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 the six-month period ended
September 30, 1997. Your Fund produced a total return, including share price
changes and dividend income generated, of 5.22%,* and an annualized tax-free
distribution rate per share of 4.40%.**
THE ECONOMY
Virtually ideal economic conditions prevailed over the reporting period.
Robust growth in the first half of 1997, the lowest unemployment rate since
the early 1970s and measures of inflation at 30-year lows combined to spur
consumer confidence to record high ground. Businesses were similarly
optimistic: government reports showed that business investment in new
equipment during the reporting period was at its fastest pace in 14 years.
The question is, how long can this favorable economic scenario continue
before inflation rekindles or, more to the point, before the Federal Reserve
Board (the "Fed") embarks on a policy of monetary restraint to dampen
possible future inflationary excess? Traditionally, the Fed has acted to
contain inflation long before it could spread throughout the economy, and Fed
Chairman Alan Greenspan is a staunch inflation-fighter. Yet there are few
traditional signs of potential inflationary excess to battle against. The
upward creep of factory operating rates in response to surging industrial
production is one, the tight labor market another. With the unemployment rate
so low, there is concern that employers will eventually raise wages to
attract workers, resulting in higher prices as increased labor costs are
passed along to consumers. So far, there has been a remarkable absence of
wage and price pressures.
There are few signs that broader measures of inflation are accelerating.
The economy grew at a 4.1% rate over the first six months of this year, a
pace that in other times would have resulted in rumblings of inflationary
pressures. Until its modest rise in September, the Producer Price Index had
an unprecedented series of seven straight monthly declines. The Consumer
Price Index rose at a 1.6% annual rate for the first eight months of the
year, a rate less than half the 3.3% rise for the comparable period in 1996.
Because of the lack of inflation, the Fed has been willing to tolerate
strong economic growth without tightening monetary policy. The Federal Open
Market Committee (FOMC), the policy-making arm of the Fed, has raised
interest rates just once in more than two years, a period roughly coinciding
with the surge of growth in the economy. The last increase in short-term
interest rates came on March 25, 1997 when the FOMC increased the Federal
Funds target rate by a modest one quarter of a percentage point to 5.50%.
(The Federal Funds rate is the rate of interest that banks charge one another
for overnight loans.)
In addition, the Fed has expected some slowdown throughout the 18-month
economic resurgence, yet demand has remained strong throughout. However, the
latest revision of the second-quarter economic growth rate showed a
considerable buildup in business inventories. A rise in inventories could
trigger a subsequent slowdown in the economy if companies cut production in
order to work off unsold backlogs. Nevertheless, it is possible that the
inherent momentum in the economy combined with more vigorous consumer
spending in the third quarter (retail sales showed renewed strength over the
summer) could absorb these inventories without a reduction in output. We
remain alert for future changes of monetary policy by the Fed, particularly
the possibility of a tightening if economic growth continues strong
throughout the rest of this year.
MARKET ENVIRONMENT
The municipal market has benefited from the same improving trends as the
broader fixed income markets. Rather than subduing the markets, the 25
basis-point interest rate hike that occurred in March acted as a stabilizer,
providing the markets with a firm floor from which bond prices continued to
rise and rates fall. Throughout the summer the bond
market moved into trading ranges, experiencing volatility within those
ranges, but continuing to move to lower levels. During this time period the
municipal market has been very attractive compared to its taxable
counterparts. For example, on September 30, the generic ten-year municipal
bond rated AAA was yielding 4.59%, which equates to a tax-equivalent yield of
6.65% on an after-tax basis (assuming a 31% Federal tax rate). Comparable
term U.S. Treasuries were yielding 6.10%. Ample supply in the municipal
market has been one factor in keeping levels attractive.
