DREYFUS LIFETIME PORTFOLIOS INC, 497, 1999-05-17

DREYFUS LIFETIME PORTFOLIOS INC
497, 1999-05-17

Previous: COLONIAL PROPERTIES TRUST, 10-Q, 1999-05-17

Next: HANOVER COMPRESSOR CO, 10-Q, 1999-05-17

Dreyfus LifeTime Portfolios, Inc.

A series of asset management portfolios for a range of investor needs

PROSPECTUS February 1, 1999 As revised, May 17, 1999

As with all mutual funds, the Securities and Exchange Commission has not
approved or disapproved these securities or passed upon the adequacy of this
prospectus. Any representation to the contrary is a criminal offense.

Contents

THE PORTFOLIOS
- -----------------------------------------------------------------

Each portfolio's investment approach, risks, performance, expenses and related
information

1 Introduction

2 Income Portfolio

6 Growth and Income Portfolio

10 Growth Portfolio

14 Management

16 Financial Highlights

YOUR INVESTMENT
- --------------------------------------------------------------------
Information for managing your fund account

22 Account Policies

25 Distributions and Taxes

26 Services for Fund Investors

28 Instructions for Regular Accounts

30 Instructions for IRAs

FOR MORE INFORMATION
- -------------------------------------------------------------------------------
Where to learn more about this and other Dreyfus funds

INFORMATION ON EACH PORTFOLIO'S RECENT
STRATEGIES AND HOLDINGS CAN BE FOUND IN THE CURRENT ANNUAL/SEMIANNUAL REPORT
(SEE BACK COVER).

The Portfolios

Dreyfus LifeTime Portfolios, Inc., consists of three separate portfolios
offering a range of investment approaches: from more conservative to moderate to
more aggressive.

While all of the portfolios typically invest in stocks and bonds, each one
allocates its assets among those investments in a distinct way. The portfolios
use the allocations shown below as a point of reference in making their
management decisions. The actual makeup of each portfolio will vary over time,
as the portfolio manager adjusts the asset mix in an effort to take advantage of
misvaluations.

In deciding when and how much of a portfolio's assets to shift among asset
classes, the portfolio manager uses proprietary computer models to assess the
relative value of stock and bond prices across different markets.

In selecting securities for each portfolio, the manager attempts to approximate
the investment characteristics of designated benchmark indexes with respect to
each asset class, but with expected returns that exceed the benchmark. The
portfolio manager may actively select stocks or bonds after considering
variables including price/earnings ratios, interest rate levels and the yield
curve slope. To efficiently maintain exposure to selected asset class
benchmarks, the portfolios also may use futures contracts as a substitute for
holding the securities that make up the relevant benchmark index.

In choosing among the portfolios, your decision may depend on your goals, time
frame and risk tolerance. All portfolios offer a diversified investment mix and
the asset allocation expertise of a professional portfolio manager.

Typical portfolio allocations

MORE CONSERVATIVE

Cash 10.0%

Bonds 67.5%

Stocks 22.5%

INCOME PORTFOLIO

Stocks 50%

Bonds 50%

GROWTH AND INCOME PORTFOLIO

Stocks 80%

Bonds 20%

GROWTH PORTFOLIO

MORE AGGRESSIVE

Introduction
[Page 1]

Income Portfolio
----------------------------------

Ticker Symbols: Investor shares DLIXX

Restricted shares DLIRX

GOAL/APPROACH

The portfolio seeks maximum current income. Capital appreciation is a secondary
goal. To pursue these goals, it typically invests in a mix of bonds, stocks and
money market instruments, all of which are U.S. securities. Normally, the
portfolio' s asset mix is approximately 67.5% in investment grade bonds (or the
unrated equivalent as determined by Dreyfus), 22.5% in stocks of large companies
(those whose total market value is more than $1.4 billion) and 10% in cash.

The portfolio manager selects securities from each asset class for the portfolio
which, in the aggregate, have approximately the same investment characteristics
as those of the Lehman Brothers Government/Corporate Intermediate Bond Index for
the portfolio' s bond investments and the S&P 500((reg.tm)) Index for its stock
investments, with expected returns equal to or better than that of the benchmark
index. The Lehman Brothers Government/Corporate Intermediate Index is composed
of approximately 5,000 fixed-income securities, including investment grade
corporate bonds and U.S. government securities, with average outstanding market
value of more than $600 million and maturities of less than 10 years and greater
than one year. The S& P 500 is composed of 500 stocks, most of which are
large-cap stocks listed on the New York Stock Exchange. The portfolio may invest
directly in securities comprising the relevant index or use derivatives whose
performance is tied to the benchmark index.

Concepts to understand

INVESTMENT GRADE BONDS: independent rating organizations analyze and evaluate a
bond issuer's credit history and ability to repay debts. Based on their
assessment, they assign letter grades that reflect the issuer's
creditworthiness. AAA or Aaa represents the highest credit rating, AA/Aa the
second highest, and so on down to D, for defaulted debt. Bonds rated BBB or Baa
and above are considered investment grade.

[Page 2]

MAIN RISKS

Because bonds and stocks fluctuate in price, the value of your investment in the
portfolio will go up and down, and you could lose money.

Prices of bonds tend to move inversely with changes in interest rates. Bond
prices also may be hurt by declines in the financial condition of the issuer.
Stocks, while typically a smaller portion of the portfolio, tend to be more
volatile than bonds, and could cause sudden drops in share price or contribute
to long-term underperformance.

The stock and bond markets can perform differently from each other at any given
time (as well as over the long term), so the portfolio will be affected by its
asset allocation. If the manager favors an asset class during a period when that
asset class underperforms, the portfolio' s performance may be hurt. The
portfolio' s performance may be lower than that of stock- oriented investments
during periods when stocks outperform bonds.

Under adverse market conditions, the portfolio could invest more than 10% of net
assets in money market securities. Although the portfolio would do this only in
seeking to avoid losses, it could reduce the benefit from any upswing in the
market.

Other potential risks

The portfolio may invest some assets in derivative securities, such as options
and futures, primarily to provide an efficient means of achieving the
portfolio's target exposure to an asset class; however, such practices sometimes
may reduce returns or increase volatility. Derivatives can be illiquid, and a
small investment in certain derivatives could have a potentially large impact on
the portfolio's performance.

The portfolio can buy securities with borrowed money (a form of leverage), which
could have the effect of magnifying the portfolio's gains or losses.

Income Portfolio
[Page 3]

INCOME PORTFOLIO (CONTINUED)

PAST PERFORMANCE

The tables below show some of the risks of investing in the portfolio. The
first table shows the changes in performance of the portfolio's Investor shares
from year to year. The second table compares the performance of each of the
portfolio' s share classes over time to that of the Lehman Brothers Intermediate
Government/Corporate Bond Index, a widely recognized unmanaged index of bond
market performance, and the Customized Blended Index prepared by Dreyfus. Both
tables assume reinvestment of dividends. Of course, past performance is no
guarantee of future results.
--------------------------------------------------------

Year-by-year total return AS OF 12/31 EACH YEAR (%)
<TABLE>

INVESTOR SHARES
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
6.84 11.85 11.74
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
</TABLE>

BEST QUARTER: Q2 '97 +5.78%

WORST QUARTER: Q1 '97 +0.31%
--------------------------------------------------------

Average annual total return AS OF 12/31/98
<TABLE>
Inception
1 Year 3 Years (3/31/95)
------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INVESTOR SHARES 11.74% 10.12% 11.25%

RESTRICTED SHARES 12.04% 10.37% 11.52%

LEHMAN BROTHERS
INTERMEDIATE
GOVERNMENT/CORPORATE
BOND INDEX 8.44% 6.77% 8.22%

CUSTOMIZED
BLENDED INDEX 12.66% 11.45% 12.68%
</TABLE>

What this portfolio is --
and isn't

This portfolio is a mutual fund:
a pooled investment that is professionally managed and gives you the
opportunity to participate in financial markets. It strives to reach its
stated goal, although as with all mutual funds, it cannot
offer guaranteed results.

An investment in this fund is not a bank deposit. It is not insured or
guaranteed by the FDIC or any other government agency. It is not a complete
investment program. You could lose money in this fund, but you also have
the potential to make money.

[Page 4]

EXPENSES

As an investor, you pay certain fees and expenses in connection with the
portfolio, which are described in the table below. Annual portfolio operating
expenses are paid out of fund assets, so their effect is included in the share
price. The portfolio has no sales charge (load) or Rule 12b-1 distribution fees
--------------------------------------------------------

Fee table

Investor
Investor Restricted
shares shares
--------------------------------------------------------

ANNUAL PORTFOLIO OPERATING EXPENSES

% OF AVERAGE DAILY NET ASSETS

Management fee 0.60% 0.60%

Shareholder services fee 0.25% none

Other expenses 0.28% 0.28%
--------------------------------------------------------

TOTAL 1.13% 0.88%
--------------------------------------------------------

Expense example
<TABLE>
1 Year 3 Years 5 Years 10 Years
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INVESTOR SHARES $115 $359 $622 $1,375

RESTRICTED SHARES $90 $281 $488 $1,084
</TABLE>

This example shows what you could pay in expenses over
time. It uses the same hypothetical conditions other
funds use in their prospectuses: $10,000 initial
investment, 5% total return each year and no changes in
expenses. The figures shown would be the same whether
you sold your shares at the end of a period or kept
them. Because actual return and expenses will be
different, the example is for comparison only.

Concepts to understand

MANAGEMENT FEE: the fee paid to the investment adviser for managing the
portfolio and assisting in all aspects of its operations.

SHAREHOLDER SERVICES FEE: the fee paid to the fund's distributor for shareholder
account service and maintenance.

OTHER EXPENSES: fees paid by the portfolio for miscellaneous items such as
transfer agency, custody, professional and registration fees.

Income Portfolio
[Page 5]

Growth and Income Portfolio
----------------------------------

Ticker Symbols: Investor shares DGIIX

Restricted shares DGIRX

GOAL/APPROACH

The portfolio seeks maximum total return (capital appreciation plus current
income). To pursue this goal, it typically invests in a mix of stocks and bonds.
The portfolio' s typical asset mix is 50% in stocks and 50% in investment grade
bonds (or the unrated equivalent as determined by Dreyfus). Depending on market
and economic conditions, the actual mix of stocks to bonds may range from 35%
/65% to 65% /35% . The portfolio may invest up to 15% of net assets in foreign
securities.

The portfolio typically invests approximately 80% of its stock allocation in
stocks of large-capitalization companies (those whose total market value is more
than $1.4 billion) and the remaining 20% in stocks of small-capitalization
companies.

The large-cap equity component of the portfolio is actively managed. In choosing
these stocks, the manager seeks those that appear likely to show above-average,
long-term appreciation, as well as those that appear undervalued. Sector
allocations for large-cap investments will generally mirror the allocations of
the S&P 500. The small-cap and foreign equity components and the bond components
of the portfolio are not actively managed and are constructed to approximate the
investment characteristics of the specified indexes as follows:

* small-cap equity -- Russell 2000 Index

* foreign equity -- Morgan Stanley EAFE Index

* domestic bond -- Lehman Brothers
Government/Corporate Intermediate Bond Index

* foreign bond -- J.P. Morgan Global Bond Index

Concepts to understand

GROWTH AND INCOME INVESTING: a management style that seeks some long-term
growth, but also includes income-producing investments such as bonds. These tend
to reduce the portfolio's volatility in several ways: their market movements can
at times offset those of stocks, their income stream adds to performance
throughout the market cycle, and they tend to be less risky than stocks.

[Page 6]

MAIN RISKS

Because stocks and bonds fluctuate in price, the value of your investment in the
portfolio will go up and down, and you could lose money.

The portfolio' s stock investments could cause sudden drops in share price or
contribute to long-term underperformance. Small company stocks tend to be more
volatile than large company stocks and could have a disproportionate effect on
performance. Prices of bonds tend to move inversely with changes in interest
rates. Bond prices also may be hurt by declines in the financial condition of
the issuer. Foreign stocks and bonds involve special risks, such as exposure to
currency fluctuations, economic and political instability, and potentially less
liquidity.

Under adverse market conditions, the portfolio could invest some or all of its
assets in money market securities. The portfolio would do this only in seeking
to avoid losses, but it could reduce the benefit from any market upswing.

Other potential risks

The portfolio can buy securities with borrowed money (a form of leverage), which
could have the effect of magnifying the portfolio's gains or losses.

Growth and Income Portfolio
[Page 7]

GROWTH AND INCOME PORTFOLIO (CONTINUED)

PAST PERFORMANCE

The tables below show some of the risk of investing in the portfolio. The first
table shows the changes in performance of the portfolio's Investor shares from
year to year. The second table compares the performance of each of the
portfolio' s share classes over time to that of the S&P 500, a widely recognized
unmanaged index of stock market performance, and the Customized Blended Index
prepared by Dreyfus. Both tables assume reinvestment of dividends. Of course,
past performance is no guarantee of future results.

--------------------------------------------------------

Year-by-year total return AS OF 12/31 EACH YEAR (%)

<TABLE>
INVESTOR SHARES

BEST QUARTER: Q4 '98 +12.32%

WORST QUARTER: Q3 '98 -2.68%
--------------------------------------------------------

Average annual total return AS OF 12/31/98
<TABLE>
Inception
1 Year 3 Years (3/31/95)
-----------------------------------------------------------------------------------------
<S> <C> <C> <C>
INVESTOR SHARES 17.47% 18.13% 19.72%

RESTRICTED SHARES 17.74% 17.81% 19.51%

S&P 500 28.60% 28.23% 29.58%

CUSTOMIZED
BLENDED INDEX 15.12% 15.54% 17.13%
</TABLE>

What this portfolio is --
and isn't

This portfolio is a mutual fund:
a pooled investment that is professionally managed and gives you the
opportunity to participate in financial markets. It strives to reach
its stated goal, although as with all mutual funds, it cannot
offer guaranteed results.

An investment in this fund is not a bank deposit. It is not insured or
guaranteed by the FDIC or any other government agency. It is not a
complete investment program. You could lose money in this fund, but you
also have the potential to make money.

[Page 8]

EXPENSES

--------------------------------------------------------

Fee table

Investor Restricted
shares shares
---------------------------------------------------

ANNUAL PORTFOLIO OPERATING EXPENSES

% OF AVERAGE DAILY NET ASSETS

Management fee 0.75% 0.75%

Shareholder services fee 0.25% none

Other expenses 0.13% 0.09%
---------------------------------------------------

TOTAL 1.13% 0.84%
---------------------------------------------------

<TABLE>
Expense example

1 Year 3 Years 5 Years 10 Years
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INVESTOR SHARES $115 $359 $622 $1,375

RESTRICTED SHARES $86 $268 $466 $1,037
</TABLE>

Concepts to understand

MANAGEMENT FEE: the fee paid to the investment adviser for managing the
portfolio and assisting in all aspects of its operations.

SHAREHOLDER SERVICES FEE: the fee paid to the fund's distributor for shareholder
account service and maintenance.

OTHER EXPENSES: fees paid by the portfolio for miscellaneous items such as
transfer agency, custody, professional and registration fees.

Growth and Income Portfolio

[Page 9]

Growth Portfolio
----------------------------------

Ticker Symbols: Investor shares DLGIX

Restricted shares DLGRX

GOAL/APPROACH

The portfolio seeks capital appreciation. To pursue this goal, it typically
invests in a mix of stocks and bonds. The portfolio's typical asset mix is 80%
in stocks and 20% in investment grade bonds (or the unrated equivalent as
determined by Dreyfus). Depending on market and economic conditions, the actual
mix of stocks to bonds may range from 65%/35% to 100% in stocks. The portfolio
may invest up to 25% of net assets in foreign securities.

* small-cap equity -- Russell 2000 Index

* foreign equity -- Morgan Stanley EAFE Index

* domestic bond -- Lehman Brothers
Government/Corporate Intermediate Bond Index

* foreign bond -- J.P. Morgan Global Bond Index

Concepts to understand

LARGE COMPANIES: established companies that are considered "known quantities."
Large companies often have the resources to weather economic shifts, though they
can be slower to innovate than small companies.

[Page 10]

MAIN RISKS

Because stocks and bonds fluctuate in price, the value of your investment in the
portfolio will go up and down, and you could lose money.

The stock and bond markets can perform differently, so the portfolio's
performance will be affected by its asset allocation. If the manager favors an
asset class during a period when that asset class underperforms, the portfolio's
performance may be hurt. The portfolio's performance may be lower than that of
more bond-oriented investments during periods when bonds outperform stocks.

The portfolio' s stock investments could cause sudden drops in share price or
contribute to long-term underperformance. Compared to larger and midsize
companies, small companies carry additional risks because their earnings tend to
be less predictable and their stocks less liquid and more volatile. Prices of
bonds tend to move inversely with changes in interest rates. Bond prices also
may be hurt by declines in the financial condition of the issuer. Foreign stocks
and bonds involve special risks, such as exposure to currency fluctuations,
economic and political instability, and potentially less liquidity.

Other potential risks

The portfolio can buy securities with borrowed money (a form of leverage), which
could have the effect of magnifying the portfolio's gains or losses.

Growth Portfolio

[Page 11]

GROWTH PORTFOLIO (CONTINUED)

PAST PERFORMANCE

The tables below show some of the risks of investing in the portfolio. The first
table shows the changes in performance of the portfolio's Investor shares from
year to year. The second table compares the performance of each of the
portfolio' s share classes over time to that of the S&P 500, a widely recognized
unmanaged index of stock market performance, and the Customized Blended Index
prepared by Dreyfus. Both tables assume reinvestment of dividends. Of course,
past performance is no guarantee of future results.

--------------------------------------------------------

Year-by-year total return AS OF 12/31 EACH YEAR (%)

<TABLE>
INVESTOR SHARES
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
21.30 26.98 20.94
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
</TABLE>

BEST QUARTER: Q4 '98 +18.43%

WORST QUARTER: Q3 '98 -7.44%
--------------------------------------------------------

Average annual total return AS OF 12/31/98
<TABLE>
Inception
1 Year 3 Years (3/31/95)
-----------------------------------------------------------------------------------------
<S> <C> <C> <C>
INVESTOR SHARES 20.94% 23.04% 25.12%

RESTRICTED SHARES 21.23% 23.30% 25.40%

S&P 500 28.60% 28.23% 29.58%

CUSTOMIZED
BLENDED INDEX 18.53% 20.03% 21.79%
</TABLE>

What this portfolio is --
and isn't

This portfolio is a mutual fund:
a pooled investment that is professionally managed and gives you the
opportunity to participate in financial markets. It strives to reach its stated
goal, although as with all mutual funds, it cannot offer guaranteed results.

[Page 12]

EXPENSES

--------------------------------------------------------

Fee table

Investor Restricted
shares shares
--------------------------------------------------------

ANNUAL PORTFOLIO OPERATING EXPENSES

% OF AVERAGE DAILY NET ASSETS

Management fee 0.75% 0.75%

Shareholder services fee 0.25% none

Other expenses 0.18% 0.19%
--------------------------------------------------------

TOTAL 1.18% 0.94%
--------------------------------------------------------

<TABLE>
Expense example

1 Year 3 Years 5 Years 10 Years
-----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INVESTOR SHARES $120 $375 $649 $1,432

RESTRICTED SHARES $96 $300 $520 $1,155
</TABLE>

Concepts to understand

MANAGEMENT FEE: the fee paid to the investment adviser for managing the
portfolio and assisting in all aspects of its operations.

SHAREHOLDER SERVICES FEE: the fee paid to the fund's distributor for shareholder
account service and maintenance.

OTHER EXPENSES: fees paid by the portfolio for miscellaneous items such as
transfer agency, custody, professional and registration fees.

Growth Portfolio

[Page 13]

MANAGEMENT

The investment adviser for the fund is The Dreyfus Corporation, 200 Park Avenue,
New York, New York 10166. Founded in 1947, Dreyfus manages more than $120
billion in over 160 mutual fund portfolios. The Growth and Income Portfolio and
the Growth Portfolio each pays Dreyfus an annual management fee of 0.75% of its
average net assets. The Income Portfolio pays Dreyfus an annual management fee
of 0.60% of its average net assets. Dreyfus is the mutual fund business of
Mellon Bank Corporation, a broad-based financial services company with a bank at
its core. With more than $389 billion of assets under management and $1.9
trillion of assets under administration and custody, Mellon provides a full
range of banking, investment and trust products and services to individuals,
businesses and institutions. Mellon is headquartered in Pittsburgh,
Pennsylvania.

