DREYFUS INSTITUTIONAL SHORT TERM TREASURY FUND
LETTER TO SHAREHOLDERS
Dear Shareholder:
We are pleased to provide you with this report on Dreyfus Institutional
Short Term Treasury Fund. For its annual reporting period ended September 30,
1996, your Fund produced a total return of 6.03% per share for Class A shares
and 5.76% for Class B shares.* Income dividends of approximately $.127 per
share were paid for Class A shares and $.122 for Class B shares, which is
equivalent to an annualized distribution rate per share of 6.38% and 6.12%
for Class A and Class B shares, respectively. **
THE ECONOMY
Low inflation in the face of ongoing strong growth in new jobs and low
unemployment remained the big economic story over the reporting period. On
September 24, the Federal Reserve Board's Open Market Committee ("the Fed")
again decided against raising interest rates. Despite what appeared to be a
sharp split within the Fed, the Central Bank kept the Fed Funds rate at
5.25%. (A news leak reported that eight of the 12 presidents of the regional
Federal Reserve Banks were concerned about inflation and leaning toward an
increase in rates.)
The potential resurgence in inflation has been a primary concern of the
Fed as the economic expansion continues. Yet inflation has remained subdued.
The Consumer Price Index has risen just 2.9% over the past twelve months.
Furthermore, indications of inflation at crude, intermediate and finished
goods levels, as measured by the Producer Price Index, have remained
well-behaved. There appear to be few signs of inflation in the production
pipeline.
The past inverse relationship between unemployment and inflation has not
prevailed during this economic expansion. Most recently, the unemployment
rate fell to 5.1%, its lowest level in seven years. Job growth has continued
to be robust. Yet despite signs of a tightening labor market, wage gains,
considered by many economists to be a harbinger of future inflation, remained
modest, as have virtually all measures of inflation.
Buoyed by such good news, consumers have remained confident. The
Conference Board's Consumer Confidence Index has risen since the beginning of
the year and was near a six-year high by the end of the reporting period.
Yet, there were some signs that consumer spending has slowed from its strong
pace in the first half of the year. Retail sales remained subdued all summer.
Consumer borrowing rose over the reporting period, continuing the three-year
trend of steady increases in credit.
Industrial production has risen consistently since February, and
businesses showed some signs of inventory accumulation by late summer.
Corporate pricing power still seems to be in check. In a survey of member
corporations released in mid-September, the National Federation of
Independent Business reported that only 20% of its respondents planned to
increase prices in coming months.
Despite all these favorable developments, we are alert for signs of potential
economic excess that could result in a resurgence in inflation.
THE MARKET
With two-year notes trading at a yield of 5.90%, the market has become
comfortable with a Fed that will allow rates to remain unchanged. Domestic
participants if polled would say that this represents fair value. However,
foreign entities look at that yield and find it extremely attractive.
Canadian two-year notes are yielding 4.31%, French two-year yield is 3.81%,
German two-year yield is 3.62%. In fact the U.S. is now one of the higher
yielding developed countries. When you couple the attractiveness of higher
rates in the U.S. with a much stronger dollar, you can then understand why
our market is attractive to overseas investors.
Whether or not this attractiveness remains depends on whether overseas
economies start to improve. The amount of fiscal drag placed on European
economies in preparation for the European Monetary Union should not be
underestimated. In essence, until Europe starts to improve our rates here
should remain attractive.
THE PORTFOLIO
The portfolio is currently positioned to be neutral in expectation that
the market may have more upside potential. However, the November refunding
auction of 3-year Treasury notes, 10-year Treasury notes, and 30-year bonds
could put an upside cap on bond prices.
Since September of last year, we have moved the Fund from an average life
of 2 years - close to its maximum - to a more defensive posture of 1.5
years by the end of September, 1996. We believe that a neutral positioning of
the Fund is prudent. Most of the good news and buying has already had a
positive impact on yields. Without more economic data on which to place
emphasis we have to anticipate any trouble spots. The one component missing
from economic forecasts is a strong retail sector. With the holiday season
quickly approaching we are anticipating that this season could be strong (we
mentioned earlier that consumer confidence is high).
We would be remiss to fail to mention politics. Our approach has been to
focus on the checks and balances that are now in place. The more important
question becomes: will they remain in place no matter what the outcome? We
believe the answer is yes; if the market reacts to election results it may be
more of a knee-jerk reaction, in our opinion, than a fundamental shift.
