N-CSR 1 form.htm SEMI-ANNUAL REPORT form
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION 
Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT 
INVESTMENT COMPANIES

Investment Company Act file number    811-524 

(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) 

Michael A. Rosenberg, Esq.
200 Park Avenue
New York, New York 10166
(Name and address of agent for service) 

Registrant's telephone number, including area code:    (212) 922-6000 

Date of fiscal year end:    12/31 

Date of reporting period:    06/30/2007 

The following N-CSR relates only to the Registrant’s series listed below and does not affect the other series of the Registrant, which have different fiscal year ends and, therefore, different N-CSR reporting requirements. Separate N-CSR Forms will be filed for those series, as appropriate.

Dreyfus Premier Core Value Fund
Dreyfus Premier Limited Term High Yield Fund 
Dreyfus Premier Managed Income Fund 

FORM N-CSR

Item 1.    Reports to Stockholders. 

Dreyfus Premier 
Core Value Fund 

SEMIANNUAL REPORT June 30, 2007

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The views expressed in this report reflect those of the portfolio manager only through the end of the period covered and do not necessarily represent the views of Dreyfus or any other person in the Dreyfus organization. Any such views are subject to change at any time based upon market or other conditions and Dreyfus disclaims any responsibility to update such views.These views may not be relied on as investment advice and, because investment decisions for a Dreyfus fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Dreyfus fund.

Not FDIC-Insured • Not Bank-Guaranteed • May Lose Value

Contents
 
    THE FUND 
2    A Letter from the CEO 
3    Discussion of Fund Performance 
6    Understanding Your Fund’s Expenses 
6    Comparing Your Fund’s Expenses 
With Those of Other Funds
7    Statement of Investments 
12    Statement of Assets and Liabilities 
13    Statement of Operations 
14    Statement of Changes in Net Assets 
17    Financial Highlights 
23    Notes to Financial Statements 
31    Information About the Review and 
    Approval of the Fund’s Investment 
Management Agreement
FOR MORE INFORMATION
    Back Cover 

Dreyfus Premier 
Core Value Fund 

The Fund

A LETTER FROM THE CEO

Dear Shareholder:

We are pleased to present this semiannual report for Dreyfus Premier Core Value Fund, covering the six-month period from January 1, 2007, through June 30, 2007.

The U.S. economy produced mixed signals over the first half of 2007, causing investor sentiment to swing from concerns regarding a domestic economic slowdown stemming from slumping housing markets to worries about mounting inflationary pressures in an environment of robust global growth. However, more recent data have provided stronger signals that a “soft landing” is likely for the U.S. economy.The rate of decline in residential construction is becoming less severe, the industrial inventory slowdown is fading and capital goods orders have strengthened. What’s more, a generally rising stock market over the past six months has helped to offset any negative “wealth effect” from the weak housing market.

Should these trends persist, we expect U.S. economic growth to hover slightly below long-term averages during the second half of this year. A moderate economic growth rate and gradually receding inflationary pressures may keep the Federal Reserve Board on the sidelines and support corporate profits through year-end. As always, your financial advisor can help you position your equity investments for these and other developments.

For information about how the fund performed during the reporting period, as well as market perspectives, we have provided a Discussion of Fund Performance given by the fund’s Portfolio Manager.

Thank you for your continued confidence and support.

2

DISCUSSION OF FUND PERFORMANCE

For the period of January 1, 2007, through June 30, 2007, as provided by Brian Ferguson, Portfolio Manager

Fund and Market Performance Overview

Stock prices continued to advance during the first half of 2007 as corporate earnings and mergers-and-acquisitions activity remained robust, more than offsetting investors’ economic and inflation concerns. The fund produced higher returns than its benchmark, primarily due to the success of our “bottom-up” security selection strategy in the utilities, consumer staples and financials sectors.

For the six-month period ended June 30, 2007, Dreyfus Premier Core Value Fund produced total returns of 6.83% for its Class A shares, 6.45% for its Class B shares, 6.45% for its Class C shares, 7.00% for its Class I shares, 6.73% for its Class T shares and 6.89% for its Institutional shares.1 In comparison, the fund’s benchmark, the Russell 1000 Value Index, produced a total return of 6.23% for the same period.2

The Fund’s Investment Approach

The fund invests primarily in large-cap companies that are considered undervalued based on traditional measures, such as price-to-earnings ratios. When choosing stocks, we use a “bottom-up” stock selection approach, focusing on individual companies, rather than a “top-down” approach that forecasts market trends. We also focus on a company’s relative value, financial strength, sales and earnings momentum and likely catalysts that could ignite the stock price.

Midcap Stocks Outperform Amid Mixed Economic Data

Although U.S. stocks posted generally attractive returns for the reporting period overall, the market encountered heightened volatility at times due to shifting investor expectations. Worries of a more severe economic slowdown alternated with concerns regarding persistent inflationary pressures as investors reacted to each new release of economic data. On one hand, soft U.S. housing markets appeared to constrain spending

The Fund 3

DISCUSSION OF FUND PERFORMANCE (continued)

among some consumers, and defaults on sub-prime mortgages rose sharply. On the other hand, robust economic growth in many overseas markets helped keep the rate of inflation above the Federal Reserve Board’s “comfort zone.” In addition, energy prices remained volatile, surging higher in the spring.

In this environment, mid-cap stocks generally provided higher returns than large- and small-cap stocks. Our bottom-up security selection strategy found a number of mid-cap companies meeting our value-oriented criteria, many of which benefited from continued growth in corporate earnings and robust mergers-and-acquisitions activity as private equity firms put capital to work.

Utilities, Consumer Staples and Financial Stocks Fueled the Fund’s Gains

The fund achieved particularly strong relative performance in the utilities sector. Non-regulated power producers such as Entergy, Constellation Energy Group and Mirant benefited from greater pricing power as oil and gas prices climbed, while natural gas company Questar rose on the strength of good exploration results and positive supply-and-demand forces.

In the consumer staples area, grocery chain SUPERVALU boosted its stock price from a relatively low valuation when earnings improved in the wake of its acquisition of Albertsons stores. Candy and beverage producer Cadbury Schweppes gained value when shareholder activism prompted the company to explore the sale of its U.S. beverages unit. The stock of food producer Dean Foods fared well when the company cut costs and declared a special dividend representing a significant percentage of its market capitalization. We sold the fund’s position in Dean Foods to lock in gains.

Although the financials area produced relatively lackluster results for the benchmark, the fund benefited from successful stock picks and its relatively light exposure to the sector. Few commercial banks met our investment criteria, sheltering the fund from the full brunt of weakness in the industry group. Conversely, asset manager Franklin Resources produced solid results due to solid asset flows and strong returns on capital.

4

Good results in these areas were offset to a degree by lagging returns in other market sectors.The fund’s underweighted exposure to materials stocks undermined relative performance when the stock prices in the sector were supported by higher commodity prices in the robust global economy. Homebuilders and housing-related stocks fared poorly when home prices continued to decline, hurting results from holdings such as Toll Brothers.Among retailers, apparel seller TJX Cos. was hurt by a downturn in consumer spending and a data intrusion investigation that interrupted the company’s stock buyback program.

Finding Opportunities in Undervalued Companies

We have continued to find ample opportunities for investments in companies whose stock prices, in our view, do not yet reflect their intrinsic values.We have found a number of such opportunities in the industrials sector, where we have taken advantage of bouts of price weakness to add to positions in farm machinery producer Deere & Co., waste processor Waste Management and industrial conglomerate General Electric. Conversely, we have reduced the fund’s holdings of financial companies due to interest-rate and credit concerns, and we have taken profits in positions that reached our price targets in the consumer discretionary and information technology sectors. Among energy companies, we have reduced the fund’s holdings of refiners, redeploying those assets to oil producers that we expect to benefit from rising demand for a limited supply of energy-producing commodities.

July 16, 2007

1    Total return includes reinvestment of dividends and any capital gains paid, and does not take into 
    consideration the maximum initial sales charges in the case of Class A and Class T shares or the 
    applicable contingent deferred sales charges imposed on redemptions in the case of Class B and 
    Class C shares. Had these charges been reflected, returns would have been lower. Past performance 
    is no guarantee of future results. Share price and investment return fluctuate such that upon 
    redemption, fund shares may be worth more or less than their original cost. 
    Part of the fund’s recent performance is attributable to positive returns from its initial public 
    offering (IPO) investments. There can be no guarantee that IPOs will have or continue to 
    have a positive effect on fund performance. 
2    SOURCE: LIPPER INC. — Reflects the reinvestment of dividends and, where applicable, 
    capital gain distributions.The Russell 1000 Value Index is an unmanaged index which measures 
    the performance of those Russell 1000 companies with lower price-to-book ratios and lower 
    forecasted growth values. 

The Fund 5

U N D E R S TA N D I N G YO U R F U N D ’ S E X P E N S E S ( U n a u d i t e d )

As a mutual fund investor, you pay ongoing expenses, such as management fees and other expenses. Using the information below, you can estimate how these expenses affect your investment and compare them with the expenses of other funds.You also may pay one-time transaction expenses, including sales charges (loads) and redemption fees, which are not shown in this section and would have resulted in higher total expenses. For more information, see your fund’s prospectus or talk to your financial adviser.

Review your fund’s expenses

The table below shows the expenses you would have paid on a $1,000 investment in Dreyfus Premier Core Value Fund from January 1, 2007 to June 30, 2007. It also shows how much a $1,000 investment would be worth at the close of the period, assuming actual returns and expenses.

Expenses and Value of a $1,000 Investment             
assuming actual returns for the six months ended June 30, 2007         
    Class A    Class B    Class C    Class I    Class T    Institutional 
Expenses paid                         
per $1,000 †    $ 5.90    $ 9.73    $ 9.73    $ 4.62    $ 7.18    $ 5.39 
Ending value                         
(after expenses)    $1,068.30    $1,064.50    $1,064.50    $1,070.00    $1,067.30    $1,068.90 

COMPARING YOUR FUND’S EXPENSES WITH THOSE OF OTHER FUNDS (Unaudited)

Using the SEC’s method to compare expenses

The Securities and Exchange Commission (SEC) has established guidelines to help investors assess fund expenses. Per these guidelines, the table below shows your fund’s expenses based on a $1,000 investment, assuming a hypothetical 5% annualized return. You can use this information to compare the ongoing expenses (but not transaction expenses or total cost) of investing in the fund with those of other funds.All mutual fund shareholder reports will provide this information to help you make this comparison. Please note that you cannot use this information to estimate your actual ending account balance and expenses paid during the period.

Expenses and Value of a $1,000 Investment             
assuming a hypothetical 5% annualized return for the six months ended June 30, 2007 
    Class A    Class B    Class C    Class I    Class T    Institutional 
Expenses paid                         
per $1,000 †    $ 5.76    $ 9.49    $ 9.49    $ 4.51    $ 7.00    $ 5.26 
Ending value                         
(after expenses)    $1,019.09    $1,015.37    $1,015.37    $1,020.33    $1,017.85    $1,019.59 

† Expenses are equal to the fund’s annualized expense ratio of 1.15% for Class A, 1.90% for Class B, 1.90% for Class C, .90% for Class I, 1.40% for Class T and 1.05% for Institutional multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

6

STATEMENT OF INVESTMENTS

June 30, 2007 (Unaudited)

Common Stocks—99.1%    Shares    Value ($) 
Banking—9.1%         
Bank of America    364,076    17,799,676 
Citigroup    491,203    25,193,802 
SunTrust Banks    36,450    3,125,223 
U.S. Bancorp    178,680    5,887,506 
Wachovia    197,330    10,113,163 
        62,119,370 
Consumer Discretionary—7.8%         
Best Buy    65,810    3,071,353 
Comcast, Cl. A    113,150 a    3,181,778 
Gap    223,130    4,261,783 
Johnson Controls    30,740    3,558,770 
Lowe’s Cos.    104,950    3,220,916 
Macy’s    68,450    2,722,941 
McDonald’s    67,220    3,412,087 
News, Cl. A    278,710    5,911,439 
Omnicom Group    160,360    8,486,251 
Royal Caribbean Cruises    82,310    3,537,684 
Time Warner    275,320    5,792,733 
TJX Cos.    137,690    3,786,475 
Toll Brothers    91,180 a    2,277,676 
        53,221,886 
Consumer Staples—10.8%         
Altria Group    205,240    14,395,534 
Cadbury Schweppes, ADR    62,220    3,378,546 
Clorox    77,860    4,835,106 
Coca-Cola Enterprises    294,170    7,060,080 
Colgate-Palmolive    46,867    3,039,325 
CVS    91,230    3,325,333 
Kraft Foods, Cl. A    233,724    8,238,771 
Procter & Gamble    289,270    17,700,431 
SUPERVALU    149,690    6,933,641 
Wal-Mart Stores    107,520    5,172,787 
        74,079,554 

The Fund 7

STATEMENT OF INVESTMENTS (Unaudited) (continued)

Common Stocks (continued)    Shares    Value ($) 
Energy—13.4%         
Anadarko Petroleum    69,130    3,594,069 
Chesapeake Energy    141,130    4,883,098 
Chevron    254,890    21,471,934 
Devon Energy    84,640    6,626,466 
EOG Resources    87,880    6,420,513 
Exxon Mobil    246,542    20,679,943 
Hess    81,920    4,830,003 
Marathon Oil    96,450    5,783,142 
Occidental Petroleum    191,940    11,109,487 
XTO Energy    111,390    6,694,539 
        92,093,194 
Financial—20.8%         
Ambac Financial Group    40,170    3,502,422 
American International Group    169,683    11,882,900 
AON    84,240    3,589,466 
Capital One Financial    106,050    8,318,562 
Chubb    105,590    5,716,643 
CIT Group    61,120    3,351,210 
Countrywide Financial    88,540    3,218,429 
Franklin Resources    27,200    3,603,184 
Freddie Mac    118,210    7,175,347 
Genworth Financial, Cl. A    187,295    6,442,948 
Goldman Sachs Group    18,040    3,910,170 
JPMorgan Chase & Co.    324,120    15,703,614 
Lincoln National    99,180    7,036,821 
Merrill Lynch & Co.    140,040    11,704,543 
MetLife    105,400    6,796,192 
MGIC Investment    49,440    2,811,158 
Morgan Stanley    89,750    7,528,230 
PMI Group    96,720    4,320,482 
PNC Financial Services Group    44,930    3,216,089 
Prudential Financial    52,710    5,124,993 

8

Common Stocks (continued)    Shares    Value ($) 
Financial (continued)         
Regions Financial    85,930    2,844,283 
Washington Mutual    78,870    3,363,017 
Wells Fargo & Co.    342,000    12,028,140 
        143,188,843 
Health Care—8.1%         
Abbott Laboratories    183,060    9,802,863 
Amgen    51,890 a    2,868,998 
Baxter International    118,530    6,677,980 
Bristol-Myers Squibb    111,690    3,524,936 
Merck & Co.    179,350    8,931,630 
Pfizer    242,620    6,203,793 
Thermo Fisher Scientific    68,260 a    3,530,407 
WellPoint    43,480 a    3,471,008 
Wyeth    189,320    10,855,609 
        55,867,224 
Index—.5%         
iShares Russell 1000 Value Index Fund    39,920    3,460,266 
Industrial—8.3%         
Deere & Co.    24,430    2,949,678 
Eaton    50,210    4,669,530 
General Electric    718,200    27,492,696 
Honeywell International    66,120    3,721,234 
Lockheed Martin    37,770    3,555,290 
Tyco International    203,440    6,874,237 
Union Pacific    33,590    3,867,889 
Waste Management    92,050    3,594,552 
        56,725,106 
Information Technology—6.9%         
Accenture, Cl. A    162,650    6,976,058 
Alcatel-Lucent, ADR    337,960    4,731,440 
Automatic Data Processing    88,160    4,273,115 
Cisco Systems    380,450 a    10,595,532 

The Fund 9

STATEMENT OF INVESTMENTS (Unaudited) (continued)

Common Stocks (continued)    Shares    Value ($) 
Information Technology (continued)     
Hewlett-Packard    152,550    6,806,781 
International Business Machines    36,650    3,857,413 
Microsoft    110,670    3,261,445 
NCR    86,470 a    4,543,134 
Sun Microsystems    502,160 a    2,641,362 
        47,686,280 
Materials—1.9%         
Air Products & Chemicals    43,350    3,484,040 
Allegheny Technologies    22,430    2,352,458 
Dow Chemical    86,370    3,819,281 
E.I. du Pont de Nemours & Co.    65,375    3,323,665 
        12,979,444 
Telecommunications—6.1%         
AT & T    656,285    27,235,828 
Sprint Nextel    116,060    2,403,603 
Verizon Communications    295,390    12,161,206 
        41,800,637 
Utilities—5.4%         
Constellation Energy Group    66,870    5,829,058 
Entergy    75,830    8,140,351 
Exelon    94,235    6,841,461 
Mirant    110,010 a    4,691,927 
NRG Energy    133,920 a    5,567,054 
Questar    108,880    5,754,308 
        36,824,159 
Total Common Stocks         
(cost $550,963,780)        680,045,963 

10

Other Investment—.8%    Shares    Value ($) 
Registered Investment Company;         
Dreyfus Institutional Preferred         
Plus Money Market Fund         
(cost $5,745,000)    5,745,000 b    5,745,000 
 
Total Investments (cost $556,708,780)    99.9%    685,790,963 
Cash and Receivables (Net)    .1%    412,119 
Net Assets    100.0%    686,203,082 
 
ADR—American Depository Receipts         
a Non-income producing security.         
b Investment in affiliated money market mutual fund.     

Portfolio Summary    (Unaudited) †         
 
    Value (%)        Value (%) 
Financial    20.8    Information Technology    6.9 
Energy    13.4    Telecommunications    6.1 
Consumer Staples    10.8    Utilities    5.4 
Banking    9.1    Materials    1.9 
Industrial    8.3    Money Market Investment    .8 
Health Care    8.1    Index    .5 
Consumer Discretionary    7.8        99.9 
 
† Based on net assets.             
See notes to financial statements.         

The Fund 11

STATEMENT OF ASSETS AND LIABILITIES

June 30, 2007 (Unaudited)

                    Cost Value 
Assets ($):                     
Investment in securities—See Statement of Investments         
Unaffiliated issuers            550,963,780         680,045,963 
Affiliated issuers            5,745,000            5,745,000 
Receivable for investment securities sold            3,450,942 
Dividends and interest receivable            957,397 
Receivable for shares of Beneficial Stock subscribed        89,302 
                    690,288,604 
Liabilities ($):                     
Due to The Dreyfus Corporation and affiliates—Note 3(b)        715,059 
Payable for investment securities purchased            2,450,096 
Payable for shares of Beneficial Stock redeemed        299,967 
Cash overdraft due to Custodian            618,761 
Interest payable—Note 2                938 
Accrued expenses                701 
                    4,085,522 
Net Assets ($)                    686,203,082 
Composition of Net Assets ($):             
Paid-in capital                    519,784,730 
Accumulated undistributed investment income—net        427,412 
Accumulated net realized gain (loss) on investments        36,908,757 
Accumulated net unrealized appreciation             
(depreciation) on investments            129,082,183 
Net Assets ($)                    686,203,082 
 
 
Net Asset Value Per Share             
    Class A    Class B    Class C    Class I    Class T    Institutional 
Net Assets ($)    570,485,186    41,171,613    19,341,795    6,688,255      2,906,270     45,609,963 
Shares                     
Outstanding    17,053,626    1,254,642    589,899    200,086    86,896      1,364,250 
Net Asset Value                 
Per Share ($)    33.45    32.82    32.79    33.43    33.45 33.43 

See notes to financial statements.

12

STATEMENT OF OPERATIONS

Six Months Ended June 30, 2007 (Unaudited)

Investment Income ($):     
Income:     
Cash dividends(net of $25,836 foreign taxes withheld at source):     
Unaffiliated issuers    9,410,913 
Affiliated issuers    97,488 
Interest    183,016 
Income from securities lending    1,072 
Total Income    9,692,489 
Expenses:     
Management fee—Note 3(a)    3,051,468 
Distribution and service fees—Note 3(b)    1,075,444 
Loan commitment fees—Note 2    7,548 
Interest expense—Note 2    1,171 
Total Expenses    4,135,631 
Investment Income—Net    5,556,858 
Realized and Unrealized Gain (Loss) on Investments—Note 4 ($): 
Net realized gain (loss) on investments    37,275,213 
Net unrealized appreciation (depreciation) on investments    2,189,012 
Net Realized and Unrealized Gain (Loss) on Investments    39,464,225 
Net Increase in Net Assets Resulting from Operations    45,021,083 

See notes to financial statements.

The Fund 13

STATEMENT OF CHANGES IN NET ASSETS

    Six Months Ended     
    June 30, 2007    Year Ended 
    (Unaudited) a    December 31, 2006 
Operations ($):         
Investment income—net    5,556,858    7,466,062 
Net realized gain (loss) on investments    37,275,213    85,435,127 
Net unrealized appreciation         
(depreciation) on investments    2,189,012    35,507,648 
Net Increase (Decrease) in Net Assets     
Resulting from Operations    45,021,083    128,408,837 
Dividends to Shareholders from ($):         
Investment income—net:         
Class A    (4,826,754)    (6,116,596) 
Class B    (203,517)    (207,125) 
Class C    (93,390)    (72,968) 
Class I    (64,542)    (76,497) 
Class T    (21,932)    (26,990) 
Institutional Shares    (409,452)    (518,978) 
Net realized gain on investments:         
Class A    (7,300,154)    (84,798,475) 
Class B    (662,765)    (8,849,926) 
Class C    (269,492)    (3,240,011) 
Class I    (84,888)    (870,947) 
Class T    (43,402)    (495,795) 
Institutional Shares    (591,226)    (6,663,598) 
Total Dividends    (14,571,514)    (111,937,906) 
Beneficial Interest Transactions ($):         
Net proceeds from shares sold:         
Class A    22,595,077    33,450,766 
Class B    376,107    1,510,935 
Class C    676,733    2,094,368 
Class I    641,272    1,340,569 
Class T    243,588    701,874 
Institutional Shares    310,437    867,944 

14

    Six Months Ended     
    June 30, 2007    Year Ended 
    (Unaudited) a    December 31, 2006 
Beneficial Interest Transactions ($) (continued):     
Dividends reinvested:         
Class A    10,538,934    79,114,953 
Class B    804,954    8,203,108 
Class C    299,491    2,610,615 
Class I    149,101    944,387 
Class T    63,282    504,754 
Institutional Shares    979,036    7,044,317 
Cost of shares redeemed:         
Class A    (36,102,726)    (133,374,410) 
Class B    (17,340,251)    (20,355,944) 
Class C    (3,486,928)    (4,756,622) 
Class I    (402,964)    (1,104,642) 
Class T    (989,026)    (686,496) 
Institutional Shares    (2,187,073)    (4,736,790) 
Increase (Decrease) in Net Assets         
from Beneficial Interest Transactions    (22,830,956)    (26,626,314) 
Total Increase (Decrease) in Net Assets    7,618,613    (10,155,383) 
Net Assets ($):         
Beginning of Period    678,584,469    688,739,852 
End of Period    686,203,082    678,584,469 
Undistributed investment income—net    427,412    490,141 

The Fund 15

STATEMENT OF CHANGES IN NET ASSETS (continued)

    Six Months Ended     
    June 30, 2007    Year Ended 
    (Unaudited) a    December 31, 2006 
Capital Share Transactions:         
Class A b         
Shares sold    687,807    1,027,585 
Shares issued for dividends reinvested    326,510    2,488,150 
Shares redeemed    (1,101,980)    (4,092,976) 
Net Increase (Decrease) in Shares Outstanding    (87,663)    (577,241) 
Class B b         
Shares sold    11,711    47,312 
Shares issued for dividends reinvested    25,579    262,866 
Shares redeemed    (537,662)    (636,104) 
Net Increase (Decrease) in Shares Outstanding    (500,372)    (325,926) 
Class C         
Shares sold    21,168    65,670 
Shares issued for dividends reinvested    9,490    83,675 
Shares redeemed    (107,467)    (149,192) 
Net Increase (Decrease) in Shares Outstanding    (76,809)    153 
Class I         
Shares sold    19,637    40,533 
Shares issued for dividends reinvested    4,617    29,734 
Shares redeemed    (12,154)    (33,401) 
Net Increase (Decrease) in Shares Outstanding    12,100    36,866 
Class T         
Shares sold    7,466    21,515 
Shares issued for dividends reinvested    1,964    15,865 
Shares redeemed    (29,876)    (20,571) 
Net Increase (Decrease) in Shares Outstanding    (20,446)    16,809 
Institutional Shares         
Shares sold    9,528    27,122 
Shares issued for dividends reinvested    30,336    221,572 
Shares redeemed    (67,088)    (143,421) 
Net Increase (Decrease) in Shares Outstanding    (27,224)    105,273 

a    Effective June 1, 2007, the fund redesignated Class R shares to Class I shares. 
b    During the period ended June 30, 2007, 313,475 Class B shares representing $10,140,173 were automatically 
    converted to 307,302 Class A shares and during the period ended December 31, 2006, 192,361 Class B shares 
    representing $6,138,847 were automatically converted to 189,051 Class A shares. 
See notes to financial statements. 

16

FINANCIAL HIGHLIGHTS

The following tables describe the performance for each share class for the fiscal periods indicated.All information (except portfolio turnover rate) reflects financial results for a single fund share.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 derived from the fund’s financial statements.

   
Six Months Ended  		      Year Ended December 31,             
June 30, 2007 
Class A Shares    (Unaudited)    2006    2005    2004    2003    2002 
Per Share Data ($):                         
Net Asset Value,                         
beginning of period    32.00    31.38    30.34    27.44    21.57    28.62 
Investment Operations:                         
Investment income—net a    .28    .38    .30    .24    .17    .10 
Net realized and unrealized                         
gain (loss) on investments    1.89    5.94    1.26    2.88    5.86    (7.06) 
Total from Investment Operations    2.17    6.32    1.56    3.12    6.03    (6.96) 
Distributions:                         
Dividends from investment                         
income—net    (.29)    (.37)    (.35)    (.22)    (.16)    (.09) 
Dividends from net realized                         
gain on investments    (.43)    (5.33)    (.17)    —    —    — 
Total Distributions    (.72)    (5.70)    (.52)    (.22)    (.16)    (.09) 
Net asset value, end of period    33.45    32.00    31.38    30.34    27.44    21.57 
Total Return (%) b    6.83c    21.00    5.18    11.41    28.09    (24.36) 
Ratios/Supplemental Data (%):                     
Ratio of total expenses                         
to average net assets    .57c    1.15    1.15    1.15    1.15    1.15 
Ratio of net investment income                         
to average net assets    .85c    1.17    .99    .86    .71    .41 
Portfolio Turnover Rate    21.21c    44.73    55.95    74.98    54.58    67.21 
Net Assets, end of period                         
($ x 1000)    570,485    548,601    556,017    634,007    607,633    504,371 

a    Based on average shares outstanding at each month end. 
b    Exclusive of sales charge. 
c    Not annualized. 
See notes to financial statements. 

The Fund 17

FINANCIAL HIGHLIGHTS (continued)

   
Six Months Ended  		      Year Ended December 31,             
June 30, 2007 
Class B Shares    (Unaudited)    2006    2005    2004    2003    2002 
Per Share Data ($):                         
Net Asset Value,                         
beginning of period    31.40    30.87    29.83    27.02    21.27    28.33 
Investment Operations:                         
Investment income (loss)—net a    .15    .13    .07    .02    (.01)    (.08) 
Net realized and unrealized                         
gain (loss) on investments    1.86    5.85    1.26    2.85    5.77    (6.98) 
Total from Investment Operations    2.01    5.98    1.33    2.87    5.76    (7.06) 
Distributions:                         
Dividends from investment                         
income—net    (.16)    (.12)    (.12)    (.06)    (.01)    — 
Dividends from net realized                         
gain on investments    (.43)    (5.33)    (.17)    —    —    — 
Total Distributions    (.59)    (5.45)    (.29)    (.06)    (.01)    — 
Net asset value, end of period    32.82    31.40    30.87    29.83    27.02    21.27 
Total Return (%) b    6.45c    20.12    4.47    10.62    27.12    (24.92) 
Ratios/Supplemental Data (%):                     
Ratio of total expenses                         
to average net assets    .94c    1.90    1.90    1.90    1.90    1.90 
Ratio of net investment income                         
(loss) to average net assets    .49c    .42    .24    .10    (.04)    (.33) 
Portfolio Turnover Rate    21.21c    44.73    55.95    74.98    54.58    67.21 
Net Assets, end of period                         
($ x 1000)    41,172    55,112    64,239    78,154    78,780    62,820 

a    Based on average shares outstanding at each month end. 
b    Exclusive of sales charge. 
c    Not annualized. 
See notes to financial statements. 

18

   
Six Months Ended  		      Year Ended December 31,             
June 30, 2007 
Class C Shares    (Unaudited)    2006    2005    2004    2003    2002 
Per Share Data ($):                         
Net Asset Value,                         
beginning of period    31.38    30.85    29.83    27.02    21.27    28.34 
Investment Operations:                         
Investment income (loss)—net a    .15    .14    .07    .02    (.01)    (.08) 
Net realized and unrealized                         
gain (loss) on investments    1.85    5.84    1.24    2.85    5.77    (6.99) 
Total from Investment Operations    2.00    5.98    1.31    2.87    5.76    (7.07) 
Distributions:                         
Dividends from investment                         
income—net    (.16)    (.12)    (.12)    (.06)    (.01)    — 
Dividends from net realized                         
gain on investments    (.43)    (5.33)    (.17)    —    —    — 
Total Distributions    (.59)    (5.45)    (.29)    (.06)    (.01)    — 
Net asset value, end of period    32.79    31.38    30.85    29.83    27.02    21.27 
Total Return (%) b    6.45c    20.07    4.43    10.62    27.12    (24.95) 
Ratios/Supplemental Data (%):                     
Ratio of total expenses                         
to average net assets    .94c    1.90    1.90    1.90    1.90    1.90 
Ratio of net investment income                         
(loss) to average net assets    .48c    .42    .24    .10    (.04)    (.32) 
Portfolio Turnover Rate    21.21c    44.73    55.95    74.98    54.58    67.21 
Net Assets, end of period                         
($ x 1000)    19,342    20,919    20,564    21,958    22,480    20,819 

a    Based on average shares outstanding at each month end. 
b    Exclusive of sales charge. 
c    Not annualized. 
See notes to financial statements. 

