N-CSR 1 formncsr.htm FORM NCSR-DLFI formncsr
  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 811-5270    
       
  THE DREYFUS/LAUREL 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)
       
  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: 10/31    
       
Date of reporting period: 4/30/04    

The following N-CSR relates only to the Registrant's series listed below and does not affect Dreyfus Premier Core Equity Fund, a series of the Registrant with a fiscal year end of August 31. A separate N-CSR will be filed for the period ending on August 31, 2004.

                     Dreyfus Bond Market Index Fund
                  Dreyfus Premier Midcap Stock Fund
                           Dreyfus Disciplined Stock Fund
         Dreyfus Premier Large Company Stock Fund
   Dreyfus Institutional Government Money Market Fund
      Dreyfus Institutional Prime Money Market Fund
Dreyfus Institutional U.S. Treasury Money Market Fund
                        Dreyfus Money Market Reserves
                              Dreyfus Municipal Reserves
         Dreyfus Premier Tax Managed Growth Fund
            Dreyfus BASIC S&P 500 Stock Index Fund
                           Dreyfus U.S. Treasury Reserves
                           Dreyfus Premier Balanced Fund
         Dreyfus Premier Limited Term Income Fund
               Dreyfus Premier Small Cap Value Fund

-2-

FORM N-CSR

Item 1. Reports to Stockholders.

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
  		 Letter from the Chairman
3
  		 Discussion of Fund Performance
6
  		 Statement of Investments
21
  		 Statement of Financial Futures
22
  		 Statement of Assets and Liabilities
23
  		 Statement of Operations
24
  		 Statement of Changes in Net Assets
25
  		 Financial Highlights
26
  		 Notes to Financial Statements

FOR MORE INFORMATION

Back Cover

   Dreyfus BASIC
S&P 500 Stock Index Fund

The Fund

LETTER FROM THE CHAIRMAN

Dear Shareholder:

This semiannual report for Dreyfus BASIC S&P 500 Index Fund covers the six-month period from November 1, 2003, through April 30, 2004. Inside, you'll find valuable information about how the fund was managed during the reporting period, including a discussion with the fund's portfolio manager,Tom Durante.

Positive economic data continued to accumulate during the reporting period, as consumers, flush with extra cash from federal tax refunds and mortgage refinancings, continued to spend. At the same time, recent evidence of stronger job growth supports the view that corporations have become more willing to spend and invest. One result of the economic rebound has been higher overall earnings and stock prices for many U.S. companies.

Although recent economic news generally has been encouraging, we continue to believe that investors should be aware of the potential risks that could lead to heightened volatility or a stock market correction. Chief among them, in our view, are a possible acceleration of inflation and the chance that terrorism could cause instability in global markets. As always, we encourage you to speak regularly with your financial advisor, who may be in the best position to suggest ways to position your portfolio for the opportunities and challenges of today's financial markets.

Thank you for your continued confidence and support.

Sincerely,

Stephen E. Canter

Chairman and Chief Executive Officer The Dreyfus Corporation

May 17, 2004

2

DISCUSSION OF FUND PERFORMANCE

Tom Durante, Portfolio Manager

How did Dreyfus BASIC S&P 500 Index Fund perform relative to its benchmark?

For the six-month period ended April 30, 2004, the fund produced a total return of 6.12%.1 The Standard & Poor's 500 Composite Stock Price Index (the “S&P 500 Index”), the fund's benchmark, produced a 6.27% return for the same period.2,3

We attribute the fund and market's performance to heightened market volatility, in which gains achieved during the first half of the reporting period were later offset by market weakness stemming from terrorism-related concerns and the possibility of higher interest rates in a stronger economy.The difference in returns between the fund and S&P 500 Index was primarily the result of transaction costs and other operating expenses.

What is the fund's investment approach?

The fund seeks to match the total return of the S&P 500 Index. To pursue this goal, the fund generally invests in all 500 stocks in the S&P 500 Index in proportion to their weighting in the S&P 500 Index. Often considered a barometer for the stock market in general, the S&P 500 Index is made up of 500 widely held common stocks across 10 economic sectors. The S&P 500 Index is dominated by large-cap, blue-chip stocks that comprise nearly 75% of total U.S. market capitalization.

However, it is important to note that the S&P 500 Index is not composed of the 500 largest companies; rather, it is designed to reflect the industries of the U.S. economy. Each stock is weighted by its market capitalization; that is, larger companies have greater representation in the S&P 500 Index than smaller ones. The fund may also use stock index futures as a substitute for the sale or purchase of stocks.

As an index fund, the fund uses a passive management approach; all

The Fund 3

DISCUSSION OF FUND PERFORMANCE (continued)

investment decisions are made based on the composition of the S&P 500 Index.The fund does not attempt to manage market volatility.

What other factors influenced the fund's performance?

When the reporting period began, investors already had become more optimistic about the prospects for stronger economic growth in the United States, chiefly because interest rates remained at generational lows, corporations had begun to invest in new capital projects and lower federal income tax rates enacted in the spring of 2003 supported consumer spending. In this economic environment, investors began to feel more comfortable with investment risks, and stocks in traditional growth areas, such as technology, produced solid gains. Indeed, gains continued to be concentrated among smaller, more speculative stocks during the reporting period as investors turned to shares that had been severely beaten down during the previous bear market.

By early 2004, as the economic recovery progressed, investors began to turn their attention to larger, higher-quality stocks that historically have demonstrated an ability to generate relatively consistent earnings growth in a variety of economic climates.This shift in investor sentiment generally benefited the larger-cap companies that compose the S&P 500 Index. However, most stocks weakened in March, when terrorist attacks in Madrid sparked renewed security concerns, and April, when a stronger than expected labor market increased the perceived likelihood of higher interest rates in 2004.

Over the full reporting period, the market's strongest returns stemmed from large pharmaceutical stocks, many of which profited from the development and launch of new drugs as well as increased merger-and-acquisition activity in the health care sector. A weakening U.S. dollar relative to most major foreign currencies also helped support their profits because most large, U.S. drug manufacturers have a significant presence in overseas markets.

Energy stocks performed relatively well during the reporting period, as higher commodity prices, limited refinery capacity and rising global

4

demand helped drive gains. In the consumer staples area, food and beverage stocks posted above-average gains, especially during the second half of the reporting period, when value stocks tended to perform better than growth stocks. Many of the larger food and beverage companies also benefited from stronger overseas sales and currency gains.

On the other hand, semiconductor stocks generally produced disappointing results. Although the semiconductor group represented one of the market's better-performing areas earlier in 2003, an increase in spending to meet rising demand recently eroded their profit margins. In the consumer discretionary area, home retailers, such as Lowe's and Home Depot, produced lackluster returns because of the effects of higher gasoline prices on shipping costs as well as higher prices for lumber, copper and steel during the reporting period.

What is the fund's current strategy?

As an index fund, our strategy is to attempt to replicate the returns of the S&P 500 Index.Accordingly, as of the end of the reporting period, the percentage of the fund's assets invested in each market sector closely approximated its representation in the S&P 500 Index.

May 17, 2004

1
  		 Total return includes reinvestment of dividends and any capital gains paid. 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.
2
  		 SOURCE: LIPPER INC. — Reflects reinvestment of dividends daily and, where applicable, capital gain distributions.The Standard & Poor's 500 Composite Stock Price Index is a widely accepted, unmanaged index of U.S. stock market performance.
3
  		 “Standard & Poor's,”“S&P,”“Standard & Poor's 500” and “S&P 500” are trademarks of The McGraw-Hill Companies, Inc., and have been licensed for use by the fund.The fund is not sponsored, endorsed, sold or promoted by Standard & Poor's and Standard & Poor's makes no representation regarding the advisability of investing in the fund.

The Fund 5

STATEMENT OF INVESTMENTS
April 30, 2004 (Unaudited)
Common Stocks—97.8% Shares   Value ($)  
 
 
Consumer Cyclical—9.6%        
Albertson's 47,686 a   1,113,945  
AutoNation 35,800 b   609,316  
AutoZone 11,400 b   998,298  
Bed Bath & Beyond 38,800 b   1,440,256  
Best Buy 42,200   2,289,350  
Big Lots 15,000 b   212,400  
Brunswick 12,150   499,487  
CVS 51,568   1,992,072  
Circuit City Stores—Circuit City Group 27,086   316,364  
Cooper Tire & Rubber 9,653 a   206,478  
Costco Wholesale 59,600   2,232,020  
Dana 19,349   390,076  
Darden Restaurants 21,450   486,057  
Delphi 72,872   743,294  
Delta Air Lines 15,750 a   97,965  
Dillard's, Cl. A 10,600   178,398  
Dollar General 43,846   822,551  
Eastman Kodak 37,250 a   960,678  
Eaton 19,742 a   1,172,280  
Family Dollar Stores 22,400   719,936  
Federated Department Stores 23,500   1,151,500  
Ford Motor 238,211   3,658,921  
Gap 116,550 a   2,565,266  
General Motors 73,150 a   3,468,773  
Genuine Parts 22,600   809,080  
Harley-Davidson 39,450   2,221,824  
Harrah's Entertainment 14,494   770,791  
Hasbro 22,675   428,331  
Hilton Hotels 49,350   863,132  
Home Depot 296,000   10,416,240  
International Game Technology 45,100   1,702,074  
J.C. Penney 35,550   1,203,723  
Johnson Controls 24,556   1,347,142  
Jones Apparel Group 16,400   600,240  
Kohl's 44,200 b   1,847,118  
Kroger 96,900 b   1,695,750  
Limited Brands 60,600   1,250,784  

6

Common Stocks (continued) Shares   Value ($)  
 
 
Consumer Cyclical (continued)        
Liz Claiborne 14,200   498,420  
Lowe's Cos. 102,300   5,325,738  
Marriott International, Cl. A 29,950   1,412,442  
Mattel 55,950   948,912  
May Department Stores 37,500   1,155,000  
Maytag 10,100   281,790  
McDonald's 164,100   4,468,443  
NIKE, Cl. B 34,250   2,464,288  
Navistar International 9,000 b   406,350  
Nordstrom 17,850 a   635,996  
Office Depot 40,450 b   708,279  
PACCAR 22,774   1,285,820  
RadioShack 21,352   656,788  
Reebok International 7,665   278,853  
Safeway 57,550 b   1,320,772  
Sears, Roebuck & Co. 29,050   1,163,452  
Southwest Airlines 102,693   1,466,456  
Staples 65,000   1,674,400  
Starbucks 51,550 b   2,003,233  
Starwood Hotels & Resorts Worldwide 26,550   1,056,424  
TJX Cos. 65,450   1,608,106  
Target 118,550   5,141,513  
Tiffany & Co. 19,100   744,900  
Toys R Us 27,800 b   429,510  
V. F. 14,050   648,548  
Visteon 16,796   182,405  
Wal-Mart Stores 563,000   32,091,000  
Walgreen 133,300   4,596,184  
Wendy's International 14,797   577,083  
Whirlpool 9,050   592,865  
Winn-Dixie Stores 18,250 a   139,065  
Yum! Brands 38,260 b   1,484,105  
      130,929,050  
Consumer Staples—8.3%        
Adolph Coors, Cl. B 4,765   313,108  
Alberto-Culver, Cl. B 11,716   552,527  
Altria Group 266,300   14,747,694  

The Fund 7

STATEMENT OF INVESTMENTS (Unaudited) (continued)

Common Stocks (continued) Shares   Value ($)  
 
 
Consumer Staples (continued)        
Anheuser-Busch Cos. 106,000   5,431,440  
Archer-Daniels-Midland 84,335   1,480,923  
Avon Products 30,636   2,573,424  
Brown-Forman, Cl. B 15,800   740,388  
Campbell Soup 53,450   1,476,824  
Clorox 27,350   1,416,183  
Coca-Cola 318,100   16,086,317  
Coca-Cola Enterprises 59,750   1,613,250  
Colgate-Palmolive 69,300   4,011,084  
ConAgra Foods 69,882   2,018,891  
Fortune Brands 19,021   1,450,351  
General Mills 48,800   2,379,000  
Gillette 131,000   5,360,520  
H.J. Heinz 45,850   1,751,012  
Hershey Foods 16,900   1,502,241  
International Flavors & Fragrances 12,200   442,250  
Kellogg 53,650   2,301,585  
Kimberly-Clark 65,200   4,267,340  
McCormick & Co. 17,900   611,464  
Newell Rubbermaid 35,678   843,428  
Pactiv 20,450 b   469,327  
Pepsi Bottling Group 33,800   989,326  
PepsiCo 222,520   12,125,115  
Procter & Gamble 168,150   17,781,862  
R.J. Reynolds Tobacco Holdings 11,050 a   715,708  
SUPERVALU 17,500   538,825  
Sara Lee 102,900   2,374,932  
Sysco 83,908   3,209,481  
UST 21,600   803,736  
Wm. Wrigley Jr. 29,250   1,804,725  
      114,184,281  
Energy—6.7%        
Amerada Hess 11,650   828,665  
Anadarko Petroleum 32,775   1,756,085  
Apache 42,126   1,763,816  
BJ Services 20,700 b   921,150  
Baker Hughes 43,570   1,598,148  

8

Common Stocks (continued) Shares   Value ($)  
 
 
Energy (continued)        
Burlington Resources 25,706   1,729,243  
CMS Energy 20,650 b   171,601  
CenterPoint Energy 39,844   429,917  
ChevronTexaco 139,160   12,733,140  
ConocoPhillips 89,037   6,348,338  
Devon Energy 30,250   1,851,300  
Duke Energy 118,022   2,485,543  
Dynegy, Cl. A 48,350 a,b   191,466  
EOG Resources 14,950   736,287  
El Paso 83,436   584,886  
Exxon Mobil 853,056   36,297,533  
Halliburton 57,000   1,698,600  
Kerr-McGee 13,139   642,891  
KeySpan 20,700   748,305  
Kinder Morgan 16,000   963,360  
Marathon Oil 44,300   1,486,708  
Nabors Industries 19,100 b   847,276  
Nicor 5,650 a   192,043  
NiSource 34,150   688,464  
Noble 17,450 b   648,442  
Occidental Petroleum 50,500   2,383,600  
Peoples Energy 4,820   201,476  
Rowan Cos. 13,560 b   302,388  
Schlumberger 76,600   4,483,398  
Sempra Energy 29,542 a   937,958  
Sunoco 10,018   630,132  
Transocean 41,650 b   1,156,621  
Unocal 33,700   1,214,548  
Valero Energy 16,500   1,052,040  
Williams Cos. 67,400   694,220  
      91,399,588  
Health Care—13.5%        
Abbott Laboratories 203,450   8,955,869  
Aetna 19,977   1,653,097  
Allergan 17,050   1,501,253  
AmerisourceBergen 14,650   848,089  
Amgen 167,766 b   9,440,193  

The Fund 9

STATEMENT OF INVESTMENTS (Unaudited) (continued)

Common Stocks (continued) Shares   Value ($)  
 
 
Health Care (continued)        
Anthem 17,950 b   1,590,011  
Applera-Applied Biosystems Group 26,800   497,676  
Bausch & Lomb 6,814   428,124  
Baxter International 79,400   2,513,010  
Becton, Dickinson & Co. 32,900   1,663,095  
Biogen 42,640 b   2,515,760  
Biomet Idec 33,275   1,314,363  
Boston Scientific 106,600 b   4,390,854  
Bristol-Myers Squibb 252,500   6,337,750  
C.R. Bard 6,750   717,323  
Cardinal Health 56,550   4,142,288  
Caremark Rx 58,100 a,b   1,966,685  
Chiron 24,400 b   1,132,160  
Eli Lilly & Co. 146,150   10,787,331  
Express Scripts 10,100 b   781,134  
Forest Laboratories 47,800 b   3,082,144  
Genzyme 29,150 b   1,269,774  
Guidant 40,500   2,551,905  
HCA 64,450   2,618,604  
Health Management Associates, Cl. A 31,650   732,065  
Humana 21,050 b   342,904  
Johnson & Johnson 386,096   20,860,767  
King Pharmaceuticals 31,350 b   540,787  
Manor Care 11,650   377,926  
McKesson 37,904   1,245,525  
Medco Health Solutions 35,169 b   1,244,983  
MedImmune 32,250 b   781,740  
Medtronic 157,700   7,957,542  
Merck & Co. 289,350   13,599,450  
Millipore 6,350 b   332,930  
Mylan Laboratories 34,900   799,559  
Pfizer 991,940   35,471,774  
Quest Diagnostics 13,450   1,134,507  
Schering-Plough 191,400   3,202,122  
St. Jude Medical 22,450 b   1,712,037  
Stryker 26,000   2,572,180  
Tenet Healthcare 60,450 b   710,892  

10

Common Stocks (continued) Shares   Value ($)  
 
 
Health Care (continued)        
Thermo Electron 21,500 b   627,800  
UnitedHealth Group 81,450   5,007,546  
Waters 15,800 b   681,770  
Watson Pharmaceuticals 14,050 b   500,320  
WellPoint Health Networks 20,200 b   2,256,138  
Wyeth 173,250   6,595,627  
Zimmer Holdings 31,420 b   2,508,887  
      184,496,270  
Interest Sensitive—23.0%        
ACE 36,300   1,591,392  
AFLAC 66,700   2,816,741  
Allstate 91,550   4,202,145  
Ambac Financial Group 13,900   959,100  
American Express 167,300   8,189,335  
American International Group 339,396   24,317,723  
AmSouth Bancorporation 45,650 a   1,005,213  
Aon 40,750   1,061,945  
Apartment Investment & Management, Cl. A 12,100   340,857  
BB&T 71,100   2,452,239  
Bank of America 265,791   21,393,518  
Bank of New York 100,628   2,932,300  
Bank One 145,598   7,188,173  
Bear Stearns Cos. 13,498   1,081,730  
CIGNA 18,300   1,180,533  
Capital One Financial 30,000   1,965,900  
Charles Schwab 176,450 a   1,815,670  
Charter One Financial 28,953   966,162  
Chubb 24,400   1,683,600  
Cincinnati Financial 21,945   899,526  
Citigroup 670,026   32,221,550  
Comerica 22,800   1,177,164  
Countrywide Financial 35,899   2,128,811  
E*TRADE Financial 47,600 b   540,736  
Equity Office Properties Trust 52,000   1,308,840  
Equity Residential 36,250   995,425  
Fannie Mae 126,450   8,689,644  
Federated Investors, Cl. B 14,150   416,010  

The Fund 11

STATEMENT OF INVESTMENTS (Unaudited) (continued)

Common Stocks (continued) Shares   Value ($)  
 
 
Interest Sensitive (continued)        
Fifth Third Bancorp 73,491   3,943,527  
First Horizon National 16,300   716,548  
Franklin Resources 32,400   1,776,492  
Freddie Mac 89,550   5,229,720  
General Electric 1,326,650   39,733,168  
Golden West Financial 19,800   2,081,178  
Goldman Sachs Group 62,850   6,065,025  
H&R Block 23,150   1,044,297  
Hartford Financial Services Group 37,900   2,314,932  
Huntington Bancshares 29,876   639,346  
J.P. Morgan Chase & Co. 267,763   10,067,889  
Janus Capital Group 31,300   475,760  
Jefferson-Pilot 18,400   912,456  
KeyCorp 54,550   1,620,135  
Lehman Brothers Holdings 36,050   2,646,070  
Lincoln National 23,150   1,038,972  
Loews 24,100   1,398,041  
M&T Bank 15,500   1,317,500  
MBIA 18,800   1,107,132  
MBNA 166,218   4,052,395  
MGIC Investment 12,850   946,017  
Marsh & McLennan Cos. 69,000   3,111,900  
Marshall & Ilsley 29,450   1,082,877  
Mellon Financial 56,000   1,659,840  
Merrill Lynch 126,250   6,846,537  
MetLife 98,900   3,412,050  
Morgan Stanley 142,660   7,331,297  
National City 78,800   2,731,996  
North Fork Bancorporation 19,750 a   733,120  
Northern Trust 28,650   1,211,322  
PNC Financial Services Group 36,050   1,914,255  
Plum Creek Timber 23,800   703,528  
Principal Financial Group 41,750   1,473,775  
Progressive 28,200   2,468,064  
ProLogis 23,600   694,312  
Providian Financial 37,750 b   457,907  
Prudential Financial 70,350   3,091,179  

12

Common Stocks (continued) Shares   Value ($)  
 
 
Interest Sensitive (continued)        
Regions Financial 28,900   1,003,119  
SLM 58,650   2,246,881  
Safeco 18,000   788,220  
Simon Property Group 26,550   1,279,975  
SouthTrust 42,950   1,334,886  
St. Paul Travelers Cos. 86,327   3,510,919  
State Street 43,600   2,127,680  
SunTrust Banks 36,700   2,497,435  
Synovus Financial 39,300   938,091  
T. Rowe Price Group 16,350   838,428  
Torchmark 14,716   765,821  
U.S. Bancorp 249,757   6,403,769  
Union Planters 24,500 a   681,100  
UnumProvident 38,472   598,240  
Wachovia 171,034   7,824,805  
Washington Mutual 116,985   4,608,039  
Wells Fargo 220,080   12,425,717  
XL Capital, Cl. A 17,900   1,366,665  
Zions Bancorporation 11,650   658,458  
      315,470,789  
Producer Goods—9.4%        
Air Products & Chemicals 29,550   1,471,886  
Alcoa 113,238   3,482,069  
Allegheny Technologies 10,433   106,625  
American Power Conversion 25,850   482,361  
American Standard Cos. 9,350 b   983,527  
Ashland 9,000   431,100  
Avery Dennison 14,392   924,398  
Ball 7,350   485,100  
Bemis 13,800   372,738  
Black & Decker 10,250   592,963  
Boeing 109,644   4,680,702  
Boise Cascade 11,314   381,621  
Burlington Northern Santa Fe 48,417   1,583,236  
CSX 27,850   856,666  
Caterpillar 45,150   3,509,510  
Centex 16,128   773,338  

The Fund 13

STATEMENT OF INVESTMENTS (Unaudited) (continued)

Common Stocks (continued) Shares   Value ($)  
 
 
Producer Goods (continued)        
Cooper Industries, Cl. A 12,000   658,920  
Crane 7,600   234,156  
Cummins 5,547   331,766  
Deere & Co. 31,700   2,156,868  
Dover 26,400   1,056,792  
Dow Chemical 121,213   4,810,944  
E. I. du Pont de Nemours 129,794   5,574,652  
Eastman Chemical 10,026   426,807  
Ecolab 33,450   996,810  
Emerson Electric 54,900   3,306,078  
Engelhard 16,300   473,352  
FedEx 38,792   2,789,533  
Fluor 10,639 a   405,984  
Freeport-McMoRan Copper & Gold, Cl. B 22,400   683,200  
General Dynamics 25,750   2,410,715  
Georgia-Pacific 32,987   1,157,844  
Goodrich 15,300   440,487  
Goodyear Tire & Rubber 22,400 a,b   195,104  
Great Lakes Chemical 6,503   163,355  
Hercules 14,250 b   158,318  
Honeywell International 111,700   3,862,586  
ITT Industries 12,050   955,445  
Illinois Tool Works 40,050   3,452,711  
Ingersoll-Rand, Cl. A 22,850   1,474,968  
International Paper 62,538   2,521,532  
KB HOME 6,050   417,027  
Leggett & Platt 25,000   565,000  
Lockheed Martin 58,650   2,797,605  
Louisiana-Pacific 13,800   325,542  
Masco 58,818   1,647,492  
MeadWestvaco 26,146   683,718  
Molex 24,725   736,310  
Monsanto 34,588   1,196,399  
Newmont Mining 56,224   2,102,778  
Norfolk Southern 50,900   1,212,438  
Northrop Grumman 24,306   2,412,370  
Nucor 10,150 a   602,910  

14

Common Stocks (continued) Shares   Value ($)  
 
 
Producer Goods (continued)        
PPG Industries 22,321   1,323,858  
Pall 16,353   388,874  
Parker-Hannifin 15,390   850,913  
Phelps Dodge 12,075 b   794,897  
Praxair 42,300   1,546,065  
Pulte Homes 16,296   801,274  
Raytheon 54,100 a   1,745,266  
Rockwell Automation 24,300   794,367  
Rockwell Collins 23,200   748,200  
Rohm & Haas 28,955   1,122,875  
Sealed Air 11,081 b   543,855  
Sherwin-Williams 19,000   722,950  
Sigma-Aldrich 9,000 a   509,760  
Snap-On 7,450   251,661  
Stanley Works 10,577   449,628  
3M 101,900   8,812,312  
Temple-Inland 7,150   441,656  
Textron 17,950   990,481  
Thomas & Betts 7,591 b   182,488  
Tyco International 260,182   7,141,996  
Union Pacific 33,650   1,982,994  
United Parcel Service, Cl. B 146,850   10,301,527  
United States Steel 14,750   422,292  
United Technologies 67,078   5,786,148  
Vulcan Materials 13,250   612,680  
W.W. Grainger 11,900   623,560  
Weyerhaeuser 30,500   1,805,600  
Worthington Industries 11,250   203,062  
      128,417,595  
Services—6.9%        
ALLTEL 40,550   2,041,287  
AT&T Wireless Services 354,455 b   4,895,024  
Affiliated Computer Services, Cl. A 17,700 b   858,450  
Allied Waste Industries 41,700 b   525,003  
Apollo Group, Cl. A 22,900 a,b   2,081,152  
Automatic Data Processing 76,750   3,362,418  
Carnival 82,000   3,498,940  

The Fund 15

STATEMENT OF INVESTMENTS (Unaudited) (continued)

Common Stocks (continued) Shares   Value ($)  
 
 
Services (continued)        
Cendant 131,086   3,104,116  
Cintas 22,300   1,002,608  
Clear Channel Communications 80,050   3,321,275  
Comcast, Cl. A 292,796 b   8,813,160  
Computer Sciences 24,450 b   1,000,250  
Convergys 18,650 b   270,798  
Deluxe 6,600   272,646  
Dow Jones & Co. 10,650   490,859  
Electronic Data Systems 62,450   1,142,211  
Equifax 18,050   442,406  
First Data 115,472   5,241,274  
Fiserv 25,350 b   926,796  
Gannett 35,250   3,055,470  
IMS Health 31,200   787,800  
Interpublic Group of Companies 54,000 b   847,260  
Knight-Ridder 10,350   801,504  
McGraw-Hill Cos. 24,900   1,963,614  
Meredith 6,560   334,166  
Monster Worldwide 14,750 b   377,747  
Moody's 19,400   1,251,494  
NEXTEL Communications, Cl. A 143,050 b   3,413,173  
New York Times, Cl. A 19,486   892,654  
Omnicom Group 24,750   1,967,872  
Paychex 49,075   1,829,516  
R. R. Donnelley & Sons 27,900   820,818  
Robert Half International 22,250 a   606,757  
Ryder System 8,450   310,875  
SunGard Data Systems 37,350 b   973,714  
Time Warner 592,300 b   9,962,486  
Tribune 42,941   2,056,015  
Unisys 43,200 b   562,896  
Univision Communications, Cl. A 41,950 b   1,420,007  
Viacom, Cl. B 227,600   8,796,740  
Walt Disney 266,400   6,135,192  
Waste Management 75,042   2,131,193  
      94,589,636  

16

Common Stocks (continued) Shares Value ($)  
 
Technology—15.5%      
ADC Telecommunications 104,950 b 262,375  
Adobe Systems 31,000 1,281,540  
Advanced Micro Devices 45,300 a,b 644,166  
Agilent Technologies 61,908 b 1,672,135  
Altera 49,300 b 986,493  
Analog Devices 48,600 2,070,360  
Andrew 20,700 b 350,865  
Apple Computer 48,100 b 1,237,613  
Applied Materials 218,750 b 3,987,813  
Applied Micro Circuits 39,900 b 175,959  
Autodesk 14,700 492,450  
Avaya 55,268 b 756,066  
BMC Software 29,250 b 506,025  
Broadcom, Cl. A 39,350 b 1,485,856  
CIENA 61,800 b 255,852  
Cisco Systems 894,050 b 18,658,824  
Citrix Systems 21,350 b 406,718  
Computer Associates International 75,700 2,029,517  
Compuware 50,050 b 382,883  
Comverse Technology 25,050 b 409,818  
Corning 175,300 b 1,933,559  
Danaher 20,000 1,850,400  
Dell 333,100 b 11,561,901  
EMC 314,600 b 3,510,936  
eBay 84,050 b 6,708,871  
Electronic Arts 38,900 b 1,969,118  
Gateway 48,700 b 234,734  
Hewlett-Packard 396,865 7,818,241  
Intel 843,500 21,703,255  
International Business Machines 221,100 19,494,387  
Intuit 25,850 b 1,097,850  
JDS Uniphase 186,800 b 567,872  
Jabil Circuit 26,000 b 686,140  
KLA-Tencor 25,500 b 1,062,585  
LSI Logic 49,332 b 367,030  
Lexmark International 16,700 b 1,510,682  

The Fund 17

STATEMENT OF INVESTMENTS (Unaudited) (continued)

Common Stocks (continued) Shares   Value ($)  
 
 
Technology (continued)        
Linear Technology 40,600   1,446,578  
Lucent Technologies 554,171 a,b   1,867,556  
Maxim Integrated Products 42,650   1,961,473  
Mercury Interactive 11,750 b   499,963  
Micron Technology 79,250 b   1,079,385  
Microsoft 1,404,250   36,468,372  
Motorola 304,506   5,557,234  
NCR 12,350 b   551,922  
NVIDIA 21,100 b   433,394  
National Semiconductor 23,200 b   946,328  
Network Appliance 44,850 b   835,107  
Novell 49,000 b   472,360  
Novellus Systems 19,950 b   577,752  
Oracle 680,050 b   7,630,161  
PMC-Sierra 22,450 b   272,767  
Parametric Technology 34,250 b   156,865  
PeopleSoft 47,300 b   798,424  
PerkinElmer 16,482   317,278  
Pitney Bowes 30,356   1,328,075  
Power-One 10,600 b   91,160  
QLogic 12,200 b   329,278  
QUALCOMM 104,750   6,542,685  
Sabre Holdings 18,226   429,951  
Sanmina-SCI 67,450 b   675,849  
Scientific-Atlanta 19,800   641,322  
Siebel Systems 64,500 b   663,060  
Solectron 108,850 b   533,365  
Sun Microsystems 427,600 b   1,667,640  
Symantec 40,500 b   1,824,525  
Symbol Technologies 30,100   361,200  
Tektronix 11,068   327,613  
Tellabs 54,050 b   471,856  
Teradyne 24,850 b   506,443  
Texas Instruments 225,400   5,657,540  
VERITAS Software 55,630 b   1,483,652  

18

Common Stocks (continued) Shares   Value ($)  
 
 
Technology (continued)        
Xerox 103,798 b   1,394,007  
Xilinx 44,800   1,506,624  
Yahoo! 86,550 b   4,367,313  
      212,806,966  
Utilities—4.9%        
AES 81,000 b   702,270  
AT&T 103,249   1,770,720  
Allegheny Energy 16,300 a,b   224,614  
Ameren 23,650   1,033,978  
American Electric Power 51,390 a   1,564,312  
BellSouth 238,300   6,150,523  
Calpine 53,000 a,b   230,020  
CenturyTel 18,800   542,944  
Cinergy 23,150   878,311  
Citizens Communications 37,000 b   482,480  
Consolidated Edison 29,400   1,211,574  
Constellation Energy Group 21,750   836,940  
DTE Energy 22,000   858,440  
Dominion Resources 42,234   2,694,952  
Edison International 42,400   992,160  
Entergy 29,750   1,624,350  
Exelon 42,837   2,867,509  
FPL Group 24,000   1,526,880  
FirstEnergy 42,931   1,678,602  
PG&E 54,500 a,b   1,499,840  
PPL 23,050   987,693  
Pinnacle West Capital 11,900   464,814  
Progress Energy 31,924   1,365,389  
Public Service Enterprise Group 30,750 a   1,319,175  
Qwest Communications International 229,774 b   923,691  
SBC Communications 430,328   10,715,167  
Southern 95,250   2,739,390  
Sprint (FON Group) 184,900   3,307,861  
TECO Energy 24,400 a   310,612  
TXU 42,170   1,439,684  

The Fund 19

STATEMENT OF INVESTMENTS (Unaudited) (continued)

Common Stocks (continued) Shares   Value ($)  
 
Utilities (continued)            
Verizon Communications   359,292   13,559,680  
Xcel Energy       51,880   867,952  
            67,372,527  
Total Common Stocks            
(cost $1,116,483,534 )       1,339,666,702  
 
        Principal      
Short-Term Investments—2.0% Amount ($) Value ($)  
 
Repurchase Agreement—1.9%        
Goldman Sachs & Co., Tri-Party Repurchase Agreement,        
.91%, dated 4/30/2004, due 5/3/2004 in the        
amount of $25,691,948 (fully collateralized by        
$17,989,000 U.S. Treasury Bond, 9.13%,        
5/15/2018, value $ 26,204,715) 25,690,000   25,690,000  
U.S. Treasury Bills—.1%          
.90%, 7/1/2004     2,000,000 c 1,997,040  
Total Short-Term Investments        
   (cost $ 27,687,034)         27,687,040  
 
Investment of Cash Collateral        
for Securities Loaned—1.8% Shares   Value ($)  
 
Registered Investment Company;        
Dreyfus Institutional Preferred Money Market Fund        
   (cost $ 24,214,975)     24,214,975 d 24,214,975  
 
               
Total Investments (cost $ 1,168,385,543) 101.6%   1,391,568,717  
Liabilities, Less Cash and Receivables (1.6%)   (21,243,432)  
Net Assets       100.0%   1,370,325,285  
a All or a portion of these securities are on loan.At April 30, 2004, the total market value of the fund's securities on loan is $25,641,248 and the total market value of the collateral held by the fund is $26,981,025, consisting of cash collateral of $24,214,975 and letters of credit valued at $2,766,050.
b
  		 Non-income producing.
c
  		 Partially held by the broker in a segregated account as collateral for open financial futures positions.
d
  		 Investment in affiliated money market mutual funds.

See notes to financial statements.

20

STATEMENT OF FINANCIAL FUTURES

      Market Value   Unrealized  
      Covered by   (Depreciation)  
  Contracts   Contracts ($) Expiration at 4/30/2004 ($)  
 
 
Financial Futures Long            
Standard & Poor's 500 101   27,929,025 June 2004 (585,900)  

See notes to financial statements.

The Fund 21

STATEMENT OF ASSETS AND LIABILITIES
April 30, 2004 (Unaudited)
    Cost Value  
 
 
Assets ($):          
Investments in securities—      
See Statement of Investments (including securities      
on loan, valued at $25,641,248)—Note 1(b,d):      
Unaffiliated issuers 1,144,170,568 1,367,353,742  
Affiliated issuers   24,214,975 24,214,975  
Cash       3,838,713  
Receivable for investment securities sold   1,824,621  
Dividends and interest receivable   1,503,800  
Receivable for shares of Capital Stock subscribed   267,042  
        1,399,002,893  
 
Liabilities ($):        
Due to The Dreyfus Corporation and affiliates—Note 2(a)   243,980  
Liability for securities on loan—Note 1(b)   24,214,975  
Payable for shares of Capital Stock redeemed   2,820,350  
Payable for investment securities purchased   1,175,759  
Payable for futures variation margin—Note 1(e)   222,544  
        28,677,608  
 
Net Assets ( $)     1,370,325,285  
 
Composition of Net Assets ($):      
Paid-in capital       1,347,776,918  
Accumulated undistributed investment income—net   5,665,958  
Accumulated net realized gain (loss) on investments   (205,714,865)  
Accumulated net unrealized appreciation (depreciation)      
on investments [including ($585,900) net unrealized      
(depreciation) on financial futures]   222,597,274  
 
Net Assets ( $)     1,370,325,285  
 
Shares Outstanding        
(150 million shares of $ .001 par value Capital Stock authorized) 59,206,368  
Net Asset Value, offering and redemption price per share ($)   23.14  

See notes to financial statements.

22

STATEMENT OF OPERATIONS
Six Months Ended April 30, 2004 (Unaudited)
Investment Income ($):    
Income:      
Cash dividends   11,211,465  
Interest   90,964  
Income on securities lending 13,845  
Total Income   11,316,274  
Expenses:      
Management fee—Note 2(a)   1,346,176  
Loan commitment fees—Note 4 6,203  
Interest expense—Note 4   4,811  
Total Expenses   1,357,190  
Investment Income—Net   9,959,084  
 
Realized and Unrealized Gain (Loss) on Investments—Note 3 ($):    
Net realized gain (loss) on investments (27,122,426)  
Net realized gain (loss) on financial futures 656,121  
Net Realized Gain (Loss)   (26,466,305)  
Net unrealized appreciation (depreciation) on investments [including    
   ($ 592,350) net unrealized (depreciation) on financial futures] 94,847,320  
Net Realized and Unrealized Gain (Loss) on Investments 68,381,015  
Net Increase in Net Assets Resulting from Operations 78,340,099  

See notes to financial statements.

The Fund 23

STATEMENT OF CHANGES IN NET ASSETS

  Six Months Ended      
  April 30, 2004   Year Ended  
  (Unaudited)   October 31, 2003  
 
 
Operations ($):        
Investment income—net 9,959,084   19,630,422  
Net realized gain (loss) on investments (26,466,305)   (50,216,155)  
Net unrealized appreciation        
   (depreciation) on investments 94,847,320   268,052,604  
Net Increase (Decrease) in Net Assets        
   Resulting from Operations 78,340,099   237,466,871  
 
 
Dividends to Shareholders from ($):        
Investment income—net (11,147,689)   (17,717,410)  
 
 
Capital Stock Transactions ($):        
Net proceeds from shares sold 166,677,487   372,738,581  
Dividends reinvested 10,161,554   16,072,034  
Cost of shares redeemed (205,253,346)   (391,152,994)  
Increase (Decrease) in Net Assets        
   from Capital Stock Transactions (28,414,305)   (2,342,379)  
Total Increase (Decrease) in Net Assets 38,778,105   217,407,082  
 
 
Net Assets ($):        
Beginning of Period 1,331,547,180   1,114,140,098  
End of Period 1,370,325,285   1,331,547,180  
Undistributed investment income—net 5,665,958   6,854,563  
 
 
Capital Share Transactions (Shares):        
Shares sold 7,151,726   19,235,475  
Shares issued for dividends reinvested 461,827   831,457  
Shares redeemed (8,964,004)   (19,695,068)  
Net Increase (Decrease) in Shares Outstanding (1,350,451)   371,864  

See notes to financial statements.

24

FINANCIAL HIGHLIGHTS

The following table describes the performance for the fiscal periods indicated.Total return shows how much your investment in the fund would have increased (or decreased) during each period, assuming you had reinvested all dividends and dis-tributions.These figures have been derived from the fund's financial statements.

  Six Months Ended                      
  April 30, 2004       Year Ended October 31,          
         
         
  (Unaudited)   2003   2002   2001   2000   1999  
 
 
 
 
 
 
Per Share Data ($):                        
Net asset value,                        
   beginning of period 21.99   18.51   22.16   29.94   28.76   23.34  
Investment Operations:                        
Investment income—neta .17   .31   .29   .28   .31   .34  
Net realized and                        
   unrealized gain (loss)                        
   on investments 1.17   3.45   (3.64)   (7.72)   1.38   5.52  
Total from                        
   Investment Operations 1.34   3.76   (3.35)   (7.44)   1.69   5.86  
Distributions:                        
Dividends from                        
   investment income—net (.19)   (.28)   (.30)   (.30)   (.28)   (.35)  
Dividends from net realized                      
   gain on investments —   —   —   (.04)   (.23)   (.09)  
Total Distributions (.19)   (.28)   (.30)   (.34)   (.51)   (.44)  
Net asset value,                        
   end of period 23.14   21.99   18.51   22.16   29.94   28.76  
 
 
 
 
 
 
Total Return (%) 6.12b   20.56   (15.32)   (25.08)   5.92   25.34  
 
 
 
 
 
 
Ratios/Supplemental                        
   Data (%):                        
Ratio of expenses                        
   to average net assets .10b   .20   .20   .20   .20   .20  
Ratio of net investment                        
   income to average                        
   net assets .74b   1.59   1.35   1.10   1.04   1.23  
Portfolio Turnover Rate 2.74b   8.01   4.72   6.34   4.16   16.58  
 
 
 
 
 
 
Net Assets,                        
   end of period                        
   ($ x 1,000) 1,370,325   1,331,547   1,114,140   1,292,792   1,989,765   1,747,282  
  • a Based on average shares outstanding at each month end.
    Not annualized.
    See notes to financial statements.

The Fund 25

NOTES TO FINANCIAL STATEMENTS (Unaudited)

NOTE 1—Significant Accounting Policies:

Dreyfus BASIC S&P 500 Stock Index Fund (the “fund”) is a separate diversified series of The Dreyfus/Laurel Funds, Inc. (the “Company”) which is registered under the Investment Company Act of 1940, as amended (the “Act”), as an open-end management investment company and operates as a series company currently offering sixteen series including the fund.The fund's investment objective is to replicate the total return of the Standard & Poor's 500 Composite Stock Price Index primarily through investments in equity securities.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”). Dreyfus Service Corporation (the “Distributor”), a wholly-owned subsidiary of the Manager, is the distributor of the fund's shares, which are sold to the public without a sales charge.

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

(a) Portfolio valuation: Investments in securities (including options and financial futures) are valued at the last sales price on the securities exchange or national securities market on which such securities are primarily traded. Securities listed on the National Market System for which market quotations are available are valued at the official closing price or, if there is no official closing price that day, at the last sale price. Securities not listed on an exchange or the national securities market, or securities for which there were no transactions, are valued at the average of the most recent bid and asked prices. Bid price is used when no asked price is available. 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

26

exchange or market), but before the fund calculates its net asset value, the fund may value these investments at fair value as determined in accordance with the procedures approved by the fund's Board. 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.

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

The fund may lend securities to qualified institutions. At origination, all loans are secured by collateral of at least 102% of the value of U.S. securities loaned and 105% of the value of foreign securities loaned. Collateral equivalent to at least 100% of the market value of securities on loan will be maintained at all times. Cash collateral is invested in certain money market mutual funds managed by the Manager as shown in the fund's Statement of Investments.The fund will be entitled to receive all income on securities loaned, in addition to income earned as a result of the lending transaction. Although each security loaned is fully collateralized, the fund would bear the risk of delay in recovery of, or loss of rights in, the securities loaned should a borrower fail to return the securities in a timely manner.

(c) Affiliated issuers: Issuers in which the fund held investments in other investment companies advised by the Manager are defined as “affiliated” in the Act.

(d) Repurchase agreements: The fund may engage in repurchase agreement transactions. Under the terms of a typical repurchase agreement, the fund, through its custodian and sub-custodian, takes possession of an underlying debt obligation subject to an obligation of the

The Fund 27

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

seller to repurchase, and the fund to resell, the obligation at an agreed-upon price and time, thereby determining the yield during the fund's holding period.This arrangement results in a fixed rate of return that is not subject to market fluctuations during the fund's holding period. The value of the collateral is at least equal, at all times, to the total amount of the repurchase obligation, including interest. In the event of a counter party default, the fund has the right to use the collateral to offset losses incurred.There is potential loss to the fund in the event the fund is delayed or prevented from exercising its rights to dispose of the collateral securities, including the risk of a possible decline in the value of the underlying securities during the period while the fund seeks to assert its rights.The Manager, acting under the supervision of the Board of Directors, reviews the value of the collateral and the cred-itworthiness of those banks and dealers with which the fund enters into repurchase agreements to evaluate potential risks.

(e) Financial futures: The fund may invest in financial futures contracts in order to gain exposure to or protect against changes in the market.The fund is exposed to market risk as a result of changes in the value of the underlying financial instruments. Investments in financial futures require the fund to “mark to market” on a daily basis, which reflects the change in the market value of the contract at the close of each day's trading.Typically, 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 April 30, 2004, are set forth in the Statement of Financial Futures.

(f) Dividends to shareholders: Dividends are recorded on the ex-dividend date. Dividends from investment income-net are declared and paid on a quarterly basis. Dividends from net realized capital gain, if any, are normally declared and paid annually, but the fund may make distributions on a more frequent basis to comply with the distribution

28

requirements of the Internal Revenue Code of 1986, as amended (the “Code”).To the extent that net realized capital gain can be offset by capital loss carryovers, it is the policy of the fund not to distribute such gain. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from U.S. generally accepted accounting principles.

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

The fund has an unused capital loss carryover of $151,876,183 available for federal income tax purposes to be applied against future net securities profits, if any, realized subsequent to October 31, 2003. If not applied, $44,810,490 of the carryover expires in fiscal 2009, $62,001,872 expires in fiscal 2010 and $45,063,821 expires in fiscal 2011.

The tax character of distributions paid to shareholders during the fiscal year ended October 31, 2003 was as follows: ordinary income $17,717,410. The tax character of current year distributions will be determined at the end of the current fiscal year.

NOTE 2—Investment Management Fee And Other Transactions with Affiliates:

(a) Pursuant to an Investment Management agreement with the Manager, the Manager provides or arranges for one or more third and/or affiliated parties to provide investment advisory, administrative, custody, fund accounting and transfer agency services to the fund.The Manager also directs the investments of the fund in accordance with its investment objective, policies and limitations. For these services, the fund is contractually obligated to pay the Manager a fee, calculated daily and paid monthly, at the annual rate of .20 of 1% of the value of the fund's average daily net assets. Out of its fee, the Manager pays all of the expenses of the fund except brokerage fees, taxes, interest, com-

The Fund 29

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

mitment fees, fees and expenses of non-interested Directors (including counsel fees) and extraordinary expenses. In addition, the Manager is required to reduce its fee in an amount equal to the fund's allocable portion of fees and expenses of the non-interested Directors (including counsel fees). Each Director receives $40,000 per year, plus $5,000 for each joint Board meeting of the Company, The Dreyfus/Laurel Tax-Free Municipal Funds, and The Dreyfus/Laurel Funds Trust (the “Dreyfus/Laurel Funds”) attended, $2,000 for separate committee meetings attended which are not held in conjunction with a regularly scheduled board meeting and $500 for Board meetings and separate committee meetings attended that are conducted by telephone and is reimbursed for travel and out-of-pocket expenses. The Chairman of the Board receives an additional 25% of such compensation (with the exception of reimbursable amounts). In the event that there is a joint committee meeting of the Dreyfus/Laurel Funds and the Dreyfus High Yield Strategies Fund, the $2,000 fee will be allocated between the Dreyfus/Laurel Funds and the Dreyfus High Yield Strategies Fund. These fees and expenses are charged and allocated to each series based on net assets. Amounts required to be paid by the Company directly to the non-interested Directors, that would be applied to offset a portion of the management fee payable to the Manager, are in fact paid directly by the Manager to the non-interested Directors.

The component of Due to The Dreyfus Corporation and affiliates in the Statement of Assets and Liabilities consists of: management fees $243,980.

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

NOTE 3—Securities Transactions:

The aggregate amount of purchases and sales of investment securities, excluding short-term securities and financial futures, during the

30

period ended April 30, 2004, amounted to $36,579,753 and $82,356,624, respectively.

At April 30, 2004, accumulated net unrealized appreciation on investments was $223,183,174, consisting of $361,519,562 gross unrealized appreciation and $138,336,388 gross unrealized depreciation.

At April 30, 2004, 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 4—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.

The average daily amount of borrowings outstanding under the Facility during the period ended April 30, 2004 was approximately $690,100, with a related weighted average annualized interest rate of .70%.

NOTE 5—Legal Matters:

Two class actions have been filed against Mellon Financial and Mellon Bank, N.A., and Dreyfus and Founders Asset Management LLC (the “Investment Advisers”), and the directors of all or substantially all of the Dreyfus funds, alleging that the Investment Advisers improperly used assets of the Dreyfus funds, in the form of directed brokerage commissions and 12b-1 fees, to pay brokers to promote sales of Dreyfus funds, and that the use of fund assets to make these payments was not properly disclosed to investors.The complaints further allege that the directors breached their fiduciary duties to fund shareholders under the Investment Company Act of 1940 and at common law.The complaints seek unspecified compensatory and punitive damages, rescission of the funds' contracts with the Investment Advisers, an

The Fund 31

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

accounting of all fees paid, and an award of attorneys' fees and litigation expenses. Dreyfus and the Dreyfus funds believe the allegations to be totally without merit and will defend the actions vigorously.

Additional lawsuits arising out of these circumstances and presenting similar allegations and requests for relief may be filed against the defendants in the future. Neither Dreyfus nor the Dreyfus funds believe that any of the pending actions will have a material adverse effect on the Dreyfus funds or Dreyfus' ability to perform its contracts with the Dreyfus funds.

32

For More Information

Dreyfus BASIC
S&P 500 Stock Index Fund
200 Park Avenue
New York, NY 10166
 
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
 
Custodian
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
 
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
200 Park Avenue
New York, NY 10166
 
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166

To obtain information:

By telephone

Call 1-800-645-6561

By mail Write to:

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

By E-mail Send your request to info@dreyfus.com

On the Internet Information can be viewed online or downloaded from: http://www.dreyfus.com

A description of the policies and procedures that the fund uses to determine how to vote proxies relating to portfolio securities is available, without charge, by calling the telephone number listed above, or by visiting the SEC's website at http://www.sec.gov

© 2004 Dreyfus Service Corporation 0713SA0404

Dreyfus
Bond Market
Index Fund

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

T H E F U N D

2
  		 Letter from the Chairman
3
  		 Discussion of Fund Performance
6
  		 Statement of Investments
23
  		 Statement of Assets and Liabilities
24
  		 Statement of Operations
25
  		 Statement of Changes in Net Assets
27
  		 Financial Highlights
29
  		 Notes to Financial Statements
     F O R M O R E I N F O R M AT I O N
Back Cover
   Dreyfus
Bond Market Index Fund

The Fund

LETTER FROM THE CHAIRMAN

Dear Shareholder:

This semiannual report for Dreyfus Bond Market Index Fund covers the six-month period from November 1, 2003, through April 30, 2004. Inside, you'll find valuable information about how the fund was managed during the reporting period, including a discussion with the fund's portfolio manager, Laurie Carroll.

Positive economic data continued to accumulate during the reporting period, as consumers, flush with extra cash from federal tax refunds and mortgage refinancings, continued to spend. At the same time, recent evidence of stronger job growth supports the view that corporations have become more willing to spend and invest. As a result, fixed-income investors have apparently grown concerned that long-dormant inflationary pressures could resurface.

Although our analysts and portfolio managers work hard to identify trends that may move the markets, no one can know with complete certainty what lies ahead for the U.S. economy and the bond market. As always, we encourage you to review your investments regularly with your financial advisor, who may be in the best position to suggest ways to position your portfolio for the opportunities and challenges of today's financial markets.

Thank you for your continued confidence and support.

Sincerely,

Stephen E. Canter

Chairman and Chief Executive Officer The Dreyfus Corporation

May 17, 2004

2

DISCUSSION OF FUND PERFORMANCE

Laurie Carroll, Portfolio Manager

How did Dreyfus Bond Market Index Fund perform relative to its benchmark?

For the six-month period ended April 30, 2004, the fund achieved total returns of 1.05% for its Investor shares and 1.09% for its BASIC shares.1 The fund's benchmark, the Lehman Brothers U.S.Aggregate Index (the “Index”), achieved a total return of 1.25% for the same period.2

We attribute the fund's and market's returns to improved market conditions as international tensions and geopolitical concerns began to dissipate and the economic outlook began to improve. Corporate securities continued to rally during the reporting period, especially those issues with ratings in the lower investment-grade range. While we attempted to adhere to the same overall sector weightings as the Index, the Index contains many more individual holdings than the fund, and this variance caused the fund's returns to trail its benchmark.

What is the fund's investment approach?

The fund seeks to match the total return of the Index.To pursue that goal, the fund invests primarily in securities that are included in the Index.

While the fund seeks to mirror the returns of the Index, it does not hold the same number of bonds. Instead, the fund holds approximately 350 securities as compared to 6,500 securities in the Index.As a matter of policy, the fund's average duration — a measure of sensitivity to changing interest rates — generally remains neutral to the Index.As of April 30, 2004, the average effective duration of the fund was approximately 4.64 years.

What other factors influenced the fund's performance?

During the reporting period, several factors influenced the fund's performance, including a strengthening U.S. economy, historically low interest rates and improving investor sentiment toward corporate

The Fund 3

DISCUSSION OF FUND PERFORMANCE (continued)

bonds. Over the last two months of 2003, the U.S. economy advanced at a relatively lethargic pace, primarily due to continued weakness in U.S. labor markets, rising oil prices and geopolitical tensions stemming from the war in Iraq. In this environment, the Federal Reserve Board (the “Fed”) chose to leave short-term interest rates unchanged. However, it should be noted that the federal funds rate — the overnight lending rate charged among banks — was already at a 46-year low of 1% as a result of the Fed's aggressively accommodative monetary policy.

While the economy continued to rebound during the first quarter of 2004, the recovery appeared to be a jobless one, with few new jobs created.As a result, many fixed-income investors believed that the Fed would refrain from raising short-term interest rates until it saw more convincing signs that inflationary pressures were resurfacing. Indeed, the Fed indicated in its public comments that it could afford to be “patient” before raising rates.

In the reporting period's low interest-rate environment, many homeowners refinanced their mortgages at lower borrowing costs. This surge in refinancing hurt mortgage-backed securities, primarily because it resulted in an above-average level of loan prepayments, effectively returning principal to bondholders. Because mortgage-backed securities represented approximately one-third of the Index and the fund, these developments hindered the fund's overall return for the reporting period.

On a more positive note, corporate securities produced relatively strong returns during the reporting period, due in large part to progress made by corporate issuers in strengthening their balance sheets by controlling spending and refinancing debt at lower rates. When business conditions and earnings began to improve for many of these corporations in the recovering economy, investors became more comfortable with the risks of corporate debt, and many apparently were willing to assume more risk in exchange for higher yields than

4

were available from less credit-sensitive bonds. As investor demand strengthened, gains among corporate bonds were led by triple-B-rated securities in industry groups — including the telecommunications, utilities, automobile, and, to a lesser degree, financial sectors — that had been severely punished during the previous downturn.

Finally, while U.S.Treasury securities provided attractive total returns during the first three months of the reporting period, those gains were offset in April 2004, when better than expected labor statistics caused many investors to conclude that the Fed may increase short-term interest rates sometime this year.

What is the fund's current strategy?

As an index fund, our goal is to seek to replicate the return of the Index.To achieve this goal, we attempt to mirror four key elements of the Index: average effective duration, industry group composition, credit quality and coupon rate.

As of the end of the reporting period, the fund's asset allocation was approximately 35% mortgage-backed securities, 29% corporate bonds and asset-backed securities, 21% U.S.Treasury securities and 12% U.S. government agency bonds. The balance of the fund's assets was invested in repurchase agreements. In addition, like the Index, the majority of the fund's corporate securities carried credit ratings in the single-A range.

May 17, 2004

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.

2 SOURCE: LIPPER INC. — Reflects reinvestment of dividends and, where applicable, capital gain distributions.The Lehman Brothers U.S.Aggregate Index is a widely accepted, unmanaged total return index of corporate, U.S. government and U.S. government agency debt instruments, mortgage-backed securities and asset-backed securities with an average maturity of 1-10 years.

The Fund 5

STATEMENT OF INVESTMENTS
April 30, 2004 (Unaudited)
  Principal      
Bonds and Notes—96.4% Amount ($) Value ($)  
 
Aerospace & Defense—.6%        
Boeing:        
   Debs., 7.25%, 2025 150,000   168,103  
   Debs., 8.1%, 2006 25,000   27,845  
General Dynamics,        
   Sr. Notes, 2.125%, 2006 500,000 a 494,315  
Lockheed Martin,        
   Notes, 8.2%, 2009 200,000   237,836  
Northrop Grumman,        
   Debs., 7.75%, 2016 250,000   296,422  
Raytheon:        
   Notes, 6.5%, 2005 275,000   288,433  
   Notes, 6.75%, 2007 550,000   603,171  
United Technologies,        
   Debs., 8.75%, 2021 50,000   64,737  
      2,180,862  
Asset-Backed Ctfs.-Auto Loans—.7%        
DaimlerChrysler Auto Trust,        
   Ser. 2000-C, Cl. A4, 6.85%, 2005 149,875   151,263  
Honda Auto Receivables Owner Trust,        
   Ser. 2002-1, Cl. A4, 4.22%, 2007 1,500,000   1,529,373  
WFS Financial Owner Trust,        
   Ser. 2003-4, Cl. A4, 3.15%, 2011 1,000,000   997,072  
      2,677,708  
Asset-Backed Ctfs.-Credit Cards—.9%        
Bank One Issuance Trust,        
   Ser. 2004-A1, Cl. A1, 3.45%, 2011 950,000   927,758  
Capital One Master Trust:        
   Ser. 2001-3A, Cl. A, 5.45%, 2009 1,000,000   1,046,819  
   Ser. 2001-5, Cl. A, 5.3%, 2009 400,000   421,428  
Chemical Master Credit Card Trust 1,        
   Ser. 1996-3, Cl. A, 7.09%, 2009 700,000   762,222  
MBNA Master Credit Card Trust,        
   Ser. 1995-C, Cl. A, 6.45%, 2008 400,000   420,040  
      3,578,267  
Asset-Backed Ctfs.-Utilities—.5%        
CPL Transition Funding,        
   Ser. 2002-1, Cl. A4, 5.96%, 2015 550,000   586,925  
California Infrastructure PG&E-1,        
   Ser. 1997-1, Cl. A8, 6.48%, 2009 850,000   927,832  

6

  Principal      
Bonds and Notes (continued) Amount ($) Value ($)  
 
Asset-Backed Ctfs.-Utilities (continued)        
Peco Energy Transition Trust,        
   Ser. 1999-A, Cl. A7, 6.13%, 2009 235,000   255,272  
      1,770,029  
Automotive—2.3%        
DaimlerChrysler:        
   Debs., 7.45%, 2027 50,000   51,869  
   Notes, 4.05%, 2008 1,225,000 a 1,204,397  
Delphi Automotive Systems,        
   Debs., 7.125%, 2029 125,000 a 126,019  
Ford Motor,        
   Global Landmark Securities, 7.45%, 2031 150,000 a 146,646  
Ford Motor Credit,        
   Bonds, 7.375%, 2011 1,925,000   2,061,192  
GMAC:        
   Debs., 6%, 2011 70,000   68,097  
   Notes, 6.75%, 2006 3,200,000 a 3,389,859  
General Motors:        
   Debs., 8.375%, 2033 450,000 a 488,078  
   Debs., 8.8%, 2021 150,000   168,360  
Hertz,        
   Sr. Notes, 8.25%, 2005 300,000   314,951  
TRW,        
   Notes, 6.25%, 2010 100,000   103,839  
Toyota Motor Credit,        
   Notes, 4.35%, 2010 650,000   646,047  
      8,769,354  
Banking—3.5%        
BB&T,        
   Sub. Notes, 4.75%, 2012 325,000   320,010  
Bank of America,        
   Sub. Notes, 7.8%, 2010 1,150,000 a 1,338,747  
Bank of New York,        
   Sr. Notes, 5.2%, 2007 450,000   478,194  
Bank One:        
   Notes, 6.875%, 2006 500,000   544,263  
   Sub. Notes, 5.9%, 2011 500,000   534,886  
Banker's Trust New York,        
   Sub. Notes, 7.5%, 2015 75,000   86,848  

The Fund 7

STATEMENT OF INVESTMENTS (Unaudited) (continued)

  Principal      
Bonds and Notes (continued) Amount ($) Value ($)  
 
Banking (continued)        
Bayerische Landesbank New York,        
   Sr. Notes, Ser. F, 5.875%, 2008 300,000   323,165  
Capital One Bank,        
   Notes, 4.25%, 2008 275,000   272,794  
Citigroup:        
   Debs., 6.625%, 2028 100,000   105,942  
   Notes, 6%, 2012 1,150,000 a 1,238,578  
Dresdner Bank-New York,        
   Sub. Debs., 7.25%, 2015 145,000   163,950  
FBS Capital I,        
   Capital Securities, 8.09%, 2026 100,000   112,177  
FleetBoston Financial,        
   Sub. Notes, 7.375%, 2009 175,000   200,717  
HSBC,        
   Sub. Notes, 7.5%, 2009 200,000   229,762  
J.P. Morgan Chase & Co.:        
   Sr. Notes, 4%, 2008 1,000,000   1,009,606  
   Sr. Notes, 5.625%, 2006 500,000   529,686  
Key Bank,        
   Sub. Debs., 6.95%, 2028 100,000   108,024  
MBNA America Bank:        
   Sr. Notes, 7.75%, 2005 300,000 b 321,104  
   Sub. Notes, 6.75, 2008 100,000 b 110,207  
NB Capital Trust IV,        
   Capital Securities, 8.25%, 2027 55,000   61,388  
NationsBank:        
   Sub. Notes, 6.875%, 2005 10,000   10,380  
   Sub. Notes, 7.8%, 2016 160,000   190,544  
PNC Funding:        
   Notes, 7%, 2004 225,000   229,051  
   Sub. Notes, 5.25%, 2015 450,000   441,419  
Royal Bank of Scotland,        
   Sub. Notes, 6.375%, 2011 910,000   999,512  
Santander Finance Issuances,        
   Sub. Notes, 7.25%, 2006 100,000   109,306  
Sanwa Finance Aruba,        
   Notes, 8.35%, 2009 150,000   174,119  
State Street Bank & Trust,        
   Sub. Notes, 5.25%, 2018 200,000   197,949  
U.S. Bank,        
   Sub. Notes, 6.375%, 2011 100,000   110,048  

8

  Principal      
Bonds and Notes (continued) Amount ($) Value ($)  
 
Banking (continued)        
Union Planters,        
   Notes, 4.375%, 2010 400,000   392,138  
Wachovia Bank,        
   Sub. Notes, 5%, 2015 250,000 a 241,308  
Washington Mutual Finance,        
   Sr. Notes, 6.25%, 2006 500,000   535,521  
Wells Fargo & Co.,        
   Sub. Notes, 6.375%, 2011 420,000   459,792  
Wells Fargo Capital I,        
   Capital Securities, 7.96%, 2026 30,000   33,400  
Westdeutsche Landesbank,        
   Sub. Notes, 6.75%, 2005 600,000   630,805  
Westpac Banking,        
   Sub. Notes, 4.625%, 2018 500,000   449,561  
Zions Bancorp,        
   Sub. Notes, 6%, 2015 250,000   258,600  
      13,553,501  
Broadcasting & Media—.4%        
Clear Channel Communications,        
   Notes, 4.25%, 2009 750,000   744,665  
Comcast Cable Communications,        
   Sr. Notes, 6.75%, 2011 600,000 a 658,431  
Cox Communications,        
   Debs., 6.8%, 2028 150,000 a 154,412  
Liberty Media,        
   Sr. Notes, 5.7%, 2013 25,000   25,041  
      1,582,549  
Building & Construction—.2%        
Centex,        
   Sr. Notes, 5.125%, 2013 500,000   479,088  
MASCO,        
   Debs., 7.125%, 2013 200,000   226,065  
      705,153  
Chemicals—.2%        
Eastman Chemical,        
   Notes, 3.25%, 2008 700,000   672,934  
Morton International,        
   Debs., 9.625%, 2020 5,000   6,553  

The Fund 9

STATEMENT OF INVESTMENTS (Unaudited) (continued)

  Principal      
Bonds and Notes (continued) Amount ($) Value ($)  
 
Chemicals (continued)        
Potash-Saskatchewan,        
   Notes, 7.75%, 2011 200,000   233,364  
      912,851  
Commercial Mortgage Pass-Through Ctfs.—2.2%        
Asset Securitization,        
   Ser. 1997-D4, Cl. A1D, 7.49%, 2029 294,339   323,040  
Bear Stearns Commercial Mortgage Securities,        
   Ser. 1999-WF2, Cl. A2, 7.08%, 2009 250,000   281,255  
CS First Boston Mortgage Securities,        
   Ser. 1999-C1, Cl. A2, 7.29%, 2041 1,050,000   1,187,671  
Chase Commercial Mortgage Securities,        
   Ser. 2000-2, Cl. A2, 7.631%, 2032 250,000   287,188  
GE Capital Commercial Mortgage,        
   Ser. 2002-1A, Cl. A3, 6.269%, 2035 850,000   923,206  
GMAC Commercial Mortgage Securities:        
   Ser. 1998-C1, Cl. A2, 6.7%, 2030 225,000   247,202  
   Ser. 1998-C2, Cl. A2, 6.42%, 2035 993,000   1,085,340  
Heller Financial Commercial Mortgage Assets,        
   Ser. 1999-PH1, Cl. A2, 6.847%, 2031 500,000   556,664  
LB Commercial Conduit Mortgage Trust,        
   Ser. 1999-C2, Cl. A2, 7.325%, 2032 200,000   226,808  
LB-UBS Commercial Mortgage Trust,        
   Ser. 2000-C3, Cl. A2, 7.95%, 2010 1,100,000   1,285,281  
Morgan Stanley Capital I:        
   Ser. 1998-WF1, Cl. A1, 6.25%, 2030 67,363   68,561  
   Ser. 2004-T13, Cl. A4, 4.66%, 2045 1,000,000   962,302  
Morgan Stanley Dean Witter Capital I,        
   Ser. 2003-HQ2, Cl. A2, 4.92%, 2035 500,000   494,797  
Salomon Brothers Mortgage Securities VII,        
   Ser. 2000-C1, Cl. A2, 7.52%, 2009 300,000   342,927  
      8,272,242  
Commercial Services—.1%        
Cendant,        
   Sr. Notes, 7.375%, 2013 500,000   566,447  
Consumer—.4%        
Avon Products,        
   Sr. Notes, 4.2%, 2018 250,000 a 221,987  
Procter & Gamble,        
   Notes, 6.875%, 2009 1,000,000   1,137,652  
      1,359,639  

10

  Principal      
Bonds and Notes (continued) Amount ($) Value ($)  
 
Data Processing—.1%        
First Data,        
   Sr. Notes, 5.625%, 2011 250,000   264,362  
Drugs & Pharmaceuticals—.4%        
Abbott Laboratories,        
   Notes, 5.625%, 2006 650,000   690,664  
Bristol-Myers Squibb,        
   Notes, 5.75%, 2011 250,000   264,238  
Merck & Co.,        
   Debs., 6.4%, 2028 300,000   320,028  
Wyeth,        
   Bonds, 6.5%, 2034 400,000   399,114  
      1,674,044  
Entertainment/Media—.4%        
News America,        
   Debs., 8.25%, 2018 150,000   180,676  
Time Warner Cos.,        
   Notes, 6.95%, 2028 850,000   873,207  
Viacom,        
   Debs., 7.625%, 2016 125,000   149,209  
Walt Disney:        
   Debs., 7.55%, 2093 100,000   108,554  
   Sr. Notes, 7%, 2032 150,000 a 160,077  
   Sr. Notes, Ser. B, 6.75%, 2006 20,000   21,358  
      1,493,081  
Financial Services—2.9%        
Aetna,        
   Debs., 7.625%, 2026 50,000   56,278  
American General Finance,        
   Medium-Term Notes, Ser. F, 5.875%, 2006 350,000   373,170  
CIT,        
   Sr. Notes, 5.5%, 2007 1,350,000   1,427,579  
Countrywide Capital Industries,        
   Notes, 8%, 2026 200,000   214,042  
Countrywide Home Loan,        
   Medium-Term Notes, Ser. J, 5.5%, 2006 400,000   421,148  
Credit Suisse First Boston USA,        
   Notes, 5.875%, 2006 1,300,000   1,385,859  
General Electric Capital:        
   Debs., 8.3%, 2009 15,000   17,828  
   Medium-Term Notes, Ser. A, 5%, 2007 1,250,000   1,312,128  

