DREYFUS MASSACHUSETTS INTERMEDIATE MUNICIPAL BOND FUND
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LETTER TO SHAREHOLDERS
Dear Shareholder:
We are pleased to provide you with this report on Dreyfus Massachusetts
Intermediate Municipal Bond Fund for the six-month period ended September 30,
1998. Your Fund produced a total return, including share price changes and
dividend income generated of 4.28%,* and an annualized tax-free distribution
rate per share of 4.23%.**
THE ECONOMY
The risk of global recession loomed large by the end of the reporting period.
Since last summer, the international economic crisis has spread from Asia and
Russia into Latin America and its effects are evident in the U.S., as witnessed
by early signs of a slowing in our domestic economy. Second-quarter gross
domestic product grew at an annual rate of 1.8%, well below the 5.5% rate in the
first quarter, while the trade deficit has continued to widen, affected by
weakening foreign demand and low-priced imports. These developments have
heightened a sense of global economic interdependence and have resulted in a
shift in emphasis by the Federal Reserve Board whereby fighting inflation has
taken a subordinate role to that of maintaining stable U.S. economic growth. As
Fed Chairman Alan Greenspan noted in early September: "It is just not credible
that the United States can remain an oasis of prosperity unaffected by a world
that is experiencing greatly increased stress." On September 29, the Federal
Open Market Committee cut interest rates for the first time since January 1996.
That, and a second quarter-point reduction taking the Federal Funds target rate
to 5% , was designed to cushion the adverse effects of the overseas economic
crisis on the domestic economy. (The Federal Funds rate is the interest rate
that banks charge each other for overnight loans.)
So far, shock waves from the overseas economic turmoil have been dampened by
the continued propensity of U.S. consumers to spend. In the first half of the
year, their spending outpaced earned income, an unsustainable phenomenon, yet a
telling indicator of the level of consumer optimism. The reasons for such
optimism are no surprise. Inflation remains tame, running at an annual rate
comfortably below 2%. After-tax income is growing: by the end of the reporting
period, wages had increased year-to-year at a 4% annual rate resulting in strong
gains in real income for workers. Finally, and of great economic and
psychological importance to consumers, jobs are plentiful; the unemployment rate
has been at or near 30-year lows throughout the reporting period and new jobs
have been created at a robust pace.
While the corporate sector wrestles with the economic implications of global
developments, consumers have powered the economy. The consumer sector comprises
two thirds of the activity in the $8-trillion U.S. economy and, with the
business sector slowing (corporate profits declined in the second quarter for
the first time in nearly a decade) , any significant pullback in household
spending could trigger a recession. Up to now, the spillover effect from
developments abroad has been largely confined to the manufacturing sector, whose
activity has contracted of late due to the falloff in export demand. Aside from
this "erosion at the edges" as Chairman Greenspan describes it, layoffs on a
broader scale--a factor that could weaken consumer resolve to spend--so far have
not occurred. It is clear that the Fed is concerned about the possibility of
worldwide recession. The October interest rate reduction was another step by the
Fed to mitigate the domestic effects of international financial turmoil, and a
gesture meant to serve notice to the world of the seriousness of its purpose.
MARKET ENVIRONMENT
Conditions in the fixed-income markets during the past six months have been
very dynamic. The normal economic fundamentals that exert the greatest influence
on the direction of interest rates have taken a backseat to other influences.
Price movements have often resulted from factors that are difficult to discern.
Most investors have seen, and perhaps felt, the effects of the Asian and
emerging market crisis on stocks; it has only come to light in recent weeks how
dramatic the impact could be on the bond markets. Generally, the various market
sectors respond similarly to economic and other news by moving in the same
direction--though not necessarily at the same pace. However, these are not
normal times. Fear of a widening crisis in the foreign markets pushed more
investors to the relative safety of U.S. Treasury bonds. Compounding the problem
are substantial hedge fund positions involving complex transactions. In many
instances the positions entail owning low quality corporate or foreign bonds and
short-selling high-quality U.S. Treasuries. The rapid rise in U.S. Treasury
prices has forced the unwinding of many of these positions which, in turn, has
exacerbated the problem.
