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 fiscal year ended
March 31, 1997. Your Fund produced a total return including bond price
changes and interest income of 3.98%.*
THE ECONOMY
Reacting to an economy which reflects strong growth, low unemployment
and stable prices, the Federal Open Market Committee (FOMC) of the Federal
Reserve Board (the "Fed") raised interest rates at the end of March for the
first time in over two years. Concerned that persistently strong demand would
increase the risk of a resurgence of inflation, the FOMC, which is the
policy-making arm of the Fed, voted to lift the Federal Funds rate by a
quarter of a percentage point to 5.5%. (The Federal Funds rate is the rate
that banks charge each other for overnight loans.) The move to raise interest
rates had been much discussed since early last year, when the Fed first
became concerned about the inflationary potential of rising wage demands
resulting from the strong rate of growth in new jobs. Yet over that time,
there has been little evidence of inflation despite robust job growth and an
unemployment rate of less than 5.5%, a level that in the 1970s and 1980s
contributed to an escalation in wages and prices. Instead, prices on
virtually all sectors of the economy have remained quiescent. The Consumer
Price Index has risen a modest 2.8% over the past 12 months, while increases
in producer prices have been equally modest and, of late, many prices have
actually fallen.
Not surprisingly, the consumer confidence index of the Conference
Board, a private research group, remains near all-time high territory. A
closely followed component measures consumer sentiment about the job market.
The percentage of people reporting that jobs are plentiful has recently
reached an eight-year high, while the portion reporting that jobs are hard to
get was the lowest ever recorded. That positive attitude regarding job
security has been cited by Federal Reserve Board Chairman Greenspan as a
possible harbinger of higher wage pressures, which could result in an
acceleration in the rate of inflation.
Looking at the economy more generally, factory production _
particularly the durable goods sector has picked up lately after slumping
over the last two months of last year. Also suggesting renewed vigor in the
economy was the brisk pickup in retail sales from their relatively sluggish
pace over the last quarter of 1996. As a corollary to the surge in retail
sales, late payments on credit card debt have risen to the highest proportion
of accounts since 1980, the year the American Bankers Association first
monitored credit card delinquencies.
Effective monetary policy is formulated less on how conditions are
today than on how things may be in the future; hence the Fed's preemptive
move to tighten credit without significant direct evidence that inflation is
already on the rise is understandable. In recent testimony to Congress made
before the Fed's decision to raise the Federal Funds rate, Fed Chairman Alan
Greenspan said that the question "is not so much . . . where prices are or
have been, but rather what the state of the economy will be later this year
and into 1998 when any actions we may or may not have taken would become
effective." We continue to remain alert to any economic developments that
might indicate a further tightening by the Fed.
MARKET ENVIRONMENT
After peaking during the summer of 1996, interest rates fell
significantly during the fall. The economic growth that was evident during
the year did not translate into anticipated higher inflation and enabled the
market to rally. The municipal market has seen considerable volatility during
the first quarter of 1997 and the recent Fed tightening once again moved
rates to levels that were seen last July. Initially it was assumed that most
of the Fed move had been priced into the municipal market, but the market
continues to erode, looking toward the possibility of another tightening in
May. The rate increase has most adversely affected the taxable market, and
municipals have outperformed Treasuries during recent
downturns. Over the past quarter, the municipal market has been able to
absorb a significant supply calendar, amounting to approximately $37.0
billion. As the stock market's pace begins to slow, we believe that renewed
attention may be directed to the municipal market by investors.
PORTFOLIO OVERVIEW
One result of the current rising rate environment is the flattening of
the yield curve. Rate changes in the intermediate sector have caused a
compression in the middle of the curve, where the yield reduction between
successive years has moved from 10 basis points to 5 basis points. For issues
maturing in 2008 and beyond, the curve has maintained the normal spread
relationship and currently remains the more attractive sector, affording the
investor yields that are competitive with the long end of the market without
extending and incurring too much added volatility. During the year, the Fund
consolidated its holdings during this time period and reduced the position in
discount bonds (bonds trading substantially below their face value) and
shortened its duration. The Fund currently holds a sizable position in high
coupon bonds, which should act as a buffer as rates rise. We anticipate that
as rates rise, the market will provide us with opportunities to purchase
discount paper at attractive levels and extend duration; however, we believe
rates will rise further before we reach that point, and we will continue to
maintain a defensive stance for the immediate future. The demand for in-state
paper continues to be strong and the recovery in the Massachusetts economy
that began several years ago continues to match national trends.