The Fund 11

STATEMENT OF INVESTMENTS (Unaudited) (continued)

  Principal      
Bonds and Notes (continued) Amount ($) Value ($)  
 
Financial Services (continued)        
General Electric Capital (continued):        
   Medium-Term Notes, Ser. A, 5.45%, 2013 1,000,000   1,025,635  
Goldman Sachs:        
   Medium-Term Notes, Ser. B, 7.35%, 2009 100,000   114,045  
   Sr. Notes, 6.6%, 2012 1,000,000   1,096,673  
   Sub. Notes, Ser. B, 6.345%, 2034 350,000 a 335,631  
Household Finance,        
   Notes, 8%, 2010 630,000   742,572  
Lehman Brothers,        
   Notes, 6.625%, 2012 650,000   718,836  
Merrill Lynch & Co.,        
   Notes, 6.875%, 2018 150,000   166,802  
Morgan Stanley Dean Witter,        
   Notes, 7.25%, 2032 600,000   680,956  
Paine Webber,        
   Sr. Notes, 6.55%, 2008 150,000   164,798  
SLM,        
   Medium-Term Notes, 5.125%, 2012 850,000   854,532  
      11,108,512  
Food & Beverages—1.4%        
Albertson's,        
   Sr. Notes, 7.25%, 2013 250,000   279,290  
Anheuser-Busch,        
   Debs., 7.55%, 2030 200,000   239,744  
Archer-Daniels-Midland,        
   Debs., 7.125%, 2013 300,000   345,578  
Bottling Group,        
   Notes, 4.625%, 2012 350,000   344,428  
Coca-Cola Enterprises,        
   Debs., 8.5%, 2022 100,000   127,759  
Coors Brewing,        
   Sr. Notes, 6.375%, 2012 130,000   140,583  
Diageo Capital,        
   Notes, 6.125%, 2005 200,000   210,063  
General Mills,        
   Notes, 6%, 2012 125,000   132,741  
H.J. Heinz,        
   Debs., 6.375%, 2028 100,000   104,156  
Hershey Foods,        
   Debs., 8.8%, 2021 30,000   39,937  

12

  Principal      
Bonds and Notes (continued) Amount ($) Value ($)  
 
Food & Beverages (continued)        
Kellogg,        
   Notes, Ser. B, 6%, 2006 300,000   318,613  
Kraft Foods,        
   Notes, 4.625%, 2006 450,000   465,688  
Kroger:        
   Sr. Notes, 7.25%, 2009 550,000 a 618,815  
   Sr. Notes, 8.05%, 2010 400,000   466,254  
McDonald's,        
   Medium-Term Notes, 6%, 2011 300,000   322,067  
Nabisco,        
   Debs., 7.55%, 2015 40,000   46,765  
Safeway,        
   Sr. Notes, 5.8%, 2012 210,000 a 216,080  
Sara Lee,        
   Notes, 6.25%, 2011 300,000   328,919  
Sysco:        
   Notes, 4.75%, 2005 200,000   206,130  
   Sr. Notes, 7%, 2006 25,000   27,121  
Unilever Capital,        
   Notes, 5.9%, 2032 250,000   244,033  
      5,224,764  
Foreign—3.9%        
Asian Development Bank,        
   Medium-Term Notes, 4.5%, 2012 750,000   750,164  
European Investment Bank,        
   Notes, 4.625%, 2007 500,000   524,554  
Hydro-Quebec:        
   Debs., Ser. HH, 8.5%, 2029 200,000   268,295  
   Debs., Ser. HK, 9.375%, 2030 20,000   29,042  
Inter-American Development Bank,        
   Bonds, 5.75%, 2008 1,600,000   1,735,048  
International Bank for Reconstruction & Development,        
   Notes, 5%, 2006 2,000,000   2,101,084  
KFW International Finance:        
   Debs., 8%, 2010 35,000   41,581  
   Notes, 2.5%, 2005 1,500,000   1,511,654  
   Notes, 5.25%, 2006 300,000 a 317,680  
Kingdom of Spain,        
   Notes, 7%, 2005 200,000   211,844  

The Fund 13

STATEMENT OF INVESTMENTS (Unaudited) (continued)

  Principal      
Bonds and Notes (continued) Amount ($) Value ($)  
 
Foreign (continued)        
Korea Development Bank:        
   Bonds, 7.25%, 2006 300,000   324,944  
   Notes, 5.5%, 2012 350,000 a 354,147  
Malaysia,        
   Notes, 8.75%, 2009 330,000   393,327  
PEMEX Project Funding Master Trust,        
   Notes, 7.375%, 2014 400,000   420,000  
Province of British Columbia,        
   Bonds, 6.5%, 2026 25,000   27,948  
Province of Manitoba,        
   Debs., 8.8%, 2020 10,000   13,598  
Province of Ontario,        
   Sr. Unsub. Notes, 5.5%, 2008 500,000   533,349  
Province of Quebec,        
   Debs., 7.5%, 2023 600,000   732,413  
Republic of Finland,        
   Bonds, 6.95%, 2026 25,000   28,843  
Republic of Italy:        
   Debs., 6.875%, 2023 70,000   81,137  
   Medium-Term Notes, 5.375%, 2033 550,000   524,186  
   Sr. Notes, 2.75%, 2006 500,000   495,857  
Republic of Korea,        
   Notes, 8.875%, 2008 840,000 a 986,580  
United Mexican States,        
   Notes, Ser. A, 9.875%, 2010 2,025,000   2,488,725  
      14,896,000  
Industrial—.5%        
Caterpillar,        
   Debs., 9.375%, 2011 150,000   194,179  
Emerson Electric,        
   Notes, 6.3%, 2005 35,000   37,070  
John Deere Capital,        
   Notes, 7%, 2012 600,000   680,237  
Praxair,        
   Notes, 2.75%, 2008 900,000   864,407  
USA Waste Services,        
   Sr. Notes, 7%, 2028 300,000   316,802  
      2,092,695  

14

  Principal      
Bonds and Notes (continued) Amount ($) Value ($)  
 
Insurance—.6%        
Anthem,        
   Bonds, 6.8%, 2012 600,000   669,118  
GE Global Insurance,        
   Notes, 7%, 2026 150,000   161,121  
Marsh & McLennan Cos.,        
   Sr. Notes, 5.875%, 2033 200,000   191,123  
MetLife,        
   Sr. Notes, 6.125%, 2011 260,000   281,640  
Nationwide Financial Services,        
   Sr. Notes, 6.25%, 2011 350,000   375,505  
Progressive,        
   Sr. Notes, 6.625%, 2029 100,000   106,215  
Safeco Capital Trust I,        
   Capital Securities, 8.072%, 2037 300,000   332,522  
Torchmark,        
   Debs., 8.25% 2009 150,000   171,039  
      2,288,283  
Metals & Mining—.1%        
Alcan,        
   Debs., 7.25%, 2031 350,000   395,987  
Alcoa,        
   Notes, 6%, 2012 150,000   162,053  
      558,040  
Oil & Gas—1.4%        
Anadarko Finance,        
   Notes, Ser. B, 6.75%, 2011 300,000   333,347  
ChevronTexaco Capital,        
   Notes, 3.5%, 2007 500,000   504,842  
ConocoPhillips:        
   Notes, 5.9%, 2032 500,000   488,200  
   Sr. Notes, 6.35%, 2009 300,000   329,572  
Devon Financing,        
   Notes, 7.875%, 2031 275,000   318,162  
Kerr-McGee,        
   Notes, 6.875%, 2011 250,000 a 273,457  
Kinder Morgan,        
   Sr. Notes, 6.5%, 2012 650,000   700,747  

The Fund 15

STATEMENT OF INVESTMENTS (Unaudited) (continued)

  Principal      
Bonds and Notes (continued) Amount ($) Value ($)  
 
Oil & Gas (continued)        
Marathon Oil,        
   Notes, 5.375%, 2007 200,000   211,030  
Occidental Petroleum,        
   Sr. Notes, 5.875%, 2007 1,500,000   1,600,643  
Phillips Petroleum,        
   Notes, 8.75%, 2010 200,000   244,724  
TransCanada Pipelines,        
   Bonds, 5.6%, 2034 300,000   276,119  
Transocean,        
   Notes, 7.5%, 2031 150,000   171,369  
Union Oil Co. of California,        
   Debs., 9.125%, 2006 200,000   222,444  
      5,674,656  
Paper Products—.1%        
International Paper:        
   Notes, 7.625%, 2007 10,000   11,029  
   Sr. Notes, 6.75%, 2011 200,000   220,063  
Weyerhaeuser,        
   Debs., 7.375%, 2032 200,000   219,785  
      450,877  
Real Estate Investment Trusts—.4%        
EOP Operating,        
   Notes, 4.75%, 2014 650,000   607,392  
ERP Operating,        
   Notes, 5.2%, 2013 600,000   596,972  
Simon Property,        
   Notes, 5.45%, 2013 500,000 a 506,408  
      1,710,772  
Retail—.6%        
Federated Department Stores,        
   Debs., 7.45%, 2017 350,000   399,732  
NIKE,        
   Sr. Notes, 5.5%, 2006 400,000   422,919  
Target,        
   Debs., 7%, 2031 125,000 a 139,664  
Wal-Mart Stores,        
   Sr. Notes, 6.875%, 2009 1,150,000   1,299,727  
      2,262,042  

16

  Principal      
Bonds and Notes (continued) Amount ($)   Value ($)  
 
 
State Government—.1%        
State of Illinois,        
   Bonds, 5.1%, 2033 450,000   408,388  
Technology—.2%        
Hewlett-Packard,        
   Notes, 7.15%, 2005 300,000   316,244  
IBM:        
   Debs., 7%, 2025 320,000   358,146  
   Debs., 7.5%, 2013 75,000   88,371  
Motorola,        
   Debs., 7.5%, 2025 150,000   162,588  
      925,349  
Telecommunications—2.3%        
AT&T,        
   Sr. Notes, 8.05%, 2011 700,000   769,180  
AT&T Broadband,        
   Notes, 9.455%, 2022 304,000   396,122  
AT&T Wireless Services,        
   Sr. Notes, 7.875%, 2011 475,000   547,850  
BellSouth Telecommunications,        
   Debs., 6.375%, 2028 100,000   100,214  
British Telecom,        
   Bonds, 8.875%, 2030 150,000   190,312  
Deutsche Telekom International Finance,        
   Notes, 8.5%, 2010 750,000   887,264  
France Telecom:        
   Notes, 8.2%, 2006 950,000   1,033,705  
   Notes, 9.5%, 2031 300,000   385,847  
Koninklijke KPN,        
   Sr. Unsub. Notes, 8.375%, 2030 250,000   307,406  
New Jersey Bell Telephone,        
   Debs., 8%, 2022 25,000   29,226  
Pacific Bell,        
   Debs., 7.125%, 2026 310,000   335,187  
Sprint Capital,        
   Sr. Notes, 7.625%, 2011 1,200,000   1,355,024  
360 Communications,        
   Sr. Notes, 7.6%, 2009 200,000   227,583  
Telefonica Europe,        
   Notes, 7.75%, 2010 200,000   232,270  

The Fund 17

STATEMENT OF INVESTMENTS (Unaudited) (continued)

  Principal      
Bonds and Notes (continued) Amount ($) Value ($)  
 
Telecommunications (continued)        
Verizon Global Funding,        
Sr. Notes, 7.25%, 2010 1,000,000 a 1,132,019  
Vodafone,        
Notes, 7.75%, 2010 580,000   672,449  
      8,601,658  
Transportation—.8%        
Burlington Northern Santa Fe:        
Debs., 6.75%, 2029 150,000   158,895  
Debs., 7%, 2025 100,000   108,505  
CSX,        
Debs., 7.45%, 2007 1,125,000   1,249,885  
Canadian National Railway,        
Notes, 6.9%, 2028 100,000   109,273  
Continental Airlines,        
Pass-Through Ctfs., Ser. 974A, 6.9%, 2018 174,900   171,988  
Delta Airlines,        
Pass-Through Ctfs., Ser. 2000-1,        
Cl. A-2, 7.57%, 2010 100,000   97,291  
FedEx,        
Notes, 9.65%, 2012 225,000   288,399  
Norfolk Southern:        
Bonds, 7.8%, 2027 250,000   290,675  
Debs., 9%, 2021 10,000   12,892  
Union Pacific,        
Notes, 6.5%, 2012 350,000   383,645  
United Parcel Service,        
Debs., 8.375%, 2030 10,000   13,112  
      2,884,560  
U.S. Government—21.3%        
U.S. Treasury Bonds:        
5.375%, 2/15/2031 1,900,000   1,925,517  
5.5%, 8/15/2028 2,350,000   2,388,446  
6.875%, 8/15/2025 5,250,000   6,266,137  
7.875%, 2/15/2021 5,830,000   7,573,053  
8.75%, 5/15/2020 480,000   668,659  
8.875%, 8/15/2017 4,825,000   6,667,716  
9.375%, 2/15/2006 700,000   787,934  
10%, 5/15/2010 1,000,000   1,083,510  
10.75%, 8/15/2005 1,515,000   1,686,195  
11.25%, 2/15/2015 25,000   38,995  
12%, 8/15/2013 1,445,000   1,937,586  

18

  Principal      
Bonds and Notes (continued) Amount ($) Value ($)  
 
U.S. Government (continued)        
U.S. Treasury Bonds (continued):        
   12.5%, 8/15/2014 40,000   56,754  
   12.75%, 11/15/2010 75,000   86,900  
   14%, 11/15/2011 30,000   38,305  
U.S. Treasury Notes:        
   1.875%, 11/30/2005 2,000,000 a 1,995,080  
   3.5%, 11/15/2006 6,000,000 a 6,127,500  
   3.625%, 5/15/2013 3,000,000 a 2,831,700  
   4%, 2/15/2014 2,750,000 a 2,642,579  
   4.375%, 8/15/2012 3,300,000 a 3,307,349  
   5%, 8/15/2011 2,150,000 a 2,261,176  
   5.625%, 5/15/2008 1,750,000 a 1,902,232  
   5.75%,11/15/2005 10,000,000   10,564,000  
   6%, 8/15/2009 3,000,000 a 3,328,590  
   6.125%, 8/15/2007 4,350,000 a 4,773,951  
   6.75%, 5/15/2005 6,300,000 a 6,629,238  
   7%, 7/15/2006 3,500,000 a 3,839,990  
      81,409,092  
U.S. Government Agencies—10.1%        
Federal Farm Credit Banks,        
   Bonds, 2.125%, 8/15/2005 3,750,000   3,762,082  
Federal Home Loan Banks:        
   Bonds, 1.875%, 6/15/2006 6,500,000   6,412,432  
   Bonds, 4.5%, 9/16/2013 1,500,000   1,453,957  
   Sr. Notes, 5.8%, 9/2/2008 850,000   918,929  
Federal Home Loan Mortgage Corp:        
   Notes, 3.5%, 9/15/2007 4,100,000   4,128,364  
   Notes, 5.125%, 7/15/2012 2,500,000   2,555,000  
   Notes, 5.5%, 9/15/2011 2,500,000   2,637,868  
   Notes, 6.25%, 7/15/2032 1,350,000   1,438,599  
Federal National Mortgage Association:        
   Bonds, 6.25%, 5/15/2029 1,900,000   2,023,882  
   Notes, 2.5%, 6/15/2008 2,590,000   2,477,622  
   Notes, 5.25%, 1/15/2009 2,925,000   3,094,738  
   Notes, 5.375%, 11/15/2011 2,500,000   2,616,698  
   Sub. Notes, 5.5%, 5/2/2006 2,800,000   2,953,829  
Financing Corp:        
   Bonds, 8.6%, 9/26/2019 40,000   52,843  
   Bonds, 9.65%, 11/2/2018 510,000   726,306  
Resolution Funding:        
   Debs., 8.625%, 1/15/2030 15,000   21,567  
   Debs., 8.875%, 7/15/2020 75,000   102,517  

The Fund 19

STATEMENT OF INVESTMENTS (Unaudited) (continued)

  Principal      
Bonds and Notes (continued) Amount ($) Value ($)  
 
U.S. Government Agencies (continued)        
Tennessee Valley Authority:        
   Debs., 6%, 3/15/2013 450,000   489,047  
   Notes, Ser. C, 4.75%, 8/1/2013 750,000   744,085  
      38,610,365  
U.S. Government Agencies/Mortgage-Backed—34.3%        
Federal Home Loan Mortgage Corp:        
   4%, 9/1/2008-9/1/2018 2,882,270   2,798,034  
   4.5%, 5/1/2010-8/1/2033 7,699,656   7,574,238  
   5%, 11/1/2007-10/1/2033 11,902,051   11,777,973  
   5.5%, 9/1/2009-4/1/2034 11,426,454   11,485,325  
   6%, 12/1/2013-10/1/2033 6,238,626   6,414,459  
   6.5%, 3/1/2011-11/1/2033 4,091,151   4,272,106  
   7%, 9/1/2011-9/1/2031 1,364,333   1,442,746  
   7.5%, 7/1/2010-10/1/2033 747,467   803,925  
   8%, 5/1/2026-10/1/2031 484,721   524,131  
   8.5%, 6/1/2030 12,166   13,162  
Federal National Mortgage Association:        
   4%, 12/1/2018 732,397   705,614  
   4.5% 500,000 c 492,185  
   4.5%, 4/1/2018-10/1/2033 5,923,739   5,756,905  
   5% 1,000,000 c 969,062  
   5%, 4/1/2010-12/1/2033 14,956,438   14,738,122  
   5.5% 700,000 c 698,467  
   5.5%, 1/1/2017-4/1/2034 19,611,817   19,674,460  
   6%, 6/1/2011-3/1/2034 11,319,423   11,619,133  
   6.5%, 1/1/2005-9/1/2032 7,170,945   7,488,604  
   7%, 8/1/2008-11/1/2032 3,193,350   3,382,476  
   7.5%, 8/1/2015-3/1/2032 780,715   836,788  
   8%, 5/1/2027-10/1/2030 147,881   160,346  
   8.5%, 2/1/2025-2/1/2031 40,077   43,457  
   9%, 10/1/2030 9,012   9,846  
Government National Mortgage Association I:        
   4.5%, 8/15/2033 712,962   671,739  
   5%, 3/15/2018-10/15/2033 2,923,412   2,863,926  
   5.5%, 2/15/2033-1/15/2034 4,769,290   4,776,731  
   6%, 4/15/2017-11/15/2033 3,745,921   3,848,666  
   6.5%, 9/15/2008-11/15/2033 2,529,805   2,645,986  
   7%, 10/15/2011-8/15/2032 1,618,859   1,723,281  
   7.5%, 12/15/2026-10/15/2032 568,803   611,723  
   8%, 8/15/2024-3/15/2032 303,737   331,763  
   8.5%, 10/15/2026 53,149   58,547  
   9%, 2/15/2022-2/15/2023 79,898   90,010  
      131,303,936  

20

  Principal      
Bonds and Notes (continued) Amount ($)   Value ($)  
 
 
Utilities/Gas & Electric—2.5%        
Arizona Public Service,        
   Bonds, 4.65%, 2015 500,000   458,366  
Cincinnati Gas & Electric,        
   Notes, 5.7%, 2012 185,000   191,499  
Commonwealth Edison,        
   Debs., 6.4%, 2005 200,000   210,910  
Consolidated Edison Company of New York,        
   Debs., Ser. 2002-B, 4.875%, 2013 550,000   546,061  
Consumers Energy,        
   First Mortgage Bonds, Ser. H, 4.8%, 2009 90,000   90,994  
Duke Capital,        
   Sr. Notes, 8%, 2019 225,000   256,061  
FPL Group Capital,        
   Notes, 7.375%, 2009 300,000   341,788  
Florida Power & Light,        
   First Mortgage Bonds, 5.625%, 2034 250,000   237,458  
Georgia Power,        
   Sr. Notes, Ser. J, 4.875%, 2007 400,000   416,983  
KeySpan,        
   Sr. Notes, 7.25%, 2005 400,000   429,122  
MidAmerican Energy,        
   Sr. Notes, 5.875%, 2012 350,000   362,384  
National Rural Utilities,        
   Notes, 6%, 2006 700,000   746,351  
Niagara Mohawk Power,        
   First Mortgage Bonds, 7.75%, 2006 1,300,000   1,423,582  
NiSource Finance,        
   Bonds, 5.4%, 2014 150,000   148,303  
Oncor Electric Delivery,        
   Secured Notes, 7%, 2032 250,000   271,590  
PPL Electric Utilities,        
   Secured Bonds, 6.25%, 2009 300,000   327,499  
Pacific Gas & Electric,        
   First Mortgage Bonds, 6.05%, 2034 175,000   166,050  
Penn Power & Light Resources,        
   First Mortgage Bonds, 6.55%, 2006 25,000   26,655  
Progress Energy,        
   Sr. Notes, 7.1%, 2011 500,000   557,999  
Public Service Company of Colorado,        
   First Mortgage Bonds, 7.875%, 2012 350,000   418,650  

The Fund 21

STATEMENT OF INVESTMENTS (Unaudited) (continued)

      Principal      
Bonds and Notes (continued)   Amount ($) Value ($)  
 
Utilities/Gas & Electric (continued)          
Sempra Energy,          
Sr. Notes, 7.95%, 2010   500,000   583,074  
South Carolina Electric & Gas,          
First Mortgage Bonds, 6.625%, 2032 200,000   215,430  
Southern California Edison,          
Notes, 6.65%, 2029   150,000   153,551  
Virginia Electric & Power,          
First Mortgage Bonds, Ser. D, 7.625%, 2007 825,000   922,950  
          9,503,310  
Total Bonds and Notes          
   (cost $ 368,565,395)       369,273,388  
 
             
Short-Term Investments—2.7%        
 
Repurchase Agreement:          
Goldman Sachs & Co., Tri-Party          
Repurchase Agreement, .91%, dated 4/30/2004,        
due 5/3/2004 in the amount of $ 10,300,781        
(fully collateralized by $10,593,000 U.S. Treasury Notes,        
1.625%, due 2/28/2006, value $ 10,506,852)        
   (cost $ 10,300,000)   10,300,000   10,300,000  
 
Investment of Cash Collateral          
for Securities Loaned—13.3% Shares   Value ($)  
 
Registered Investment Company,          
Dreyfus Institutional Preferred Money Market Fund        
   (cost $ 51,026,675)   51,026,675 d 51,026,675  
 
             
Total Investments (cost $ 429,892,070) 112.4%   430,600,063  
Liabilities, Less Cash and Receivables (12.4%)   (47,604,482)  
Net Assets   100.0%   382,995,581  

a All or a portion of these securities are on loan.At April 30, 2004, the total market value of the fund's securities on loan is $51,985,780 and the total market value of the collateral held by the fund is $53,967,954, consisting of cash collateral of $51,026,675 and U.S. Government and Agency securities valued at $2,941,279. b Securities exempt from registration under Rule 144A of the Securities Act of 1933.These securities may be resold transactions exempt from registration, normally to qualified institutional buyers.At April 30, 2004, these securities amounted to $431,311 or .1% of net assets. c Purchased on a forward commitment basis. d Investments in affiliated money market mutual funds.

See notes to financial statements.

22

STATEMENT OF ASSETS AND LIABILITIES
April 30, 2004 (Unaudited)
    Cost Value  
 
Assets ($):        
Investments in securities—      
See Statement of Investments (including securities      
on loan, valued at $51,985,780)—Note 1(b,c):      
Unaffiliated issuers 378,865,395 379,573,388  
Affiliated issuers 51,026,675 51,026,675  
Cash     2,992,387  
Receivable for shares of Capital Stock subscribed   2,319,849  
Receivable for investment securities sold   8,948,037  
Interest receivable   4,144,074  
      449,004,410  
 
Liabilities ($):      
Due to The Dreyfus Corporation and affiliates—Note 2(a)   92,306  
Liability for securities on loan—Note 1(b)   51,026,675  
Payable for investment securities purchased   14,572,778  
Payable for shares of Capital Stock redeemed   317,070  
      66,008,829  
 
Net Assets ( $)   382,995,581  
 
Composition of Net Assets ($):      
Paid-in capital     382,372,254  
Accumulated distributions in excess of investment income—net   (448,861)  
Accumulated net realized gain (loss) on investments   364,195  
Accumulated net unrealized appreciation      
(depreciation) on investments   707,993  
 
Net Assets ( $)   382,995,581  
 
         
         
Net Asset Value Per Share      
    Investor Shares BASIC Shares  
 
Net Assets ($) 215,647,984 167,347,597  
Shares Outstanding 21,149,987 16,399,301  
 
Net Asset Value Per Share ($) 10.20 10.20  

See notes to financial statements.

The Fund 23

STATEMENT OF OPERATIONS

Six Months Ended April 30, 2004 (Unaudited)

Investment Income ($):    
Income:    
Interest 8,104,114  
Income on securities lending 9,975  
Total Income 8,114,089  
Expenses:    
Management fee—Note 2(a) 283,068  
Distribution fee (Investor Shares)—Note 2(b) 272,997  
Loan commitment fees—Note 4 1,640  
Total Expenses 557,705  
Investment Income—Net 7,556,384  
 
Realized and Unrealized Gain (Loss) on Investments—Note 3 ($):    
Net realized gain (loss) on investments 392,800  
Net unrealized appreciation (depreciation) on investments (4,015,241)  
Net Realized and Unrealized Gain (Loss) on Investments (3,622,441)  
Net Increase in Net Assets Resulting from Operations 3,933,943  

See notes to financial statements.

24

STATEMENT OF CHANGES IN NET ASSETS

  Six Months Ended      
  April 30, 2004   Year Ended  
  (Unaudited)   October 31, 2003  
 
 
Operations ($):        
Investment income—net 7,556,384   12,724,130  
Net realized gain (loss) on investments 392,800   3,985,889  
Net unrealized appreciation        
   (depreciation) on investments (4,015,241)   (4,270,503)  
Net Increase (Decrease) in Net Assets        
   Resulting from Operations 3,933,943   12,439,516  
 
 
Dividends to Shareholders from ($):        
Investment income—net:        
Investor shares (4,514,164)   (7,050,693)  
BASIC shares (3,491,081)   (7,162,885)  
Net realized gain on investments:        
Investor shares (993,873)   (88,995)  
BASIC shares (710,630)   (57,242)  
Total Dividends (9,709,748)   (14,359,815)  
 
 
Capital Stock Transactions ($):        
Net proceeds from shares sold:        
Investor shares 60,942,308   201,562,124  
BASIC shares 44,525,148   124,159,472  
Dividends reinvested:        
Investor shares 5,223,674   6,806,308  
BASIC shares 3,172,956   5,468,769  
Cost of shares redeemed:        
Investor shares (65,943,644)   (98,287,288)  
BASIC shares (18,129,300)   (92,925,677)  
Increase (Decrease) in Net Assets        
   from Capital Stock Transactions 29,791,142   146,783,708  
Total Increase (Decrease) in Net Assets 24,015,337   144,863,409  
 
 
Net Assets ($):        
Beginning of Period 358,980,244   214,116,835  
End of Period 382,995,581   358,980,244  

The Fund 25

STATEMENT OF CHANGES IN NET ASSETS (continued)

  Six Months Ended      
  April 30, 2004   Year Ended  
  (Unaudited)   October 31, 2003  
 
 
Capital Share Transactions:        
Investor Shares        
Shares sold 5,858,028   19,215,031  
Shares issued for dividends reinvested 503,218   651,244  
Shares redeemed (6,346,774)   (9,412,671)  
Net Increase (Decrease) in Shares Outstanding 14,472   10,453,604  
 
 
BASIC Shares        
Shares sold 4,296,191   11,875,497  
Shares issued for dividends reinvested 305,467   521,572  
Shares redeemed (1,742,871)   (8,786,695)  
Net Increase (Decrease) in Shares Outstanding 2,858,787   3,610,374  

See notes to financial statements.

26

FINANCIAL HIGHLIGHTS

The following tables describe the performance for each share class for the fiscal periods indicated. All information (except portfolio turnover rate) reflects financial results for a single fund share.Total return shows how much your investment in the fund would have increased (or decreased) during each period, assuming you had reinvested all dividends and distributions.These figures have been derived from the fund's financial statements.

  Six Months Ended                      
  April 30, 2004       Year Ended October 31,      
         
     
Investor Shares (Unaudited)   2003   2002a   2001   2000   1999  
 
 
 
 
 
Per Share Data ($):                        
Net asset value,                        
   beginning of period 10.35   10.38   10.34   9.62   9.63   10.26  
Investment Operations:                        
Investment income—net .20b   .40b   .51b   .59   .60   .56  
Net realized and unrealized                        
   gain (loss) on investments (.09)   .02   .05   .72   (.01)   (.56)  
Total from Investment Operations .11   .42   .56   1.31   .59   —  
Distributions:                        
Dividends from                        
   investment income—net (.21)   (.45)   (.52)   (.59)   (.60)   (.56)  
Dividends from net realized                        
   gain on investments (.05)   (.00) c —   —   —   (.07)  
Total Distributions (.26)   (.45)   (.52)   (.59)   (.60)   (.63)  
Net asset value, end of period 10.20   10.35   10.38   10.34   9.62   9.63  
 
 
 
 
 
Total Return (%) 1.05d   4.10   5.68   13.99   6.34   .03  
 
 
 
 
 
Ratios/Supplemental Data (%):                        
Ratio of expenses                        
   to average net assets .40e   .40   .40   .40   .40   .40  
Ratio of net investment income                        
   to average net assets 3.90e   3.77   5.04   5.85   6.25   5.72  
Portfolio Turnover Rate 16.44d   99.57   37.69   90.97   67.33   73.14  
 
 
 
 
 
Net Assets, end of period                        
   ($ x 1,000) 215,648   218,731 110,923   62,314   35,613   33,699  

a As required, effective November 1, 2001, the fund has adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began amortizing discount on fixed income securities on a scientific basis and including paydown gains and losses in interest income.The effect of this change for the period ended October 31, 2002 was to decrease net investment income per share and increase net realized and unrealized gain (loss) on investments per share by $.01 and decrease the ratio of net investment income to average net assets from 5.11% to 5.04%. Per share data and ratios/supplemental data for periods prior to November 1, 2001 have not been restated to reflect this change in presentation. b Based on average shares outstanding at each month end. c Amount represents less than $.01. d Not annualized. e Annualized.

See notes to financial statements.

The Fund 27

FINANCIAL HIGHLIGHTS (continued)

  Six Months Ended                      
  April 30, 2004       Year Ended October 31,      
         
     
BASIC Shares (Unaudited)   2003   2002a   2001   2000   1999  
 
 
 
 
 
Per Share Data ($):                        
Net asset value,                        
   beginning of period 10.36   10.39   10.35   9.63   9.64   10.27  
Investment Operations:                        
Investment income—net .22b   .43b   .54b   .61   .62   .59  
Net realized and unrealized                        
   gain (loss) on investments (.10)   .02   .05   .72   (.01)   (.56)  
Total from Investment Operations .12   .45   .59   1.33   .61   .03  
Distributions:                        
Dividends from                        
   investment income—net (.23)   (.48)   (.55)   (.61)   (.62)   (.59)  
Dividends from net realized                        
   gain on investments (.05)   (.00) c —   —   —   (.07)  
Total Distributions (.28)   (.48)   (.55)   (.61)   (.62)   (.66)  
Net asset value, end of period 10.20   10.36   10.39   10.35   9.63   9.64  
 
 
 
 
 
Total Return (%) 1.09d   4.36   5.95   14.25   6.63   .29  
 
 
 
 
 
Ratios/Supplemental Data (%):                        
Ratio of expenses                        
   to average net assets .15e   .15   .15   .15   .15   .15  
Ratio of net investment income                        
   to average net assets 4.15e   4.06   5.32   6.11   6.53   5.96  
Portfolio Turnover Rate 16.44d   99.57   37.69   90.97   67.33   73.14  
 
 
 
 
 
Net Assets, end of period                        
   ($ x 1,000) 167,348   140,249 103,194   82,050   70,040   64,232  

a As required, effective November 1, 2001, the fund has adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began amortizing discount on fixed income securities on a scientific basis and including paydown gains and losses in interest income.The effect of this change for the period ended October 31, 2002 was to decrease net investment income per share and increase net realized and unrealized gain (loss) on investments per share by $.01 and decrease the ratio of net investment income to average net assets from 5.40% to 5.32%. Per share data and ratios/supplemental data for periods prior to November 1, 2001 have not been restated to reflect this change in presentation. b Based on average shares outstanding at each month end. c Amount represents less than $.01. d Not annualized. e Annualized.

See notes to financial statements.

28

NOTES TO FINANCIAL STATEMENTS (Unaudited)

NOTE 1—Significant Accounting Policies:

Dreyfus Bond Market Index Fund (the “fund”) is a separate diversified series of The Dreyfus/Laurel Funds, Inc. (the “Company”) which is registered under the Investment Company Act of 1940, as amended (the “Act”), as an open-end management investment company and operates as a series company currently offering sixteen series, including the fund.The fund's investment objective is to seek to replicate the total return of the Lehman Brothers U.S. Aggregate Index. 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”).

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 150 million shares of $.001 par value Capital Stock.The fund is currently authorized to issue two classes of shares: Investor (50 million shares authorized) and BASIC (100 million shares authorized). BASIC shares and Investor shares are offered to any investor. Differences between the two classes include the services offered to and the expenses borne by each class, as well as their minimum purchase and account balance requirements.

Investment income, net of expenses (other than class specific expenses) and realized and unrealized gains and losses are allocated daily to each class of shares based upon the relative proportion of net assets of each class.

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

(a) Portfolio valuation: Investments in securities (excluding short-term investments other than U.S.Treasury Bills) 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

The Fund 29

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

quoted bid prices (as obtained by the Service from dealers in such securities) and asked prices (as calculated by the Service based upon its evaluation of the market for such securities). Other investments (which constitute a majority of the portfolio securities) are valued as determined by the Service, based on methods which include consideration of: yields or prices of securities of comparable quality, coupon, maturity and type; indications as to values from dealers; and general market conditions. Securities for which there are no such valuations are valued at fair value as determined in good faith under the direction of the Board of Directors. Short-term investments, excluding U.S. Treasury Bills, are carried at amortized cost, which approximates value.

(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, including where applicable, accretion of discount and amortization of premium on investments, is recognized on the accrual basis.

The fund may lend securities to qualified institutions. At origination, all loans are secured by collateral of at least 102% of the value of U.S. securities loaned and 105% of the value of foreign securities loaned. Collateral equivalent to at least 100% of the market value of securities on loan will be maintained at all times. Cash collateral is invested in certain money market mutual funds managed by the Manager as shown in the fund's Statement of Investments.The fund will be entitled to receive all income on securities loaned, in addition to income earned as a result of the lending transaction. Although each security loaned is fully collateralized, the fund would bear the risk of delay in recovery of, or loss of rights in, the securities loaned should a borrower fail to return the securities in a timely manner.

(c) Repurchase agreements: The fund may engage in repurchase agreement transactions. Under the terms of a typical repurchase agreement, the fund, through its custodian and sub-custodian, takes possession of an underlying debt obligation subject to an obligation of the seller to repurchase, and the fund to resell, the obligation at an agreed-upon price and time, thereby determining the yield during the fund's

30

holding period.This arrangement results in a fixed rate of return that is not subject to market fluctuations during the fund's holding period. The value of the collateral is at least equal, at all times, to the total amount of the repurchase obligation, including interest. In the event of a counter party default, the fund has the right to use the collateral to offset losses incurred. There is potential loss to the fund in the event the fund is delayed or prevented from exercising its rights to dispose of the collateral securities, including the risk of a possible decline in the value of the underlying securities during the period while the fund seeks to assert its rights.The Manager, acting under the supervision of the Board of Directors, reviews the value of the collateral and the cred-itworthiness of those banks and dealers with which the fund enters into repurchase agreements to evaluate potential risks.

(d) Affiliated issuers: Issuers in which the fund held investments in other investment companies advised by the Manager are defined as “affiliated” in the Act.

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

(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 31

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

The tax character of distributions paid to shareholders during the fiscal year ended October 31, 2003 were as follows: ordinary income $14,213,578 and long term capital gains $146,237.The tax character of current year distributions will be determined at the end of the current fiscal year.

NOTE 2—Investment Management Fee and Other Transactions With Affiliates:

(a) Investment management fee: Pursuant to an Investment Management Agreement with the Manager, the Manager provides or arranges for one or more third parties and or affiliates to provide investment advisory, administrative, custody, fund accounting and transfer agency services to the fund. The Manager also directs the investments of the fund in accordance with its investment objective, policies and limitations. For these services, the fund is contractually obligated to pay the Manager a fee, calculated daily and paid monthly, at the annual rate of .15% of the value of the fund's average daily net assets. Out of its fee, the Manager pays all of the expenses of the fund except brokerage fees, taxes, interest, commitment fees, Rule 12b-1 distribution fees and expenses, fees and expenses of non-interested Directors (including counsel fees) and extraordinary expenses. In addition, the Manager is required to reduce its fee in an amount equal to the fund's allocable portion of fees and expenses of the non-interested Directors (including counsel fees). Each Director receives $40,000 per year, plus $5,000 for each joint Board meeting of the Company,The Dreyfus/Laurel Tax-Free Municipal Funds, and The Dreyfus/Laurel Funds Trust (the “Dreyfus/Laurel Funds”) attended, $2,000 for separate committee meetings attended which are not held in conjunction with a regularly scheduled board meeting and $500 for Board meetings and separate committee meetings attended that are conducted by telephone and is reimbursed for travel and out-of-pocket expenses. The Chairman of the Board receives an additional 25% of such compensation (with the exception of reimbursable amounts). In the event that there is a joint committee meeting of the Dreyfus/Laurel Funds

32

and the Dreyfus High Yield Strategies Fund, the $2,000 fee will be allocated between the Dreyfus/Laurel Funds and the Dreyfus High Yield Strategies Fund. These fees and expenses are charged and allocated to each series based on net assets. Amounts required to be paid by the Company directly to the non-interested Directors, that would be applied to offset a portion of the management fee payable to the Manager, are in fact paid directly by the Manager to the non-interested Directors.

The components of Due to The Dreyfus Corporation and affiliates in the Statement of Assets and Liabilities consists of: management fees $47,662 and Rule 12b-1 distributions plan fees $44,644.

(b) Distribution plan: Under the fund's Distribution Plan (the “Plan”) adopted pursuant to Rule 12b-1 under the Act, Investor shares may pay annually up to .25% of the value of the average daily net assets to compensate the Distributor for shareholder servicing activities primarily intended to result in the sale of Investor shares. The BASIC shares bear no distribution fee. During the period ended April 30, 2004, the Investor shares were charged $272,997 pursuant to the Plan.

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

NOTE 3—Securities Transactions:

The aggregate amount of purchases and sales (including paydowns) of investment securities, excluding short-term securities, during the period ended April 30, 2004, amounted to $79,079,732 and $60,910,714, respectively.

At April 30, 2004, accumulated net unrealized appreciation on investments was $707,993, consisting of $5,291,862 gross unrealized appre-

The Fund 33

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

ciation and $4,583,869 gross unrealized depreciation.

At April 30, 2004, 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 4—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 at rates based on prevailing market rates in effect at the time of borrowings. For the period ended April 30, 2004, the fund did not borrow under the Facility.

NOTE 5—Legal Matters:

Two class actions have been filed against Mellon Financial and Mellon Bank, N.A., and Dreyfus and Founders Asset Management LLC (the “Investment Advisers”), and the directors of all or substantially all of the Dreyfus funds, alleging that the Investment Advisers improperly used assets of the Dreyfus funds, in the form of directed brokerage commissions and 12b-1 fees, to pay brokers to promote sales of Dreyfus funds, and that the use of fund assets to make these payments was not properly disclosed to investors.The complaints further allege that the directors breached their fiduciary duties to fund shareholders under the Investment Company Act of 1940 and at common law.The complaints seek unspecified compensatory and punitive damages, rescission of the funds' contracts with the Investment Advisers, an accounting of all fees paid, and an award of attorneys' fees and litigation expenses. Dreyfus and the Dreyfus funds believe the allegations to be totally without merit and will defend the actions vigorously.

34

Additional lawsuits arising out of these circumstances and presenting similar allegations and requests for relief may be filed against the defendants in the future. Neither Dreyfus nor the Dreyfus funds believe that any of the pending actions will have a material adverse effect on the Dreyfus funds or Dreyfus' ability to perform its contracts with the Dreyfus funds.

The Fund 35

For More Information

Dreyfus
Bond Market Index Fund
200 Park Avenue
New York, NY 10166
 
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
 
Custodian
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
 
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
200 Park Avenue
New York, NY 10166
 
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166

To obtain information:

By telephone

Call 1-800-645-6561

By mail Write to:

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

By E-mail Send your request to info@dreyfus.com

On the Internet Information can be viewed online or downloaded from: http://www.dreyfus.com

A description of the policies and procedures that the fund uses to determine how to vote proxies relating to portfolio securities is available, without charge, by calling the telephone number listed above, or by visiting the SEC's website at http://www.sec.gov

© 2004 Dreyfus Service Corporation 0310SA0404

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
  		 Letter from the Chairman
3
  		 Discussion of Fund Performance
6
  		 Statement of Investments
11
  		 Statement of Assets and Liabilities
12
  		 Statement of Operations
13
  		 Statement of Changes in Net Assets
14
  		 Financial Highlights
15
  		 Notes to Financial Statements
     FOR MORE INFORMATION
Back Cover
   Dreyfus
Disciplined Stock Fund

The Fund

LETTER FROM THE CHAIRMAN

Dear Shareholder:

This semiannual report for Dreyfus Disciplined Stock Fund covers the six-month period from November 1, 2003, through April 30, 2004. Inside, you'll find valuable information about how the fund was managed during the reporting period, including a discussion with the fund's portfolio manager, D. Gary Richardson.

Positive economic data continued to accumulate during the reporting period, as consumers, flush with extra cash from federal tax refunds and mortgage refinancings, continued to spend. At the same time, recent evidence of stronger job growth supports the view that corporations have become more willing to spend and invest. One result of the economic rebound has been higher overall earnings and stock prices for many U.S. companies.

Although recent economic news generally has been encouraging, we continue to believe that investors should be aware of the potential risks that could lead to heightened volatility or a stock market correction. Chief among them, in our view, are a possible acceleration of inflation and the chance that terrorism could cause instability in global markets. As always, we encourage you to speak regularly with your financial advisor, who may be in the best position to suggest ways to position your portfolio for the opportunities and challenges of today's financial markets.

Thank you for your continued confidence and support.

Sincerely,

Stephen E. Canter

Chairman and Chief Executive Officer The Dreyfus Corporation

May 17, 2004

2

DISCUSSION OF FUND PERFORMANCE

D. Gary Richardson, Portfolio Manager

How did Dreyfus Disciplined Stock Fund perform relative to its benchmark?

For the six-month period ended April 30, 2004, the fund produced a total return of 3.67%.1 For the same period, the Standard & Poor's 500 Composite Stock Price Index (“S&P 500 Index”), the fund's benchmark, produced a total return of 6.27%.2

We attribute these results to a generally positive environment for stocks which was fostered by robust economic growth and good earnings reports.While the fund participated in the market's rise to a degree, negative surprises undermined the value of several holdings, particularly in the technology sector. In addition, concerns regarding future growt prospects took a toll on some of the fund's positions in the basic materia sector and the interest-rate-sensitive financial and industrial sectors.As a result, the fund's total return underperformed that of its benchmark.

What is the fund's investment approach?

The fund invests in a diversified portfolio of large-cap companies that we believe meet our strict standards for value and growth.We identify potential investments through a quantitative analytic process that sifts through a universe of approximately 2,000 stocks in search of those that are not only undervalued according to our criteria, but that also exhibit what we believe to be higher than expected earnings momen-tum.A team of experienced analysts examines the fundamentals of the top-ranked candidates for investment. Armed with these analytical insights, the portfolio manager decides which stocks to purchase and whether any current holdings should be sold.

In addition to identifying what we believe are attractive investment opportunities, our approach has been designed to manage the risks associated with modifying the fund's sector and industry exposure often in an effort to capitalize on those sectors and industries currently in

The Fund 3

DISCUSSION OF FUND PERFORMANCE (continued)

favor.We do not believe that the advantages of attempting to rotate in and out of various industry sectors outweigh the risks of such moves. Instead, our goal is to minimize these risks by being fully invested and remaining industry and sector neutral in relation to the S&P 500 Index.

The result is a broadly diversified portfolio of carefully selected stocks. At the end of the recent six-month period, the fund held positions in approximately 123 stocks across 9 economic sectors. Our 10 largest holdings accounted for approximately 23% of the portfolio, so that the fund's performance was not overly dependent on any one stock but was determined by a large number of securities.

What other factors influenced the fund's performance?

The fund's gains during the reporting period were generated primarily by its energy and health care holdings. Refinery operator Valero Energy benefited from a shortage of refinery capacity, while higher commodity prices led to rising revenues and stock prices for oil and gas producer Occidental Petroleum, oil service company Halliburton, and diversified energy firm ConocoPhillips. In the health care area, our emphasis on traditionally defensive stocks such as insurers and health management firms Aetna and UnitedHealth Group benefited from the prospect of rising interest rates. Other health care holdings such as medical device maker Boston Scientific and pharmaceutical giant Pfizer also posted strong gains. However, drug maker Wyeth was hurt by product-related lawsuits that drove its stock price lower.

Investors' concerns regarding potentially higher interest rates undermined many of the fund's more economically sensitive stocks during the reporting period.The holdings most deeply affected included mining companies such as Freeport-McMoRan Copper & Gold, Inco Limited and Alcan; brokerage firms, including Merrill Lynch and Morgan Stanley; and industrial equipment manufacturers such as Deere & Co., Ingersoll-Rand and United Technologies. In addition, company-specific problems weakened several technology holdings.

4

For example, communications equipment company Nortel Networks faced regulatory inquiries regarding their accounting practices, while computer hardware maker Seagate Technology was hurt by unexpectedly stiff price competition. Gains in other technology holdings such as software company Symantec, online auctioneer eBay and cellular innovator QUALCOMM, failed to compensate for these losses. Finally, in the services area, the unsuccessful takeover of Walt Disney by cable operator Comcast caused both stocks to decline. As a result, the fund sold its position in Comcast during the reporting period.

What is the fund's current strategy?

While we generally have continued to maintain our disciplined, sector-neutral investment approach, favorable trends in the energy area have led us to place slightly greater emphasis on energy stocks than has the fund's benchmark.Within other market sectors, the prospect of rising interest rates and the likelihood of slowing earnings growth have prompted us to focus on defensive stocks that we believe are well-positioned for the current phase of the economic cycle.

May 17, 2004

1
  		 Total return includes reinvestment of dividends and any capital gains paid. 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 fund expenses by The Dreyfus Corporation pursuant to an agreement in effect through July 20, 2004, 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 the monthly reinvestment of dividends and, where applicable, capital gain distributions.The Standard & Poor's 500 Composite Stock Price Index is a widely accepted, unmanaged index of U.S. stock market performance.

The Fund 5

STATEMENT OF INVESTMENTS
April 30, 2004 (Unaudited)
Common Stocks—99.1% Shares   Value ($)  
 
 
Consumer Cyclical—10.6%        
BJ's Wholesale Club 176,380 a,b   4,273,687  
Bed Bath & Beyond 193,640 a   7,187,917  
Best Buy 175,590   9,525,758  
CVS 212,680   8,215,828  
Dana 348,260   7,020,922  
GTECH Holdings 70,900   4,319,228  
Home Depot 683,360   24,047,438  
Lear 89,970   5,453,981  
Limited Brands 495,050   10,217,832  
McDonald's 440,060   11,982,834  
NIKE, Cl. B 53,650   3,860,118  
Safeway 234,960 a   5,392,332  
Target 155,500   6,744,035  
Wal-Mart Stores 463,960   26,445,720  
Wendy's International 183,250   7,146,750  
      141,834,380  
Consumer Staples—8.3%        
Altria Group 310,820   17,213,212  
Archer-Daniels-Midland 278,100   4,883,436  
Coca-Cola 405,390   20,500,572  
Fortune Brands 90,140   6,873,175  
General Mills 115,500   5,630,625  
Kimberly-Clark 184,340   12,065,053  
PepsiCo 359,020   19,563,000  
Procter & Gamble 226,290   23,930,167  
      110,659,240  
Energy Related—8.0%        
Apache 183,690   7,691,100  
ConocoPhillips 238,180   16,982,234  
Devon Energy 186,336   11,403,763  
Exxon Mobil 609,810   25,947,416  
GlobalSantaFe 145,100   3,826,287  
Halliburton 408,080   12,160,784  
Nabors Industries 174,090 a   7,722,632  
Occidental Petroleum 264,210   12,470,712  
Valero Energy 125,370   7,993,592  

6

Common Stocks (continued) Shares   Value ($)  
 
 
Health Care—13.8%        
Abbott Laboratories 324,730   14,294,615  
Aetna 138,410   11,453,428  
Amgen 212,030 a   11,930,928  
Biogen 75,500 a   4,454,500  
Boston Scientific 342,250 a   14,097,278  
Genzyme 86,600 a   3,772,296  
Johnson & Johnson 453,810   24,519,354  
Merck & Co. 304,030   14,289,410  
Novartis, ADR 88,450   3,962,560  
Pfizer 1,183,884   42,335,692  
Teva Pharmaceutical Industries, ADR 112,240   6,909,494  
UnitedHealth Group 242,590   14,914,433  
Varian Medical Systems 31,460 a   2,700,526  
Wyeth 365,980   13,932,858  
      183,567,372  
Interest Sensitive—23.0%        
Allstate 159,990   7,343,541  
American Express 230,210   11,268,780  
American International Group 415,710   29,785,622  
Bank of America 213,860   17,213,591  
Bank One 293,900   14,509,843  
Bear Stearns Cos. 68,460   5,486,384  
Capital One Financial 121,960   7,992,039  
Citigroup 877,600   42,203,784  
Fannie Mae 165,640   11,382,781  
Freddie Mac 215,680   12,595,712  
General Electric 1,098,180   32,890,491  
Goldman Sachs Group 143,020   13,801,430  
J.P. Morgan Chase & Co. 429,040   16,131,904  
Lehman Brothers Holdings 106,920   7,847,928  
MBNA 333,990   8,142,676  
Merrill Lynch 292,850   15,881,256  
Morgan Stanley 134,530   6,913,497  
New York Community Bancorp 152,533   3,824,002  
Radian Group 66,950   3,113,844  
RenaissanceRe Holdings 88,450   4,660,431  
SouthTrust 170,000   5,283,600  

The Fund 7

STATEMENT OF INVESTMENTS (Unaudited) (continued)

Common Stocks (continued) Shares   Value ($)  
 
 
Interest Sensitive (continued)        
U.S. Bancorp 385,019   9,871,887  
Wells Fargo 333,620   18,836,184  
      306,981,207  
Producer Goods—10.9%        
Air Products & Chemicals 157,850   7,862,509  
Alcan 91,300   3,672,999  
Alcoa 111,000 a   3,413,250  
Companhia Vale do Rio Doce, ADR 74,800 b   3,403,400  
Cooper Industries, Cl. A 90,560   4,972,650  
Deere & Co. 133,200   9,062,928  
E. I. du Pont de Nemours 203,900   8,757,505  
Freeport-McMoRan Copper & Gold, Cl. B 193,550   5,903,275  
Honeywell International 255,740   8,843,489  
ITT Industries 70,460   5,586,773  
Inco Limited 174,440 a   5,015,150  
Ingersoll-Rand, Cl. A 133,200   8,598,060  
International Paper 128,200   5,169,024  
PPG Industries 126,550   7,505,680  
Pentair 129,300   7,704,987  
Phelps Dodge 100,790 a   6,635,006  
3M 146,250   12,647,700  
Tyco International 434,950   11,939,377  
Union Pacific 117,760   6,939,597  
United Technologies 142,980   12,333,455  
      145,966,814  
Services—6.0%        
Cendant 311,790   7,383,187  
Manpower 188,360   8,834,084  
News Corporation 145,630 b   5,324,233  
Nextel Communications, Cl. A 387,900 a   9,255,294  
Time Warner 414,080 a   6,964,826  
Tribune 119,380   5,715,914  
Univision Communications, Cl. A 190,200 a   6,438,270  
Viacom, Cl. B 280,367   10,836,185  

8

Common Stocks (continued) Shares   Value ($)  
 
 
Services (continued)        
Walt Disney 839,430   19,332,073  
      80,084,066  
Technology—14.7%        
Agilent Technologies 264,500 a   7,144,145  
Cisco Systems 1,025,240 a   21,396,759  
Dell 536,460 a   18,620,527  
EMC 698,370 a   7,793,809  
eBay 86,160 a,b   6,877,291  
Intel 502,080   12,918,518  
International Business Machines 154,550   13,626,673  
Lexmark International 80,540 a   7,285,648  
Linear Technology 245,300   8,740,039  
Maxim Integrated Products 196,060   9,016,799  
Microsoft 1,406,710   36,532,259  
Nortel Networks 908,140 a   3,396,444  
QUALCOMM 182,190   11,379,587  
Seagate Technology 378,600 a   4,736,286  
Symantec 228,570 a   10,297,079  
Taiwan Semiconductor Manufacturing .40 a   4  
Texas Instruments 436,980   10,968,198  
Xilinx 151,890 a   5,108,061  
      195,838,126  
Utilities—3.8%        
Entergy 117,080   6,392,568  
Exelon 143,160   9,583,130  
FPL Group 108,890   6,927,582  
PPL 143,420   6,145,547  
SBC Communications 323,561   8,056,669  
Sprint 281,800   5,041,402  
Telefonos de Mexico, Cl. L, ADR 235,690   8,046,457  
      50,193,355  
Total Common Stocks        
   (cost $998,699,367)     1,321,323,080  

The Fund 9

STATEMENT OF INVESTMENTS (Unaudited) (continued)

      Principal      
Short-Term Investments—.9% Amount ($) Value ($)  
 
Repurchase Agreement;          
Goldman Sachs & Co., Tri-Party        
Repurchase Agreement, .91%, dated        
4/30/2004, due 5/3/2004, in the        
amount of $11,920,904 (fully collateralized        
by $12,259,000 U.S. Treasury Notes,        
1.625%, 2/28/2006, value $ 11,920,885)        
   (cost $ 11,920,000)   11,920,000   11,920,000  
 
Investment of Cash Collateral        
for Securities Loaned—1.3% Shares   Value ($)  
 
Registered Investment Company;        
Dreyfus Institutional Preferred Money Market Fund        
   (cost $ 17,441,380)   17,441,380 c 17,441,380  
 
               
Total Investments (cost $ 1,028,060,747) 101.3%   1,350,684,460  
Liabilities, Less Cash and Receivables (1.3%)   (17,725,463)  
Net Assets     100.0%   1,332,958,997  
a Non-income producing.
b
  		 All or a portion of these securities are on loan. At April 30, 2004, the total market value of the fund's securities on loan is $16,680,736 and the total market value of the collateral held by the fund is $17,441,380.
c
  		 Investment in affiliated money market mutual funds.

See notes to financial statements.

10

STATEMENT OF ASSETS AND LIABILITIES
April 30, 2004 (Unaudited)
    Cost Value  
 
Assets ($):        
Investments in securities—      
See Statement of Investments (including securities      
on loan, valued at $16,680,736)—Note 1(b,d):      
Unaffiliated issuers 1,010,619,367 1,333,243,080  
Affiliated issuers 17,441,380 17,441,380  
Cash     5,933  
Dividends and interest receivable   1,160,949  
Receivable for shares of Capital Stock subscribed   36,622  
Receivable for investment securities sold   14,601  
      1,351,902,565  
 
Liabilities ($):      
Due to The Dreyfus Corporation and affiliates—Note 2(a)   1,023,738  
Liability for securities on loan—Note 1(b)   17,441,380  
Payable for shares of Capital Stock redeemed   478,450  
      18,943,568  
 
Net Assets ( $)   1,332,958,997  
 
Composition of Net Assets ($):      
Paid-in capital     1,330,194,384  
Accumulated undistributed investment income—net   2,218,120  
Accumulated net realized gain (loss) on investments   (322,077,220)  
Accumulated net unrealized appreciation      
(depreciation) on investments   322,623,713  
 
Net Assets ( $)   1,332,958,997  
 
Shares Outstanding      
(165 million shares of $.001 par value Capital Stock authorized) 45,058,423  
Net Asset Value, offering and redemption price per share ($)   29.58  
         
See notes to financial statements.      

The Fund 11

STATEMENT OF OPERATIONS
Six Months Ended April 30, 2004 (Unaudited)
Investment Income ( $):    
Income:      
Cash dividends (net of $13,312 foreign taxes withheld at source) 11,280,852  
Interest   29,112  
Income on securities lending 17,095  
Total Income   11,327,059  
Expenses:      
Management fee—Note 2(a)   6,452,424  
Distribution fees—Note 2(b)   716,936  
Loan commitment fees—Note 4 6,666  
Interest expense—Note 4   6,453  
Total Expenses   7,182,479  
Less—reduction in management fee due to    
   undertaking—Note 2(a)   (348,662)  
Net Expenses   6,833,817  
Investment Income—Net   4,493,242  
 
Realized and Unrealized Gain (Loss) on Investments—Note 3 ($):    
Net realized gain (loss) on investments 65,240,382  
Net unrealized appreciation (depreciation) on investments (14,076,837)  
Net Realized and Unrealized Gain (Loss) on Investments 51,163,545  
Net Increase in Net Assets Resulting from Operations 55,656,787  

See notes to financial statements.

12

STATEMENT OF CHANGES IN NET ASSETS

  Six Months Ended      
  April 30, 2004   Year Ended  
  (Unaudited)   October 31, 2003  
 
 
Operations ($):        
Investment income—net 4,493,242   9,453,795  
Net realized gain (loss) on investments 65,240,382   (5,509,786)  
Net unrealized appreciation        
   (depreciation) on investments (14,076,837)   193,705,562  
Net Increase (Decrease) in Net Assets        
   Resulting from Operations 55,656,787   197,649,571  
 
 
Dividends to Shareholders from ($):        
Investment income—net (5,008,769)   (9,724,617)  
 
 
Capital Stock Transactions ($):        
Net proceeds from shares sold 36,253,968   155,147,645  
Dividends reinvested 4,642,944   8,937,741  
Cost of shares redeemed (222,866,823)   (448,170,741)  
Increase (Decrease) in Net Assets        
   from Capital Stock Transactions (181,969,911)   (284,085,355)  
Total Increase (Decrease) in Net Assets (131,321,893)   (96,160,401)  
 
 
Net Assets ($):        
Beginning of Period 1,464,280,890   1,560,441,291  
End of Period 1,332,958,997   1,464,280,890  
Undistributed investment income—net 2,218,120   2,733,647  
 
 
Capital Share Transactions (Shares):        
Shares sold 1,205,618   6,158,463  
Shares issued for dividends reinvested 160,984   347,253  
Shares redeemed (7,443,086)   (17,632,652)  
Net Increase (Decrease) in Shares Outstanding (6,076,484)   (11,126,936)  

See notes to financial statements.

The Fund 13

FINANCIAL HIGHLIGHTS

The following table describes the performance for the fiscal periods indicated.Total return shows how much your investment in the fund would have increased (or decreased) during each period, assuming you had reinvested all dividends and dis-tributions.These figures have been derived from the fund's financial statements.

  Six Months Ended                      
  April 30, 2004       Year Ended October 31,      
         
     
  (Unaudited)   2003   2002   2001   2000   1999  
 
 
 
 
 
 
Per Share Data ($):                        
Net asset value,                        
   beginning of period 28.64   25.06   29.57   42.34   40.96   34.68  
Investment Operations:                        
Investment income—neta .09   .17   .12   .05   .01   .11  
Net realized and unrealized                        
   gain (loss) on investments .95   3.58   (4.53)   (10.87)   2.78   7.97  
Total from                        
   Investment Operations 1.04   3.75   (4.41)   (10.82)   2.79   8.08  
Distributions:                        
Dividends from                        
   investment income—net (.10)   (.17)   (.10)   (.03)   (.02)   (.15)  
Dividends from net realized                        
   gain on investments —   —   —   (1.92)   (1.39)   (1.65)  
Total Distributions (.10)   (.17)   (.10)   (1.95)   (1.41)   (1.80)  
Net asset value,                        
   end of period 29.58   28.64   25.06   29.57   42.34   40.96  
 
 
 
 
 
 
Total Return (%) 3.67b   14.99   (14.96)   (26.63)   6.88   24.01  
 
 
 
 
 
 
Ratios/Supplemental                        
   Data (%):                        
Ratio of expenses                        
   to average net assets .47b   1.00   1.00   1.00   1.00   1.00  
Ratio of net investment                        
   income to average                        
   net assets .31b   .66   .41   .16   .02   .28  
Decrease reflected in above                        
   expense ratios due to                        
   undertaking by The                        
   Dreyfus Corporation .02b   —   —   —   —   —  
Portfolio Turnover Rate 20.09b   50.96   41.46   53.68   50.32   57.23  
 
 
 
 
 
 
Net Assets,                        
   end of period                        
   ($ x 1,000) 1,332,959   1,464,281   1,560,441   2,362,569   3,514,925   3,289,549  
  • a Based on average shares outstanding at each month end.
    Not annualized.

See notes to financial statements.

14

NOTES TO FINANCIAL STATEMENTS (Unaudited)

NOTE 1—Significant Accounting Policies:

Dreyfus Disciplined Stock Fund (the “fund”) is a separate diversified series of The Dreyfus/Laurel Funds, Inc. (the “Company”) which is registered under the Investment Company Act of 1940, as amended (the “Act”), as an open-end management investment company and operates as a series company currently offering sixteen series, including the fund. The fund's investment objective is to seek investment returns (consisting of capital appreciation and income) that are consistently superior to the Standard & Poor's 500 Composite Stock Price Index.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”). Dreyfus Service Corporation (the “Distributor”), a wholly-owned subsidiary of the Manager, is the distributor of the fund's shares, which are sold without a sales charge.

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

(a) Portfolio valuation: Investments in securities (including financial futures) are valued at the last sales price on the securities exchange or national securities market on which such securities are primarily traded. Securities listed on the National Market System for which market quotations are available are valued at the official closing price or, if there is no official closing price that day, at the last sale price. Securities not listed on an exchange or the national securities market, or securities for which there were no transactions, are valued at the average of the most recent bid and asked prices. Bid price is used when no asked price is available.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 15

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

the fund may value these investments at fair value as determined in accordance with the procedures approved by the fund's Board. 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.

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

The fund may lend securities to qualified institutions. At origination, all loans are secured by collateral of at least 102% of the value of U.S. securities loaned and 105% of the value of foreign securities loaned. Collateral equivalent to at least 100% of the market value of securities on loan will be maintained at all times. Cash collateral is invested in certain money market mutual funds managed by the Manager as shown in the fund's Statement of Investments.The fund will be entitled to receive all income on securities loaned, in addition to income earned as a result of the lending transaction. Although each security loaned is fully collateralized, the fund would bear the risk of delay in recovery of, or loss of rights in, the securities loaned should a borrower fail to return the securities in a timely manner.

(c) Affiliated issuers: Issuers in which the fund held investments in other investment companies advised by the Manager are defined as “affiliated” in the Act.

(d) Repurchase agreements: The fund may engage in repurchase agreement transactions. Under the terms of a typical repurchase agreement, the fund, through its custodian and sub-custodian, takes possession of an underlying debt obligation subject to an obligation of the seller to repurchase, and the fund to resell, the obligation at an agreed-upon price and time, thereby determining the yield during the fund's holding period.This arrangement results in a fixed rate of return that

16

is not subject to market fluctuations during the fund's holding period. The value of the collateral is at least equal, at all times, to the total amount of the repurchase obligation, including interest. In the event of a counterparty default, the fund has the right to use the collateral to offset losses incurred. There is potential loss to the fund in the event the fund is delayed or prevented from exercising its rights to dispose of the collateral securities, including the risk of a possible decline in the value of the underlying securities during the period while the fund seeks to assert its rights.The Manager, acting under the supervision of the Board of Directors, reviews the value of the collateral and the cred-itworthiness of those banks and dealers with which the fund enters into repurchase agreements to evaluate potential risks.

(e) Dividends to shareholders: Dividends are recorded on the ex-dividend date. Dividends from investment income-net are declared and paid on a quarterly basis. Dividends from net realized capital gain, if any, are normally declared and paid annually, but the fund may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code of 1986, as amended (the “Code”). To the extent that net realized capital gain can be offset by capital loss carryovers, 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 has an unused capital loss carryover of $383,515,975 available for federal income tax purposes to be applied against future net securities profits, if any, realized subsequent to October 31, 2003. If not applied, $213,718,104 of the carryover expires in fiscal 2009, $162,812,878 expires in fiscal 2010 and $6,984,993 expires in fiscal 2011.

The Fund 17

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

The tax character of distributions paid to shareholders during the fiscal year ended October 31, 2003 was as follows: ordinary income $9,724,617. The tax character of current year distributions will be determined at the end of the current fiscal year.

NOTE 2—Investment Management Fee and Other Transactions With Affiliates:

(a) Investment management fee: Pursuant to an Investment Management Agreement with the Manager, the Manager provides or arranges for one or more third parties and/or affiliates to provide investment advisory, administrative, custody, fund accounting and transfer agency services to the fund. The Manager also directs the investments of the fund in accordance with its investment objective, policies and limitations. For these services, the fund is contractually obligated to pay the Manager a fee, calculated daily and paid monthly, at the annual rate of .90% of the value of the fund's average daily net assets. Out of its fee, the Manager pays all of the expenses of the fund except brokerage fees, taxes, interest, commitment fees, Rule 12b-1 distribution fees and expenses, fees and expenses of non-interested Directors (including counsel fees) and extraordinary expenses. In addition, the Manager is required to reduce its fee in an amount equal to the fund's allocable portion of fees and expenses of the non-interested Directors (including counsel fees). Each Director receives $40,000 per year, plus $5,000 for each joint Board meeting of the Company, The Dreyfus/Laurel Tax-Free Municipal Funds, and The Dreyfus/Laurel Funds Trust (the “Dreyfus/Laurel Funds”) attended, $2,000 for separate committee meetings attended which are not held in conjunction with a regularly scheduled board meeting and $500 for Board meetings and separate committee meetings attended that are conducted by telephone and is reimbursed for travel and out-of-pocket expenses. The Chairman of the Board receives an additional 25% of such compensation (with the exception of reimbursable amounts). In the event that there is a joint committee meeting of the Dreyfus/Laurel Funds and the Dreyfus High Yield Strategies Fund, the $2,000 fee will be allocated between the Dreyfus/Laurel Funds and the Dreyfus High Yield Strategies Fund. These fees and expenses are charged and allo-

18

cated to each series based on net assets. Amounts required to be paid by the Company directly to the non-interested Directors, that would be applied to offset a portion of the management fee payable to the Manager, are in fact paid directly by the Manager to the non-interested Directors.

