DREYFUS INTERNATIONAL EQUITY FUND INC, N-30D, 1995-01-26

DREYFUS INTERNATIONAL EQUITY FUND INC
N-30D, 1995-01-26

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LETTER TO SHAREHOLDERS
Dear Shareholder:
There has been considerable turmoil in world equity markets since our
last letter to you six months ago. Inevitably, your Fund was not immune to
the factors that depressed many markets around the globe.
For the six months ended November 30, Dreyfus International Equity Fund
produced a total return of -3.03%.* This compares with a total return of .80%
for the Standard & Poor's 500 Composite Stock Price Index for the same
period,**-.15% for the Morgan Stanley Capital International Europe, Australasia
and Far East (EAFE(R)) Index*** and -1.15% for the average of all international
equity funds tracked by Lipper Analytical Services, Inc.+
As we noted in our last report, the start of the U.S. Federal Reserve
Board's policy of raising interest rates in February, 1994, marked a
watershed for world markets. The Fed's measures to head off inflation, now
totalling six since February, have caused declines in many leading stock
exchanges as well as weakening the U.S. dollar.
When the rally in U.S. bond prices faltered at the end of the Summer, so
did the rallies in the world's equity markets for the most part. The general
drift of early fall turned in places into somewhat of a rout by the end of
November.
The fact that your Fund did not quite keep up with the EAFE(R) Index
cannot be ascribed to any one factor, but is a combination of being
underweighted relative to the strong performing area of Europe (including
U.K.), a modest loss on hedged currency positions and a limited number of
stock selections that did not live up to our expectations.
Hedging against currency risk is one of the basic strategies of the Fund.
In the past six months, we made forward sales of Japanese, and to a lesser
extent, European currencies to protect the performance of the underlying
investments in these countries from being offset in the event the U.S. dollar
strengthened from its undervalued level. As it happened, the insurance
obtained by hedging has probably cost the Fund a couple of percentage points
off performance, a price one can pay for attempting to lower the volatility
of a foreign-invested fund.
Among world markets, the U.K., Singapore, Malaysia, Sweden and the
Netherlands were the only good performers of any significant size during the
period under review. All these markets showed gains of better than 5% in
dollar terms with France and Germany managing to do just better than break
even. Overall performance was not helped, however, by the extremely poor
results from Hong Kong and Italy, but neither fortunately amounted to a very
large proportion of the Fund and some above-average stock selection mitigated
against greater losses.
Earlier in the year, we began increasing our investments in Japan and
Europe and making an initial commitment to India's attractive, if
underdeveloped, market. More recently, we have taken some profits in the Far
East, and in Malaysia in particular.
Currently Japan, where an economic recovery appears to be underway,
accounts for just under 30% of the portfolio. During the six months under
review, the Japanese market retreated by some 4% in dollar terms, but it has
improved of late, outperforming the EAFE(R) Index in the month of December.
The next largest, the United Kingdom, is about 13% of the total, and the
outlook there for 1995 corporate profits and dividends appears very
encouraging.
We continue to favor the world's lagging economies where there would
still appear to be plenty of time and capacity for expansion. This inevitably
throws us principally towards the economies of Japan and Continental Europe,
and then perhaps the likes of South Africa and India. All of these are
improving, but still behind the general pack, of which the U.S.A. is firmly
in the lead. For high noncyclical growth, however, the "tiger" markets of the
Far East remain the place to go. We believe the Fund is well represented in
these areas.
The world economy continues to expand apace, and though admittedly, there
are countries such as the U.S. where supply and demand may have narrowed too
much for prolonged inflationless expansion, there are also many others that
are placed earlier in the cycle and should have many years of expansion in
production and profitability ahead of them.
Sincerely,
(Paul D.A. Nix Signature Logo)
Paul D.A. Nix
Portfolio Manager
Dreyfus International Equity Fund
Director, M & G Investment Management, Ltd.
December 15, 1994
London, U.K.
* Total return represents the change during the period in a
hypothetical account with dividends reinvested.
**SOURCE: LIPPER ANALYTICAL SERVICES, INC. - Reflects the reinvestment of
income dividends and, where applicable, capital gain distributions. The
Standard & Poor's 500 Composite Stock Price Index is a widely accepted
unmanaged index of U.S. stock market performance.
***SOURCE: LIPPER ANALYTICAL SERVICES, INC. - The Morgan Stanley Capital
International Europe, Australasia, Far East (EAFE(R)) Index is an
unmanaged index composed of a sample of companies representative of the
market structure of European and Pacific Basin countries. The return
indicated includes net dividends reinvested. The Index is the property
of Morgan Stanley & Co., Incorporated.
+ SOURCE: LIPPER ANALYTICAL SERVICES, INC. - Average total return for
all funds in the International Equity funds category reflect
reinvestment of distributions. The Fund's share price and yield
fluctuate.
DREYFUS INTERNATIONAL EQUITY FUND, INC NOVEMBER 30, 1994

