N-CSR 1 form-085.htm ANNUAL REPORT form-085
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 811-3940 
 
Strategic Funds, 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) 
 
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:    10/31 
Date of reporting period:    10/31/07 

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 these series, as appropriate.

Systematic International Equity Fund

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    Fund Performance 
8    Understanding Your Fund’s Expenses 
8    Comparing Your Fund’s Expenses 
With Those of Other Funds
9    Statement of Investments 
17    Statement of Financial Futures 
18    Statement of Assets and Liabilities 
19    Statement of Operations 
20    Statement of Changes in Net Assets 
21    Financial Highlights 
22    Notes to Financial Statements 
30    Report of Independent Registered 
    Public Accounting Firm 
31    Important Tax Information 
32    Board Members Information 
35    Officers of the Fund 
 
FOR MORE INFORMATION
    Back Cover 

The Fund

Systematic 
International Equity Fund 

A LETTER FROM THE CEO

Dear Shareholder:

We are pleased to present this annual report for Systematic International Equity Fund covering the period from the fund’s inception on November 30, 2006, through October 31, 2007.

After an extended period of steady gains, turmoil in U.S. credit markets over the summer of 2007 has led to heightened volatility in many international equity markets. Nonetheless, fundamentals in the global economy have remained relatively robust, particularly in the “Greater China” region, and recent rate cuts in the United States helped to sustain market rebounds in many regions of the world.

While we expect the global expansion to continue, it probably will do so at a slower rate as U.S. consumer spending moderates and as some high-flying emerging markets, notably China, take steps to reduce unsustainably high growth rates by tightening their respective monetary policies. However, the U.S. dollar has declined against most major currencies throughout most of the reporting period, making investments denominated in foreign currencies more valuable for U.S. residents. Lastly, a stubborn U.S. trade deficit and stronger economic growth in overseas markets continue to attract global capital away from U.S. markets and toward those with higher potential returns.As always, we encourage you to discuss these developments with your financial advisor, who can help you make any adjustments that may be right for your portfolio.

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 Managers.

Thank you for your continued confidence and support.

Thomas F. Eggers 
Chief Executive Officer 
The Dreyfus Corporation 
November 15, 2007 

2

DISCUSSION OF FUND PERFORMANCE

For the period from the fund’s inception on November 30, 2006, through October 31, 2007, as provided by Robert A. Wilk and Donald E. Perks, Portfolio Managers

Fund and Market Performance Overview

International equity markets continued to fare well during the reporting period in an environment of robust global economic growth and strong industrial demand from emerging markets, especially in Asia. The fund participated in the market’s gains, with particularly strong results from materials stocks in the Asia/Pacific region and information technology shares in Europe.

For the period between the fund’s inception on November 30, 2006, and the end of its annual reporting period on October 31, 2007, Systematic International Equity Fund’s Class A shares achieved a 24.80% total return, Class C shares achieved a 24.00% total return, Class I shares achieved a 25.12% total return and Class T shares achieved a 24.56% total return.1 The fund’s benchmark, the Morgan Stanley Capital International Europe, Australasia, Far East Index (“MSCI EAFE Index”), produced a total return of 21.29% for the same period.2 Please note that effective June 1, 2007, the fund’s Class R shares were renamed Class I shares.

What is the fund’s investment approach?

The fund seeks long-term capital growth by normally investing at least 80% of its assets in equity securities.The fund normally invests primarily in equity securities of foreign companies.The fund invests in at least 10 different countries and may invest up to 25% of its assets in emerging market countries, but no more than 10% of its assets may be invested in any one emerging market country.

When selecting securities, we use a quantitative model to identify and rank stocks within geographic regions and economic sectors based on six factor classifications: value, stewardship, growth, accruals, market sentiment and analysts’ expectations.We generally select higher ranked securities as identified by the quantitative model, but we may also assess qualitative factors.We attempt to manage risk through diversifi-

The Fund 3

DISCUSSION OF FUND PERFORMANCE (continued)

cation across regions, countries, sectors and industries in proportions that are similar to those of the MSCI EAFE Index.The fund’s currency exposure typically is unhedged to the U.S. dollar.

Strong International Growth Drove Stock Prices Higher

In the emerging markets of Asia and Latin America, strong demand for the natural resources used in industrial construction helped support economic expansion and the growth of a larger middle class of consumers. In Europe, corporate restructuring and mergers-and-acquisitions activity helped bolster corporate earnings and stock prices. Japan was one of the few major markets to post disappointing results,primarily due to its longstanding struggle to reform its banking system.

During the summer of 2007, international markets encountered heightened volatility stemming from a U.S. credit and liquidity crisis.Although only a handful of international banks had direct exposure to the sub-prime mortgages that triggered the crisis, selling pressure from highly leveraged hedge funds and institutional investors caused market turbulence around the world. However, investors soon recognized that fundamental conditions had not deteriorated for most international companies, and global markets rebounded by the reporting period’s end.

Materials in Asia, Technology in Europe Fueled Fund Performance

Our disciplined, “bottom-up” investment approach proved successful in this environment. For example, our stock scoring system identified a number of basic materials producers in Asia that appeared to be attractively valued and poised to benefit from strong demand for construction materials from China and India.We invested primarily in materials companies listed on securities exchanges in developed markets, such as Taiwan and Hong Kong, to guard against risks that less regulated emerging markets typically entail.The fund achieved particularly strong results in this area from Nisshin Steel and Mitsubishi Corp.

In Europe, the fund received strong contributions to performance from information technology companies, such as cellular telephone handset maker Nokia, that helped deliver technological advances to eager consumers. German automaker Volkswagen boosted its penetration of the

4

U.S. market and forged a closer alliance with partner Porsche, boosting the valuations of both companies’ stocks. An underweight position among pharmaceutical developers helped the fund avoid weakness in several companies that continued to contend with product development issues and competitive pressures from generic drug manufacturers. Finally, the fund benefited from relatively light exposure to lackluster Japanese banks.

The Fund Remains Positioned for Robust Global Growth

Despite the slowdown of the U.S. economy, the recent results of our quantitative models have suggested that there are few signs of impending weakness in international markets. Our models have continued to assign higher rankings to information technology firms in Europe and industrial and materials companies in Asia outside of Japan. Our stock selection system also recently has found more attractively valued opportunities among health care companies, causing us to increase the fund’s exposure to the industry group. In our judgment, these tilts position the fund well over the foreseeable future. Of course, conditions can change rapidly and our models may or may not drive similar portfolio construction in such circumstances.

