N-CSR 1 form-928.htm SEMI-ANNUAL form-928
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 811-3757 

DREYFUS PREMIER CALIFORNIA TAX EXEMPT BOND FUND, INC. 
(Exact name of Registrant as specified in charter)

c/o The Dreyfus Corporation 
200 Park Avenue 
New York, New York 10166 
(Address of principal executive offices) (Zip code) 
 
Mark N. Jacobs, 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:    5/31 
Date of reporting period:    11/30/06 

FORM N-CSR

Item 1. Reports to Stockholders.

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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 
21    Statement of Assets and Liabilities 
22    Statement of Operations 
23    Statement of Changes in Net Assets 
25    Financial Highlights 
29    Notes to Financial Statements 
36    Proxy Results 
FOR MORE INFORMATION
    Back Cover 

Dreyfus Premier California 
Tax Exempt Bond Fund, Inc. 

The Fund

A LETTER FROM THE CEO
Dear Shareholder:

We are pleased to present this semiannual report for Dreyfus Premier California Tax Exempt Bond Fund, Inc., covering the six-month period from June 1, 2006, through November 30, 2006.

Although reports of declining housing prices have raised some economic concerns, we believe that neither a domestic recession nor a major shortfall in global growth is likely. A stubbornly low unemployment rate suggests that labor market conditions remain strong, and stimulative monetary policies over the last several years have left a legacy of ample financial liquidity worldwide.These and other factors should continue to support further economic expansion, but at a slower rate than we saw earlier this year.

The U.S. bond market also appears to be expecting a slower economy, as evidenced by an “inverted yield curve” at the end of November, in which yields of two-year U.S.Treasury securities were lower than the overnight federal funds rate.This anomaly may indicate that short-term interest rates have peaked, while the Federal Reserve Board remains “on hold” as it assesses new releases of economic data. As always, we encourage you to discuss the implications of these and other matters with your financial advisor.

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.

Thomas F. Eggers
Chief Executive Officer
The Dreyfus Corporation
December 15, 2006
2

DISCUSSION OF FUND PERFORMANCE

Joseph P. Darcy, Senior Portfolio Manager

How did Dreyfus Premier California Tax Exempt Bond Fund perform relative to its benchmark?

For the six-month period ended November 30, 2006, the fund produced total returns of 4.82% for Class A shares, 4.54% for Class B shares, 4.48% for Class C shares and 5.00% for Class Z shares.1 In comparison, the Lehman Brothers Municipal Bond Index, the fund’s benchmark, achieved a total return of 4.53% for the same period.2 In addition, the average total return for all funds reported in the Lipper California Municipal Debt Funds category was 4.37% .3

After encountering weakness at the start of the reporting period, municipal bonds rallied over the summer and fall as inflation and interest-rate concerns eased. The fund produced higher returns than its Lipper category average, primarily due to its relatively long duration posture. In addition, the fund’s benchmark contains securities from many states, not just California, and does not reflect fund fees and expenses in its performance.

What is the fund’s investment approach?

The fund seeks as high a level of current income exempt from federal and California state income taxes as is consistent with the preservation of capital. To pursue this goal, the fund normally invests substantially all of its assets in municipal bonds that provide income exempt from federal and California state personal income taxes.The fund will invest at least 80% of its assets in investment-grade municipal bonds or the unrated equivalent as determined by Dreyfus.The fund may invest up to 20% of its assets in municipal bonds rated below investment grade (“high yield” or “junk” bonds) or the unrated equivalent as determined by Dreyfus.The dollar-weighted average maturity of the fund’s portfolio normally exceeds 10 years, but the fund’s average portfolio maturity is not restricted.

The Fund 3

DISCUSSION OF FUND PERFORMANCE (continued)

We may buy and sell bonds based on credit quality, market outlook and yield potential. In selecting municipal bonds for investment, we may assess the current interest-rate environment and the municipal bond’s potential volatility in different rate environments.We focus on bonds with the potential to offer attractive current income, typically looking for bonds that can provide consistently attractive current yields or that are trading at competitive market prices.A portion of the fund’s assets may be allocated to “discount” bonds, which are bonds that sell at a price below their face value, or to “premium” bonds, which are bonds that sell at a price above their face value.The fund’s allocation either to discount bonds or to premium bonds will change along with our changing views of the current interest-rate and market environment.We also may look to select bonds that are most likely to obtain attractive prices when sold.

What other factors influenced the fund’s performance?

Municipal bond prices declined at the start of the reporting period,when hawkish comments by members of the Federal Reserve Board (the “Fed”) rekindled investors’ inflation and interest-rate concerns. However, these worries eased over the summer, as softening housing markets and less impressive employment gains indicated that inflationary pressures might be moderating. Indeed, the Fed cited a slowing economy when it refrained from raising short-term interest rates at its meetings in August, September and October, its first pauses in more than two years. As investors anticipated and reacted to the change in Fed policy, municipal bond prices rallied, more than offsetting earlier weakness.

Supply-and-demand factors also supported higher municipal bond prices. California participated fully in the U.S. economic recovery, enabling the state to take in more tax revenue than originally projected and reducing its need to borrow. Although California continued to rank as the largest municipal bond issuer among all the states, its issuance volume declined substantially compared to the same period one year earlier. In fact, the three major bond rating agencies recog-

4

nized California’s improved fiscal condition by upgrading the state’s credit rating during the reporting period. Meanwhile, demand remained robust from individual and institutional investors.

While the fund’s relatively long average duration posture detracted from performance in the spring, this strategy helped the fund participate more fully in the market rally over the summer and fall. In addition, the fund benefited from our emphasis on securities that we believed had the potential for price gains in a rallying market, such as zero-coupon bonds. However, because yield differences along the market’s quality spectrum were unusually narrow compared to historical norms, it made little sense to us to “reach” for higher yields among lower-rated credits. Instead, when making new purchases, we generally focused on securities with strong liquidity characteristics and maturities in the 20-year range.

What is the fund’s current strategy?

If the market can sustain its gains over the next month, 2006 will become the seventh consecutive calendar year of positive municipal bond market performance. In our view, slower economic growth, steady interest rates and favorable supply-and-demand dynamics could continue to support municipal bond prices over the foreseeable future.

December 15, 2006
1    Total return includes reinvestment of dividends and any capital gains paid. 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. Income may be subject 
    to state and local taxes for non-California residents, and some income may be subject to the federal 
    alternative minimum tax (AMT) for certain investors. Capital gains, if any, are fully taxable. 
2    SOURCE: LIPPER INC. — Reflects reinvestment of dividends and, where applicable, capital 
    gain distributions.The Lehman Brothers Municipal Bond Index is a widely accepted, unmanaged 
    total return performance benchmark for the long-term, investment-grade, tax-exempt bond market. 
    Index returns do not reflect fees and expenses associated with operating a mutual fund. 
3    Source: Lipper Inc. 

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 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 California Tax Exempt Bond Fund, Inc. from June 1, 2006 to November 30, 2006. 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 November 30, 2006     
    Class A    Class B    Class C    Class Z 
Expenses paid per $1,000 †    $ 5.39    $ 8.05    $ 9.33    $ 4027 
Ending value (after expenses)    $1,048.20    $1,045.40    $1,044.80    $1,050.00 

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 November 30, 2006 

    Class A    Class B    Class C    Class Z 
Expenses paid per $1,000 †    $ 5.32    $ 7.94    $ 9.20    $ 4.20 
Ending value (after expenses)    $1,019.80    $1,017.20    $1,015.94    $1,020.91 

† Expenses are equal to the fund’s annualized expense ratio of 1.05% for Class A, 1.57% for Class B, 1.82% for 
Class C and .83% for Class Z; multiplied by the average account value over the period, multiplied by 183/365 
(to reflect the one-half year period). 