PORTFOLIO OVERVIEW
The intermediate sector curve has continued to provide, on a relative
value basis, a very attractive return. Currently, investors are receiving in
15-year bonds approximately 96% of the yield of 30-year bonds without being
exposed to the added volatility. Demand for Massachusetts intermediate paper
has remained strong. The Fund had taken a more defensive posture during the
early part of the year. As the inflation outlook improved, we took advantage
of strong retail demand to sell odd-lot pieces, consolidate our positions and
increase holdings in discount coupons. The longer end of the intermediate
sector was the more attractive part of the interest rate curve, and
subsequently we weighted a large percentage of reinvestments in that area.
During the third quarter, supply picked up significantly and provided an
opportunity to enhance the portfolio with specialty state paper purchased at
very attractive levels.
Included in this report is a series of detailed statements about your
Fund's holdings and its financial condition. We hope they are informative.
Very truly yours,
[Richard J. Moynihan signature logo]
Richard J. Moynihan
Director, Municipal
Portfolio Management
The Dreyfus Corporation
October 20, 1997
New York, N.Y.
* Total return includes reinvestment of dividends and any capital gains
paid. Income is subject to state and local taxes for non-Massachusetts
residents.
** 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, adjusted for capital gain
distributions. Some income may be subject to the Federal Alternative Minimum
Tax (AMT) for certain shareholders. Yields fluctuate and there can be no
guarantee that any particular tax-exempt yield can be achieved.
<TABLE>
DREYFUS MASSACHUSETTS INTERMEDIATE MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS SEPTEMBER 30, 1997 (UNAUDITED)
Principal
Long-Term Municipal Investments-100.0% Amount Value
------- ------
Massachusetts-90.8%
Attleboro:
<S> <C> <C>
5.50%, 1/15/2001.......................................................... $ 400,000 $ 413,504
5.70%, 1/15/2002.......................................................... 400,000 417,960
Boston:
6.20%, 7/1/2002........................................................... 865,000 934,131
Revenue, Refunding (Boston City Hospital) 5.45%, 2/15/2004 (Insured; FHA). 500,000 516,030
Brockton, Refunding 5.70%, 6/1/2002 (Insured; AMBAC)........................ 260,000 275,348
Fall River, Refunding 5.25%, 6/1/2010 (Insured; MBIA)....................... 1,000,000 1,018,280
Lawrence:
5%, 9/15/2002............................................................. 1,030,000 1,058,624
4.625%, 2/15/2005......................................................... 1,190,000 1,195,486
Lowell:
5.60%, 4/1/2005 (Insured; FSA)............................................ 1,530,000 1,625,151
5.30%, 12/15/2010 (Insured; AMBAC)........................................ 1,000,000 1,021,980
Ludlow 6.90%, 10/15/2003.................................................... 100,000 113,645
Lynn, Refunding:
4.90%, 1/15/2005 (Insured; FSA)........................................... 1,000,000 1,021,450
5%, 1/15/2006............................................................. 1,185,000 1,215,644
Massachusetts Bay Transportation Authority, Refunding
(General Transportation System):
6%, 3/1/2005............................................................ 1,000,000 1,084,580
6%, 3/1/2006............................................................ 1,250,000 1,351,337
Massachusetts Commonwealth:
Consolidated Loan:
5.75%, 5/1/2003......................................................... 500,000 533,340
5.30%, 7/1/2006......................................................... 1,750,000 1,834,753
Refunding:
5.40%, 11/1/2006........................................................ 2,000,000 2,114,600
6%, 8/1/2010 (Insured; AMBAC)........................................... 1,500,000 1,664,805
Massachusetts Educational Financing Authority, Education Loan Revenue,
Refunding
5.70%, 7/1/2011 (Insured; AMBAC).......................................... 1,880,000 1,943,506
Massachusetts Education Loan Authority, Education Loan Revenue
