estimates and assumptions. Actual results could differ from those estimates.
(A) PORTFOLIO VALUATION: The Fund's investments (excluding options and
financial futures on municipal and U.S. treasury securities) are valued each
business day by an independent pricing service ("Service") approved by the
Board of Trustees. Investments for which quoted bid prices are readily
available and are representative of the bid side of the market in the
judgment of the Service are valued at the mean between the quoted bid prices
(as obtained by the Service from dealers in such securities) and asked prices
(as calculated by the Service based upon its evaluation of the market for
such securities). Other investments (which constitute a majority of the
portfolio securities) are carried at fair value as determined by the Service,
based on methods which include consideration of: yields or prices of
municipal securities of comparable quality, coupon, maturity and type;
indications as to values from dealers; and general market conditions. Options
and financial futures on municipal and U.S. treasury securities are valued at
the last sales price on the securities exchange on which such securities are
primarily traded or at the last sales price on the national securities market
on each business day. Investments not listed on an exchange or the national
securities market, or securities for which there were no transactions, are
valued at the average of the most recent bid and asked prices. Bid price is
used when no asked price is available.
(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities
transactions are recorded on a trade date basis. Realized gain and loss from
securities transactions are recorded on the identified cost basis. Interest
income, adjusted for amortization of premiums and original issue discounts on
investments, is earned from settlement date and recognized on the accrual
basis. Securities purchased or sold on a when-issued or delayed-delivery
basis may be settled a month or more after the trade date.
The Fund follows an investment policy of investing primarily in municipal
obligations of one state. Economic changes affecting the state and certain of
its public bodies and municipalities may affect the ability of issuers within
the state to pay interest on, or repay principal of, municipal obligations
held by the Fund.
(C) DIVIDENDS TO SHAREHOLDERS: It is the policy of the Fund to declare
dividends daily from investment income-net. Such dividends are paid monthly.
Dividends from net realized capital gain, if any, are normally declared and
paid annually, but the Fund may make distributions on a more frequent basis
to comply with the distribution requirements of the Internal Revenue Code. To
the extent that net realized capital gain can be offset by capital loss
carryovers, it is the policy of the Fund not to distribute such gain.
DREYFUS MASSACHUSETTS INTERMEDIATE MUNICIPAL BOND FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
(D) FEDERAL INCOME TAXES: It is the policy of the Fund to continue to
qualify as a regulated investment company, which can distribute tax exempt
dividends, by complying with the applicable provisions of the Internal Revenue
Code, and to make distributions of income and net realized capital gain
sufficient to relieve it from substantially all Federal income and excise taxes.
The Fund has an unused capital loss carryover of approximately $2,742,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to March 31, 1996. The
carryover does not include net realized securities losses from November 1,
1995 through March 31, 1996 which are treated, for Federal income tax
purposes, as arising in fiscal 1997. If not applied, $432,000 of the
carryover expires in fiscal 2003 and $2,310,000 of the carryover expires in
fiscal 2004.
NOTE 2-MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
(A) Pursuant to a management agreement ("Agreement") with the Manager,
the management fee is computed at the annual rate of .60 of 1% of the value
of the Fund's average daily net assets and is payable monthly. The Agreement
provides that if in any full fiscal year the aggregate expenses of the Fund,
exclusive of taxes, brokerage, interest on borrowings and extraordinary
expenses, exceed the expense limitation of any state having jurisdiction over
the Fund, the Fund may deduct from payments to be made to the Manager, or the
Manager will bear the amount of such excess to the extent required by state
law. The Manager has undertaken from April 1, 1996 through March 31, 1997 to
reduce the management fee paid by or reimburse such excess expenses of the
Fund, to the extent that the Fund's aggregate annual expenses (exclusive of
certain expenses as described above) exceed an annual rate of .80 of 1% of
the value of the Fund's average daily net assets. The reduction in management
fee, pursuant to the undertaking, amounted to $36,072 during the six months
ended September 30, 1996.
The undertaking may be extended, modified or terminated by the Manager,
provided that the resulting expense reimbursement would not be less than the
amount required pursuant to the Agreement.
(B) Pursuant to the Fund's Shareholder Services Plan, the Fund reimburses
Dreyfus Service Corporation, a wholly-owned subsidiary of the Manager, an
amount not to exceed an annual rate of .25 of 1% of the value of the Fund's
average daily net assets for certain allocated expenses of providing personal
services and/or maintaining shareholder accounts. The services provided may
include personal services relating to shareholder accounts, such as answering
shareholder inquiries regarding the Fund and providing reports and other
information, and services related to the maintenance of shareholder accounts.
During the six months ended September 30, 1996, the Fund was charged an
aggregate of $33,340 pursuant to the Shareholder Services Plan.
The Fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of
the Manager, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the Fund. Such
compensation amounted to $18,944 during the six months ended September 30,
1996.
(C) Each trustee who is not an "affiliated person" as defined in the Act
receives from the Fund an annual fee of $1,000 and an attendance fee of $250
per meeting. The Chairman of the Board receives an additional 25% of such
compensation.
DREYFUS MASSACHUSETTS INTERMEDIATE MUNICIPAL BOND FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
NOTE 3-SECURITIES TRANSACTIONS:
The aggregate amount of purchases and sales of investment securities,
excluding short-term securities, during the six months ended September 30,
1996, amounted to $1,745,625 and $5,545,220, respectively.
At September 30, 1996, accumulated net unrealized appreciation on
investments was $713,133, consisting of $1,290,861 gross unrealized
appreciation and $577,728 gross unrealized depreciation.
At September 30, 1996, the cost of investments for Federal income tax
purposes was substantially the same as the cost for financial reporting
purposes (see the Statement of Investments).
DREYFUS MASSACHUSETTS INTERMEDIATE MUNICIPAL BOND FUND
REVIEW REPORT OF ERNST & YOUNG LLP, INDEPENDENT ACCOUNTANTS
SHAREHOLDERS AND BOARD OF TRUSTEES
DREYFUS MASSACHUSETTS INTERMEDIATE MUNICIPAL BOND FUND
We have reviewed the accompanying statement of assets and liabilities of
Dreyfus Massachusetts Intermediate Municipal Bond Fund, including the
statement of investments, as of September 30, 1996, and the related
statements of operations and changes in net assets and financial highlights
for the six month period ended September 30, 1996. These financial statements
and financial highlights are the responsibility of the Fund's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures
to financial data, and making inquiries of persons responsible for financial
and accounting matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing standards, which
will be performed for the full year with the objective of expressing an
opinion regarding the financial statements and financial highlights taken as
a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the interim financial statements and financial highlights
referred to above for them to be in conformity with generally accepted
accounting principles.
We have previously audited, in accordance with generally accepted
auditing standards, the statement of changes in net assets for the year ended
March 31, 1996 and financial highlights for each of the four years in the
period ended March 31, 1996 and in our report dated May 2, 1996, we expressed
an unqualified opinion on such statement of changes in net assets and
financial highlights.
[Ernst and Young LLP signature logo]
New York, New York
November 5, 1996
[Dreyfus lion "d" logo]
DREYFUS MASSACHUSETTS INTERMEDIATE
MUNICIPAL BOND FUND
200 Park Avenue
New York, NY 10166
MANAGER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
CUSTODIAN
The Bank of New York
90 Washington Street
New York, NY 10286
TRANSFER AGENT &
DIVIDEND DISBURSING AGENT
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Printed in U.S.A. 268SA969
[Dreyfus logo]
Massachusetts
Intermediate
Municipal
Bond Fund
Semi-Annual Report
September 30, 1996