It is difficult to anticipate when the markets will return to more normal
conditions. The bond markets continue to be driven by foreign liquidity and
hedge funds' deleveraging needs. Mindful of these forces and the prospects for
softening in the domestic economy, it appears that the Fed will have to maintain
an accommodative bias in its conduct of monetary policy.
The impact on municipal securities has generally been positive. Yields have
moved lower during 1998, though the path down has not been a smooth one. With
stock prices experiencing significant erosion, more signals of a slowing
economy, and the consensus view that the Fed will act again to lower short-term
interest rates, we believe that the merits of owning tax exempt securities are
compelling. For example, some AAA-rated municipal bonds are yielding nearly 100%
of the yield of taxable U.S. Treasury bonds. Furthermore, while the supply of
newly-issues municipal securities has been at a near record level for the past
year, future projections call for a curtailment in the amount of issues to be
marketed.
PORTFOLIO FOCUS
Over the past six months we have seen strong demand for Massachusetts paper,
particularly in the intermediate sector. The portfolio holds a large percentage
of insured paper. Bond insurance continues to be a major factor in the market.
The relatively inexpensive cost of insuring bonds has made it very attractive
for issuers to obtain insurance. As a result, close to 50% of all new deals come
to the market as insured. Unlike the domestic and international debt markets,
the credit spreads in the municipal market have continued to tighten and are
currently close to historical lows. The portfolio continues to maintain a
significant base of high income producing issues which we believe stabilizes the
portfolio through up and down market cycles. In light of the low rate
environment, we intend to retain these issues, as replacement is not possible.
Municipal bond prices have retreated from their earlier highs, which was the
direct result of the "flight to quality."
We view this as healthier than a continued run to new levels, since it provides
the time to re-evaluate the market. Included with this report are financial
statements relating to your Fund's holdings and its financial condition. We hope
you will find them informative.
Very truly yours,
[Richard J. Moynihan signature logo]
Richard J. Moynihan
Director, Municipal Portfolio Management
The Dreyfus Corporation
October 16, 1998
New York, N.Y.
* Total return includes reinvestment of dividends and any capital gains paid.
Income may be subject to state and local income 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. Some income may be subject to the
Federal Alternative Minimum Tax (AMT) for certain shareholders.
<TABLE>
DREYFUS MASSACHUSETTS INTERMEDIATE MUNICIPAL BOND FUND
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STATEMENT OF INVESTMENTS SEPTEMBER 30, 1998 (UNAUDITED)
Principal
Long-Term Municipal Investments--96.8% Amount Value
- -------------------------------------------------------
____________ ___________
<S> <C> <C>
Massachusetts--84.2%
Boston 6.20%, 7/1/2002 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 865,000 $ 939,018
Fall River, Refunding 5.25%, 6/1/2010 (Insured; MBIA). . . . . . . . . . . . . . . . . . . 1,000,000 1,070,870
Haverhill, Refunding 5%, 8/15/2011 (Insured; FSA). . . . . . . . . . . . . . . . . . . . . 1,620,000 1,691,102
Lawrence:
5%, 9/15/2002 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,030,000 1,070,592
4.625%, 2/15/2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,190,000 1,233,138
Lowell:
5.60%, 4/1/2005 (Insured; FSA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,530,000 1,671,234