6
STATEMENT OF INVESTMENTS
November 30, 2006 (Unaudited)
Long-Term Municipal    Coupon    Maturity    Principal     
Investments—101.2%    Rate (%)    Date    Amount ($)    Value ($) 

California—95.5%
ABAG Finance Authority for                 
Nonprofit Corps., MFHR                 
(Central Park Apartments)    5.50    7/1/19    1,010,000    1,044,582 
ABAG Finance Authority for                 
Nonprofit Corps., MFHR                 
(Central Park Apartments)    5.60    7/1/38    5,815,000    5,984,042 
ABAG Finance Authority for                 
Nonprofit Corps., MFHR                 
(Sansum-Santa Barbara                 
Medical Foundation Clinic)    5.50    4/1/21    3,500,000    3,748,955 
Alameda County,                 
COP (Insured; MBIA)    7.04    12/1/13    10,000,000 a,b    10,952,200 
Anaheim Public Finance Authority,                 
Tax Allocation Revenue                 
(Insured; MBIA)    6.45    12/28/18    26,000,000    27,260,740 
Bay Area Toll Authority,                 
San Francisco Bay Area Toll                 
Bridge Revenue    5.00    4/1/25    17,675,000    19,147,328 
Bay Area Toll Authority,                 
San Francisco Bay Area Toll                 
Bridge Revenue    5.00    4/1/26    14,500,000    15,696,105 
California,                 
Economic Recovery Bonds    5.00    7/1/16    13,000,000    13,836,160 
California,                 
GO    5.25    2/1/30    25,700,000    27,277,723 
California,                 
GO (Various Purpose)    6.13    10/1/11    2,875,000    3,211,317 
California,                 
GO (Various Purpose)    5.50    4/1/28    900,000    1,014,165 
California,                 
GO (Veterans)    5.05    12/1/36    14,500,000    15,176,135 
California Department of Veteran                 
Affairs, Home Purchase Revenue    5.50    12/1/19    5,015,000    5,313,543 
California Department of Veteran                 
Affairs, Home Purchase Revenue    4.50    12/1/23    10,000,000    10,149,700 
California Department of Veteran                 
Affairs, Home Purchase Revenue    5.20    12/1/28    10,000,000    10,008,200 
California Department of Water                 
Resources, Power Supply Revenue    5.88    5/1/12    10,000,000 c    11,285,300 

The Fund 7

STATEMENT OF INVESTMENTS (Unaudited) (continued)

Long-Term Municipal    Coupon    Maturity    Principal     
Investments (continued)    Rate (%)    Date    Amount ($)    Value ($) 

California (continued)
California Department of Water                 
Resources, Water System                 
Revenue (Central Valley                 
Project) (Insured; MBIA)    5.00    12/1/23    10,000,000    10,821,400 
California Educational Facilities                 
Authority, Revenue (Pooled                 
College and University Projects)    5.63    7/1/23    1,275,000    1,296,828 
California Health Facilities                 
Financing Authority, Revenue                 
(Cedars-Sinai Medical Center)    6.13    12/1/09    30,695,000 c    33,340,909 
California Health Facilities                 
Financing Authority, Revenue                 
(Cedars-Sinai Medical Center)    6.25    12/1/09    9,460,000 c    10,307,521 
California Health Facilities Financing                 
Authority, Revenue (Sutter Health)    6.25    8/15/35    7,965,000    8,776,952 
California Health Facilities                 
Financing Authority, Revenue                 
(Sutter Health) (Insured; MBIA)    5.35    7/15/09    240,000 c    253,877 
California Health Facilities                 
Financing Authority, Revenue                 
(Sutter Health) (Insured; MBIA)    5.35    8/15/28    3,540,000    3,710,840 
California Housing Finance Agency,                 
Home Mortgage Revenue    4.80    8/1/36    7,500,000    7,646,175 
California Housing Finance Agency,                 
MFHR (Insured; AMBAC)    6.15    8/1/22    1,845,000    1,884,077 
California Housing Finance Agency,                 
SFMR    6.30    8/1/24    565,000    571,260 
California Housing Finance Agency,                 
SFMR    6.45    8/1/25    285,000    288,394 
California Housing Finance Agency,                 
SFMR (Collateralized; FHA and                 
Insured; AMBAC)    6.25    8/1/14    210,000    212,308 
California Infrastructure and                 
Economic Development Bank, Bay                 
Area Toll Bridges Seismic                 
Retrofit Revenue (Insured; FGIC)    5.00    7/1/25    10,455,000    12,017,709 
California Infrastructure and                 
Economic Development Bank,                 
Revenue (Kaiser Hospital                 
Assistance I-LLC)    5.55    8/1/31    21,900,000    23,463,441 

8
Long-Term Municipal    Coupon    Maturity    Principal     
Investments (continued)    Rate (%)    Date    Amount ($)    Value ($) 

California (continued)
California Pollution Control                 
Financing Authority, PCR    8.07    6/1/14    11,000,000 a,b    12,687,235 
California Pollution Control                 
Financing Authority, PCR                 
(Insured; MBIA)    8.07    6/1/14    48,330,000 a,b    55,743,097 
California Pollution Control                 
Financing Authority, SWDR                 
(Browning-Ferris Industries of             
California, Inc. Project)    5.80    12/1/16    2,000,000    2,002,580 
California Pollution Control                 
Financing Authority, SWDR                 
(Browning-Ferris Industries of             
California, Inc. Project)    6.75    9/1/19    600,000    601,638 
California Pollution Control                 
Financing Authority, SWDR (Keller             
Canyon Landfill Co. Project)    6.88    11/1/27    1,000,000    1,006,710 
California Public Works Board,                 
LR (Department of Corrections,             
Calipatria State Prison,                 
Imperial County)                 
(Insured; MBIA)    6.50    9/1/17    13,000,000    15,594,670 
California Public Works Board,                 
LR (Department of Health                 
Services, Richmond Laboratory             
Project) (Insured; AMBAC)    5.00    11/1/21    10,910,000    11,862,116 
California Public Works Board,                 
LR (University of California                 
Research Projects)                 
(Insured; MBIA)    5.25    11/1/28    10,005,000    11,010,002 
California Public Works Board,                 
LR (Various University of                 
California Projects)    5.50    6/1/14    5,000,000    5,519,500 
California State University,                 
Fresno Association Inc.,                 
Auxiliary Organization Event                 
Center Revenue    6.00    7/1/12    3,500,000 c    3,972,045 
California State University,                 
Fresno Association Inc.,                 
Auxiliary Organization Event                 
Center Revenue    6.00    7/1/12    2,500,000 c    2,837,175 

The Fund 9

STATEMENT OF INVESTMENTS (Unaudited) (continued)

Long-Term Municipal    Coupon    Maturity    Principal     
Investments (continued)    Rate (%)    Date    Amount ($)    Value ($) 

California (continued)
California State University,                 
Fresno Association Inc.,                 
Auxiliary Organization Event                 
Center Revenue    6.00    7/1/12    5,250,000 c    5,958,067 
California Statewide Communities                 
Development Authority, COP                 
(Catholic Healthcare West)    6.50    7/1/10    2,780,000 c    3,084,716 
California Statewide Communities                 
Development Authority, COP                 
(Catholic Healthcare West)    6.50    7/1/20    1,220,000    1,339,853 
California Statewide Communities                 
Development Authority, COP                 
(The Internext Group)    5.38    4/1/30    20,000,000    20,480,200 
California Statewide Communities                 
Development Authority, Health                 
Facility Revenue (Adventist                 
Health System/West)    5.00    3/1/35    11,880,000    12,437,528 
California Statewide Communities                 
Development Authority,                 
Revenue (Daughters of                 
Charity Health System)    5.25    7/1/24    8,205,000    8,777,627 
California Statewide Communities                 
Development Authority,                 
Revenue (Daughters of                 
Charity Health System)    5.25    7/1/35    23,475,000    25,000,406 
California Statewide Communities                 
Development Authority, Revenue             
(Kaiser Permanente)    5.50    11/1/32    13,500,000    14,364,270 
California Statewide Communities                 
Development Authority, Revenue             
(Kaiser Permanente)    5.25    3/1/45    15,000,000    16,107,000 
California Statewide Communities                 
Development Authority, Revenue             
(Sutter Health)    5.50    8/15/28    14,000,000    15,203,440 
California Statewide Communities                 
Development Authority, Revenue             
(The California Endowment)    5.00    7/1/28    15,360,000    16,309,555 
California Statewide Communities                 
Development Authority, Revenue             
(The California Endowment)    5.00    7/1/33    16,710,000    17,753,038 