November 15, 2007

    Investing in foreign companies involves special risks, including changes in currency rates, 
    political, economic and social instability, a lack of comprehensive company information, 
    differing auditing and legal standards and less market liquidity. 
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 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. Return figures provided reflect the 
    absorption of certain fund expenses by The Dreyfus Corporation pursuant to an agreement in 
    effect through October 31, 2008, at which time it may be extended, terminated or modified. Had 
    these expenses not been absorbed, the fund’s returns would have been lower. 
2    SOURCE: LIPPER INC. — Reflects reinvestment of net dividends and, where applicable, 
    capital gain distributions.The Morgan Stanley Capital International Europe, Australasia, Far 
    East (MSCI EAFE) Free Index is an unmanaged index composed of a sample of companies 
    representative of the market structure of European and Pacific Basin countries.The index reflects 
    actual investable opportunities for global investors for stocks that are free of foreign ownership 
    limits or legal restrictions at the country level. 

The Fund 5

FUND PERFORMANCE

† Source: Lipper Inc. 
Past performance is not predictive of future performance. 
The above graph compares a $10,000 investment made in Class A, Class C, Class I and Class T shares of Systematic 
International Equity Fund on 11/30/06 (inception date) to a $10,000 investment made in the Morgan Stanley 
Capital International Europe, Australasia, Far East Index (the “Index”) on that date. All dividends and capital gain 
distributions are reinvested. 
The fund’s performance shown in the line graph takes into account the maximum initial sales charges on Class A and 
Class T shares, the applicable contingent deferred sales charge on Class C shares and all other applicable fees and 
expenses on all classes.The Index is an unmanaged index composed of a sample of companies representative of the 
market structure of European and Pacific Basin countries.The Index does not take into account charges, fees and other 
expenses which can contribute to the Index potentially outperforming or underperforming the fund. Further information 
relating to fund performance, including expense reimbursements, if applicable, is contained in the Financial Highlights 
section of the prospectus and elsewhere in this report. 

6

Actual Aggregate Total Returns as of 10/31/07     
 
    Inception    From 
    Date    Inception 
Class A shares         
with maximum sales charge (5.75%)    11/30/06    17.65% 
without sales charge    11/30/06    24.80% 
Class C shares         
with applicable redemption charge †    11/30/06    23.00% 
without redemption    11/30/06    24.00% 
Class I shares    11/30/06    25.12% 
Class T shares         
with applicable sales charge (4.5%)    11/30/06    18.95% 
without sales charge    11/30/06    24.56% 

Past performance is not predictive of future performance.The fund’s performance shown in the graph and table does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.

† The maximum contingent deferred sales charge for Class C shares is 1% for shares redeemed within one year of the 
date of purchase. 

The Fund 7

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 Systematic International Equity Fund from May 1, 2007 to October 31, 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 October 31, 2007         
    Class A    Class C    Class I    Class T 
Expenses paid per $1,000 †    $ 7.39    $ 11.33    $ 6.08    $ 8.71 
Ending value (after expenses)    $1,095.50    $1,091.60    $1,096.80    $1,094.20 

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 October 31, 2007 
    Class A    Class C    Class I    Class T 
Expenses paid per $1,000 †    $ 7.12    $ 10.92    $ 5.85    $ 8.39 
Ending value (after expenses)    $1,018.15    $1,014.37    $1,019.41    $1,016.89 

† Expenses are equal to the fund’s annualized expense ratio of 1.40% for Class A, 2.15% for Class C, 1.15% for 
Class I and 1.65% for Class T, multiplied by the average account value over the period, multiplied by 184/365 (to 
reflect the one-half year period). 

8

STATEMENT OF INVESTMENTS 
October 31, 2007 

Common Stocks—98.9%    Shares    Value ($) 
Australia—6.7%         
APA Group    1,264    4,658 
BHP Billiton    2,900    126,294 
BlueScope Steel    5,967    59,458 
Coca-Cola Amatil    4,900    46,919 
Computershare    5,489    44,379 
CSL    1,350    45,919 
DB RREEF Trust    30,662    60,116 
GPT Group    11,033    47,977 
Lion Nathan    6,506    56,543 
Origin Energy    7,465    64,112 
Pacific Brands    19,778    64,557 
Qantas Airways    10,928    60,511 
Rio Tinto    520    54,037 
Santos    4,025    53,348 
Telstra    14,000    61,400 
        850,228 
Austria—1.4%         
Flughafen Wien    439    52,009 
OMV    850    63,535 
Voestalpine    683    61,399 
        176,943 
Belgium—2.1%         
Belgacom    1,060    50,646 
Dexia    1,884    60,411 
Groupe Bruxelles Lambert    400    51,073 
InBev    730    68,891 
Omega Pharma    589    39,411 
        270,432 
Denmark—2.3%         
AP Moller—Maersk, Cl. B    5    68,984 
Carlsberg, Cl. B    450    60,599 
Novo Nordisk, Cl. B    650    80,585 
Sydbank    850    39,105 
Topdanmark    275 a    46,919 
        296,192 

The Fund 9

STATEMENT OF INVESTMENTS (continued)

Common Stocks (continued)    Shares    Value ($) 
Finland—2.5%         
Elisa    1,635    48,472 
Konecranes    1,635    73,170 
Nokia    4,883    193,421 
        315,063 
France—7.2%         
Air France-KLM    1,135    43,134 
AXA    2,400    107,267 
BNP Paribas    290    31,958 
Business Objects    1,105 a    66,383 
Cie de Saint-Gobain    700    75,012 
CNP Assurances    409    52,121 
Compagnie Generale des Etablissements Michelin, Cl. B    568    76,036 
France Telecom    2,975    109,699 
Peugeot    400    37,065 
Sanofi-Aventis    1,320    115,738 
Scor    619    16,854 
Total    1,212    97,685 
Vivendi    1,900    85,525 
        914,477 
Germany—10.2%         
Allianz    547    122,968 
BASF    820    113,416 
Bayer    900    75,002 
Daimler    1,300    142,998 
Deutsche Boerse    618    97,471 
Deutsche Lufthansa    1,785    52,713 
Deutsche Telekom    525    10,759 
E.ON    188    36,731 
Fresenius Medical Care & Co.    1,050    55,445 
MAN    519    92,605 
Merck    400    50,024 
Muenchener Rueckversicherungs    425    81,508 
RWE    400    54,595 
Salzgitter    280    55,034 
Siemens    268    36,377 
Suedzucker    1,737    39,471 

