Dreyfus Balanced Fund Inc – ‘485BPOS’ on 12/17/99

On:  Friday, 12/17/99   ·   Effective:  1/1/00   ·   Accession #:  890341-99-8   ·   File #s:  33-50350, 811-07068

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Post-Effective Amendment
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 485BPOS     Post-Effective Amendment No.10                        77±   314K 
 2: EX-23       Consent of Independent Auditors                        1      4K 

485BPOS   —   Post-Effective Amendment No.10
Document Table of Contents

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                                                            File Nos. 33-50350
                                                                      811-7068

              SECURITIES AND EXCHANGE COMMISSION
              Washington, D.C. 20549

               FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933                 [X]     

Pre-Effective Amendment No.                                         
                                                                    [  ]

Post-Effective Amendment No. 10                                     
                                                                   [X]

              and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940         [X]     

 Amendment No. 10                                                  [X]

               (Check appropriate box or boxes.)

               Dreyfus Balanced Fund, Inc.
              (Exact Name of Registrant as Specified in Charter)

c/o The Dreyfus Corporation                             
200 Park Avenue, New York, New York       10166         
(Address of Principal Executive Offices)  (Zip Code)    

Registrant's Telephone Number, including Area Code: (212) 922-6000  

              Mark N. Jacobs, Esq.
               200 Park Avenue
              New York, New York 10166
               (Name and Address of Agent for Service)

It is proposed that this filing will become effective (check appropriate box)   

immediately upon filing pursuant to paragraph (b)       
----                                                                
X    on January 1, 2000 pursuant to paragraph (b)                 
----                                                                
60 days after filing pursuant to paragraph (a)(i)       
----                                                                
on   (date)   pursuant to paragraph (a)(i)              
----                                                                
75 days after filing pursuant to paragraph (a)(ii)      
----                                                                
    on     (date)      pursuant to paragraph (a)(ii) of Rule 485
----                                                                

If appropriate, check the following box:                                        

           this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.              
----                                                                

Dreyfus Balanced                                                                

Fund, Inc.                                                                      

Investing for long-term capital growth and current income                       

PROSPECTUS January 1, 2000                                                      

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.           

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Contents      

THE FUND    
----------------------------------------------------                            

2    Goal/Approach    

3    Main Risks       

4    Past Performance 

5    Expenses         

6    Management       

   7    Financial Highlights

   YOUR INVESTMENT
--------------------------------------------------------------------            

8    Account Policies 

     11    Distributions and Taxes

         12    Services for Fund Investors

               14    Instructions for Regular Accounts

   16    Instructions for IRAs

        FOR MORE INFORMATION
------------------------------------------------------------------------------- 

Back Cover  

What every investor should know about the fund                                  

Information for managing your fund account                                      

Where to learn more about this and other Dreyfus funds                          

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The Fund                                                                        

Dreyfus Balanced Fund, Inc.                                                     
--------------------------------                                                

Ticker Symbol: DRBAX                                                            

GOAL/APPROACH                                                                   

The fund seeks long-term capital growth and current income. To pursue this goal,
the fund invests in equity and debt securities of U.S. and foreign issuers. The 
proportion of the fund's assets invested in each type of security will vary from
time to time in accordance with Dreyfus's assessment of economic conditions and 
investment opportunities. However, under normal market conditions, equity       
investments will range from 40% to 75% of its portfolio, with a benchmark       
allocation of 60%. Fixed-income investments (including cash and cash            
equivalents) will range from 25% to 60%, with a benchmark allocation of 40%.    

To select equity investments for the fund, Dreyfus generally employs a          
value-oriented, "bottom-up" approach: investing primarily in midsize and large  
companies that we believe have above-average growth potential and are           
attractively valued relative to the market in general.                          

To select fixed-income investments for the fund, Dreyfus reviews the terms of   
the instruments and evaluates the creditworthiness of the issuers, considering  
all factors which it deems relevant, including, as applicable, a review of the  
issuer's cash flow; level of short-term debt; leverage; capitalization; the     
quality and depth of management; profitability; return on assets; and economic  
factors relative to the issuer's industry.                                      

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

Concepts to understand                                                          

BENCHMARK ALLOCATIONS: represent the asset mix Dreyfus expects to maintain when 
its assessment of economic conditions and investment opportunities indicate that
the financial markets are fairly valued relative to each other.                 

INVESTMENT RANGE: indicates ordinarily expected variations from the benchmarks  
and reflects expected shifts within specific asset classes.                     

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MAIN RISKS                                                                      

Because stocks and bonds fluctuate in price, the value of your investment in the
fund will go up and down, and you could lose money. The stock and bond markets  
can perform differently from each other at any given time (as well as over the  
long term), so the fund'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 fund's performance may be hurt.                              

The fund's investments in value stocks are subject to the risk that their       
intrinsic values may never be realized by the market, or their prices may go    
down. Further, while the fund's investments in value stocks may limit the       
overall downside risk of the fund over time, the fund may produce more modest   
gains than riskier stock funds as a trade-off for this potentially lower risk.  
Investments in midsize company stocks tend to be more volatile than large       
company stocks and could have a disproportionate effect on performance.         

Bond prices tend to move inversely with changes in interest rates and may be    
hurt by declines in the issuer's financial condition.                           

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 fund may invest in derivatives such as mortgage- and asset-backed           
securities, and futures and options. Derivatives can be illiquid and highly     
sensitive to changes in their underlying securities, interest rate or index,    
and, as a result, can be highly volatile. The fund also may engage in foreign   
currency transactions and sell short. These practices can be used to hedge the  
fund's portfolio or to increase returns; of course, such practices sometimes may
reduce returns or increase volatility.                                          

The fund is non-diversified and may invest a greater percentage of its assets in
a particular company compared with other funds. Accordingly, the fund's         
portfolio may be more sensitive to changes in the market value of a single      
company or industry.                                                            

The Fund                                                                        

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PAST PERFORMANCE                                                                

The tables below show some of the risks of investing in the fund. The first     
table shows the changes in the fund's performance from year to year.  The second
table compares the fund's performance over time to that of the S&P              
500((reg.tm)), a widely recognized unmanaged index of stock 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 (%)                             

                    10.84  3.98   25.04  11.62  17.43   9.69
89     90     91     92     93     94     95     96     97     98     

BEST QUARTER:                                 Q4 '98        +10.83%             

WORST QUARTER:                                Q3 '98         -7.13%             

THE FUND'S YEAR-TO-DATE TOTAL RETURN AS OF 9/30/99 WAS 2.09%.                   
                        --------------------------------------------------------

                                                        [Enlarge/Download Table]

                                                                                                                                 

Average annual total return AS OF 12/31/98                                                                                       

                                                                                                                   Since         
                                                                                                                 inception       
                                                                         1 Year               5 Years            (9/30/92)       
---------------------------------------------------------------------------------------------------------------------------------

FUND                                                                      9.69%               13.33%             12.73%          

S&P 500                                                                  28.60%               24.05%             21.60%          

CUSTOMIZED BLENDED                                                                                                               

INDEX*                                                                   18.29%               15.53%             14.30%          

* THE INDEX MATCHES THE FUND'S BENCHMARK ALLOCATIONS IN EXISTENCE PRIOR TO                                                       
SEPTEMBER 15, 1999 (50% S&P 500, 40% LEHMAN AGGREGATE BOND INDEX AND 10% CASH                                                    
AND CASH EQUIVALENTS). EFFECTIVE SEPTEMBER 15, 1999, THE FUND CHANGED ITS                                                        
BENCHMARK ALLOCATIONS TO 60% S&P 500 AND 40% LEHMAN AGGREGATE BOND INDEX.                                                        

What this fund is -- and isn't                                                  

This fund 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 FDIC-insured or     
government-endorsed. It is not a complete investment program. You could lose    
money in this fund, but you also have the potential to make money.              

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EXPENSES                                                                        

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

Fee table                                                                       

ANNUAL FUND OPERATING EXPENSES                                                  

% OF AVERAGE DAILY NET ASSETS                                                   

Management fees                                                   0.60%         

Shareholder services fee                                          0.22%         

Other expenses                                                    0.15%         

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

TOTAL                                                             0.97%         

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

Expense example                                                                 

1 Year                     3 Years            5 Years               10 Years    

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

$99                        $309               $536                   $1,190     

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 Dreyfus for managing the fund's portfolio and   
assisting in all aspects of the fund's operations.                              

SHAREHOLDER SERVICES FEE: a fee of up to 0.25% used to reimburse Dreyfus Service
Corporation for shareholder account service and maintenance.                    

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

The Fund                                                                        

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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. For the past fiscal year, the fund  
paid Dreyfus a management fee at the annual rate of 0.60% of the fund's average 
daily net assets. Dreyfus is the primary mutual fund business of Mellon         
Financial Corporation, a global financial services company with approximately   
$2.5 trillion of assets under management, administration or custody, including  
approximately $450 billion under management. Mellon provides wealth management, 
global investment services and a comprehensive array of banking services for    
individuals, businesses and institutions. Mellon is headquartered in Pittsburgh,
Pennsylvania.                                                                   

Douglas D. Ramos, CFA, is the fund's primary portfolio manager, a position he   
has held since joining Dreyfus in July 1997. Previously, he was a senior partner
and investment counselor for Loomis, Sayles & Company.                          

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.                                      

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 has taken steps designed to avoid year 2000- related problems in its    
systems and to monitor the readiness of other service providers. 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.                                                

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FINANCIAL HIGHLIGHTS                                                            

This table describes the fund's performance for the fiscal periods indicated.   
"Total return" shows how much your investment in the fund 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.                                                              

                                                        [Enlarge/Download Table]

                                                                                                                                    

                                                                                    YEAR ENDED AUGUST 31                            

                                                               1999           1998           1997           1996          1995      
------------------------------------------------------------------------------------------------------------------------------------

PER-SHARE DATA ($)                                                                                                                  

Net asset value, beginning of period                          15.19          18.15          15.13          15.61         13.72      

Investment operations:                                                                                                              

      Investment income -- net                                  .87*          .47            .45            .51           .54       

      Net realized and unrealized gain (loss)                                                                                       
      on investments                                           1.98          (.88)           3.65            .29          1.99      

Total from investment operations                               2.85          (.41)           4.10            .80          2.53      

Distributions:                                                                                                                      

      Dividends from investment                                                                                                     
      income -- net                                           (.45)          (.46)          (.44)          (.53)         (.51)      

      Dividends from net realized gain                                                                                              
      on investments                                         (1.08)         (2.09)          (.64)          (.75)         (.13)      

Total distributions                                          (1.53)         (2.55)         (1.08)         (1.28)         (.64)      

Net asset value, end of period                                16.51          15.19          18.15          15.13         15.61      

Total return (%)                                              19.37         (2.99)          28.06           5.19         19.03      
------------------------------------------------------------------------------------------------------------------------------------

RATIOS/SUPPLEMENTAL DATA                                                                                                            

Ratio of operating expenses                                                                                                         
to average net assets (%)                                       .94            .91            .96           1.00          1.04      

Ratio of interest expense                                                                                                           
to average net assets (%)                                       .03             --             --             --            --      

Ratio of net investment income                                                                                                      
to average net assets (%)                                      2.62           2.76           2.71           3.37          3.99      

Portfolio turnover rate (%)                                  162.40         177.85         235.56         186.23         72.42      
------------------------------------------------------------------------------------------------------------------------------------

Net assets, end of period ($ x 1,000)                       188,215        359,521        347,259        269,869       165,909      

* BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.                                                                            

The Fund                                                                        

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Your Investment                                                                 

ACCOUNT POLICIES                                                                

Buying shares                                                                   

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 or other authorized entity. 
The fund's investments are generally valued based on market value or, where     
market quotations are not readily available, based on fair value as determined  
in good faith by the fund's board.                                              
                        --------------------------------------------------------

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.                                                        

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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    $250,000 PER DAY        

WIRE                                      $1,000        $500,000 FOR JOINT      
                                        ACCOUNTS
                                             EVERY 30 DAYS

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

Written sell orders                                                             

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

*  amounts of $10,000 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                                                                 

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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.                                                          

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DISTRIBUTIONS AND TAXES                                                         

THE FUND USUALLY PAYS ITS SHAREHOLDERS DIVIDENDS from its net investment income 
quarterly, 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 for tax-advantaged accounts, any sale or exchange of fund shares may     
generate a tax liability. Of course, withdrawals or distributions from          
tax-deferred accounts are taxable when received.                                

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                                                                 

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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.     

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.                                               

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Exchange privilege                                                              

YOU CAN EXCHANGE SHARES WORTH $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 1-800-645-6561    

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

Your Investment                                                                 

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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                                  

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                                             

By Telephone                                              

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

* ABA# 021000018                                                          

* DDA# 8900117176                                                         

* the fund name                                                           

* your Social Security or tax ID number                                   

* name(s) of investor(s)                                                  

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

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

* ABA# 021000018                                                                

* DDA# 8900117176                                                               

* the fund name                                                                 

* 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.                                                                    

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.                                                      

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.                                                   

Via the Internet                                          

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

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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                                                                 

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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                                  

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).              

By Telephone                                              

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

* ABA# 021000018                                                                

* DDA# 8900117176                                                               

* the fund name                                                                 

* 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).    

Automatically                                             

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

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.                                   

Via the Internet                                          

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

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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                                                          

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                                                                 

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For More Information                                                            

Dreyfus Balanced Fund, Inc.     
-----------------------------   

SEC file number:  811-7068      

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

Annual/Semiannual Report        

                 Describes the fund'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 the fund's
        performance during the last fiscal year.

         Statement of Additional Information (SAI)

                        Provides more details about the fund 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 info@dreyfus.com                                

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.                                                                     

(c) 2000 Dreyfus Service Corporation                                  222P0100  

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------------------------------------------------------------------------------  
 DREYFUS BALANCED FUND, INC.

