formncsr-172.htm - Generated by SEC Publisher for SEC Filing

0001056707-12-000001.txt : 20120215 0001056707-12-000001.hdr.sgml : 20120215 20120215160021 ACCESSION NUMBER: 0001056707-12-000001 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 36 CONFORMED PERIOD OF REPORT: 20111231 FILED AS OF DATE: 20120215 DATE AS OF CHANGE: 20120215 EFFECTIVENESS DATE: 20120215 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DREYFUS INVESTMENT PORTFOLIOS CENTRAL INDEX KEY: 0001056707 IRS NUMBER: 134000024 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-08673 FILM NUMBER: 12616037 BUSINESS ADDRESS: STREET 1: C/O THE DREYFUS CORPORATION STREET 2: 200 PARK AVENUE CITY: NEW YORK STATE: NY ZIP: 10166 BUSINESS PHONE: 2129226789 MAIL ADDRESS: STREET 1: C/O THE DREYFUS CORPORATION STREET 2: 200 PARK AVENUE CITY: NEW YORK STATE: NY ZIP: 10166

0001056707 S000002774 Core Value Portfolio

C000007601 Core Value Portfolio - Initial Shares

C000007602 Core Value Portfolio - Service Shares

0001056707 S000002779 Midcap Stock Portfolio

C000007611 Midcap Stock Portfolio - Initial Shares

C000007612 Midcap Stock Portfolio - Service Shares

0001056707 S000002780 Small Cap Stock Index Portfolio

C000007613 Small Cap Stock Index Portfolio

0001056707 S000002781 Technology Growth Portfolio

C000007614 Technology Growth Portfolio - Initial Shares

C000007615 Technology Growth Portfolio - Service Shares

N-CSR 1 formncsr-172.htm ANNUAL REPORT formncsr-172.htm - Generated by SEC Publisher for SEC Filing

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- 08673

	Dreyfus Investment Portfolios
	(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)

	Janette E. Farragher, Esq. 200 Park Avenue New York, New York 10166
	(Name and address of agent for service)

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

Date of fiscal year end:		12/31
Date of reporting period:		12/31/11

FORM N-CSR

Item 1. Reports to Stockholders.

Dreyfus

Investment Portfolios,

Core Value Portfolio

ANNUAL REPORT December 31, 2011

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

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

	Contents
	THE FUND
2	A Letter from the Chairman and CEO
3	Discussion of Fund Performance
6	Fund Performance
8	Understanding Your Fund’s Expenses
8	Comparing Your Fund’s Expenses With Those of Other Funds
9	Statement of Investments
13	Statement of Assets and Liabilities
14	Statement of Operations
15	Statement of Changes in Net Assets
17	Financial Highlights
19	Notes to Financial Statements
29	Report of Independent Registered Public Accounting Firm
30	Important Tax Information
31	Information About the Renewal of the Fund’s Management Agreement
36	Board Members Information
38	Officers of the Fund
	FOR MORE INFORMATION
	Back Cover

Dreyfus Investment Portfolios,
Core Value Portfolio

The Fund

A LETTER FROM THE CHAIRMAN AND CEO

Dear Shareholder:

We present to you this annual report for Dreyfus Investment Portfolios, Core Value Portfolio, covering the 12-month period from January 1, 2011, through December 31, 2011. For information about how the fund performed during the reporting period, as well as general market perspectives, we provide a Discussion of Fund Performance on the pages that follow.

The generally mild returns produced by the U.S. stock market in 2011 belie the pronounced volatility affecting equities over much of the year. Day-to-day market movements were often tumultuous, driven by macroeconomic developments ranging from catastrophic natural disasters in Japan to an unprecedented downgrade of long-term U.S. debt securities and the resurgence of a sovereign debt crisis in Europe. Still, U.S. corporations achieved record-setting profits, on average, even as market valuations dropped below historical norms. A fundamentals-based investment approach proved relatively ineffective in a market fueled mainly by emotion, causing most active portfolio managers to lag market averages.

We are hopeful that equity investors will adopt a more rational perspective in 2012. Our economic forecast calls for a mild acceleration of the U.S. recovery as the domestic banking system regains strength, credit conditions loosen and housing markets begin a long-awaited convalescence. Of course, we encourage you to talk with your financial adviser to help ensure that your investment objectives are properly aligned with your risk tolerance in pursuing potential market opportunities in 2012.

Thank you for your continued confidence and support.