7.55%, 1/1/2002 (Insured; MBIA)........................................... 720,000 767,844
Massachusetts Health and Educational Facilities Authority, Revenue:
(Bentley College) 5.50%, 7/1/2003 (Insured; MBIA)......................... 500,000 527,910
(Cape Cod Health System)
5%, 11/15/2002 (Insured; College Construction Loan Insurance Association) 1,000,000 1,030,910
(Central New England Health System) 5.75%, 8/1/2003....................... 1,000,000 977,810
(Faulkner Hospital) 5.75%, 7/1/2003....................................... 1,850,000 1,929,735
(New England Medical Center Hospitals) 4.90%, 7/1/2006 (Insured; MBIA).... 1,365,000 1,395,126
(Partners Healthcare System) 5.125%, 7/1/2011 (Insured; MBIA)............. 1,000,000 999,430
(Refunding-Baystate Medical Center) 4.90%, 7/1/2005 (Insured; FGIC)....... 1,000,000 1,022,580
</TABLE>
<TABLE>
DREYFUS MASSACHUSETTS INTERMEDIATE MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS (CONTINUED) SEPTEMBER 30, 1997 (UNAUDITED)
Principal
Long-Term Municipal Investments (continued) Amount Value
------- ------
Massachusetts (continued)
Massachusetts Health and Educational Facilities Authority, Revenue (continued):
<S> <C> <C>
(Refunding-Berklee College of Music) 4.75%, 10/1/2009 (Insured; MBIA)..... $ 1,000,000 $ 994,580
(Refunding-Fairview Extended) 4.55%, 7/15/2002 (LOC; Bank Boston) (a)..... 1,000,000 1,000,360
(Refunding-Massachusetts General Hospital):
4.85%, 7/1/2004 (Insured; AMBAC)........................................ 1,000,000 1,019,540
6%, 7/1/2004 (Insured; AMBAC)........................................... 1,875,000 2,039,344
Massachusetts Housing Finance Agency, Housing Projects, Refunding:
5.20%, 4/1/2000........................................................... 800,000 815,216
6.30%, 10/1/2013.......................................................... 2,000,000 2,107,320
Massachusetts Industrial Finance Agency, Revenue:
(Refunding-Combined Jewish Philanthropies) 5.65%, 2/1/2003 (Insured; AMBAC) 795,000 843,304
(Refunding-Refusetech, Inc. Project) 6.15%, 7/1/2002...................... 1,800,000 1,884,744
Massachusetts Municipal Wholesale Electric Co., Power Supply Systems Revenue:
5.875%, 7/1/2003.......................................................... 500,000 531,470
Refunding 6.75%, 7/1/2008................................................. 1,000,000 1,083,180
Massachusetts Port Authority, Revenue 5.10%, 7/1/2010....................... 1,175,000 1,181,521
Massachusetts Water Pollution Abatement Trust, Water Pollution Abatement
Revenue
(Pool Loan Program):
5.25%, 2/1/2008......................................................... 1,000,000 1,050,410
5.70%, 2/1/2012......................................................... 2,260,000 2,396,775
Milford 5.10%, 12/15/2010................................................... 1,300,000 1,310,400
New Bedford 5.60%, 3/1/2003................................................. 600,000 623,802
New England Education Loan Marketing Corp., Student Loan Revenue:
6%, 3/1/2002.............................................................. 500,000 517,880
6.60%, 9/1/2002........................................................... 100,000 106,516
6.90%, 11/1/2009.......................................................... 1,000,000 1,108,340
North Andover:
6.50%, 11/1/2004.......................................................... 300,000 328,971
6.55%, 11/1/2005.......................................................... 300,000 333,612
North Reading, Refunding 6.40%, 6/15/2002 (Insured; MBIA)................... 200,000 218,016
Peabody, Refunding 4.50%, 8/1/2009.......................................... 1,140,000 1,110,326
Pioneer Valley Transit Authority, COP 5.70%, 2/1/2003 (Insured; CGIC)....... 1,240,000 1,316,446
Plymouth County, COP 6.50%, 10/1/2001....................................... 200,000 214,126
Springfield, Refunding 6%, 9/1/2001......................................... 500,000 525,190
Swansea 6.60%, 1/15/2005.................................................... 100,000 109,880
Webster 6.50%, 9/1/2005 (Insured; AMBAC).................................... 310,000 339,121
Westford, Refunding 5%, 10/15/2004 (Insured; AMBAC)......................... 795,000 825,059