The Manager has agreed to waive receipt of a portion of the fund's management fee, in the amount of .10 of 1% of the value of the fund's average daily net assets from February 1, 2004 through July 20, 2004. The reduction in management fee, pursuant to the undertaking, amounted to $348,662 during the period ended April 30, 2004.

The components of Due to The Dreyfus Corporation and affiliates in the Statement of Assets and Liabilities consists of: management fees $910,142 and Rule 12b-1 distribution plan fees $113,596.

(b) Distribution plan: Under the Distribution Plan (the “Plan”) adopted pursuant to Rule 12b-1 under the Act, the fund may pay annually up to .10% of the value of the fund's average daily net assets to compensate Mellon and the Manager for shareholder servicing activities and the Distributor for shareholder servicing activities and expenses primarily intended to result in the sale of fund shares. During the period ended April 30, 2004, the fund was charged $716,936 pursuant to the Plan.

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

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

The Fund 19

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

NOTE 3—Securities Transactions:

The aggregate amount of purchases and sales of investment securities, excluding short-term securities, during the period ended April 30, 2004, amounted to $286,916,171 and $474,826,674, respectively.

At April 30, 2004, accumulated net unrealized appreciation on investments was $322,623,713, consisting of $344,047,874 gross unrealized appreciation and $21,424,161 gross unrealized depreciation.

At April 30, 2004, 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 4—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 at rates based on prevailing market rates in effect at the time of borrowings.

The average daily amount of borrowings outstanding under the Facility during the period ended April 30, 2004 was approximately $460,300, with a related weighted average annualized interest rate of 1.40%.

NOTE 5—Legal Matters:

Two class actions have been filed against Mellon Financial and Mellon Bank, N.A., and Dreyfus and Founders Asset Management LLC (the “Investment Advisers”), and the directors of all or substantially all of the Dreyfus funds, alleging that the Investment Advisers improperly used assets of the Dreyfus funds, in the form of directed brokerage commissions and 12b-1 fees, to pay brokers to promote sales of Dreyfus funds, and that the use of fund assets to make these payments

20

was not properly disclosed to investors.The complaints further allege that the directors breached their fiduciary duties to fund shareholders under the Investment Company Act of 1940 and at common law.The complaints seek unspecified compensatory and punitive damages, rescission of the funds' contracts with the Investment Advisers, an accounting of all fees paid, and an award of attorneys' fees and litigation expenses. Dreyfus and the Dreyfus funds believe the allegations to be totally without merit and will defend the actions vigorously.

Additional lawsuits arising out of these circumstances and presenting similar allegations and requests for relief may be filed against the defendants in the future. Neither Dreyfus nor the Dreyfus funds believe that any of the pending actions will have a material adverse effect on the Dreyfus funds or Dreyfus' ability to perform its contracts with the Dreyfus funds.

The Fund 21

For More Information

Dreyfus
Disciplined Stock Fund
200 Park Avenue
New York, NY 10166
 
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
 
Custodian
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
 
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
200 Park Avenue
New York, NY 10166
 
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166

To obtain information:

By telephone

Call 1-800-645-6561

By mail Write to:

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

By E-mail Send your request to info@dreyfus.com

On the Internet Information can be viewed online or downloaded from: http://www.dreyfus.com

A description of the policies and procedures that the fund uses to determine how to vote proxies relating to portfolio securities is available, without charge, by calling the telephone number listed above, or by visiting the SEC's website at http://www.sec.gov

© 2004 Dreyfus Service Corporation 0728SA0404

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

T H E F U N D

2
  		 Letter from the Chairman
3
  		 Discussion of Fund Performance
6
  		 Statement of Investments
7
  		 Statement of Assets and Liabilities
8
  		 Statement of Operations
9
  		 Statement of Changes in Net Assets
10
  		 Financial Highlights
11
  		 Notes to Financial Statements

F O R M O R E I N F O R M AT I O N

Back Cover

   Dreyfus Institutional
Government Money Market Fund

The Fund

LETTER FROM THE CHAIRMAN

Dear Shareholder:

This semiannual report for Dreyfus Institutional Government Money Market Fund covers the six-month period from November 1, 2003, through April 30, 2004. Inside, you'll find valuable information about how the fund was managed during the reporting period, including a discussion with the fund's portfolio manager, Laurie Carroll.

Positive economic data continued to accumulate during the reporting period, as consumers, flush with extra cash from federal tax refunds and mortgage refinancings, continued to spend. At the same time, recent evidence of stronger job growth supports the view that corporations have become more willing to spend and invest. However, an aggressively accommodative U.S. monetary policy has kept short-term interest rates near historical lows.

Despite their low yields, we continue to believe that liquidity and stability make money market funds a valuable component of many investors' portfolios. Although our analysts and portfolio managers work hard to identify trends that may move the markets, no one can know with complete certainty what lies ahead for the U.S. economy and the money markets. As always, we encourage you to review your investments regularly with your financial advisor, who may be in the best position to suggest ways to position your portfolio for the opportunities and challenges of today's financial markets.

Thank you for your continued confidence and support.

Sincerely,

Stephen E. Canter

Chairman and Chief Executive Officer The Dreyfus Corporation

May 17, 2004

2

DISCUSSION OF FUND PERFORMANCE

Laurie Carroll, Portfolio Manager

How did Dreyfus Institutional Government Money Market Fund perform during the period?

For the six-month period ended April 30, 2004, Dreyfus Institutional Government Money Market Fund produced an annualized yield of 0.74%, and after taking into account the effects of compounding, an annualized effective yield of 0.74%.1

We attribute the fund's performance during the reporting period primarily to historically low interest rates and low inflation in a gradually recovering economy, which resulted in persistently low yields for money market instruments.

What is the fund's investment approach?

The fund seeks a high level of current income consistent with stability of principal and conservative investment risk. To pursue its goal, the fund normally invests at least 80% of its assets in money market instruments issued or guaranteed by the U.S. government and its agencies and instrumentalities.The fund may also invest in repurchase agreements, including tri-party repurchase agreements.

What other factors influenced the fund's performance?

Although the U.S. economy appeared to gain strength in the early part of the reporting period, the job market generally remained sluggish.As a result, the Federal Reserve Board (the “Fed”) left short-term interest rates unchanged at 1%, citing the ability to remain “patient” in a strengthening economy while inflationary pressures remained low. Because interest rates remained near historically low levels, so did yields of money market instruments.

In addition, generally robust demand from risk-averse investors for a relatively limited supply of money market instruments put additional downward pressure on money market yields. In response to these

The Fund 3

DISCUSSION OF FUND PERFORMANCE (continued)

economic and technical factors, we extended the fund's weighted average maturity early in the reporting period to a position we considered slightly longer than average.This strategy was designed to capture incrementally higher yields.

By early 2004, the U.S. economy began to show signs of more robust improvement, including higher retail sales, strong home sales and housing starts, increased factory orders and higher public infrastructure spending. In addition, corporations began to spend and invest more in capital projects after many had cut costs, strengthened their balance sheets and refinanced their debt during the previous downturn. Improving sales and lower costs helped fuel higher earnings for many companies, including manufacturers that also benefited from consolidation within their industries.

In early April, the U.S. Department of Labor released data showing stronger than expected improvement in the labor markets, which many investors interpreted as a sign that long-dormant inflationary pressures might be resurfacing. Higher energy and commodity prices lent credence to this view, causing many investors to expect that the Fed might begin to raise short-term interest rates sooner than they previously had expected. As a result, yields of money market instruments at the longer end of the maturity range began to rise in anticipation of an eventual rate hike by the Fed. At the same time, yields of U.S. government securities at the short end of the maturity range remained anchored by the 1% federal funds rate.

As the yield differences between shorter- and longer-term instruments widened, we began to adopt a more defensive position, reducing the fund's weighted average maturity toward a range that we considered to be roughly in line with that of other money market funds. This strategy was designed to give us the flexibility we need to capture higher yields as they became available.

4

What is the fund's current strategy?

Just days after the end of the reporting period, the Fed chose to leave interest rates unchanged at its May meeting. However, it also refrained from stating that it could be patient before raising rates, suggesting instead that future rate hikes were likely to be “measured.”

Because the markets had anticipated the Fed's stance, the market already appeared to us to reflect the possibility of higher interest rates. Accordingly, just before the end of the reporting period, we extended the fund's weighted average maturity to a range that is slightly longer than average. As of April 30, 2004, the fund's average maturity was 44 days, compared to 40 days when the reporting period began. This positioning was designed to capture higher yields, from securities toward the long end of the fund's maturity range.

In addition, as of the end of the reporting period, approximately 61% of the fund's assets was invested U.S. government agency securities, about 23% in U.S. government-issued floating-rate notes and 15% in repurchase agreements. Because of their low yields we lowered our exposure to U.S. Treasury bills, and as of the end of the reporting period the fund had no exposure to U.S.Treasury bills. Of course, we are prepared to modify the fund's weighted average maturity and composition as market conditions evolve.

May 17, 2004

  • Annualized effective yield is based upon dividends declared daily and reinvested monthly. Past performance is no guarantee of future results.Yields fluctuate.An investment in the fund is not insured or guaranteed by the FDIC or the U.S. government.Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund.

The Fund 5

STATEMENT OF INVESTMENTS
April 30, 2004 (Unaudited)
        Annualized          
        Yield on          
        Date of   Principal      
U.S. Government Agencies—84.8% Purchase (%)   Amount ($)   Value ($)  
 
 
 
Federal Farm Credit Bank, Floating Rate Notes            
   5/3/2004       .97 a   15,000,000   15,000,000  
   6/10/2004       .99 a   20,850,000   20,850,000  
Federal Home Loan Banks, Discount Notes            
   5/3/2004       .93   52,278,000   52,275,298  
   7/14/2004       1.09   10,000,000   9,977,800  
Federal Home Loan Banks, Floating Rate Notes            
   7/14/2004       1.02 a   10,000,000   9,999,541  
Federal Home Loan Mortgage Corp.,                
Discount Notes                
      6/9/2004       1.21   15,000,000   14,980,500  
6/21/2004     1.03   10,000,000   9,985,408  
8/23/2004     1.08   10,000,000   9,966,117  
10/18/2004     1.09   10,000,000   9,948,764  
11/15/2004     1.07   10,000,000   9,941,425  
Federal National Mortgage Association,                
Discount Notes                
      5/3/2004       1.06   10,000,000   9,999,414  
6/23/2004     1.02   10,000,000   9,984,983  
9/29/2004     1.07   10,000,000   9,955,539  
Federal National Mortgage Association,                
Floating Rate Notes                
9/10/2004     1.05 a   10,000,000   10,000,000  
Total U.S. Government Agencies                
   (cost $ 202,864,789)             202,864,789  
 
 
 
 
                   
Repurchase Agreements—15.3%                
 
 
 
 
Goldman Sachs & Co.                
dated 4/30/2004, due 5/3/2004 in the            
amount of $36,460,820 (fully collateralized by          
$27,357,000 U.S. Treasury Bonds 8.125%—8.50%,          
due 8/15/2019—2/15/2020, value $   37,187,919)          
Total Repurchase Agreement                
   (cost $ 36,458,055)     .91   36,458,055   36,458,055  
 
 
 
 
                   
Total Investments (cost $   239,322,844)     100.1%   239,322,844  
Liabilities, Less Cash and Receivables         (.1%)   (212,102)  
Net Assets           100.0%   239,110,742  

a Variable interest rate—subject to periodic change See notes to financial statements.

6

STATEMENT OF ASSETS AND LIABILITIES
April 30, 2004 (Unaudited)
    Cost Value  
 
Assets ($):        
Investments in securities—See Statement of      
Investments (including Repurchase Agreements      
of $36,458,055)—Note 1(c) 239,322,844 239,322,844  
Cash     5  
Interest receivable   44,106  
      239,366,955  
 
Liabilities ($):        
Due to The Dreyfus Corporation and affiliates—Note 2(a)   76,865  
Dividends payable   179,348  
      256,213  
 
Net Assets ( $)   239,110,742  
 
Composition of Net Assets ($):      
Paid-in capital     239,153,373  
Accumulated net realized gain (loss) on investments   (42,631)  
 
Net Assets ( $)   239,110,742  
 
Shares Outstanding      
(2 billion shares of $   239,153,373  
Net Asset Value, offering and redemption price per share ($)   1.00  

See notes to financial statements.

The Fund 7

STATEMENT OF OPERATIONS

Six Months Ended April 30, 2004 (Unaudited)

Investment Income ($):    
Interest Income 1,945,824  
Expenses:    
Management fee—Note 2(a) 280,320  
Shareholder servicing costs—Note 2(b) 280,320  
Total Expenses 560,640  
Investment Income—Net, representing net    
   increase in net assets resulting from operations 1,385,184  

See notes to financial statements.

8

STATEMENT OF CHANGES IN NET ASSETS

  Six Months Ended      
  April 30, 2004   Year Ended  
  (Unaudited)   October 31, 2003  
 
 
Operations ($):        
Investment income—net 1,385,184   5,778,886  
Net realized gain (loss) from investments —   27,210  
Net Increase (Decrease) in Net Assets        
   Resulting from Operations 1,385,184   5,806,096  
 
 
Dividends to Shareholders from ($):        
Investment income—net (1,385,184)   (5,778,886)  
 
 
Capital Stock Transactions ($1.00 per share):        
Net proceeds from shares sold 2,493,107,665   3,761,589,853  
Dividends reinvested 29   72  
Cost of shares redeemed (2,583,406,783)   (4,254,703,107)  
Increase (Decrease) in Net Assets        
   from Capital Stock Transactions (90,299,089)   (493,113,182)  
Total Increase (Decrease) in Net Assets (90,299,089)   (493,085,972)  
 
 
Net Assets ($):        
Beginning of Period 329,409,831   822,495,803  
End of Period 239,110,742   329,409,831  

See notes to financial statements.

The Fund 9

FINANCIAL HIGHLIGHTS

The following table describes the performance for the fiscal periods indicated.Total return shows how much your investment in the fund would have increased (or decreased) during each period, assuming you had reinvested all dividends and dis-tributions.These figures have been derived from the fund's financial statements.

  Six Months Ended                      
  April 30, 2004       Year Ended October 31,      
         
     
  (Unaudited)   2003   2002   2001   2000   1999  
 
 
 
 
 
 
Per Share Data ($):                        
Net asset value,                        
   beginning of period 1.00   1.00   1.00   1.00   1.00   1.00  
Investment Operations:                        
Investment income—net .004   .009   .016   .045   .058   .046  
Distributions:                        
Dividends from investment                        
   income—net (.004)   (.009)   (.016)   (.045)   (.058)   (.046)  
Net asset value, end of period 1.00   1.00   1.00   1.00   1.00   1.00  
 
 
 
 
 
 
Total Return (%) .74a   .93   1.66   4.59   5.94   4.74  
 
 
 
 
 
 
Ratios/Supplemental Data (%):                        
Ratio of expenses to                        
   average net assets .30a   .30   .30   .30   .30   .30  
Ratio of net investment income                        
   to average net assets .74a   .97   1.65   4.08   5.81   4.64  
 
 
 
 
 
 
Net Assets, end of period                        
   ($ x 1,000) 239,111   329,410   822,496   624,020   292,672   236,532  

a Annualized.

See notes to financial statements.

10

NOTES TO FINANCIAL STATEMENTS (Unaudited)

NOTE 1—Significant Accounting Policies:

Dreyfus Institutional Government Money Market Fund (the “fund”) is a separate diversified series of The Dreyfus/Laurel Funds, Inc. (the “Company”) which is registered under the Investment Company Act of 1940, as amended (the “Act”), as an open-end management investment company and operates as a series company currently offering sixteen series including the fund.The fund's investment objective is to seek a high level of current income consistent with stability of principal and conservative investment risk by investing principally in high quality money market instruments issued or guaranteed by the U.S. Government and its agencies and instrumentalities. 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”). Dreyfus Service Corporation (the “Distributor”), a wholly-owned subsidiary of the Manager, is the distributor of the fund's shares, which are sold to the public without a sales charge.

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

(a) Portfolio valuation: Investments in securities are valued at amortized cost in accordance with Rule 2a-7 of the Act, which has been determined by the fund's Board of Directors to represent the fair value of the fund's investments.

It is the fund's policy to maintain a continuous net asset value per share of $1.00 for the fund; the fund has adopted certain investment, portfolio valuation and dividend and distribution policies to enable it to do so. There is no assurance, however, that the fund will be able to maintain a stable net asset value per share of $1.00.

(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

The Fund 11

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

income, adjusted for accretion of discount and amortization of premium on investment, is earned from settlement date and is recognized on the accrual basis. Cost of investments represents amortized cost.

(c) Repurchase agreements: The fund may engage in repurchase agreement transactions. Under the terms of a typical repurchase agreement, the fund, through its custodian and sub-custodian, takes possession of an underlying debt obligation subject to an obligation of the seller to repurchase, and the fund to resell, the obligation at an agreed-upon price and time, thereby determining the yield during the fund's holding period.This arrangement results in a fixed rate of return that is not subject to market fluctuations during the fund's holding period. The value of the collateral is at least equal, at all times, to the total amount of the repurchase obligation, including interest. In the event of a counter party default, the fund has the right to use the collateral to offset losses incurred.There is potential loss to the fund in the event the fund is delayed or prevented from exercising its rights to dispose of the collateral securities, including the risk of a possible decline in the value of the underlying securities during the period while the fund seeks to assert its rights.The Manager, acting under the supervision of the Board of Directors, reviews the value of the collateral and the creditworthiness of those banks and dealers with which the fund enters into repurchase agreements to evaluate potential risks.

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

(e) 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

12

provisions of the Code, and to make distributions of taxable income sufficient to relieve it from substantially all federal income and excise taxes.

The tax character of distributions paid to shareholders during the fiscal year ended October 31, 2003 were all ordinary income. The tax character of current year distributions will be determined at the end of the current fiscal year.

The fund has an unused capital loss carryover of $42,631 available for federal income tax purposes to be applied against future net securities profits, if any, realized subsequent to October 31, 2003. If not applied, $10,982 of the carryover expires in fiscal 2006 and $31,649 expires in fiscal 2007.

At April 30, 2004, 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 2—Investment Management Fee and Other Transactions with Affiliates:

(a) Investment management fee: Pursuant to an Investment Management agreement with the Manager, the Manager provides or arranges for one or more third parties and/or affiliates to provide investment advisory, administrative, custody, fund accounting and transfer agency services to the fund. The Manager also directs the investments of the fund in accordance with its investment objective, policies and limitations. For these services, the fund is contractually obligated to pay the Manager a fee, calculated daily and paid monthly, at the annual rate of .15% of the value of the fund's average daily net assets. Out of its fee, the Manager pays all of the expenses of the fund except brokerage fees, taxes, interest, shareholder servicing fees and expenses, fees and expenses of non-interested Directors (including counsel fees) and extraordinary expenses. In addition, the Manager is required to reduce its fee in an amount equal to the fund's allocable portion of fees and expenses of the non-interested Directors (includ-

The Fund 13

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

ing counsel fees). Each director receives $40,000 per year, plus $5,000 for each joint Board meeting of the Company, The Dreyfus/Laurel Tax-Free Municipal Funds, and The Dreyfus/Laurel Funds Trust (the “Dreyfus/Laurel Funds”) attended, $2,000 for separate committee meetings attended which are not held in conjunction with a regularly scheduled board meeting and $500 for Board meetings and separate committee meetings attended that are conducted by telephone and is reimbursed for travel and out-of-pocket expenses. The Chairman of the Board receives an additional 25% of such compensation (with the exception of reimbursable amounts). In the event that there is a joint committee meeting of the Dreyfus/Laurel Funds and the Dreyfus High Yield Strategies Fund, the $2,000 fee will be allocated between the Dreyfus/Laurel Funds and the Dreyfus High Yield Strategies Fund. These fees and expenses are allocated to each series based on net assets. Amounts required to be paid by the Company directly to the non-interested Directors, that would be applied to offset a portion of the management fee payable to the Manager, are in fact paid directly by the Manager to the non-interested Directors.

The components of Due to The Dreyfus Corporation and affiliates in the Statement of Assets and Liabilities consists of: management fees $38,432 and shareholder services plan fees $38,433.

(b) Shareholder servicing plan: Under the Shareholder Servicing Plan (the “Plan”), the fund may pay up to .15% of the value of the average daily net assets annually to compensate certain banks, brokers, dealers or other financial institutions for shareholder services. During the period ended April 30, 2004, the fund was charged $280,320 pursuant to the Plan.

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

14

NOTE 3—Bank Line of Credit:

The fund participates with other Dreyfus-managed funds in a $100 million unsecured line of credit primarily to be utilized for temporary or emergency purposes, including the financing of redemptions. Interest is charged to the fund based on prevailing market rates in effect at the time of borrowings. During the period ended April 30, 2004, the fund did not borrow under the line of credit.

NOTE 4—Legal Matters:

Two class actions have been filed against Mellon Financial and Mellon Bank, N.A., and Dreyfus and Founders Asset Management LLC (the “Investment Advisers”), and the directors of all or substantially all of the Dreyfus funds, alleging that the Investment Advisers improperly used assets of the Dreyfus funds, in the form of directed brokerage commissions and 12b-1 fees, to pay brokers to promote sales of Dreyfus funds, and that the use of fund assets to make these payments was not properly disclosed to investors.The complaints further allege that the directors breached their fiduciary duties to fund shareholders under the Investment Company Act of 1940 and at common law.The complaints seek unspecified compensatory and punitive damages, rescission of the funds' contracts with the Investment Advisers, an accounting of all fees paid, and an award of attorneys' fees and litigation expenses. Dreyfus and the Dreyfus funds believe the allegations to be totally without merit and will defend the actions vigorously.

Additional lawsuits arising out of these circumstances and presenting similar allegations and requests for relief may be filed against the defendants in the future. Neither Dreyfus nor the Dreyfus funds believe that any of the pending actions will have a material adverse effect on the Dreyfus funds or Dreyfus' ability to perform its contracts with the Dreyfus funds.

The Fund 15

NOTES

For More Information

Dreyfus Institutional
Government Money
Market Fund
200 Park Avenue
New York, NY 10166
 
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
 
Custodian
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
 
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
200 Park Avenue
New York, NY 10166
 
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166

To obtain information:

By telephone

Call 1-800-645-6561

By mail Write to:

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

By E-mail Send your request to info@dreyfus.com

On the Internet Information can be viewed online or downloaded from: http://www.dreyfus.com

© 2004 Dreyfus Service Corporation 0919SA0404

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
  		 Letter from the Chairman
3
  		 Discussion of Fund Performance
6
  		 Statement of Investments
9
  		 Statement of Assets and Liabilities
10
  		 Statement of Operations
11
  		 Statement of Changes in Net Assets
12
  		 Financial Highlights
13
  		 Notes to Financial Statements
     FOR MORE INFORMATION
Back Cover
   Dreyfus Institutional
Prime Money Market Fund

The Fund

LETTER FROM THE CHAIRMAN

Dear Shareholder:

This semiannual report for Dreyfus Institutional Prime Money Market Fund covers the six-month period from November 1, 2003, through April 30, 2004. Inside, you'll find valuable information about how the fund was managed during the reporting period, including a discussion with the fund's portfolio manager, Laurie Carroll.

Positive economic data continued to accumulate during the reporting period, as consumers, flush with extra cash from federal tax refunds and mortgage refinancings, continued to spend. At the same time, recent evidence of stronger job growth supports the view that corporations have become more willing to spend and invest. However, an aggressively accommodative U.S. monetary policy has kept short-term interest rates near historical lows.

Despite their low yields, we continue to believe that liquidity and stability make money market funds a valuable component of many investors' portfolios. Although our analysts and portfolio managers work hard to identify trends that may move the markets, no one can know with complete certainty what lies ahead for the U.S. economy and the money markets. As always, we encourage you to review your investments regularly with your financial advisor, who may be in the best position to suggest ways to position your portfolio for the opportunities and challenges of today's financial markets.

Thank you for your continued confidence and support.

Sincerely,

Stephen E. Canter

Chairman and Chief Executive Officer The Dreyfus Corporation

May 17, 2004

2

DISCUSSION OF FUND PERFORMANCE

Laurie Carroll, Portfolio Manager

How did Dreyfus Institutional Prime Money Market Fund perform during the period?

For the six-month period ended April 30, 2004, Dreyfus Institutional Prime Money Market Fund produced a 0.78% annualized yield, and, after taking into account the effects of compounding, an annualized effective yield of 0.78%.1

We attribute the fund's performance primarily to historically low interest rates and low inflation in a gradually recovering economy during the reporting period, which resulted in lower yields for most money market instruments.

What is the fund's investment approach?

The fund seeks a high level of current income consistent with the stability of principal. To pursue its goal, the fund invests in a diversified portfolio of high-quality, short-term debt securities, including:

  • Securities issued or guaranteed by the U.S. government or its agencies and instrumentalities
  • Certificates of deposit, time deposits, bankers' acceptances and other short-term securities issued by U.S. or foreign banks or their subsidiaries or branches
  • Repurchase agreements, including tri-party repurchase agreements
  • Asset-backed securities
  • Domestic and dollar-denominated foreign commercial paper, and other short-term corporate obligations, including those with floating or variable rates of interest.

What other factors influenced the fund's performance?

Although the U.S. economy appeared to gain strength in the early part of the reporting period, the job market generally remained sluggish.As a result, the Federal Reserve Board (the “Fed”) left short-term interest

The Fund 3

DISCUSSION OF FUND PERFORMANCE (continued)

rates unchanged at 1%, citing the ability to remain “patient” in a strengthening economy while inflationary pressures remained low. Because interest rates remained near historically low levels, so did yields of money market instruments.

In addition, generally robust demand from risk-averse investors for a relatively limited supply of money market instruments put additional downward pressure on yields. In response to these economic and technical factors, we extended the fund's weighted average maturity early in the reporting period to a position we considered slightly longer than average. This strategy was designed to capture incrementally higher yields.

By early 2004, the U.S. economy began to show signs of more robust improvement. However, inflationary pressures generally failed to materialize during the first quarter of 2004, and money market yields remained near historical lows. In early April, however, the U.S. Department of Labor released data showing stronger than expected improvement in the labor markets, which many investors interpreted as a sign that long-dormant inflationary pressures might be resurfacing. Higher energy and commodity prices lent credence to this view, causing many investors to expect that the Fed might begin to raise short-term interest rates sooner than they previously had expected.As a result, yields of money market instruments at the longer end of the maturity range began to rise in anticipation of an eventual rate hike by the Fed, while yields of securities at the short end of the maturity range remained anchored by the 1% federal funds rate.

As the yield differences between shorter- and longer-term instruments widened, we began to adopt a more defensive position, reducing the fund's weighted average maturity toward a range that we considered to be roughly in line with that of other money market funds. This strategy was designed to give us the flexibility we need to capture higher yields as they became available.

4

In this environment, the fund received higher returns from commercial paper, to which we allocated the largest portion of the fund's assets. Short-term U.S. government agency securities also provided relatively attractive yields, while U.S. Treasury bills and repurchase agreements offered more modest returns.

What is the fund's current strategy?

Just days after the end of the reporting period, the Fed chose to leave interest rates unchanged at its May meeting. However, it also refrained from stating that it could be patient before raising rates, suggesting instead that future rate hikes were likely to be “measured.”

Because the markets had anticipated the Fed's stance, the market already appeared to us to reflect the possibility of higher interest rates. Accordingly, just before the end of the reporting period, we extended the fund's weighted average maturity to a range that is slightly longer than average. As of April 30, 2004, the fund's average maturity was 51 days, compared to 38 days when the reporting period began. This positioning was designed to capture higher yields from securities toward the long end of the fund's maturity range. In addition, as of the end of the reporting period, the largest portion of the fund's assets was invested in commercial paper, followed by repurchase agreements, floating rate notes, time deposits and short-term bank notes. Of course, we are prepared to modify the fund's weighted average maturity and composition as market conditions evolve.

May 17, 2004

1 Annualized effective yield is based upon dividends declared daily and reinvested monthly. Past performance is no guarantee of future results.Yields fluctuate. An investment in the fund is not insured or guaranteed by the FDIC or the U.S. government. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund.

The Fund 5

STATEMENT OF INVESTMENTS
April 30, 2004 (Unaudited)
    Principal      
Negotiable Bank Certificates of Deposit—4.2% Amount ($) Value ($)  
 
Barclays Bank PLC (Yankee)        
1.05%, 11/8/2004 10,000,000 a 9,998,945  
Credit Suisse First Boston Inc. (Yankee)        
1.08%, 7/7/2004 10,000,000 a 10,000,000  
Total Negotiable Bank Certificates of Deposit        
   (cost $ 19,998,945)     19,998,945  
 
           
Commercial Paper—36.5%        
 
Archer Daniels Midland Co.        
1.08%, 8/24/2004 10,000,000 b 9,965,500  
Citigroup Global Markets Holdings Inc.        
1.02%, 5/6/2004 10,000,000 b 9,998,583  
Citigroup Inc.        
1.15%, 9/1/2004 10,000,000   9,961,050  
Credit Lyonnais N.A. Inc.        
1.19%, 5/11/2004 15,000,000   14,995,083  
Danske Corp.        
1.12%, 7/22/2004 10,000,000   9,974,603  
Depfa Bank PLC        
1.09%, 10/18/2004 10,000,000 b 9,948,764  
DnB NOR Bank ASA        
1.05%, 6/22/2004 10,000,000   9,984,833  
Fairway Finance Company LLC        
1.10%, 7/22/2004 10,000,000 b 9,975,172  
Grampian Funding Ltd.        
1.17%, 10/8/2004 10,000,000 b 9,948,445  
Greyhawk Funding LLC        
1.09%, 8/16/2004 10,000,000 b 9,967,900  
HBOS Treasury Services PLC        
1.12%, 6/22/2004 10,000,000   9,983,967  
Mane Funding Corp.        
1.08%, 7/21/2004 10,000,000 b 9,975,700  
Moat Funding LLC        
1.19%, 10/5/2004 10,000,000 b 9,948,539  
Natexis Banques Populaires        
1.12%, 12/17/2004 10,000,000   9,929,083  
Sanpaolo IMI U.S. Financial Co.        
1.12%, 5/19/2004 10,000,000   9,994,450  

6

    Principal      
Commercial Paper (continued) Amount ($) Value ($)  
 
Scaldis Capital Ltd.        
1.09%, 9/28/2004 10,000,000 b 9,955,000  
Sheffield Receivables Corp.        
1.04%, 5/18/2004 10,000,000 b 9,995,089  
Total Commercial Paper        
   (cost $ 174,501,761)     174,501,761  
 
           
Corporate Notes—11.4%        
 
American Honda Finance Corp.        
1.07%, 6/11/2004 12,500,000 a,b 12,502,673  
Bear Stearns Cos. Inc.        
1.10%, 9/21/2004 10,000,000 a 10,015,557  
Lehman Brothers Holdings Inc.        
1.07%, 5/16/2005 12,000,000 a 12,000,000  
Manufactuers & Traders Trust Company        
1.08%, 11/18/2004 10,000,000 a 9,999,484  
Merrill Lynch & Co. Inc.        
1.11%, 4/28/2005 10,000,000 a 10,023,572  
Total Corporate Notes        
   (cost $ 54,541,286)     54,541,286  
 
           
Short-Term Bank Notes—6.3%        
 
American Express Centurion Bank        
1.05%-1.07%, 7/28/2004-1/12/2005 20,000,000 a 20,000,000  
Canadian Imperial Bank Of Commerce        
1.06%, 5/28/2004 10,000,000 a 10,000,000  
Total Short-Term Bank Notes        
   (cost $ 30,000,000)     30,000,000  
 
           
Time Deposits—8.1%        
 
Branch Banking & Trust Co. (Grand Cayman)        
1.02%, 5/3/2004 19,300,000   19,300,000  
Marshall & Ilsley Corp. (Grand Cayman)        
1.02%, 5/3/2004 19,300,000   19,300,000  
Total Time Deposits        
   (cost $ 38,600,000)     38,600,000  

The Fund 7

STATEMENT OF INVESTMENTS (Unaudited) (continued)

a Variable interest rate—subject to periodic change. 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 April 30, 2004, these securities amounted to $112,181,365 or 23.5% of net assets.

See notes to financial statements.

8

STATEMENT OF ASSETS AND LIABILITIES
April 30, 2004 (Unaudited)
    Cost Value  
 
 
Assets ($):          
Investments in securities—See Statement      
of Investments (including Repurchase      
Agreements of $135,729,370)—Note 1(c) 478,294,626 478,294,626  
Cash       70,118  
Interest receivable     91,781  
        478,456,525  
 
Liabilities ($):        
Due to The Dreyfus Corporation and affiliates—Note 2(a)   123,012  
Dividend payable     313,232  
        436,244  
 
Net Assets ( $)     478,020,281  
 
Composition of Net Assets ($):      
Paid-in capital       478,015,020  
Accumulated net realized gain (loss) on investments   5,261  
 
Net Assets ( $)     478,020,281  
 
Shares Outstanding      
(2 billion shares of $   478,015,020  
Net Asset Value, offering and redemption price per share ($)   1.00  

See notes to financial statements.

The Fund 9

STATEMENT OF OPERATIONS
Six Months Ended April 30, 2004 (Unaudited)
Investment Income ($):    
Interest Income 2,709,430  
Expenses:    
Management fee—Note 2(a) 376,030  
Shareholder servicing costs—Note 2(b) 376,030  
Total Expenses 752,060  
Investment Income—Net 1,957,370  
 
Net Realized Gain (Loss) on Investments—Note 1(b) ($) 2,886  
Net Increase in Net Assets Resulting from Operations 1,960,256  

See notes to financial statements.

10

STATEMENT OF CHANGES IN NET ASSETS

  Six Months Ended      
  April 30, 2004   Year Ended  
  (Unaudited)   October 31, 2003  
 
 
Operations ($):        
Investment income—net 1,957,370   6,310,798  
Net realized gain (loss) from investments 2,886   2,375  
Net Increase (Decrease) in Net Assets        
   Resulting from Operations 1,960,256   6,313,173  
 
 
Dividends to Shareholders from ($):        
Investment income—net (1,957,370)   (6,310,798)  
 
 
Capital Stock Transactions ($1.00 per share):        
Net proceeds from shares sold 1,654,284,875   4,256,007,126  
Dividends reinvested 170,295   463,759  
Cost of shares redeemed (1,738,966,405)   (4,414,896,630)  
Increase (Decrease) in Net Assets        
   from Capital Stock Transactions (84,511,235)   (158,425,745)  
Total Increase (Decrease) in Net Assets (84,508,349)   (158,423,370)  
 
 
Net Assets ($):        
Beginning of Period 562,528,630   720,952,000  
End of Period 478,020,281   562,528,630  

See notes to financial statements.

The Fund 11

FINANCIAL HIGHLIGHTS

The following table describes the performance for the fiscal periods indicated.Total return shows how much your investment in the fund would have increased (or decreased) during each period, assuming you had reinvested all dividends and dis-tributions.These figures have been derived from the fund's financial statements.

  Six Months Ended                      
  April 30, 2004       Year Ended October 31,      
         
     
  (Unaudited)   2003   2002   2001   2000   1999  
 
 
 
 
 
 
Per Share Data ($):                        
Net asset value,                        
   beginning of period 1.00   1.00   1.00   1.00   1.00   1.00  
Investment Operations:                        
Investment income—net .004   .010   .017   .047   .060   .048  
Distributions:                        
Dividends from investment                        
   income—net (.004)   (.010)   (.017)   (.047)   (.060)   (.048)  
Net asset value, end of period 1.00   1.00   1.00   1.00   1.00   1.00  
 
 
 
 
 
 
Total Return (%) .78a   .98   1.68   4.76   6.13   4.91  
 
 
 
 
 
 
Ratios/Supplemental Data (%):                        
Ratio of expenses to                        
   average net assets .30a   .30   .30   .30   .30   .30  
Ratio of net investment income                        
   to average net assets .78a   .98   1.66   4.69   5.98   4.81  
 
 
 
 
 
 
Net Assets, end of period                        
   ($ x 1,000) 478,020   562,529   720,952   670,915   677,756   584,471  

a Annualized.

See notes to financial statements.

12

NOTES TO FINANCIAL STATEMENTS (Unaudited)

NOTE 1—Significant Accounting Policies:

Dreyfus Institutional Prime Money Market Fund (the “fund”) is a separate diversified series of The Dreyfus/Laurel Funds, Inc. (the “Company”) which is registered under the Investment Company Act of 1940, as amended (the “Act”), as an open-end management investment company and operates as a series company currently offering sixteen series including the fund.The fund's investment objective is to seek a high level of current income consistent with stability of princi-pal.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”). Dreyfus Service Corporation (the “Distributor”), a wholly-owned subsidiary of the Manager, is the distributor of the fund's shares, which are sold to the public without a sales charge.

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

(a) Portfolio valuation: Investments in securities are valued at amortized cost in accordance with Rule 2a-7 of the Act, which has been determined by the fund's Board of Directors to represent the fair value of the fund's investments.

It is the fund's policy to maintain a continuous net asset value per share of $1.00 for the fund; the fund has adopted certain investment, portfolio valuation and dividend and distribution policies to enable it to do so. There is no assurance, however, that the fund will be able to maintain a stable net asset value per share of $1.00.

(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 is recognized on the accrual basis. Cost of investments represents amortized cost.

The Fund 13

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

(c) Repurchase agreements: The fund may engage in repurchase agreement transactions. Under the terms of a typical repurchase agreement, the fund, through its custodian and sub-custodian, takes possession of an underlying debt obligation subject to an obligation of the seller to repurchase, and the fund to resell, the obligation at an agreed-upon price and time, thereby determining the yield during the fund's holding period.This arrangement results in a fixed rate of return that is not subject to market fluctuations during the fund's holding period.The value of the collateral is at least equal, at all times, to the total amount of the repurchase obligation, including interest. In the event of a counterparty default, the fund has the right to use the collateral to offset losses incurred.There is potential loss to the fund in the event the fund is delayed or prevented from exercising its rights to dispose of the collateral securities, including the risk of a possible decline in the value of the underlying securities during the period while the fund seeks to assert its rights.The Manager, acting under the supervision of the Board of Directors, reviews the value of the collateral and the creditworthiness of those banks and dealers with which the fund enters into repurchase agreements to evaluate potential risks.

(d) 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.

(e) 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.

14

The tax character of distributions paid to shareholders during the fiscal year ended October 31, 2003 were all ordinary income.The tax character of current year distributions will be determined at the end of the current fiscal year.

At April 30, 2004, 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 2—Investment Management Fee and Other Transactions with Affiliates:

(a) Investment management fee: Pursuant to an Investment Management agreement with the Manager, the Manager provides or arranges for one or more third parties and/or affiliates to provide investment advisory, administrative, custody, fund accounting and transfer agency services to the fund. The Manager also directs the investments of the fund in accordance with its investment objective, policies and limitations. For these services, the fund is contractually obligated to pay the Manager a fee, calculated daily and paid monthly, at the annual rate of .15% of the value of the fund's average daily net assets. Out of its fee, the Manager pays all of the expenses of the fund except brokerage fees, taxes, interest, shareholder servicing fees and expenses, fees and expenses of non-interested Directors (including counsel fees) and extraordinary expenses. In addition, the Manager is required to reduce its fee in an amount equal to the fund's allocable portion of fees and expenses of the non-interested Directors (including counsel fees). Each Director receives $40,000 per year, plus $5,000 for each joint Board meeting of the Company, The Dreyfus/Laurel Tax-Free Municipal Funds, and The Dreyfus/Laurel Funds Trust (the “Dreyfus/Laurel Funds”) attended, $2,000 for separate committee meetings attended which are not held in conjunction with a regularly scheduled board meeting and $500 for Board meetings and separate committee meetings attended that are conducted by telephone and is

The Fund 15

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

reimbursed for travel and out-of-pocket expenses. The Chairman of the Board receives an additional 25% of such compensation (with the exception of reimbursable amounts). In the event that there is a joint committee meeting of the Dreyfus/Laurel Funds and the Dreyfus High Yield Strategies Fund, the $2,000 fee will be allocated between the Dreyfus/Laurel Funds and the Dreyfus High Yield Strategies Fund. These fees and expenses are allocated to each series based on net assets. Amounts required to be paid by the Company directly to the non-interested Directors, that would be applied to offset a portion of the management fee payable to the Manager, are in fact paid directly by the Manager to the non-interested Directors.

The components of Due to The Dreyfus Corporation and affiliates in the Statement of Assets and Liabilities consists of: management fees $61,506 and shareholder servicing plan fees $61,506.

(b) Shareholder servicing plan: Under the Shareholder Servicing Plan (the “Plan”), the fund may pay up to .15% of the value of the average daily net assets annually to compensate certain banks, brokers, dealers or other financial institutions for shareholder services. During the period ended April 30, 2004, the fund was charged $376,030 pursuant to the Plan.

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

NOTE 3—Bank Line of Credit:

The fund participates with other Dreyfus-managed funds in a $100 million unsecured line of credit primarily to be utilized for temporary or emergency purposes, including the financing of redemptions. Interest is charged to the fund based on prevailing market rates in effect at the time of borrowings. During the period ended April 30, 2004, the fund did not borrow under the line of credit.

16

NOTE 4—Legal Matters:

Two class actions have been filed against Mellon Financial and Mellon Bank, N.A., and Dreyfus and Founders Asset Management LLC (the “Investment Advisers”), and the directors of all or substantially all of the Dreyfus funds, alleging that the Investment Advisers improperly used assets of the Dreyfus funds, in the form of directed brokerage commissions and 12b-1 fees, to pay brokers to promote sales of Dreyfus funds, and that the use of fund assets to make these payments was not properly disclosed to investors.The complaints further allege that the directors breached their fiduciary duties to fund shareholders under the Investment Company Act of 1940 and at common law.The complaints seek unspecified compensatory and punitive damages, rescission of the funds' contracts with the Investment Advisers, an accounting of all fees paid, and an award of attorneys' fees and litigation expenses. Dreyfus and the Dreyfus funds believe the allegations to be totally without merit and will defend the actions vigorously.

Additional lawsuits arising out of these circumstances and presenting similar allegations and requests for relief may be filed against the defendants in the future. Neither Dreyfus nor the Dreyfus funds believe that any of the pending actions will have a material adverse effect on the Dreyfus funds or Dreyfus' ability to perform its contracts with the Dreyfus funds.

The Fund 17

For More Information

Dreyfus Institutional
Prime Money Market Fund
200 Park Avenue
New York, NY 10166
 
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
 
Custodian
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
 
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
200 Park Avenue
New York, NY 10166
 
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166

To obtain information:

By telephone

Call 1-800-645-6561

By mail Write to:

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

By E-mail Send your request to info@dreyfus.com

On the Internet Information can be viewed online or downloaded from: http://www.dreyfus.com

© 2004 Dreyfus Service Corporation 0922SA0404

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
  		 Letter from the Chairman
3
  		 Discussion of Fund Performance
6
  		 Statement of Investments
8
  		 Statement of Assets and Liabilities
9
  		 Statement of Operations
10
  		 Statement of Changes in Net Assets
11
  		 Financial Highlights
12
  		 Notes to Financial Statements
     FOR MORE INFORMATION
Back Cover
   Dreyfus Institutional
U.S. Treasury Money Market Fund

The Fund

LETTER FROM THE CHAIRMAN

Dear Shareholder:

This semiannual report for Dreyfus Institutional U.S.Treasury Money Market Fund covers the six-month period from November 1, 2003, through April 30, 2004. Inside, you'll find valuable information about how the fund was managed during the reporting period, including a discussion with the fund's portfolio manager, Laurie Carroll.

Positive economic data continued to accumulate during the reporting period, as consumers, flush with extra cash from federal tax refunds and mortgage refinancings, continued to spend. At the same time, recent evidence of stronger job growth supports the view that corporations have become more willing to spend and invest. However, an aggressively accommodative U.S. monetary policy has kept short-term interest rates near historical lows.

Despite their low yields, we continue to believe that liquidity and stability make money market funds a valuable component of many investors' portfolios. Although our analysts and portfolio managers work hard to identify trends that may move the markets, no one can know with complete certainty what lies ahead for the U.S. economy and the money markets. As always, we encourage you to review your investments regularly with your financial advisor, who may be in the best position to suggest ways to position your portfolio for the opportunities and challenges of today's financial markets.

Thank you for your continued confidence and support.

Sincerely,

Stephen E. Canter

Chairman and Chief Executive Officer The Dreyfus Corporation

May 17, 2004

2

DISCUSSION OF FUND PERFORMANCE

Laurie Carroll, Portfolio Manager

How did Dreyfus Institutional U.S. Treasury Money Market Fund perform during the period?

For the six-month period ended April 30, 2004, Dreyfus Institutional U.S. Treasury Money Market Fund produced an annualized yield of 0.69% and, after taking into account the effects of compounding, an annualized effective yield of 0.69%.1

We attribute the fund's performance primarily to persistently low interest rates during the reporting period, which resulted in low yields for most money market instruments.

What is the fund's investment approach?

The fund seeks a high level of current income with stability of principal and conservative investment risk.As a U.S.Treasury money market fund, we attempt to provide shareholders with an investment vehicle that invests in a portfolio of U.S.Treasury securities as well as repurchase agreements that are backed by U.S. Treasuries. A major benefit of these securities is that they are very liquid in nature — that is, they can be converted to cash quickly. Because U.S. Treasury obligations are backed by the full faith and credit of the U.S. government, they are generally considered to be among the highest-quality investments available. By investing in these obligations, the fund seeks to add an incremental degree of safety to the portfolio.The fund is required to maintain an average dollar-weighted maturity of 90 days or less.

What other factors influenced the fund's performance?

Although the U.S. economy appeared to gain strength in the early part of the reporting period, the job market generally remained sluggish.As a result, the Federal Reserve Board (the “Fed”) left short-term interest

The Fund 3

DISCUSSION OF FUND PERFORMANCE (continued)

rates unchanged at 1%, citing the ability to remain “patient” in a strengthening economy while inflationary pressures remained low.

In addition, despite a rising supply of U.S. Treasury securities as the federal budget deficit ballooned, investors looked toward other types of short-term securities, such as those issued by U.S. government agencies, in an attempt to capture higher yields.As a result, demand for U.S. Treasury securities fell during the reporting period, putting upward pressure on yields toward the longer end of the short-term maturity range. In response to these economic and technical factors, we extended the fund's weighted average maturity early in the reporting period to a position we considered slightly longer than average in an effort to capture incrementally higher yields.

By early 2004, the U.S. economy began to show signs of more robust improvement. However, the absence of renewed inflationary pressures kept money market yields near historically low levels during the first quarter of the new year.The market environment began to change in early April, with the release of data showing stronger than expected improvement in the labor markets. Many investors interpreted the data as a sign that long-dormant inflationary pressures might be resurfacing. Higher energy and commodity prices lent credence to this view, causing many investors to believe that the Fed might begin to raise short-term interest rates. As a result, yields of longer-dated U.S. Treasury bills began to rise while yields of very short-term securities remained anchored by the 1% federal funds rate.

As the yield differences between shorter- and longer-term instruments widened, we began to adopt a more defensive position, reducing the fund's weighted average maturity toward a range that we considered to be roughly in line with that of other money market funds. This strategy was designed to give us the flexibility we need to capture higher yields as they became available.

4

What is the fund's current strategy?

Just days after the end of the reporting period, the Fed chose to leave interest rates unchanged at its May meeting. However, it also refrained from stating that it could be patient before raising rates, suggesting instead that future rate hikes were likely to be “measured.”

Because the markets had anticipated the Fed's stance, the market already appeared to us to reflect the possibility of higher interest rates. Accordingly, just before the end of the reporting period, we extended the fund's weighted average maturity to a range that is slightly longer than average. As of April 30, 2004, the fund's average maturity was 46 days, compared to 40 days when the reporting period began. This positioning was designed to capture higher yields from securities toward the long end of the fund's maturity range.

In addition, as of the end of the reporting period, approximately 52% of the fund's assets was invested in U.S.Treasury securities, and about 48% was allocated to repurchase agreements. These percentages are roughly the same as they were at the beginning of the reporting period. As always, we are prepared to modify the fund's weighted average maturity and composition as conditions evolve.

May 17, 2004

1 Annualized effective yield is based upon dividends declared daily and reinvested monthly. Past performance is no guarantee of future results.Yields fluctuate. An investment in the fund is not insured or guaranteed by the FDIC or the U.S. government. Although the fund seeks to preserve th value of your investment at $1.00 per share, it is possible to lose money by investing in the fund.

The Fund 5

STATEMENT OF INVESTMENTS

April 30, 2004 (Unaudited)

      Annualized          
      Yield on          
      Date of   Principal      
U.S. Treasury Bills—23.9%   Purchase (%)   Amount ($)   Value ($)  
 
 
 
 
5/6/2004   .91   10,000,000   9,998,733  
5/27/2004   .82   15,000,000   14,991,117  
6/3/2004   .90   10,000,000   9,991,773  
6/24/2004   .95   10,000,000   9,985,750  
7/15/2004   .92   15,000,000   14,971,250  
8/12/2004   .96   10,000,000   9,972,676  
9/30/2004   1.03   10,000,000   9,956,638  
Total U.S. Treasury Bills              
   (cost $ 79,867,937)           79,867,937  
 
 
 
 
                 
U.S. Treasury Notes—28.6%              
 
 
 
 
5.25%, 5/15/2004   1.03   10,000,000   10,018,163  
7.25%, 5/15/2004   1.11   10,000,000   10,026,600  
2.875%, 6/30/2004   1.02   15,000,000   15,044,956  
2.25%, 7/31/2004   1.03   20,000,000   20,060,755  
2.125%, 8/31/2004   .99   10,000,000   10,036,625  
1.875%, 9/30/2004   1.04   10,000,000   10,033,670  
2.125%, 10/31/2004   1.07   10,000,000   10,050,279  
5.875%, 11/15/2004   .95   10,000,000   10,250,430  
Total U.S. Treasury Notes              
   (cost $ 95,521,478)           95,521,478  

6

        Annualized        
        Yield on        
        Date of Principal      
Repurchase Agreements—47.2% Purchase (%) Amount ($)   Value ($)  
 
 
Barclays Capital Inc.                
dated 4/30/2004, due 5/3/2004 in the          
amount of $60,004,650 (fully collateralized by          
$60,919,000 U.S. Treasury Notes 1.875%,          
due 11/30/2005, value $ 61,200,181) .93 60,000,000   60,000,000  
Credit Suisse First Boston Inc.          
dated 4/30/2004, due 5/3/2004 in the          
amount of $60,004,650 (fully collateralized by          
$59,055,000 U.S. Treasury Notes 3.50%,          
due 11/15/2006, value $ 61,202,692) .93 60,000,000   60,000,000  
Goldman Sachs & Co.                
dated 4/30/2004, due 5/3/2004 in the          
amount of $38,028,090 (fully collateralized by          
$30,300,000 U.S. Treasury Bonds          
7.125%—8.125%, due 8/15/2019—          
2/15/2023, value $ 38,785,722) .91 38,025,206   38,025,206  
Total Repurchase Agreements          
   (cost $ 158,025,206)             158,025,206  
 
 
                   
Total Investments (cost $ 333,414,621)   99.7%   333,414,621  
Cash and Receivables (Net)     .3%   903,197  
Net Assets           100.0%   334,317,818  

See notes to financial statements.

The Fund 7

STATEMENT OF ASSETS AND LIABILITIES
April 30, 2004 (Unaudited)
    Cost Value  
 
Assets ($):        
Investments in securities—      
See Statement of Investments (including      
Repurchase Agreements of $158,025,206)—Note 1(c) 333,414,621 333,414,621  
Interest receivable   1,425,576  
      334,840,197  
 
Liabilities ($):        
Due to The Dreyfus Corporation and affiliates—Note 2(a)   74,820  
Cash overdraft due to Custodian   274,688  
Dividends payable   172,871  
      522,379  
 
Net Assets ( $)   334,317,818  
 
Composition of Net Assets ($):      
Paid-in capital     334,307,407  
Accumulated net realized gain (loss) on investments   10,411  
 
Net Assets ( $)   334,317,818  
 
Shares Outstanding      
(2 billion shares of $   334,307,407  
Net Asset Value, offering and redemption price per share ($)   1.00  

See notes to financial statements.

8

STATEMENT OF OPERATIONS
Six Months Ended April 30, 2004 (Unaudited)
Investment Income ($):    
Interest Income 1,914,482  
Expenses:    
Management fee—Note 2(a) 290,617  
Shareholder servicing costs—Note 2(b) 290,617  
Total Expenses 581,234  
Investment Income—Net 1,333,248  
 
Net Realized Gain (Loss) on Investments—Note 1(b) ($) (1,056)  
Net Increase in Net Assets Resulting from Operations 1,332,192  

See notes to financial statements.

The Fund 9

STATEMENT OF CHANGES IN NET ASSETS

  Six Months Ended      
  April 30, 2004   Year Ended  
  (Unaudited)   October 31, 2003  
 
 
Operations ($):        
Investment income—net 1,333,248   4,406,185  
Net realized gain (loss) from investments (1,056)   11,845  
Net Increase (Decrease) in Net Assets        
   Resulting from Operations 1,332,192   4,418,030  
 
 
Dividends to Shareholders from ($):        
Investment income—net (1,333,248)   (4,406,185)  
 
 
Capital Stock Transactions ($1.00 per share):        
Net proceeds from shares sold 1,084,225,497   2,900,700,179  
Dividends reinvested 2,850   10,479  
Cost of shares redeemed (1,291,458,503)   (2,974,315,288)  
Increase (Decrease) in Net Assets        
   from Capital Stock Transactions (207,230,156)   (73,604,630)  
Total Increase (Decrease) in Net Assets (207,231,212)   (73,592,785)  
 
 
Net Assets ($):        
Beginning of Period 541,549,030   615,141,815  
End of Period 334,317,818   541,549,030  

See notes to financial statements.

10

FINANCIAL HIGHLIGHTS

The following table describes the performance for the fiscal periods indicated.Total return shows how much your investment in the fund would have increased (or decreased) during each period, assuming you had reinvested all dividends and dis-tributions.These figures have been derived from the fund's financial statements.

  Six Months Ended                      
  April 30, 2004       Year Ended October 31,      
         
     
  (Unaudited)   2003   2002   2001   2000   1999  
 
 
 
 
 
 
Per Share Data ($):                        
Net asset value,                        
   beginning of period 1.00   1.00   1.00   1.00   1.00   1.00  
Investment Operations:                        
Investment income—net .003   .009   .016   .044   .055   .047  
Distributions:                        
Dividends from                        
   investment income—net (.003)   (.009)   (.016)   (.044)   (.055)   (.047)  
Net asset value, end of period 1.00   1.00   1.00   1.00   1.00   1.00  
 
 
 
 
 
 
Total Return (%) .68a   .88   1.59   4.53   5.64   4.58  
 
 
 
 
 
 
Ratios/Supplemental Data (%):                        
Ratio of expenses                        
   to average net assets .30a   .30   .30   .30   .30   .30  
Ratio of net investment income                        
   to average net assets .69a   .89   1.56   4.52   5.53   4.45  
 
 
 
 
 
 
Net Assets, end of period                        
   ($ x 1,000) 334,318   541,549   615,142   420,096   462,366   473,341  

a Annualized.

See notes to financial statements.

The Fund 11

NOTES TO FINANCIAL STATEMENTS (Unaudited)

NOTE 1—Significant Accounting Policies:

Dreyfus Institutional U.S.Treasury Money Market Fund (the “fund”) is a separate diversified series of The Dreyfus/Laurel Funds, Inc. (the “Company”) which is registered under the Investment Company Act of 1940, as amended (the “Act”), as an open-end management investment company and operates as a series company currently offering sixteen series including the fund.The fund's investment objective is to seek a high level of current income consistent with stability of principal and conservative investment risk by investing in direct obligations of the U.S.Treasury and repurchase agreements secured by such oblig-ations.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”). Dreyfus Service Corporation (the “Distributor”), a wholly-owned subsidiary of the Manager, is the distributor of the fund's shares, which are sold to the public without a sales charge.

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

(a) Portfolio valuation: Investments in securities are valued at amortized cost in accordance with Rule 2a-7 of the Act, which has been determined by the fund's Board of Directors to represent the fair value of the fund's investments.

It is the fund's policy to maintain a continuous net asset value per share of $1.00 for the fund; the fund has adopted certain investment, portfolio valuation and dividend and distribution policies to enable it to do so. There is no assurance, however, that the fund will be able to maintain a stable net asset value per share of $1.00.

(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

12

income, adjusted for accretion of discount and amortization of premium on investment, is earned from settlement date and is recognized on the accrual basis. Cost of investments represents amortized cost.

(c) Repurchase agreements: The fund may engage in repurchase agreement transactions. Under the terms of a typical repurchase agreement, the fund, through its custodian and sub-custodian, takes possession of an underlying debt obligation subject to an obligation of the seller to repurchase, and the fund to resell, the obligation at an agreed-upon price and time, thereby determining the yield during the fund's holding period.This arrangement results in a fixed rate of return that is not subject to market fluctuations during the fund's holding period.The value of the collateral is at least equal, at all times, to the total amount of the repurchase obligation, including interest. In the event of a counter party default, the fund has the right to use the collateral to offset losses incurred.There is potential loss to the fund in the event the fund is delayed or prevented from exercising its rights to dispose of the collateral securities, including the risk of a possible decline in the value of the underlying securities during the period while the fund seeks to assert its rights.The Manager, acting under the supervision of the Board of Directors, reviews the value of the collateral and the creditworthiness of those banks and dealers with which the fund enters into repurchase agreements to evaluate potential risks.

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

(e) 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 Fund 13

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

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 tax character of distributions paid to shareholders during the fiscal year ended October 31, 2003 were all ordinary income. The tax character of current year distributions will be determined at the end of the current fiscal year.

At April 30, 2004, 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 2—Investment Management Fee and Other Transactions with Affiliates:

(a) Investment management fee: Pursuant to an Investment Management agreement with the Manager, the Manager provides or arranges for one or more third parties and/or affiliates to provide investment advisory, administrative, custody, fund accounting and transfer agency services to the fund. The Manager also directs the investments of the fund in accordance with its investment objective, policies and limitations. For these services, the fund is contractually obligated to pay the Manager a fee, calculated daily and paid monthly, at the annual rate of .15% of the value of the fund's average daily net assets. Out of its fee, the Manager pays all of the expenses of the fund except brokerage fees, taxes, interest, Rule 12b-1 distribution fees and expenses, fees and expenses of non-interested Directors (including counsel fees) and extraordinary expenses. In addition, the Manager is required to reduce its fee in an amount equal to the fund's allocable portion of fees and expenses of the non-interested Directors (including counsel fees). Each Director receives $40,000 per year, plus $5,000 for each joint Board meeting of the Company, The Dreyfus/Laurel Tax-Free Municipal Funds, and The Dreyfus/Laurel Funds Trust (the “Dreyfus/Laurel Funds”) attended, $2,000 for separate committee meetings attended which are not held in conjunction with a regularly

14

scheduled board meeting and $500 for Board meetings and separate committee meetings attended that are conducted by telephone and is reimbursed for travel and out-of-pocket expenses. The Chairman of the Board receives an additional 25% of such compensation (with the exception of reimbursable amounts). In the event that there is a joint committee meeting of the Dreyfus/Laurel Funds and the Dreyfus High Yield Strategies Fund, the $2,000 fee will be allocated between the Dreyfus/Laurel Funds and the Dreyfus High Yield Strategies Fund. These fees and expenses are allocated to each series based on net assets. Amounts required to be paid by the Company directly to the non-interested Directors, that would be applied to offset a portion of the management fee payable to the Manager, are in fact paid directly by the Manager to the non-interested Directors.

The components of Due to The Dreyfus Corporation and affiliates in the Statement of Assets and Liabilities consists of: management fees $37,410 and shareholder services plan fees $37,410.

(b) Shareholder servicing plan: Under the Shareholder Servicing Plan (the “Plan”), the fund may pay up to .15% of the value of the average daily net assets to compensate certain banks, brokers, dealers or other financial institutions for shareholder services. During the period ended April 30, 2004, the fund was charged $290,617 pursuant to the Plan.

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

NOTE 3—Bank Line of Credit:

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

The Fund 15

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

effect at the time of borrowings. During the period ended April 30, 2004, the fund did not borrow under the line of credit.

NOTE 4—Legal Matters:

Two class actions have been filed against Mellon Financial and Mellon Bank, N.A., and Dreyfus and Founders Asset Management LLC (the “Investment Advisers”), and the directors of all or substantially all of the Dreyfus funds, alleging that the Investment Advisers improperly used assets of the Dreyfus funds, in the form of directed brokerage commissions and 12b-1 fees, to pay brokers to promote sales of Dreyfus funds, and that the use of fund assets to make these payments was not properly disclosed to investors.The complaints further allege that the directors breached their fiduciary duties to fund shareholders under the Investment Company Act of 1940 and at common law.The complaints seek unspecified compensatory and punitive damages, rescission of the funds' contracts with the Investment Advisers, an accounting of all fees paid, and an award of attorneys' fees and litigation expenses. Dreyfus and the Dreyfus funds believe the allegations to be totally without merit and will defend the actions vigorously.

Additional lawsuits arising out of these circumstances and presenting similar allegations and requests for relief may be filed against the defendants in the future. Neither Dreyfus nor the Dreyfus funds believe that any of the pending actions will have a material adverse effect on the Dreyfus funds or Dreyfus' ability to perform its contracts with the Dreyfus funds.

16

For More Information

To obtain information:

By telephone

Call 1-800-645-6561

By mail Write to:

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

By E-mail Send your request to info@dreyfus.com

On the Internet Information can be viewed online or downloaded from: http://www.dreyfus.com

Dreyfus Institutional
U.S. Treasury
Money Market Fund
200 Park Avenue
New York, NY 10166
 
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
 
Custodian
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
 
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
200 Park Avenue
New York, NY 10166
 
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166

© 2004 Dreyfus Service Corporation 0930SA0404

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
  		 Letter from the Chairman
3
  		 Discussion of Fund Performance
6
  		 Statement of Investments
9
  		 Statement of Assets and Liabilities
10
  		 Statement of Operations
11
  		 Statement of Changes in Net Assets
12
  		 Financial Highlights
14
  		 Notes to Financial Statements
     FOR MORE INFORMATION
Back Cover
   Dreyfus
Money Market Reserves

The Fund

LETTER FROM THE CHAIRMAN

Dear Shareholder:

This semiannual report for Dreyfus Money Market Reserves covers the six-month period from November 1, 2003, through April 30, 2004. Inside, you'll find valuable information about how the fund was managed during the reporting period, including a discussion with the fund's portfolio manager, Laurie Carroll.

Positive economic data continued to accumulate during the reporting period, as consumers, flush with extra cash from federal tax refunds and mortgage refinancings, continued to spend. At the same time, recent evidence of stronger job growth supports the view that corporations have become more willing to spend and invest. However, an aggressively accommodative U.S. monetary policy has kept short-term interest rates near historical lows.

Despite their low yields, we continue to believe that liquidity and stability make money market funds a valuable component of many investors' portfolios. Although our analysts and portfolio managers work hard to identify trends that may move the markets, no one can know with complete certainty what lies ahead for the U.S. economy and the money markets. As always, we encourage you to review your investments regularly with your financial advisor, who may be in the best position to suggest ways to position your portfolio for the opportunities and challenges of today's financial markets.

Thank you for your continued confidence and support.

Sincerely,

Stephen E. Canter

Chairman and Chief Executive Officer The Dreyfus Corporation

May 17, 2004

2

DISCUSSION OF FUND PERFORMANCE

Laurie Carroll, Portfolio Manager

How did Dreyfus Money Market Reserves perform during the period?

For the six-month period ended April 30, 2004, the fund's Investor shares produced an annualized yield of 0.39% while its Class R shares produced an annualized yield of 0.59%.Taking into account the effects of compounding, the annualized effective yields for the fund's Investor shares and Class R shares were also 0.39% and 0.59%, respectively.1

We attribute the fund's performance primarily to low interest rates during the reporting period, which resulted in low yields for money market securities.

What is the fund's investment approach?

The fund seeks a high level of current income consistent with stability of principal. To pursue its goal, the fund invests in a diversified portfolio of high-quality, short-term debt securities, including:

  • securities issued or guaranteed by the U.S. government or its agencies and instrumentalities
  • certificates of deposit, time deposits, bankers' acceptances and other short-term securities issued by domestic or foreign banks or their subsidiaries or branches
  • repurchase agreements
  • asset-backed securities
  • domestic and dollar-denominated foreign commercial paper, and other short-term corporate obligations, including those with floating or variable rates of interest.

What other factors influenced the fund's performance?

Although the U.S. economy appeared to gain strength in the early part of the reporting period, the job market generally remained sluggish.As a result, the Federal Reserve Board (the “Fed”) left short-term interest

The Fund 3

DISCUSSION OF FUND PERFORMANCE (continued)

rates unchanged at 1%, citing the ability to remain “patient” in a strengthening economy while inflationary pressures remained low. Because interest rates remained near historically low levels, so did yields of money market instruments.

In addition, generally robust demand from risk-averse investors for a relatively limited supply of money market instruments put additional downward pressure on money market yields. In response to these economic and technical factors, we extended the fund's weighted average maturity early in the reporting period to a position we considered slightly longer than average. This strategy was designed to capture incrementally higher yields.

By early 2004, the U.S. economy began to show signs of more robust improvement. However, inflationary pressures generally failed to materialize during the first quarter of 2004, and money market yields remained near historical lows. In early April, however, the U.S. Department of Labor released data showing a stronger than expected improvement in the labor markets, which many investors interpreted as a sign that long-dormant inflationary pressures might be resurfacing. Higher energy and commodity prices lent credence to this view, causing many investors to expect that the Fed might begin to raise short-term interest rates sooner than they previously had expected.As a result, yields of money market instruments at the longer end of the maturity range began to rise in anticipation of an eventual rate hike by the Fed, while yields of securities at the short end of the maturity range remained anchored by the 1% federal funds rate.

As the yield differences between shorter- and longer-term instruments widened, we began to adopt a more defensive position, reducing the fund's weighted average maturity toward a range that we considered to be roughly in line with that of other money market funds. This strategy was designed to give us the flexibility we need to capture higher yields as they became available.

In this environment, the fund received higher returns from commercial paper, to which we allocated the largest portion of the fund's

4

assets. Short-term U.S. government agency securities also provided relatively attractive yields, while U.S. Treasury bills and repurchase agreements offered more modest returns. Toward the end of the reporting period, we eliminated the fund's position in U.S. Treasury bills, redeploying assets to commercial paper.

