Dreyfus
Municipal Income, Inc.
ANNUAL REPORT
September 30, 2001
DREYFUS MUNICIPAL INCOME, INC.
PROTECTING YOUR PRIVACY
OUR PLEDGE TO YOU
THE FUND IS COMMITTED TO YOUR PRIVACY. On this page, you will find the
fund's policies and practices for collecting, disclosing, and safeguarding
"nonpublic personal information," which may include financial or other
customer information. These policies apply to individuals who purchase Fund
shares for personal, family, or household purposes, or have done so in the
past. This notification replaces all previous statements of the Fund's
consumer privacy policy, and may be amended at any time. We'll keep you
informed of changes as required by law.
YOUR ACCOUNT IS PROVIDED IN A SECURE ENVIRONMENT. The Fund maintains
physical, electronic and procedural safeguards that comply with federal
regulations to guard nonpublic personal information. The Fund's agents and
service providers have limited access to customer information based on their
role in servicing your account.
THE FUND COLLECTS INFORMATION IN ORDER TO SERVICE AND ADMINISTER YOUR
ACCOUNT. The Fund collects a variety of nonpublic personal information,
which may include:
* Information we receive from you, such as your name, address, and social
security number.
* Information about your transactions with us, such as the purchase or sale
of Fund shares.
* Information we receive from agents and service providers, such as proxy
voting information.
THE FUND DOES NOT SHARE NONPUBLIC PERSONAL INFORMATION WITH ANYONE, EXCEPT AS
PERMITTED BY LAW.
THANK YOU FOR THIS OPPORTUNITY TO SERVE YOU.
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured * Not Bank-Guaranteed * May Lose Value
Contents
THE FUND
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2 Letter from the Chairman
3 Discussion of Fund Performance
6 Selected Information
7 Statement of Investments
14 Statement of Assets and Liabilities
15 Statement of Operations
16 Statement of Changes in Net Assets
17 Financial Highlights
18 Notes to Financial Statements
23 Report of Independent Auditors
24 Additional Information
27 Important Tax Information
28 Proxy Results
29 Officers and Directors
FOR MORE INFORMATION
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Back Cover
The Fund
Dreyfus
Municipal Income, Inc.
LETTER FROM THE CHAIRMAN
Dear Shareholder:
This annual report for Dreyfus Municipal Income, Inc. covers the 12-month period
from October 1, 2000 through September 30, 2001. 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, Joseph Darcy.
It is impossible to address the economy and the financial markets without first
mentioning the devastating events that befell the U.S. on Tuesday, September 11,
2001. On behalf of The Dreyfus Corporation, I would like to extend heartfelt
sympathies to all who have been touched by these tragedies and assure you that
we continue to support the relief efforts.
Even before the September 11 attacks, a slowing economy and a return to more
normal valuations took their toll on stocks and high yield bonds. And,
realistically, the investment environment has become even more challenging in
the wake of these traumatic events. However, municipal bonds have generally been
one of the bright spots in an otherwise difficult investment environment.
Although lower interest rates generally caused tax-exempt bond yields to fall,
investors who allocated a portion of their overall investment portfolios to
municipal bonds enjoyed the benefits of tax-exempt income and potential capital
appreciation.
Over the past 50 years, we at Dreyfus have seen investment climates wax and
wane, alternately leading to optimism and pessimism among investors. But,
through it all, three enduring investment principles have helped investors
weather the periodic storms: ASSET ALLOCATION, DIVERSIFICATION and a LONG-TERM
PERSPECTIVE. Together, these investing basics have consistently demonstrated
their potential to improve performance, manage risk and combat volatility, even
during exaggerated market swings.
Given the current market environment, now might be a good time to ensure that
your investments are appropriately allocated and diversified for the long term.
We encourage you to contact your financial advisor for information about ways to
refine your investment strategies.
Thank you for your continued confidence and support.
Sincerely,
Stephen E. Canter
Chairman and Chief Executive Officer
The Dreyfus Corporation
October 15, 2001
DISCUSSION OF FUND PERFORMANCE
Joseph Darcy, Portfolio Manager
How did Dreyfus Municipal Income, Inc. perform during the period?
For the 12-month period ended September 30, 2001, the fund achieved a 16.41%
total return.(1) During the same period, the fund provided income dividends of
$0.528 per share, which is equal to a distribution rate of 6.06%.(2)
We attribute the fund's good performance to a favorable environment for
municipal bonds. Tax-exempt bonds provided strong returns because of falling
short-term interest rates and high levels of demand from investors fleeing a
declining stock market. However, the fund was adversely affected near the end of
the period by the tragic events of September 11.
What is the fund's investment approach?
The fund seeks high current federally tax-exempt income from a portfolio
primarily of municipal bonds. In so doing, we strive to identify bonds that we
believe can help the fund in seeking high current income.
We generally employ two primary strategies. First, we attempt to add value by
evaluating interest-rate trends and supply-and-demand factors. Based on that
assessment, we look for bonds that we believe can potentially provide high
current levels of income. We look at such criteria as the bond's yield, price,
age, the creditworthiness of its issuer and any provisions for early redemption
Second, we actively manage the fund's average duration -- a measure of
sensitivity to changes in interest rates -- in anticipation of temporary
supply-and-demand changes. For example, if we expect the supply of newly issued
bonds to increase temporarily, we may reduce the fund's average duration to make
cash available for the purchase of what we believe can potentially be higher
yielding securities. Conversely, if
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
we expect demand for municipal bonds to surge at a time when we anticipate
little issuance, we may increase the fund's average duration to maintain then
current yields for as long as we think practical.
When bonds held by the fund mature or are redeemed by their issuers, we
generally attempt to replace them with newly issued comparable securities. We
also may look to upgrade the portfolio investments, when we deem appropriate,
with newly issued bonds that, in our opinion, have better structural or income
characteristics than existing holdings.
What other factors influenced the fund's performance?