Very truly yours,
[Richard J. Moynihan signature logo]
Richard J. Moynihan
Director, Municipal Portfolio Management
The Dreyfus Corporation
April 17, 1997
New York, N.Y.
* Total return included reinvestment of dividends and any capital gains paid.
DREYFUS MASSACHUSETTS INTERMEDIATE MUNICIPAL BOND FUND MARCH 31, 1997
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN DREYFUS MASSACHUSETTS
INTERMEDIATE MUNICIPAL BOND FUND AND THE LEHMAN BROTHERS 10-YEAR MUNICIPAL
BOND INDEX
[Exhibit A:
$13,800
Lehman Brothers
10-Year Municipal
Bond Index*
Dollars
$13,051
Dreyfus Massachusetts
Intermediate Municipal
Bond Fund
*Source: Lehman Brothers]
Average Annual Total Returns
One Year Ended From Inception (6/26/92)
March 31, 1997 to March 31, 1997
____________________ _______________________
3.98% 5.75%
Past performance is not predictive of future performance.
The above graph compares a $10,000 investment made in Dreyfus Massachusetts
Intermediate Municipal Bond Fund on 6/26/92 (Inception Date) to a $10,000
investment made in the Lehman Brothers 10-Year Municipal Bond Index on that
date. For comparative purposes, the value of the Index on 6/30/92 is used as
the beginning value on 6/26/92. All dividends and capital gain distributions
are reinvested.
The Fund invests primarily in Massachusetts municipal securities and
maintains a portfolio with a weighted-average maturity ranging between 3 and
10 years. The Fund's performance shown in the line graph takes into account
fees and expenses. Unlike the Fund, the Lehman Brothers 10-Year Municipal
Bond Index is an unmanaged total return performance benchmark for the
investment-grade, geographically unrestricted 10-year tax exempt bond market,
consisting of municipal bonds with maturities of 9-12 years. The Index does
not take into account charges, fees and other expenses and is not limited to
investments principally in Massachusetts municipal obligations. These factors
can contribute to the Index potentially outperforming the Fund. Further
information relating to Fund performance, including expense reimbursements,
if applicable, is contained in the Financial Highlights section of the
Prospectus and elsewhere in this report.
<TABLE>
<CAPTION>
DREYFUS MASSACHUSETTS INTERMEDIATE MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS MARCH 31, 1997
Principal
Long-Term Municipal Investments_100.0% Amount Value
_______ ______
<S> <C> <C>
Massachusetts_93.9%
Arlington 5%, 8/15/2001..................................................... $ 200,000 $ 202,374
Attleboro:
5.50%, 1/15/2001........................................................ 400,000 408,316
5.70%, 1/15/2002........................................................ 400,000 411,076
5.90%, 1/15/2004........................................................ 325,000 337,844
6%, 1/15/2005........................................................... 345,000 360,214
Boston:
6.10%, 7/1/1999 (Insured; MBIA)......................................... 250,000 258,963
6.20%, 7/1/2002......................................................... 865,000 918,682
Refunding 5.20%, 2/1/2004 (Insured; AMBAC).............................. 500,000 506,705
Revenue, Refunding (Boston City Hospital):
5.45%, 2/15/2004 (Insured; FHA)....................................... 500,000 501,950
5.45%, 8/15/2004 (Insured; FHA)....................................... 210,000 210,819
5.55%, 2/15/2005 (Insured; FHA)....................................... 295,000 296,336
Brockton, Refunding:
5.60%, 6/1/2001 (Insured; AMBAC)........................................ 255,000 263,527
5.70%, 6/1/2002 (Insured; AMBAC)........................................ 260,000 270,517
Brookline 5.20%, 9/1/2003................................................... 500,000 508,840
Dartmouth 4.90%, 5/1/2002................................................... 200,000 201,828
Fall River, Refunding 5.25%, 6/1/2010 (Insured; MBIA)....................... 1,000,000 970,340
Haverhill 6.30%, 6/15/2002.................................................. 100,000 104,303
Holyoke, Refunding:
6.10%, 11/1/1998........................................................ 190,000 195,024