What is the fund's current strategy?

Just days after the end of the reporting period, the Fed chose to leave interest rates unchanged at its May meeting. However, it also refrained from stating that it could be patient before raising rates, suggesting instead that future rate hikes were likely to be “measured.”

Because the markets had anticipated the Fed's stance, the market already appeared to us to reflect the possibility of higher interest rates. Accordingly, just before the end of the reporting period, we extended the fund's weighted average maturity to a range that is slightly longer than average. As of April 30, 2004, the fund's average maturity was 45 days, compared to 33 days when the reporting period began. This positioning was designed to capture higher yields from securities toward the long end of the fund's maturity range.

In addition, as of the end of the reporting period, approximately 46% of the fund's assets was invested in commercial paper, approximately 24% in corporate floating-rate notes, about 24% in repurchase agreements and 6% in U.S. government agency securities. Of course, we are prepared to modify the fund's weighted average maturity and composition as market conditions evolve.

May 17, 2004

1 Annualized effective yield is based upon dividends declared daily and reinvested monthly. Past performance is no guarantee of future results.Yields fluctuate. An investment in the fund is not insured or guaranteed by the FDIC or the U.S. government. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund.

The Fund 5

STATEMENT OF INVESTMENTS
April 30, 2004 (Unaudited)
    Principal      
Negotiable Bank Certificates of Deposit—3.5% Amount ($) Value ($)  
 
Barclays Bank PLC (Yankee)        
1.05%, 11/8/2004 10,000,000 a 9,998,944  
Credit Suisse First Boston (Yankee)        
1.08%, 7/7/2004 10,000,000 a 10,000,000  
Total Negotiable Bank Certificates of Deposit        
   (cost $ 19,998,944)     19,998,944  
 
           
Commercial Paper—46.3%        
 
AWB Harvest Finance Ltd.        
1.02%, 5/28/2004 10,000,000   9,992,350  
Alpine Securitization Corp.        
1.05%, 7/6/2004 10,000,000 b 9,980,750  
Archer Daniels Midland Co.        
1.06%, 8/3/2004 10,000,000 b 9,972,322  
Asset Securitization Corp.        
1.06%, 5/4/2004 10,000,000 b 9,999,117  
Atlantis One Funding Corp.        
1.09%, 8/12/2004 10,000,000 b 9,969,100  
Aventis S.A.        
1.02%, 5/21/2004 10,000,000 b 9,994,333  
Barton Capital Corp.        
1.07%, 5/21/2004 10,000,000 b 9,994,056  
Britannia Building Society        
1.05%, 6/29/2004 10,000,000   9,982,792  
CBA (Delaware) Finance Inc.        
1.03%, 6/11/2004 10,000,000   9,988,269  
Cargill Global Funding PLC        
1.02%, 6/3/2004 10,000,000 b 9,990,650  
DaimlerChrysler AG        
1.03%, 5/13/2004 10,000,000   9,996,567  
Dexia Delaware LLC        
1.02%, 5/24/2004 10,000,000   9,993,483  
Fleet Funding Corp.        
1.03%, 6/2/2004 10,000,000 b 9,990,844  
Grampian Funding Ltd.        
1.07%, 7/2/2004 5,000,000 b 4,990,786  
Greenwich Capital Holdings Inc.        
1.04%, 8/17/2004 10,000,000   9,968,800  
ING (U.S.) Funding LLC        
1.09%, 7/6/2004 10,000,000   9,980,200  

6

    Principal      
Commercial Paper (continued) Amount ($) Value ($)  
 
Irish Life & Permanent PLC        
1.06%, 6/8/2004 10,000,000 b 9,988,864  
KFW International Finance Inc.        
1.14%, 9/7/2004 10,000,000 b 9,959,150  
Mane Funding Corp.        
1.08%, 7/21/2004 10,000,000 b 9,975,700  
Merrill Lynch & Co. Inc.        
1.05%, 7/8/2004 10,000,000   9,980,167  
Metlife Funding Inc.        
1.07%, 7/21/2004 10,000,000   9,975,925  
Moat Funding LLC        
1.10%, 7/9/2004 -7/14/2004 20,000,000 b 19,956,702  
Nestle Capital Corp.        
1.05%-1.09%, 7/6/2004 -9/10/2004 20,000,000 b 19,941,150  
Pfizer Inc.          
1.21%, 10/13/2004 10,000,000 b 9,945,000  
Windmill Funding Corp.        
1.03%, 5/5/2004 10,000,000 b 9,998,856  
Total Commercial Paper        
   (cost $ 264,505,933)     264,505,933  
 
           
Corporate Notes—13.4%        
 
American Honda Finance Corp.        
1.07%, 6/11/2004 12,500,000 a,b 12,502,673  
Bear Stearns Cos. Inc.        
1.10%, 9/21/2004 10,000,000 a 10,015,557  
Goldman Sachs Group Inc.        
1.09%, 7/6/2004 10,000,000 a 10,006,909  
Lehman Brothers Holdings Inc.        
1.07%, 5/16/2005 10,000,000 a 10,000,000  
Manufacturers & Traders Trust Company        
1.08%, 11/18/2004 10,000,000 a 9,999,484  
Merrill Lynch & Co. Inc.        
1.11%, 4/28/2005 10,000,000 a 10,023,572  
Nationwide Building Society        
1.14%, 7/23/2004 4,000,000 a,b 4,000,000  
SunTrust Banks Inc.        
1.08%, 10/25/2004 10,000,000 a 10,001,214  
Total Corporate Notes        
   (cost $ 76,549,409)     76,549,409  

The Fund 7

STATEMENT OF INVESTMENTS (Unaudited) (continued)

      Principal      
Short-Term Bank Notes—7.0%   Amount ($) Value ($)  
 
American Express Centurion Bank          
1.05%, 1/12/2005     10,000,000 a 10,000,000  
Canadian Imperial Bank Of Commerce          
1.06%, 5/28/2004     10,000,000 a 10,000,000  
Northern Rock PLC            
1.11%, 1/13/2005     10,000,000 a,b 10,000,000  
SouthTrust Bank            
1.07%, 5/24/2004     10,000,000 a 10,000,847  
Total Short-Term Bank Notes          
   (cost $ 40,000,847)         40,000,847  
 
               
U.S. Government Agencies—6.1%          
 
Federal Home Loan Mortgage Corp.          
1.04%-1.16%, 7/19/2004-10/19/2004 25,000,000   24,911,142  
Federal National Mortgage Association          
1.11%, 9/10/2004     10,000,000   9,959,300  
Total U.S. Government Agencies          
   (cost $ 34,870,442)         34,870,442  
 
               
Repurchase Agreements—23.7%          
 
Goldman Sachs & Co.            
.91% dated 4/30/2004, due 5/3/2004 in the        
amount of $35,663,037 (fully collateralized by        
$20,500,000 U.S. Treasury Bonds 12.375%,        
due 5/15/2004 and $14,741,000 U.S. Treasury Notes        
1.625%, due 2/28/2006, value $ 36,374,260) 35,660,333   35,660,333  
Salomon Smith Barney Holdings Inc.          
1.03% dated 4/30/2004, due 5/3/2004 in the        
amount of $100,008,583 (fully collateralized by        
$99,469,000 Federal Home Loan Mortgage Corp.        
Notes 6%, due 12/24/2018, value $ 102,000,486) 100,000,000   100,000,000  
Total Repurchase Agreements          
   (cost $ 135,660,333)         135,660,333  
 
               
Total Investments (cost $ 571,585,908) 100.0%   571,585,908  
Liabilities, Less Cash and Receivables   (.0%)   (95,514)  
Net Assets       100.0%   571,490,394  

a Variable interest rate—subject to periodic change. 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 April 30, 2004, these securities amounted to $201,150,053 or 35.2% of net assets.

See notes to financial statements.

8

STATEMENT OF ASSETS AND LIABILITIES

April 30, 2004 (Unaudited)

    Cost Value  
 
Assets ($):        
Investments in securities—See Statement of Investments      
(including Repurchase Agreements      
of $135,660,333)—Note 1(c) 571,585,908 571,585,908  
Cash     293,996  
Interest receivable   129,210  
      572,009,114  
 
Liabilities ($):      
Due to The Dreyfus Corporation and affiliates—Note 2(a)   301,192  
Payable for Capital Stock redeemed   7,524  
Dividend payable   210,004  
      518,720  
 
Net Assets ( $)   571,490,394  
 
Composition of Net Assets ($):      
Paid-in capital     571,490,740  
Accumulated net realized gain (loss) on investments   (346)  
 
Net Assets ( $)   571,490,394  
 
         
         
Net Asset Value Per Share      
    Investor Shares Class R Shares  
 
Net Assets ($) 367,631,912 203,858,482  
Shares Outstanding 367,630,354 203,860,386  
 
Net Asset Value Per Share ($) 1.00 1.00  
         
See notes to financial statements.      

The Fund 9

STATEMENT OF OPERATIONS

Six Months Ended April 30, 2004 (Unaudited)

Investment Income ($):    
Interest Income 3,314,257  
Expenses:    
Management fee—Note 2(a) 1,517,591  
Distribution fees (Investor Shares)—Note 2(b) 380,164  
Total Expenses 1,897,755  
Investment Income—Net 1,416,502  
 
Net Realized Gain (Loss) on Investments—Note 1(b) ($) 278  
Net Increase in Net Assets Resulting from Operations 1,416,780  

See notes to financial statements.

10

STATEMENT OF CHANGES IN NET ASSETS

  Six Months Ended      
  April 30, 2004   Year Ended  
  (Unaudited)   October 31, 2003  
 
 
Operations ($):        
Investment income—net 1,416,502   4,528,551  
Net realized gain (loss) on investments 278   —  
Net Increase (Decrease) in Net Assets        
   Resulting from Operations 1,416,780   4,528,551  
 
 
Dividends to Shareholders from ($):        
Investment income—net:        
Investor shares (744,922)   (2,577,224)  
Class R shares (671,580)   (1,951,327)  
Total Dividends (1,416,502)   (4,528,551)  
 
 
Capital Stock Transactions ($1.00 per share):        
Net proceeds from shares sold:        
Investor shares 706,977,972   1,210,475,432  
Class R shares 451,821,909   824,082,066  
Dividends reinvested:        
Investor shares 740,478   2,559,070  
Class R shares 127,256   205,716  
Cost of shares redeemed:        
Investor shares (719,351,548)   (1,266,585,325)  
Class R shares (462,202,560)   (858,339,686)  
Increase (Decrease) in Net Assets        
   from Capital Stock Transactions (21,886,493)   (87,602,727)  
Total Increase (Decrease) in Net Assets (21,886,215)   (87,602,727)  
 
 
Net Assets ($):        
Beginning of Period 593,376,609   680,979,336  
End of Period 571,490,394   593,376,609  

See notes to financial statements.

The Fund 11

FINANCIAL HIGHLIGHTS

The following tables describe the performance for each share class for the fiscal periods indicated. All information 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                      
  April 30, 2004       Year Ended October 31,      
         
     
Investor Shares (Unaudited)   2003   2002   2001   2000   1999  
 
 
 
 
 
 
Per Share Data ($):                        
Net asset value,                        
   beginning of period 1.00   1.00   1.00   1.00   1.00   1.00  
Investment Operations:                        
Investment income—net .002   .006   .016   .044   .056   .045  
Distributions:                        
Dividends from investment                        
   income—net (.002)   (.006)   (.016)   (.044)   (.056)   (.045)  
Net asset value, end of period 1.00   1.00   1.00   1.00   1.00   1.00  
 
 
 
 
 
 
Total Return (%) .38a   .64   1.58   4.47   5.70   4.64  
 
 
 
 
 
 
Ratios/Supplemental Data (%):                        
Ratio of expenses to                        
   average net assets .70a   .70   .70   .70   .70   .70  
Ratio of net investment income                        
   to average net assets .39a   .64   1.63   3.91   5.56   4.54  
 
 
 
 
 
 
Net Assets, end of period                        
   ($ X 1,000) 367,632   379,265   432,816   871,945   333,377   347,596  

a Annualized.

See notes to financial statements.

12

  Six Months Ended                      
  April 30, 2004       Year Ended October 31,      
         
     
Class R Shares (Unaudited)   2003   2002   2001   2000   1999  
 
 
 
 
 
 
Per Share Data ($):                        
Net asset value,                        
   beginning of period 1.00   1.00   1.00   1.00   1.00   1.00  
Investment Operations:                        
Investment income—net .003   .008   .018   .046   .058   .047  
Distributions:                        
Dividends from investment                        
   income—net (.003)   (.008)   (.018)   (.046)   (.058)   (.047)  
Net asset value, end of period 1.00   1.00   1.00   1.00   1.00   1.00  
 
 
 
 
 
 
Total Return (%) .60a   .83   1.79   4.68   5.91   4.84  
 
 
 
 
 
 
Ratios/Supplemental Data (%):                        
Ratio of expenses to                        
   average net assets .50a   .50   .50   .50   .50   .50  
Ratio of net investment income                        
   to average net assets .59a   .84   1.82   4.54   5.80   4.74  
 
 
 
 
 
 
Net Assets, end of period                        
   ($ X 1,000) 203,858   214,112   248,164   419,057   393,117   300,386  

a Annualized.

See notes to financial statements.

The Fund 13

NOTES TO FINANCIAL STATEMENTS (Unaudited)

NOTE 1—Significant Accounting Policies:

Dreyfus Money Market Reserves (the “fund”) is a separate diversified series of The Dreyfus/Laurel Funds, Inc. (the “Company”) which is registered under the Investment Company Act of 1940, as amended (the “Act”), as an open-end management investment company and operates as a series company currently offering sixteen series including the fund.The fund's investment objective is to seek a high level of current income consistent with stability of principal by investing in a diversified portfolio of high-quality, short-term debt securities. 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”).

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 2 billion shares of $.001 par value Capital Stock in each of the following classes of shares: Investor and Class R. Investor shares are sold primarily to retail investors and bear a distribution fee. Class R shares are sold primarily to bank trust departments and other financial service providers (including Mellon and its affiliates) acting on behalf of customers having a qualified trust or investment account or relationship at such institution, and bear no distribution fee. Each class of shares has identical rights and privileges, except with respect to the distribution fee and voting rights on matters affecting a single class.

Investment income, net of expenses (other than class specific expenses) and realized and unrealized gains and losses are allocated daily to each class of shares based upon the relative proportion of net assets of each class.

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.

14

(a) Portfolio valuation: Investments in securities are valued at amortized cost in accordance with Rule 2a-7 of the Act, which has been determined by the fund's Board of Directors to represent the fair value of the fund's investments.

It is the fund's policy to maintain a continuous net asset value per share of $1.00 for the fund; the fund has adopted certain investment, portfolio valuation and dividend and distribution policies to enable it to do so. There is no assurance, however, that the fund will be able to maintain a stable net asset value per share of $1.00.

(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 is recognized on the accrual basis. Cost of investments represents amortized cost.

(c) Repurchase agreements: The fund may engage in repurchase agreement transactions. Under the terms of a typical repurchase agreement, the fund, through its custodian and sub-custodian, takes possession of an underlying debt obligation subject to an obligation of the seller to repurchase, and the fund to resell, the obligation at an agreed-upon price and time, thereby determining the yield during the fund's holding period.This arrangement results in a fixed rate of return that is not subject to market fluctuations during the fund's holding period.The value of the collateral is at least equal, at all times, to the total amount of the repurchase obligation, including interest. In the event of a counter party default, the fund has the right to use the collateral to offset losses incurred.There is potential loss to the fund in the event the fund is delayed or prevented from exercising its rights to dispose of the collateral securities, including the risk of a possible decline in the value of the underlying securities during the period while the fund seeks to assert its rights.The Manager, acting under the supervi-

The Fund 15

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

sion of the Board of Directors, reviews the value of the collateral and the creditworthiness of those banks and dealers with which the fund enters into repurchase agreements to evaluate potential risks.

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

(e) Federal income taxes: It is the policy of the fund to continue to qualify as a regulated investment company, if such qualifications is in the best interest 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 has an unused capital loss carryover of $624 available to be applied against future net securities profits, if any, realized subsequent to October 31, 2003. If not applied, the carryover expires in fiscal 2005.

The tax character of distributions paid to shareholders during the fiscal year ended October 31, 2003 were as all ordinary income.The tax character of current year distributions will be determined at the end of the current fiscal year.

At April 30, 2004, 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).

16

NOTE 2—Investment Management Fee and Other Transactions With Affiliates:

(a) Investment management fee: Pursuant to an Investment Management agreement with the Manager, the Manager provides or arranges for one or more third parties and/or affiliates to provide investment advisory, administrative, custody, fund accounting and transfer agency services to the fund. The Manager also directs the investments of the fund in accordance with its investment objective, policies and limitations. For these services, the fund is contractually obligated to pay the Manager a fee, calculated daily and paid monthly, at the annual rate of .50% of the value of the fund's average daily net assets. Out of its fee, the Manager pays all of the expenses of the fund except brokerage fees, taxes, interest, commitment fees, Rule 12b-1 distribution fees and expenses, fees and expenses of non-interested Directors (including counsel fees) and extraordinary expenses. In addition, the Manager is required to reduce its fee in an amount equal to the fund's allocable portion of fees and expenses of the non-interested Directors (including counsel fees). Each Director receives $40,000 per year, plus $5,000 for each joint Board meeting of the Company, The Dreyfus/Laurel Tax-Free Municipal Funds, and The Dreyfus/Laurel Funds Trust (the “Dreyfus/Laurel Funds”) attended, $2,000 for separate committee meetings attended which are not held in conjunction with a regularly scheduled board meeting and $500 for Board meetings and separate committee meetings attended that are conducted by telephone and is reimbursed for travel and out-of-pocket expenses. The Chairman of the Board receives an additional 25% of such compensation (with the exception of reimbursable amounts). In the event that there is a joint committee meeting of the Dreyfus/Laurel Funds

The Fund 17

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

and the Dreyfus High Yield Strategies Fund, the $2,000 fee will be allocated between the Dreyfus/Laurel Funds and the Dreyfus High Yield Strategies Fund. These fees and expenses are charged and allocated to each series based on net assets. Amounts required to be paid by the Company directly to the non-interested Directors, that would be applied to offset a portion of the management fee payable to the Manager, are in fact paid directly by the Manager to the non-interested Directors.

The components of Due to The Dreyfus Corporation and affiliates in the Statement of Assets and Liabilities consists of: management fees $240,482 and Rule 12b-1 distribution plan fees $60,710.

(b) Distribution plan: The fund has adopted a Distribution Plan (the “Plan”) adopted pursuant to Rule 12b-1 under the Act. Investor shares may pay annually up to .25% (currently limited by the Company's Board of Directors to .20%) of the value of the average daily net assets attributable to its Investor shares to compensate the Distributor, an affiliate of the Manager, for shareholder servicing activities and activities primarily intended to result in the sale of Investor shares. During the period ended April 30, 2004, the Investor shares were charged $380,164 pursuant to the Plan.

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

NOTE 3—Bank Line of Credit:

The fund participates with other Dreyfus-managed funds in a $100 million unsecured line of credit primarily to be utilized for temporary or emergency purposes, including the financing of redemptions. Interest is charged based on prevailing market rates in effect at the time of borrowings. During the period ended April 30, 2004, the fund did not borrow under the line of credit.

18

NOTE 4—Legal Matters:

Two class actions have been filed against Mellon Financial and Mellon Bank, N.A., and Dreyfus and Founders Asset Management LLC (the “Investment Advisers”), and the directors of all or substantially all of the Dreyfus funds, alleging that the Investment Advisers improperly used assets of the Dreyfus funds, in the form of directed brokerage commissions and 12b-1 fees, to pay brokers to promote sales of Dreyfus funds, and that the use of fund assets to make these payments was not properly disclosed to investors.The complaints further allege that the directors breached their fiduciary duties to fund shareholders under the Investment Company Act of 1940 and at common law.The complaints seek unspecified compensatory and punitive damages, rescission of the funds' contracts with the Investment Advisers, an accounting of all fees paid, and an award of attorneys' fees and litigation expenses. Dreyfus and the Dreyfus funds believe the allegations to be totally without merit and will defend the actions vigorously.

Additional lawsuits arising out of these circumstances and presenting similar allegations and requests for relief may be filed against the defendants in the future. Neither Dreyfus nor the Dreyfus funds believe that any of the pending actions will have a material adverse effect on the Dreyfus funds or Dreyfus' ability to perform its contracts with the Dreyfus funds.

The Fund 19

NOTES

For More Information

Dreyfus
Money Market Reserves
200 Park Avenue
New York, NY 10166
 
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
 
Custodian
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
 
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
200 Park Avenue
New York, NY 10166
 
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166

To obtain information:

By telephone

Call 1-800-645-6561

By mail Write to:

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

By E-mail Send your request to info@dreyfus.com

On the Internet Information can be viewed online or downloaded from: http://www.dreyfus.com

© 2004 Dreyfus Service Corporation 0317SA0404

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
  		 Letter from the Chairman
3
  		 Discussion of Fund Performance
6
  		 Statement of Investments
12
  		 Statement of Assets and Liabilities
13
  		 Statement of Operations
14
  		 Statement of Changes in Net Assets
15
  		 Financial Highlights
17
  		 Notes to Financial Statements
     FOR MORE INFORMATION
Back Cover
   Dreyfus
Municipal Reserves

The Fund

LETTER FROM THE CHAIRMAN

Dear Shareholder:

This semiannual report for Dreyfus Municipal Reserves covers the six-month period from November 1, 2003, through April 30, 2004. Inside, you'll find valuable information about how the fund was managed during the reporting period, including a discussion with the fund's portfolio manager, J. Christopher Nicholl.

Positive economic data continued to accumulate during the reporting period, as consumers, flush with extra cash from federal tax refunds and mortgage refinancings, continued to spend. At the same time, recent evidence of stronger job growth supports the view that corporations have become more willing to spend and invest. However, an aggressively accommodative U.S. monetary policy has kept short-term interest rates near historical lows.

Despite their low yields, we continue to believe that liquidity and stability make tax-exempt money market funds a valuable component of many investors' portfolios. Indeed, despite recently encouraging economic news, a number of risks that could lead to corrections in the longer term financial markets may still surface. Chief among them, in our view, are a possible acceleration of inflation and the chance that terrorism could cause instability in global markets. As always, we encourage you to review your investments regularly with your financial advisor, who may be in the best position to suggest ways to position your portfolio for the opportunities and challenges of today's financial markets.

Thank you for your continued confidence and support.

Sincerely,

Stephen E. Canter

Chairman and Chief Executive Officer The Dreyfus Corporation

May 17, 2004

2

DISCUSSION OF FUND PERFORMANCE

J. Christopher Nicholl, Portfolio Manager

How did Dreyfus Municipal Reserves perform during the period?

For the six-month period ended April 30, 2004, the fund's Investor shares produced an annualized yield of 0.33% and, taking into account the effects of compounding, an annualized effective yield of 0.33%. The fund's Class R shares provided an annualized 0.53% yield and a 0.53% annualized effective yield for the same period.1

We attribute the fund's performance to persistently low short-term interest rates, despite an improving economy. However, a rising supply of newly issued municipal money market securities put upward pressure on tax-exempt yields during much of the reporting period, making their after-tax returns highly competitive with those of taxable money market securities.

What is the fund's investment approach?

The fund seeks income, consistent with stability of principal, that is exempt from federal income tax.To pursue its goal, the fund invests at least 80% of its assets in tax-exempt municipal obligations, including short-term municipal debt securities. Among these are municipal notes, short-term municipal bonds, tax-exempt commercial paper and municipal leases. The fund reserves the right to invest up to 20% of total assets in taxable money market securities, such as U.S. government obligations, U.S. and foreign bank and corporate obligations and commercial paper. Municipal bonds are typically of two types:

  • General obligation bonds, which are secured by the full faith and credit of the issuer and its taxing power.
  • Revenue bonds, which are payable from the revenues derived from a specific revenue source, such as charges for water and sewer service or highway tolls.

The Fund 3

DISCUSSION OF FUND PERFORMANCE (continued)

What other factors influenced the fund's performance?

The economic recovery that began in the spring of 2003 persisted throughout the reporting period, resulting in annualized economic growth rates of more than 4% during the fourth quarter of 2003 and the first quarter of 2004. Although robust economic growth historically has led to more restrictive monetary policies from the Federal Reserve Board (the “Fed”) in previous recoveries, the current economic rebound was largely a “jobless” one, and there generally were few inflationary pressures for the Fed to fight with higher rates. Accordingly, the Fed left short-term interest rates unchanged at 1%.

In light of the Fed's accommodative monetary policy, money market yields continued to hover near historical lows during most of the reporting period. In addition, the money market “yield curve” remained relatively flat during the first five months of the reporting period, with smaller than average differences among the yields of money market instruments with maturities ranging from overnight to one year.

Despite early signs that the economic recovery had begun to result in higher tax revenues, most state and local governments continued to face operating budget deficits during the reporting period.To bridge their budget gaps, many municipalities increased their issuance of short-term debt.The resulting rise in the supply of newly issued tax-exempt money market instruments caused their yields to remain high relative to comparable taxable instruments. In fact, at times during the reporting period, tax-exempt money market securities offered higher yields than taxable ones.

In this environment, we generally maintained a cautious investment posture, setting the fund's weighted average maturity in a range between neutral and slightly shorter than average.This positioning was designed to give us the flexibility we need to move quickly if the market environment changes. In addition, because of the relatively flat yield curve, there generally was little incentive to purchase securities at

4

the long end of the fund's maturity range. While we have focused primarily on money market instruments with one-day or one-week maturities, we often complemented the fund's very short-term holdings with securities with maturities in the three- to eight-month range, which provided most of the yield of longer-dated securities with less interest-rate risk.

What is the fund's current strategy?

Market conditions appeared to change rapidly and significantly in April, after the release of data indicating a stronger labor market. Renewed concerns regarding potential inflationary pressures in the recovering economy, including higher energy and commodity prices, contributed to a widening of yield differences among money market instruments of various maturities. Indeed, just days after the end of the reporting period, the Fed appeared to move away from previous assurances that it could be “patient” before raising rates, stating instead that future rate hikes were likely to be “measured.”

In this changing environment and to keep cash available for seasonal redemptions, we recently increased the fund's holdings of variable-rate demand notes (VRDNs) whose yields are reset on a daily or weekly basis, and we reduced the fund's positions in commercial paper and municipal notes. This strategy is designed to help the fund capture higher yields more quickly if they become available.At the same time, we have maintained our focus on credit quality. Of course, we are prepared to change the fund's composition as market conditions evolve.

May 17, 2004

1 Annualized effective yield is based upon dividends declared daily and reinvested monthly. Past performance is no guarantee of future results.Yields fluctuate. Income may be subject to state and local taxes, and some income may be subject to the federal alternative minimum tax (AMT) for certain investors.An investment in the fund is not insured or guaranteed by the FDIC or the U.S. government.Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund.

The Fund 5

STATEMENT OF INVESTMENTS

April 30, 2004 (Unaudited)

6

  Principal      
Tax Exempt Investments (continued) Amount ($) Value ($)  
 
Colorado (continued)        
Interstate South Metropolitan District, GO Notes        
   Refunding 1.20%, 11/1/2004 (LOC; BNP Paribas) 1,975,000   1,975,000  
Florida—5.6%        
Alachua County Health Facilities Authority        
   Health Care Facilities Revenue, VRDN        
   (Oak Hammock University of Florida Project)        
   1.10% (LOC; BNP Paribas) 2,300,000 a 2,300,000  
Broward County Housing Finance Authority, MFHR        
   Refunding, VRDN (Waters Edge Project)        
   1.10% (Insured; FNMA) 6,740,000 a 6,740,000  
Florida Housing Finance Agency, MFMR, VRDN        
   (Town Colony Associates)        
   1.12% (LOC; Credit Suisse) 4,800,000 a 4,800,000  
Georgia—6.0%        
Burke County Development Authority, PCR        
   VRDN (Oglethorpe Power Corporation)        
   1.07% (Insured; FGIC and Liquidity Facility;        
   Bayerische Landesbank) 11,195,000 a 11,195,000  
De Kalb County Development Authority        
   Private Schools Revenue, VRDN        
   (Marist School Inc. Project)        
   1.09% (LOC; SunTrust Bank) 3,500,000 a 3,500,000  
Illinois—20.9%        
City of Chicago, GO Notes 1.05%, 1/13/2005        
   (LOC; State Street Bank and Trust) 5,500,000   5,500,000  
Illinois Development Finance Authority, VRDN:        
   IDR (Heritage Tool and Manufacturing Inc.)        
      1.23% (LOC; Bank of Montreal) 4,285,000 a 4,285,000  
   MFHR, Refunding (Orleans-Illinois Project)        
      1.09% (Insured; FSA and Liquidity Facility;        
      The Bank of New York) 12,000,000 a 12,000,000  
Illinois Educational Facilities Authority        
   Recreational Revenue, VRDN        
   (Shedd Aquarium Society)        
   1.11% (LOC; Bank One) 4,300,000 a 4,300,000  
Illinois Health Facilities Authority, Revenue, VRDN:        
   (Decatur Memorial Hospital Project)        
      1.09% (Insured; MBIA and Liquidity Facility;        
      Northern Trust Co.) 5,000,000 a 5,000,000  

The Fund 7

STATEMENT OF INVESTMENTS (Unaudited) (continued)

  Principal      
Tax Exempt Investments (continued) Amount ($) Value ($)  
 
Illinois (continued)        
Illinois Health Facilities Authority        
   Revenue, VRDN (continued):        
      (Memorial Medical Center)        
         1.09% (LOC; KBC Bank) 2,400,000 a 2,400,000  
      (Rush Presbyterian Medical Center)        
         1.08% (LOC; Northern Trust Co.) 3,800,000 a 3,800,000  
      (The Carle Foundation)        
         1.09% (Insured; AMBAC and Liquidity Facility;        
         Northern Trust Co.) 4,000,000 a 4,000,000  
Illinois Student Assistance Commission, SLR        
   VRDN 1.14% (LOC; Bank One) 3,400,000 a 3,400,000  
Jackson-Union Counties Regional Port District        
   Port Facilities Revenue, Refunding, VRDN        
   (Enron Transportation Services)        
   1.09% (LOC; Wachovia Bank) 6,600,000 a 6,600,000  
Indiana—5.3%        
Indiana Health Facilities Financing Authority        
   Health Care Facilities Revenue, VRDN        
   Capital Access Designated Program        
   1.09% (LOC; Comerica Bank) 1,725,000 a 1,725,000  
City of Seymour, EDR, VRDN        
   (Pedcor Investments Project)        
   1.14% (LOC; FHLB) 3,922,000 a 3,922,000  
City of Wabash, EDR, VRDN        
   (Wabash Alloys Project)        
   1.13% (LOC; Fleet National Bank) 7,250,000 a 7,250,000  
Kentucky—.6%        
County of Breckinridge, LR, VRDN        
   (Kentucky Association Counties Leasing Trust)        
   1.11% (LOC; U.S. Bank N.A.) 1,400,000 a 1,400,000  
Louisiana—3.7%        
South Louisiana Port Commission, Port Revenue, VRDN        
   (Holnam Inc. Project) 1.14% (LOC; Wachovia Bank) 9,000,000 a 9,000,000  
Massachusetts—8.5%        
Massachusetts Health and Educational Facilities Authority        
   College and University Revenue, VRDN:        
      (Boston University) 1.06%        
         (LOC; State Street Bank and Trust Co.) 7,400,000 a 7,400,000  
      (Harvard University) .99% 6,100,000 a 6,100,000  
      (Simmons College) 1.09% (Insured; AMBAC and        
         Liquidity Facility; Fleet National Bank) 200,000 a 200,000  

8

  Principal      
Tax Exempt Investments (continued) Amount ($) Value ($)  
 
Massachusetts (continued)        
Town of Pembroke, GO Notes, BAN 2%, 8/5/2004 3,000,000   3,007,627  
City of Salem, GO Notes, BAN 1.50%, 1/13/2005 4,000,000   4,011,664  
Michigan—1.6%        
University of Michigan, University Revenue, CP        
   .97%, 5/3/2004 4,000,000   4,000,000  
Mississippi—2.6%        
County of Jackson, Port Facilities Revenue, Refunding        
   VRDN (Chevron USA Inc. Project) 1.10% 6,300,000 a 6,300,000  
Nebraska—.7%        
Nebraska Educational Finance Authority        
   College and University Revenue, Refunding        
   VRDN (Creighton University Project)        
   1.10% (LOC; Allied Irish Bank PLC) 1,700,000 a 1,700,000  
Nevada—1.3%        
Clark County, IDR, VRDN        
   (Nevada Cogeneration Associates)        
   1.13% (LOC; ABN-AMRO) 2,600,000 a 2,600,000  
Clark County School District, GO Notes, VRDN        
   1.07% (Insured; FSA and Liquidity Facility;        
   State Street Bank and Trust) 600,000 a 600,000  
New Mexico—1.3%        
City of Santa Fe, Gross Receipts Tax Revenue        
   VRDN (Wastewater Systems)        
   1.17% (LOC; BNP Paribas) 3,300,000 a 3,300,000  
New York—2.0%        
New York City Municipal Water Finance Authority        
   Water and Sewer Systems Revenue, VRDN        
   1.06% (Liquidity Facility; Bayerische Landesbank) 4,800,000 a 4,800,000  
Ohio-1.2%        
Ohio State University, Educational Revenue, CP        
   1%, 9/10/2004 3,000,000   3,000,000  
Oklahoma—.5%        
Tulsa County Industrial Authority, Revenue, VRDN        
   (First Mortgage Montercau)        
   1.10% (LOC; BNP Paribas) 1,185,000 a 1,185,000  
Pennsylvania—.4%        
Lehigh County Industrial Development Authority, PCR        
   VRDN (Allegheny Electric Cooperative)        
   1.05% (LOC; Rabobank) 1,020,000 a 1,020,000  

The Fund 9

STATEMENT OF INVESTMENTS (Unaudited) (continued)

    Principal      
Tax Exempt Investments (continued) Amount ($) Value ($)  
 
Texas—7.8%          
Harris County Industrial Development Corporation, PCR        
VRDN (Exxon Mobil Corporation) 1.03% 4,500,000 a 4,500,000  
Northside Independent School District, GO Notes        
1.02%, 6/15/2004 (Insured; PSF Guaranteed and        
Liquidity Facility; Bank of America) 3,000,000 b 3,000,000  
Southwest Higher Education Authority        
College and University Revenue, VRDN        
(Southern Methodist University) 1.10%        
(LOC; Landesbank Hessen-Thuringen Girozentrale) 500,000 a 500,000  
State of Texas, TRAN 2%, 8/31/2004 11,000,000   11,029,732  
Washington—6.5%          
Washington Housing Finance Commission, VRDN:        
MFHR (Anchor Village Apartments Project)        
      1.10% (Insured; FNMA)   10,750,000 a 10,750,000  
MFMR (Wandering Creek Project)        
1.10% (Insured; FHLMC and        
Liquidity Facility; FHLMC) 5,300,000 a ©5,300,000  
Wisconsin—3.1%          
University of Wisconsin Hospitals and Clinics Authority        
Health Care Facilities Revenue, VRDN        
1.09% (Insured; MBIA and LOC; U.S. Bank N.A.) 7,600,000 a 7,600,000  
 
           
Total Investments (cost $ 249,520,853) 101.7%   249,520,853  
Liabilities, Less Cash and Receivables (1.7%)   (4,151,471)  
Net Assets   100.0%   245,369,382  

10

Summary of Combined Ratings (Unaudited)    
             
Fitch or Moody's or Standard & Poor's Value (%)  
 
F1+, F1   VMIG1, MIG1, P1 SP1+, SP1, A1+, A1 98.6  
AAA, AA, Ac   Aaa, Aa, Ac   AAA, AA, Ac 1.4  
          100.0  

a Securities payable on demand.Variable interest rate—subject to periodic change. b 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. c Notes which are not F, MIG and SP rated are represented by bond ratings of the issuers.

See notes to financial statements.

The Fund 11

STATEMENT OF ASSETS AND LIABILITIES
April 30, 2004 (Unaudited)
    Cost Value  
 
Assets ($):        
Investments in securities—See Statement of Investments 249,520,853 249,520,853  
Cash     44,797  
Interest receivable   498,750  
      250,064,400  
 
Liabilities ($):      
Due to The Dreyfus Corporation and affiliates—Note 2(a)   101,856  
Payable for investment securities purchased   2,650,000  
Bank loan payable—Note 3   1,820,000  
Dividends payable   109,707  
Payable for shares of Capital Stock redeemed   12,107  
Interest payable—Note 3   1,348  
      4,695,018  
 
Net Assets ( $)   245,369,382  
 
Composition of Net Assets ($):      
Paid-in capital     245,373,882  
Accumulated net realized gain (loss) on investments   (4,500)  
 
Net Assets ( $)   245,369,382  
 
         
         
Net Asset Value Per Share      
    Investor Shares Class R Shares  
 
Net Assets ($) 31,031,799 214,337,583  
Shares Outstanding 31,033,554 214,340,328  
 
Net Asset Value Per Share ($) 1.00 1.00  

See notes to financial statements.

12

STATEMENT OF OPERATIONS

Six Months Ended April 30, 2004

Investment Income ($):    
Interest Income 1,422,566  
Expenses:    
Management fee—Note 2(a) 684,767  
Distribution fees (Investor Shares)—Note 2(b) 28,079  
Interest expense—Note 3 6,930  
Total Expenses 719,776  
Investment Income—Net, representing net increase    
   in net assets resulting from operations 702,790  

See notes to financial statements.

The Fund 13

STATEMENT OF CHANGES IN NET ASSETS

  Six Months Ended      
  April 30, 2004   Year Ended  
  (Unaudited)   October 31, 2003  
 
 
Operations ($):        
Investment income—net 702,790   2,237,750  
Net realized gain (loss) on investments —   (2,787)  
Net Increase (Decrease) in Net Assets        
   Resulting from Operations 702,790   2,234,963  
 
 
Dividends to Shareholders from ($):        
Investment income—net:        
Investor shares (47,178)   (174,081)  
Class R shares (655,612)   (2,063,669)  
Total Dividends (702,790)   (2,237,750)  
 
 
Capital Stock Transactions ($1.00 per share):        
Net proceeds from shares sold:        
Investor shares 44,242,509   118,427,509  
Class R shares 302,771,761   694,361,504  
Dividends reinvested:        
Investor shares 39,684   129,832  
Class R shares 62,956   145,926  
Cost of shares redeemed:        
Investor shares (44,561,256)   (119,147,931)  
Class R shares (337,740,620)   (762,363,992)  
Increase (Decrease) in Net Assets        
   from Capital Stock Transactions (35,184,966)   (68,447,152)  
Total Increase (Decrease) in Net Assets (35,184,966)   (68,449,939)  
 
 
Net Assets ($):        
Beginning of Period 280,554,348   349,004,287  
End of Period 245,369,382   280,554,348  

See notes to financial statements.

14

FINANCIAL HIGHLIGHTS

The following tables describe the performance for each share class for the fiscal periods indicated. All information 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 dis-tributions.These figures have been derived from the fund's financial statements.

  Six Months Ended                      
  April 30, 2004       Year Ended October 31,      
         
     
Investor Shares (Unaudited)   2003   2002   2001   2000   1999  
 
 
 
 
 
 
Per Share Data ($):                        
Net asset value,                        
   beginning of period 1.00   1.00   1.00   1.00   1.00   1.00  
Investment Operations:                        
Investment income—net .002   .004   .009   .026   .033   .025  
Distributions:                        
Dividends from investment                        
   income—net (.002)   (.004)   (.009)   (.026)   (.033)   (.025)  
Net asset value, end of period 1.00   1.00   1.00   1.00   1.00   1.00  
 
 
 
 
 
 
Total Return (%) .34a   .44   .87   2.60   3.38   2.57  
 
 
 
 
 
 
Ratios/Supplemental Data (%):                        
Ratio of operating expenses                        
   to average net assets .70a   .70   .70   .70   .70   .70  
Ratio of interest expense                        
   to average net assets .01a   .00b   .01   .01   .01   —  
Ratio of net investment income                        
   to average net assets .34a   .45   .86   2.64   3.35   2.54  
 
 
 
 
 
 
Net Assets, end of period                        
   ($ X 1,000) 31,032   31,311   31,902   26,955   39,694   30,689  

a Annualized b Amount represents less than .01% per share. See notes to financial statements.

The Fund 15

FINANCIAL HIGHLIGHTS (continued)

  Six Months Ended                      
  April 30, 2004       Year Ended October 31,      
         
     
Class R Shares (Unaudited)   2003   2002   2001   2000   1999  
 
 
 
 
 
 
Per Share Data ($):                        
Net asset value,                        
   beginning of period 1.00   1.00   1.00   1.00   1.00   1.00  
Investment Operations:                        
Investment income—net .003   .006   .011   .028   .035   .027  
Distributions:                        
Dividends from investment                        
   income—net (.003)   (.006)   (.011)   (.028)   (.035)   (.027)  
Net asset value, end of period 1.00   1.00   1.00   1.00   1.00   1.00  
 
 
 
 
 
 
Total Return (%) .54a   .65   1.07   2.78   3.59   2.77  
 
 
 
 
 
 
Ratios/Supplemental Data (%):                        
Ratio of operating expenses                        
   to average net assets .50a   .50   .50   .50   .50   .50  
Ratio of interest expense                        
   to average net assets .01a   .00b   .01   .01   .01   —  
Ratio of net investment income                        
   to average net assets .53a   .65   1.07   2.72   3.52   2.74  
 
 
 
 
 
 
Net Assets, end of period                        
   ($ X 1,000) 214,338   249,243   317,102   341,092   264,215   287,117  

a Annualized b Amount represents less than .01% per share. See notes to financial statements.

16

NOTES TO FINANCIAL STATEMENTS (Unaudited)

NOTE 1—Significant Accounting Policies:

Dreyfus Municipal Reserves (the “fund”) is a separate diversified series of The Dreyfus/Laurel Funds, Inc. (the Company”) which is registered under the Investment Company Act of 1940, as amended (the “Act”), as an open-end management investment company and operates as a series company currently offering sixteen series including the fund. The fund's investment objective is to seek income, consistent with stability of principal, that is exempt from federal income tax. 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”).

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 1 billion shares of $.001 par value Capital Stock in each of the following classes of shares: Investor and Class R. Investor shares are sold primarily to retail investors and bear a distribution fee. Class R shares are sold primarily to bank trust departments and other financial service providers (including Mellon and its affiliates) acting on behalf of customers having a qualified trust or investment account or relationship at such institution, and bear no distribution fee. Each class of shares has identical rights and privileges, except with respect to the distribution fee and voting rights on matters affecting a single class.

Investment income, net of expenses (other than class specific expenses) and realized and unrealized gains and losses are allocated daily to each class of shares based upon the relative proportion of net assets of each class.

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

(a) Portfolio valuation: Investments in securities are valued at amortized cost in accordance with Rule 2a-7 of the Act, which has been determined by the fund's Board of Directors to represent the fair value

The Fund 17

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

of the fund's investments.

It is the fund's policy to maintain a continuous net asset value per share of $1.00 for the fund; the fund has adopted certain investment, portfolio valuation and dividend and distribution policies to enable it to do so. There is no assurance, however, that the fund will be able to maintain a stable net asset value per share of $1.00.

(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 is recognized on the accrual basis. Cost of investments represents amortized cost.

(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, it is the policy of the fund not to distribute such gain.

(d) Federal income taxes: It is the policy of the fund to continue to qualify as a regulated investment company, 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.

The fund has an unused capital loss carryover of $4,500 available for federal income tax purposes to be applied against future net securities profits, if any, realized subsequent to October 31, 2003. If not applied, $1,713 of the carryover expires in fiscal 2005 and $2,787 expires in fiscal 2011.

The tax character of distributions paid to shareholders during the fiscal year ended October 31, 2003 were all tax exempt income.The tax

18

character of current year distributions will be determined at the end of the current fiscal year.

At April 30, 2004, 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 2—Investment Management Fee and Other Transactions With Affiliates:

(a) Investment management fee: Pursuant to an Investment Management agreement with the Manager, the Manager provides or arranges for one or more third parties and/or affiliates to provide investment advisory, administrative, custody, fund accounting and transfer agency services to the fund. The Manager also directs the investments of the fund in accordance with its investment objective, policies and limitations. For these services, the fund is contractually obligated to pay the Manager a fee, calculated daily and paid monthly, at the annual rate of .50% of the value of the fund's average daily net assets. Out of its fee, the Manager pays all of the expenses of the fund except brokerage fees, taxes, interest, Rule 12b-1 distribution fees and expenses, fees and expenses of non-interested Directors (including counsel fees) and extraordinary expenses. In addition, the Manager is required to reduce its fee in an amount equal to the fund's allocable portion of fees and expenses of the non-interested Directors (including counsel fees). Each director receives $40,000 per year, plus $5,000 for each joint Board meeting of the Company, The Dreyfus/Laurel Tax-Free Municipal Funds, and The Dreyfus/Laurel Funds Trust (the “Dreyfus/Laurel Funds”) attended, $2,000 for separate committee meetings attended which are not held in conjunction with a regularly scheduled board meeting and $500 for Board meetings and separate committee meetings attended that are conducted by telephone and is reimbursed for travel and out-of-pocket expenses. The Chairman of the Board receives an additional 25% of such compensation (with the exception of reimbursable amounts). In the event that there is a joint committee meeting of the Dreyfus/Laurel Funds and the Dreyfus

The Fund 19

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

High Yield Strategies Fund, the $2,000 fee will be allocated between the Dreyfus/Laurel Funds and the Dreyfus High Yield Strategies Fund. These fees and expenses are charged and allocated to each series based on net assets. Amounts required to be paid by the Company directly to the non-interested Directors, that would be applied to offset a portion of the management fee payable to the Manager, are in fact paid directly by the Manager to the non-interested Directors.

The components of Due to The Dreyfus Corporation and affiliates in the Statement of Assets and Liabilities consists of: management fees $97,624 and Rule 12b-1 distribution plan fees $4,232.

(b) Distribution Plan: Under the Distribution Plan (the “Plan”) adopted pursuant to Rule 12b-1 under the Act, Investor shares may pay annually up to .25% of the value of the average daily net assets (currently limited by the Company's Board of Directors to .20%) attributable to its Investor shares to compensate the Distributor for shareholder servicing activities and activities primarily intended to result in the sale of Investor shares. During the period ended April 30, 2004, Investor shares were charged $28,079 pursuant to the Plan.

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

NOTE 3—Bank Line of Credit:

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

The average amount of borrowings outstanding under the line of credit during the period ended April 30, 2004 was approximately

20

$918,500 with a related weighted average annualized interest rate of 1.51%.

NOTE 4—Legal Matters:

Two class actions have been filed against Mellon Financial and Mellon Bank, N.A., and Dreyfus and Founders Asset Management LLC (the “Investment Advisers”), and the directors of all or substantially all of the Dreyfus funds, alleging that the Investment Advisers improperly used assets of the Dreyfus funds, in the form of directed brokerage commissions and 12b-1 fees, to pay brokers to promote sales of Dreyfus funds, and that the use of fund assets to make these payments was not properly disclosed to investors.The complaints further allege that the directors breached their fiduciary duties to fund shareholders under the Investment Company Act of 1940 and at common law.The complaints seek unspecified compensatory and punitive damages, rescission of the funds' contracts with the Investment Advisers, an accounting of all fees paid, and an award of attorneys' fees and litigation expenses. Dreyfus and the Dreyfus funds believe the allegations to be totally without merit and will defend the actions vigorously.

Additional lawsuits arising out of these circumstances and presenting similar allegations and requests for relief may be filed against the defendants in the future. Neither Dreyfus nor the Dreyfus funds believe that any of the pending actions will have a material adverse effect on the Dreyfus funds or Dreyfus' ability to perform its contracts with the Dreyfus funds.

The Fund 21

For More Information

Dreyfus
Municipal Reserves
200 Park Avenue
New York, NY 10166
 
Investment Adviser
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
 
Custodian
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
 
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
200 Park Avenue
New York, NY 10166
 
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166

To obtain information:

By telephone

Call 1-800-645-6561

By mail Write to:

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

By E-mail Send your request to info@dreyfus.com

On the Internet Information can be viewed online or downloaded from: http://www.dreyfus.com

© 2004 Dreyfus Service Corporation 0324SA0404

Dreyfus Premier
Balanced Fund

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
  		 Letter from the Chairman
3
  		 Discussion of Fund Performance
6
  		 Statement of Investments
16
  		 Statement of Financial Futures
17
  		 Statement of Assets and Liabilities
18
  		 Statement of Operations
19
  		 Statement of Changes in Net Assets
21
  		 Financial Highlights
26
  		 Notes to Financial Statements
     FOR MORE INFORMATION
Back Cover
Dreyfus Premier
   Balanced Fund

The Fund

LETTER FROM THE CHAIRMAN

Dear Shareholder:

This semiannual report for Dreyfus Premier Balanced Fund covers the six-month period from November 1, 2003, through April 30, 2004. Inside, you’ll find valuable information about how the fund was managed during the reporting period, including a discussion with Douglas D. Ramos, CFA, who manages the equity component of the fund, and Gerald E. Thunelius, Director of the Dreyfus Taxable Fixed Income Team that manages the fixed-income component of the fund.

Positive economic data continued to accumulate during the reporting period, as consumers, flush with extra cash from federal tax refunds and mortgage refinancings, continued to spend. At the same time, recent evidence of stronger job growth supports the view that corporations have become more willing to spend and invest.The sustained economic rebound has driven overall corporate earnings and stock prices higher, while bond prices generally have become more volatile.

Despite recently encouraging economic news, we continue to believe that investors should be aware of the potential risks that could lead to corrections in the financial markets. Chief among them, in our view, are a possible acceleration of inflation and the chance that terrorism could cause instability in global markets.As always, we encourage you to speak regularly with your financial advisor, who may be in the best position to suggest ways to position your portfolio for the opportunities and challenges of today’s financial markets.

Thank you for your continued confidence and support.

Sincerely,

Stephen E. Canter

Chairman and Chief Executive Officer The Dreyfus Corporation

May 17, 2004

2

DISCUSSION OF FUND PERFORMANCE

Douglas D. Ramos, CFA, Portfolio Manager

Gerald E. Thunelius, Director, Dreyfus Taxable Fixed Income Team

How did Dreyfus Premier Balanced Fund perform relative to its benchmark?

For the six-month period ended April 30, 2004, the fund produced total returns of 2.53% for Class A shares, 2.15% for Class B shares, 2.23% for Class C shares, 2.74% for Class R shares, and 2.49% for Class T shares.1 In comparison, the fund’s benchmark, a hybrid index composed of 60% Standard & Poor’s 500 Composite Stock Price Index (“S&P 500 Index”) and 40% Lehman Brothers U.S. Aggregate Index (“Lehman Aggregate Index”), provided a total return of 4.01% for the same period. Separately, the S&P 500 Index and the Lehman Aggregate Index provided total returns of 6.27% and 1.25%, respectively, for the same period.2

We attribute these results to a generally favorable, but volatile, market environment for both stocks and bonds during the reporting period. While the fund shared in the market’s rise to a degree, disappointing results from our security selection strategy undermined the fund’s overall performance relative to the fund’s hybrid benchmark.

What is the fund’s investment approach?

The fund is a balanced fund, with an allocation under normal circumstances of 60% stocks and 40% bonds, corresponding to the fund’s benchmark. However, the fund is permitted to invest up to 75%, and as little as 40%, of its total assets in stocks, and up to 60%, and as little as 25%, of its total assets in bonds.

When allocating assets between stocks and bonds, we assess the relative returns and risks of each asset class, using a model that analyzes several factors, including interest-rate-adjusted price-to-earnings ratios, the valuation and volatility levels of stocks relative to bonds, and economic factors such as interest rates.

T h e F u n d 3

DISCUSSION OF FUND PERFORMANCE (continued)

What other factors influenced the fund’s performance?

In light of stronger U.S. economic growth during the reporting period, we generally emphasized stocks over bonds. Energy stocks led the fund’s gains, benefiting from strong industrial demand, constrained supplies and rising commodity prices.Top performers included independent exploration and production companies, such as XTO Energy, and oil service companies, like Schlumberger. Financial services companies that tend to be less sensitive to interest rates, particularly consumer finance and insurance companies, represented another profitable area, as did industrial machinery manufacturers.The fund also derived significant gains from individual holdings in other areas, most notably outdoor advertising company Lamar Advertising and electric utility TXU Corp.

On the other hand, the fund’s equity-related gains were held in check by the market’s bias in favor of smaller stocks than those on which the fund focuses. Returns compared to the benchmark also suffered from the fund’s emphasis on technology stocks. Although most technology companies met or exceeded analysts’ earnings expectations, stock prices generally retreated on concerns that earnings growth might slow as the economic cycle unfolds. While most areas of technology were hurt by this trend, the fund’s semiconductor holdings, such as Novellus Systems, KLA-Tencor, Intel and Taiwan Semiconductor Manufacturing Company, were most deeply affected. In the telecommunications services area, relative performance was hurt by the fund’s position in MCI, which faced uncertainties emerging from bankruptcy, and its lack of exposure to AT&T Wireless, which benefited from a buyout offer. Finally, declines in Ryanair, a low-fare European airline, undermined gains in the industrials area.

The bond portion of the fund slightly underperformed the Lehman Aggregate Index during the reporting period, primarily due to the fund’s strategy of targeting higher quality in credit. The portfolio was underweight in corporate bonds relative to the Lehman Aggregate Index by a small percentage, which detracted slightly from performance

4

as corporate bonds (particular lower credit quality bonds) outperformed Treasuries.Toward the end of the reporting period, the bond portfolio was overweight in cash and underweight Treasuries, which further detracted from performance relative to the Lehman Aggregate Index.

What is the fund’s current strategy?

As of the end of the reporting period, the fund continues to emphasize stocks over bonds in light of current economic trends. Among stocks, we hold slightly overweighted positions in the economically sensitive technology and materials sectors, and an underweighted position in the consumer discretionary area, which we believe may be vulnerable to potentially higher interest rates. However, the primary focus of our stock selection process remains on finding the most attractive individual investment ideas wherever they may be.

Among bonds, we have continued to invest in corporate bonds, mortgage-backed securities, U.S. Treasury securities and other types of fixed-income securities in proportions that approximately mirror their representation in the Lehman Aggregate Index.

May 17, 2004

1
  		 Total return includes reinvestment of dividends and any capital gains paid, and does not take into consideration the maximum initial sales charges in the case of Class A and Class T shares, or the applicable contingent deferred sales charges imposed on redemptions in the case of Class B and Class C shares. Had these charges been reflected, returns would have been lower. Past performance is no guarantee of future results. Share price and investment return fluctuate such that upon redemption, fund shares may be worth more or less than their original cost. Return figures provided reflect the absorption of fund expenses by The Dreyfus Corporation pursuant to an agreement in effect through July 20, 2004, 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 dividends and, where applicable, capital gain distributions.The Standard & Poor’s 500 Composite Stock Price Index is a widely accepted, unmanaged index of U.S. stock market performance.The Lehman Brothers U.S.Aggregate Index is a widely accepted, unmanaged total return index of corporate, U.S. government and U.S. government agency debt instruments, mortgage-backed securities and asset-backed securities with an average maturity of 1-10 years.

The Fund 5

STATEMENT OF INVESTMENTS
April 30, 2004 (Unaudited)
Common Stocks—66.6% Shares   Value ($)  
 
 
Consumer Discretionary—6.8%        
Carnival 35,800   1,527,586  
Clear Channel Communications 34,000   1,410,660  
Comcast, Cl. A 21,937 a   660,303  
Disney(Walt) 51,000   1,174,530  
Hilton Hotels 50,000   874,500  
Home Depot 63,000   2,216,970  
Lamar Advertising 35,000 a,b   1,437,100  
Liberty Media 114,000 a   1,247,160  
Petsmart 43,000   1,191,100  
Staples 30,800   793,408  
TJX Cos 59,000   1,449,630  
Target 32,900   1,426,873  
Time Warner 104,300 a   1,754,326  
Toyota Motor, ADR 17,000   1,244,570  
Univision Communications 33,000 a   1,117,050  
Viacom, Cl. B 66,000   2,550,900  
      22,076,666  
Consumer Staples—6.7%        
Altria Group 72,800   4,031,664  
Coca-Cola 49,900   2,523,443  
Colgate-Palmolive 24,000   1,389,120  
PepsiCo 53,400   2,909,766  
Procter & Gamble 35,500   3,754,125  
Wal-Mart Stores 124,100   7,073,700  
      21,681,818  
Energy—4.1%        
Anadarko Petroleum 33,000   1,768,140  
ChevronTexaco 24,000   2,196,000  
Exxon Mobil 141,200   6,008,060  
Schlumberger 31,000   1,814,430  
XTO Energy 52,125   1,391,738  
      13,178,368  
Financial—13.3%        
American Express 27,000   1,321,650  
American International Group 71,700   5,137,305  
Bank of America 48,769   3,925,417  

6

Common Stocks (continued) Shares   Value ($)  
 
 
Financial (continued)        
Bank of New York 53,300   1,553,162  
Bank One 25,000   1,234,250  
Capital One Financial 20,000   1,310,600  
CIT Group 54,000   1,855,980  
Citigroup 129,700   6,237,273  
Countrywide Financial 22,999   1,363,840  
Federal Home Loan Association 19,000   1,109,600  
Federal National Mortgage Association 35,900   2,467,048  
Fidelity National Financial 26,400   966,240  
Fifth Third Bancorp 31,000   1,663,460  
Goldman Sachs Group 20,300   1,958,950  
J.P. Morgan Chase & Co. 35,600   1,338,560  
MBNA 51,850   1,264,103  
Merrill Lynch 31,000   1,681,130  
Morgan Stanley 31,000   1,593,090  
St. Paul Cos 26,380   1,072,875  
U.S. Bancorp 53,000   1,358,920  
Wells Fargo 48,400   2,732,664  
      43,146,117  
Health Care—9.3%        
Abbott Laboratories 23,300   1,025,666  
Amgen 21,000 a   1,181,670  
Bard (C.R.) 11,000 a   1,168,970  
Barr Pharmaceuticals 21,000 a   869,820  
Becton, Dickinson & Co. 23,000   1,162,650  
Boston Scientific 26,000 a   1,070,940  
CIGNA 21,000   1,354,710  
Community Health Systems 30,000 a   773,700  
Genzyme 23,000 a   1,001,880  
Johnson & Johnson 68,300   3,690,249  
Lilly (Eli) & Co. 22,100   1,631,201  
Medtronic 26,000   1,311,960  
Merck & Co. 39,100   1,837,700  
Novartis, ADR 26,000   1,164,800  
Pfizer 215,700   7,713,432  
Teva Pharmaceutical Industries, ADR 18,000   1,108,080  

The Fund 7

STATEMENT OF INVESTMENTS (Unaudited) (continued)

Common Stocks (continued) Shares   Value ($)  
 
 
Health Care (continued)        
Watson Pharmaceuticals 23,000 a   819,030  
Wyeth 30,000   1,142,100  
      30,028,558  
Industrials—7.3%        
Danaher 13,000   1,202,760  
Deere & Co 23,000   1,564,920  
Emerson Electric 19,000   1,144,180  
General Electric 239,600   7,176,020  
Illinois Tool Works 19,000   1,637,990  
Ingersoll-Rand 20,000 a   1,291,000  
Lockheed Martin 24,000   1,144,800  
PACCAR 18,000   1,016,280  
Rockwell Collins 27,000   870,750  
3M 17,200   1,487,456  
Tyco International 53,000   1,454,850  
United Parcel Service, Cl. B 17,000   1,192,550  
United Technologies 13,000   1,121,380  
Waste Management 45,000   1,278,000  
      23,582,936  
Information Technology—12.1%        
Accenture 54,000 a   1,283,580  
Altera 37,000 a   740,370  
Cisco Systems 149,700 a   3,124,239  
Computer Associates International 24,000   643,440  
Computer Sciences 27,000 a   1,104,570  
Dell 74,900 a   2,599,779  
EMC 119,000 a   1,328,040  
Hewlett-Packard 92,640   1,825,008  
Intel 141,300   3,635,649  
International Business Machines 43,200   3,808,944  
Jabil Circuit 67,000 a   1,768,130  
Lexmark International 17,000 a   1,537,820  
Microsoft 216,800   5,630,296  
Motorola 61,000   1,113,250  
National Semiconductor 17,000 a   693,430  
Oracle 114,100 a   1,280,202  

8

Common Stocks (continued) Shares   Value ($)  
 
 
Information Technology (continued)        
QUALCOMM 15,000   936,900  
SanDisk 30,000 a   693,300  
SAP, ADR 20,000   745,600  
Siebel Systems 76,000 a   781,280  
Taiwan Semiconductor Manufacturing, ADR 115,300   1,098,809  
Texas Instruments 51,000   1,280,100  
VeriSign 78,000 a   1,258,140  
Xilinx 12,300   413,649  
      39,324,525  
Materials—2.9%        
Air Products & Chemicals 27,000   1,344,870  
Alcoa 35,600   1,094,700  
du Pont (EI) deNemours 27,000   1,159,650  
International Paper 37,000   1,491,840  
PPG Industries 20,000   1,186,200  
Praxair 51,800   1,893,290  
Weyerhaeuser 20,000   1,184,000  
      9,354,550  
Telecommunication Services—2.1%        
BellSouth 34,500   890,445  
SBC Communications 54,700   1,362,030  
Sprint (FON Group) 76,000   1,359,640  
Telefonos de Mexico, ADR 32,000   1,092,480  
Verizon Communications 58,000   2,188,920  
      6,893,515  
Utilities—2.0%        
Exelon 27,000   1,807,380  
FPL Group 15,000   954,300  
Progress Energy 16,000   684,320  
Southern 35,000 b   1,006,600  
TXU 41,000 b   1,399,740  
Wisconsin Energy 23,000   722,200  
      6,574,540  
Total Common Stocks        
   (cost $182,354,316)     215,841,593  

The Fund 9

STATEMENT OF INVESTMENTS (Unaudited) (continued)

  Principal      
Bonds and Notes—29.4% Amount ($) Value ($)  
 
Airlines—.0%        
Continental Airlines,        
   Pass-Through Ctfs., Ser. 1998-1,        
   Cl. A, 6.648%, 9/15/2017 63,881   61,841  
Asset-Backed Certificates-Credit Cards—.4%        
MBNA Credit Card Master Note Trust,        
   Ser. 2002-C1, Cl. 1, 6.8%, 7/15/2014 1,228,300   1,336,829  
Auto Manufacturing—.4%        
Ford Motor,        
   Notes, 7.45%, 7/16/2031 620,000   606,137  
General Motors,        
   Sr. Notes, 8.375%, 7/15/2033 547,000   593,285  
      1,199,422  
Banks—.6%        
Bank of America,        
   Sr. Notes, 4.375%, 12/1/2010 1,675,000   1,651,632  
Dresdner Funding Trust I,        
   Bonds, 8.151%, 6/30/2031 275,000 c 316,970  
      1,968,602  
Commercial Mortgage Pass-Through Ctfs.—1.7%        
Chase Commerical Mortgage Securities Corp,        
   Ser. 2001-245, Cl. A1, 5.974%, 2/12/2016 1,507,889 c 1,595,965  
CS First Boston Mortgage Securities,        
   Ser. 1998-C1,Cl. A1A, 6.26%, 5/17/2040 952,325   987,152  
GE Capital Commercial Mortgage Corp,        
   Ser. 2004-C2 G, 5.326%, 3/10/2014 1,500,000 c 1,461,094  
Salomon Brothers Mortgage Securities VII,        
   Ser. 2002-Key2, Cl. A1, 3.222%, 3/18/2036 1,617,276   1,630,383  
      5,674,594  
Computers—.5%        
International Businss Machines,        
   Sr. Notes, 4.75%, 11/29/2012 210,000   207,883  
Hewlett-Packard,        
   Notes, 5.75%, 12/15/2006 1,365,000   1,456,680  
      1,664,563  
Consumer Products—.2%        
Kimberly-Clark,        
   Notes, 5%, 8/15/2013 760,000   769,798  

10

  Principal      
Bonds and Notes (continued) Amount ($) Value ($)  
 
Diversified Financial Services—.7%        
Boeing Capital,        
   Bonds, 5.8%, 1/15/2013 201,000 b 208,816  
   Sr. Notes, 4.75%, 8/25/2008 421,000   432,167  
CIT Group,        
   Sr. Notes, 4.75%, 12/15/2010 342,000   339,465  
Ford Motor Credit,        
   Notes, 1.31%, 3/13/2007 159,000   155,820  
General Electric Capital,        
   Sr. Notes, Ser. A,        
   4.25%, 12/1/2010 461,000   451,626  
Goldman Sachs,        
   Notes, 3.875%, 1/15/2009 640,000 b 630,774  
      2,218,668  
Electric—.9%        
Consolidated Edison of New York,        
   Debs., 4.875%, 2/1/2013 1,075,000   1,067,301  
Entergy Arkansas,        
   First Mortgage, 5.4%, 5/1/2018 385,000   365,959  
Public Service Company of Colorado,        
   First Collateral Trust Bonds, Ser. 12,        
   4.875%, 3/1/2013 541,000   533,363  
TXU Energy,        
   Sr. Notes, 7%, 3/15/2013 800,000   885,806  
      2,852,429  
Equipment—.5%        
Pitney Bowes,        
   Notes, 4.75%, 5/15/2018 1,715,000   1,611,925  
Food & Beverages—.2%        
Miller Brewing,        
   Notes, 4.25%, 8/15/2008 400,000 b,c 401,765  
Pepsi Bottling,        
   Sr. Notes, Ser. B, 7%, 3/1/2029 235,000   262,979  
      664,744  
Electrical Components & Equipment—.2%        
Emerson Electric,        
   Bonds, 4.5%, 5/1/2003 685,000   661,161  

The Fund 11

STATEMENT OF INVESTMENTS (Unaudited) (continued)

  Principal      
Bonds and Notes (continued) Amount ($) Value ($)  
 
Forest Products and Paper—.1%        
International Paper,        
   Notes, 5.85%, 10/30/2012 150,000   155,113  
Healthcare—.4%        
Abbott Laboratories,        
   Notes, 4.35%, 3/15/2014 792,000   750,790  
UnitedHealth Group,        
   Sr. Notes, 3.3%, 1/30/2008 500,000   494,827  
      1,245,617  
Insurance—.2%        
Chubb,        
   Notes, 6%, 11/15/2011 185,000   197,254  
Metlife,        
   Sr. Notes, 5.375%, 12/15/2012 535,000 b 544,092  
      741,346  
Manufacturing—.2%        
General Electric,        
   Notes, 5%, 2/1/2013 641,000   638,439  
Media—.2%        
Clear Channel Communications,        
   Sr. Notes, 5%, 3/15/2012 181,000 b 179,990  
Liberty Media,        
   Sr. Notes, 5.7%, 5/15/2013 255,000 b 255,422  
Time Warner,        
   Notes, 6.875%, 5/1/2012 200,000   218,991  
      654,403  
Mining—.2%        
Alcoa,        
   Notes, 4.25%, 8/15/2007 130,000   133,660  
   6%, 1/15/2012 520,000 b 561,784  
      695,444  
Oil and Gas—.1%        
Conocophillips,        
   Notes, 4.75%, 10/15/2012 285,000   282,355  
Real Estate—.1%        
EOP Operating,        
   Sr. Notes, 7%, 7/15/2011 190,000   211,164  

12

  Principal      
Bonds and Notes (continued) Amount ($) Value ($)  
 
Residential Mortgage Pass-Through Ctfs.—.7%        
Argent Securities,        
   Ser. 2004-WE5,Cl. AF4, 4.01%, 4/25/2034 800,000   770,560  
Residential Asset Mortgage Products        
   Ser. 2003-RS8, Cl. A4, 4.223%, 10/25/2028 1,600,000   1,613,782  
      2,384,342  
Structured Index—1.0%        
Morgan Stanley Traded Custody Receipts:        
   Ser. 2002-1, 5.878%, 3/1/2007 3,045,000 c,d 3,231,780  
Telecommunications—.6%        
British Telecommunications,        
   Notes, 8.375%, 12/15/2010 727,000   866,468  
Motorola,        
   Sr. Notes, 8%, 11/1/2011 260,000   301,604  
Verizon Florida,        
   Debs., 6.125%, 1/15/2013 411,000   430,955  
Verizon Wireless Capital,        
   Notes, 5.375%, 12/15/2006 115,000   121,424  
Vodafone,        
   Notes, 7.875%, 2/15/2030 55,000   65,907  
      1,786,358  
Transportation—.0%        
Union Pacific Corp,        
   Debs., 7.125%, 2/1/2028 115,000   126,858  
U.S. Government—6.3%        
U.S. Treasury Bonds:        
   5.375%, 2/15/2031 265,000   268,559  
U.S. Treasury Notes:        
   1.5%,3/31/2006 84,000   82,855  
   1.625% 2/28/2006 176,000   174,185  
   2.25%, 4/30/2006 176,000   175,849  
   4%, 2/15/2014 15,009,000 b 14,422,718  
   6.25%,2/15/2007 2,090,000 b 2,284,454  
U.S. Treasury Inflation Protection Securities:        
   4.151%, 1/15/2008 2,799,034 b,e 3,082,094  
      20,490,714  

The Fund 13

STATEMENT OF INVESTMENTS (Unaudited) (continued)

    Principal      
Bonds and Notes (continued) Amount ($) Value ($)  
 
U.S. Government Agencies/Mortgage-Backed—13.0%        
Federal Home Loan Bank, Bonds:        
Ser. 432, 4.5%, 9/16/2013 8,270,000   8,016,152  
Federal Home Loan Mortgage Corp.,        
REMIC, Gtd. Multiclass Mortgage Participation Cfts.:        
Ser. 2612, Cl. LJ, 4%, 7/15/2022 359,239   365,353  
Ser. 2693, Cl. MH, 5.5%, 9/15/2027 2,000,000   1,940,000  
(Interest Only Obligation):        
Ser. 2770, Cl. YI, 5%, 6/15/2022 1,000,000 f 129,062  
Federal National Mortgage Association:        
Mortgage-Backed:        
6.88%, 2/1/2028 743,700   802,787  
6%, 8/1/2032 1,326,724   1,358,234  
6%, 10/1/2032 1,641,518   1,680,504  
Government National Mortgage Association I:        
5.5%, 4/15/2033 4,846,387   4,853,948  
6%, 5/15/2028-4/15/2033 27,253,604   22,996,027  
        42,142,067  
Total Bonds and Notes        
   (cost $ 97,249,790)     95,470,576  
 
           
Other Investments—4.7% Shares   Value ($)  
 
Registered Investment Companies:        
Dreyfus Institutional Cash Advantage Fund 5,105,334 g 5,105,334  
Dreyfus Institutional Cash Advantage Plus Fund 5,105,333 g 5,105,333  
Dreyfus Institutional Preferred Plus Money Market Fund 5,105,333 g 5,105,333  
Total Other Investments        
   (cost $ 15,316,000)     15,316,000  
 
    Principal      
Short-Term Investments—.4% Amount ($) Value ($)  
 
U.S. Treasury Bills;        
.93%, 6/10/2004        
   (cost $ 1,303,719) 1,305,000 h 1,303,826  

14

Investment of Cash Collateral        
for Securities Loaned—7.8% Shares   Value ($)  
 
 
Registered Investment Company;        
Dreyfus Institutional Preferred Money Market Fund        
   (cost $ 24,520,579)   25,420,579 g   25,420,579  
 
 
             
Total Investments (cost $ 320,744,404) 108.9%   353,352,574  
Liabilities, Less Cash and Receivables (8.9%)   (28,797,225)  
Net Assets   100.0%   324,555,349  
a Non-income producing.
b
  		 All or a portion of these securities are on loan.At April 30, 2004, the total market value of the fund’s securities on loan is $24,652,031 and the total market value of the collateral held by fund is $25,420,579.
c
  		 Securities exempt from registration under Rule 144A of the Securities Act of 1993.These securities may be sold in transactions exempt from registration, normally to qualified institutional buyers.At April 30, 2004, these securities amount to $7,007,574 or 2.2% of net assets.
d
  		 Security linked to a portfolio of investment grade debt securities.
e
  		 Principal amount for accrual purpose is periodically adjusted based on a changes to the Consumer Price Index.
f
  		 Notional face amount shown
g
  		 Investments in affiliated money market mutual funds.
h
  		 Partially held by a broker in a segregated account for open financial futures.