Dreyfus has engaged Mellon Equity Associates, 500 Grant Street, Pittsburgh,
Pennsylvania 15258, to serve as each portfolio's sub-investment adviser. Mellon
Equity provides advisory assistance and research and the day-to-day management
of each portfolio' s investments. As of March 31, 1999, Mellon Equity managed
approximately $29 billion of assets and served as investment adviser for 17
other investment companies.

Concepts to understand

YEAR 2000 ISSUES: the fund could be adversely affected if the computer systems
used by Dreyfus and the fund's other service providers do not properly process
and calculate date-related information from and after January 1, 2000.

Dreyfus is working to avoid year 2000-related problems in its systems and to
obtain assurances from other service providers that they are taking similar
steps. In addition, issuers of securities in which the fund invests may be
adversely affected by year 2000-related problems. This could have an impact on
the value of the fund's investments and its share price.

[Page 14]

Steven A. Falci is the primary portfolio manager for each portfolio, a position
he has held since the fund's inception. Since April 1994, Mr. Falci has been
employed by Mellon Equity Associates, the fund's sub-investment adviser and an
affiliate of Dreyfus. Previously, he was a managing director for pension
investments at NYNEX Corporation.

Dreyfus has a personal securities trading policy (the "Policy") which restricts
the personal securities transactions of its employees. Its primary purpose is to
ensure that personal trading by Dreyfus employees does not disadvantage any
Dreyfus-managed fund. Dreyfus portfolio managers and other investment personnel
who comply with the Policy' s preclearance and disclosure procedures may be
permitted to purchase, sell or hold certain types of securities which also may
be or are held in the fund(s) they advise.

Management
[Page 15]

FINANCIAL HIGHLIGHTS

Income Portfolio

The following two tables describe the performance of each share class of the
Income Portfolio for the fiscal periods indicated. "Total return" shows how much
your investment in the portfolio would have increased (or decreased) during each
period, assuming you had reinvested all dividends and distributions. These
figures have been independently audited by Ernst & Young LLP, whose report,
along with the fund's financial statements, is included in the annual report.

<TABLE>
YEAR ENDED SEPTEMBER 30,
INVESTOR SHARES 1998 1997 1996 1995(1)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PER-SHARE DATA ($)

Net asset value, beginning of period 14.01 13.39 13.51 12.50

Investment operations:

Investment income -- net .65 .72 .73 .39

Net realized and unrealized gain
(loss) on investments .49 .95 .18 .62

Total from investment operations 1.14 1.67 .91 1.01

Distributions:

Dividends from investment income -- net (.70) (.62) (.60) --

Dividends from net realized gain
on investments (.71) (.43) (.43) --

Total distributions (1.41) (1.05) (1.03) --

Net asset value, end of period 13.74 14.01 13.39 13.51

Total return (%) 8.92 13.19 7.07 8.08(2)
- ----------------------------------------------------------------------------------------------------------------------------------

RATIOS/SUPPLEMENTAL DATA

Ratio of expenses to average net assets (%) 1.13 .97 .85 .43(2)

Ratio of net investment income to
average net assets (%) 4.92 5.52 5.50 2.95(2)

Decrease reflected in above expense
ratios due to actions by Dreyfus (%) -- .15 .61 .26(2)

Portfolio turnover rate (%) 64.58 72.08 32.95 5.66(2)
- ----------------------------------------------------------------------------------------------------------------------------------

Net assets, end of period ($ x 1,000) 11,862 10,136 8,701 8,122

(1) FROM MARCH 31, 1995 (COMMENCEMENT OF OPERATIONS) TO SEPTEMBER 30, 1995.

(2) NOT ANNUALIZED.
</TABLE>

[Page 16]

<TABLE>
YEAR ENDED SEPTEMBER 30,
RESTRICTED SHARES 1998 1997 1996 1995(1)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PER-SHARE DATA ($)

Net asset value, beginning of period 14.04 13.42 13.52 12.50

Investment operations:

Investment income -- net .61 .71 .64 .40

Net realized and unrealized gain
(loss) on investments .57 .99 .31 .62

Total from investment operations 1.18 1.70 .95 1.02

Distributions:

Dividends from investment income -- net (.73) (.65) (.62) --

Dividends from net realized gain
on investments (.71) (.43) (.43) --

Total distributions (1.44) (1.08) (1.05) --

Net asset value, end of period 13.78 14.04 13.42 13.52

Total return (%) 9.14 13.50 7.30 8.24(2)
- ---------------------------------------------------------------------------------------------------------------------------------

RATIOS/SUPPLEMENTAL DATA

Ratio of expenses to average net assets (%) .88 .68 .60 .30(2)

Ratio of net investment income to
average net assets (%) 5.15 5.87 5.75 3.08(2)

Decrease reflected in above expense
ratios due to actions by Dreyfus (%) -- .14 .61 .26(2)

Portfolio turnover rate (%) 64.58 72.08 32.95 5.66(2)
- ---------------------------------------------------------------------------------------------------------------------------------

Net assets, end of period ($ x 1,000) 40,582 22,727 12,889 8,141

(1) FROM MARCH 31, 1995 (COMMENCEMENT OF OPERATIONS) TO SEPTEMBER 30, 1995.

(2) NOT ANNUALIZED.
</TABLE>

Financial Highlights

[Page 17]

FINANCIAL HIGHLIGHTS

Growth and Income Portfolio

The following two tables describe the performance of each share class of the
Growth and Income Portfolio for the fiscal periods indicated. "Total return"
shows how much your investment in the portfolio would have increased (or
decreased) during each period, assuming you had reinvested all dividends and
distributions. These figures have been independently audited by Ernst & Young
LLP, whose report, along with the fund's financial statements, is included in
the annual report.
<TABLE>

YEAR ENDED SEPTEMBER 30,
INVESTOR SHARES 1998 1997 1996 1995(1)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PER-SHARE DATA ($)

Net asset value, beginning of period 19.05 15.43 14.29 12.50

Investment operations:

Investment income -- net .72(2) .57(2) .90(2) .27

Net realized and unrealized gain
(loss) on investments .28 3.36 1.12 1.52

Total from investment operations 1.00 3.93 2.02 1.79

Distributions:

Dividends from investment income -- net (.61) -- (.40) --

Dividends from net realized gain
on investments (2.34) (.31) (.48) --

Total distributions (2.95) (.31) (.88) --

Net asset value, end of period 17.10 19.05 15.43 14.29

Total return (%) 6.04 25.85 14.84 14.32(3)
- ---------------------------------------------------------------------------------------------------------------------------------

RATIOS/SUPPLEMENTAL DATA

Ratio of expenses to average net assets (%) 1.08 1.00 1.00 .51(3)

Ratio of net investment income to
average net assets (%) 3.81 3.85 3.35 1.98(3)

Decrease reflected in above expense
ratios due to actions by Dreyfus (%) -- .05 .39 .33(3)

Portfolio turnover rate (%) 76.78 107.85 122.52 33.55(3)
- ---------------------------------------------------------------------------------------------------------------------------------

Net assets, end of period ($ x 1,000) 3,976 683 160 8,602

(1) FROM MARCH 31, 1995 (COMMENCEMENT OF OPERATIONS) TO SEPTEMBER 30, 1995.

(2) BASED ON AVERAGE SHARES OUTSTANDING. (3) NOT ANNUALIZED.
</TABLE>

[Page 18]
<TABLE>

YEAR ENDED SEPTEMBER 30,
RESTRICTED SHARES 1998 1997 1996 1995(1)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PER-SHARE DATA ($)

Net asset value, beginning of period 18.43 15.34 14.31 12.50

Investment operations:

Investment income -- net .70 .58 .33 .27

Net realized and unrealized gain
(loss) on investments .30 3.16 1.60 1.54

Total from investment operations 1.00 3.74 1.93 1.81

Distributions:

Dividends from investment income -- net (.63) (.34) (.42) --

Dividends from net realized gain
on investments (2.34) (.31) (.48) --

Total distributions (2.97) (.65) (.90) --

Net asset value, end of period 16.46 18.43 15.34 14.31

Total return (%) 6.28 25.22 14.17 14.48(2)
- ---------------------------------------------------------------------------------------------------------------------------------

RATIOS/SUPPLEMENTAL DATA

Ratio of expenses to average net assets (%) .84 .78 .75 .38(2)

Ratio of net investment income to
average net assets (%) 4.06 3.52 3.60 2.10(2)

Decrease reflected in above expense
ratios due to actions by Dreyfus (%) -- .06 .39 .33(2)

Portfolio turnover rate (%) 76.78 107.85 122.52 33.55(2)
- ---------------------------------------------------------------------------------------------------------------------------------

Net assets, end of period ($ x 1,000) 186,397 172,705 124,677 9,248

(1) FROM MARCH 31, 1995 (COMMENCEMENT OF OPERATIONS) TO SEPTEMBER 30, 1995.

(2) NOT ANNUALIZED.
</TABLE>

Financial Highlights
[Page 19]

FINANCIAL HIGHLIGHTS

Growth Portfolio

The following two tables describe the performance of each share class of the
Growth Portfolio for the fiscal periods indicated. "Total return" shows how much
your investment in the portfolio would have increased (or decreased) during each
period, assuming you had reinvested all dividends and distributions. These
figures have been independently audited by Ernst & Young LLP, whose report,
along with the fund's financial statements, is included in the annual report.

<TABLE>
YEAR ENDED SEPTEMBER 30,
INVESTOR SHARES
1998 1997 1996 1995(1)
- ------------------------------------------------------------------------------------------------------------------------------

<S> <C> <C> <C> <C>
PER-SHARE DATA ($)

Net asset value, beginning of period 20.50 16.58 14.82 12.50

Investment operations:

Investment income -- net .44(2) .62 .32 .19

Net realized and unrealized gain
(loss) on investments .03 4.68 2.42 2.13

Total from investment operations .47 5.30 2.74 2.32

Distributions:

Dividends from investment income -- net (.46) (.26) (.28) --

Dividends from net realized gain
on investments (4.58) (1.12) (.70) --

Total distributions (5.04) (1.38) (.98) --

Net asset value, end of period 15.93 20.50 16.58 14.82

Total return (%) 2.97 34.32 19.58 18.56(3)
- ---------------------------------------------------------------------------------------------------------------------------------

RATIOS/SUPPLEMENTAL DATA

Ratio of expenses to average net assets (%) 1.18 1.06 1.00 .51(3)

Ratio of net investment income to
average net assets (%) 2.65 2.05 2.08 1.39(3)

Decrease reflected in above expense
ratios due to actions by Dreyfus (%) -- .27 .53 .26(3)

Portfolio turnover rate (%) 89.23 118.49 77.83 52.86(3)
- ---------------------------------------------------------------------------------------------------------------------------------

Net assets, end of period ($ x 1,000) 3,746 8,662 14,458 11,939

(1) FROM MARCH 31, 1995 (COMMENCEMENT OF OPERATIONS) TO SEPTEMBER 30, 1995.

(2) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END. (3) NOT ANNUALIZED.
</TABLE>

[Page 20]
<TABLE>
YEAR ENDED SEPTEMBER 30,
RESTRICTED SHARES 1998 1997 1996 1995(1)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PER-SHARE DATA ($)

Net asset value, beginning of period 20.52 16.59 14.84 12.50

Investment operations:

Investment income -- net .52 .41 .28 .21

Net realized and unrealized gain
(loss) on investments (.02) 4.94 2.48 2.13

Total from investment operations .50 5.35 2.76 2.34

Distributions:

Dividends from investment income -- net (.55) (.30) (.31) --

Dividends from net realized gain
on investments (4.58) (1.12) (.70) --

Total distributions (5.13) (1.42) (1.01) --

Net asset value, end of period 15.89 20.52 16.59 14.84

Total return (%) 3.17 34.70 19.73 18.72(2)
- ---------------------------------------------------------------------------------------------------------------------------------

RATIOS/SUPPLEMENTAL DATA

Ratio of expenses to average net assets (%) .94 .83 .75 .38(2)

Ratio of net investment income to
average net assets (%) 2.84 2.38 2.38 1.51(2)

Decrease reflected in above expense
ratios due to actions by Dreyfus (%) -- .20 .53 .26(2)

Portfolio turnover rate (%) 89.23 118.49 77.83 52.86(2)
- ---------------------------------------------------------------------------------------------------------------------------------

Net assets, end of period ($ x 1,000) 56,431 46,960 28,143 11,898

(1) FROM MARCH 31, 1995 (COMMENCEMENT OF OPERATIONS) TO SEPTEMBER 30, 1995.

(2) NOT ANNUALIZED.
</TABLE>

Financial Highlights

[Page 21]

Your Investment

ACCOUNT POLICIES

Buying shares

EACH PORTFOLIO OFFERS TWO SHARE CLASSES -- Investor shares and Restricted
shares. Investor shares are offered to any investor. Restricted shares are sold
primarily to clients of certain financial institutions that have selling
agreements with the fund' s distributor or that provide sub-accounting or
recordkeeping. YOU PAY NO SALES CHARGES to invest in this fund. Your price for
fund shares is the fund's net asset value per share (NAV), which is generally
calculated as of the close of trading on the New York Stock Exchange (usually 4:
00 p.m. Eastern time) every day the exchange is open. Your order will be priced
at the next NAV calculated after your order is accepted by the fund's transfer
agent or other authorized entity. The fund's investments are generally valued
based on market value or,

Minimum investments

Initial Additional
- --------------------------------------------------------------------------------

REGULAR ACCOUNTS $2,500 $100
$500 FOR
TELETRANSFER INVESTMENTS

TRADITIONAL IRAS $750 NO MINIMUM

SPOUSAL IRAS $750 NO MINIMUM

ROTH IRAS $750 NO MINIMUM

EDUCATION IRAS $500 NO MINIMUM
AFTER THE FIRST YEAR

DREYFUS AUTOMATIC $100 $100
INVESTMENT PLANS

All investments must be in U.S. dollars. Third-party checks cannot be accepted.
You may be charged a fee for any check that does not clear. Maximum TeleTransfer
purchase is $150,000 per day.

Third-party investments

If you invest through a third party (rather than directly with Dreyfus), the
policies and fees may be different than those described here. Banks, brokers,
401(k) plans, financial advisers and financial supermarkets may charge
transaction fees and may set different minimum investments or limitations on
buying or selling shares. Consult a representative of your plan or financial
institution if in doubt.

[Page 22]

where market quotations are not readily available, based on fair value as
determined in good faith by the fund's board.

Selling shares

YOU MAY SELL (REDEEM) SHARES AT ANY TIME. Your shares will be sold at the next
NAV calculated after your order is accepted by the fund's transfer agent or
other authorized entity. Any certificates representing fund shares being sold
must be returned with your redemption request. Your order will be processed
promptly and you will generally receive the proceeds within a week.

BEFORE SELLING RECENTLY PURCHASED SHARES, please note that if the fund has not
yet collected payment for the shares you are selling, it may delay sending the
proceeds for up to eight business days or until it has collected payment.
--------------------------------------------------------

Limitations on selling shares by phone

Proceeds
sent by Minimum Maximum
--------------------------------------------------------

CHECK NO MINIMUM $150,000 PER DAY

WIRE $1,000 $250,000 FOR JOINT
ACCOUNTS
EVERY 30 DAYS

TELETRANSFER $500 $250,000 FOR JOINT
ACCOUNTS
EVERY 30 DAYS

Written sell orders

Some circumstances require written sell orders along with signature guarantees.
These include:

* amounts of $1,000 or more on accounts whose address has been changed
within the last 30 days

* requests to send the proceeds to a different payee or address

Written sell orders of $100,000 or more must also be signature guaranteed.

A SIGNATURE GUARANTEE helps protect against fraud. You can obtain one from most
banks or securities dealers, but not from a notary public. For joint accounts,
each signature must be guaranteed. Please call us to ensure that your signature
guarantee will be processed correctly.

Your Investment
[Page 23]

ACCOUNT POLICIES (CONTINUED)

General policies

UNLESS YOU DECLINE TELEPHONE PRIVILEGES on your application, you may be
responsible for any fraudulent telephone order as long as Dreyfus takes
reasonable measures to verify the order.

THE FUND RESERVES THE RIGHT TO:

* refuse any purchase or exchange request that
could adversely affect the fund or its operations,
including those from any individual or group who,
in the fund's view, is likely to engage in excessive
trading (usually defined as more than four exchanges
out of the fund within a calendar year)

* refuse any purchase or exchange request in excess of
1% of the fund's total assets

* change or discontinue its exchange privilege, or
temporarily suspend this privilege during unusual market
conditions

* change its minimum investment amounts

* delay sending out redemption proceeds for up to
seven days (generally applies only in cases of very
large redemptions, excessive trading or during unusual
market conditions)

The fund also reserves the right to make a "redemption in kind" -- payment in
portfolio securities rather than cash -- if the amount you are redeeming is
large enough to affect fund operations (for example, if it represents more than
1% of the fund's assets).

Small account policies

To offset the relatively higher costs of servicing smaller accounts, the fund
charges regular accounts with balances below $2,000 an annual fee of $12. The
fee will be imposed during the fourth quarter of each calendar year.

The fee will be waived for: any investor whose aggregate Dreyfus mutual fund
investments total at least $25,000; IRA accounts; accounts participating in
automatic investment programs; accounts opened through a financial institution.

If your account falls below $500, the fund may ask you to increase your balance.
If it is still below $500 after 45 days, the fund may close your account and
send you the proceeds.

[Page 24]

DISTRIBUTIONS AND TAXES

THE FUND USUALLY PAYS ITS SHAREHOLDERS dividends from its net investment income
and distributes any net capital gains it has realized once a year. Your
distributions will be reinvested in the fund unless you instruct the fund
otherwise. There are no fees or sales charges on reinvestments.

FUND DIVIDENDS AND DISTRIBUTIONS ARE TAXABLE to most investors (unless your
investment is in an IRA or other tax-advantaged account). The tax status of any
distribution is the same regardless of how long you have been in the fund and
whether you reinvest your distributions or take them in cash. In general,
distributions are federally taxable as follows:
--------------------------------------------------------

Taxability of distributions

Type of Tax rate for Tax rate for

distribution 15% bracket 28% bracket or above
--------------------------------------------------------

INCOME ORDINARY ORDINARY
DIVIDENDS INCOME RATE INCOME RATE

SHORT-TERM ORDINARY ORDINARY
CAPITAL GAINS INCOME RATE INCOME RATE

LONG-TERM
CAPITAL GAINS 10% 20%

The tax status of your dividends and distributions will be detailed in your
annual tax statement from the fund.

Because everyone's tax situation is unique, always consult your tax professional
about federal, state and local tax consequences.

Taxes on transactions

Except in tax-advantaged accounts, any sale or exchange of fund shares may
generate a tax liability.

The table at right also can provide a guide for your potential tax liability
when selling or exchanging fund shares. "Short-term capital gains" applies to
fund shares sold or exchanged up to 12 months after buying them. "Long-term
capital gains" applies to shares sold or exchanged after 12 months.

Your Investment
[Page 25]

SERVICES FOR FUND INVESTORS

Automatic services

BUYING OR SELLING SHARES AUTOMATICALLY is easy with the services described
below. With each service, you select a schedule and amount, subject to certain
restrictions. You can set up most of these services with your application or by
calling 1-800-645-6561.
--------------------------------------------------------

For investing

DREYFUS AUTOMATIC For making automatic investments
ASSET BUILDER((reg.tm)) from a designated bank account.

DREYFUS PAYROLL For making automatic investments
SAVINGS PLAN through a payroll deduction.

DREYFUS GOVERNMENT For making automatic investments
DIRECT DEPOSIT from your federal employment,
PRIVILEGE Social Security or other regular
federal government check.

DREYFUS DIVIDEND For automatically reinvesting the
SWEEP dividends and distributions from
one Dreyfus fund into another
(not available for IRAs).
--------------------------------------------------------

For exchanging shares

DREYFUS AUTO- For making regular exchanges
EXCHANGE PRIVILEGE from one Dreyfus fund into
another.
--------------------------------------------------------

For selling shares

DREYFUS AUTOMATIC For making regular withdrawals
WITHDRAWAL PLAN from most Dreyfus funds.

Dreyfus Financial Centers

Through a nationwide network of Dreyfus Financial Centers, Dreyfus offers a full
array of investment services and products. This includes information on mutual
funds, brokerage services, tax-advantaged products and retirement planning.

Our experienced financial consultants can help you make informed choices and
provide you with personalized attention in handling account transactions. The
Financial Centers also offer informative seminars and events. To find the
Financial Center nearest you, call 1-800-499-3327.