 STATEMENT OF ADDITIONAL INFORMATION
 JANUARY 1, 2000
------------------------------------------------------------------------------  

This Statement of Additional Information, which is not a prospectus,
supplements and should be read in conjunction with the current Prospectus of    
Dreyfus Balanced Fund, Inc. (the "Fund"), dated January 1, 2000 as it may be    
revised from time to time. 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 one of 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...................................................B- 2  
Management of the Fund....................................................B-18  
Management Arrangements...................................................B-23  
How to Buy Shares.........................................................B-26  
Shareholder Services Plan.................................................B-28  
How to Redeem Shares......................................................B-29  
Shareholder Services......................................................B-31  
Portfolio Transactions....................................................B-34  
Determination of Net Asset Value..........................................B-35  
Dividends, Distributions and Taxes........................................B-36  
Performance Information...................................................B-38  
Information About the Fund................................................B-39  
Counsel and Independent Auditors..........................................B-41  
Appendix..................................................................B-42  

 DESCRIPTION OF THE FUND

   The Fund is a Maryland corporation that commenced operations on September
30, 1992. The Fund is an open-end management investment company, known as a     
mutual fund.                                                                    

   The Dreyfus Corporation (the "Manager") serves as the Fund's investment
adviser.                                                                        

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

Certain Portfolio Securities                                                    

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

     Convertible Securities. Convertible securities may be converted at either
a stated price or stated rate into underlying shares of common stock.           
Convertible securities have characteristics similar to both fixed-income and    
equity securities. Convertible securities generally are subordinated to other   
similar but non-convertible securities of the same issuer, although convertible 
bonds, as corporate debt obligations, enjoy seniority in right of payment to all
equity securities, and convertible preferred stock is senior to common stock, of
the same issuer. Because of the subordination feature, however, convertible     
securities typically have lower ratings than similar non-convertible securities.

     Although to a lesser extent than with fixed-income securities, the market
value of convertible securities tends to decline as interest rates increase and,
conversely, tends to increase as interest rates decline. In addition, because of
the conversion feature, the market value of convertible securities tends to vary
with fluctuations in the market value of the underlying common stock. A unique  
feature of convertible securities is that as the market price of the underlying 
common stock declines, convertible securities tend to trade increasingly on a   
yield basis, and so may not experience market value declines to the same extent 
as the underlying common stock. When the market price of the underlying common  
stock increases, the prices of the convertible securities tend to rise as a     
reflection of the value of the underlying common stock. While no securities     
investments are without risk, investments in convertible securities generally   
entail less risk than investments in common stock of the same issuer.           

Convertible securities provide for a stable stream of income with   
generally higher yields than common stocks, but there can be no assurance of    
current income because the issuers of the convertible securities may default on 
their obligations. A convertible security, in addition to providing fixed       
income, offers the potential for capital appreciation through the conversion    
feature, which enables the holder to benefit from increases in the market price 
of the underlying common stock. There can be no assurance of capital            
appreciation, however, because securities prices fluctuate. Convertible         
securities generally offer lower interest or dividend yields than               
non-convertible securities of similar quality because of the potential for      
capital appreciation.                                                           

      Warrants. A warrant is an instrument issued by a corporation which gives
the holder the right to subscribe to a specified amount of the corporation's    
capital stock at a set price for a specified period of time. The Fund may invest
up to 2% of its net assets in warrants, except that this limitation does not    
apply to warrants purchased by the Fund that are sold in units with, or attached
to, other securities.                                                           

    Zero Coupon Securities. The Fund 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. Zero      
coupon securities also are 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 holders
during its life and is sold at a discount to its face value at maturity. 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.                      

  Mortgage-Related Securities. Mortgage-related securities are a form of
derivative collateralized by pools of commercial or residential mortgages. Pools
of mortgage loans are assembled as securities for sale to investors by various  
governmental, government-related and private organizations. These securities may
include complex instruments such as collateralized mortgage obligations and     
stripped mortgage-backed securities, mortgage pass-through securities, interests
in real estate mortgage investment conduits ("REMICs"), adjustable rate         
mortgages, real estate investment trusts ("REITs"), including debt and preferred
stock issued by REITS, as well as other real estate-related securities,         
including those with fixed, floating and variable interest rates, those with    
interest rates based on multiples of changes in a specified index of interest   
rates and those with interest rates that change inversely to changes in interest
rates, as well as those that do not bear interest.                              

Residential Mortgage-Related Securities--The Fund may invest in mortgage-related
securities representing participation interests in pools of one- to four-family 
residential mortgage loans issued or guaranteed by governmental agencies or     
instrumentalities, such as the Government National Mortgage Association         
("GNMA"), the Federal National Mortgage Association ("FNMA") and the Federal    
Home Loan Mortgage Corporation ("FHLMC"), or issued by private entities. Similar
to commercial mortgage-related securities, residential mortgage-related         
securities have been issued using a variety of structures, including multi-class
structures featuring senior and subordinated classes.                           

Mortgage-related securities issued by GNMA include GNMA Mortgage    
Pass-Through Certificates (also know as "Ginnie Maes") which are guaranteed as  
to the timely payment of principal and interest by GNMA and such guarantee is   
backed by the full faith and credit of the United States. GNMA certificates also
are supported by the authority of GNMA to borrow funds from the U.S. Treasury to
make payments under its guarantee. Mortgage-related securities issued by FNMA   
include FNMA Guaranteed Mortgage Pass-Through Certificates (also known as       
"Fannie Maes") which are solely the obligations of FNMA and are not backed by or
entitled to the full faith and credit of the United States. Fannie Maes are     
guaranteed as to timely payment of principal and interest by FNMA.              

Mortgage-related securities issued by FHLMC include FHLMC Mortgage  
Participation Certificates (also known as "Freddie Macs" or "PCs"). Freddie Macs
are not guaranteed by the United States or by any Federal Home Loan Bank and do 
not constitute a debt or obligation of the United States or of any Federal Home 
Loan Bank. Freddie Macs entitle the holder to timely payment of interest, which 
is guaranteed by FHLMC. FHLMC guarantees either ultimate collection or timely   
payment of all principal payments on the underlying mortgage loans. When FHLMC  
does not guarantee timely payment of principal, FHLMC may remit the amount due  
on account of its guarantee of ultimate payment of principal at any time after  
default on an underlying mortgage, but in no event later than one year after it 
becomes payable.                                                                

Commercial Mortgage-Related Securities--Commercial mortgage-related securities  
generally are multi-class debt or pass-through certificates secured by mortgage 
loans on commercial properties. These mortgage-related securities generally are 
structured to provide protection to the holders of senior classes against       
potential losses on the underlying mortgage loans. This protection generally is 
provided by having the holders of subordinated classes of securities            
("Subordinated Securities") take the first loss if there are defaults on the    
underlying commercial mortgage loans. Other protection, which may benefit all of
the classes or particular classes, may include issuer guarantees, reserve funds,
additional Subordinated Securities, cross-collateralization and                 
over-collateralization.                                                         

Subordinated Securities--The Fund may invest in Subordinated Securities issued  
or sponsored by commercial banks, savings and loan institutions, mortgage       
bankers, private mortgage insurance companies and other non-governmental        
issuers. Subordinated Securities have no governmental guarantee, and are        
subordinated in some manner as to the payment of principal and/or interest to   
the holders of more senior mortgage-related securities arising out of the same  
pool of mortgages. The holders of Subordinated Securities typically are         
compensated with a higher stated yield than are the holders of more senior      
mortgage-related securities. On the other hand, Subordinated Securities         
typically subject the holder to greater risk than senior mortgage-related       
securities and tend to be rated in a lower rating category, and frequently a    
substantially lower rating category, than the senior mortgage-related securities
issued in respect of the same pool of mortgage. Subordinated Securities         
generally are likely to be more sensitive to changes in prepayment and interest 
rates and the market for such securities may be less liquid than is the case for
traditional fixed-income securities and senior mortgage-related securities.     

Collateralized Mortgage Obligations ("CMOs") and Multi-Class                    
Pass-Through-Securities--A CMO is a multiclass bond backed by a pool of mortgage
pass-through certificates or mortgage loans. CMOs may be collateralized by (a)  
Ginnie Mae, Fannie Mae, or Freddie Mac pass-through certificates, (b)           
unsecuritized mortgage loans insured by the Federal Housing Administration or   
guaranteed by the Department of Veterans' Affairs, (c) unsecuritized            
conventional mortgages, (d) other mortgage-related securities, or (e) any       
combination thereof.                                                            

Each class of CMOs, often referred to as a "tranche," is issued at a
specific coupon rate and has a stated maturity or final distribution date.      
Principal prepayments on collateral underlying a CMO may cause it to be retired 
substantially earlier than the stated maturities or final distribution dates.   
The principal and interest on the underlying mortgages may be allocated among   
the several classes of a series of a CMO in many ways. One or more tranches of a
CMO may have coupon rates which reset periodically at a specified increment over
an index, such as the London Interbank Offered Rate ("LIBOR") (or sometimes more
than one index). These floating rate CMOs typically are issued with lifetime    
caps on the coupon rate thereon. The Fund also may invest in inverse floating   
rate CMOs. Inverse floating rate CMOs constitute a tranche of a CMO with a      
coupon rate that moves in the reverse direction to an applicable index such as  
LIBOR. Accordingly, the coupon rate thereon will increase as interest rates     
decrease. Inverse floating rate CMOs are typically more volatile than fixed or  
floating rate tranches of CMOs.                                                 

 Many inverse floating rate CMOs have coupons that move inversely to a
multiple of the applicable indexes. The effect of the coupon varying inversely  
to a multiple of an applicable index creates a leverage factor. Inverse floaters
based on multiples of a stated index are designed to be highly sensitive to     
changes in interest rates and can subject the holders thereof to extreme        
reductions of yield and loss of principal. The markets for inverse floating rate
CMOs with highly leveraged characteristics at times may be very thin. The Fund's
ability to dispose of its positions in such securities will depend on the degree
of liquidity in the markets for such securities. It is impossible to predict the
amount of trading interest that may exist in such securities, and therefore the 
future degree of liquidity.                                                     

Stripped Mortgage-Backed Securities--The Fund also may invest in stripped       
mortgage-backed securities which are created by segregating the cash flows from 
underlying mortgage loans or mortgage securities to create two or more new      
securities, each with a specified percentage of the underlying security's       
principal or interest payments. Mortgage securities may be partially stripped so
that each investor class receives some interest and some principal. When        
securities are completely stripped, however, all of the interest is distributed 
to holders of one type of security, known as an interest-only security, or IO,  
and all of the principal is distributed to holders of another type of security  
known as a principal-only security, or PO. Strips can be created in a           
pass-through structure or as tranches of a CMO. The yields to maturity on IOs   
and POs are very sensitive to the rate of principal payments (including         
prepayments) on the related underlying mortgage assets. If the underlying       
mortgage assets experience greater than anticipated prepayments of principal,   
the Fund may not fully recoup its initial investment in IOs. Conversely, if the 
underlying mortgage assets experience less than anticipated prepayments of      
principal, the yield on POs could be materially and adversely affected.         

Real Estate Investment Trusts--A REIT is a corporation, or a business trust that
would otherwise be taxed as a corporation, which meets the definitional         
requirements of the Internal Revenue Code of 1986, as amended (the "Code"). The 
Code permits a qualifying REIT to deduct dividends paid, thereby effectively    
eliminating corporate level Federal income tax and making the REIT a            
pass-through vehicle for Federal income tax purposes. To meet the definitional  
requirements of the Code, a REIT must, among other things, invest substantially 
all of its assets in interests in real estate (including mortgages and other    
REITs) or cash and government securities, derive most of its income from rents  
from real property or interest on loans secured by mortgages on real property,  
and distribute to shareholders annually a substantial portion of its otherwise  
taxable income.                                                                 

     REITs are characterized as equity REITs, mortgage REITs and hybrid REITs.
Equity REITs, which may include operating or finance companies, own real estate 
directly and the value of, and income earned by, the REITs depends upon the     
income of the underlying properties and the rental income they earn. Equity     
REITs also can realize capital gains (or losses) by selling properties that have
appreciated (or depreciated) in value. Mortgage REITs can make construction,    
development or long-term mortgage loans and are sensitive to the credit quality 
of the borrower. Mortgage REITs derive their income from interest payments on   
such loans. Hybrid REITs combine the characteristics of both equity and mortgage
REITs, generally by holding both ownership interests and mortgage interests in  
real estate. The value of securities issued by REITs are affected by tax and    
regulatory requirements and by perceptions of management skill. They also are   
subject to heavy cash flow dependency, defaults by borrowers or tenants,        
self-liquidation and the possibility of failing to qualify for tax-free status  
under the Code or to maintain exemption from the Investment Company Act of 1940,
as amended (the "1940 Act").                                                    

Adjustable-Rate Mortgage Loans ("ARMs")--ARMs eligible for inclusion in a       
mortgage pool will generally provide for a fixed initial mortgage interest rate 
for a specified period of time, generally for either the first three, six,      
twelve, thirteen, thirty-six, or sixty scheduled monthly payments. Thereafter,  
the interest rates are subject to periodic adjustment based on changes in an    
index. ARMs typically have minimum and maximum rates beyond which the mortgage  
interest rate may not vary over the lifetime of the loans. Certain ARMs provide 
for additional limitations on the maximum amount by which the mortgage interest 
rate may adjust for any single adjustment period. Negatively amortizing ARMs may
provide limitations on changes in the required monthly payment. Limitations on  
monthly payments can result in monthly payments that are greater or less than   
the amount necessary to amortize a negatively amortizing ARM by its maturity at 
the interest rate in effect during any particular month.                        

Private Entity Securities--These mortgage-related securities are issued by      
commercial banks, savings and loan institutions, mortgage bankers, private      
mortgage insurance companies and other nongovernmental issuers. Timely payment  
of principal and interest on mortgage-related securities backed by pools created
by non-governmental issuers often is supported partially by various forms of    
insurance or guarantees, including individual loan, title, pool and hazard      
insurance. The insurance and guarantees are issued by government entities,      
private insurers and the mortgage poolers. There can be no assurance that the   
private insurers or mortgage poolers can meet their obligations under the       
policies, so that if the issuers default on their obligations the holders of the
security could sustain a loss. No insurance or guarantee covers the Fund or the 
price of the Fund's shares. Mortgage-related securities issued by               
non-governmental issuers generally offer a higher rate of interest than         
government-agency and government-related securities because there are no direct 
or indirect government guarantees of payment.                                   