The Fund 19

FINANCIAL HIGHLIGHTS (continued)

   
Six Months Ended  		      Year Ended December 31,             
June 30, 2007 
Class I Shares    (Unaudited)a    2006    2005    2004    2003    2002 
Per Share Data ($):                         
Net Asset Value,                         
beginning of period    31.98    31.36    30.33    27.43    21.56    28.62 
Investment Operations:                         
Investment income—net b    .32    .46    .38    .31    .22    .17 
Net realized and unrealized                         
gain (loss) on investments    1.89    5.95    1.25    2.88    5.87    (7.08) 
Total from Investment Operations    2.21    6.41    1.63    3.19    6.09    (6.91) 
Distributions:                         
Dividends from investment                         
income—net    (.33)    (.46)    (.43)    (.29)    (.22)    (.15) 
Dividends from net realized                         
gain on investments    (.43)    (5.33)    (.17)    —    —    — 
Total Distributions    (.76)    (5.79)    (.60)    (.29)    (.22)    (.15) 
Net asset value, end of period    33.43    31.98    31.36    30.33    27.43    21.56 
Total Return (%) c    7.00d    21.26    5.45    11.69    28.43    (24.18) 
Ratios/Supplemental Data (%):                     
Ratio of total expenses                         
to average net assets    .45d    .90    .90    .90    .90    .90 
Ratio of net investment income                         
to average net assets    .97d    1.42    1.25    1.09    .95    .67 
Portfolio Turnover Rate    21.21d    44.73    55.95    74.98    54.58    67.21 
Net Assets, end of period                         
($ x 1000)    6,688    6,012    4,740    50,536    52,723    40,320 

a    Effective June 1, 2007, the fund redesignated Class R shares to Class I shares. 
b    Based on average shares outstanding at each month end. 
c    Exclusive of sales charge. 
d    Not annualized. 
See notes to financial statements. 

20

   
Six Months Ended  		      Year Ended December 31,             
June 30, 2007 
Class T Shares    (Unaudited)    2006    2005    2004    2003    2002 
Per Share Data ($):                         
Net Asset Value,                         
beginning of period    31.99    31.37    30.33    27.43    21.57    28.63 
Investment Operations:                         
Investment income—net a    .24    .30    .23    .18    .11    .05 
Net realized and unrealized                         
gain (loss) on investments    1.89    5.94    1.26    2.87    5.85    (7.07) 
Total from Investment Operations    2.13    6.24    1.49    3.05    5.96    (7.02) 
Distributions:                         
Dividends from investment                         
income—net    (.24)    (.29)    (.28)    (.15)    (.10)    (.04) 
Dividends from net realized                         
gain on investments    (.43)    (5.33)    (.17)    —    —    — 
Total Distributions    (.67)    (5.62)    (.45)    (.15)    (.10)    (.04) 
Net asset value, end of period    33.45    31.99    31.37    30.33    27.43    21.57 
Total Return (%) b    6.73c    20.67    4.95    11.14    27.72    (24.53) 
Ratios/Supplemental Data (%):                     
Ratio of total expenses                         
to average net assets    .69c    1.40    1.40    1.40    1.40    1.40 
Ratio of net investment income                         
to average net assets    .74c    .93    .74    .65    .45    .21 
Portfolio Turnover Rate    21.21c    44.73    55.95    74.98    54.58    67.21 
Net Assets, end of period                         
($ x 1000)    2,906    3,434    2,840    2,945    2,264    1,567 

a    Based on average shares outstanding at each month end. 
b    Exclusive of sales charge. 
c    Not annualized. 
See notes to financial statements. 

The Fund 21

FINANCIAL HIGHLIGHTS (continued)

   
Six Months Ended  		      Year Ended December 31,             
June 30, 2007 
Institutional Shares    (Unaudited)    2006    2005    2004    2003    2002 
Per Share Data ($):                         
Net Asset Value,                         
beginning of period    31.98    31.36    30.32    27.42    21.55    28.60 
Investment Operations:                         
Investment income—net a    .30    .42    .33    .27    .19    .13 
Net realized and unrealized                         
gain (loss) on investments    1.88    5.94    1.26    2.88    5.87    (7.07) 
Total from Investment Operations    2.18    6.36    1.59    3.15    6.06    (6.94) 
Distributions:                         
Dividends from investment                         
income—net    (.30)    (.41)    (.38)    (.25)    (.19)    (.11) 
Dividends from net realized                         
gain on investments    (.43)    (5.33)    (.17)    —    —    — 
Total Distributions    (.73)    (5.74)    (.55)    (.25)    (.19)    (.11) 
Net asset value, end of period    33.43    31.98    31.36    30.32    27.42    21.55 
Total Return (%)    6.89b    21.11    5.33    11.53    28.25    (24.28) 
Ratios/Supplemental Data (%):                     
Ratio of total expenses                         
to average net assets    .52b    1.05    1.05    1.05    1.05    1.05 
Ratio of net investment income                         
to average net assets    .90b    1.28    1.09    .96    .81    .51 
Portfolio Turnover Rate    21.21b    44.73    55.95    74.98    54.58    67.21 
Net Assets, end of period                         
($ x 1000)    45,610    44,506    40,341    41,202    41,848    37,174 

a    Based on average shares outstanding at each month end. 
b    Not annualized. 
See notes to financial statements. 

22

NOTES TO FINANCIAL STATEMENTS (Unaudited)

NOTE 1—Significant Accounting Policies:

Dreyfus Premier Core Value Fund (the “fund”) is a separate diversified series of The Dreyfus/Laurel Funds Trust (the “Trust”) which is registered under the Investment Company Act of 1940, as amended (the “Act”), as an open-end management investment company and operates as a series company offering six series, including the fund, as of the date of this report.The fund’s investment objective is to seek long-term capital growth. The Dreyfus Corporation (the “Manager” or “Dreyfus”) serves as the fund’s investment manager. During the reporting period, the Manager was a wholly-owned subsidiary of Mellon Financial Corporation (“Mellon Financial”).

On July 1, 2007, Mellon Financial and The Bank of New York Company, Inc. merged, forming The Bank of New York Mellon Corporation. As part of this transaction, Dreyfus became a wholly-owned subsidiary of The Bank of New York Mellon Corporation.

The fund’s Board of Directors approved the redesignation of the fund’s Class R shares as Class I shares, effective June 1, 2007.The description of the eligibility requirements for Class I shares remains the same as it was for Class R shares.

During the reporting period, Dreyfus Service Corporation (the “Distributor”), a wholly-owned subsidiary of the Manager served as the distributor of the fund’s shares. Effective June 30, 2007, the Distributor became known as MBSC Securities Corporation. The fund is authorized to issue an unlimited number of shares of Beneficial Interest in each of the following classes of shares: Class A, Class B, Class C, Class I, Class T and Institutional shares. Class A, Class B, Class C and Class T shares are sold primarily to retail investors through financial intermediaries and bear a distribution fee and/or service fee. Class A and Class T shares are subject to a front-end sales charge, while Class B and Class C shares are subject to a contingent deferred sales charge (“CDSC”). Class B shares automatically convert to Class A shares after six years.The fund no longer offers Class B shares, except in connection with dividend reinvestment and permitted exchanges of Class B

The Fund 23

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

shares. Class I shares are sold primarily to bank trust departments and other financial service providers (including Mellon Financial and its affiliates) acting on behalf of customers having a qualified trust or investment account or relationship at such institution, and bear no distribution or service fees. Class I and Institutional shares are offered without a front-end sales charge or CDSC. Institutional shares are offered only to those customers of certain financial planners and investment advisers who held shares of a predecessor class of the fund as of April 4, 1994, and bear a distribution fee. Each class of shares has identical rights and privileges, except with respect to the distribution and service fees and voting rights on matters affecting a single class. Income, expenses (other than expenses attributable to a specific class), and realized and unrealized gains or losses on investments are allocated to each class of shares based on its relative net assets.

The fund’s financial statements are prepared in accordance with U.S. generally accepted accounting principles, which may require the use of management estimates and assumptions. Actual results could differ from those estimates.

(a) Portfolio valuation: Investments in securities are valued at the last sales price on the securities exchange or national securities market on which such securities are primarily traded. Securities listed on the National Market System, for which market quotations are available are valued at the official closing price or, if there is no official closing price that day, at the last sale price. Securities not listed on an exchange or the national securities market, or securities for which there were no transactions, are valued at the average of the most recent bid and asked prices. Bid price is used when no asked price is available. Registered open-ended investment companies that are not traded on an exchange are valued at their net asset value. When market quotations or official closing prices are not readily available, or are determined not to reflect accurately fair value, such as when the value of a security has been significantly affected by events after the close of the exchange or market on which the security is principally traded (for example, a foreign exchange or market),but before the fund calculates its net asset value,the fund may

24

value these investments at fair value as determined in accordance with the procedures approved by the Board of Trustees. Fair valuing of securities may be determined with the assistance of a pricing service using calculations based on indices of domestic securities and other appropriate indicators, such as prices of relevant ADR’s and futures contracts. For other securities that are fair valued by the Board of Trustees, certain factors may be considered such as: fundamental analytical data, the nature and duration of restrictions on disposition, an evaluation of the forces that influence the market in which the securities are purchased and sold, and public trading in similar securities of the issuer or comparable issuers. Investments denominated in foreign currencies are translated to U.S. dollars at the prevailing rates of exchange. Forward currency exchange contracts are valued at the forward rate.

The Financial Accounting Standards Board (FASB) released Statement of Financial Accounting Standards No. 157 “Fair Value Measurements” (“FAS 157”). FAS 157 establishes an authoritative definition of fair value, sets out a framework for measuring fair value, and requires additional disclosures about fair-value measurements. The application of FAS 157 is required for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. Management does not believe that the application of this standard will have a material impact on the financial statements of the fund.

(b) Securities transactions and investment income: Securities transactions are recorded on a trade date basis. Realized gain and loss from securities transactions are recorded on the identified cost basis. Dividend income is recognized on the ex-dividend date and interest income, including, where applicable, accretion of discount and amortization of premium on investments, is recognized on the accrual basis.

Pursuant to a securities lending agreement with Mellon Bank, N.A., an affiliate of the Manager, the fund may lend securities to qualified institutions. It is the fund’s policy, that at origination, all loans are secured by collateral of at least 102% of the value of U.S. securities loaned and 105% of the value of foreign securities loaned. It is the fund’s policy that

The Fund 25

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

collateral equivalent to at least 100% of the market value of securities on loan is maintained at all times. Cash collateral is invested in certain money market mutual funds managed by the Manager. The fund is entitled to receive all income on securities loaned, in addition to income earned as a result of the lending transaction. Although each security loaned is fully collateralized, the fund bears the risk of delay in recovery of, or loss of rights in, the securities loaned should a borrower fail to return the securities in a timely manner.

(c) Affiliated issuers: Investments in other investment companies advised by the Manager are defined as “affiliated” in the Act.

(d) Foreign currency transactions: The fund does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in the market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss from investments.

Net realized foreign exchange gains or losses arise from sales and maturities of short-term securities, sales of foreign currencies, currency gains or losses realized on securities transactions and the difference between the amount of dividends, interest, and foreign withholding taxes recorded on the fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the value of assets and liabilities other than investments in securities, resulting from changes in exchange rates. Such gains and losses are included with net realized and unrealized gain or loss on investments.

(e) Dividends to shareholders: Dividends are recorded on the ex-dividend date. Dividends from investment income-net are declared and paid on a quarterly basis. Dividends from net realized capital gain, if any, are normally declared and paid annually, but the fund may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code of 1986, as amended (the “Code”).To the extent that net realized capital gain can be offset by capital loss carryovers, if any, it is the policy of the fund not to distribute such gain. Income and capital gain distributions are determined in

26

accordance with income tax regulations, which may differ from U.S. generally accepted accounting principles.

(f) Federal income taxes: It is the policy of the fund to continue to qualify as a regulated investment company, if such qualification is in the best interests of its shareholders, by complying with the applicable provisions of the Code, and to make distributions of taxable income sufficient to relieve it from substantially all federal income and excise taxes.

The FASB released FASB Interpretation No. 48 “Accounting for Uncertainty in Income Taxes” (FIN 48). FIN 48 provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. FIN 48 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the fund’s tax returns to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax benefit or expense in the current year.Adoption of FIN 48 is required for fiscal years beginning after December 15, 2006 and is to be applied to all open tax years as of the effective date. Management does not believe that the application of this standard will have a material impact on the financial statements of the fund.

The tax character of distributions paid to shareholders during the fiscal year ended December 31, 2006 were as follows: ordinary income $20,615,240 and long-term capital gains $91,322,666.The tax character of current year distributions will be determined at the end of the current fiscal year.

NOTE 2—Bank Line of Credit:

The fund participates with other Dreyfus-managed funds in a $350 million redemption credit facility (“the Facility”) to be utilized for temporary or emergency purposes, including the financing of redemptions. In connection therewith, the fund has agreed to pay commitment fees on its pro rata portion of the Facility. Interest is charged to the fund based on prevailing market rates in effect at the time of borrowing.

The Fund 27

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

The average daily amount of borrowings outstanding under the Facility during the period ended June 30, 2007, was $41,600 with a related weighted average annualized interest rate of 5.68% .

NOTE 3—Investment Management Fee and Other Transactions With Affiliates:

(a) Pursuant to an Investment Management agreement with the Manager, the Manager provides or arranges for one or more third parties and/or affiliates to provide investment advisory, administrative, custody, fund accounting and transfer agency services to the fund. The Manager also directs the investments of the fund in accordance with its investment objective, policies and limitations. For these services, the fund is contractually obligated to pay the Manager a fee, calculated daily and paid monthly, at the annual rate of .90% of the value of the fund’s average daily net assets. Out of its fee, the Manager pays all of the expenses of the fund except brokerage fees, taxes, interest, commitment fees, Rule 12b-1 distribution fees and expenses, service fees and expenses of non-interested Trustees (including counsel fees) and extraordinary expenses. In addition, the Manager is required to reduce its fee in an amount equal to the fund’s allocable portion of fees and expenses of the non-interested Trustees (including counsel fees). Each Trustee receives $45,000 per year, plus $6,000 for each joint Board meeting of The Dreyfus/Laurel Funds, Inc., The Dreyfus/Laurel Tax-Free Municipal Funds and the Trust (collectively, the “Dreyfus/Laurel Funds”) attended, $2,000 for separate in-person committee meetings attended which are not held in conjunction with a regularly scheduled Board meeting and $1,500 for Board meetings and separate committee meetings attended that are conducted by telephone and is reimbursed for travel and out-of-pocket expenses.With respect to Board meetings, the Chairman of the Board receives an additional 25% of such compensation (with the exception of reimbursable amounts). With respect to compensation committee meetings, the Chair of the compensation committee receives $900 per meeting and, with respect to audit committee meetings, the Chair of the audit committee receives $1,350 per meeting. In the event that there is

28

an in-person joint committee meeting or a joint telephone meeting of the Dreyfus/Laurel Funds and Dreyfus High Yield Strategies Fund, the $2,000 or $1,500 fee, as applicable, will be allocated between the Dreyfus/Laurel Funds and Dreyfus High Yield Strategies Fund. These fees and expenses are charged and allocated to each series based on net assets. Amounts required to be paid by the Trust directly to the non-interested Trustees, that would be applied to offset a portion of the management fee payable to the Manager, are in fact paid directly by the Manager to the non-interested Trustees.

During the period ended June 30, 2007, the Distributor retained $8,920 and $340 from commissions earned on sales of the fund’s Class A and Class T shares, respectively, and $53,147 and $1,952 from CDSC on redemptions on the fund’s Class B and Class C shares, respectively.

(b) Under separate Distribution Plans (the “Plans”) adopted pursuant to Rule 12b-1 under the Act, Class A shares and Institutional shares may pay annually up to .25% and .15%, respectively, of the value of their average daily net assets to compensate the Distributor for shareholder servicing activities and expenses primarily intended to result in the sale of Class A shares and Institutional shares. Class B, Class C and Class T shares pay the Distributor for distributing their shares at an aggregate annual rate of .75% of the value of the average daily net assets of Class B and Class C shares, and .25% of the value of average daily net assets of Class T shares.The Distributor may pay one or more agents in respect of advertising, marketing and other distribution services for Class T shares and determines the amounts, if any, to be paid to agents and the basis on which such payments are made. Class B, Class C and Class T shares are also subject to a service plan adopted pursuant to Rule 12b-1 (the “Service Plan”), under which Class B, Class C and Class T shares pay the Distributor for providing certain services to the holders of their shares a fee at the annual rate of .25% of the value of the average daily net assets of Class B, Class C and Class T shares, respectively. During the period ended June 30, 2007, Class A,

The Fund 29

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

Class B, Class C, Class T and Institutional shares were charged $694,986, $179,343, $74,841, $3,987 and $33,572 respectively, pursuant to their respective Plans. During the period ended June 30, 2007, Class B, Class C and Class T shares were charged $59,781, $24,947 and $3,987, respectively, pursuant to the Service Plan.

Under its terms, the Plans and Service Plan shall remain in effect from year to year, provided such continuance is approved annually by a vote of majority of those Trustees who are not “interested persons” of the Trust and who have no direct or indirect financial interest in the operation of or in any agreement related to the Plans or Service Plan.

The components of Due to The Dreyfus Corporation and affiliates in the Statement of Assets and Liabilities consist of: management fees $532,396, Rule 12b-1 distribution plan fees $168,868 and shareholder services plan fees $13,795.

(c) The Trust and the Manager have received an exemptive order from the SEC which, among other things, permits the fund to use cash collateral received in connection with lending the fund’s securities and other uninvested cash to purchase shares of one or more registered money market mutual funds advised by the Manager in excess of the limitations imposed by the Act.

NOTE 4—Securities Transactions:

The aggregate amount of purchases and sales of investment securities, excluding short-term securities, during the period ended June 30, 2007, amounted to $144,166,869 and $181,619,777, respectively.

At June 30, 2007, accumulated net unrealized appreciation on investments was $129,082,183 consisting of $133,237,442 gross unrealized appreciation and $4,155,259 gross unrealized depreciation.

At June 30,2007,the cost of investments for federal income tax purposes was substantially the same as the cost for financial reporting purposes (see the Statement of Investments).

30

INFORMATION ABOUT THE REVIEW AND APPROVAL OF THE FUND’S INVESTMENT

MANAGEMENT AGREEMENT (Unaudited)

At a meeting of the fund’s Board of Trustees held on January 31 and February 1, 2007, the Board considered the re-approval for an annual period of the fund’s Investment Management Agreement (“Management Agreement”), pursuant to which the Manager provides the fund with investment advisory and administrative services. The Board members, none of whom are “interested persons” (as defined in the Investment Company Act of 1940, as amended) of the fund, were assisted in their review by independent legal counsel and met with counsel in executive session separate from representatives of the Manager.

Analysis of Nature, Extent and Quality of Services Provided to the Fund. The Board members considered information previously provided to them in a presentation from representatives of the Manager regarding services provided to the fund and other funds in the Dreyfus fund complex, and representatives of the Manager confirmed that there had been no material changes in this information. The Board also discussed the nature, extent and quality of the services provided to the fund pursuant to its Management Agreement.The Manager’s representatives reviewed the fund’s distribution of accounts and the relationships the Manager has with various intermediaries and the different needs of each. The Manager’s representatives noted the distribution channels for the fund as well as the diversity of distribution among the funds in the Dreyfus fund complex, and the Manager’s corresponding need for broad, deep, and diverse resources to be able to provide ongoing shareholder services to each distribution channel, including those of the fund.The Board also reviewed the number of shareholder accounts in the fund, as well as the fund’s asset size.

The Board members also considered the Manager’s research and portfolio management capabilities and that the Manager also provides oversight of day-to-day fund operations, including fund accounting and administration and assistance in meeting legal and regulatory requirements.The Board members also considered the Manager’s extensive administrative, accounting and compliance infrastructure.

The Fund 31

I N FO R M AT I O N   A B O U T   T H E   R E V I E W   A N D   A P P R O V A L   O F   T H E   F U N D ’ S   N V E S T M E N T    M A N A G E M E N T   A G R E E M E N T ( U n a u d i t e d ) ( c o n t i n u e d )

Comparative Analysis of the Fund’s Performance and Management Fee and Expense Ratio. The Board members reviewed the fund’s performance and placed significant emphasis on comparisons to a group of retail front-end load, large-cap value funds (the “Performance Group”) and to a larger universe of funds, consisting of all retail and institutional large-cap value funds (the “Performance Universe”) selected and provided by Lipper, Inc., an independent provider of investment company data. The Board was provided with a description of the methodology Lipper used to select the Performance Group and Performance Universe, as well as the Expense Group and Expense Universe (discussed below). The Board members discussed the results of the comparisons and noted that the fund’s total return performance was variously above and below the Performance Group and Performance Universe medians for various periods ended November 30, 2006.The Manager also provided a comparison of the fund’s total returns to the returns of the fund’s benchmark index for each calendar year for the past ten years.

The Board members also discussed the fund’s management fee and expense ratio and reviewed the range of management fees and expense ratios of a comparable group of funds (the “Expense Group”) and a broader group of funds (the “Expense Universe”), each selected and provided by Lipper.The Board members noted that the fund was the only fund in the Expense Group with a “unitary fee” structure. The Board members also noted that the fund’s management fee was above the Expense Group and Expense Universe medians and the expense ratio was below the Expense Group and Expense Universe medians.

Representatives of the Manager noted that there were no other mutual funds managed by the Manager or its affiliates with similar investment objectives, policies and strategies, and included in the same Lipper category as the fund. A representative of the Manager reviewed with the Board members the fees paid to the Manager or its affiliates by other accounts managed by the Manager or its affiliates with similar investment objectives, policies and strategies as the fund (the “Similar Accounts”). The Manager’s representatives explained the nature of the Similar Accounts and the differences, from the Manager’s perspective, in provid-

32

ing services to such Similar Accounts as compared to managing and providing services to the fund.The Manager’s representatives also reviewed the costs associated with distribution through intermediaries.The Board analyzed differences in fees paid to the Manager and discussed the relationship of the fees paid in light of the Manager’s performance and the services provided, noting the fund’s “unitary fee” structure.The Board members considered the relevance of the fee information provided for the Similar Accounts to evaluate the appropriateness and reasonableness of the fund’s management fee. The Board acknowledged that differences in fees paid by the Similar Accounts seemed to be consistent with the services provided.

Analysis of Profitability and Economies of Scale. The Manager’s representatives reviewed the dollar amount of expenses allocated and profit received by the Manager and the method used to determine such expenses and profit. The Board previously had been provided with information prepared by an independent consulting firm regarding the Manager’s approach to allocating costs to, and determining the profitability of, individual funds and the entire Dreyfus mutual fund complex.The Board also was informed that the methodology had also been reviewed by an independent registered public accounting firm which, like the consultant, found the methodology to be reasonable. The consulting firm also analyzed where any economies of scale might emerge in connection with the management of the fund. The Board members evaluated the profitability analysis in light of the relevant circumstances for the fund and the extent to which economies of scale would be realized if the fund grows and whether fee levels reflect these economies of scale for the benefit of fund shareholders. The Board members also considered potential benefits to the Manager from acting as investment adviser and noted the Manager’s soft dollar arrangements with respect to trading the fund’s portfolio.

It was noted that the Board members should consider the Manager’s profitability with respect to the fund as part of their evaluation of whether the fees under the Management Agreement bear a reasonable

The Fund 33

I N FO R M AT I O N   A B O U T   T H E   R E V I E W   A N D   A P P R O V A L   O F   T H E   F U N D ’ S   N V E S T M E N T    M A N A G E M E N T   A G R E E M E N T ( U n a u d i t e d ) ( c o n t i n u e d )

relationship to the mix of services provided by the Manager, including the nature, extent and quality of such services and that a discussion of economies of scale is predicated on increasing assets and that, if a fund’s assets had been decreasing, the possibility that the Manager may have realized any economies of scale would be less. It also was noted that the profitability percentage for managing the fund was within the range determined by appropriate court cases to be reasonable given the services rendered and generally superior service levels provided by the Manager.

At the conclusion of these discussions, the Board agreed that it had been furnished with sufficient information to make an informed business decision with respect to continuation of the fund’s Management Agreement. Based on the discussions and considerations as described above, the Board made the following conclusions and determinations.

  • The Board concluded that the nature, extent and quality of the ser- vices provided by the Manager are adequate and appropriate.
  • The Board was generally satisfied with the fund’s overall performance.
  • The Board concluded that the fee paid by the fund to the Manager was reasonable in light of the services provided, comparative perfor- mance, expense and advisory fee information, costs of the services provided and profits to be realized and benefits derived or to be derived by the Manager from its relationship with the fund.
  • The Board determined that the economies of scale which may accrue to the Manager and its affiliates in connection with the man- agement of the fund had been adequately considered by the Manager in connection with the management fee rate charged to the fund and that, to the extent in the future it were determined that material economies of scale had not been shared with the fund, the Board would seek to have those economies of scale shared with the fund.

The Board members considered these conclusions and determinations, along with information received on a routine and regular basis throughout the year, and, without any one factor being dispositive, the Board determined that re-approval of the fund’s Management Agreement was in the best interests of the fund and its shareholders and that the Management Agreement would be renewed through April 4, 2008.

34

NOTES

Dreyfus Premier Limited Term High Yield Fund

SEMIANNUAL REPORT June 30, 2007

Save time. Save paper. View your next shareholder report online as soon as it’s available. Log into www.dreyfus.com and sign up for Dreyfus eCommunications. It’s simple and only takes a few minutes.

The views expressed in this report reflect those of the portfolio manager only through the end of the period covered and do not necessarily represent the views of Dreyfus or any other person in the Dreyfus organization. Any such views are subject to change at any time based upon market or other conditions and Dreyfus disclaims any responsibility to update such views.These views may not be relied on as investment advice and, because investment decisions for a Dreyfus fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Dreyfus fund.

Not FDIC-Insured • Not Bank-Guaranteed • May Lose Value

Contents
 
    THE FUND 
2    A Letter from the CEO 
3    Discussion of Fund Performance 
6    Understanding Your Fund’s Expenses 
6    Comparing Your Fund’s Expenses 
With Those of Other Funds
7    Statement of Investments 
23    Statement of Assets and Liabilities 
24    Statement of Operations 
25    Statement of Changes in Net Assets 
27    Financial Highlights 
31    Notes to Financial Statements 
43    Information About the Review 
and Approval of the Fund’s
    Investment Management Agreement 
FOR MORE INFORMATION
    Back Cover 

Dreyfus Premier 
Limited Term High Yield Fund 

The Fund

A LETTER FROM THE CEO

Dear Shareholder:

We are pleased to present this semiannual report for Dreyfus Premier Limited Term High Yield Fund, covering the six-month period from January 1, 2007, through June 30, 2007.

The U.S. economy produced mixed signals over the first half of 2007, causing investor sentiment to swing from concerns regarding a domestic economic slowdown stemming from slumping housing markets to worries about mounting inflationary pressures in an environment of robust global growth. However, more recent data have provided stronger signals that a “soft landing” is likely for the U.S. economy.The rate of decline in residential construction is becoming less severe, the industrial inventory slowdown is fading and capital goods orders have strengthened. What’s more, a generally rising stock market over the past six months has helped to offset any negative “wealth effect” from the weak housing market.

Should these trends persist, we expect U.S. economic growth to hover slightly below long-term averages during the second half of this year. A moderate economic growth rate and gradually receding inflationary pressures may keep the Federal Reserve Board on the sidelines and bond yields within a relatively narrow trading range. As always, your financial advisor can help you position your fixed-income investments for these and other developments.

For information about how the fund performed during the reporting period, as well as market perspectives, we have provided a Discussion of Fund Performance given by the fund’s Portfolio Manager.

Thank you for your continued confidence and support.

2

DISCUSSION OF FUND PERFORMANCE

For the period of January 1, 2007, through June 30, 2007, as provided by David Bowser, Portfolio Manager

Fund and Market Performance Overview

After posting relatively strong returns early in the reporting period, high yield bond prices fell relatively sharply in late May and June as ongoing turmoil in the sub-prime mortgage market and robust mergers-and-acquisitions activity caused credit concerns to affect other credit-sensitive market sectors.The fund produced lower returns than its benchmark, primarily due to its relatively defensive investment posture, which prevented it from participating fully in strength among lower-rated credits early in the year.

For the six-month period ended June 30, 2007, Dreyfus Premier Limited Term High Yield Fund achieved total returns of 2.59% for its Class A shares, 2.34% for Class B shares, 2.21% for Class C shares and 2.72% for Class I shares. Please note that effective June 1, 2007, Class R shares were renamed Class I shares. The fund generated aggregate income dividends of $0.26 for Class A shares, $0.24 for Class B shares, $0.23 for Class C shares and $0.27 for Class I shares.1 In comparison, the Merrill Lynch U.S. High Yield Master II Constrained Index (the “Index”) achieved a total return of 3.16% for the same period.2

The Fund’s Investment Approach

The fund seeks to maximize total return, consisting of capital appreciation and current income.The average effective maturity of the fund is limited to a maximum of 5.5 years.

At least 80% of the fund’s assets are invested in fixed-income securities that are rated below investment grade (“high yield” or “junk” bonds) or are the unrated equivalent as determined by Dreyfus. Individual issues are selected based on careful credit analysis.We thoroughly analyze the business, management and financial strength of each of the companies whose bonds we buy, then project each issuer’s ability to repay its debt.

The Fund 3

DISCUSSION OF FUND PERFORMANCE (continued)

Heightened Market Volatility Eroded High Yield Bond Prices

Moderate economic growth, low default rates and strong corporate earnings helped support corporate bond prices early in the reporting period. Despite bouts of volatility stemming from turmoil in the sub-prime mortgage market, investor sentiment and business fundamentals remained strong across most industry groups.

However, after rallying early in the year, the high yield market suffered a sharp decline in late May and June, when credit concerns appeared to spread from the sub-prime mortgage market to other credit-sensitive sectors of the bond market, causing investor sentiment to deteriorate. In addition, investors apparently reacted negatively to heightened activity among private equity firms.A number of record-setting leveraged buy-outs substantially boosted the supply of newly issued high yield bonds, including those with terms favoring shareholders over bondholders. As a result, high yield bond prices declined, partly offsetting positive returns derived from income.

The fund participated in a number of new issues over the first half of 2007 that were negatively affected by the late sell-off in May and June. Most notably, those deals in which the fund participated that settled during the month of June were particularly hard-hit, which hurt fund performance relative to the Index.

A Defensive Investment Posture Helped the Fund Weather the Downturn

In this environment, we generally emphasized bonds with credit ratings toward the upper end of the high yield market’s range.This positioning prevented the fund from participating as fully as the benchmark in ongoing strength among lower-rated credits early in the reporting period. However, the fund’s defensive stance helped it avoid the full brunt of the market downturn in late May and June.

In addition to emphasizing BB-rated credits, we attempted to avoid issuers that we believed were susceptible to the risk of leveraged buyouts or recapitalizations.We also maintained relatively light exposure to economically-sensitive issuers that we feared might be adversely affected in

4

a cyclical downturn, such as home builders and other housing-related companies.These strategies helped support the fund’s performance, as did relatively heavy exposure to the theater industry early in the reporting period.The fund also benefited from a number of holdings that received credit-rating upgrades from the major bond-rating agencies during the reporting period. Fund holdings El Paso and Qwest Communications were upgraded from the high yield category to investment-grade status.

The Fund Remains Positioned for Volatile Markets

As of the end of the reporting period, we have continued to see signs that the credit cycle has peaked.Although we expect default rates to rise from today’s very low levels, we believe the increase will be manageable and investors are likely to adapt to a gradual shift toward more normalized market conditions. Accordingly, the fund has remained fully invested in high yield bonds, but we have retained a relatively defensive investment posture that emphasizes the higher credit-rating tiers and issuers that tend to be less sensitive to economic changes.We also have maintained the fund’s focus on bonds with strong covenants that tend to discourage leveraged buyouts or other activities that favor shareholders over bondholders. In our judgment, these are prudent strategies in today’s relatively unsettled market environment.