[Page 26]

Exchange privilege

YOU CAN EXCHANGE $500 OR MORE from one Dreyfus fund into another (no minimum for
retirement accounts) . You can request your exchange in writing or by phone. Be
sure to read the current prospectus for any fund into which you are exchanging.
Any new account established through an exchange will have the same privileges as
your original account (as long as they are available). There is currently no fee
for exchanges, although you may be charged a sales load when exchanging into any
fund that has one.

Dreyfus TeleTransfer privilege

TO MOVE MONEY BETWEEN YOUR BANK ACCOUNT and your Dreyfus fund account with a
phone call, use the Dreyfus TeleTransfer privilege. You can set up TeleTransfer
on your account by providing bank account information and following the
instructions on your application.

24-hour automated account access

YOU CAN EASILY MANAGE YOUR DREYFUS accounts, check your account balances,
transfer money between your Dreyfus funds, get price and yield information and
much more -- when it's convenient for you.

Retirement plans

Dreyfus offers a variety of retirement plans, including traditional, Roth and
Education IRAs. Here's where you call for information:

* for traditional, rollover, Roth and Education IRAs, call 1-800-645-656

* for SEP-IRAs, Keogh accounts, 401(k) and 403(b) accounts, call
1-800-358-0910

Your Investment
[Page 27]

INSTRUCTIONS FOR REGULAR ACCOUNTS

TO OPEN AN ACCOUNT

In Writing

Complete the application.

Mail your application and a check to:
The Dreyfus Family of Funds
P.O. Box 9387, Providence, RI 02940-9387

By Telephone

WIRE Have your bank send your
investment to The Bank of New York, with these instructions:

* ABA# 021000018

* DDA# 8900251786 Income Portfolio

* DDA# 8900118253 Growth and Income Portfolio

* DDA# 8900251794 Growth Portfolio

* your Social Security or tax ID number

* name(s) of investor(s)

Call us to obtain an account number. Return your application.

Automatically

WITH AN INITIAL INVESTMENT Indicate on your application which automatic
service(s) you want. Return your application with your investment.

WITHOUT ANY INITIAL INVESTMENT Check the Dreyfus Step Program option on your
application. Return your application, then complete the additional materials
when they are sent to you.

Via the Internet

COMPUTER Visit the Dreyfus Web site http://www.dreyfus.com and follow the
instructions to download an account application.

TO ADD TO AN ACCOUNT

Fill out an investment slip, and write your account number on your check.

Mail the slip and the check to: The Dreyfus Family of Funds P.O. Box 105,
Newark, NJ 07101-0105

WIRE Have your bank send your investment to The Bank of New York, with these
instructions:

* ABA# 021000018

* DDA# 8900251786 Income Portfolio

* DDA# 8900118253 Growth and Income Portfolio

* DDA# 8900251794 Growth Portfolio

* your account number

* name(s) of investor(s)

ELECTRONIC CHECK Same as wire, but insert "1111" before your account number.

TELETRANSFER Request TeleTransfer on your application. Call us to request your
transaction.

ALL SERVICES Call us to request a form to add any automatic investing service
(see "Services for Fund Investors"). Complete and return the forms along with
any other required materials.

[Page 28]

TO SELL SHARES

Write a letter of instruction that includes:

* your name(s) and signature(s)

* your account number

* the fund name

* the dollar amount you want to sell

* how and where to send the proceeds

Obtain a signature guarantee or other documentation, if required (see "Account
Policies -- Selling Shares").

Mail your request to:
The Dreyfus Family of Funds
P.O. Box 9671,
Providence, RI 02940-9671

WIRE Be sure the fund has your bank account information on file. Call us to
request your transaction. Proceeds will be wired to your bank.

TELETRANSFER Be sure the fund has your bank account information on file. Call
us to request your transaction. Proceeds will be sent to your bank by electronic
check.

CHECK Call us to request your transaction. A check will be sent to the address
of record.

DREYFUS AUTOMATIC WITHDRAWAL PLAN Call us to request a form to add the plan.
Complete the form, specifying the amount and frequency of withdrawals you would
like.

Be sure to maintain an account balance of $5,000 or more.

To reach Dreyfus, call toll free in the U.S.

1-800-645-6561

Outside the U.S. 516-794-5452

Make checks payable to:

THE DREYFUS FAMILY OF FUNDS

You also can deliver requests to any Dreyfus Financial Center. Because
processing time may vary, please ask the representative when your account will
be credited or debited.

Concepts to understand

WIRE TRANSFER: for transferring money from one financial institution to another.
Wiring is the fastest way to move money, although your bank may charge a fee to
send or receive wire transfers. Wire redemptions from the fund are subject to a
$1,000 minimum.

ELECTRONIC CHECK: for transferring money out of a bank account. Your transaction
is entered electronically, but may take up to eight business days to clear.
Electronic checks usually are available without a fee at all Automated Clearing
House (ACH) banks.

Your Investment
[Page 29]

INSTRUCTIONS FOR IRAS

TO OPEN AN ACCOUNT

In Writing

Complete an IRA application, making sure to specify the fund name and to
indicate the year the contribution is for.

Mail your application and a check to:
The Dreyfus Trust Company, Custodian P.O. Box 6427, Providence, RI 02940-6427

By Telephone

Automatically

WITHOUT ANY INITIAL INVESTMENT Call us
to request a Dreyfus Step Program form. Complete and return the form along with
your application.

Via the Internet

COMPUTER Visit the Dreyfus Web site http://www.dreyfus.com and follow the
instructions to download an account application.

TO ADD TO AN ACCOUNT

Fill out an investment slip, and write your account number on your check.
Indicate the year the contribution is for.

Mail in the slip and the check (see "To Open an Account" at left).

WIRE Have your bank send your investment to The Bank of New York, with these
instructions:

* ABA# 021000018

* DDA# 8900251786 Income Portfolio

* DDA# 8900118253 Growth and Income Portfolio

* DDA# 8900251794 Growth Portfolio

* your account number

* name of investor

* the contribution year

ELECTRONIC CHECK Same as wire, but insert "1111" before your account number.

TELEPHONE CONTRIBUTION Call to request us to move money from a regular Dreyfus
account to an IRA (both accounts must be held in the same shareholder name).

ALL SERVICES Call us to request a form to add an automatic investing service
(see "Services for Fund Investors"). Complete and return the form along with any
other required materials.

All contributions will count as current year.

[Page 30]

TO SELL SHARES

Write a letter of instruction that includes:

* your name and signature

* your account number

* the fund name

* the dollar amount you want to sell

* how and where to send the proceeds

* whether the distribution is qualified or premature

* whether the 10% TEFRA should be withheld

Obtain a signature guarantee or other documentation, if required.

Mail in your request (see "To Open an Account" at left).

DREYFUS AUTOMATIC WITHDRAWAL PLAN Call us to request instructions to establish
the plan.

To reach Dreyfus, call toll free in the U.S.

1-800-645-6561

Outside the U.S. 516-794-5452

Make checks payable to:

THE DREYFUS TRUST COMPANY, CUSTODIAN

You also can deliver requests to any Dreyfus Financial Center. Because
processing time may vary, please ask the representative when your account will
be credited or debited.

Concepts to understand

Your Investment
[Page 32]

NOTES
[Page 33]

For More Information

Dreyfus LifeTime Portfolios, Inc.
-----------------------------

SEC file number: 811-7878

More information on this fund is available free upon
request, including the following:

Annual/Semiannual Report

Describes each portfolio's performance, lists portfolio
holdings and contains a letter from the fund's manager
discussing recent market conditions, economic trends and
fund strategies that significantly affected each
portfolio's performance during the last fiscal year.

Statement of Additional Information (SAI)

Provides more details about each portfolio and its
policies. A current SAI is on file with the Securities
and Exchange Commission (SEC) and is incorporated by
reference (is legally considered part of this
prospectus).

To obtain information:

BY TELEPHONE Call 1-800-645-6561

BY MAIL Write to:
The Dreyfus Family of Funds
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144

BY E-MAIL Send your request to [email protected]

ON THE INTERNET Text-only versions of fund documents can be viewed online or
downloaded from:

SEC
http://www.sec.gov
DREYFUS
http://www.dreyfus.com

You can also obtain copies by visiting the SEC's Public Reference Room in
Washington, DC (phone 1-800-SEC-0330) or by sending your request and a
duplicating fee to the SEC's Public Reference Section, Washington, DC
20549-6009.

DREYFUS LIFETIME PORTFOLIOS, INC.
INCOME PORTFOLIO
GROWTH AND INCOME PORTFOLIO
GROWTH PORTFOLIO
INVESTOR CLASS SHARES AND RESTRICTED CLASS SHARES
STATEMENT OF ADDITIONAL INFORMATION
FEBRUARY 1, 1999
(as revised on May 17, 1999)

This Statement of Additional Information, which is not a prospectus,
supplements and should be read in conjunction with the current Prospectus of
Dreyfus LifeTime Portfolios, Inc. (the "Fund"), dated February 1, 1999, as
revised on May 17, 1999. To obtain a copy of the Fund's Prospectus, please
write to the Fund at 144 Glenn Curtiss Boulevard, Uniondale, New York
11556-0144, or call the following numbers:

Call Toll Free 1-800-645-6561
In New York City -- Call 1-718-895-1206
Outside the U.S. -- Call 516-794-5452

The Fund's most recent Annual Report and Semi-Annual Report to
Shareholders are separate documents supplied with this Statement of
Additional Information, and the financial statements, accompanying notes and
report of independent auditors appearing in the Annual Report are
incorporated by reference into this Statement of Additional Information.

TABLE OF CONTENTS

Page

Description of the Fund and Portfolios B-2
Management of the Fund B-17
Management Arrangements B-23
How to Buy Shares B-27
Shareholder Services Plan B-29
How to Redeem Shares B-30
Shareholder Services B-32
Determination of Net Asset Value B-36
Dividends, Distributions and Taxes B-37
Portfolio Transactions B-39
Performance Information B-40
Information About the Fund and Portfolios B-42
Counsel and Independent Auditors B-43
Appendix B-44

DESCRIPTION OF THE FUND AND PORTFOLIOS

The Fund is a Maryland corporation formed on July 15, 1993. Each
Portfolio is a separate portfolio of the Fund, an open-end management
investment company, known as a mutual fund. Each Portfolio is a diversified
portfolio, which means that, with respect to 75% of the Portfolio's total
assets, the Portfolio will not invest more than 5% of its assets in the
securities of any single issuer.

The Dreyfus Corporation ("Dreyfus") serves as each Portfolio's
investment adviser. Dreyfus has engaged its affiliate, Mellon Equity
Associates ("Mellon Equity"), to serve as each Portfolio's sub-investment
adviser and to provide day-to-day management of each Portfolio's
investments, subject to the supervision of Dreyfus. Dreyfus and Mellon
Equity are referred to collectively as the "Advisers."

Premier Mutual Fund Services, Inc. (the "Distributor") is the
distributor of each Portfolio's shares.

Investment Approach

The following information supplements and should be read in conjunction
with the Fund's Prospectus.

I. Asset Allocation Baseline. For each Portfolio, Mellon Equity will
establish an asset allocation baseline (the "Portfolio Baseline"). The
Portfolio Baseline describes target levels or relative weights for the
Portfolio's asset classes: Level One describes the relative weighing of
total assets between international assets, domestic assets, and money market
instruments; Level Two describes the relative weighing of international and
domestic assets between common stock and fixed-income assets; and Level
Three describes the relative weighing of domestic common stock assets
between large and small capitalization stocks. The following table
illustrates this hierarchy:
<TABLE>

Level One Level Two Level Three
International Domestic
Total Assets Assets Domestic Assets Equity
Money
Market Fixed Fixed
Portfolio Int' Domestic Instruments Equity Income Equity Income Large Cap Small Cap
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Income N/A 90% 10% N/A N/A 25% 75% 100% N/A

Growth
and
Incom 10% 90% * 50% 50% 50% 50% 80% 20%

Growth 15% 85% * 80% 20% 80% 20% 80% 20%

__________
* Not held as an asset class. Money market instruments held for
transactional and liquidity purposes only.
</TABLE>

Mellon Equity will attempt to maintain relative asset class weights
consistent with the Portfolio Baseline as adjusted by the Active Allocation
Overlay described below. At any given time, however, actual weights will
not equal the Portfolio Baseline because of fluctuations in market values,
money market instruments held for transactional and liquidity purposes, and
Mellon Equity's active allocation overlay decisions as described below.

II. Active Allocation Overlay. For each of the Growth Portfolio and
the Growth and Income Portfolio, Mellon Equity will establish two active
allocation ranges ("Portfolio Overlay One" and "Portfolio Overlay Two").
Portfolio Overlay One describes the amount of over/under weighing to the
Portfolio Baseline for the relative weighing between international and
domestic assets. Portfolio Overlay Two describes the amount of over/under
weighing to the Portfolio Baseline for the relative weighing of domestic
assets between common stock and fixed-income assets. The following table
illustrates these ranges:

Portfolio Portfolio Overlay One Portfolio Overlay Two

Range for Relative Range for Relative
Weighing of Weighing of Domestic
International and Assets Between Equity
Domestic Assets Assets and Fixed-
Income Assets

Growth and Income +/- 5% of Portfolio +/- 15% of Portfolio
Baseline Baseline

Growth +/- 10% of Portfolio +20%/-15% of
Baseline Portfolio Baseline

The following examples illustrate Mellon Equity's allocation overlay
process:

Example 1: Given the Level One Portfolio Baseline for the Growth and Income
Portfolio of 10% of total assets in international securities and 90% of
total assets in domestic securities, under Portfolio Overlay One, Mellon
Equity could invest as much as 15% of the Growth and Income Portfolio's
total assets in international securities and 85% of its total assets in
domestic securities or as little as 5% of its total assets in international
securities and 95% of its total assets in domestic securities.

Example 2: Given the Level Two Portfolio Baseline for the Growth and Income
Portfolio of 50% of domestic assets in equity securities and 50% of domestic
assets in fixed-income securities, under Portfolio Overlay Two, Mellon
Equity could invest as much as 65% of the Growth and Income Portfolio's
assets invested in domestic assets in equity securities and 35% of such
domestic assets in fixed-income securities or as little as 35% of the
Portfolio's assets invested in domestic assets in equity securities and 65%
of such domestic assets in fixed-income securities.

Under normal circumstances, Mellon Equity expects to maintain relative
asset class weights consistent with the Portfolio Baseline adjusted by
Portfolio Overlay One and Portfolio Overlay Two as described above. At any
given time, however, actual weights may not fall within the ranges suggested
by the Portfolio Baseline adjusted by Portfolio Overlay One and Portfolio
Overlay Two because of fluctuations in market values, cash and cash-
equivalents held for transactional and liquidity purposes, and Portfolio
rebalancing.

Mellon Equity reserves the right to vary the relative asset class
weights and the percentage of assets invested in any asset class from the
Portfolio Baseline adjusted by Portfolio Overlay One and Portfolio Overlay
Two described above as the risk and return characteristics of either asset
classes or markets, as assessed by Mellon Equity, vary over time. None of
the Portfolios will be managed as a balanced portfolio, which would require
that at least 25% of the Portfolio's total assets be invested in fixed-
income securities.

III. Implementing the Active Allocation Overlay. To implement
Portfolio Overlay One, Mellon Equity will employ a proprietary country asset
allocation model (the "Country Model"). The Country Model evaluates the
return and risk characteristics of individual capital markets and their
correlation across countries, incorporates expected movements in currency
markets to determine expected U.S. dollar returns, and then employs an
international correlation model to recommend appropriate relative
weightings.

To implement Portfolio Overlay Two, Mellon Equity will employ a
proprietary domestic asset allocation model (the "Domestic Model"). The
Domestic Model evaluates the return and risk characteristics of the domestic
equity and fixed-income markets by comparing the valuation of equity and
fixed-income assets relative to their current market prices and long-term
values in the context of the current economic environment. Once this
analysis is completed, the Domestic Model recommends appropriate relative
weightings.

With respect to the Growth Portfolio and the Growth and Income
Portfolio, Mellon Equity will compare each such Portfolio's relative asset
class weights from time to time to that suggested by the Country Model and
the Domestic Model. Recommended changes will be implemented subject to
Mellon Equity's assessment of current economic conditions and investment
opportunities. From time to time, Mellon Equity may change the criteria and
methods used to implement the recommendations of the asset allocation
models.

IV. Asset Class Benchmarks. For each asset class, other than money
market instruments, a market-based index is designated as a benchmark or
reference for the respective asset class (the "Asset Class Benchmark"). A
brief description of each Asset Class Benchmark listed in the table below is
contained in Section VI. The Asset Class Benchmarks are used in the
investment management process as described in the following section. The
Asset Class Benchmarks are listed in the following table:

Asset Class Portfolios Asset Class Benchmark

Domestic Large Cap Income, Growth and Standard & Poor's 500
Equity Income and Growth Index ("S&P 500 Index")

Domestic Small Cap Growth and Income and Russell 2000r Index
Equity Growth

International Growth and Income and Morgan Stanley Capital
Equity Growth International Europe,
Australia, Far East
(Free) Index ("EAFE
Index")*

Domestic Fixed- Income, Growth and Lehman Brothers
Income Income and Growth Government/Corporate
Intermediate Bond Index
("Lehman Government/
Corporate Index")

International Growth and Income and J.P. Morgan Non-US
Fixed-Income Growth Government Bond Index -
Hedged ("J.P. Morgan
Global Index")
____________________________

* In U.S. dollars

Under normal circumstances, Mellon Equity expects to use the Asset
Class Benchmarks as described below. Mellon Equity, however, reserves the
right to substitute another suitable Asset Class Benchmark if the then-
existing Asset Class Benchmark is no longer calculated, suffers a material
change in formula or content, fails to adequately reflect the return
characteristics of the asset class, or for any other reason, in the judgment
of Mellon Equity, is inappropriate.

V. Asset Class Investment Management. When constructing portfolios
for each asset class, Mellon Equity seeks to select securities which, in the
aggregate, have approximately the same investment characteristics as those
of the Asset Class Benchmark with expected returns equal to or better than
that of the Asset Class Benchmark. Some of the asset classes will be
managed on an indexed basis and Mellon Equity reserves the right, in its
judgment, to manage asset classes either actively or on an indexed basis
consistent with the Portfolio's investment objective.

For asset classes managed on an indexed basis, a statistically based
"sampling" technique will be used to construct portfolios. The sampling
technique is expected to be an effective means of substantially duplicating
the investment performance of the Asset Class Benchmark. It will not,
however, provide investment performance relative to the Asset Class
Benchmark with the same degree of accuracy that complete or full replication
would provide.

If possible, Mellon Equity will seek to fully replicate the holdings of
an Asset Class Benchmark when managing an indexed portfolio. Such a
strategy is limited by the number of securities in the Asset Class Benchmark
and will not provide investment performance equal to that of the Asset Class
Benchmark owing to certain factors, including Asset Class Benchmark changes,
calculation rules which assume dividends are reinvested into the Asset Class
Benchmark on ex-dividend dates and transaction costs of rebalancing.

For asset classes that are actively managed, Mellon Equity will employ
proprietary valuation models to assist in the selection of stocks and in the
construction of portfolios that maintain the investment characteristics of
the Asset Class Benchmark consistent with the Portfolio's investment
objective. In its active investment process, Mellon Equity concentrates on
fundamental factors such as relative price/earnings ratios, relative book to
price ratios, earnings growth rates and momentum, and consensus earnings
expectations and changes in that consensus to value and rank stocks based on
expected relative performance to the Asset Class Benchmark.

Mellon Equity will seek to manage each asset class consistent with the
descriptions above and with each Portfolio's investment objective. Across
the Portfolios, it is not anticipated that each asset class will be managed
identically with respect to being an indexed portfolio or actively managed.
For example, the domestic equity, large cap asset class could be managed as
an index portfolio in the Income Portfolio while being actively managed in
the other Portfolios.

Mellon Equity may choose to combine Asset Class Benchmarks
proportionately if the amount of investable assets in a Portfolio is deemed
low in the judgment of Mellon Equity. For example, the domestic equity
large cap and small cap Asset Class Benchmarks could be combined
proportionately according to the Portfolio Baseline in order to create more
efficient portfolio management as deemed appropriate by Mellon Equity.
Mellon Equity would continue to provide investment management services as
described above, but would manage to the combined Asset Class Benchmark.