Very truly yours,
[Gerald E. Thunelius signature logo]
Gerald E. Thunelius
Portfolio Manager
October 18, 1996
New York, N.Y.
* Total return includes reinvestment of dividends and any capital gains
paid.
**Annualized distribution rate per share is based upon dividends per share
paid from net investment income during the period, divided by the net asset
value per share at the end of the period.
DREYFUS INSTITUTIONAL SHORT TERM TREASURY FUND SEPTEMBER 30, 1996
[Exhibit A]
COMPARISON OF CHANGE IN VALUE OF $10,000,000 INVESTMENT IN DREYFUS
INSTITUTIONAL SHORT TERM TREASURY FUND CLASS A SHARES AND CLASS B SHARES AND
THE MERRILL LYNCH
GOVERNMENTS, U.S. TREASURY, SHORT-TERM (1-2.99 YEARS) INDEX
Dollars
$11,825,104
Dreyfus Institutional
Short Term Treasury
Fund (Class A Shares)
$11,797,886
Dreyfus Institutional
Short Term Treasury
Fund (Class B Shares)
$11,545,505
Merrill Lynch
Governments,
U.S. Treasury,
Short-Term (1-2.99
Years) Index*
[Exhibit A]
*Source: Merrill Lynch, Pierce, Fenner and Smith Inc.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
CLASS A SHARES CLASS B SHARES
_____________________________________________________ __________________________________________________
PERIOD ENDED 9/30/96 PERIOD ENDED 9/30/96
_________________________ ________________________
<S> <C> <C> <C>
1 Year 6.03% 1 Year 5.76%
From Inception (10/29/93) 5.90 From Inception (10/29/93) 5.82
</TABLE>
Past performance is not predictive of future performance.
The above graph compares a $10,000,000 investment made in each of the Class A
shares and Class B shares of Dreyfus Institutional Short Term Treasury Fund
on 10/29/93 (Inception Date) to a $10,000,000 investment made in the Merrill
Lynch Governments, U.S. Treasury, Short-Term (1-2.99 Years) Index on that
date. For comparative purposes, the value of the Index on 10/31/93 is used as
the beginning value on 10/29/93. All dividends and capital gain distributions
are reinvested.
The Fund invests exclusively in U.S. Treasury securities and repurchase
agreements in respect thereof. The Fund's portfolio of U.S. Treasury
securities will, under normal circumstances, generally have a dollar-weighted
average maturity not to exceed two years. The Fund's performance shown in the
line graph takes into account fees and expenses. Unlike the Fund, the Merrill
Lynch Governments, U.S. Treasury, Short-Term (1-2.99 Years) Index is an
unmanaged performance benchmark for Treasury securities with maturities of
1-2.99 years. The Index does not take into account charges, fees and other
expenses. Further information relating to Fund performance, including expense
reimbursements, if applicable, is contained in the Financial Highlights
section of the Prospectus and elsewhere in this report.
<TABLE>
<CAPTION>
DREYFUS INSTITUTIONAL SHORT TERM TREASURY FUND
STATEMENT OF INVESTMENTS SEPTEMBER 30,1996
PRINCIPAL
BONDS AND NOTES-52.8% AMOUNT VALUE
_______ _______
<S> <C> <C>
U.S. TREASURY COUPON STRIPS-10.1%
Zero Coupon, 2/15/1997.................................................. $ 20,000,000 $ 19,606,216
_____________
U.S. TREASURY NOTES-42.7%
8 1/2%, 7/15/1997....................................................... 10,000,000 10,210,938
6 1/8%, 8/31/1998....................................................... 56,100,000 56,126,300
6%, 8/15/1999........................................................... 17,000,000 16,883,125
_____________
83,220,363
_____________
TOTAL BONDS AND NOTES
(cost $102,960,903)..................................................... $102,826,579
=============
SHORT-TERM INVESTMENTS-8.0%
REPURCHASE AGREEMENTS-1.7%
Aubrey G. Lanston & Co., 5.65%
dated 9/30/1996, due 10/1/1996 in the amount of $3,391,532
(fully collateralized by $3,463,000 U.S. Treasury Bills,
12/5/1996, value $3,430,102)............................................ $ 3,391,000 $ 3,391,000
U.S. TREASURY BILLS-6.3%
5.19%, 12/5/1996........................................................ 12,330,000 12,219,276
_____________
TOTAL SHORT-TERM INVESTMENTS
(cost $15,605,457)...................................................... $ 15,610,276
=============
TOTAL INVESTMENTS
(cost $118,566,360)..................................................... 60.8% $118,436,855
====== =============
CASH AND RECEIVABLES (NET).................................................. 39.2% $ 76,342,959
====== =============
NET ASSETS ........................................................... 100.0% $194,779,814
====== =============
See notes to financial statements.