5.30%, 12/15/2010 (Insured; AMBAC) . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000,000 1,085,220
Lynn, Refunding 5%, 1/15/2006. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,185,000 1,261,160
Massachusetts Bay Transportation Authority, Refunding
(General Transportation System):
6%, 3/1/2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000,000 1,097,890
6%, 3/1/2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,250,000 1,372,363
5.50%, 3/1/2012 (Insured; MBIA) . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000,000 1,108,940
Massachusetts Commonwealth:
Consolidated Loan:
5.75%, 5/1/2003 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 500,000 542,085
5.30%, 7/1/2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,750,000 1,904,875
Refunding:
5.40%, 11/1/2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,000,000 2,202,640
6%, 8/1/2010 (Insured; AMBAC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,500,000 1,741,320
Massachusetts Educational Financing Authority, Education Loan Revenue:
5.10%, 12/1/2014 (Insured; MBIA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000,000 1,005,430
Refunding 5.70%, 7/1/2011 (Insured; AMBAC) . . . . . . . . . . . . . . . . . . . . . . . 1,880,000 2,052,114
Massachusetts Health and Educational Facilities Authority, Revenue:
(Bentley College) 5.50%, 7/1/2003 (Insured; MBIA) . . . . . . . . . . . . . . . . . . . 500,000 536,725
(Cape Cod Health System)
5%, 11/15/2002 (Insured; College Construction Loan Insurance Association) . . . . . . 1,000,000 1,047,510
(Central New England Health System) 5.75%, 8/1/2003 . . . . . . . . . . . . . . . . . . 1,000,000 1,022,100
(Faulkner Hospital) 5.75%, 7/1/2003 . . . . . . . . . . . . . . . . . . . . . . . . . . 1,850,000 1,975,541
(New England Medical Center Hospitals) 4.90%, 7/1/2006 (Insured; MBIA) . . . . . . . . . 1,365,000 1,451,268
(Partners Healthcare System) 5.125%, 7/1/2011 (Insured; MBIA) . . . . . . . . . . . . . 1,000,000 1,049,660
(Refunding--Baystate Medical Center) 4.90%, 7/1/2005 (Insured; FGIC) . . . . . . . . . . 1,000,000 1,057,900
(Refunding--Berklee College of Music) 4.75%, 10/1/2009 (Insured; MBIA) . . . . . . . . . 1,000,000 1,049,410
(Refunding--Hallmark Health System) 5.25%, 7/1/2010 (Insured; FSA) . . . . . . . . . . . 2,055,000 2,204,768
(Refunding--Massachusetts General Hospital):
4.85%, 7/1/2004 (Insured; AMBAC) . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000,000 1,046,640
6%, 7/1/2004 (Insured; AMBAC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,875,000 2,079,281
Massachusetts Housing Finance Agency, Housing Projects, Refunding
6.30%, 10/1/2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,000,000 2,132,360
Massachusetts Industrial Finance Agency, Revenue:
(Refunding--Combined Jewish Philanthropies) 5.65%, 2/1/2003 (Insured; AMBAC) . . . . . . 795,000 854,394
(Refunding--Ogden Haverhill Project) 5.45%, 12/1/2012 . . . . . . . . . . . . . . . . . 1,000,000 1,027,160
(Refunding--Refusetech, Inc. Project) 6.15%, 7/1/2002 . . . . . . . . . . . . . . . . . 1,800,000 1,899,648
DREYFUS MASSACHUSETTS INTERMEDIATE MUNICIPAL BOND FUND
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STATEMENT OF INVESTMENTS (CONTINUED) SEPTEMBER 30, 1998 (UNAUDITED)
Principal
Long-Term Municipal Investments (continued) Amount Value
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____________ ___________
Massachusetts (continued)
Massachusetts Municipal Wholesale Electric Co., Power Supply Systems Revenue:
5.875%, 7/1/2003 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 500,000 $ 539,615
Refunding 6.75%, 7/1/2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000,000 1,096,460
Massachusetts Port Authority, Revenue 5.10%, 7/1/2010. . . . . . . . . . . . . . . . . . . 1,175,000 1,243,479