6.20%, 11/1/1999........................................................ 100,000 103,703
Lawrence:
5%, 9/15/2002........................................................... 1,030,000 1,034,367
4.625%, 2/15/2005....................................................... 1,190,000 1,150,290
Lowell:
5.60%, 4/1/2005 (Insured; FSA).......................................... 1,530,000 1,577,721
5.30%, 12/15/2010 (Insured; AMBAC)...................................... 1,000,000 975,200
Ludlow 6.90%, 10/15/2003.................................................... 100,000 111,279
Lynn, Refunding:
4.90%, 1/15/2005 (Insured; FSA)......................................... 1,210,000 1,192,152
5%, 1/15/2006........................................................... 1,185,000 1,168,765
Massachusetts Bay Transportation Authority, Refunding
(General Transportation System):
6%, 3/1/2005.......................................................... 1,000,000 1,057,640
6%, 3/1/2006.......................................................... 1,250,000 1,315,400
Massachusetts Commonwealth:
Consolidated Loan:
5.75%, 5/1/2003....................................................... 500,000 521,165
5.30%, 7/1/2006....................................................... 1,750,000 1,764,490
DREYFUS MASSACHUSETTS INTERMEDIATE MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS (CONTINUED) MARCH 31, 1997
Principal
Long-Term Municipal Investments (continued) Amount Value
_______ ______
Massachusetts (continued)
Massachusetts Commonwealth (continued):
Refunding:
5.40%, 11/1/2006...................................................... $ 2,000,000 $ 2,032,060
6%, 8/1/2010 (Insured; AMBAC)......................................... 1,500,000 1,583,895
Massachusetts Education Loan Authority, Education Loan Revenue
7.55%, 1/1/2002 (Insured; MBIA)......................................... 745,000 797,768
Massachusetts Educational Financing Authority, Education Loan Revenue,
Refunding
5.70%, 7/1/2011 (Insured; AMBAC)........................................ 1,880,000 1,858,869
Massachusetts Health and Educational Facilities Authority, Revenue:
(Bentley College) 5.50%, 7/1/2003 (Insured; MBIA)....................... 500,000 514,725
(Brigham and Womens Hospital) 4.90%, 7/1/2005........................... 1,840,000 1,798,858
(Cape Cod Health System)
5%, 11/15/2002 (Insured; College Construction Loan Insurance Association) 1,000,000 1,007,000
(Central New England Health System) 5.75%, 8/1/2003..................... 1,000,000 952,850
(Faulkner Hospital) 5.75%, 7/1/2003..................................... 1,850,000 1,860,415
(New England Medical Center Hospitals) 4.90%, 7/1/2006 (Insured; MBIA).. 1,365,000 1,338,956
(Refunding_Baystate Medical Center) 4.90%, 7/1/2005 (Insured; FGIC)..... 1,000,000 984,210
(Refunding_Massachusetts General Hospital):
4.85%, 7/1/2004 (Insured; AMBAC)...................................... 1,000,000 987,910
6%, 7/1/2004 (Insured; AMBAC)......................................... 1,875,000 1,985,925
(Refunding_Melrose-Wakefield Hospital):
5.50%, 7/1/1999....................................................... 200,000 202,426
5.80%, 7/1/2001....................................................... 100,000 102,119
(University of Massachusetts Medical School Research Project)
5.30%, 7/1/2002 (Insured; College Construction Loan Insurance Association) 400,000 408,036
Massachusetts Housing Finance Agency:
(Holy Cross College-11) 6%, 11/1/2002................................... 100,000 105,737
Housing Projects, Refunding:
5.20%, 4/1/2000....................................................... 800,000 812,992
6.30%, 10/1/2013...................................................... 2,000,000 2,054,280
Massachusetts Industrial Finance Agency, Revenue:
(Refunding_Combined Jewish Philanthropies) 5.65%, 2/1/2003 (Insured; AMBAC) 795,000 825,083
(Refunding_Refusetech, Inc. Project) 6.15%, 7/1/2002.................... 1,800,000 1,847,592
Massachusetts Municipal Wholesale Electric Co., Power Supply Systems Revenue:
5.875%, 7/1/2003........................................................ 500,000 518,845