July 16, 2007

1    Total return includes reinvestment of dividends and any capital gains paid, and does not take into 
    consideration the maximum initial sales charge in the case of Class A shares, or the applicable 
    contingent deferred sales charges imposed on redemptions in the case of Class B and Class C 
    shares. Had these charges been reflected, returns would have been lower. Past performance is no 
    guarantee of future results. Share price, yield and investment return fluctuate such that upon 
    redemption, fund shares may be worth more or less than their original cost. 
2    SOURCE: BLOOMBERG — Reflects reinvestment of dividends and, where applicable, 
    capital gain distributions.The Merrill Lynch U.S. High Yield Master II Constrained Index is an 
    unmanaged performance benchmark composed of U.S. dollar-denominated domestic and Yankee 
    bonds rated below investment grade with at least $100 million par amount outstanding and at 
    least one year remaining to maturity. Bonds are capitalization-weighted.Total allocations to an 
    issuer are capped at 2%. 

The Fund 5

UNDERSTANDING YOUR FUND’S EXPENSES (Unaudited)

As a mutual fund investor, you pay ongoing expenses, such as management fees and other expenses. Using the information below, you can estimate how these expenses affect your investment and compare them with the expenses of other funds.You also may pay one-time transaction expenses, including sales charges (loads) and redemption fees, which are not shown in this section and would have resulted in higher total expenses. For more information, see your fund’s prospectus or talk to your financial adviser.

Review your fund’s expenses

The table below shows the expenses you would have paid on a $1,000 investment in Dreyfus Premier Limited Term High Yield Fund from January 1, 2007 to June 30, 2007. It also shows how much a $1,000 investment would be worth at the close of the period, assuming actual returns and expenses.

Expenses and Value of a $1,000 Investment             
assuming actual returns for the six months ended June 30, 2007         
    Class A    Class B    Class C    Class I 
Expenses paid per $1,000 †    $ 4.77    $ 7.27    $ 8.52    $ 3.52 
Ending value (after expenses)    $1,025.90    $1,023.40    $1,022.10    $1,027.20 

COMPARING YOUR FUND’S EXPENSES WITH THOSE OF OTHER FUNDS (Unaudited)

Using the SEC’s method to compare expenses

The Securities and Exchange Commission (SEC) has established guidelines to help investors assess fund expenses. Per these guidelines, the table below shows your fund’s expenses based on a $1,000 investment, assuming a hypothetical 5% annualized return. You can use this information to compare the ongoing expenses (but not transaction expenses or total cost) of investing in the fund with those of other funds.All mutual fund shareholder reports will provide this information to help you make this comparison. Please note that you cannot use this information to estimate your actual ending account balance and expenses paid during the period.

Expenses and Value of a $1,000 Investment             
assuming a hypothetical 5% annualized return for the six months ended June 30, 2007 
    Class A    Class B    Class C    Class I 
Expenses paid per $1,000 †    $ 4.76    $ 7.25    $ 8.50    $ 3.51 
Ending value (after expenses)    $1,020.08    $1,017.60    $1,016.36    $1,021.32 

† Expenses are equal to the fund’s annualized expense ratio of .95% for Class A, 1.45% for Class B, 1.70% for Class C and .70% Class I; multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

6

STATEMENT OF INVESTMENTS

June 30, 2007 (Unaudited)

    Coupon    Maturity    Principal     
Bonds and Notes—96.0%    Rate (%)    Date    Amount ($)    Value ($) 
Advertising—.7%                 
Lamar Media,                 
Gtd. Notes, Ser. B    6.63    8/15/15    750,000    714,375 
Lamar Media,                 
Sr. Unscd. Notes    6.63    8/15/15    1,725,000    1,643,063 
                2,357,438 
Aerospace & Defense—1.2%                 
DRS Technologies,                 
Gtd. Notes    6.88    11/1/13    524,000    510,900 
Esterline Technologies,                 
Sr. Notes    6.63    3/1/17    1,375,000 a    1,333,750 
L-3 Communications,                 
Gtd. Bonds    3.00    8/1/35    550,000    622,875 
L-3 Communications,                 
Gtd. Notes, Ser. B    6.38    10/15/15    1,410,000    1,339,500 
                3,807,025 
Agricultural—.3%                 
Alliance One International,                 
Gtd. Notes    11.00    5/15/12    800,000    882,000 
Airlines—.3%                 
United AirLines,                 
Pass-Through Ctfs., Ser. 00-2    7.81    4/1/11    981,877    1,119,953 
Asset-Backed Ctfs./                 
Home Equity Loans—.1%                 
Countrywide Asset-Backed                 
Certificates, Ser. 2007-4, Cl. M7    7.20    9/25/37    180,000    167,733 
Automobile Manufacturers—2.0%                 
Ford Motor,                 
Debs.    6.50    8/1/18    1,355,000 b    1,104,325 
Ford Motor,                 
Unscd. Notes    7.45    7/16/31    3,315,000 b    2,664,431 
General Motors,                 
Notes    7.20    1/15/11    2,615,000    2,520,206 
                6,288,962 
Automotive, Trucks & Parts—2.5%             
American Axle and Manufacturing,                 
Gtd. Notes    7.88    3/1/17    1,705,000 b    1,683,688 
Goodyear Tire & Rubber,                 
Sr. Notes    8.63    12/1/11    461,000 a    487,508 

The Fund 7

STATEMENT OF INVESTMENTS (Unaudited) (continued)

    Coupon    Maturity    Principal     
Bonds and Notes (continued)    Rate (%)    Date    Amount ($)    Value ($) 
Automotive, Trucks & Parts (continued)             
Goodyear Tire & Rubber,                 
Sr. Notes    9.00    7/1/15    1,114,000 b    1,205,905 
Goodyear Tire & Rubber,                 
Sr. Notes    9.13    12/1/09    500,000 a,c    503,750 
Tenneco Automotive,                 
Gtd. Notes    8.63    11/15/14    1,070,000 b    1,107,450 
Tenneco Automotive,                 
Scd. Notes, Ser. B    10.25    7/15/13    1,200,000    1,296,000 
United Components,                 
Sr. Sub. Notes    9.38    6/15/13    1,613,000    1,673,488 
                7,957,789 
Building & Construction—.8%                 
Goodman Global Holdings,                 
Gtd. Notes    7.88    12/15/12    524,000    521,380 
Goodman Global Holdings,                 
Gtd. Notes, Ser. B    8.36    6/15/12    1,159,000 c    1,170,590 
KB Home,                 
Gtd. Notes    5.75    2/1/14    920,000    814,200 
                2,506,170 
Cable & Media—.8%                 
CCH I Holdings,                 
Gtd. Notes    9.92    4/1/14    2,700,000 b    2,511,000 
Casinos & Gaming—.6%                 
Fontainebleau Las Vegas,                 
Mortgage Notes    10.25    6/15/15    920,000 a    910,800 
Shingle Springs Tribal Group,                 
Sr. Notes    9.38    6/15/15    1,130,000 a    1,145,538 
                2,056,338 
Chemicals—2.8%                 
Airgas,                 
Gtd. Notes    6.25    7/15/14    1,450,000    1,399,250 
CPG International I,                 
Sr. Unscd. Notes    10.50    7/1/13    975,000    1,004,250 
Ineos Group Holdings,                 
Sr. Sub. Notes    8.50    2/15/16    2,550,000 a,b    2,505,375 
Lyondell Chemical,                 
Gtd. Notes    8.00    9/15/14    1,250,000    1,290,625 
Nalco,                 
Sr. Sub. Notes    8.88    11/15/13    2,653,000 b    2,765,753 
                8,965,253 

8

    Coupon    Maturity    Principal     
Bonds and Notes (continued)    Rate (%)    Date    Amount ($)    Value ($) 
Coal—.3%                 
Peabody Energy,                 
Gtd. Notes, Ser. B    6.88    3/15/13    805,000    805,000 
Commercial & Professional                 
Services—2.8%                 
Aramark,                 
Sr. Notes    8.50    2/1/15    1,012,000 a    1,034,770 
Aramark,                 
Sr. Notes    8.86    2/1/15    490,000 a,c    499,800 
Corrections Corp. of America,                 
Gtd. Notes    6.25    3/15/13    1,710,000    1,650,150 
Education Management/Finance,                 
Gtd. Notes    8.75    6/1/14    625,000    643,750 
Education Management/Finance,                 
Gtd. Notes    10.25    6/1/16    1,310,000    1,385,325 
Hertz,                 
Gtd. Notes    8.88    1/1/14    1,375,000    1,440,312 
Hertz,                 
Gtd. Notes    10.50    1/1/16    430,000    477,300 
Williams Scotsman,                 
Gtd. Notes    8.50    10/1/15    1,825,000 b    1,893,438 
                9,024,845 
Commercial Mortgage                 
Pass-Through Ctfs.—.7%                 
Global Signal Trust,                 
Ser. 2006-1, Cl. F    7.04    2/15/36    1,080,000 a    1,078,074 
Goldman Sachs Mortgage Securities                 
Corporation II, Ser. 2007-EOP, Cl. L    6.62    3/6/20    1,295,000 c    1,295,000 
                2,373,074 
Communications—.2%                 
Cricket Communications I,                 
Gtd. Notes    9.38    11/1/14    530,000 a    549,875 
Consumer Products—1.3%                 
Chattem,                 
Sr. Sub. Notes    7.00    3/1/14    826,000    828,065 
Constellation Brands Incorporated,                 
Sr. Notes    7.25    5/15/17    850,000 a    833,000 
Playtex Products,                 
Gtd. Notes    9.38    6/1/11    2,546,000 b    2,628,745 
                4,289,810 

The Fund 9

STATEMENT OF INVESTMENTS (Unaudited) (continued)

        Coupon    Maturity    Principal     
Bonds and Notes (continued)    Rate (%)    Date    Amount ($)    Value ($) 
Containers-Paper—.6%                 
Stone Container,                     
Sr. Unscd. Notes        8.00    3/15/17    1,945,000    1,896,375 
Diversified Financial Services—11.8%             
CCM Merger,                     
Notes        8.00    8/1/13    630,000 a    630,000 
Chevy Chase Bank,                     
Sub. Notes        6.88    12/1/13    2,970,000    2,970,000 
Consolidated Communications                 
Illinois/Texas Holdings, Sr. Notes    9.75    4/1/12    761,000    800,952 
E*TRADE FINANCIAL,                 
Sr. Unscd. Notes        8.00    6/15/11    320,000    329,600 
FCE Bank,                     
Notes    EUR    5.16    9/30/09    2,825,000 c,d    3,771,062 
Ford Motor Credit,                     
Notes        5.63    10/1/08    945,000 b    933,062 
Ford Motor Credit,                     
Unscd. Notes        7.38    10/28/09    820,000    814,403 
Ford Motor Credit,                     
Sr. Unscd. Notes        8.00    12/15/16    1,820,000    1,746,103 
Ford Motor Credit,                     
Sr. Unscd. Notes        8.63    11/1/10    1,135,000    1,153,625 
Ford Motor Credit,                     
Sr. Unscd. Notes        9.75    9/15/10    368,000 c    384,522 
General Motors Acceptance                 
International Finance,                 
Gtd. Notes    EUR    4.38    10/31/07    1,585,000 d    2,139,379 
GMAC,                     
Sr. Unsub. Notes    EUR    5.38    6/6/11    1,000,000 d    1,301,420 
GMAC,                     
Notes        6.13    1/22/08    1,375,000 b    1,374,989 
GMAC,                     
Unsub. Notes        7.75    1/19/10    3,665,000    3,712,308 
HUB International Holdings,                 
Sr. Sub. Notes        10.25    6/15/15    3,935,000 a    3,807,112 
Idearc,                     
Gtd. Notes        8.00    11/15/16    1,595,000    1,618,925 
K & F Acquisition,                     
Gtd. Notes        7.75    11/15/14    645,000    686,925 
Kansas City Southern Railway,                 
Gtd. Notes        7.50    6/15/09    600,000    598,500 

10

    Coupon    Maturity    Principal     
Bonds and Notes (continued)    Rate (%)    Date    Amount ($)    Value ($) 
Diversified Financial                 
Services (continued)                 
Nell,                 
Gtd. Notes    8.38    8/15/15    2,175,000 a,b    2,093,437 
Residential Capital,                 
Gtd. Notes    6.50    4/17/13    1,253,000    1,212,556 
Residential Capital,                 
Gtd. Notes    6.88    6/30/15    825,000    801,386 
SLM,                 
Unscd. Notes, Ser. A    4.50    7/26/10    1,730,000    1,600,695 
SLM,                 
Notes    5.13    8/27/12    1,820,000    1,612,824 
Stena,                 
Sr. Notes    7.50    11/1/13    1,001,000    1,016,015 
UCI Holdco,                 
Sr. Notes    12.36    12/15/13    848,420 a,c    865,388 
                37,975,188 
Diversified Metals & Mining—2.4%             
Consol Energy,                 
Gtd. Notes    7.88    3/1/12    1,578,000    1,641,120 
CSN Islands IX,                 
Gtd. Notes    10.50    1/15/15    1,500,000 a,c    1,747,500 
Freeport-McMoRan Copper & Gold,                 
Sr. Notes    6.88    2/1/14    500,000 b    508,125 
Freeport-McMoRan Copper & Gold,                 
Sr. Unscd. Notes    8.25    4/1/15    2,300,000    2,432,250 
Gibraltar Industries,                 
Gtd. Notes, Ser. B    8.00    12/1/15    670,000 c    659,950 
Noranda Aluminium Acquisition,                 
Sr. Unscd. Notes    9.36    5/15/15    750,000 a,c    727,500 
                7,716,445 
Electric Utilities—5.1%                 
AES,                 
Sr. Unsub. Notes    8.88    2/15/11    1,000,000    1,058,750 
AES,                 
Scd. Notes    9.00    5/15/15    874,000 a    929,718 
AES,                 
Sr. Notes    9.38    9/15/10    1,000,000    1,068,750 
Edison Mission Energy,                 
Sr. Notes    7.00    5/15/17    200,000 a    189,500 

The Fund 11

STATEMENT OF INVESTMENTS (Unaudited) (continued)

    Coupon    Maturity    Principal     
Bonds and Notes (continued)    Rate (%)    Date    Amount ($)    Value ($) 
Electric Utilities (continued)                 
Edison Mission Energy,                 
Sr. Unscd. Notes    7.50    6/15/13    1,185,000    1,179,075 
Mirant Americas Generation,                 
Sr. Unscd. Notes    8.30    5/1/11    1,625,000    1,685,937 
Mirant North America,                 
Gtd. Notes    7.38    12/31/13    2,315,000    2,378,662 
Nevada Power,                 
Mortgage Notes, Ser. A    8.25    6/1/11    1,321,000    1,436,000 
NRG Energy,                 
Gtd. Notes    7.25    2/1/14    1,050,000    1,055,250 
NRG Energy,                 
Gtd. Notes    7.38    2/1/16    225,000    226,125 
NRG Energy,                 
Gtd. Notes    7.38    1/15/17    565,000    568,531 
Reliant Energy,                 
Sr. Notes    7.63    6/15/14    2,640,000 b    2,587,200 
Sierra Pacific Resources,                 
Sr. Unscd. Notes    8.63    3/15/14    1,910,000 b    2,059,576 
                16,423,074 
Environmental Control—2.0%                 
Allied Waste North America,                 
Gtd. Notes    6.88    6/1/17    5,000,000 b    4,862,500 
Allied Waste North America,                 
Gtd. Notes, Ser. B    9.25    9/1/12    703,000    739,029 
WCA Waste,                 
Gtd. Notes    9.25    6/15/14    625,000    653,125 
                6,254,654 
Food & Beverages—2.6%                 
Dean Foods,                 
Gtd. Notes    7.00    6/1/16    750,000    720,000 
Del Monte,                 
Sr. Sub. Notes    8.63    12/15/12    1,031,000 c    1,069,662 
Dole Food,                 
Sr. Notes    8.63    5/1/09    745,000 c    746,862 
Dole Food,                 
Debs.    8.75    7/15/13    780,000 b    764,400 
Dole Food,                 
Gtd. Notes    8.88    3/15/11    555,000 b    549,450 
Smithfield Foods,                 
Sr. Notes, Ser. B    7.75    5/15/13    700,000    714,000 

12

    Coupon    Maturity    Principal     
Bonds and Notes (continued)    Rate (%)    Date    Amount ($)    Value ($ 
Food & Beverages (continued)                 
Smithfield Foods,                 
Sr. Unscd. Notes    7.75    7/1/17    750,000 b    753,750 
Stater Brothers Holdings,                 
Sr. Notes    8.13    6/15/12    2,970,000    3,007,125 
                8,325,249 
Foreign/Governmental—1.0%                 
Federal Republic of Brazil,                 
Unscd. Bonds BRL    12.50    1/5/16    4,850,000 b,d    3,067,233 
Health Care—6.0%                 
Community Health Systems,                 
Sr. Notes    8.88    7/15/15    2,650,000 a,e    2,699,687 
DaVita,                 
Gtd. Notes    7.25    3/15/15    1,150,000 b    1,141,375 
HCA,                 
Sr. Unscd. Notes    6.95    5/1/12    1,700,000 b    1,640,500 
HCA,                 
Sr. Unscd. Notes    8.75    9/1/10    1,860,000    1,946,025 
HCA,                 
Scd. Notes    9.13    11/15/14    350,000 a    368,813 
HCA,                 
Scd. Notes    9.25    11/15/16    1,300,000 a    1,387,750 
Psychiatric Solutions,                 
Gtd. Notes    7.75    7/15/15    1,650,000    1,639,688 
Psychiatric Solutions,                 
Sr. Sub. Notes    7.75    7/15/15    2,050,000 a    2,037,187 
Tenet Healthcare,                 
Sr. Notes    6.38    12/1/11    375,000    344,531 
Tenet Healthcare,                 
Sr. Notes    9.88    7/1/14    2,502,000 b    2,489,490 
Triad Hospitals,                 
Sr. Sub. Notes    7.00    11/15/13    3,340,000    3,519,355 
                19,214,401 
Lodging & Entertainment—9.6%                 
AMC Entertainment,                 
Sr. Sub. Notes    8.00    3/1/14    2,800,000    2,758,000 
Cinemark,                 
Sr. Discount Notes    9.75    3/15/14    3,250,000 f    2,973,750 
Gaylord Entertainment,                 
Gtd. Notes    6.75    11/15/14    1,425,000    1,407,187 

The Fund 13

STATEMENT OF INVESTMENTS (Unaudited) (continued)

    Coupon    Maturity    Principal     
Bonds and Notes (continued)    Rate (%)    Date    Amount ($)    Value ($) 
Lodging & Entertainment (continued)             
Gaylord Entertainment,                 
Gtd. Notes    8.00    11/15/13    900,000    916,875 
Isle of Capri Casinos,                 
Gtd. Notes    9.00    3/15/12    1,050,000    1,099,875 
Leslie’s Poolmart,                 
Sr. Notes    7.75    2/1/13    2,025,000    2,025,000 
Mandalay Resort Group,                 
Sr. Unscd. Notes    6.50    7/31/09    1,651,000    1,659,255 
Marquee Holdings,                 
Sr. Discount Notes    12.00    8/15/14    610,000 b,f    533,750 
MGM Mirage,                 
Gtd. Notes    8.38    2/1/11    470,000    482,925 
MGM Mirage,                 
Gtd. Notes    8.50    9/15/10    1,518,000    1,595,797 
Mohegan Tribal Gaming Authority,                 
Gtd. Notes    6.38    7/15/09    2,048,000    2,037,760 
Pokagon Gaming Authority,                 
Sr. Notes    10.38    6/15/14    2,825,000 a    3,128,687 
Scientific Games,                 
Gtd. Notes    6.25    12/15/12    1,940,000    1,874,525 
Seneca Gaming,                 
Sr. Unscd. Notes, Ser. B    7.25    5/1/12    1,200,000    1,222,500 
Speedway Motorsports,                 
Sr. Sub. Notes    6.75    6/1/13    1,875,000    1,837,500 
Station Casinos,                 
Sr. Sub. Notes    6.50    2/1/14    500,000 b    445,000 
Vail Resorts,                 
Gtd. Notes    6.75    2/15/14    1,500,000    1,468,125 
Wimar OpCo,                 
Sr. Sub. Notes    9.63    12/15/14    3,800,000 a,b    3,676,500 
                31,143,011 
Machinery—2.4%                 
Case,                 
Notes    7.25    1/15/16    2,500,000    2,550,000 
Columbus McKinnon,                 
Sr. Sub. Notes    8.88    11/1/13    605,000    642,813 

14

    Coupon    Maturity    Principal     
Bonds and Notes (continued)    Rate (%)    Date    Amount ($)    Value ($) 
Machinery (continued)                 
Douglas Dynamics,                 
Gtd. Notes    7.75    1/15/12    1,980,000 a    1,890,900 
Terex,                 
Gtd. Notes    7.38    1/15/14    2,725,000    2,738,625 
                7,822,338 
Manufacturing—2.3%                 
Bombardier,                 
Notes    6.30    5/1/14    1,500,000 a    1,432,500 
Bombardier,                 
Sr. Uscd. Notes    8.00    11/15/14    500,000 a    520,000 
J.B. Poindexter & Co.,                 
Gtd. Notes    8.75    3/15/14    1,500,000 b    1,395,000 
Mueller Water Products,                 
Sr. Sub. Notes    7.38    6/1/17    385,000 a    383,695 
Polypore International,                 
Sr. Discount Notes    10.50    10/1/12    2,435,000 f    2,361,950 
Polypore,                 
Gtd. Notes    8.75    5/15/12    550,000    562,375 
RBS Global & Rexnord,                 
Gtd. Notes    9.50    8/1/14    275,000    283,250 
RBS Global & Rexnord,                 
Gtd. Notes    11.75    8/1/16    525,000 b    567,000 
                7,505,770 
Media—3.8%                 
CSC Holdings,                 
Sr. Notes, Ser. B    7.63    4/1/11    2,000,000    1,995,000 
CSC Holdings,                 
Sr. Notes, Ser. B    8.13    7/15/09    750,000    766,875 
Dex Media East/Finance,                 
Gtd. Notes    12.13    11/15/12    2,323,000 b    2,505,936 
Dex Media West/Finance,                 
Gtd. Notes, Ser. B    9.88    8/15/13    2,879,000    3,094,925 
Kabel Deutschland,                 
Gtd. Notes    10.63    7/1/14    1,570,000    1,727,000 
Nexstar Finance Holdings,                 
Sr. Discount Notes    11.38    4/1/13    956,000 f    944,050 

The Fund 15

STATEMENT OF INVESTMENTS (Unaudited) (continued)

    Coupon    Maturity    Principal     
Bonds and Notes (continued)    Rate (%)    Date    Amount ($)    Value ($) 
Media (continued)                 
Nexstar Finance,                 
Gtd. Notes    7.00    1/15/14    915,000    910,425 
Radio One,                 
Gtd. Notes, Ser. B    8.88    7/1/11    250,000    257,188 
                12,201,399 
Oil & Gas—5.2%                 
Chesapeake Energy,                 
Gtd. Notes    7.00    8/15/14    1,240,000    1,236,900 
Chesapeake Energy,                 
Gtd. Notes    7.50    6/15/14    775,000    788,563 
Chesapeake Energy,                 
Gtd. Notes    7.63    7/15/13    325,000 b    334,750 
Cimarex Energy                 
Gtd. Notes    7.13    5/1/17    1,610,000    1,577,800 
Colorado Interstate Gas,                 
Sr. Unscd. Notes    5.95    3/15/15    540,000    528,533 
Dynegy Holdings,                 
Sr. Unscd. Notes    8.38    5/1/16    2,435,000    2,392,387 
Hanover Equipment Trust,                 
Gtd. Notes, Ser. A    8.50    9/1/08    2,745,000 b,c    2,745,000 
Hanover Equipment Trust,                 
Scd. Notes, Ser. B    8.75    9/1/11    15,000 c    15,488 
Whiting Petroleum,                 
Gtd. Notes    7.25    5/1/13    2,000,000 b    1,910,000 
Williams Cos.,                 
Sr. Unscd. Notes    7.13    9/1/11    250,000    257,500 
Williams Cos.,                 
Notes    7.35    10/1/10    2,375,000 a,b,c    2,464,063 
Williams Cos.,                 
Sr. Notes    7.63    7/15/19    975,000    1,033,500 
Williams Cos.,                 
Sr. Unscd. Notes    7.88    9/1/21    1,170,000    1,263,600 
                16,548,084 
Packaging & Containers—5.7%                 
BPC Holding,                 
Scd. Notes    8.88    9/15/14    1,345,000 b    1,368,538 
BPC Holding,                 
Scd. Notes    9.24    9/15/14    180,000 b,c    182,700 

16

    Coupon    Maturity    Principal     
Bonds and Notes (continued)    Rate (%)    Date    Amount ($)    Value ($) 
Packaging & Containers (continued)             
Crown Americas/Capital,                 
Gtd. Notes    7.63    11/15/13    3,715,000    3,770,725 
Crown Americas/Capital,                 
Gtd. Notes    7.75    11/15/15    3,835,000    3,873,350 
Norampac,                 
Gtd. Notes    6.75    6/1/13    2,380,000 b    2,281,825 
Owens Brockway Glass Container,                 
Gtd. Notes    6.75    12/1/14    519,000    508,620 
Owens Brockway Glass Container,                 
Gtd. Notes    7.75    5/15/11    1,025,000 b    1,057,031 
Owens Brockway Glass Container,                 
Gtd. Notes    8.25    5/15/13    515,000    535,600 
Owens Brockway Glass Container,                 
Gtd. Notes    8.75    11/15/12    1,156,000    1,210,910 
Owens Brockway Glass Container,                 
Gtd. Notes    8.88    2/15/09    822,000    840,495 
Owens-Illinois,                 
Debs.    7.80    5/15/18    300,000    304,500 
Plastipak Holdings,                 
Sr. Notes    8.50    12/15/15    2,200,000 a,b    2,288,000 
                18,222,294 
Paper & Forest Products—1.3%                 
Georgia-Pacific,                 
Gtd. Notes    7.00    1/15/15    3,410,000 a    3,299,175 
Georgia-Pacific,                 
Sr. Uscd. Notes    8.00    1/15/24    725,000    706,875 
                4,006,050 
Pipelines—.1%                 
Dynegy Holdings,                 
Sr. Notes    8.75    2/15/12    270,000    279,450 
Property & Casualty                 
Insurance—1.2%                 
Allmerica Financial,                 
Debs.    7.63    10/15/25    1,500,000    1,566,358 
Leucadia National,                 
Sr. Notes    7.13    3/15/17    2,315,000 a    2,257,125 
                3,823,483 

The Fund 17

    Coupon    Maturity    Principal     
Bonds and Notes (continued)    Rate (%)    Date    Amount ($)    Value ($) 
Real Estate Investment Trusts—1.3%             
B.F. Saul REIT,                 
Scd. Notes    7.50    3/1/14    1,525,000    1,538,344 
Host Marriott,                 
Gtd. Notes, Ser. M    7.00    8/15/12    2,500,000    2,515,625 
                4,053,969 
Residential Mortgage                 
Pass-Through Ctfs.—.0%                 
Countrywide Asset-Backed                 
Certificates, Ser. 2007-4, Cl. M8    7.20    9/25/37    90,000    72,351 
Retail—1.4%                 
Amerigas Partners,                 
Sr. Unscd. Notes    7.25    5/20/15    1,245,000    1,238,775 
Central European Distribution,                 
Scd. Bonds EUR    8.00    7/25/12    500,000 a,d    729,198 
Neiman-Marcus Group,                 
Gtd. Notes    9.00    10/15/15    665,000    714,875 
Rite Aid,                 
Gtd. Notes    9.38    12/15/15    1,995,000 a,b    1,925,175 
                4,608,023 
State/Territory Gen Oblg.—1.3%                 
Erie Tobacco Asset                 
Securitization/NY, Tobacco                 
Settlement Asset-Backed Bonds    6.00    6/1/28    595,000    573,033 
Michigan Tobacco Settlement                 
Finance Authority, Tobacco                 
Settlement Asset-Backed Bonds    7.31    6/1/34    1,475,000    1,505,651 
Tobacco Settlement Authority of                 
Iowa, Tobacco Settlement                 
Asset-Backed Bonds    6.50    6/1/23    1,965,000    1,940,339 
                4,019,023 
Technology—1.9%                 
Freescale Semiconductor,                 
Sr. Notes    8.88    12/15/14    2,785,000 a    2,673,600 
Freescale Semiconductor,                 
Sr. Sub. Notes    10.13    12/15/16    805,000 a,b    760,725 

  18

STATEMENT OF INVESTMENTS (Unaudited) (continued)

        Coupon    Maturity    Principal     
Bonds and Notes (continued)    Rate (%)    Date    Amount ($)    Value ($) 
Technology (continued)                     
NXP/Funding,                     
Scd. Notes        7.88    10/15/14    1,320,000 b    1,306,800 
NXP/Funding,                     
Scd. Notes        8.11    10/15/13    325,000 a,c    327,031 
Sensata Technologies,                     
Gtd. Notes    EUR    9.00    5/1/16    475,000 d    657,378 
Sungard Data Systems,                     
Gtd. Notes        10.25    8/15/15    350,000 b    371,875 
                    6,097,409 
Telecommunications—7.7%                 
Arch Western Finance,                     
Gtd. Notes        6.75    7/1/13    750,000 c    723,750 
Cricket Communications I,                     
Gtd. Notes        9.38    11/1/14    960,000    996,000 
Digicel Group,                     
Sr. Notes        9.13    1/15/15    1,650,000 a    1,631,438 
Intelsat Bermuda,                     
Sr. Unscd. Notes        11.25    6/15/16    2,200,000    2,475,000 
Intelsat Subsidiary Holding,                 
Sr. Notes        8.25    1/15/13    1,610,000 c    1,642,200 
Intelsat Subsidiary Holding,                 
Gtd. Notes        8.63    1/15/15    275,000 c    283,250 
Level 3 Financing,                     
Sr. Notes        9.15    2/15/15    1,150,000 a,b,c    1,155,750 
Level 3 Financing,                     
Sr. Notes        9.25    11/1/14    400,000    406,000 
MetroPCS Wireless,                     
Sr. Notes        9.25    11/1/14    145,000 a    150,438 
Metropcs Wireless,                     
Sr. Notes        9.25    11/1/14    870,000 a    902,625 
Nordic Telephone Holdings,                 
Scd. Notes    EUR    8.25    5/1/16    1,175,000 a,d    1,709,640 
Nordic Telephone Holdings,                 
Scd. Bonds        8.88    5/1/16    300,000 a    319,500 

The Fund 19

STATEMENT OF INVESTMENTS (Unaudited) (continued)

    Coupon    Maturity    Principal     
Bonds and Notes (continued)    Rate (%)    Date    Amount ($)    Value ($) 
Telecommunications (continued)                 
Qwest,                 
Bank Note, Ser. B    6.95    6/30/10    375,000 c    380,625 
Qwest,                 
Bank Note, Ser. B    6.95    6/30/10    477,000 c    484,155 
Qwest,                 
Sr. Notes    7.88    9/1/11    440,000    460,900 
Qwest,                 
Sr. Notes    8.61    6/15/13    710,000 c    773,900 
US Unwired,                 
Gtd. Notes, Ser. B    10.00    6/15/12    2,149,000 b    2,327,586 
Wind Acquisition Finance,                 
Scd. Bonds    10.75    12/1/15    500,000 a    576,250 
Windstream,                 
Gtd. Notes    8.13    8/1/13    5,425,000    5,696,250 
Windstream,                 
Gtd. Notes    8.63    8/1/16    1,660,000    1,763,750 
                24,859,007 
Textiles & Apparel—1.4%                 
Invista,                 
Notes    9.25    5/1/12    3,710,000 a    3,941,875 
Levi Strauss & Co.,                 
Sr. Notes    12.25    12/15/12    353,000    383,888 
                4,325,763 
Transportation—.3%                 
Kansas City Southern of Mexico,                 
Sr. Notes    7.63    12/1/13    825,000 a    825,000 
Wire & Cable Products—.2%                 
Belden CDT,                 
Sr. Sub. Notes    7.00    3/15/17    500,000 a    495,000 
Total Bonds and Notes                 
(cost $304,398,634)                307,442,308 
 
Preferred Stocks—1.6%            Shares    Value ($) 
Banks—1.1%                 
Sovereign Capital Trust IV,                 
Conv., Cum. $2.1875            71,900    3,379,300 

  20
Preferred Stocks (continued)    Shares        Value ($) 
Media—.5%             
ION Media Networks,             
Conv    8 a        46,114 
Spanish Broadcasting System,             
Ser. B, Cum. $107.50    1,482        1,611,691 
            1,657,805 
Total Preferred Stocks             
(cost $5,194,446)            5,037,105 
 
Common Stocks—1.1%             
Aerospace & Defense—.1%             
GenCorp    23,000g        300,610 
Cable & Media—.1%             
Time Warner Cable, Cl. A    12,220g         478,657 
Computers—.1%             
Sinclair Broadcast Group, Cl. A    22,550g        320,661 
Energy—.2%             
Newfield Exploration    12,477g        568,327 
Health Care—.1%             
Psychiatric Solutions    13,225g        479,538 
Hotels, Restaurants & Leisure—.2%         
FelCor Lodging Trust    19,610g        510,448 
Insurance-Multiline—.1%             
Hanover Insurance Group    7,500g        365,925 
Oil & Gas—.2%             
Williams Cos.    17,307g        547,247 
Total Common Stocks             
(cost $3,406,054)            3,571,413 
 
Other Investment—.7%             
Registered Investment Company;             
Dreyfus Institutional Preferred             
Plus Money Market Fund             
(cost $2,157,000)    2,157,000h        2,157,000 

The Fund 21

STATEMENT OF INVESTMENTS (Unaudited) (continued)

Investment of Cash Collateral         
for Securities Loaned—16.2%    Shares    Value ($) 
Registered Investment Company;         
Dreyfus Institutional Cash         
Advantage Fund         
(cost $51,915,918)    51,915,918 h    51,915,918 
Total Investments (cost $367,072,052)    115.6%    370,123,744 
Liabilities, Less Cash and Receivables    (15.6%)    (49,927,030) 
Net Assets    100.0%    320,196,714 

a Securities exempt from registration under Rule 144A of the Securities Act of 1933.These securities may be resold in 
transactions exempt from registration, normally to qualified institutional buyers. At June 30, 2007, these securities 
amounted to $67,875,836 or 21.2% of net assets. 
b All or a portion of these securities are on loan. At June 30, 2007, the total market value of the fund’s securities on 
loan is $51,577,768 and the total market value of the collateral held by the fund is $55,116,218, consisting of 
cash collateral of $51,915,918 and U.S. Government and agency securities valued at $3,200,300. 
c Variable rate security—interest rate subject to periodic change. 
d Principal amount stated in U.S. Dollars unless otherwise noted. 
BRL—Brazilian Real 
EUR—Euro 
e Purchased on a delayed delivery basis. 
f Zero coupon until a specified date at which time the stated coupon rate becomes effective until maturity. 
g Non-income producing security. 
h Investment in affiliated money market mutual fund. 