10
Long-Term Municipal    Coupon    Maturity    Principal     
Investments (continued)    Rate (%)    Date    Amount ($)    Value ($) 

California (continued)
Capistrano Unified School District,                 
Community Facilities District                 
Special Tax Number 98 (Ladera)    5.75    9/1/09    5,500,000 c    5,931,530 
Capistrano Unified School                 
District, School Facilities                 
Improvement District Number 1                 
(Insured; FGIC)    6.00    8/1/24    2,075,000    2,265,091 
Castaic Lake Water Agency,                 
COP, Revenue (Water System                 
Improvement Project)                 
(Insured; AMBAC)    0.00    8/1/27    10,000,000    4,142,100 
Central California Joint Powers                 
Health Financing Authority,                 
COP (Community Hospitals of                 
Central California Obligated Group)    6.00    2/1/30    5,000,000    5,281,250 
Central California Joint Powers                 
Health Financing Authority,                 
COP (Community Hospitals of                 
Central California Obligated Group)    5.75    2/1/31    18,500,000    19,576,885 
Central Marin Sanitation Agency,                 
Revenue (Insured; MBIA)    4.38    9/1/31    11,940,000    12,033,729 
Chabot-Las Positas Community                 
College District, GO                 
(Insured; AMBAC)    0.00    8/1/32    10,000,000    2,922,300 
Chino Valley Unified School                 
District, GO (Insured; MBIA)    5.25    8/1/30    10,000,000    11,019,200 
Chula Vista,                 
IDR (San Diego Gas and                 
Electric Co.)    5.00    12/1/27    3,000,000    3,200,190 
Coast Community College District,                 
GO (Insured; FSA)    0.00    8/1/29    15,565,000    12,178,212 
Contra Costa County Public Finance                 
Authority, Tax Allocation                 
Revenue (Pleasant Hill BART,                 
North Richmond, Bay Point,                 
Oakley and Rodeo Redevlopment                 
Projects Areas)    5.45    8/1/28    2,720,000    2,846,398 
Cucamonga County Water District,                 
COP (Insured; FGIC)    5.25    9/1/25    5,555,000    5,969,459 

The Fund 11

STATEMENT OF INVESTMENTS (Unaudited) (continued)

Long-Term Municipal    Coupon    Maturity    Principal     
Investments (continued)    Rate (%)    Date    Amount ($)    Value ($) 

California (continued)
Delano,                 
COP (Delano Regional                 
Medical Center)    5.25    1/1/18    13,500,000    13,654,980 
Elsinore Valley Municipal Water                 
District, COP (Insured; FGIC)    5.38    7/1/19    3,855,000    4,447,359 
Escondido Reassessment                 
District Number 98-1                 
(Rancho San Pasqual)    5.70    9/2/26    1,335,000    1,377,480 
Fontana,                 
Special Tax (Insured; MBIA)    5.25    9/1/17    10,000,000    10,467,800 
Fontana Public Financing                 
Authority, Tax Allocation                 
Revenue (North Fontana                 
Redevelopment Project)                 
(Insured; AMBAC)    5.50    9/1/32    13,800,000    14,957,268 
Foothill/Eastern Transportation                 
Corridor Agency, Toll Road Revenue    5.75    1/15/40    500,000    520,540 
Fremont Union High School District                 
(Insured; FGIC)    5.25    9/1/10    3,400,000 c    3,614,132 
Fremont Union High School District                 
(Insured; FGIC)    5.25    9/1/10    4,000,000 c    4,251,920 
Fremont Union High School District                 
(Insured; FGIC)    5.25    9/1/10    11,295,000 c    12,006,359 
Fullerton Community Facilities                 
District Number 1, Special Tax                 
Revenue (Amerige Heights)    6.10    9/1/22    1,000,000    1,072,740 
Fullerton Community Facilities                 
District Number 1, Special Tax                 
Revenue (Amerige Heights)    6.20    9/1/32    2,500,000    2,680,250 
Golden State Tobacco                 
Securitization Corp., Enhanced                 
Tobacco Settlement                 
Asset-Backed Bonds    5.50    6/1/13    5,000,000 c    5,563,250 
Golden State Tobacco                 
Securitization Corp., Enhanced                 
Tobacco Settlement Asset-Backed                 
Bonds (Insured; FGIC)    5.00    6/1/35    10,000,000    10,681,300 
Golden State Tobacco                 
Securitization Corp., Tobacco                 
Settlement Asset-Backed Bonds    6.75    6/1/39    14,770,000    16,998,055 

12
Long-Term Municipal    Coupon    Maturity    Principal     
Investments (continued)    Rate (%)    Date    Amount ($)    Value ($) 

California (continued)
Kaweah Delta Health Care District,                 
Revenue    6.00    8/1/34    9,000,000    9,946,080 
La Quinta Financing Authority,                 
Local Agency Revenue                 
(Insured; AMBAC)    5.00    9/1/29    12,400,000    13,231,668 
Long Beach Special Tax Community             
Facilities District Number 5                 
(Towne Center)    6.88    10/1/25    500,000    514,915 
Los Angeles Unified School                 
District (Insured; MBIA)    5.75    7/1/17    8,385,000    9,899,163 
Madera County,                 
COP (Valley Children’s                 
Hospital) (Insured; MBIA)    6.50    3/15/09    3,370,000    3,587,870 
Metropolitan Water District of                 
Southern California,                 
Water Revenue    5.00    7/1/35    10,000,000    10,810,100 
Metropolitan Water District of                 
Southern California,                 
Waterworks GO    5.00    3/1/17    5,500,000    6,054,730 
Metropolitan Water District of                 
Southern California,                 
Waterworks GO    5.00    3/1/18    5,510,000    6,045,131 
Murrieta Unified School District                 
(Insured; FGIC)    0.00    9/1/21    4,950,000    2,673,247 
Natomas Unified School District                 
(Insured; MBIA)    5.95    9/1/21    2,500,000    3,015,425 
Northern California Power Agency,                 
Revenue (Hydroelectric Project                 
Number 1) (Insured; AMBAC)    7.00    1/1/16    670,000 c    844,883 
Northern California Power Agency,                 
Revenue (Hydroelectric Project                 
Number 1) (Insured; AMBAC)    7.50    7/1/21    375,000 c    514,867 
Northern California Power Agency,                 
Revenue (Hydroelectric Project                 
Number 1) (Insured; MBIA)    6.30    7/1/18    26,400,000    32,479,656 
Oakland Unified School District,                 
GO (Insured; FGIC)    5.25    8/1/24    17,275,000    18,632,297 
Oakland Unified School District,                 
GO (Insured; FSA)    4.38    8/1/31    8,000,000    8,062,400 

The Fund 13

STATEMENT OF INVESTMENTS (Unaudited) (continued)

Long-Term Municipal    Coupon    Maturity    Principal     
Investments (continued)    Rate (%)    Date    Amount ($)    Value ($) 