Other Mortgage-Related Securities--Other mortgage-related securities include    
securities other than those described above that directly or indirectly         
represent a participation in, or are secured by and payable from, mortgage loans
on real property, including CMO residuals. Other mortgage-related securities may
be equity or debt securities issued by agencies or instrumentalities of the U.S.
Government or by private originators of, or investors in, mortgage loans,       
including savings and loan associations, homebuilders, mortgage banks,          
commercial banks, investment banks, partnerships, trusts and special purpose    
entities of the foregoing.                                                      

      Asset-Backed Securities. Asset-backed securities are a form of derivative.
The securitization techniques used for asset-backed securities are similar to   
those used for mortgage-related securities. The collateral for these securities 
has included home equity loans, automobile and credit card receivables, boat    
loans, computer leases, airplane leases, mobile home loans, recreational vehicle
loans and hospital account receivables. The Fund may invest in these and other  
types of asset-backed securities that may be developed in the future.           

   Asset-backed securities present certain risks that are not presented by
mortgage-backed securities. Primarily, these securities may provide the Fund    
with a less effective security interest in the related collateral than do       
mortgage-backed securities. Therefore, there is the possibility that recoveries 
on the underlying collateral may not, in some cases, be available to support    
payments on these securities.                                                   

      Illiquid Securities. The Fund 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 Fund's investment objective.  
These securities may include securities that are not readily marketable, such as
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 Fund is      
subject to a risk that should the Fund desire to sell them when a ready buyer is
not available at a price the Fund deems representative of their value, the value
of the Fund's net assets could be adversely affected.                           

  Money Market Instruments. A portion of the Fund's investments in fixed
income securities may include cash and cash equivalents, such as money market   
instruments including U.S. Government securities, repurchase agreements, bank   
obligations and commercial paper. When the Manager determines that adverse      
market conditions exist, the fund may adopt a temporary defensive position and  
invest some or all of its assets in money market instruments. The Fund also may 
purchase money market instruments when it has cash reserves or in anticipation  
of taking a market position.                                                    

Investment Techniques                                                           

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

   Foreign Currency Transactions. The Fund 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 Fund has agreed  
to buy or sell; to hedge the U.S. dollar value of securities the Fund 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 Fund's  
purchase of foreign currencies for U.S. dollars or the maintenance of short     
positions in foreign currencies. A short position would involve the Fund        
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 Fund contracted to receive. The  
Fund's success in these transactions will depend principally on the ability of  
the Manager 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 (buying securities using borrowed money) exaggerates
the effect on net asset value of any increase or decrease in the market value of
the Fund'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 the    
Fund 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 Fund 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 Fund 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.

The Fund may enter into reverse repurchase agreements with banks,   
broker/dealers or other financial institutions. This form of borrowing involves 
the transfer by the Fund of an underlying debt instrument in return for cash    
proceeds based on a percentage of the value of the security. The Fund retains   
the right to receive interest and principal payments on the security. At an     
agreed upon future date, the Fund repurchases the security at principal plus    
accrued interest. As a result of these transactions, the Fund is exposed to     
greater potential fluctuations in the value of its assets and its net asset     
value per share. To the extent the Fund enters into a reverse repurchase        
agreement, the Fund will segregate permissible liquid assets at least equal to  
the aggregate amount of its reverse repurchase obligations, plus accrued        
interest, in certain cases, in accordance with releases promulgated by the      
Securities and Exchange Commission. The Securities and Exchange Commission views
reverse repurchase transactions as collateralized borrowings by the Fund. Except
for these transactions, the Fund's borrowings generally will be unsecured.      

Lending Portfolio Securities. The Fund may lend securities from its 
portfolio to brokers, dealers and other financial institutions needing to borrow
securities to complete certain transactions. The Fund continues to be entitled  
to payments in amounts equal to the interest, dividends or other distributions  
payable on the loaned securities which affords the Fund an opportunity to earn  
interest on the amount of the loan and on the loaned securities' collateral.    
Loans of portfolio securities may not exceed 33-1/3% of the value of the Fund's 
total assets, and the Fund 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 Fund at any time upon   
specified notice. The Fund might experience risk of loss if the institution with
which it has engaged in a portfolio loan transaction breaches its agreement with
the Fund. In connection with its securities lending transactions, the Fund 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.                        

    Derivatives. The Fund may invest in, or enter into, derivatives, such as
options and futures, mortgage-related securities and asset-backed securities,   
for a variety of reasons, including, with respect to options and futures, to    
hedge certain market risks, to provide a substitute for purchasing or selling   
particular securities 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 Fund 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 Fund can increase or decrease the level of  
risk, or change the character of the risk, of its portfolio by making           
investments in specific securities. However, 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 Fund's     
performance.                                                                    

    If the Fund invests in derivatives at inopportune times or judges market
conditions incorrectly, such investments may lower the Fund's return or result  
in a loss. The Fund also could experience losses if its derivatives were poorly 
correlated with its other investments, or if the Fund 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 the Fund will not be a commodity pool, certain derivatives 
subject the Fund to the rules of the Commodity Futures Trading Commission which 
limit the extent to which the Fund can invest in such derivatives. The Fund may 
invest in futures contracts and options with respect thereto for hedging        
purposes without limit. However, the Fund may not 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 
Fund'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.                                   

      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 variation margin system 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  
Manager 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 the Fund. 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. The Fund may enter into futures contracts in  
U.S. domestic markets or on exchanges located outside the United States. 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 the Fund might realize in trading could be eliminated
by adverse changes in the currency exchange rate, or the Fund could incur losses
as a result of those changes. Transactions on foreign exchanges may include     
commodities which are traded on domestic exchanges or 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 the Fund which
could adversely affect the value of the Fund's net assets. Although the Fund    
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 Fund to substantial losses.            

  Successful use of futures by the Fund also is subject to the Manager's
ability 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 securities being hedged and   
the price movements of the futures contract. For example, if the Fund 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 Fund 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 Fund has           
insufficient cash, it may have to sell securities to meet daily variation margin
requirements. The Fund 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, the Fund may be required to segregate permissible liquid   
assets to cover its obligations relating to its transactions in derivatives. To 
maintain this required cover, the Fund 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. In addition, the segregation of such 
assets will have the effect of limiting the Fund's ability otherwise to invest  
those assets.                                                                   

Specific Futures Transactions. The Fund may purchase and sell stock index       
futures contracts. A stock index future obligates the Fund 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.                                                       

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

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

Options--In General. The Fund may invest up to 5% of its assets, represented by 
the premium paid, in the purchase of call and put options. The Fund 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. 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 the Fund is a call option with respect to
which the Fund owns the underlying security or otherwise covers the transaction 
by segregating permissible liquid assets. A put option written by the Fund is   
covered when, among other things, the Fund segregates permissible liquid assets 
having a value equal to or greater than the exercise price of the option 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. The Fund 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 Fund 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. The Fund 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 Fund 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.                                    

The Fund may purchase cash-settled options on interest rate swaps,  
interest rate swaps denominated in foreign currency and equity index swaps in   
pursuit of its investment objective. Interest rate swaps involve the exchange by
the Fund with another party of their respective commitments to pay or receive   
interest (for example, an exchange of floating-rate payments for fixed-rate     
payments) denominated in U.S. dollars or foreign currency. Equity index swaps   
involve the exchange by the Fund with another party of cash flows based upon the
performance of an index or a portion of an index of securities which usually    
includes dividends. A cash-settled option on a swap gives the purchaser the     
right, but not the obligation, in return for the premium paid, to receive an    
amount of cash equal to the value of the underlying swap as of the exercise     
date. These options typically are purchased in privately negotiated transactions
from financial institutions, including securities brokerage firms.              

Successful use by the Fund of options and options on futures will be
subject to the Manager's ability to predict correctly movements in the prices of
individual stocks, the stock market generally, foreign currencies or interest   
rates. To the extent the Manager's predictions are incorrect, the Fund may incur
losses.                                                                         

    Future Developments. The Fund 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 Fund or   
which are not currently available but which may be developed, to the extent such
opportunities are both consistent with the Fund's investment objective and      
legally permissible for the Fund. Before entering into such transactions or     
making any such investment, the Fund will provide appropriate disclosure in its 
Prospectus or Statement of Additional Information.                              

   Short-Selling. In these transactions, the Fund sells a security it does
not own in anticipation of a decline in the market value of the security. To    
complete the transaction, the Fund must borrow the security to make delivery to 
the buyer. The Fund is obligated to replace the security borrowed by purchasing 
it subsequently at the market price at the time of replacement. The price at    
such time may be more or less than the price at which the security was sold by  
the Fund, which would result in a loss or gain, respectively. The Fund also may 
make short sales "against the box," in which the Fund enters into a short sale  
of a security it owns.                                                          

   Securities will not be sold short if, after effect is given to any such
short sale, the total market value of all securities sold short would exceed 5% 
of the value of the Fund's net assets.                                          

Until the Fund closes its short position or replaces the borrowed   
security, it will: (a) segregate permissible liquid assets in an amount that,   
together with the amount deposited with the broker as collateral, always equals 
the current value of the security sold short; or (b) otherwise cover its short  
position.                                                                       

      Forward Commitments. The Fund may purchase or sell securities on a forward
commitment, when-issued or delayed delivery basis, which means delivery and     
payment take place a number of days after the date of the commitment to purchase
or sell the securities at a predetermined price and/or yield. Typically, no     
interest accrues to the purchaser until the security is delivered. When         
purchasing a security on a forward commitment basis, the Fund assumes the rights
and risks of ownership of the security, including the risk of price and yield   
fluctuations, and takes such fluctuations into account when determining its net 
asset value. Because the Fund is not required to pay for these securities until 
the delivery date, these risks are in addition to the risks associated with the 
Fund's other investments. If the Fund is fully or almost fully invested when    
forward commitment purchases are outstanding, such purchases may result in a    
form of leverage. The Fund intends to engage in forward commitments to increase 
its portfolio's financial exposure to the types of securities in which it       
invests. Leveraging the portfolio in this manner will increase the Fund's       
exposure to changes in interest rates and will increase the volatility of its   
returns. The Fund will segregate permissible liquid assets at least equal at all
times to the amount of the Fund'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 the Fund 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 the Fund
is fully or almost fully invested may result in greater potential fluctuation in
the value of the Fund's net assets and its net asset value per share.           

Investment Considerations and Risks                                             

   Equity Securities. Equity securities fluctuate in value, often based on
factors unrelated to the value of the issuer of the securities, and such        
fluctuations can be pronounced. Changes in the value of the Fund's investments  
will result in changes in the value of its shares and thus the Fund's total     
return to investors.                                                            

     The Fund may purchase securities of smaller capitalization companies, the
prices of which may be subject to more abrupt or erratic market movements than  
larger, more established companies, because these securities typically are      
traded in lower volume and the issuers typically are more subject to changes in 
earnings and prospects.                                                         

     Fixed-Income Securities. The debt securities in which the Fund may invest
must be rated at least Baa by Moody's Investors Services, Inc. ("Moody's") or at
least BBB by Standard & Poor's Ratings Group ("S&P"), Fitch IBCA, Inc. ("Fitch")
or Duff & Phelps Credit Rating Co. ("Duff") or, if unrated, deemed to be of     
comparable quality by the Manager. The debt securities in which the Fund invests
have remaining maturities of 40 years or less and, under normal market          
conditions, the dollar-weighted average maturity of the Fund's portfolio        
invested in debt securities is expected to be between two and ten years. During 
periods of rapidly rising interest rates, the dollar-weighted average portfolio 
maturity of the Fund's debt securities may be shortened to one year or less.    
Even though interest-bearing securities are investments which promise a stable  
stream of income, the prices of such securities are inversely affected by       
changes in interest rates and, therefore, are subject to the risk of market     
price fluctuations. Certain securities that may be purchased by the Fund, such  
as those with interest rates that fluctuate directly or indirectly based on     
multiples of a stated index, are designed to be highly sensitive to changes in  
interest rates and can subject the holders thereof to extreme reductions of     
yield and possibly loss of principal. The values of fixed-income securities also
may be affected by changes in the credit rating or financial condition of the   
issuer. Certain securities purchased by the Fund, such as those rated Baa by    
Moody's and BBB by S&P, Fitch and Duff, may be subject to such risk with respect
to the issuing entity and to greater market fluctuations than certain lower     
yielding, higher rated fixed-income securities. Once the rating of a portfolio  
security has been changed, the Fund will consider all circumstances deemed      
relevant in determining whether to continue to hold the security. See           
"Appendix."                                                                     

Mortgage-Related Securities. Mortgage-related securities are complex
derivative instruments, subject to both credit and prepayment risk, and may be  
more volatile and less liquid than more traditional debt securities. Although   
certain mortgage-related securities are guaranteed by a third party (such as a  
U.S. Government agency or instrumentality with respect to government-related    
mortgage-backed securities) or otherwise similarly secured, the market value of 
these securities, which may fluctuate, is not secured. If a mortgage-related    
security is purchased at a premium, all or part of the premium may be lost if   
there is a decline in the market value of the security, whether resulting from  
changes in interest rates or prepayments on the underlying mortgage collateral. 
Mortgage-related securities are subject to credit risks associated with the     
performance of the underlying mortgage properties. Adverse changes in economic  
conditions and circumstances are more likely to have an adverse impact on       
mortgage-related securities secured by loans on certain types of commercial     
properties than on those secured by loans on residential properties. In         
addition, these securities are subject to prepayment risk, although commercial  
mortgages typically have shorter maturities than residential mortgages and      
prepayment protection features. Some mortgage-related securities have structures
that make their reactions to interest rate changes and other factors difficult  
to predict, making their value highly volatile.                                 

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 evidences of ownership of foreign securities usually are held
outside the United States, the Fund will be subject to additional risks which   
include: possible adverse political and economic developments, seizure or       
nationalization of foreign deposits and adoption of governmental restrictions   
which might adversely affect or restrict the payment of principal and interest  
on the foreign securities to investors located outside the country of the       
issuer, whether from currency blockage or otherwise.                            

 Developing countries have economic structures that are generally less
diverse and mature, and political systems that are less stable, than those of   
developed countries. The markets of developing countries may be more volatile   
than the markets of more mature economies; however, such markets may provide    
higher rates of return to investors. Many developing countries providing        
investment opportunities for the Fund have experienced substantial, and in some 
periods extremely high, rates of inflation for many years. Inflation and rapid  
fluctuations in inflation rates have had and may continue to have adverse       
effects on the economies and securities markets of certain of these countries.  