See notes to financial statements.

The Fund 15

STATEMENT OF FINANCIAL FUTURES
April 30, 2004 (Unaudited)
          Unrealized  
      Market Value   Appreciation  
      Covered by   (Depreciation)  
  Contracts   Contracts ($) Expiration at 4/30/2004 ($)  
 
 
Financial Futures Long:            
U.S. Treasury 30 year Bond 1   107,094 June 2004 (2,694)  
Financial Futures Short:            
U.S. Treasury 5 year Note 9   989,438 June 2004 221  
          (2,473)  

See notes to financial statements.

16

STATEMENT OF ASSETS AND LIABILITIES
April 30, 2004 (Unaudited)
      Cost Value  
 
Assets ($):          
Investments in securities—        
See Statement of Investments (including securities      
on loan valued at $24,652,031)—Note 1(b,c):      
Unaffiliated issuers   280,007,825 312,615,995  
Affiliated issuers   40,736,579 40,736,579  
Cash       603,510  
Receivable for investment securities sold   5,193,039  
Dividends and interest receivable     1,124,830  
Receivable for shares of Capital Stock subscribed   68,590  
        360,342,543  
 
Liabilities ($):        
Due to The Dreyfus Corporation and affiliates—Note 2(a)   369,589  
Liability for securities on loan—Note 1(b)   25,420,579  
Payable for shares of Capital Stock redeemed   7,432,989  
Payable for investment securities purchased   2,561,004  
Payable for futures variation margin—Note 1(d)   3,033  
        35,787,194  
 
Net Assets ( $)     324,555,349  
 
Composition of Net Assets ( $):      
Paid-in capital       526,776,561  
Accumulated undistributed investment income—net   698,874  
Accumulated net realized gain (loss) on investments   (234,625,783)  
Accumulated net unrealized appreciation (depreciation)      
on investments [including ($2,473) net unrealized      
(depreciation) on financial futures]   31,705,697  
 
Net Assets ( $)     324,555,349  
Net Asset Value Per Share                  
  Class A   Class B   Class C   Class R   Class T  
 
 
 
 
 
Net Assets ($) 106,752,319   92,158,810   18,279,785   107,001,377   363,058  
Shares Outstanding 8,811,440   7,638,800   1,509,737   8,826,084   29,995  
 
 
 
 
 
Net Asset Value                    
   Per Share ($) 12.12   12.06   12.11   12.12   12.10  

See notes to financial statements.

The Fund 17

STATEMENT OF OPERATIONS
Six Months Ended April 30, 2004 (Unaudited)
Investment Income ($):    
Income:      
  1,939,676  
Cash dividends (net of $6,589 foreign taxes withheld at source):    
  1,875,627  
  46,984  
  18,306  
Total Income   3,880,593  
Expenses:      
Management fee—Note 2(a)   1,713,641  
Distribution and service fees—Note 2(b) 746,627  
Dividends on securities sold short 15,480  
Loan commitment fees—Note 4 1,701  
Total Expenses   2,477,449  
Less—reduction in management fee due to    
   undertaking—Note 2(a)   (84,406)  
Net Expenses   2,393,043  
Investment Income—Net   1,487,550  
 
Realized and Unrealized Gain (Loss) on Investments—Note 3 ($):    
Net realized gain (loss) on investments:    
   Long transactions   9,981,609  
   Short sale transactions   (163,814)  
Net realized gain (loss) on financial futures (1,622,224)  
Net Realized Gain (Loss)   8,195,571  
Net unrealized appreciation (depreciation) on investments (including    
   $ 105,286 net unrealized appreciation on financial futures) (1,195,407)  
Net Realized and Unrealized Gain (Loss) on Investments 7,000,164  
Net Increase in Net Assets Resulting from Operations 8,487,714  

See notes to financial statements.

18

STATEMENT OF CHANGES IN NET ASSETS

  Six Months Ended      
  April 30, 2004   Year Ended  
  (Unaudited)   October 31, 2003  
 
 
Operations ($):        
Investment income—net 1,487,550   3,304,279  
Net realized gain (loss) on investments 8,195,571   (41,937,771)  
Net unrealized appreciation        
   (depreciation) on investments (1,195,407)   84,395,022  
Net Increase (Decrease) in Net Assets        
   Resulting from Operations 8,487,714   45,761,530  
 
 
Dividends to Shareholders from ($):        
Investment income—net:        
Class A shares (908,159)   (1,635,519)  
Class B shares (381,182)   (371,108)  
Class C shares (75,275)   (80,194)  
Class R shares (875,389)   (2,536,285)  
Class T shares (2,022)   (3,338)  
Total Dividends (2,242,027)   (4,626,444)  
 
 
Capital Stock Transactions ($):        
Net proceeds from shares sold:        
Class A shares 15,656,491   31,942,055  
Class B shares 2,756,473   6,411,710  
Class C shares 1,163,926   1,148,146  
Class R shares 19,044,037   21,709,250  
Class T shares 48,877   230,654  
Dividends reinvested:        
Class A shares 587,044   947,612  
Class B shares 303,381   292,272  
Class C shares 43,603   48,470  
Class R shares 872,360   2,532,492  
Class T shares 1,822   2,924  
Cost of shares redeemed:        
Class A shares (40,265,762)   (96,121,460)  
Class B shares (16,967,594)   (31,813,694)  
Class C shares (3,706,751)   (8,956,678)  
Class R shares (13,948,408)   (174,633,286)  
Class T shares (13,003)   (398,514)  
Increase (Decrease) in Net Assets        
   from Capital Stock Transactions (34,423,504)   (246,658,047)  
Total Increase (Decrease) in Net Assets (28,177,817)   (205,522,961)  
 
 
Net Assets ($):        
Beginning of Period 352,733,166   558,256,127  
End of Period 324,555,349   352,733,166  
Undistributed investment income—net 698,874   1,453,351  

The Fund 19

STATEMENT OF CHANGES IN NET ASSETS (continued)

  Six Months Ended      
  April 30, 2004   Year Ended  
  (Unaudited)   October 31, 2003  
 
 
Capital Share Transactions:        
Class Aa        
Shares sold 1,269,106   2,873,319  
Shares issued for dividends reinvested 49,149   86,369  
Shares redeemed (3,309,826)   (8,805,556)  
Net Increase (Decrease) in Shares Outstanding (1,991,571)   (5,845,868)  
 
 
Class Ba        
Shares sold 224,388   579,890  
Shares issued for dividends reinvested 25,432   26,821  
Shares redeemed (1,381,399)   (2,911,193)  
Net Increase (Decrease) in Shares Outstanding (1,131,579)   (2,304,482)  
 
 
Class C        
Shares sold 93,845   101,979  
Shares issued for dividends reinvested 3,641   4,435  
Shares redeemed (300,998)   (813,527)  
Net Increase (Decrease) in Shares Outstanding (203,512)   (707,113)  
 
 
Class R        
Shares sold 1,523,492   2,008,521  
Shares issued for dividends reinvested 73,029   231,306  
Shares redeemed (1,138,132)   (15,737,305)  
Net Increase (Decrease) in Shares Outstanding 458,389   (13,497,478)  
 
 
Class T        
Shares sold 3,998   20,036  
Shares issued for dividends reinvested 152   267  
Shares redeemed (1,043)   (35,436)  
Net Increase (Decrease) in Shares Outstanding 3,107   (15,133)  

a During the period ended April 30, 2004, 481,707 Class B shares representing $5,937,451 were automatically converted to 480,438 Class A shares and during the period ended October 31, 2003, 554,499 Class B shares representing $6,062,358 were automatically converted to 553,053 Class A shares.

See notes to financial statements.

20

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                      
  April 30, 2004       Year Ended October 31,      
         
     
Class A Shares (Unaudited)   2003   2002   2001   2000   1999  
 
 
 
 
 
 
Per Share Data ($):                          
Net asset value,                          
   beginning of period   11.90   10.73   12.44   15.23   15.69   14.88  
Investment Operations:                          
Investment income—neta   .06   .09   .13   .22   .44   .36  
Net realized and unrealized                          
   gain (loss) on investments   .25   1.19   (1.68)   (2.71)   (.19)   1.68  
Total from Investment Operations .31   1.28   (1.55)   (2.49)   .25   2.04  
Distributions:                          
Dividends from                          
   investment income—net   (.09)   (.11)   (.16)   (.30)   (.38)   (.30)  
Dividends from net realized                          
   gain on investments   —   —   —   —   (.33)   (.93)  
Total Distributions   (.09)   (.11)   (.16)   (.30)   (.71)   (1.23)  
Net asset value, end of period   12.12   11.90   10.73   12.44   15.23   15.69  
 
 
 
 
 
 
Total Return (%)b   2.53c   12.05   (12.62)   (16.65)   1.66   14.39  
 
 
 
 
 
 
Ratios/Supplemental Data (%):                        
Ratio of expense                          
   to average net assets   .60c   1.25   1.25   1.25   1.25   1.25  
Ratio of net investment income                        
   to average net assets   .52c   .86   1.06   1.57   2.83   2.31  
Decrease reflected in above expense                        
   ratios due to undertaking by                          
   The Dreyfus Corporation   .02c   —   —   —   —   —  
Portfolio Turnover Rate   89.46c   305.24   268.17   150.98   100.47   104.42  
 
 
 
 
 
 
Net Assets, end of period                          
   ($ x 1,000) 106,752   128,519   178,679   290,331   379,670   213,362  
a Based on average shares outstanding at each month end.
b
  		 Exclusive of sales charge.
c
  		 Not annualized.

See notes to financial statements.

The Fund 21

FINANCIAL HIGHLIGHTS (continued)

  Six Months Ended                      
  April 30, 2004       Year Ended October 31,      
         
     
Class B Shares (Unaudited)   2003   2002   2001   2000   1999  
 
 
 
 
 
 
Per Share Data ($):                          
Net asset value,                          
   beginning of period   11.85   10.69   12.40   15.18   15.65   14.83  
Investment Operations:                          
Investment income—neta   .02   .01   .04   .11   .32   .24  
Net realized and unrealized                          
   gain (loss) on investments   .23   1.19   (1.68)   (2.70)   (.19)   1.69  
Total from Investment Operations .25   1.20   (1.64)   (2.59)   .13   1.93  
Distributions:                          
Dividends from                          
   investment income—net   (.04)   (.04)   (.07)   (.19)   (.27)   (.18)  
Dividends from net realized                          
   gain on investments   —   —   —   —   (.33)   (.93)  
Total Distributions   (.04)   (.04)   (.07)   (.19)   (.60)   (1.11)  
Net asset value, end of period   12.06   11.85   10.69   12.40   15.18   15.65  
 
 
 
 
 
 
Total Return (%)b   2.15c   11.21   (13.29)   (17.27)   .84   13.64  
 
 
 
 
 
 
Ratios/Supplemental Data (%):                        
Ratio of operating expenses                          
   to average net assets   .97c   2.00   2.00   2.00   2.00   2.00  
Ratio of interest expense and                          
   loan commitment fees                          
   to average net assets   .01c   —   —   —   —   —  
Ratio of net investment income                        
   to average net assets   .15c   .12   .31   .83   2.07   1.55  
Decrease reflected in above expense                        
   ratios due to undertaking by                          
   The Dreyfus Corporation   .02c   —   —   —   —   —  
Portfolio Turnover Rate   89.46c   305.24   268.17   150.98   100.47   104.42  
 
 
 
 
 
 
Net Assets, end of period                          
   ($ x 1,000) 92,159   103,904   118,415   174,172   223,096   205,491  
a Based on average shares outstanding at each month end.
b
  		 Exclusive of sales charge.
c
  		 Not annualized.

See notes to financial statements.

22

  Six Months Ended                      
  April 30, 2004       Year Ended October 31,      
         
     
Class C Shares (Unaudited)   2003   2002   2001   2000   1999  
 
 
 
 
 
 
Per Share Data ($):                          
Net asset value,                          
   beginning of period   11.89   10.73   12.45   15.23   15.70   14.87  
Investment Operations:                          
Investment income—neta   .02   .01   .04   .12   .32   .24  
Net realized and unrealized                          
   gain (loss) on investments   .24   1.19   (1.69)   (2.71)   (.19)   1.71  
Total from Investment Operations .26   1.20   (1.65)   (2.59)   .13   1.95  
Distributions:                          
Dividends from                          
   investment income—net   (.04)   (.04)   (.07)   (.19)   (.27)   (.19)  
Dividends from net realized                          
   gain on investments   —   —   —   —   (.33)   (.93)  
Total Distributions   (.04)   (.04)   (.07)   (.19)   (.60)   (1.12)  
Net asset value, end of period   12.11   11.89   10.73   12.45   15.23   15.70  
 
 
 
 
 
 
Total Return (%)b   2.23c   11.17   (13.32)   (17.26)   .90   13.59  
 
 
 
 
 
 
Ratios/Supplemental Data (%):                        
Ratio of operating expenses                          
   to average net assets   .97c   2.00   2.00   2.00   2.00   2.00  
Ratio of interest expense and                          
   loan commitment fees                          
   to average net assets   .01c   —   —   —   —   —  
Ratio of net investment income                        
   to average net assets   .15c   .11   .31   .83   2.07   1.57  
Decrease reflected in above expense                        
   ratios due to undertaking by                          
   The Dreyfus Corporation   .02c   —   —   —   —   —  
Portfolio Turnover Rate   89.46c   305.24   268.17   150.98   100.47   104.42  
 
 
 
 
 
 
Net Assets, end of period                          
   ($ x 1,000) 18,280   20,370   25,970   43,451   60,237   55,723  
a Based on average shares outstanding at each month end.
b
  		 Exclusive of sales charge.
c
  		 Not annualized.

See notes to financial statements.

The Fund 23

FINANCIAL HIGHLIGHTS (continued)

  Six Months Ended                      
  April 30, 2004       Year Ended October 31,      
         
     
Class R Shares (Unaudited)   2003   2002   2001   2000   1999  
 
 
 
 
 
 
Per Share Data ($):                          
Net asset value,                          
   beginning of period   11.91   10.74   12.45   15.24   15.70   14.88  
Investment Operations:                          
Investment income—neta   .08   .12   .16   .25   .47   .40  
Net realized and unrealized                          
   gain (loss) on investments   .23   1.19   (1.68)   (2.71)   (.18)   1.69  
Total from Investment Operations .31   1.31   (1.52)   (2.46)   .29   2.09  
Distributions:                          
Dividends from                          
   investment income—net   (.10)   (.14)   (.19)   (.33)   (.42)   (.34)  
Dividends from net realized                          
   gain on investments   —   —   —   —   (.33)   (.93)  
Total Distributions   (.10)   (.14)   (.19)   (.33)   (.75)   (1.27)  
Net asset value, end of period   12.12   11.91   10.74   12.45   15.24   15.70  
 
 
 
 
 
 
Total Return (%)   2.74b   12.19   (12.38)   (16.43)   1.86   14.76  
 
 
 
 
 
 
Ratios/Supplemental Data (%):                        
Ratio of operating expenses                          
   to average net assets   .47b   1.00   1.00   1.00   1.00   1.00  
Ratio of interest expense and                          
   loan commitment fees                          
   to average net assets   .01b   —   —   —   —   —  
Ratio of net investment income                        
   to average net assets   .65b   1.10   1.31   1.83   3.07   2.54  
Decrease reflected in above expense                        
   ratios due to undertaking by                          
   The Dreyfus Corporation   .03b   —   —   —   —   —  
Portfolio Turnover Rate   89.46b   305.24   268.17   150.98   100.47   104.42  
 
 
 
 
 
 
Net Assets, end of period                          
   ($ x 1,000) 107,001   99,620   234,741   300,882   424,083   397,234  
  • a Based on average shares outstanding at each month end.
    Not annualized.

See notes to financial statements.

24

  Six Months Ended                      
  April 30, 2004       Year Ended October 31,      
         
     
Class T Shares (Unaudited)   2003   2002   2001   2000   1999a  
 
 
 
 
 
 
Per Share Data ($):                          
Net asset value,                          
   beginning of period   11.88   10.72   12.43   15.21   15.68   15.43  
Investment Operations:                          
Investment income—netb   0.05   0.07   .10   .18   .36   .08  
Net realized and unrealized                          
   gain (loss) on investments   .24   1.18   (1.68)   (2.70)   (.15)   .17  
Total from Investment Operations .29   1.25   (1.58)   (2.52)   .21   .25  
Distributions:                          
Dividends from                          
   investment income—net   (.07)   (.09)   (.13)   (.26)   (.35)   —  
Dividends from net realized                          
   gain on investments   —   —   —   —   (.33)   —  
Total Distributions   (.07)   (.09)   (.13)   (.26)   (.68)   —  
Net asset value, end of period   12.10   11.88   10.72   12.43   15.21   15.68  
 
 
 
 
 
 
Total Return (%)c   2.49d   11.69   (12.86)   (16.82)   1.35   1.62d  
 
 
 
 
 
 
Ratios/Supplemental Data (%):                        
Ratio of operating expenses                          
   to average net assets   .72d   1.50   1.50   1.50   1.50   .32d  
Ratio of interest expense and                          
   loan commitment fees                          
   to average net assets   .01d   —   —   —   —   —  
Ratio of net investment income                        
   to average net assets   .40d   .62   .78   1.31   2.52   .40d  
Decrease reflected in above expense                        
   ratios due to undertaking by                          
   The Dreyfus Corporation   .03d   —   —   —   —   —  
Portfolio Turnover Rate   89.46d   305.24   268.17   150.98   100.47   104.42  
 
 
 
 
 
 
Net Assets, end of period                          
   ($ x 1,000)   363   320   451   1,074   1,154   26  
a From August 16, 1999 (commencement of initial offering) to October 31, 1999.
b
  		 Based on average shares outstanding at each month end.
c
  		 Exclusive of sales charge.
d
  		 Not annualized.

See notes to financial statements.

The Fund 25

NOTES TO FINANCIAL STATEMENTS (Unaudited)

NOTE 1—Significant Accounting Policies:

Dreyfus Premier Balanced Fund (the “fund”) is a separate diversified series of The Dreyfus/Laurel Funds, Inc. (the “Company”) which is registered under the Investment Company Act of 1940, as amended (the “Act”), as an open-end management investment company and operates as a series company currently offering sixteen series, including the fund. The fund’s investment objective is to outperform an unmanaged hybrid index, 60% of which is the Standard & Poor’s 500 Composite Stock Price Index and 40% of which is the Lehman Brothers U.S. Aggregate Index.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”).

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 50 million shares of $.001 par value Capital Stock in each of the following classes of shares: Class A, Class B, Class C and Class R and 200 million shares of $.001 par value Capital Stock of Class T shares. Class A, Class B, Class C and Class T shares are sold primarily to retail investors through financial intermediaries and bear a distribution fee and /or service fee. Class A and Class T shares are sold with a front-end sales charge, while Class B and Class C shares are subject to a contingent deferred sales charge (“CDSC”). Class B shares automatically convert to Class A shares after six years. Class R shares are sold primarily to bank trust departments and other financial service providers (including Mellon and its affiliates) acting on behalf of customers having a qualified trust or an investment account or relationship at such institution and bear no distribution fee or service fee. Class R shares are offered without a front-end sales charge or CDSC. Each class of shares has identical rights and privileges, except with respect to distribution and service fees and voting rights on matters affecting a single class.

Investment income, net of expenses (other than class specific expenses) and realized and unrealized gains and losses are allocated daily to each class of shares based upon the relative proportion of net assets of each class.

26

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

(a) Portfolio valuation: Most debt securities are valued each business day by an independent pricing service (the “Service”) approved by the Board of Directors. Debt securities 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 debt securities are carried at fair value as determined by the Service, based on methods which include consideration of: yields or prices of securities of comparable quality, coupon, maturity and type; indications as to values from dealers; and general market conditions. Other securities (including financial futures) are valued at the last sales price on the securities exchange or national securities market on which such securities are primarily traded. Securities listed on the National Market System for which market quotations are available are valued at the official closing price or, if there is no official closing price that day, at the last sale price. Securities not listed on an exchange or the national securities market, or securities for which there were no transactions, are valued at the average of the most recent bid and asked prices. Bid price is used when no asked price is available. 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 in accordance with the procedures approved by the fund’s Board. 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.

The Fund 27

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

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

The fund may lend securities to qualified institutions. At origination, all loans are secured by collateral of at least 102% of the value of U.S. securities loaned and 105% of the value of foreign securities loaned. Collateral equivalent to at least 100% of the market value of securities on loan will be maintained at all times. Cash collateral is invested in certain money market mutual funds managed by the Manager as shown in the fund’s Statement of Investments.The fund will be entitled to receive all income on securities loaned, in addition to income earned as a result of the lending transaction. Although each security loaned is fully collateralized, the fund would bear the risk of delay in recovery of, or loss of rights in, the securities loaned should a borrower fail to return the securities in a timely manner.

(c) Affiliated issuers: Issuers in which the fund held investments in other investment companies advised by the Manager are defined as “affiliated” in the Act.

(d) Financial futures: The fund may invest in financial futures contracts in order to gain exposure to or protect against changes in the market.The fund is exposed to market risk as a result of changes in the value of the underlying financial instruments. Investments in financial futures require the fund to “mark to market” on a daily basis, which reflects the change in the market value of the contract at the close of each day’s trading. Typically, 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 April 30,2004,are set forth in the Statement of Financial Futures.

28

(e) Dividends to shareholders: Dividends are recorded on the ex-dividend date. Dividends from investment income-net are declared and paid on a quarterly basis. Dividends from net realized capital gain, if any, are normally declared and paid annually, but the fund may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code of 1986, as amended (the “Code”).To the extent that net realized capital gain can be offset by capital loss carryovers, 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 has an unused capital loss carryover of $240,844,500 available for federal income tax purposes to be applied against future net securities profits, if any, realized subsequent to October 31, 2003. If not applied, $19,144,390 of the carryover expires in fiscal 2008, $105,290,796 expires in fiscal 2009, $72,687,006 expires in fiscal 2010 and $43,722,308 expires in fiscal 2011.

The tax character of distributions paid to shareholders during the fiscal year ended October 31, 2003 was as follows: ordinary income $4,626,444. The tax character of current year distributions will be determined at the end of the current fiscal year.

NOTE 2—Investment Management Fee And Other Transactions With Affiliates:

(a) Investment management fee: Pursuant to an Investment Management agreement with the Manager, the Manager provides for one or more third parties and/or affiliates to provide investment advisory, administrative, custody, fund accounting and transfer agency ser-

The Fund 29

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

vices to the fund.The Manager also directs the investments of the fund in accordance with its investment objective, policies and limitations. For these services, the fund is contractually obligated to pay the Manager a fee, calculated daily and paid monthly, at the annual rate of 1% of the value of the fund’s average daily net assets. Out of its fee, the Manager pays all of the expenses of the fund except brokerage fees, taxes, interest, commitment fees, Rule 12b-1 distribution fees and expenses, service fees, fees and expenses of non-interested Directors (including counsel fees) and extraordinary expenses. In addition, the Manager is required to reduce its fee in an amount equal to the fund’s allocable portion of fees and expenses of the non-interested Directors (including counsel fees). Each Director receives $40,000 per year, plus $5,000 for each joint Board meeting of the Company, The Dreyfus/Laurel Tax-Free Municipal Funds, and The Dreyfus/Laurel Funds Trust (the “Dreyfus/Laurel Funds”) attended, $2,000 for separate committee meetings attended which are not held in conjunction with a regularly scheduled board meeting and $500 for Board meetings and separate committee meetings attended that are conducted by telephone and is reimbursed for travel and out-of-pocket expenses. The Chairman of the Board receives an additional 25% of such compensation (with the exception of reimbursable amounts). In the event that there is a joint committee meeting of the Dreyfus/Laurel Funds and the Dreyfus High Yield Strategies Fund, the $2,000 fee will be allocated between the Dreyfus/Laurel Funds and the Dreyfus High Yield Strategies Fund. These fees and expenses are charged and allocated to each series based on net assets. Amounts required to be paid by the Company directly to the non-interested Directors, that would be applied to offset a portion of the management fee payable to the Manager, are in fact paid directly by the Manager to the non-interested Directors.

The Manager has agreed from February 1, 2004 through July 20, 2004 to waive receipt of a portion of the fund’s management fee, in the amount of .10 of 1% of the value of the fund’s average daily net assets. The reduction in management fee pursuant to the undertaking, amounted to $84,406 during the period ended April 30, 2004.

30

The components of Due to The Dreyfus Corporation and affiliates in the statement of Assets and Liabilities consists of: management fees $280,417, distribution plan fees $93,678 and shareholder services plan fees $23,535, which are offset against an expense reimbursement currently in effect in the amount of $28,041.

During the period ended April 30, 2004, the Distributor retained $11,522 and $20 from commissions earned on sales of the fund’s Class A and Class T shares, respectively, and $150,819 and $1,042 from contingent deferred sales charges on redemptions of the fund’s Class B and Class C shares, respectively.

(b) Distribution and service plan: Under separate Distribution Plans (the “Plans”) adopted pursuant to Rule 12b-1 under the Act, Class A shares may pay annually up to .25% of the value of their average daily net assets to compensate the Distributor for shareholder servicing activities and expenses primarily intended to result in the sale of Class A shares. Class B, Class C and Class T shares may pay the Distributor for distributing their shares at an aggregate annual rate of .75% of the value of the average daily net assets of Class B and Class C shares and .25% of the value of the average daily net assets of Class T shares.The Distributor may pay one or more agents in respect of advertising,marketing and other distribution services for Class T shares and determines the amounts, if any, to be paid to agents and the basis on which such payments are made. Class B, Class C and Class T shares are also subject to a service plan adopted pursuant to Rule 12b-1 (the “Service Plan”), under which Class B, Class C and Class T shares pay the Distributor for providing certain services to the holders of their shares a fee at the annual rate of .25% of the value of the average daily net assets of Class B, Class C and Class T shares. During the period ended April 30, 2004, Class A, Class B, Class C and Class T shares were charged $145,771, $376,061, $73,957 and $416, respectively, pursuant to their respective Plans. During the period ended April 30, 2004 Class B, Class C and Class T shares were charged $125,354, $24,652 and $416, respectively, pursuant to the Service Plan.

The Fund 31

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

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

(c) Pursuant to an exemptive order from the Securities and Exchange Commission, the fund may invest its available cash balances in affiliated money market mutual funds as shown in the fund’s Statement of Investments. Management fees of the underlying money market mutual funds have been waived by the Manager. During the period ended April 30, 2004, the fund derived $46,984 in income from these investments, which is included in dividend income in the fund’s Statement of Operations.

NOTE 3—Securities Transactions:

The following summarizes the aggregate amount of purchases and sales of investment securities, excluding short-term securities, financial futures and short sales, during the period ended April 30, 2004, of which $33,085,236 in purchases and $33,193,276 in sales were from dollar roll transactions:

  Purchases ($)   Sales ($)  
 
 
Long transactions 304,255,374   363,834,294  
Short sale transactions 1,350,807   846  
   Total 305,606,181   363,835,140  

The fund may enter into dollar roll transactions with respect to mortgage-backed securities. In a dollar roll transaction, the fund sells mortgage-backed securities to a financial institution and simultaneously agrees to accept substantially similar (same type, coupon and maturity) securities at a later date, at an agreed upon price.

The fund is engaged in short-selling which obligates the fund to replace the security borrowed by purchasing the security at current market value. The fund would realize a gain, limited to the price at which the fund sold the security short, or a loss, unlimited in size, will

32

be recognized upon the termination of a short sale. Until the fund replaces the borrowed security, the fund will maintain daily a segregated account with a broker or custodian, of permissible liquid assets sufficient to cover its short position. At April 30, 2004, there were no securities sold short outstanding.

At April 30, 2004, accumulated net unrealized appreciation on investments was $32,608,170, consisting of $40,190,982 gross unrealized appreciation and $7,582,812 gross unrealized depreciation.

At April 30, 2004, 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 4—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 April 30, 2004, the fund did not borrow under the Facility.

NOTE 5—Legal Matters:

Two class actions have been filed against Mellon Financial and Mellon Bank, N.A., and Dreyfus and Founders Asset Management LLC (the “Investment Advisers”), and the directors of all or substantially all of the Dreyfus funds, alleging that the Investment Advisers improperly used assets of the Dreyfus funds, in the form of directed brokerage commissions and 12b-1 fees, to pay brokers to promote sales of Dreyfus funds, and that the use of fund assets to make these payments was not properly disclosed to investors.The complaints further allege that the directors breached their fiduciary duties to fund shareholders under the Investment Company Act of 1940 and at common law.The

The Fund 33

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

complaints seek unspecified compensatory and punitive damages, rescission of the funds’ contracts with the Investment Advisers, an accounting of all fees paid, and an award of attorneys’ fees and litigation expenses. Dreyfus and the Dreyfus funds believe the allegations to be totally without merit and will defend the actions vigorously.

Additional lawsuits arising out of these circumstances and presenting similar allegations and requests for relief may be filed against the defendants in the future. Neither Dreyfus nor the Dreyfus funds believe that any of the pending actions will have a material adverse effect on the Dreyfus funds or Dreyfus’ ability to perform its contracts with the Dreyfus funds.

34

NOTES

For More Information

Dreyfus Premier
Balanced Fund
200 Park Avenue
New York, NY 10166
 
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
 
Custodian
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
 
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
200 Park Avenue
New York, NY 10166
 
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166

To obtain information:

By telephone

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

By mail Write to: The Dreyfus Premier Family of Funds 144 Glenn Curtiss Boulevard Uniondale, NY 11556-0144

A description of the policies and procedures that the fund uses to determine how to vote proxies relating to portfolio securities is available, without charge, by calling the telephone number listed above, or by visiting the SEC’s website at http://www.sec.gov

© 2004 Dreyfus Service Corporation 0342SA0404

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
  		 Letter from the Chairman
3
  		 Discussion of Fund Performance
6
  		 Statement of Investments
11
  		 Statement of Assets and Liabilities
12
  		 Statement of Operations
13
  		 Statement of Changes in Net Assets
15
  		 Financial Highlights
20
  		 Notes to Financial Statements

FOR MORE INFORMATION

Back Cover

   Dreyfus Premier
Large Company Stock Fund

The Fund

LETTER FROM THE CHAIRMAN

Dear Shareholder:

This semiannual report for Dreyfus Premier Large Company Stock Fund covers the six-month period from November 1, 2003, through April 30, 2004. Inside, you'll find valuable information about how the fund was managed during the reporting period, including a discussion with the fund's portfolio manager, D. Gary Richardson.

Positive economic data continued to accumulate during the reporting period, as consumers, flush with extra cash from federal tax refunds and mortgage refinancings, continued to spend. At the same time, recent evidence of stronger job growth supports the view that corporations have become more willing to spend and invest. One result of the economic rebound has been higher overall earnings and stock prices for many U.S. companies.

Although recent economic news generally has been encouraging, we continue to believe that investors should be aware of the potential risks that could lead to heightened volatility or a stock market correction. Chief among them, in our view, are a possible acceleration of inflation and the chance that terrorism could cause instability in global markets. As always, we encourage you to speak regularly with your financial advisor, who may be in the best position to suggest ways to position your portfolio for the opportunities and challenges of today's financial markets.

Thank you for your continued confidence and support.

Sincerely,

Stephen E. Canter

Chairman and Chief Executive Officer The Dreyfus Corporation

May 17, 2004

2

DISCUSSION OF FUND PERFORMANCE

D. Gary Richardson, Portfolio Manager

How did Dreyfus Premier Large Company Stock Fund perform relative to its benchmark?

For the six-month period ended April 30, 2004, the fund produced a total return of 3.58% for Class A shares, 3.23% for Class B shares, 3.22% for Class C shares, 3.78% for Class R shares and 3.49% for Class T shares.1 For the same period, the total return of the Standard & Poor's 500 Composite Stock Price Index (“S&P 500 Index”), the fund's benchmark, was 6.27%.2

We attribute the stock market's good performance primarily to strong earnings reports and greater U.S. and global economic growth.While the fund benefited from this trend to a degree, its returns were undermined by negative surprises reported by several of its technology holdings and by price declines in some of the fund's holdings that are sensitive to changing interest rates.These factors caused the fund's performance to underperform that of the S&P 500 Index.

What is the fund's investment approach?

The fund invests in a diversified portfolio of large companies that we believe meet our strict standards for value and growth. We identify potential investments through a quantitative analytic process that sifts through a universe of approximately 2,000 stocks in search of those that are not only undervalued according to our criteria, but also exhibit what we believe to be higher than expected earnings momen-tum.A team of experienced analysts examines the fundamentals of the top-ranked candidates for investment. Armed with these analytical insights, the portfolio manager decides which stocks to purchase and whether any current holdings should be sold.

In addition to identifying what we believe are attractive investment opportunities, our approach has been designed to manage the risks associated with modifying the fund's sector and industry exposure

The Fund 3

DISCUSSION OF FUND PERFORMANCE (continued)

often in an effort to capitalize on those sectors and industries currently in favor.We do not believe that the advantages of attempting to rotate in and out of various industry sectors outweigh the risks of such moves. Instead, our goal is to minimize these risks by being fully invested and remaining industry and sector neutral in relation to the S&P 500 Index.

The result is a broadly diversified portfolio of carefully selected stocks. At the end of the recent six-month period, the fund held positions in approximately 123 stocks across 9 economic sectors. Our 10 largest holdings accounted for approximately 23% of the portfolio, so that the fund's performance was not overly dependent on any one stock, but was determined by a large number of securities.

What other factors influenced the fund's performance?

Energy and health care holdings generated the fund's greatest gains during the reporting period. Higher levels of demand, constrained supplies and rising commodity prices boosted the performance of refiners such as Valero Energy, energy producer Occidental Petroleum, oil service company Halliburton and diversified energy firm Conoco-Phillips. In the health care sector, traditionally defensive positions in insurers and health management firms, such as Aetna and UnitedHealth Group, benefited the fund's performance. Other health care holdings such as medical device maker Boston Scientific and pharmaceutical giant Pfizer also posted strong gains. However, drug maker Wyeth was hurt by product-related lawsuits that drove its stock price lower.

The fund suffered its greatest disappointments in the technology sector, where company-specific problems hurt several holdings. Most notably, communications equipment company Nortel Networks and software developer VERITAS Software faced regulatory inquiries regarding their accounting practices. Computer hard drive maker Seagate Technology also declined as a result of rising competitive pressures. Gains in other technology holdings, such as security software maker Symantec, online auctioneer eBay and cellular technology

4

provider QUALCOMM, failed to make up for these losses. In other areas, several economically sensitive holdings experienced declines in response to investors' concerns regarding potentially higher interest rates. Metal mining stocks such as Freeport-McMoRan Copper & Gold, Inco Limited and Alcan were hit hard, as were brokerage firms Merrill Lynch and Morgan Stanley and industrial stocks such as Deere & Co., Ingersoll-Rand and United Technologies. Finally, the initial bid and its subsequent withdrawal by cable television operator Comcast to acquire Walt Disney caused both stocks to decline.As a result, the fund sold its position in Comcast during the reporting period.

What is the fund's current strategy?

As of the end of the reporting period, we are emphasizing relatively defensive positions in high-quality companies that we believe have the potential to produce consistent, predictable earnings despite the possibility of rising interest rates and slowing economic expansion.We also have found a slightly greater than average number of what we believe are attractive investment opportunities in the energy sector, where demand remains high and supplies continue to be constrained. At the same time, we generally have continued to maintain our disciplined, sector-neutral investment approach.

May 17, 2004

1 Total return includes reinvestment of dividends and any capital gains paid, and does not take into consideration the maximum initial sales charges in the case of Class A and Class T shares, or the applicable contingent deferred sales charges imposed on redemptions in the case of Class B and Class C shares. Had these charges been reflected, returns would have been lower. Past performance is no guarantee of future results. Share price and investment return fluctuate such that upon redemption, fund shares may be worth more or less than their original cost. Return figures provided reflect the absorption of fund expenses by The Dreyfus Corporation pursuant to an agreement in effect through July 20, 2004, 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 the monthly reinvestment of dividends and, where applicable, capital gain distributions.The Standard & Poor's 500 Composite Stock Price Index is a widely accepted, unmanaged index of U.S. stock market performance.

The Fund 5

STATEMENT OF INVESTMENTS

April 30, 2004 (Unaudited)

Common Stocks—99.1% Shares   Value ($)  
 
 
Consumer Cyclical—10.6%        
BJ's Wholesale Club 22,710 a   550,263  
Bed Bath & Beyond 24,930 a   925,401  
Best Buy 22,590   1,225,508  
CVS 27,380   1,057,689  
Dana 44,810   903,370  
GTECH Holdings 9,100   554,372  
Home Depot 88,040   3,098,128  
Lear 11,590   702,586  
Limited Brands 63,730   1,315,387  
McDonald's 56,640   1,542,307  
NIKE, Cl. B 6,920   497,894  
Safeway 30,300 a   695,385  
Target 20,000   867,400  
Wal-Mart Stores 59,750   3,405,750  
Wendy's International 23,620   921,180  
      18,262,620  
Consumer Staples—8.3%        
Altria Group 40,070   2,219,077  
Archer-Daniels-Midland 35,800   628,648  
Coca-Cola 52,180   2,638,743  
Fortune Brands 11,610   885,262  
General Mills 14,900   726,375  
Kimberly-Clark 23,770   1,555,746  
PepsiCo 46,255   2,520,435  
Procter & Gamble 29,120   3,079,440  
      14,253,726  
Energy Related—8.0%        
Apache 23,690   991,900  
ConocoPhillips 30,710   2,189,623  
Devon Energy 24,050   1,471,860  
Exxon Mobil 78,550   3,342,303  
GlobalSantaFe 18,700   493,119  
Halliburton 52,540   1,565,692  
Nabors Industries 22,390 a   993,220  
Occidental Petroleum 34,010   1,605,272  

6

Common Stocks (continued) Shares   Value ($)  
 
 
Energy Related (continued)        
Valero Energy 16,150   1,029,724  
      13,682,713  
Health Care—13.8%        
Abbott Laboratories 41,850   1,842,237  
Aetna 17,800   1,472,950  
Amgen 27,300 a   1,536,171  
Biogen 9,700 a   572,300  
Boston Scientific 44,100 a   1,816,479  
Genzyme 11,140 a   485,258  
Johnson & Johnson 58,490   3,160,215  
Merck & Co. 39,170   1,840,990  
Novartis, ADR 11,390   510,272  
Pfizer 152,503   5,453,507  
Teva Pharmaceutical Industries, ADR 14,480   891,389  
UnitedHealth Group 31,210   1,918,791  
Varian Medical Systems 4,020 a   345,077  
Wyeth 47,090   1,792,716  
      23,638,352  
Interest Sensitive—23.0%        
Allstate 20,610   945,999  
American Express 29,630   1,450,389  
American International Group 53,567   3,838,076  
Bank of America 27,540   2,216,695  
Bank One 37,900   1,871,123  
Bear Stearns Cos. 8,810   706,033  
Capital One Financial 15,690   1,028,166  
Citigroup 113,043   5,436,238  
Fannie Mae 21,350   1,467,172  
Freddie Mac 27,780   1,622,352  
General Electric 141,390   4,234,631  
Goldman Sachs Group 18,420   1,777,530  
J.P. Morgan Chase & Co. 55,270   2,078,152  
Lehman Brothers Holdings 13,770   1,010,718  
MBNA 42,990   1,048,096  
Merrill Lynch 37,760   2,047,725  

The Fund 7

STATEMENT OF INVESTMENTS (Unaudited) (continued)

Common Stocks (continued) Shares   Value ($)  
 
 
Interest Sensitive (continued)        
Morgan Stanley 17,280   888,019  
New York Community Bancorp 19,660   492,876  
Radian Group 8,600   399,986  
RenaissanceRe Holdings 11,390   600,139  
SouthTrust 21,840   678,787  
U.S. Bancorp 49,550   1,270,462  
Wells Fargo 42,940   2,424,392  
      39,533,756  
Producer Goods—11.0%        
Air Products & Chemicals 20,310   1,011,641  
Alcan 11,800   474,714  
Alcoa 14,300   439,725  
Companhia Vale do Rio Doce, ADR 9,600 a,b   436,800  
Cooper Industries, Cl. A 11,680   641,349  
Deere & Co. 17,210   1,170,968  
E. I. du Pont de Nemours 26,310   1,130,014  
Freeport-McMoRan Copper & Gold, Cl. B 24,920   760,060  
Honeywell International 32,970   1,140,103  
ITT Industries 9,070   719,160  
Inco Limited 22,440 a   645,150  
Ingersoll-Rand, Cl. A 17,210   1,110,906  
International Paper 16,530   666,490  
PPG Industries 16,310   967,346  
Pentair 16,680   993,961  
Phelps Dodge 12,940 a   851,840  
3M 18,850   1,630,148  
Tyco International 56,060   1,538,847  
Union Pacific 15,150   892,789  
United Technologies 18,410   1,588,047  
      18,810,058  
Services—6.0%        
Cendant 40,110   949,805  
Manpower 24,270   1,138,263  
News Corporation 18,770 b   686,231  
Nextel Communications, Cl. A 50,000 a   1,193,000  
Time Warner 53,350 a   897,347  

8

Common Stocks (continued) Shares   Value ($)  
 
 
Services (continued)        
Tribune 15,340   734,479  
Univision Communications, Cl. A 24,500 a   829,325  
Viacom, Cl. B 36,070   1,394,106  
Walt Disney 108,150   2,490,694  
      10,313,250  
Technology—14.7%        
Agilent Technologies 34,100 a   921,041  
Cisco Systems 132,000 a   2,754,840  
Dell 69,110 a   2,398,808  
EMC 89,970 a   1,004,065  
eBay 11,080 a   884,406  
Intel 64,680   1,664,217  
International Business Machines 19,870   1,751,938  
Lexmark International 10,370 a   938,070  
Linear Technology 31,570   1,124,839  
Maxim Integrated Products 25,250   1,161,248  
Microsoft 181,160   4,704,725  
Nortel Networks 116,950 a   437,393  
QUALCOMM 23,490   1,467,185  
Seagate Technology 48,800 a   610,488  
Symantec 29,420 a   1,325,371  
Taiwan Semiconductor Manufacturing .20 a   2  
Texas Instruments 56,230   1,411,373  
Xilinx 19,510 a   656,121  
      25,216,130  
Utilities—3.7%        
Entergy 15,040   821,184  
Exelon 18,440   1,234,373  
FPL Group 14,030   892,588  
PPL 18,470   791,440  
SBC Communications 41,675   1,037,708  
Sprint 36,300   649,407  
Telefonos de Mexico, Cl. L., ADR 30,350   1,036,149  
      6,462,849  
Total Common Stocks        
   (cost $140,194,021)     170,173,454  

The Fund 9

STATEMENT OF INVESTMENTS (Unaudited) (continued)

a Non-income producing.
b
  		 All or a portion of these securities are on loan.At April 30,2004, the total market value of the fund's securities on loan is $466,048 and the total market value of the collateral held by the fund is $481,600.
c
  		      Investments in affiliated money market mutual fund. See notes to financial statements.

10

STATEMENT OF ASSETS AND LIABILITIES
April 30, 2004 (Unaudited)
            Cost Value  
 
 
Assets ($):                
Investments in securities—See Statement            
of Investments (including securities on loan,        
valued at $466,048)—Note 1(b,d):            
Unaffiliated issuers       141,947,021 171,926,454  
Affiliated issuers       481,600 481,600  
Dividends and interest receivable         149,640  
Receivable for shares of Capital Stock subscribed     16,151  
Receivable for investment securities sold         4,867  
              172,578,712  
 
 
Liabilities ($):                
Due to The Dreyfus Corporation and affiliates—Note 2(a)     192,787  
Cash overdraft due to custodian           50,868  
Liability for securities on loan—Note 1(b)         481,600  
Payable for shares of Capital Stock redeemed     129,480  
              854,735  
 
 
Net Assets ( $)           171,723,977  
 
 
Composition of Net Assets ($):            
Paid-in capital             222,449,814  
Accumulated undistributed investment income-net     80,525  
Accumulated net realized gain (loss) on investments     (80,785,795)  
Accumulated net unrealized appreciation            
(depreciation) on investments           29,979,433  
 
 
Net Assets ( $)           171,723,977  
 
 
                 
                 
Net Asset Value Per Share            
    Class A   Class B Class C Class R Class T  
 
 
Net Assets ($)   96,784,428   52,294,860 11,394,629 10,529,128 720,932  
Shares Outstanding 5,141,093   2,891,585 629,881 554,254 38,718  
 
 
Net Asset Value              
   Per Share ( $) 18.83   18.09 18.09 19.00 18.62  
                 
See notes to financial statements.              

The Fund 11

STATEMENT OF OPERATIONS

Six Months Ended April 30, 2004 (Unaudited)

Investment Income ( $):    
Income:      
Cash dividends (net of $1,693 foreign taxes withheld at source) 1,413,026  
Interest   3,806  
Income from securities lending 917  
Total Income   1,417,749  
Expenses:      
Management fee—Note 2(a)   809,877  
Distribution and service fees—Note 2(b) 468,048  
Loan commitment fees—Note 4 822  
Interest expense—Note 4   121  
Total Expenses   1,278,868  
Less—reduction in management fee due    
   to undertaking—Note 2(a)   (44,511)  
Net Expenses   1,234,357  
Investment Income-Net   183,392  
 
Realized and Unrealized Gain (Loss) on Investments—Note 3 ($):    
Net realized gain (loss) on investments 3,682,066  
Net unrealized appreciation (depreciation) on investments 2,529,548  
Net Realized and Unrealized Gain (Loss) on Investments 6,211,614  
Net Increase in Net Assets Resulting from Operations 6,395,006  
       
See notes to financial statements.      

12

STATEMENT OF CHANGES IN NET ASSETS

  Six Months Ended      
  April 30, 2004   Year Ended  
  (Unaudited)   October 31, 2003  
 
 
Operations ($):        
Investment income—net 183,392   394,284  
Net realized gain (loss) on investments 3,682,066   (11,290,149)  
Net unrealized appreciation        
   (depreciation) on investments 2,529,548   33,869,302  
Net Increase (Decrease) in Net Assets        
   Resulting from Operations 6,395,006   22,973,437  
 
 
Dividends to Shareholders from ($):        
Investment income—net:        
Class A shares (320,999)   (47,527)  
Class B shares (46,771)   —  
Class C shares (10,924)   —  
Class R shares (55,405)   (13,410)  
Class T shares (2,115)   —  
Total Dividends (436,214)   (60,937)  
 
 
Capital Stock Transactions ($):        
Net proceeds from shares sold:        
Class A shares 8,477,882   15,373,938  
Class B shares 1,114,195   2,903,606  
Class C shares 693,337   783,176  
Class R shares 60,813   109,531  
Class T shares 111,608   113,643  
Dividends reinvested:        
Class A shares 92,714   15,925  
Class B shares 40,897   —  
Class C shares 6,347   —  
Class R shares 42,320   10,095  
Class T shares 1,996   —  
Cost of shares redeemed:        
Class A shares (13,363,072)   (25,753,225)  
Class B shares (6,035,946)   (9,342,384)  
Class C shares (2,851,656)   (3,485,995)  
Class R shares (1,445,217)   (2,569,827)  
Class T shares (157,763)   (408,499)  
Increase (Decrease) in Net Assets        
   from Capital Stock Transactions (13,211,545)   (22,250,016)  
Total Increase (Decrease) in Net Assets (7,252,753)   662,484  
 
 
Net Assets ($):        
 
 
Beginning of Period 178,976,730   178,314,246  
End of Period 171,723,977   178,976,730  
Undistributed investment income—net 80,525   333,347  

The Fund 13

STATEMENT OF CHANGES IN NET ASSETS (continued)

  Six Months Ended      
  April 30, 2004   Year Ended  
  (Unaudited)   October 31, 2003  
 
 
Capital Share Transactions:        
Class Aa        
Shares sold 442,359   935,198  
Shares issued for dividends reinvested 5,085   995  
Shares redeemed (699,727)   (1,577,617)  
Net Increase (Decrease) in Shares Outstanding (252,283)   (641,424)  
 
 
Class Ba        
Shares sold 60,302   183,949  
Shares issued for dividends reinvested 2,328   —  
Shares redeemed (326,707)   (596,027)  
Net Increase (Decrease) in Shares Outstanding (264,077)   (412,078)  
 
 
Class C        
Shares sold 38,052   49,916  
Shares issued for dividends reinvested 361   —  
Shares redeemed (155,048)   (220,972)  
Net Increase (Decrease) in Shares Outstanding (116,635)   (171,056)  
 
 
Class R        
Shares sold 3,173   6,678  
Shares issued for dividends reinvested 2,301   626  
Shares redeemed (75,651)   (155,685)  
Net Increase (Decrease) in Shares Outstanding (70,177)   (148,381)  
 
 
Class T        
Shares sold 6,135   7,191  
Shares issued for dividends reinvested 111   —  
Shares redeemed (8,196)   (25,912)  
Net Increase (Decrease) in Shares Outstanding (1,950)   (18,721)  

a During the period ended April 30, 2004, 88,407 Class B shares representing $1,653,963 were automatically converted to 85,022 Class A shares and during the period ended October 31, 2003, 28,422 Class B shares representing $454,744 were automatically converted to 27,438 Class A shares.

See notes to financial statements.

14

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                      
  April 30, 2004       Year Ended October 31,      
         
     
Class A Shares (Unaudited)   2003   2002   2001   2000   1999  
 
 
 
 
 
 
Per Share Data ($):                        
Net asset value,                        
   beginning of period 18.23   15.90   18.71   25.59   23.97   20.45  
Investment Operations:                        
Investment income (loss)—neta .04   .08   .05   .00b   (.03)   .03  
Net realized and unrealized                        
   gain (loss) on investments .62   2.26   (2.86)   (6.88)   1.66   4.68  
Total from                        
   Investment Operations .66   2.34   (2.81)   (6.88)   1.63   4.71  
Distributions:                        
Dividends from investment                        
   income—net (.06)   (.01)   —   —   —   (.04)  
Dividends from net realized                        
   gain on investments —   —   —   —   (.01)   (1.15)  
Total Distributions (.06)   (.01)   —   —   (.01)   (1.19)  
Net asset value, end of period 18.83   18.23   15.90   18.71   25.59   23.97  
 
 
 
 
 
 
Total Return (%)c 3.58d   14.71   (15.02)   (26.88)   6.80   23.86  
 
 
 
 
 
 
Ratios/Supplemental Data (%):                        
Ratio of expenses to                        
   average net assets .55d   1.15   1.15   1.15   1.15   1.15  
Ratio of net investment income                        
   (loss) to average net assets .24d   .50   .26   .02   (.11)   .13  
Decrease reflected in above                        
   expense ratios due to                        
   undertakings by                        
   The Dreyfus Corporation .02d   —   —   —   —   —  
Portfolio Turnover Rate 20.00d   51.02   43.46   54.09   43.98   49.42  
 
 
 
 
 
 
Net Assets, end of period                        
   ($ x 1,000) 96,784   98,320   95,930   124,162   71,133   51,926  
a Based on average shares outstanding at each month end.
b
  		 Amount represents less than $.01 per share.
c
  		 Exclusive of sales charge.
d
  		 Not Annualized
See notes to financial statements.

The Fund 15

FINANCIAL HIGHLIGHTS (continued)

  Six Months Ended                      
  April 30, 2004       Year Ended October 31,      
         
     
Class B Shares (Unaudited)   2003   2002   2001   2000   1999  
 
 
 
 
 
 
Per Share Data ($):                        
Net asset value,                        
   beginning of period 17.54   15.40   18.26   25.16   23.75   20.38  
Investment Operations:                        
Investment (loss)—neta (.03)   (.04)   (.09)   (.15)   (.22)   (.14)  
Net realized and unrealized                        
   gain (loss) on investments .60   2.18   (2.77)   (6.75)   1.64   4.66  
Total from                        
   Investment Operations .57   2.14   (2.86)   (6.90)   1.42   4.52  
Distributions:                        
Dividends from investment                        
   income—net (.02)   —   —   —   —   —  
Dividends from net realized                        
   gain on investments —   —   —   —   (.01)   (1.15)  
Total Distributions (.02)   —   —   —   (.01)   (1.15)  
Net asset value, end of period 18.09   17.54   15.40   18.26   25.16   23.75  
 
 
 
 
 
 
Total Return (%)b 3.23c   13.83   (15.66)   (27.42)   5.98   22.91  
 
 
 
 
 
 
Ratios/Supplemental Data (%):                        
Ratio of expenses to                        
   average net assets .92c   1.90   1.90   1.90   1.90   1.90  
Ratio of net investment (loss)                        
   to average net assets (.14)c   (.25)   (.49)   (.72)   (.87)   (.63)  
Decrease reflected in above                        
   expense ratios due to                        
   undertakings by                        
   The Dreyfus Corporation .02c   —   —   —   —   —  
Portfolio Turnover Rate 20.00c   51.02   43.46   54.09   43.98   49.42  
 
 
 
 
 
 
Net Assets, end of period                        
   ($ x 1,000) 52,295   55,336   54,937   77,099   98,884   55,289  
a Based on average shares outstanding at each month end.
b
  		 Exclusive of sales charge.
c
  		 Not annualized.
See notes to financial statements.

16

  Six Months Ended                      
  April 30, 2004       Year Ended October 31,      
         
     
Class C Shares (Unaudited)   2003   2002   2001   2000   1999  
 
 
 
 
 
 
Per Share Data ($):                        
Net asset value,                        
   beginning of period 17.54   15.40   18.27   25.17   23.75   20.38  
Investment Operations:                        
Investment (loss)—neta (.02)   (.04)   (.09)   (.15)   (.22)   (.15)  
Net realized and unrealized                        
   gain (loss) on investments .59   2.18   (2.78)   (6.75)   1.65   4.67  
Total from                        
   Investment Operations .57   2.14   (2.87)   (6.90)   1.43   4.52  
Distributions:                        
Dividends from investment                        
   income—net (.02)   —   —   —   —   —  
Dividends from net realized                        
   gain on investments —   —   —   —   (.01)   (1.15)  
Total Distributions (.02)   —   —   —   (.01)   (1.15)  
Net asset value, end of period 18.09   17.54   15.40   18.27   25.17   23.75  
 
 
 
 
 
 
Total Return (%)b 3.22c   13.90   (15.71)   (27.41)   6.02   22.97  
 
 
 
 
 
 
Ratios/Supplemental Data (%):                        
Ratio of expenses to                        
   average net assets .92c   1.90   1.90   1.90   1.90   1.90  
Ratio of net investment (loss)                        
   to average net assets (.13)c   (.24)   (.50)   (.72)   (.86)   (.64)  
Decrease reflected in above                        
   expense ratios due to                        
   undertakings by                        
   The Dreyfus Corporation .02c   —   —   —   —   —  
Portfolio Turnover Rate 20.00c   51.02   43.46   54.09   43.98   49.42  
 
 
 
 
 
 
Net Assets, end of period                        
   ($ x 1,000) 11,395   13,094   14,133   23,072   30,213   23,249  
a Based on average shares outstanding at each month end.
b
  		 Exclusive of sales charge.
c
  		 Not annualized.
See notes to financial statements.

The Fund 17

FINANCIAL HIGHLIGHTS (continued)

  Six Months Ended                      
  April 30, 2004       Year Ended October 31,      
         
     
Class R Shares (Unaudited)   2003   2002   2001   2000   1999  
 
 
 
 
 
 
Per Share Data ($):                        
Net asset value,                        
   beginning of period 18.40   16.02   18.81   25.66   23.97   20.44  
Investment Operations:                        
Investment income—neta .07   .13   .09   .06   .04   .09  
Net realized and unrealized                        
   gain (loss) on investments .62   2.27   (2.88)   (6.91)   1.66   4.67  
Total from                        
   Investment Operations .69   2.40   (2.79)   (6.85)   1.70   4.76  
Distributions:                        
Dividends from investment                        
   income—net (.09)   (.02)   —   —   —   (.08)  
Dividends from net realized                        
   gain on investments —   —   —   —   (.01)   (1.15)  
Total Distributions (.09)   (.02)   —   —   (.01)   (1.23)  
Net asset value, end of period 19.00   18.40   16.02   18.81   25.66   23.97  
 
 
 
 
 
 
Total Return (%) 3.78b   14.98   (14.83)   (26.70)   7.10   24.16  
 
 
 
 
 
 
Ratios/Supplemental Data (%):                        
Ratio of expenses to                        
   average net assets .42b   .90   .90   .90   .90   .90  
Ratio of net investment income                        
   to average net assets .36b   .76   .51   .28   .16   .40  
Decrease reflected in above                        
   expense ratios due to                        
   undertakings by                        
   The Dreyfus Corporation .02b   —   —   —   —   —  
Portfolio Turnover Rate 20.00b   51.02   43.46   54.09   43.98   49.42  
 
 
 
 
 
 
Net Assets, end of period                        
   ($ x 1,000) 10,529   11,492   12,379   17,709   28,492   31,503  
  • a Based on average shares outstanding at each month end.
    Not annualized.
    See notes to financial statements.

18

  Six Months Ended                      
  April 30, 2004       Year Ended October 31,      
         
     
Class T Shares (Unaudited)   2003   2002   2001   2000   1999a  
 
 
 
 
 
 
Per Share Data ($):                        
Net asset value,                        
   beginning of period 18.04   15.77   18.61   25.51   23.96   23.57  
Investment Operations:                        
Investment income (loss)—netb .02   .04   .00c   (.05)   (.13)   (.01)  
Net realized and unrealized                        
   gain (loss) on investments .61   2.23   (2.84)   (6.85)   1.69   .40  
Total from                        
   Investment Operations .63   2.27   (2.84)   (6.90)   1.56   .39  
Distributions:                        
Dividends from investment                        
   income—net (.05)   —   —   —   —   —  
Dividends from net realized                        
   gain on investments —   —   —   —   (.01)   —  
Total Distributions (.05)   —   —   —   (.01)   —  
Net asset value, end of period 18.62   18.04   15.77   18.61   25.51   23.96  
 
 
 
 
 
 
Total Return (%)d 3.49e   14.40   (15.26)   (27.08)   6.55   1.66e  
 
 
 
 
 
 
Ratios/Supplemental Data (%):                        
Ratio of expenses to                        
   average net assets .67e   1.40   1.40   1.40   1.40   .30e  
Ratio of net investment income                        
   (loss) to average net assets .11e   .27   .01   (.23)   (.49)   (.11)e  
Decrease reflected in above                        
   expense ratios due to                        
   undertakings by                        
   The Dreyfus Corporation .02e   —   —   —   —   —  
Portfolio Turnover Rate 20.00e   51.02   43.46   54.09   43.98   49.42  
 
 
 
 
 
 
Net Assets, end of period                        
   ($ x 1,000) 721   734   936   1,423   1,310   40  
a From August 16, 1999 (commencement of initial offering) to October 31, 1999.
b
  		 Based on average shares outstanding at each month end.
c
  		 Amount represents less than $.01 per share.
d
  		 Exclusive of sales charge.
e
  		 Not annualized.
See notes to financial statements.

The Fund 19

NOTES TO FINANCIAL STATEMENTS (Unaudited)

NOTE 1—Significant Accounting Policies:

Dreyfus Premier Large Company Stock Fund (the “fund”) is a separate diversified series of The Dreyfus/Laurel Funds, Inc. (the “Company”) which is registered under the Investment Company Act of 1940, as amended (the “Act”), as an open-end management investment company and operates as a series company currently offering sixteen series, including the fund.The fund's investment objective is to seek investment returns (consisting of capital appreciation and income) that are consistently superior to the Standard & Poor's 500 Composite Stock Price Index. 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”).

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 450 million shares of $.001 par value Capital Stock.The fund currently offers five classes of shares: Class A (20 million shares authorized), Class B (100 million shares authorized), Class C (100 million shares authorized), Class R (30 million shares authorized) and Class T (200 million shares authorized). Class A, Class B, Class C and Class T shares are sold primarily to retail investors through financial intermediaries and bear a distribution fee and/or service fee. Class A and Class T shares are sold with a front-end sales charge, while Class B and Class C shares are subject to a contingent deferred sales charge (“CDSC”). Class B shares automatically convert to Class A shares after six years. Class R shares are sold primarily to bank trust departments and other financial service providers (including Mellon Bank and its affiliates) acting on behalf of customers having a qualified trust or an investment account or relationship at such institution and bear no distribution or service fees. Class R shares are offered without a front-end sales charge or CDSC. Each class of shares has identical rights and privileges, except with respect to distribution and service fees and voting rights on matters affecting a single class.

20

Investment income, net of expenses (other than class specific expenses) and realized and unrealized gains and losses are allocated daily to each class of shares based upon the relative proportion of net assets of each class.

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

(a) Portfolio valuation: Investments in securities are valued at the last sales price on the securities exchange or national securities market on which such securities are primarily traded. Securities listed on the National Market System for which market quotations are available are valued at the official closing price or, if there is no official closing price that day, at the last sale price. Securities not listed on an exchange or the national securities market, or securities for which there were no transactions, are valued at the average of the most recent bid and asked prices. Bid price is used when no asked price is available.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 in accordance with the procedures approved by the fund's Board. 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.

(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.

The Fund 21

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

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 may lend securities to qualified institutions. At origination, all loans are secured by collateral of at least 102% of the value of U.S. securities loaned and 105% of the value of foreign securities loaned. Collateral equivalent to at least 100% of the market value of securities on loan will be maintained at all times. Cash collateral is invested in certain money market mutual funds managed by the Manager as shown in the fund's Statement of Investments.The fund will be entitled to receive all income on securities loaned, in addition to income earned as a result of the lending transaction. Although each security loaned is fully collateralized, the fund would bear the risk of delay in recovery of, or loss of rights in, the securities loaned should a borrower fail to return the securities in a timely manner.