Jonathan R. Baum
Chairman and Chief Executive Officer
The Dreyfus Corporation
January 17, 2012

DISCUSSION OF FUND PERFORMANCE

For the period of January 1, 2011, through December 31, 2011, as provided by Brian Ferguson, Portfolio Manager

Fund and Market Performance Overview

For the 12-month period ended December 31, 2011, Dreyfus Investment Portfolios, CoreValue Portfolio, produced a total return of –5.82% for its Initial shares, and its Service shares produced a total return of –6.03%.¹In comparison, the fund’s benchmark, the Russell 1000 Value Index (the “Index”), produced a total return of 0.39% for the same period.²

Macroeconomic disappointments throughout the world weighed on equity markets during much of 2011, but rallies in the first and fourth quarters enabled the Index to end the year virtually unchanged from where it began.The fund produced lower returns than its benchmark, primarily due to shortfalls in our stock selection strategy in the energy, utilities and consumer discretionary sectors.

The Fund’s Investment Approach

The fund seeks long-term growth of capital, with current income as a secondary objective. To pursue its goals, the fund normally invests at least 80% of its net assets in stocks of large-cap value companies.When choosing stocks, we use a “bottom-up” stock selection approach, focusing on individual companies, rather than a “top-down” approach that forecasts market trends. A three-step value screening process is used to select stocks based on value, sound business fundamentals and positive business momentum.

Global Economic Developments Roiled Equity Markets

Improvements in U.S. economic data supported stock prices at the start of 2011, but political unrest in the Middle East and catastrophic natural and nuclear disasters in Japan soon interrupted the rally. Nonetheless, investors continued to look forward to better business conditions, and stocks generally rebounded from these unexpected shocks by the end of the first quarter.


The Fund	3

DISCUSSION OF FUND PERFORMANCE (continued)

Investors’ hopes for a more robust recovery were dashed in late April, when Greece teetered on the brink of default on its sovereign debt and the crisis spread to other European nations. In addition, U.S. economic data proved more disappointing than expected, and investors reacted cautiously to a contentious political debate regarding U.S. government spending and borrowing. Consequently, newly risk-averse investors shifted their focus away from more speculative investments and toward traditionally defensive industries and companies, particularly well-known businesses with consistent earnings.

Market declines were particularly severe in August and September, after a major credit-rating agency downgraded its assessment of long-term U.S. government debt. In contrast, the market rebounded to a degree from October through December, when U.S. economic data improved and European policymakers made some progress in addressing the region’s problems. In this turbulent environment, value stocks generally lagged their more growth-oriented counterparts.

Stock Selections Dampened Relative Performance

The fund’s results compared to the benchmark in 2011 were hurt by a tilt toward companies that tend to be relatively sensitive to economic conditions. In the energy sector, coal producer Alpha Natural Resources lowered its production forecast, prompting its sale from the portfolio. In addition, overweighted exposure to oil services provider Schlumberger proved counterproductive when a number of international projects were delayed in the struggling global economy. In the consumer discretionary sector, cruise operator Carnival was hurt by elevated fuel costs and the need to reroute itineraries to avoid political unrest in North Africa. Office supplies retailer Staples lost value after reporting disappointing sales and earnings stemming from lackluster employment gains among its corporate customers.

The fund achieved better results from individual holdings across a number of different industry groups. Energy exploration-and-production company EOG Resources fared well when the company trimmed costs and natural gas prices climbed. Pharmaceutical giant Pfizer posted better-than-expected earnings based on strong results in Japan, and investors responded positively to good news regarding new products

under development. Retail chain The Home Depot gained value amid rising sales and after announcing its second dividend increase of 2011. The fund also benefited from underweighted exposure to Bank of America, avoiding the brunt of weakness stemming from negative headlines and concerns regarding mortgage liabilities.

Stocks Have Become More Attractively Valued

Despite ongoing headwinds, we believe the economic expansion is likely to persist. Indeed, for much of 2011 the stock market seemed to react more to macroeconomic developments than to the fundamental strengths and weaknesses of individual companies. Consequently, in our analysis many stocks have declined to lower valuations than are warranted by their fundamentals. Our bottom-up security selection process has identified a number of value-oriented opportunities in the consumer discretionary sector, especially among media companies poised for increased advertising spending in an election year. Conversely, we have found fewer opportunities meeting our investment criteria in the utilities sector, where stocks generally appear more expensive and do not meet our value-oriented investment criteria.