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

Investment Restrictions                                                         

    The Fund'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 Fund's outstanding voting shares. In addition, the Fund has adopted 
investment restrictions numbered 1 through 7 as fundamental policies. Investment
restrictions numbered 8 through 13 are not fundamental policies and may be      
changed by vote of a majority of the Fund's Board members at any time. The Fund 
may not:                                                                        

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

  2. Purchase, hold or deal in real estate, or oil, gas or other mineral
leases or exploration or development programs, but the Fund may purchase and    
sell securities that are secured by real estate or issued by companies that     
invest or deal in real estate. In particular, the Fund may purchase             
mortgage-backed securities and real estate investment trust securities.         

     3. Borrow money, except to the extent permitted under the 1940 Act (which
currently limits borrowing to no more than 33-1/3% of the value of the Fund'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.                                                                      

    4. Make loans to others, except through the purchase of debt obligations
and the entry into repurchase agreements. However, the Fund may lend its        
portfolio securities in an amount not to exceed 33-1/3% 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.                                                                          

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

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

     7. 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. 1, 3, 9 and 10 may be deemed to give rise to a senior security.

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

9. Pledge, mortgage or hypothecate its assets, except to the extent 
necessary to secure permitted borrowings and to the extent related to the       
deposit of assets in escrow in connection with writing covered put and call     
options and the purchase of securities on a when-issued or forward commitment   
basis 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.                           

      10. 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.                                                                    

11. 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 Fund's investments in all such companies  
to exceed 5% of the value of its total assets.                                  

      12. 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 Fund's net assets would be so      
invested.                                                                       

13. Purchase securities of other investment companies, except to the
extent permitted under the 1940 Act, or those received as part of a merger or   
consolidation.                                                                  

  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 the
Fund. The Board approves all significant agreements between the Fund and those  
companies that furnish services to the Fund. These companies are as follows:    

The Dreyfus Corporation..................... Investment Adviser     
Premier Mutual Fund Services, Inc........... Distributor            
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                                                                   

JOSEPH S. DiMARTINO, Chairman of the Board. Since January 1995, Chairman of the 
Board of various funds in the Dreyfus Family of Funds. He also is a 
director of 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 Company, Inc.), a button packager and   
     distributor, Career Blazers, Inc. (formerly, Staffing Resources, Inc.), a
      temporary placement agency, and Century Business Services, Inc. (formerly,
     International Alliance Services, Inc.), a provider of various outsourcing
    functions for small and medium sized companies. For more than five years
 prior to January 1995, he was President, a director and, until August
     1994, Chief Operating Officer of the Manager and Executive Vice President
    and a director of Dreyfus Service Corporation, a wholly-owned subsidiary
  of the Manager and until August 24, 1994, the Fund's distributor. From
      August 1994 until December 31, 1994, he was a director of Mellon Financial
   Corporation. He is 56 years old and his address is 200 Park Avenue, New
York, New York 10166.                                               

DAVID P. FELDMAN, Board Member. A director of several mutual funds in the 59    
Wall Street Mutual Funds Group and The Jeffrey Company, a private   
investment company. He was employed by AT&T from July 1961 until his
 retirement in April 1997, most recently serving as Chairman and Chief
 Executive Officer of AT&T Investment Management Corporation. He is 60
 years old and his address is 466 Lexington Avenue, New York, New York
10017.                                                              

JOHN M. FRASER, JR., Board Member. Retired President of Fraser Associates, a    
   service company for planning and arranging corporate meetings and other
     events. From September 1975 to June 1978, he was Executive Vice President
    of Flagship Cruises Ltd. Prior thereto, he was Senior Vice President and
    Resident Director of the Swedish-American Line for the United States and
   Canada. He is 78 years old and his address is 133 East 64th Street, New
York, New York 10021.                                               

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. He 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
     chairman of The Measurisk Group, a risk measurement advisory and software
    development firm, co-chairman of the Investment Committee, Massachusetts
     State Retirement Fund, and a director of The Dun & Bradstreet Corp., Exel
Limited, a Bermuda based insurance company, Cooke and Bieler, Inc., 
    investment counselors, National Association of Securities Dealers, Inc.,
 NASD Regulation, Inc. and the Federal Reserve Bank of Boston. He is a
   member of the Council on Foreign Relations, Boston Committee on Foreign
   Relations and treasurer of The Boston Economic Club. He is 60 years old
  and his address is 79 John F. Kennedy Street, Cambridge, Massachusetts
02138.                                                              

JAMES F. HENRY, Board Member. President of the CPR Institute for Dispute        
Resolution, a non-profit organization principally engaged in the    
   development of alternatives to business litigation. He was a partner of
Lovejoy, Wasson & Ashton from January 1977 to September 1979. He was
President and a director of the Edna McConnell Clark Foundation, a  
      philanthropic organization, from September 1971 to December 1976. He is 69
      years old and his address is c/o CPR Institute for Dispute Resolution, 366
Madison Avenue, New York, New York 10017.                           

ROSALIND GERSTEN JACOBS, Board Member. Merchandise and marketing consultant.    
  From 1997 to 1998, she was a Director of Merchandise and Marketing for
     Corporate Property Investors, a real estate investment company. From 1974
to 1976, she was owner and manager of a merchandise and marketing   
   consulting firm. Prior to 1974, she was a Vice President of Macy's, New
York. She is 74 years old and her address is c/o Corporate Property 
Investors, 305 East 47th Street, New York, New York 10017.          

IRVING KRISTOL, Board Member. John M. Olin Distinguished Fellow of the American 
    Enterprise Institute for Public Policy Research, co-editor of The Public
    Interest magazine, and an author or co-editor of several books. From May
 1981 to December 1994, he was a consultant to the Manager on economic
 matters; from 1969 to 1988, he was Professor of Social Thought at the
 Graduate School of Business Administration, New York University; from
  September 1969 to August 1979, he was Henry R. Luce Professor of Urban
  Values at New York University; from 1975 to 1990, he was a director of
      Lincoln National Corporation, an insurance company; and from 1977 to 1990,
      he was a director of Warner-Lambert Company, a pharmaceutical and consumer
  products company. He is 79 years old and his address is c/o The Public
Interest, 1112 16th Street, N.W., Suite 530, Washington, D.C. 20036.

DR. PAUL A. MARKS, Board Member. President and Chief Executive Officer of       
     Memorial Sloan-Kettering Cancer Center. He is also a director emeritus of
      Pfizer, Inc., a pharmaceutical company, where he served as a director from
   1978 to 1996; and a director of Tularik, Inc., a biotechnology company,
 and Genos, Inc., a genomics company. He was Vice President for Health
  Sciences and Director of the Cancer Center at Columbia University from
   1973 to September 1980, and Professor of Medicine and of Human Genetics
and Development at Columbia University from 1968 to 1982. He was a  
 director of Life Technologies, Inc., a life science company producing
 products for cell and molecular biology and microbiology from 1986 to
    1996. He is 73 years old and his address is c/o Memorial Sloan-Kettering
Cancer Center, 1275 York Avenue, New York, New York 10021.          

DR. MARTIN PERETZ, Board Member. Editor-in-Chief of The New Republic magazine   
     and a lecturer in Social Studies at Harvard University, where he has been
 a member of the faculty since 1965. He is a trustee of The Center for
Blood Research at the Harvard Medical School, and of the Academy for
  Liberal Education, an accrediting agency for colleges and universities
      certified by the U.S. Department of Education; and a director of LeukoSite
Inc., a biopharmaceutical company. Dr. Peretz is also Co-Chairman of
    TheStreet.com, a financial daily published on the Web, and a director of
      The Electronic Newsstand, a distributor of magazines on the Web. From 1988
   to 1991, he was a director of Bank Leumi Trust Company of New York, and
    from 1988 to 1991, he was a director of Carmel Container Corporation. He
      is 60 years old and his address is c/o The New Republic, 1220 19th Street,
N.W., Washington, D.C. 20036.                                       

BERT W. WASSERMAN, Board Member. Financial Consultant. From January 1990 to     
    March 1995, he was Executive Vice President and Chief Financial Officer,
      and, from January 1990 to March 1993, a director of Time Warner Inc.; from
1981 to 1990, he was a member of the office of the President and a  
   director of Warner Communications, Inc. He is also a director of Malibu
  Entertainment International, Inc., the Lillian Vernon Corporation, and
  Winstar Communications, Inc. He is 67 years old and his address is 126
East 56th Street, Suite 12 North, New York, New York 10022-3613.    

The Fund has a standing nominating committee comprised of its Board 
members who are not "interested persons" of the Fund, as defined in the 1940    
Act. The function of the nominating committee is to select and nominate all     
candidates who are not "interested persons" of the Fund for election to the     
Fund's Board.                                                                   

  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 for the fiscal year ended August 31, 1999, and 
by all funds in the Dreyfus Family of Funds for which such person is a Board    
member (the number of which is set forth in parenthesis next to each Board      
member's total compensation)* for the year ended December 31, 1998, is as       
follows:                                                                        

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

Joseph S. DiMartino                   $2,813                 $619,660(187)      
David P. Feldman                      $2,250                 $106,750(56)       
John M. Fraser, Jr.                   $2,250                 $ 75,750(42)       
Robert R. Glauber                     $2,250                 $ 88,250(41)       
James F. Henry                        $2,250                 $ 54,250(28)       
Rosalind Gersten Jacobs               $2,250                 $ 84,000(44)       
Irving Kristol                        $2,250                 $ 50,000(28)       
Dr. Paul A. Marks                     $2,000                 $ 50,000(28)       
Dr. Martin Peretz                     $2,250                 $ 54,250(28)       
Bert W. Wasserman                     $2,250                 $ 54,250(28)       
---------------------------                                                     
*     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 $4,093 for all Board members as a group.          

Officers of the Fund                                                            

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 the Manager. She is 42 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 the Manager. 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 40 years old.

*FREDERICK C. DEY, Vice President, Assistant Treasurer and Assistant            
Secretary.  Vice President, New Business Development of Funds       
Distributor, Inc. since September 1994, and an officer of other     
  investment companies advised or administered by the Manager.  He is 37
years old.                                                          

STEPHANIE D. PIERCE, Vice President, Assistant Treasurer and Assistant          
     Secretary. Vice President of the Distributor and Funds Distributor, Inc.,
   and an officer of other investment companies advised or administered by
the Manager. 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 31 years old.                                

*JOHN P. COVINO, Vice President and Assistant Treasurer. Vice President and     
    Treasury Group Manager of Treasury Servicing and Administration of Funds
     Distributor, Inc. since December 1998, and an officer of other investment
   companies advised or administered by the Manager. From December 1995 to
November 1998, he was employed by Fidelity Investments where he held
multiple positions in their Institutional Brokerage Group. Prior to 
   joining Fidelity, he was employed by SunGard Brokerage Systems where he
was responsible for the technology and development of the accounting
product group. He is 35 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 the Manager.  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 the Manager. 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. He is 45
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 the Manager.  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 the Manager.  From  
April 1993 to January 1995, he was a Senior Fund Accountant for     
Investors Bank & Trust Company.  He is 30 years old.                

*KAREN JACOPPO-WOOD, Vice President and Assistant Secretary.  Vice President    
  and Senior Counsel of Funds Distributor, Inc. since February 1997, and
   an officer of other investment companies advised or administered by the
Manager.  From June 1994 to January 1996, she was Manager of SEC    
Registration at Scudder, Stevens & Clark, Inc.  She is 32 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 the Manager.  From April 1994 to July 1996,
   he was Assistant Counsel at Forum Financial Group.  He is 35 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 the
Manager.  From July 1994 to November 1995, she was a Fund Accountant
for Investors Bank & Trust Company.  She is 27 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 the Manager. 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 38 years old.                 

     The address of each officer of the Fund is 200 Park Avenue, New York, New
York 10166, except those officers indicated by an (*), whose address is 60 State
Street, Boston, Massachusetts 02109.                                            

    The Fund's Board members and officers, as a group, owned less than 1% of
the Fund's shares outstanding on December 13, 1999.                             

      The following persons are known by the Fund to own of record 5% or more of
the Fund's outstanding voting securities as of December 13, 1999: Boston Safe   
Deposit and Trust Company, Trustee and Agent for Omnibus Account, One Cabot     
Road, Medford, MA 02155-5141 - 10.23%; Charles Schwab & Co. Inc.--Reinvestment  
Account, Mutual Funds Department, 101 Montgomery Street, San Francisco, CA      
94104-4122 - 11.31%; Nationwide QPVA, Qualified Plans Variable Account c/o IPO  
CO67, P.O. Box 182029, Columbus, Ohio 43218-2029 - 12.72%; and Dreyfus Trust    
Company TTEE Cablevision Systems Corporation, 401(k) Savings Plan, Attn: Trust  
Officer, 135 Santilli Highway, Everett, Massachusetts 02149-1906 - 7.31%. Under 
applicable trust law, Fund shares held in trust by the Boston Safe Deposit and  
Trust Company are beneficially owned by plan participants having an interest in 
such trust. 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. The Manager is a wholly-owned subsidiary of Mellon
Bank, N.A., which is a wholly-owned subsidiary of Mellon Financial 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.                                                   

The Manager provides management services pursuant to a Management   
Agreement (the "Agreement") between the Fund and the Manager. The 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 the Fund,  
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 Manager, by vote cast in person at a meeting called for the  
purpose of voting on such approval. The Agreement is terminable without penalty,
on 60 days' notice, by the Fund's Board or by vote of the holders of a majority 
of the Fund's shares, or, on not less than 90 days' notice, by the Manager. The 
Agreement will terminate automatically 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; Lawrence S. Kash, Vice Chairman and a director; J.      
David Officer, Vice Chairman and a director; Thomas F. Eggers, Vice             
Chairman--Institutional and a director; Ronald P. O'Hanley III, Vice            
Chairman; William T. Sandalls, Jr., Executive Vice President; Mark N. Jacobs,   
Vice President, General Counsel and Secretary; Diane P. Durnin, Vice            
President--Product Development; 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.                                                    