Portfolio Summary (Unaudited) †         
 
Value (%)        Value (%) 
Corporate Bonds    92.9    Common Stocks    1.1 
Money Market Investments    16.9    Foreign/Governmental    1.0 
Preferred Stocks    1.6    Asset/Mortgage-Backed    .8 
State/Government General Obligations    1.3        115.6 
 
† Based on net assets.             
See notes to financial statements.             

22

STATEMENT OF ASSETS AND LIABILITIES

June 30, 2007 (Unaudited)

            Cost    Value 
Assets ($):                 
Investment in securities—See Statement of Investments (including     
securities on loan, valued at $51,577,768)—Note 1(c):         
Unaffiliated issuers            312,999,134    316,050,826 
Affiliated issuers            54,072,918    54,072,918 
Cash denominated in foreign currencies        710,544    722,044 
Interest and dividends receivable                5,918,296 
Unrealized appreciation on swap contracts—Note 4        2,234,039 
Swaps premium paid                1,707,691 
Receivable for investment securities sold            817,647 
Receivable for shares of Beneficial Interest subscribed        336,839 
Receivable from broker for swap transactions—Note 4        2,551 
                381,862,851 
Liabilities ($):                 
Due to The Dreyfus Corporation and affiliates—Note 3(b)        311,121 
Cash overdraft due to Custodian                364,867 
Liability for Securities on Loan—Note 1(c)            51,915,918 
Payable for investment securities purchased            5,549,529 
Unrealized depreciation on swap contracts—Note 4        2,711,070 
Payable for shares of Beneficial Interest redeemed        643,304 
Unrealized depreciation on forward currency             
exchange contracts—Note 4                169,887 
Interest payable—Note 2                441 
                61,666,137 
Net Assets ($)                320,196,714 
Composition of Net Assets ($):             
Paid-in capital                799,900,022 
Accumulated distributions in excess of investment income—net        (1,190,490) 
Accumulated net realized gain (loss) on investments         
and foreign currency transactions            (480,939,738) 
Accumulated net unrealized appreciation (depreciation) on investments,     
swap transactions and foreign currency transactions        2,426,920 
Net Assets ($)                320,196,714 
 
 
 
Net Asset Value Per Share             
    Class A    Class B    Class C    Class I 
Net Assets ($)    190,328,653    51,896,381    62,088,594    15,883,086 
Shares Outstanding    26,328,442    7,172,229    8,578,578    2,196,114 
Net Asset Value Per Share ($)    7.23    7.24    7.24    7.23 

See notes to financial statements.

The Fund 23

STATEMENT OF OPERATIONS

Six Months Ended June 30, 2007 (Unaudited)

Investment Income ($):     
Income:     
Interest    12,424,646 
Dividends:     
Unaffiliated issuers    172,288 
Affiliated issuers    142,139 
Income from securities lending    57,110 
Total Income    12,796,183 
Expenses:     
Management fee—Note 3(a)    1,191,655 
Distribution and service fees—Note 3(b)    791,063 
Interest expense—Note 2    2,182 
Total Expenses    1,984,900 
Investment Income—Net    10,811,283 
Realized and Unrealized Gain (Loss) on Investments—Note 4 ($): 
Net realized gain (loss) on investments and foreign currency transactions    (601,989) 
Net realized gain (loss) on swap transactions    (123,522) 
Net realized gain (loss) on forward currency exchange contracts    (85,793) 
Net realized gain (loss)    (811,304) 
Net unrealized appreciation (depreciation) on investments,     
swaps transactions and foreign currency transactions    (2,651,589) 
Net Realized and Unrealized Gain (Loss) on Investments    (3,462,893) 
Net Increase in Net Assets Resulting from Operations    7,348,390 

See notes to financial statements.

24

STATEMENT OF CHANGES IN NET ASSETS

    Six Months Ended     
    June 30, 2007    Year Ended 
    (Unaudited) a    December 31, 2006 
Operations ($):         
Investment income—net    10,811,283    25,032,256 
Net realized gain (loss) on investments    (811,304)    5,023,959 
Net unrealized appreciation         
(depreciation) on investments    (2,651,589)    2,272,264 
Net Increase (Decrease) in Net Assets         
Resulting from Operations    7,348,390    32,328,479 
Dividends to Shareholders from ($):         
Investment income—net:         
Class A shares    (7,031,664)    (16,213,908) 
Class B shares    (1,968,328)    (5,618,531) 
Class C shares    (2,045,184)    (4,708,337) 
Class I shares    (707,519)    (1,384,831) 
Total Dividends    (11,752,695)    (27,925,607) 
Beneficial Interest Transactions ($):         
Net proceeds from shares sold:         
Class A shares    12,385,561    24,562,106 
Class B shares    371,923    2,985,895 
Class C shares    2,653,116    7,985,544 
Class I shares    2,672,456    3,347,791 
Dividends reinvested:         
Class A shares    3,634,908    8,054,669 
Class B shares    989,025    2,649,119 
Class C shares    800,083    1,924,723 
Class I shares    680,923    1,363,284 
Cost of shares redeemed:         
Class A shares    (25,174,455)    (69,472,740) 
Class B shares    (16,651,780)    (34,967,375) 
Class C shares    (6,237,253)    (19,803,807) 
Class I shares    (5,242,312)    (5,433,618) 
Increase (Decrease) in Net Assets         
from Beneficial Interest Transactions    (29,117,805)    (76,804,409) 
Total Increase (Decrease) in Net Assets    (33,522,110)    (72,401,537) 
Net Assets ($):         
Beginning of Period    353,718,824    426,120,361 
End of Period    320,196,714    353,718,824 
Distributions in excess of investment income—net    (1,190,490)    (249,078) 

The Fund 25

STATEMENT OF CHANGES IN NET ASSETS (continued)

    Six Months Ended     
    June 30, 2007    Year Ended 
    (Unaudited) a    December 31, 2006 
Capital Share Transactions:         
Class A b         
Shares sold    1,681,863    3,402,897 
Shares issued for dividends reinvested    494,189    1,115,544 
Shares redeemed    (3,417,632)    (9,623,951) 
Net Increase (Decrease) in Shares Outstanding    (1,241,580)    (5,105,510) 
Class B b         
Shares sold    50,626    412,273 
Shares issued for dividends reinvested    134,273    366,732 
Shares redeemed    (2,257,964)    (4,834,773) 
Net Increase (Decrease) in Shares Outstanding    (2,073,065)    (4,055,768) 
Class C         
Shares sold    359,739    1,104,471 
Shares issued for dividends reinvested    108,614    266,305 
Shares redeemed    (845,540)    (2,736,302) 
Net Increase (Decrease) in Shares Outstanding    (377,187)    (1,365,526) 
Class I         
Shares sold    362,716    461,934 
Shares issued for dividends reinvested    92,512    188,704 
Shares redeemed    (722,005)    (756,747) 
Net Increase (Decrease) in Shares Outstanding    (266,777)    (106,109) 

a    Effective June 1, 2007, the fund redesignated Class R shares to Class I shares. 
b    During the period ended June 30, 2007, 735,652 Class B shares representing $5,425,088, were automatically 
    converted to 736,363 Class A shares and during the period ended December 31, 2006, 1,462,933 Class B shares 
    representing $10,587,498 were automatically converted to 1,464,542 Class A shares. 
See notes to financial statements. 

26

FINANCIAL HIGHLIGHTS

The following tables describe the performance for each share class for the fiscal periods indicated. All information (except portfolio turnover rate) reflects financial results for a single fund share.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 derived from the fund’s financial statements.

   
Six Months Ended  		      Year Ended December 31,             
June 30, 2007 
Class A Shares    (Unaudited)    2006    2005    2004 a    2003    2002 
Per Share Data ($):                         
Net asset value,                         
beginning of period    7.33    7.24    7.65    7.43    6.28    7.94 
Investment Operations:                         
Investment income—net b    .24    .49    .51    .52    .63    .68 
Net realized and unrealized                         
gain (loss) on investments    (.08)    .14    (.36)    .23    1.17    (1.62) 
Total from Investment Operations    .16    .63    .15    .75    1.80    (.94) 
Distributions:                         
Dividends from investment                         
income—net    (.26)    (.54)    (.56)    (.53)    (.65)    (.72) 
Net asset value, end of period    7.23    7.33    7.24    7.65    7.43    6.28 
Total Return (%) c    2.59d    8.66    2.22    10.44    29.87    (12.19) 
Ratios/Supplemental Data (%):                     
Ratio of total expenses                         
to average net assets    .95e    .95    .95    .95    .97    .96 
Ratio of net investment income                         
to average net assets    6.57e    6.76    6.93    7.00    8.87    10.05 
Portfolio Turnover Rate    32.53d    29.98    40.57    129.27    235.42    340.47 
Net Assets, end of period                         
($ x 1,000)    190,329    202,098    236,421    286,342    191,270    121,775 

a    As of January 1, 2004, the fund has adopted the method of accounting for interim payments on swap contracts in 
    accordance with Financial Accounting Standards Board Statement No. 133.These interim payments are reflected 
    within net realized and unrealized gain (loss) on swap contracts, however, prior to January 1, 2004, these interim 
    payments were reflected within interest income/expense in the Statement of Operations.The effect of this change for 
    the fiscal year ended December 31, 2004, was to increase net investment income per share by less than $.01, decrease 
    net realized and unrealized gain (loss) on investments per share by less than $.01 and had no effect on the ratio of 
    net investment income to average net assets. 
b    Based on average shares outstanding at each month end. 
c    Exclusive of sales charge. 
d    Not annualized. 
e    Annualized. 
See notes to financial statements. 

The Fund 27

FINANCIAL HIGHLIGHTS (continued)

   
Six Months Ended  		      Year Ended December 31,             
June 30, 2007 
Class B Shares    (Unaudited)    2006    2005    2004 a    2003    2002 
Per Share Data ($):                         
Net asset value,                         
beginning of period    7.34    7.24    7.65    7.43    6.28    7.94 
Investment Operations:                         
Investment income—net b    .22    .45    .46    .47    .59    .66 
Net realized and unrealized                         
gain (loss) on investments    (.08)    .16    (.35)    .25    1.18    (1.64) 
Total from Investment Operations    .14    .61    .11    .72    1.77    (.98) 
Distributions:                         
Dividends from investment                         
income—net    (.24)    (.51)    (.52)    (.50)    (.62)    (.68) 
Net asset value, end of period    7.24    7.34    7.24    7.65    7.43    6.28 
Total Return (%) c    2.34d    8.12    1.73    10.06    29.25    (12.64) 
Ratios/Supplemental Data (%):                     
Ratio of total expenses                         
to average net assets    1.45e    1.45    1.45    1.45    1.47    1.46 
Ratio of net investment income                         
to average net assets    6.05e    6.25    6.36    6.50    8.46    9.41 
Portfolio Turnover Rate    32.53d    29.98    40.57    129.27    235.42    340.47 
Net Assets, end of period                         
($ x 1,000)    51,896    67,834    96,334    167,756    239,015    230,011 

a    As of January 1, 2004, the fund has adopted the method of accounting for interim payments on swap contracts in 
    accordance with Financial Accounting Standards Board Statement No. 133.These interim payments are reflected 
    within net realized and unrealized gain (loss) on swap contracts, however, prior to January 1, 2004, these interim 
    payments were reflected within interest income/expense in the Statement of Operations.The effect of this change for 
    the fiscal year ended December 31, 2004, was to increase net investment income per share by less than $.01, decrease 
    net realized and unrealized gain (loss) on investments per share by less than $.01 and had no effect on the ratio of 
    net investment income to average net assets. 
b    Based on average shares outstanding at each month end. 
c    Exclusive of sales charge. 
d    Not annualized. 
e    Annualized. 
See notes to financial statements. 

28

   
Six Months Ended  		      Year Ended December 31,             
June 30, 2007 
Class C Shares    (Unaudited)    2006    2005    2004 a    2003    2002 
Per Share Data ($):                         
Net asset value,                         
beginning of period    7.34    7.24    7.65    7.43    6.28    7.95 
Investment Operations:                         
Investment income—net b    .21    .43    .45    .46    .57    .64 
Net realized and unrealized                         
gain (loss) on investments    (.08)    .16    (.36)    .24    1.18    (1.65) 
Total from Investment Operations    .13    .59    .09    .70    1.75    (1.01) 
Distributions:                         
Dividends from investment                         
income—net    (.23)    (.49)    (.50)    (.48)    (.60)    (.66) 
Net asset value, end of period    7.24    7.34    7.24    7.65    7.43    6.28 
Total Return (%) c    2.21d    7.85    1.48    9.63    29.10    (12.97) 
Ratios/Supplemental Data (%):                     
Ratio of total expenses                         
to average net assets    1.70e    1.70    1.70    1.70    1.72    1.71 
Ratio of net investment income                         
to average net assets    5.82e    6.01    6.14    6.26    8.15    9.17 
Portfolio Turnover Rate    32.53d    29.98    40.57    129.27    235.42    340.47 
Net Assets, end of period                         
($ x 1,000)    62,089    65,728    74,770    115,309    86,479    62,036 

a    As of January 1, 2004, the fund has adopted the method of accounting for interim payments on swap contracts in 
    accordance with Financial Accounting Standards Board Statement No. 133.These interim payments are reflected 
    within net realized and unrealized gain (loss) on swap contracts, however, prior to January 1, 2004, these interim 
    payments were reflected within interest income/expense in the Statement of Operations.The effect of this change for 
    the fiscal year ended December 31, 2004, was to increase net investment income per share by less than $.01, decrease 
    net realized and unrealized gain (loss) on investments per share by less than $.01 and had no effect on the ratio of 
    net investment income to average net assets. 
b    Based on average shares outstanding at each month end. 
c    Exclusive of sales charge. 
d    Not annualized. 
e    Annualized. 
See notes to financial statements. 

The Fund 29

FINANCIAL HIGHLIGHTS (continued)

   
Six Months Ended  		      Year Ended December 31,             
June 30, 2007 
Class I Shares    (Unaudited)a    2006    2005    2004 b    2003    2002 
Per Share Data ($):                         
Net asset value,                         
beginning of period    7.33    7.24    7.65    7.43    6.27    7.94 
Investment Operations:                         
Investment income—net c    .26    .51    .53    .52    .67    .70 
Net realized and unrealized                         
gain (loss) on investments    (.09)    .14    (.36)    .25    1.16    (1.64) 
Total from Investment Operations    .17    .65    .17    .77    1.83    (.94) 
Distributions:                         
Dividends from investment                         
income—net    (.27)    (.56)    (.58)    (.55)    (.67)    (.73) 
Net asset value, end of period    7.23    7.33    7.24    7.65    7.43    6.27 
Total Return (%)    2.72d    8.92    2.34    10.87    30.15    (11.99) 
Ratios/Supplemental Data (%):                     
Ratio of total expenses                         
to average net assets    .70e    .70    .70    .70    .72    .70 
Ratio of net investment income                         
to average net assets    6.81e    7.01    7.18    7.31    9.26    10.08 
Portfolio Turnover Rate    32.53d    29.98    40.57    129.27    235.42    340.47 
Net Assets, end of period                         
($ x 1,000)    15,883    18,059    18,595    21,714    1,283    114 

a    Effective June 1, 2007, the fund redesignated Class R shares to Class I. 
b    As of January 1, 2004, the fund has adopted the method of accounting for interim payments on swap contracts in 
    accordance with Financial Accounting Standards Board Statement No. 133.These interim payments are reflected 
    within net realized and unrealized gain (loss) on swap contracts, however, prior to January 1, 2004, these interim 
    payments were reflected within interest income/expense in the Statement of Operations.The effect of this change for 
    the fiscal year ended December 31, 2004, was to increase net investment income per share by less than $.01, decrease 
    net realized and unrealized gain (loss) on investments per share by less than $.01 and had no effect on the ratio of 
    net investment income to average net assets. 
c    Based on average shares outstanding at each month end. 
d    Not annualized. 
e    Annualized. 
See notes to financial statements. 

30

NOTES TO FINANCIAL STATEMENTS (Unaudited)

NOTE 1—Significant Accounting Policies:

Dreyfus Premier Limited Term High Yield Fund (the “fund”) is a separate diversified series of The Dreyfus/Laurel Funds Trust (the “Trust”) which is registered under the Investment Company Act of 1940, as amended (the “Act”), as an open-end management investment company and operates as a series company currently offering six series, including the fund.The fund’s investment objective is to seek to maximize total return, consisting of capital appreciation and current income.The Dreyfus Corporation (the “Manager” or “Dreyfus”) serves as the fund’s investment manager. During the reporting period, the Manager was a wholly-owned subsidiary of Mellon Financial Corporation (“Mellon Financial”).

On July 1, 2007, the Mellon Financial and The Bank of New York Company, Inc. merged, forming The Bank of New York Mellon Corporation. As part of this transaction, Dreyfus became a wholly-owned subsidiary of The Bank of New York Mellon Corporation.

The fund’s Board of Directors approved the redesignation of the fund’s Class R shares as Class I shares, effective June 1, 2007.The description of the eligibility requirements for Class I shares remains the same as it was for Class R shares.

During the reporting period, Dreyfus Service Corporation (the “Distributor”), a wholly-owned subsidiary of the Manager, served as the distributor of the fund’s shares. Effective, June 30, 2007, the Distributor became known as MBSC Securities Corporation. The fund is authorized to issue an unlimited number of shares of Beneficial Interest in each of the following classes of shares: Class A, Class B, Class C and Class I. Class A, Class B and Class C shares are sold primarily to retail investors through financial intermediaries and bear a distribution fee and/or service fee. Class A shares are sold with a front-end sales charge, while Class B and Class C shares are subject to a contingent deferred sales charge (“CDSC”). Class B shares automatically convert to Class A shares after six years. The fund no longer offers Class B shares, except in connection with dividend reinvestment and permit-

The Fund 31

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

ted exchanges of Class B shares. Class I shares are sold primarily to bank trust departments and other financial service providers (including Mellon Financial and its affiliates) acting on behalf of customers having a qualified trust or investment account or relationship at such institution, and bear no distribution or service fees. Class I shares are offered without a front-end sales charge or CDSC. Each class of shares has identical rights and privileges, except with respect to distribution and service fees and voting rights on matters affecting a single class. Income, expenses (other than expenses attributable to a specific class), and realized and unrealized gains or losses on investments are allocated to each class of shares based on its relative net assets.

The fund’s financial statements are prepared in accordance with U.S. generally accepted accounting principles, which may require the use of management estimates and assumptions. Actual results could differ from those estimates.

(a) Portfolio valuation: Investments in securities (excluding short-term investments (other than U.S. Treasury Bills), financial futures, options, swaps and forward currency exchange contracts) are valued each business day by an independent pricing service (the “Service”) approved by the Board of Trustees. Investments for which quoted bid prices are readily available and are representative of the bid side of the market in the judgment of the Service are valued at the mean between the quoted bid prices (as obtained by the Service from dealers in such securities) and asked prices (as calculated by the Service based upon its evaluation of the market for such securities). Other investments (which constitute a majority of the portfolio securities) are valued as determined by the Service, based on methods which include consideration of: yields or prices of securities of comparable quality, coupon, maturity and type; indications as to values from dealers; and general market conditions. Securities for which there are no such valuations are valued at fair value as determined in good faith under the direction of the Board of Trustees. Restricted securities, as well as securities or other assets for which recent market quotations are not readily available and are not valued by a pricing service approved by the Board of Trustees, or are determined by the

32

fund not to reflect accurately fair value (such as when an event occurs after the close of the exchange on which the security is principally traded and that is determined by the fund to have changed the value of the security), are valued at fair value as determined in good faith under the direction of the Board of Trustees.The factors that may be considered when fair valuing a security include fundamental analytical data,the nature and duration of restrictions on disposition, an evaluation of the forces that influence the market in which the securities are purchased and sold and public trading in similar securities of the issuer or comparable issuers. Short-term investments, excluding U.S.Treasury Bills, are carried at amortized cost, which approximates fair value. Registered open-end investment companies that are not traded on an exchange are valued at their net asset value. Financial futures and options, which are traded on an exchange, are valued at the last sales price on the securities exchange on which such securities are primarily traded or at the last sales price on the national securities market on each business day. Options traded over-the-counter are priced at the mean between the bid and asked prices. Investments denominated in foreign currencies are translated to U.S. dollars at the prevailing rates of exchange. Investments in swap transactions are valued each business day by an independent pricing service approved by the Board of Trustees. Swaps are valued by the service by using a swap pricing model which incorporates among other factors, default probabilities, recovery rates, credit curves of the underlying issuer and swap spreads on interest rates.

The Financial Accounting Standards Board (FASB) released Statement of Financial Accounting Standards No. 157 “Fair Value Measurements” (“FAS 157”). FAS 157 establishes an authoritative definition of fair value, sets out a framework for measuring fair value, and requires additional disclosures about fair-value measurements. The application of FAS 157 is required for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. Management does not believe that the application of this standard will have a material impact on the financial statements of the fund.

The Fund 33

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

(b) Foreign currency transactions: The fund does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in the market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss on investments.

Net realized foreign exchange gains or losses arise from sales and maturities of short-term securities, sales of foreign currencies, currency gains or losses realized on securities transactions and the difference between the amount of dividends, interest and foreign withholding taxes recorded on the fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the value of assets and liabilities other than investments in securities, resulting from changes in exchange rates. Such gains and losses are included with net realized and unrealized gain or loss on investments.

(c) Securities transactions and investment income: Securities transactions are recorded on a trade date basis. Realized gain and loss from securities transactions are recorded on the identified cost basis. Dividend income is recognized on the ex-dividend date and interest income, including, where applicable, accretion of discount and amortization of premium on investments, is recognized on the accrual basis.

Pursuant to a securities lending agreement with Mellon Bank, N.A., an affiliate of the Manager, the fund may lend securities to qualified institutions. It is the fund’s policy, that at origination, all loans are secured by collateral of at least 102% of the value of U.S. securities loaned and 105% of the value of foreign securities loaned. Collateral equivalent to at least 100% of the market value of securities on loan is maintained at all times. Cash collateral is invested in certain money market mutual funds managed by the Manager.The fund is entitled to receive all income on securities loaned, in addition to income earned as a result of the lending transaction.Although each security loaned is fully collateralized, the fund bears the risk of delay in recovery of, or loss of rights in, the securities loaned should a borrower fail to return the securities in a timely manner.

34

(d) Affiliated issuers: Investments in other investment companies advised by the Manager are defined as “affiliated” in the Act.

(e) Concentration of Risk: The fund invests primarily in debt securities. Failure of an issuer of the debt securities to make timely interest or principal payments, or a decline or the perception of a decline in the credit quality of a debt security, can cause the debt security’s price to fall, potentially lowering the fund’s share price. High yield (“junk”) bonds involve greater credit risk, including the risk of default, than investment grade bonds, and are considered predominantly speculative with respect to the issuer’s continuing ability to make principal and interest payments. In addition, the value of debt securities may decline due to general market conditions that are not specifically related to a particular company, such as real or perceived adverse economic conditions, changes in outlook for corporate earnings, changes in interest or currency rates or adverse investor sentiment. They may also decline because of factors that affect a particular industry.

(f) Dividends to shareholders: It is the policy of the fund to declare dividends daily from investment income-net. Such dividends are paid monthly. Dividends from net realized capital gain, if any, are normally declared and paid annually, but the fund may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code of 1986, as amended (the “Code”).To the extent that net realized capital gain can be offset by capital loss carryovers, it is the policy of the fund not to distribute such gain. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from U.S. generally accepted accounting principles.

(g) Federal income taxes: It is the policy of the fund to continue to qualify as a regulated investment company, if such qualification is in the best interests of its shareholders, by complying with the applicable provisions of the Code, and to make distributions of taxable income sufficient to relieve it from substantially all federal income and excise taxes.

The Fund 35

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

The FASB released FASB Interpretation No. 48 “Accounting for Uncertainty in Income Taxes” (FIN 48). FIN 48 provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. FIN 48 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the fund’s tax returns to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax benefit or expense in the current year.Adoption of FIN 48 is required for fiscal years beginning after December 15, 2006 and is to be applied to all open tax years as of the effective date. Management does not believe that the application of this standard will have a material impact on the financial statements of the fund.

The fund has an unused capital loss carryover of $478,138,042 available for federal income tax purposes to be applied against future net securities profits, if any, realized subsequent to December 31, 2006. If not applied, $44,631,820 expires in fiscal 2007, $53,989,658 expires in fiscal 2008, $161,394,992 expires in fiscal 2009, $138,776,715 expires in fiscal 2010, $72,493,638 expires in fiscal 2011 and $6,851,219 expires in fiscal 2013. Based on certain provisions in the Internal Revenue Code, various limitations regarding the future utilization of these carryforwards, brought forward as a result of the fund’s merger with the following funds may apply: Dreyfus Short Term High Yield Fund, Dreyfus Premier High Yield Securities Fund and High Yield Total Fund. It is probable that the fund will not be able to utilize most of its capital loss carryovers prior to its expiration date.

The tax character of distributions paid to shareholders during the fiscal year ended December 31, 2006 were as follows: ordinary income $27,925,607. The tax character of current year distributions will be determined at the end of the current year.

NOTE 2—Bank Lines of Credit:

The fund may borrow up to $20 million for leveraging purposes under a short-term unsecured line of credit and participates with other

36

Dreyfus-managed funds in a $100 million unsecured line of credit primarily to be utilized for temporary or emergency purposes, including the financing of redemptions. Interest is charged to the fund based on prevailing market rates in effect at the time of borrowing.

The average daily amount of borrowings outstanding under the leveraging arrangement during the period ended June 30, 2007, was approximately $75,500 with a related weight average annualized inter est rate of 5.83% .

NOTE 3—Investment Management Fee and Other Transactions with Affiliates:

(a) Pursuant to an Investment Management agreement with the Manager, the Manager provides or arranges for one or more third parties and/or affiliates to provide investment advisory, administrative, custody, fund accounting and transfer agency services to the fund. The Manager also directs the investments of the fund in accordance with its investment objective, policies and limitations. For these services, the fund is contractually obligated to pay the Manager a fee, calculated daily and paid monthly, at the annual rate of .70% of the value of the fund’s average daily net assets. Out of its fee, the Manager pays all of the expenses of the fund except brokerage fees, taxes, interest, commitment fees, Rule 12b-1 distribution fees and expenses, service fees and expenses of non-interested Trustees (including counsel fees) and extraordinary expenses. In addition, the Manager is required to reduce its fee in an amount equal to the fund’s allocable portion of fees and expenses of the non-interested Trustees (including counsel fees). Each Trustee receives $45,000 per year, plus $6,000 for each joint Board meeting of The Dreyfus/Laurel Funds, Inc., The Dreyfus/Laurel Tax-Free Municipal Funds and the Trust (collectively the “Dreyfus/Laurel Funds”) attended, $2,000 for separate in-person committee meetings attended which are not held in conjunction with a regularly scheduled board meeting and $1,500 for Board meetings and separate committee meetings attended that are conducted by telephone and is reimbursed for travel and out-of-pocket expenses.With respect to Board meetings,

The Fund 37

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

the Chairman of the Board receives an additional 25% of such compensation (with the exception of reimbursable amounts).With respect to compensation committee meetings, the Chair of the compensation committee receives $900 per meeting and, with respect to audit committee meetings, the Chair of the audit committee receives $1,350 per meeting. In the event that there is an in-person joint committee meeting of the Dreyfus/Laurel Funds and Dreyfus High Yield Strategies Fund, the $2,000 or $1,500 fee, as applicable, will be allocated between the Dreyfus/Laurel Funds and Dreyfus High Yield Strategies Fund. These fees and expenses are charged and allocated to each series based on net assets. Amounts required to be paid by the Trust directly to the non-interested Trustees, that would be applied to offset a portion of the management fee payable to the Manager, are in fact paid directly by the Manager to the non-interested Trustees.