DREYFUS INSTITUTIONAL SHORT TERM TREASURY FUND
STATEMENT OF ASSETS AND LIABILITIES SEPTEMBER 30, 1996
ASSETS:
Investments in securities, at value-Note 1(a,b)
(cost $118,566,360)-see statement..................................... $118,436,855
Cash.................................................................... 2,399,930
Receivable for investment securities sold............................... 80,524,374
Interest receivable..................................................... 461,924
____________
201,823,083
LIABILITIES:
Due to The Dreyfus Corporation.......................................... $ 38,117
Due to Distributor...................................................... 5,152
Payable for shares of Beneficial Interest redeemed...................... 7,000,000 7,043,269
____________ ____________
NET ASSETS ................................................................ $194,779,814
==============
REPRESENTED BY:
Paid-in capital......................................................... $198,144,871
Accumulated net realized (loss) on investments.......................... (3,235,552)
Accumulated net unrealized (depreciation) on investments-Note 4......... (129,505)
____________
NET ASSETS at value......................................................... $194,779,814
==============
Shares of Beneficial Interest outstanding:
Class A Shares
(unlimited number of $.001 par value shares authorized)............... 85,893,872
==============
Class B Shares
(unlimited number of $.001 par value shares authorized)............... 12,298,420
==============
NET ASSET VALUE per share:
Class A Shares
($170,289,579 / 85,893,872 shares).................................... $1.98
======
Class B Shares
($24,490,235 / 12,298,420 shares)..................................... $1.99
======
STATEMENT OF OPERATIONS YEAR ENDED SEPTEMBER 30, 1996
INVESTMENT INCOME:
INTEREST INCOME......................................................... $ 15,471,548
EXPENSES:
Management fee-Note 3(a).............................................. $ 468,699
Distribution fees (Class B shares)-Note 3(b).......................... 41,623
__________
TOTAL EXPENSES.................................................... 510,322
____________
INVESTMENT INCOME-NET............................................. 14,961,226
REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS-Note 4:
Net realized (loss) on investments...................................... $(2,484,085)
Net unrealized (depreciation) on investments............................ (14,896)
__________
NET REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS................. (2,498,981)
____________
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $ 12,462,245
=============
See notes to financial statements.
DREYFUS INSTITUTIONAL SHORT TERM TREASURY FUND
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED SEPTEMBER 30,
______________________________________
1995 1996
_____________ _____________
OPERATIONS:
Investment income-net................................................... $ 6,040,397 $ 14,961,226
Net realized gain (loss) on investments................................. 17,213 (2,484,085)
Net unrealized appreciation (depreciation) on investments for the year.. 487,103 (14,896)
_____________ _______________
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.............. 6,544,713 12,462,245
_____________ _______________
DIVIDENDS TO SHAREHOLDERS FROM;
Investment income-net:
Class A shares........................................................ (5,125,168) (13,968,029)
Class B shares........................................................ (886,038) (1,022,388)
_____________ _______________
TOTAL DIVIDENDS................................................... (6,011,206) (14,990,417)
_____________ _______________
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold:
Class A shares........................................................ 205,025,138 257,457,775
Class B shares........................................................ 9,691,420 41,742,937
Dividends reinvested:
Class A shares........................................................ 2,977,656 10,564,901
Class B shares........................................................ 735,883 872,362
Cost of shares redeemed:
Class A shares........................................................ (138,068,260) (256,062,818)
Class B shares........................................................ (27,751,723) (23,978,886)
_____________ _______________
INCREASE IN NET ASSETS FROM BENEFICIAL INTEREST TRANSACTIONS...... 52,610,114 30,596,271
_____________ _______________
TOTAL INCREASE IN NET ASSETS.................................... 53,143,621 28,068,099
NET ASSETS:
Beginning of year....................................................... 113,568,094 166,711,715
_____________ _______________
End of year (including undistributed investment income-net of $29,191 in 1995) $ 166,711,715 $ 194,779,814
============== =============
</TABLE>
<TABLE>
<CAPTION>
SHARES
__________________________________________________________________________
CLASS A CLASS B
________________________________ ________________________________
YEAR ENDED SEPTEMBER 30, YEAR ENDED SEPTEMBER 30,
________________________________ ________________________________
1995 1996 1995 1996
____________ ____________ ___________ ________________
<S> <C> <C> <C> <C>
CAPITAL SHARE TRANSACTIONS:
Shares sold............................ 103,232,663 128,426,345 4,898,778 20,911,548
Shares issued for dividends reinvested. 1,502,166 5,314,554 372,428 436,954
Shares redeemed........................ (70,202,557) (128,532,027) (14,048,233) (12,025,940)
____________ ____________ ___________ ________________
NET INCREASE (DECREASE) IN
SHARES OUTSTANDING............. 34,532,272 5,208,872 (8,777,027) 9,322,562
============== ============= ============ ===============
See notes to financial statements.