Declining interest rates in a slowing economy represented an important driver of
the fund's performance. When the reporting period began, the U.S. economy had
already begun showing signs of weakening. Capital spending by businesses fell
dramatically, and consumer confidence was compromised by a falling stock market.
In this environment, the Federal Reserve Board (the "Fed") attempted to reverse
the trend in early January 2001, when it implemented the first of the reporting
period' s eight short-term interest-rate reductions. All told, the Fed reduced
short-term interest rates by a total of 3.50 percentage points to 3.00% during
the first nine months of 2001.
At the same time that short-term bond yields fell, long-term bond yields rose,
reflecting investors' concerns about a potential re-emergence of inflationary
pressures over time. This widening of the yield differences among short-term and
long-term municipal bonds created a phenomenon known as a STEEPENING YIELD
CURVE. The combination of lower short-term interest rates and a steepening yield
curve caused prices of the fund's longer term municipal bond holdings to rise
substantially, producing attractive levels of capital appreciation.
In addition, the municipal bond market was positively influenced when demand for
higher quality, tax-exempt securities surged from investors fleeing a declining
stock market, more than offsetting a relative modest increase in supply compared
to the previous year. This also supported municipal bond prices.
What is the fund's current strategy?
We intend to continue to manage the fund with an eye toward upgrading the fund
when we deem practicable and protecting its income stream from reinvestment risk
in today's low interest-rate environment. This includes seeking income-oriented
securities that feature adequate levels of liquidity, sound economic
fundamentals and protection from early redemption. We recently found some such
opportunities in single-A rated bonds issued by hospitals, which we believed
were selling at attractive prices. After energy prices had declined and
California's energy crisis had abated, we also invested in what we believed were
beaten down bonds from utilities outside of California.
October 15, 2001
(1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS PAID,
BASED UPON NET ASSET VALUE PER SHARE. PAST PERFORMANCE IS NO GUARANTEE OF
FUTURE RESULTS. MARKET PRICE PER SHARE, NET ASSET VALUE PER SHARE AND
INVESTMENT RETURN 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. CAPITAL GAINS, IF ANY, ARE FULLY TAXABLE.
(2) DISTRIBUTION RATE PER SHARE IS BASED UPON DIVIDENDS PER SHARE PAID FROM NET
INVESTMENT INCOME DURING THE PERIOD, DIVIDED BY THE MARKET PRICE PER SHARE
AT THE END OF THE PERIOD.
The Fund
SELECTED INFORMATION
September 30, 2001 (Unaudited)
Market Price per share September 30, 2001 $ 8.71
Shares Outstanding September 30, 2001 20,382,927
American Stock Exchange Ticker Symbol DMF
MARKET PRICE (AMERICAN STOCK EXCHANGE)
Fiscal Year Ended September 30, 2001
--------------------------------------------------------------------------------------------------------------------------------
QUARTER QUARTER QUARTER QUARTER
ENDED ENDED ENDED ENDED
DECEMBER 31, 2000 MARCH 31, 2001 JUNE 30, 2001 SEPTEMBER 30, 2001
------------------------------------------------------------------------------------------------------------------------------------
High $8.19 $ 9.00 $8.80 $9.15
Low 7.31 8.31 8.46 8.28
Close 8.00 8.86 8.77 8.71
PERCENTAGE GAIN based on change in Market Price*
October 24, 1988 (commencement of operations)
through September 30, 2001 112.47%
October 1, 1991 through September 30, 2001 73.05
October 1, 1996 through September 30, 2001 25.31
October 1, 2000 through September 30, 2001 17.55
January 1, 2001 through September 30, 2001 13.82
April 1, 2001 through September 30, 2001 1.27
July 1, 2001 through September 30, 2001 .79
NET ASSET VALUE PER SHARE
October 24, 1988 (commencement of operations) $ 9.26
September 30, 2000 8.82
December 31, 2000 9.18
March 31, 2001 9.37
June 30, 2001 9.39
September 30, 2001 9.66
PERCENTAGE GAIN based on change in Net Asset Value*
October 24, 1988 (commencement of operations)
through September 30, 2001 154.48%
October 1, 1991 through September 30, 2001 95.25
October 1, 1996 through September 30, 2001 38.44
October 1, 2000 through September 30, 2001 16.41
January 1, 2001 through September 30, 2001 10.01
April 1, 2001 through September 30, 2001 6.20
July 1, 2001 through September 30, 2001 4.40
* WITH DIVIDENDS REINVESTED.