January 17, 2012


	Please note, the position in any security highlighted in italicized typeface was sold during the
	reporting period.
	Equity funds are subject generally to market, market sector, market liquidity, issuer and investment
	style risks, among other factors, to varying degrees, all of which are more fully described in the
	fund’s prospectus.
	The fund is only available as a funding vehicle under variable life insurance policies or variable
	annuity contracts issued by insurance companies. Individuals may not purchase shares of the fund
	directly.A variable annuity is an insurance contract issued by an insurance company that enables
	investors to accumulate assets on a tax-deferred basis for retirement or other long-term goals.
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 certain fund expenses pursuant to an agreement by The Dreyfus Corporation
	through February 29, 2012, 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 reinvestment of dividends and, where applicable,
	capital gain distributions.The Russell 1000 Value Index is an unmanaged index which measures
	the performance of those Russell 1000 companies with lower price-to-book ratios and lower
	forecasted growth values. Investors cannot invest directly in any index.


The Fund	5

FUND PERFORMANCE


Average Annual Total Returns as of 12/31/11
	1Year	5 Years	10 Years
Initial shares	–5.82%	–3.62%	1.58%
Service shares	–6.03%	–3.79%	1.42%
Russell 1000 Value Index	0.39%	–2.64%	3.89%

† Source: Lipper Inc.

Past performance is not predictive of future performance.The fund’s performance shown in the graph and table does not

reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.

The fund’s performance does not reflect the deduction of additional charges and expenses imposed in connection

with investing in variable insurance contracts which will reduce returns.

The above graph compares a $10,000 investment made in Initial and Service shares of Dreyfus Investment Portfolios,

Core Value Portfolio on 12/31/01 to a $10,000 investment made in the Russell 1000 Value Index (the “Index”)

on that date.

The fund’s Initial shares are not subject to a Rule 12b-1 fee.The fund’s Service shares are subject to a 0.25% annual Rule 12b-1 fee.The performance figures for each share class reflect certain expense reimbursements, without which the performance of each share class would have been lower.All dividends and capital gain distributions are reinvested.

The fund’s performance shown in the line graph above takes into account all applicable fund fees and expenses (after any expense reimbursements).The Index is an unmanaged index, which measures the performance of those Russell 1000 companies with lower price-to-book ratios and lower forecasted growth values. Unlike a mutual fund, the Index is not subject to charges, fees and other expenses. Investors cannot invest directly in any index. Further information relating to fund performance, including expense reimbursements, if applicable, is contained in the Financial Highlights section of the prospectus and elsewhere in this report.


The Fund	7

UNDERSTANDING YOUR FUND’S EXPENSES (Unaudited)

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

Review your fund’s expenses

The table below shows the expenses you would have paid on a $1,000 investment in Dreyfus Investment Portfolios, CoreValue Portfolio from July 1, 2011 to December 31, 2011. It also shows how much a $1,000 investment would be worth at the close of the period, assuming actual returns and expenses.

Expenses and Value of a $1,000 Investment
assuming actual returns for the six months ended December 31, 2011


	Initial Shares	Service Shares
Expenses paid per $1,000^†	$4.24	$5.43
Ending value (after expenses)	$892.20	$890.70

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

Using the SEC’s method to compare expenses

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

Expenses and Value of a $1,000 Investment
assuming a hypothetical 5% annualized return for the six months ended December 31, 2011


	Initial Shares	Service Shares
Expenses paid per $1,000^†	$4.53	$5.80
Ending value (after expenses)	$1,020.72	$1,019.46

† Expenses are equal to the fund’s annualized expense ratio of .89% for Initial shares and 1.14% for Service shares,

multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).

STATEMENT OF INVESTMENTS

December 31, 2011


Common Stocks—100.2%	Shares	Value ($)
Consumer Discretionary—17.9%
Carnival	11,750	383,520
CBS, Cl. B	5,500	149,270
General Motors	5,621^a	113,938
Guess?	4,420	131,804
Home Depot	11,100	466,644
Johnson Controls	13,340	417,008
Macy’s	6,130	197,263
Newell Rubbermaid	21,330	344,480
News, Cl. A	20,820	371,429
NVR	220^a	150,920
Omnicom Group	19,180	855,044
PVH	2,330	164,242
Staples	9,350	129,872
Time Warner	9,113	329,344
Toll Brothers	7,600^a	155,192
Viacom, Cl. B	6,200	281,542
Walt Disney	11,130	417,375
		5,058,887
Consumer Staples—7.2%
ConAgra Foods	10,260	270,864
CVS Caremark	9,360	381,701
Dr. Pepper Snapple Group	3,780	149,234
Energizer Holdings	6,050^a	468,754
Kraft Foods, Cl. A	9,600	358,656
PepsiCo	6,160	408,716
		2,037,925
Energy—14.5%
Anadarko Petroleum	5,570	425,158
Cameron International	5,650^a	277,923
EOG Resources	5,880	579,239
Hess	5,140	291,952
Occidental Petroleum	14,160	1,326,792
Schlumberger	15,530	1,060,854
Valero Energy	6,040	127,142
		4,089,060