ASSET ALLOCATION DIVERSIFICATION OF FOREIGN INVESTMENTS

[EXHIBIT A] [EXHIBIT B]

(Foreign Securities equal 98.2% of Total Net Assets)
<S> <C>
TEN LARGEST HOLDINGS
Amway Japan..................................................... 1.5%
Cemex S.A., Cl. B., A.D.R....................................... 1.4
Lucas Industries................................................ 1.4
Grupo Carso S.A., Ser. B., A.D.R................................ 1.3
Nippon Yusen K.K................................................ 1.3
Fila Holding S.P.A., A.D.R...................................... 1.3
Global Mark International, 3.50%, 4/6/97........................ 1.3
Autoliv AB...................................................... 1.3
NGK Spark Plug.................................................. 1.3
Royal Doulton PLC............................................... 1.2

All percentages shown above are based on Total Net Assets.

</TABLE>
<TABLE>
<CAPTION>
DREYFUS INTERNATIONAL EQUITY FUND, INC.
STATEMENT OF INVESTMENTS
NOVEMBER 30, 1994 (UNAUDITED)
COMMON STOCKS--95.7% SHARES VALUE
-------------- --------------
<S> <C> <C>
AUSTRALIA--4.3% Broken Hill Proprietary 125,000 $ 1,792,759
Commonwealth Bank of Australia......... 350,000 1,979,914
Mayne Nickless......................... 350,000 1,689,383
Newcrest Mining........................ 350,000 1,646,341
--------------
7,108,397
--------------
AUSTRIA--.9% Bau Holdings 9,000 681,917
Burgenland Holding..................... 24,000 846,293
--------------
1,528,210
--------------
CANADA--2.3% Placer Dome 100,000 1,871,638
TVX Gold............................. (a) 300,000 1,907,981
--------------
3,779,619
--------------
DENMARK--.9% Tele Danmark A/S, Cl. B 30,000 1,565,854
--------------
FRANCE--5.6% BUT S.A. 7,000 1,182,916
Banque Nationale de Paris.............. 31,400 1,556,880
Canal Plus............................. 6,300 1,064,624
Compagnie Signaux et
Equipements Electronique........... 16,266 1,401,564
Groupe Zannier......................... 10,769 353,967
Imetal................................. 9,000 859,053
Naf Naf S.A. .......................... 27,000 1,679,666
Naf Naf S.A. (Warrants).............. (a) 3,000 10,139
Skis Rossignol S.A. ................... 3,190 1,221,500
--------------
9,330,309
--------------
GERMANY--3.3% BASF AG....................... 9,250 1,791,120
Continental AG ........................ 11,500 1,584,818
Etienne Aigner AG ..................... 4,000 1,260,344
Felten & Guilleaume Energietechnik..... 4,200 882,241
--------------
5,518,523
--------------
HONG KONG--4.9% B & B Asia 2,331,000 572,690
China Light & Power.................... 232,600 1,001,562
Citic Pacific.......................... 500,000 1,267,214
Dah Sing Financial Holdings............ 546,650 1,187,524
Lamex Holdings......................... 1,534,000 614,909
New Island Printing Holdings........... 4,297,000 611,198
Swire Pacific, Cl. A................... 185,000 1,231,978
Vitasoy International Holdings....... (a) 3,094,000 1,080,210
Vtech Holdings......................... 474,000 502,593
--------------
8,069,878
--------------
INDIA--1.4% Finolex Cables, G.D.R. ................ (b) 31,500 578,812
Hindalco Industries, G.D.R............. 30,000 1,050,000
Tube Investments, G.D.R................ 100,000 663,000
--------------
2,291,812
--------------
INDONESIA--1.3%. Freeport McMoRan Copper & Gold, Cl. A. 60,000 1,207,500
PT Indosat, A.D.R...................... 25,000 950,000
--------------
2,157,500
--------------
DREYFUS INTERNATIONAL EQUITY FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) NOVEMBER 30, 1994 (UNAUDITED)
COMMON STOCKS (CONTINUED) SHARES VALUE
-------------- --------------
ITALY--3.3% Edison S.P.A. 340,000 $ 1,418,418
Fila Holding S.P.A., A.D.R. ........... 115,000 2,141,875
Telecom Italia S.P.A. ................. 720,000 1,864,524
--------------
5,424,817
--------------
JAPAN--28.2% Amway Japan 75,000 2,425,467
Anritsu Electric....................... 120,000 1,576,554
Asahi Concrete Works................... 75,000 1,220,313
DDI.................................... 220 1,934,310
East Japan Railway..................... 380 1,793,431
Enix................................... 29,000 794,239
Hitachi Credit......................... 100,000 1,758,464
Honda Motor............................ 120,000 2,013,138
Japan Airlines....................... (a) 270,000 1,991,915
Mitsubishi Bank........................ 60,000 1,340,071
Mitsui Fudosan......................... 125,000 1,288,530
NEC.................................... 175,000 2,033,855
NGK Spark Plug......................... 160,000 2,102,072
Nippon Express......................... 170,000 1,769,581
Nippon Kayaku.......................... 150,000 1,082,365
Nippon Steel........................... 500,000 1,940,374
Nippon Telegraph & Telephone........... 240 2,037,393
Nippon Yusen K.K. ..................... 325,000 2,161,192
Nissan Chemical Industries............. 270,000 1,896,412
Rinnai................................. 66,000 1,454,068
Sankyo ................................ 20,000 1,317,837
Seven Eleven Japan..................... 20,000 1,574,533
Sharp.................................. 80,000 1,390,601
Sony................................... 30,000 1,591,713
Sumitomo Bank.......................... 60,000 1,073,269
Sumitomo Metal Mining.................. 200,000 1,879,737
Tokio Marine & Fire Insurance.......... 50,000 576,049
Toshoku................................ 220,000 1,485,195
Ushio.................................. 150,000 1,561,395
--------------
47,064,073
--------------
MALAYSIA--1.6% Hong Leong Credit Berhad 180,000 922,535
Leader Universal Holdings Berhad....... 100,000 563,381
Metacorp Berhad........................ 150,000 454,812
Renong Berhad.......................... 600,000 774,648
--------------
2,715,376
--------------
MEXICO--4.3% Cemex S.A., Cl. B, A.D.R. 118,125 2,325,586
Cifra S.A. de C.V., A.D.R. ............ 350,000 984,375
Grupo Carso S.A., Ser. B, A.D.R. .. (a,b) 100,000 2,225,000
Telefonos De Mexico S.A., CI. L, A.D.R. 15,000 795,000
Transportacion Maritima
Mexicana S.A., CI. L, A.D.R. 125,000 906,250
--------------
7,236,211
--------------