Refunding:
6.30%, 7/1/2001....................................................... 100,000 104,991
6.40%, 7/1/2002....................................................... 100,000 106,006
Massachusetts Water Pollution Abatement Trust, Water Pollution Abatement
Revenue
(Pool Loan Program) 5.70%, 2/1/2012..................................... 2,260,000 2,274,170
Milford 5.10%, 12/15/2010................................................... 1,300,000 1,246,063
New Bedford 5.60%, 3/1/2003................................................. 600,000 606,582
DREYFUS MASSACHUSETTS INTERMEDIATE MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS (CONTINUED) MARCH 31, 1997
Principal
Long-Term Municipal Investments (continued) Amount Value
_______ ______
Massachusetts (continued)
New England Education Loan Marketing Corp., Student Loan Revenue:
6%, 3/1/2002............................................................ $ 500,000 $ 517,790
6.60%, 9/1/2002......................................................... 100,000 106,675
6.90%, 11/1/2009........................................................ 1,000,000 1,077,260
North Andover:
6.50%, 11/1/2004........................................................ 300,000 326,685
6.55%, 11/1/2005........................................................ 300,000 326,718
North Reading, Refunding 6.40%, 6/15/2002 (Insured; MBIA)................... 200,000 215,092
Pioneer Valley Transit Authority, COP 5.70%, 2/1/2003 (Insured; CGIC)....... 1,240,000 1,286,847
Plymouth County, COP 6.50%, 10/1/2001....................................... 200,000 210,722
Springfield:
4.90%, 1/15/2002 (Insured; MBIA)........................................ 850,000 853,358
Refunding:
6%, 9/1/2001.......................................................... 500,000 515,580
4.90%, 9/1/2002 (Insured; MBIA)....................................... 515,000 517,287
Swansea 6.60%, 1/15/2005.................................................... 100,000 107,975
Taunton 5.25%, 7/15/2002 (Insured; AMBAC)................................... 100,000 102,424
Webster 6.50%, 9/1/2005 (Insured; AMBAC).................................... 310,000 333,002
Westford, Refunding 5%, 10/15/2004 (Insured; AMBAC)......................... 795,000 800,191
Weymouth 6%, 6/15/2001...................................................... 100,000 103,895
Woods Hole, Marthas Vineyard & Nantucket 6.10%, 3/1/2005.................... 690,000 728,116
Worcester:
5.80%, 8/1/1998......................................................... 200,000 203,912
5.80%, 8/1/1999......................................................... 250,000 256,048
6%, 8/1/2003............................................................ 545,000 567,628
U. S. Related_6.1%
Guam Airport Authority, Revenue 6%, 10/1/2000............................... 1,100,000 1,124,310
Puerto Rico Commonwealth Highway and Transportation Authority,
Highway Revenue, Refunding:
5.875%, 7/1/1999...................................................... 100,000 102,666
4.90%, 7/1/2001....................................................... 2,500,000 2,497,350
_______
TOTAL INVESTMENTS (cost $59,969,682)........................................ $60,699,724
=======
</TABLE>
<TABLE>
<CAPTION>
DREYFUS MASSACHUSETTS INTERMEDIATE MUNICIPAL BOND FUND
Summary of Abbreviations
<S> <C> <S> <C>
AMBAC American Municipal Bond Assurance Corporation FHA Federal Housing Administration
CGIC Capital Guaranty Insurance Company FSA Financial Security Assurance
COP Certificate of Participation MBIA Municipal Bond Investors Assurance
FGIC Financial Guaranty Insurance Company Insurance Corporation
</TABLE>
<TABLE>
<CAPTION>
Summary of Combined Ratings (Unaudited)
Fitch (a) or Moody's or Standard & Poor's Percentage of Value
________ ________ _________________ __________________
<S> <C> <C> <C>
AAA Aaa AAA 47.4%
AA Aa AA 2.0
A A A 36.2
BBB Baa BBB 12.9
BB Ba BB 1.5
____
100.0%
====
</TABLE>
Notes to Statement of Investments:
(a)Fitch currently provides creditworthiness information for a limited number
of investments.
SEE NOTES TO FINANCIAL STATEMENTS.