During the period ended June 30, 2007, the Distributor retained $2,308 from commissions earned on sales of the fund’s Class A shares and $106,394 and $1,824 from CDSC on redemptions of the fund’s Class B and Class C shares, respectively.

(b) Under separate Distribution Plans (the “Plans”) adopted pursuant to Rule 12b-1 under the Act, Class A shares pay annually up to .25% of the value of the average daily net assets to compensate the Distributor for shareholder servicing activities and expenses primarily intended to result in the sale of Class A shares. Class B and Class C shares pay the Distributor for distributing their shares at an aggregate annual rate of .50% and .75% of the value of the average daily net assets of Class B and Class C shares, respectively. Class B and Class C shares are also subject to a service plan adopted pursuant to Rule 12b-1 (the “Service Plan”), under which Class B and Class C shares pay the Distributor for providing certain services to the holders of their shares a fee at the annual rate of .25% of the value of the average daily net assets of Class B and Class C shares. During the period ended June 30, 2007, Class A, Class B and Class C shares were charged $246,929, $148,551 and $240,980, respectively, pursuant to their respective Plans. During the period ended June 30, 2007, Class B and Class C shares were charged $74,276 and $80,327, respectively, pursuant to the Service Plan.

38

Under its terms, the Plans and Service Plan shall remain in effect from year to year, provided such continuance is approved annually by a vote of a majority of those Trustees who are not “interested persons” of the Trust and who have no direct or indirect financial interest in the operation of or in any agreement related to the Plans or Service Plan.

The components of Due to The Dreyfus Corporation and affiliates in the Statement of Assets and Liabilities consist of: management fees $186,719, Rule 12b-1 distribution plan fees $100,523 and service plan fees $23,879.

(c) The Trust and the Manager have received an exemptive order from the SEC which, among other things, permits the fund to use cash collateral received in connection with lending the fund’s securities and other uninvested cash to purchase shares of one or more registered money market mutual funds advised by the Manager in excess of the limitations imposed by the Act.

NOTE 4—Securities Transactions:

The aggregate amount of purchases and sales (including paydowns) of investment securities, excluding short-term securities, forward currency exchange contracts and swap transactions during the period ended June 30, 2007, amounted to $107,951,445 and $134,505,878, respectively.

The fund enters into forward currency exchange contracts in order to hedge its exposure to changes in foreign currency exchange rates on its foreign portfolio holdings and to settle foreign currency transactions. When executing forward currency exchange contracts, the fund is obligated to buy or sell a foreign currency at a specified rate on a certain date in the future. With respect to sales of forward currency exchange contracts, the fund would incur a loss if the value of the contract increases between the date the forward contract is opened and the date the forward contract is closed.The fund realizes a gain if the value of the contract decreases between those dates.With respect to purchases of forward currency exchange contracts, the fund would incur a loss if the value of the contract decreases between the date the forward con-

The Fund 39

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

tract is opened and the date the forward contract is closed. The fund realizes a gain if the value of the contract increases between those dates. The fund is also exposed to credit risk associated with counterparty nonperformance on these forward currency exchange contracts which is typically limited to the unrealized gain on each open contract.The following summarizes open forward currency exchange contracts at June 30, 2007:

    Foreign             
Forward Currency    Currency            Unrealized 
Exchange Contracts    Amounts    Proceeds ($)    Value ($)    Depreciation ($) 
Sells:                 
Euro,                 
Expiring 09/19/2007    7,220,000    9,627,653    9,797,540    (169,887) 

The fund may enter into swap agreements to exchange the interest rate on, or return generated by, one nominal instrument for the return generated by another nominal instrument.

The fund accrues for the interim payments on swap contracts in accordance with Financial Accounting Standards Board Statement No. 133. The fund accrues for the interim payments on swap contracts on a daily basis, with the net amount recorded within unrealized appreciation (depreciation) on swap contracts in the Statement of Assets and Liabilities. Once the interim payments are settled in cash, the net amount is recorded as realized gain (loss) on swaps, in addition to realized gain (loss) recorded upon the termination of swaps contracts in the Statement of Operations. Fluctuations in the value of swap contracts are recorded as a component of net change in unrealized appreciation (depreciation) on investments.

Credit default swaps involve commitments to pay a fixed interest rate in exchange for payment if a credit event affecting a third party (the referenced company) occurs. For those credit default swaps in which the fund is receiving a fixed rate, the fund is providing credit protection on the underlying instrument. The maximum payouts for these contracts are limited to the notional amount of each swap. Credit

40

events may include a failure to pay interest or principal, bankruptcy, or restructuring. The following summarizes open credit default swaps entered into by the fund at June 30, 2007:

                    Unrealized 
Notional    Reference        (Pay)/Receive Expiration    Appreciation 
Amount ($)    Entity    Counterparty    Fixed Rate (%) Date             (Depreciation)($) 
 
840,000    ABX HE 07-1    UBS             
    Bbb Index Cusip    Securities, Inc    2.24    8/25/2037    (305,878) 
7,977,500    Dow Jones    Lehman             
    CDX.NA.IG.4 Index    Brothers Inc.    (.35)    6/20/2010    (72,419) 
5,022,500        Merrill Lynch             
    Dow Jones    Pierce Fenner             
    CDX.NA.IG.4 Index    & Smith    (.31)    6/20/2010    (1,945,848) 
3,049,000    Kimberly Clark,                 
    6.875%,    J.P. Morgan             
    2/15/2014    Chase    (.19)    12/20/2011    195,081 
800,000    Kimberly Clark,    J.P. Morgan             
    6.875%,                 
    2/15/2014    Chase    (.37)    12/20/2016    (4,796) 
1,700,000        Morgan             
    Kimberly Clark,    Stanley,             
    6.875%,    Dean Witter             
    2/15/2014    & Co.    (.37)    12/20/2016    (8,847) 
2,500,000    Kimberly Clark,                 
    6.875%,    J.P. Morgan             
    2/15/2014    Chase    (.37)    12/20/2016    (12,499) 
2,675,000    Owens-Brockway                 
    Glass Container,                 
    8.875%,    J.P. Morgan             
    2/15/2009    Chase    (1.95)    6/20/2010    (61,171) 
2,675,000    Owens-Illinois,    J.P. Morgan             
    7.5%, 5/15/2010    Chase    2.60    6/20/2010    25,640 
2,425,000    SMAM IG/HY                 
    0-3% Model    Barclays             
    12.6 2013    Capital Inc.    13.40    6/20/2012    (282,964) 
2,425,000    SMAM LBO                 
    5-7% @ 480    Barclays             
    6/20/17    Capital Inc.    (4.80)    6/20/2017    (16,648) 
8,390,000    Structured Model    UBS             
    Porfolio 0-3%    Securities, Inc    —    9/20/2013    2,013,317 
                    (477,032) 

Risks may arise upon entering into these agreements from the potential inability of the counterparties to meet the terms of the agreement and are generally limited to the amount of net payments to be received, if any, at the date of default.

The Fund 41

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

At June 30, 2007, accumulated net unrealized appreciation on investments was $3,051,692, consisting of $7,205,492 gross unrealized appreciation and $4,153,800 gross unrealized depreciation.

At June 30,2007,the cost of investments for federal income tax purposes was substantially the same as the cost for financial reporting purposes (see Statement of Investment).

42

INFORMATION ABOUT THE REVIEW AND APPROVAL OF THE FUND’S INVESTMENT

MANAGEMENT AGREEMENT (Unaudited)

At a meeting of the fund’s Board of Trustees held on January 31 and February 1, 2007, the Board considered the re-approval for an annual period of the fund’s Investment Management Agreement (“Management Agreement”), pursuant to which the Manager provides the fund with investment advisory and administrative services. The Board members, none of whom are “interested persons” (as defined in the Investment Company Act of 1940, as amended) of the fund, were assisted in their review by independent legal counsel and met with counsel in executive session separate from representatives of the Manager.

Analysis of Nature, Extent and Quality of Services Provided to the Fund. The Board members considered information previously provided to them in a presentation from representatives of the Manager regarding services provided to the fund and other funds in the Dreyfus fund complex, and representatives of the Manager confirmed that there had been no material changes in this information. The Board also discussed the nature, extent and quality of the services provided to the fund pursuant to its Management Agreement.The Manager’s representatives reviewed the fund’s distribution of accounts and the relationships the Manager has with various intermediaries and the different needs of each.The Manager’s representatives noted the distribution channels for the fund as well as the diversity of distribution among the funds in the Dreyfus fund complex, and the Manager’s corresponding need for broad, deep, and diverse resources to be able to provide ongoing shareholder services to each distribution channel, including those of the fund. The Board also reviewed the number of shareholder accounts in the fund, as well as the fund’s asset size.

The Board members also considered the Manager’s research and portfolio management capabilities and that the Manager also provides oversight of day-to-day fund operations, including fund accounting and administration and assistance in meeting legal and regulatory requirements. The Board members also considered the Manager’s extensive administrative, accounting and compliance infrastructure.

The Fund 43

INFORMATION ABOUT THE REVIEW AND APPROVAL OF THE FUND’S

INVESTMENT MANAGEMENT AGREEMENT (Unaudited) (continued)

Comparative Analysis of the Fund’s Performance and Management Fee and Expense Ratio. The Board members reviewed the fund’s performance and placed significant emphasis on comparisons to a group of retail front-end load, high current yield funds (the “Performance Group”) and to a larger universe of funds, consisting of all retail and institutional high current yield funds (the “Performance Universe”) selected and provided by Lipper, Inc., an independent provider of investment company data.The Board was provided with a description of the methodology Lipper used to select the Performance Group and Performance Universe, as well as the Expense Group and Expense Universe (discussed below).The Board members discussed the results of the comparisons and noted that the fund’s yield performance for the past ten one-year periods ended November 30th (1997-2006) was above the Performance Group and Performance Universe medians (except it was below the Performance Group median for the one-year ended November 30, 2001).The Board members noted that the fund’s total return performance was below the Performance Group and Performance Universe medians for various periods ended November 30, 2007 (except it was at the Performance Group median and above the Performance Universe median for the 4-year period). The Board members also noted that a new primary portfolio manager had been put into place effective October 2006. The Manager also provided a comparison of the fund’s total returns to the returns of the fund’s benchmark index for each calendar year for the past ten years.

The Board members also discussed the fund’s management fee and expense ratio and reviewed the range of management fees and expense ratios of a comparable group of funds (the “Expense Group”) and a broader group of funds (the “Expense Universe”), each selected and provided by Lipper. Noting that the fund was the only fund in the Expense Group with a “unitary fee structure”, the Board members noted that the fund’s management fee was above the Expense Group and Expense Universe medians and its expense ratio was below the Expense Group and Expense Universe medians.

44

Representatives of the Manager reviewed with the Board members the fees paid to the Manager or its affiliates by mutual funds managed by the Manager or its affiliates with similar investment objectives, policies and strategies, and included in the same Lipper category as the fund (the “Similar Funds”), and by other accounts managed by the Manager or its affiliates with similar investment objectives, policies and strategies as the fund (the “Similar Accounts”). The Manager’s representatives explained the nature of the Similar Accounts and the differences, from the Manager’s perspective, in providing services to such Similar Accounts as compared to managing and providing services to the fund.The Manager’s representatives also reviewed the costs associated with distribution through intermediaries.The Board analyzed differences in fees paid to the Manager and discussed the relationship of the fees paid in light of the services provided, noting the fund’s “unitary fee” structure. The Board members considered the relevance of the fee information provided for the Similar Funds and Similar Accounts to evaluate the appropriateness and reasonableness of the fund’s management fee. The Board acknowledged that differences in fees paid by the Similar Funds and Similar Accounts seemed to be consistent with the services provided.

Analysis of Profitability and Economies of Scale. The Manager’s representatives reviewed the dollar amount of expenses allocated and profit received by the Manager and the method used to determine such expenses and profit. The Board previously had been provided with information prepared by an independent consulting firm regarding the Manager’s approach to allocating costs to, and determining the profitability of, individual funds and the entire Dreyfus mutual fund complex.The Board also was informed that the methodology had also been reviewed by an independent registered public accounting firm which, like the consultant, found the methodology to be reasonable. The consulting firm also analyzed where any economies of scale might emerge in connection with the management of the fund. The Board members evaluated the profitability analysis in light of the relevant cir-

The Fund 45

INFORMATION ABOUT THE REVIEW AND APPROVAL OF THE FUND’S

INVESTMENT MANAGEMENT AGREEMENT (Unaudited) (continued)

cumstances for the fund, including the recent decline in assets, and the extent to which economies of scale would be realized if the fund grows and whether fee levels reflect these economies of scale for the benefit of fund shareholders. The Board members also considered potential benefits to the Manager from acting as investment adviser and noted that there were no soft dollar arrangements with respect to trading the fund’s portfolio.

It was noted that the Board members should consider the Manager’s profitability with respect to the fund as part of their evaluation of whether the fees under the Management Agreement bear a reasonable relationship to the mix of services provided by the Manager, including the nature, extent and quality of such services and that a discussion of economies of scale is predicated on increasing assets and that, if a fund’s assets had been decreasing, the possibility that the Manager may have realized any economies of scale would be less. It also was noted that the profitability percentage for managing the fund was within the range determined by appropriate court cases to be reasonable given the services rendered and generally superior service levels provided by the Manager.

At the conclusion of these discussions, the Board agreed that it had been furnished with sufficient information to make an informed business decision with respect to continuation of the fund’s Management Agreement. Based on the discussions and considerations as described above, the Board made the following conclusions and determinations.

  • The Board concluded that the nature, extent and quality of the ser- vices provided by the Manager are adequate and appropriate.
  • While the Board was satisfied with the fund’s yield performance, it was somewhat concerned with the fund’s total return performance.
    The Board members noted that a new primary portfolio manager had been put in place effective October 2006 and determined to continue to monitor the fund’s performance closely.

46

  • The Board concluded that the fee paid by the fund to the Manager was reasonable in light of the services provided, comparative perfor- mance, expense and advisory fee information, costs of the services provided and profits to be realized and benefits derived or to be derived by the Manager from its relationship with the fund.
  • The Board determined that the economies of scale which may accrue to the Manager and its affiliates in connection with the man- agement of the fund had been adequately considered by the Manager in connection with the management fee rate charged to the fund and that, to the extent in the future it were determined that material economies of scale had not been shared with the fund, the Board would seek to have those economies of scale shared with the fund.

The Board members considered these conclusions and determinations, along with information received on a routine and regular basis throughout the year, and, without any one factor being dispositive, the Board determined that re-approval of the fund’s Management Agreement was in the best interests of the fund and its shareholders and that the Management Agreement would be renewed through April 4, 2008.

The Fund 47

NOTES

Dreyfus Premier Managed Income Fund

SEMIANNUAL REPORT June 30, 2007

Save time. Save paper. View your next shareholder report online as soon as it’s available. Log into www.dreyfus.com and sign up for Dreyfus eCommunications. It’s simple and only takes a few minutes.

The views expressed in this report reflect those of the portfolio manager only through the end of the period covered and do not necessarily represent the views of Dreyfus or any other person in the Dreyfus organization. Any such views are subject to change at any time based upon market or other conditions and Dreyfus disclaims any responsibility to update such views.These views may not be relied on as investment advice and, because investment decisions for a Dreyfus fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Dreyfus fund.

Not FDIC-Insured • Not Bank-Guaranteed • May Lose Value

Contents
 
    THE FUND 
2    A Letter from the CEO 
3    Discussion of Fund Performance 
6    Understanding Your Fund’s Expenses 
6    Comparing Your Fund’s Expenses 
With Those of Other Funds
7    Statement of Investments 
27    Statement of Financial Futures 
27    Statement of Options Written 
28    Statement of Assets and Liabilities 
29    Statement of Operations 
30    Statement of Changes in Net Assets 
32    Financial Highlights 
36    Notes to Financial Statements 
51    Information About the Review 
and Approval of the Fund’s
    Investment Management Agreement 
FOR MORE INFORMATION
    Back Cover 

Dreyfus Premier 
Managed Income Fund 

The Fund

A LETTER FROM THE CEO

Dear Shareholder:

We are pleased to present this semiannual report for Dreyfus Premier Managed Income Fund, covering the six-month period from January 1, 2007, through June 30, 2007.

The U.S. economy produced mixed signals over the first half of 2007, causing investor sentiment to swing from concerns regarding a domestic economic slowdown stemming from slumping housing markets to worries about mounting inflationary pressures in an environment of robust global growth. However, more recent data have provided stronger signals that a “soft landing” is likely for the U.S. economy.The rate of decline in residential construction is becoming less severe, the industrial inventory slowdown is fading and capital goods orders have strengthened. What’s more, a generally rising stock market over the past six months has helped to offset any negative “wealth effect” from the weak housing market.

Should these trends persist, we expect U.S. economic growth to hover slightly below long-term averages during the second half of this year. A moderate economic growth rate and gradually receding inflationary pressures may keep the Federal Reserve Board on the sidelines and bond yields within a relatively narrow trading range. As always, your financial advisor can help you position your fixed-income investments for these and other developments.

For information about how the fund performed during the reporting period, as well as market perspectives, we have provided a Discussion of Fund Performance given by the fund’s Portfolio Manager.

Thank you for your continued confidence and support.

2

DISCUSSION OF FUND PERFORMANCE

For the period of January 1, 2007, through June 30, 2007, as provided by Kent Wosepka, Portfolio Manager

Fund and Market Performance Overview

Gains early in the reporting period were tempered by heightened volatility in late May and June, when economic and inflation concerns led to a sharp decline in bond prices. The fund’s Class A and Class I shares produced higher returns than its benchmark, largely on the strength of favorable security selections among corporate bonds as well as our interest-rate and yield curve strategies. Please note that effective June 1, 2007, Class R shares were renamed Class I shares.

For the six-month period ended June 30, 2007, Dreyfus Premier Managed Income Fund produced total returns of 1.22% for Class A shares, 0.85% for Class B shares, 0.84% for Class C shares and 1.34% for Class I shares.1 In comparison, the Lehman Brothers U.S. Aggregate Index (the “Index”), the fund’s benchmark, produced a total return of 0.98% for the same period.2

The Fund’s Investment Approach

The fund seeks high current income consistent with what is believed to be prudent risk of capital.The fund invests at least 65% of its total assets in various types of U.S.government and corporate debt obligations rated investment grade (or their unrated equivalent as determined by Dreyfus).The fund also normally invests at least 65% of its total assets in debt obligations having effective maturities of 10 years or less.We do not attempt to match the sector percentages of any index, nor do we attempt to predict the direction of interest rates by substantially altering the fund’s sensitivity to changes in rates. Instead, the heart of our investment process is selecting individual securities that possess a combination of superior fundamentals and attractive relative valuations.

The Fund 3

DISCUSSION OF FUND PERFORMANCE (continued)

Bouts of Market Volatility Hurt Bond Prices

Moderating economic growth and generally benign inflation helped support bond prices early in the reporting period. Despite bouts of volatility stemming from turmoil in the sub-prime mortgage market, investor sentiment remained favorable as the Federal Reserve Board (the “Fed”) left short-term interest rates unchanged in its attempt to keep the U.S. economy growing without stimulating a reacceleration of inflation.

After rallying early in the year, the market suffered a sharp decline in late May and June, when signs of mounting inflationary pressures and credit concerns in some of the market’s riskier sectors caused investor sentiment to deteriorate.As a result, bond prices declined over the reporting period overall, partly offsetting positive returns derived from income.

Corporate Bonds Helped Support the Fund’s Returns

Although prices of high yield corporate bonds declined somewhat due to weakening investor sentiment, their relatively high yields enabled them to post above-average returns over the first half of 2007. The fund participated in the high yield market’s relative strength, avoiding the full brunt of price declines by focusing primarily on credits with maturities in the one- to two-year range, which tend to be less sensitive to changes in perceived credit quality and interest rates.We found such opportunities from issuers that we believed exhibited improving credit characteristics, including gaming companies and the financing arms of major automobile manufacturers.

The fund also benefited from owning investment-grade corporate bonds, where we attempted to avoid issuers that we regarded as susceptible to leveraged buyouts. Instead, we emphasized regulated industries, such as utilities and real estate investment trusts, and we favored shorter-maturity bonds, which may be tendered by their issuers to improve cash flow in the event of a leveraged buyout.

In addition, the fund’s holdings of international bonds issued in emerging market countries produced attractive returns, including securities denominated in U.S. dollars and local currencies. Bonds from Brazil proved to be particularly rewarding due to their high yields

4

and currency appreciation relative to the U.S. dollar. However, bonds from developed markets such as Japan and Sweden did not perform as strongly as we expected due to rising interest rates in those countries.

Although the fund’s slightly longer-than-average duration posture detracted from relative performance early in the reporting period, it helped shelter the fund from the market’s decline in May and June. Our yield-curve strategy, which emphasized intermediate-term bonds and de-emphasized bonds at the longer end of the maturity range, also helped support relative performance when yield differences steepened along the market’s maturity range.

Finally, mortgage-backed securities produced mixed results.An underweight position in mortgages constrained returns in the low volatility environment early in the reporting period, but helped during more volatile market conditions in May and June.

The Fund Is Positioned for Stable Interest Rates

Recent economic and inflation data suggest to us that the Fed is likely to remain on hold for some time, and we have modestly increased the fund’s average duration in an attempt to capture incrementally higher yields. Conversely, we have trimmed our positions in investment-grade credits while intensifying our focus on bonds with strong covenants that discourage leveraged buyouts.We have maintained the fund’s exposure to bonds in certain emerging markets where yields and interest-rate trends appear attractive to us.

July 16, 2007
1    Total return includes reinvestment of dividends and any capital gains paid, and does not take into 
    consideration the maximum initial sales charge in the case of Class A shares, or the applicable 
    contingent deferred sales charges imposed on redemptions in the case of Class B and Class C 
    shares. Had these charges been reflected, returns would have been lower. Past performance is no 
    guarantee of future results. Share price, yield and investment return fluctuate such that upon 
    redemption, fund shares may be worth more or less than their original cost. 
2    SOURCE: LIPPER INC. — Reflects reinvestment of dividends and, where applicable, capital 
    gain distributions.The Lehman Brothers U.S.Aggregate Index is a widely accepted, unmanaged 
    total return index of corporate, U.S. government and U.S. government agency debt instruments, 
    mortgage-backed securities and asset-backed securities with an average maturity of 1-10 years. 

The Fund 5

UNDERSTANDING YOUR FUND’S EXPENSES (Unaudited)

As a mutual fund investor, you pay ongoing expenses, such as management fees and other expenses. Using the information below, you can estimate how these expenses affect your investment and compare them with the expenses of other funds.You also may pay one-time transaction expenses, including sales charges (loads) and redemption fees, which are not shown in this section and would have resulted in higher total expenses. For more information, see your fund’s prospectus or talk to your financial adviser.

Review your fund’s expenses

The table below shows the expenses you would have paid on a $1,000 investment in Dreyfus Premier Managed Income Fund from January 1, 2007 to June 30, 2007. It also shows how much a $1,000 investment would be worth at the close of the period, assuming actual returns and expenses.

Expenses and Value of a $1,000 Investment             
assuming actual returns for the six months ended June 30, 2007         
    Class A    Class B    Class C    Class I 
Expenses paid per $1,000 †    $ 4.74    $ 8.47    $ 8.47    $ 3.49 
Ending value (after expenses)    $1,012.20    $1,008.50    $1,008.40    $1,013.40 

COMPARING YOUR FUND’S EXPENSES WITH THOSE OF OTHER FUNDS (Unaudited)

Using the SEC’s method to compare expenses

The Securities and Exchange Commission (SEC) has established guidelines to help investors assess fund expenses. Per these guidelines, the table below shows your fund’s expenses based on a $1,000 investment, assuming a hypothetical 5% annualized return. You can use this information to compare the ongoing expenses (but not transaction expenses or total cost) of investing in the fund with those of other funds.All mutual fund shareholder reports will provide this information to help you make this comparison. Please note that you cannot use this information to estimate your actual ending account balance and expenses paid during the period.

Expenses and Value of a $1,000 Investment             
assuming a hypothetical 5% annualized return for the six months ended June 30, 2007 
    Class A    Class B    Class C    Class I 
Expenses paid per $1,000 †    $ 4.76    $ 8.50    $ 8.50    $ 3.51 
Ending value (after expenses)    $1,020.08    $1,016.36    $1,016.36    $1,021.32 

† Expenses are equal to the fund’s annualized expense ratio of .95% for Class A, 1.70% for Class B, 1.70% for Class C and .70% for Class I; multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

6

STATEMENT OF INVESTMENTS

June 30, 2007 (Unaudited)

    Coupon    Maturity    Principal     
Bonds and Notes—134.1%    Rate (%)    Date    Amount ($)    Value ($) 
Aerospace & Defense—.1%                 
L-3 Communications,                 
Gtd. Bonds    3.00    8/1/35    45,000    50,963 
Agricultural—.2%                 
Philip Morris,                 
Debs.    7.75    1/15/27    105,000    123,128 
Asset-Backed Ctfs./                 
Auto Receivables—3.6%                 
Americredit Prime Automobile                 
Receivables, Ser. 2007-1, Cl. E    6.96    3/8/16    120,000 a    119,554 
BMW Vehicle Owner Trust,                 
Ser. 2004-A, Cl. A4    3.32    2/25/09    81,784    81,579 
Capital Auto Receivables Asset                 
Trust, Ser. 2005-1, Cl. C,    4.73    9/15/10    425,000    419,140 
Capital Auto Receivables Asset                 
Trust, Ser. 2007-1, Cl. D    6.57    9/16/13    500,000 a    490,225 
Daimler Chrysler Auto Trust,                 
Ser. 2004-A, Cl. CTFS    2.85    8/8/10    110,000    109,332 
Ford Credit Auto Owner Trust,                 
Ser. 2004-A, Cl. C    4.19    7/15/09    50,000    49,795 
Ford Credit Auto Owner Trust,                 
Ser. 2005-B, Cl. B    4.64    4/15/10    125,000    124,020 
Ford Credit Auto Owner Trust,                 
Ser. 2007-A, Cl. D    7.05    12/15/13    250,000 a    250,078 
Hyundai Auto Receivables Trust,                 
Ser. 2006-A, Cl. A2    5.13    2/16/09    17,038    17,052 
Hyundai Auto Receivables Trust,                 
Ser. 2006-B, Cl. C    5.25    5/15/13    50,000    49,728 
Nationstar Home Equity Loan Trust,             
Ser. 2007-C, Cl. 2AV1    5.38    6/25/37    105,000 b    105,000 
Option One Mortgage Loan Trust,             
Ser. 2007-6, Cl. 2A1    5.38    7/25/37    49,034 b    49,065 
WFS Financial Owner Trust,                 
Ser. 2004-4, Cl. B    3.13    5/17/12    65,183    64,084 
WFS Financial Owner Trust,                 
Ser. 2004-3, Cl. B    3.51    2/17/12    59,698    58,957 
WFS Financial Owner Trust,                 
Ser. 2005-3, Cl. B    4.50    5/17/13    95,000    93,700 
WFS Financial Owner Trust,                 
Ser. 2005-3, Cl. C    4.54    5/17/13    50,000    49,278 

The Fund 7

STATEMENT OF INVESTMENTS (Unaudited) (continued)

    Coupon    Maturity    Principal     
Bonds and Notes (continued)    Rate (%)    Date    Amount ($)    Value ($) 
Asset-Backed Ctfs./                 
Auto Receivables (continued)                 
WFS Financial Owner Trust,                 
Ser. 2005-2, Cl. B    4.57    11/19/12    170,000    168,207 
                2,298,794 
Asset-Backed Ctfs./                 
Home Equity Loans—7.0%                 
Accredited Mortgage Loan Trust,                 
Ser. 2006-1, Cl. A3    5.50    4/25/36    700,000 b    700,898 
Citicorp Residential Mortgage                 
Securities, Ser. 2006-1, Cl. A1    5.96    7/25/36    124,008 b    123,862 
Citicorp Residential Mortgage                 
Securities, Ser. 2007-2, Cl. A1A    5.98    6/25/37    550,000 a    550,000 
Citigroup Mortgage Loan Trust,                 
Ser. 2005-WF1, Cl. A5    5.01    2/25/35    140,000 b    135,079 
Countrywide Asset-Backed                 
Certificates, Ser. 2006-1, Cl. AF1    5.45    7/25/36    44,153 b    44,182 
Credit Suisse Mortgage Capital                 
Certificates, Ser. 2007-1, Cl. 1A6A    5.86    2/25/37    160,000 b    157,419 
Credit-Based Asset Servicing and                 
Securitization, Ser. 2006-CB1,                 
Cl. AF1    5.46    1/25/36    77,123 b    76,847 
Credit-Based Asset Servicing and                 
Securitization, Ser. 2005-CB8,                 
Cl. AF5    5.65    12/25/35    235,000 b    227,128 
Credit-Based Asset Servicing and                 
Securitization, Ser. 2006-CB2,                 
Cl. AF1    5.72    12/25/36    34,378 b    34,275 
Home Equity Mortgage Trust,                 
Ser. 2006-5, Cl. A1    5.50    1/25/37    93,111 b    93,075 
JP Morgan Mortgage Acquisition,                 
Ser. 2007-CH1, Cl. AF1A    5.40    11/25/36    112,978 b    113,048 
Morgan Stanley ABS Capital I,                 
Ser. 2006-HE3, Cl. A2A    5.36    4/25/36    19,449 b    19,454 
Morgan Stanley Mortgage Loan                 
Trust, Ser. 2006-15XS, Cl. A6B    5.83    11/25/36    75,000 b    73,810 
Nationstar Home Equity Loan Trust,                 
Ser. 2007-A, Cl. AV2    5.42    3/25/37    400,000 b    400,248 
Ownit Mortgage Loan Asset Backed                 
Certificates, Ser. 2006-1, Cl. AF1    5.42    12/25/36    150,516 b    149,894 

8

    Coupon    Maturity    Principal     
Bonds and Notes (continued)    Rate (%)    Date    Amount ($)    Value ($) 
Asset-Backed Ctfs./                 
Home Equity Loans (continued)                 
Popular ABS Mortgage Pass-Through             
Trust, Ser. 2005-6, Cl. M1    5.91    1/25/36    145,000 b    142,959 
Renaissance Home Equity Loan                 
Trust, Ser. 2006-4, Cl. AV1    5.39    1/25/37    84,146 b    84,192 
Renaissance Home Equity Loan                 
Trust, Ser. 2007-2, Cl. AV1    5.43    6/25/37    265,000 b    265,164 
Renaissance Home Equity Loan                 
Trust, Ser. 2006-1, Cl. AF2    5.53    5/25/36    221,630 b    220,906 
Renaissance Home Equity Loan                 
Trust, Ser. 2006-3, Cl. AF2    5.58    11/25/36    250,000 b    249,265 
Renaissance Home Equity Loan                 
Trust, Ser. 2006-3, Cl. AF1    5.92    11/25/36    144,929 b    144,616 
Renaissance Home Equity Loan                 
Trust, Ser. 2006-2, Cl. AF1    6.00    8/25/36    88,076 b    87,878 
Renaissance Home Equity Loan                 
Trust, Ser. 2005-2, Cl. M9    6.64    8/25/35    130,000 b    105,695 
Residential Asset Mortgage                 
Products, Ser. 2004-RS12, Cl. AI6    4.55    12/25/34    145,000    137,993 
Residential Asset Securities,                 
Ser. 2001-KS3, Cl. MII1    6.15    9/25/31    66,815 b    66,879 
                4,404,766 
Asset-Backed Ctfs./                 
Manufactured Housing—.5%                 
Green Tree Financial,                 
Ser. 1994-7, Cl. M1    9.25    3/15/20    61,349    63,265 
Origen Manufactured Housing,                 
Ser. 2004-B, Cl. A2    3.79    12/15/17    45,905    45,105 
Origen Manufactured Housing,                 
Ser. 2005-B, Cl. A2    5.25    12/15/18    115,000    113,587 
Vanderbilt Mortgage Finance,                 
Ser. 1999-A, Cl. 1A6    6.75    3/7/29    80,000    81,767 
                303,724 
Automobile Manufacturers—1.2%                 
Daimler Chrysler N.A. Holding,                 
Gtd. Notes    5.71    3/13/09    320,000 b    320,724 
DaimlerChrysler N.A. Holding,                 
Notes    4.88    6/15/10    65,000    63,804 