DREYFUS INTERNATIONAL EQUITY FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED)
NOVEMBER 30, 1994 (UNAUDITED)
COMMON STOCKS (CONTINUED) SHARES VALUE
-------------- --------------
NETHERLANDS--4.2% Ahrend Groep N.V. 15,000 $ 1,429,506
Akzo N.V. ............................. 17,000 1,886,095
Internationale Nederlanden Groep N.V... 36,422 1,711,685
Royal PTT Nederland N.V. .............. 62,000 1,936,618
--------------
6,963,904
--------------
NEW ZEALAND--1.1% Brierley Investments 2,500,000 1,869,788
--------------
SINGAPORE--4.7% Fraser & Neave 118,300 1,316,688
Haw Par Brothers International......... 555,000 1,197,542
IPCO International..................... 185,000 838,050
Keppel................................. 192,600 1,564,998
Robinson & Co.......................... 303,000 1,293,104
Singapore Press Holdings............. (a) 90,000 1,659,269
--------------
7,869,651
--------------
SOUTH AFRICA--2.0% Premier Group Holdings 1,300,000 1,593,446
South African Breweries................ 75,000 1,765,777
--------------
3,359,223
--------------
SPAIN--3.6% Centros Commercial Pryca 86,250 1,394,737
Hidroelectrica del Cantabrico S.A...... 46,000 1,347,368
Iberdrola S.A. ........................ 234,000 1,568,925
Repsol S.A. ........................... 61,000 1,754,157
--------------
6,065,187
--------------
SWEDEN--1.8% Autoliv AB........................... (a) 60,000 2,104,983
Volvo AB............................... 45,900 884,452
--------------
2,989,435
--------------
SWITZERLAND--3.4% Baloise Holdings 900 1,698,305
Baloise Holdings (Warrants).......... (a) 900 11,695
Elektrowatt AG (Warrants)............ (a) 7,000 406,026
Pelikan Holding AG................... (a) 7,000 590,584
Rieter Holding AG...................... 1,400 1,761,205
Sika Finanz AG......................... 4,300 1,182,298
--------------
5,650,113
--------------
UNITED KINGDOM-- 12.6% BAT Industries PLC 250,000 1,753,360
Booker PLC............................. 290,000 1,852,300
British Gas PLC........................ 200,000 969,044
British Steel PLC...................... 650,000 1,617,944
Burton Group PLC....................... 1,400,000 1,512,273
Commercial Union PLC................... 100,000 841,065
Cookson Group PLC...................... 200,000 754,571
Glaxo Holdings PLC..................... 135,000 1,303,983
Hammerson PLC.......................... 175,000 896,542
Harrisons & Crosfield PLC.............. 425,000 1,011,313
Johnson, Matthey PLC................... 100,000 875,506
Lloyds Bank PLC........................ 110,000 990,179
Lucas Industries PLC................... 700,000 2,268,409
Royal Doulton PLC...................... 500,000 2,039,064

DREYFUS INTERNATIONAL EQUITY FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) NOVEMBER 30, 1994 (UNAUDITED)
COMMON STOCKS (CONTINUED) SHARES VALUE
-------------- --------------
UNITED KINGDOM (CONTINUED) Welsh Water PLC 80,000 $ 794,022
World Fluids PLC..................... (a) 1,300,000 152,636
Zeneca Group PLC....................... 100,000 1,324,413
--------------
20,956,624
--------------
TOTAL COMMON STOCKS
(cost $156,048,127) $159,514,504
==============
PREFERRED STOCK--.9%
GERMANY; Herlitz AG
(cost $1,620,615) 8,444 $ 1,461,979
==============
CONVERTIBLE PREFERRED STOCK--.3%
JAPAN; Sakura Bank, 2.25%
(cost $620,456) (a) 32,000 $ 620,920
==============
CONVERTIBLE BOND--1.3% PRINCIPAL
AMOUNT
--------------
INDONESIA; Global Mark International, 3.50%, 4/6/97
(cost $2,000,000) (c) $ 2,000,000 $ 2,125,000
==============
SHORT-TERM INVESTMENTS--1.4%
UNITED STATES; U.S. Treasury Bill;
5.18%, 12/22/94
(cost $2,326,947) $ 2,334,000 $ 2,326,947
==============
TOTAL INVESTMENTS (cost $162,616,145)....................................... 99.6% $166,049,350
====== ==============
CASH AND RECEIVABLES (NET).................................................. .4% $ 667,514
====== ==============
NET ASSETS.................................................................. 100.0% $166,716,864
====== ==============
</TABLE>
NOTES TO STATEMENT OF INVESTMENTS:
(a) Non-income producing.
(b) Securities exempt from registration under Rule 144A of the
Securities Act of 1933. These securities may be resold in transactions
exempt from registration, normally to qualified institutional buyers. At
November 30, 1994, these securities amounted to $2,803,812 or 1.7% of net
assets.
(c) Convertible into Indofoods Sukses Makmur common stock.

See independent accountants' review report and notes to financial statements.
<TABLE>
<CAPTION>
DREYFUS INTERNATIONAL EQUITY FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1994 (UNAUDITED)
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $162,616,145)--see statement.................................... $166,049,350
Cash.................................................................... 402,045
Dividends and interest receivable....................................... 547,214
Receivable for subscriptions to Common Stock............................ 293,000
Prepaid expenses........................................................ 118,705
--------------
167,410,314
LIABILITIES:
Due to The Dreyfus Corporation.......................................... $106,219
Due to the Distributor.................................................. 106,219
Net unrealized (depreciation) on forward currency exchange
contracts_Note 3(a)................................................... 179,198
Payable for Common Stock redeemed....................................... 136,290
Accrued expenses........................................................ 165,524 693,450
---------- --------------
NET ASSETS ................................................................ $166,716,864
==============
REPRESENTED BY:
Paid-in capital......................................................... $162,902,711
Accumulated distributions in excess of investment income_net_Note 1(d).. (38,982)
Accumulated undistributed net realized gain on investments and
foreign currency transactions......................................... 598,219
Accumulated net unrealized appreciation on investments
and foreign currency transactions..................................... 3,254,916
--------------
NET ASSETS at value applicable to 11,308,427 outstanding shares of
Common Stock, equivalent to $14.74 per share (300 million shares
of $.001 par value authorized).......................................... $166,716,864
==============