<TABLE>
<CAPTION>
DREYFUS MASSACHUSETTS INTERMEDIATE MUNICIPAL BOND FUND
STATEMENT OF ASSETS AND LIABILITIES MARCH 31, 1997
_____________ ___________
<S> <C> <C> <C>
ASSETS: Investments in securities_See Statement of Investments $59,969,682 $60,699,724
Cash....................................... 472,649
Interest receivable........................ 830,583
Prepaid expenses........................... 6,403
_______
62,009,359
_______
LIABILITIES: Due to The Dreyfus Corporation and affiliates 33,804
Payable for shares of Beneficial Interest redeemed 7,068
Accrued expenses........................... 37,724
_______
78,596
_______
NET ASSETS.................................................................. $61,930,763
=======
REPRESENTED BY: Paid-in capital............................ $64,394,780
Accumulated net realized gain (loss) on investments (3,194,059)
Accumulated net unrealized appreciation (depreciation) on
investments_Note 4 .......................... 730,042
_______
NET ASSETS.................................................................. $61,930,763
=======
SHARES OUTSTANDING
(unlimited number of $.001 par value shares of Beneficial Interest
authorized) ........................................... 4,738,973
NET ASSET VALUE, offering and redemption price per share.................... $13.07
=======
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS MASSACHUSETTS INTERMEDIATE MUNICIPAL BOND FUND
STATEMENT OF OPERATIONS YEAR ENDED MARCH 31, 1997
INVESTMENT INCOME
INCOME Interest Income............................ $3,402,389
EXPENSES: Management fee_Note 3(a)................... $ 390,896
Shareholder servicing costs_Note 3(b)...... 102,555
Professional fees.......................... 35,405
Trustees' fees and expenses_Note 3(c)...... 21,164
Custodian fees............................. 7,190
Registration fees.......................... 6,940
Prospectus and shareholders' reports....... 2,222
Miscellaneous.............................. 18,783
______
Total Expenses....................... 585,155
Less_reduction in Management Fee due to
undertaking_Note 3(a).................. (63,961)
______
Net Expenses......................... 521,194
______
INVESTMENT INCOME_NET....................................................... 2,881,195
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS_Note 4:
Net realized gain (loss) on investments.... $ (256,909)
Net unrealized appreciation (depreciation) on investments (96,758)
______
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS...................... (353,667)
______
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $2,527,528
======
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS MASSACHUSETTS INTERMEDIATE MUNICIPAL BOND FUND
STATEMENT OF CHANGES IN NET ASSETS
Year Ended Year Ended
March 31, 1997 March 31, 1996
________ ________
OPERATIONS:
Investment income_net................................................... $ 2,881,195 $ 3,135,420
Net realized gain (loss) on investments................................. (256,909) (316,507)
Net unrealized appreciation (depreciation) on investments............... (96,758) 2,125,130
_______ _______
Net Increase (Decrease) in Net Assets Resulting from Operations....... 2,527,528 4,944,043
_______ _______
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income_net................................................... (2,897,434) (3,119,181)
_______ _______
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold........................................... 8,525,678 12,306,338
Dividends reinvested.................................................... 2,123,797 2,284,138
Cost of shares redeemed................................................. (16,477,669) (16,789,097)
_______ _______
Increase (Decrease) in Net Assets from Beneficial Interest Transactions (5,828,194) (2,198,621)
_______ _______
Total Increase (Decrease) in Net Assets........................... (6,198,100) (373,759)
NET ASSETS:
Beginning of Period..................................................... 68,128,863 68,502,622
_______ _______
End of Period........................................................... $61,930,763 $68,128,863
======= =======
Undistributed investment income_net......................................... ____ $ 16,239
_______ _______
Shares Shares
_______ _______
CAPITAL SHARE TRANSACTIONS:
Shares sold............................................................. 648,488 933,252
Shares issued for dividends reinvested.................................. 161,538 172,921
Shares redeemed......................................................... (1,253,670) (1,271,693)
_______ _______
Net Increase (Decrease) in Shares Outstanding......................... (443,644) (165,520)
======= =======
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
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.