The Fund 9

STATEMENT OF INVESTMENTS (Unaudited) (continued)

    Coupon    Maturity    Principal     
Bonds and Notes (continued)    Rate (%)    Date    Amount ($)    Value ($) 
Automobile Manufacturers (continued)             
DaimlerChrysler N.A. Holding,                 
Gtd. Notes    5.79    3/13/09    135,000 b    135,624 
DaimlerChrysler N.A. Holding,                 
Gtd. Notes, Ser. E    5.89    10/31/08    250,000 b    251,453 
                771,605 
Automotive, Trucks & Parts—.0%             
Goodyear Tire & Rubber,                 
Sr. Notes    9.13    12/1/09    30,000 a,b    30,225 
Banks—6.4%                 
Capital One Financial,                 
Sr. Unsub. Notes    5.64    9/10/09    540,000 b    541,788 
Chevy Chase Bank,                 
Sub. Notes    6.88    12/1/13    145,000    145,000 
Chuo Mitsui Trust & Banking,                 
Sub. Notes    5.51    12/29/49    200,000 a,b    189,071 
Colonial Bank,                 
Sub. Notes    6.38    12/1/15    250,000    252,042 
Glitnir Banki,                 
Unscd. Bonds    7.45    9/14/49    250,000 a,b    259,967 
Greater Bay Bancorp,                 
Sr. Notes, Ser. B    5.25    3/31/08    100,000    99,759 
Industrial Bank of Korea,                 
Sub. Notes    4.00    5/19/14    275,000 a,b    267,528 
Islandsbanki,                 
Notes    5.52    10/15/08    87,000 a,b    86,934 
Landsbanki Islands,                 
Sr. Notes    6.06    8/25/09    250,000 a,b    252,723 
Marshall and Ilsley Bank,                 
Sub. Notes    5.63    12/4/12    260,000 b    260,320 
NB Capital Trust IV,                 
Gtd. Cap. Secs.    8.25    4/15/27    180,000    187,258 
Northern Rock,                 
Sub. Notes    6.59    6/28/49    100,000 a,b    100,681 
Popular North America,                 
Notes    5.71    12/12/07    125,000 b    125,202 
Sovereign Bancorp,                 
Sr. Unscd. Notes    5.59    3/23/10    250,000 b    250,230 
Sovereign Bancorp,                 
Sr. Notes    5.64    3/1/09    195,000 b    195,540 

10

    Coupon    Maturity    Principal     
Bonds and Notes (continued)    Rate (%)    Date    Amount ($)    Value ($) 
Banks (continued)                 
SunTrust Preferred Capital I,                 
Bank Gtd. Notes    5.85    12/31/49    35,000 b    34,822 
USB Capital IX,                 
Gtd. Notes    6.19    4/15/49    500,000 b,c    504,111 
Western Financial Bank,                 
Sub. Debs.    9.63    5/15/12    165,000    176,810 
Zions Bancorporation,                 
Sr. Unscd. Notes    5.48    4/15/08    105,000 b    105,085 
                4,034,871 
Building & Construction—.8%                 
American Standard,                 
Gtd. Notes    7.38    2/1/08    145,000    146,204 
Centex,                 
Notes    4.75    1/15/08    65,000    64,814 
D.R. Horton,                 
Gtd. Notes    5.88    7/1/13    120,000    114,308 
D.R. Horton,                 
Sr. Unsub. Notes    6.00    4/15/11    15,000    14,634 
Masco,                 
Sr. Unscd. Notes    5.66    3/12/10    140,000 b    140,208 
                480,168 
Chemicals—.3%                 
Equistar Chemicals/Funding,                 
Gtd. Notes    10.13    9/1/08    29,000    30,305 
Lubrizol,                 
Debs.    6.50    10/1/34    70,000    67,781 
RPM International,                 
Sr. Notes    4.45    10/15/09    125,000    121,875 
                219,961 
Commercial & Professional Services—.3%             
ERAC USA Finance,                 
Notes    5.61    4/30/09    70,000 a,b    70,217 
ERAC USA Finance,                 
Notes    7.95    12/15/09    100,000 a    105,251 
                175,468 
Commercial Mortgage                 
Pass-Through Ctfs.—5.5%                 
Bayview Commercial Asset Trust,                 
Ser. 2006-SP2, Cl. A    5.60    1/25/37    192,758 a,b    192,758 

The Fund 11

STATEMENT OF INVESTMENTS (Unaudited) (continued)

    Coupon    Maturity    Principal         
Bonds and Notes (continued)    Rate (%)    Date    Amount ($)    Value ($ 
Commercial Mortgage                     
Pass-Through Ctfs. (continued)                     
Bayview Commercial Asset Trust,                     
Ser. 2005-3A, Cl. A2    5.72    11/25/35    154,706    a,b    155,141 
Bayview Commercial Asset Trust,                     
Ser. 2005-4A, Cl. M5    5.97    1/25/36    86,637    a,b    86,691 
Bayview Commercial Asset Trust,                     
Ser. 2005-3A, Cl. B1    6.42    11/25/35    81,424    a,b    81,618 
Bayview Commercial Asset Trust,                     
Ser. 2005-3A, Cl. B3    8.32    11/25/35    81,424    a,b    82,700 
Bear Stearns Commercial Mortgage                     
Securities, Ser. 2003-T12, Cl. A3    4.24    4/13/12    295,000        285,731 
Bear Stearns Commercial Mortgage                     
Securities, Ser. 2005-T18, Cl. A2    4.56    2/13/42    125,000    b    122,478 
Bear Stearns Commercial Mortgage                     
Securities, Ser. 2004-PWR5, Cl. A3    4.57    7/11/42    120,000        115,620 
Chase Commercial Mortgage                     
Securities, Ser. 1997-2, Cl. C    6.60    12/19/29    40,000        40,030 
Credit Suisse/Morgan Stanley                     
Commercial Mortgage Certificates,                     
Ser. 2006-HC1A, Cl. A1    5.51    5/15/23    20,000    a,b    20,028 
Crown Castle Towers,                     
Ser. 2005-1A, Cl. D    5.61    6/15/35    115,000    a    113,519 
Crown Castle Towers,                     
Ser. 2006-1A, Cl. D    5.77    11/15/36    75,000    a    73,780 
DLJ Commercial Mortgage,                     
Ser. 1998-CF2, Cl. A1B    6.24    11/12/31    116,132        116,895 
DLJ Commercial Mortgage,                     
Ser. 1998-CGI, Cl. A1B    6.41    6/10/31    335,540        336,950 
Global Signal Trust,                     
Ser. 2006-1, Cl. D    6.05    2/15/36    160,000    a    159,265 
Global Signal Trust,                     
Ser. 2006-1, Cl. E    6.50    2/15/36    35,000    a    34,993 
Goldman Sachs Mortgage Securities                     
Corporation II, Ser. 2007-EOP, Cl. F    5.80    3/6/20    120,000    a,b    120,000 
Goldman Sachs Mortgage Securities                     
Corporation II, Ser. 2007-EOP, Cl. G    5.84    3/6/20    150,000    a,b    150,000 
Goldman Sachs Mortgage Securities                     
Corporation II, Ser. 2007-EOP, Cl. K    6.37    3/6/20    95,000    a,b    95,000 
Goldman Sachs Mortgage Securities                     
Corporation II, Ser. 2007-EOP, Cl. L    6.62    3/6/20    330,000    a,b    330,000 

12

    Coupon    Maturity    Principal     
Bonds and Notes (continued)    Rate (%)    Date    Amount ($)    Value ($) 
Commercial Mortgage                 
Pass-Through Ctfs. (continued)                 
Mach One Trust Commercial                 
Mortgage-Backed, Ser. 2004-1A,                 
Cl. A1    3.89    5/28/40    47,731 a    47,267 
Morgan Stanley Capital I,                 
Ser. 1999-RM1, Cl. A2    6.71    12/15/31    118,811    120,175 
Morgan Stanley Capital I,                 
Ser. 1999-CAM1, Cl. A4    7.02    3/15/32    36,242    36,790 
Morgan Stanley Dean Witter Capital I,                 
Ser. 2001-PPM, Cl. A3    6.54    2/15/31    108,758    110,650 
SBA CMBS Trust,                 
Ser. 2006-1A, Cl. D    5.85    11/15/36    70,000 a    69,075 
Washington Mutual Asset                 
Securities, Ser. 2003-C1A, Cl. A    3.83    1/25/35    353,325 a    341,976 
                3,439,130 
Diversified Financial Services—9.4%                 
Ameriprise Financial,                 
Jr. Sub. Notes    7.52    6/1/66    235,000 b    245,156 
Amvescap,                 
Gtd. Notes    5.63    4/17/12    290,000    287,999 
Capmark Financial Group,                 
Gtd. Notes    5.88    5/10/12    340,000 a    335,893 
CIT Group,                 
Sr. Notes    5.51    8/15/08    185,000 b    185,034 
Countrywide Financial,                 
Gtd. Notes    5.49    1/5/09    260,000 b    259,355 
FCE Bank,                 
Notes EUR    5.16    9/30/09    100,000 b,d    133,489 
Ford Motor Credit,                 
Notes    5.63    10/1/08    335,000    330,768 
Ford Motor Credit,                 
Unscd. Notes    6.19    9/28/07    130,000 b    130,000 
Fuji JGB Investment,                 
Sub. Bonds    9.87    12/29/49    100,000 a,b    103,977 
Glencore Funding,                 
Gtd. Notes    6.00    4/15/14    140,000 a    137,588 
GMAC,                 
Unsub. Notes    6.61    5/15/09    155,000 b    155,074 
Goldman Sachs Capital II,                 
Gtd. Bonds    5.79    12/29/49    305,000 b    297,976 

The Fund 13

STATEMENT OF INVESTMENTS (Unaudited) (continued)

    Coupon    Maturity    Principal     
Bonds and Notes (continued)    Rate (%)    Date    Amount ($)    Value ($) 
Diversified Financial Services (continued)             
HSBC Finance,                 
Sr. Notes    5.71    9/14/12    280,000 b    280,578 
International Lease Finance,                 
Sr. Unscd. Notes    5.58    5/24/10    125,000 b    125,372 
Janus Capital Group,                 
Notes    6.25    6/15/12    215,000    216,670 
Jefferies Group,                 
Sr. Notes, Ser. B    7.50    8/15/07    70,000    70,094 
Jefferies Group,                 
Sr. Unscd. Notes    7.75    3/15/12    140,000    150,159 
John Deere Capital,                 
Notes    5.40    9/1/09    80,000 b    80,075 
Kaupthing Bank,                 
Sr. Notes    6.06    1/15/10    235,000 a,b    237,595 
Lehman Brothers Capital Trust VII,                 
Notes    5.86    11/29/49    285,000 b    279,467 
Leucadia National,                 
Sr. Unscd. Notes    7.00    8/15/13    115,000    113,275 
MBNA Capital,                 
Gtd. Cap. Secs., Ser. A    8.28    12/1/26    80,000    83,494 
Merrill Lynch,                 
Notes, Ser. C    5.58    2/5/10    80,000 b    80,317 
NIPSCO Capital Markets,                 
Notes    7.86    3/27/17    75,000    81,027 
Residential Capital,                 
Gtd. Notes    6.38    6/30/10    125,000    123,469 
Residential Capital,                 
Gtd. Notes    6.66    11/21/08    175,000 b    175,524 
Residential Capital,                 
Gtd. Notes    7.19    4/17/09    240,000 a,b    239,027 
SB Treasury,                 
Bonds    9.40    12/29/49    280,000 a,b    289,781 
SLM,                 
Unscd. Notes, Ser. A    4.50    7/26/10    180,000    166,546 
SLM,                 
Unscd. Notes, Ser. A    5.50    7/27/09    285,000 b    278,015 
Tokai Preferred Capital,                 
Bonds    9.98    12/29/49    220,000 a,b    228,870 
                5,901,664 

14

    Coupon    Maturity    Principal     
Bonds and Notes (continued)    Rate (%)    Date    Amount ($)    Value ($) 
Diversified Metals & Mining—.2%                 
Falconbridge,                 
Bonds    5.38    6/1/15    25,000    24,056 
Noranda,                 
Notes    6.00    10/15/15    75,000    75,089 
                99,145 
Electric Utilities—3.3%                 
AES,                 
Sr. Notes    9.38    9/15/10    20,000    21,375 
Dominion Resources,                 
Sr. Unscd. Notes, Ser. B    5.54    11/14/08    140,000 b    140,194 
Dominion Resources,                 
Sr. Notes, Ser. D    5.66    9/28/07    255,000 b    255,073 
FirstEnergy,                 
Unsub. Notes, Ser. B    6.45    11/15/11    235,000    241,199 
IPALCO Enterprises,                 
Scd. Notes    8.63    11/14/11    75,000 b    80,625 
National Grid,                 
Sr. Unscd. Notes    6.30    8/1/16    150,000    153,000 
Niagara Mohawk Power,                 
Sr. Notes, Ser. G    7.75    10/1/08    90,000    92,311 
NiSource Finance,                 
Gtd. Notes    5.93    11/23/09    275,000 b    275,580 
Ohio Power,                 
Unscd. Notes    5.53    4/5/10    145,000 b    145,194 
TXU Electric Delivery,                 
Bonds    5.74    9/16/08    460,000 a,b    460,284 
TXU,                 
Sr. Notes, Ser. O    4.80    11/15/09    145,000    141,803 
TXU,                 
Unscd. Notes, Ser. C    6.38    1/1/08    65,000    65,487 
                2,072,125 
Environmental Control—.3%                 
Allied Waste North America,                 
Scd. Notes, Ser. B    5.75    2/15/11    45,000    43,031 
Allied Waste North America,                 
Scd. Notes    6.38    4/15/11    50,000    48,875 
Oakmont Asset Trust,                 
Notes    4.51    12/22/08    130,000 a    128,269 
                220,175 

The Fund 15

STATEMENT OF INVESTMENTS (Unaudited) (continued)

        Coupon    Maturity    Principal     
Bonds and Notes (continued)    Rate (%)    Date    Amount ($)    Value ($) 
Food & Beverages—.7%                 
H.J. Heinz,                     
Notes        6.43    12/1/20    150,000 a    151,547 
Safeway,                     
Sr. Unscd. Notes        4.13    11/1/08    85,000    83,709 
Stater Brothers Holdings,                 
Sr. Notes        7.75    4/15/15    35,000 a    35,263 
Stater Brothers Holdings,                 
Sr. Notes        8.13    6/15/12    100,000    101,250 
Tyson Foods,                     
Sr. Unscd. Notes        6.85    4/1/16    80,000 b    82,539 
                    454,308 
Foreign/Governmental—3.4%                 
Banco Nacional de Desenvolvimento                 
Economico e Social, Unsub.                 
Notes        5.84    6/16/08    220,000 b    219,450 
Federal Republic of Brazil,                 
Unscd. Bonds    BRL    12.50    1/5/16    675,000 c,d    426,883 
Mexican Bonos,                     
Bonds, Ser. M    MXN    9.00    12/22/11    2,600,000 d    252,625 
Mexican Bonos,                     
Bonds, Ser. M 30    MXN    10.00    11/20/36    1,220,000 d    142,954 
Republic of Argentina,                 
Bonds        5.48    8/3/12    770,000 b    563,062 
Republic of El Salvador,                 
Unscd. Notes        8.50    7/25/11    60,000 a    66,600 
Russian Federation,                     
Unsub. Bonds        8.25    3/31/10    426,678 a    443,746 
                    2,115,320 
Health Care—.8%                     
Baxter International,                 
Sr. Unscd. Notes        5.20    2/16/08    140,000    139,816 
HCA,                     
Sr. Unscd. Notes        7.88    2/1/11    115,000    117,015 
HCA,                     
Sr. Unscd. Notes        8.75    9/1/10    80,000    83,700 
Medco Health Solutions,                 
Sr. Unscd. Notes        7.25    8/15/13    60,000    63,212 
Tenet Healthcare,                     
Sr. Notes        6.38    12/1/11    125,000    114,844 
                    518,587 

16

    Coupon    Maturity    Principal     
Bonds and Notes (continued)    Rate (%)    Date    Amount ($)    Value ($) 
Lodging & Entertainment—.4%                 
Cinemark,                 
Sr. Discount Notes    9.75    3/15/14    15,000 e    13,725 
MGM Mirage,                 
Gtd. Notes    8.50    9/15/10    155,000    162,944 
Mohegan Tribal Gaming Authority,                 
Sr. Unscd. Notes    6.13    2/15/13    20,000    19,500 
Speedway Motorsports,                 
Sr. Sub. Notes    6.75    6/1/13    70,000    68,600 
                264,769 
Machinery—.3%                 
Case New Holland,                 
Gtd. Notes    7.13    3/1/14    65,000    66,137 
Terex,                 
Gtd. Notes    7.38    1/15/14    115,000    115,575 
                181,712 
Manufacturing—.1%                 
Tyco International Group,                 
Gtd. Notes    6.88    1/15/29    60,000    69,458 
Media—1.2%                 
Comcast,                 
Gtd. Notes    5.66    7/14/09    450,000 b    450,251 
Time Warner,                 
Gtd. Notes    5.59    11/13/09    290,000 b    290,438 
                740,689 
Oil & Gas—2.7%                 
Anadarko Petroleum,                 
Sr. Unscd. Notes    5.76    9/15/09    534,000 b    534,749 
ANR Pipeline,                 
Sr. Notes    7.00    6/1/25    50,000    53,677 
BJ Services,                 
Sr. Unscd. Notes    5.53    6/1/08    500,000 b    500,548 
Enterprise Products Operating,                 
Gtd. Notes, Ser. B    4.00    10/15/07    405,000    403,350 
Northwest Pipeline,                 
Sr. Unscd. Notes    6.63    12/1/07    210,000    211,575 
                1,703,899 
Packaging & Containers—.1%                 
Crown Americas/Capital,                 
Gtd. Notes    7.63    11/15/13    75,000    76,125 

The Fund 17

STATEMENT OF INVESTMENTS (Unaudited) (continued)

    Coupon    Maturity    Principal     
Bonds and Notes (continued)    Rate (%)    Date    Amount ($)    Value ($) 
Paper & Forest Products—.3%                 
Sappi Papier Holding,                 
Gtd. Notes    6.75    6/15/12    105,000 a    103,870 
Temple-Inland,                 
Gtd. Notes    6.63    1/15/18    105,000    104,766 
                208,636 
Property & Casualty Insurance—2.0%             
Allmerica Financial,                 
Debs.    7.63    10/15/25    75,000    78,318 
Chubb,                 
Sr. Unscd. Notes    5.47    8/16/08    250,000    249,873 
Hartford Financial Services Group,                 
Sr. Notes    5.66    11/16/08    250,000    250,369 
Leucadia National,                 
Sr. Notes    7.13    3/15/17    355,000 a    346,125 
Lincoln National,                 
Sr. Unscd. Notes    5.44    3/12/10    240,000 b    240,341 
Phoenix Cos.,                 
Sr. Unscd. Notes    6.68    2/16/08    70,000    70,272 
                1,235,298 
Real Estate Investment Trusts—3.2%             
Archstone-Smith Operating Trust,                 
Notes    3.00    6/15/08    85,000    82,854 
Archstone-Smith Operating Trust,                 
Notes    5.00    8/15/07    75,000    74,976 
Boston Properties,                 
Sr. Notes    5.63    4/15/15    85,000    83,947 
Commercial Net Lease Realty,                 
Sr. Unscd. Notes    6.15    12/15/15    100,000    99,588 
Duke Realty,                 
Notes    3.50    11/1/07    70,000    69,547 
Duke-Weeks Realty,                 
Sr. Notes    6.95    3/15/11    170,000    177,277 
ERP Operating,                 
Notes    4.75    6/15/09    55,000    54,208 
ERP Operating,                 
Notes    5.13    3/15/16    75,000    70,935 

18

    Coupon    Maturity    Principal     
Bonds and Notes (continued)    Rate (%)    Date    Amount ($)    Value ($) 
Real Estate Investment                 
Trusts (continued)                 
Federal Realty Investment Trust,                 
Sr. Unscd. Notes    5.40    12/1/13    50,000    48,645 
Federal Realty Investment Trust,                 
Notes    6.00    7/15/12    55,000    55,578 
Healthcare Realty Trust,                 
Unscd. Notes    8.13    5/1/11    225,000    242,279 
HRPT Properties Trust,                 
Sr. Unscd. Notes    5.96    3/16/11    125,000 b    125,160 
Istar Financial,                 
Sr. Unscd. Notes    5.71    3/9/10    300,000 b    300,526 
Mack-Cali Realty,                 
Unscd. Notes    5.05    4/15/10    130,000    127,791 
Mack-Cali Realty,                 
Sr. Unscd. Notes    5.13    1/15/15    75,000    71,380 
Mack-Cali Realty,                 
Notes    5.25    1/15/12    55,000    53,764 
Regency Centers,                 
Gtd. Notes    5.25    8/1/15    125,000    119,152 
Simon Property Group,                 
Notes    4.60    6/15/10    105,000    102,309 
Simon Property Group,                 
Notes    4.88    8/15/10    75,000    73,651 
                2,033,567 
Residential Mortgage                 
Pass-Through Ctfs.—4.6%                 
American General Mortgage Loan                 
Trust, Ser. 2006-1, Cl. A1    5.75    12/25/35    65,781 a,b    65,675 
Banc of America Mortgage                 
Securities, Ser. 2004-F, Cl. 2A7    4.14    7/25/34    279,967 b    273,869 
ChaseFlex Trust,                 
Ser. 2006-2, Cl. A1A    5.59    9/25/36    53,601 b    53,607 
ChaseFlex Trust,                 
Ser. 2006-2, Cl. A5    5.99    9/25/36    120,000 b    118,765 
Citigroup Mortgage Loan Trust,                 
Ser. 2005-WF2, Cl. AF2    4.92    8/25/35    22,373 b    22,277 

The Fund 19

STATEMENT OF INVESTMENTS (Unaudited) (continued)

    Coupon    Maturity    Principal     
Bonds and Notes (continued)    Rate (%)    Date    Amount ($)    Value ($) 
Residential Mortgage                 
Pass-Through Ctfs. (continued)                 
Countrywide Asset-Backed                 
Certificates, Ser. 2007-4, Cl. A1A    5.44    9/25/37    96,798 b    96,874 
CSAB Mortgage Backed Trust,                 
Ser. 2006-3, Cl. A1A    6.00    11/25/36    84,221 b    84,051 
Impac CMB Trust,                 
Ser. 2005-8, Cl. 2M2    6.07    2/25/36    126,309 b    125,601 
Impac CMB Trust,                 
Ser. 2005-8, Cl. 2M3    6.82    2/25/36    93,562 b    89,180 
Impac Secured Assets CMN Owner                 
Trust, Ser. 2006-1, Cl. 2A1    5.67    5/25/36    66,566 b    66,727 
IndyMac Index Mortgage Loan Trust,             
Ser. 2006-AR25, Cl. 4A2    6.16    9/25/36    97,513 b    98,161 
J.P. Morgan Alternative Loan                 
Trust, Ser. 2006-S4, Cl. A6    5.71    12/25/36    105,000 b    103,678 
J.P. Morgan Mortgage Trust,                 
Ser. 2005-A1, Cl. 5A1    4.49    2/25/35    67,109 b    65,262 
New Century Alternative Mortgage                 
Loan Trust, Ser. 2006-ALT2,                 
Cl. AF6A    5.89    10/25/36    70,000 b    68,917 
Nomura Asset Acceptance,                 
Ser. 2005-AP1, Cl. 2A5    4.86    2/25/35    200,000 b    193,515 
Nomura Asset Acceptance,                 
Ser. 2005-AP2, Cl. A5    4.98    5/25/35    150,000 b    144,464 
Nomura Asset Acceptance,                 
Ser. 2005-WF1, Cl. 2A5    5.16    3/25/35    115,000 b    110,846 
Soundview Home Equity Loan Trust,             
Ser. 2007-NS1, Cl. A1    5.44    1/25/37    74,037 b    74,089 
Structured Asset Mortgage                 
Investments, Ser. 1998-2, Cl. B    5.89    4/30/30    1,750 b    1,742 
Washington Mutual,                 
Ser. 2004-AR7, Cl. A6    3.94    7/25/34    135,000 b    131,584 
Washington Mutual,                 
Ser. 2003-AR10, Cl. A6    4.06    10/25/33    203,000 b    200,099 
Washington Mutual,                 
Ser. 2004-AR9, Cl. A7    4.15    8/25/34    165,000 b    160,874 
Wells Fargo Mortgage Backed                 
Securities Trust,                 
Ser. 2005-AR1, Cl. 1A1    4.54    2/25/35    432,097 b    423,631 

20

    Coupon    Maturity    Principal     
Bonds and Notes (continued)    Rate (%)    Date    Amount ($)    Value ($) 
Residential Mortgage                 
Pass-Through Ctfs. (continued)                 
Wells Fargo Mortgage Backed                 
Securities Trust, Ser. 2003-1,                 
Cl. 2A9    5.75    2/25/33    150,000    146,440 
                2,919,928 
Retail—.5%                 
CVS Caremark,                 
Sr. Unscd. Notes    5.66    6/1/10    110,000 b    110,110 
Home Depot,                 
Sr. Unscd. Notes    5.49    12/16/09    85,000 b    84,916 
May Department Stores,                 
Unscd. Notes    3.95    7/15/07    45,000    44,977 
May Department Stores,                 
Unscd. Notes    4.80    7/15/09    45,000    44,162 
                284,165 
State/Territory Gen Oblg—1.9%                 
Erie Tobacco Asset                 
Securitization/NY, Tobacco                 
Settlement Asset-Backed Bonds    6.00    6/1/28    75,000    72,231 
Michigan Tobacco Settlement                 
Finance Authority, Tobacco                 
Settlement Asset-Backed Bonds    7.31    6/1/34    410,000    418,520 
Michigan Tobacco Settlement                 
Finance Authority, Tobacco                 
Settlement Asset-Backed Bonds    7.54    6/1/34    100,000 b    97,829 
New York Counties Tobacco Trust                 
IV, Tobacco Settlement                 
Pass-Through Bonds    6.00    6/1/27    160,000    158,347 
Tobacco Settlement Authority of                 
Iowa, Tobacco Settlement                 
Asset-Backed Bonds    6.50    6/1/23    165,000    162,929 
Tobacco Settlement Finance                 
Authority of West Virginia,                 
Tobacco Settlement                 
Asset-Backed Bonds    7.47    6/1/47    300,000    304,932 
                1,214,788 
Telecommunications—3.3%                 
America Movil,                 
Gtd. Notes    5.46    6/27/08    45,000 a,b    45,007 

The Fund 21

STATEMENT OF INVESTMENTS (Unaudited) (continued)

    Coupon    Maturity    Principal     
Bonds and Notes (continued)    Rate (%)    Date    Amount ($)    Value ($) 
Telecommunications (continued)                 
AT & T,                 
Sr. Notes    5.45    5/15/08    125,000 b    125,118 
AT & T,                 
Notes    5.46    2/5/10    245,000 b    245,431 
France Telecom,                 
Unsub. Notes    7.75    3/1/11    110,000 b    117,615 
Intelsat,                 
Sr. Unscd. Notes    5.25    11/1/08    150,000    148,500 
Nextel Communications,                 
Gtd. Notes, Ser. F    5.95    3/15/14    95,000    90,605 
Nextel Partners,                 
Gtd. Notes    8.13    7/1/11    150,000    156,458 
Qwest,                 
Sr. Notes    7.88    9/1/11    65,000    68,088 
Qwest,                 
Sr. Notes    8.61    6/15/13    100,000 b    109,000 
Sprint Capital,                 
Gtd. Notes    8.75    3/15/32    95,000    106,986 
Telefonica Emisiones,                 
Gtd. Notes    5.66    6/19/09    240,000 b    240,879 
Telefonica Emisiones,                 
Gtd. Notes    5.98    6/20/11    250,000    252,521 
Time Warner Cable,                 
Sr. Unscd. Notes    5.85    5/1/17    150,000 a    146,165 
U.S. West Communications,                 
Notes    5.63    11/15/08    70,000    70,088 
Windstream,                 
Gtd. Notes    8.13    8/1/13    140,000    147,000 
                2,069,461 
Textiles & Apparel—.2%                 
Mohawk Industries,                 
Sr. Unscd. Notes    5.75    1/15/11    95,000    95,001 
Transportation—.2%                 
Ryder System,                 
Notes    3.50    3/15/09    130,000    125,432 

  22
    Principal     
Bonds and Notes (continued)    Amount ($)    Value ($) 
U.S. Government Agencies/Mortgage-Backed—24.6%         
Federal Home Loan Mortgage Corp.:         
4.00%, 10/1/09    80,579    79,129 
4.50%, 10/1/09    72,948    72,158 
5.00%, 10/1/18    426,390    413,713 
6.00%, 7/1/17—4/1/33    210,077    210,028 
Federal National Mortgage Association:         
5.00%    275,000 f    265,760 
5.50%    2,875,000 f    2,778,609 
6.00%    6,045,000 f    6,013,096 
3.53%, 7/1/10    278,600    265,444 
4.06%, 6/1/13    100,000    92,411 
5.00%, 7/1/11—4/1/19    476,061    464,466 
5.50%, 12/1/24—1/1/34    1,214,349    1,179,620 
6.00%, 2/1/33—6/1/33    229,361    228,333 
6.50%, 12/1/31—9/1/32    174,250    177,415 
7.00%, 5/1/32—7/1/32    46,014    47,676 
Grantor Trust, Ser. 2001-T11,         
Cl. B, 5.50%, 9/25/11    75,000    75,446 
Grantor Trust, Ser. 2001-T6, Cl. B, 6.09%, 5/25/11    275,000    281,627 
Government National Mortgage Association I:         
6.50%, 9/15/32    72,248    73,707 
8.00%, 2/15/30—5/15/30    5,111    5,430 
Ser. 2004-43, Cl. A, 2.82%, 12/16/19    322,303    310,625 
Ser. 2003-88, Cl. AC, 2.91%, 6/16/18    209,071    203,025 
Ser. 2004-23, Cl. B, 2.95%, 3/16/19    128,382    123,506 
Ser. 2004-57, Cl. A, 3.02%, 1/16/19    157,608    152,601 
Ser. 2004-97, Cl. AB, 3.08%, 4/16/22    189,831    183,860 
Ser. 2003-64, Cl. A, 3.09%, 4/16/24    13,045    12,902 
Ser. 2004-9, Cl. A, 3.36%, 8/16/22    80,832    78,096 
Ser. 2004-25, Cl. AC, 3.38%, 1/16/23    264,356    256,057 
Ser. 2004-77, Cl. A, 3.40%, 3/16/20    145,853    142,146 
Ser. 2003-96, Cl. B, 3.61%, 8/16/18    72,075    71,073 
Ser. 2004-67, Cl. A, 3.65%, 9/16/17    135,897    132,912 
Ser. 2004-108, Cl. A, 4.00%, 5/16/27    115,762    112,229 
Ser. 2005-79, Cl. A, 4.00%, 10/16/33    118,261    115,226 
Ser. 2005-50, Cl. A, 4.02%, 10/16/26    112,166    109,539 
Ser. 2005-29, Cl. A, 4.02%, 7/16/27    159,637    154,942 
Ser. 2005-9, Cl. A, 4.03%, 5/16/22    91,119    89,175 