STATEMENT OF INVESTMENTS
September 30, 2001
Principal
LONG-TERM MUNICIPAL INVESTMENTS--97.2% Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
ALABAMA--5.2%
Courtland Industrial Development Board, SWDR
(Champion International Corp. Project)
6.50%, 9/1/2025 2,500,000 2,576,450
Jefferson County, Sewer Revenue, Capital Improvement
5.75%, 2/1/2038 (Insured; FGIC) 7,500,000 7,877,250
The Board of Trustees of the University of Alabama, HR
(University of Alabama at Birmingham)
5.875%, 9/1/2031 (Insured; MBIA) 4,620,000 4,920,023
ALASKA--3.3%
Alaska Housing Finance Corp., General Mortgage Revenue
6.05%, 6/1/2039 (Insured; MBIA) 7,000,000 7,288,890
Valdez, Marine Terminal Revenue
(British Petroleum Pipeline Inc. Project)
5.50%, 10/1/2028 2,375,000 2,390,153
CALIFORNIA--5.8%
Abag Financial Authority For Nonprofit Corporations:
Insured Revenue, COP
(Odd Fellows Home of California) 6%, 8/15/2024 5,000,000 5,359,000
MFHR (Civic Center Drive Apartments)
5.875%, 9/1/2032 (Insured; FSA) 3,750,000 3,887,887
California Health Facilities Financing Authority,
Revenue (Sutter Health)
6.25%, 8/15/2035 2,500,000 2,681,675
California Statewide Communties Development
Authority, COP (Catholic Healthcare West)
6.50%, 7/1/2020 5,000,000 5,280,350
COLORADO--2.7%
Colorado Springs, HR 6.375%, 12/15/2030 5,725,000 6,077,431
City and County of Denver, Airport Revenue
(Special Facilities-United Airlines Inc. Project)
6.875%, 10/1/2032 2,480,000 2,060,186
DISTRICT OF COLUMBIA--2.6%
District of Columbia, Revenue
(Catholic University of America Project)
5.625%, 10/1/2029 (Insured; AMBAC) 2,080,000 2,167,048
District of Columbia Tobacco Settlement
Financing Corp., Tobacco Settlement
Asset-Backed Bonds 6.75%, 5/15/2040 5,000,000 5,525,300
The Fund
STATEMENT OF INVESTMENTS (CONTINUED)
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
FLORIDA--2.8%
Orange County Health Facilities Authority, Revenue
(Orlando Regional Healthcare System)
6%, 10/1/2026 1,500,000 1,564,200
Pinellas County Housing Finance Authority,
SFMR (Multi-County Program)
6.70%, 2/1/2028 3,990,000 4,203,026
South Lake County Hospital District, Revenue
(South Lake Hospital Inc.) 5.80%, 10/1/2034 2,500,000 2,541,525
GEORGIA--2.2%
Private Colleges and Universities Facilities Authority,
Revenue (Clark Atlanta University Project)
8.25%, 1/1/2015 (Prerefunded 1/1/2003) 5,895,000 (a) 6,598,038
ILLINOIS--7.6%
Chicago 6.125%, 1/1/2028 (Insured; FGIC) 4,000,000 4,401,400
Chicago-O'Hare International Airport, Special Facility
Revenue (American Airlines Inc. Project)
8.20%, 12/1/2024 1,000,000 977,940
Illinois Development Finance Authority, Revenue
(Community Rehabilitation Providers Facilities
Acquisition Program):
8.75%, 3/1/2010 105,000 105,996
5.50%, 7/1/2012 1,405,000 1,383,377
Illinois Health Facilities Authority, Revenue:
(Advocate Health Care Network) 6.125%, 11/15/2022 5,800,000 6,120,914
(OSF Healthcare System) 6.25%, 11/15/2029 7,000,000 7,317,030
(Swedish American Hospital) 6.875%, 11/15/2030 2,000,000 2,172,000
INDIANA--1.0%
Franklin Township School Building Corp.
(Marion County) First Mortgage
6.125%, 1/15/2022 (Prerefunded 7/15/2010) 2,500,000 (a) 2,935,025
KENTUCKY--1.3%
Perry County, SWDR (TJ International Project)
7%, 6/1/2024 3,500,000 3,723,370
MARYLAND--2.7%
Maryland Health and Higher Educational Facilities
Authority, Revenue (The John Hopkins University Issue)
6%, 7/1/2039 (Prerefunded 7/1/2009) 7,000,000 (a) 8,050,140
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS--2.0%
Massachusetts Industrial Finance Agency, Revenue
(Water Treatment-American Hingham)
6.95%, 12/1/2035 5,640,000 5,885,904
MICHIGAN--5.5%
Hancock Hospital Finance Authority, Mortgage Revenue
(Portgage Health) 5.45%, 8/1/2047 (Insured; MBIA) 2,200,000 2,220,064
Michigan Hospital Finance Authority, HR
(Genesys Health System Obligated Group)
8.125%, 10/1/2021 (Prerefunded 10/1/2005) 7,670,000 (a) 9,278,706
Michigan Strategic Fund, SWDR
(Genesee Power Station Project)
7.50%, 1/1/2021 5,000,000 4,942,000
MINNESOTA--.9%
Minnesota Agricultural and Economic Development
Board, Health Care System Revenue
(Fairview Health Services) 6.375%, 11/15/2029 2,500,000 2,657,000
MISSISSIPPI--2.0%
Mississippi Business Finance Corp., PCR
(System Energy Resource Inc. Project)
5.875%, 4/1/2022 6,000,000 - 5,919,120
MISSOURI--3.2%
Health and Educational Facilities
Authoriity of the State of Missouri,
Health Facilities Revenue
(Saint Anthony's Medical Center)
6.25%, 12/1/2030 2,500,000 2,641,400
The Industrial Development Authority of the
City of Saint Louis, Senior Lien Revenue
(Saint Louis Convention Center
Headquarters Hotel Project):
7.20%, 12/15/2028 1,500,000 1,605,945
7.25%, 12/15/2035 3,000,000 3,211,350
Missouri Housing Development Commission,
Mortgage Revenue
(Single Family- Homeownersip Loan)
6.30%, 9/1/2025 1,945,000 2,048,357
The Fund
STATEMENT OF INVESTMENTS (CONTINUED)
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
NEVADA--5.6%
Clark County, IDR:
(Nevada Power Co. Project) 5.90%, 10/1/2030 4,000,000 3,777,880
(Southwest Gas Corp.):
7.50%, 9/1/2032 3,000,000 3,096,780
6.50%, 12/1/2033 5,300,000 5,344,520
6.10%, 12/1/2038 (Insured; AMBAC) 4,000,000 4,311,800
NEW HAMPSHIRE--1.7%
New Hampshire Industrial Development Authority, PCR
(Public Service Co. Project) 7.65%, 5/1/2021 5,000,000 5,108,100