California (continued)
Orange County Community Facilities             
District (Landera Ranch)                 
Special Tax Number 1    6.25    8/15/08    1,600,000 c    1,674,832 
Orange County Community Facilities             
District (Landera Ranch)                 
Special Tax Number 1    6.00    8/15/10    3,000,000 c    3,290,940 
Orange County Community Facilities             
District (Landera Ranch)                 
Special Tax Number 3    5.60    8/15/28    3,250,000    3,453,677 
Orange County Community Facilities             
District (Landera Ranch)                 
Special Tax Number 3    5.63    8/15/34    6,000,000    6,313,920 
Orange County Public Financing                 
Authority, LR (Juvenile                 
Justice Center Facility)                 
(Insured; AMBAC)    5.38    6/1/19    6,150,000    6,745,935 
Pomona,                 
COP (General Fund Lease                 
Financing) (Insured; AMBAC)    5.50    6/1/28    1,000,000    1,121,310 
Pomona Redevelopment Agency,                 
Tax Allocation Revenue                 
(West Holt Avenue                 
Redevelopment Project)    5.50    5/1/32    3,000,000    3,380,220 
Rancho Cucamonga Redevelopment             
Agency, Tax Allocation Revenue             
(Rancho Development Project)                 
(Insured; MBIA)    5.38    9/1/25    7,485,000    8,033,127 
Rancho Mirage Joint Powers                 
Financing Authority, Revenue                 
(Eisenhower Medical Center)    5.63    7/1/29    10,430,000    11,554,354 
Redwood Empire Financing                 
Authority, COP    6.40    12/1/23    2,455,000    2,486,498 
Riverside County,                 
SFMR (Collateralized; GNMA)    7.80    5/1/21    1,250,000    1,748,838 
Sacramento City Financing                 
Authority, Revenue                 
(Insured; AMBAC)    7.33    12/1/13    4,670,000 a,b    5,073,208 
Sacramento City Financing                 
Authority, Revenue                 
(Insured; AMBAC)    7.33    12/1/14    5,140,000 a,b    5,583,788 

14
Long-Term Municipal    Coupon    Maturity    Principal     
Investments (continued)    Rate (%)    Date    Amount ($)    Value ($) 

California (continued)
Sacramento County,                 
Laguna Creek Ranch/Elliott                 
Ranch Community Facilities                 
District Number 1, Improvement             
Area Number 1, Special Tax                 
(Laguna Creek Ranch)    5.70    12/1/20    2,970,000    3,027,380 
Sacramento County Housing                 
Authority, MFHR (Cottage                 
Estate Apartments)                 
(Collateralized; FNMA)    6.00    2/1/33    1,000,000    1,057,880 
Sacramento County Sanitation                 
District Financing Authority,                 
Revenue (Sacramento Regional             
County Sanitation District)                 
(Insured; FGIC)    5.00    12/1/30    10,000,000    10,854,100 
Sacramento Municipal Utility                 
District, Electric Revenue                 
(Insured; MBIA)    6.50    9/1/13    6,930,000    7,867,768 
San Bernardino County,                 
COP (Capital Facilities Project)    6.88    8/1/24    5,000,000    6,712,050 
San Diego County,                 
COP (Burnham Institute for                 
Medical Research)    6.25    9/1/09    3,800,000 c    4,106,774 
San Diego County,                 
COP (Burnham Institute for                 
Medical Research)    5.00    9/1/24    2,265,000    2,382,259 
San Diego County,                 
COP (Burnham Institute for                 
Medical Research)    5.00    9/1/34    5,190,000    5,445,089 
San Diego County,                 
COP (Edgemoor Completion                 
Project) (Insured; AMBAC)    4.25    2/1/26    5,000,000 d    4,990,000 
San Diego Unified School District                 
(Insured; FGIC)    0.00    7/1/17    2,325,000    1,519,271 
San Francisco Bay Area Rapid                 
Transit District, Sales Tax                 
Revenue (Insured; FSA)    4.25    7/1/33    12,315,000    12,293,202 
San Francisco City and County,                 
COP (San Bruno Jail Number 3)             
(Insured; AMBAC)    5.25    10/1/21    2,985,000    3,122,609 

The Fund 15

STATEMENT OF INVESTMENTS (Unaudited) (continued)

Long-Term Municipal    Coupon    Maturity    Principal     
Investments (continued)    Rate (%)    Date    Amount ($)    Value ($) 

California (continued)
San Francisco City and County                 
Public Utilities Commission,                 
San Francisco Water Revenue                 
(Insured; FSA)    5.00    11/1/24    10,000,000    10,864,000 
San Joaquin Hills Transportation                 
Corridor Agency, Toll Road                 
Revenue (Insured; MBIA)    0.00    1/15/32    48,295,000    16,583,537 
San Jose Redevelopment Agency,                 
Tax Allocation Revenue (Merged                 
Area Redevelopment Project)    5.25    8/1/29    1,000,000    1,039,730 
San Jose Unified School District,                 
GO (Insured; FGIC)    5.00    8/1/24    12,580,000    13,690,437 
San Juan Unified School District,                 
GO (Insured; FSA)    0.00    8/1/23    10,030,000    4,959,434 
San Juan Unified School District,                 
GO (Insured; FSA)    0.00    8/1/24    10,655,000    5,041,733 
Sequoia Union High School                 
District, GO (Insured; FSA)    5.00    7/1/24    2,695,000    2,931,244 
South Placer Authority,                 
Wastewater Revenue (Insured; FGIC)    5.25    11/1/10    1,000,000 c    1,076,660 
Southeast Resource Recovery                 
Facility Authority, LR                 
(Insured; AMBAC)    5.25    12/1/16    4,000,000    4,405,320 
Southeast Resource Recovery                 
Facility Authority, LR                 
(Insured; AMBAC)    5.25    12/1/18    8,085,000    8,880,645 
Stockton,                 
Health Facilities Revenue                 
(Dameron Hospital Association)    5.70    12/1/14    1,000,000    1,035,300 
Tobacco Securitization Authority                 
of Northern California, Tobacco                 
Settlement Asset-Backed Bonds                 
(Sacramento County Tobacco                 
Securitization Corp.)    5.38    6/1/38    20,000,000    21,073,400 
Torrance Redevelopment Agency,                 
Tax Allocation Revenue    5.63    9/1/28    500,000    513,195 
Trustees of the California State                 
University, Systemwide Revenue                 
(Insured; AMBAC)    5.00    11/1/19    10,000,000    10,915,400 

16
Long-Term Municipal    Coupon    Maturity    Principal     
Investments (continued)    Rate (%)    Date    Amount ($)    Value ($) 

California (continued)
University of California,                 
Multi Purpose Revenue                 
(Insured; MBIA)    5.25    9/1/27    31,475,000    32,588,900 
University of California,                 
Revenue (Limited Project)                 
(Insured; FSA)    5.00    5/15/22    14,655,000    15,755,297 
Ventura County Community College                 
District (Insured; MBIA)    5.50    8/1/23    4,250,000    4,676,913 
West Covina Redevelopment Agency,                 
Community Facilities District,                 
Special Tax Revenue (Fashion Plaza)    6.00    9/1/17    6,000,000    6,837,060 
West Covina Redevelopment Agency,                 
Community Facilities District,                 
Special Tax Revenue (Fashion Plaza)    6.00    9/1/22    11,325,000    13,431,790 
Whittier Health Facility,                 
Revenue (Presbyterian                 
Intercommunity Hospital)    5.75    6/1/31    10,090,000    10,947,045 
U.S. Related—5.7%                 
Puerto Rico Highway and                 
Transportation Authority,                 
Highway Revenue (Insured; MBIA)    5.50    7/1/13    4,750,000    5,184,055 
Puerto Rico Highway and                 
Transportation Authority,                 
Transportation Revenue    6.00    7/1/10    2,000,000 c    2,182,260 
Puerto Rico Highway and                 
Transportation Authority,                 
Transportation Revenue                 
(Insured; MBIA)    6.23    7/1/38    2,000,000 a,b    2,055,380 
Puerto Rico Infrastructure                 
Financing Authority, Special                 
Obligation    5.50    10/1/32    10,000,000    10,816,000 
Puerto Rico Infrastructure                 
Financing Authority, Special                 
Tax Revenue    5.50    10/1/40    40,000,000    43,204,000 
Puerto Rico Infrastructure                 
Financing Authority, Special                 
Tax Revenue (Insured; AMBAC)    6.22    7/1/15    2,000,000 a,b    2,052,300 
Virgin Islands Public Finance                 
Authority, Revenue    7.30    10/1/18    3,100,000    3,890,841 

The Fund 17

STATEMENT OF INVESTMENTS (Unaudited) (continued)

Long-Term Municipal    Coupon    Maturity    Principal     
Investments (continued)    Rate (%)    Date    Amount ($)    Value ($) 