The Fund	9

STATEMENT OF INVESTMENTS (continued)


Common Stocks (continued)	Shares	Value ($)
Financial—22.2%
American Express	3,060	144,340
Ameriprise Financial	4,820	239,265
Aon	6,460	302,328
Capital One Financial	7,590	320,981
Chubb	6,080	420,858
Citigroup	14,966	393,755
Comerica	11,210	289,218
Franklin Resources	1,660	159,460
JPMorgan Chase & Co.	19,260	640,395
Marsh & McLennan	12,880	407,266
MetLife	12,160	379,149
Moody’s	7,930^b	267,082
NASDAQ OMX Group	5,320^a	130,393
PNC Financial Services Group	5,120	295,270
Prudential Financial	5,150	258,118
SunTrust Banks	7,140	126,378
TD Ameritrade Holding	11,330	177,315
Travelers	2,440	144,375
U.S. Bancorp	14,740	398,717
Wells Fargo & Co.	28,970	798,413
		6,293,076
Health Care—14.3%
Baxter International	2,670	132,112
Cigna	6,520	273,840
Eli Lilly & Co.	3,410	141,720
Johnson & Johnson	6,710	440,042
McKesson	3,930	306,186
Medtronic	4,010	153,383
Merck & Co.	17,870	673,699
Mylan	6,850^a	147,001
Pfizer	58,660	1,269,402
Thermo Fisher Scientific	2,670^a	120,070
UnitedHealth Group	7,580	384,154
		4,041,609


Common Stocks (continued)	Shares	Value ($)
Industrial—9.4%
Caterpillar	1,710	154,926
Cooper Industries	2,460	133,209
Dover	7,250	420,862
Eaton	6,170	268,580
General Electric	32,800	587,448
Honeywell International	2,590	140,767
Hubbell, Cl. B	2,240	149,766
Owens Corning	6,170^a	177,202
Pitney Bowes	6,340^b	117,544
Stanley Black & Decker	3,350	226,460
Thomas & Betts	2,960^a	161,616
United Technologies	1,760	128,638
		2,667,018
Information Technology—9.8%
Cisco Systems	47,660	861,693
Corning	6,910	89,692
Dell	8,240^a	120,551
Electronic Arts	23,140^a	476,684
Oracle	6,950	178,268
QUALCOMM	12,710	695,237
SanDisk	4,520^a	222,429
Texas Instruments	4,650	135,362
		2,779,916
Materials—3.9%
Air Products & Chemicals	2,120	180,603
Celanese, Ser. A	6,350	281,114
Cliffs Natural Resources	3,020	188,297
Dow Chemical	10,970	315,497
Freeport-McMoRan Copper & Gold	3,610	132,812
		1,098,323
Utilities—1.0%
Exelon	6,470	280,604
Total Common Stocks
(cost $28,419,921)		28,346,418


The Fund	11

STATEMENT OF INVESTMENTS (continued)


Other Investment—.0%	Shares	Value ($)
Registered Investment Company;
Dreyfus Institutional Preferred
Plus Money Market Fund
(cost $8,004)	8,004^c	8,004

Investment of Cash Collateral
for Securities Loaned—.9%
Registered Investment Company;
Dreyfus Institutional Cash Advantage Fund
(cost $251,233)	251,233^c	251,233

Total Investments (cost $28,679,158)	101.1%	28,605,655
Liabilities, Less Cash and Receivables	(1.1)	(309,521)
Net Assets	100.0%	28,296,134

a Non-income producing security.

b Security, or portion thereof, on loan.At December 31, 2011, the value of the fund’s securities on loan was $244,012

and the value of the collateral held by the fund was $251,233.

c Investment in affiliated money market mutual fund.