Massachusetts Water Pollution Abatement Trust, Water Pollution Abatement Revenu
(Pool Loan Program):
5.25%, 2/1/2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000,000 1,090,170
5.70%, 2/1/2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,260,000 2,471,016
Milford 5.10%, 12/15/2010. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,300,000 1,380,652
New Bedford 5.60%, 3/1/2003. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 600,000 637,014
New England Education Loan Marketing Corp., Student Loan Revenue:
6%, 3/1/2002 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 500,000 529,185
6.90%, 11/1/2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000,000 1,118,960
North Andover:
6.50%, 11/1/2004 (Prerefunded 11/1/2002) (a) . . . . . . . . . . . . . . . . . . . . . . 300,000 336,714
6.55%, 11/1/2005 (Prerefunded 11/1/2002) (a) . . . . . . . . . . . . . . . . . . . . . . 300,000 337,278
Pioneer Valley Transit Authority, COP 5.70%, 2/1/2003 (Insured; CGIC). . . . . . . . . . . 1,240,000 1,333,558
Swansea 6.60%, 1/15/2005 (Prerefunded 1/15/2002) (a) . . . . . . . . . . . . . . . . . . . 100,000 110,626
Woods Hole, Marthas Vineyard & Nantucket 6.10%, 3/1/2005 . . . . . . . . . . . . . . . . . 690,000 749,989
Worcester 6%, 8/1/2003 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 545,000 591,837
U. S. Related--12.6%
Guam Airport Authority, Revenue 6%, 10/1/2000. . . . . . . . . . . . . . . . . . . . . . . 1,100,000 1,143,659
Guam Government, Limited Obligation Revenue, Refunding
(Infrastructure Improvement) 5%, 11/1/2012 (Insured; AMBAC) . . . . . . . . . . . . . . 1,000,000 1,051,710
Puerto Rico Commonwealth, Refunding:
5.375%, 7/1/2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000,000 1,080,290
5.50%, 7/1/2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000,000 1,100,760
Puerto Rico Electric Power Authority, Power Revenue 5.50%, 7/1/2008. . . . . . . . . . . . 1,000,000 1,100,980
Virgin Islands Public Finance Authority, Revenue, Refunding
6%, 10/1/2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 965,000 1,017,834
Virgin Islands Water and Power Authority, Electric Systems, Refunding:
5.125%, 7/1/2003 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000,000 1,041,470
5.125%, 7/1/2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000,000 1,030,400
____________
TOTAL INVESTMENTS (cost $61,551,848) . . . . . . . . . . . . . . . . . . . . . . . . . . . 96.8% $65,618,012
_______ ____________
CASH AND RECEIVABLES (NET) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2% $ 2,173,321
_______ ____________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.0% $67,791,333
_______ ____________
DREYFUS MASSACHUSETTS INTERMEDIATE MUNICIPAL BOND FUND
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Summary of Abbreviations
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AMBAC American Municipal Bond Assurance Corporation FSA Financial Security Assurance
CGIC Capital Guaranty Insurance Company MBIA Municipal Bond Investors Assurance
COP Certificate of Participation Insurance Corporation
FGIC Financial Guaranty Insurance Company
Summary of Combined Ratings (Unaudited)
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Fitch or Moody's or Standard & Poor's Percentage of Value
_______ ________ _________________ ___________________
AAA Aaa AAA 51.2%
AA Aa AA 13.9
A A A 13.2
BBB Baa BBB 18.6
BB Ba BB 1.6
Not Rated (b) Not Rated (b) Not Rated (b) 1.5
_______
100.0%
_______
Notes to Statement of Investments:
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(a) Bonds which are prerefunded are collateralized by U.S. Government
securities which are held in escrow and are used to pay principal and
interest on the municipal issue and to retire the bonds in full at the
earliest refunding date.