      The Manager manages the Fund's portfolio of investments in accordance with
the stated policies of the Fund, subject to the approval of the Fund's Board.   
The Manager is responsible for investment decisions, and provides the Fund with 
portfolio managers who are authorized by the Fund's Board to execute purchases  
and sales of securities. The Fund's portfolio managers are Dominick De Alto,    
Timothy M. Ghriskey, Douglas R. Ramos and Gerald Thunelius. The Manager also    
maintains a research department with a professional staff of portfolio managers 
and securities analysts who provide research services for the Fund and for other
funds advised by the Manager.                                                   

     The Manager 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 the Manager's employees does not  
disadvantage any fund managed by the Manager. Under the Policy, the Manager's   
employees must preclear personal transactions in securities not exempt under the
Policy. In addition, the Manager's employees must report their personal         
securities transactions and holdings, which are reviewed for compliance with the
Policy. In that regard, the Manager's portfolio managers and other investment   
personnel also are subject to the oversight of Mellon's Investment Ethics       
Committee. Portfolio managers and other investment personnel of the Manager 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.                                       

The Manager 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. The Manager may pay the Distributor for shareholder       
services from the Manager's own assets, including past profits but not including
the management fee paid by the Funds. The Distributor may use part or all of    
such payments to pay securities dealers, banks or other financial institutions  
in respect of these services. The Manager also may make such advertising and    
promotional expenditures, using its own resources, as it from time to time deems
appropriate.                                                                    

     All expenses incurred in the operation of the Fund are borne by the Fund,
except to the extent specifically assumed by the Manager. The expenses borne by 
the Fund include: taxes, interest, loan commitment fees, dividends and interest 
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 Manager, Securities and Exchange       
Commission fees, state Blue Sky qualification fees, advisory fees, charges of   
custodians, transfer and dividend disbursing agents' fees, all costs of         
insurance obtained other than under a blanket policy covering one or more other 
investment companies managed by the Manager, 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     
shareholders' reports and meetings, costs of preparing and printing prospectuses
for regulatory purposes and for distribution to existing shareholders, and any  
extraordinary expenses. In addition, the Fund is subject to an annual service   
fee for ongoing personal services relating to shareholder accounts and services 
related to the maintenance of shareholder accounts. See "Shareholder Services   
Plan."                                                                          

      As compensation for the Manager's services, the Fund has agreed to pay the
Manager a monthly management fee at the annual rate of .60% of the value of the 
Fund's average daily net assets. All fees and expenses are accrued daily and    
deducted before declaration of dividends to shareholders. For the fiscal years  
ended August 31, 1997, 1998 and 1999, the management fees paid by the Fund      
amounted to $1,825,854, $2,309,615 and $1,705,742, respectively.                

    The Manager has agreed that if in any fiscal year the aggregate expenses
of the Fund, 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 the Fund, the Fund may deduct  
from the payment to be made to the Manager under the Agreement, or the Manager  
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 the Manager is not subject to  
reduction as the value of the Fund's net assets increases.                      

Distributor. The Distributor, 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 based on 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 plan or        
programs exceeds $1,000,000 ("Eligible Benefit Plans"). Generally, the fee paid 
to dealers will not exceed 1% of the amount invested through such dealers. The  
Distributor, however, may pay dealers a higher fee and 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 the 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 the Manager, 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 the Fund. 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 Bank Center, Pittsburgh,
Pennsylvania 15258, is the Fund's custodian. Under a custody agreement with the 
Fund, the Custodian holds the Fund'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 the Fund's assets held in custody and receives     
certain securities transactions charges.                                        

 HOW TO BUY SHARES

      General. Fund shares are sold without a sales charge. You may be charged a
fee if you effect transactions in Fund shares through a securities dealer, bank 
or other financial institution. 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 is $2,500, or $1,000 if you are a client of
a securities dealer, bank or other financial institution which maintains an     
omnibus account in the Fund and has made an aggregate minimum initial purchase  
for its customers of $2,500. Subsequent investments 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.     
Subsequent investments in a spousal IRA must be at least $250. The initial      
investment must be accompanied by the Account Application. For full-time or     
part-time employees of the Manager or any of its affiliates or subsidiaries,    
directors of the Manager, Board members of a fund advised by the Manager,       
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 the Manager 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 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 Builder(R), 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 you against loss in a declining market.                                 

  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 determining net asset 
value per share, options and futures contracts will be valued 15 minutes after  
the close of trading on the floor of the New York Stock Exchange. Net asset     
value per share is computed by dividing the value of the Fund's net assets      
(i.e., the value of its assets less liabilities) by the total number of shares  
outstanding. The Fund's investments are valued based on market value, or where  
market quotations are not readily available, based on fair value as determined  
in good faith by the Fund's Board. For further information regarding the methods
employed in valuing Fund investments, see "Determination of Net Asset Value."   

For certain institutions that have entered into agreements with the 
Distributor, payment for the purchase of Fund 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 ("ACH") 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 day 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 day the      
Transfer Agent and the New York Stock Exchange are open for business, or orders 
made on Saturday, Sunday or any Federal 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

     The Fund has adopted a Shareholder Services Plan (the "Plan") pursuant to
which the Fund reimburses Dreyfus Service Corporation an amount not to exceed an
annual rate of .25% of the value of the Fund's average daily net assets for     
certain allocated expenses of providing personal services and/or maintaining    
shareholder accounts. The services provided may include personal services       
relating to shareholder accounts, such as answering shareholder inquiries       
regarding the Fund and providing reports and other information, and services    
related to the maintenance of shareholder accounts.                             

A quarterly report of the amounts expended under the Plan, and the  
purposes for which such expenditures were incurred, must be made to the Board   
for its review. In addition, the 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 or the Manager and
have no direct or indirect financial interest in the operation of the Plan, by  
vote cast in person at a meeting called for the purpose of considering such     
amendments. The Plan is subject to annual approval by such vote cast in person  
at a meeting called for the purpose of voting on the Plan. The Plan is          
terminable at any time 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 Plan.                                                          

  For the fiscal year ended August 31, 1999, the Fund reimbursed Dreyfus
Service Corporation $638,872 pursuant to the Plan.                              

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 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 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."                                   

Dreyfus TeleTransfer Privilege. You may request by telephone that   
redemption proceeds be transferred between your Fund account and your bank      
account. Only a bank account maintained in a domestic financial institution     
which is an ACH 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 $500,000 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 TeleTransfer transaction
through the 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."                                 

     Stock Certificates; Signatures. Any certificates representing Fund 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 ("STAMP"), 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.                                                                          

   Redemption Commitment. The Fund has committed itself to pay in cash all
redemption requests by any shareholder of record, limited in amount during any  
90-day period to the lesser of $250,000 or 1% of the value of the Fund's net    
assets at the beginning of such period. Such commitment is irrevocable without  
the prior approval of the Securities and Exchange Commission. In the case of    
requests for redemption in excess of such amount, the Board reserves the right  
to make payments in whole or part in securities or other assets of the Fund in  
case of an emergency or any time a cash distribution would impair the liquidity 
of the Fund to the detriment of the existing shareholders. In such event, the   
securities would be valued in the same manner as the Fund's portfolio is 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 Fund 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 Fund's shareholders.     

SHAREHOLDER SERVICES

 Fund Exchanges. You may purchase, in exchange for shares of the Fund,
shares of certain other funds managed or administered by the Manager, 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 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"), but 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 Touch(R) automated telephone system) 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. Telephone   
exchanges may be subject to limitations as to the amount involved or 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 personal 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 the Fund, shares of certain other    
funds in the Dreyfus Family of Funds of which you are a shareholder. 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.                                                      

 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. Shares may be exchanged only between      
accounts having identical names and other identifying designations. 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 Builder(R). Dreyfus-Automatic Asset Builder 
permits you to purchase Fund shares (minimum of $100 and maximum of $150,000 per
transaction) at regular intervals selected by you. Fund 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 Fund 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 U.S. 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 Fund 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 ACH 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 to
arrange for transactions under the Dreyfus Payroll Savings Plan.                

   Dreyfus Step Program. Dreyfus Step Program enables you to purchase Fund
shares without regard to the Fund's minimum initial investment requirements     
through Dreyfus-Automatic Asset Builder(R), 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. If
you wish to purchase Fund shares through the Dreyfus Step Program in conjunction
with a Dreyfus-sponsored retirement plan, you may do so only for IRAs, SEP-IRAs 
and rollover IRAs.                                                              

 Dreyfus Dividend Options. Dreyfus Dividend Sweep allows you to invest
automatically your dividends or dividends and capital gain distributions, if    
any, from the Fund in shares of another fund 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 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"), but 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 ACH 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 $5,000 minimum account. Withdrawal     
payments are the proceeds from sales of Fund 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. The Automatic       
Withdrawal Plan may be terminated at any time by you, the Fund or the Transfer  
Agent. Shares for which stock certificates have been issued may not be redeemed 
through 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, Education IRAs and rollover IRAs) and  
403(b)(7) Plans. Plan support services also are available.                      

     If you who wish to purchase Fund shares in conjunction with a Keogh Plan,
a 403(b)(7) Plan or an IRA, including a 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.                                         

     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.                                 

PORTFOLIO TRANSACTIONS

    The Manager supervises the placement of orders on behalf of the Fund for
the purchase or sale of portfolio securities. Allocation of brokerage           
transactions, including their frequency, is made in the Manager's 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 include those that          
supplement the Manager's 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 Manager and the  
Manager's fee is not reduced as a consequence of the receipt of such            
supplemental information. Such information may be useful to the Manager in      
serving both the Fund and other clients it advises and, conversely, supplemental
information obtained by the placement of business of other clients may be useful
to the Manager in carrying out its obligation to the Fund. Brokers also may be  
selected based upon their sales of shares of the Fund or other funds advised by 
the Manager or its affiliates, or 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, in certain cases,
may result from two or more clients the Manager might advise 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. 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. 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.                           

    Portfolio turnover may vary from year to year, as well as within a year.
High turnover rates are likely to result in comparatively greater brokerage     
expenses. The overall reasonableness of brokerage commissions paid is evaluated 
by the Manager 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 August 31, 1997, 1998 and 1999, the Fund paid
total brokerage commissions of $727,055, $656,853 and $571,669, respectively,   
none of which was paid to the Distributor. The above figures for brokerage      
commissions do not include gross spreads and concessions on principal           
transactions, which, where determinable, amounted to $500,738, $449,252 and     
$35,565, respectively, for such periods, none of which was paid to the          
Distributor.                                                                    

 During the fiscal year ended August 31, 1999, the Fund paid brokerage
commissions $14,630 to Dreyfus Brokerage Services, Inc., an affiliate of the    
Manager. This amount represented approximately 3% of the aggregate brokerage    
commissions paid by the Fund for transactions involving approximately 5% of the 
aggregate dollar value of transactions for which the Fund paid brokerage        
commissions.                                                                    

    The aggregate amount of transactions during the fiscal year ended August
31, 1999 in securities effected on an agency basis through a broker in          
consideration of, among other things, research services provided was $70,552,606
and the commissions and concessions related to such transactions were $83,293.  

DETERMINATION OF NET ASSET VALUE

      Valuation of Portfolio Securities. Portfolio securities, including covered
call options written by the Fund, are valued at the last sale price on the      
securities exchange or national securities market on which such securities      
primarily are traded. 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; open short positions are
valued at the asked price. Bid price is used when no asked price is available.  
Market quotations of foreign securities in foreign currencies are translated    
into U.S. dollars at the prevailing rates of exchange. Any securities or other  
assets for which recent market quotations are not readily available are valued  
at fair value as determined in good faith by the Board. Short-term investments  
may be carried at amortized cost, which approximates value. Expenses and fees,  
including the management fee, are accrued daily and taken into account for the  
purpose of determining the net asset value of Fund shares.                      

  Restricted securities, as well as securities or other assets for which
recent 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 Board will review the method of      
valuation on a current basis. In making their good faith valuation of restricted
securities, Board members generally will take the following factors into        
consideration: restricted securities which are, or are convertible into,        
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 Board if it  
believes that the discount 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   
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 believes that the Fund qualified as a "regulated investment
company" under the Code for the fiscal year ended August 31, 1999. The Fund     
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 Fund from any liability for Federal income taxes to the extent its earnings 
are distributed in accordance with applicable provisions of the Code. If the    
Fund 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 and 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 an investor's purchase of
Fund shares may have the effect of reducing the aggregate net asset value of the
shares below the cost of his or her investment. Such a dividend or distribution 
would be a return on investment in an economic sense, although taxable as stated
in "Dividends and Taxes" in the Prospectus. In addition, the Code provides that 
if a shareholder has not held his or her shares more than six months (or shorter
period as the Internal Revenue Service may prescribe by regulation) 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.                                 

   In general, all or a portion of the dividends paid by the Fund from net
investment income may qualify for the dividends received deduction allowable to 
certain U.S. corporate shareholders ("dividends received deduction") to the     
extent the Fund's income consists of dividends paid by U.S. corporations.       
However, Section 246(c) of the Code provides that if a qualifying corporate     
shareholder has disposed of Fund shares held for less than 46 days, which 46    
days generally must be during the 90 day period commencing 45 days before the   
shares become ex-dividend, and has received a dividend from net investment      
income with respect to such shares, the portion designated by the Fund as       
qualifying for dividend received deduction will not be eligible for such        
shareholder's dividend received deduction. In addition, the Code provides other 
limitations with respect to the ability of a qualifying corporate shareholder to
claim the dividends received deduction in connection with holding Fund shares.  

     Ordinarily, gains and losses realized from portfolio transactions will be
treated as capital gains and losses. However, a portion of the gain or loss     
realized from the disposition of foreign currencies (including foreign currency 
denominated bank deposits) and non-U.S. dollar denominated securities (including
debt instruments and certain forward contracts and options) may be treated as   
ordinary income or loss under Section 988 of the Code. In addition, all or a    
portion of any gains 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 Fund from
certain forward contracts and options transactions (other than those taxed under
Section 988 of the Code) 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 
Fund's taxable year will be treated as sold for their then fair market value,   
resulting in additional gain or loss characterized as described above.          