Portfolio Summary (Unaudited)^†

	Value (%)		Value (%)
Financial	22.2	Consumer Staples	7.2
Consumer Discretionary	17.9	Materials	3.9
Energy	14.5	Utilities	1.0
Health Care	14.3	Money Market Investments	.9
Information Technology	9.8
Industrial	9.4		101.1

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

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2011


	Cost	Value
Assets ($):
Investments in securities—See Statement of Investments (including
securities on loan, valued at $244,012)—Note 1(b):
Unaffiliated issuers	28,419,921	28,346,418
Affiliated issuers	259,237	259,237
Cash		1,702
Dividends and securities lending income receivable		61,443
Receivable for shares of Beneficial Interest subscribed		641
Prepaid expenses		1,224
		28,670,665
Liabilities ($):
Due to The Dreyfus Corporation and affiliates—Note 3(b)		18,172
Liability for securities on loan—Note 1(b)		251,233
Payable for shares of Beneficial Interest redeemed		83,131
Accrued expenses		21,995
		374,531
Net Assets ($)		28,296,134
Composition of Net Assets ($):
Paid-in capital		32,849,955
Accumulated undistributed investment income—net		231,982
Accumulated net realized gain (loss) on investments		(4,712,300)
Accumulated net unrealized appreciation
(depreciation) on investments		(73,503)
Net Assets ($)		28,296,134


Net Asset Value Per Share
	Initial Shares	Service Shares
Net Assets ($)	15,420,886	12,875,248
Shares Outstanding	1,267,559	1,053,165
Net Asset Value Per Share ($)	12.17	12.23

See notes to financial statements.


The Fund	13

STATEMENT OF OPERATIONS

Year Ended December 31, 2011


Investment Income ($):
Income:
Cash dividends (net of $288 foreign taxes withheld at source):
Unaffiliated issuers	567,726
Affiliated issuers	112
Income from securities lending—Note 1(b)	554
Total Income	568,392
Expenses:
Management fee—Note 3(a)	238,561
Auditing fees	45,677
Distribution fees—Note 3(b)	37,457
Custodian fees—Note 3(b)	13,753
Legal fees	5,393
Prospectus and shareholders’ reports	3,407
Trustees’ fees and expenses—Note 3(c)	1,315
Shareholder servicing costs—Note 3(b)	476
Loan commitment fees—Note 2	425
Registration fees	38
Miscellaneous	14,151
Total Expenses	360,653
Less—reduction in management fees due to undertaking—Note 3(a)	(24,722)
Less—reduction in fees due to earnings credits—Note 3(b)	(1)
Net Expenses	335,930
Investment Income—Net	232,462
Realized and Unrealized Gain (Loss) on Investments—Note 4 ($):
Net realized gain (loss) on investments	3,570,985
Net unrealized appreciation (depreciation) on investments	(5,696,611)
Net Realized and Unrealized Gain (Loss) on Investments	(2,125,626)
Net (Decrease) in Net Assets Resulting from Operations	(1,893,164)

See notes to financial statements.

STATEMENT OF CHANGES IN NET ASSETS


	Year Ended December 31,
	2011	2010
Operations ($):
Investment income—net	232,462	330,787
Net realized gain (loss) on investments	3,570,985	1,833,354
Net unrealized appreciation
(depreciation) on investments	(5,696,611)	1,907,060
Net Increase (Decrease) in Net Assets
Resulting from Operations	(1,893,164)	4,071,201
Dividends to Shareholders from ($):
Investment income—net:
Initial Shares	(193,154)	(246,146)
Service Shares	(134,893)	(235,251)
Total Dividends	(328,047)	(481,397)
Beneficial Interest Transactions ($):
Net proceeds from shares sold:
Initial Shares	1,316,103	570,890
Service Shares	362,137	279,519
Dividends reinvested:
Initial Shares	193,154	246,146
Service Shares	134,893	235,251
Cost of shares redeemed:
Initial Shares	(2,558,345)	(1,799,736)
Service Shares	(3,423,010)	(3,378,764)
Increase (Decrease) in Net Assets from
Beneficial Interest Transactions	(3,975,068)	(3,846,694)
Total Increase (Decrease) in Net Assets	(6,196,279)	(256,890)
Net Assets ($):
Beginning of Period	34,492,413	34,749,303
End of Period	28,296,134	34,492,413
Undistributed investment income—net	231,982	328,465


The Fund	15

STATEMENT OF CHANGES IN NET ASSETS (continued)


	Year Ended December 31,
	2011	2010
Capital Share Transactions:
Initial Shares
Shares sold	98,630	46,467
Shares issued for dividends reinvested	14,244	20,342
Shares redeemed	(197,658)	(152,105)
Net Increase (Decrease) in Shares Outstanding	(84,784)	(85,296)
Service Shares
Shares sold	28,578	23,721
Shares issued for dividends reinvested	9,882	19,315
Shares redeemed	(268,071)	(282,911)
Net Increase (Decrease) in Shares Outstanding	(229,611)	(239,875)

See notes to financial statements.