NEW MEXICO--1.0%
Farmington, PCR (Public Service Co. San Juan)
6.30%, 12/1/2016 3,000,000 3,065,550
NEW YORK--1.0%
New York City 8.25%, 11/15/2010
(Prerefunded 11/15/2001) 3,000,000 (a) 3,068,820
NORTH CAROLINA--.9%
North Carolina Housing Finance Agency
(Home Ownership)
6.25%, 1/1/2029 2,500,000 2,624,900
NORTH DAKOTA--.1%
North Dakota Housing Finance Agency, SFMR
8.30%, 1/1/2012 294,400 297,647
OHIO--2.1%
Cuyahoga County, Hospital Improvement Revenue
(The Metrohealth System Project)
6.125%, 2/15/2024 5,000,000 5,178,100
Ohio Housing Finance Agency,
Residential Mortgage Revenue
5.75%, 9/1/2030 1,000,000 1,025,670
OKLAHOMA--.9%
Oklahoma Development Finance Authority, Revenue
(Saint John Health System) 6%, 2/15/2029 2,500,000 2,677,100
PENNSYLVANIA--1.2%
Pennsylvania Economic Development Financing Authority,
RRR (Northampton Generating Project)
6.60%, 1/1/2019 3,500,000 3,536,960
SOUTH CAROLINA--5.2%
Medical University, Hospital Facilities Revenue
6%, 7/1/2019 2,500,000 2,645,350
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
SOUTH CAROLINA (CONTINUED)
Piedmont Municipal Power Agency, Electric Revenue:
6.55%, 1/1/2016 880,000 880,334
5.25%, 1/1/2021 3,000,000 2,767,350
Tobacco Settlement Revenue Management Authority,
Tobacco Settlement Asset--Backed Bonds:
6.375%, 5/15/2028 2,900,000 3,100,767
6.375%, 5/15/2030 5,500,000 6,108,355
TEXAS--8.1%
Alliance Airport Authority Inc., Special Facilities Revenue
(American Airlines Inc. Project) 7.50%, 12/1/2029 2,375,000 2,224,900
Austin Convention Enterprises Inc., Convention Center
Hotel First Tier Revenue
6.70%, 1/1/2032 2,000,000 2,067,960
Dallas-Fort Worth International Airport Facility
Improvement Corp., Revenue
(American Airlines, Inc.) 6.375%, 5/1/2035 2,500,000 1,999,575
Gregg County Health Facilities Development Corp., HR
(Good Shepherd Medical Center Project)
6.375%, 10/1/2025 2,500,000 2,708,925
Harris County Health Facilities Development Corp., HR
(Memorial Hermann Healthcare) 6.375%, 6/1/2029 3,565,000 3,777,046
Port of Corpus Christi Authority, Nueces County,
General Revenue (Union Pacific) 5.65%, 12/1/2022 4,000,000 3,912,720
Texas, Veterans Housing Assistance Program
6.10%, 6/1/2031 7,000,000 7,392,210
UTAH--2.1%
Carbon County, SWDR (Sunnyside Cogeneration):
7.10%, 8/15/2023 3,345,000 3,473,615
Zero Coupon, 8/15/2024 1,080,000 276,523
Utah Housing Finance Agency, Single Family Mortgage
6%, 1/1/2031 2,485,000 2,596,701
VERMONT--1.1%
Vermont Housing Finance Agency, Single Family Housing
6.40%, 11/1/2030 (Insured; FSA) 3,000,000 3,175,860
WASHINGTON--2.5%
Public Utility District Number 1 of Pend Orielle County,
Electric Revenue 6.375%, 1/1/2015 2,000,000 2,116,340
Washington Higher Education Facilities Authority, Revenue
(Whitman College Project) 5.875%, 10/1/2029 5,000,000 5,270,600
The Fund
STATEMENT OF INVESTMENTS (CONTINUED)
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
WEST VIRGINIA--4.3%
Braxton County, SWDR (Weyerhaeuser Co. Project):
6.50%, 4/1/2025 5,000,000 5,179,650
5.80%, 6/1/2027 7,450,000 7,551,320
WISCONSIN--3.2%
Wisconsin Health and Educational Facilities Authority, Revenue
(Aurora Health Care, Inc.) 5.60%, 2/15/2029 5,750,000 5,405,518
Wisconsin Housing and Economic Development Authority,
Home Ownership Revenue 5.75%, 9/1/2028 4,000,000 4,071,040
WYOMING--1.0%
Sweetwater County, SWDR (FMC Corp. Project)
7%, 6/1/2024 3,000,000 3,106,800
U.S. RELATED--4.4%
Puerto Rico Highway and Transportation Authority,
Transportation Revenue:
7.84%, 7/1/2038 (Insured; MBIA) 4,000,000 (b,c) 3,952,720
7.84%, 7/1/2038 5,000,000 (b,c) 4,940,900
Puerto Rico Infrastructure Financing Authority,
Special Tax Revenue, Residual Certficates
7.785%, 7/1/2015 4,000,000 (b,c) 4,300,480
TOTAL LONG-TERM MUNICIPAL INVESTMENTS
(cost $273,308,531) 288,712,856
------------------------------------------------------------------------------------------------------------------------------------
SHORT-TERM MUNICIPAL INVESTMENTS--1.0%
------------------------------------------------------------------------------------------------------------------------------------
ALABAMA;
Stevenson Industrial Development Board,
Environmental Improvement Revenue
VRDN (Mead Corp. Project)
2.80% (LOC; Toronto--Dominion Bank)
(cost $3,000,000) 3,000,000 (d) 3,000,000
------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $276,308,531) 98.2% 291,712,856
CASH AND RECEIVABLES (NET) 1.8% 5,238,734
NET ASSETS 100.0% 296,951,590
Summary of Abbreviations
AMBAC American Municipal Bond
Assurance Corporation
COP Certificate of Participation
FGIC Financial Guaranty Insurance
Company
FSA Financial Security Assurance
HR Hospital Revenue
IDR Industrial Development Revenue
MBIA Municipal Bond Investors Assurance
Insurance Corporation
MFHR Multi-Family Housing Revenue
PCR Pollution Control Revenue
RRR Resources Recovery Revenue
SFMR Single Family Mortgage Revenue
SWDR Solid Waste Disposal Revenue
VRDN Variable Rate Demand Notes
Summary of Combined Ratings (Unaudited)
Fitch or Moody's or Standard & Poor's Value (%)
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa AAA 25.9
AA Aa AA 15.3
A A A 28.6
BBB Baa BBB 24.0
BB Ba BB 2.2
F1 MIG1/P1 SP1/A1 1.0
Not Rated (e) Not Rated (e) Not Rated (e) 3.0
100.0
(A) 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.