U.S. Related (continued)
Virgin Islands Public Finance                 
Authority, Revenue, Virgin                 
Islands Matching Fund Loan Notes    6.00    10/1/22    2,000,000    2,088,060 
Total Long-Term Municipal Investments             
(cost $1,187,481,579)                1,273,881,528 
 
Short-Term Municipal                 
Investments—1.2%                 
California;                 
California Department of Water                 
Resources, Power Supply                 
Revenue (LOC; Bank of America)    3.42    12/1/06    8,500,000 e    8,500,000 
California Pollution Control                 
Financing Authority, PCR,                 
Refunding (Pacific Gas and                 
Electric Company) (LOC; Bank One)    3.40    12/1/06    2,400,000 e    2,400,000 
San Pablo Redevelopment Agency,                 
Subordinate Tax Allocation                 
Revenue (Tenth Township                 
Redevelopment Project)                 
(Insured; AMBAC and Liquidity                 
Facility; Dexia Credit Locale)    3.50    12/1/06    4,000,000 e    4,000,000 
Total Short-Term Municipal Investments             
(cost $14,900,000)                14,900,000 
 
Total Investments (cost $1,202,381,579)        102.4%    1,288,781,528 
Liabilities, Less Cash and Receivables        (2.4%)    (29,905,401) 
Net Assets            100.0%    1,258,876,127 

a Collateral for floating rate borrowings. 
b Securities exempt from registration under Rule 144A of the Securities Act of 1933.These securities may be resold in 
transactions exempt from registration, normally to qualified institutional buyers.At November 30, 2006, these 
securities amounted to $94,147,208 or 7.5% of net assets. 
c These securities are prerefunded; the date shown represents the prerefunded date. Bonds which are prerefunded are 
collateralized by U.S. Government securities which are held in escrow and are used to pay principal and interest on 
the municipal issue and to retire the bonds in full at the earliest refunding date. 
d Purchased on a delayed delivery basis. 
e Securities payable on demand.Variable interest rate—subject to periodic change. 

18
Summary of Abbreviations         
 
ACA    American Capital Access    AGC    ACE Guaranty Corporation 
AGIC    Asset Guaranty Insurance    AMBAC    American Municipal Bond 
    Company        Assurance Corporation 
ARRN    Adjustable Rate Receipt Notes    BAN    Bond Anticipation Notes 
BIGI    Bond Investors Guaranty Insurance    BPA    Bond Purchase Agreement 
CGIC    Capital Guaranty Insurance    CIC    Continental Insurance 
    Company        Company 
CIFG    CDC Ixis Financial Guaranty    CMAC    Capital Market Assurance 
            Corporation 
COP    Certificate of Participation    CP    Commercial Paper 
EDR    Economic Development Revenue    EIR    Environmental Improvement 
            Revenue 
FGIC    Financial Guaranty Insurance         
    Company    FHA    Federal Housing Administration 
FHLB    Federal Home Loan Bank    FHLMC    Federal Home Loan Mortgage 
            Corporation 
FNMA    Federal National         
    Mortgage Association    FSA    Financial Security Assurance 
GAN    Grant Anticipation Notes    GIC    Guaranteed Investment Contract 
GNMA    Government National         
    Mortgage Association    GO    General Obligation 
HR    Hospital Revenue    IDB    Industrial Development Board 
IDC    Industrial Development Corporation    IDR    Industrial Development Revenue 
LOC    Letter of Credit    LOR    Limited Obligation Revenue 
LR    Lease Revenue    MBIA    Municipal Bond Investors Assurance 
            Insurance Corporation 
MFHR    Multi-Family Housing Revenue    MFMR    Multi-Family Mortgage Revenue 
PCR    Pollution Control Revenue    PILOT    Payment in Lieu of Taxes 
RAC    Revenue Anticipation Certificates    RAN    Revenue Anticipation Notes 
RAW    Revenue Anticipation Warrants    RRR    Resources Recovery Revenue 
SAAN    State Aid Anticipation Notes    SBPA    Standby Bond Purchase Agreement 
SFHR    Single Family Housing Revenue    SFMR    Single Family Mortgage Revenue 
SONYMA    State of New York Mortgage Agency    SWDR    Solid Waste Disposal Revenue 
TAN    Tax Anticipation Notes    TAW    Tax Anticipation Warrants 
TRAN    Tax and Revenue Anticipation Notes    XLCA    XL Capital Assurance 

The Fund 19

STATEMENT OF INVESTMENTS (Unaudited) (continued)

Summary of Combined Ratings (Unaudited)     
 
Fitch    or Moody’s    or    Standard & Poor’s    Value (%) † 
AAA    Aaa        AAA    54.6 
AA    Aa        AA    14.8 
A        A        A    14.6 
BBB    Baa        BBB    11.8 
BB    Ba        BB    .4 
F1    MIG1/P1        SP1/A1    1.2 
Not Rated f    Not Rated f        Not Rated f    2.6 
                    100.0 
 
†    Based on total investments.             
f    Securities which, while not rated by Fitch, Moody’s and Standard & Poor’s, have been determined by the Manager to 
    be of comparable quality to those rated securities in which the fund may invest.     
See notes to financial statements.             

20

STATEMENT OF ASSETS AND LIABILITIES

November 30, 2006 (Unaudited)

            Cost    Value 
Assets ($):                 
Investments in securities—See Statement of Investments    1,202,381,579    1,288,781,528 
Interest receivable                19,717,461 
Receivable for shares of Common Stock subscribed        12,172 
Prepaid expenses                36,241 
                1,308,547,402 
Liabilities ($):                 
Due to The Dreyfus Corporation and affiliates—Note 3(c)        691,378 
Cash overdraft due to Custodian                1,071,499 
Payable for floating rate notes issued            41,570,000 
Payable for investment securities purchased            4,897,100 
Interest and related expenses payable            805,569 
Payable for shares of Common Stock redeemed            480,065 
Accrued expenses                155,664 
                49,671,275 
Net Assets ($)                1,258,876,127 
Composition of Net Assets ($):                 
Paid-in capital                1,170,377,101 
Accumulated undistributed investment income—net        42,000 
Accumulated net realized gain (loss) on investments        2,057,077 
Accumulated net unrealized appreciation             
(depreciation) on investments                86,399,949 
Net Assets ($)                1,258,876,127 
 
 
Net Asset Value Per Share                 
    Class A    Class B    Class C    Class Z 
Net Assets ($)    85,398,824    6,052,665    3,882,870    1,163,541,768 
Shares Outstanding    5,680,409    402,588    258,229    77,408,047 
Net Asset Value Per Share ($)    15.03    15.03    15.04    15.03 

See notes to financial statements.

The Fund 21

STATEMENT OF OPERATIONS
Six Months Ended November 30, 2006 (Unaudited)
Investment Income ($):     
Interest Income    30,773,958 
Expenses:     
Management fee—Note 3(a)    3,743,634 
Interest and related expenses    808,718 
Shareholder servicing costs—Note 3(c)    591,928 
Custodian fees    41,575 
Directors’ fees and expenses—Note 3(c)    39,471 
Distribution fees—Note 3(b)    28,677 
Professional fees    27,942 
Registration fees    26,528 
Prospectus and shareholders’ reports    3,500 
Loan commitment fees—Note 2    27 
Miscellaneous    32,256 
Total Expenses    5,344,256 
Less—reduction in custody fees due to     
earnings credits—Note 1(b)    (33,026) 
Net Expenses    5,311,230 
Investment Income—Net    25,462,728 
Realized and Unrealized Gain (Loss) on Investments—Note 4 ($): 
Net realized gain (loss) on investments    1,355,625 
Net unrealized appreciation (depreciation) on investments    33,683,574 
Net Realized and Unrealized Gain (Loss) on Investments    35,039,199 
Net Increase In Net Assets Resulting from Operations    60,501,927 