The Fund 23

STATEMENT OF INVESTMENTS (Unaudited) (continued)

    Principal     
Bonds and Notes (continued)    Amount ($)    Value ($) 
U.S. Government Agencies/Mortgage-Backed (continued)     
Government National Mortgage Association I (continued)     
Ser. 2005-12, Cl. A, 4.04%, 5/16/21    61,515    60,158 
Ser. 2005-42, Cl. A, 4.05%, 7/16/20    136,121    133,475 
Ser. 2005-14, Cl. A, 4.13%, 2/16/27    108,135    106,156 
Ser. 2004-51, Cl. A, 4.15%, 2/16/18    155,467    152,566 
Ser. 2005-32, Cl. B, 4.39%, 8/16/30    150,000    147,234 
        15,571,571 
U.S. Government Securities—44.5%         
U.S. Treasury Bonds         
4.75%, 2/15/37    921,000 g    868,691 
U.S. Treasury Notes:         
4.25%, 1/15/11    12,525,000 c    12,264,718 
4.50%, 5/15/17    9,760,000 g    9,360,455 
4.88%, 6/30/12    5,645,000 g    5,631,333 
        28,125,197 
Total Bonds and Notes         
(cost $84,772,869)        84,633,823 
 
Preferred Stocks—.5%         
Banks—.1%         
Sovereign Capital Trust IV,         
Conv., Cum. $2.1875    1,400    65,800 
Diversified Financial Services—.3%         
AES Trust VII,         
Conv., Cum. $3.00    3,450    172,500 
Financial—.1%         
Ford Motor Capital Trust II,         
Conv., Cum. $3.25    2,300    88,550 
Total Preferred Stocks         
(cost $325,264)        326,850 
    Face Amount     
    Covered by     
Options—.9%    Contracts ($)    Value ($) 
Call Options—.9%         
3-Month Floor USD Libor-BBA         
Interest Rate, October 2009 @ 4    5,090,000    3,072 

24

        Face Amount     
        Covered by     
Options (continued)        Contracts ($)    Value ($) 
Call Options (continued)             
3-Month USD Libor-BBA,             
Swaption        3,480,000    154,839 
3-Month USD Libor-BBA,             
Swaption        7,670,000    342,695 
Dow Jones CDX.IG8             
September 2007 @.400        11,220,000    13,124 
U.S. Treasury 10-Year Notes,             
August 2007 @ 106        2,300,000    14,016 
U.S. Treasury 5 Year Future Notes,             
July 2007 @ 104.5        4,500,000    8,438 
Total Options             
(cost $541,959)            536,184 
        Principal     
Short-Term Investments—1.5%        Amount ($)    Value ($) 
Commercial Paper—.9%             
Cox Enterprises,             
5.60%, 8/15/07        560,000 a,b    560,000 
Corporate Notes—.5%             
Egyptian Treasury Bills,             
8.29%, 6/26/07    EGP    1,621,800 a,d,h    285,012 
U.S. Treasury Bills—.1%             
4.65%, 9/6/07        75,000 i    74,358 
Total Short-Term Investments             
(cost $919,080)            919,370 
 
Other Investment—1.0%        Shares    Value ($) 
Registered Investment Company;             
Dreyfus Institutional Preferred             
Plus Money Market Fund             
(cost $618,000)        618,000 j    618,000 

The Fund 25

STATEMENT OF INVESTMENTS (Unaudited) (continued)

Investment of Cash Collateral         
for Securities Loaned—16.5%    Shares    Value ($) 
Registered Investment Company;         
Dreyfus Institutional Cash         
Advantage Plus Fund         
(cost $10,400,691)    10,400,691 j    10,400,691 
Total Investments (cost $97,577,863)    154.5%    97,434,918 
Liabilities, Less Cash and Receivables    (54.5%)    (34,390,522) 
Net Assets    100.0%    63,044,396 

a Securities exempt from registration under Rule 144A of the Securities Act of 1933.These securities may be resold in 
transactions exempt from registration, normally to qualified institutional buyers.At June 30, 2007, these securities 
amounted to $9,336,559 or 14.8% of net assets. 
b Variable rate security—interest rate subject to periodic change. 
c All or a portion of these securities are on loan.At June 30, 2007, the total market value of the fund’s securities on 
loan is $10,037,731 and the total market value of the collateral held by the fund is $10,400,691. 
d Principal amount stated in U.S. Dollars unless otherwise noted. 
BRL—Brazilian Real 
EGP—Egyptian Pound 
EUR—Euro 
MXN—Mexican Peso 
e Zero coupon until a specified date at which time the stated coupon rate becomes effective until maturity. 
f Purchased on a forward commitment basis. 
g Purchased on a delayed delivery basis. 
h Credit Linked Notes. 
i Held by a broker as collateral for open financial futures. 
j Investment in affiliated money market mutual fund. 

Portfolio Summary (Unaudited) †         
 
    Value (%)        Value (%) 
U.S. Government & Agencies    69.1    Foreign/Governmental    3.4 
Corporate Bonds    38.5    State/Government General Obligations    1.9 
Asset/Mortgage-Backed    21.2    Options    .9 
Short-Term/Money        Preferred Stocks    .5 
Market Investments    19.0        154.5 
 
† Based on net assets.             
See notes to financial statements.             

26

STATEMENT OF FINANCIAL FUTURES

June 30, 2007 (Unaudited)

        Market Value        Unrealized 
        Covered by        Appreciation 
    Contracts    Contracts ($)    Expiration    at 6/30/2007 ($) 
Financial Futures Long                 
U.S. Treasury 5 Year Notes    15    1,561,172    September 2007    849 
Financial Futures Short                 
U.S. Treasury 2 Year Notes    13    (2,649,156)    September 2007    4,235 
                5,084 

See notes to financial statements.

STATEMENT OF OPTIONS WRITTEN

June 30, 2007 (Unaudited)

    Face Amount     
    Covered by     
    Contracts ($)    Value ($) 
Call Options         
Dow Jones CDX.IG8         
September 2007 @ .349    22,440,000    (10,254) 
Put Options         
U.S. Treasury 10-Year Notes         
August 2007 @ 101.00    2,300,000    (719) 
(Premiums received $27,820)        (10,973) 

See notes to financial statements.

The Fund 27

STATEMENT OF ASSETS AND LIABILITIES

June 30, 2007 (Unaudited)

            Cost    Value 
Assets ($):                 
Investment in securities—See Statement of Investments (including     
securities on loan, valued at $10,037,731)—Note 1(c):         
Unaffiliated issuers            86,559,172    86,416,227 
Affiliated issuers            11,018,691    11,018,691 
Cash                157,218 
Cash denominated in foreign currencies        25,355    25,355 
Receivable for investment securities sold            11,493,216 
Dividends and interest receivable                790,126 
Receivable from broker for swap transactions—Note 4        428,602 
Unrealized appreciation on swap—Note 4            248,931 
Receivable for shares of Beneficial Interest subscribed        57,522 
Swaps premium paid                38,158 
Unrealized appreciation on forward currency exchange contracts—Note 4    3,717 
                110,677,763 
Liabilities ($):                 
Due to The Dreyfus Corporation and affiliates—Note 3(b)        48,994 
Payable for investment securities purchased            26,210,237 
Payable for open mortgage backed dollar rolls            10,557,108 
Liability for securities on loan—Note 1(c)            10,400,691 
Unrealized depreciation on swaps—Note 4            332,524 
Payable for shares of Beneficial Interest redeemed        64,319 
Outstanding options written, at value (premiums received         
$27,820)—See Statement of Options Written—Note 4        10,973 
Unrealized depreciation on forward currency exchange contracts—Note 4    4,517 
Payable to broker from swap transactions—Note 4        2,573 
Payable for futures variation margin—Note 4            1,431 
                47,633,367 
Net Assets ($)                63,044,396 
Composition of Net Assets ($):             
Paid-in capital                71,569,644 
Accumulated distributions in excess of investment income—net        (144,411) 
Accumulated net realized gain (loss) on investments        (8,176,587) 
Accumulated net unrealized appreciation (depreciation) on investments,     
options transactions, swap transactions and foreign currency transactions     
(including $5,084 net unrealized appreciation on financial futures)    (204,250) 
Net Assets ($)                63,044,396 
 
 
Net Asset Value Per Share                 
    Class A    Class B    Class C    Class I 
Net Assets ($)    54,585,731    2,496,524    4,016,013    1,946,128 
Shares Outstanding    5,190,910    237,440    381,602    185,256 
Net Asset Value Per Share ($)    10.52    10.51    10.52    10.51 
See notes to financial statements.                 

28

STATEMENT OF OPERATIONS

Six Months Ended June 30, 2007 (Unaudited)

Investment Income ($):     
Income:     
Interest    1,546,637 
Cash dividends:     
Unaffiliated issuers    24,881 
Affiliated issuers    11,784 
Income from securities lending    2,043 
Total Income    1,585,345 
Expenses:     
Management fee—Note 3(a)    197,471 
Distribution and service fees—Note 3(b)    87,161 
Loan commitment fees—Note 2    600 
Total Expenses    285,232 
Investment Income—Net    1,300,113 
Realized and Unrealized Gain (Loss) on Investments—Note 4 ($): 
Net realized gain (loss) on investments and foreign currency transactions    (522,490) 
Net realized gain (loss) on options transactions    (21,618) 
Net realized gain (loss) on financial futures    (178,455) 
Net realized gain (loss) on swap transactions    176,067 
Net realized gain (loss) on forward currency exchange contracts    68,362 
Net Realized Gain (Loss)    (478,134) 
Net unrealized appreciation (depreciation) on investments,     
forward currency exchange contracts, foreign currency     
transactions, options and swap transactions [including     
($22,360) net unrealized (depreciation) on financial futures]    (349,457) 
Net Realized and Unrealized Gain (Loss) on Investments    (827,591) 
Net Increase in Net Assets Resulting from Operations    472,522 

See notes to financial statements.

The Fund 29

STATEMENT OF CHANGES IN NET ASSETS

    Six Months Ended     
    June 30, 2007    Year Ended 
    (Unaudited)    December 31, 2006 
Operations ($):         
Investment income—net    1,300,113    2,198,873 
Net realized gain (loss) on investments    (478,134)    (190,028) 
Net unrealized appreciation         
(depreciation) on investments    (349,457)    434,034 
Net Increase (Decrease) in Net Assets         
Resulting from Operations    472,522    2,442,879 
Dividends to Shareholders from ($):         
Investment income—net:         
Class A shares    (1,215,856)    (2,033,770) 
Class B shares    (52,383)    (129,603) 
Class C shares    (53,494)    (69,336) 
Class I shares    (50,155)    (84,536) 
Total Dividends    (1,371,888)    (2,317,245) 
Beneficial Interest Transactions ($):         
Net proceeds from shares sold:         
Class A shares    12,013,539    12,417,172 
Class B shares    557,584    667,285 
Class C shares    2,426,907    1,285,514 
Class I shares    78,522    595,821 
Dividends reinvested:         
Class A shares    1,062,039    1,705,392 
Class B shares    39,930    97,660 
Class C shares    28,176    29,617 
Class I shares    42,070    66,131 
Cost of shares redeemed:         
Class A shares    (4,954,665)    (10,912,615) 
Class B shares    (840,219)    (2,022,593) 
Class C shares    (487,450)    (887,977) 
Class I shares    (296,273)    (319,730) 
Increase (Decrease) in Net Assets         
from Beneficial Interest Transactions    9,670,160    2,721,677 
Total Increase (Decrease) in Net Assets    8,770,794    2,847,311 
Net Assets ($):         
Beginning of Period    54,273,602    51,426,291 
End of Period    63,044,396    54,273,602 
Distributions in excess of investment income—net    (144,411)    (72,636) 

30

    Six Months Ended     
    June 30, 2007    Year Ended 
    (Unaudited)    December 31, 2006 
Capital Share Transactions:         
Class A a         
Shares sold    1,127,291    1,178,484 
Shares issued for dividends reinvested    99,677    161,611 
Shares redeemed    (464,236)    (1,033,981) 
Net Increase (Decrease) in Shares Outstanding    762,732    306,114 
Class B a         
Shares sold    52,425    63,406 
Shares issued for dividends reinvested    3,745    9,261 
Shares redeemed    (78,655)    (192,381) 
Net Increase (Decrease) in Shares Outstanding    (22,485)    (119,714) 
Class C         
Shares sold    228,347    121,979 
Shares issued for dividends reinvested    2,645    2,803 
Shares redeemed    (45,739)    (83,950) 
Net Increase (Decrease) in Shares Outstanding    185,253    40,832 
Class I         
Shares sold    7,322    55,827 
Shares issued for dividends reinvested    3,951    6,271 
Shares redeemed    (27,760)    (30,267) 
Net Increase (Decrease) in Shares Outstanding    (16,487)    31,831 

a    During the period ended June 30, 2007, 37,871 Class B shares representing $405,046, were automatically 
    converted to 37,871 Class A shares and during the period ended December 31, 2006, 97,534 Class B shares 
    representing $1,024,145 were automatically converted to 97,513 Class A shares. 
See notes to financial statements. 

The Fund 31

FINANCIAL HIGHLIGHTS

The following tables describe the performance for each share class for the fiscal periods indicated. All information (except portfolio turnover rate) reflects financial results for a single fund share.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 derived from the fund’s financial statements.

   
Six Months Ended  		      Year Ended December 31,             
June 30, 2007 
Class A Shares    (Unaudited)    2006    2005    2004 a    2003    2002 
Per Share Data ($):                         
Net Asset Value,                         
beginning of period    10.64    10.65    10.94    10.90    10.75    10.37 
Investment Operations:                         
Investment income—net b    .25    .47    .40    .37    .33    .38 
Net realized and unrealized                         
gain (loss) on investments    (.11)    .04    (.13)    .18    .26    .42 
Total from Investment Operations    .14    .51    .27    .55    .59    .80 
Distributions:                         
Dividends from investment                         
income—net    (.26)    (.49)    (.48)    (.47)    (.39)    (.42) 
Dividends from net realized                         
gain on investments    —    —    (.08)    (.04)    (.05)    — 
Total Distributions    (.26)    (.49)    (.56)    (.51)    (.44)    (.42) 
Net asset value, end of period    10.52    10.67    10.65    10.94    10.90    10.75 
Total Return (%) c    1.22d    4.67    2.50    5.15    5.51    7.87 
Ratios/Supplemental Data (%):                     
Ratio of total expenses                         
to average net assets    .95e    .95    .95    .95    .95    .95 
Ratio of net investment income                         
to average net assets    4.67e    4.43    3.72    3.38    3.06    3.63 
Portfolio Turnover Rate    271.27d,f 422.95f    345.82f    315.33f    469.41f    524.46 
Net Assets, end of period                         
($ x 1000)    54,586    47,253    43,915    43,466    43,811    47,571 

a    As of January 1, 2004, the fund has adopted the method of accounting for interim payments on swap contracts in 
    accordance with Financial Accounting Standards Board Statement No. 133.These interim payments are reflected 
    within net realized and unrealized gain (loss) on swap contracts, however, prior to January 1, 2004, these interim 
    payments were reflected within interest income/expense in the Statement of Operations.The effect of these changes 
    the fiscal year ended December 31, 2004, was to decrease net investment income per share by $.02, increase net 
    realized and unrealized gain (loss) on investments per share by $.02 and decrease the ratio of net investment income 
    to average net assets from 3.52% to 3.38%. 
b    Based on average shares outstanding at each month end. 
c    Exclusive of sales charge. 
d    Not annualized. 
e    Annualized. 
f    The portfolio turnover rates excluding mortgage dollar roll transactions for the periods ended June 30, 2007, 
    December 31, 2006, December 31, 2005, December 31, 2004 and December 31, 2003 were 207.90%, 
    334.24%, 198.52%, 189.68% and 272.57%, respectively. 
See notes to financial statements. 

32

   
Six Months Ended  		      Year Ended December 31,             
June 30, 2007 
Class B Shares    (Unaudited)    2006    2005    2004 a    2003    2002 
Per Share Data ($):                         
Net Asset Value,                         
beginning of period    10.64    10.65    10.93    10.90    10.75    10.37 
Investment Operations:                         
Investment income—net b    .20    .38    .32    .30    .25    .30 
Net realized and unrealized                         
gain (loss) on investments    (.11)    .05    (.12)    .16    .25    .42 
Total from Investment Operations    .09    .43    .20    .46    .50    .72 
Distributions:                         
Dividends from investment                         
income—net    (.22)    (.41)    (.40)    (.39)    (.30)    (.34) 
Dividends from net realized                         
gain on investments    —    —    (.08)    (.04)    (.05)    — 
Total Distributions    (.22)    (.41)    (.48)    (.43)    (.35)    (.34) 
Net asset value, end of period    10.51    10.67    10.65    10.93    10.90    10.75 
Total Return (%) c    .85d    3.90    1.84    4.27    4.73    7.07 
Ratios/Supplemental Data (%):                     
Ratio of total expenses                         
to average net assets    1.70e    1.70    1.70    1.70    1.70    1.70 
Ratio of net investment income                         
to average net assets    3.92e    3.68    2.99    2.77    2.31    2.91 
Portfolio Turnover Rate    271.27d,f 422.95f    345.82f    315.33f    469.41f    524.46 
Net Assets, end of period                         
($ x 1000)    2,497    2,773    4,044    6,537    10,309    12,470 

a    As of January 1, 2004, the fund has adopted the method of accounting for interim payments on swap contracts in 
    accordance with Financial Accounting Standards Board Statement No. 133.These interim payments are reflected 
    within net realized and unrealized gain (loss) on swap contracts, however, prior to January 1, 2004, these interim 
    payments were reflected within interest income/expense in the Statement of Operations.The effect of these changes for 
    the period ended December 31, 2004, was to decrease net investment income per share by $.01, increase net realized 
    and unrealized gain (loss) on investments per share by $.01 and decrease the ratio of net investment income to 
    average net assets from 2.88% to 2.77%. 
b    Based on average shares outstanding at each month end. 
c    Exclusive of sales charge. 
d    Not annualized. 
e    Annualized. 
f    The portfolio turnover rates excluding mortgage dollar roll transactions for the period ended June 30, 2007, 
    December 31, 2006, December 31, 2005, December 31, 2004 and December 31, 2003 were 207.90%, 
    334.24%, 198.52%, 189.68% and 272.57%, respectively. 
See notes to financial statements. 

The Fund 33

FINANCIAL HIGHLIGHTS (continued)

   
Six Months Ended  		      Year Ended December 31,             
June 30, 2007 
Class C Shares    (Unaudited)    2006    2005    2004 a    2003    2002 
Per Share Data ($):                         
Net Asset Value,                         
beginning of period    10.65    10.66    10.94    10.91    10.76    10.38 
Investment Operations:                         
Investment income—net b    .20    .39    .32    .29    .25    .31 
Net realized and unrealized                         
gain (loss) on investments    (.11)    .04    (.12)    .17    .25    .41 
Total from Investment Operations    .09    .43    .20    .46    .50    .72 
Distributions:                         
Dividends from investment                         
income—net    (.22)    (.41)    (.40)    (.39)    (.30)    (.34) 
Dividends from net realized                         
gain on investments    —    —    (.08)    (.04)    (.05)    — 
Total Distributions    (.22)    (.41)    (.48)    (.43)    (.35)    (.34) 
Net asset value, end of period    10.52    10.68    10.66    10.94    10.91    10.76 
Total Return (%) c    .84d    3.89    1.83    4.28    4.73    7.06 
Ratios/Supplemental Data (%):                     
Ratio of total expenses                         
to average net assets    1.70e    1.70    1.70    1.70    1.70    1.70 
Ratio of net investment income                         
to average net assets    3.93e    3.67    2.98    2.66    2.31    2.92 
Portfolio Turnover Rate    271.27d,f 422.95f    345.82f    315.33f    469.41f    524.46 
Net Assets, end of period                         
($ x 1000)    4,016    2,097    1,658    1,598    1,692    1,980 

a    As of January 1, 2004, the fund has adopted the method of accounting for interim payments on swap contracts in 
    accordance with Financial Accounting Standards Board Statement No. 133.These interim payments are reflected 
    within net realized and unrealized gain (loss) on swap contracts, however, prior to January 1, 2004, these interim 
    payments were reflected within interest income/expense in the Statement of Operations.The effect of these changes for 
    the fiscal year ended December 31, 2004, was to decrease net investment income per share by $.01, increase net 
    realized and unrealized gain (loss) on investments per share by $.01 and decrease the ratio of net investment income 
    to average net assets from 2.80% to 2.66%. 
b    Based on average shares outstanding at each month end. 
c    Exclusive of sales charge. 
d    Not annualized. 
e    Annualized. 
f    The portfolio turnover rates excluding mortgage dollar roll transactions for the period ended June 30, 2007, 
    December 31, 2006, December 31, 2005, December 31, 2004 and December 31, 2003 were 207.90%, 
    334.24%, 198.52%, 189.68% and 272.57%, respectively. 
See notes to financial statements. 

34

   
Six Months Ended  		      Year Ended December 31,             
June 30, 2007 
Class I Shares    (Unaudited)    2006    2005    2004 a    2003    2002 
Per Share Data ($):                         
Net Asset Value,                         
beginning of period    10.65    10.64    10.93    10.89    10.74    10.36 
Investment Operations:                         
Investment income—net b    .26    .49    .43    .39    .37    .41 
Net realized and unrealized                         
gain (loss) on investments    (.13)    .05    (.13)    .19    .24    .41 
Total from Investment Operations    .13    .54    .30    .58    .61    .82 
Distributions:                         
Dividends from investment                         
income—net    (.27)    (.52)    (.51)    (.50)    (.41)    (.44) 
Dividends from net realized                         
gain on investments    —    —    (.08)    (.04)    (.05)    — 
Total Distributions    (.27)    (.52)    (.59)    (.54)    (.46)    (.44) 
Net asset value, end of period    10.51    10.66    10.64    10.93    10.89    10.74 
Total Return (%)    1.34c    4.93    2.76    5.43    5.78    8.14 
Ratios/Supplemental Data (%):                     
Ratio of total expenses                         
to average net assets    .70d    .70    .70    .70    .70    .70 
Ratio of net investment income                         
to average net assets    4.91d    4.68    3.97    3.61    3.70    3.88 
Portfolio Turnover Rate    271.27c,e 422.95e    345.82e    315.33e    469.41e    524.46 
Net Assets, end of period                         
($ x 1000)    1,946    2,151    1,809    1,926    2,202    3,387 

a    As of January 1, 2004, the fund has adopted the method of accounting for interim payments on swap contracts in 
    accordance with Financial Accounting Standards Board Statement No. 133.These interim payments are reflected 
    within net realized and unrealized gain (loss) on swap contracts, however, prior to January 1, 2004, these interim 
    payments were reflected within interest income/expense in the Statement of Operations.The effect of these changes for 
    the fiscal year ended December 31, 2004, was to decrease net investment income per share by $.02, increase net 
    realized and unrealized gain (loss) on investments per share by $.02 and decrease the ratio of net investment income 
    to average net assets from 3.74% to 3.61%. 
b    Based on average shares outstanding at each month end. 
c    Not annualized. 
d    Annualized. 
e    The portfolio turnover rates excluding mortgage dollar roll transactions for the period ended June 30, 2007, 
    December 31, 2006, December 31, 2005, December 31, 2004 and December 31, 2003 were 207.90%, 
    334.24%, 198.52%, 189.68% and 272.57%, respectively. 
See notes to financial statements. 

The Fund 35

NOTES TO FINANCIAL STATEMENTS (Unaudited)

NOTE 1—Significant Accounting Policies:

Dreyfus Premier Managed Income Fund (the “fund”) is a separate diversified series of The Dreyfus/Laurel Funds Trust (the “Trust”), which is registered under the Investment Company Act of 1940, as amended (the “Act”), as an open-end management investment company and operates as a series company offering six series, including the fund, as of the date of this report. The fund’s investment objective is to seek high current income consistent with what is believed to be prudent risk of capital primarily through investments in investment-grade corporate and U.S. Government obligations which primarily have maturities of 10 years or less. The Dreyfus Corporation (the “Manager” or “Dreyfus”) serves as the fund’s investment manager. During the reporting period, the Manager was a wholly-owned subsidiary of Mellon Financial Corporation (“Mellon Financial”).

On July 1, 2007, Mellon Financial and The Bank of New York Company, Inc. merged, forming The Bank of New York Mellon Corporation. As part of this transaction, Dreyfus became a wholly-owned subsidiary of The Bank of New York Mellon Corporation.

The fund’s Board of Directors approved the redesignation of the fund’s Class R shares as Class I shares, effective June 1, 2007.The description of the eligibility requirements for Class I shares remains the same as it was for Class R shares.

During the reporting period, Dreyfus Service Corporation (the “Distributor”), a wholly-owned subsidiary of the Manager, served as the distributor of the fund’s shares. Effective, June 30, 2007, the Distributor became known as MBSC Securities Corporation. The fund is authorized to issue an unlimited number of shares of Beneficial Interest in the following classes of shares: Class A, Class B, Class C and Class I. Class A, Class B and Class C shares are sold primarily to retail investors through financial intermediaries and bear a distribution fee and/or service fee. Class A shares are sold with a front-end sales charge, while Class B and Class C shares are subject to a contingent deferred sales charge (“CDSC”). Class B shares automatically convert to Class A shares after

36

six years.The fund no longer offer Class B shares, except in connection with dividend reinvestment and permitted exchanges of Class B shares. Class I shares are sold primarily to bank trust departments and other financial service providers (including Mellon Financial and its affiliates) acting on behalf of customers having a qualified trust or investment account or relationship at such institution, and bear no distribution fee or service fee. Class I shares are offered without a front-end sales charge or CDSC. Each class of shares has identical rights and privileges, except with respect to distribution fees and voting rights on matters affecting a single class. Income, expenses (other than expenses attributable to a specific class), and realized and unrealized gains or losses on investments are allocated to each class of shares based on its relative net assets.

The fund’s financial statements are prepared in accordance with U.S. generally accepted accounting principles, which may require the use of management estimates and assumptions. Actual results could differ from those estimates.

(a) Portfolio valuation: Investments in securities (excluding short-term investments other than U.S. Treasury Bills), financial futures, options, swaps and forward currency exchange contracts are valued each business day by an independent pricing service (the “Service”) approved by the Board of Trustees. Investments for which quoted bid prices are readily available and are representative of the bid side of the market in the judgment of the Service are valued at the mean between the quoted bid prices (as obtained by the Service from dealers in such securities) and asked prices (as calculated by the Service based upon its evaluation of the market for such securities). Other investments (which constitute a majority of the portfolio securities) are valued as determined by the Service, based on methods which include consideration of: yields or prices of securities of comparable quality, coupon, maturity and type; indications as to values from dealers; and general market conditions. Restricted securities, as well as securities or other assets for which recent market quotations are not readily available and are not valued by a pricing service approved by the Board of Trustees,

The Fund 37

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

or are determined by the fund not to reflect accurately fair value, are valued at fair value as determined in good faith under the direction of the Board of Trustees. The factors that may be considered when fair valuing a security include fundamental analytical data, the nature and duration of restrictions on disposition, an evaluation of the forces that influence the market in which the securities are purchased and sold and public trading in similar securities of the issuer or comparable issuers. Short-term investments, excluding U.S.Treasury Bills, are carried at amortized cost, which approximates fair value. Registered open-end investment companies that are not traded on an exchange are valued at their net asset value. Financial futures and options, which are traded on an exchange, are valued at the last sales price on the securities exchange on which such securities are primarily traded or at the last sales price on the national securities market on each business day. Options traded over-the-counter are priced at the mean between the bid and asked prices. Investments denominated in foreign currencies are translated to U.S. dollars at the prevailing rates of exchange. Forward currency exchange contracts are valued at the forward rate. Investments in swap transactions are valued each business day by a pricing service approved by the Board of Trustees. Swaps are valued by the service by using a swap pricing model which incorporates among other factors, default probabilities, recovery rates, credit curves of the underlying issuer and swap spreads on interest rates.

The Financial Accounting Standards Board (FASB) released Statement of Financial Accounting Standards No. 157 “Fair Value Measurements” (“FAS 157”). FAS 157 establishes an authoritative definition of fair value, sets out a framework for measuring fair value, and requires additional disclosures about fair-value measurements. The application of FAS 157 is required for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. Management does not believe that the application of this standard will have a material impact on the financial statements of the fund.

(b) Foreign currency transactions: The fund does not isolate that portion of the results of operations resulting from changes in foreign

38

exchange rates on investments from the fluctuations arising from changes in the market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss on investments.

Net realized foreign exchange gains or losses arise from sales and maturities of short-term securities, sales of foreign currencies, currency gains or losses realized on securities transactions and the difference between the amount of dividends, interest and foreign withholding taxes recorded on the fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the value of assets and liabilities other than investments in securities, resulting from changes in exchange rates. Such gains and losses are included with net realized and unrealized gain or loss on investments.

(c) Securities transactions and investment income: Securities transactions are recorded on a trade date basis. Realized gain and loss from securities transactions are recorded on the identified cost basis. Dividend income is recorded on the ex-dividend date and interest income, including, where applicable, accretion of discount and amortization of premium on investments, is recognized on the accrual basis.

Pursuant to a securities lending agreement with Mellon Bank, N.A., an affiliate of the Manager, the fund may lend securities to qualified institutions. It is the fund’s policy, that at origination, all loans are secured by collateral of at least 102% of the value of U.S. securities loaned and 105% of the value of foreign securities loaned. Collateral equivalent to at least 100% of the market value of securities on loan is maintained at all times. Cash collateral is invested in certain money market mutual funds managed by the Manager.The fund is entitled to receive all income on securities loaned, in addition to income earned as a result of the lending transaction.Although each security loaned is fully collateralized, the fund bears the risk of delay in recovery of, or loss of rights in, the securities loaned should a borrower fail to return the securities in a timely manner.

The Fund 39

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

(d) Affiliated issuers: Investments in other investment companies advised by the Manager are defined as “affiliated” in the Act.

(e) Concentration of Risk: The fund invests primarily in debt securities. Failure of an issuer of the debt securities to make timely interest or principal payments, or a decline or the perception of a decline in the credit quality of a debt security, can cause the debt security’s price to fall, potentially lowering the fund’s share price. In addition the value of debt securities may decline due to general market conditions that are not specifically related to a particular company, such as real or perceived adverse economic conditions, changes in outlook for corporate earnings, changes in interest or currency rates or adverse investor sentiment.They may also decline because of factors that affect a particular industry.