(c) Affiliated issuers: Issuers in which the fund held investments in other investment companies advised by the Manager are defined as “affiliated” in the Act.

(d) Repurchase agreements: The fund may engage in repurchase agreement transactions. Under the terms of a typical repurchase agreement, the fund, through its custodian and sub-custodian, takes possession of an underlying debt obligation subject to an obligation of the seller to repurchase, and the fund to resell, the obligation at an agreed-upon price and time, thereby determining the yield during the fund's holding period.This arrangement results in a fixed rate of return that is not subject to market fluctuations during the fund's holding period. The value of the collateral is at least equal, at all times, to the total amount of the repurchase obligation, including interest. In the event of a counter party default, the fund has the right to use the collateral to offset losses incurred.There is potential loss to the fund in the event the fund is delayed or prevented from exercising its rights to dispose of the collateral securities, including the risk of a possible decline in the value of the underlying securities during the period while the fund

22

seeks to assert its rights.The Manager, acting under the supervision of the Board of Directors, reviews the value of the collateral and the cred-itworthiness of those banks and dealers with which the fund enters into repurchase agreements to evaluate potential risks.

(e) Dividends to shareholders: Dividends are recorded on the ex-dividend date. Dividends from investment income-net are declared and paid on a quarterly basis. Dividends from net realized capital gain, if any, are normally declared and paid annually, but the fund may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code of 1986, as amended (the “Code”).To the extent that net realized capital gain can be offset by capital loss carryovers, 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 has an unused capital loss carryover of $82,955,998 available for federal income tax purposes to be applied against future net securities profits, if any, realized subsequent to October 31, 2003. If not applied, $2,015,803 of the carryover expires in fiscal 2008, $36,747,456 expires in fiscal 2009, $32,648,933 expires in fiscal 2010 and $11,543,806 expires in fiscal 2011.

The tax character of distributions paid to shareholders during the fiscal year ended October 31, 2003 was as follows: ordinary income

The Fund 23

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

$60,937.The tax character of current year distributions will be determined at the end of the current fiscal year.

NOTE 2—Investment Management Fee And Other Transactions With Affiliates:

(a) Investment management fee: Pursuant to an Investment Management agreement with the Manager, the Manager provides or arranges for one or more third parties and/or affiliates to provide investment advisory, administrative, custody, fund accounting and transfer agency services to the fund. The Manager also directs the investments of the fund in accordance with its investment objective, policies and limitations. For these services, the fund is contractually obligated to pay the Manager a fee, calculated daily and paid monthly, at the annual rate of .90% of the value of the fund's average daily net assets. Out of its fee, the Manager pays all of the expenses of the fund except brokerage fees, taxes, interest, commitment fees, Rule 12b-1 distribution fees and expenses, service fees, fees and expenses of non-interested Directors (including counsel fees) and extraordinary expenses. In addition, the Manager is required to reduce its fee in an amount equal to the fund's allocable portion of fees and expenses of the non-interested Directors (including counsel fees). Each director receives $40,000 per year, plus $5,000 for each joint Board meeting of the Company,The Dreyfus/Laurel Tax-Free Municipal Funds and The Dreyfus/Laurel Funds Trust (the “Dreyfus/Laurel Funds”) attended, $2,000 for separate committee meetings attended which are not held in conjunction with a regularly scheduled board meeting and $500 for Board meetings and separate committee meetings attended that are conducted by telephone and is reimbursed for travel and out-of-pocket expenses. The Chairman of the Board receives an additional 25% of such compensation (with the exception of reimbursable amounts). In the event that there is a joint committee meeting of the Dreyfus/Laurel Funds and the Dreyfus High Yield Strategies Fund, the $2,000 fee will be allocated between the Dreyfus/Laurel Funds and the Dreyfus High Yield Strategies Fund. These fees and expenses are

24

charged and allocated to each series based on net assets. Amounts required to be paid by the Company directly to the non-interested Directors, that would be applied to offset a portion of the management fee payable to the Manager, are in fact paid directly by the Manager to the non-interested Directors.

The Manager has agreed to waive receipt of a portion of the fund's management fee in the amount of .10 of 1% of the value of the fund's average daily net assets from February 1, 2004 through July 20, 2004. The reduction in management fee, pursuant to the undertaking, amounted to $44,511 during the period ended April 30, 2004.

The components of Due to The Dreyfus Corporation and affiliates in the Statement of Assets and Liabilities consists of: management fees $117,626, Rule 12b-1 distribution fees $61,441 and shareholder services plan fees $13,720.

During the period ended April 30, 2004, the Distributor retained $2,142 and $58 from commissions earned on sales of the fund's Class A and Class T shares, respectively, and $61,761 and $391 from contingent deferred sales charges on redemptions of the fund's Class B and Class C shares, respectively.

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

The Fund 25

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

plan adopted pursuant to Rule 12b-1 (the “Service Plan”) under which Class B, Class C and Class T shares pay the Distributor for providing services to the holders of their shares, a fee at the annual rate of .25% of the value of the average daily net assets of Class B, Class C and Class T shares. During the period ended April 30, 2004, Class A, Class B, Class C and Class T shares were charged $124,556, $208,272, $47,854 and $995, respectively, pursuant to their respective Plans. Class B, Class C and Class T shares were charged $69,424, $15,952 and $995, respectively, pursuant to the Service Plan.

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

NOTE 3—Securities Transactions:

The aggregate amount of purchases and sales of investment securities, excluding short-term securities, during the period ended April 30, 2004, amounted to $35,787,892 and $49,689,183, respectively.

At April 30, 2004, accumulated net unrealized appreciation on investments was $29,979,433, consisting of $32,830,235 gross unrealized appreciation and $2,850,802 gross unrealized depreciation.

At April 30, 2004, 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 4—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 commit-

26

ment 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.

The average amount of borrowings outstanding under the Facility during the period ended April 30, 2004 was approximately $8,500 with a related weighted average annualized interest rate of 1.42%.

NOTE 5—Legal Matters:

Two class actions have been filed against Mellon Financial and Mellon Bank, N.A., and Dreyfus and Founders Asset Management LLC (the “Investment Advisers”), and the directors of all or substantially all of the Dreyfus funds, alleging that the Investment Advisers improperly used assets of the Dreyfus funds, in the form of directed brokerage commissions and 12b-1 fees, to pay brokers to promote sales of Dreyfus funds, and that the use of fund assets to make these payments was not properly disclosed to investors.The complaints further allege that the directors breached their fiduciary duties to fund shareholders under the Investment Company Act of 1940 and at common law.The complaints seek unspecified compensatory and punitive damages, rescission of the funds' contracts with the Investment Advisers, an accounting of all fees paid, and an award of attorneys' fees and litigation expenses. Dreyfus and the Dreyfus funds believe the allegations to be totally without merit and will defend the actions vigorously.

Additional lawsuits arising out of these circumstances and presenting similar allegations and requests for relief may be filed against the defendants in the future. Neither Dreyfus nor the Dreyfus funds believe that any of the pending actions will have a material adverse effect on the Dreyfus funds or Dreyfus' ability to perform its contracts with the Dreyfus funds.

The Fund 27

NOTES

For More Information

Dreyfus Premier
Large Company Stock Fund
200 Park Avenue
New York, NY 10166
 
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
 
Custodian
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
 
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
200 Park Avenue
New York, NY 10166
 
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166

To obtain information:

By telephone

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

By mail Write to: The Dreyfus Premier Family of Funds 144 Glenn Curtiss Boulevard Uniondale, NY 11556-0144

A description of the policies and procedures that the fund uses to determine how to vote proxies relating to portfolio securities is available, without charge, by calling the telephone number listed above, or by visiting the SEC's website at http://www.sec.gov

© 2004 Dreyfus Service Corporation 0318SA0404

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
  		 Letter from the Chairman
3
  		 Discussion of Fund Performance
6
  		 Statement of Investments
17
  		 Statement of Assets and Liabilities
18
  		 Statement of Operations
19
  		 Statement of Changes in Net Assets
22
  		 Financial Highlights
26
  		 Notes to Financial Statements

FOR MORE INFORMATION

Back Cover

   Dreyfus Premier
Limited Term Income Fund

The Fund

LETTER FROM THE CHAIRMAN

Dear Shareholder:

This semiannual report for Dreyfus Premier Limited Term Income Fund covers the six-month period from November 1, 2003, through April 30, 2004. Inside, you'll find valuable information about how the fund was managed during the reporting period, including a discussion with the fund's portfolio manager, Chris Pellegrino.

Positive economic data continued to accumulate during the reporting period, as consumers, flush with extra cash from federal tax refunds and mortgage refinancings, continued to spend. At the same time, recent evidence of stronger job growth supports the view that corporations have become more willing to spend and invest. As a result, fixed-income investors have apparently grown concerned that long-dormant inflationary pressures could resurface.

Although our analysts and portfolio managers work hard to identify trends that may move the markets, no one can know with complete certainty what lies ahead for the U.S. economy and the bond market. As always, we encourage you to review your investments regularly with your financial advisor, who may be in the best position to suggest ways to position your portfolio for the opportunities and challenges of today's financial markets.

Thank you for your continued confidence and support.

Sincerely,

Stephen E. Canter

Chairman and Chief Executive Officer The Dreyfus Corporation

May 17, 2004

2

DISCUSSION OF FUND PERFORMANCE

Chris Pellegrino, CFA, Portfolio Manager

How did Dreyfus Premier Limited Term Income Fund perform relative to its benchmark?

For the six-month period ended April 30, 2004, the fund achieved total returns of 0.96% for Class A shares, 0.80% for Class B shares, 0.78% for Class C shares and 1.08% for Class R shares.1 The fund's benchmark, the Lehman Brothers U.S.Aggregate Index (the “Index”), produced a total return of 1.25% for the same period.2

We attribute the fund's and market's returns to the effects of an improving economy and rising inflationary pressures toward the end of the reporting period.Weakness among the more interest-rate-sensitive areas of the bond market was partly offset by strength among corporate securities. However, because the fund focused on higher-rated corporate securities early in the reporting period in a market that favored lower-rated bonds, the fund's returns trailed the Index.

As of April 15, 2004, Chris Pellegrino became the fund's primary portfolio manager.

What is the fund's investment approach?

The fund's goal is to provide shareholders with as high a level of current income as is consistent with safety of principal and maintenance of liquidity.To pursue its goal, the fund invests primarily in various types of U.S. and foreign investment-grade bonds, including government bonds, mortgage-backed securities and corporate debt.

When choosing securities for the fund, we conduct extensive research into the credit history and current financial strength of investment-grade bond issuers. We also examine such factors as the long-term outlook for the industry in which the issuer operates, the economy, the bond market and the maturity of the securities. Maturity refers to the length of time between the date on which a bond is issued and the date the principal amount must be paid. Generally speaking,

The Fund 3

DISCUSSION OF FUND PERFORMANCE (continued)

bonds with longer maturities tend to offer higher yields but also fluctuate more in price than their short-term counterparts. Although the portfolio manager may invest in individual bonds with different remaining maturities, the fund's dollar-weighted average portfolio maturity will be no more than 10 years.

What other factors influenced the fund's performance?

When the reporting period began, the U.S. economy had already begun to improve, posting impressive growth during the third quarter of 2003. Despite the recovering economy, however, inflationary pressures remained low as labor markets failed to improve. As a result, the Federal Reserve Board (the “Fed”) has kept short-term interest rates at a 46-year low of 1%. While the market's more interest-rate-sensitive areas performed relatively well for much of the reporting period, bond prices experienced heightened volatility as investors reacted to each new release of economic data amid concerns that potential inflationary pressures might cause the Fed to change course.

With interest rates remaining at generational lows during the reportin period, many homeowners refinanced their mortgages at lower prevailin rates. The resulting surge in mortgage prepayments effectively returne principal to bondholders, eroding returns. Because mortgage-backe securities comprised approximately one-third of the fund's assets, the hindered the fund's overall performance during the reporting period.

Toward the middle of the reporting period, we began to reduce the fund's exposure to mortgage-backed securities and increase its holdings of corporate securities, which offered more attractive yields. Corporate bonds continued to rally during the reporting period, largely due to better business conditions in the wake of companies' efforts during the previous downturn to strengthen their balance sheets, cut costs and refinance their existing debt at lower rates.

Within the corporate sector, lower-quality securities provided stronger returns, especially those in industry groups that had been severely punished over the past several years, including the telecommunications, utilities and automobile sectors. Later in the reporting period, we

4

began to reduce the fund's holdings of corporate securities generally rated single-A and double-A, and increase the fund's exposure to triple-B-rated securities in an attempt to capture higher yields.While this shift benefited the fund's performance, it was not enough to offset earlier lagging returns.

What is the fund's current strategy?

The bond market generally became more volatile in April 2004 amid evidence of improving labor markets and rising inflationary pressures. In our judgment, these developments suggest that the more credit-sensitive market sectors are likely to fare better than areas that are more sensitive to changing interest rates.Accordingly, as of the end of the reporting period, we have continued to devote the largest portion of the fund's assets to corporate securities while attempting to lower the fund's exposure to mortgage-backed securities. In addition, we recently have lowered the fund's exposure to U.S. government agency bonds, redeploying those assets into commercial mortgage-backed securities, which harbor comparative quality and generally are considered higher-yielding substitutes. As always, we intend to continue to monitor the economy and the fixed-income markets, and we are prepared to adjust the fund's sector allocation and security selection strategies as economic and market conditions evolve.

May 17, 2004

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

The Fund 5

STATEMENT OF INVESTMENTS

April 30, 2004 (Unaudited)

  Principal      
Bonds and Notes—102.0% Amount ($)   Value ($)  
 
 
Aerospace & Defense—.7%        
Lockheed Martin,        
   Bonds, 8.5%, 2029 180,000   228,472  
Raytheon,        
   Sr. Notes, 5.375%, 2013 230,000   230,989  
      459,461  
Asset-Backed Ctfs./Auto Loans—4.7%        
Capital Auto Receivables Asset Trust,        
   Ser. 2004-1, Cl. A4, 2.64%, 2008 350,000   343,949  
Chase Manhattan Auto Owner Trust,        
   Ser. 2003-C, Cl. A3, 2.26%, 2007 170,000   169,738  
DaimlerChrysler Auto Trust,        
   Ser. 2003-A, Cl. A4, 2.88%, 2009 420,000   420,768  
Honda Auto Receivables Owner Trust,        
   Ser. 2003-2, Cl. A3, 1.69%, 2007 100,000   99,789  
   Ser. 2004-1, Cl. A3, 2.4%, 2008 500,000   497,500  
National City Auto Receivables Trust,        
   Ser. 2004-A, Cl. A3, 2.11%, 2008 140,000   138,961  
Nissan Auto Receivables Owner Trust,        
   Ser. 2003-C, Cl. A4, 2.7%, 2007 350,000   350,149  
   Ser. 2004-A, Cl. A3, 2.01%, 2007 170,000   168,519  
USAA Auto Owner Trust,        
   Ser. 2004-1, Cl. A3, 2.06%, 2008 700,000   694,027  
Volkswagen Auto Loan Enhanced Trust,        
   Ser. 2003-1, Cl. A3, 1.49%, 2007 200,000   198,776  
      3,082,176  
Asset-Backed Ctfs./Credit Cards—1.8%        
Bank One Issuance Trust,        
   Ser. 2002-A2, Cl. A2, 4.16%, 2008 700,000   716,506  
   Ser. 2004-A1, Cl. A1, 3.45%, 2011 240,000   234,381  
Capital One Multi-Asset Execution Trust,        
   Ser. 2004-C1, Cl. C1, 3.4%, 2009 250,000   247,782  
      1,198,669  
Asset-Backed Ctfs./Home Equity—3.6%        
Ameriquest Mortgage Securities,        
   Ser. 2004-FR1, Cl. A3, 2.65%, 2034 150,000   150,000  
Centex Home Equity,        
   Ser. 2004-A, Cl. AF2, 2.67%, 2021 200,000   199,751  
Residential Asset Mortgage Products,        
   Ser. 2004-RS4, Cl. AI2, 3.247%, 2025 250,000   248,320  

6

  Principal      
Bonds and Notes (continued) Amount ($) Value ($)  
 
Asset-Backed Ctfs./Home Equity (continued)        
Residential Asset Securities:        
   Ser. 2002-KS4, Cl. AIIB, 1.35%, 2032 1,049,976 a 1,051,506  
   Ser. 2004-KS3, Cl. AI2, 2.17%, 2024 400,000   394,999  
   Ser. 2004-KS4, Cl. AI2, 2.53%, 2024 350,000   349,966  
      2,394,542  
Asset-Backed Ctfs./Utilities—.1%        
Detroit Edison Securitization Funding,        
   Ser. 2001-1, Cl. A2, 5.51%, 2007 51,560   52,796  
Automotive—2.2%        
DaimlerChrysler,        
   Notes, 7.3%, 2012 110,000   121,836  
Ford Motor Credit:        
   Global Landmark Securities, 7.25%, 2011 480,000 b 510,069  
   Global Landmark Securities, 7.375%, 2009 190,000   205,616  
GMAC,        
   Notes, 7%, 2012 550,000   579,660  
      1,417,181  
Banking—10.6%        
Bank of New York,        
   Sr. Notes, 5.2%, 2007 300,000   318,796  
Bank One,        
   Notes, 6.5%, 2006 500,000 b 534,086  
Barnett Capital I,        
   Capital Securities, 8.06%, 2026 200,000   220,536  
Branch Banking & Trust,        
   Sub. Notes, 5.2%, 2015 300,000   293,737  
Glencore Funding,        
   Notes, 6%, 2014 100,000 c 94,676  
HSBC,        
   Sub. Notes, 7.5%, 2009 250,000   287,203  
J.P. Morgan Chase & Co.,        
   Sub. Notes, 6.75%, 2011 150,000   167,797  
Jefferies,        
   Sr. Notes, 7.75%, 2012 250,000   290,844  
KeyCorp,        
   Medium-Term Notes, Ser. F, 1.37%, 2004 1,000,000 a 1,001,049  
Landwirtschaftliche Rentenbank,        
   Sr. Notes, 3.25%, 2008 100,000   98,580  

The Fund 7

STATEMENT OF INVESTMENTS (Unaudited) (continued)

  Principal      
Bonds and Notes (continued) Amount ($) Value ($)  
 
Banking (continued)        
National City,        
   Sr. Notes, 3.2%, 2008 460,000   452,139  
Northern Rock,        
   Notes, 5.6%, 2049 350,000 c 343,656  
PNC Funding,        
   Sr. Notes, 5.75%, 2006 310,000   329,195  
Royal Bank of Scotland,        
   Sub. Notes, 6.4%, 2009 150,000 b 165,557  
Swiss Bank,        
   Sub. Debs., 7%, 2015 200,000   228,641  
U.S. Bancorp,        
   Medium-Term Notes, Ser. N, 3.125%, 2008 450,000   441,681  
Union Planters,        
   Sub. Notes, 7.75%, 2011 90,000   104,902  
Wachovia,        
   Notes, 3.5%, 2008 250,000   246,423  
Washington Mutual,        
   Sub. Notes, 4.625%, 2014 450,000 b 417,118  
Washington Mutual Capital I,        
   Capital Securities, 8.375%, 2027 250,000   284,124  
Wells Fargo & Co.,        
   Sr. Notes, 5.125%, 2007 350,000   368,661  
Westpac Capital Trust IV,        
   Notes, 5.256%, 2049 170,000 c 160,098  
Zions Bancorp,        
   Sub. Notes, 6%, 2015 70,000   72,408  
      6,921,907  
Broadcasting & Media—1.5%        
British Sky Broadcasting,        
   Notes, 6.875%, 2009 175,000   193,710  
Clear Channel Communications,        
   Notes, 4.25%, 2009 30,000   29,787  
Comcast Cable Communications,        
   Sr. Notes, 6.75%, 2011 250,000   274,346  
Cox Communications,        
   Notes, 7.125%, 2012 175,000 b 194,109  
Liberty Media,        
   Notes, 3.5%, 2006 270,000   270,675  
      962,627  

8

  Principal      
Bonds and Notes (continued) Amount ($) Value ($)  
 
Commercial Mortgage Pass-Through Ctfs.—4.9%        
Bear Stearns Commercial Mortgage Securities,        
   Ser. 1999-WF2, Cl. A1, 6.8%, 2008 179,024   188,185  
   Ser. 2003-T12, Cl. A4, 4.68%, 2039 200,000   193,858  
CS First Boston Mortgage Securities,        
   Ser. 2001-CF2, Cl. A4, 6.505%, 2034 200,000   219,208  
Capco America Securitization,        
   Ser. 1998-D7, Cl. A1B, 6.26%, 2030 700,000   762,908  
DLJ Commercial Mortgage,        
   Ser. 1999-CG1, Cl. A1B, 6.46%, 2032 370,000   404,477  
First Union-Lehman Brothers-Bank of America,        
   Ser. 1998-C2, Cl. A2, 6.56%, 2035 300,000   328,569  
J.P. Morgan Commercial Mortgage Finance,        
   Ser. 2000-C10, Cl. A2, 7.371%, 2032 290,000   330,500  
LB Commercial Conduit Mortgage Trust,        
   Ser. 1999-C1, Cl. B, 6.93%, 2031 150,000   167,323  
Morgan Stanley Capital I,        
   Ser. 1998-WF1, Cl. A2, 6.55%, 2030 580,000   631,513  
      3,226,541  
Data Processing—.1%        
First Data,        
   Notes, 4.7%, 2013 90,000 b 87,964  
Entertainment/Media—.6%        
Carnival,        
   Sr. Notes, 3.75%, 2007 100,000 c 99,776  
News America,        
   Debs., 8.875%, 2023 150,000   188,221  
Viacom,        
   Sr. Notes, 5.5%, 2033 120,000   109,425  
      397,422  
Financial Services—8.2%        
American Express,        
   Notes, 4.875%, 2013 100,000   98,679  
American General Finance,        
   Medium-Term Notes, Ser. G, 5.375%, 2009 250,000   263,575  
Amvescap,        
   Sr. Notes, 5.9%, 2007 200,000   213,513  
Bear Stearns Cos.,        
   Notes, 7.8%, 2007 275,000 b 310,162  

The Fund 9

STATEMENT OF INVESTMENTS (Unaudited) (continued)

  Principal      
Bonds and Notes (continued) Amount ($) Value ($)  
 
Financial Services (continued)        
Boeing Capital,        
   Sr. Notes, 5.75%, 2007 175,000 b 186,149  
CIT,        
   Notes, 6.5%, 2006 130,000   138,577  
Countrywide Home Loan:        
   Medium-Term Notes, Ser. L, 1.26%, 2005 500,000 a 500,438  
   Medium-Term Notes, Ser. L, 3.25%, 2008 250,000 b 242,921  
General Electric Capital:        
   Medium-Term Notes, Ser. A, 1.235%, 2005 1,000,000 a,b 1,001,851  
   Medium-Term Notes, Ser. A, 6.8%, 2005 500,000 b 533,506  
Goldman Sachs,        
   Sub. Notes, 6.345%, 2034 300,000 b 287,683  
John Deere Capital,        
   Notes, 7%, 2012 60,000   68,024  
Lehman Brothers,        
   Medium-Term Notes, Ser. F, 7.5%, 2006 200,000   221,131  
MBNA America Bank,        
   Sub. Notes, 6.625%, 2012 300,000   328,288  
Merrill Lynch & Co.,        
   Notes, 6%, 2009 250,000   269,600  
Morgan Stanley,        
   Sub. Notes, 4.75%, 2014 250,000   234,024  
SLM,        
   Medium-Term Notes, 5.05%, 2014 200,000   194,485  
Santander Financial Issuances,        
   Sub. Notes, 6.375%, 2011 250,000   272,561  
      5,365,167  
Food & Beverages—1.5%        
ConAgra Foods,        
   Notes, 6.75%, 2011 130,000   143,801  
Coors Brewing,        
   Sr. Notes, 6.375%, 2012 150,000   162,211  
Diageo Capital,        
   Notes, 4.85%, 2018 20,000 b 18,747  
H.J. Heinz Finance,        
   Notes, 6%, 2012 120,000   129,159  
Kellogg,        
   Notes, Ser. B, 6.6%, 2011 50,000   55,618  

10

  Principal      
Bonds and Notes (continued) Amount ($) Value ($)  
 
Food & Beverages (continued)        
Kraft Foods,        
   Bonds, 6.5%, 2031 20,000   20,559  
Kroger,        
   Sr. Notes, 6.2%, 2012 200,000   212,745  
Pepsi Bottling,        
   Sr. Notes, Ser. B, 7%, 2029 100,000   111,906  
Safeway,        
   Debs., 7.25%, 2031 100,000   107,242  
      961,988  
Foreign—.5%        
United Mexican States,        
   Bonds, 8.3%, 2031 320,000   344,160  
Industrial—.7%        
Pitney Bowes,        
   Notes, 4.75%, 2018 30,000   28,197  
R.R. Donnelley & Sons,        
   Notes, 4.95%, 2014 125,000 c 120,947  
Waste Management:        
   Sr. Notes, 5%, 2014 140,000   134,868  
   Sr. Notes, 6.875%, 2009 140,000 b 155,114  
      439,126  
Insurance—.6%        
Nationwide Mutual Insurance,        
   Bonds, 6.6%, 2034 170,000 c 163,433  
Pacific Life,        
   Bonds, 6.6%, 2033 220,000 c 229,893  
      393,326  
Medical—.3%        
Becton Dickinson & Co.,        
   Notes, 4.9%, 2018 60,000   57,511  
Johnson & Johnson,        
   Debs., 6.95%, 2029 100,000   115,522  
      173,033  
Metals & Mining—.3%        
Inco,        
   Notes, 7.75%, 2012 180,000   208,975  

The Fund 11

STATEMENT OF INVESTMENTS (Unaudited) (continued)

  Principal      
Bonds and Notes (continued) Amount ($) Value ($)  
 
Oil & Gas—1.6%        
Apache,        
   Sr. Notes, 6.25%, 2012 100,000   110,472  
Kinder Morgan,        
   Sr. Notes, 6.5%, 2012 40,000   43,123  
Marathon Oil,        
   Notes, 5.375%, 2007 50,000   52,758  
Occidental Petroleum,        
   Sr. Notes, 5.875%, 2007 350,000   373,483  
Phillips Petroleum,        
   Debs., 6.65%, 2018 150,000   166,279  
Valero Energy,        
   Notes, 6.875%, 2012 30,000 b 33,225  
XTO Energy,        
   Sr. Notes, 7.5%, 2012 250,000   287,595  
      1,066,935  
Paper Products—.4%        
Domtar,        
   Notes, 5.375, 2013 85,000   82,638  
International Paper,        
   Notes, 5.85%, 2012 190,000 b 196,476  
      279,114  
Real Estate Investment Trusts—1.4%        
Boston Properties,        
   Sr. Notes, 6.25%, 2013 140,000   148,095  
Duke Realty,        
   Sr. Notes, 5.25%, 2010 300,000   311,893  
EOP Operating,        
   Notes, 4.75%, 2014 250,000   233,612  
Healthcare Realty Trust,        
   Sr. Notes, 5.125%, 2014 200,000   188,186  
Simon Property,        
   Notes, 4.9%, 2014 20,000 c 19,023  
      900,809  
Retail—.3%        
Target,        
   Notes, 5.875%, 2012 175,000   186,673  
State Government—.1%        
State of Illinois,        
   Bonds, 5.1%, 2033 60,000   54,452  

12

  Principal      
Bonds and Notes (continued) Amount ($) Value ($)  
 
Telecommunications—5.3%        
AT&T Wireless Services,        
Sr. Notes, 8.75%, 2031 310,000   379,280  
British Telecommunications,        
Notes, 8.375%, 2010 250,000 a 297,960  
Deutsche Telekom International Finance,        
Notes, 8.5%, 2010 150,000 a 177,453  
France Telecom,        
Notes, 8.75%, 2011 90,000 a 106,539  
Sprint Capital,        
Sr. Notes, 6.875%, 2028 405,000   398,767  
TELUS,        
Notes, 8%, 2011 250,000   290,390  
Telecom Italia Capital,        
Notes, Cl. B, 5.25%, 2013 310,000 c 306,203  
Verizon Communications,        
Debs., 6.94%, 2028 300,000   311,915  
Verizon Wireless Capital:        
Notes, 1.19%, 2005 1,000,000 a,c 999,457  
Notes, 5.375%, 2006 170,000   179,496  
      3,447,460  
Transportation—1.6%        
Canadian Pacific Railway,        
Notes, 5.75%, 2033 50,000   47,136  
FedEx,        
Notes, 3.5%, 2009 70,000 c 67,770  
Norfolk Southern,        
Notes, 7.35%, 2007 300,000   333,632  
Union Pacific,        
Notes, 6.125%, 2012 400,000   428,410  
United Parcel Service,        
Debs., 8.375%, 2020 150,000   194,504  
      1,071,452  
U.S. Government—14.0%        
U.S. Treasury Bonds:        
5.25%, 11/15/2028 800,000   786,400  
5.375%, 2/15/2031 50,000   50,672  
5.5%, 8/15/2028 95,000   96,554  
6%, 2/15/2026 500,000   540,855  
6.25%, 5/15/2030 130,000   146,133  

The Fund 13

STATEMENT OF INVESTMENTS (Unaudited) (continued)

  Principal      
Bonds and Notes (continued) Amount ($) Value ($)  
 
U.S. Government (continued)        
U.S. Treasury Bonds (continued):        
   6.5%, 11/15/2026 200,000   229,546  
   11.25%, 2/15/2015 950,000   1,481,810  
U.S. Treasury Notes:        
   1.125%, 6/30/2005 600,000 b 596,130  
   2.25%, 2/15/2007 2,000,000 b 1,973,580  
   3.125%, 4/15/2009 1,750,000   1,712,062  
   3.25%, 8/15/2008 250,000 b 248,535  
   5.75%, 8/15/2010 210,000 b 230,885  
   6.5%, 8/15/2005 1,000,000 b 1,059,410  
      9,152,572  
U.S. Government Agencies—2.8%        
Federal Farm Credit Banks,        
   Bonds, 2.375%, 10/2/2006 400,000   396,597  
Federal Home Loan Mortgage Corp.,        
   Notes, 5.125%, 7/15/2012 300,000   306,600  
Federal National Mortgage Association,        
   Notes, 6.625%, 10/15/2007 1,000,000   1,107,112  
      1,810,309  
U.S. Government Agencies/Mortgage-Backed—25.8%        
Federal Home Loan Mortgage Corp.:        
   5%, 6/1/2033 516,556   501,380  
   5.5%, 6/1/2016-3/1/2033 2,483,410   2,484,592  
   6%, 6/1/2012-2/1/2032 535,441   550,192  
   6.5%, 11/1/2004-9/1/2029 188,665   198,430  
   7%, 3/1/2012-4/1/2031 170,032   180,182  
   7.5%, 12/1/2025-1/1/2031 98,133   105,700  
   8%, 10/1/2019-10/1/2030 62,288   67,637  
   8.5%, 7/1/2030 5,365   5,804  
   9%, 8/1/2030 4,921   5,401  
Federal National Mortgage Association:        
   Grantor Trust,        
      Ser. 2001-T11, Cl. B, 5.503%, 9/25/2011 210,000   218,912  
   4.5%, 8/1/2018-8/1/2033 1,937,492   1,865,491  
   5%, 9/1/2033 965,423   936,357  
   5.5%, 12/1/2013-1/1/2034 2,304,163   2,309,699  
   6% 3,500,000 d 3,580,920  
   6%, 9/1/2013-5/1/2033 1,370,627   1,410,997  
   7%, 7/1/2015-5/1/2031 94,179   99,812  
   7.5%, 3/1/2012-3/1/2031 153,673   164,736  
   8%, 5/1/2013-3/1/2031 70,951   76,806  

14

  Principal      
Bonds and Notes (continued) Amount ($)   Value ($)  
 
 
U.S. Government Agencies/Mortgage-Backed (continued)        
Government National Mortgage Association I:        
   Grantor Trust,        
      Ser. 2004-25, Cl. AC, 3.377%, 1/16/2023 350,000   343,875  
   5.5%, 7/15/2033 476,235   477,868  
   6%, 1/15/2029 99,137   101,800  
   6.5%, 9/15/2008-6/15/2029 204,459   213,939  
   7%, 8/15/2025-9/15/2031 197,224   210,189  
   7.5%, 12/15/2026-1/15/2031 113,397   121,941  
   8%, 1/15/2030-10/15/2030 64,374   70,268  
   8.5%, 4/15/2025-9/15/2030 22,490   24,797  
   9%, 10/15/2027 50,734   56,473  
   9.5%, 2/15/2025 18,815   21,213  
Tennessee Valley Authority,        
   Bonds, 4.75%, 7/15/2004 500,000   503,463  
      16,908,874  
Utilities/Gas & Electric—5.8%        
Alabama Power,        
   Sr. Notes, Ser. X, 3.125%, 2008 140,000   136,335  
Carolina Power & Light,        
   First Mortgage Bonds, 5.125%, 2013 180,000   179,975  
Consolidated Edison Company of New York,        
   Debs., Ser. 2002-B, 4.875%, 2013 200,000   198,568  
Duke Energy,        
   Sr. Notes, 5.625%, 2012 50,000   50,742  
Florida Power & Light,        
   First Mortgage Bonds, 5.625%, 2034 50,000   47,491  
MidAmerican Energy:        
   Medium-Term Notes, 5.125%, 2013 345,000   345,669  
   Sr. Notes, 3.5%, 2008 160,000   156,125  
National Rural Utilities:        
   Notes, 5.5%, 2005 500,000   512,456  
   Notes, 5.75%, 2009 230,000   245,365  
Niagara Mohawk Power,        
   First Mortgage Bonds, 7.75%, 2006 300,000   328,519  
Ohio Power,        
   Sr. Notes, Ser. G, 6.6%, 2033 20,000   20,771  
Oncor Electric Delivery,        
   Secured Notes, 6.375%, 2012 260,000   282,131  
Pacific Gas & Electric,        
   First Mortgage Bonds, 6.05%, 2034 100,000   94,886  

The Fund 15

STATEMENT OF INVESTMENTS (Unaudited) (continued)

        Principal      
Bonds and Notes (continued)     Amount ($) Value ($)  
 
Utilities/Gas & Electric (continued)            
Peco Energy,            
First Mortgage Bonds, 3.5%, 2008     135,000   133,666  
Southern Cal Edison:            
First Mortgage Bonds, 5%, 2014     140,000   137,607  
First Mortgage Bonds, Ser. 2004-G, 5.75%, 2035 200,000   186,195  
Virginia Electric & Power,            
Sr. Notes, Ser. A, 4.75%, 2013     215,000   208,268  
Wisconsin Energy,            
Sr. Notes, 5.5%, 2008     500,000   525,940  
            3,790,709  
Total Bonds and Notes            
   (cost $ 66,877,255)         66,756,420  
 
               
Short-Term Investments—3.2%          
 
Repurchase Agreements;            
Goldman Sachs & Co., Tri-Party            
Repurchase Agreement, .91%, dated 4/30/2004,        
due 5/3/2004 in the amount of $ 2,131,114        
(fully collateralized by $2,192,000 U.S. Treasury        
Notes, 1.625% due 2/28/2006, value $ 2,174,173)        
   (cost $ 2,130,952)     2,130,952   2,130,952  
 
Investment of Cash Collateral            
for Securities Loaned—13.7%   Shares   Value ($)  
 
Registered Investment Company,            
Dreyfus Institutional Preferred Money Market Fund        
   (cost $ 8,949,909)     8,949,909 e 8,949,909  
 
               
Total Investments (cost $ 77,958,116)   118.9%   77,837,281  
Liabilities, Less Cash and Receivables   (18.9%)   (12,379,284)  
Net Assets     100.0%   65,457,997  
a Variable rate security—interest rate subject to periodic change.
b
  		 All or a portion of these securities are on loan. At April 30, 2004, the total market value of the fund's securities on loan is $8,687,134 and the total market value of the collateral held by the fund is $8,949,909.
c
  		 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 April 30, 2004, these securities amounted to $2,604,932 or 4.0% of net assets.
d
  		 Purchased on a forward commitment basis.
e
  		      Investment in affiliated money market mutual fund. See notes to financial statements.

16

STATEMENT OF ASSETS AND LIABILITIES

April 30, 2004 (Unaudited)

          Cost Value  
 
 
Assets ($):              
Investments in securities—See Statement of Investments—Note 1(c)      
(including securities on loan, valued at $8,687,134)—Note 1(b):      
Unaffiliated issuers       69,008,207 68,887,372  
Affiliated issuers       8,949,909 8,949,909  
Interest receivable         571,686  
Receivable for investment securities sold         442,186  
Receivable for shares of Capital Stock subscribed       17,343  
            78,868,496  
 
 
Liabilities ($):            
Due to The Dreyfus Corporation and affiliates—Note 2(a)   56,906  
Cash overdraft due to Custodian         89,298  
Liability for securities on loan—Note 1(b)         8,949,909  
Payable for open mortgage-backed dollar rolls       3,622,938  
Payable for investment securities purchased       630,002  
Payable for shares of Capital Stock redeemed       61,446  
            13,410,499  
 
 
Net Assets ( $)         65,457,997  
 
 
Composition of Net Assets ($):            
Paid-in capital           65,063,427  
Accumulated distributions in excess of investment income—net   (68,637)  
Accumulated net realized gain (loss) on investments       584,042  
Accumulated net unrealized appreciation            
(depreciation) on investments         (120,835)  
 
 
Net Assets ( $)         65,457,997  
 
 
               
               
Net Asset Value Per Share            
    Class A   Class B Class C Class R  
 
 
Net Assets ($) 20,981,498   20,264,671 10,925,140 13,286,688  
Shares Outstanding 1,850,204   1,781,432 973,955 1,171,806  
 
 
Net Asset Value Per Share ($) 11.34   11.38 11.22 11.34  
               
See notes to financial statements.            

The Fund 17

STATEMENT OF OPERATIONS    
Six Months Ended April 30, 2004 (Unaudited)    
 
     
     
     
     
     
     
Investment Income ($):    
Income:    
Interest 1,452,043  
Income on securities lending 1,921  
Total Income 1,453,964  
Expenses:    
Management fee—Note 2(a) 208,822  
Distribution and service fees—Note 2(b) 154,756  
Loan commitment fees—Note 4 331  
Total Expenses 363,909  
Investment Income—Net 1,090,055  
 
Realized and Unrealized Gain (Loss) on Investments—Note 3 ($):    
Net realized gain (loss) on investments 584,178  
Net unrealized appreciation (depreciation) on investments (964,257)  
Net Realized and Unrealized Gain (Loss) on Investments (380,079)  
Net Increase in Net Assets Resulting from Operations 709,976  
     
See notes to financial statements.    

18

STATEMENT OF CHANGES IN NET ASSETS

  Six Months Ended      
  April 30, 2004   Year Ended  
  (Unaudited)   October 31, 2003  
 
 
Operations ($):        
Investment income—net 1,090,055   2,163,332  
Net realized gain (loss) on investments 584,178   1,714,867  
Net unrealized appreciation        
   (depreciation) on investments (964,257)   (1,704,103)  
Net Increase (Decrease) in Net Assets        
   Resulting from Operations 709,976   2,174,096  
 
 
Dividends to Shareholders from ($):        
Investment income—net:        
Class A shares (374,335)   (668,027)  
Class B shares (344,465)   (732,897)  
Class C shares (172,666)   (265,088)  
Class R shares (267,472)   (609,264)  
Net realized gain on investments:        
Class A shares (16,325)   —  
Class B shares (17,993)   —  
Class C shares (8,692)   —  
Class R shares (10,781)   —  
Total Dividends (1,212,729)   (2,275,276)  
 
 
Capital Stock Transactions ($):        
Net proceeds from shares sold:        
Class A shares 5,482,373   19,481,910  
Class B shares 1,222,015   11,730,524  
Class C shares 2,000,296   9,521,207  
Class R shares 265,816   1,508,539  

The Fund 19

STATEMENT OF CHANGES IN NET ASSETS (continued)

  Six Months Ended      
  April 30, 2004   Year Ended  
  (Unaudited)   October 31, 2003  
 
 
Capital Stock Transactions ($) (continued):        
Dividends reinvested:        
Class A shares 211,261   359,673  
Class B shares 212,858   404,705  
Class C shares 114,126   140,886  
Class R shares 162,412   341,613  
Cost of shares redeemed:        
Class A shares (4,706,634)   (16,774,875)  
Class B shares (5,913,304)   (13,568,821)  
Class C shares (2,203,722)   (6,120,401)  
Class R shares (1,755,575)   (8,964,571)  
Increase (Decrease) in Net Assets from        
   Capital Stock Transactions (4,908,078)   (1,939,611)  
Total Increase (Decrease) in Net Assets (5,410,831)   (2,040,791)  
 
 
Net Assets ($):        
Beginning of Period 70,868,828   72,909,619  
End of Period 65,457,997   70,868,828  
Undistributed (distributions in excess of)        
   investment income—net (68,637)   246  

20

  Six Months Ended      
  April 30, 2004   Year Ended  
  (Unaudited)   October 31, 2003  
 
 
Capital Share Transactions:        
Class Aa        
Shares sold 476,130   1,685,356  
Shares issued for dividends reinvested 18,344   31,175  
Shares redeemed (408,177)   (1,452,244)  
Net Increase (Decrease) in Shares Outstanding 86,297   264,287  
 
 
Class Ba        
Shares sold 105,918   1,010,625  
Shares issued for dividends reinvested 18,425   34,960  
Shares redeemed (510,810)   (1,173,435)  
Net Increase (Decrease) in Shares Outstanding (386,467)   (127,850)  
 
 
Class C        
Shares sold 175,523   830,432  
Shares issued for dividends reinvested 10,016   12,346  
Shares redeemed (192,992)   (533,059)  
Net Increase (Decrease) in Shares Outstanding (7,453)   309,719  
 
 
Class R        
Shares sold 23,028   131,511  
Shares issued for dividends reinvested 14,105   29,609  
Shares redeemed (151,621)   (779,986)  
Net Increase (Decrease) in Shares Outstanding (114,488)   (618,866)  

a During the period ended April 30, 2004, 133,298 Class B shares representing $1,539,127 were automatically converted to 133,708 Class A shares and during the period ended October 31, 2003, 185,087 Class B shares representing $2,142,491 were automatically converted to 185,649 Class A shares.

See notes to financial statements.

The Fund 21

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                      
  April 30, 2004       Year Ended October 31,      
         
     
Class A Shares (Unaudited)   2003   2002a   2001   2000   1999  
 
 
 
 
 
 
Per Share Data ($):                        
Net asset value, beginning of period 11.44   11.44   11.46   10.64   10.60   11.31  
Investment Operations:                        
Investment income—net .19b   .37b   .49b   .60   .62   .57  
Net realized and unrealized                        
   gain (loss) on investments (.08)   .01   .00c   .82   .04   (.71)  
Total from Investment Operations .11   .38   .49   1.42   .66   (.14)  
Distributions:                        
Dividends from investment income—net (.20)   (.38)   (.51)   (.60)   (.62)   (.57)  
Dividends from net realized                        
   gain on investments (.01)   —   —   —   —   —  
Total Distributions (.21)   (.38)   (.51)   (.60)   (.62)   (.57)  
Net asset value, end of period 11.34   11.44   11.44   11.46   10.64   10.60  
 
 
 
 
 
 
Total Return (%)d .96e   3.34   4.44   13.74   6.43   (1.26)  
 
 
 
 
 
 
Ratios/Supplemental Data (%):                        
Ratio of expenses to average net assets .85f   .85   .85   .85   .85   .85  
Ratio of net investment income                        
   to average net assets 3.32f   3.13   4.44   5.41   5.87   5.22  
Portfolio Turnover Rate 76.98e,g   173.68   136.77   65.05   72.30   161.28  
 
 
 
 
 
 
Net Assets, end of period                        
   ($ x 1,000) 20,981   20,176   17,159   11,415   6,657   5,044  
a As required, effective November 1, 2001, the fund has adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began amortizing discount on fixed income securities on a scientific basis and including paydown gains and losses in interest income.The effect of these changes for the period ended October 31, 2002 was to increase net investment income per share and decrease net realized and unrealized gain (loss) on investments per share by less than $.01 and increase the ratio of net investment income to average net assets from 4.43% to 4.44%. Per share data and ratios/supplemental data for periods prior to November 1, 2001 have not been restated to reflect this change in presentation.
b
  		 Based on average shares outstanding at each month end.
c
  		 Amount represents less than $.01 per share.
d
  		 Exclusive of sales charge.
e
  		 Not annualized.
f
  		 Annualized.
g
  		 The portfolio turnover rate excluding mortgage dollar roll transactions was 61.12%.

See notes to financial statements.

22

  Six Months Ended                      
  April 30, 2004       Year Ended October 31,      
         
     
Class B Shares (Unaudited)   2003   2002a   2001   2000   1999  
 
 
 
 
 
 
Per Share Data ($):                        
Net asset value, beginning of period 11.47   11.48   11.49   10.68   10.64   11.35  
Investment Operations:                        
Investment income—net .16b   .30b   .44b   .55   .57   .52  
Net realized and unrealized                        
   gain (loss) on investments (.07)   .01   .00c   .81   .04   (.71)  
Total from Investment Operations .09   .31   .44   1.36   .61   (.19)  
Distributions:                        
Dividends from investment income—net (.17)   (.32)   (.45)   (.55)   (.57)   (.52)  
Dividends from net realized                        
   gain on investments (.01)   —   —   —   —   —  
Total Distributions (.18)   (.32)   (.45)   (.55)   (.57)   (.52)  
Net asset value, end of period 11.38   11.47   11.48   11.49   10.68   10.64  
 
 
 
 
 
 
Total Return (%)d .80e   2.74   4.00   13.05   5.90   (1.73)  
 
 
 
 
 
 
Ratios/Supplemental Data (%):                        
Ratio of expenses to average net assets 1.35f   1.35   1.35   1.35   1.35   1.35  
Ratio of net investment income                        
   to average net assets 2.83f   2.64   3.93   4.94   5.37   4.72  
Portfolio Turnover Rate 76.98e,g   173.68   136.77   65.05   72.30   161.28  
 
 
 
 
 
 
Net Assets, end of period                        
   ($ x 1,000) 20,265   24,877   26,352   16,144   9,813   10,056  
a As required, effective November 1, 2001, the fund has adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began amortizing discount on fixed income securities on a scientific basis and including paydown gains and losses in interest income.The effect of these changes for the period ended October 31, 2002 was to increase net investment income per share and decrease net realized and unrealized gain (loss) on investments per share by less than $.01 and increase the ratio of net investment income to average net assets from 3.91% to 3.93%. Per share data and ratios/supplemental data for periods prior to November 1, 2001 have not been restated to reflect this change in presentation.
b
  		 Based on average shares outstanding at each month end.
c
  		 Amount represents less than $.01 per share.
d
  		 Exclusive of sales charge.
e
  		 Not annualized.
f
  		 Annualized.
g
  		 The portfolio turnover rate excluding mortgage dollar roll transactions was 61.12%.

See notes to financial statements.

The Fund 23

FINANCIAL HIGHLIGHTS (continued)

  Six Months Ended                      
  April 30, 2004       Year Ended October 31,      
         
     
Class C Shares (Unaudited)   2003   2002a   2001   2000   1999  
 
 
 
 
 
 
Per Share Data ($):                        
Net asset value, beginning of period 11.31   11.32   11.33   10.53   10.50   11.20  
Investment Operations:                        
Investment income—net .16b   .30b   .43b   .54   .56   .51  
Net realized and unrealized                        
   gain (loss) on investments (.07)   .01   .00c   .80   .03   (.70)  
Total from Investment Operations .09   .31   .43   1.34   .59   (.19)  
Distributions:                        
Dividends from investment income—net (.17)   (.32)   (.44)   (.54)   (.56)   (.51)  
Dividends from net realized                        
   gain on investments (.01)   —   —   —   —   —  
Total Distributions (.18)   (.32)   (.44)   (.54)   (.56)   (.51)  
Net asset value, end of period 11.22   11.31   11.32   11.33   10.53   10.50  
 
 
 
 
 
 
Total Return (%)d .78e   2.73   4.00   13.05   5.80   (1.74)  
 
 
 
 
 
 
Ratios/Supplemental Data (%):                        
Ratio of expenses to average net assets 1.35f   1.35   1.35   1.35   1.35   1.35  
Ratio of net investment income                        
   to average net assets 2.83f   2.64   3.90   4.86   5.34   4.72  
Portfolio Turnover Rate 76.98e,g   173.68   136.77   65.05   72.30   161.28  
 
 
 
 
 
 
Net Assets, end of period                        
   ($ x 1,000) 10,925   11,104   7,603   3,713   2,156   1,812  

a As required, effective November 1, 2001, the fund has adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began amortizing discount on fixed income securities on a scientific basis and including paydown gains and losses in interest income.The effect of these changes for the period ended October 31, 2002 was to increase net investment income per share and decrease net realized and unrealized gain (loss) on investments per share by less than $.01 and increase the ratio of net investment income to average net assets from 3.88% to 3.90%. Per share data and ratios/supplemental data for periods prior to November 1, 2001 have not been restated to reflect this change in presentation.

b
  		 Based on average shares outstanding at each month end.
c
  		 Amount represents less than $.01 per share.
d
  		 Exclusive of sales charge.
e
  		 Not annualized.
f
  		 Annualized.
g
  		 The portfolio turnover rate excluding mortgage dollar roll transactions was 61.12%.

See notes to financial statements.

24

  Six Months Ended                      
  April 30, 2004       Year Ended October 31,      
         
     
Class R Shares (Unaudited)   2003   2002a   2001   2000   1999  
 
 
 
 
 
 
Per Share Data ($):                        
Net asset value, beginning of period 11.44   11.44   11.46   10.64   10.61   11.31  
Investment Operations:                        
Investment income—net .21b   .39b   .54b   .63   .64   .60  
Net realized and unrealized                        
   gain (loss) on investments (.08)   .02   (.03)   .82   .03   (.70)  
Total from Investment Operations .13   .41   .51   1.45   .67   (.10)  
Distributions:                        
Dividends from                        
   investment income—net (.22)   (.41)   (.53)   (.63)   (.64)   (.60)  
Dividends from net realized                        
   gain on investments (.01)   —   —   —   —   —  
Total Distributions (.23)   (.41)   (.53)   (.63)   (.64)   (.60)  
Net asset value, end of period 11.34   11.44   11.44   11.46   10.64   10.61  
 
 
 
 
 
 
Total Return (%) 1.08c   3.61   4.70   14.02   6.59   (.91)  
 
 
 
 
 
 
Ratios/Supplemental Data (%):                        
Ratio of expenses                        
   to average net assets .60d   .60   .60   .60   .60   .60  
Ratio of net investment income                        
   to average net assets 3.58d   3.37   4.80   5.77   6.12   5.47  
Portfolio Turnover Rate 76.98c,e   173.68   136.77   65.05   72.30   161.28  
 
 
 
 
 
 
Net Assets, end of period                        
   ($ x 1,000) 13,287   14,711   21,796   24,322   40,492   37,207  

a As required, effective November 1, 2001, the fund has adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began amortizing discount on fixed income securities on a scientific basis and including paydown gains and losses in interest income.The effect of these changes for the period ended October 31, 2002 was to increase net investment income per share and decrease net realized and unrealized gain (loss) on investments per share by less than $.01 and increase the ratio of net investment income to average net assets from 4.79% to 4.80%. Per share data and ratios/supplemental data for periods prior to November 1, 2001 have not been restated to reflect this change in presentation.

b
  		 Based on average shares outstanding at each month end.
c
  		 Not annualized.
d
  		 Annualized.
e
  		 The portfolio turnover rate excluding mortgage dollar roll transactions was 61.12%.

See notes to financial statements.

The Fund

25

NOTES TO FINANCIAL STATEMENTS (Unaudited)

NOTE 1—Significant Accounting Policies:

Dreyfus Premier Limited Term Income Fund (the “fund”) is a separate diversified series of The Dreyfus/Laurel Funds, Inc. (the “Company”) which is registered under the Investment Company Act of 1940, as amended (the “Act”), as an open-end management investment company and operates as a series company currently offering sixteen series, including the fund.The fund's investment objective is to obtain as high a level of current income as is consistent with safety of principal and maintenance of liquidity. Although the fund may invest in obligations with different remaining maturities, the fund's dollar-weighted average maturity will be no more than ten years. 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”).

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 250 million shares of $.001 par value Capital Stock.The fund currently offers four classes of shares: Class A (50 million shares authorized), Class B (50 million shares authorized), Class C (50 million shares authorized) and Class R (100 million shares authorized). Class A, Class B and Class C shares are sold primarily to retail investors through financial intermediaries and bear a distribution fee and/or service fee. Class A shares are sold with a front-end sales charge, while Class B and Class C shares are subject to a contingent deferred sales charge (“CDSC”). Class B shares automatically convert to Class A shares after six years. Class R shares are sold primarily to bank trust departments and other financial service providers (including Mellon Financial and its affiliates) acting on behalf of customers having a qualified trust or investment account or relationship at such institution, and bear no distribution or service fees. Class R shares are offered without a front-end sales charge or CDSC. Each class of shares has identical rights and privileges, except with respect to distribution and service fees and voting rights on matters affecting a single class.

Investment income, net of expenses (other than class specific expenses) and realized and unrealized gains and losses are allocated daily to each

26

class of shares based upon the relative proportion of net assets of each class.

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

(a) Portfolio valuation: Investments in securities (excluding short-term investments other than U.S.Treasury Bills) 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 value as determined by the Service, based on methods which include consideration of: yields or prices of securities of comparable quality, coupon, maturity and type; indications as to values from dealers; and general market conditions. Securities for which there are no such valuations are valued at fair value as determined in good faith under the direction of the Board of Directors. Short-term investments, excluding U.S. Treasury Bills, are carried at amortized cost, which approximates value.

(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, including, where applicable, accretion of discount and amortization of premium on investments, is recognized on the accrual basis.

The fund may lend securities to qualified institutions. At origination, all loans are secured by collateral of at least 102% of the value of U.S. securities loaned and 105% of the value of foreign securities loaned. Collateral equivalent to at least 100% of the market value of securities on loan will be maintained at all times. Cash collateral is invested in

The Fund

27

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

certain money market mutual funds managed by the Manager as shown in the fund's Statement of Investments.The fund will be entitled to receive all income on securities loaned, in addition to income earned as a result of the lending transaction. Although each security loaned is fully collateralized, the fund would bear the risk of delay in recovery of, or loss of rights in, the securities loaned should a borrower fail to return the securities in a timely manner.

(c) Repurchase agreements: The fund may engage in repurchase agreement transactions. Under the terms of a typical repurchase agreement, the fund, through its custodian and sub-custodian, takes possession of an underlying debt obligation subject to an obligation of the seller to repurchase, and the fund to resell, the obligation at an agreed upon price and time, thereby determining the yield during the fund's holding period.This arrangement results in a fixed rate of return that is not subject to market fluctuations during the fund's holding period. The value of the collateral is at least equal, at all times, to the total amount of the repurchase obligation, including interest. In the event of a counterparty default, the fund has the right to use the collateral to offset losses incurred. There is potential loss to the fund in the event the fund is delayed or prevented from exercising its rights to dispose of the collateral securities, including the risk of a possible decline in the value of the underlying securities during the period while the fund seeks to assert its rights.The Manager, acting under the supervision of the Board of Directors, reviews the value of the collateral and the cred-itworthiness of those banks and dealers with which the fund enters into repurchase agreements to evaluate potential risks.

(d) Affiliated issuers: Issuers in which the fund held investments in other investment companies advised by the Manager are defined as “affiliated” in the Act.

(e) 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

28

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 tax character of distributions paid to shareholders during the fiscal year ended October 31, 2003 was as follows: ordinary income $2,275,276. The tax character of current year distributions will be determined at the end of the current fiscal year.

NOTE 2—Investment Management Fee and Other Transactions With Affiliates:

(a) Investment management fee: Pursuant to an Investment Management agreement with the Manager, the Manager provides or arranges for one or more third parties and/or affiliates to provide investment advisory, administrative, custody, fund accounting and transfer agency services to the fund. The Manager also directs the investments of the fund in accordance with its investment objective, policies and limitations. For these services, the fund is contractually obligated to pay the Manager a fee, calculated daily and paid monthly, at the annual rate of .60% of the value of the fund's average daily net assets. Out of its fee, the Manager pays all of the expenses of the fund except brokerage fees, taxes, interest, commitment fees, Rule 12b-1 distribution fees, service fees and expenses, fees and expenses of non-interested Directors (including counsel fees) and extraordinary expenses. In addition, the Manager is required to reduce its fee in an amount equal to the fund's allocable portion of fees and expenses of the non-interested Directors (including counsel fees). Each Director receives $40,000 per year, plus $5,000 for each joint Board meeting of

The Fund

29

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

the Company,The Dreyfus/Laurel Tax-Free Municipal Funds and The Dreyfus/Laurel Funds Trust (the “Dreyfus/Laurel Funds”) attended, $2,000 for separate committee meetings attended which are not held in conjunction with a regularly scheduled board meeting and $500 for Board meetings and separate committee meetings attended that are conducted by telephone and is reimbursed for travel and out-of-pocket expenses. The Chairman of the Board receives an additional 25% of such compensation (with the exception of reimbursable amounts). In the event that there is a joint committee meeting of the Dreyfus/Laurel Funds and the Dreyfus High Yield Strategies Fund, the $2,000 fee will be allocated between the Dreyfus/Laurel Funds and the Dreyfus High Yield Strategies Fund. These fees and expenses are charged and allocated to each series based on net assets. Amounts required to be paid by the Company directly to the non-interested Directors, that would be applied to offset a portion of the management fee payable to the Manager, are in fact paid directly by the Manager to the non-interested Directors.

The components of Due to The Dreyfus Corporation and affiliates in the Statement of Assets and Liabilities consists of: management fees $32,943, Rule 12b-1 distribution plan fees $17,434 and service plan fees $6,529.

During the period ended April 30, 2004, the Distributor retained $7,718 from commissions earned on sales of the fund's Class A shares and $20,607 and $2,033 from contingent deferred sales charges on redemptions of the fund's Class B and Class C shares, respectively.

(b) Distribution and service plan: Under separate Distribution Plans (the “Plans”) adopted pursuant to Rule 12b-1 under the Act, Class A shares may pay annually up to .25% of the value of its average daily net assets to compensate the Distributor for shareholder servicing activities and expenses primarily intended to result in the sale of Class A shares. Class B and Class C shares pay the Distributor for distributing their shares at an aggregate annual rate of .50% of the value of the average daily net assets of Class B and Class C shares. Class B and Class C shares are also subject to a service plan adopted pursuant to Rule 12b-1 (the “Service Plan”), under which Class B and Class C shares

30

pay the Distributor for providing certain services to the holders of their shares a fee at the annual rate of .25% of the value of the average daily net assets of Class B and Class C shares. During the period ended April 30, 2004, Class A, Class B and Class C shares were charged $26,558, $56,909 and $28,556, respectively, pursuant to their respective Plans. Class B and Class C shares were charged $28,455 and $14,278, respectively, pursuant to the Service Plan.

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

NOTE 3—Securities Transactions:

The aggregate amount of purchases and sales (including paydowns) of investment securities, excluding short-term securities, during the period ended April 30, 2004, amounted to $55,251,289 and $53,015,257, respectively, of which $10,892,656 in purchases and $10,926,836 in sales were from dollar roll transactions.

The fund may enter into dollar roll transactions with respect to mortgage-backed securities. In a dollar roll transaction, the fund sells mortgage-backed securities to a financial institution and simultaneously agrees to accept substantially similar (same type, coupon and maturity) securities at a later date, at an agreed upon price.

At April 30, 2004, accumulated net unrealized depreciation on investments was $120,835, consisting of $835,292 gross unrealized appreciation and $956,127 gross unrealized depreciation.

At April 30, 2004, 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 4—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

The Fund

31

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

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 April 30, 2004, the fund did not borrow under the Facility.

NOTE 5—Legal Matters:

Two class actions have been filed against Mellon Financial and Mellon Bank, N.A., and Dreyfus and Founders Asset Management LLC (the “Investment Advisers”), and the directors of all or substantially all of the Dreyfus funds, alleging that the Investment Advisers improperly used assets of the Dreyfus funds, in the form of directed brokerage commissions and 12b-1 fees, to pay brokers to promote sales of Dreyfus funds, and that the use of fund assets to make these payments was not properly disclosed to investors.The complaints further allege that the directors breached their fiduciary duties to fund shareholders under the Investment Company Act of 1940 and at common law.The complaints seek unspecified compensatory and punitive damages, rescission of the funds' contracts with the Investment Advisers, an accounting of all fees paid, and an award of attorneys' fees and litigation expenses. Dreyfus and the Dreyfus funds believe the allegations to be totally without merit and will defend the actions vigorously.

Additional lawsuits arising out of these circumstances and presenting similar allegations and requests for relief may be filed against the defendants in the future. Neither Dreyfus nor the Dreyfus funds believe that any of the pending actions will have a material adverse effect on the Dreyfus funds or Dreyfus' ability to perform its contracts with the Dreyfus funds.

32

For More Information

Dreyfus Premier
Limited Term
Income Fund
200 Park Avenue
New York, NY 10166
 
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
 
Custodian
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
 
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
200 Park Avenue
New York, NY 10166
 
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166

To obtain information:

By telephone

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

By mail Write to: The Dreyfus Premier Family of Funds 144 Glenn Curtiss Boulevard Uniondale, NY 11556-0144

A description of the policies and procedures that the fund uses to determine how to vote proxies relating to portfolio securities is available, without charge, by calling the telephone number listed above, or by visiting the SEC's website at http://www.sec.gov

© 2004 Dreyfus Service Corporation 0345SA0404

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
  		 Letter from the Chairman
3
  		 Discussion of Fund Performance
6
  		 Statement of Investments
12
  		 Statement of Assets and Liabilities
13
  		 Statement of Operations
14
  		 Statement of Changes in Net Assets
16
  		 Financial Highlights
21
  		 Notes to Financial Statements
     FOR MORE INFORMATION
Back Cover
   Dreyfus Premier
Midcap Stock Fund

The Fund

LETTER FROM THE CHAIRMAN

Dear Shareholder:

This semiannual report for Dreyfus Premier Midcap Stock Fund covers the six-month period from November 1, 2003, through April 30, 2004. Inside, you'll find valuable information about how the fund was managed during the reporting period, including a discussion with the fund's portfolio manager, John O'Toole.

Positive economic data continued to accumulate during the reporting period, as consumers, flush with extra cash from federal tax refunds and mortgage refinancings, continued to spend. At the same time, recent evidence of stronger job growth supports the view that corporations have become more willing to spend and invest. One result of the economic rebound has been higher overall earnings and stock prices for many U.S. companies.

Although recent economic news generally has been encouraging, we continue to believe that investors should be aware of the potential risks that could lead to heightened volatility or a stock market correction. Chief among them, in our view, are a possible acceleration of inflation and the chance that terrorism could cause instability in global markets. As always, we encourage you to speak regularly with your financial advisor, who may be in the best position to suggest ways to position your portfolio for the opportunities and challenges of today's financial markets.

Thank you for your continued confidence and support.

Sincerely,

Stephen E. Canter

Chairman and Chief Executive Officer The Dreyfus Corporation

May 17, 2004

2

DISCUSSION OF FUND PERFORMANCE

John O'Toole, Portfolio Manager

How did Dreyfus Premier Midcap Stock Fund perform relative to its benchmark?

For the six-month period ended April 30, 2004, the fund produced total returns of 3.12% for Class A shares, 2.71% for Class B shares, 2.70% for Class C shares, 3.24% for Class R shares and 3.04% for Class T shares.1 This compares with the performance of the fund's benchmark, the Standard & Poor's MidCap 400 Index (“S&P 400 Index”), which produced a total return of 6.93% for the same period.2

We attribute these results to a positive environment for stocks, which were bolstered by robust U.S. economic growth and rising corporate earnings. Midcap stocks generally kept pace with the overall market, with the fund's benchmark slightly outperforming the more broadly based S&P 500 Index.While the fund participated to a degree in the market's overall rise, disappointments concentrated primarily in the technology sector caused the fund's total returns to trail its benchmark.

What is the fund's investment approach?

The fund invests primarily in a blended portfolio of growth and value stocks of mid-capitalization companies, which are chosen through a disciplined process that combines computer-modeling techniques, fundamental analysis and risk management.

The quantitatively driven valuation process identifies and ranks approximately 2,500 midcap stocks based on more than a dozen different valuation inputs. Those inputs, which we believe can have an important influence on stock returns, include, among other things, earnings estimates, profit margins and growth in cash flow. Based on our analysis of which inputs are being rewarded by investors, we establish weightings for each input and make continuous adjustments for the uniqueness of various industries and economic sectors. For example, if the equity markets were rewarding companies with strong growth in cash flow, then we would add more weight to our growth-in-cash-flow input.

The Fund 3

DISCUSSION OF FUND PERFORMANCE (continued)

After considering the different valuation factors, our investment management team conducts fundamental research on each stock, which ultimately results in their buy-and-sell recommendations. The fund seeks to own the best-performing stocks within each economic sector of the midcap market. By maintaining an economic sector-neutral stance, we allow individual stock selection to drive the portfolio's performance.

What other factors influenced the fund's performance?

The fund generated its greatest gains from investments in the energy sector, where it outperformed its benchmark. Geopolitical tensions, high commodity prices, rising demand and constrained supplies created a profitable environment for holdings such as refinery operator Valero Energy and domestic exploration and production companies XTO Energy and Patina Oil & Gas. Individual investments in various consumer-related areas provided strong returns as well.Top consumer cyclical performers included auto supply chain Pep Boys, which was effectively restructured by new management, and GTECH Holdings, which services the government-sponsored lottery business. Among consumer staples holdings, poultry processor Pilgrim's Pride benefited from increasing public acceptance of high-protein, low-carbohydrate diets.The fund's relative performance also benefited from its avoidance of most investments in the airline industry, which was hurt by rising energy prices and competitive pressures.

The fund produced positive returns in every sector in which it invested, except for technology.Technology stocks, which enjoyed significant gains during 2003, began the reporting period priced at relatively high valuations based on investors' expectations of rapid growth. While most technology companies in which the fund invested met or exceeded earnings forecasts during the reporting period, their stocks proved vulnerable to concerns that the pace of growth might slow. Semiconductor holdings such as Amkor Technology, Cypress Semiconductor and QLogic were hit particularly hard. Other notable declines in technology included flash memory chipmaker SanDisk, software provider Citrix Systems and computer hardware maker Western Digital.

4

While technology accounted for most of the fund's underperformance relative to its benchmark, a few holdings in other areas undermined returns as well. In business services, education provider ITT Educational Services encountered company-specific problems that led to a lower stock price. In the health care sector, the fund did not own a few high-flying biotechnology stocks that were members of the benchmark, such as Sepracor and Protein Design Labs, because they failed to meet our disciplined investment criteria for profitability and revenue growth.

What is the fund's current strategy?