See notes to financial statements.
22

STATEMENT OF CHANGES IN NET ASSETS

    Six Months Ended     
    November 30, 2006    Year Ended 
    (Unaudited)    May 31, 2006 
Operations ($):         
Investment income—net    25,462,728    52,847,221 
Net realized gain (loss) on investments    1,355,625    5,148,435 
Net unrealized appreciation         
(depreciation) on investments    33,683,574    (37,661,072) 
Net Increase (Decrease) in Net Assets         
Resulting from Operations    60,501,927    20,334,584 
Dividends to Shareholders from ($):         
Investment income—net:         
Class A shares    (1,610,587)    (3,311,668) 
Class B shares    (105,392)    (268,502) 
Class C shares    (53,634)    (87,936) 
Class Z shares    (23,651,115)    (49,135,562) 
Net realized gain on investments:         
Class A shares    —    (83,762) 
Class B shares    —    (7,538) 
Class C shares    —    (2,716) 
Class Z shares    —    (1,192,823) 
Total Dividends    (25,420,728)    (54,090,507) 
Capital Stock Transactions ($):         
Net proceeds from shares sold:         
Class A shares    11,286,552    6,568,651 
Class B shares    63,763    351,072 
Class C shares    1,081,107    1,052,655 
Class Z shares    15,869,691    41,757,321 
Dividends reinvested:         
Class A shares    1,115,639    2,223,662 
Class B shares    73,150    192,856 
Class C shares    32,416    58,074 
Class Z shares    16,190,020    34,073,188 
Cost of shares redeemed:         
Class A shares    (10,945,222)    (12,964,954) 
Class B shares    (883,836)    (3,245,768) 
Class C shares    (383,924)    (848,560) 
Class Z shares    (56,002,033)    (127,164,572) 
Increase (Decrease) in Net Assets from         
Capital Stock Transactions    (22,502,677)    (57,946,375) 
Total Increase (Decrease) in Net Assets    12,578,522    (91,702,298) 
Net Assets ($):         
Beginning of Period    1,246,297,605    1,337,999,903 
End of Period    1,258,876,127    1,246,297,605 
Undistributed investment income—net    42,000    — 

The Fund 23

STATEMENT OF CHANGES IN NET ASSETS (continued)
    Six Months Ended     
    November 30, 2006    Year Ended 
    (Unaudited)    May 31, 2006 
Capital Share Transactions:         
Class A a         
Shares sold    767,572    444,418 
Shares issued for dividends reinvested    75,425    150,247 
Shares redeemed    (743,740)    (877,760) 
Net Increase (Decrease) in Shares Outstanding    99,257    (283,095) 
Class B a         
Shares sold    4,295    23,819 
Shares issued for dividends reinvested    4,947    13,022 
Shares redeemed    (59,980)    (219,069) 
Net Increase (Decrease) in Shares Outstanding    (50,738)    (182,228) 
Class C         
Shares sold    73,220    71,071 
Shares issued for dividends reinvested    2,190    3,926 
Shares redeemed    (26,100)    (57,154) 
Net Increase (Decrease) in Shares Outstanding    49,310    17,843 
Class Z         
Shares sold    1,077,589    2,821,639 
Shares issued for dividends reinvested    1,094,939    2,303,054 
Shares redeemed    (3,799,297)    (8,602,582) 
Net Increase (Decrease) in Shares Outstanding    (1,626,769)    (3,477,889) 

a    During the period ended November 30, 2006, 11,740 Class B shares representing $174,040 were automatically 
    converted to 11,740 Class A shares and during the period ended May 31, 2006, 99,222 Class B shares 
    representing $1,469,616 were automatically converted to 99,222 Class A shares. 
See notes to financial statements. 

24
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         
        November 30, 2006    Year Ended May 31, 
Class A Shares    (Unaudited)    2006    2005 a 
Per Share Data ($):             
Net asset value, beginning of period    14.62    15.00    14.97 
Investment Operations:             
Investment income—net b    .29    .58    .34 
Net realized and unrealized             
gain (loss) on investments    .41    (.37)    .12 
Total from Investment Operations    .70    .21    .46 
Distributions:             
Dividends from investment income—net    (.29)    (.58)    (.34) 
Dividends from net realized             
gain on investments    —    (.01)    (.09) 
Total Distributions    (.29)    (.59)    (.43) 
Net asset value, end of period    15.03    14.62    15.00 
Total Return (%) c    4.82d    1.44    3.12 
Ratios/Supplemental Data (%):             
Ratio of total expenses to average net assets    1.06e    1.04f    1.03e,f 
Ratio of net expenses to average net assets    1.05e    1.01f    1.02e,f 
Ratio of net investment income             
to average net assets    3.88e    3.90    3.77e 
Portfolio Turnover Rate    21.99d    35.92    38.73 
Net Assets, end of period ($ x 1,000)    85,399    81,579    87,976 
 
a    From October 21, 2004 (commencement of initial offering) to May 31, 2005.         
b    Based on average shares outstanding at each month end.         
c    Exclusive of sales charge.             
d    Not annualized.             
e    Annualized.             
f    Ratio of total expenses to average net assets and ratio of net expenses to average net assets for all periods have been 
    restated.This restatement has no impact on the fund’s previously reported net assets, net investment income, net asset 
    value or total return. See Note 5.             
See notes to financial statements.             

The Fund 25

FINANCIAL HIGHLIGHTS (continued)
        Six Months Ended         
        November 30, 2006    Year Ended May 31, 
Class B Shares    (Unaudited)    2006    2005 a 
Per Share Data ($):             
Net asset value, beginning of period    14.62    15.00    14.97 
Investment Operations:             
Investment income—net b    .25    .50    .30 
Net realized and unrealized             
gain (loss) on investments    .41    (.37)    .12 
Total from Investment Operations    .66    .13    .42 
Distributions:             
Dividends from investment income—net    (.25)    (.50)    (.30) 
Dividends from net realized gain on investments    —    (.01)    (.09) 
Total Distributions    (.25)    (.51)    (.39) 
Net asset value, end of period    15.03    14.62    15.00 
Total Return (%) c    4.54d    .93    2.82 
Ratios/Supplemental Data (%):             
Ratio of total expenses to average net assets    1.58e    1.56f    1.54e,f 
Ratio of net expenses to average net assets    1.57e    1.51f    1.51e,f 
Ratio of net investment income             
to average net assets    3.37e    3.39    3.29e 
Portfolio Turnover Rate    21.99d    35.92    38.73 
Net Assets, end of period ($ x 1,000)    6,053    6,626    9,534 
 
a    From October 21, 2004 (commencement of initial offering) to May 31, 2005.         
b    Based on average shares outstanding at each month end.         
c    Exclusive of sales charge.             
d    Not annualized.             
e    Annualized.             
f    Ratio of total expenses to average net assets and ratio of net expenses to average net assets for all periods have been 
    restated.This restatement has no impact on the fund’s previously reported net assets, net investment income, net asset 
    value or total return. See Note 5.             
See notes to financial statements.             

26
        Six Months Ended         
        November 30, 2006    Year Ended May 31, 
Class C Shares    (Unaudited)    2006    2005 a 
Per Share Data ($):             
Net asset value, beginning of period    14.62    15.00    14.97 
Investment Operations:             
Investment income—net b    .23    .46    .27 
Net realized and unrealized             
gain (loss) on investments    .42    (.37)    .12 
Total from Investment Operations    .65    .09    .39 
Distributions:             
Dividends from investment income—net    (.23)    (.46)    (.27) 
Dividends from net realized gain on investments    —    (.01)    (.09) 
Total Distributions    (.23)    (.47)    (.36) 
Net asset value, end of period    15.04    14.62    15.00 
Total Return (%) c    4.48d    .67    2.67 
Ratios/Supplemental Data (%):             
Ratio of total expenses to average net assets    1.82e    1.80f    1.77e,f 
Ratio of net expenses to average net assets    1.82e    1.77f    1.76e,f 
Ratio of net investment income             
to average net assets    3.10e    3.13    3.01e 
Portfolio Turnover Rate    21.99d    35.92    38.73 
Net Assets, end of period ($ x 1,000)    3,883    3,054    2,867 
 
a    From October 21, 2004 (commencement of initial offering) to May 31, 2005.         
b    Based on average shares outstanding at each month end.         
c    Exclusive of sales charge.             
d    Not annualized.             
e    Annualized.             
f    Ratio of total expenses to average net assets and ratio of net expenses to average net assets for all periods have been 
    restated.This restatement has no impact on the fund’s previously reported net assets, net investment income, net asset 
    value or total return. See Note 5.             
See notes to financial statements.             