    Offsetting positions held by the Fund involving certain foreign currency
forward 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 Sections  
1256 and 988 of the Code. As such, all or a portion of any short or long-term   
capital gain from certain "straddle" transactions may be recharacterized to     
ordinary income.                                                                

  If the Fund 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 Fund may make one or more elections with respect to "mixed     
straddles." Depending on which election is made, if any, the results to the Fund
may differ. If no election is made, to the extent the "straddle" and conversion 
transaction rules apply to positions established by the Fund, losses realized by
the Fund will be deferred to the extent of unrealized gain in the offsetting    
position. Moreover, as a result of the "straddle" and conversion transaction    
rules, short-term capital loss on "straddle" positions may be recharacterized as
long-term capital loss, and long-term capital gains may be treated as short-term
capital gains 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 positions") and then enters into a 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 as hedging or straddle           
transactions under other provisions of the Code can be subject to the           
constructive sale provisions.                                                   

     If the Fund 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 Fund. In addition, gain realized from the
sale or other disposition of PFIC securities may be treated as ordinary income  
under Section 1291 or under Section 1296 of the Code with respect to PFIC       
securities that are marked to market.                                           

     Investment by the Fund 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 Fund to recognize 
income prior to the receipt of cash payments. For example, the Fund could be    
required to accrue a portion of the discount (or deemed discount) at which the  
securities were issued each year and to distribute such income in order to      
maintain its qualification as a regulated investment company. In such case, the 
Fund may have to dispose of securities which it might otherwise have continued  
to hold in order to generate cash to satisfy these distribution requirements.   

 PERFORMANCE INFORMATION

     The Fund's average annual total return for the 1, 5 and 6.92 year periods
ended August 31, 1999 was 19.37%, 13.18% and 11.90%, respectively. 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.                                      

      The Fund's total return for the period September 30, 1992 (commencement of
operations) through August 31, 1999 was 117.78%. Total return is calculated by  
subtracting the amount of the Fund'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.                                                        

Comparative performance information may be used from time to time in
advertising or marketing the Fund's shares, including data from Lipper          
Analytical Services, Inc., Standard & Poor's 500 Composite Stock Price Index,   
Standard & Poor's MidCap 400 Index, the Dow Jones Industrial Average,           
Morningstar, Inc. and other industry publications.                              

From time to time, advertising material for the Fund may include    
biographical information relating to one or more of its portfolio managers 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. In  
addition, from time to time advertising materials for the Fund may refer to     
Morningstar ratings and related analysis supporting the ratings. From time to   
time advertising materials may refer to studies performed by the Manager or its 
affiliates, such as "The Dreyfus Tax Informed Investing Study" or "The Dreyfus  
Gender Investment Comparison Study (1996 & 1997)" or other such studies.        

INFORMATION ABOUT THE FUND

    Each Fund share has one vote and, when issued and paid for in accordance
with the terms of the offering, is fully paid and non-assessable. Fund shares   
are of one class and have equal rights as to dividends and in liquidation.      
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 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 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     
Fund'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 the Fund during any calendar year or who makes exchanges  
that appear to coincide with a 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, 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 Fund 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 Fund receives or anticipates receiving simultaneous orders that may         
significantly affect the Fund (e.g., amounts equal to 1% or more of the Fund'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 Fund. The Fund's policy on   
excessive trading applies to investors who invest in the Fund 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 Fund'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.                                       

    To offset the relatively higher costs of servicing smaller accounts, the
Fund will charge regular accounts with balances below $2,000 an annual fee of   
$12. The valuation of accounts and the deductions are expected to take place    
during the last four months of each year. The fee will be waived for any        
investor whose aggregate Dreyfus mutual fund investments total at least $25,000,
and will not apply to IRA accounts or to accounts participating in automatic    
investment programs or opened through a securities dealer, bank or other        
financial institution, or to other fiduciary accounts.                          

     The Fund will send 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.   

485BPOS
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APPENDIX

    Description of certain ratings assigned by S&P, Moody's, Fitch and 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.                               

AA

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.        

 A

    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 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.                                   

Aa

      Bonds 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.                  

 A

    Bonds 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 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.                                                                         

AA

 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+.                                                                     

 A

  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.                                                                  

AA

     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.                                                            

 A

 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.                                                         

 Dreyfus Balanced Fund, Inc.

 PART C. OTHER INFORMATION
             -------------------------

Item 23.    Exhibits.                                                           
-------     -----------------------------------------------------               

   (a)      Registrant's Articles of Incorporation are incorporated by reference
            to Exhibit (1) of Post-Effective Amendment No. 5 to the Registration
Statement on Form N-1A, filed on December 14, 1995.     

   (b)      Registrant's By-Laws, is incorporated by reference to Exhibit (2) of
        Post-Effective No. 8 to the Registration Statement on Form N-1A,
filed on November 23, 1998.                             

  (d)      Management Agreement is incorporated by reference to Exhibit (5) of
            Post-Effective Amendment No. 4 to the Registration Statement on Form
N-1A, filed on October 26, 1994.                        

 (e)      Distribution Agreement is incorporated by reference to Exhibit (6)
          of Post-Effective Amendment No. 4 to the Registration Statement on
Form N-1A, filed on October 26, 1994.                   

(g)      Custody Agreement is incorporated by reference to Exhibit (8) of 
            Post-Effective Amendment No. 6 to the Registration Statement on Form
N-1A, filed on December 18, 1996.                       

  (h)      Shareholder Services Plan, as revised, is incorporated by reference
            to Exhibit (9) of Post-Effective Amendment No. 4 to the Registration
Statement on Form N-1A, filed on October 26, 1994.      

(i)      Opinion and consent of Registrant's counsel is incorporated by   
          reference to Exhibit (10) of Post-Effective Amendment No. 5 to the
        Registration Statement on Form N-1A, filed on December 14, 1995.

(j)      Consent of Independent Auditors.                                 

Other Exhibits                                          
--------------                                          

         (a)   Powers of Attorney are incorporated by reference to Exhibit (a)
               of Post Effective Amendment No. 9 to the Registration Statement
on Form N-1A, filed on October 28, 1999.        

(b)   Certificate of Assistant Secretary is incorporated by 
        reference to Exhibit (b) of Post Effective Amendment No.
      9 to the Registration Statement on Form N-1A, filed on
October 28, 1999.                               

Item 24.    Persons Controlled by or under Common Control with Registrant.      
-------     --------------------------------------------------------------      

Not Applicable                                          

Item 25.  Indemnification                                                       
-------         ---------------                                                 

          Reference is made to Article SEVENTH of the Registrant's Articles of
       Incorporation filed as Exhibit 1 hereto. The application of these
       provisions is limited by Article VIII of the Registrant's By-Laws
          filed as Exhibit 2 hereto and by the following undertaking set forth
         in the rules promulgated by the Securities and Exchange Commission:

          Insofar as indemnification for liabilities arising under the
            Securities Act of 1933 may be permitted to directors, officers
       and controlling persons of the registrant pursuant to the
         foregoing provisions, or otherwise, the registrant has been
        advised that in the opinion of the Securities and Exchange
         Commission such indemnification is against public policy as
            expressed in such Act and is, therefore, unenforceable. In the
             event that a claim for indemnification against such liabilities
               (other than the payment by the registrant of expenses incurred or
      paid by a director, officer or controlling person of the
         registrant in the successful defense of any action, suit or
              proceeding) is asserted by such director, officer or controlling
            person in connection with the securities being registered, the
              registrant will, unless in the opinion of its counsel the matter
             has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
            indemnification by it is against public policy as expressed in
             such Act and will be governed by the final adjudication of such
issue.                                            

    Reference is also made to the Distribution Agreement filed as Exhibit 6 to
    Post-Effective Amendment No. 4 to the Registration Statement on Form N-1A,
filed on October 26, 1994.                                            

Item 26.  Business and Other Connections of Investment Adviser.                 
-------         ----------------------------------------------------            

          The Dreyfus Corporation ("Dreyfus") and subsidiary companies
               comprise a financial service organization whose business consists
          primarily of providing investment management services as the
               investment adviser and manager for sponsored investment companies
           registered under the Investment Company Act of 1940 and as an
          investment adviser to institutional and individual accounts.
     Dreyfus also serves as sub-investment adviser to and/or
          administrator of other investment companies. Dreyfus Service
       Corporation, a wholly-owned subsidiary of Dreyfus, serves
         primarily as a registered broker-dealer. Dreyfus Investment
      Advisors Inc., another wholly-owned subsidiary, provides
      investment management services to various pension plans,
institutions and individuals.                     

                                                        [Enlarge/Download Table]

ITEM 26           Business and Other Connections of Investment Adviser (continued)                                  

                  Officers and Directors of Investment Adviser                                                      

Name and Position                                                                                                   
With Dreyfus                       Other Businesses                      Position Held              Dates           
                                                                                                                    
Christopher M. Condron             Franklin Portfolio Associates, LLC*   Director                   1/97 - Present  
Chairman of the Board and                                                                                           
Chief Executive Officer            TBCAM Holdings, Inc.*                 Director                   10/97 - Present 
                                                                         President                  10/97 - 6/98    
                                                                         Chairman                   10/97 - 6/98    

                                   The Boston Company                    Director                   1/98 - Present  
                                   Asset Management, LLC*                Chairman                   1/98 - 6/98     
                                                                         President                  1/98 - 6/98     

                                   The Boston Company                    President                  9/95 - 1/98     
                                   Asset Management, Inc.*               Chairman                   4/95 - 1/98     

                                   Franklin Portfolio Holdings, Inc.*    Director                   1/97 - Present  

                                   Certus Asset Advisors Corp.**         Director                   6/95 -Present   

                                   Mellon Capital Management             Director                   5/95 -Present   
                                   Corporation***                                                                   

                                   Mellon Bond Associates, LLP+          Executive Committee        1/98 - Present  
                                                                         Member                                     

                                   Mellon Bond Associates+               Trustee                    5/95 -1/98      

                                   Mellon Equity Associates, LLP+        Executive Committee        1/98 - Present  
                                                                         Member                                     

                                   Mellon Equity Associates+             Trustee                    5/95 - 1/98     

                                   Boston Safe Advisors, Inc. *          Director                   5/95 - Present  
                                                                         President                  5/95 - Present  

                                   Mellon Bank, N.A. +                   Director                   1/99 - Present  
                                                                         Chief Operating Officer    3/98 - Present  
                                                                         President                  3/98 - Present  
                                                                         Vice Chairman              11/94 - 3/98    

                                   Mellon Financial Corporation+         Chief Operating Officer    1/99 - Present  
                                                                         President                  1/99 - Present  
                                                                         Director                   1/98 - Present  
                                                                         Vice Chairman              11/94 - 1/99    
Christopher M. Condron             The Boston Company, Inc.*             Vice Chairman              1/94 - Present  
Chairman and Chief Executive                                             Director                   5/93 - Present  
Officer                                                                                                             
(Continued)                        Laurel Capital Advisors, LLP+         Exec. Committee            1/98 - 8/98     
                                                                         Member                                     

                                   Laurel Capital Advisors+              Trustee                    10/93 - 1/98    

                                   Boston Safe Deposit and Trust         Director                   5/93 -Present   
                                   Company*                                                                         

                                   The Boston Company Financial          President                  6/89 - Present  
                                   Strategies, Inc. *                    Director                   6/89 - Present  

Mandell L. Berman                  Self-Employed                         Real Estate Consultant,    11/74 -  Present
Director                           29100 Northwestern Highway            Residential Builder and                    
                                   Suite 370                             Private Investor                           
                                   Southfield, MI 48034                                                             

Burton C. Borgelt                  DeVlieg Bullard, Inc.                 Director                   1/93 - Present  
Director                           1 Gorham Island                                                                  
                                   Westport, CT 06880                                                               

                                   Mellon Financial Corporation+         Director                   6/91 - Present  

                                   Mellon Bank, N.A. +                   Director                   6/91 - Present  

                                   Dentsply International, Inc.          Director                   2/81 - Present  
                                   570 West College Avenue                                                          
                                   York, PA                                                                         

                                   Quill Corporation                     Director                   3/93 - Present  
                                   Lincolnshire, IL                                                                 

Stephen E. Canter                  Dreyfus Investment                    Chairman of the Board      1/97 - Present  
President, Chief Operating         Advisors, Inc.++                      Director                   5/95 - Present  
Officer, Chief Investment                                                President                  5/95 - Present  
Officer, and Director                                                                                               
                                   Newton Management Limited             Director                   2/99 - Present  
                                   London, England                                                                  

                                   Mellon Bond Associates, LLP+          Executive Committee        1/99 - Present  
                                                                         Member                                     

                                   Mellon Equity Associates, LLP+        Executive Committee        1/99 - Present  
                                                                         Member                                     

                                   Franklin Portfolio Associates, LLC*   Director                   2/99 - Present  

                                   Franklin Portfolio Holdings, Inc.*    Director                   2/99 - Present  

                                   The Boston Company Asset              Director                   2/99 - Present  
                                   Management, LLC*                                                                 

                                   TBCAM Holdings, Inc.*                 Director                   2/99 - Present  

                                   Mellon Capital Management             Director                   1/99 - Present  
                                   Corporation***                                                                   

Stephen E. Canter                  Founders Asset Management, LLC****    Member, Board of           12/97 - Present 
President, Chief Operating                                               Managers                                   
Officer, Chief Investment                                                Acting Chief Executive     7/98 - 12/98    
Officer, and Director                                                    Officer                                    
(Continued)                                                                                                         
                                   The Dreyfus Trust Company+++          Director                   6/95 - Present  
                                                                         Chairman                   1/99 - Present  
                                                                         President                  1/99 - Present  
                                                                         Chief Executive Officer    1/99 - Present  

Thomas F. Eggers                   Dreyfus Service Corporation++         Executive Vice President   4/96 - Present  
Vice Chairman - Institutional                                            Director                   9/96 - Present  
and Director                                                                                                        
                                   Founders Asset Management, LLC****    Member, Board of Managers  2/99 - Present  

                                   Dreyfus Service Organization++        Director                   3/99 - Present  

                                   Dreyfus Insurance Agency of           Director                   3/99 - Present  
                                   Massachusetts, Inc. +++                                                          

                                   Dreyfus Brokerage Services, Inc.      Director                   11/97 - 6/98    
                                   401 North Maple Avenue                                                           
                                   Beverly Hills, CA.                                                               

Steven G. Elliott                  Mellon Financial Corporation+         Senior Vice Chairman       1/99 - Present  
Director                                                                 Chief Financial Officer    1/90 - Present  
                                                                         Vice Chairman              6/92 - 1/99     
                                                                         Treasurer                  1/90 - 5/98     