See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS INTERNATIONAL EQUITY FUND, INC.
STATEMENT OF OPERATIONS SIX MONTHS ENDED NOVEMBER 30, 1994 (UNAUDITED)
<S> <C> <C>
INVESTMENT INCOME:
INCOME:
Cash dividends (net of $231,452 foreign taxes withheld at source)..... $1,656,287
Interest.............................................................. 91,879
------------
TOTAL INCOME...................................................... $ 1,748,166
EXPENSES:
Management fee--Note 2(a)............................................. 653,104
Shareholder servicing costs_Note 2(b,c)............................... 778,631
Custodian fees........................................................ 124,832
Prospectus and shareholders' reports_Note 2(b)........................ 43,125
Registration fees..................................................... 31,368
Professional fees..................................................... 24,813
Directors' fees and expenses_Note 2(d)................................ 19,881
Miscellaneous......................................................... 12,725
------------
TOTAL EXPENSES.................................................... 1,688,479
------------
INVESTMENT INCOME--NET............................................ 59,687
------------
REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS:
Net realized gain on investments and foreign currency
transactions--Note 3(a)............................................... $ 334,910
Net realized (loss) on forward currency exchange
contracts_Note 3(a)................................................... (2,072,876)
------------
NET REALIZED (LOSS)................................................... (1,737,966)
Net unrealized (depreciation) on investments and foreign currency
transactions.......................................................... (2,740,063)
------------
NET REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS................. (4,478,029)
------------
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS...................... $(4,418,342)
============

See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS INTERNATIONAL EQUITY FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS

YEAR ENDED SIX MONTHS ENDED
MAY 31, NOVEMBER 30, 1994
1994* (UNAUDITED)
-------------- ------------------
<S> <C> <C>
OPERATIONS:
Investment income--net............................................ $ 116,463 $ 59,687
Net realized gain (loss) on investments........................... 2,792,970 (1,737,966)
Net unrealized appreciation (depreciation) on investments for the period 5,994,979 (2,740,063)
-------------- --------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS. 8,904,412 (4,418,342)
-------------- --------------
DIVIDENDS TO SHAREHOLDERS:
From investment income--net....................................... (136,536) --__
In excess of investment income_net................................ (286,348) ___
From net realized gain on investments............................. (269,107) ___
-------------- --------------
TOTAL DIVIDENDS................................................. (691,991) --__
-------------- --------------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold..................................... 350,172,480 280,653,385
Dividends reinvested.............................................. 648,010 ___
Cost of shares redeemed........................................... (179,226,393) (289,424,697)
-------------- --------------
INCREASE (DECREASE) IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS 171,594,097 (8,771,312)
-------------- --------------
TOTAL INCREASE (DECREASE) IN NET ASSETS..................... 179,806,518 (13,189,654)
NET ASSETS:
Beginning of period............................................... 100,000 179,906,518
-------------- --------------
End of period [including distributions in excess of investment
income_net: ($98,669) and ($38,982), respectively].............. $179,906,518 $166,716,864
============== ==============

SHARES SHARES
-------------- --------------
CAPITAL SHARE TRANSACTIONS:
Shares sold....................................................... 23,578,540 18,224,439
Shares issued for dividends reinvested............................ 42,773 ___
Shares redeemed................................................... (11,796,511) (18,748,814)
-------------- --------------
NET INCREASE (DECREASE) IN SHARES OUTSTANDING................... 11,824,802 (524,375)
============== ==============
- ------------------------------
* From June 29, 1993 (commencement of operations) to May 31, 1994.

See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS INTERNATIONAL EQUITY FUND, INC.
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share of
Common Stock outstanding, total investment return, ratios to average net
assets and other supplemental data for each period indicated. This
information has been derived from the Fund's financial statements.