(b) Securities which, while not rated by Fitch, Moody's and Standard & Poor's
have been determined by the Manager to be of comparable quality to those
rated securities in which the Fund may invest.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
DREYFUS MASSACHUSETTS INTERMEDIATE MUNICIPAL BOND FUND
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STATEMENT OF ASSETS AND LIABILITIES SEPTEMBER 30, 1998 (UNAUDITED)
Cost Value
____________ ___________
<S> <C> <C>
ASSETS: Investments in securities-See Statement of Investments . $61,551,848 $65,618,012
Receivable for investment securities sold . . . . . . . . 1,339,867
Interest receivable . . . . . . . . . . . . . . . . . . . 896,817
Prepaid expenses . . . . . . . . . . . . . . . . . . . . 18,839
____________
67,873,535
____________
LIABILITIES: Due to The Dreyfus Corporation and affiliates . . . . . . 28,168
Cash overdraft due to Custodian . . . . . . . . . . . . . 34,080
Accrued expenses . . . . . . . . . . . . . . . . . . . . 19,954
____________
82,202
____________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $67,791,333
____________
REPRESENTED BY: Paid-in capital . . . . . . . . . . . . . . . . . . . . . $66,427,074
Accumulated net realized gain (loss) on investments . . . (2,701,905)
Accumulated gross unrealized appreciation on investments . 4,066,164
____________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $67,791,333
____________
SHARES OUTSTANDING
(UNLIMITED NUMBER OF $.001 PAR VALUE SHARES OF BENEFICIAL INTEREST AUTHORIZED) . . . . . . 4,888,397
NET ASSET VALUE, offering and redemption price per share--Note 3(d). . . . . . . . . . . . $13.87
_______
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
DREYFUS MASSACHUSETTS INTERMEDIATE MUNICIPAL BOND FUND
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STATEMENT OF OPERATIONS SIX MONTHS ENDED SEPTEMBER 30, 1998 (UNAUDITED)
INVESTMENT INCOME
<S> <C> <C>
INCOME Interest Income . . . . . . . . . . . . . . . . . . . . . $1,679,730
EXPENSES: Management fee--Note 3(a) . . . . . . . . . . . . . . . . $ 197,549
Shareholder servicing costs--Note 3(b) . . . . . . . . . 62,433
Professional fees . . . . . . . . . . . . . . . . . . . . 15,513
Trustees' fees and expenses--Note 3(c) . . . . . . . . . 9,920
Registration fees . . . . . . . . . . . . . . . . . . . . 4,094
Custodian fees . . . . . . . . . . . . . . . . . . . . . 3,611
Prospectus and shareholders' reports . . . . . . . . . . 1,940
Loan commitment fees--Note 2 . . . . . . . . . . . . . . 210
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . 5,183
___________
Total Expenses . . . . . . . . . . . . . . . . . . 300,453
Less--reduction in management fee due to
undertaking--Note 3(a) . . . . . . . . . . . . . . . . (36,845)
___________
Net Expenses . . . . . . . . . . . . . . . . . . . 263,608
___________
INVESTMENT INCOME--NET . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,416,122
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--Note 4:
Net realized gain (loss) on investments . . . . . . . . . $ 128,760
Net unrealized appreciation (depreciation) on investments . . 1,222,426
___________
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS . . . . . . . . . . . . . . . . . . 1,351,186
___________
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS . . . . . . . . . . . . . . . . . . . $2,767,308
___________
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
DREYFUS MASSACHUSETTS INTERMEDIATE MUNICIPAL BOND FUND
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STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
September 30, 1998 Year Ended
(Unaudited) March 31, 1998
_____________ ___________________
OPERATIONS:
<S> <C> <C>
Investment income--net . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,416,122 $ 2,818,405
Net realized gain (loss) on investments . . . . . . . . . . . . . . . . . . . 128,760 363,394
Net unrealized appreciation (depreciation) on investments . . . . . . . . . . 1,222,426 2,113,696
____________ ____________
Net Increase (Decrease) in Net Assets Resulting from Operations . . . . . . 2,767,308 5,295,495
____________ ____________
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,416,122) (2,818,405)
____________ ____________
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold . . . . . . . . . . . . . . . . . . . . . . . . 5,138,454 12,493,557
Dividends reinvested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,057,646 2,079,034
Cost of shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . (5,441,547) (13,294,850)
____________ ____________
Increase (Decrease) in Net Assets from Beneficial Interest Transactions . . 754,553 1,277,741
____________ ____________
Total Increase (Decrease) in Net Assets . . . . . . . . . . . . . . . . . 2,105,739 3,754,831
NET ASSETS:
Beginning of Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65,685,594 61,930,763
____________ ____________
End of Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $67,791,333 $65,685,594