(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 SEPTEMBER 30,
2001, THESE SECURITIES AMOUNTED TO $13,194,100 OR 4.4% OF NET ASSETS.
(C) INVERSE FLOATER SECURITY--THE INTEREST RATE IS SUBJECT TO CHANGE
PERIODICALLY.
(D) SECURITIES PAYABLE ON DEMAND. VARIABLE INTEREST RATE--SUBJECT TO PERIODIC
CHANGE.
(E) SECURITIES WHICH, WHILE NOT RATED BY FITCH, MOODY'S AND STANDARD & POOR'S
HAVE BEEN DETERMINED BY THE MANAGER TO BE OF COMPARABLE QUALITY TO THOSE
RATED SECURITIES IN WHICH THE FUND MAY INVEST.
(F) AT SEPTEMBER 30, 2001, THE FUND HAD $84,712,729 (28.5%) OF NET ASSETS
INVESTED IN SECURITIES WHOSE PAYMENT OF PRINCIPAL AND INTEREST IS DEPENDENT
UPON REVENUES GENERATED FROM HEALTH CARE PROJECTS.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF ASSETS AND LIABILITIES
September 30, 2001
Cost Value
--------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of
Investments 276,308,531 291,712,856
Cash 6,896
Interest receivable 5,573,099
Prepaid expenses 7,461
297,300,312
--------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 180,933
Dividend payable to Preferred Shareholders 25,211
Commssions payable 14,789
Accrued expenses 127,789
348,722
--------------------------------------------------------------------------------
NET ASSETS ($) 296,951,590
--------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Auction Preferred Stock, Series A and B, par value $.001 per share
(4,000 shares issued and outstanding at $25,000 per share
liquidation preference)--Note 1 100,000,000
Common Stock, par value, $.001 per share
(20,382,927 shares issued and outstanding) 20,383
Paid-in capital 188,610,337
Accumulated undistributed investment income--net 1,098,157
Accumulated net realized gain (loss) on investments (8,181,612)
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 15,404,325
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS 196,951,590
--------------------------------------------------------------------------------
NET ASSETS ($) 296,951,590
--------------------------------------------------------------------------------
SHARES OUTSTANDING
(110 million shares of $.001 par value Common Stock authorized) 20,382,927
NET ASSET VALUE, per share of Common Stock 9.66
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF OPERATIONS
Year Ended September 30, 2001
--------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INTEREST INCOME 17,698,285
EXPENSES:
Management fee--Note 3(a) 2,023,927
Commission fees--Note 1 266,417
Professional fees 143,427
Shareholders' reports 51,337
Shareholder servicing costs--Note 3(b) 50,261
Registration fees 29,000
Custodian fees--Note 3(b) 21,262
Directors' fees and expenses--Note 3(c) 9,445
Interest expense--Note 2 214
Miscellaneous 34,784
TOTAL EXPENSES 2,630,074
INVESTMENT INCOME--NET 15,068,211
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments (1,403,724)
Net unrealized appreciation (depreciation) on investments 17,581,781
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS 16,178,057
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 31,246,268
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF CHANGES IN NET ASSETS
Year Ended September 30,
-----------------------------------
2001 2000
--------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 15,068,211 15,074,014
Net realized gain (loss) on investments (1,403,724) (1,054,513)
Net unrealized appreciation (depreciation)
on investments 17,581,781 (662,672)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 31,246,268 13,356,829
--------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net:
Common Stock (10,762,186) (10,762,185)
Preferred Stock (3,354,280) (4,007,246)
TOTAL DIVIDENDS (14,116,466) (14,769,431)
--------------------------------------------------------------------------------
CAPITAL STOCK TRANSACTIONS ($):
Offering cost to paid-in capital resulting
from the issuance of Preferred Stock 30,000 (110,503)
INCREASE (DECREASE) IN NET ASSETS FROM
CAPITAL STOCK TRANSACTIONS 30,000 (110,503)
TOTAL INCREASE (DECREASE) IN NET ASSETS 17,159,802 (1,523,105)
--------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 279,791,788 281,314,893
END OF PERIOD 296,951,590 279,791,788
Undistributed investment income--net 1,098,157 146,412
SEE NOTES TO FINANCIAL STATEMENTS.
FINANCIAL HIGHLIGHTS
The following table describes the performance for the fiscal periods indicated.
Total return shows how much your investment in the fund would have increased (or
decreased) during each period, assuming you had reinvested all dividends and
distributions. These figures have been derived from the fund's financial
statements and, with respect to common stock, market price data for the fund's
common shares.
Year Ended September 30,
-------------------------------------------------------------------
2001 2000 1999 1998 1997
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 8.82 8.90 9.71 9.55 9.60
Investment Operations:
Investment income--net .74 .74 .53 .55 .61
Net realized and unrealized
gain (loss) on investments .79 (.08) (.73) .21 (.02)
Total from Investment Operations 1.53 .66 (.20) .76 .59
Distributions:
Dividends from investment income--net:
Common Stock (.53) (.53) (.54) (.60) (.64)
Preferred Stock (.16) (.20) (.01) -- --
Total Distributions (.69) (.73) (.55) (.60) (.64)
Capital Stock transaction--net
effect of Preferred Stock offering .00(a) (.01) (.06) -- --
Net asset value, end of period 9.66 8.82 8.90 9.71 9.55
Market value, end of period 8.71 77_8 75_8 911_16 103_8
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) (B) 17.55 10.71 (16.35) (.69) 15.90
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average
net assets applicable to Common Stock 1.39(c,d) 1.48(c,d) .85(c,d) .82 .82
Ratio of net investment income to average
net assets applicable to Common Stock 7.97(c,d) 8.64(c,d) 5.72(c,d) 5.75 6.36
Portfolio Turnover Rate 15.27 22.47 35.55 8.84 10.67
Asset coverage of Preferred Stock,
end of period 297 280 281 -- --
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, net of Preferred stock,
end of period ($ x 1,000) 196,952 179,792 181,315 197,505 193,578
Preferred Stock outstanding,
end of period ($ x 1,000) 100,000 100,000 100,000 -- --
(A) AMOUNT REPRESENTS LESS THAN $.01.