The Fund 27

FINANCIAL HIGHLIGHTS (continued)
Six Months Ended                     
November 30, 2006            Year Ended May 31,         
Class Z Shares (Unaudited)    2006    2005    2004    2003    2002 
Per Share Data ($):                         
Net asset value,                         
beginning of period    14.61    15.00    14.39    15.28    14.60    14.56 
Investment Operations:                         
Investment income—net a    .30    .61    .58    .58    .63    .67 
Net realized and unrealized                         
gain (loss) on investments    .42    (.38)    .71    (.76)    .83    .29 
Total from Investment                         
Operations    .72    .23    1.29    (.18)    1.46    .96 
Distributions:                         
Dividends from                         
investment income—net    (.30)    (.61)    (.59)    (.57)    (.63)    (.67) 
Dividends from net realized                         
gain on investments    —    (.01)    (.09)    (.14)    (.15)    (.25) 
Total Distributions    (.30)    (.62)    (.68)    (.71)    (.78)    (.92) 
Net asset value,                         
end of period    15.03    14.61    15.00    14.39    15.28    14.60 
Total Return (%)    5.00b    1.57    9.10    (1.16)    10.30    6.69 

Ratios/Supplemental                         
Data (%):                         
Ratio of total expenses                         
to average net assets    .84c    .81d    .78d    .73d    .75d    .78d 
Ratio of net expenses                         
to average net assets    .83c    .81d    .78d    .73d    .75d    .78d 
Ratio of net investment                         
income to average                         
net assets    4.10c    4.10    3.96    3.93    4.27    4.54 
Portfolio Turnover Rate    21.99b    35.92    38.73    56.87    47.21    51.69 
Net Assets, end of period                     
($ x 1,000)    1,163,542    1,155,038    1,237,623    1,004,253    1,140,398    1,099,751 
 
a    Based on average shares outstanding at each month end.                 
b    Not annualized.                         
c    Annualized.                         
d    Ratio of total expenses to average net assets and ratio of net expenses to average net assets for all periods have been 
    restated.This restatement has no impact on the fund’s previously reported net assets, net investment income, net asset 
    value or total return. See Note 5.                     
See notes to financial statements.                     
28                             

NOTES TO FINANCIAL STATEMENTS (Unaudited)

NOTE 1—Significant Accounting Policies:

Dreyfus Premier California Tax Exempt Bond Fund, Inc. (the “fund”) is registered under the Investment Company Act of 1940, as amended (the “Act”), as a non-diversified open-end management investment company.The fund’s investment objective is to provide investors with a high level of current income exempt from federal and California state income taxes, as is consistent with the preservation of capital.The Dreyfus Corporation (the “Manager” or “Dreyfus”) serves as the fund’s investment adviser. The Manager is a wholly-owned subsidiary of Mellon Financial Corporation (“Mellon Financial”).

On December 4, 2006, Mellon Financial and The Bank of New York Company, Inc. announced that they had entered into a definitive agreement to merge. The new company will be called The Bank of New York Mellon Corporation. As part of this transaction, Dreyfus would become a wholly-owned subsidiary of The Bank of New York Mellon Corporation.The transaction is subject to certain regulatory approvals and the approval of The Bank of New York Company, Inc.’s and Mellon Financial’s shareholders, as well as other customary conditions to closing. Subject to such approvals and the satisfaction of the other conditions, Mellon Financial and The Bank of New York Company, Inc. expect the transaction to be completed in the third quarter of 2007.

Dreyfus Service Corporation (the “Distributor”), a wholly-owned subsidiary of the Manager, is the distributor of the fund’s shares.The fund is authorized to issue 500 million shares of $.001 par value Common Stock.The fund currently offers four classes of shares: Class A (100 million shares authorized). Class B (100 million shares authorized), Class C (100 million shares authorized) and Class Z (200 million shares authorized). Class A shares are subject to a sales charge imposed at the time of purchase. Class B shares are subject to a contingent deferred sales charge (“CDSC”) imposed on Class B share redemptions made within six years of purchase and automatically convert to Class A shares after six years. Class C shares are subject to a CDSC imposed on Class C shares redeemed within one year of purchase. Class Z shares are sold at

The Fund 29

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

net asset value per share generally only to shareholders who received Class Z shares in exchange for their shares of General California and California Municipal Income, as a result of the reorganization of such funds. Class Z shares generally are not available for new accounts. Other differences between the classes include the services offered to and the expenses borne by each class and certain voting rights. 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.

Effective June 1, 2006, the fund no longer offers Class B shares, except in connection with dividend reinvestment and permitted exchanges of Class B shares.

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.

The fund enters into contracts that contain a variety of indemnifications. The fund’s maximum exposure under these arrangements is unknown.The fund does not anticipate recognizing any loss related to these arrangements.

(a) Portfolio valuation: Investments in securities are valued each business day by an independent pricing service (the “Service”) approved by the Board of Directors. 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 carried at fair value as determined by the Service, based on methods which include consideration of: yields or prices of municipal securities of comparable quality, coupon, maturity and type; indications as to values from dealers; and general market conditions. Options and financial futures on municipal and U.S.Treasury securities are valued at the last

30

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.

On September 20, 2006, 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. Interest income, adjusted for accretion of discount and amortization of premium on investments, is earned from settlement date and recognized on the accrual basis. Securities purchased or sold on a when-issued or delayed-delivery basis may be settled a month or more after the trade date.

Inverse floaters purchased after January 1, 1997 in the agency market are accounted for as financing transactions in accordance with FASB 140 “Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities.”

The fund has an arrangement with the custodian bank whereby the fund receives earnings credits from the custodian when positive cash balances are maintained, which are used to offset custody fees. For financial reporting purposes, the fund includes net earnings credits as an expense offset in the Statement of Operations.

The fund follows an investment policy of investing primarily in municipal obligations of one state. Economic changes affecting the state and certain of its public bodies and municipalities may affect the ability of issuers within the state to pay interest on, or repay principal of, municipal obligations held by the fund.

The Fund 31

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

(c) Dividends to shareholders: It is the policy of the fund to declare dividends daily from investment income-net. Such dividends are paid monthly. Dividends from net realized capital gain, 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 accordance with income tax regulations, which may differ from U.S. generally accepted accounting principles.

(d) Federal income taxes: It is the policy of the fund to continue to qualify as a regulated investment company, which can distribute tax exempt dividends, by complying with the applicable provisions of the Code, and to make distributions of income and net realized capital gain sufficient to relieve it from substantially all federal income and excise taxes.

On July 13, 2006, 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.

As a result of the fund’s mergers with Dreyfus Premier California Municipal Bond Fund, General California Municipal Bond and Dreyfus California Municipal Income, Inc., capital losses of $11,076,983 are

32

available to offset future gains. Based on certain provisions in the code, the amount of losses which can be utilized in subsequent years is subject to an annual limitation.These acquired capital losses are expected to expire between fiscal 2008-2011.

The tax character of distributions paid to shareholders during the fiscal year ended May 31, 2006 was as follows: tax exempt income $52,803,668 and ordinary income $1,286,839. 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 November 30, 2006, the fund did not borrow under the Facility.

NOTE 3—Management Fee and Other Transactions with Affiliates:

(a) Pursuant to a management agreement (“Agreement”) with the Manager, the management fee is computed at the annual rate of .60% of the value of the fund’s average daily net assets and is payable monthly. The Agreement provides that if in any fiscal year the aggregate expenses allocable to Class Z, exclusive of taxes, brokerage fees, interest on borrowings, commitment fees and extraordinary expenses, exceed 1 1 / 2 % of the value of the average net assets of Class Z, the fund may deduct from the fees paid to the Manager, or the Manager will bear such excess expense. During the period ended November 30, 2006, there was no expense reimbursement pursuant to the Agreement.