Woods Hole, Marthas Vineyard & Nantucket 6.10%, 3/1/2005.................... 690,000 741,936
Worcester 6%, 8/1/2003...................................................... 545,000 581,760
</TABLE>
<TABLE>
DREYFUS MASSACHUSETTS INTERMEDIATE MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS (CONTINUED) SEPTEMBER 30, 1997 (UNAUDITED)
Principal
Long-Term Municipal Investments (continued) Amount Value
------- ------
U. S. Related-9.2%
<S> <C> <C>
Guam Airport Authority, Revenue 6%, 10/1/2000............................... $ 1,100,000 $ 1,143,978
Puerto Rico Commonwealth, Refunding 5.375%, 7/1/2005........................ 1,000,000 1,047,000
Puerto Rico Commonwealth Highway and Transportation Authority,
Highway Revenue, Refunding 4.90%, 7/1/2001................................ 2,500,000 2,552,625
Puerto Rico Electric Power Authority, Power Revenue 5.50%, 7/1/2008......... 1,000,000 1,052,600
-------
TOTAL INVESTMENTS (cost $60,627,088)........................................ $63,060,847
=======
Summary of Abbreviations
AMBAC American Municipal Bond Assurance Corporation FSA Financial Security Assurance
CGIC Capital Guaranty Insurance Company LOC Letter of Credit
COP Certificate of Participation MBIA Municipal Bond Investors Assurance
FGIC Financial Guaranty Insurance Company Insurance Corporation
FHA Federal Housing Administration
Summary of Combined Ratings (Unaudited)
Fitch (b) or Moody's or Standard & Poor's Percentage of Value
- -------- -------- ----------------- ------------------
AAA Aaa AAA 47.7%
AA Aa AA 4.5
A A A 32.1
BBB Baa BBB 14.2
BB Ba BB 1.5
----
100.0%
====
Notes to Statement of Investments:
(a)Secured by letters of credit.
(b)Fitch currently provides creditworthiness information for a limited
number of investments.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
DREYFUS MASSACHUSETTS INTERMEDIATE MUNICIPAL BOND FUND
STATEMENT OF ASSETS AND LIABILITIES SEPTEMBER 30, 1997 (UNAUDITED)
Cost Value
------- ------
<S> <C> <C>
ASSETS: Investments in securities-See Statement of Investments $60,627,088 $63,060,847
Cash....................................... 582,042
Interest receivable........................ 849,880
Receivable for shares of Beneficial Interest subscribed 50,000
Prepaid expenses........................... 3,613
-------
64,546,382
-------
LIABILITIES: Due to The Dreyfus Corporation and affiliates 30,729
Payable for shares of Beneficial Interest redeemed 175,201
Accrued expenses........................... 22,039
-------
227,969
-------
NET ASSETS.................................................................. $64,318,413
=======
REPRESENTED BY: Paid-in capital............................ $64,941,730
Accumulated net realized gain (loss) on investments (3,057,076)
Accumulated net unrealized appreciation (depreciation)
on investments-Note 4...................... 2,433,759
-------
NET ASSETS.................................................................. $64,318,413
=======
SHARES OUTSTANDING
(unlimited number of $.001 par value shares of Beneficial Interest
authorized) ........................................... 4,780,806
NET ASSET VALUE, offering and redemption price per share-Note 3(d).......... $13.45
====
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS MASSACHUSETTS INTERMEDIATE MUNICIPAL BOND FUND
STATEMENT OF OPERATIONS SIX MONTHS ENDED SEPTEMBER 30, 1997 (UNAUDITED)
INVESTMENT INCOME
INCOME Interest Income............................ $1,669,293
EXPENSES: Management fee-Note 3(a)................... $ 190,602
Shareholder servicing costs-Note 3(b)...... 21,507
Professional fees.......................... 17,272
Trustees' fees and expenses-Note 3(c)...... 8,256
Registration fees.......................... 7,560
Custodian fees............................. 3,304
Loan commitment fees-Note 2................ 730
Prospectus and shareholders' reports....... 661
Miscellaneous.............................. 8,126
------
Total Expenses....................... 258,018
Less-reduction in management fee due to
undertaking-Note 3(a).................. (3,152)
------
Net Expenses......................... 254,866
------