</TABLE>
DREYFUS INSTITUTIONAL SHORT TERM TREASURY FUND
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share of
Beneficial Interest outstanding, total investment return, ratios to average
net assets and other supplemental data for each year indicated. This
information has been derived from the Fund's financial statements.
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES
________________________________ _____________________________
YEAR ENDED SEPTEMBER 30, YEAR ENDED SEPTEMBER 30,
________________________________ _____________________________
PER SHARE DATA: 1994(1) 1995 1996 1994(1) 1995 1996
______ ______ ______ ______ ______ ______
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year............ $ 2.00 $ 1.96 $ 1.99 $ 2.00 $ 1.97 $ 2.00
______ ______ ______ ______ ______ ______
INVESTMENT OPERATIONS:
Investment income-net......................... .10 .13 .13 .09 .13 .12
Net realized and unrealized gain (loss)
on investments.............................. (.04) .03 (.01) (.03) .03 (.01)
______ ______ ______ ______ ______ ______
TOTAL FROM INVESTMENT OPERATIONS............ .06 .16 .12 .06 .16 .11
______ ______ ______ ______ ______ ______
DISTRIBUTIONS;
Dividends from investment income-net.......... (.10) (.13) (.13) (.09) (.13) (.12)
______ ______ ______ ______ ______ ______
Net asset value, end of year.................. $ 1.96 $ 1.99 $ 1.98 $ 1.97 $ 2.00 $ 1.99
======== ======= ====== ======= ======= ========
TOTAL INVESTMENT RETURN........................ 3.08%(2) 8.45% 6.03% 3.39%(2) 8.17% 5.76%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets....... .20%(2) .20% .20% .45%(2) .45% .45%
Ratio of net investment income to
average net assets......................... 5.41%(2) 6.48% 6.40% 5.01%(2) 6.35% 6.13%
Portfolio Turnover Rate................... 4,125.54%(3) 1,926.32% 694.24% 4,125.54%(3) 1,926.32% 694.24%
Net Assets, end of year (000's Omitted)....... $90,421 $160,748 $170,290 $23,147 $5,964 $24,490
(1) From October 29, 1993 (commencement of operations) to September 30, 1994.
(2) Annualized.
(3) Not annualized.
</TABLE>
See notes to financial statements.
DREYFUS INSTITUTIONAL SHORT TERM TREASURY FUND
NOTES TO FINANCIAL STATEMENTS
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES:
Dreyfus Institutional Short Term Treasury Fund ("the Fund") is registered
under the Investment Company Act of 1940 ("Act") as a diversified open-end
management investment company. The Fund's investment objective is to provide
investors with a high level of current income with minimum fluctuation of
principal value. The Dreyfus Corporation ("Manager") serves as the Fund's
investment adviser. The Manager is a direct subsidiary of Mellon Bank, N.A.
("Mellon").
Premier Mutual Fund Services, Inc. (the "Distributor") acts as the
distributor of the Fund's shares, which are sold without a sales load. The
Fund offers both Class A and Class B shares. Class B shares are subject to a
Service Plan adopted pursuant to Rule 12b-1 under the Act. Other differences
between the two Classes include the services offered to and the expenses
borne by each Class and certain voting rights.
The Fund's financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management
estimates and assumptions. Actual results could differ from those estimates.
(A) PORTFOLIO VALUATION: The Fund's investments, including U.S. Treasury
Bills, are valued at the mean between the quoted bid prices and asked prices.