As of end of the reporting period, the fund maintained slightly greater exposure to value-oriented stocks than to growth-oriented stocks. This reflects our view that the current market environment is more likely to reward sustainable earnings growth than price momentum. For example, within the areas of technology and consumer cyclicals, we have found what we believe are more attractive opportunities among steady-performing hardware distribution companies and department stores than from growth-leveraged semiconductor firms and specialty retailers. At the same time, we have continued to maintain the sector neutral, company-by-company stock selection process that is the hallmark of our disciplined investment approach.

May 17, 2004

1
  		 Total return includes reinvestment of dividends and any capital gains paid and does not take into consideration the maximum initial sales charges in the case of Class A and Class T shares or the applicable contingent deferred sales charges imposed on redemptions in the case of Class B and Class C shares. Had these charges been reflected, returns would have been lower. Past performance is no guarantee of future results. Share price and investment return fluctuate such that upon redemption, fund shares may be worth more or less than their original cost.
2
  		 SOURCE: LIPPER INC. — Reflects reinvestment of dividends and, where applicable, capital gain distributions.The Standard & Poor's MidCap 400 Index is a widely accepted, unmanaged total return index measuring the performance of the midsize-company segment of the U.S. market.

The Fund 5

STATEMENT OF INVESTMENTS
April 30, 2004 (Unaudited)
Common Stocks—99.1% Shares   Value ($)  
 
 
Consumer Cyclical—15.5%        
Abercrombie & Fitch, Cl. A 45,000   1,415,250  
Aztar 39,200 a   1,015,280  
Bandag 19,600   853,580  
Blyth 60,500   1,966,855  
Borders Group 65,600   1,572,432  
Brinker International 50,700 a   1,949,922  
CBRL Group 59,700   2,241,735  
Chico's FAS 48,600 a,b   1,979,478  
Claire's Stores 110,800   2,258,104  
Coach 82,700 a   3,523,020  
GTECH Holdings 51,700   3,149,564  
Gentex 50,000   1,966,500  
HON INDUSTRIES 29,100   1,076,991  
La-Z-Boy 58,900   1,227,476  
Lear 41,800   2,533,916  
Michaels Stores 38,000   1,901,140  
Mohawk Industries 34,400 a   2,653,616  
Movie Gallery 37,200   722,424  
Pep Boys—Manny, Moe & Jack 54,700 b   1,502,609  
Pier 1 Imports 73,200   1,512,312  
Saks 119,000 a   1,713,600  
Timberland, Cl. A 23,100 a   1,448,832  
Zale 30,500 a   1,705,560  
      41,890,196  
Consumer Staples—3.6%        
Bunge 20,100   744,705  
Fresh Del Monte Produce 54,300 b   1,267,905  
Helen of Troy 46,500 a   1,546,125  
Jarden 30,400 a   1,130,880  
Pactiv 59,900 a   1,374,705  
Pilgrim's Pride 57,200   1,323,036  
Sensient Technologies 52,400 b   1,072,104  
Smithfield Foods 51,400 a   1,367,240  
      9,826,700  
Energy Related—7.7%        
CARBO Ceramics 17,000   1,099,560  
Energen 31,200   1,290,120  

6

Common Stocks (continued) Shares   Value ($)  
 
 
Energy Related (continued)        
Houston Exploration 34,900 a   1,561,426  
Patina Oil & Gas 80,300   2,232,340  
Questar 69,700   2,472,259  
Southwestern Energy 54,500 a   1,370,675  
Sunoco 20,100   1,264,290  
TETRA Technologies 40,800 a   975,528  
Unit 74,000 a   2,090,500  
Valero Energy 39,000   2,486,640  
XTO Energy 143,575   3,833,453  
      20,676,791  
Health Care—12.3%        
Apria Healthcare Group 59,500 a   1,715,980  
Beckman Coulter 40,100   2,239,184  
Coventry Health Care 72,500 a   3,033,400  
Diagnostic Products 18,800   802,008  
First Health Group 59,900 a,b   1,000,330  
Gilead Sciences 45,400 a   2,761,682  
Health Net 77,100 a   1,961,424  
Henry Schein 32,700 a   2,304,369  
Hillenbrand Industries 29,100   1,964,250  
Impax Laboratories 45,700 a   951,017  
Invacare 26,500   1,055,495  
Kos Pharmaceuticals 39,600 a,b   1,629,936  
Millipore 18,200 a   954,226  
Mylan Laboratories 69,600   1,594,536  
Oxford Health Plans 35,400   1,927,176  
Pharmaceutical Resources 46,000 a   1,853,800  
STERIS 58,500 a   1,296,360  
Select Medical 65,500   1,241,225  
Varian Medical Systems 34,000 a   2,918,560  
      33,204,958  
Interest Sensitive—19.6%        
Associated Banc-Corp 50,200   2,055,690  
Bank of Hawaii 53,300   2,330,276  
Bear Stearns Cos. 20,400   1,634,856  
Cincinnati Financial 40,550   1,662,144  
Commerce Bancshares 36,925   1,657,933  

The Fund 7

STATEMENT OF INVESTMENTS (Unaudited) (continued)

Common Stocks (continued) Shares   Value ($)  
 
 
Interest Sensitive (continued)        
Dime Bancorp (Warrants) 68,300 a   10,245  
Doral Financial 70,600   2,314,974  
Everest Re Group 34,100   2,904,638  
Fidelity National Financial 91,787   3,359,404  
First American 70,500   1,911,960  
First Horizon National 36,200   1,591,352  
Hibernia, Cl. A 107,400   2,340,246  
Huntington Bancshares 69,000   1,476,600  
IPC Holdings 32,200   1,184,960  
Investors Financial Services 51,000   1,982,370  
Knight Trading Group 104,400 a   1,213,128  
Legg Mason 31,200 b   2,872,272  
Lincoln National 41,500   1,862,520  
National Commerce Financial 102,700   2,730,793  
New Century Financial 30,000   1,272,900  
New York Community Bancorp 129,933   3,257,420  
Northwest Bancorp 34,200   705,546  
Nuveen Investments, Cl. A 40,400   1,035,452  
Old Republic International 101,700   2,361,474  
Piper Jaffray Cos. 28,300 a   1,370,286  
RenaissanceRe Holdings 24,000   1,264,560  
Sovereign Bancorp 133,900   2,675,322  
Zions Bancorporation 33,200   1,876,464  
      52,915,785  
Producer Goods & Services—13.7%        
American Power Conversion 54,700   1,020,702  
Bemis 65,800   1,777,258  
Briggs & Stratton 14,300   1,001,000  
C.H. Robinson Worldwide 41,800   1,715,472  
Cabot 50,200   1,696,760  
Carlisle Companies 23,500   1,392,375  
Cooper Industries, Cl. A 23,700   1,301,367  
Crane 42,500   1,309,425  
Cytec Industries 40,800   1,604,256  
Energizer Holdings 45,900 a   1,987,470  
Engineered Support Systems 22,000   1,069,860  
Harsco 32,700   1,423,431  

8

Common Stocks (continued) Shares   Value ($)  
 
 
Producer Goods & Services (continued)        
Hovnanian Enterprises, Cl. A 38,200 a   1,374,054  
Hunt (J.B.) Transport Services 67,200 a   2,127,552  
KB HOME 21,100   1,454,423  
Lennar, Cl. A 68,400 b   3,204,540  
Lubrizol 60,400   1,920,720  
Overseas Shipholding Group 28,000   917,560  
Precision Castparts 50,600   2,277,506  
RPM International 64,700   975,676  
Ryland Group 10,600   836,870  
Sigma-Aldrich 25,000 b   1,416,000  
United Stationers 27,200 a   1,033,600  
York International 53,700   2,105,040  
      36,942,917  
Services—10.5%        
Affiliated Computer Services, Cl. A 23,600 a   1,144,600  
CIBER 110,000 a   962,500  
Convergys 54,400 a   789,888  
Cox Radio, Cl. A 64,000 a   1,325,440  
Entercom Communications 29,400 a   1,340,640  
FactSet Research Systems 44,200 b   1,757,392  
Hearst-Argyle Television 31,400   824,250  
ITT Educational Services 37,400 a   1,508,342  
MPS Group 164,500 a   1,799,630  
Manpower 39,600   1,857,240  
Media General, Cl. A 28,100   2,019,828  
Moody's 13,800   890,238  
Rent-A-Center 62,200 a   1,820,594  
Republic Services 90,500   2,608,210  
Ryder System 30,500   1,122,095  
SunGard Data Systems 58,200 a   1,517,274  
Valassis Communications 55,300 a   1,708,770  
Washington Post, Cl. B 3,600   3,312,000  
      28,308,931  
Technology—12.0%        
Activision 118,700 a   1,787,622  
Altera 52,500 a   1,050,525  
Amkor Technology 109,700 a   886,376  

The Fund 9

STATEMENT OF INVESTMENTS (Unaudited) (continued)

Common Stocks (continued) Shares Value ($)  
 
Technology (continued)      
Amphenol, Cl. A 56,500 a 1,785,965  
Arrow Electronics 106,100 a 2,682,208  
Avid Technology 33,800 a,b 1,621,386  
Benchmark Electronics 49,850 a 1,347,445  
CheckFree 45,300 a,b 1,360,812  
Citrix Systems 62,600 a 1,192,530  
Cypress Semiconductor 125,800 a 1,757,426  
Digital River 60,200 a 1,550,150  
Ingram Micro, Cl. A 76,900 a 918,955  
Integrated Circuit Systems 60,700 a 1,437,983  
International Rectifier 34,800 a 1,379,472  
National Semiconductor 46,500 a 1,896,735  
Plantronics 63,000 a 2,390,850  
SanDisk 51,600 a,b 1,192,476  
Sanmina-SCI 142,000 a 1,422,840  
Storage Technology 80,900 a 2,125,243  
Take-Two Interactive Software 31,000 a,b 895,590  
Tech Data 45,600 a 1,550,400  
    32,232,989  
Utilities—4.2%      
Alliant Energy 88,000 2,187,680  
Great Plains Energy 71,200 2,222,152  
Northeast Utilities 130,300 2,391,005  
SCANA 68,600 b 2,359,840  
WPS Resources 47,700 2,185,137  
    11,345,814  
Total Common Stocks      
   (cost $225,532,540)   267,345,081  

10

      Principal      
Short-Term Investments—.6%   Amount ($) Value ($)  
 
Repurchase Agreements;          
Goldman Sachs & Co., Tri-Party Repurchase        
Agreement, .91%, dated 4/30/2004,        
due 5/3/2004 in the amount of $ 1,643,125        
(fully collateralized by $1,690,000 U.S.        
Treasury Bonds, 1.625% due 2/28/2006,        
   value $ 1,671,778)          
   (cost $ 1,643,000)   1,643,000   1,643,000  
 
Investment of Cash Collateral          
for Securities Loaned—7.2%   Shares   Value ($)  
 
Registered Investment Company;          
Dreyfus Institutional Preferred Money Market Fund        
   (cost $ 19,483,464)   19,483,464 c 19,483,464  
 
             
Total Investments (cost $ 246,659,004) 106.9%   288,471,545  
Cash and Receivables (Net)   (6.9%)   (18,974,948)  
Net Assets   100.0%   269,496,597  
a Non-income producing.
b
  		 All or a portion of these securities are on loan.At April 30, 2004, the total market value of the fund's securities on loan is $18,980,159 and the total market value of the collateral held by the fund is $19,483,464.
c
  		 Investment in affiliated money market mutual funds.

See notes to financial statements.

The Fund 11

STATEMENT OF ASSETS AND LIABILITIES
April 30, 2004 (Unaudited)
              Cost Value  
 
 
 
Assets ($):                  
Investments in securities—              
See Statement of Investments (including securities          
on loan, valued at $18,980,159)—Note 1(b,d):          
Unaffiliated issuers         227,175,540 268,988,081  
Affiliated issuers           19,483,464 19,483,464  
Cash               486,640  
Receivable for investment securities sold       4,840,561  
Receivable for shares of Capital Stock subscribed       224,573  
Dividends and interest receivable           375,081  
                294,398,400  
 
 
 
Liabilities ($):                
Due to The Dreyfus Corporation and affiliates—Note 2(a)       347,264  
Liability for securities on loan—Note 1(b)       19,483,464  
Payable for shares of Capital Stock redeemed       5,070,925  
Loan commitment fees payable           150  
                24,901,803  
 
 
 
Net Assets ( $)             269,496,597  
 
 
 
Composition of Net Assets ($):              
Paid-in capital               241,471,143  
Accumulated investment (loss)—net           (336,039)  
Accumulated net realized gain (loss) on investments       (13,451,048)  
Accumulated net unrealized appreciation          
(depreciation) on investments           41,812,541  
 
 
 
Net Assets ( $)             269,496,597  
 
 
 
                   
                   
Net Asset Value Per Share              
    Class A   Class B   Class C Class R Class T  
 
 
 
Net Assets ($) 151,866,469   48,743,305   16,491,963 50,761,382 1,633,478  
Shares Outstanding 8,831,695   2,990,193   1,009,556 2,900,047 96,211  
 
 
 
Net Asset Value                
   Per Share ( $) 17.20   16.30   16.34 17.50 16.98  

See notes to financial statements.

12

STATEMENT OF OPERATIONS

Six Months Ended April 30, 2004 (Unaudited)

Investment Income ( $):    
Income:      
Cash dividends (net of $1,739 foreign    
   taxes withheld at source):      
      Unaffiliated issuers   1,750,682  
      Affiliated issuers   17,555  
Income on securities lending 11,672  
Total Income   1,779,909  
Expenses:      
Management fee—Note 2(a)   1,571,313  
Distribution and service plan fees—Note 2(b) 542,372  
Loan commitment fees—Note 4 1,237  
Interest expense—Note 4   1,026  
Total Expenses   2,115,948  
Investment (Loss)—Net   (336,039)  
 
Realized and Unrealized Gain (Loss) on Investments—Note 3 ($):    
Net realized gain (loss) on investments 19,241,838  
Net unrealized appreciation (depreciation) on investments (10,355,136)  
Net Realized and Unrealized Gain (Loss) on Investments 8,886,702  
Net Increase in Net Assets Resulting from Operations 8,550,663  

The Fund 13

STATEMENT OF CHANGES IN NET ASSETS

  Six Months Ended      
  April 30, 2004   Year Ended  
  (Unaudited)   October 31, 2003  
 
 
Operations ($):        
Investment (loss)—net (336,039)   (834,449)  
Net realized gain (loss) on investments 19,241,838   4,254,603  
Net unrealized appreciation        
   (depreciation) on investments (10,355,136)   53,181,380  
Net Increase (Decrease) in Net Assets        
   Resulting from Operations 8,550,663   56,601,534  
 
 
Capital Stock Transactions ($):        
Net proceeds from shares sold:        
Class A shares 30,575,038   64,031,243  
Class B shares 2,789,333   6,685,895  
Class C shares 1,780,743   3,938,123  
Class R shares 6,734,569   16,213,510  
Class T shares 505,788   7,066,708  
Cost of shares redeemed:        
Class A shares (30,181,698)   (52,342,850)  
Class B shares (6,449,767)   (8,362,790)  
Class C shares (1,887,428)   (2,592,427)  
Class R shares (17,238,646)   (43,208,527)  
Class T shares (411,732)   (6,711,443)  
Increase (Decrease) in Net Assets        
   from Capital Stock Transactions (13,783,800)   (15,282,558)  
Total Increase (Decrease) in Net Assets (5,233,137)   41,318,976  
 
 
Net Assets ($):        
Beginning of Period 274,729,734   233,410,758  
End of Period 269,496,597   274,729,734  

14

  Six Months Ended      
  April 30, 2004   Year Ended  
  (Unaudited)   October 31, 2003  
 
 
Capital Share Transactions:        
Class Aa        
Shares sold 1,740,831   4,475,622  
Shares redeemed (1,721,772)   (3,674,986)  
Net Increase (Decrease) in Shares Outstanding 19,059   800,636  
 
 
Class Ba        
Shares sold 167,540   496,630  
Shares redeemed (383,078)   (624,968)  
Net Increase (Decrease) in Shares Outstanding (215,538)   (128,338)  
 
 
Class C        
Shares sold 106,860   292,590  
Shares redeemed (113,815)   (192,486)  
Net Increase (Decrease) in Shares Outstanding (6,955)   100,104  
 
 
Class R        
Shares sold 377,069   1,141,554  
Shares redeemed (972,335)   (3,158,056)  
Net Increase (Decrease) in Shares Outstanding (595,266)   (2,016,502)  
 
 
Class T        
Shares sold 29,427   503,176  
Shares redeemed (23,386)   (469,246)  
Net Increase (Decrease) in Shares Outstanding 6,041   33,930  

a During the period ended April 30, 2004, 148,742 Class B shares representing $2,529,691 were automatically converted to 141,168 Class A shares and during the period ended October 31, 2003, 20,828 Class B shares representing $291,034 were automatically converted to 19,874 Class A shares.

See notes to financial statements.

The Fund 15

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                      
  April 30, 2004       Year Ended October 31,      
         
     
Class A Shares (Unaudited)   2003   2002   2001   2000   1999  
 
 
 
 
 
Per Share Data ($):                        
Net asset value,                        
   beginning of period 16.68   13.16   13.73   19.99   16.69   14.24  
Investment Operations:                        
Investment (loss)—neta (.01)   (.03)   (.03)   (.04)   (.03)   (.03)  
Net realized and unrealized                        
   gain (loss) on investments .53   3.55   (.54)   (2.69)   3.66   2.48  
Total from Investment Operations .52   3.52   (.57)   (2.73)   3.63   2.45  
Distributions:                        
Dividends from net realized                        
   gain on investments —   —   —   (3.53)   (.33)   —  
Net asset value, end of period 17.20   16.68   13.16   13.73   19.99   16.69  
 
 
 
 
 
Total Return (%)b 3.12c   26.67   (4.15)   (15.81)   22.14   17.21  
 
 
 
 
 
Ratios/Supplemental Data (%):                        
Ratio of operating expenses                        
   to average net assets .67c   1.35   1.35   1.35   1.35   1.35  
Ratio of interest expense and                        
   loan commitment fees                        
   to average net assets .00c,d   .00d   .00d   .00d   .01   —  
Ratio of net investment (loss)                        
   to average net assets (.05) c (.24)   (.24)   (.31)   (.17)   (.17)  
Portfolio Turnover Rate 33.27c   92.97   65.85   82.49   122.19   80.15  
 
 
 
 
 
Net Assets, end of period                        
   ($ x 1,000) 151,866 146,958   105,449   81,028   78,425   83,674  
a Based on average shares outstanding at each month end.
b
  		 Exclusive of sales charge.
c
  		 Not annualized.
d
  		 Amount represents less than .01%.

See notes to financial statements.

16

  Six Months Ended                      
  April 30, 2004       Year Ended October 31,      
         
     
Class B Shares (Unaudited)   2003   2002   2001   2000   1999  
 
 
 
 
 
 
Per Share Data ($):                        
Net asset value,                        
   beginning of period 15.87   12.62   13.26   19.57   16.46   14.16  
Investment Operations:                        
Investment (loss)—neta (.07)   (.13)   (.14)   (.14)   (.17)   (.15)  
Net realized and unrealized                        
   gain (loss) on investments .50   3.38   (.50)   (2.64)   3.61   2.45  
Total from Investment Operations .43   3.25   (.64)   (2.78)   3.44   2.30  
Distributions:                        
Dividends from net realized                        
   gain on investments —   —   —   (3.53)   (.33)   —  
Net asset value, end of period 16.30   15.87   12.62   13.26   19.57   16.46  
 
 
 
 
 
 
Total Return (%)b 2.71c   25.75   (4.83)   (16.47)   21.22   16.32  
 
 
 
 
 
 
Ratios/Supplemental Data (%):                        
Ratio of operating expenses                        
   to average net assets 1.04c   2.10   2.10   2.10   2.10   2.10  
Ratio of interest expense and                        
   loan commitment fees                        
   to average net assets .00c,d   .00d   .00d   .00d   .01   —  
Ratio of net investment (loss)                        
   to average net assets (.43)c   (.98)   (.98)   (1.06)   (.91)   (.92)  
Portfolio Turnover Rate 33.27c   92.97   65.85   82.49   122.19   80.15  
 
 
 
 
 
 
Net Assets, end of period                        
   ($ x 1,000) 48,743   50,866   42,067   37,556   35,959   25,724  
a Based on average shares outstanding at each month end.
b
  		 Exclusive of sales charge.
c
  		 Not annualized.
d
  		 Amount represents less than .01%.

See notes to financial statements.

The Fund 17

FINANCIAL HIGHLIGHTS (continued)

  Six Months Ended                      
  April 30, 2004       Year Ended October 31,      
         
     
Class C Shares (Unaudited)   2003   2002   2001   2000   1999  
 
 
 
 
 
 
Per Share Data ($):                        
Net asset value,                        
   beginning of period 15.90   12.64   13.29   19.59   16.48   14.17  
Investment Operations:                        
Investment (loss)—neta (.07)   (.13)   (.14)   (.14)   (.17)   (.15)  
Net realized and unrealized                        
   gain (loss) on investments .51   3.39   (.51)   (2.63)   3.61   2.46  
Total from Investment Operations .44   3.26   (.65)   (2.77)   3.44   2.31  
Distributions:                        
Dividends from net realized                        
   gain on investments —   —   —   (3.53)   (.33)   —  
Net asset value, end of period 16.34   15.90   12.64   13.29   19.59   16.48  
 
 
 
 
 
 
Total Return (%)b 2.70c   25.79   (4.89)   (16.40)   21.19   16.30  
 
 
 
 
 
 
Ratios/Supplemental Data (%):                        
Ratio of operating expenses                        
   to average net assets 1.04c   2.10   2.10   2.10   2.10   2.10  
Ratio of interest expense and                        
   loan commitment fees                        
   to average net assets .00c,d   .00d   .00d   .00d   .01   —  
Ratio of net investment (loss)                        
   to average net assets (.42)c   (.99)   (.99)   (1.06)   (.91)   (.92)  
Portfolio Turnover Rate 33.27c   92.97   65.85   82.49   122.19   80.15  
 
 
 
 
 
 
Net Assets, end of period                        
   ($ x 1,000) 16,492   16,164   11,587   8,203   7,178   5,473  
a Based on average shares outstanding at each month end.
b
  		 Exclusive of sales charge.
c
  		 Not annualized.
d
  		 Amount represents less than .01%.

See notes to financial statements.

18

  Six Months Ended                      
  April 30, 2004       Year Ended October 31,      
         
     
Class R Shares (Unaudited)   2003   2002   2001   2000   1999  
 
 
 
 
 
 
Per Share Data ($):                        
Net asset value,                        
   beginning of period 16.95   13.35   13.89   20.14   16.77   14.28  
Investment Operations:                        
Investment income (loss)—neta .01   .01   .00b   (.01)   .02   .01  
Net realized and unrealized                        
   gain (loss) on investments .54   3.59   (.54)   (2.71)   3.68   2.48  
Total from Investment Operations .55   3.60   (.54)   (2.72)   3.70   2.49  
Distributions:                        
Dividends from net realized                        
   gain on investments —   —   —   (3.53)   (.33)   —  
Net asset value, end of period 17.50   16.95   13.35   13.89   20.14   16.77  
 
 
 
 
 
 
Total Return (%) 3.24c   26.97   (3.89)   (15.56)   22.40   17.44  
 
 
 
 
 
 
Ratios/Supplemental Data (%):                        
Ratio of operating expenses                        
   to average net assets .55c   1.10   1.10   1.10   1.10   1.10  
Ratio of interest expense and                        
   loan commitment fees                        
   to average net assets .00c,d   .00d   .00d   .00d   .01   —  
Ratio of net investment income                        
   (loss) to average net assets .07c   .04   .02   (.06)   .10   .09  
Portfolio Turnover Rate 33.27c   92.97   65.85   82.49   122.19   80.15  
 
 
 
 
 
 
Net Assets, end of period                        
   ($ x 1,000) 50,761   59,256   73,575   86,251   113,318   94,455  
a Based on average shares outstanding at each month end.
b
  		 Amount represents less than $.01 per share.
c
  		 Not annualized.
d
  		 Amount represents less than .01%.

See notes to financial statements.

The Fund 19

FINANCIAL HIGHLIGHTS (continued)

  Six Months Ended                      
  April 30, 2004       Year Ended October 31,      
         
     
Class T Shares (Unaudited)   2003   2002   2001   2000   1999a  
 
 
 
 
 
 
Per Share Data ($):                        
Net asset value,                        
   beginning of period 16.49   13.05   13.64   19.93   16.68   16.84  
Investment Operations:                        
Investment (loss)—netb (.03)   (.07)   (.12)   (.07)   (.08)   (.01)  
Net realized and unrealized                        
   gain (loss) on investments .52   3.51   (.47)   (2.69)   3.66   (.15)  
Total from Investment Operations .49   3.44   (.59)   (2.76)   3.58   (.16)  
Distributions:                        
Dividends from net realized                        
   gain on investments —   —   —   (3.53)   (.33)   —  
Net asset value, end of period 16.98   16.49   13.05   13.64   19.93   16.68  
 
 
 
 
 
 
Total Return (%)c 3.04d   26.28   (4.32)   (16.04)   21.84   .95d  
 
 
 
 
 
 
Ratios/Supplemental Data (%):                        
Ratio of operating expenses                        
   to average net assets .80d   1.60   1.60   1.60   1.60   .34d  
Ratio of interest expense and                        
   loan commitment fees                        
   to average net assets .00d,e   .00e   .00e   .00e   .01   —  
Ratio of net investment (loss)                        
   to average net assets (.18)d   (.49)   (.83)   (.53)   (.41)   (.06)d  
Portfolio Turnover Rate 33.27d   92.97   65.85   82.49   122.19   80.15  
 
 
 
 
 
 
Net Assets, end of period                        
   ($ x 1,000) 1,633   1,486   734   243   109   2  
a From August 16, 1999 (commencement of initial offering) to October 31, 1999.
b
  		 Based on average shares outstanding at each month end.
c
  		 Exclusive of sales charge.
d
  		 Not annualized.
e
  		 Amount represents less than .01%.

See notes to financial statements.

20

NOTES TO FINANCIAL STATEMENTS (Unaudited)

NOTE 1—Significant Accounting Policies:

Dreyfus Premier Midcap Stock Fund (the “fund”) is a separate diversified series of The Dreyfus/Laurel Funds, Inc. (the “Company”) which is registered under the Investment Company Act of 1940, as amended (the “Act”), as an open-end management investment company and operates as a series company currently offering sixteen series, including the fund. The fund's investment objective is to seek investment returns (consisting of capital appreciation and income) that are consistently superior to the Standard & Poor's 400 MidCap Index. 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”).

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 488 million shares of $.001 par value Capital Stock.The fund currently offers five classes of shares: Class A (22 million shares authorized), Class B (100 million shares authorized), Class C (100 million shares authorized), Class R (66 million shares authorized) and Class T shares (200 million shares authorized). Class A, Class B, Class C and Class T shares are sold primarily to retail investors through financial intermediaries and bear a distribution fee and/or service fee. Class A and Class T shares are sold with a front-end sales charge, while Class B and Class C shares are subject to a contingent deferred sales charge (“CDSC”). Class B shares automatically convert to Class A shares after six years. Class R shares are sold primarily to bank trust departments and other financial service providers (including Mellon and its affiliates) acting on behalf of customers having a qualified trust or an investment account or relationship at such institution and bear no distribution or service fees. Class R shares are offered without a front end sales charge or CDSC. Each class of shares has identical rights and privileges, except with respect to distribution and service fees and voting rights on matters affecting a single class.

The Fund 21

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

Investment income, net of expenses (other than class specific expenses) and realized and unrealized gains and losses are allocated daily to each class of shares based upon the relative proportion of net assets of each class.

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

(a) Portfolio valuation: Investments in securities (including options and financial futures) are valued at the last sales price on the securities exchange or national securities market on which such securities are primarily traded. Securities listed on the National Market System for which market quotations are available are valued at the official closing price or, if there is no official closing price that day, at the last sale price. Securities not listed on an exchange or the national securities market, or securities for which there were no transactions, are valued at the average of the most recent bid and asked prices. Bid price is used when no asked price is available. 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 in accordance with the procedures approved by the fund's Board. 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. Short-term investments (excluding U.S. Treasury Bills) are carried at amortized cost, which approximates value.

(b) Securities transactions and investment income: Securities trans-

22

actions 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, amortization of discount and premium on investments, is recognized on the accrual basis.

The fund may lend securities to qualified institutions. At origination, all loans are secured by collateral of at least 102% of the value of U.S. securities loaned and 105% of the value of foreign securities loaned. Collateral equivalent to at least 100% of the market value of securities on loan will be maintained at all times. Cash collateral is invested in certain money market mutual funds managed by the Manager as shown in the fund's Statement of Investments.The fund will be entitled to receive all income on securities loaned, in addition to income earned as a result of the lending transaction. Although each security loaned is fully collateralized, the fund would bear the risk of delay in recovery of, or loss of rights in, the securities loaned should a borrower fail to return the securities in a timely manner.

(c) Affiliated issuers: Issuers in which the fund held investments in other investment companies advised by the Manager are defined as “affiliated” in the act.

(d) Repurchase agreements: The fund may engage in repurchase agreement transactions. Under the terms of a typical repurchase agreement, the fund, through its custodian and sub-custodian, takes possession of an underlying debt obligation subject to an obligation of the seller to repurchase, and the fund to resell, the obligation at an agreed upon price and time, thereby determining the yield during the fund's holding period.This arrangement results in a fixed rate of return that is not subject to market fluctuations during the fund's holding period.

The Fund 23

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

The value of the collateral is at least equal, at all times, to the total amount of the repurchase obligation, including interest. In the event of a counter party default, the fund has the right to use the collateral to offset losses incurred.There is potential loss to the fund in the event the fund is delayed or prevented from exercising its rights to dispose of the collateral securities, including the risk of a possible decline in the value of the underlying securities during the period while the fund seeks to assert its rights.The Manager, acting under the supervision of the Board of Directors, reviews the value of the collateral and the cred-itworthiness of those banks and dealers with which the fund enters into repurchase agreements to evaluate potential risks.

(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, 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 has an unused capital loss carryover of $32,516,099 available for federal income tax purposes to be applied against future net securities profits, if any, realized subsequent to October 31, 2003. If not applied, $9,344,169 of the carryover expires in fiscal 2009 and $23,171,930 expires in fiscal 2010.

24

NOTE 2—Investment Management Fee And Other Transactions With Affiliates:

(a) Investment management fee: Pursuant to an Investment Management agreement with the Manager, the Manager provides or arranges for one or more third parties and/or affiliates to provide investment advisory, administrative, custody, fund accounting and transfer agency services to the fund. The Manager also directs the investments of the fund in accordance with its investment objective, policies and limitations. For these services, the fund is contractually obligated to pay the Manager a fee, calculated daily and paid monthly, at the annual rate of 1.10% of the value of the fund's average daily net assets. Out of its fee, the Manager pays all of the expenses of the fund except brokerage fees, taxes, interest, commitment fees, Rule 12b-1 distribution fees and expenses, service fees, fees and expenses of non-interested Directors (including counsel fees) and extraordinary expenses. In addition, the Manager is required to reduce its fee in an amount equal to the fund's allocable portion of fees and expenses of the non-interested Directors (including counsel fees). Each Director receives $40,000 per year, plus $5,000 for each joint Board meeting of the Company,The Dreyfus/Laurel Tax-Free Municipal Funds and The Dreyfus/Laurel Funds Trust (the “Dreyfus/Laurel Funds”) attended, $2,000 for separate committee meetings attended which are not held in conjunction with a regularly scheduled board meeting and $500 for Board meetings and separate committee meetings attended that are conducted by telephone and is reimbursed for travel and out-of-pocket expenses. The Chairman of the Board receives an additional 25% of such compensation (with the exception of reimbursable amounts). In the event that there is a joint committee meeting of the Dreyfus/Laurel Funds and the Dreyfus High Yield Strategies Fund, the $2,000 fee will be allocated between the Dreyfus/Laurel Funds and the Dreyfus High Yield Strategies Fund. These fees and expenses are charged and allocated to each series based on net assets. Amounts

The Fund 25

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

required to be paid by the Company directly to the non-interested Directors, that would be applied to offset a portion of the management fee payable to the Manager, are in fact paid directly by the Manager to the non-interested Directors.

The components of Due to The Dreyfus Corporation and affiliates in the Statement of Assets and Liabilities consists of: management fees $258,246, Rule 12b-1 distribution fees $74,700, and shareholder services plan fees $14,318.

During the period ended April 30, 2004, the Distributor retained $17,065 and $21 from commissions earned on sales of the fund's Class A and Class T shares, respectively, and $52,892 and $824 from contingent deferred sales charges on redemptions of the fund's Class B and Class C shares, respectively.

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

26

fee at the annual rate of .25% of the value of the average daily net assets of Class B, Class C and Class T shares. During the period ended April 30, 2004, Class A, Class B, Class C and Class T shares were charged $194,061, $194,589, $63,532 and $2,075, respectively, pursuant to their respective Plans, and Class B, Class C and Class T shares were charged $64,863, $21,177 and $2,075, respectively, pursuant to the Service Plan.

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

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

NOTE 3—Securities Transactions:

The aggregate amount of purchases and sales of investment securities, excluding short-term securities, during the period ended April 30, 2004, amounted to $93,209,428 and $100,168,793, respectively.

At April 30, 2004, accumulated net unrealized appreciation on investments was $41,812,541, consisting of $51,216,316 gross unrealized appreciation and $9,403,775 gross unrealized depreciation.

At April 30, 2004, the cost of investments for federal income tax pur-

The Fund 27

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

poses was substantially the same as the cost for financial reporting purposes (see the Statement of Investments).

NOTE 4—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 at rates based on prevailing market rates in effect at the time of borrowings.

The average daily amount of borrowings outstanding under the Facility during the period ended April 30, 2004, was approximately $70,000, with a related weighted average annualized interest rate of 1.47%.

NOTE 5—Legal Matters:

Two class actions have been filed against Mellon Financial and Mellon Bank, N.A., and Dreyfus and Founders Asset Management LLC (the “Investment Advisers”), and the directors of all or substantially all of the Dreyfus funds, alleging that the Investment Advisers improperly used assets of the Dreyfus funds, in the form of directed brokerage commissions and 12b-1 fees, to pay brokers to promote sales of Dreyfus funds, and that the use of fund assets to make these payments was not properly disclosed to investors.The complaints further allege that the directors breached their fiduciary duties to fund shareholders under the Investment Company Act of 1940 and at common law.The complaints seek unspecified compensatory and punitive damages,

28

rescission of the funds' contracts with the Investment Advisers, an accounting of all fees paid, and an award of attorneys' fees and litigation expenses. Dreyfus and the Dreyfus funds believe the allegations to be totally without merit and will defend the actions vigorously.

Additional lawsuits arising out of these circumstances and presenting similar allegations and requests for relief may be filed against the defendants in the future. Neither Dreyfus nor the Dreyfus funds believe that any of the pending actions will have a material adverse effect on the Dreyfus funds or Dreyfus' ability to perform its contracts with the Dreyfus funds.

The Fund 29

For More Information

Dreyfus Premier
Midcap Stock Fund
200 Park Avenue
New York, NY 10166
 
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
 
Custodian
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
 
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
200 Park Avenue
New York, NY 10166
 
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166

To obtain information:

By telephone

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

By mail Write to: The Dreyfus Premier Family of Funds 144 Glenn Curtiss Boulevard Uniondale, NY 11556-0144

A description of the policies and procedures that the fund uses to determine how to vote proxies relating to portfolio securities is available, without charge, by calling the telephone number listed above, or by visiting the SEC's website at http://www.sec.gov

© 2004 Dreyfus Service Corporation 0330SA0404

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
  		 Letter from the Chairman
3
  		 Discussion of Fund Performance
6
  		 Statement of Investments
14
  		 Statement of Assets and Liabilities
15
  		 Statement of Operations
16
  		 Statement of Changes in Net Assets
18
  		 Financial Highlights
23
  		 Notes to Financial Statements

FOR MORE INFORMATION

Back Cover

   Dreyfus Premier
Small Cap Value Fund

The Fund

LETTER FROM THE CHAIRMAN

Dear Shareholder:

This semiannual report for Dreyfus Premier Small Cap Value Fund covers the six-month period from November 1, 2003, through April 30, 2004. Inside, you'll find valuable information about how the fund was managed during the reporting period, including a discussion with the fund's portfolio manager, Mark W. Sikorski, CFA.

Positive economic data continued to accumulate during the reporting period, as consumers, flush with extra cash from federal tax refunds and mortgage refinancings, continued to spend. At the same time, recent evidence of stronger job growth supports the view that corporations have become more willing to spend and invest. One result of the economic rebound has been higher overall earnings and stock prices for many U.S. companies.

Although recent economic news generally has been encouraging, we continue to believe that investors should be aware of the potential risks that could lead to heightened volatility or a stock market correction. Chief among them, in our view, are a possible acceleration of inflation and the chance that terrorism could cause instability in global markets. As always, we encourage you to speak regularly with your financial advisor, who may be in the best position to suggest ways to position your portfolio for the opportunities and challenges of today's financial markets.

Thank you for your continued confidence and support.

Sincerely,

Stephen E. Canter

Chairman and Chief Executive Officer The Dreyfus Corporation

May 17, 2004

2

DISCUSSION OF FUND PERFORMANCE

Mark W. Sikorski, CFA, Portfolio Manager

How did Dreyfus Premier Small Cap Value Fund perform relative to its benchmark?

For the six-month period ended April 30, 2004, the fund's Class A, B, C, R and T shares produced total returns of 11.83%, 11.41%, 11.39%, 11.98% and 11.68%, respectively.1 In comparison, the fund's benchmark, the Russell 2000 Value Index (the “Index”), produced a total return of 9.09%.2 In addition, the average total return of all funds reported in the Lipper Small-Cap Value Funds category was 10.45% over the reporting period.3

Stocks generally continued to benefit during the reporting period from an improving economy, low interest rates and higher corporate profits. The fund produced higher returns than the Index and its Lipper category average, primarily on the strength of its investments in business services-related companies and in the energy sector, where oil and natural gas prices rose.

What is the fund's investment approach?

The fund seeks investment returns (consisting of capital appreciation and income) that are consistently superior to the Index.This objective may be changed without shareholder approval.To pursue its goal, the fund normally invests at least 80% of its assets in stocks of small U.S. companies.We use a disciplined process that combines disciplined valuation techniques, fundamental analysis and risk management to select undervalued stocks for the fund.

In selecting securities, we use a disciplined valuation model to identify and rank undervalued stocks. Undervalued stocks are normally characterized by relatively low price-to-earnings and low price-to-book ratios. The model analyzes how a stock is priced relative to its perceived intrinsic value.

The Fund 3

DISCUSSION OF FUND PERFORMANCE (continued)

Next, based on fundamental analysis, we generally select the most attractive of the higher-ranked securities, drawing on a variety of sources, including Wall Street research and company management.

Then the portfolio is constructed so that its sector weightings and risk characteristics are similar to those of the Index.

What other factors influenced the fund's performance?

While virtually every sector within the fund posted gains during the reporting period, the prevailing economic recovery was especially good to shares of energy and manufacturing companies. The fund's energy stocks rose sharply during the reporting period, with gains concentrated among producers and distributors of natural gas such as Unit and Houston Exploration.Although the impact on consumers of higher oil prices received a good deal of publicity, natural gas prices also soared as demand increased.

The economic recovery also benefited makers of heavy machinery and construction equipment, which began to see signs of greater pricing power as order volumes increased. Many companies in this area have raised prices for finished goods, in part to pay for increased energy costs in the manufacturing process. However, higher prices also have contributed to greater profitability for many of these businesses. The fund's performance benefited from such holdings as Terex, a Connecticut-based manufacturer of equipment for the construction, infrastructure and mining industries.

The improving business climate saw a return of mergers and acquisitions activity to the capital markets, which benefited some of the fund's holdings. During the reporting period, Group 1 Software rose on news of a takeover offer by Pitney Bowes, while Vans, a youth-oriented sporting apparel company was acquired by VF Corp., the maker of Lee,Wrangler and other jeans brands.

However, in April fears of higher interest rates hurt the fund's investments in financial services, real estate investment trusts and technology shares, when speculation intensified that the Federal Reserve Board

4

would raise short-term interest rates. In addition, transportation-related stocks such as airlines, were hurt by higher fuel costs.

What is the fund's current strategy?

Although some market sectors currently appear more attractive than others, we are committed to maintaining a diversified portfolio, attempting to make money across all economic sectors while managing the risk that unexpected declines in any one area will have a disproportionate effect on the fund's performance.Therefore, we intend to continue to allocate the fund's assets in a diversified manner and we will continue our attempts to add value by selecting what we believe to be the more attractive stocks in each area.

While the overall stock market appears to be reasonably valued as of the end of the reporting period, we have continued to identify compelling values in the homebuilding area, where we expect demand to remain strong even if mortgage rates increase moderately. In the technology sector, we have found opportunities among companies that survived the tech “bubble” of 1999-2000, many of which we regard as stronger financially than they have been in years.

May 17, 2004

1
  		 Total return includes reinvestment of dividends and any capital gains paid, and does not take into consideration the maximum initial sales charges in the case of Class A and Class T shares, or the applicable contingent deferred sales charges imposed on redemptions in the case of Class B and Class C shares. Had these charges been reflected, returns would have been lower. Past performance is no guarantee of future results. Share price and investment return fluctuate such that upon redemption, fund shares may be worth more or less than their original cost.
2
  		 SOURCE: LIPPER INC. — Reflects the reinvestment of dividends and, where applicable, capital gain distributions.The Russell 2000 Value Index is an unmanaged index, which measures the performance of those Russell 2000 companies with lower price-to-book ratios and lower forecasted growth values.
3
  		 SOURCE: LIPPER INC. — Category average returns reflect the fees and expenses of the funds composing the average.

The Fund 5

STATEMENT OF INVESTMENTS

April 30, 2004 (Unaudited)

Common Stocks—95.6% Shares   Value ($)  
 
 
Consumer Cyclical—13.7%        
AirTran Holdings 30,000 a   366,300  
American Axle & Manufacturing Holdings 13,500 a,b   519,345  
Applebee's International 13,000   504,140  
Aztar 25,500 a   660,450  
BJ's Wholesale Club 14,500 a   351,335  
CBRL Group 18,000   675,900  
CSK Auto 19,500 a   359,970  
Callaway Golf 15,000   254,550  
Cato, Cl. A 29,000   580,580  
Christopher & Banks 21,000   375,690  
Columbia Sportswear 7,400 a   393,976  
Continental Airlines, Cl. B 20,500 a   218,530  
Dura Automotive Systems, Cl.A 17,500 a   219,800  
ExpressJet Holdings 18,900 a   240,408  
Furniture Brands International 15,000   422,100  
GameStop Cl. A 23,000 a   405,030  
Group 1 Automotive 10,300 a   355,968  
Mesa Air Group 55,500 a,b   392,385  
Prime Hospitality 33,500 a   336,675  
Quiksilver 13,500 a   292,005  
ShopKo Stores 31,000 a   411,060  
Sonic Automotive 23,000   572,700  
Stage Stores 17,000 a   667,420  
Stanley Furniture 8,200   328,000  
Stride Rite 40,000   429,200  
Thor Industries 17,000   473,620  
Toro 4,800   279,120  
Toys R Us 24,000 a   370,800  
Vans 28,000 a   568,400  
Water Pik Technologies 26,000 a   423,800  
      12,449,257  
Consumer Staples—1.7%        
Jarden 13,500 a   502,200  
Ralcorp Holdings 15,000 a   522,150  
Sensient Technologies 25,000   511,500  
      1,535,850  

6

Common Stocks (continued) Shares   Value ($)  
 
 
Energy Related—8.0%        
AGL Resources 24,700   706,420  
CMS Energy 53,000 a   440,430  
Cimarex Energy 16,000 a   441,440  
Denbury Resources 23,500 a   429,110  
Energen 14,600   603,710  
Forest Oil 16,500 a   433,125  
Frontier Oil 16,000   284,480  
Houston Exploration 15,800 a   706,892  
Magnum Hunter Resources 36,000 a   369,720  
New Jersey Resources 10,500   400,155  
ONEOK 31,000   649,450  
Range Resources 32,500   406,575  
St. Mary Land & Exploration 12,500   451,875  
Unit 24,500 a   692,125  
Vintage Petroleum 18,000   271,260  
      7,286,767  
Health Care—4.4%        
Bradley Pharmaceuticals 11,000 a,b   288,420  
Curative Health Services 23,395 a   271,382  
DaVita 10,700 a   546,770  
ICU MedicaI 10,000 a,b   333,700  
ILEX Oncology 4,000 a   92,760  
Kensey Nash 11,500 a   372,600  
Lexicon Genetics 33,500 a   236,510  
Nuvelo 18,500 a   199,985  
Orthodontic Centers of America 11,000 a,b   78,870  
Osteotech 53,000 a   351,920  
Pacificare Health Systems 11,200 a   400,512  
Theragenics 26,500 a   138,860  
United Therapeutics 16,600 a,b   408,692  
Zoll Medical 8,500 a   256,020  
      3,977,001  
Interest Sensitive—20.7%        
American Land Lease 17,100 a   330,885  
Astoria Financial 13,500   464,670  
BRT Realty Trust 10,900   226,938  

The Fund 7

STATEMENT OF INVESTMENTS (Unaudited) (continued)

Common Stocks (continued) Shares   Value ($)  
 
 
Interest Sensitive (continued)        
BankUnited Financial, Cl. A 7,300 a   192,939  
Capitol Bancorp 14,500   362,500  
Chemical Financial 8,520   291,810  
Chittenden 15,800   480,636  
Citizens First Bancorp 17,500   411,250  
City Holding 11,300   345,780  
Columbia Banking Systems 11,700   262,548  
Commercial Federal 8,600   220,676  
Corus Bankshares 8,400   317,100  
Doral Financial 11,700   383,643  
Duke Realty 10,500   306,180  
Equity One 27,500   451,000  
First Citizens BancShares 3,800   465,538  
First Republic Bank 10,000   381,000  
FirstFed Finacial 12,900 a   521,418  
Flagstar Bancorp 19,500   398,385  
Glacier Bancorp 8,800   269,720  
Great Southern Bancorp 5,100   253,113  
HRPT Properties Trust 41,000   391,550  
Health Care REIT 12,200 b   389,668  
Heritage Property Investment Trust 12,800   324,864  
Hudson United Bancorp 16,300   582,399  
ITLA Capital 11,000 a   473,000  
Independence Community Bank 17,000   619,310  
InnKeepers USA Trust 44,500   340,425  
Intergra Bank 12,500   256,750  
Irwin Financial 17,100   404,415  
Knight Trading Group 28,000 a   325,360  
La Quinta 61,500 a   442,185  
Lakeland Financial 7,800   237,900  
MFA Mortgage Investments 57,700   514,107  
Mercantile Bank 10,395   373,700  
MeriStar Hospitality 76,000 a   440,800  
Mid-State Bancshares 16,500   371,085  
Mills 11,300   458,780  
Newcastle Investment 16,000   427,520  
OMEGA Healthcare Investors 30,000   277,500  

8

Common Stocks (continued) Shares   Value ($)  
 
 
Interest Sensitive (continued)        
Pennsylvania Real Estate Investment Trust 10,000   323,500  
Raymond James Financial 22,000   552,640  
Reckson Associates Realty 22,400   532,448  
Senior Housing Properties Trust 33,500   500,825  
Sizeler Property Investors 28,500   284,145  
South Financial Group 10,000   277,000  
Southwest Bancorp 16,900   278,850  
Susquehanna Bancshares 11,500   269,100  
Washington Federal 19,000   443,840  
Western Sierra Bancorp 8,000 a   333,920  
      18,785,315  
Life/Health Insurance—1.1%        
Great American Financial Resources 34,500   550,275  
Phoenix 33,000   418,110  
      968,385  
Producer Goods & Services—21.0%        
AGCO 21,000 a   404,250  
Barnes Group 11,800   321,550  
Beazer Homes U.S.A. 7,300   718,685  
Briggs & Stratton 7,100   497,000  
Building Materials Holding 32,500   534,300  
CLARCOR 13,300   585,466  
CONSOL Energy 18,000 b   515,340  
Cable Design Technologies 46,000 a   392,380  
Cabot 9,800   331,240  
Calgon Carbon 37,000   222,370  
Commonwealth Industries 70,000 a   553,000  
Covenant Transport, Cl. A 26,000 a   457,860  
Cummins 13,800   825,378  
Ducommun 13,500 a   318,600  
ESCO Technologies 11,500 a   555,450  
Encore Wire 9,200 a   251,528  
Energy Partners 23,000 a   322,000  
Gardner Denver 16,000 a   419,520  
Georgia Gulf 11,500   366,390  
Gibraltar Steel 20,500   504,300  
Greif, Cl. A 14,500   476,615  

The Fund 9

STATEMENT OF INVESTMENTS (Unaudited) (continued)

Common Stocks (continued) Shares   Value ($)  
 
 
Producer Goods & Services (continued)        
Griffon 24,000 a   526,800  
Hercules 35,000 a   388,850  
Hughes Supply 6,000   335,340  
Jacuzzi Brands 43,000 a   375,820  
Kadant 26,000 a   478,400  
Kennametal 7,900   340,964  
Louisiana-Pacific 14,500   342,055  
Lubrizol 17,600   559,680  
MasTec 51,000 a   373,830  
Moog, Cl. A 7,500 a   247,500  
Owens-Illinois 49,000 a   684,040  
Pacer International 26,000 a   488,800  
Powell Industries 5,000 a   79,500  
Regal Beloit 19,000   380,190  
Schulman (A.) 19,500   390,000  
Standard Pacific 12,500   630,500  
Tecumseh Products, Cl. A 11,500   447,005  
Terex 11,000 a   361,350  
Tredegar 32,000   425,280  
WCI Communities 19,500 a   474,045  
Wellman 35,000   283,150  
Yellow Roadway 13,200 a   449,460  
York International 10,700   419,440  
      19,055,221  
Property Insurance—3.4%        
Allmerica Financial 20,100 a   698,676  
Argonaut Group 24,700 a   456,950  
CNA Surety 27,000 a   294,030  
LandAmerica Financial Group 14,000   576,940  
Navigators Group 13,500 a   351,675  
Platinum Underwriters Holdings 13,000   415,740  
Stewart Information Services 9,500   337,250  
      3,131,261  
Services—8.5%        
Advisory Board 12,000 a   415,320  
CIBER 46,000 a   402,500  

10

Common Stocks (continued) Shares   Value ($)  
 
 
Services (continued)        
Cell Genesys 34,500   381,225  
Cornell 36,500 a   442,745  
Cox Radio, Cl. A 17,500 a   362,425  
Deluxe 7,000   289,170  
FindWhat.Com 16,700 a,b   336,655  
Gray Television 30,500   452,010  
HealthCare Group 14,000   219,800  
Hearst-Argyle Television 18,000   472,500  
Labor Ready 44,000 a   556,160  
MPS Group 63,000 a   689,220  
Media General, Cl. A 5,700   409,716  
Regent Communications 22,000 a   140,140  
SM & A 46,000 a   370,300  
Thomas Nelson 6,600   172,656  
Waste Connections 16,800 a   676,536  
Watson Wyatt & Company Holdings 24,300 a   637,389  
Westwood One 11,500 a   339,710  
      7,766,177  
Technology—10.8%        
Amkor Technology 16,000 a   129,280  
Andrew 13,000 a   220,350  
aQuantive 43,000   432,150  
Artesyn Technologies 35,000 a   322,350  
Ascential Software 18,500 a   314,500  
Atari 120,000 a   363,600  
Atmel 53,000 a   309,520  
Audiovox Cl. A 16,300 a   246,130  
Axcelis Technologies 38,000 a   399,380  
ChipPAC, Cl. A 32,000 a   196,160  
Cohu 16,300   285,250  
Comtech Telecommunications 19,000 a   307,420  
Cypress Semiconductor 22,500 a   314,325  
EarthLink 46,000 a   423,660  
Emulex 14,500 a   241,715  
EnPro Industries 14,100   279,180  
Epicor Software 27,000 a   345,870  

The Fund 11

STATEMENT OF INVESTMENTS (Unaudited) (continued)

Common Stocks (continued) Shares Value ($)  
 
Technology (continued)      
Gateway 40,500 a 195,210  
Hypercom 46,000 a 308,200  
j2 Global Communications 15,500 a,b 358,980  
Kulicke & Soffa Industries 33,000 a 327,690  
Lionbridge Technologies 60,000 a 541,200  
MEMC Electronic Materials 44,000 a 350,680  
MKS Instruments 15,500 a 297,910  
Maxtor 18,500 a 120,435  
PTEK Holdings 78,000 a 793,260  
RadiSys 8,000 a 149,360  
Silicon Graphics 69,000 a,b 133,170  
Take-Two Interactive Software 12,800 a 369,792  
TriQuint Semiconductor 26,000 a 142,740  
Varian Semiconductor Equiptment Associates 7,000 a 227,920  
White Electronic Designs 54,000 a 391,500  
    9,838,887  
Utilities—2.3%      
Calpine 88,000 a,b 381,920  
Cincinnati Bell 67,000 a 264,650  
Cleco 24,500 439,775  
PNM Resources 17,400 507,732  
Westar Energy 26,000 530,660  
    2,124,737  
Total Common Stocks      
   (cost $84,634,560)   86,918,858  
 
 

12

Investment of Cash Collateral        
for Securities Loaned—5.0% Shares   Value ($)  
 
 
Registered Investment Company;        
Dreyfus Institutional Preferred Money Market Fund        
   (cost $ 4,538,968)   4,538,968 c   4,538,968  
 
 
             
Total Investments (cost $ 92,163,528) 103.9%   94,447,826  
Liabilities, Less Cash and Receivables (3.9)%   (3,508,297)  
Net Assets   100.0%   90,939,529  
a Non-income producing.
b
  		 All or a portion of these securities are on loan. At April 30, 2004, the total market value of the fund's securities on loan is $4,132,385 and the total market value of the collateral held by the fund is $4,538,968.
c
  		 Investment in affiliated money market mutual funds.

See notes to financial statements.

The Fund 13

STATEMENT OF ASSETS AND LIABILITIES
April 30, 2004 (Unaudited)
    Cost Value  
 
Assets ($):        
Investments in securities—      
See Statement of Investments (including securities      
on loan, valued at $4,132,385)—Note 1(b,d):      
Unaffiliated issuers 87,624,560 89,908,858  
Affiliated issuers 4,538,968 4,538,968  
Cash     176,629  
Receivable for investment securities sold   1,480,683  
Receivable for shares of Capital Stock subscribed   823,746  
Dividends and interest receivable   70,103  
      96,998,987  
 
Liabilities ($):      
Due to The Dreyfus Corporation and affiliates—Note 2(a)   135,443  
Liability for securities on loan—Note 1(b)   4,538,968  
Payable for investment securities purchased   1,093,915  
Payable for shares of Capital Stock redeemed   290,932  
Loan commitment fee payable   200  
      6,059,458  
 
Net Assets ( $)   90,939,529  
 
Composition of Net Assets ($):      
Paid-in capital     78,527,312  
Accumulated investment (loss)—net   (171,342)  
Accumulated net realized gain (loss) on investments   10,299,261  
Accumulated net unrealized appreciation      
(depreciation) on investments   2,284,298  
 
Net Assets ( $)   90,939,529  
Net Asset Value Per Share                  
  Class A   Class B   Class C   Class R   Class T  
 
 
 
 
 
Net Assets ($) 50,320,200   21,756,788   14,186,832   3,124,469   1,551,240  
Shares Outstanding 2,693,641   1,206,484   785,346   165,910   83,788  
 
 
 
 
 
Net Asset Value                    
   Per Share ($) 18.68   18.03   18.06   18.83   18.51  

See notes to financial statements.

14

STATEMENT OF OPERATIONS
Six Months Ended April 30, 2004 (Unaudited)
Investment Income ( $):    
Income:      
Cash dividends (net of $665 foreign taxes withheld at source source) 483,060  
Income on securities lending 14,381  
Interest   11,168  
Total Income   508,609  
Expenses:      
Management fee—Note 2(a)   467,626  
Distribution and service plan fees—Note 2(b) 211,853  
Loan commitment fees—Note 4 472  
Total Expenses   679,951  
Investment (Loss)—Net   (171,342)  
 
Realized and Unrealized Gain (Loss) on Investments—Note 3 ($):    
Net realized gain (loss) on investments 10,324,017  
Net unrealized appreciation (depreciation) on investments (3,488,208)  
Net Realized and Unrealized Gain (Loss) on Investments 6,835,809  
Net Increase in Net Assets Resulting from Operations 6,664,467  

See notes to financial statements.

The Fund 15

STATEMENT OF CHANGES IN NET ASSETS

  Six Months Ended      
  April 30, 2004   Year Ended  
  (Unaudited)   October 31, 2003  
 
 
Operations ($):        
Investment (loss)—net (171,342)   (54,202)  
Net realized gain (loss) on investments 10,324,017   3,119,371  
Net unrealized appreciation        
   (depreciation) on investments (3,488,208)   8,462,478  
Net Increase (Decrease) in Net Assets        
   Resulting from Operations 6,664,467   11,527,647  
 
 
Dividends to Shareholders from ($):        
Net realized gain on investments:        
Class A shares (1,482,128)   —  
Class B shares (909,499)   —  
Class C shares (361,973)   —  
Class R shares (94,350)   —  
Class T shares (42,850)   —  
Total Dividends (2,890,800)   —  
 
 
Capital Stock Transactions ($):        
Net proceeds from shares sold:        
Class A shares 35,208,999   9,519,048  
Class B shares 3,375,168   6,159,042  
Class C shares 7,725,973   2,298,111  
Class R shares 1,303,972   848,385  
Class T shares 912,986   700,107  
Dividends reinvested:        
Class A shares 1,251,568   —  
Class B shares 692,013   —  
Class C shares 267,228   —  
Class R shares 93,752   —  
Class T shares 42,331   —  
Cost of shares redeemed:        
Class A shares (5,889,668)   (3,771,298)  
Class B shares (3,176,471)   (4,687,834)  
Class C shares (782,648)   (2,478,592)  
Class R shares (424,445)   (453,807)  
Class T shares (245,511)   (288,861)  
Increase (Decrease) in Net Assets        
   from Capital Stock Transactions 40,355,247   7,844,301  
Total Increase (Decrease) in Net Assets 44,128,914   19,371,948  
 
 
Net Assets ($):        
Beginning of Period 46,810,615   27,438,667  
End of Period 90,939,529   46,810,615  

16

  Six Months Ended      
  April 30, 2004   Year Ended  
  (Unaudited)   October 31, 2003  
 
 
Capital Share Transactions:        
Class Aa        
Shares sold 1,906,943   625,140  
Shares issued for dividends reinvested 70,650   —  
Shares redeemed (310,974)   (268,806)  
Net Increase (Decrease) in Shares Outstanding 1,666,619   356,334  
 
 
Class Ba        
Shares sold 186,586   436,213  
Shares issued for dividends reinvested 40,376   —  
Shares redeemed (174,783)   (345,734)  
Net Increase (Decrease) in Shares Outstanding 52,179   90,479  
 
 
Class C        
Shares sold 423,550   155,862  
Shares issued for dividends reinvested 15,546   —  
Shares redeemed (43,255)   (180,679)  
Net Increase (Decrease) in Shares Outstanding 395,841   (24,817)  
 
 
Class R        
Shares sold 68,971   54,832  
Shares issued for dividends reinvested 5,255   —  
Shares redeemed (22,234)   (34,244)  
Net Increase (Decrease) in Shares Outstanding 51,992   20,588  
 
 
Class T        
Shares sold 48,673   47,319  
Shares issued for dividends reinvested 2,409   —  
Shares redeemed (13,255)   (19,725)  
Net Increase (Decrease) in Shares Outstanding 37,827   27,594  

a During the period ended April 30, 2004, 18,498 Class B shares representing $341,019 were automatically converted to 17,892 Class A shares and during the period ended October 31, 2003, 20,695 Class B shares representing $283,288 were automatically converted to 20,149 Class A shares.

See notes to financial statements.

The Fund 17

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                      
  April 30, 2004       Year Ended October 31,      
         
     
Class A Shares (Unaudited)   2003   2002   2001   2000   1999  
 
 
 
 
 
 
Per Share Data ($):                        
Net asset value,                        
   beginning of period 17.43   12.32   12.11   11.75   10.63   10.45  
Investment Operations:                        
Investment income (loss)—neta (.01)   .04   .05   .10   .06   .01  
Net realized and unrealized                        
   gain (loss) on investments 2.03   5.07   .25   .32   1.06   .20  
Total from Investment Operations 2.02   5.11   .30   .42   1.12   .21  
Distributions:                        
Dividends from                        
   investment income—net —   —   (.06)   (.06)   —   (.03)  
Dividends from net realized                        
   gain on investments (.77)   —   (.03)   —   —   —  
Total Distributions (.77)   —   (.09)   (.06)   —   (.03)  
Net asset value, end of period 18.68   17.43   12.32   12.11   11.75   10.63  
 
 
 
 
 
 
Total Return (%)b 11.83d   41.48   2.47   3.55   10.54   2.01  
 
 
 
 
 
 
Ratios/Supplemental Data (%):                        
Ratio of operating expenses                        
   to average net assets .75d   1.50   1.50   1.50   1.50   1.50  
Ratio of interest expense and                        
   loan commitment fees                        
   to average net assets .00c,d   .00c   .00c   .01   —   —  
Ratio of net investment income                        
   (loss) to average net assets (.06)d   .27   .33   .82   .59   .12  
Portfolio Turnover Rate 72.73d   147.81   95.03   112.09   101.02   53.87  
 
 
 
 
 
 
Net Assets, end of period                        
   ($ x 1,000) 50,320   17,901   8,260   4,574   4,392   4,432  
a Based on average shares outstanding at each month end.
b
  		 Exclusive of sales charge.
c
  		 Amount represents less than .01%.
d
  		 Not annualized.

See notes to financial statements.

18

  Six Months Ended                      
  April 30, 2004       Year Ended October 31,      
         
     
Class B Shares (Unaudited)   2003   2002   2001   2000   1999  
 
 
 
 
 
 
Per Share Data ($):                        
Net asset value,                        
   beginning of period 16.91   12.04   11.89   11.56   10.54   10.41  
Investment Operations:                        
Investment income (loss)—neta (.08)   (.06)   (.06)   .00b   (.02)   (.07)  
Net realized and unrealized                        
   gain (loss) on investments 1.97   4.93   .26   .33   1.04   .20  
Total from Investment Operations 1.89   4.87   .20   .33   1.02   .13  
Distributions:                        
Dividends from                        
   investment income—net —   —   (.02)   —   —   —  
Dividends from net realized                        
   gain on investments (.77)   —   (.03)   —   —   —  
Total Distributions (.77)   —   (.05)   —   —   —  
Net asset value, end of period 18.03   16.91   12.04   11.89   11.56   10.54  
 
 
 
 
 
 
Total Return (%)c 11.41d   40.45   1.69   2.85   9.68   1.25  
 
 
 
 
 
 
Ratios/Supplemental Data (%):                        
Ratio of operating expenses                        
   to average net assets 1.12d   2.25   2.25   2.25   2.25   2.25  
Ratio of interest expense and                        
   loan commitment fees                        
   to average net assets .00d,e   .00e   .00e   .02   —   —  
Ratio of net investment income                        
   (loss) to average net assets (.45)d   (.45)   (.44)   .03   (.15)   (.63)  
Portfolio Turnover Rate 72.73d   147.81   95.03   112.09   101.02   53.87  
 
 
 
 
 
 
Net Assets, end of period                        
   ($ x 1,000) 21,757   19,519   12,804   6,591   1,658   990  
a Based on average shares outstanding at each month end.
b
  		 Amount represents less than $.01 per share.
c
  		 Exclusive of sales charge.
d
  		 Not annualized.
e
  		 Amount represents less than .01%.

See notes to financial statements.

The Fund 19

FINANCIAL HIGHLIGHTS (continued)

  Six Months Ended                      
  April 30, 2004       Year Ended October 31,      
         
     
Class C Shares (Unaudited)   2003   2002   2001   2000   1999  
 
 
 
 
 
 
Per Share Data ($):                        
Net asset value,                        
   beginning of period 16.94   12.06   11.90   11.57   10.55   10.41  
Investment Operations:                        
Investment income (loss)—neta (.08)   (.06)   (.06)   .01   (.02)   (.07)  
Net realized and unrealized                        
   gain (loss) on investments 1.97   4.94   .25   .32   1.04   .21  
Total from Investment Operations 1.89   4.88   .19   .33   1.02   .14  
Distributions:                        
Dividends from net realized                        
   gain on investments (.77)   —   (.03)   —   —   —  
Net asset value, end of period 18.06   16.94   12.06   11.90   11.57   10.55  
 
 
 
 
 
 
Total Return (%)b 11.39c   40.46   1.61   2.85   9.67   1.34  
 
 
 
 
 
 
Ratios/Supplemental Data (%):                        
Ratio of operating expenses                        
   to average net assets 1.12c   2.25   2.25   2.25   2.25   2.25  
Ratio of interest expense and                        
   loan commitment fees                        
   to average net assets .00c,d   .00d   .00d   .02   —   —  
Ratio of net investment income                        
   (loss) to average net assets (.44)c   (.45)   (.44)   .05   (.17)   (.63)  
Portfolio Turnover Rate 72.73c   147.81   95.03   112.09   101.02   53.87  
 
 
 
 
 
 
Net Assets, end of period                        
   ($ x 1,000) 14,187   6,598   4,996   2,012   1,014   660  
a Based on average shares outstanding at each month end.
b
  		 Exclusive of sales charge.
c
  		 Not annualized.
d
  		 Amount represents less than .01%.

See notes to financial statements.

20

  Six Months Ended                      
  April 30, 2004       Year Ended October 31,      
         
     
Class R Shares (Unaudited)   2003   2002   2001   2000   1999  
 
 
 
 
 
 
Per Share Data ($):                        
Net asset value,                        
   beginning of period 17.54   12.36   12.17   11.80   10.65   10.47  
Investment Operations:                        
Investment income—neta .01   .08   .08   .14   .09   .04  
Net realized and unrealized                        
   gain (loss) on investments 2.05   5.10   .25   .32   1.06   .20  
Total from Investment Operations 2.06   5.18   .33   .46   1.15   .24  
Distributions:                        
Dividends from                        
   investment income—net —   —   (.11)   (.09)   —   (.06)  
Dividends from net realized                        
   gain on investments (.77)   —   (.03)   —   —   —  
Total Distributions (.77)   —   (.14)   (.09)   —   (.06)  
Net asset value, end of period 18.83   17.54   12.36   12.17   11.80   10.65  
 
 
 
 
 
 
Total Return (%) 11.98b   41.91   2.64   3.88   10.80   2.26  
 
 
 
 
 
 
Ratios/Supplemental Data (%):                        
Ratio of operating expenses                        
   to average net assets .62b   1.25   1.25   1.25   1.25   1.25  
Ratio of interest expense and                        
   loan commitment fees                        
   to average net assets .00b,c   .00c   .00c   .01   —   —  
Ratio of net investment income                        
   to average net assets .05b   .55   .58   1.07   .84   .36  
Portfolio Turnover Rate 72.73b   147.81   95.03   112.09   101.02   53.87  
 
 
 
 
 
 
Net Assets, end of period                        
   ($ x 1,000) 3,124   1,998   1,154   589   631   509  
a Based on average shares outstanding at each month end.
b
  		 Not annualized.
c
  		 Amount represents less than .01%.