____________ ____________
Shares Shares
____________ ____________
CAPITAL SHARE TRANSACTIONS:
Shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 376,892 931,247
Shares issued for dividends reinvested . . . . . . . . . . . . . . . . . . . . 77,483 154,589
Shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (399,991) (990,796)
____________ ____________
Net Increase (Decrease) in Shares Outstanding . . . . . . . . . . . . . . . 54,384 (95,040)
____________ ____________
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
DREYFUS MASSACHUSETTS INTERMEDIATE MUNICIPAL BOND FUND
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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, 1998 Year Ended March 31,
_____________________________________________
PER SHARE DATA: (Unaudited) 1998 1997 1996 1995 1994
___________ ______ ______ ______ ______ ______
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period . . . . . . $13.59 $13.07 $13.15 $12.81 $12.91 $13.15
______ ______ ______ ______ ______ ______
Investment Operations:
Investment income--net . . . . . . . . . . . . . .05 .59 .58 .59 .61 .67
Net realized and unrealized gain (loss)
on investments . . . . . . . . . . . . . . . .28 .52 (.08) .34 (.08) (.24)
______ ______ ______ ______ ______ ______
Total from Investment Operations . . . . . . . . .33 1.11 .50 .93 .53 .43
______ ______ ______ ______ ______ ______
Distributions:
Dividends from investment income--net . . . . . . (.05) (.59) (.58) (.59) (.61) (.67)
Dividends from net realized gain on investments . . -- -- -- -- (.02) --
______ ______ ______ ______ ______ ______
Total Distributions . . . . . . . . . . . . . . . (.05) (.59) (.58) (.59) (.63) (.67)
______ ______ ______ ______ ______ ______
Net asset value, end of period . . . . . . . . . $13.87 $13.59 $13.07 $13.15 $12.81 $12.91
______ ______ ______ ______ ______ ______
TOTAL INVESTMENT RETURN. . . . . . . . . . . . . . . 8.54%(1) 8.63% 3.98% 7.22% 4.23% 3.18%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets . . . . . .80%(1) .80% .80% .75% .49% .06%
Ratio of net investment income
to average net assets . . . . . . . . . . . . 4.30%(1) 4.39% 4.42% 4.45% 4.82% 4.90%
Decrease reflected in above expense ratios
due to undertakings by the Manager . . . . . 11%(1) .06% .10% .14% .42% .92%
Portfolio Turnover Rate . . . . . . . . . . . . . 9.77%(2) 29.22% 23.45% 31.81% 9.41% 4.64%
Net Assets, end of period (000's Omitted) . . . . $67,791 $65,686 $61,931 $68,129 $68,503 $91,248
- -----------------------------
(1) Annualized.
(2) Not annualized.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
DREYFUS MASSACHUSETTS INTERMEDIATE MUNICIPAL BOND FUND
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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, as amended (the "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 (the "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. Under the terms of the custody
agreement, the Fund received net earnings credits of $1,047 during the period
ended September 30, 1998 based on available cash balances left on deposit.
Income earned under this arrangement is included in interest income.
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 of 1986, as
amended (the "Code"). To the extent that net realized capital gain can be offset
by capital loss carryovers, it is the policy of the 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 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 $2,830,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to March 31, 1998. If not
applied, $214,000 of the carryover expires in fiscal 2003, $2,310,000 expires in
fiscal 2004 and $306,000 expires in fiscal 2005.
DREYFUS MASSACHUSETTS INTERMEDIATE MUNICIPAL BOND FUND
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
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. During the period ended
September 30, 1998, 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 had undertaken from April 1, 1998 through September 30,
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, exceeded 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 $36,845 during the
period ended September 30, 1998.
(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, 1998, the Fund was charged $37,353 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. During the period
ended September 30, 1998, the Fund was charged $16,046 pursuant to the transfer
agency agreement.
(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 and retained by the Fund on certain
redemptions of Fund shares (including redemptions through use of the Fund
Exchanges service) where 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, 1998
amounted to $6,774,941 and $6,307,426, respectively.
At September 30, 1998, 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 lion "d" logo (reg.tm)
Dreyfus logo (reg.tm)
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. 268SA989
Massachusetts
Intermediate
Municipal Bond Fund
Semi-Annual
Report
September 30, 1998