VI. Description of Asset Class Benchmarks.

Common Stocks. The S&P 500 Index is composed of 500 common stocks, most of
which are listed on the New York Stock Exchange. The weightings of stocks
in the S&P 500 Index are based on each stock's relative total market
capitalization; that is, its market price per share times the number of
shares outstanding.

The Russell 2000r Index is an unmanaged index and is composed of the
smallest companies in the Russell 3000r Index. The Russell 3000r Index is
composed of 3,000 of the largest U.S. companies by market capitalization.

The EAFE Index is a broadly diversified international index composed of
the equity securities of approximately 1,548 companies located outside the
United States. The weightings of stocks in the EAFE Index are based on each
stock's market capitalization relative to the total market capitalization of
all stocks in the Index.

Fixed Income Securities. The Lehman Government/Corporate Index is composed
of approximately 5,000 fixed-income securities, including U.S. Government
securities and investment grade corporate bonds, with an average outstanding
market value of more than $600 million and maturities of less than ten years
and greater than one year.

The J.P. Morgan Global Government Index is composed of traded, fixed-
rate government bonds from twelve countries with maturities of greater than
one year. The twelve countries are Australia, Belgium, Canada, Denmark,
France, Germany, Italy, Japan, the Netherlands, Spain, Sweden and the United
Kingdom.

Certain Portfolio Securities

The following information supplements and should be read in conjunction
with the Fund's Prospectus.

Depositary Receipts. (Growth and Income Portfolio and Growth Portfolio
only) Each of these Portfolios may invest in the securities of foreign
issuers in the form of American Depositary Receipts and American Depositary
Shares (collectively, "ADRs") and Global Depositary Receipts and Global
Depositary Shares (collectively, "GDRs") and other forms of depositary
receipts. These securities may not necessarily be denominated in the same
currency as the securities into which they may be converted. ADRs are
receipts typically issued by a United States bank or trust company which
evidence ownership of underlying securities issued by a foreign corporation.
GDRs are receipts issued outside the United States typically by non-United
States banks and trust companies that evidence ownership of either foreign
or domestic securities. Generally, ADRs in registered form are designed for
use in the United States securities markets and GDRs in bearer form are
designed for use outside the United States.

These securities may be purchased through "sponsored" or "unsponsored"
facilities. A sponsored facility is established jointly by the issuer of
the underlying security and a depositary, whereas a depositary may establish
an unsponsored facility without participation by the issuer of the deposited
security. Holders of unsponsored depositary receipts generally bear all the
costs of such facilities and the depositary of an unsponsored facility
frequently is under no obligation to distribute shareholder communications
received from the issuer of the deposited security or to pass through voting
rights to the holders of such receipts in respect of the deposited
securities.

Money Market Instruments. The short-term money market instruments in
which a Portfolio may invest consist of U.S. Government securities, bank
obligations, including certificates of deposit, time deposits and bankers'
acceptances and other short-term obligations of domestic or foreign banks,
domestic savings and loan associations and other banking institutions having
total assets in excess of $1 billion; commercial paper, and repurchase
agreements. The Income Portfolio will purchase only money market
instruments having remaining maturities of 13 months or less.

The Income Portfolio generally invests up to 10% of its assets in money
market instruments. When the Advisers determine that adverse market
conditions exist, a Portfolio may adopt a temporary defensive position and
invest without limitation in money market instruments.

Zero Coupon Securities. Each Portfolio may invest in zero coupon U.S.
Treasury securities, which are Treasury Notes and Bonds that have been
stripped of their unmatured interest coupons, the coupons themselves and
receipts or certificates representing interests in such stripped debt
obligations and coupons. Each Portfolio also may invest in zero coupon
securities issued by corporations and financial institutions which
constitute a proportionate ownership of the issuer's pool of underlying U.S.
Treasury securities. A zero coupon security pays no interest to its holder
during its life and is sold at a discount to its face value at maturity.
The amount of the discount fluctuates with the market price of the security.
The market prices of zero coupon securities generally are more volatile than
the market prices of securities that pay interest periodically and are
likely to respond to a greater degree to changes in interest rates than non-
zero coupon securities having similar maturities and credit qualities.

Foreign Government Obligations; Securities of Supranational Entities.
(Growth and Income Portfolio and Growth Portfolio only) Each of these
Portfolios may invest in obligations issued or guaranteed by one or more
foreign governments or any of their political subdivisions, agencies or
instrumentalities that are determined by the Advisers to be of comparable
quality to the other obligations in which the Portfolio may invest. Such
securities also include debt obligations of supranational entities.
Supranational entities include international organizations designated or
supported by governmental entities to promote economic reconstruction or
development and international banking institutions and related government
agencies. Examples include the International Bank for Reconstruction and
Development (the World Bank), the European Coal and Steel Community, the
Asian Development Bank and the InterAmerican Development Bank.

Investment Companies. Each Portfolio may invest in securities issued
by other investment companies to the extent consistent with its investment
objective. Under the Investment Company Act of 1940, as amended (the "1940
Act"), the Portfolio's investment in such securities, subject to certain
exceptions, currently is limited to (i) 3% of the total voting stock of any
one investment company, (ii) 5% of the Portfolio's total assets with respect
to any one investment company and (iii) 10% of the Portfolio's total assets
in the aggregate. Investments in the securities of other investment
companies may involve duplication of advisory fees and certain other
expenses.

Illiquid Securities. Each Portfolio may invest up to 15% of the value
of its net assets in securities as to which a liquid trading market does not
exist, provided such investments are consistent with the Portfolio's
investment objective. These securities may include securities that are not
readily marketable, such as certain securities that are subject to legal or
contractual restrictions on resale, repurchase agreements providing for
settlement in more than seven days after notice, and certain privately
negotiated, non-exchange traded options and securities used to cover such
options. As to these securities, the Portfolio is subject to a risk that
should the Portfolio desire to sell them when a ready buyer is not available
at a price the Portfolio deems representative of their value, the value of
the Portfolio's net assets could be adversely affected.

Investment Techniques

The following information supplements and should be read in conjunction
with the Fund's Prospectus.

Foreign Currency Transactions. (Growth and Income Portfolio and Growth
Portfolio only) Each of these Portfolios may enter into foreign currency
transactions for a variety of purposes, including: to fix in U.S. dollars,
between trade and settlement date, the value of a security the Portfolio has
agreed to buy or sell; to hedge the U.S. dollar value of securities the
Portfolio already owns, particularly if it expects a decrease in the value
of the currency in which the foreign security is denominated; or to gain
exposure to the foreign currency in an attempt to realize gains.

Foreign currency transactions may involve, for example, the Portfolio's
purchase of foreign currencies for U.S. dollars or the maintenance of short
positions in foreign currencies, which would involve the Portfolio agreeing
to exchange an amount of a currency it did not currently own for another
currency at a future date in anticipation of a decline in the value of the
currency sold relative to the currency the Portfolio contracted to receive
in the exchange. The Portfolio's success in these transactions will depend
principally on the Advisers' ability to predict accurately the future
exchange rates between foreign currencies and the U.S. dollar.

Currency exchange rates may fluctuate significantly over short periods
of time. They generally are determined by the forces of supply and demand
in the foreign exchange markets and the relative merits of investments in
different countries, actual or perceived changes in interest rates and other
complex factors, as seen from an international perspective. Currency
exchange rates also can be affected unpredictably by intervention by U.S. or
foreign governments or central banks, or the failure to intervene, or by
currency controls or political developments in the United States or abroad.

Leverage. Leveraging (that is, buying securities using borrowed money)
exaggerates the effect on net asset value of any increase or decrease in the
market value of a Portfolio's portfolio. These borrowings will be subject
to interest costs which may or may not be recovered by appreciation of the
securities purchased; in certain cases, interest costs may exceed the return
received on the securities purchased. For borrowings for investment
purposes, the 1940 Act requires a Portfolio to maintain continuous asset
coverage (that is, total assets including borrowings, less liabilities
exclusive of borrowings) of 300% of the amount borrowed. If the required
coverage should decline as a result of market fluctuations or other reasons,
the Portfolio may be required to sell some of its portfolio holdings within
three days to reduce the amount of its borrowings and restore the 300% asset
coverage, even though it may be disadvantageous from an investment
standpoint to sell securities at that time. The Portfolio also may be
required to maintain minimum average balances in connection with such
borrowing or pay a commitment or other fee to maintain a line of credit;
either of these requirements would increase the cost of borrowing over the
stated interest rate.

A Portfolio may enter into reverse repurchase agreements with banks,
brokers or dealers. This form of borrowing involves the transfer by the
Portfolio of an underlying debt instrument in return for cash proceeds based
on a percentage of the value of the security. The Portfolio retains the
right to receive interest and principal payments on the security. At an
agreed upon future date, the Portfolio repurchases the security at principal
plus accrued interest. Except for these transactions, a Portfolio's
borrowings generally will be unsecured.

Derivatives. Each Portfolio may invest in, or enter into, derivatives,
such as options and futures, for a variety of reasons, primarily to provide
a substitute for purchasing or selling particular securities, but also to
hedge certain market risks, or to increase potential income gain.
Derivatives may provide a cheaper, quicker or more specifically focused way
for the Fund to invest than "traditional" securities would.

Derivatives can be volatile and involve various types and degrees of
risk, depending upon the characteristics of the particular derivative and
the portfolio as a whole. Derivatives permit the Portfolio to increase or
decrease the level of risk, or change the character of the risk, to which
its portfolio is exposed in much the same way as the Portfolio can increase
or decrease the level of risk, or change the character of the risk, of its
portfolio by making investments in specific securities.

Derivatives may entail investment exposures that are greater than their
cost would suggest, meaning that a small investment in derivatives could
have a large potential impact on the Portfolio's performance.

If a Portfolio invests in derivatives at inopportune times or judges
market conditions incorrectly, such investments may lower the Portfolio's
return or result in a loss. The Portfolio also could experience losses if
its derivatives were poorly correlated with its other investments, or if the
Portfolio were unable to liquidate its position because of an illiquid
secondary market. The market for many derivatives is, or suddenly can
become, illiquid. Changes in liquidity may result in significant, rapid and
unpredictable changes in the prices for derivatives.

Although neither the Fund nor any Portfolio will be a commodity pool,
certain derivatives subject the Portfolios to the rules of the Commodity
Futures Trading Commission which limit the extent to which a Portfolio can
invest in such derivatives. Each Portfolio may invest in futures contracts
and options with respect thereto for hedging purposes without limit.
However, no Portfolio may invest in such contracts and options for other
purposes if the sum of the amount of initial margin deposits and premiums
paid for unexpired options with respect to such contracts, other than for
bona fide hedging purposes, exceeds 5% of the liquidation value of the
Portfolio's assets, after taking into account unrealized profits and
unrealized losses on such contracts and options; provided, however, that in
the case of an option that is in-the-money at the time of purchase, the in-
the-money amount may be excluded in calculating the 5% limitation.

Each Portfolio may invest up to 5% of its assets, represented by the
premium paid, in the purchase of call and put options. Each Portfolio may
write (i.e., sell) covered call and put option contracts to the extent of
20% of the value of its net assets at the time such option contracts are
written. When required by the Securities and Exchange Commission, the
Portfolio will set aside permissible liquid assets in a segregated account
to cover its obligations relating to its purchase of derivatives. To
maintain this required cover, the Portfolio may have to sell portfolio
securities at disadvantageous prices or times since it may not be possible
to liquidate a derivative position at a reasonable price.

Derivatives may be purchased on established exchanges or through
privately negotiated transactions referred to as over-the-counter
derivatives. Exchange-traded derivatives generally are guaranteed by the
clearing agency which is the issuer or counterparty to such derivatives.
This guarantee usually is supported by a daily payment system (i.e.,
variation margin requirements) operated by the clearing agency in order to
reduce overall credit risk. As a result, unless the clearing agency
defaults, there is relatively little counterparty credit risk associated
with derivatives purchased on an exchange. By contrast, no clearing agency
guarantees over-the-counter derivatives. Therefore, each party to an over-
the-counter derivative bears the risk that the counterparty will default.
Accordingly, the Advisers will consider the creditworthiness of
counterparties to over-the-counter derivatives in the same manner as it
would review the credit quality of a security to be purchased by a
Portfolio. Over-the-counter derivatives are less liquid than exchange-
traded derivatives since the other party to the transaction may be the only
investor with sufficient understanding of the derivative to be interested in
bidding for it.

Futures Transactions--In General. A Portfolio may enter into futures
contracts in U.S. domestic markets, such as the Chicago Board of Trade and
the International Monetary Market of the Chicago Mercantile Exchange, or, in
the case of the Growth and Income Portfolio and Growth Portfolio, on
exchanges located outside the United States, such as the London
International Financial Futures Exchange, the Deutsche Termine Borse and the
Sydney Futures Exchange Limited. Foreign markets may offer advantages such
as trading opportunities or arbitrage possibilities not available in the
United States. Foreign markets, however, may have greater risk potential
than domestic markets. For example, some foreign exchanges are principal
markets so that no common clearing facility exists and an investor may look
only to the broker for performance of the contract. In addition, any
profits that a Portfolio might realize in trading could be eliminated by
adverse changes in the exchange rate, or the Portfolio could incur losses as
a result of those changes. Transactions on foreign exchanges may include
both commodities which are traded on domestic exchanges and those which are
not. Unlike trading on domestic commodity exchanges, trading on foreign
commodity exchanges is not regulated by the Commodity Futures Trading
Commission.

Engaging in these transactions involves risk of loss to a Portfolio
which could adversely affect the value of the Portfolio's net assets.
Although each Portfolio intends to purchase or sell futures contracts only
if there is an active market for such contracts, no assurance can be given
that a liquid market will exist for any particular contract at any
particular time. Many futures exchanges and boards of trade limit the
amount of fluctuation permitted in futures contract prices during a single
trading day. Once the daily limit has been reached in a particular
contract, no trades may be made that day at a price beyond that limit or
trading may be suspended for specified periods during the trading day.
Futures contract prices could move to the limit for several consecutive
trading days with little or no trading, thereby preventing prompt
liquidation of futures positions and potentially subjecting the Portfolio to
substantial losses.

Successful use of futures by a Portfolio also is subject to the ability
of the Advisers to predict correctly movements in the direction of the
relevant market and, to the extent the transaction is entered into for
hedging purposes, to ascertain the appropriate correlation between the
transaction being hedged and the price movements of the futures contract.
For example, if a Portfolio uses futures to hedge against the possibility of
a decline in the market value of securities held in its portfolio and the
prices of such securities instead increase, the Portfolio will lose part or
all of the benefit of the increased value of securities which it has hedged
because it will have offsetting losses in its futures positions.
Furthermore, if in such circumstances the Portfolio has insufficient cash,
it may have to sell securities to meet daily variation margin requirements.
A Portfolio may have to sell such securities at a time when it may be
disadvantageous to do so.

Pursuant to regulations and/or published positions of the Securities
and Exchange Commission, a Portfolio may be required to segregate
permissible liquid assets in connection with its commodities transactions in
an amount generally equal to the value of the underlying commodity. The
segregation of such assets will have the effect of limiting a Portfolio's
ability otherwise to invest those assets.

Specific Futures Transactions. A Portfolio may purchase and sell stock
index futures contracts. A stock index future obligates a Portfolio to pay
or receive an amount of cash equal to a fixed dollar amount specified in the
futures contract multiplied by the difference between the settlement price
of the contract on the contract's last trading day and the value of the
index based on the stock prices of the securities that comprise it at the
opening of trading in such securities on the next business day.

A Portfolio may purchase and sell interest rate futures contracts. An
interest rate future obligates the Portfolio to purchase or sell an amount
of a specific debt security at a future date at a specific price.

The Growth and Income Portfolio and Growth Portfolio may purchase and
sell currency futures. A foreign currency future obligates the Portfolio to
purchase or sell an amount of a specific currency at a future date at a
specific price.

Options--In General. A Portfolio may purchase and write (i.e., sell) call
or put options with respect to specific securities. A call option gives the
purchaser of the option the right to buy, and obligates the writer to sell,
the underlying security or securities at the exercise price at any time
during the option period, or at a specific date. Conversely, a put option
gives the purchaser of the option the right to sell, and obligates the
writer to buy, the underlying security or securities at the exercise price
at any time during the option period, or at a specific date.

A covered call option written by a Portfolio is a call option with
respect to which the Portfolio owns the underlying security or otherwise
covers the transaction by segregating cash or other securities. A put
option written by a Portfolio is covered when, among other things, cash or
liquid securities having a value equal to or greater than the exercise price
of the option are placed in a segregated account with the Fund's custodian
to fulfill the obligation undertaken. The principal reason for writing
covered call and put options is to realize, through the receipt of premiums,
a greater return than would be realized on the underlying securities alone.
A Portfolio receives a premium from writing covered call or put options
which it retains whether or not the option is exercised.

There is no assurance that sufficient trading interest to create a
liquid secondary market on a securities exchange will exist for any
particular option or at any particular time, and for some options no such
secondary market may exist. A liquid secondary market in an option may
cease to exist for a variety of reasons. In the past, for example, higher
than anticipated trading activity or order flow, or other unforeseen events,
at times have rendered certain of the clearing facilities inadequate and
resulted in the institution of special procedures, such as trading
rotations, restrictions on certain types of orders or trading halts or
suspensions in one or more options. There can be no assurance that similar
events, or events that may otherwise interfere with the timely execution of
customers' orders, will not recur. In such event, it might not be possible
to effect closing transactions in particular options. If, as a covered call
option writer, the Portfolio is unable to effect a closing purchase
transaction in a secondary market, it will not be able to sell the
underlying security until the option expires or it delivers the underlying
security upon exercise or it otherwise covers its position.

Specific Options Transactions. A Portfolio may purchase and sell call and
put options in respect of specific securities (or groups or "baskets" of
specific securities) or stock indices listed on national securities
exchanges or traded in the over-the-counter market. An option on a stock
index is similar to an option in respect of specific securities, except that
settlement does not occur by delivery of the securities comprising the
index. Instead, the option holder receives an amount of cash if the closing
level of the stock index upon which the option is based is greater than, in
the case of a call, or less than, in the case of a put, the exercise price
of the option. Thus, the effectiveness of purchasing or writing stock index
options will depend upon price movements in the level of the index rather
than the price of a particular stock.

The Growth and Income Portfolio and Growth Portfolio may purchase and
sell call and put options on foreign currency. These options convey the
right to buy or sell the underlying currency at a price which is expected to
be lower or higher than the spot price of the currency at the time the
option is exercised or expires.

Successful use by a Portfolio of options will be subject to the ability
of the Advisers to predict correctly movements in the prices of individual
stocks or the stock market generally. To the extent such predictions are
incorrect, a Portfolio may incur losses.

Future Developments. A Portfolio may take advantage of opportunities
in the area of options and futures contracts and options on futures
contracts and any other derivatives which are not presently contemplated for
use by the Portfolio or which are not currently available but which may be
developed, to the extent such opportunities are both consistent with the
Portfolio's investment objective and legally permissible for the Portfolio.
Before entering into such transactions or making any such investment, the
Fund will provide appropriate disclosure in its Prospectus or Statement of
Additional Information.

Lending Portfolio Securities. Each Portfolio may lend securities from
its portfolio to brokers, dealers and other financial institutions needing
to borrow securities to complete certain transactions. The Portfolio
continues to be entitled to payments in amounts equal to the interest,
dividends or other distributions payable on the loaned securities which
affords the Portfolio an opportunity to earn interest on the amount of the
loan and on the loaned securities' collateral. Loans of portfolio
securities may not exceed 331/3% of the value of the Portfolio's total
assets, and the Portfolio will receive collateral consisting of cash, U.S.
Government securities or irrevocable letters of credit which will be
maintained at all times in an amount equal to at least 100% of the current
market value of the loaned securities. Such loans are terminable by the
Portfolio at any time upon specified notice. The Portfolio might experience
risk of loss if the institution with which it has engaged in a portfolio
loan transaction breaches its agreement with the Portfolio.

In connection with its securities lending transactions, a Portfolio may
return to the borrower or a third party which is unaffiliated with the Fund,
and which is acting as a "placing broker," a part of the interest earned
from the investment of collateral received for securities loaned.

Forward Commitments. A Portfolio may purchase securities on a forward
commitment or when-issued basis, which means that delivery and payment take
place a number of days after the date of the commitment to purchase. The
payment obligation and the interest rate receivable on a forward commitment
or when-issued security are fixed when the Portfolio enters into the
commitment, but the Portfolio does not make payment until it receives
delivery from the counterparty. The Portfolio will commit to purchase such
securities only with the intention of actually acquiring the securities, but
the Portfolio may sell these securities before the settlement date if it is
deemed advisable. The Portfolio will set aside in a segregated account
permissible liquid assets at least equal at all times to the amount of the
Portfolio's purchase commitments.