YEAR ENDED SIX MONTHS ENDED
MAY 31, NOVEMBER 30, 1994
PER SHARE DATA: 1994(1) (UNAUDITED)
------- -------------
<S> <C> <C>
Net asset value, beginning of period................................. $12.50 $15.20
------- -------
INVESTMENT OPERATIONS:
Investment income--net............................................... .05 -_
Net realized and unrealized gain (loss) on investments
and foreign currency transactions.................................. 2.74 (.46)
------- -------
TOTAL FROM INVESTMENT OPERATIONS............................... 2.79 (.46)
------- -------
DISTRIBUTIONS:
Dividends from investment income--net................................ (.02) -_
Dividends in excess of investment income_net......................... (.04) -_
Dividends from net realized gain on investments...................... (.03) -_
------- -------
TOTAL DISTRIBUTIONS............................................ (.09) -_
------- -------
Net asset value, end of period....................................... $15.20 $14.74
====== =======
TOTAL INVESTMENT RETURN 22.32%(2) (3.03%)(2)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets.............................. 1.71%(2) .97%(2)
Ratio of net investment income to average net assets................. .11%(2) .03%(2)
Decrease reflected in above expense ratios due to undertakings by Dreyfus .16%(2) -_
Portfolio Turnover Rate.............................................. 51.32%(2) 16.59%(2)
Net Assets, end of period (000's Omitted)............................ $179,907 $166,717
- ------------------
(1) From June 29, 1993 (commencement of operations) to May 31, 1994.
(2) Not annualized.