                                   Mellon Bank, N.A.+                    Senior Vice Chairman       3/98 - Present  
                                                                         Vice Chairman              6/92 - 3/98     
                                                                         Chief Financial Officer    1/90 - Present  

                                   Mellon EFT Services Corporation       Director                   10/98 - Present 
                                   Mellon Bank Center, 8th Floor                                                    
                                   1735 Market Street                                                               
                                   Philadelphia, PA 19103                                                           

                                   Mellon Financial Services             Director                   1/96 - Present  
                                   Corporation #1                        Vice President             1/96 - Present  
                                   Mellon Bank Center, 8th Floor                                                    
                                   1735 Market Street                                                               
                                   Philadelphia, PA 19103                                                           

                                   Boston Group Holdings, Inc.*          Vice President             5/93 - Present  

                                   APT Holdings Corporation              Treasurer                  12/87 - Present 
                                   Pike Creek Operations Center                                                     
                                   4500 New Linden Hill Road                                                        
                                   Wilmington, DE 19808                                                             

                                   Allomon Corporation                   Director                   12/87 - Present 
                                   Two Mellon Bank Center                                                           
                                   Pittsburgh, PA 15259                                                             

                                   Collection Services Corporation       Controller                 10/90 - 2/99    
                                   500 Grant Street                      Director                   9/88 - 2/99     
                                   Pittsburgh, PA 15258                  Vice President             9/88 - 2/99     
                                                                         Treasurer                  9/88 - 2/99     

Steven G. Elliott                  Mellon Financial Company+             Principal Exec. Officer    1/88 - Present  
Director (Continued)                                                     Chief Financial Officer    8/87 - Present  

                                   Mellon Overseas Investments           Director                   8/87 - Present  
                                   Corporation+                          President                  8/87 - Present  

                                                                         Director                   4/88 - Present  
                                                                         Chairman                   7/89 - 11/97    
                                   Mellon International Investment       President                  4/88 - 11/97    
                                   Corporation+                          Chief Executive Officer    4/88 - 11/97    

                                                                         Director                   9/89 - 8/97     

                                   Mellon Financial Services             Treasurer                  12/87 - Present 
                                   Corporation +                                                                    

                                   Mellon Financial Markets, Inc.+       Director                   1/99 - Present  

                                   Mellon Financial Services             Director                   1/99 - Present  
                                   Corporation #17                                                                  
                                   Fort Lee, NJ                                                                     

                                   Mellon Mortgage Company               Director                   1/99 - Present  
                                   Houston, TX                                                                      

                                   Mellon Ventures, Inc. +               Director                   1/99 - Present  

Lawrence S. Kash                   Dreyfus Investment                    Director                   4/97 - Present  
Vice Chairman                      Advisors, Inc.++                                                                 
And Director                                                                                                        
                                   Dreyfus Brokerage Services, Inc.      Chairman                   11/97 - 2/99    
                                   401 North Maple Ave.                  Chief Executive Officer    11/97 - 2/98    
                                   Beverly Hills, CA                                                                

                                   Dreyfus Service Corporation++         Director                   1/95 - 2/99     
                                                                         President                  9/96 - 3/99     

                                   Dreyfus Precious Metals, Inc.+++      Director                   3/96 - 12/98    
                                                                         President                  10/96 - 12/98   

                                   Dreyfus Service                       Director                   12/94 - 3/99    
                                   Organization, Inc.++                  President                  1/97 -  3/99    

                                   Seven Six Seven Agency, Inc. ++       Director                   1/97 - 4/99     

                                   Dreyfus Insurance Agency of           Chairman                   5/97 - 3/99     
                                   Massachusetts, Inc.++++               President                  5/97 - 3/99     
                                                                         Director                   5/97 - 3/99     

                                   The Dreyfus Trust Company+++          Chairman                   1/97 - 1/99     
                                                                         President                  2/97 - 1/99     
                                                                         Chief Executive Officer    2/97 - 1/99     
                                                                         Director                   12/94 - Present 

                                   The Dreyfus Consumer Credit           Chairman                   5/97 - 6/99     
                                   Corporation++                         President                  5/97 - 6/99     
                                                                         Director                   12/94 - 6/99    

                                   Founders Asset Management, LLC****    Member, Board of Managers  12/97 - Present 

Lawrence S. Kash                   The Boston Company Advisors,          Chairman                   12/95 - Present 
Vice Chairman                      Inc.                                  Chief Executive Officer    12/95 - Present 
And Director (Continued)           Wilmington, DE                        President                  12/95 - Present 

                                   The Boston Company, Inc.*             Director                   5/93 - Present  
                                                                         President                  5/93 - Present  

                                   Mellon Bank, N.A.+                    Executive Vice President                   
                                                                                                    6/92 - Present  

                                   Laurel Capital Advisors, LLP+         Chairman                   1/98 - 8/98     
                                                                         Executive Committee        1/98 - 8/98     
                                                                         Member                                     
                                                                         Chief Executive Officer    1/98 - 8/98     
                                                                         President                  1/98 - 8/98     

                                   Laurel Capital Advisors, Inc. +       Trustee                    12/91 - 1/98    
                                                                         Chairman                   9/93 - 1/98     
                                                                         President and CEO          12/91 - 1/98    

                                   Boston Group Holdings, Inc.*          Director                   5/93 - Present  
                                                                         President                  5/93 - Present  

Martin G. McGuinn                  Mellon Financial Corporation+         Chairman                   1/99 - Present  
Director                                                                 Chief Executive Officer    1/99 - Present  
                                                                         Director                   1/98 - Present  
                                                                         Vice Chairman              1/90 - 1/99     

                                   Mellon Bank, N. A. +                  Chairman                   3/98 - Present  
                                                                         Chief Executive Officer    3/98 - Present  
                                                                         Director                   1/98 - Present  
                                                                         Vice Chairman              1/90 - 3/98     

                                   Mellon Leasing Corporation+           Vice Chairman              12/96 - Present 

                                   Mellon Bank (DE) National             Director                   4/89 - 12/98    
                                   Association                                                                      
                                   Wilmington, DE                                                                   

                                   Mellon Bank (MD) National             Director                   1/96 - 4/98     
                                   Association                                                                      
                                   Rockville, Maryland                                                              

                                   Mellon Financial                      Vice President             9/86  - 10/97   
                                   Corporation (MD)                                                                 
                                   Rockville, Maryland                                                              

J. David Officer                   Dreyfus Service Corporation++         Executive Vice President   5/98 - Present  
Vice Chairman                                                            Director                   3/99 - Present  
And Director                                                                                                        
                                   Dreyfus Service Organization++        Director                   3/99 - Present  

                                   Dreyfus Insurance Agency of           Director                   5/98 - Present  
                                   Massachusetts, Inc.++++                                                          

                                   Dreyfus Brokerage Services, Inc.      Chairman                   3/99 - Present  
                                   401 North Maple Avenue                                                           
                                   Beverly Hills, CA                                                                

                                   Seven Six Seven Agency, Inc.++        Director                   10/98 - Present 

                                   Mellon Residential Funding Corp. +    Director                   4/97 - Present  

J. David Officer                   Mellon Trust of Florida, N.A.         Director                   8/97 - Present  
Vice Chairman and                  2875 Northeast 191st Street                                                      
Director (Continued)               North Miami Beach, FL 33180                                                      

                                   Mellon Bank, NA+                      Executive Vice President   7/96 - Present  

                                   The Boston Company, Inc.*             Vice Chairman              1/97 - Present  
                                                                         Director                   7/96 - Present  

                                   Mellon Preferred Capital              Director                   11/96 - Present 
                                   Corporation*                                                                     

                                   RECO, Inc.*                           President                  11/96 - Present 
                                                                         Director                   11/96 - Present 

                                   The Boston Company Financial          President                  8/96 - Present  
                                   Services, Inc.*                       Director                   8/96 - Present  

                                   Boston Safe Deposit and Trust         Director                   7/96 - Present  
                                   Company*                              President                  7/96 - 1/99     

                                   Mellon Trust of New York              Director                   6/96 - Present  
                                   1301 Avenue of the Americas                                                      
                                   New York, NY 10019                                                               

                                   Mellon Trust of California            Director                   6/96 - Present  
                                   400 South Hope Street                                                            
                                   Suite 400                                                                        
                                   Los Angeles, CA 90071                                                            

                                   Mellon Bank, N.A.+                    Executive Vice President   2/94 - Present  

                                   Mellon United National Bank           Director                   3/98 - Present  
                                   1399 SW 1st Ave., Suite 400                                                      
                                   Miami, Florida                                                                   

                                   Boston Group Holdings, Inc.*          Director                   12/97 - Present 

                                   Dreyfus Financial Services Corp. +    Director                   9/96 - Present  

                                   Dreyfus Investment Services           Director                   4/96 - Present  
                                   Corporation+                                                                     

Richard W. Sabo                    Founders Asset Management LLC****     President                  12/98 - Present 
Director                                                                 Chief Executive Officer    12/98 - Present 

                                   Prudential Securities                                                            
                                   New York, NY                          Senior Vice President      07/91 - 11/98   
                                                                         Regional Director          07/91 - 11/98   

Richard F. Syron                   Thermo Electron                       President                  6/99 - Present  
Director                           81 Wyman Street                       Chief Executive Officer    6/99 - Present  
                                   Waltham, MA 02454-9046                                                           

                                   American Stock Exchange               Chairman                   4/94 -6/99      
                                   86 Trinity Place                      Chief Executive Officer    4/94 - 6/99     
                                   New York, NY 10006                                                               

Ronald P. O'Hanley                 Franklin Portfolio Holdings, Inc.*    Director                   3/97 - Present  
Vice Chairman                                                                                                       
                                   TBCAM Holdings, Inc.*                 Chairman                   6/98 - Present  
                                                                         Director                   10/97 - Present 

Ronald P. O'Hanley                 The Boston Company Asset              Chairman                   6/98 - Present  
Vice Chairman                      Management, LLC*                      Director                   1/98 - 6/98     
(Continued)                                                                                                         
                                   The Boston Company Asset              Director                   2/97 - 12/97    
                                   Management, Inc. *                                                               

                                   Boston Safe Advisors, Inc. *          Chairman                   6/97 - Present  
                                                                         Director                   2/97 - Present  

                                   Pareto Partners                       Partner Representative     5/97 - Present  
                                   271 Regent Street                                                                
                                   London, England W1R 8PP                                                          

                                   Mellon Capital Management             Director                   5/97 -Present   
                                   Corporation***                                                                   

                                   Certus Asset Advisors Corp.**         Director                   2/97 - Present  

                                   Mellon Bond Associates+               Trustee                    2/97 - Present  
                                                                         Chairman                   2/97 - Present  

                                   Mellon Equity Associates+             Trustee                    2/97 - Present  
                                                                         Chairman                   2/97 - Present  

                                   Mellon-France Corporation+            Director                   3/97 - Present  

                                   Laurel Capital Advisors+              Trustee                    3/97 - Present  

Mark N. Jacobs                     Dreyfus Investment                    Director                   4/97 - Present  
General Counsel,                   Advisors, Inc.++                      Secretary                  10/77 - 7/98    
Vice President, and                                                                                                 
Secretary                          The Dreyfus Trust Company+++          Director                   3/96 - Present  

                                   The TruePenny Corporation++           President                  10/98 - Present 
                                                                         Director                   3/96 - Present  

                                   Dreyfus Service                       Director                   3/97 - 3/99     
                                   Organization, Inc.++                                                             

William H. Maresca                 The Dreyfus Trust Company+++          Chief Financial Officer    3/99 - Present  
Controller                                                               Treasurer                  9/98 - Present  
                                                                         Director                   3/97 - Present  

                                   Dreyfus Service Corporation++         Chief Financial Officer    12/98 - Present 

                                   Dreyfus Consumer Credit Corp. ++      Treasurer                  10/98 -Present  

                                   Dreyfus Investment                    Treasurer                  10/98 - Present 
                                   Advisors, Inc. ++                                                                

                                   Dreyfus-Lincoln, Inc.                 Vice President             10/98 - Present 
                                   4500 New Linden Hill Road                                                        
                                   Wilmington, DE 19808                                                             

                                   The TruePenny Corporation++           Vice President             10/98 - Present 

                                   Dreyfus Precious Metals, Inc. +++     Treasurer                  10/98 - 12/98   

                                   The Trotwood Corporation++            Vice President             10/98 - Present 

                                   Trotwood Hunters Corporation++        Vice President             10/98 - Present 

William H. Maresca                 Trotwood Hunters Site A Corp. ++      Vice President             10/98 - Present 
Controller (Continued)                                                                                              
                                   Dreyfus Transfer, Inc.                Chief Financial Officer    5/98 - Present  
                                   One American Express Plaza,                                                      
                                   Providence, RI 02903                                                             

                                   Dreyfus Service                       Treasurer                  3/99 - Present  
                                   Organization, Inc.++                  Assistant Treasurer        3/93 - 3/99     

                                   Dreyfus Insurance Agency of                                                      
                                   Massachusetts, Inc.++++               Assistant Treasurer        5/98 - Present  

William T. Sandalls, Jr.           Dreyfus Transfer, Inc.                Chairman                   2/97 - Present  
Executive Vice President           One American Express Plaza,                                                      
                                   Providence, RI 02903                                                             

                                   Dreyfus Service Corporation++         Director                   1/96 - Present  
                                                                         Executive Vice President   2/97 - Present  
                                                                         Chief Financial Officer    2/97-12/98      

                                   Dreyfus Investment                    Director                   1/96 - Present  
                                   Advisors, Inc.++                      Treasurer                  1/96 - 10/98    

                                   Dreyfus-Lincoln, Inc.                 Director                   12/96 - Present 
                                   4500 New Linden Hill Road             President                  1/97 - Present  
                                   Wilmington, DE 19808                                                             

                                   Seven Six Seven Agency, Inc.++        Director                   1/96 - 10/98    
                                                                         Treasurer                  10/96 - 10/98   

                                   The Dreyfus Consumer                  Director                   1/96 - Present  
                                   Credit Corp.++                        Vice President             1/96 - Present  
                                                                         Treasurer                  1/97 - 10/98    