Securities purchased on a forward commitment or when-issued basis are
subject to changes in value (generally changing in the same way, i.e.,
appreciating when interest rates decline and depreciating when interest
rates rise) based upon the public's perception of the creditworthiness of
the issuer and changes, real or anticipated, in the level of interest rates.
Securities purchased on a forward commitment or when-issued basis may expose
a Portfolio to risks because they may experience such fluctuations prior to
their actual delivery. Purchasing securities on a when-issued basis can
involve the additional risk that the yield available in the market when the
delivery takes place actually may be higher than that obtained in the
transaction itself. Purchasing securities on a forward commitment or when-
issued basis when a Portfolio is fully or almost fully invested may result
in greater potential fluctuation in the value of the Portfolio's net assets
and its net asset value per share.

Investment Considerations and Risks

General. Because each Portfolio will have at any given time a
different asset mix to achieve its investment objective, the risks of
investing will vary depending on the Portfolio selected for investment.
Before selecting a Portfolio in which to invest, the investor should assess
the risks associated with the types of investments made by the Portfolio.
The net asset value per share of each Portfolio should be expected to
fluctuate. Investors should consider each Portfolio as a supplement to an
overall investment program and should invest only if they are willing to
undertake the risks involved.

Foreign Securities. Foreign securities markets generally are not as
developed or efficient as those in the United States. Securities of some
foreign issuers are less liquid and more volatile than securities of
comparable U.S. issuers. Similarly, volume and liquidity in most foreign
securities markets are less than in the United States and, at times,
volatility of price can be greater than in the United States.

Because stock certificates and other evidences of ownership of such
securities usually are held outside the United States, the Growth and Income
Portfolio and Growth Portfolio will be subject to additional risks, which
include possible adverse political and economic developments, seizure or
nationalization of foreign deposits or adoption of governmental restrictions
which might adversely affect or restrict the payment of principal, interest
and dividends on the foreign securities to investors located outside the
country of the issuers, whether from currency blockage or otherwise.

Since foreign securities often are purchased with and payable in
currencies of foreign countries, the value of these assets as measured in
U.S. dollars may be affected favorably or unfavorably by changes in currency
rates and exchange control regulations.

Simultaneous Investments. Investment decisions for each Portfolio are
made independently from those of other investment companies or accounts
advised by the Advisers. If, however, such other investment companies or
accounts desire to invest in, or dispose of, the same securities as a
Portfolio, available investments or opportunities for sales will be
allocated equitably to each. In some cases, this procedure may adversely
affect the size of the position obtained for or disposed of by the Portfolio
or the price paid or received by the Portfolio.

Investment Restrictions

Each Portfolio's investment objective is a fundamental policy, which
cannot be changed without approval by the holders of a majority (as defined
in the 1940 Act) of the Portfolio's outstanding voting shares. In addition,
the Portfolios have adopted certain investment restrictions as fundamental
policies and certain other investment restrictions as non-fundamental
policies, as described below.

Each Portfolio has adopted investment restrictions numbered 1 through
10 as fundamental policies, which cannot be changed, as to a Portfolio,
without approval by the holders of a majority (as defined in the 1940 Act)
of such Portfolio's outstanding voting shares. Investment restrictions
numbered 11 through 16 are not fundamental policies and may be changed by
vote of a majority of the Fund's Board members at any time. No Portfolio
may:

1. Invest more than 5% of its assets in the obligations of any single
issuer, except that up to 25% of the value of the Portfolio's total assets
may be invested, and securities issued or guaranteed by the U.S. Government,
or its agencies or instrumentalities may be purchased, without regard to any
such limitation.

2. Hold more than 10% of the outstanding voting securities of any
single issuer. This Investment Restriction applies only with respect to 75%
of the Portfolio's total assets.

3. Invest in commodities, except that the Portfolio may purchase and
sell options, forward contracts, futures contracts, including those relating
to indices, and options on futures contracts or indices.

4. Purchase, hold or deal in real estate, or oil, gas or other
mineral leases or exploration or development programs, but the Portfolio may
purchase and sell securities that are secured by real estate or issued by
companies that invest or deal in real estate.

5. Borrow money, except to the extent permitted under the 1940 Act
(which currently limits borrowing to no more than 331/3% of the Portfolio's
total assets). For purposes of this investment restriction, the entry into
options, forward contracts, futures contracts, including those relating to
indices, and options on futures contracts or indices shall not constitute
borrowing.

6. Make loans to others, except through the purchase of debt
obligations and the entry into repurchase agreements. However, the
Portfolio may lend its portfolio securities in an amount not to exceed
331/3% of the value of its total assets. Any loans of portfolio securities
will be made according to guidelines established by the Securities and
Exchange Commission and the Fund's Board of Directors.

7. Act as an underwriter of securities of other issuers, except to
the extent the Portfolio may be deemed an underwriter under the Securities
Act of 1933, as amended, by virtue of disposing of portfolio securities.

8. Invest more than 25% of the value of its assets in the securities
of issuers in any single industry, provided that, there shall be no
limitation on the purchase of obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities.

9. Issue any senior security (as such term is defined in Section
18(f) of the 1940 Act), except to the extent the activities permitted in
Investment Restriction Nos. 3, 5, 12 and 13 may be deemed to give rise to a
senior security.

10. Purchase securities on margin, but the Portfolio may make margin
deposits in connection with transactions in options, forward contracts,
futures contracts, including those relating to indices, and options on
futures contracts or indices.

11. Invest in the securities of a company for the purpose of
exercising management or control, but the Portfolio will vote the securities
it owns in its portfolio as a shareholder in accordance with its views.

12. Pledge, mortgage or hypothecate its assets, except to the extent
necessary to secure permitted borrowings and to the extent related to the
purchase of securities on a when-issued or forward commitment basis and the
deposit of assets in escrow in connection with writing covered put and call
options and collateral and initial or variation margin arrangements with
respect to options, forward contracts, futures contracts, including those
relating to indices, and options on futures contracts or indices.

13. Purchase, sell or write puts, calls or combinations thereof,
except as may be described in the Fund's Prospectus and this Statement of
Additional Information.

14. Purchase securities of any company having less than three years'
continuous operations (including operations of any predecessors) if such
purchase would cause the value of the Portfolio's investments in all such
companies to exceed 5% of the value of its total assets.

15. Enter into repurchase agreements providing for settlement in more
than seven days after notice or purchase securities which are illiquid, if,
in the aggregate, more than 15% of the value of the Portfolio's net assets
would be so invested.

16. Purchase securities of other investment companies, except to the
extent permitted under the 1940 Act.

If a percentage restriction is adhered to at the time of investment, a
later change in percentage resulting from a change in values or assets will
not constitute a violation of such restriction.

MANAGEMENT OF THE FUND

The Fund's Board is responsible for the management and supervision of
each Portfolio. The Board approves all significant agreements with those
companies that furnish services to the Portfolio. These companies are as
follows:

The Dreyfus Corporation Investment Adviser
Mellon Equity Associates Sub-Investment Adviser
Premier Mutual Fund Services, Distributor
Inc.
Dreyfus Transfer, Inc. Transfer Agent
Mellon Bank, N.A. Custodian

Board members and officers of the Fund, together with information as to
their principal business occupations during at least the last five years,
are shown below.

Board Members of the Fund

JOSEPH S. DiMARTINO, Chairman of the Board. Since January 1995, Chairman of
the Board of various funds in the Dreyfus Family of Funds. He is a
director of The Noel Group, Inc., a venture capital company (for which,
from February 1995 until November 1997, he was Chairman of the Board),
The Muscular Dystrophy Association, HealthPlan Services Corporation, a
provider of marketing, administrative and risk management services to
health and other benefit programs, Carlyle Industries, Inc. (formerly,
Belding Heminway, Inc.), a button packager and distributor, Century
Business Services, Inc. (formerly, International Alliance Services,
Inc.), a provider of various outsourcing functions for small and medium
sized companies, and Career Blazers Inc. (formerly, Staffing Resources,
Inc.), a temporary placement agency. For more than five years prior to
January 1995, he was President, a director and, until August 1994,
Chief Operating Officer of Dreyfus and Executive Vice President and a
director of Dreyfus Service Corporation, a wholly-owned subsidiary of
Dreyfus and, until August 24, 1994, the Fund's distributor. From
August 1994 until December 31, 1994, he was a director of Mellon Bank
Corporation. He is 55 years old and his address is 200 Park Avenue,
New York, New York 10106.

LUCY WILSON BENSON, Board Member. President of Benson and Associates,
consultants to business and government. Mrs. Benson is a director of
COMSAT Corporation and Logistics Management Institute. She is also a
Trustee of the Alfred P. Sloan Foundation, Vice Chairman of the Board
of Trustees of Lafayette College, Vice Chairman of the Citizens Network
for Foreign Affairs and of the Atlantic Council of the U.S. and a
member of the Council on Foreign Relations. From 1980 to 1994, Mrs.
Benson was a director of the Grumman Corporation and of the General RE
Corporation from 1980 to 1998. Mrs. Benson served as a consultant to
the U.S. Department of State and to SRI International from 1980 to
1981. From 1977 to 1980, she was Under Secretary of State for Security
Assistance, Science and Technology. Mrs. Benson is 71 years old and
her address is 46 Sunset Avenue, Amherst, Massachusetts 01002.

DAVID W. BURKE, Board Member. Chairman of the Broadcasting Board of
Governors, an independent board within the United States Information
Agency, from August 1994 to November 1998. From August 1994 to
December 1994, Mr. Burke was a Consultant to Dreyfus, and from October
1990 to August 1994, he was Vice President and Chief Administrative
Officer of Dreyfus. From 1977 to 1990, Mr. Burke was involved in the
management of national television news, as Vice President and Executive
Vice President of ABC News, and subsequently as President of CBS News.
He is 63 years old and his address is 197 Eighth Street, Charleston,
Massachusetts 02109.

MARTIN D. FIFE, Board Member. Chairman of the Board of Magar Inc., a
company specializing in financial products and developing early stage
companies. In addition, Mr. Fife is Chairman of the Board and Chief
Executive Officer of Skysat Communications Network Corporation, a
company developing telecommunications systems. Mr. Fife also serves on
the boards of various other companies. He is 72 years old and his
address is The Chrysler Building, 405 Lexington Avenue, New York, New
York 10174.

WHITNEY I. GERARD, Board Member. Partner of the New York City law firm of
Chadbourne & Parke. Mr. Gerard is 64 years old and his address is 30
Rockefeller Plaza, New York, New York 10112.

ROBERT R. GLAUBER, Board Member. Research Fellow, Center for Business and
Government at the John F. Kennedy School of Government, Harvard
University, since January 1992. Mr. Glauber was Under Secretary of the
Treasury for Finance at the U.S. Treasury Department from May 1989 to
January 1992. For more than five years prior thereto, he was a
Professor of Finance at the Graduate School of Business Administration
of Harvard University and, from 1985 to 1989, Chairman of its Advanced
Management Program. He is a director of Mid Ocean Reinsurance Co. Ltd
and Cooke and Bieler, Inc., investment counselors, NASD Regulation,
Inc. and the Federal Reserve Bank of Boston. He is 60 years old and
his address is 79 John F. Kennedy Street, Cambridge, Massachusetts
02138.

ARTHUR A. HARTMAN, Board Member. Senior consultant with APCO Associates
Inc. From 1981 to 1987, he was United States Ambassador to the former
Soviet Union. He sits on the Boards of Ford Meter Box Corporation and
Lawter International and is a member of the advisory councils of
several other companies, research institutes and foundations.
Ambassador Hartman is Chairman of First NIS Regional Funds (ING/Barings
Management) and former President of the Harvard Board of Overseers. He
is 73 years old and his address is 2738 McKinley Street, N.W.,
Washington, D.C. 20015.

GEORGE L. PERRY, Board Member. An economist and Senior Fellow at the
Brookings Institution since 1969. He is co-director of the Brookings
Panel on Economic Activity and editor of its journal, The Brookings
Papers. He is also a director of the State Farm Mutual Automobile
Association and State Farm Life Insurance Company and a trustee of
Federal Realty Investment Trust. He is 65 years old and his address is
1775 Massachusetts Avenue, N.W., Washington, D.C. 20015.

PAUL WOLFOWITZ, Board Member. Dean of The Paul H. Nitze School of Advanced
International Studies at Johns Hopkins University. From 1989 to 1993,
he was Under Secretary of Defense for Policy. From 1986 to 1989, he
was the U.S. Ambassador to the Republic of Indonesia. From 1982 to
1986, he was Assistant Secretary of State for East Asian and Pacific
Affairs of the Department of State. He is 53 years old and his address
is 1740 Massachusetts Avenue, N.W., Washington, D.C. 20036.

For so long as the Fund's plan described in the section captioned
"Shareholder Services Plan" remains in effect, the Board members of the Fund
who are not "interested persons" of the Fund, as defined in the 1940 Act,
will be selected and nominated by the Board members who are not "interested
persons" of the Fund.

The Fund typically pays its Board members an annual retainer and a per
meeting fee and reimburses them for their expenses. The Chairman of the
Board receives an additional 25% of such compensation. Emeritus Board
members are entitled to receive an annual retainer and a per meeting fee of
one-half the amount paid to them as Board members. The aggregate amount of
compensation paid to each Board member by the Fund and by all funds in the
Dreyfus Family of Funds for which such person was a Board member (the number
of which is set forth in parenthesis next to each Board member's total
compensation)* during the year ended December 31, 1998, were as follows:

Total Compensation
Aggregate From Fund and Fund
Name of Board Compensation from Complex Paid to
Member Fund** Board Members

Lucy Wilson Benson $ 9,500 $ 77,168 (24)
David W. Burke $ 9,500 $233,500 (62)
Joseph S. DiMartino $11,875 $619,660 (187)
Martin D. Fife $ 9,500 $ 56,000 (15)
Whitney I. Gerard $ 9,500 $ 60,250 (15)
Robert R. Glauber $ 8,500 $ 88,250 (41)
Arthur A. Hartman $ 9,000 $ 55,750 (15)
George L. Perry $ 8,500 $ 51,750 (15)
Paul D. Wolfowitz $ 9,000 $ 49,500 (14)
_________________________
* Represents the number of separate portfolios comprising the investment
companies in the Fund Complex, including the Fund, for which the Board
member serves.
** Amount does not include reimbursed expenses for attending Board meetings,
which amounted to $5,981 for all Board members as a group.

Officers of the Company

MARIE E. CONNOLLY, President and Treasurer. President, Chief Executive
Officer, Chief Compliance Officer and a director of the Distributor and
Funds Distributor, Inc., the ultimate parent of which is Boston
Institutional Group, Inc., and an officer of other investment companies
advised or administered by Dreyfus. She is 41 years old.

MARGARET W. CHAMBERS, Vice President and Secretary. Senior Vice President
and General Counsel of Funds Distributor, Inc., and an officer of other
investment companies advised or administered by Dreyfus. From August
1996 to March 1998, she was Vice President and Assistant General
Counsel for Loomis, Sayles & Company, L.P. From January 1986 to July
1996, she was an associate with the law firm of Ropes & Gray. She is
39 years old.

STEPHANIE D. PIERCE, Vice President, Assistant Secretary and Assistant
Treasurer. Vice President and Client Development Manager of Funds
Distributor, Inc., and an officer of other investment companies advised
or administered by Dreyfus. From April 1997 to March 1998, she was
employed as a Relationship Manager with Citibank, N.A. From August
1995 to April 1997, she was an Assistant Vice President with Hudson
Valley Bank, and from September 1990 to August 1995, she was Second
Vice President with Chase Manhattan Bank. She is 30 years old.

MARY A. NELSON, Vice President and Assistant Treasurer. Vice President of
the Distributor and Funds Distributor, Inc., and an officer of other
investment companies advised or administered by Dreyfus. From
September 1989 to July 1994, she was an Assistant Vice President and
Client Manager for The Boston Company, Inc. She is 35 years old.

GEORGE A. RIO, Vice President and Assistant Treasurer. Executive Vice
President and Client Service Director of Funds Distributor, Inc., and
an officer of other investment companies advised or administered by
Dreyfus. From June 1995 to March 1998, he was Senior Vice President
and Senior Key Account Manager for Putnam Mutual Funds. From May 1994
to June 1995, he was Director of Business Development for First Data
Corporation. From September 1983 to May 1994, he was Senior Vice
President and Manager of Client Services and Director of Internal Audit
at The Boston Company, Inc. He is 44 years old.

JOSEPH F. TOWER, III, Vice President and Assistant Treasurer. Senior Vice
President, Treasurer, Chief Financial Officer and a director of the
Distributor and Funds Distributor, Inc., and an officer of other
investment companies advised or administered by Dreyfus. From July
1988 to August 1994, he was employed by The Boston Company, Inc. where
he held various management positions in the Corporate Finance and
Treasury areas. He is 37 years old.

DOUGLAS C. CONROY, Vice President and Assistant Secretary. Assistant Vice
President of Funds Distributor, Inc., and an officer of other
investment companies advised or administered by Dreyfus. From April
1993 to January 1995, he was a Senior Fund Accountant for Investors
Bank & Trust Company. He is 30 years old.

CHRISTOPHER J. KELLEY, Vice President and Assistant Secretary. Vice
President and Senior Associate General Counsel of the Distributor and
Funds Distributor, Inc., and an officer of other investment companies
advised or administered by Dreyfus. From April 1994 to July 1996, he
was Assistant Counsel at Forum Financial Group. From October 1992 to
March 1994, he was employed by Putnam Investments in legal and
compliance capacities. He is 34 years old.

KATHLEEN K. MORRISEY, Vice President and Assistant Secretary. Manager of
Treasury Services Administration of Funds Distributor, Inc., and an
officer of other investment companies advised or administered by
Dreyfus. From July 1994 to November 1995, she was a Fund Accountant
for Investors Bank & Trust Company. She is 26 years old.

ELBA VASQUEZ, Vice President and Assistant Secretary. Assistant Vice
President of Funds Distributor, Inc., and an officer of other
investment companies advised or administered by Dreyfus. From March
1990 to May 1996, she was employed by U.S. Trust Company of New York,
where she held various sales and marketing positions. She is 37 years
old.

The address of each officer of the Fund is 200 Park Avenue, New York,
New York 10166.

The Fund's Board members and officers, as a group, owned less than 1%
of the shares outstanding of each Portfolio on January 5, 1999.