INVESTMENT INCOME-NET....................................................... 1,414,427
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS-Note 4:
Net realized gain (loss) on investments.... $ 136,983
Net unrealized appreciation (depreciation) on investments 1,703,717
------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS...................... 1,840,700
------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $3,255,127
======
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
DREYFUS MASSACHUSETTS INTERMEDIATE MUNICIPAL BOND FUND
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
September 30, 1997 Year Ended
(Unaudited) March 31, 1997
------------------ --------------
OPERATIONS:
<S> <C> <C>
Investment income-net............................................... $ 1,414,427 $ 2,881,195
Net realized gain (loss) on investments............................. 136,983 (256,909)
Net unrealized appreciation (depreciation) on investments........... 1,703,717 (96,758)
------- -------
Net Increase (Decrease) in Net Assets Resulting from Operations... 3,255,127 2,527,528
------- -------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income-net............................................... (1,414,427) (2,897,434)
------- -------
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold....................................... 6,331,944 8,525,678
Dividends reinvested................................................ 1,035,812 2,123,797
Cost of shares redeemed............................................. (6,820,806) (16,477,669)
------- -------
Increase (Decrease) in Net Assets from Beneficial Interest Transactions 546,950 (5,828,194)
------- -------
Total Increase (Decrease) in Net Assets......................... 2,387,650 (6,198,100)
NET ASSETS:
Beginning of Period................................................. 61,930,763 68,128,863
------- -------
End of Period....................................................... $ 64,318,413 $ 61,930,763
======= =======
Shares Shares
------- -------
CAPITAL SHARE TRANSACTIONS:
Shares sold......................................................... 477,041 648,488
Shares issued for dividends reinvested.............................. 77,819 161,538
Shares redeemed..................................................... (513,027) (1,253,670)
------- -------
Net Increase (Decrease) in Shares Outstanding..................... 41,833 (443,644)
======= =======
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<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.
Six Months Ended
September 30, 1997 Year Ended March 31,
----------------------------------------------------
PER SHARE DATA: (Unaudited) 1997 1996 1995 1994 1993(1)
------------ ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period.. $13.07 $13.15 $12.81 $12.91 $13.15 $12.50
---- ---- ---- ---- ---- ----
Investment Operations:
Investment income-net................. .30 .58 .59 .61 .67 .57
Net realized and unrealized gain (loss)
on investments...................... .38 (.08) .34 (.08) (.24) .65
---- ---- ---- ---- ---- ----
Total from Investment Operations...... .68 .50 .93 .53 .43 1.22
---- ---- ---- ---- ---- ----
Distributions:
Dividends from investment income-net.. (.30) (.58) (.59) (.61) (.67) (.57)
Dividends from net realized gain on investments - - - (.02) - -
---- ---- ---- ---- ---- ----
Total Distributions................... (.30) (.58) (.59) (.63) (.67) (.57)
---- ---- ---- ---- ---- ----
Net asset value, end of period........ $13.45 $13.07 $13.15 $12.81 $12.91 $13.15
==== ==== ==== ==== ==== ====
TOTAL INVESTMENT RETURN................... 10.41%(2) 3.98% 7.22% 4.23% 3.18% 12.05%(2)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets .80%(2) .80% .75% .49% .06% -
Ratio of net investment income
to average net assets............... 4.45%(2) 4.42% 4.45% 4.82% 4.90% 5.17%(2)
Decrease reflected in above expense ratios
due to undertakings by the Manager.. .01%(2) .10% .14% .42% .92% 1.59%(2)
Portfolio Turnover Rate............... 14.26%(3) 23.45% 31.81% 9.41% 4.64% 9.66%(3)
Net Assets, end of period (000's Omitted) $64,318 $61,931 $68,129 $68,503 $91,248 $34,951
(1) From May 28, 1992 (commencement of operations) to March 31, 1993.