10

Common Stocks (continued)    Shares    Value ($) 
Germany (continued)         
ThyssenKrupp    1,100    73,284 
Volkswagen    390    111,781 
        1,302,182 
Greece—.5%         
Coca-Cola Hellenic Bottling    1,100    68,250 
Hong Kong—5.1%         
BOC Hong Kong Holdings    18,500    53,005 
Cathay Pacific Airways    16,000    48,094 
CLP Holdings    4,500    30,376 
Esprit Holdings    4,000    68,015 
Hang Lung Properties    12,000    58,975 
Hang Seng Bank    4,200    87,058 
Henderson Land Development    8,000    71,717 
New World Development    15,000    53,801 
Swire Pacific, Cl. A    4,500    64,437 
Wharf Holdings    13,000    78,697 
Yue Yuen Industrial Holdings    12,000    37,309 
        651,484 
Ireland—1.5%         
Allied Irish Banks    2,300    57,428 
Bank of Ireland    2,600    47,973 
Independent News & Media    11,400    41,854 
Irish Life & Permanent    1,800    40,788 
        188,043 
Italy—2.0%         
Assicurazioni Generali    2,100    99,668 
ENI    872    31,826 
Fiat    2,200    71,085 
Intesa Sanpaolo    800    6,332 
Snam Rete Gas    8,000    51,733 
        260,644 
Japan—16.7%         
Aisin Seiki    1,300    53,224 
Bank of Kyoto    4,000    51,009 
Canon    330    16,684 
Central Glass    7,000    33,319 

The Fund 11

STATEMENT OF INVESTMENTS (continued)

Common Stocks (continued)    Shares    Value ($) 
Japan (continued)         
Central Japan Railway    5    51,722 
eAccess    62    39,223 
Electric Power Development    1,100    43,633 
Hitachi High-Technologies    600    13,485 
Honda Motor    1,300    48,745 
Ibiden    700    59,521 
Itochu    6,000    76,435 
JFE Holdings    1,100    64,297 
Joyo Bank    7,000    43,298 
Kawasaki Kisen Kaisha    6,000    83,201 
Kyocera    600    50,840 
Kyowa Hakko Kogyo    5,000    54,638 
Marubeni    6,000    51,389 
Mitsubishi    1,700    52,883 
Mitsubishi Chemical Holdings    7,000    57,774 
Mitsubishi UFJ Financial Group    3,000    29,903 
Mitsui & Co.    4,000    104,051 
Mitsui OSK Lines    5,000    82,592 
NEC    11,000    54,708 
Nippon Mining Holdings    1,000    9,426 
Nippon Oil    4,000    35,516 
Nippon Sheet Glass    8,000    48,569 
Nippon Steel    5,000    33,169 
Nippon Yusen    7,000    72,268 
Nisshin Steel    10,000    38,442 
Nomura Research Institute    500    17,599 
Resona Holdings    34    60,328 
Ricoh    2,000    39,453 
Shimachu    1,500    42,979 
Sumitomo    3,700    64,504 
Taiyo Yuden    2,000    33,169 
TDK    600    49,317 
Tokai Rika    1,700    50,051 
Tokyo Tatemono    3,000    38,499 
Tosoh    9,000    57,406 
Toyota Industries    1,100    47,015 

12

Common Stocks (continued)    Shares    Value ($) 
Japan (continued)         
Toyota Motor    3,000    171,486 
Yamaha    400    9,317 
        2,135,087 
Netherlands—1.8%         
Aegon    3,300    68,154 
Heineken    900    62,958 
ING Groep    1,625    73,052 
STMicroelectronics    1,500    25,657 
        229,821 
New Zealand—.3%         
Vector    20,600    38,120 
Norway—1.8%         
Frontline    1,000    45,070 
Prosafe Se    1,100    19,503 
Tandberg    3,200    81,350 
Yara International    2,100    81,252 
        227,175 
Singapore—3.8%         
CapitaLand    10,000    56,317 
ComfortDelgro    21,000    28,293 
DBS Group Holdings    4,000    62,519 
Haw Par    9,000    49,514 
Jardine Cycle & Carriage    2,000    29,371 
Keppel Corp    8,000    82,590 
Oversea-Chinese Banking    5,000    32,152 
Singapore Land    4,000    27,084 
United Overseas Bank    4,000    60,021 
UOL Group    14,000    51,245 
        479,106 
Spain—3.8%         
Acerinox    1,645    48,507 
ACS-Actividades de Construccion y Servicios    1,000    61,857 
Banco Bilbao Vizcaya Argentaria    1,074    27,019 
Banco Santander    2,400    52,139 
Iberia Lineas Aereas de Espana    11,712    59,369 
Mapfre    9,129    42,838 

The Fund 13

STATEMENT OF INVESTMENTS (continued)

Common Stocks (continued)    Shares    Value ($) 
Spain (continued)         
Sacyr Vallehermoso    200    9,397 
Telefonica    5,618    185,432 
        486,558 
Sweden—1.8%         
Kungsleden    3,200    45,569 
Scania, Cl. B    2,400    65,521 
Ssab Svenskt Stal, Ser. B    1,400    41,195 
Svenska Handelsbanken, Cl. A    1,500    49,684 
Volvo, Cl. B    1,300    25,314 
        227,283 
Switzerland—4.8%         
Holcim    640    72,966 
Nestle    200    92,330 
Novartis    1,200    63,845 
Roche Holding    300    51,200 
Swatch Group    200    63,914 
Swiss Life Holding    210 a    58,041 
Swiss Reinsurance    700    65,719 
UBS    1,000    53,506 
Zurich Financial Services    300    90,365 
        611,886 
United Kingdom—22.1%         
3i Group    2,079    46,914 
Aggreko    4,000    51,628 
Anglo American    1,799    121,943 
Barclays    8,133    97,502 
Berkeley Group Holdings    1,311 a    46,586 
BHP Billiton    3,300    125,312 
BP    12,431    160,900 
British American Tobacco    2,000    73,687 
British Land    2,125    45,610 
Carnival    916    42,817 
Daily Mail & General Trust, Cl. A    3,100    39,225 
Enterprise Inns    3,850    50,258 
GlaxoSmithKline    3,139    79,909 
Home Retail Group    7,400    66,802 