The following persons are known by the Fund to own, beneficially and of
record, except where indicated, 5% or more of the outstanding voting
securities of the indicated Portfolio as of January 5, 1999: Fund 555: Apt
Holdings Corporation, Attention Michael Botsford, 4500 New Linden Hill Road,
Wilmington, DE 19808 - 72.68%; Bank of New York, Trustee for various
Retirement Plans, The Centre at Purchase, Attention Louis Stewart, 3
Manhattanville Road, Purchase, NY 10577-2116 - 6.50%; Bank of New York,
Trustee for various Retirement Plans, The Centre at Purchase, Attention
Louis Stewart, 3 Manhattanville Road, Purchase, NY 10577-2116 - 50.85%;
Union Bank of California, Select Benefit Omnibus, Attention Mutual Fund,
P.O. Box 109, San Diego, California 92112-4103 - 16.69%; Fund 552: Bank of
New York, Trustee for various Retirement Plans, The Centre at Purchase,
Attention Louis Stewart, 3 Manhattanville Road, Purchase, NY 10577-2116 -
61.54%; Union Bank of California, Select Benefit Omnibus, Attention Mutual
Fund, P.O. Box 109, San Diego, California 92112-4103 - 14.85%; Fund 755:
Boston Safe Deposit & Trust Co., Trustee as Agent-Omnibus Account, 1 Cabot
Road, Medford, Massachusetts, 02155-5141 - 51.63%; Apt Holdings Corporation,
Attention Michael Botsford, 4500 New Linden Hill Road, Wilmington, DE 19808
- - 14.26%; MAC & Co., A/C MLCF8548702, Mutual Funds Operations, P.O. Box
3198, Pittsburgh, Pennsylvania, 15230-3198 - 11.12%; MAC & Co., A/C 195-859,
FBO EASY 401(K) Plan, A/C DEPF1958592, Attention Mutual Fund Operations,
P.O. Box 3198, Pittsburgh, Pennsylvania, 15230-3198 - 10.22%; Fidelity
Investments Institutional Operations Co. (FIIOC), as agent for certain
employee benefit plans, 100 Magellan Way, Covington, Kentucky 41015-1987 -
8.16%; MAC & Co., A/C MLCF8548722, Mutual Funds Operations, P.O. Box 3198,
Pittsburgh, Pennsylvania, 15230-3198 - 28.35%; Fidelity Investments
Institutional Operations Co. (FIIOC), as agent for certain employee benefit
plans, 100 Magellan Way, Covington, Kentucky 41015-1987 - 25.64%; Boston
Safe Deposit & Trust Co., Trustee as Agent-Omnibus Account, 1 Cabot Road,
Medford, Massachusetts, 02155-5141 - 23.24%; MAC & Co., A/C 195-861, FBO
EASY 401(K) Plan, A/C DEPF1958612, Attention Mutual Fund Operations, P.O.
Box 3198, Pittsburgh, Pennsylvania, 15230-3198 - 12.64%; Boston Safe Deposit
& Trust Co., Trustee as Agent-Omnibus Account, 1 Cabot Road, Medford,
Massachusetts, 02155-5141 - 44.35%; MAC & Co., A/C MLCF8548712, Mutual Funds
Operations, P.O. Box 3198, Pittsburgh, Pennsylvania, 15230-3198 - 40.87%;
MAC & Co., A/C 195-860, FBO EASY 401(K) Plan, Mellon Bank, NA, Mutual Funds,
P.O. Box 320, Pittsburgh, Pennsylvania, 15230-0320 - 6.03%; Fidelity
Investments Institutional Operations Co. (FIIOC), as agent for certain
employee benefit plans, 100 Magellan Way, Covington, Kentucky 41015-1987 -
5.74%

A shareholder who beneficially owns, directly or indirectly, more than
25% of the Fund's voting securities may be deemed a "control person" (as
defined in the 1940 Act) of the Fund.

MANAGEMENT ARRANGEMENTS

Investment Adviser. Dreyfus is a wholly-owned subsidiary of Mellon
Bank, N.A., which is a wholly-owned subsidiary of Mellon Bank Corporation
("Mellon"). Mellon is a publicly owned multibank holding company
incorporated under Pennsylvania law in 1971 and registered under the Federal
Bank Holding Company Act of 1956, as amended. Mellon provides a
comprehensive range of financial products and services in domestic and
selected international markets. Mellon is among the twenty-five largest
bank holding companies in the United States based on total assets.

Dreyfus supervises investment management of each Portfolio pursuant to
the Management Agreement (the "Management Agreement") dated August 24, 1994,
as amended February 2, 1995, between Dreyfus and the Fund. As to each
Portfolio, the Management Agreement is subject to annual approval by (i) the
Fund's Board or (ii) vote of a majority (as defined in the 1940 Act) of the
outstanding voting securities of such Portfolio, provided that in either
event the continuance also is approved by a majority of the Board members
who are not "interested persons" (as defined in the 1940 Act) of the Fund or
Dreyfus, by vote cast in person at a meeting called for the purpose of
voting on such approval. The Management Agreement was last approved by the
Board, including a majority of the Board members who are not "interested
persons" of any party to the Agreement, at a meeting held on November 5,
1998. As to each Portfolio, the Management Agreement is terminable without
penalty, on 60 days' notice, by the Fund's Board or by vote of the holders
of a majority of such Portfolio's shares, or, upon not less than 90 days'
notice, by Dreyfus. The Management Agreement will terminate automatically,
as to the relevant Portfolio, in the event of its assignment (as defined in
the 1940 Act).

The following persons are officers and/or directors of the Manager:
Christopher M. Condron, Chairman of the Board and Chief Executive Officer;
Stephen E. Canter, President, Chief Operating Officer, Chief Investment
Officer and a director; Thomas F. Eggers, Vice Chairman-Institutional and a
director; Lawrence S. Kash, Vice Chairman and a director; Ronald P. O'Hanley
III, Vice Chairman; J. David Officer, Vice Chairman and a director; William
T. Sandalls, Jr., Executive Vice President; Mark N. Jacobs, Vice President,
General Counsel and Secretary; Patrice M. Kozlowski, Vice President--
Corporate Communications; Mary Beth Leibig, Vice President--Human Resources;
Andrew S. Wasser, Vice President--Information Systems; Theodore A. Schachar,
Vice President; Wendy Strutt, Vice President; Richard Terres, Vice
President; William H. Maresca, Controller; James Bitetto, Assistant
Secretary; Steven F. Newman, Assistant Secretary; and Mandell L. Berman,
Burton C. Borgelt, Steven G. Elliot, Martin C. McGuinn, Richard W. Sabo and
Richard F. Syron, directors.

Dreyfus maintains office facilities on behalf of the Fund, and
furnishes statistical and research data, clerical help, accounting, data
processing, bookkeeping and internal auditing and certain other required
services to the Fund. Dreyfus may pay the Distributor for shareholder
services from Dreyfus's own assets, including past profits but not including
the management fee paid by the Fund. The Distributor may use part or all of
such payments to pay Service Agents (as defined below) in respect of these
services. Dreyfus also may make such advertising and promotional
expenditures using its own resources, as it from time to time deems
appropriate.

Sub-Investment Adviser. Mellon Equity provides investment advisory
assistance and day-to-day management of each Portfolio's investments
pursuant to the Sub-Investment Advisory Agreement (the "Sub-Advisory
Agreement") dated February 2, 1995 between Mellon Equity and Dreyfus. As to
each Portfolio, the Sub-Advisory Agreement is subject to annual approval by
(i) the Fund's Board or (ii) vote of a majority (as defined in the 1940 Act)
of such Portfolio's outstanding voting securities, provided that in either
event the continuance also is approved by a majority of the Board members
who are not "interested persons" (as defined in the 1940 Act) of the Fund or
the Advisers, by vote cast in person at a meeting called for the purpose of
voting on such approval. The Sub-Advisory Agreement was last approved by
the Board, including a majority of the Board members who are not "interested
persons" of any party to the Sub-Advisory Agreement, at a meeting held on
November 5, 1998. As to each Portfolio, the Sub-Advisory Agreement is
terminable without penalty, (i) by Dreyfus on 60 days' notice, (ii) by the
Fund's Board or by vote of the holders of a majority of such Portfolio's
outstanding voting securities on 60 days' notice, or (iii) upon not less
than 90 days' notice, by Mellon Equity. The Sub-Advisory Agreement will
terminate automatically, as to the relevant Portfolio, in the event of its
assignment (as defined in the 1940 Act).

The following entities/persons are partners, officers and/or directors
of Mellon Equity: MMIP, Inc. as General Partner, an affiliate of Mellon
Equity Associates; Mellon Bank, N.A. as Limited Partner, an affiliate of
Mellon Equity Associates; Christopher M. Condron, Executive Committee
Member; James M. Gockley, Executive Committee Member; Ronald P. O'Hanley,
Chairman and Executive Committee Member; William P. Rydell, Executive
Committee Member, President and Chief Executive Officer; Joan A. Greene,
Treasurer; Patricia K. Nichols, Executive Vice President and Chief
Operations Officer; and Barbara J. Parrish, Secretary.

Mellon Equity provides day-to-day management of each Portfolio's
investments, subject to the supervision of Dreyfus and the approval of the
Fund's Board. The Advisers provide the Fund with portfolio managers who are
authorized by the Fund's Board to execute purchases and sales of securities
for each Portfolio. The Fund's portfolio manager is Steven A. Falci. The
Advisers maintain research departments with professional portfolio managers
and securities analysts who provide research services for the Fund and for
other funds advised by Dreyfus and Mellon Equity.

Under Dreyfus's personal securities trading policy (the "Policy"),
Dreyfus employees must preclear personal transactions in securities not
exempt under the Policy. In addition, Dreyfus employees must report their
personal securities transactions and holdings, which are reviewed for
compliance with the Policy. In that regard, Dreyfus portfolio managers and
other investment personnel also are subject to the oversight of Mellon's
Investment Ethics Committee. Dreyfus portfolio managers and other
investment personnel who comply with the Policy's preclearance and
disclosure procedures and the requirements of the Committee, may be
permitted to purchase, sell or hold securities which also may be or are held
in fund(s) they manage or for which they otherwise provide investment
advice.

All expenses incurred in the operation of the Fund are borne by the
Fund, except to the extent specifically assumed by Dreyfus. The expenses
borne by the Fund include: organizational costs, taxes, interest, loan
commitment fees, interest and distributions paid on securities sold short,
brokerage fees and commissions, if any, fees of Board members who are not
officers, directors, employees or holders of 5% or more of the outstanding
voting securities of the Advisers or their affiliates, Securities and
Exchange Commission fees, state Blue Sky qualification fees, advisory fees,
charges of custodians, transfer and dividend disbursing agents' fees,
certain insurance premiums, industry association fees, outside auditing and
legal expenses, costs of maintaining the Fund's existence, costs of
independent pricing services, costs attributable to investor services
(including, without limitation, telephone and personnel expenses), costs of
preparing and printing prospectuses and statements of additional information
for regulatory purposes and for distribution to existing shareholders, costs
of shareholders' reports and meetings, and any extraordinary expenses. In
addition, the Investor Class shares are subject to an annual service fee.
See "Shareholder Services Plan." Expenses attributable to a particular
Portfolio are charged against the assets of that Portfolio; other expenses
of the Fund are allocated among the Portfolios on the basis determined by
the Fund's Board, including, but not limited to, proportionately in relation
to the net assets of the Portfolios.

As compensation for its services, the Fund has agreed to pay Dreyfus a
monthly management fee at the annual rate of .60 of 1% of the value of the
Income Portfolio's average daily net asset and .75 of 1% of the value of
each of the Growth Portfolio's and the Growth and Income Portfolio's average
daily net assets. For the fiscal years ended September 30, 1996, 1997 and
1998, the management fees payable by each Portfolio, the amounts waived by
Dreyfus and the net fees paid to Dreyfus were as follows:

<TABLE>

Management Fee Payable Reduction In Fee Net Fees Paid by Portfolio
Portfolio 1996 1997 1998 1996 1997 1998 1996 1997 1998
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Income $106,953 $ 164,651 $ 241,264 $106,953 $39,831 $ 0 0 $124,820 $ 241,264

Growth $363,726 $1,114,168 $1,403976 $186,888 $88,813 $ 0 $176,838 $1,025,355 $1,403,976

Growth $222,888 $ 392,656 $ 447,108 $156,678 $115,735 $ 0 $ 66,210 $ 276,921 $ 447,108
Portfolio
</TABLE>

As compensation for Mellon Equity's services, Dreyfus has agreed to pay
Mellon Equity an annual fee payable monthly, at the following rate: .35% of
each Portfolio's average daily net assets up to $600 million in Fund assets;
.25% of the Portfolio's average daily net assets when the Fund's assets are
between $600 million and $1.2 billion; .20% of the Portfolio's average daily
net assets when the Fund's assets are between $1.2 billion and $1.8 billion;
and .15% of the Portfolio's average daily net assets when the fund's assets
are over $1.8 billion. For the fiscal years ended September 30, 1996, 1997
and 1998, the sub-investment advisory fee payable by Dreyfus was as follows:

Portfolio Sub-Investment Advisory Fee Payable by Dreyfus
1996 1997 1998

Income Portfolio $62,430 $95,953 $140,738

Growth and
Income Portfolio $169,780 $519,418 $655,189

Growth Portfolio $104,256 $183,033 $208,651

Dreyfus has agreed that if in any fiscal year the aggregate expenses of
a Portfolio, exclusive of taxes, brokerage, interest on borrowings and (with
the prior written consent of the necessary state securities commissions)
extraordinary expenses, but including the management fee, exceed the expense
limitation of any state having jurisdiction over that Portfolio, the Fund
may deduct from the payment to be made to Dreyfus under the Management
Agreement, or Dreyfus will bear, such excess expense to the extent required
by state law. Such deduction or payment, if any, will be estimated daily,
and reconciled and effected or paid, as the case may be, on a monthly basis.

The aggregate of the fees payable to Dreyfus is not subject to
reduction as the value of the Portfolios' net assets increases.

Distributor. Premier Mutual Fund Services, Inc., located at 60 State
Street, Boston, Massachusetts 02109, serves as the Fund's distributor on a
best efforts basis pursuant to an agreement which is renewable annually.

The Distributor may pay dealers a fee of up to .5% of the amount
invested through such dealers in Fund shares by employees participating in
qualified or non-qualified employee benefit plans or other programs where
(i) the employers or affiliated employers maintaining such plans or programs
have a minimum of 250 employees eligible for participation in such plans or
programs or (ii) such plan's or program's aggregate investment in the
Dreyfus Family of Funds or certain other products made available by the
Distributor to such plans or programs exceeds $1,000,000 ("Eligible Benefit
Plans"). Shares of funds in the Dreyfus Family of Funds then held by
Eligible Benefit Plans will be aggregated to determine the fee payable. The
Distributor reserves the right to cease paying these fees at any time. The
Distributor will pay such fees from its own funds, other than amounts
received from a Fund, including past profits or any other source available
to it.

Transfer and Dividend Disbursing Agent and Custodian. Dreyfus
Transfer, Inc. (the "Transfer Agent"), a wholly-owned subsidiary of Dreyfus,
P.O. Box 9671, Providence, Rhode Island 02940-9671, is the Fund's transfer
and dividend disbursing agent. Under a transfer agency agreement with the
Fund, the Transfer Agent arranges for the maintenance of shareholder account
records for the Fund, the handling of certain communications between
shareholders and the Fund and the payment of dividends and distributions
payable by each Portfolio. For these services, the Transfer Agent receives
a monthly fee computed on the basis of the number of shareholder accounts it
maintains for the Fund during the month, and is reimbursed for certain out-
of-pocket expenses.

Mellon Bank, N.A. (the "Custodian"), One Mellon Center, Pittsburgh,
Pennsylvania 15258, acts as custodian of the Fund's investments. Under a
custody agreement with the Fund, the Custodian holds each Portfolio's
securities and keeps all necessary accounts and records. For its custody
services, the Custodian receives a monthly fee based on the market value of
each Portfolio's assets held in custody and receives certain securities
transaction charges.

HOW TO BUY SHARES

General. Shares of each Class are sold without a sales charge.
Certain financial institutions (which may include banks), securities dealers
and other industry professionals (collectively, "Service Agents") effecting
transactions in Fund shares may charge their clients direct fees in
connection with such transactions.

Investor Class shares are offered to any investor. Restricted Class
shares are offered only to clients of Service Agents that have entered into
a selling agreement with the Distributor, and omnibus accounts maintained by
institutions that provide sub-accounting or recordkeeping services to their
clients. Restricted Class shares also may be purchased by investors who
held Restricted Class shares (formerly, Retail Class shares) in a Fund
account on August 31, 1997 and who are purchasing the shares for such
account. Otherwise, Restricted Class shares may not be purchased directly
by individuals, although institutions may purchase Restricted Class shares
for accounts maintained by individuals.

Stock certificates are issued only upon your written request. No
certificates are issued for fractional shares. The Fund reserves the right
to reject any purchase order.

The minimum initial investment for each Class is $2,500, or $1,000 if
you are a client of a Service Agent which maintains an omnibus account in
the Fund and has made an aggregate minimum initial purchase for its
customers of $2,500. Subsequent investment must be at least $100. However,
the minimum initial investment is $750 for Dreyfus-sponsored Keogh Plans,
IRAs (including regular IRAs, spousal IRAs for a non-working spouse, Roth
IRAs, IRAs set up under a Simplified Employee Pension Plan ("SEP-IRAs"), and
rollover IRAs) and 403(b)(7) Plans with only one participant and $500 for
Dreyfus-sponsored Education IRAs, with no minimum for subsequent purchases.
The initial investment must be accompanied by the Account Application. For
full-time or part-time employees of Dreyfus or any of its affiliates or
subsidiaries, directors of Dreyfus, Board members of a fund advised by
Dreyfus, including members of the Fund's Board, or the spouse or minor child
of any of the foregoing, the minimum initial investment is $1,000. For full-
time or part-time employees of Dreyfus or any of its affiliates or
subsidiaries who elect to have a portion of their pay directly deposited
into their Fund accounts, the minimum initial investment is $50. The Fund
reserves the right to offer Fund shares without regard to minimum purchase
requirements to employees participating in certain qualified or non-
qualified employee benefit plans or other programs where contributions or
employee benefit plans or other programs where contributions or account
information can be transmitted in a manner and form acceptable to the Fund.
The Fund reserves the right to vary further the initial and subsequent
investment minimum requirements at any time. Fund shares also are offered
without regard to the minimum initial investment requirements through
Dreyfus-Automatic Asset Builderr, Dreyfus Government Direct Deposit
Privilege or Dreyfus Payroll Savings Plan pursuant to the Dreyfus Step
Program described under "Shareholder Services." These services enable you
to make regularly scheduled investments and may provide you with a
convenient way to invest for long-term financial goals. You should be
aware, however, that periodic investment plans do not guarantee a profit and
will not protect an investor against loss in a declining market.

Service Agents may receive different levels of compensation for selling
different Classes of shares. Management understands that some Service
Agents may impose certain conditions on their clients which are different
from those described in the Fund's Prospectus and this Statement of
Additional Information, and, to the extent permitted by applicable
regulatory authority, may charge their clients direct fees. You should
consult your Service Agent in this regard.

Shares are sold on a continuous basis at the net asset value per share
next determined after an order in proper form is received by the Transfer
Agent or other entity authorized to receive orders on behalf of the Fund.
Net asset value per share is determined as of the close of trading on the
floor of the New York Stock Exchange (currently 4:00 p.m., New York time) on
each day the New York Stock Exchange is open for business. For purposes of
computing net asset value per share, options will be valued 15 minutes after
the close of trading on the floor of the New York Stock Exchange. Net asset
value per share of each Class is computed by dividing the value of the
Portfolio's net assets represented by such Class (i.e., the value of its
assets less liabilities) by the total number of Portfolio shares of such
class outstanding. Each Portfolio's investments are valued based on market
value or, where market quotations are not readily available, based on fair
market value as determined in good faith by the Fund's Board. For further
information regarding the methods employed in valuing the Portfolios'
investments, see "Determination of Net Asset Value."

For certain institutions that have entered into agreements with the
Distributor, payment for the purchase of Portfolio shares may be
transmitted, and must be received by the Transfer Agent, within three
business days after the order is placed. If such payment is not received
within three business days after the order is placed, the order may be
canceled and the institution could be held liable for resulting fees and/or
losses.

Dreyfus TeleTransfer Privilege. You may purchase shares by telephone
if you have checked the appropriate box and supplied the necessary
information on the Account Application or have filed a Shareholder Services
Form with the Transfer Agent. The proceeds will be transferred between the
bank account designated in one of these documents and your Fund account.
Only a bank account maintained in a domestic financial institution which is
an Automated Clearing House member may be so designated.

Dreyfus TeleTransfer purchase orders may be made at any time. Purchase
orders received by 4:00 p.m., New York time, on any business day that the
Transfer Agent and the New York Stock Exchange are open for business will be
credited to the shareholder's Fund account on the next bank business day
following such purchase order. Purchase orders made after 4:00 p.m., New
York time, on any business day the Transfer Agent and the New York Stock
Exchange are open for business, or orders made on Saturday, Sunday or any
Fund holiday (e.g., when the New York Stock Exchange is not open for
business), will be credited to the shareholder's Fund account on the second
bank business day following such purchase order. To qualify to use the
Dreyfus TeleTransfer Privilege, the initial payment for purchase of shares
must be drawn on, and redemption proceeds paid to, the same bank and account
as are designated on the Account Application or Shareholder Services Form on
file. If the proceeds of a particular redemption are to be wired to an
account at any other bank, the request must be in writing and signature-
guaranteed. See "How to Redeem Shares--Dreyfus TeleTransfer Privilege."

Reopening an Account. You may reopen an account with a minimum
investment of $100 without filing a new Account Application during the
calendar year the account is closed or during the following calendar year,
provided the information on the old Account Application is still applicable.

SHAREHOLDER SERVICES PLAN
(INVESTOR CLASS SHARES ONLY)

The Fund has adopted a Shareholder Services Plan pursuant to which each
Portfolio pays the Distributor for the provision of certain services to
holders of its Investor Class shares a fee at an annual rate of .25 of 1% of
the value of the average daily net assets of the Portfolio's Investor Class
shares. 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. Under the Shareholder Services
Plan, the Distributor may make payments to Service Agents in respect to
these services.