See independent accountants' review report and notes to financial statements.
</TABLE>
DREYFUS INTERNATIONAL EQUITY FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES:
The Fund is registered under the Investment Company Act of 1940 ("Act")
as a non-diversified open-end management investment company. The Dreyfus
Corporation ("Dreyfus") serves as the Fund's investment adviser. M&G
Investment Management Limited ("M&G") serves as the Fund's sub-investment
adviser. Dreyfus Service Corporation, a wholly-owned subsidiary of Dreyfus,
until August 24, 1994, acted as the distributor of the Fund's shares, which
are sold to the public without a sales load. Effective August 24, 1994,
Dreyfus became a direct subsidiary of Mellon Bank, N.A.
On August 24, 1994, Premier Mutual Fund Services, Inc. (the
"Distributor") was engaged as the Fund's distributor. The Distributor,
located at One Exchange Place, Boston, Massachusetts 02109, is a wholly-owned
subsidiary of Institutional Administration Services, Inc., a provider of
mutual fund administration services, the parent company of which is Boston
Institutional Group, Inc.
(A) PORTFOLIO VALUATION: Investments in securities (including options and
financial futures) 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. Securities 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, except for open short positions, where the asked price is used for
valuation purposes. Bid price is used when no asked price is available.
Short-term investments are carried at amortized cost, which approximates
value. Investments denominated in foreign currencies are translated to U.S.
dollars at the prevailing rates of exchange.
(B) FOREIGN CURRENCY TRANSACTIONS: The Fund does not isolate that portion
of the results of operations resulting from changes in foreign exchange rates
on investments from the fluctuations arising from changes in market prices of
securities held. Such fluctuations are included with the net realized and
unrealized gain or loss from investments.
Reported net realized foreign exchange gains or losses arise from sales
and maturities of short-term securities, sales of foreign currencies,
currency gains or losses realized on securities transactions, the difference
between the amounts of dividends, interest, and foreign withholding taxes
recorded on the Fund's books, and the U.S. dollar equivalent of the amounts
actually received or paid. Net unrealized foreign exchange gains and losses
arise from changes in the value of assets and liabilities other than
investments in securities, resulting from changes in exchange rates.
(C) 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. Dividend
income is recognized on the ex-dividend date and interest income, including,
where applicable, amortization of discount on investments, is recognized on
the accrual basis.
(D) DIVIDENDS TO SHAREHOLDERS: Dividends are recorded on the ex-dividend
date. Dividends from investment income-net and 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, if any, it is the
policy of the Fund not to distribute such gain.
Dividends in excess of investment income_net result from Federal income
tax distribution requirements, primarily unrealized gains on Passive Foreign
Investment Companies and foreign currency transactions.
DREYFUS INTERNATIONAL EQUITY FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
(E) FEDERAL INCOME TAXES: It is the policy of the Fund to continue to
qualify as a regulated investment company, if such qualification is in the
best interests of its shareholders, by complying with the applicable
provisions of the Internal Revenue Code, and to make distributions of taxable
income sufficient to relieve it from substantially all Federal income and
excise taxes.
NOTE 2--INVESTMENT ADVISORY FEE, SUB-INVESTMENT ADVISORY FEE AND OTHER
TRANSACTIONS WITH AFFILIATES:
(A) Pursuant to a Management Agreement with Dreyfus, the management fee is
computed at the annual rate of .75 of 1% of the
average daily value of the Fund's net assets and is payable monthly. Dreyfus
and M&G have agreed that if in any full fiscal year the Fund's aggregate
expenses, exclusive of interest, taxes, brokerage and extraordinary expenses,
exceed the expense limitation of any state having jurisdiction over the Fund,
Dreyfus and M&G will bear the excess expense in proportion to their
management fee and sub-advisory fee to the extent required by state law. The
most stringent state expense limitation applicable to the Fund presently
requires reimbursement of expenses in any full fiscal year that such expenses
(exclusive of distribution expenses and certain expenses as described above)
exceed 2 1/2% of the first $30 million, 2% of the next $70 million and 1 1/2%
of the excess over $100 million of the average value of the Fund's net assets
in accordance with California "blue sky" regulations. No expense
reimbursement was required for the six months ended November 30, 1994.
Pursuant to a Sub-Investment Advisory Agreement between Dreyfus and M&G,
the sub-advisory fee is computed at the annual rate of .30 of 1% of the
average daily value of the Fund's net assets and is payable monthly by
Dreyfus.
(B) On August 2, 1994, the shareholders approved a revised Distribution
Plan (the "Plan") pursuant to Rule 12b-1 under the Act. Pursuant to the Plan,
effective August 24, 1994, the Fund (a) reimburses the Distributor for
payments to certain Service Agents for distributing the Fund's shares and (b)
pays the Manager, Dreyfus Service Corporation and any affiliate of either of
them for advertising and marketing relating to the Fund, at an aggregate
annual rate of .50 of 1% of the value of the Fund's average daily net assets.
The Distributor may pay one of more Service Agents in respect of distribution
services. The Distributor determines the amounts, if any, to be paid to
Service Agents under the Plan and the basis on which such payments are made.