See notes to financial statements.

The Fund 21

FINANCIAL HIGHLIGHTS (continued)

  Six Months Ended                  
  April 30, 2004       Year Ended October 31,      
         
     
Class T Shares (Unaudited)   2003   2002   2001   2000a  
 
 
 
 
 
Per Share Data ($):                    
Net asset value, beginning of period 17.30   12.25   12.10   11.72   10.34  
Investment Operations:                    
Investment income (loss)—netb (.04)   .00c   .01   .06   .02  
Net realized and unrealized                    
   gain (loss) on investments 2.02   5.05   .25   .35   1.36  
Total from Investment Operations 1.98   5.05   .26   .41   1.38  
Distributions:                    
Dividends from investment income—net —   —   (.08)   (.03)   —  
Dividends from net realized                    
   gain on investments (.77)   —   (.03)   —   —  
Total Distributions (.77)   —   (.11)   (.03)   —  
Net asset value, end of period 18.51   17.30   12.25   12.10   11.72e  
 
 
 
 
 
Total Return (%)d 11.68e   41.22   2.09   3.46   13.35e  
 
 
 
 
 
Ratios/Supplemental Data (%):                    
Ratio of operating expenses                    
   to average net assets .87e   1.75   1.75   1.75   1.17e  
Ratio of interest expense and                    
   loan commitment fees                    
   to average net assets .00e,f   .00f   .00f   .02   —  
Ratio of net investment income                    
   (loss) to average net assets (.20)e   .00f   .05   .52   .21e  
Portfolio Turnover Rate 72.73e   147.81   95.03   112.09   101.02  
 
 
 
 
 
Net Assets, end of period ($ x 1,000) 1,551   795   225   48   1  
a From March 1, 2000 (commencement of initial offering) to October 31, 2000.
b
  		 Based on average shares outstanding at each month end.
c
  		 Amount represents less than $.01.
d
  		 Exclusive of sales charge.
e
  		 Not annualized.
f
  		 Amount represents less than .01%.

See notes to financial statements.

22

NOTES TO FINANCIAL STATEMENTS (Unaudited)

NOTE 1—Significant Accounting Policies:

Dreyfus Premier Small Cap Value Fund (the “fund”) is a separate diversified series of The Dreyfus/Laurel Funds, Inc. (the “Company”) which is registered under the Investment Company Act of 1940, as amended (the “Act”) as an open-end management investment company and operates as a series company currently offering sixteen series, including the fund. The fund's investment objective is to seek investment returns (consisting of capital appreciation and income) that are consistently superior to the Russell 2000 Value Index. 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”).

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 100 million shares of $.001 par value Capital Stock in each of the following classes: Class A, Class B, Class C and Class R and 200 million shares of $.001 par value Capital Stock of Class T shares. Class A, Class B, Class C and Class T shares are sold primarily to retail investors through financial intermediaries and bear a distribution fee and/or service fee. Class A and Class T shares are sold with a front-end sales charge, while Class B and Class C shares are subject to a contingent deferred sales charge (“CDSC”). Class B shares automatically convert to Class A shares after six years. Class R shares are sold primarily to bank trust departments and other financial service providers (including Mellon and its affiliates) acting on behalf of customers having a qualified trust or investment account or relationship at such institution, and bear no distribution or service fees. Class R shares are offered without a front-end sales charge or CDSC. Each class of shares has identical rights and privileges, except with respect to distribution and service fees and voting rights on matters affecting a single class.

Investment income, net of expenses (other than class specific expenses) and realized and unrealized gains and losses are allocated daily to each class of shares based upon the relative proportion of net assets of each class.

The Fund 23

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

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

(a) Portfolio valuation: Investments in securities (including options and financial futures) are valued at the last sales price on the securities exchange or national securities market on which such securities are primarily traded. Securities listed on the National Market System for which market quotations are available are valued at the official closing price or, if there is no official closing price that day, at the last sale price. Securities not listed on an exchange or the national securities market, or securities for which there were no transactions, are valued at the average of the most recent bid and asked prices. Bid price is used when no asked price is available. 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 in accordance with the procedures approved by the fund's Board. 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. Short-term investments (excluding U.S. Treasury Bills) are carried at amortized cost, which approximates value.

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

The fund may lend securities to qualified institutions. At origination, all loans are secured by collateral of at least 102% of the value of U.S. securities loaned and 105% of the value of foreign securities loaned.

24

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

(c) Affiliated issuers: Issuers in which the fund held investments in other investment companies advised by the Manager are defined as “affiliated” in the Act.

(d) Repurchase agreements: The fund may engage in repurchase agreement transactions. Under the terms of a typical repurchase agreement, the fund, through its custodian and sub-custodian, takes possession of an underlying debt obligation subject to an obligation of the seller to repurchase, and the fund to resell, the obligation at an agreed-upon price and time, thereby determining the yield during the fund's holding period.This arrangement results in a fixed rate of return that is not subject to market fluctuations during the fund's holding period. The value of the collateral is at least equal, at all times, to the total amount of the repurchase obligation, including interest. In the event of a counter party default, the fund has the right to use the collateral to offset losses incurred. There is potential loss to the fund in the event the fund is delayed or prevented from exercising its rights to dispose of the collateral securities, including the risk of a possible decline in the value of the underlying securities during the period while the fund seeks to assert its rights.The Manager, acting under the supervision of the Board of Directors, reviews the value of the collateral and the cred-itworthiness of those banks and dealers with which the fund enters into repurchase agreements to evaluate potential risks.

(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

The Fund 25

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

annually, but the fund may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code of 1986, as amended (the “Code”).To the extent that net realized capital gain can be offset by capital loss carryovers, it is the policy of the fund not to distribute such gain. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from U.S. generally accepted accounting principles.

(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 tax character of current year distributions, will be determined at the end of the current fiscal year.

NOTE 2—Investment Management Fee and Other Transactions With Affiliates:

(a) Investment management fee: Pursuant to an Investment Management agreement with the Manager, the Manager provides or arranges for one or more third parties and/or affiliates to provide investment advisory, administrative, custody, fund accounting and transfer agency services to the fund. The Manager also directs the investments of the fund in accordance with its investment objective, policies and limitations. For these services, the fund is contractually obligated to pay the Manager a fee, calculated daily and paid monthly, at the annual rate of 1.25% of the value of the fund's average daily net assets. Out of its fee, the Manager pays all of the expenses of the fund, except brokerage fees, taxes, interest, commitment fees, Rule 12b-1 distribution fees and expenses, service fees, fees and expenses of non-interested Directors (including counsel fees) and extraordinary expenses. In addition, the Manager is required to reduce its fee in an amount equal to the fund's allocable portion of fees and expenses of the non-interested Directors (including counsel fees). Each Director

26

receives $40,000 per year, plus $5,000 for each joint Board meeting of the Company,The Dreyfus/Laurel Tax-Free Municipal Funds and The Dreyfus/Laurel Funds Trust (the “Dreyfus/Laurel Funds”) attended, $2,000 for separate committee meetings attended which are not held in conjunction with a regularly scheduled board meeting and $500 for Board meetings and separate committee meetings attended that are conducted by telephone and is reimbursed for travel and out-of-pocket expenses. The Chairman of the Board receives an additional 25% of such compensation (with the exception of reimbursable amounts). In the event that there is a joint committee meeting of the Dreyfus/Laurel Funds and the Dreyfus High Yield Strategies Fund, the $2,000 fee will be allocated between the Dreyfus/Laurel Funds and the Dreyfus High Yield Strategies Fund. These fees and expenses are charged and allocated to each series based on net assets. Amounts required to be paid by the Company directly to the non-interested Directors, that would be applied to offset a portion of the management fee payable to the Manager, are in fact paid directly by the Manager to the non-interested Directors.

The components of Due to The Dreyfus Corporation and affiliates in the Statement of Assets and Liabilities consists of: management fees $94,207, Rule 12b-1 distribution fees $33,332 and shareholder services plan fees $7,904.

During the period ended April 30, 2004, the Distributor retained $13,451 and $295 from commissions earned on sales of fund's Class A and T shares, respectively, and $19,357and $1,788 from contingent deferred sales charges on redemptions of the fund's Class B and C shares, respectively.

(b) Distribution and service plan: Under separate Distribution Plans (the “Plans”) adopted pursuant to Rule 12b-1 under the Act, Class A shares may pay annually up to .25% of the value of their average daily net assets to compensate the Distributor for shareholder servicing activities and expenses primarily intended to result in the sale of Class A shares. Class B, Class C and Class T shares pay the Distributor for

The Fund 27

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

distributing their shares at an aggregate annual rate of .75% of the value of the average daily net assets of Class B and Class C shares and .25% of the value of the average daily net assets of Class T shares.The Distributor may pay one or more agents in respect of advertising, marketing and other distribution services for Class T shares and determines the amounts, if any, to be paid to agents and the basis on which such payments are made. Class B, Class C and Class T shares are also subject to a service plan adopted pursuant to Rule 12b-1 (the “Service Plan”), under which Class B, Class C and Class T shares pay the Distributor for providing certain services to the holders of their shares a fee at the annual rate of .25% of the value of the average daily net assets of Class B, Class C and Class T shares. During the period ended April 30, 2004, Class A, Class B, Class C and Class T shares were charged $48,687, $81,804, $38,313 and $1,505, respectively, pursuant to their respective Plans, and Class B, Class C and Class T shares were charged $27,268, $12,771 and $1,505, respectively, pursuant to the Service Plan.

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

NOTE 3—Securities Transactions:

The aggregate amount of purchases and sales of investment securities, excluding short-term securities, during the period ended April 30, 2004, amounted to $86,123,081 and $52,328,029, respectively.

At April 30, 2004, accumulated net unrealized appreciation on investments was $2,284,298, consisting of $6,938,844 gross unrealized appreciation and $4,654,546 gross unrealized depreciation.

At April 30, 2004, 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).

28

NOTE 4—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 April 30, 2004, the fund did not borrow under the Facility.

NOTE 5—Legal Matters:

Two class actions have been filed against Mellon Financial and Mellon Bank, N.A., and Dreyfus and Founders Asset Management LLC (the “Investment Advisers”), and the directors of all or substantially all of the Dreyfus funds, alleging that the Investment Advisers improperly used assets of the Dreyfus funds, in the form of directed brokerage commissions and 12b-1 fees, to pay brokers to promote sales of Dreyfus funds, and that the use of fund assets to make these payments was not properly disclosed to investors.The complaints further allege that the directors breached their fiduciary duties to fund shareholders under the Investment Company Act of 1940 and at common law.The complaints seek unspecified compensatory and punitive damages, rescission of the funds' contracts with the Investment Advisers, an accounting of all fees paid, and an award of attorneys' fees and litigation expenses. Dreyfus and the Dreyfus funds believe the allegations to be totally without merit and will defend the actions vigorously.

Additional lawsuits arising out of these circumstances and presenting similar allegations and requests for relief may be filed against the defendants in the future. Neither Dreyfus nor the Dreyfus funds believe that any of the pending actions will have a material adverse effect on the Dreyfus funds or Dreyfus' ability to perform its contracts with the Dreyfus funds.

The Fund 29

For More Information

Dreyfus Premier
Small Cap Value Fund
200 Park Avenue
New York, NY 10166
 
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
 
Custodian
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
 
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
200 Park Avenue
New York, NY 10166
 
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166

To obtain information:

By telephone

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

By mail Write to: The Dreyfus Premier Family of Funds 144 Glenn Curtiss Boulevard Uniondale, NY 11556-0144

A description of the policies and procedures that the fund uses to determine how to vote proxies relating to portfolio securities is available, without charge, by calling the telephone number listed above, or by visiting the SEC's website at http://www.sec.gov

© 2004 Dreyfus Service Corporation 0148SA0404

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
  		 Letter from the Chairman
3
  		 Discussion of Fund Performance
6
  		 Statement of Investments
9
  		 Statement of Assets and Liabilities
10
  		 Statement of Operations
11
  		 Statement of Changes in Net Assets
13
  		 Financial Highlights
17
  		 Notes to Financial Statements

FOR MORE INFORMATION

Back Cover

   Dreyfus Premier
Tax Managed Growth Fund

The Fund

LETTER FROM THE CHAIRMAN

Dear Shareholder:

This semiannual report for Dreyfus Premier Tax Managed Growth Fund covers the six-month period from November 1, 2003, through April 30, 2004. Inside, you'll find valuable information about how the fund was managed during the reporting period, including a discussion with the fund's portfolio manager, Fayez Sarofim, of Fayez Sarofim & Co., the fund's sub-investment adviser.

Positive economic data continued to accumulate during the reporting period, as consumers, flush with extra cash from federal tax refunds and mortgage refinancings, continued to spend. At the same time, recent evidence of stronger job growth supports the view that corporations have become more willing to spend and invest. One result of the economic rebound has been higher overall earnings and stock prices for many U.S. companies.

Although recent economic news generally has been encouraging, we continue to believe that investors should be aware of the potential risks that could lead to heightened volatility or a stock market correction. Chief among them, in our view, are a possible acceleration of inflation and the chance that terrorism could cause instability in global markets. As always, we encourage you to speak regularly with your financial advisor, who may be in the best position to suggest ways to position your portfolio for the opportunities and challenges of today's financial markets.

Thank you for your continued confidence and support.

Sincerely,

Stephen E. Canter

Chairman and Chief Executive Officer The Dreyfus Corporation

May 17, 2004

2

DISCUSSION OF FUND PERFORMANCE

Fayez Sarofim, Portfolio Manager

Fayez Sarofim & Co., Sub-Investment Adviser

How did Dreyfus Premier Tax Managed Growth Fund perform relative to its benchmark?

For the six-month period ended April 30, 2004, the fund produced total returns of 7.00% for Class A shares, 6.57% for Class B shares, 6.53% for Class C shares and 6.89% for Class T shares.1 For the same period, the fund's benchmark, the Standard & Poor's 500 Composite Stock Price Index (“S&P 500 Index”), provided a 6.27% total return.2

On May 14, 2004, after the end of the reporting period, the fund added Class R shares.

The U.S. stock market proved to be relatively volatile during the reporting period, gaining value as the economy strengthened before declining sharply in April, when concerns over potentially higher interest rates took their toll. The fund produced higher returns than the S&P 500 Index for the overall reporting period, primarily because its holdings of leading blue-chip companies held up better than the average company during April's downturn.

What is the fund's investment approach?

The fund invests primarily in large, well-established, multinational growth companies that we believe are well-positioned to weather difficult economic climates and thrive during favorable times. We focus on purchasing growth stocks at a price we consider to be justified by a company's fundamentals.The result is a portfolio of stocks in prominent companies selected for what we consider to be sustained patterns of profitability, strong balance sheets, expanding global presence and above-average growth potential.

At the same time, we manage the portfolio in a manner cognizant of the concerns of tax-conscious investors. Our tax-managed approach is based on targeting long-term growth rather than short-term profit.We typically buy and sell relatively few stocks during the course of the

The Fund 3

DISCUSSION OF FUND PERFORMANCE (continued)

year, which may help reduce investors' tax liabilities and the fund's trading costs. During the reporting period, the fund's portfolio turnover rate was 0%.3

What other factors influenced the fund's performance?

During the early part of the reporting period, the fund's performance lagged that of the S&P 500 Index as smaller, lower-quality companies continued to post higher returns than the larger, well-established companies in which the fund invests. In this environment, companies in the technology sector and other economically sensitive areas fared better than companies that historically have produced steady, consistent returns in good and bad economic times.

Market sentiment appeared to shift in February 2004, when investors turned their attention to higher-quality companies that tend to perform well in the later stages of economic recoveries.Although terrorism in March briefly derailed the market's renewed preference for higher-quality companies, the trend resumed in April after the U.S. Department of Labor released statistics showing a dramatic increase in new jobs. Investors became concerned that rising employment, higher commodities prices and other inflationary pressures might cause the Federal Reserve Board (the “Fed”) to begin raising short-term interest rates, which could adversely affect the growth rates of smaller companies.

In this changing market environment, the fund enjoyed particularly robust results from its holdings in the consumer staples area, which benefited from higher earnings, rising dividends and a history of consistency as the economic recovery unfolded.The fund's overweighted position in the sector and successful stock selection strategy helped drive the fund's strong relative performance. For example, food and tobacco giant Altria Group, which represented the fund's top performer during the reporting period, announced stronger than expected earnings growth and appeared to benefit from an easing of litigation-related issues.

The fund also received strong contributions to performance from its energy holdings. Leading integrated oil producers such as Exxon

4

Mobil, British Petroleum and ChevronTexaco benefited from higher oil and gas prices and the appearance of long-dormant inflationary pressures. However, the fund sold its position in The Royal Dutch Shell Group due to allegations of mismanagement in the way it estimated its oil reserves.

A few of the fund's holdings detracted from its performance. By far the largest negative contribution came from semiconductor manufacturer Intel, whose stock price fell sharply on inventory-related concerns in Asia. Retailer Wal-Mart Stores and mortgage finance enterprise Fannie Mae also declined during the reporting period when consumer spending and mortgage refinancing activity softened.

What is the fund's current strategy?

As long-term investors, we have continued to maintain our buy-and-hold approach to investing in some of the nation's largest and most consistently successful companies. Nonetheless, we remain aware of economic conditions, including current expectations that the Fed may begin to raise interest rates sometime this year. In our judgment, dividend-paying companies that have demonstrated an ability to achieve consistent earnings growth in a variety of economic climates, including those characterized by rising short-term interest rates, are likely to command investors' attention over the long term.

May 17, 2004

1
  		 Total return includes reinvestment of dividends and any capital gains paid, and does not take into consideration the maximum initial sales charges in the case of Class A and Class T shares, or the applicable contingent deferred sales charges imposed on redemptions in the case of Class B and Class C shares. Had these charges been reflected, returns would have been lower. Past performance is no guarantee of future results. Share price and investment return fluctuate such that upon redemption, fund shares may be worth more or less than their original cost.
2
  		 SOURCE: LIPPER INC. — Reflects monthly reinvestment of dividends and, where applicable, capital gain distributions.The Standard & Poor's 500 Composite Stock Price Index is a widely accepted, unmanaged index of U.S. stock market performance.
3
  		 Portfolio turnover rates are subject to change. Portfolio turnover rates alone do not automatically result in high or low distribution levels.There can be no guarantee that the fund will generate any specific level of distributions annually.

The Fund 5

STATEMENT OF INVESTMENTS

April 30, 2004 (Unaudited)

Common Stocks—99.5% Shares   Value ($)  
 
 
Banking—6.1%        
Bank of America 40,948   3,295,904  
Federal Home Loan Mortgage 55,000   3,212,000  
Federal National Mortgage Assoociation 100,000   6,872,000  
SunTrust Banks 60,000   4,083,000  
      17,462,904  
Capital Goods—4.9%        
Emerson Electric 53,000   3,191,660  
General Electric 360,000   10,782,000  
      13,973,660  
Diversified Financial Services—8.6%        
American Express 120,000   5,874,000  
Citigroup 240,833   11,581,659  
J.P. Morgan Chase & Co. 134,500   5,057,200  
Merrill Lynch 37,000   2,006,510  
      24,519,369  
Energy—12.1%        
BP, ADR 150,000   7,935,000  
ChevronTexaco 89,000   8,143,500  
Exxon Mobil 431,612   18,365,091  
      34,443,591  
Food, Beverage & Tobacco—19.1%        
Altria Group 315,000   17,444,700  
Anheuser-Busch Cos. 108,000   5,533,920  
Coca-Cola 250,000   12,642,500  
Kraft Foods 84,000   2,764,440  
Nestle, ADR 100,000   6,340,625  
PepsiCo 175,000   9,535,750  
      54,261,935  
Health Care—.1%        
Medco Health Solutions 11,105   393,117  
Hotel Restraurants & Leisure—1.1%        
McDonald's 115,000   3,131,450  

6

Common Stocks (continued) Shares   Value ($)  
 
 
Household & Personal Products—5.4%        
Colgate-Palmolive 75,000   4,341,000  
Estee Lauder, Cl. A 30,000   1,371,300  
Procter & Gamble 90,000   9,517,500  
      15,229,800  
Insurance—6.1%        
American International Group 68,425   4,902,651  
Berkshire Hathaway, Cl. A 60 a   5,603,400  
Marsh & McLennan Cos. 150,000   6,765,000  
      17,271,051  
Media—4.6%        
Fox Entertainment Group, Cl. A 25,000 a   696,250  
McGraw-Hill Cos. 95,000   7,491,700  
Time Warner 139,700 a   2,349,754  
Viacom, Cl. B 70,000   2,705,500  
      13,243,204  
Pharmaceuticals & Biotechnology—15.8%        
Abbott Laboratories 133,000   5,854,660  
Johnson & Johnson 190,000   10,265,700  
Lilly (Eli) & Co. 95,000   7,011,950  
Merck & Co. 130,000 a   6,110,000  
Pfizer 435,000   15,555,600  
      44,797,910  
Retailing—6.0%        
Wal-Mart Stores 155,000   8,835,000  
Walgreen 240,000   8,275,200  
      17,110,200  
Semiconductors & Semiconductor Equipment—4.4%        
Intel 490,000   12,607,700  
Software & Services—2.3%        
Microsoft 250,000   6,492,500  
Technology Hardware & Equipment—1.9%        
International Business Machines 60,000   5,290,200  

The Fund 7

STATEMENT OF INVESTMENTS (Unaudited) (continued)

Common Stocks (continued) Shares   Value ($)  
 
 
Transportation—1.0%            
United Parcel Service, Cl. B   40,000   2,806,000  
Total Common Stocks            
   (cost $ 260,384,200)         283,034,591  
 
 
               
Preferred Stocks—.7%          
 
 
Media;              
News Corp, ADR, Cum., $ 1.960        
   (cost $ 1,391,500)     55,000   1,856,250  
 
 
               
Total Investments (cost $ 261,775,700) 100.2%   284,890,841  
Liabilities, Less Cash and Receivables (.2%)   (519,156)  
Net Assets     100.0%   284,371,685  

a Non-income producing. See notes financial statements.

8

STATEMENT OF ASSETS AND LIABILITIES
April 30, 2004 (Unaudited)
    Cost Value  
 
Assets ($):        
Investments in securities—See Statement of Investments 261,775,700 284,890,841  
Dividends and interest receivable   433,852  
Receivable for shares of Capital Stock subscribed   29,484  
      285,354,177  
 
Liabilities ($):        
Due to The Dreyfus Corporation and affiliates—Note 2(a)   437,735  
Cash overdraft due to Custodian   66,682  
Payable for shares of Capital Stock redeemed   478,075  
      982,492  
 
Net Assets ( $)   284,371,685  
 
Composition of Net Assets ($):      
Paid-in capital     294,725,939  
Accumulated undistributed investment income—net   208,895  
Accumulated net realized gain (loss) on investments   (33,678,290)  
Accumulated net unrealized appreciation      
(depreciation) on investments   23,115,141  
 
Net Assets ( $)   284,371,685  
Net Asset Value Per Share                
  Class A   Class B   Class C   Class T  
 
 
 
 
Net Assets ($) 92,555,134   128,460,684   58,180,146   5,175,721  
Shares Outstanding 5,866,870   8,478,152   3,842,342   332,493  
 
 
 
 
Net Asset Value Per Share ($) 15.78   15.15   15.14   15.57  

See notes to financial statements.

The Fund 9

STATEMENT OF OPERATIONS

Six Months Ended April 30, 2004 (Unaudited)

Investment Income ( $):    
Income:      
Cash dividends (net of $6,500 foreign taxes withheld at source):    
   Unaffilliated issuers   3,078,122  
   Affiliated issuers   433  
Income on securities lending 5,387  
Total Income   3,083,942  
Expenses:      
Management fee—Note 2(a)   1,602,779  
Distribution and service plan fees—Note 2(b) 1,111,057  
Interest expense—Note 4   3,046  
Loan commitment fees—Note 4 1,338  
Total Expenses   2,718,220  
Investment Income—Net   365,722  
 
Realized and Unrealized Gain (Loss) on Investments—Note 3 ($):    
Net realized gain (loss) on investments (2,251,984)  
Net unrealized appreciation (depreciation) on investments 20,927,115  
Net Realized and Unrealized Gain (Loss) on Investments 18,675,131  
Net Increase in Net Assets Resulting from Operations 19,040,853  

See notes to financial statements.

10

STATEMENT OF CHANGES IN NET ASSETS

  Six Months Ended      
  April 30, 2004   Year Ended  
  (Unaudited)   October 31, 2003  
 
 
Operations ($):        
Investment income—net 365,722   593,589  
Net realized gain (loss) on investments (2,251,984)   (8,603,573)  
Net unrealized appreciation        
   (depreciation) on investments 20,927,115   33,313,308  
Net Increase (Decrease) in Net Assets        
   Resulting from Operations 19,040,853   25,303,324  
 
 
Dividends to Shareholders from ($):        
Investment income—net:        
Class A shares (650,724)   —  
Class B shares (37,571)   —  
Class C shares (36,071)   —  
Class T shares (26,050)   —  
Total Dividends (750,416)   —  
 
 
Capital Stock Transactions ($):        
Net proceeds from shares sold:        
Class A shares 20,654,162   25,359,780  
Class B shares 4,608,580   11,478,601  
Class C shares 3,950,469   10,978,619  
Class T shares 246,909   254,677  
Dividends reinvested:        
Class A shares 501,465   —  
Class B shares 25,428   —  
Class C shares 20,219   —  
Class T shares 22,338   —  
Cost of shares redeemed:        
Class A shares (14,038,196)   (21,125,423)  
Class B shares (28,022,774)   (26,857,128)  
Class C shares (8,567,259)   (15,167,098)  
Class T shares (552,664)   (1,197,288)  
Increase (Decrease) in Net Assets from        
   Capital Stock Transactions (21,151,323)   (16,275,260)  
Total Increase (Decrease) in Net Assets (2,860,886)   9,028,064  
 
 
Net Assets ($):        
Beginning of Period 287,232,571   278,204,507  
End of Period 284,371,685   287,232,571  
Undistributed investment income—net 208,895   593,589  

The Fund 11

STATEMENT OF CHANGES IN NET ASSETS (continued)

  Six Months Ended      
  April 30, 2004   Year Ended  
  (Unaudited)   October 31, 2003  
 
 
Capital Share Transactions:        
Class Aa        
Shares sold 1,320,657   1,900,719  
Shares issued for dividends reinvested 33,232   —  
Shares redeemed (897,444)   (1,535,716)  
Net Increase (Decrease) in Shares Outstanding 456,445   365,003  
 
 
Class Ba        
Shares sold 306,671   874,043  
Shares issued for dividends reinvested 1,749   —  
Shares redeemed (1,862,721)   (2,053,559)  
Net Increase (Decrease) in Shares Outstanding (1,554,301)   (1,179,516)  
 
 
Class C        
Shares sold 262,661   833,021  
Shares issued for dividends reinvested 1,392   —  
Shares redeemed (571,987)   (1,157,605)  
Net Increase (Decrease) in Shares Outstanding (307,934)   (324,584)  
 
 
Class T        
Shares sold 15,949   19,186  
Shares issued for dividends reinvested 1,499   —  
Shares redeemed (35,623)   (88,898)  
Net Increase (Decrease) in Shares Outstanding (18,175)   (69,712)  

a During the period ended April 30, 2004, 101,551 Class B shares representing $1,545,614 were automatically converted to 97,762 Class A shares and during the period ended October 31, 2003, 47,406 Class B shares representing $651,739 were automatically converted to 45,473 Class A shares.

See notes to financial statements.

12

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                      
  April 30, 2004       Year Ended October 31,      
         
     
Class A Shares (Unaudited)   2003   2002   2001   2000   1999  
 
 
 
 
 
 
Per Share Data ($):                        
Net asset value,                        
   beginning of period 14.86   13.51   15.27   18.88   17.67   14.77  
Investment Operations:                        
Investment income—neta .06   .10   .07   .05   .02   .09  
Net realized and unrealized                        
   gain (loss) on investments .98   1.25   (1.83)   (3.66)   1.19   2.81  
Total from                        
   Investment Operations 1.04   1.35   (1.76)   (3.61)   1.21   2.90  
Distributions:                        
Dividends from                        
   investment income—net (.12)   —   —   —   —   —  
Net asset value, end of period 15.78   14.86   13.51   15.27   18.88   17.67  
 
 
 
 
 
 
Total Return (%)b 7.00c   9.99   (11.53)   (19.12)   6.85   19.64  
 
 
 
 
 
 
Ratios/Supplemental Data (%):                        
Ratio of expenses                        
   to average net assets .67c   1.35   1.35   1.35   1.35   1.35  
Ratio of net investment income                        
   to average net assets .38c   .74   .44   .27   .10   .15  
Portfolio Turnover Rate —   3.51   7.25   3.56   4.21   1.26  
 
 
 
 
 
 
Net Assets, end of period                        
   ($ x 1,000) 92,555   80,401   68,183   70,431   89,166   82,943  
a Based on average shares outstanding at each month end.
b
  		 Exclusive of sales charge.
c
  		 Not annualized.

See notes to financial statements.

The Fund 13

FINANCIAL HIGHLIGHTS (continued)

  Six Months Ended                      
  April 30, 2004       Year Ended October 31,      
         
     
Class B Shares (Unaudited)   2003   2002   2001   2000   1999  
 
 
 
 
 
Per Share Data ($):                        
Net asset value,                        
   beginning of period 14.22   13.03   14.83   18.48   17.43   14.67  
Investment Operations:                        
Investment income (loss)—neta .00b   .00b   (.05)   (.08)   (.12)   (.15)  
Net realized and unrealized                        
   gain (loss) on investments .93   1.19   (1.75)   (3.57)   1.17   2.91  
Total from                        
   Investment Operations .93   1.19   (1.80)   (3.65)   1.05   2.76  
Distributions:                        
Dividends from                        
   investment income—net (.00) b —   —   —   —   —  
Net asset value, end of period 15.15   14.22   13.03   14.83   18.48   17.43  
 
 
 
 
 
Total Return (%)c 6.57d   9.13   (12.14)   (19.75)   6.02   18.81  
 
 
 
 
 
Ratios/Supplemental Data (%):                        
Ratio of expenses                        
   to average net assets 1.04d   2.10   2.10   2.10   2.10   2.10  
Ratio of net investment income                        
   (loss) to average net assets .01d   .01   (.32)   (.48)   (.65)   (.60)  
Portfolio Turnover Rate —   3.51   7.25   3.56   4.21   1.26  
 
 
 
 
 
Net Assets, end of period                        
   ($ x 1,000) 128,461 142,689   146,118   182,073   227,555   192,196  
a Based on average shares outstanding at each month end.
b
  		 Amount represents less than $.01 per share.
c
  		 Exclusive of sales charge.
d
  		 Not annualized.

See notes to financial statements.

14

  Six Months Ended                      
  April 30, 2004       Year Ended October 31,      
         
     
Class C Shares (Unaudited)   2003   2002   2001   2000   1999  
 
 
 
 
 
 
Per Share Data ($):                        
Net asset value,                        
   beginning of period 14.22   13.03   14.82   18.47   17.42   14.66  
Investment Operations:                        
Investment income (loss)—neta .00b   .00b   (.05)   (.08)   (.12)   (.14)  
Net realized and unrealized                        
   gain (loss) on investments .93   1.19   (1.74)   (3.57)   1.17   2.90  
Total from                        
   Investment Operations .93   1.19   (1.79)   (3.65)   1.05   2.76  
Distributions:                        
Dividends from                        
   investment income—net (.01)   —   —   —   —   —  
Net asset value, end of period 15.14   14.22   13.03   14.82   18.47   17.42  
 
 
 
 
 
 
Total Return (%)c 6.53d   9.13   (12.08)   (19.76)   6.03   18.74  
 
 
 
 
 
 
Ratios/Supplemental Data (%):                        
Ratio of expenses                        
   to average net assets 1.04d   2.10   2.10   2.10   2.10   2.10  
Ratio of net investment income                        
   (loss) to average net assets .01d   .01   (.31)   (.48)   (.64)   (.60)  
Portfolio Turnover Rate —   3.51   7.25   3.56   4.21   1.26  
 
 
 
 
 
 
Net Assets, end of period                        
   ($ x 1,000) 58,180   59,007   58,289   59,104   70,239   62,533  
a Based on average shares outstanding at each month end.
b
  		 Amount represents less than $.01 per share.
c
  		 Exclusive of sales charge.
d
  		 Not annualized.

See notes to financial statements.

The Fund 15

FINANCIAL HIGHLIGHTS (continued)

  Six Months Ended                      
  April 30, 2004       Year Ended October 31,      
         
     
Class T Shares (Unaudited)   2003   2002   2001   2000   1999  
 
 
 
 
 
 
Per Share Data ($):                        
Net asset value,                        
   beginning of period 14.64   13.36   15.12   18.75   17.60   14.74  
Investment Operations:                        
Investment income (loss)—neta .04   .07   .03   .00b   (.03)   .12  
Net realized and unrealized                        
   gain (loss) on investments .96   1.21   (1.79)   (3.63)   1.18   2.74  
Total from                        
   Investment Operations 1.00   1.28   (1.76)   (3.63)   1.15   2.86  
Distributions:                        
Dividends from                        
   investment income—net (.07)   —   —   —   —   —  
Net asset value, end of period 15.57   14.64   13.36   15.12   18.75   17.60  
 
 
 
 
 
 
Total Return (%)c 6.89d   9.58   (11.64)   (19.36)   6.53   19.40  
 
 
 
 
 
 
Ratios/Supplemental Data (%):                        
Ratio of expenses                        
   to average net assets .80d   1.60   1.60   1.60   1.60   1.60  
Ratio of net investment income                        
   (loss) to average net assets .26d   .51   .18   .02   (.14)   (.10)  
Portfolio Turnover Rate —   3.51   7.25   3.56   4.21   1.26  
 
 
 
 
 
 
Net Assets, end of period                        
   ($ x 1,000) 5,176   5,135   5,615   7,404   8,290   8,457  
a Based on average shares outstanding at each month end.
b
  		 Amount represents less than $.01 per share.
c
  		 Exclusive of sales charge.
d
  		 Not annualized.

See notes to financial statements.

16

NOTES TO FINANCIAL STATEMENTS (Unaudited)

NOTE 1—Significant Accounting Policies:

Dreyfus Premier Tax Managed Growth Fund (the “fund”) is a separate diversified series of The Dreyfus/Laurel Funds, Inc. (the “Company”) which is registered under the Investment Company Act of 1940, as amended (the “Act”), as an open-end management investment company and operates as a series company currently offering sixteen series, including the fund. The fund's investment objective is to provide investors with long-term capital appreciation consistent with minimizing realized capital gains and taxable current income.The Dreyfus Corporation (“Dreyfus”) serves as the fund's investment adviser. Dreyfus is a wholly-owned subsidiary of Mellon Financial Corporation (“Mellon Financial”). Fayez Sarofim & Co. (“Sarofim & Co.”) serves as the fund's sub-investment adviser.

On January 29, 2004, the fund's Board of Directors approved, effective May 14, 2004, the addition of Class R shares.

Dreyfus Service 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 Capital Stock in each of the following classes of shares: Class A, Class B, Class C and Class T. Class A, Class B, Class C and Class T shares are sold primarily to retail investors through financial intermediaries and bear a distribution fee and/or service fee. Class A and Class T shares are sold with a front-end sales charge, while Class B and Class C shares are subject to a contingent deferred sales charge (“CDSC”). Class B shares automatically convert to Class A shares after six years. Each class of shares has identical rights and privileges, except with respect to distribution and service fees and voting rights on matters affecting a single class.

Investment income, net of expenses (other than class specific expenses) and realized and unrealized gains and losses are allocated daily to each class of shares based upon the relative proportion of net assets of each class.

The Fund 17

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

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

(a) Portfolio valuation: Investments in securities are valued at the last sales price on the securities exchange or national securities market on which such securities are primarily traded. Securities listed on the National Market System for which market quotations are available are valued at the official closing price or, if there is no official closing price that day, at the last sale price. Securities not listed on an exchange or the national securities market, or securities for which there were no transactions, are valued at the average of the most recent bid and asked prices. Bid price is used when no asked price is available.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 in accordance with the procedures approved by the fund's Board. 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.

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

The fund may lend securities to qualified institutions. At origination, all loans are secured by collateral of at least 102% of the value of U.S. securities loaned and 105% of the value of foreign securities loaned. Collateral equivalent to at least 100% of the market value of securities

18

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

(c) Affiliated issuers: Issuers in which the fund held investments in other investment companies advised by Dreyfus are defined as “affiliated” in the Act.

(d) 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, 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.

(e) 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 has an unused capital loss carryover of $31,426,306 available for federal income tax purposes to be applied against future net securities profits, if any, realized subsequent to October 31, 2003. If not applied, $235,550 of the carryover expires in fiscal 2007, $3,064,821 expires in fiscal 2008, $5,341,001 expires in fiscal 2009, $14,181,361 expires in fiscal 2010 and $8,603,573 expires in fiscal 2011.

The Fund 19

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

There were no distributions paid to shareholders during the fiscal year ended October 31, 2003. The tax character of current year distributions will be determined at the end of the current fiscal year.

NOTE 2—Investment Management Fee and Other Transactions With Affiliates:

(a) Investment management fee: Pursuant to an Investment Management Agreement with Dreyfus, Dreyfus provides or arranges for one or more third parties and/or affiliates to provide investment advisory, administrative, custody, fund accounting and transfer agency services to the fund. Dreyfus also directs the investments of the fund in accordance with its investment objective, policies and limitations. For these services, the fund is contractually obligated to pay Dreyfus a fee, calculated daily and paid monthly, at the annual rate of 1.10% of the value of the fund's average daily net assets. Out of its fee, Dreyfus pays all of the expenses of the fund except brokerage fees, taxes, interest, commitment fees, Rule 12b-1 distribution fees and expenses, service fees, expenses of non-interested Directors (including counsel fees) and extraordinary expenses. In addition, Dreyfus is required to reduce its fee in an amount equal to the fund's allocable portion of fees and expenses of the non-interested Directors (including counsel fees). Each Director receives $40,000 per year, plus $5,000 for each joint Board meeting of the Company, The Dreyfus/Laurel Tax-Free Municipal Funds and The Dreyfus/Laurel Funds Trust (the “Dreyfus/Laurel Funds”) attended, $2,000 for separate committee meetings attended which are not held in conjunction with a regularly scheduled board meeting and $500 for Board meetings and separate committee meetings attended that are conducted by telephone and is reimbursed for travel and out-of-pocket expenses. The Chairman of the Board receives an additional 25% of such compensation (with the exception of reimbursable amounts). In the event that there is a joint committee meeting of the Dreyfus/Laurel Funds and the Dreyfus High Yield Strategies Fund, the $2,000 fee will be allocated between

20

the Dreyfus/Laurel Funds and the Dreyfus High Yield Strategies Fund. These fees and expenses are charged and allocated to each series based on net assets. Amounts required to be paid by the Company directly to the non-interested Directors, that would be applied to offset a portion of the management fee payable to Dreyfus, are in fact paid directly by Dreyfus to the non-interested Directors.

The components of Due to The Dreyfus Corporation and affiliates in the Statement of Assets and Liabilities consists of: management fees $260,521, Rule 12b-1 distribution plan fees $137,160 and service plan fees $40,054.

Pursuant to a Sub-Investment Advisory Agreement between Dreyfus and Sarofim & Co., Dreyfus pays Sarofim & Co. an annual fee of .30 of 1% of the value of the fund's average daily net assets, payable monthly.

During the period ended April 30, 2004, the Distributor retained $14,802 and $445 from commissions earned on sales of the fund's Class A and Class T shares, respectively, and $190,253 and $6,823 from contingent deferred sales charges on redemptions of the fund's Class B and Class C shares, respectively.

(b) Distribution and service plan: Under separate Distribution Plans (the “Plans”) adopted pursuant to Rule 12b-1 under the Act, Class A shares may pay annually up to .25% of the value of its average daily net assets to compensate the Distributor for shareholder servicing activities and expenses primarily intended to result in the sale of Class A shares. Class B, Class C and Class T shares pay the Distributor for distributing their shares at an aggregate annual rate of .75% of the value of the average daily net assets of Class B and Class C shares and .25% of the value of the average daily net assets of Class T shares. The Distributor may pay one or more agents in respect of advertising, marketing and other distribution services for Class T shares and determines the amounts, if any, to be paid to agents and the basis on which

The Fund 21

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

such payments are made. Class B, Class C and Class T shares are also subject to a service plan adopted pursuant to Rule 12b-1 (the “Service Plan”), under which Class B, Class C and Class T shares pay the Distributor for providing certain services to the holders of their shares a fee at the annual rate of .25% of the value of the average daily net assets of Class B, Class C and Class T shares. During the period ended April 30, 2004, Class A, Class B, Class C and Class T shares were charged $110,916, $517,147, $223,009 and $6,633, respectively, pursuant to their respective Plans. During the period ended April 30, 2004, Class B, Class C and Class T shares were charged $172,383, $74,336 and $6,633, respectively, pursuant to the Service Plan.

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

(c) Pursuant to an exemptive order from the Securities and Exchange Commission, the fund may invest its available cash balances in affiliated money market mutual funds. Management fees of the underlying money market mutual funds have been waived by Dreyfus. During the period ended April 30, 2004, the fund derived $433 in income from these investments, which is included in dividend income in the fund's Statement of Operations.

NOTE 3—Securities Transactions:

The aggregate amount of sales of investment securities, excluding short-term securities, during the period ended April 30, 2004, amounted $21,214,339.

At April 30, 2004, accumulated net unrealized appreciation on investments was $23,115,141, consisting of $39,490,513 gross unrealized appreciation and $16,375,372 gross unrealized depreciation.

22

At April 30, 2004, 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 4—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.

The average daily amount of borrowings outstanding under the Facility during the period ended April 30, 2004, was approximately $427,000, with a related weighted average annualized interest rate of 1.41%.

NOTE 5—Legal Matters:

Two class actions have been filed against Mellon Financial and Mellon Bank, N.A., and Dreyfus and Founders Asset Management LLC (the “Investment Advisers”), and the directors of all or substantially all of the Dreyfus funds, alleging that the Investment Advisers improperly used assets of the Dreyfus funds, in the form of directed brokerage commissions and 12b-1 fees, to pay brokers to promote sales of Dreyfus funds, and that the use of fund assets to make these payments was not properly disclosed to investors.The complaints further allege that the directors breached their fiduciary duties to fund shareholders under the Investment Company Act of 1940 and at common law.The complaints seek unspecified compensatory and punitive damages, rescission of the funds' contracts with the Investment Advisers, an accounting of all fees paid, and an award of attorneys' fees and litiga-

The Fund 23

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

tion expenses. Dreyfus and the Dreyfus funds believe the allegations to be totally without merit and will defend the actions vigorously.

Additional lawsuits arising out of these circumstances and presenting similar allegations and requests for relief may be filed against the defendants in the future. Neither Dreyfus nor the Dreyfus funds believe that any of the pending actions will have a material adverse effect on the Dreyfus funds or Dreyfus' ability to perform its contracts with the Dreyfus funds.

NOTE 6—Subsequent Event:

On April 22, 2004, the fund's Board of Directors approved an Agreement and Plan of Reorganization, subject to the approval of shareholders of Dreyfus Premier Core Equity Fund, on or about September 8, 2004, providing for the fund to acquire the net assets of Dreyfus Premier Core Equity Fund in exchange for shares of Capital Stock of the fund.

24

For More Information

Dreyfus Premier
Tax Managed Growth Fund
200 Park Avenue
New York, NY 10166
 
Investment Adviser
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
 
Sub-Investment Adviser
Fayez Sarofim & Co.
Two Houston Center
Suite 2907
Houston,TX 77010
 
Custodian
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
 
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

To obtain information:

By telephone

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

By mail Write to: The Dreyfus Premier Family of Funds 144 Glenn Curtiss Boulevard Uniondale, NY 11556-0144

A description of the policies and procedures that the fund uses to determine how to vote proxies relating to portfolio securities is available, without charge, by calling the telephone number listed above, or by visiting the SEC's website at http://www.sec.gov

© 2004 Dreyfus Service Corporation 0149SA0404

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
  		 Letter from the Chairman
3
  		 Discussion of Fund Performance
6
  		 Statement of Investments
7
  		 Statement of Assets and Liabilities
8
  		 Statement of Operations
9
  		 Statement of Changes in Net Assets
10
  		 Financial Highlights
12
  		 Notes to Financial Statements

FOR MORE INFORMATION

Back Cover

   Dreyfus
U.S. Treasury Reserves

The Fund

LETTER FROM THE CHAIRMAN

Dear Shareholder:

This semiannual report for Dreyfus U.S.Treasury Reserves covers the six-month period from November 1, 2003, through April 30, 2004. Inside, you'll find valuable information about how the fund was managed during the reporting period, including a discussion with the fund's portfolio manager, Laurie Carroll.

Positive economic data continued to accumulate during the reporting period, as consumers, flush with extra cash from federal tax refunds and mortgage refinancings, continued to spend. At the same time, recent evidence of stronger job growth supports the view that corporations have become more willing to spend and invest. However, an aggressively accommodative U.S. monetary policy has kept short-term interest rates near historical lows.

Despite their low yields, we continue to believe that liquidity and stability make money market funds a valuable component of many investors' portfolios. Although our analysts and portfolio managers work hard to identify trends that may move the markets, no one can know with complete certainty what lies ahead for the U.S. economy and the money markets. As always, we encourage you to review your investments regularly with your financial advisor, who may be in the best position to suggest ways to position your portfolio for the opportunities and challenges of today's financial markets.

Thank you for your continued confidence and support.

Sincerely,

Stephen E. Canter

Chairman and Chief Executive Officer The Dreyfus Corporation

May 17, 2004

2

DISCUSSION OF FUND PERFORMANCE

Laurie Carroll, Portfolio Manager

How did Dreyfus U.S. Treasury Reserves perform during the period?

For the six-month period ended April 30, 2004, the fund's Investor shares produced an annualized yield of 0.28% while its Class R shares produced a yield of 0.48%. Taking into account the effects of compounding, the fund's Investor shares and Class R shares also produced annualized effective yields of 0.28% and 0.48%, respectively.1

We attribute the fund's performance to low interest rates during the reporting period, which resulted in low yields for U.S. Treasury bills and notes.

What is the fund's investment approach?

The fund seeks a high level of current income consistent with stability of principal. As a U.S. Treasury money market fund, we attempt to provide shareholders with an investment vehicle that is made up of Treasury bills and notes issued by the United States government as well as repurchase agreements with securities dealers, which are backed by U.S. Treasuries. To pursue its goal, the fund invests exclusively in direct obligations of the U.S.Treasury and in repurchase agreements secured by these obligations.

What other factors influenced the fund's performance?

Although the U.S. economy appeared to gain strength in the early part of the reporting period, the job market generally remained sluggish.As a result, the Federal Reserve Board (the “Fed”) left short-term interest rates unchanged at 1%, citing the ability to remain “patient” in a strengthening economy while inflationary pressures remained low.

In addition, despite a rising supply of U.S. Treasury securities as the federal budget deficit ballooned, investors looked toward other types of short-term securities, such as those issued by U.S. government

The Fund 3

DISCUSSION OF FUND PERFORMANCE (continued)

agencies, in an attempt to capture higher yields.As a result, demand for U.S. Treasury securities fell during the reporting period, putting upward pressure on yields toward the longer end of the short-term maturity range. In response to these economic and technical factors, we extended the fund's weighted average maturity early in the reporting period to a position we considered slightly longer than average in an effort to capture incrementally higher yields.

By early 2004, the U.S. economy began to show signs of more robust improvement, including higher retail sales, strong home sales and housing starts, increased factory orders and higher public infrastructure spending. In addition, corporations began to spend and invest more in capital projects after many had cut costs, strengthened their balance sheets and refinanced their debt during the previous downturn. Improving sales and lower costs helped fuel higher earnings for many companies, including manufacturers that also benefited from consolidation within their industries. However, the apparent absence of inflationary pressures kept money market yields near historically low levels during the first quarter of the new year.

The market environment began to change in early April, with the release of data showing stronger than expected improvement in the labor markets. Many investors interpreted the data as a sign that long-dormant inflationary pressures might be resurfacing. Higher energy and commodity prices lent credence to this view, causing many investors to believe that the Fed might begin to raise short-term interest rates.As a result, yields of longer-dated U.S.Treasury bills began to rise while yields of very short-term securities remained anchored by the 1% federal funds rate.

As the yield differences between shorter- and longer-term instruments widened, we began to adopt a more defensive position, reducing the fund's weighted average maturity toward a range that we considered to be roughly in line with that of other money market funds.This strategy was designed to give us the flexibility we need to capture higher yields as they became available.

4

What is the fund's current strategy?

Just days after the end of the reporting period, the Fed chose to leave interest rates unchanged at its May meeting. However, it also refrained from stating that it could be patient before raising rates, suggesting instead that future rate hikes were likely to be “measured.”

Because the markets had anticipated the Fed's stance, the market already appeared to us to reflect the possibility of higher interest rates. Accordingly, just before the end of the reporting period, we extended the fund's weighted average maturity to a range that is slightly longer than average. As of April 30, 2004, the fund's average maturity was 48 days, compared to 36 days when the reporting period began. This positioning was designed to capture higher yields from securities toward the long end of the fund's maturity range.

In addition, as of the end of the reporting period, approximately 59% of the fund's assets was invested in U.S.Treasury securities and 41% was allocated to repurchase agreements. As always, we are prepared to modify the fund's weighted average maturity and composition as conditions evolve.

May 17, 2004

  • Annualized effective yield is based upon dividends declared daily and reinvested monthly. Past performance is no guarantee of future results.Yields fluctuate. An investment in the fund is not insured or guaranteed by the FDIC or the U.S. government. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund.

The Fund 5

STATEMENT OF INVESTMENTS
April 30, 2004 (Unaudited)
      Annualized          
      Yield on          
      Date of   Principal      
U.S. Treasury Bills—22.9%   Purchase (%)   Amount ($)   Value ($)  
 
 
 
5/20/2004   .91   5,000,000   4,997,612  
7/15/2004   .95   20,000,000   19,960,373  
8/5/2004   .95   10,000,000   9,974,666  
Total U.S. Treasury Bills              
   (cost $ 34,932,651)           34,932,651  
 
 
 
                 
U.S. Treasury Notes—36.1%            
 
 
 
3.25%, 5/31/2004   .94   10,000,000   10,019,129  
2.875%, 6/30/2004   .93   10,000,000   10,031,771  
2.25%, 7/31/2004   .99   20,000,000   20,062,378  
6%, 8/15/2004   .97   5,000,000   5,072,798  
2.125%, 8/31/2004   1.01   10,000,000   10,036,127  
Total U.S. Treasury Notes              
   (cost $ 55,222,203)           55,222,203  
 
 
 
                 
Repurchase Agreements—40.8%            
 
 
 
Goldman Sachs & Co.              
dated 4/30/2004, due 5/3/2004 in the amount            
of $22,298,037 (fully collateralized by            
$16,833,000 U.S. Treasury Bonds            
8.125%-9.125%, due 5/15/2018-8/15/2019,            
   value $ 22,742,557)   .91   22,296,346   22,296,346  
Greenwich Capital Markets, Inc.              
dated 4/30/2004, due 5/3/2004 in the amount            
of $40,003,033 (fully collateralized by            
$109,170,000 U.S. Treasury Strip Bonds            
8%, due 11/15/2021, value $ 40,801,198) .91   40,000,000   40,000,000  
Total Repurchase Agreements              
   (cost $ 62,296,346)           62,296,346  
 
 
 
                 
Total Investments (cost $ 152,451,200)     99.8%   152,451,200  
Cash and Receivables (Net)       .2%   341,239  
Net Assets       100.0%   152,792,439  

See notes to financial statements.

6

STATEMENT OF ASSETS AND LIABILITIES
April 30, 2004 (Unaudited)
    Cost Value  
 
Assets ($):        
Investments in securities—See Statement of      
Investments (including Repurchase Agreements      
of $62,296,346)—Note 1(c) 152,451,200 152,451,200  
Cash     22,781  
Interest receivable   442,668  
      152,916,649  
 
Liabilities ($):        
Due to The Dreyfus Corporation and affiliates—Note 2(a)   77,577  
Payable for shares of Capital Stock redeemed   315  
Dividend payable   46,318  
      124,210  
 
Net Assets ( $)   152,792,439  
 
Composition of Net Assets ($):      
Paid-in capital     152,791,608  
Accumulated net realized gain (loss) on investments   831  
 
Net Assets ( $)   152,792,439  
Net Asset Value Per Share        
  Investor Shares   Class R Shares  
 
 
Net Assets ($) 78,564,551   74,227,888  
Shares Outstanding 78,564,071   74,227,537  
 
 
Net Asset Value Per Share ($) 1.00   1.00  

See notes to financial statements.

The Fund 7

STATEMENT OF OPERATIONS
Six Months Ended April 30, 2004 (Unaudited)
Investment Income ($):    
Interest Income 782,102  
Expenses:    
Management fee—Note 2(a) 397,438  
Distribution fees (Investor Shares)—Note 2(b) 83,854  
Total Expenses 481,292  
Investment Income—Net, representing net increase    
   in net assets resulting from operations 300,810  

See notes to financial statements.

8

STATEMENT OF CHANGES IN NET ASSETS

  Six Months Ended      
  April 30, 2004   Year Ended  
  (Unaudited)   October 31, 2003  
 
 
Operations ($):        
Investment income—net 300,810   906,543  
Net realized gain (loss) on investments —   831  
Net Increase (Decrease) in Net Assets        
   Resulting from Operations 300,810   907,374  
 
 
Dividends to Shareholders from ($):        
Investment income—net:        
Investor shares (119,335)   (466,429)  
Class R shares (181,475)   (440,114)  
Total Dividends (300,810)   (906,543)  
 
 
Capital Stock Transactions ($1.00 per share):        
Net proceeds from shares sold:        
Investor shares 48,885,707   86,938,807  
Class R shares 81,279,984   213,811,534  
Dividends reinvested:        
Investor shares 115,816   460,432  
Class R shares 28,466   7,004  
Cost of shares redeemed:        
Investor shares (62,423,721)   (85,362,778)  
Class R shares (67,377,826)   (219,368,808)  
Increase (Decrease) in Net Assets        
   from Capital Stock Transactions 508,426   (3,513,809)  
Total Increase (Decrease) in Net Assets 508,426   (3,512,978)  
 
 
Net Assets ($):        
Beginning of Period 152,284,013   155,796,991  
End of Period 152,792,439   152,284,013  

See notes to financial statements.

The Fund 9

FINANCIAL HIGHLIGHTS

The following tables describe the performance for each share class for the fiscal periods indicated. All information 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                      
  April 30, 2004       Year Ended October 31,      
         
     
Investor Shares (Unaudited)   2003   2002   2001   2000   1999  
 
 
 
 
 
 
Per Share Data ($):                        
Net asset value,                        
   beginning of period 1.00   1.00   1.00   1.00   1.00   1.00  
Investment Operations:                        
Investment income—net .001   .005   .012   .046   .053   .042  
Net realized and unrealized                        
   gain (loss) on investments —   —   —   .002   —   —  
Total from Investment Operations .001   .005   .012   .048   .053   .042  
Distributions:                        
Dividends from                        
   investment income—net (.001)   (.005)   (.012)   (.046)   (.053)   (.042)  
Dividends from net realized                        
   gain on investments —   —   —   (.002)   —   —  
Total Distributions (.001)   (.005)   (.012)   (.048)   (.053)   (.042)  
Net asset value, end of period 1.00   1.00   1.00   1.00   1.00   1.00  
 
 
 
 
 
 
Total Return (%) .28a   .51   1.23   4.66   5.42   4.27  
 
 
 
 
 
 
Ratios/Supplemental Data (%):                        
Ratio of expenses                        
   to average net assets .70a   .70   .70   .70   .70   .70  
Ratio of net investment income                        
   to average net assets .28a   .51   1.20   4.25   5.28   4.16  
 
 
 
 
 
 
Net Assets, end of period                        
   ($ x 1,000) 78,565   91,987   89,950   45,969   34,482   36,375  

a Annualized.

See notes to financial statements.

10

  Six Months Ended                      
  April 30, 2004       Year Ended October 31,      
         
     
Class R Shares (Unaudited)   2003   2002   2001   2000   1999  
 
 
 
 
 
 
Per Share Data ($):                        
Net asset value,                        
   beginning of period 1.00   1.00   1.00   1.00   1.00   1.00  
Investment Operations:                        
Investment income—net .002   .007   .014   .048   .055   .044  
Net realized and unrealized                        
   gain (loss) on investments —   —   —   .002   —   —  
Total from Investment Operations .002   .007   .014   .050   .055   .044  
Distributions:                        
Dividends from                        
   investment income—net (.002)   (.007)   (.014)   (.048)   (.055)   (.044)  
Dividends from net realized                        
   gain on investments —   —   —   (.002)   —   —  
Total Distributions (.002)   (.007)   (.014)   (.050)   (.055)   (.044)  
Net asset value, end of period 1.00   1.00   1.00   1.00   1.00   1.00  
 
 
 
 
 
 
Total Return (%) .48a   .72   1.43   4.88   5.64   4.48  
 
 
 
 
 
 
Ratios/Supplemental Data (%):                        
Ratio of expenses                        
   to average net assets .50a   .50   .50   .50   .50   .50  
Ratio of net investment income                        
   to average net assets .48a   .72   1.43   4.95   5.49   4.40  
 
 
 
 
 
 
Net Assets, end of period                        
   ($ x 1,000) 74,228   60,297   65,847   101,909   591,466   564,774  

a Annualized.

See notes to financial statements.

The Fund 11

NOTES TO FINANCIAL STATEMENTS (Unaudited)

NOTE 1—Significant Accounting Policies:

Dreyfus U.S. Treasury Reserves (the “fund”) is a separate diversified series of The Dreyfus/Laurel Funds, Inc. (the “Company”) which is registered under the Investment Company Act of 1940, as amended (the “Act”), as an open-end management investment company and operates as a series company currently offering sixteen series including the fund.The fund's investment objective is to seek a high level of current income consistent with stability of principal by investing in direct obligations of U.S.Treasury and repurchase agreements secured by these obligations. 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”).

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 1 billion shares of $.001 par value Capital Stock in each of the following classes of shares: Investor and Class R. Investor shares are sold primarily to retail investors and bear a distribution fee. Class R shares are sold primarily to bank trust departments and other financial service providers (including Mellon and its affiliates) acting on behalf of customers having a qualified trust or investment account or relationship at such institution, and bear no distribution fee. Each class of shares has identical rights and privileges, except with respect to the distribution fee and voting rights on matters affecting a single class.

Investment income, net of expenses (other than class specific expenses) and realized and unrealized gains and losses are allocated daily to each class of shares based upon the relative proportion of net assets of each class.

The fund's financial statements are prepared in accordance with U.S. generally accepted accounting principles, which may require the use

12

of management estimates and assumptions. Actual results could differ from those estimates.

(a) Portfolio valuation: Investments in securities are valued at amortized cost in accordance with Rule 2a-7 of the Act, which has been determined by the fund's Board of Directors to represent the fair value of the fund's investments.

It is the fund's policy to maintain a continuous net asset value per share of $1.00 for the fund; the fund has adopted certain investment, portfolio valuation and dividend and distribution policies to enable it to do so. There is no assurance, however, that the fund will be able to maintain a stable net asset value per share of $1.00.

(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 investment, is earned from settlement date and is recognized on the accrual basis. Cost of investments represents amortized cost.

(c) Repurchase agreements: The fund may engage in repurchase agreement transactions. Under the terms of a typical repurchase agreement, the fund, through its custodian and sub-custodian, takes possession of an underlying debt obligation subject to an obligation of the seller to repurchase, and the fund to resell, the obligation at an agreed-upon price and time, thereby determining the yield during the fund's holding period.This arrangement results in a fixed rate of return that is not subject to market fluctuations during the fund's holding period. The value of the collateral is at least equal, at all times, to the total amount of the repurchase obligation, including interest. In the event of a counter party default, the fund has the right to use the collateral to offset losses incurred. There is potential loss to the fund in the event the fund is delayed or prevented from exercising its rights to dispose

The Fund 13

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

of the collateral securities, including the risk of a possible decline in the value of the underlying securities during the period while the fund seeks to assert its rights.The Manager, acting under the supervision of the Board of Directors, reviews the value of the collateral and the cred-itworthiness of those banks and dealers with which the fund enters into repurchase agreements to evaluate potential risks.

(d) 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.

(e) 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 tax character of distributions paid to shareholders during the fiscal year ended October 31, 2003 were all ordinary income. The tax character of current year distributions will be determined at the end of the current fiscal year.

At April 30, 2004, 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 2—Investment Management Fee and Other Transactions with Affiliates:

(a) Investment management fee: Pursuant to an Investment Management agreement with the Manager, the Manager provides or arranges for one or more third parties and/or affiliates to provide

14

investment advisory, administrative, custody, fund accounting and transfer agency services to the fund. The Manager also directs the investments of the fund in accordance with its investment objective, policies and limitations. For these services, the fund is contractually obligated to pay the Manager a fee, calculated daily and paid monthly, at the annual rate of .50% of the value of the fund's average daily net assets. Out of its fee, the Manager pays all of the expenses of the fund except brokerage fees, taxes, interest, Rule 12b-1 distribution fees, service fees and expenses, fees and expenses of non-interested Directors (including counsel fees) and extraordinary expenses. In addition, the Manager is required to reduce its fee in an amount equal to the fund's allocable portion of fees and expenses of the non-interested Directors (including counsel fees). Each Director receives $40,000 per year, plus $5,000 for each joint Board meeting of the Company, The Dreyfus/Laurel Tax-Free Municipal Funds, and The Dreyfus/Laurel Funds Trust (the “Dreyfus/Laurel Funds”) attended, $2,000 for separate committee meetings attended which are not held in conjunction with a regularly scheduled board meeting and $500 for Board meetings and separate committee meetings attended that are conducted by telephone and is reimbursed for travel and out-of-pocket expenses. The Chairman of the Board receives an additional 25% of such compensation (with the exception of reimbursable amounts). In the event that there is a joint committee meeting of the Dreyfus/Laurel Funds and the Dreyfus High Yield Strategies Fund, the $2,000 fee will be allocated between the Dreyfus/Laurel Funds and the Dreyfus High Yield Strategies Fund. These fees and expenses are charged and allocated to each series based on net assets. Amounts required to be paid by the Company directly to the non-interested Directors, that would be applied to offset a portion of the management fee payable to the Manager, are in fact paid directly by the Manager to the non-interested Directors.

The components of Due to The Dreyfus Corporation and affiliates in the Statement of Assets and Liabilities consists of: management fees $64,597 and Rule 12b-1 distribution plan fees $12,980.

The Fund 15

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

(b) Distribution plan: Under the fund's Distribution Plan (the “Plan”) adopted pursuant to Rule 12b-1 under the Act, Investor shares may pay annually up to .25% (currently limited by the Company's Board of Directors to .20%) of the value of the average daily net assets attributable to its Investor shares to compensate the Distributor for shareholder servicing activities and expenses primarily intended to result in the sale of Investor shares. During the period April 30, 2004, Investor shares were charged $83,854 pursuant to the Plan.

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

NOTE 3—Bank Line of Credit:

The fund participates with other Dreyfus-managed funds in a $100 million unsecured line of credit primarily to be utilized for temporary or emergency purposes, including the financing of redemptions. Interest is charged to the fund based on prevailing market rates in effect at the time of borrowings. During the period ended April 30, 2004, the fund did not borrow under the line of credit.

NOTE 4—Legal Matters:

Two class actions have been filed against Mellon Financial and Mellon Bank, N.A., and Dreyfus and Founders Asset Management LLC (the “Investment Advisers”), and the directors of all or substantially all of the Dreyfus funds, alleging that the Investment Advisers improperly used assets of the Dreyfus funds, in the form of directed brokerage commissions and 12b-1 fees, to pay brokers to promote sales of Dreyfus funds, and that the use of fund assets to make these payments was not properly disclosed to investors.The complaints further allege that the directors breached their fiduciary duties to fund shareholders under the Investment Company Act of 1940 and at common law.The complaints seek unspecified compensatory and punitive damages,

16

rescission of the funds' contracts with the Investment Advisers, an accounting of all fees paid, and an award of attorneys' fees and litigation expenses. Dreyfus and the Dreyfus funds believe the allegations to be totally without merit and will defend the actions vigorously.

Additional lawsuits arising out of these circumstances and presenting similar allegations and requests for relief may be filed against the defendants in the future. Neither Dreyfus nor the Dreyfus funds believe that any of the pending actions will have a material adverse effect on the Dreyfus funds or Dreyfus' ability to perform its contracts with the Dreyfus funds.

The Fund 17

For More Information

Dreyfus
U.S. Treasury Reserves
200 Park Avenue
New York, NY 10166
 
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
 
Custodian
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
 
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
200 Park Avenue
New York, NY 10166
 
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166

To obtain information:

By telephone

Call 1-800-645-6561

By mail Write to:

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

By E-mail Send your request to info@dreyfus.com

On the Internet Information can be viewed online or downloaded from: http://www.dreyfus.com

© 2004 Dreyfus Service Corporation 0326SA0404

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. [Reserved]

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management

Investment Companies.

Not applicable.

Item 8. Purchases of Equity Securities by Closed-End Management Investment Companies and Affiliated Purchasers.

Not applicable.

Item 9. Submission of Matters to a Vote of Security Holders.

The Fund has a Nominating Committee, which is responsible for selecting and nominating persons for election or appointment by the Fund's Board as Board members. The Committee has adopted a Nominating Committee Charter (“Charter”). Pursuant to the Charter, the Committee will consider recommendations for nominees from shareholders submitted to the Secretary of the Fund, c/o The Dreyfus Corporation Legal Department, 200 Park Avenue, 8th Floor West, 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 Fund 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

-3-

information must be provided regarding the recommended nominee as reasonably requested by the Committee.

Item 10. 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 Registrant's most recently ended fiscal half-year that have materially affected, or are reasonably likely to materially affect, the Registrant's internal control over financial reporting.

Item 11. 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.

-4-

SIGNATURES

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

The Dreyfus/Laurel Funds, Inc.
   
By: /s/ Stephen E. Canter_
 
  Stephen E. Canter
  President
   
Date: June 25, 2004

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/ Stephen E. Canter
 
  Stephen E. Canter
  Chief Executive Officer
   
Date: June 25, 2004
   
By: /s/ James Windels
 
  James Windels
  Chief Financial Officer
   
Date: June 25, 2004

EXHIBIT INDEX

(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. (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)

-5-