(f) Dividends to shareholders: It is the policy of the fund to declare dividends daily from investment income-net. Such dividends are paid monthly. Dividends from net realized capital gain, if any, are normally declared and paid annually, but the fund may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code of 1986, as amended (the “Code”).To the extent that net realized capital gain can be offset by capital loss carryovers, it is the policy of the fund not to distribute such gain.

(g) Federal income taxes: It is the policy of the fund to continue to qualify as a regulated investment company, if such qualification is in the best interests of its shareholders, by complying with the applicable provisions of the Code, and to make distributions of taxable income sufficient to relieve it from substantially all federal income and excise taxes.

The FASB released FASB Interpretation No. 48 “Accounting for Uncertainty in Income Taxes” (FIN 48). FIN 48 provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. FIN 48 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the fund’s tax returns to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority.Tax positions not deemed to meet the more-

40

likely-than-not threshold would be recorded as a tax benefit or expense in the current year.Adoption of FIN 48 is required for fiscal years beginning after December 15, 2006 and is to be applied to all open tax years as of the effective date. Management does not believe that the application of this standard will have a material impact on the financial statements of the fund.

The fund has an unused capital loss carryover of $7,402,051 available for federal income tax purposes to be applied against future net securities profits, if any, realized subsequent to December 31, 2006. If not applied, $4,281,545 of the carryover expires in fiscal 2007, $2,840,637 expires in fiscal 2008 and $279,869 expires in fiscal 2014.

The tax character of distributions paid to shareholders during the fiscal year ended December 31, 2006 were as follows: ordinary income $2,317,245. The tax character of current year distributions, will be determined at the end of the current fiscal year.

NOTE 2—Bank Line of Credit:

The fund participates with other Dreyfus-managed funds in a $350 million redemption credit facility (the “Facility”) to be utilized for temporary or emergency purposes, including the financing of redemptions. In connection therewith, the fund has agreed to pay commitment fees on its pro rata portion of the Facility. Interest is charged to the fund based on prevailing market rates in effect at the time of borrowing. During the period ended June 30, 2007, the fund did not borrow under the Facility.

NOTE 3—Investment Management Fee and Other Transactions With Affiliates:

(a) Pursuant to an Investment Management agreement with the Manager, the Manager provides or arranges for one or more third parties and/or affiliates to provide investment advisory, administrative, custody, fund accounting and transfer agency services to the fund.The Manager also directs the investments of the fund in accordance with

The Fund 41

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

its investment objective, policies and limitations. For these services, the fund is contractually obligated to pay the Manager a fee, calculated daily and paid monthly, at the annual rate of .70% of the value of the fund’s average daily net assets. Out of its fee, the Manager pays all of the expenses of the fund except brokerage fees, taxes, interest, commitment fees, Rule 12b-1 distribution fees and expenses, service fees and expenses of non-interested Trustees (including counsel fees) and extraordinary expenses. In addition, the Manager is required to reduce its fee in an amount equal to the fund’s allocable portion of fees and expenses of the non-interested Trustees (including counsel fees). Each Trustee receives $45,000 per year, plus $6,000 for each joint Board meeting of The Dreyfus/Laurel Funds, Inc.,The Dreyfus/Laurel Tax-Free Municipal Funds and the Trust (collectively, the “Dreyfus/Laurel Funds”) attended, $2,000 for separate in-person committee meetings attended which are not held in conjunction with a regularly scheduled Board meeting and $1,500 for Board meetings and separate committee meetings attended that are conducted by telephone and is reimbursed for travel and out-of-pocket expenses. With respect to Board meetings, the Chairman of the Board receives an additional 25% of such compensation (with the exception of reimbursable amounts). With respect to compensation committee meetings, the Chair of the compensation committee receives $900 per meeting and, with respect to audit committee meetings, the Chair of the audit committee receives $1,350 per meeting. In the event that there is an in-person joint committee meeting or a joint telephone meeting of the Dreyfus/Laurel Funds and Dreyfus High Yield Strategies Fund, the $2,000 or $1,500 fee, as applicable, will be allocated between the Dreyfus/Laurel Funds and Dreyfus High Yield Strategies Fund.These fees and expenses are charged and allocated to each series based on net assets. Amounts required to be paid by the Trust directly to the non-interested Trustees, that would be applied to offset a portion of the management fee payable to the Manager, are in fact paid directly by the Manager to the non-interested Trustees.

42

During the period ended June 30, 2007, the Distributor retained $3,094 from commissions earned on sales of the fund’s Class A shares and $2,619 and $83 from CDSC on redemptions on the fund’s Class B and Class C shares, respectively.

(b) Under separate Distribution Plans (the “Plans”) adopted pursuant to Rule 12b-1 under the Act, Class A shares pay annually up to .25% of the value of the average daily net assets to compensate the Distributor for shareholder servicing activities and expenses primarily intended to result in the sale of Class A shares. Class B and Class C shares may pay the Distributor for distributing their shares at an aggregate annual rate of .75% of the value of the average daily net assets of Class B and Class C shares. Class B and Class C shares are also subject to a service plan adopted pursuant to Rule 12b-1 (the “Service Plan”), under which Class B and Class C shares pay the Distributor for providing certain services to the holders of their shares a fee at the annual rate of .25% of the value of the average daily net assets of Class B and Class C shares. During the period ended June 30, 2007, Class A, Class B and Class C shares were charged $61,748, $9,392 and $9,668, respectively, pursuant to their respective Plans. Class B and Class C shares were charged $3,131 and $3,222, respectively, pursuant to the Service Plan.

Under its terms, the Plans and Service Plan shall remain in effect from year to year, provided such continuance is approved annually by a vote of majority of those Trustees who are not “interested persons” of the Trust and who have no direct or indirect financial interest in the operation of or in any agreement related to the Plans or Service Plan.

The components of “Due to The Dreyfus Corporation and affiliates” in the Statement of Assets and Liabilities consist of: management fees $33,052, Rule 12b-1 distribution plan fees $14,712 and shareholder services plan fees $1,230.

(c) The Trust and the Manager have received an exemptive order from the SEC which, among other things, permits the fund to use cash col-

The Fund 43

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

lateral received in connection with lending the fund’s securities and other uninvested cash to purchase shares of one or more registered money market mutual funds advised by the Manager in excess of the limitations imposed by the Act.

NOTE 4—Securities Transactions:

The aggregate amount of purchases and sales (including paydowns) of investment securities, excluding short-term securities, forward currency exchange contracts, futures, options and swap transactions during the period ended June 30, 2007, amounted to $220,914,533 and $205,721,164, respectively, of which $48,014,112 in purchases and $48,062,754 in sales were from mortgage dollar roll transactions.

A mortgage dollar roll transaction involves a sale by the fund of mortgage related securities that it holds with an agreement by the fund to repurchase similar securities at an agreed upon price and date. The securities purchased will bear the same interest rate as those sold, but generally will be collateralized by pools of mortgages with different prepayment histories than those securities sold.

The fund may purchase and write (sell) call/put options in order to gain exposure to or protect against change in the market.

As a writer of call options, the fund receives a premium at the outset and then bears the market risk of unfavorable changes in the price of the financial instruments underlying the options. Generally, the fund would incur a gain, to the extent of the premium, if the price of the underlying financial instrument decreases between the date the option is written and the date on which the option is terminated. Generally, the fund would realize a loss, if the price of the financial instrument increases between those dates.

As a writer of put options, the fund receives a premium at the outset and then bears the market risk of unfavorable changes in the price of the financial instruments underlying the options. Generally, the fund would incur a gain, to the extent of the premium, if the price of the underlying financial instrument increases between the date the option

44

is written and the date on which the option is terminated. Generally, the fund would realize a loss, if the price of the financial instrument decreases between those dates.

In addition, the following table summarizes the fund’s call/put options written during the period ended June 30, 2007:

    Face Amount        Options Terminated 
    Covered by    Premiums        Net Realized 
Options Written:    Contracts ($)    Received ($)    Cost ($)    Gain ($) 
Contracts outstanding                 
December 31, 2006    3,395,000    12,222    —    — 
Contracts written    29,740,000    40,227         
Contracts terminated;                 
Closed    2,500,000    4,641    1,219    3,422 
Expired    5,895,000    19,988    —    19,988 
Contracts outstanding                 
June 30, 2007    24,740,000    27,820         

The fund may invest in financial futures contracts in order to gain exposure to or protect against changes in the market. The fund is exposed to market risk as a result of changes in the value of the underlying financial instruments. Investments in financial futures require the fund to “mark to market” on a daily basis, which reflects the change in the market value of the contracts at the close of each day’s trading. Accordingly, variation margin payments are received or made to reflect daily unrealized gains or losses.When the contracts are closed, the fund recognizes a realized gain or loss.These investments require initial margin deposits with a broker.The amount of these deposits is determined by the exchange or Board of Trade on which the contract is traded and is subject to change. Contracts open at June 30, 2007 are set forth in the Statement of Financial Futures.

The fund enters into forward currency exchange contracts in order to hedge its exposure to changes in foreign currency exchange rates on its foreign portfolio holdings and to settle foreign currency transactions. When executing forward currency exchange contracts, the fund is obligated to buy or sell a foreign currency at a specified rate on a certain date in the future.With respect to sales of forward cur-

The Fund 45

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

rency exchange contracts, the fund would incur a loss if the value of the contract increases between the date the forward contract is opened and the date the forward contract is closed.The fund realizes a gain if the value of the contract decreases between those dates.With respect to purchases of forward currency exchange contracts, the fund would incur a loss if the value of the contract decreases between the date the forward contract is opened and the date the forward contract is closed.The fund realizes a gain if the value of the contract increases between those dates.The fund is also exposed to credit risk associated with counterparty nonperformance on these forward currency exchange contracts which is typically limited to the unrealized gain on each open contract.The following summarizes open forward currency exchange contracts at June 30, 2007:

    Foreign            Unrealized 
Forward Currency    Currency            Appreciation 
Exchange Contracts    Amounts    Cost ($)    Value ($)    (Depreciation) ($) 
Purchases:                 
Icelandic Krona,                 
expiring 9/19/2007    9,740,000    152,759    156,475    3,717 
Sales:        Proceeds ($)         
Euro, expiring 9/19/2007    214,170    286,111    290,628    (4,517) 
Total                (800) 

The fund may enter into swap agreements to exchange the interest rate on, or return generated by, one nominal instrument for the return generated by another nominal instrument.

The fund accrues for the interim payments on swap contracts on a daily basis, with the net amount recorded within unrealized appreciation (depreciation) of swap contracts in the Statement of Assets and Liabilities. Once the interim payments are settled in cash, the net amount is recorded as realized gain (loss) on swaps, in addition to realized gain (loss) recorded upon the termination of swaps contracts in the Statement of Operations. Fluctuations in the value of swap contracts are recorded as a component of net change in unrealized appreciation (depreciation) on investments.

46

The fund may enter into interest rate swaps which involve the exchange of commitments to pay and receive interest based on a notional principal amount.The following summarizes interest rate swaps entered into by the fund at June 30, 2007:

                    Unrealized 
Notional    Reference        (Pay)/Receive        Appreciation 
Amount ($)    Entity    Counterparty    Fixed Rate (%) Expiration (Depreciation)($) 
 
1,565,000    USD-3 MONTH    JP Morgan    5.56    8/3/2016    11,977 
    LIBOR BBA    Chase             
270,000    USD-3 MONTH    Lehman             
    LIBOR BBA    Brothers    4.10    12/2/2009    (8,025) 
                    3,952 

Credit default swaps involve commitments to pay or receive a fixed interest rate in exchange for payment if a credit event affecting a third party (the referenced company) occurs. Credit events may include a failure to pay interest or principal, bankruptcy, or restructuring. For those credit default swaps in which the fund is receiving a fixed rate, the fund is providing credit protection on the underlying instrument. The maximum payouts for these contracts are limited to the notional amount of each swap. The following summarizes open credit default swap agreements at June 30, 2007:

                    Unrealized 
Notional    Reference        (Pay)/Receive        Appreciation 
Amount ($)    Entity    Counterparty    Fixed Rate (%)    Expiration (Depreciation)($) 
 
1,070,000    Altria, 7%, 11/4/2013    Citigroup    (.27)    12/20/2011    (753) 
580,000    Autozone, 5.875%,                 
    10/15/2012    Goldman Sachs    (.62)    6/20/2012    1,353 
260,000    Dow Jones                 
    CDX.NA.IG.6 Index    UBS    1.40    12/20/2011    2,770 
250,000    Dow Jones    Deutsche             
    CDX.NA.IG.6 Index    Bank    1.40    12/20/2011    6,205 
198,000    Centurytel,                 
    7.875%, 8/15/2012    Citigroup    (1.16)    9/20/2015    (4,044) 
58,000    Centurytel,    Morgan             
    7.875%, 8/15/2012    Stanley    (1.15)    9/20/2015    (1,147) 
257,000    ConocoPhilips,    Bear             
    4.75%, 10/15/2012    Stearns & Co.    (.31)    6/20/2010    (1,719) 
540,000    Ford Motor                 
    Company, 7.45%,    Morgan             
    7/16/2031    Stanley    4.50    3/20/2012    (10,968) 

The Fund 47

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

                    Unrealized 
Notional    Reference        (Pay)/Receive        Appreciation 
Amount ($)    Entity    Counterparty    Fixed Rate (%) Expiration (Depreciation)($) 
 
190,000    Ford Motor                 
    Company, 7.45%,    Morgan             
    7/16/2031    Stanley    5.35    3/20/2012    2,080 
540,000    General Motors,    Morgan             
    7.125%, 7/15/2013    Stanley    (3.30)    3/20/2012    10,218 
190,000    General Motors,    Morgan             
    7.125%, 7/15/2013    Stanley    (3.80)    3/20/2012    73 
970,000    JPMCC 2006-CB15,                 
    CL.AJ, 5.89%,    Merrill             
    6/12/2043    Lynch    (.13)    6/20/2016    (1,071) 
150,000    Kaupthing Bank,    Deutsche             
    5.52%, 12/1/2009    Bank    .65    9/20/2007    220 
575,000    Kaupthing Bank,    Deutsche             
    5.52%, 12/1/2009    Bank    .52    9/20/2007    648 
110,000    Kimberly Clark,    JP Morgan             
    6.875%, 2/15/2014    Chase    (.37)    12/20/2016    (555) 
100,000    Kimberly Clark,    Morgan             
    6.875%, 2/15/2014    Stanley    (.38)    12/20/2016    (578) 
135,000    Kraft Foods,                 
    5.625%, 11/1/2011    Barclays    (.57)    6/20/2017    818 
145,000    Kraft Foods,    Goldman             
    5.625%, 11/1/2011    Sachs    (.53)    6/20/2017    1,315 
410,000    Kimberly Clark,    Morgan             
    6.875%, 2/15/2014    Stanley    (.37)    12/20/2016    (2,067) 
400,000    Kimberly Clark,    JP Morgan             
    6.875%, 2/15/2014    Chase    (.37)    12/20/2016    (2,017) 
570,000    Structured Model                 
    Portfolio 0-3%    Barclays    —    6/20/2012    (64,208) 
430,000    Structured Model                 
    Portfolio 5-7%    Barclays    —    6/20/2017    (3,535) 
405,000    Structured Model    JP Morgan             
    Portfolio 0-3%    Chase    —    9/20/2013    16,200 
288,000    Structured Model    Morgan             
    Portfolio 0-3%    Stanley    —    9/20/2013    9,613 
277,000    Structured Model                 
    Portfolio 0-3%    UBS    —    9/20/2013    10,803 
341,000    Morgan Stanley,                 
    6.6%, 4/1/2012    Citigroup    (.62)    6/20/2015    (4,251) 
269,000    News America,    Lehman             
    7.25%, 5/18/2018    Brothers    .47    12/20/2009    2,244 
535,000    Northern Tobacco,    Lehman             
    5%, 6/1/2046    Brothers    1.35    12/20/2011    (4,847) 
120,000    Nucor, 4.875%,    Bear             
    10/1/2012    Stearns & Co.    (.40)    6/20/2010    (1,006) 
1,070,000    AT&T, 5.1%,    Goldman             
    9/15/2014    Sachs    (.49)    3/20/2017    (4,082) 
535,000    Southern California                 
    Tobacco,                 
    5%, 6/1/2037    Citigroup    1.35    12/20/2011    (4,847) 
280,000    Univision                 
    Communication,    Lehman             
    7.85%, 7/15/2011    Brothers    2.60    6/20/2010    (3,719) 

48
                    Unrealized 
Notional    Reference        (Pay)/Receive        Appreciation 
Amount ($)    Entity    Counterparty    Fixed Rate (%)    Expiration (Depreciation)($) 
 
250,000    Republic of                 
    Venzuela, 9.25%,    Deutsche             
    9/15/2027    Bank    (2.87)    6/20/2013    5,543 
260,000    Republic of                 
    Venzuela, 9.25%,                 
    9/15/2027    UBS    (2.33)    11/20/2016    15,593 
180,000    Republic of                 
    Venzuela, 9.25%,                 
    9/15/2027    UBS    (2.53)    1/20/2017    7,225 
290,000    Republic of                 
    Venzuela, 9.25%,                 
    9/15/2027    UBS    (2.33)    1/20/2017    15,602 
150,000    VF, 8.5%, 10/1/2010    Morgan             
        Stanley    (.72)    6/20/2016    (3,160) 
180,000    VF, 8.5%, 10/1/2010    Morgan             
        Stanley    (.46)    6/20/2016    (1,986) 
100,000    VF, 8.5%, 10/1/2010    Morgan             
        Stanley    (.45)    6/20/2011    (1,067) 
270,000    VF, 8.5%, 10/1/2010    UBS    (.45)    6/20/2011    (2,881) 
530,000    ABX HE 07-1 BBB    Morgan             
    Index    Stanley    2.24    5/25/2046    (63,912) 
80,000    ABX HE 07-1    Deutsche             
    BBB Index    Bank    2.24    8/25/2037    (8,066) 
270,000    CDX IG7 3-5%                 
    10YR Index    UBS    5.88    12/20/2016    (31,468) 
540,000    CDX IG7 3-5%                 
    10YR Index    UBS    (2.65)    12/20/2013    37,032 
270,000    CDX IG7 3-5%                 
    10YR Index    Barclays    5.90    12/20/2016    (31,135) 
540,000    CDX IG7 3-5%                 
    10YR Index    Barclays    (2.60)    12/20/2013    38,175 
355,000    DOW JONES                 
    CDX.NA.IG.4 Index    Citigroup    (.71)    6/20/2010    (6,646) 
230,000    DOW JONES    Morgan             
    CDX.NA.IG.4 Index    Stanley    (.69)    6/20/2010    (4,177) 
240,000    DOW JONES                 
    CDX.NA.IG.4 Index    Citigroup    (.69)    6/20/2010    (4,358) 
427,700    DOW JONES    Morgan             
    CDX.NA.IG.4 Index    Stanley    (.35)    6/20/2010    (3,743) 
269,300    DOW JONES                 
    CDX.NA.IG.4 Index    Merrill Lynch    (.31)    6/20/2010    (2,016) 
740,000    DOW JONES                 
    CDX.NA.IG.7 Index    Citigroup    (1.09)    12/20/2016    25,645 
1,480,000    DOW JONES                 
    CDX.NA.IG.7 Index    Citigroup    .51    12/20/2016    (19,772) 
800,000    DOW JONES    JP Morgan             
    CDX.NA.IG.7 Index    Chase    (1.10)    12/20/2016    27,579 
1,600,000    DOW JONES    JP Morgan             
    CDX.NA.IG.7 Index    Chase    .51    12/20/2016    (20,784) 
                    (83,631) 

The Fund 49

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

Total return swaps involve commitments to pay interest in exchange for a market-linked return based on a notional amount.To the extent the total return of the security or index underlying the transaction exceeds or falls short of the offsetting interest rate obligation, the portfolio will receive a payment from or make a payment to the counter-party, respectively. The following summarizes total return swaps entered into by the portfolio at June 30, 2007:

                Unrealized 
Notional    Reference        (Pay)/Receive    Appreciation 
Amount ($)    Entity    Counterparty    Fixed Rate (%) Expiration (Depreciation)($) 
 
1,550,000    Commercial             
    Mortgage    Lehman         
    Index Swap    Brothers    — 10/1/2007    (3,914) 

Risks may arise upon entering into these agreements from the potential inability of the counterparties to meet the terms of the agreement and are generally limited to the amount of net payments to be received, if any, at the date of default.

At June 30, 2007, accumulated net unrealized depreciation on investments was $142,945, consisting of $504,875 gross unrealized appreciation and $647,820 gross unrealized depreciation.

At June 30,2007,the cost of investments for federal income tax purposes was substantially the same as the cost for financial reporting purposes (see the Statement of Investments).

50

INFORMATION ABOUT THE REVIEW AND APPROVAL OF THE FUND’S INVESTMENT MANAGEMENT AGREEMENT (Unaudited)

At a meeting of the fund’s Board of Trustees held on January 31 and February 1, 2007, the Board considered the re-approval for an annual period of the fund’s Investment Management Agreement (“Management Agreement”), pursuant to which the Manager provides the fund with investment advisory and administrative services. The Board members, none of whom are “interested persons” (as defined in the Investment Company Act of 1940, as amended) of the fund, were assisted in their review by independent legal counsel and met with counsel in executive session separate from representatives of the Manager.

Analysis of Nature, Extent and Quality of Services Provided to the Fund.The Board members considered information previously provided to them in a presentation from representatives of the Manager regarding services provided to the fund and other funds in the Dreyfus fund complex, and representatives of the Manager confirmed that there had been no material changes in this information.The Board also discussed the nature, extent and quality of the services provided to the fund pursuant to its Management Agreement. The Manager’s representatives reviewed the fund’s distribution of accounts and the relationships the Manager has with various intermediaries and the different needs of each.The Manager’s representatives noted the distribution channels for the fund as well as the diversity of distribution among the funds in the Dreyfus fund complex, and the Manager’s corresponding need for broad, deep, and diverse resources to be able to provide ongoing shareholder services to each distribution channel, including those of the fund.The Board also reviewed the number of shareholder accounts in the fund, as well as the fund’s asset size.

The Board members also considered the Manager’s research and portfolio management capabilities and that the Manager also provides oversight of day-to-day fund operations, including fund accounting and administration and assistance in meeting legal and regulatory requirements. The Board members also considered the Manager’s extensive administrative, accounting and compliance infrastructure.

The Fund 51

INFORMATION ABOUT THE REVIEW AND APPROVAL OF THE

FUND’S INVESTMENT MANAGEMENT AGREEMENT (Unaudited) (continued)

Comparative Analysis of the Fund’s Performance and Management Fee and Expense Ratio. The Board members reviewed the fund’s performance and placed significant emphasis on comparisons to a group of retail front-end load, intermediate investment-grade debt funds (the “Performance Group”) and to a larger universe of funds, consisting of all retail and institutional intermediate investment-grade debt funds (the “Performance Universe”) selected and provided by Lipper, Inc., an independent provider of investment company data.The Board was provided with a description of the methodology Lipper used to select the Performance Group and Performance Universe, as well as the Expense Group and Expense Universe (discussed below). The Board members discussed the results of the comparisons and noted that the fund’s yield performance for the past ten one-year periods ended November 30th (1997-2006) was variously above and below the Performance Group and Performance Universe medians.The Board members noted that the fund’s total return performance was above the Performance Group and Performance Universe medians for various periods ended November 30, 2007 (except it was below the Performance Universe median for the 10-year period).The Manager also provided a comparison of the fund’s total returns to the returns of the fund’s benchmark index for each calendar year for the past ten years.

The Board members also discussed the fund’s management fee and expense ratio and reviewed the range of management fees and expense ratios of a comparable group of funds (the “Expense Group”) and a broader group of funds (the “Expense Universe”), each selected and provided by Lipper. Noting that the fund was the only fund in the Expense Group with a “unitary fee structure”, the Board members noted that the fund’s management fee and expense ratio were above the Expense Group and Expense Universe medians.

Representatives of the Manager reviewed with the Board members the fees paid to the Manager or its affiliates by mutual funds managed by the Manager or its affiliates with similar investment objectives, policies and strategies, and included in the same Lipper category as the fund (the “Similar Funds”), and by other accounts managed by the

52

Manager or its affiliates with similar investment objectives, policies and strategies as the fund (the “Similar Accounts”). The Manager’s representatives explained the nature of the Similar Accounts and the differences, from the Manager’s perspective, in providing services to such Similar Accounts as compared to managing and providing services to the fund. The Manager’s representatives also reviewed the costs associated with distribution through intermediaries. The Board analyzed differences in fees paid to the Manager and discussed the relationship of the fees paid in light of the services provided, noting the fund’s “unitary fee” structure.The Board members considered the relevance of the fee information provided for the Similar Funds and Similar Accounts to evaluate the appropriateness and reasonableness of the fund’s management fee. The Board acknowledged that differences in fees paid by the Similar Funds and Similar Accounts seemed to be consistent with the services provided.

Analysis of Profitability and Economies of Scale. The Manager’s representatives reviewed the dollar amount of expenses allocated and profit received by the Manager and the method used to determine such expenses and profit. The Board previously had been provided with information prepared by an independent consulting firm regarding the Manager’s approach to allocating costs to, and determining the profitability of, individual funds and the entire Dreyfus mutual fund complex.The Board also was informed that the methodology had also been reviewed by an independent registered public accounting firm which, like the consultant, found the methodology to be reasonable. The consulting firm also analyzed where any economies of scale might emerge in connection with the management of the fund. The Board members evaluated the profitability analysis in light of the relevant circumstances for the fund and the extent to which economies of scale would be realized if the fund grows and whether fee levels reflect these economies of scale for the benefit of fund shareholders. The Board members also considered potential benefits to the Manager from acting as investment adviser and noted that there were no soft dollar arrangements with respect to trading the fund’s portfolio.

The Fund 53

INFORMATION ABOUT THE REVIEW AND APPROVAL OF THE

FUND’S INVESTMENT MANAGEMENT AGREEMENT (Unaudited) (continued)

It was noted that the Board members should consider the Manager’s profitability with respect to the fund as part of their evaluation of whether the fees under the Management Agreement bear a reasonable relationship to the mix of services provided by the Manager, including the nature, extent and quality of such services and that a discussion of economies of scale is predicated on increasing assets and that, if a fund’s assets had been decreasing, the possibility that the Manager may have realized any economies of scale would be less. It also was noted that the profitability percentage for managing the fund was within the range determined by appropriate court cases to be reasonable given the services rendered and generally superior service levels provided by the Manager.

At the conclusion of these discussions, the Board agreed that it had been furnished with sufficient information to make an informed business decision with respect to continuation of the fund’s Management Agreement. Based on the discussions and considerations as described above, the Board made the following conclusions and determinations.

  • The Board concluded that the nature, extent and quality of the ser- vices provided by the Manager are adequate and appropriate.
  • The Board was generally satisfied with the fund’s performance.
  • The Board concluded that the fee paid by the fund to the Manager was reasonable in light of the services provided, comparative perfor- mance, expense and advisory fee information, costs of the services provided and profits to be realized and benefits derived or to be derived by the Manager from its relationship with the fund.
  • The Board determined that the economies of scale which may accrue to the Manager and its affiliates in connection with the man- agement of the fund had been adequately considered by the Manager in connection with the management fee rate charged to the fund and that, to the extent in the future it were determined that material economies of scale had not been shared with the fund, the Board would seek to have those economies of scale shared with the fund.

54

The Board members considered these conclusions and determinations, along with information received on a routine and regular basis throughout the year, and, without any one factor being dispositive, the Board determined that re-approval of the fund’s Management Agreement was in the best interests of the fund and its shareholders and that the Management Agreement would be renewed through April 4, 2008.

The Fund 55

NOTES

Item 2.    Code of Ethics. 
    Not applicable. 
Item 3.    Audit Committee Financial Expert. 
    Not applicable. 
Item 4.    Principal Accountant Fees and Services. 
    Not applicable. 
Item 5.    Audit Committee of Listed Registrants. 
    Not applicable. 
Item 6.    Schedule of Investments. 
    Not applicable. 
Item 7.    Disclosure of Proxy Voting Policies and Procedures for Closed-End Management 
    Investment Companies. 
    Not applicable. 
Item 8.    Portfolio Managers of Closed-End Management Investment Companies. 
    Not applicable. 
Item 9.    Purchases of Equity Securities by Closed-End Management Investment Companies and 
    Affiliated Purchasers. 
    Not applicable. 
Item 10.    Submission of Matters to a Vote of Security Holders. 

The Registrant has a Nominating Committee (the "Committee"), which is responsible for selecting and nominating persons for election or appointment by the Registrant's Board as Board members. The Committee has adopted a Nominating Committee Charter (the "Charter"). Pursuant to the Charter, the Committee will consider recommendations for nominees from shareholders submitted to the Secretary of the Registrant, c/o The Dreyfus Corporation Legal Department, 200 Park Avenue, 8th Floor East, New York, New York 10166. A nomination submission must include information regarding the recommended nominee as specified in the Charter. This information includes all information relating to a recommended nominee that is required to be disclosed in solicitations or proxy statements for the election of Board members, as well as information sufficient to evaluate the factors to be considered by the Committee, including character and integrity, business and professional experience, and whether the person has the ability to apply sound and independent business judgment and would act in the interests of the Registrant and its shareholders.

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Nomination submissions are required to be accompanied by a written consent of the individual to stand for election if nominated by the Board and to serve if elected by the shareholders, and such additional information must be provided regarding the recommended nominee as reasonably requested by the Committee.

Item 11.    Controls and Procedures. 

(a) The Registrant's principal executive and principal financial officers have concluded, based on their evaluation of the Registrant's disclosure controls and procedures as of a date within 90 days of the filing date of this report, that the Registrant's disclosure controls and procedures are reasonably designed to ensure that information required to be disclosed by the Registrant on Form N-CSR is recorded, processed, summarized and reported within the required time periods and that information required to be disclosed by the Registrant in the reports that it files or submits on Form N-CSR is accumulated and communicated to the Registrant's management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

(b) There were no changes to the Registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Registrant's internal control over financial reporting.

Item 12.    Exhibits. 

(a)(1) Not applicable.

(a)(2) Certifications of principal executive and principal financial officers as required by Rule 30a-2(a) under the Investment Company Act of 1940.

(a)(3) Not applicable.

(b) Certification of principal executive and principal financial officers as required by Rule 30a-2(b) under the Investment Company Act of 1940.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

The Dreyfus/Laurel Funds Trust

By:    /s/ J. David Officer 
    J. David Officer 
    President 
 
Date:    August 27, 2007 

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

By:    /s/ J. David Officer 
    J. David Officer 
    President 
 
Date:    August 27, 2007 

By:    /s/ James Windels 
    James Windels 
    Treasurer 
 
Date:    August 27, 2007 

EXHIBIT INDEX

(a)(2) Certifications of principal executive and principal financial officers as required by Rule 30a-2(a) under the Investment Company Act of 1940. (EX-99.CERT)

(b) Certification of principal executive and principal financial officers as required by Rule 30a-2(b) under the Investment Company Act of 1940. (EX-99.906CERT)

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