14

Common Stocks (continued)    Shares    Value ($) 
United Kingdom (continued)         
HSBC Holdings    9,767    193,075 
Imperial Tobacco Group    1,550    78,112 
International Power    6,800    68,405 
Kelda Group    1,923    37,594 
Liberty International    1,100    27,103 
Next    1,301    58,894 
Old Mutual    16,600    62,673 
Prudential    4,950    79,507 
Punch Taverns    2,625    54,955 
Royal Bank of Scotland Group    10,896    116,704 
Royal Dutch Shell, Cl. A    1,965    85,734 
Royal Dutch Shell, Cl. B    3,291    142,237 
SABMiller    2,600    77,761 
Schroders    1,900    60,776 
Scottish & Newcastle    3,200    51,931 
Severn Trent    1,600    48,227 
Smith & Nephew    4,700    62,121 
Unilever    1,050    35,736 
United Business Media    1,600    23,823 
Vodafone Group    57,053    223,660 
Whitbread    1,316    48,072 
WPP Group    3,000    40,958 
Xstrata    1,310    93,499 
        2,820,650 
United States—.5%         
iShares MSCI EAFE Index Fund    704    60,614 
Total Common Stocks         
(cost $10,632,918)        12,610,238 
 
Preferred Stocks—.8%         
Australia—.0%         
BBI EPS    319    268 
Germany—.8%         
Porsche    41    109,202 
Total Preferred Stocks         
(cost $47,849)        109,470 

The Fund 15

STATEMENT OF INVESTMENTS (continued)

    Principal     
Short-Term Investments—.2%    Amount ($)    Value ($) 
U.S. Treasury Bills;         
3.50%, 12/27/07         
(cost $19,891)    20,000 b    19,879 
Total Investments (cost $10,700,658)    99.9%    12,739,587 
Cash and Receivables (Net)    .1%    7,957 
Net Assets    100.0%    12,747,544 

a    Non-income producing security. 
b    All or partially held by a broker as collateral for open financial futures positions. 

Portfolio Summary (Unaudited) †         
 
    Value (%)        Value (%) 
Financial    17.8    Telecommunication Services    5.8 
Consumer Discretionary    14.3    Health Care    5.5 
Industrial    13.3    Utilities    2.8 
Materials    11.4    Transportation    .9 
Insurance    8.4    Index    .5 
Energy    6.5    Short Term Investment    .2 
Consumer Staples    6.4         
Information Technology    6.1        99.9 

† Based on net assets. 
See notes to financial statements. 

16

STATEMENT OF FINANCIAL FUTURES 
October 31, 2007 

                Unrealized 
        Market Value        Appreciation 
        Covered by        (Depreciation) 
    Contracts    Contracts ($)    Expiration    at 10/31/2007 ($) 
Financial Futures Long                 
Euro FX    1    181,375    December 2007    7,059 
Japanese Yen    4    435,800    December 2007    (6,166) 
Franc FX    2    216,775    December 2007    4,142 
                5,035 

See notes to financial statements.

The Fund 17

STATEMENT OF ASSETS AND LIABILITIES 
October 31, 2007 

    Cost    Value 
Assets ($):         
Investments in securities-See Statement of Investments    10,700,658    12,739,587 
Cash        24,280 
Cash denominated in foreign currencies    10,364    8,730 
Dividends and interest receivable        24,506 
Prepaid expenses        20,357 
        12,817,460 
Liabilities ($):         
Due to The Dreyfus Corporation and affiliates—Note 3(c)        33,845 
Payable for futures variation margin—Note 4        688 
Accrued expenses        35,383 
        69,916 
Net Assets ($)        12,747,544 
Composition of Net Assets ($):         
Paid-in capital        10,244,928 
Accumulated undistributed investment income—net        122,228 
Accumulated net realized gain (loss) on investments        337,640 
Accumulated net unrealized appreciation (depreciation) on     
investments and foreign currency transactions (including     
$5,035 net unrealized appreciation on financial futures)    2,042,748 
Net Assets ($)        12,747,544 

See notes to financial statements.

Net Asset Value Per Share                 
    Class A    Class C    Class I    ClassT 
Net Assets ($)    8,973,935    1,271,207    1,256,661    1,245,741 
Shares Outstanding    574,968    82,011    80,331    80,000 
Net Asset Value Per Share ($)    15.61    15.50    15.64    15.57 

18

STATEMENT OF OPERATIONS 
From November 30, 2006 (commencement of operations) to October 31, 2007 

Investment Income ($):     
Income:     
Cash dividends (net of $25,792 foreign taxes withheld at source):     
Unaffiliated issuers    276,673 
Affiliated issuers    1,714 
Interest    1,320 
Total Income    279,707 
Expenses:     
Management fee—Note 3(a)    83,024 
Custodian fees—Note 3(c)    59,260 
Auditing fees    33,107 
Shareholder servicing costs—Note 3(c)    23,867 
Distribution fees—Note 3(b)    10,367 
Registration fees    8,435 
Prospectus and shareholders’ reports    7,334 
Legal fees    1,089 
Directors’ fees and expenses—Note 3(d)    1,088 
Miscellaneous    49,700 
Total Expenses    277,271 
Less—expense reimbursement by The Dreyfus Corporation     
due to undertaking—Note 3(a)    (124,186) 
Less—reduction in custody fees due to earnings credits—Note 1(c)    (5,805) 
Net Expenses    147,280 
Investment Income-Net    132,427 
Realized and Unrealized Gain (Loss) on Investments—Note 4 ($): 
Net realized gain (loss) on investments and foreign currency transactions    265,462 
Net realized gain (loss) on financial futures    26,902 
Net realized gain (loss) on forward currency exchange contracts    35,055 
Net Realized Gain (Loss)    327,419 
Net unrealized appreciation (depreciation) on investments     
and foreign currency transactions (including $5,035     
net unrealized appreciation on financial futures)    2,042,748 
Net Realized and Unrealized Gain (Loss) on Investments    2,370,167 
Net Increase in Net Assets Resulting from Operations    2,502,594 
 
See notes to financial statements.     