The fees payable under the Plan are payable without regard to actual expenses
incurred. The Plan also separately provides for the Fund to bear the costs of
preparing, printing and distributing certain of the Fund's prospectuses and
statements of additional information and costs associated with implementing
and operating the Plan, not to exceed the greater of $100,000 or .005 of 1%
of the Fund's average daily net assets for any full fiscal year.
Prior to August 24, 1994, the Fund's Distribution Plan ("prior
Distribution Plan") provided that the Fund pay Dreyfus Service Corporation at
an annual rate of .50 of 1% of the value of the Fund's average daily net
assets, for costs and expenses in connection with advertising, marketing and
distributing the Fund's shares and for servicing shareholder accounts.
Dreyfus Service Corporation made payments to one or more Service Agents based
on the value of the Fund's shares owned by clients of the Service Agent. The
prior Distribution Plan also separately provided for the Fund to bear the
costs of preparing, printing and distributing certain of the Fund's
prospectuses and statements of additional information and costs associated
with implementing and operating the prior Distribution Plan, not to exceed
the greater of $100,000 or .005 of 1% of the Fund's average daily net assets
for any full fiscal year.
DREYFUS INTERNATIONAL EQUITY FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
During the period ended November 30, 1994, $255,097 was charged to the
Fund pursuant to the Plan and $203,340 was charged to the Fund pursuant to
the prior Distribution Plan.
(C) Pursuant to the Fund's Shareholder Services Plan, the Fund pays the
Distributor an annual rate of .25 of 1% of the value of the Fund's average
daily net assets for servicing 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. From June 1, 1994 through August 23, 1994, $99,243 was charged to
the Fund by Dreyfus Service Corporation and from August 24, 1994 through
November 30, 1994, $118,458 was charged to the Fund by the Distributor
pursuant to the Shareholder Services Plan.
(D) Prior to August 24, 1994, certain officers and directors of the Fund
were "affiliated persons," as defined in the Act, of Dreyfus and/or Dreyfus
Service Corporation. Each director who is not an "affiliated person" receives
an annual fee of $2,500 and an attendance fee of $500 per meeting.
NOTE 3--SECURITIES TRANSACTIONS:
(A) The aggregate amount of purchases and sales of investment securities,
excluding short-term securities and forward currency exchange contracts,
during the period ended November 30, 1994 amounted to $28,410,939 and
$35,750,228, respectively.
In addition, the following summarizes open forward currency exchange
contracts at November 30, 1994:
<TABLE>
<CAPTION>
U.S. DOLLAR UNREALIZED
FORWARD CURRENCY SALE CONTRACTS PROCEEDS VALUE (DEPRECIATION)
- --------------------------------------- --------------- --------------- -----------------
<S> <C> <C> <C>
Japanese Yen, expiring 4/12/95............................ $15,199,108 $15,378,306 $(179,198)
============
</TABLE>
When executing forward currency exchange contracts, the Fund is obligated
to buy or sell a foreign currency at a specified
rate on a certain date in the future. With respect to sales of forward
currency exchange contracts, the Fund would incur a loss if the value of the
contract increases between the date the forward contract is opened and the
date the forward contract is closed. The Fund realizes a gain if the value of
the contract decreases between those dates. With respect to purchases of
forward currency exchange contracts, the Fund would incur a loss if the value
of the contract decreases between the date the forward contract is opened and
the date the forward contract is closed. The Fund realizes a gain if the
contract increases between those dates. The Fund is also exposed to credit
risk associated with counter party nonperformance on these forward currency
exchange contracts which is typically limited to the unrealized gains on such
contracts that are recognized in the statement of assets and liabilities.
(B) At November 30, 1994, accumulated net unrealized appreciation on
investments was $3,433,205, consisting of $13,161,565 gross unrealized
appreciation and $9,728,360 gross unrealized depreciation, excluding foreign
currency transactions.
At November 30, 1994, 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 INTERNATIONAL EQUITY FUND, INC.
REVIEW REPORT OF ERNST & YOUNG LLP, INDEPENDENT ACCOUNTANTS
SHAREHOLDERS AND BOARD OF DIRECTORS
DREYFUS INTERNATIONAL EQUITY FUND, INC.
We have reviewed the accompanying statement of assets and liabilities of
Dreyfus International Equity Fund, Inc., including the statement of
investments, as of November 30, 1994, and the related statements of
operations and changes in net assets and financial highlights for the six
month period ended November 30, 1994. These financial statements and
financial highlights are the responsibility of the Fund's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures
to financial data, and making inquiries of persons responsible for financial
and accounting matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing standards, which
will be performed for the full year with the objective of expressing an
opinion regarding the financial statements and financial highlights taken as
a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the interim financial statements and financial highlights
referred to above for them to be in conformity with generally accepted
accounting principles.
We have previously audited, in accordance with generally accepted
auditing standards, the statement of changes in net assets and financial
highlights for the period from June 29, 1993 (commencement of operations) to
May 31, 1994 and in our report dated July 11, 1994, we expressed an
unqualified opinion on such statement of changes in net assets and financial
highlights.