A quarterly report of the amounts expended under the Shareholder
Services Plan, and the purposes for which such expenditures were incurred,
must be made to the Fund's Board for its review. In addition, the
Shareholder Services Plan provides that material amendments of the Plan must
be approved by the Board, and by the Board members who are not "interested
persons" (as defined in the 1940 Act) of the Fund and have no direct or
indirect financial interest in the operation of the Shareholder Services
Plan or in any agreements entered into in connection with the Shareholder
Services Plan, by vote cast in person at a meeting called for the purpose of
considering such amendments. As to each Portfolio, the Shareholder Services
Plan is subject to annual approval by such vote of the Board members cast in
person at a meeting called for the purpose of voting on the Shareholder
Services Plan. The Shareholder Services Plan was last so approved at a
meeting held on November 5 , 1998. The Shareholder Services Plan is
terminable at any time with respect to each Portfolio by vote of a majority
of the Board members who are not "interested persons" and have no direct or
indirect financial interest in the operation of the Shareholder Services
Plan or in any agreements entered into in connection with the Shareholder
Services Plan.

For the fiscal year ended September 30, 1998, the amounts charged
Investor Class shares (formerly, Institutional Shares) of each Portfolio
pursuant to the Shareholder Services Plan were as follows:

Amount Charged Pursuant
Portfolio to the Plan

Income Portfolio $27,990

Growth and Income Portfolio $ 7,498
Portfolio

Growth Portfolio $14,741

HOW TO REDEEM SHARES

Wire Redemption Privilege. By using this Privilege, you authorize the
Transfer Agent to act on wire, telephone or letter redemption instructions
from any person representing himself or herself to be you or a
representative of your Service Agent, and reasonably believed by the
Transfer Agent to be genuine. Ordinarily, the Fund will initiate payment
for shares redeemed pursuant to this Privilege on the next business day
after receipt if the Transfer Agent receives a redemption request in proper
form. Redemption proceeds ($1,000 minimum) will be transferred by Federal
Reserve wire only to the commercial bank account specified by you on the
Account Application or Shareholder Services Form, or to a correspondent bank
if your bank is not a member of the Federal Reserve System. Fees ordinarily
are imposed by such bank and borne by the investor. Immediate notification
by the correspondent bank to your bank is necessary to avoid a delay in
crediting the funds to your bank account.

If you have access to telegraphic equipment, you may wire redemption
requests to the Transfer Agent by employing the following transmittal code
which may be used for domestic or overseas transmissions:

Transfer Agent's
Transmittal Code Answer Back Sign

144295 144295 TSSG PREP

If you do not have direct access to telegraphic equipment, you may have
the wire transmitted by contacting a TRT Cables operator at 1-800-654-7171,
toll free. You should advise the operator that the above transmittal code
must be used and should also inform the operator of the Transfer Agent's
answer back sign.

To change the commercial bank or account designated to receive
redemption proceeds, a written request must be sent to the Transfer Agent.
This request must be signed by each shareholder, with each signature
guaranteed as described below under "Stock Certificates; Signatures."

Telephone Redemption Privilege. You may request by telephone that
redemption proceeds (maximum $150,000 per day) be paid by check and mailed
to your address. The Telephone Redemption Privilege is granted
automatically unless you refuse it.

Stock Certificates; Signatures. Any certificates representing
Portfolio shares to be redeemed must be submitted with the redemption
request. Written redemption requests must be signed by each shareholder,
including each holder of a joint account, and each signature must be
guaranteed. Signatures on endorsed certificates submitted for redemption
also must be guaranteed. The Transfer Agent has adopted standards and
procedures pursuant to which signature-guarantees in proper form generally
will be accepted from domestic banks, brokers, dealers, credit unions,
national securities exchanges, registered securities associations, clearing
agencies and savings associations as well as from participants in the New
York Stock Exchange Medallion Signature Program, the Securities Transfer
Agents Medallion Program and the Stock Exchanges Medallion Program.
Guarantees must be signed by an authorized signatory of the guarantor, and
"Signature-Guaranteed" must appear with the signature. The Transfer Agent
may request additional documentation from corporations, executors,
administrators, trustees or guardians, and may accept other suitable
verification arrangements from foreign investors, such as consular
verification. For more information with respect to signature-guarantees,
please call one of the telephone numbers listed on the cover.

Dreyfus TeleTransfer Privilege. You may request by telephone that
redemption proceeds (minimum $500 per day) be transferred between your Fund
account and your bank account. Only a bank account maintained in a domestic
financial institution which is an Automated Clearing House member may be
designated. Holders of jointly registered Fund or bank accounts may redeem
through the Dreyfus TeleTransfer Privilege for transfer to their bank
account not more than $250,000 within any 30-day period. You should be
aware that if you have selected the Dreyfus TeleTransfer Privilege, any
request for a wire redemption will be effected as a Dreyfus TeleTransfer
transaction through the Automated Clearing House ("ACH") system unless more
prompt transmittal specifically is requested. Redemption proceeds will be
on deposit in your account at an ACH member bank ordinarily two business
days after receipt of the redemption request. See "How to Buy Shares--
Dreyfus TeleTransfer Privilege."

Redemption Commitment. The Fund has committed to pay in cash all
redemption requests by any shareholder of record of a Portfolio, limited in
amount during any 90-day period to the lesser of $250,000 or 1% of the value
of the Portfolio's net assets at the beginning of such period. Such
commitment is irrevocable without the prior approval of the Securities and
Exchange Commission and is a fundamental policy of the Fund, which may not
be changed without shareholder approval. In the case of requests for
redemption in excess of such amount, the Board reserves the right to make
payments in whole or in part in securities or other assets in case of an
emergency or any time a cash distribution would impair the liquidity of the
Portfolio to the detriment of the existing shareholders. In such event, the
securities would be valued in the same manner as the Portfolio's investments
are valued. If the recipient sold such securities, brokerage charges would
be incurred.

Suspension of Redemptions. The right of redemption may be suspended or
the date of payment postponed (a) during any period when the New York Stock
Exchange is closed (other than customary weekend and holiday closings), (b)
when trading in the markets the Portfolio ordinarily utilizes is restricted,
or when an emergency exists as determined by the Securities and Exchange
Commission so that disposal of the Fund's investments or determination of
its net asset value is not reasonably practicable, or (c) for such other
periods as the Securities and Exchange Commission by order may permit to
protect the Portfolio's shareholders.

SHAREHOLDER SERVICES

Fund Exchanges. You may purchase, in exchange for shares of a Class of
a Portfolio, shares of the same Class of another Portfolio or shares of
certain other funds managed or administered by Dreyfus, to the extent such
shares are offered for sale in your state of residence. Shares of other
funds purchased by exchange will be purchased on the basis of relative net
asset value per share as follows:

A. Exchanges for shares of funds that are offered without a sales
load will be made without a sales load.

B. Shares of funds purchased without a sales load may be exchanged
for shares of other funds sold with a sales load, and the
applicable sales load will be deducted.

C. Shares of funds purchased with a sales load may be exchanged
without a sales load for shares of other funds sold without a
sales load.

D. Shares of funds purchased with a sales load, shares of funds
acquired by a previous exchange from shares purchased with a sales
load and additional shares acquired through reinvestment of
dividends or distributions of any such funds (collectively
referred to herein as "Purchased Shares") may be exchanged for
shares of other funds sold with a sales load (referred to herein
as "Offered Shares"), provided that, if the sales load applicable
to the Offered Shares exceeds the maximum sales load that could
have been imposed in connection with the Purchased Shares (at the
time the Purchased Shares were acquired), without giving effect to
any reduced loads, the difference will be deducted.

To accomplish an exchange under item D above, you must notify the
Transfer Agent of your prior ownership of fund shares and your account
number.

To request an exchange, you must give exchange instructions to the
Transfer Agent in writing or by telephone. The ability to issue exchange
instructions by telephone is given to all Fund shareholders automatically,
unless you check the applicable "No" box on the Account Application,
indicating that you specifically refuse this Privilege. By using the
Telephone Exchange Privilege, you authorize the Transfer Agent to act on
telephonic instructions (including over The Dreyfus Touchr automated
telephone system) from any person representing himself or herself to be you,
and reasonably believed by the Transfer Agent to be genuine. Telephone
exchanges may be subject to limitations as to the amount involved or the
number of telephone exchanges permitted. Shares issued in certificate form
are not eligible for telephone exchange. No fees currently are charged
shareholders directly in connection with exchanges, although the Fund
reserves the right, upon not less than 60 days' written notice, to charge
shareholders a nominal administrative fee in accordance with rules
promulgated by the Securities and Exchange Commission.

To establish a retirement plan by exchange, shares of the fund being
exchanged must have a value of at least the minimum initial investment
required for the fund into which the exchange is being made.

Dreyfus Auto-Exchange Privilege. Dreyfus Auto-Exchange Privilege
permits you to purchase, in exchange for shares of a Portfolio, shares of
the same Class of another Portfolio or shares of certain other funds in the
Dreyfus Family of Funds. This Privilege is available only for existing
accounts. Shares will be exchanged on the basis of relative net asset value
as described above under "Fund Exchanges." Enrollment in or modification or
cancellation of this Privilege is effective three business days following
notification by you. You will be notified if your account falls below the
amount designated to be exchanged under this Privilege. In this case, your
account will fall to zero unless additional investments are made in excess
of the designated amount prior to the next Auto-Exchange transaction.
Shares held under IRA and other retirement plans are eligible for this
Privilege. Exchanges of IRA shares may be made between IRA accounts and
from regular accounts to IRA accounts, but not from IRA accounts to regular
accounts. With respect to all other retirement accounts, exchanges may be
made only among those accounts.

Fund Exchanges and the Dreyfus Auto-Exchange Privilege are available to
shareholders resident in any state in which shares of the fund being
acquired may legally be sold. Shares may be exchanged only between accounts
having identical names and other identifying designations.

Shareholder Services Forms and prospectuses of the other funds may be
obtained by calling 1-800-645-6561. The Fund reserves the right to reject
any exchange request in whole or in part. The Fund Exchanges service or the
Dreyfus Auto-Exchange Privilege may be modified or terminated at any time
upon notice to shareholders.

Dreyfus-Automatic Asset Builderr. Dreyfus-Automatic Asset Builder
permits you to purchase Portfolio shares (minimum of $100 and maximum of
$150,000 per transaction) at regular intervals selected by you. Portfolio
shares are purchased by transferring funds from the bank account designated
by you.

Dreyfus Government Direct Deposit Privilege. Dreyfus Government Direct
Deposit Privilege enables you to purchase Portfolio shares (minimum of $100
and maximum of $50,000 per transaction) by having Federal salary, Social
Security, or certain veterans', military or other payments from the Federal
Government automatically deposited into your fund account. You may deposit
as much of such payments as you elect.

Dreyfus Payroll Savings Plan. Dreyfus Payroll Savings Plan permits you
to purchase Portfolio shares (minimum of $100 per transaction) automatically
on a regular basis. Depending upon your employer's direct deposit program,
you may have part or all of your paycheck transferred to your existing
Dreyfus account electronically through the Automated Clearing House system
at each pay period. To establish a Dreyfus Payroll Savings Plan account,
you must file an authorization form with your employer's payroll department.
It is the sole responsibility of your employer, not the Distributor, the
Advisers, the Fund, the Transfer Agent or any other person, to arrange for
transactions under the Dreyfus Payroll Savings Plan.

Dreyfus Step Program. The Dreyfus Step Program enables you to purchase
Portfolio shares without regard to the Fund's minimum initial investment
requirements through Dreyfus-Automatic Asset Builderr, Dreyfus Government
Direct Deposit Privilege or Dreyfus Payroll Savings Plan. To establish a
Dreyfus Step Program account, you must supply the necessary information on
the Account Application and file the required authorization form(s) with the
Transfer Agent. For more information concerning this Program, or to request
the necessary authorization form(s), please call toll free 1-800-782-6620.
You may terminate your participation in this Program at any time by
discontinuing your participation in Dreyfus-Automatic Asset Builder, Dreyfus
Government Direct Deposit Privilege or Dreyfus Payroll Savings Plan, as the
case may be, as provided under the terms of such Privilege(s). The Fund may
modify or terminate this Program at any time.

Dreyfus Dividend Options. Dreyfus Dividend Sweep allows you to invest
automatically on the payment date your dividends or dividends and capital
gain distributions, if any, from a Portfolio in shares of the same Class of
another Portfolio or shares of certain other funds in the Dreyfus Family of
Funds of which you are a shareholder. Shares of other funds purchased
pursuant to this privilege will be purchased on the basis of relative net
asset value per share as follows:

A. Dividends and distributions paid by a fund may be invested without
imposition of a sales load in shares of other funds that are
offered without a sales load.

B. Dividends and distributions paid by a fund which does not charge a
sales load may be invested in shares of other funds sold with a
sales load, and the applicable sales load will be deducted.

C. Dividends and distributions paid by a fund that charges a sales
load may be invested in shares of other funds sold with a sales
load (referred to herein as "Offered Shares"), provided that, if
the sales load applicable to the Offered Shares exceeds the
maximum sales load charged by the fund from which dividends or
distributions are being swept, without giving effect to any
reduced loads, the difference will be deducted.

D. Dividends and distributions paid by a fund may be invested in
shares of other funds that impose a contingent deferred sales
charge ("CDSC") and the applicable CDSC, if any, will be imposed
upon redemption of such shares.

Dreyfus Dividend ACH permits you to transfer electronically dividends
or dividends and capital gain distributions, if any, from the Fund to a
designated bank account. Only an account maintained at a domestic financial
institution which is an Automated Clearing House member may be so
designated. Banks may charge a fee for this service.

Automatic Withdrawal Plan. The Automatic Withdrawal Plan permits you
to request withdrawal of a specified dollar amount (minimum of $50) on
either a monthly or quarterly basis if you have a $5000 minimum account.
Withdrawal payments are the proceeds from sales of Portfolio shares, not the
yield on the shares. If withdrawal payments exceed reinvested dividends and
distributions, your shares will be reduced and eventually may be depleted.
Automatic Withdrawal may be terminated at any time by you, the Fund or the
Transfer Agent. Shares for which certificates have been issued may not be
redeemed through the Automatic Withdrawal Plan.

Certain Retirement Plans, including Dreyfus-sponsored retirement
plans, may permit certain participants to establish an automatic
withdrawal plan from such Retirement Plans. Participants should consult
their Retirement Plan sponsor and tax adviser for details. Such a
withdrawal plan is different than the Automatic Withdrawal Plan.

Corporate Pension/Profit-Sharing and Retirement Plans. The Fund makes
available to corporations a variety of prototype pension and profit-sharing
plans, including a 401(k) Salary Reduction Plan. In addition, the Fund
makes available Keogh Plans, IRAs (including regular IRAs, spousal IRAs for
a non-working spouse, Roth IRAs, SEP-IRAs, rollover IRAs and Education IRAs)
and 403(b)(7) Plans. Plan support services also are available. You can
obtain details on the various plans by calling the following numbers toll
free: for Keogh Plans, please call 1-800-358-5566; for IRAs (except SEP-
IRAs), please call 1-800-554-4611; or for SEP-IRAs, 401(k) Salary Reduction
Plans and 403(b)(7) Plans, please call 1-800-322-7880.

If you wish to purchase Portfolio shares in conjunction with a Keogh
Plan, a 403(b)(7) Plan or an IRA, including an SEP-IRA, you may request from
the Distributor forms for adoption of such plans.

The entity acting as custodian for Keogh Plans, 403(b)(7) Plans or IRAs
may charge a fee, payment of which could require the liquidation of shares.
All fees charged are described in the appropriate form.

Shares may be purchased in connection with these plans only by direct
remittance to the entity acting as custodian. Purchases for these plans may
not be made in advance of receipt of funds.

The minimum initial investment for corporate plans, Salary Reduction
Plans, 403(b)(7) Plans and SEP-IRAs with more than one participant, is
$2,500 with no minimum for subsequent purchases. The minimum initial
investment is $750 for Dreyfus-sponsored Keogh Plans, IRAs (including
regular IRAs, spousal IRAs for a non-working spouse, Roth IRAs, SEP-IRAs and
rollover IRAs) and 403(b)(7) Plans with only one participant and $500 for
Dreyfus-sponsored Education IRAs, with no minimum for subsequent purchases.

You should read the prototype retirement plan and the appropriate form
of custodial agreement for further details on eligibility, service fees and
tax implications, and should consult a tax adviser.

DETERMINATION OF NET ASSET VALUE

Valuation of Portfolio Securities. Each Portfolio's securities,
including covered call options written by the Portfolio, are valued at the
last sale price on the securities exchange or national securities market on
which such securities primarily are traded. Short-term investments are
carried at amortized cost, which approximates value. Securities not listed
on an exchange or national securities market, or securities in 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. Any
assets or liabilities initially expressed in terms of foreign currency will
be translated into dollars at the midpoint of the New York Interbank market
spot exchange rate as quoted on the day of such translation by the Federal
Reserve Bank of New York or if no such rate is quoted on such date, at the
exchange rate previously quoted by the Federal Reserve Bank of New York or
at such other quoted market exchange rate as may be determined to be
appropriate by the Advisers. Forward currency contracts will be valued at
the current cost of offsetting the contract. Because of the need to obtain
prices as of the close of trading on various exchanges throughout the world,
the calculation of net asset value for each of the Growth and Income
Portfolio and Growth Portfolio does not take place contemporaneously with
the determination of prices of certain portfolio securities. Expenses and
fees of each Portfolio, including the management fee paid by the Portfolio
and, with respect to Investor Class shares, fees pursuant to the Fund's
Shareholder Services Plan, are accrued daily and taken into account for the
purpose of determining the net asset value of Portfolio shares.

Restricted securities, as well as securities or other assets for which
market quotations are not readily available, or are not valued by a pricing
service approved by the Fund's Board, are valued at fair value as determined
in good faith by the Board. The Fund's Board will review the method of
valuation on a current basis. In making their good faith valuation of
restricted securities, the Board generally will take the following factors
into consideration: restricted securities which are securities of the same
class of securities for which a public market exists usually will be valued
at market value less the same percentage discount at which purchased. This
discount will be revised periodically by the Fund's Board if it believes
that it no longer reflects the value of the restricted securities.
Restricted securities not of the same class as securities for which a public
market exists usually will be valued initially at cost. Any subsequent
adjustment from cost will be based upon considerations deemed relevant by
the Fund's Board.

New York Stock Exchange Closings. The holidays (as observed) on which
the New York Stock Exchange is closed currently are: New Year's Day, Martin
Luther King Jr. Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving and Christmas.

DIVIDENDS, DISTRIBUTIONS AND TAXES

Management of the Fund believes that each Portfolio qualified for the
fiscal year ended September 30, 1998 as a "regulated investment company"
under the Internal Revenue Code of 1986, as amended (the "Code"). Each
Portfolio intends to continue to so qualify if such qualification is in the
best interests of its shareholders. Qualification as a regulated investment
company relieves the Portfolio from any liability for Federal income tax to
the extent its earnings are distributed in accordance with the applicable
provisions of the Code. If a Portfolio did not qualify as a regulated
investment company, it would be treated for tax purposes as an ordinary
corporation subject to Federal income tax. The term "regulated investment
company" does not imply the supervision of management or investment
practices or policies by any government agency.

If you elect to receive dividends and distributions in cash, and your
dividend or distribution check is returned to the Fund as undeliverable or
remains uncashed for six months, the Fund reserves the right to reinvest
such dividend or distribution and all future dividends and distributions
payable to you in additional Fund shares at net asset value. No interest
will accrue on amounts represented by uncashed distribution or redemption
checks.

Any dividend or distribution paid shortly after your purchase may have
the effect of reducing the net asset value of the shares below the cost of
your investment. Such a dividend or distribution would be a return on
investment in an economic sense, although taxable as stated above. In
addition, the Code provides that if a shareholder holds shares of the Fund
for six months or less and has received a capital gain distribution with
respect to such shares, any loss incurred on the sale of such shares will be
treated as a long-term capital loss to the extent of the capital gain
distribution received.