The Fund 19

STATEMENT OF CHANGES IN NET ASSETS 
From November 30, 2006 (commencement of operations) to October 31, 2007a 

Operations ($):     
Investment income—net    132,427 
Net realized gain (loss) on investments    327,419 
Net unrealized appreciation (depreciation) on investments    2,042,748 
Net Increase (Decrease) in Net Assets     
Resulting from Operations    2,502,594 
Capital Stock Transactions ($):     
Net proceeds from shares sold:     
Class A shares    7,217,159 
Class C shares    1,033,587 
Class I shares    1,005,000 
Class T shares    1,000,000 
Cost of shares redeemed:     
Class A shares    (4,720) 
Class C shares    (6,076) 
Increase (Decrease) in Net Assets     
from Capital Stock Transactions    10,244,950 
Total Increase (Decrease) in Net Assets    12,747,544 
Net Assets ($):     
Beginning of Period    — 
End of Period    12,747,544 
Undistributed investment income—net    122,228 
Capital Share Transactions (Shares):     
Class A     
Shares sold    575,335 
Shares redeemed    (367) 
Net Increase (Decrease) in Shares Outstanding    574,968 
Class C     
Shares sold    82,431 
Shares redeemed    (420) 
Net Increase (Decrease) in Shares Outstanding    82,011 
Class I     
Shares sold    80,331 
Class T     
Shares sold    80,000 

a Effective June 1, 2007, the fund redesignated Class R shares to Class I shares. 
See notes to financial statements. 

20

FINANCIAL HIGHLIGHTS

The following table describes the performance for each share class for the period from November 30, 2006 (commencement of operations) to October 31, 2007. 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.

    Class A    Class C    Class Ia    Class T 
    Shares    Shares    Shares    Shares 
Per Share Data ($):                 
Net asset value, beginning of period    12.50    12.50    12.50    12.50 
Investment Operations:                 
Investment income—net b    .17    .08    .21    .14 
Net realized and unrealized                 
gain (loss) on investments    2.94    2.92    2.93    2.93 
Total from Investment Operations    3.11    3.00    3.14    3.07 
Net asset value, end of period    15.61    15.50    15.64    15.57 
Total Return (%) c    24.80d    24.00d    25.12    24.56d 
Ratios/Supplemental Data (%):                 
Ratio of total expenses                 
to average net assets e    2.60    3.35    2.35    2.85 
Ratio of net expenses                 
to average net assets e    1.34    2.09    1.09    1.59 
Ratio of net investment income                 
to average net assets e    1.35    .61    1.60    1.10 
Portfolio Turnover Rate c    85.40    85.40    85.40    85.40 
Net Assets, end of period ($ x 1,000)    8,974    1,271    1,257    1,246 

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    Not annualized. 
d    Exclusive of sales charge. 
e    Annualized. 
See notes to financial statements. 

The Fund 21

NOTES TO FINANCIAL STATEMENTS

NOTE 1—Significant Accounting Policies:

Systematic International Equity Fund (the “fund”) is a separate diversified series of Strategic Funds, Inc. (the “Company”) which is registered under the Investment Company Act of 1940, as amended (the “Act”), as a diversified open-end management investment company and operates as a series company currently offering five series, including the fund, which commenced operations on November 30, 2006. The fund’s investment objective is to pursue long-term capital growth.The Dreyfus Corporation (the “Manager” or “Dreyfus”) serves as the fund’s investment adviser. Mellon Equity Associates, LLP (“Mellon Equity”) serves as the fund’s sub-investment adviser and is an affiliate of BNY Mellon.

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

The fund’s Board of Trustees 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.

MBSC Securities Corporation (the “Distributor”), a wholly-owned subsidiary of Dreyfus, is the distributor of the fund’s shares.The fund is authorized to issue 100 million shares of $.001 par value Common Stock in each of the following classes of shares: Class A, Class C, Class I and Class T. Class A and Class T shares are subject to a sales charge imposed at the time of purchase. Class C shares are subject to a contingent deferred sales charge (“CDSC”) on Class C shares redeemed within one year of purchase. Class I shares are sold at net asset value per share only to institutional investors. 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.

22

As of October 31, 2007, MBC Investments Corp., an indirect subsidiary of BNY Mellon, held 560,000 of the outstanding Class A shares and 80,000 each of the outstanding Class C, Class I and Class T shares of the fund.

The Company accounts separately for the assets, liabilities and operations of each series. Expenses directly attributable to each series are charged to that series’ operations; expenses which are applicable to all series are allocated among them on a pro rata basis.

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 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 sales 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, except for open short positions, where the asked price is used for valuation purposes. Bid price is used when no asked price is available. Registered open-end 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 value these investments at fair value as determined

The Fund 23

NOTES TO FINANCIAL STATEMENTS (continued)

in accordance with the procedures approved by the Board of Directors. 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 Directors, 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. Financial futures are valued at the last sales price. 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) 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 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 amounts 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

24

gains or 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.

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.

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

(e) Dividends to shareholders: Dividends are recorded on the ex-dividend date. Dividends from investment income-net and 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.

(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 Fund 25

NOTES TO FINANCIAL STATEMENTS (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 “morelikely-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.

At October 31, 2007, the components of accumulated earnings on a tax basis were as follows: undistributed ordinary income $512,905, undistributed capital gains $19,162 and unrealized appreciation $1,970,549.

During the period ended October 31, 2007, as a result of permanent book to tax differences, primarily due to the tax treatment for foreign currency gains and losses and passive foreign investment companies, the fund decreased accumulated undistributed investment income-net by $10,199, increased accumulated net realized gain (loss) on investments by $10,221 and decreased paid-in capital by $22. Net assets and net asset value per share were not affected by this reclassification.

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 borrowings. During the period ended October 31, 2007, the fund did not borrow under the Facility.

26

NOTE 3—Management Fee, Sub-Investment Advisory Fee and Other Transactions With Affiliates:

(a) Pursuant to a management agreement (“Agreement”) with Dreyfus, the management fee is computed at the annual rate of .80% of the value of the fund’s average daily net assets and is payable monthly. Dreyfus has contractually agreed to waive receipt of its fees and/or assume the expenses of the fund, until October 31, 2008, so that annual fund operating expenses (excluding Rule 12b-1 fees, shareholder services fees, taxes, interest, brokerage commissions, commitment fees on borrowings and extraordinary expenses) do not exceed 1.15% of the fund’s average daily net assets.The expense reimbursement, pursuant to the undertaking, amounted to $124,186 during the period ended October 31, 2007.

Pursuant to a Sub-Investment Advisory Agreement between Dreyfus and Mellon Equity, Dreyfus pays Mellon Equity an annual fee of .45% of the value of the fund’s average daily net assets, payable monthly.

(b) Under the Distribution Plan (the “Plan”) adopted pursuant to Rule 12b-1 under the Act, Class C and Class T shares pay the Distributor for distributing their shares at an annual rate of .75% of the value of the average daily net assets of Class C shares and .25% of the value of the average daily net assets of Class T shares. During the period ended October 31, 2007, Class C and Class T shares were charged $7,800 and $2,567, respectively, pursuant to the Plan.