(B) CALCULATED BASED ON MARKET VALUE.
(C) DOES NOT REFLECT THE EFFECT OF DIVIDENDS TO PREFERRED STOCK SHAREHOLDERS.
(D) THE RATIO OF EXPENSES TO TOTAL AVERAGE NET ASSETS AND THE RATIO OF NET
INVESTMENT INCOME TO TOTAL AVERAGE NET ASSETS WERE .91% AND 5.21%,
RESPECTIVELY, FOR THE YEAR ENDED SETEMBER 30, 2001, .94% AND 5.49%,
RESPECTIVELY, FOR THE YEAR ENDED SEPTEMBER 30, 2000 AND .84% AND 5.63%,
RESPECTIVELY, FOR THE YEAR ENDED SEPTEMBER 30, 1999.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
NOTES TO FINANCIAL STATEMENTS
NOTE 1--Significant Accounting Policies:
Dreyfus Municipal Income, Inc. (the "fund") is registered under the Investment
Company Act of 1940, as amended (the "Act"), as a non-diversified closed-end
management investment company. The fund's investment objective is to maximize
current income exempt from Federal income tax to the extent consistent with the
preservation of capital. The Dreyfus Corporation (the "Manager") serves as the
fund's investment adviser. The Manager is a direct subsidiary of Mellon Bank,
N.A. (" Mellon" ), which is a wholly-owned subsidiary of Mellon Financial
Corporation. The fund's Common Stock trades on the New York Stock Exchange under
the ticker symbol DMF.
The fund issued 2,000 shares of Series A and 2,000 shares of Series B Auction
Preferred Stock (" APS" ), with a liquidation preference of $25,000 per share
(plus an amount equal to accumulated but unpaid dividends upon liquidation). APS
dividend rates are determined pursuant to periodic auctions. Bankers Trust, as
Auction Agent, receives a fee from the fund for its services in connection with
such auctions. The fund also compensates broker-dealers generally at an annual
rate of .25% of the purchase price of the shares of APS placed by the
broker-dealer in an auction.
The fund is subject to certain restrictions relating to the APS. Failure to
comply with these restrictions could preclude the fund from declaring any
distributions to common shareholders or repurchasing common shares and/or could
trigger the mandatory redemption of APS at liquidation value.
The holders of the APS, voting as a separate class, have the right to elect at
least two directors. The holders of the APS will vote as a separate class on
certain other matters, as required by law. The fund has designated Martin D.
Fife and Whitney I. Gerard to represent holders of APS on the fund's Board of
Directors.
The fund's financial statements are prepared in accordance with accounting
principles generally accepted in the United States, which may require the use of
management estimates and assumptions. Actual results could differ from those
estimates.
(a) Portfolio valuation: Investments in municipal debt securities (excluding
options and financial futures on municipal and U.S. Treasury securities) are
valued daily by an independent pricing service ("Service") approved by the Board
of Directors. Investments for which quoted bid prices are readily available and
are representative of the bid side of the market in the judgment of the Service
are valued at the mean between the quoted bid prices (as obtained by the Service
from dealers in such securities) and asked prices (as calculated by the Service
based upon its evaluation of the market for such securities). Other investments
(which constitute a majority of the portfolio securities) are carried at fair
value as determined by the Service, based on methods which include consideration
of: yields or prices of municipal securities of comparable quality, coupon,
maturity and type; indications as to values from dealers; and general market
conditions. Options and financial futures on municipal and U.S. Treasury
securities are valued at the last sales price on the securities exchange on
which such securities are primarily traded or at the last sales price on the
national securities market on each business day. Investments 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.
(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 amortization of premiums and original issue discounts on
investments, is earned from settlement date and recognized on the accrual basis.
Securities purchased or sold on a when-issued or delayed-delivery basis may be
settled a month or more after the trade date.
In November 2000 the American Institute of Certified Public Accountants
(" AICPA" ) issued a revised version of the AICPA Audit and Accounting Guide for
Investment Companies (the "Guide" ). The revised version of the Guide is
effective for financial statements issued for the fiscal years beginning after
December 15, 2000. One of the
The Fund
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
new provisions in the Guide requires investment companies to amortize market
discount on municipal securities which the fund does not currently do. Upon
adoption, the fund will be required to record a cumulative effect adjustment to
conform with accounting principles generally accepted in the United States. The
effect of this adjustment, effective October 1, 2001, is to increase accumulated
net investment income with an offsetting decrease to accumulated unrealized
appreciation (depreciation) on securities. This adjustment will therefore, have
no effect on the net assets of the fund.
(c) Dividends to shareholders of Common Stock (" Common Shareholder(s)"):
Dividends are recorded on the ex-dividend date. Dividends from investment
income-net are declared and paid monthly. Dividends from net realized capital
gain are declared and paid at least annually. 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.
For Common Shareholders who elect to receive their distributions in additional
shares of the fund, in lieu of cash, such distributions will be reinvested at
the lower of the market price or net asset value per share (but not less than
95% of the market price) as defined in the dividend reinvestment plan
On September 28, 2001, the Board of Directors declared a cash dividend to Common
Shareholders of $.044 per share from investment income-net, payable on October
26, 2001 to Common Shareholders of record as of the close of business on October
12, 2001.
(d) Dividends to shareholders of APS: For APS, dividends are currently reset
every 7 days. The dividend rates in effect at September 30, 2001 were as
follows: Series A 2.30% and Series B 2.30%.