Other short-term investments are carried at amortized cost, which
approximates value.
(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities
transactions are recorded on a trade date basis. Interest income, including,
where applicable, amortization of discount on investments, is recognized on
the accrual basis. Realized gain and loss from securities transactions are
recorded on the identified cost basis.
The Fund may enter into repurchase agreements with financial
institutions, deemed to be creditworthy by the Fund's Manager, subject to the
seller's agreement to repurchase and the Fund's agreement to resell such
securities at a mutually agreed upon price. Securities purchased subject to
repurchase agreements are deposited with the Fund's custodian and, pursuant
to the terms of the repurchase agreement, must have an aggregate market value
greater than or equal to the repurchase price plus accrued interest at all
times. If the value of the underlying securities falls below the value of the
repurchase price plus accrued interest, the Fund will require the seller to
deposit additional collateral by the next business day. If the request for
additional collateral is not met, or the seller defaults on its repurchase
obligation, the Fund maintains the right to sell the underlying securities at
market value and may claim any resulting loss against the seller.
(C) DIVIDENDS TO SHAREHOLDERS: It is the policy of the Fund to declare
dividends daily from investment income-net. Such dividends are paid monthly.
Dividends from net realized capital gain are normally declared and paid
annually, but the Fund may make distributions on a more frequent basis to
comply with the distribution requirements of the Internal Revenue Code. To
the extent that net realized capital gain can be offset by capital loss
carryovers, it is the policy of the Fund not to distribute such gain.
(D) FEDERAL INCOME TAXES: It is the policy of the Fund to continue to
qualify as a regulated investment company, if such qualification is in the
best interests of its shareholders, by complying with the applicable
provisions of the Internal Revenue Code, and to make distributions of taxable
income sufficient to relieve it from substantially all Federal income and
excise taxes.
DREYFUS INSTITUTIONAL SHORT TERM TREASURY FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The Fund has an unused capital loss carryover of approximately $777,000
available for Federal income tax purposes to be
applied against future net securities profits, if any, realized subsequent to
September 30, 1996. The carryover does not include net realized securities
losses from November 1, 1995 through September 30, 1996 which are treated,
for Federal income tax purposes, as arising in fiscal 1997. If not applied,
$728,000 of the carryover expires in fiscal 2003 and $49,000 expires in
fiscal 2004.
NOTE 2-BANK LINE OF CREDIT:
The Fund participates with other Dreyfus-managed Funds in a $100 million
unsecured line of credit primarily to be utilized for temporary or emergency
purposes, including the financing of redemptions. Interest is charged to the
Fund at rates which are related to the Federal Funds rate in effect at the
time of borrowings. For the period ended September 30, 1996, the Fund did not
borrow under the line of credit.
NOTE 3-MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
(A) Pursuant to a management agreement ("Agreement") with the Manager,
the management fee is computed at the annual rate of .20 of 1% of the value
of the Fund's average daily net assets and is payable monthly.
Unless the Manager gives the Fund's investors 90 days notice to the
contrary, the Manager, and not the Fund, will be liable for Fund expenses
(exclusive of taxes, brokerage, interest on borrowings and with the prior
written consent of the necessary state securities commissions, extraordinary
expenses) other than the following expenses, which will be borne by the Fund:
the management fee, and with respect to the Fund's Class B shares, Rule 12b-1
Service Plan expenses.
Effective December 1, 1995, the Manager compensates Dreyfus Transfer,
Inc., a wholly-owned subsidiary, under a transfer agency agreement for
providing personnel and facilities to perform transfer agency services for
the Fund.
Effective May 10, 1996, the Manager compensates Mellon under a custody
agreement for providing custodial services for the Fund.