(c) Under the Shareholder Services Plan, Class A, Class C and Class T shares pay the Distributor at an annual rate of .25% of the value of their average daily net assets for the provision of certain services.The services provided may include personal services relating to shareholder accounts, such as answering shareholder inquiries regarding Class A, Class C and Class T shares 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

The Fund 27

NOTES TO FINANCIAL STATEMENTS (continued)

Service Agents. During the period ended October 31, 2007, Class A, Class C and Class T shares were charged $18,204, $2,600 and $2,567, respectively, pursuant to the Shareholder Services Plan.

The fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of Dreyfus, under a transfer agency agreement for providing personnel and facilities to perform transfer agency services for the fund. During the period ended October 31, 2007, the fund was charged $293 pursuant to the transfer agency agreement.

Effective July 1, 2007, the fund’s custodian, The Bank of New York, became an affiliate of the Manager. Under the fund’s pre-existing custody agreement with The Bank of New York, for providing custodial services for the fund for the four months ended October 31, 2007, the fund was charged $8,219. Prior to becoming an affiliate,The Bank of New York was paid $51,041 for the custody services to the fund for the seven months ended June 30, 2007.

During the period ended October 31, 2007, the fund was charged $4,660 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 $8,408, Rule 12b-1 distribution plan fees $1,044, shareholder services plan fees $2,369, custodian fees $31,366 and chief compliance officer fees $2,000, which are offset against an expense reimbursement currently in effect in the amount of $11,342.

(d) 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, financial futures and forward currency exchange contracts, during the period ended October 31, 2007, amounted to $20,065,010 and $9,661,530, respectively.

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

28

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 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, which consist of cash or cash equivalents.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 October 31, 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 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 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. At October 31, 2007, there were no forward currency exchange contracts outstanding.

At October 31, 2007, the cost of investments for federal income tax purposes was $10,767,822; accordingly, accumulated net unrealized appreciation on investments was $1,971,765, consisting of $2,262,722 gross unrealized appreciation and $290,957 gross unrealized depreciation.

The Fund 29

REPORT OF INDEPENDENT REGISTERED 
PUBLIC ACCOUNTING FIRM 

Shareholders and Board of Directors 
Systematic International Equity Fund 

We have audited the accompanying statement of assets and liabilities, including the statement of investments and financial futures, of Systematic International Equity Fund (one of the funds comprising Strategic Funds, Inc.) as of October 31, 2007, and the related statement of operations, the statement of changes in net assets and financial highlights for the period from November 30, 2006 (commencement of operations) to October 31, 2007.These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement.We were not engaged to perform an audit of the Fund’s internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of October 31, 2007 by correspondence with the custodian and others.We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Systematic International Equity Fund at October 31, 2007, and the results of its operations, the changes in its net assets and financial highlights for the period from November 30, 2006 to October 31, 2007, in conformity with U. S. generally accepted accounting principles.

New York, New York 
December 21, 2007 

30

IMPORTANT TAX INFORMATION ( U n a u d i t e d )

In accordance with federal tax law, the fund elects to provide each shareholder with their portion of the fund’s foreign taxes paid and the income sourced from foreign countries.Accordingly, the fund hereby makes the following designations regarding its fiscal year ended October 31, 2007:

As required by federal tax law rules, shareholders will receive notification of their proportionate share of foreign taxes paid and foreign sourced income for the 2007 calendar year with Form 1099-DIV which will be mailed by January 31, 2008.

The Fund 31

BOARD MEMBERS INFORMATION ( U n a u d i t e d )

Joseph S. DiMartino (64) 
Chairman of the Board (1995) 

Principal Occupation During Past 5 Years: 
• Corporate Director and Trustee 
Other Board Memberships and Affiliations: 
• The Muscular Dystrophy Association, Director 
• Century Business Services, Inc., a provider of outsourcing functions for small and medium size 
companies, Director 
• The Newark Group, a provider of a national market of paper recovery facilities, paperboard 
mills and paperboard converting plants, Director 
• Sunair Services Corporation, a provider of certain outdoor-related services to homes and 
businesses, Director 

No. of Portfolios for which Board Member Serves: 165 ———————

David W. Burke (71) 
Board Member (1994) 

Principal Occupation During Past 5 Years: 
• Corporate Director and Trustee. 
Other Board Memberships and Affiliations: 
• John F. Kennedy Library Foundation, Director 

No. of Portfolios for which Board Member Serves: 88 ———————

William Hodding Carter III (72) 
Board Member (1988) 

Principal Occupation During Past 5 Years: 
• Professor of Leadership & Public Policy, University of North Carolina, Chapel Hill 
(January 1, 2006-present) 
• President and Chief Executive Officer of the John S. and James L. Knight Foundation 
(February 1, 1998-February 1, 2006) 

Other Board Memberships and Affiliations:

  • The Century Foundation, Emeritus Director
  • The Enterprise Corporation of the Delta, Director

No. of Portfolios for which Board Member Serves: 27 ———————

Gordon J. Davis (66) 
Board Member (2006) 

Principal Occupation During Past 5 Years: 
• Partner in the law firm of Dewey & LeBoeuf, LLP 
• President, Lincoln Center for the Performing Arts, Inc. (2001) 

Other Board Memberships and Affiliations:

  • Consolidated Edison, Inc., a utility company, Director
  • Phoenix Companies, Inc., a life insurance company, Director
  • Board Member/Trustee for several not-for-profit groups

No. of Portfolios for which Board Member Serves: 36

32

Joni Evans (65) 
Board Member (2006) 

Principal Occupation During Past 5 Years: 
• Principal, Joni Evans Ltd. 
• Senior Vice President of the William Morris Agency (2005) 

No. of Portfolios for which Board Member Serves: 27

———————

Ehud Houminer (67) 
Board Member (1994) 

Principal Occupation During Past 5 Years: 
• Executive-in-Residence at the Columbia Business School, Columbia University 
Other Board Memberships and Affiliations: 
• Avnet Inc., an electronics distributor, Director 
• International Advisory Board to the MBA Program School of 
Management, Ben Gurion University, Chairman 

No. of Portfolios for which Board Member Serves: 67

———————

Richard C. Leone (67) 
Board Member (1984) 

Principal Occupation During Past 5 Years: 
• President of The Century Foundation (formerly,The Twentieth Century Fund, Inc.), a tax exempt 
research foundation engaged in the study of economic, foreign policy and domestic issues 

Other Board Memberships and Affiliations:

  • The American Prospect, Director
  • Center for American Progress, Director

No. of Portfolios for which Board Member Serves: 27

———————

Hans C. Mautner (69) 
Board Member (1984) 

Principal Occupation During Past 5 Years: 
• President—International Division and an Advisory Director of Simon Property Group, a 
real estate investment company (1998-present) 
• Director and Vice Chairman of Simon Property Group (1998-2003) 
• Chairman and Chief Executive Officer of Simon Global Limited (1999-present) 

Other Board Memberships and Affiliations:

  • Capital and Regional PLC, a British co-investing real estate asset manager, Director
  • Member - Board of Managers of: Mezzacappa Long/Short Fund LLC
    Mezzacappa Partners LLC

No. of Portfolios for which Board Member Serves: 27

The Fund 33

BOARD MEMBERS INFORMATION ( U n a u d i t e d ) (continued)

Robin A. Melvin (44) 
Board Member (1995) 

Principal Occupation During Past 5 Years: 
• Director, Boisi Family Foundation, a private family foundation that supports youth-serving orga- 
nizations that promote the self sufficiency of youth from disadvantaged circumstances 

No. of Portfolios for which Board Member Serves: 27

———————

Burton N. Wallack (56) 
Board Member (2006) 

Principal Occupation During Past 5 Years: 
• President and co-owner of Wallack Management Company, a real estate management company 

No. of Portfolios for which Board Member Serves: 27

———————

John E. Zuccotti (70) 
Board Member (1984) 

Principal Occupation During Past 5 Years: 
• Chairman of Brookfield Financial Properties, Inc. 
• Senior Counsel of Weil, Gotshal & Manges, LLP 
• Chairman of the Real Estate Board of New York 

Other Board Memberships and Affiliations:

  • Emigrant Savings Bank, Director
  • Wellpoint, Inc., Director
  • Visiting Nurse Service of New York, Director
  • Columbia University,Trustee
  • Doris Duke Charitable Foundation,Trustee

No. of Portfolios for which Board Member Serves: 27

———————

Once elected all Board Members serve for an indefinite term, but achieve Emeritus status upon reaching age 80.The address of the Board Members and Officers is in c/o The Dreyfus Corporation, 200 Park Avenue, New York, New York 10166. Additional information about the Board Members is available in the fund’s Statement of Additional Information which can be obtained from Dreyfus free of charge by calling this toll free number: 1-800-554-4611.

Arnold S. Hiatt, Emeritus Board Member

34

OFFICERS OF THE FUND ( U n a u d i t e d )

J. DAVID OFFICER, President since 
December 2006. 

Chief Operating Officer,Vice Chairman and a Director of the Manager, and an officer of 82 investment companies (comprised of 165 portfolios) managed by the Manager. He is 59 years old and has been an employee of the Manager since April 1998.

PHILLIP N. MAISANO, Executive Vice 
President since July 2007. 

Chief Investment Officer,Vice Chair and a director of the Manager, and an officer of 82 investment companies (comprised of 165 portfolios) managed by the Manager. Mr. Maisano also is an officer and/or Board member of certain other investment management subsidiaries of The Bank of New York Mellon Corporation, each of which is an affiliate of the Manager. He is 60 years old and has been an employee of the Manager since November 2006. Prior to joining the Manager, Mr. Maisano served as Chairman and Chief Executive Officer of EACM Advisors, an affiliate of the Manager, since August 2004, and served as Chief Executive Officer of Evaluation Associates, a leading institutional investment consulting firm, from 1988 until 2004.

MICHAEL A. ROSENBERG, Vice President 
and Secretary since August 2005. 

Associate General Counsel of the Manager, and an officer of 83 investment companies (comprised of 182 portfolios) managed by the Manager. He is 47 years old and has been an employee of the Manager since October 1991.

JAMES BITETTO, Vice President and 
Assistant Secretary since August 2005. 

Associate General Counsel and Secretary of the Manager, and an officer of 83 investment companies (comprised of 182 portfolios) managed by the Manager. He is 41 years old and has been an employee of the Manager since December 1996.

JONI LACKS CHARATAN, Vice President 
and Assistant Secretary since 
August 2005. 

Associate General Counsel of the Manager, and an officer of 83 investment companies (comprised of 182 portfolios) managed by the Manager. She is 51 years old and has been an employee of the Manager since October 1988.

JOSEPH M. CHIOFFI, Vice President and 
Assistant Secretary since August 2005. 

Associate General Counsel of the Manager, and an officer of 83 investment companies (comprised of 182 portfolios) managed by the Manager. He is 45 years old and has been an employee of the Manager since June 2000.

JANETTE E. FARRAGHER, Vice President 
and Assistant Secretary since 
August 2005. 

Associate General Counsel of the Manager, and an officer of 83 investment companies (comprised of 182 portfolios) managed by the Manager. She is 44 years old and has been an employee of the Manager since February 1984.

JOHN B. HAMMALIAN, Vice President and 
Assistant Secretary since August 2005. 

Associate General Counsel of the Manager, and an officer of 83 investment companies (comprised of 182 portfolios) managed by the Manager. He is 44 years old and has been an employee of the Manager since February 1991.

ROBERT R. MULLERY, Vice President and 
Assistant Secretary since August 2005. 

Associate General Counsel of the Manager, and an officer of 83 investment companies (comprised of 182 portfolios) managed by the Manager. He is 55 years old and has been an employee of the Manager since May 1986.

The Fund 35

OFFICERS OF THE FUND (Unaudited) (continued)

JEFF PRUSNOFSKY, Vice President and 
Assistant Secretary since August 2005. 

Associate General Counsel of the Manager, and an officer of 83 investment companies (comprised of 182 portfolios) managed by the Manager. He is 42 years old and has been an employee of the Manager since October 1990.

JAMES WINDELS, Treasurer since 
November 2001. 

Director – Mutual Fund Accounting of the Manager, and an officer of 83 investment companies (comprised of 182 portfolios) managed by the Manager. He is 49 years old and has been an employee of the Manager since April 1985.

ROBERT ROBOL, Assistant Treasurer 
since August 2005. 

Senior Accounting Manager – Money Market and Municipal Bond Funds of the Manager, and an officer of 83 investment companies (comprised of 182 portfolios) managed by the Manager. He is 43 years old and has been an employee of the Manager since October 1988.

ROBERT SALVIOLO, Assistant Treasurer since May 2007.

Senior Accounting Manager – Equity Funds of the Manager, and an officer of 83 investment companies (comprised of 182 portfolios) managed by the Manager. He is 40 years old and has been an employee of the Manager since June 1989.