(2) Annualized.
(3) Not annualized.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
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. is 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: Investments in securities (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 are normally declared and paid
annually, but the Fund may make distributions on a more frequent basis to
comply with the distribution requirements of the Internal Revenue Code. To
the extent that net realized capital gain can be offset by capital loss
carryovers, it is the policy of the Fund not to distribute such gain.
(d) Federal income taxes: It is the policy of the Fund to continue to
qualify as a regulated investment company, which can distribute tax exempt
dividends, by complying with the applicable provisions of the Internal
Revenue Code, and to make distributions of income and net realized capital
gain sufficient to relieve it from substantially all Federal income and
excise taxes.
The Fund has an unused capital loss carryover of approximately $3,048,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to March 31, 1997. The
carryover does not
DREYFUS MASSACHUSETTS INTERMEDIATE MUNICIPAL BOND FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
include net realized securities losses from November 1, 1996 through March
31, 1997 which are treated, for Federal income tax purposes, as arising in
fiscal 1998. If not applied, $432,000 of the carryover expires in fiscal
2003, $2,310,000 expires in fiscal 2004 and $306,000 expires in fiscal 2005.
NOTE 2-BANK LINE OF CREDIT:
The Fund participates with other Dreyfus-managed funds in a $600 million
redemption credit facility ("Facility") to be utilized for temporary or
emergency purposes, including the financing of redemptions. In connection
therewith, the Fund has agreed to pay commitment fees on its pro rata portion
of the Facility. Interest is charged to the Fund at rates based on prevailing
market rates in effect at the time of borrowings. For the period ended
September 30, 1997, the Fund did not borrow under the Facility.
NOTE 3-MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
(a) Pursuant to a management agreement with the Manager, the management
fee is computed at the annual rate of .60 of 1% of the value of the Fund's
average daily net assets and is payable monthly. The Manager has undertaken
from April 1, 1997 through March 31, 1998 to reduce the management fee paid
by the Fund, to the extent that the Fund's aggregate annual expenses,
exclusive of taxes, brokerage, interest on borrowings, commitment fees and
extraordinary expenses, 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 $3,152 during the period ended
September 30, 1997.
(b) Under the Shareholder Services Plan, the Fund reimburses Dreyfus
Service Corporation, a wholly-owned subsidiary of the Manager, an amount not
to exceed an annual rate of .25 of 1% of the value of the Fund's average
daily net assets for certain allocated expenses of providing personal
services and/or maintaining shareholder accounts. The services provided may
include personal services relating to shareholder accounts, such as answering
shareholder inquiries regarding the Fund and providing reports and other
information, and services related to the maintenance of shareholder accounts.
During the period ended September 30, 1997, the Fund was charged an aggregate
of $6,258 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 $17,276 during the period ended September 30, 1997.
(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.
(d) A 1% redemption fee is charged on certain redemptions of Fund shares
(including redemptions through use of the Fund Exchanges service) where the
shares being redeemed were issued subsequent to a specified effective date
and the redemption or exchange occurs less than fifteen days following the
date of issuance.
NOTE 4-SECURITIES TRANSACTIONS:
The aggregate amount of purchases and sales of investment securities,
excluding short-term securities, during the period ended September 30, 1997,
amounted to $9,355,640 and $8,815,480, respectively.
At September 30, 1997, accumulated net unrealized appreciation on
investments was $2,433,759, consisting of $2,444,660 gross unrealized
appreciation and $10,901 gross unrealized depreciation.
At September 30, 1997, the cost of investments for Federal income tax
purposes was substantially the same as the cost for financial reporting
purposes (see the Statement of Investments).
Registration Mark
[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. 268SA979
Registration Mark
[Dreyfus logo]
Massachusetts
Intermediate
Municipal
Bond Fund
Semi-Annual
Report
September 30, 1997