(e) 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 Internal Revenue Code of 1986,
as amended 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 approximately $6,768,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to September 30, 2001. The
amount is calculated based on Federal income tax regulations which may differ
from financial reporting in accordance with accounting principles generally
accepted in the United States. If not applied, $5,000,000 of the carryover
expires in fiscal 2004, $1,148,000 expires in fiscal 2008, and $620,000 expires
in fiscal 2009.
NOTE 2--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. Interest is charged to the fund based on prevailing market rates in
effect at the time of borrowings. During the period ended September 30, 2001,
the fund did not borrow under the line of credit.
NOTE 3--Management Fee and Other Transactions With Affiliates:
(a) Pursuant to a management agreement ("Agreement") with the Manager, the
management fee is computed at the annual rate of .70 of 1% of the value of the
fund's average daily net assets and is payable monthly. The Agreement provides
that if in any full fiscal year the aggregate expenses of the fund, exclusive of
taxes, interest on borrowings, brokerage fees and extraordinary expenses, exceed
the expense limitation of any state having jurisdiction over the fund, the fund
may deduct from payments to be made to the Manager, or the Manager will bear the
amount of such excess to the extent required by state law. There was no expense
reimbursement for the period ended September 30, 2001.
(b) The fund compensates Mellon under a transfer agency agreement for providing
personnel and facilities to perform transfer agency services for the fund.
During the period ended September 30, 2001, the fund was charged $50,261
pursuant to the transfer agency agreement.
The Fund
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The fund compensates Mellon under a custody agreement for providing custodial
services for the fund. During the period ended September 30, 2001, the fund was
charged $21,262 pursuant to the custody agreement.
(c) Each Board member also serves as a Board member of other funds within the
Dreyfus complex (collectively, the "Fund Group"). Each Board member who is not
an "affiliated person" as defined in the Act receives an annual fee of $45,000
and an attendance fee of $5,000 for each in person meeting and $500 for
telephone meetings. These fees are allocated among the funds in the Fund Group.
The Chairman of the Board receives an additional 25% of such compensation.
Subject to the fund's Emeritus Program Guidelines, Emeritus Board members, if
any, receive 50% of the annual retainer fee and per meeting fee paid at the time
the Board member achieves emeritus status.
NOTE 4--Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding
short-term securities, during the period ended September 30, 2001, amounted to
$43,888,972 and $43,054,642, respectively.
At September 30, 2001, accumulated net unrealized appreciation on investments
was $15,404,325, consisting of $16,838,722 gross unrealized appreciation and
$1,434,397 gross unrealized depreciation.
At September 30, 2001, 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).
REPORT OF INDEPENDENT AUDITORS
Shareholders and Board of Directors Dreyfus Municipal Income, Inc.
We have audited the accompanying statement of assets and liabilities of Dreyfus
Municipal Income, Inc., including the statement of investments, as of September
30, 2001, and the related statement of operations for the year then ended, the
statement of changes in net assets for each of the two years in the period then
ended, and financial highlights for each of the years indicated therein. These
financial statements and financial highlights are the responsibility of the
fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights. Our procedures included
verification by examination of securities held by the custodian as of September
30, 2001 and confirmation of securities not held by the custodian by
correspondence with others. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Dreyfus Municipal Income, Inc. at September 30, 2001, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and the financial highlights for each of
the indicated years, in conformity with accounting principles generally accepted
in the United States.
New York, New York
November 8, 2001
The Fund
ADDITIONAL INFORMATION (Unaudited)
Dividend Reinvestment Plan
Under the fund's Dividend Reinvestment Plan (the "Plan"), a Common Shareholder
who has fund shares registered in his name will have all dividends and
distributions reinvested automatically by Mellon, as Plan agent (the "Agent"),
in additional shares of the fund at the lower of prevailing market price or net
asset value (but not less than 95% of market value at the time of valuation)
unless such Common Shareholder elects to receive cash as provided below. If
market price is equal to or exceeds net asset value, shares will be issued at
net asset value. If net asset value exceeds market price or if a cash dividend
only is declared, the Agent, as agent for the Plan participants, will buy fund
shares in the open market. A Plan participant is not relieved of any income tax
that may be payable on such dividends or distributions.
A Common Shareholder who owns fund shares registered in nominee name through his
broker/dealer (i.e., in "street name") may not participate in the Plan, but may
elect to have cash dividends and distributions reinvested by his broker/dealer
in additional shares of the fund if such service is provided by the
broker/dealer; otherwise such dividends and distributions will be treated like
any other cash dividend or distribution.
A Common Shareholder who has fund shares registered in his name may elect to
withdraw from the Plan at any time for a $5.00 fee and thereby elect to receive
cash in lieu of shares of the fund. Changes in elections must be in writing,
sent to Mellon Bank, c/o ChaseMellon Shareholder Services, Shareholder
Investment Plan, P.O. Box 3338, South Hackensack, New Jersey 07606, should
include the shareholder's name and address as they appear on the Agent's records
and will be effective only if received more than ten business days prior to the
record date for any distribution.
The Agent maintains all Common Shareholder accounts in the Plan and furnishes
written confirmations of all transactions in the account. Shares in the account
of each Plan participant will be held by the Agent in non-certificated form in
the name of the participant, and each such participant's proxy will include
those shares purchased pursuant to the Plan.
The fund pays the Agent's fee for reinvestment of dividends and distributions.
Plan participants pay a pro rata share of brokerage commissions inc rred with
respect to the Agent's open market purchases in connection with the reinvestment
of dividends or distributions.
The fund reserves the right to amend or terminate the Plan as applied to any
dividend or distribution paid subsequent to notice of the change sent to Plan
participants at least 90 days before the record date for such dividend or
distribution. The Plan also may be amended or terminated by the Agent on at
least 90 days' written notice to Plan participants.