ROBERT SVAGNA, Assistant Treasurer 
since December 2002. 

Senior Accounting Manager – Equity Funds of the Manager, and an officer of 83 investment companies (comprised of 182 portfolios) managed by the Manager. He is 40 years old and has been an employee of the Manager since November 1990.

GAVIN C. REILLY, Assistant Treasurer 
since December 2005. 

Tax Manager of the Investment Accounting and Support Department of the Manager, and an officer of 83 investment companies (comprised of 182 portfolios) managed by the Manager. He is 39 years old and has been an employee of the Manager since April 1991.

JOSEPH W. CONNOLLY, Chief Compliance 
Officer since October 2004. 

Chief Compliance Officer of the Manager and The Dreyfus Family of Funds (83 investment companies, comprised of 182 portfolios). From November 2001 through March 2004, Mr. Connolly was first Vice-President, Mutual Fund Servicing for Mellon Global Securities Services. In that capacity, Mr. Connolly was responsible for managing Mellon’s Custody, Fund Accounting and Fund Administration services to third-party mutual fund clients. He is 50 years old and has served in various capacities with the Manager since 1980, including manager of the firm’s Fund Accounting Department from 1997 through October 2001.

WILLIAM GERMENIS, Anti-Money 
Laundering Compliance Officer since 
September 2002. 

Vice President and Anti-Money Laundering Compliance Officer of the Distributor, and the Anti-Money Laundering Compliance Officer of 79 investment companies (comprised of 178 portfolios) managed by the Manager. He is 37 years old and has been an employee of the Distributor since October 1998.

36

For More Information

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.

A description of the policies and procedures that the fund uses to determine how to vote proxies relating to portfolio securities, and information regarding how the fund voted these proxies for the 12-month period ended June 30, 2007, is available at http://www.dreyfus.com and on the SEC’s website at http://www.sec.gov. The description of the policies and procedures is also available without charge, upon request, by calling 1-800-645-6561.

© 2007 MBSC Securities Corporation

Item 2. Code of Ethics.

The Registrant has adopted a code of ethics that applies to the Registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. There have been no amendments to, or waivers in connection with, the Code of Ethics during the period covered by this Report.

Item 3. Audit Committee Financial Expert.

The Registrant's Board has determined that Joseph S. DiMartino, a member of the Audit Committee of the Board, is an audit committee financial expert as defined by the Securities and Exchange Commission (the "SEC"). Joseph S. DiMartino is "independent" as defined by the SEC for purposes of audit committee financial expert determinations.

Item 4. Principal Accountant Fees and Services

(a) Audit Fees. The aggregate fees billed for each of the last two fiscal years (the "Reporting Periods") for professional services rendered by the Registrant's principal accountant (the "Auditor") for the audit of the Registrant's annual financial statements, or services that are normally provided by the Auditor in connection with the statutory and regulatory filings or engagements for the Reporting Periods, were $0 in 2006 and $39,462 in 2007.

(b) Audit-Related Fees. The aggregate fees billed in the Reporting Periods for assurance and related services by the Auditor that are reasonably related to the performance of the audit of the Registrant's financial statements and are not reported under paragraph (a) of this Item 4 were $0 in 2006 and $0 in 2007.

The aggregate fees billed in the Reporting Periods for non-audit assurance and related services by the Auditor to the Registrant's investment adviser (not including any sub-investment adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the Registrant ("Service Affiliates"), that were reasonably related to the performance of the annual audit of the Service Affiliate, which required pre-approval by the Audit Committee were $0 in 2006 and $0 in 2007.

Note: For the second paragraph in each of (b) through (d) of this Item 4, certain of such services were not pre-approved prior to May 6, 2003, when such services were required to be pre-approved. On and after May 6, 2003, 100% of all services provided by the Auditor were pre-approved as required. For comparative purposes, the fees shown assume that all such services were pre-approved, including services that were not pre-approved prior to the compliance date of the pre-approval requirement.

(c) Tax Fees. The aggregate fees billed in the Reporting Periods for professional services rendered by the Auditor for tax compliance, tax advice and tax planning ("Tax Services") were $0 in 2006 and $2,983 in 2007. These services consisted of (i) review or preparation of U.S. federal, state, local and excise tax returns; (ii) U.S. federal, state and local tax planning, advice and assistance regarding statutory, regulatory or administrative developments, (iii) tax advice regarding tax qualification matters and/or treatment of various

financial instruments held or proposed to be acquired or held, and (iv) determination of Passive Foreign Investment Companies.

The aggregate fees billed in the Reporting Periods for Tax Services by the Auditor to Service Affiliates which required pre-approval by the Audit Committee were $0 in 2006 and $0 in 2007.

(d) All Other Fees. The aggregate fees billed in the Reporting Periods for products and services provided by the Auditor, other than the services reported in paragraphs (a) through (c) of this Item, were $0 in 2006 and $0 in 2007.

The aggregate fees billed in the Reporting Periods for Non-Audit Services by the Auditor to Service Affiliates, other than the services reported in paragraphs (b) through (c) of this Item, which required pre-approval by the Audit Committee were $0 in 2006 and $0 in 2006.

Audit Committee Pre-Approval Policies and Procedures. The Registrant's Audit Committee has established policies and procedures (the "Policy") for pre-approval (within specified fee limits) of the Auditor's engagements for non-audit services to the Registrant and Service Affiliates without specific case-by-case consideration. Pre-approval considerations include whether the proposed services are compatible with maintaining the Auditor's independence. Pre-approvals pursuant to the Policy are considered annually.

Non-Audit Fees. The aggregate non-audit fees billed by the Auditor for services rendered to the Registrant, and rendered to Service Affiliates, for the Reporting Periods were $0 in 2006 and $1,627,514 in 2007.

Auditor Independence. The Registrant's Audit Committee has considered whether the provision of non-audit services that were rendered to Service Affiliates which were not pre-approved (not requiring pre-approval) is compatible with maintaining the Auditor's independence.

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.

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)    Code of ethics referred to in Item 2. 
(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.

Strategic Funds, Inc. 
 
By:    /s/ J. David Officer 
    J. David Officer 
    President
 
Date:    December 18, 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:    December 18, 2007 
 
By:    /s/ James Windels 
    James Windels 
    Treasurer
 
Date:    December 18, 2007 

EXHIBIT INDEX

(a)(1)    Code of ethics referred to in Item 2. 
 
(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)