Ordinarily, gains and losses realized from portfolio transactions will
be treated as capital gain and loss. However, a portion of the gain or loss
from the disposition of non-U.S. dollar denominated securities (including
debt instruments, certain financial forward futures and option contracts and
certain preferred stock) may be treated as ordinary income or loss under
Section 988 of the Code. In addition, all or a portion of any gain realized
from the sale or other disposition of certain market discount bonds will be
treated as ordinary income under Section 1276 of the Code. Finally, all or
a portion of the gain realized from engaging in "conversion transactions"
may be treated as ordinary income under Section 1258 of the Code.
"Conversion transactions" are defined to include certain forward, futures,
option and straddle transactions, transactions marketed or sold to produce
capital gains, or transactions described in Treasury regulations to be
issued in the future.

Under Section 1256 of the Code, any gain or loss realized by the
Portfolio from certain futures and forward contracts and options
transactions will be treated as 60% long-term capital gain or loss and 40%
short-term capital gain or loss. Gain or loss will arise upon exercise or
lapse of such contracts and options as well as from closing transactions.
In addition, any such contracts or options remaining unexercised at the end
of the Portfolio's taxable year will be treated as sold for their then fair
market value, resulting in additional gain or loss to the Portfolio
characterized in the manner described above.

Offsetting positions held by the Portfolio involving certain contracts
or options may constitute "straddles." "Straddles" are defined to include
"offsetting positions" in actively traded personal property. The tax
treatment of "straddles" is governed by Sections 1092 and 1258 of the Code,
which, in certain circumstances, override or modify the provisions of
Section 1256 of the Code. As such, all or a portion of any short-term or
long-term capital gain from certain "straddle" transactions may be
recharacterized to ordinary income. If the Portfolio were treated as
entering into "straddles" by reason of its engaging in certain forward
contracts or options transactions, such "straddles" would be characterized
as "mixed straddles" if the forward contracts or options transactions
comprising a part of such "straddles" were governed by Section 1256 of the
Code. The Portfolio may make one or more elections with respect to "mixed
straddles." Depending on which election is made, if any, the results to the
Portfolio may differ. If no election is made, to the extent the "straddle"
and conversion transactions rules apply to positions established by the
Portfolio, losses realized by the Portfolio will be deferred to the extent
of unrealized gain in the related offsetting position. Moreover, as a
result of the "straddle" rules, short-term capital loss on "straddle"
positions may be recharacterized as long-term capital loss, and long-term
capital gain on straddle positions may be treated as short-term capital gain
or ordinary income.

The Taxpayer Relief Act of 1997 included constructive sale provisions
that generally apply if the Fund either (1) holds an appreciated financial
position with respect to stock, certain debt obligations, or partnership
interests ("appreciated financial position") and then enters into a short
sale, futures, forward, or offsetting notional principal contract
(collectively, a "Contract") respecting the same or substantially identical
property or (2) holds an appreciated financial position that is a Contract
and then acquires property that is the same as, or substantially identical
to, the underlying property. In each instance, with certain exceptions, the
Fund generally will be taxed as if the appreciated financial position were
sold at its fair market value on the date the Fund enters into the financial
position or acquires the property, respectively. Transactions that are
identified hedging or straddle transactions under other provisions of the
Code can be subject to the constructive sale provisions.

Investment by the Portfolio in securities issued or acquired at a
discount, or providing for deferred interest or for payment of interest in
the form of additional obligations could under special tax rules affect the
amount, timing and character of distributions to shareholders by causing the
Portfolio to recognize income prior to the receipt of cash payments. For
example, the Portfolio could be required to accrue a portion of the discount
(or deemed discount) at which the securities were issued and to distribute
such income in order to maintain its qualification as a regulated investment
company. In such case, the Portfolio may have to dispose of securities
which it might otherwise have continued to hold in order to generate cash to
satisfy these distribution requirements.

If the Growth and Income Portfolio or Growth Portfolio invests in an
entity that is classified as a "passive foreign investment company" ("PFIC")
for Federal income tax purposes, the operation of certain provisions of the
Code applying to PFICs could result in the imposition of certain Federal
income taxes on the Portfolio. In addition, gain realized from the sale or
other disposition of PFIC securities may be treated as ordinary income under
Section 1291 of the Code and, with respect to PFIC securities that are
marked-to-market, under Section 1296 of the Code.

PORTFOLIO TRANSACTIONS

The Advisers assume general supervision over placing orders on behalf
of the Portfolio for the purchase or sale of investment securities.
Allocation of brokerage transactions, including their frequency, is made in
the Advisers' best judgment and in a manner deemed fair and reasonable to
shareholders. The primary consideration is prompt execution of orders at
the most favorable net price. Subject to this consideration, the brokers
selected will include those that supplement the Advisers' research
facilities with statistical data, investment information, economic facts and
opinions. Information so received is in addition to and not in lieu of
services required to be performed by the Advisers and the Advisers' fees are
not reduced as a consequence of the receipt of such supplemental
information.

Such information may be useful to the Advisers in serving both the Fund
and other funds which either advises and, conversely, supplemental
information obtained by the placement of business of other clients may be
useful to the Advisers in carrying out their obligations to the Fund. Sales
by a broker of shares of a Portfolio or other funds advised by Dreyfus or
its affiliates may be taken into consideration, and brokers also will be
selected because of their ability to handle special executions such as are
involved in large block trades or broad distributions, provided the primary
consideration is met. Large block trades may, in certain cases, result from
two or more funds advised or administered by Dreyfus being engaged
simultaneously in the purchase or sale of the same security. Certain of the
Fund's transactions in securities of foreign issuers may not benefit from
the negotiated commission rates available to the Fund for transactions in
securities of domestic issuers. When transactions are executed in the
over-the-counter market, the Fund will deal with the primary market makers
unless a more favorable price or execution otherwise is obtainable. Foreign
exchange transactions are made with banks or institutions in the Interbank
market at prices reflecting a mark-up or mark-down and/or commission.

Portfolio turnover may vary from year to year as well as within a year.
In periods in which extraordinary market conditions prevail, the Advisers
will not be deterred from changing investment strategy as rapidly as needed,
in which case higher turnover rates can be anticipated which would result in
greater brokerage expenses. The overall reasonableness of brokerage
commissions paid is evaluated by Dreyfus based upon its knowledge of
available information as to the general level of commissions paid by other
institutional investors for comparable services.

For the fiscal years ended September 30, 1996, 1997 and 1998 each
Portfolio paid total brokerage commissions, none of which was paid to the
Distributor, as follows:

Portfolio Brokerage Commissions Paid
1996 1997 1998

Income Portfolio $ 1,070 $ 9,640 $ 2,424

Growth and Income $69,824 $136,654 $105,184
Portfolio

Growth Portfolio $48,621 $ 66,374 $ 54,683

The above figures for brokerage commissions do not include gross spreads and
concessions on principal transactions, which, where determinable for the
fiscal years ended September 30, 1996, 1997 and 1998 amounted to $7,620,
$9,695 and $8,013, respectively, for the Growth and Income Portfolio and
$13,246, $5,755 and $10,099, respectively, for the Growth Portfolio, none of
which was paid to the Distributor.

PERFORMANCE INFORMATION

The total return and average annual total return for each Portfolio for
the indicated period ended September 30, 1998 were as follows:

<TABLE>
Average Annual Total Average Annual Total
Aggregate Total Total Return Since Return Since
Portfolio Since March 31, 1995* March 31, 1995* One-Year Period

Restricted Investor Restricted Investor Restricted Investor
Class Shares Class Shares Class Shares Class Shares Class Shares Class Shares
<S> <C> <C> <C> <C> <C> <C>
Income Portfolio 43.88% 42.68% 10.95% 10.69% 9.14% 8.92%

Growth and Income
Portfolio 73.94% 75.19% 17.38% 17.13% 6.28% 6.04%

Growth Portfolio 97.52% 96.10% 21.47% 21.22% 3.17% 2.97%

______________________

* Commencement of operations.
</TABLE>

Total return is calculated by subtracting the amount of each
Portfolio's net asset value per share at the beginning of a stated period
from the net asset value per share at the end of the period (after giving
effect to the reinvestment of dividends and distributions during the
period), and dividing the result by the net asset value per share at the
beginning of the period.

Average annual total return is calculated by determining the ending
redeemable value of an investment purchased at net asset value per share
with a hypothetical $1,000 payment made at the beginning of the period
(assuming the reinvestment of dividends and distributions), dividing by the
amount of the initial investment, taking the "n"th root of the quotient
(where "n" is the number of years in the period) and subtracting 1 from the
result.

From time to time, advertising material for the Fund may include
biographical information relating to its portfolio manager and may refer to,
or include commentary by a portfolio manager relating to investment
strategy, asset growth, current or past business, political, economic or
financial conditions and other matters of general interest to investors.

Comparative performance information may be used from time to time in
advertising the Fund's shares, including data from Lipper Analytical
Services, Inc., Morningstar, Inc., S&P 500 Index, EAFE Index, Lehman
Government/Corporate Index, J.P. Morgan Global Index, Russell 2000 Index,
the Dow Jones Industrial Average, Money Magazine, Wilshire 5000 Index and
other industry publications. From time to time, the Fund may compare its
performance against inflation with the performance of other instruments
against inflation, such as short-term Treasury Bills (which are direct
obligations of the U.S. Government) and FDIC-insured bank money market
accounts. In addition, advertising for the Fund may indicate that investors
may consider diversifying their investment portfolios in order to seek
protection of the value of their assets against inflation. From time to
time, advertising materials for the Fund may refer to or discuss then-
current or past economic or financial conditions, developments and/or
events.

From time to time, advertising materials for the Fund may refer to
Morningstar ratings and related analyses supporting such ratings.

INFORMATION ABOUT THE FUND AND PORTFOLIOS

Each Portfolio share has one vote and, when issued and paid for in
accordance with the terms of the offering, is fully paid and non-assessable.
Portfolio shares have no preemptive, subscription or conversion rights and
are freely transferable.

Unless otherwise required by the 1940 Act, ordinarily it will not be
necessary for the Fund to hold annual meetings of shareholders. As a
result, Fund shareholders may not consider each year the election of Board
members or the appointment of auditors. However, the holders of at least
10% of the shares outstanding and entitled to vote may require the Fund to
hold a special meeting of shareholders for purposes of removing a Board
member from office. Fund shareholders may remove a Board member by the
affirmative vote of a majority of the Fund's outstanding voting shares. In
addition, the Fund's Board will call a meeting of shareholders for the
purpose of electing Board members if, at any time, less than a majority of
the Board members then holding office have been elected by shareholders.

The Fund is a "series fund," which is a mutual fund divided into
separate portfolios, each of which is treated as a separate entity for
certain matters under the 1940 Act and for other purposes. A shareholder of
one Portfolio is not deemed to be a shareholder of any other Portfolio. For
certain matters shareholders vote together as a group; as to others they
vote separately by Portfolio.

To date, the Board has authorized the creation of three series of
shares. All consideration received by the Fund for shares of one of the
Portfolios and all assets in which such consideration is invested will
belong to that Portfolio (subject only to the rights of creditors of the
Fund) and will be subject to the liabilities related thereto. The assets
attributable to, and the expenses of, one Portfolio (and as to classes
within a Portfolio) are treated separately from those of the other
Portfolios (and classes). The Fund has the ability to create, from time to
time, new portfolios of shares without shareholder approval.

Rule 18f-2 under the 1940 Act provides that any matter required to be
submitted under the provisions of the 1940 Act or applicable state law or
otherwise to the holders of the outstanding voting securities of an
investment company, such as the Fund, will not be deemed to have been
effectively acted upon unless approved by the holders of a majority of the
outstanding shares of each Portfolio affected by such matter. Rule 18f-2
further provides that a Portfolio shall be deemed to be affected by a matter
unless it is clear that the interests of each Portfolio in the matter are
identical or that the matter does not affect any interest of such Portfolio.
However, that Rule exempts the selection of independent accountants and the
election of Directors from the separate voting requirements of the rule.

Each Portfolio is intended to be a long-term investment vehicle and is
not designed to provide investors with a means of speculating on short-term
market movements. A pattern of frequent purchases and exchanges can be
disruptive to efficient portfolio management and, consequently, can be
detrimental to the Portfolio's performance and its shareholders.
Accordingly, if the Fund's management determines that an investor is
following a market-timing strategy or is otherwise engaging in excessive
trading, the Fund, with or without prior notice, may temporarily or
permanently terminate the availability of Fund Exchanges, or reject in whole
or part any purchase or exchange request, with respect to such investor's
account. Such investors also may be barred from purchasing other funds in
the Dreyfus Family of Funds. Generally, an investor who makes more than
four exchanges out of a Portfolio during any calendar year or who makes
exchanges that appear to coincide with an active market-timing strategy may
be deemed to be engaged in excessive trading. Accounts under common
ownership or control will be considered as one account for purposes of
determining a pattern of excessive trading. In addition, with respect to
each Portfolio, the Fund may refuse or restrict purchase or exchange
requests by any person or group if, in the judgment of the Fund's
management, the Portfolio would be unable to invest the money effectively in
accordance with its investment objective and policies or could otherwise be
adversely affected or if the Portfolio receives or anticipates receiving
simultaneous orders that may significantly affect the Portfolio (e.g.,
amounts equal to 1% or more of the Portfolio's total assets). If an
exchange request is refused, the Fund will take no other action with respect
to the shares until it receives further instructions from the investor. The
Fund may delay forwarding redemption proceeds for up to seven days if the
investor redeeming shares is engaged in excessive trading or if the amount
of the redemption request otherwise would be disruptive to efficient
portfolio management or would adversely affect the Portfolio. The Fund's
policy on excessive trading applies to investors who invest in a Portfolio
directly or through financial intermediaries, but does not apply to the
Dreyfus Auto-Exchange Privilege, to any automatic investment or withdrawal
privilege described herein, or to participants in employer-sponsored
retirement plans.

During times of drastic economic or market conditions, the Fund may
suspend Fund Exchanges temporarily without notice and treat exchange
requests based on their separate components--redemption orders with a
simultaneous request to purchase the other fund's shares. In such a case,
the redemption request would be processed at the relevant Portfolio's next
determined net asset value but the purchase order would be effective only at
the net asset value next determined after the fund being purchased receives
the proceeds of the redemption, which may result in the purchase being
delayed.

The Fund sends annual and semi-annual financial statements to all its
shareholders.

COUNSEL AND INDEPENDENT AUDITORS

Stroock & Stroock & Lavan LLP, 180 Maiden Lane, New York, New York
10038-4982, as counsel for the Fund, has rendered its opinion as to certain
legal matters regarding the due authorization and valid issuance of the
shares being sold pursuant to the Fund's Prospectus.

Ernst & Young LLP, 787 Seventh Avenue, New York, New York 10019,
independent auditors, have been selected as independent auditors of the
Fund.

APPENDIX

Description of certain ratings assigned by Standard & Poor's Ratings
Group ("S&P"), Moody's Investors Service, Inc. ("Moody's"), Fitch IBCA, Inc.
("Fitch") and Duff & Phelps Credit Rating Co. ("Duff"):

S&P

Bond Ratings

AAA

Bonds rated AAA have the highest rating assigned by S&P. Capacity to
pay interest and repay principal is extremely strong.

Bonds rated AA have a very strong capacity to pay interest and repay
principal and differ from the highest rated issues only in small degree.

Bonds rated A have a strong capacity to pay interest and repay
principal although they are somewhat more susceptible to the adverse effects
of changes in circumstances and economic conditions than obligations in
higher rated categories.

BBB

Bonds rated BBB are regarded as having an adequate capacity to pay
interest and repay principal. Whereas they normally exhibit adequate
protection parameters, adverse economic conditions or changing circumstances
are more likely to lead to a weakened capacity to pay interest and repay
principal for bonds in this category than for bonds in higher rated
categories.

S&P's letter ratings may be modified by the addition of a plus (+) or
minus (-) sign designation, which is used to show relative standing within
the major rating categories, except in the AAA (Prime Grade) category.

Commercial Paper Rating

The designation A-1 by S&P indicates that the degree of safety
regarding timely payment is either overwhelming or very strong. Those
issues determined to possess overwhelming safety characteristics are denoted
with a plus sign (+) designation.

Moody's

Bond Ratings

Aaa

Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to
as "gilt edge." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized
are most unlikely to impair the fundamentally strong position of such
issues.

Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what generally are
known as high grade bonds. They are rated lower than the best bonds because
margins of protection may not be as large as in Aaa securities or
fluctuation of protective elements may be of greater amplitude or there may
be other elements present which make the long-term risks appear somewhat
larger than in Aaa securities.

Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper medium grade obligations. Factors giving
security to principal and interest are considered adequate, but elements may
be present which suggest a susceptibility to impairment sometime in the
future.

Baa

Bonds which are rated Baa are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest
payments and principal security appear adequate for the present but certain
protective elements may be lacking or may be characteristically unreliable
over any great length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as well.

Moody's applies the numerical modifiers 1, 2 and 3 to show relative
standing within the major rating categories, except in the Aaa category.
The modifier 1 indicates a ranking for the security in the higher end of a
rating category; the modifier 2 indicates a mid-range ranking; and the
modifier 3 indicates a ranking in the lower end of a rating category.

Commercial Paper Rating

The rating Prime-1 (P-1) is the highest commercial paper rating
assigned by Moody's. Issuers of P-1 paper must have a superior capacity for
repayment of short-term promissory obligations, and ordinarily will be
evidenced by leading market positions in well established industries, high
rates of return on funds employed, conservative capitalization structures
with moderate reliance on debt and ample asset protection, broad margins in
earnings coverage of fixed financial charges and high internal cash
generation, and well established access to a range of financial markets and
assured sources of alternate liquidity.

Fitch

Bond Ratings

The ratings represent Fitch's assessment of the issuer's ability to
meet the obligations of a specific debt issue or class of debt. The ratings
take into consideration special features of the issue, its relationship to
other obligations of the issuer, the current financial condition and
operative performance of the issuer and of any guarantor, as well as the
political and economic environment that might affect the issuer's future
financial strength and credit quality.

AAA

Bonds rated AAA are considered to be investment grade and of the
highest credit quality. The obligor has an exceptionally strong ability to
pay interest and repay principal, which is unlikely to be affected by
reasonably foreseeable events.

Bonds rated AA are considered to be investment grade and of very high
credit quality. The obligor's ability to pay interest and repay principal
is very strong, although not quite as strong as bonds rated AAA. Because
bonds rated in the AAA and AA categories are not significantly vulnerable to
foreseeable future developments, short-term debt of these issuers is
generally rated F-1+.

Bonds rated A are considered to be investment grade and of high credit
quality. The obligor's ability to pay interest and repay principal is
considered to be strong, but may be more vulnerable to adverse changes in
economic conditions and circumstances than bonds with higher ratings.

BBB

Bonds rated BBB are considered to be investment grade and of
satisfactory credit quality. The obligor's ability to pay interest and
repay principal is considered to be adequate. Adverse changes in economic
conditions and circumstances, however, are more likely to have an adverse
impact on these bonds and, therefore, impair timely payment. The likelihood
that the ratings of these bonds will fall below investment grade is higher
than for bonds with higher ratings.

Plus (+) and minus (-) signs are used with a rating symbol to indicate
the relative position of a credit within the rating category.

Short-Term Ratings

Fitch's short-term ratings apply to debt obligations that are payable
on demand or have original maturities of up to three years, including
commercial paper, certificates of deposit, medium-term notes, and municipal
and investment notes.

Although the credit analysis is similar to Fitch's bond rating
analysis, the short-term rating places greater emphasis than bond ratings on
the existence of liquidity necessary to meet the issuer's obligations in a
timely manner.

F-1+

Exceptionally Strong Credit Quality. Issues assigned this rating are
regarded as having the strongest degree of assurance for timely payment.

F-1

Very Strong Credit Quality. Issues assigned this rating reflect an
assurance of timely payment only slightly less in degree than issues rated F-
1+.

Duff

Bond Ratings

AAA

Bonds rated AAA are considered highest credit quality. The risk
factors are negligible, being only slightly more than for risk-free U.S.
Treasury debt.

Bonds rated AA are considered high credit quality. Protection factors
are strong. Risk is modest but may vary slightly from time to time because
of economic conditions.

Bonds rated A have protection factors which are average but adequate.
However, risk factors are more variable and greater in periods of economic
stress.

BBB

Bonds rated BBB are considered to have below average protection factors
but still considered sufficient for prudent investment. Considerable
variability in risk during economic cycles.

Plus (+) and minus (-) signs are used with a rating symbol (except AAA)
to indicate the relative position of a credit within the rating category.

Commercial Paper Rating

The rating Duff-1 is the highest commercial paper rating assigned by
Duff. Paper rated Duff-1 is regarded as having very high certainty of
timely payment with excellent liquidity factors which are supported by ample
asset protection. Risk factors are minor.