Managed Dividend Policy
The fund's dividend policy is to distribute substantially all of its net
investment income to its shareholders on a monthly basis. In order to provide
shareholders with a more consistent yield to the current trading price of shares
of Common Stock of the fund, the fund may at times pay out less than the entire
amount of net investment income earned in any particular month and may at times
in any month pay out such accumulated but undistributed income in addition to
net investment income earned in that month. As a result, the dividends paid by
the fund for any particular month may be more or less than the amount of net
investment income earned by the fund during such month. The fund's current
accumulated but undistributed net investment income, if any, is disclosed in the
Statement of Assets and Liabilities, which comprises part of the Financial
Information included in this report.
Benefits and Risks of Leveraging
The fund utilizes leverage to seek to enhance the yield and net asset value of
its Common Stock. These objectives cannot be achieved in all interest rate
environments. To leverage, the fund issues Preferred Stock, which pays dividends
at prevailing short-term interest rates, and invests the proceeds in long-term
municipal bonds. The interest earned on these investments is paid to Common
Shareholders in the form of dividends, and the value of these portfolio holdings
is reflected in the per share net asset value of the fund's Common Stock. In
order to benefit Common
The Fund
ADDITIONAL INFORMATION (Unaudited) (CONTINUED)
Shareholders, the yield curve must be positively sloped: that is, short-term
interest rates must be lower than long-term interest rates. At the same time, a
period of generally declining interest rates will benefit Common Shareholders.
If either of these conditions change, then the risk of leveraging will begin to
outweigh the benefits.
Supplemental Information
For the period ended September 30, 2001, there were: (i) no material changes in
the fund's investment objectives or polices, (ii) no changes in the fund's
charter or by-laws that would delay or prevent a change of control of the fund,
(iii) no material changes in the principal risk factors associated with
investment in the fund, and (iv) no change in the person primarily responsible
for the day-to-day management of the fund's portfolio.
IMPORTANT TAX INFORMATION (Unaudited)
In accordance with Federal tax law, the fund hereby designates all the dividends
paid from investment income-net during the fiscal year ended September 30, 2001
as "exempt-interest dividends" (not generally subject to regular Federal income
tax).
As required by Federal tax law rules, shareholders will receive notification of
their portion of the fund's taxable ordinary dividends (if any) and capital gain
distributions (if any) paid for the 2001 calendar year on Form 1099-DIV which
will be mailed by January 31, 2002.
The Fund
PROXY RESULTS (Unaudited)
Holders of common stock and holders of Auction Preferred Stock ("APS") voted
together as a single class (except as noted below) on a proposal presented the
annual stockholders' meeting held on May 18, 2001. The description of the
proposal and the number of shares voted are as follows:
Shares
------------------------------------------------------------------------------------------------------------------------------------
For Authority Withheld
------------------------------------------------------------------------------------------------------------------------------------
To elect two Class II Directors: ((+))
Arthur A. Hartman 18,017,258 321,229
Whitney I. Gerard ((+)(+)) 3,996 0
((+)) THE TERMS OF THESE CLASS II DIRECTORS EXPIRE IN 2004.
((+)(+)) ELECTED SOLELY BY APS HOLDERS. COMMON STOCKHOLDERS WERE NOT
ENTITLED TO VOTE.
OFFICERS AND DIRECTORS
Dreyfus Municipal Income, Inc.
200 Park Avenue
New York, NY 10166
DIRECTORS
Joseph S. DiMartino, Chairman
Lucy Wilson Benson
David W. Burke
Martin D. Fife*
Whitney I. Gerard*
Arthur A. Hartman
George L. Perry
* AUCTION PREFERRED STOCK DIRECTORS
OFFICERS
President
Stephen E. Canter
Vice President
Mark N. Jacobs
Vice President and Treasurer
Joseph Connolly
Executive Vice President
Joseph P. Darcy
Secretary
Michael A. Rosenberg
Assistant Secretary
Robert R. Mullery
Assistant Secretary
Steven F. Newman
Assistant Treasurer
Gregory S. Gruber
PORTFOLIO MANAGERS
Joseph P. Darcy
A. Paul Disdier
Douglas J. Gaylor
Joseph A. Irace
PORTFOLIO MANAGERS (CONTINUED)
Colleen A. Meehan
W. Michael Petty
Scott Sprauer
James Welch
Monica S. Wieboldt
INVESTMENT ADVISER
The Dreyfus Corporation
CUSTODIAN
Mellon Bank, N.A.
COUNSEL
Stroock & Stroock & Lavan LLP
TRANSFER AGENT, DIVIDEND DISBURSING AGENT AND REGISTRAR
Mellon Bank N.A. (Common Stock)
Bankers Trust (Auction Preferred Stock)
AUCTION AGENT
Bankers Trust (Auction Preferred Stock)
STOCK EXCHANGE LISTING
NYSE Symbol: DMF
INITIAL SEC EFFECTIVE DATE
10/21/88
THE NET ASSET VALUE APPEARS IN THE FOLLOWING PUBLICATIONS: BARRON'S, CLOSED-END
BOND FUNDS SECTION UNDER THE HEADING "MUNICIPAL BOND FUNDS" EVERY MONDAY; WALL
STREET JOURNAL, MUTUAL FUNDS SECTION UNDER THE HEADING "CLOSED-END FUNDS" EVERY
MONDAY; NEW YORK TIMES, BUSINESS SECTION UNDER THE HEADING "CLOSED-END BOND
FUNDS--NATIONAL MUNICIPAL BOND FUNDS" EVERY SUNDAY.
NOTICE IS HEREBY GIVEN IN ACCORDANCE WITH SECTION 23(C) OF THE INVESTMENT
COMPANY ACT OF 1940, AS AMENDED, THAT THE FUND MAY PURCHASE SHARES OF ITS COMMON
STOCK IN THE OPEN MARKET WHEN IT CAN DO SO AT PRICES BELOW THE THEN CURRENT NET
ASSET VALUE PER SHARE.
The Fund
For More Information
Dreyfus Municipal Income, Inc.
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
and Registrar
(Common Stock)
Mellon Bank, N.A.
85 Challenger Road
Ridgefield Park, NJ 07660
(c) 2001 Dreyfus Service Corporation 424AR0901