Year Ended March 31,
______________________________________________________________
PER SHARE DATA: 1997 1996 1995 1994 1993(1)
____ ____ ____ ____ ____
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period......... $13.15 $12.81 $12.91 $13.15 $12.50
____ ____ ____ ____ ____
Investment Operations:
Investment income_net........................ .58 .59 .61 .67 .57
Net realized and unrealized gain (loss)
on investments............................. (.08) .34 (.08) (.24) .65
____ ____ ____ ____ ____
Total from Investment Operations............. .50 .93 .53 .43 1.22
____ ____ ____ ____ ____
Distributions:
Dividends from investment income_net......... (.58) (.59) (.61) (.67) (.57)
Dividends from net realized gain on investments _ _ (.02) _ _
____ ____ ____ ____ ____
Total Distributions.......................... (.58) (.59) (.63) (.67) (.57)
____ ____ ____ ____ ____
Net asset value, end of period............... $13.07 $13.15 $12.81 $12.91 $13.15
==== ==== ==== ==== ====
TOTAL INVESTMENT RETURN.......................... 3.98% 7.22% 4.23% 3.18% 12.05%(2)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets...... .80% .75% .49% .06% _
Ratio of net investment income
to average net assets...................... 4.42% 4.45% 4.82% 4.90% 5.17%(2)
Decrease reflected in above expense ratios
due to undertakings by the Manager......... .10% .14% .42% .92% 1.59%(2)
Portfolio Turnover Rate...................... 23.45% 31.81% 9.41% 4.64% 9.66%(3)
Net Assets, end of period (000's Omitted).... $61,931 $68,129 $68,503 $91,248 $34,951
</TABLE>
- ---------------------
(1) From May 28, 1992 (commencement of operations) to March 31, 1993.
(2) Annualized.
(3) Not annualized.
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS MASSACHUSETTS INTERMEDIATE MUNICIPAL BOND FUND
NOTES TO FINANCIAL STATEMENTS
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, 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.
(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 (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 of the carryover 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 March
31, 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, 1996 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 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 $63,961 during the period ended March 31, 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 March 31, 1997, the Fund was charged an aggregate of
$49,246 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 $37,482 during the period ended March 31, 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) Effective November 4, 1996, 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 March 31, 1997,
amounted to $14,375,897 and $17,601,094, respectively.
At March 31, 1997, accumulated net unrealized appreciation on investments
was $730,042, consisting of $1,075,888 gross unrealized appreciation and
$345,846 gross unrealized depreciation.
At March 31, 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).
DREYFUS MASSACHUSETTS INTERMEDIATE MUNICIPAL BOND FUND
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
Shareholders and Board of Trustees
Dreyfus Massachusetts Intermediate Municipal Bond Fund
We have audited the accompanying statement of assets and liabilities of
Dreyfus Massachusetts Intermediate Municipal Bond Fund, including the
statement of investments, as of March 31, 1997, and the related statement of
operations for the year then ended, the statement of changes in net assets
for each of the two years in the period then ended, and financial highlights
for each of the years indicated therein. These financial statements and
financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements and financial highlights. Our procedures included
confirmation of securities owned as of March 31, 1997 by correspondence with
the custodian. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide
a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of Dreyfus Massachusetts Intermediate Municipal Bond Fund at March
31, 1997, the results of its operations for the year then ended, the changes
in its net assets for each of the two years in the period then ended, and the
financial highlights for each of the indicated years, in conformity with
generally accepted accounting principles.
[ERNST & YOUNG LLP signature logo]
New York, New York
April 30, 1997
DREYFUS MASSACHUSETTS INTERMEDIATE MUNICIPAL BOND FUND
IMPORTANT TAX INFORMATION (UNAUDITED)
In accordance with Federal tax law, the Fund hereby designates all the
dividends paid from investment income-net during its fiscal year ended March
31, 1997 as "exempt-interest dividends" (not subject to regular Federal and,
for individuals who are Massachusetts residents, Massachusetts personal
income taxes).
As required by Federal tax law rules, shareholders will receive
notification of their portion of the Fund's taxable ordinary dividends (if
any) and capital gain distributions (if any) paid for the 1997 calendar year
on Form 1099-DIV which will be mailed by January 31, 1998.
[Dreyfus lion "d" logo]
Registration Mark
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. 268AR973
[Dreyfus logo]
Registration Mark
Massachusetts
Intermediate
Municipal
Bond Fund
Annual Report
March 31, 1997
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
IN DREYFUS MASSACHUSETTS INTERMEDIATE MUNICIPAL BOND FUND
AND THE LEHMAN BROTHERS 10-YEAR MUNICIPAL BOND INDEX
EXHIBIT A:
LEHMAN BROTHERS
10-YEAR DREYFUS MASSACHUSETTS
PERIOD MUNICIPAL INTERMEDIATE
BOND INDEX * MUNICIPAL BOND FUND
6/26/92 10,000 10,000
3/31/93 10,898 10,885
3/31/94 11,205 11,231
3/31/95 12,048 11,706
3/31/96 13,116 12,551
3/31/97 13,800 13,051
* Source: Lehman Brothers