During the period ended November 30, 2006, the Distributor retained $41,862 from commissions earned on sales of the fund’s Class A shares

The Fund 33

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

and $8,263 and $2,960 from CDSC on redemptions of the fund’s Class B and Class C shares, respectively.

(b) Under the Distribution Plan (the “Plan”) adopted pursuant to Rule 12b-1 under the Act, Class B and Class C shares pay the Distributor for distributing their shares at an annual rate of .50% of the value of the average daily net assets of Class B shares and .75% of the value of the average daily net assets of Class C shares. During the period ended November 30, 2006, Class B and Class C shares were charged $15,675 and $13,002, respectively, pursuant to the Plan.

(c) Under the Shareholder Services Plan, Class A, Class B and Class C shares pay the Distributor at an annual rate of .25% of the value of the average daily net assets of their shares, for the provision of certain ser-vices.The services provided may include personal services relating to shareholder accounts, such as answering shareholder inquiries regarding the fund and providing reports and other information, and services related to the maintenance of shareholder accounts. The Distributor may make payments to Service Agents (a securities dealer, financial institution or other industry professional) in respect of these services. The Distributor determines the amounts to be paid to Service Agents. During the period ended November 30, 2006, Class A, Class B and Class C shares were charged $103,843, $7,838 and $4,334, respectively, pursuant to the Shareholder Services Plan.

Under the Shareholder Services Plan, Class Z shares reimburse the Distributor an amount not to exceed an annual rate of .25% of the value of Class Z shares’ average daily net assets for certain allocated expenses of providing personal services and/or maintaining shareholder accounts.The services provided may include personal services relating to shareholder accounts, such as answering shareholder inquiries regarding Class Z shares and providing reports and other information, and services related to the maintenance of shareholder accounts. During the period ended November 30, 2006, Class Z shares were charged $245,000 pursuant to the Shareholder Services Plan.

The fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary

34

of the Manager, under a transfer agency agreement for providing personnel and facilities to perform transfer agency services for the fund. During the period ended November 30, 2006, the fund was charged $153,411 pursuant to the transfer agency agreement.

During the period ended November 30, 2006, the fund was charged $2,044 for services performed by the Chief Compliance Officer.

The components of Due to The Dreyfus Corporation and affiliates in the Statement of Assets and Liabilities consist of: management fees $616,822, Rule 12b-1 distribution plan fees $4,787, shareholder services plan fees $14,349, transfer agency per account fees $53,716 and chief compliance officer fees $1,704.

(c) Each Board member also serves as a Board member of other funds within the Dreyfus complex. Annual retainer fees and attendance fees are allocated to each fund based on net assets.

NOTE 4—Securities Transactions:

The aggregate amount of purchases and sales of investment securities, excluding short-term securities, during the period ended November 30, 2006, amounted to $268,635,163 and $307,907,825, respectively.

At November 30, 2006, 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).

NOTE 5 — Restatement

Subsequent to the issuance of the May 31, 2006 financial statements, the fund determined that the transfers of certain tax-exempt municipal bond securities by the fund to special purpose bond trusts in connection with participation in inverse floater structures do not qualify for sale treatment under Statement of Financial Accounting Standard No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities, and should have been accounted for as a secured borrowing.

The Fund 35

36

The correction of the above item resulted in the restatement of the ratio of net expenses of the financial highlights table as shown below:

Ratio of Total Expenses    2006    2005    2004    2003    2002 
Class A shares:                     
As previously reported    .94%    .97%             
As restated    1.04%    1.03%             
Class B shares:                     
As previously reported    1.46%    1.48%             
As restated    1.56%    1.54%             
Class C shares:                     
As previously reported    1.70%    1.71%             
As restated    1.80%    1.77%             
Class Z shares:                     
As previously reported    .71%    .72%    .70%    .70%    .71% 
As restated    .81%    .78%    .73%    .75%    .78% 
 
Ratio of Net Expenses    2006    2005    2004    2003    2002 
Class A shares:                     
As previously reported    .91%    .96%             
As restated    1.01%    1.02%             
Class B shares:                     
As previously reported    1.41%    1.45%             
As restated    1.51%    1.51%             
Class C shares:                     
As previously reported    1.67%    1.70%             
As restated    1.77%    1.76%             
Class Z shares:                     
As previously reported    .71%    .72%    .70%    .70%    .71% 
As restated    .81%    .78%    .73%    .75%    .78% 

This restatement has no impact on the fund’s previously reported net assets, net investment income, net asset value per share or total return.

In addition, the statement of investments, the statement of assets and liabilities, the statement of operations and the statement of changes in net assets were also restated as follows:

2006 2006

    Original Reported    As Restated 
Portfolio of Investments ($):         
Total investments    1,244,866,722    1,286,456,722 
Identified cost    1,192,818,332    1,233,740,347 
Other assets and liabilities    1,410,883    (40,159,117) 
Statement of Assets and Liabilities ($):     
Total investments in securities, at value    1,244,866,722    1,286,456,722 
Identified cost    1,192,818,332    1,233,740,347 
Total assets    1,264,446,700    1,306,735,080 
Payable for floating rate notes issued    —    41,570,000 
Total liabilities    18,149,095    60,437,475 
Net unrealized appreciation         
of investments    52,068,390    52,716,375 
Accumulated net realized         
loss on investments    (9,727,548)    (10,375,533) 
Statement of Operations ($):         
Investment income—Interest    62,333,379    63,665,998 
Expense—Interest    —    1,332,619 
Total expenses    9,540,107    10,872,726 
Net expenses    9,486,158    10,818,777 

The Fund 37

PROXY RESULTS (Unaudited)

The fund held a special meeting of shareholders on September 20, 2006.The proposal considered at the meeting, and the results, are as follows:

        Shares     
    Votes For        Authority Withheld 
To elect additional Board Members:             
Hodding Carter III †    48,009,067        1,414,819 
Ehud Houminer †    48,049,807        1,374,079 
Richard C. Leone †    48,087,992        1,335,894 
Hans C. Mautner †    48,069,680        1,354,206 
Robin A. Melvin †    48,065,135        1,358,751 
John E. Zuccotti †    48,058,207        1,365,679 

† Each new Board member’s term commenced on January 1, 2007. 
In addition Joseph S. DiMartino, David W. Burke, Gordon J. Davis, Joni Evans,Arnold S. Hiatt and Burton N. 
Wallack continue as Board members of the fund. 

38

NOTES

For    More    Information 

Dreyfus Premier 
California Tax Exempt 
Bond Fund, Inc. 
200 Park Avenue 
New York, NY 10166 
 
Manager 
The Dreyfus Corporation 
200 Park Avenue 
New York, NY 10166 
 
Custodian 
The Bank of New York 
One Wall Street 
New York, NY 10286 

Transfer Agent & 
Dividend Disbursing Agent 
Dreyfus Transfer, Inc. 
200 Park Avenue 
New York, NY 10166 
 
Distributor 
Dreyfus Service Corporation 
200 Park Avenue 
New York, NY 10166 

Telephone Call your financial representative or 1-800-554-4611

Mail    The Dreyfus Premier Family of Funds 
    144 Glenn Curtiss Boulevard, Uniondale, NY 11556-0144 

The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (“SEC”) for the first and third quarters of each fiscal year on Form N-Q. The fund's Forms N-Q are available on the SEC’s website at http://www.sec.gov and may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-202-551-8090.

Information regarding how the fund voted proxies relating to portfolio securities for the 12-month period ended June 30, 2006, is available on the SEC’s website at http://www.sec.gov and without charge, upon request, by calling 1-800-645-6561.

© 2007 Dreyfus Service Corporation 

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 
    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.

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) The Registrant has revised its internal control over financial reporting with respect to investments in certain inverse floater structures to account for such investments as secured borrowings and to report the related income and expense.

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. 

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.

DREYFUS PREMIER CALIFORNIA TAX EXEMPT BOND FUND, INC.

By:    /s/ J. David Officer 
    J. David Officer 
    President
 
Date:    January 29, 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:    January 29, 2007 
 
By:    /s/ James Windels 
    James Windels 
    Treasurer 
 
Date:    January 29, 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)