(B) Under the Class B Service Plan (the "Plan") adopted pursuant to Rule
12b-1 under the Act, the Fund (a) reimburses the Distributor for distributing
the Fund's Class B shares and (b) pays the Manager, Dreyfus Service
Corporation, a wholly-owned subsidiary of the Manager, and any affiliate of
either of them (collectively, "Dreyfus") for advertising and marketing
relating to the Fund's Class B shares and for providing certain services
relating to Class B shareholder accounts, such as answering shareholder inquir
ies regarding the Fund and providing reports and other information, and
services related to the maintenance of shareholder accounts ("Servicing"), at
an aggregate annual rate of .25 of 1% of the value of the average daily net
assets of Class B shares. Both the Distributor and Dreyfus may pay one or
more Service Agents (a securities dealer, financial institution or other
industry professional) a fee in respect of the Fund's Class B shares owned by
shareholders with whom the Service Agent has a Servicing relationship or for
whom the Service Agent is the dealer or holder of record. Both the
Distributor and Dreyfus determines the amounts, if any, to be paid to Service
Agents under the Plan and the basis on which such payments are made. The fees
payable under the Plan are payable without regard to actual expenses
incurred. During the year ended September 30, 1996, $41,623 was charged to
the Fund pursuant to the Plan.
DREYFUS INSTITUTIONAL SHORT TERM TREASURY FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(C) Each trustee who is not an "affiliated person" as defined in the Act
receives an annual fee of $1,000 and an attendance
fee of $250 per meeting. The Chairman of the Board receives an additional 25%
of such compensation.
NOTE 4-SECURITIES TRANSACTIONS:
The aggregate amount of purchases and sales of investment securities,
excluding short term securities, during the year ended September 30, 1996,
amounted to $1,259,085,622 and $1,283,054,558, respectively.
At September 30, 1996, accumulated net unrealized depreciation on
investments was $129,505, consisting of $142,758 gross unrealized
appreciation and $272,263 gross unrealized depreciation.
At September 30, 1996, the cost of investments for Federal income tax
purposes was substantially the same as the cost for financial reporting
purposes (see the Statement of Investments).
DREYFUS INSTITUTIONAL SHORT TERM TREASURY FUND
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF TRUSTEES
DREYFUS INSTITUTIONAL SHORT TERM TREASURY FUND
We have audited the accompanying statement of assets and liabilities of
Dreyfus Institutional Short Term Treasury Fund, including the statement of
investments, as of September 30, 1996, and the related statement of
operations for the year then ended, the statement of changes in net assets
for each of the two years in the period then ended, and financial highlights
for each of the years indicated therein. These financial statements and
financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included verification by
examination of securities held by the custodian as of September 30, 1996 and
confirmation of securities not held by the custodian by correspondence with
others. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of Dreyfus Institutional Short Term Treasury Fund at September 30,
1996, the results of its operations for the year then ended, the changes in
its net assets for each of the two years in the period then ended, and the
financial highlights for each of the indicated years, in conformity with
generally accepted accounting principles.
[Ernst & Young LLP signature logo]
New York, New York
October 31, 1996
IMPORTANT TAX INFORMATION (UNAUDITED)
For State individual income tax purposes, the Fund hereby designates
93.90% of the ordinary income dividends paid during its fiscal year ended
September 30, 1996 as attributable to interest income from direct obligations
of the United States. Such dividends are currently exempt from taxation for
individual income tax purposes in most states, including New York, California
and the District of Columbia.
[Dreyfus lion "d" logo]
DREYFUS INSTITUTIONAL
SHORT TERM TREASURY FUND
200 Park Avenue
New York, NY 10166
MANAGER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
CUSTODIAN
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
TRANSFER AGENT &
DIVIDEND DISBURSING AGENT
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Printed in U.S.A. 721/680AR969
[Dreyfus logo]
Institutional
Short Term
Treasury Fund
Annual Report
September 30, 1996
COMPARISON OF CHANGE IN VALUE OF $10,000,000 INVESTMENT
IN DREYFUS INSTITUTIONAL SHORT TERM TREASURY FUND CLASS A
SHARES AND CLASS B SHARES AND THE MERRILL LYNCH GOVERNMENTS,
U.S. TREASURY, SHORT-TERM (1-2.99 YEARS) INDEX
EXHIBIT A:
MERRILL LYNCH
GOVERNMENTS, DREYFUS DREYFUS
U.S. TREASURY INSTITUTIONAL INSTITUTIONAL
PERIOD SHORT-TERM SHORT TERM SHORT TERM
(1-2.99 YEARS) TREASURY FUND TREASURY FUND
INDEX* (CLASS A SHARES) (CLASS B SHARES)
10/29/93 10,000,000 10,000,000 10,000,000
9/30/94 10,096,045 10,284,036 10,312,543
9/30/95 10,931,865 11,152,591 11,155,305
9/30/96 11,545,505 11,825,104 11,797,886
* Source: Merrill Lynch, Pierce, Fenner and Smith Inc.