                                   The Dreyfus Trust Company +++         Director                   1/96 - Present  

                                   Dreyfus Service Organization,         Treasurer                  10/96- 3/99     
                                   Inc.++                                                                           

                                   Dreyfus Insurance Agency of           Director                   5/97 - 3/99     
                                   Massachusetts, Inc.++++               Treasurer                  5/97- 3/99      
                                                                         Executive Vice President   5/97 - 3/99     

Diane P. Durnin                    Dreyfus Service Corporation++         Senior Vice President -    5/95 - 3/99     
Vice President - Product                                                 Marketing and                              
Development                                                              Advertising Division                       

Patrice M. Kozlowski               None                                                                             
Vice President - Corporate                                                                                          
Communications                                                                                                      

Mary Beth Leibig                   None                                                                             
Vice President -                                                                                                    
Human Resources                                                                                                     

Theodore A. Schachar               Dreyfus Service Corporation++         Vice President -Tax        10/96 - Present 
Vice President - Tax                                                                                                
                                   The Dreyfus Consumer Credit           Chairman                   6/99 - Present  
                                   Corporation ++                        President                  6/99 - Present  

                                   Dreyfus Investment Advisors, Inc.++   Vice President - Tax       10/96 - Present 

                                   Dreyfus Precious Metals, Inc. +++     Vice President - Tax       10/96 - 12/98   

                                   Dreyfus Service Organization, Inc.++  Vice President - Tax       10/96 - Present 

Wendy Strutt                       None                                                                             
Vice President                                                                                                      

Richard Terres                     None                                                                             
Vice President                                                                                                      

Andrew S. Wasser                   Mellon Financial Corporation+         Vice President             1/95 - Present  
Vice-President -                                                                                                    
Information Systems                                                                                                 

James Bitetto                      The TruePenny Corporation++           Secretary                  9/98 - Present  
Assistant Secretary                                                                                                 
                                   Dreyfus Service Corporation++         Assistant Secretary        8/98 - Present  

                                   Dreyfus Investment                    Assistant Secretary        7/98 - Present  
                                   Advisors, Inc.++                                                                 

                                   Dreyfus Service                       Assistant Secretary        7/98 - Present  
                                   Organization, Inc.++                                                             

Steven F. Newman                   Dreyfus Transfer, Inc.                Vice President             2/97 - Present  
Assistant Secretary                One American Express Plaza            Director                   2/97 - Present  
                                   Providence, RI 02903                  Secretary                  2/97 - Present  

                                   Dreyfus Service                       Secretary                  7/98 - Present  
                                   Organization, Inc.++                  Assistant Secretary        5/98 - 7/98     

------------------------------------                                                                                
*     The address of the business so indicated is One Boston Place, Boston, Massachusetts, 02108.                   
**    The address of the business so  indicated  is One Bush Street,  Suite 450, San Francisco, California 94104.   
***   The address of the business so indicated is 595 Market Street, Suite 3000, San Francisco, California 94105.   
****  The address of the business so indicated is 2930 East Third Avenue,Denver, Colorado 80206.                    
+     The address of the business so indicated is One Mellon Bank Center, Pittsburgh, Pennsylvania 15258.           
++    The address of the business so indicated is 200 Park Avenue, New York, New York 10166.                        
+++   The address of the business so indicated is 144 Glenn Curtiss Boulevard, Uniondale, New York 11556-0144.      
++++  The address of the business so indicated is 53 State Street, Boston, Massachusetts 02109                      


Item 27.   Principal Underwriters                                               
--------   ----------------------                                               

(a)  Other investment companies for which Registrant's principal    
underwriter (exclusive distributor) acts as principal underwriter or exclusive  
distributor:                                                                    

1)   Comstock Partners Funds, Inc.                                  
2)   Dreyfus A Bonds Plus, Inc.                                     
3)   Dreyfus Appreciation Fund, Inc.                                
4)   Dreyfus Asset Allocation Fund, Inc.                            
5)   Dreyfus Balanced Fund, Inc.                                    
6)   Dreyfus BASIC GNMA Fund                                        
7)   Dreyfus BASIC Money Market Fund, Inc.                          
8)   Dreyfus BASIC Municipal Fund, Inc.                             
9)   Dreyfus BASIC U.S. Government Money Market Fund                
10)  Dreyfus California Intermediate Municipal Bond Fund            
11)  Dreyfus California Tax Exempt Bond Fund, Inc.                  
12)  Dreyfus California Tax Exempt Money Market Fund                
13)  Dreyfus Cash Management                                        
14)  Dreyfus Cash Management Plus, Inc.                             
15)  Dreyfus Connecticut Intermediate Municipal Bond Fund           
16)  Dreyfus Connecticut Municipal Money Market Fund, Inc.          
17)  Dreyfus Florida Intermediate Municipal Bond Fund               
18)  Dreyfus Florida Municipal Money Market Fund                    
19)  The Dreyfus Fund Incorporated                                  
20)  Dreyfus Global Bond Fund, Inc.                                 
21)  Dreyfus Global Growth Fund                                     
22)  Dreyfus GNMA Fund, Inc.                                        
23)  Dreyfus Government Cash Management Funds                       
24)  Dreyfus Growth and Income Fund, Inc.                           
25)  Dreyfus Growth and Value Funds, Inc.                           
26)  Dreyfus Growth Opportunity Fund, Inc.                          
27)  Dreyfus Debt and Equity Funds                                  
28)  Dreyfus Index Funds, Inc.                                      
29)  Dreyfus Institutional Money Market Fund                        
30)  Dreyfus Institutional Preferred Money Market Fund              
31)  Dreyfus Institutional Short Term Treasury Fund                 
32)  Dreyfus Insured Municipal Bond Fund, Inc.                      
33)  Dreyfus Intermediate Municipal Bond Fund, Inc.                 
34)  Dreyfus International Funds, Inc.                              
35)  Dreyfus Investment Grade Bond Funds, Inc.                      
36)  Dreyfus Investment Portfolios                                  
37)  The Dreyfus/Laurel Funds, Inc.                                 
38)  The Dreyfus/Laurel Funds Trust                                 
39)  The Dreyfus/Laurel Tax-Free Municipal Funds                    
40)  Dreyfus LifeTime Portfolios, Inc.                              
41)  Dreyfus Liquid Assets, Inc.                                    
42)  Dreyfus Massachusetts Intermediate Municipal Bond Fund         
43)  Dreyfus Massachusetts Municipal Money Market Fund              
44)  Dreyfus Massachusetts Tax Exempt Bond Fund                     
     45)  Dreyfus MidCap Index Fund 46) Dreyfus Money Market Instruments, Inc.
47)  Dreyfus Municipal Bond Fund, Inc.                              
48)  Dreyfus Municipal Cash Management Plus                         
49)  Dreyfus Municipal Money Market Fund, Inc.                      
50)  Dreyfus New Jersey Intermediate Municipal Bond Fund            
51)  Dreyfus New Jersey Municipal Bond Fund, Inc.                   
52)  Dreyfus New Jersey Municipal Money Market Fund, Inc.           
53)  Dreyfus New Leaders Fund, Inc.                                 
54)  Dreyfus New York Insured Tax Exempt Bond Fund                  
55)  Dreyfus New York Municipal Cash Management                     
56)  Dreyfus New York Tax Exempt Bond Fund, Inc.                    
57)  Dreyfus New York Tax Exempt Intermediate Bond Fund             
58)  Dreyfus New York Tax Exempt Money Market Fund                  
59)  Dreyfus U.S. Treasury Intermediate Term Fund                   
60)  Dreyfus U.S. Treasury Long Term Fund                           
61)  Dreyfus 100% U.S. Treasury Money Market Fund                   
62)  Dreyfus U.S. Treasury Short Term Fund                          
63)  Dreyfus Pennsylvania Intermediate Municipal Bond Fund          
64)  Dreyfus Pennsylvania Municipal Money Market Fund               
65)  Dreyfus Premier California Municipal Bond Fund                 
66)  Dreyfus Premier Equity Funds, Inc.                             
67)  Dreyfus Premier International Funds, Inc.                      
68)  Dreyfus Premier GNMA Fund                                      
69)  Dreyfus Premier Worldwide Growth Fund, Inc.                    
70)  Dreyfus Premier Municipal Bond Fund                            
71)  Dreyfus Premier New York Municipal Bond Fund                   
72)  Dreyfus Premier State Municipal Bond Fund                      
73)  Dreyfus Premier Value Equity Funds                             
74)  Dreyfus Short-Intermediate Government Fund                     
75)  Dreyfus Short-Intermediate Municipal Bond Fund                 
76)  The Dreyfus Socially Responsible Growth Fund, Inc.             
77)  Dreyfus Stock Index Fund                                       
78)  Dreyfus Tax Exempt Cash Management                             
79)  The Dreyfus Third Century Fund, Inc.                           
80)  Dreyfus Treasury Cash Management                               
81)  Dreyfus Treasury Prime Cash Management                         
82)  Dreyfus Variable Investment Fund                               
83)  Dreyfus Worldwide Dollar Money Market Fund, Inc.               
84)  Founders Funds, Inc.                                           
85)  General California Municipal Bond Fund, Inc.                   
86)  General California Municipal Money Market Fund                 
87)  General Government Securities Money Market Fund, Inc.          
88)  General Money Market Fund, Inc.                                
89)  General Municipal Bond Fund, Inc.                              
90)  General Municipal Money Market Funds, Inc.                     
91)  General New York Municipal Bond Fund, Inc.                     
92)  General New York Municipal Money Market Fund                   

(b)                                                                             
                                                   Positions
                                             and
Name and principal      Positions and offices with           offices with       
business address        the Distributor                      Registrant         
------------------      ---------------------------         -------------       

Marie E. Connolly+      Director, President, Chief           President and      
              Executive Officer and Chief          Treasurer
Compliance Officer              

Joseph F. Tower, III+   Director, Senior Vice President,     Vice President     
                  Treasurer and Chief Financial        and Assistant
              Officer                              Treasurer

Mary A. Nelson+         Vice President                       Vice President     
                                                       and Assistant
                                                   Treasurer

Jean M. O'Leary+        Assistant Vice President                                
         Assistant Secretary and              None
Assistant Clerk                 

William J. Nutt+        Chairman of the Board                None               

Stephanie D. Pierce++   Vice President                       Vice President,    
                                                            Assistant Scretary
                                                       and Assistant
                                                   Treasurer

Patrick W. McKeon+      Vice President                       None               

Joseph A. Vigone+       Vice President                       None               

--------------------------------                                                
 +   Principal business address is 60 State Street, Boston, Massachusetts 02109.
++   Principal business address is 200 Park Avenue, New York, New York 10166.   

Item 28.       Location of Accounts and Records                                 
--------------------------------                  

1.  Mellon Bank, N.A.                             
One Mellon Bank Center                    
Pittsburgh, Pennsylvania 15258            

2.  Dreyfus Transfer, Inc.                        
P.O. Box 9671                             
Providence, Rhode Island 02940-9671       

3.  The Dreyfus Corporation                       
200 Park Avenue                           
New York, New York 10166                  

Item 29.       Management Services                                              
-------        -------------------                                              

Not Applicable                                    

Item 30.       Undertakings                                                     
--------       ------------                                                     

SIGNATURES  

Pursuant to the requirements of the Securities Act of 1933 and the  
Investment Company Act of 1940, the Registrant certifies that it meets all of   
the requirements for effectiveness of this Amendment to the Registration        
Statement pursuant to Rule 485(b) under the Securities Act of 1933 and has duly 
caused this Amendment to the Registration Statement to be signed on its behalf  
by the undersigned, thereunto duly authorized, in the City of New York, and     
State of New York on the 17th day of December, 1999.                            

 DREYFUS BALANCED FUND, INC.

BY:   /s/ Marie E. Connolly*                  
Marie E. Connolly, PRESIDENT      

                                                        [Enlarge/Download Table]


      Pursuant to the requirements of the Securities Act of 1933, this Amendment         
to the Registration Statement has been signed below by the following persons in          
the capacities and on the dates indicated.                                               

        Signatures                            Title                                Date  
-----------------------------          --------------------------                ------- 

                                                                                         

/s/Marie E. Connolly*                  President and Treasurer (Principal        12/17/99
Marie E. Connolly                      Executive and Financial Officer)                  

/s/Frederick C. Dey                    Vice President, Assistant                 12/17/99
Frederick C. Dey                       Treasurer and Assistant Secretary                 
                                       (Principal Accounting Officer)                    

/s/Joseph S.DiMartino*                 Director                                  12/17/99
Joseph S. DiMartino                                                                      

/s/David P. Feldman*                   Director                                  12/17/99
David P. Feldman                                                                         

/s/John M. Fraser, Jr.*                Director                                  12/17/99
John M. Fraser, Jr.                                                                      

/s/Robert R. Glauber*                  Director                                  12/17/99
Robert R. Glauber                                                                        

/s/James F. Henry*                     Director                                  12/17/99
James F. Henry                                                                           

/s/Rosalind Gersten Jacobs*            Director                                  12/17/99
Rosalind Gersten Jacobs                                                                  

/s/Irving Kristol*                     Director                                  12/17/99
Irving Kristol                                                                           

/s/Paul A. Marks*                      Director                                  12/17/99
Paul A. Marks                                                                            

/s/Martin Peretz*                      Director                                  12/17/99
Martin Peretz                                                                            

/s/Bert W. Wasserman*                  Director                                  12/17/99
Bert W. Wasserman                                                                        


*BY:       /s/ Stephanie D. Pierce                                              
Stephanie D. Pierce,                                      
Attorney-in-Fact                                          

INDEX OF EXHIBITS     

(j)   Consent of Independent Auditors                               

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘485BPOS’ Filing		Date		First		Last			Other Filings
Effective on:		1/1/00		1		20
Filed on:		12/17/99
		12/13/99		20
		10/28/99		21
		9/15/99		5					497
		8/31/99		20					24F-2NT,  N-30D,  NSAR-B
		12/31/98		20
		11/23/98		21					485BPOS
		8/31/98		20					24F-2NT,  N-30D,  NSAR-B
		8/31/97		20					24F-2NT,  N-30D,  NSAR-B
		12/18/96		21					485BPOS
		12/14/95		21					485BPOS
		12/31/94		20
		10/26/94		21					24F-2NT,  485APOS
		8/24/94		20
		9/30/92		20
									List all Filings