(Ernst & Young LLP Signature Logo)
New York, New York
January 12, 1995

(Dreyfus `D' Logo)

DREYFUS INTERNATIONAL
EQUITY FUND, INC.
200 Park Avenue
New York, NY 10166
INVESTMENT ADVISER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
SUB-INVESTMENT ADVISER
M&G Investment Management Limited
Three Quays, Tower Hill
London, EC3R 6BQ, England
CUSTODIAN
The Bank of New York
90 Washington Street
New York, NY 10286
TRANSFER AGENT &
DIVIDEND DISBURSING AGENT
The Shareholder Services Group, Inc.
P.O. Box 9671
Providence, RI 02940

Further information is contained
in the Prospectus, which must
precede or accompany this report.

Printed in U.S.A. 095SA9411

(Dreyfus Logo)

International
Equity Fund, Inc.
Semi-Annual
Report
November 30, 1994

(Dreyfus Lion Logo)

Dreyfus International Equity Fund, Inc. November 30, 1994

Asset Allocation
|------------------------------------------------------------------|
|Common Stocks 95.7 % |
|Preferred Stock 0.9 % |
|Convertible Preferred Stock 0.3 % |
|Convertible Bond 1.3 % |
|Cash Equivalents 1.8 % |
|------------------------------------------------------------------|

Dreyfus International Equity Fund, Inc. November 30, 1994