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 portfolio share.Total return shows how much your investment in the portfolio would have increased (or decreased) during each period, assuming you had reinvested all dividends and distributions.The fund’s total returns do not reflect expenses associated with variable annuity or insurance contracts.These figures have been derived from the fund’s financial statements.


		Year Ended December 31,
Initial Shares	2011	2010	2009	2008	2007
Per Share Data ($):
Net asset value, beginning of period	13.06	11.70	10.24	18.37	19.50
Investment Operations:
Investment income—net^a	.11	.13	.15	.25	.31
Net realized and unrealized
gain (loss) on investments	(.85)	1.40	1.61	(6.14)	.25
Total from Investment Operations	(.74)	1.53	1.76	(5.89)	.56
Distributions:
Dividends from investment income—net	(.15)	(.17)	(.30)	(.35)	(.28)
Dividends from net realized
gain on investments	—	—	—	(1.89)	(1.41)
Total Distributions	(.15)	(.17)	(.30)	(2.24)	(1.69)
Net asset value, end of period	12.17	13.06	11.70	10.24	18.37
Total Return (%)	(5.82)	13.21	18.18	(35.91)	3.00
Ratios/Supplemental Data (%):
Ratio of total expenses
to average net assets	1.02	.96	.98	.88	.87
Ratio of net expenses
to average net assets	.94	.96	.96	.88	.86
Ratio of net investment income
to average net assets	.86	1.12	1.54	1.77	1.63
Portfolio Turnover Rate	83.87	57.06	67.53	55.84	69.92
Net Assets, end of period ($ x 1,000)	15,421	17,660	16,822	16,745	32,547

a Based on average shares outstanding at each month end.
See notes to financial statements.


The Fund	17

FINANCIAL HIGHLIGHTS (continued)


		Year Ended December 31,
Service Shares	2011	2010	2009	2008	2007
Per Share Data ($):
Net asset value, beginning of period	13.12	11.77	10.27	18.39	19.52
Investment Operations:
Investment income—net^a	.08	.10	.14	.23	.28
Net realized and unrealized
gain (loss) on investments	(.86)	1.41	1.62	(6.14)	.26
Total from Investment Operations	(.78)	1.51	1.76	(5.91)	.54
Distributions:
Dividends from investment income—net	(.11)	(.16)	(.26)	(.32)	(.26)
Dividends from net realized
gain on investments	—	—	—	(1.89)	(1.41)
Total Distributions	(.11)	(.16)	(.26)	(2.21)	(1.67)
Net asset value, end of period	12.23	13.12	11.77	10.27	18.39
Total Return (%)	(6.03)	12.93	17.96	(35.93)	2.79
Ratios/Supplemental Data (%):
Ratio of total expenses
to average net assets	1.27	1.21	1.23	1.13	1.12
Ratio of net expenses
to average net assets	1.19	1.21	1.08	1.00	1.00
Ratio of net investment income
to average net assets	.59	.87	1.42	1.65	1.50
Portfolio Turnover Rate	83.87	57.06	67.53	55.84	69.92
Net Assets, end of period ($ x 1,000)	12,875	16,832	17,928	18,992	37,851

a Based on average shares outstanding at each month end.
See notes to financial statements.

NOTES TO FINANCIAL STATEMENTS

NOTE 1—Significant Accounting Policies:

Dreyfus Investment Portfolios (the “Company”) is registered under the Investment Company Act of 1940, as amended (the “Act”), as an open-end management investment company operating as a series company currently offering four series, including the Core Value Portfolio (the “fund”). The fund is only offered to separate accounts established by insurance companies to fund variable annuity contracts and variable life insurance policies.The fund is a diversified series.The fund’s investment objective is to seek long-term capital growth. The Dreyfus Corporation (the “Manager” or “Dreyfus”), a wholly-owned subsidiary of The Bank of New York Mellon Corporation (“BNY Mellon”), serves as the fund’s investment adviser.

MBSC Securities 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 is authorized to issue an unlimited number of $.001 par value shares of Beneficial Interest in each of the following classes of shares: Initial and Service. Each class of shares has identical rights and privileges, except with respect to the distribution plan and the expenses borne by each class, the allocation of certain transfer agency costs and certain voting rights. Income, expenses (other than expenses attributable to a specific class), and realized and unrealized gains or losses on investments are allocated to each class of shares based on its relative net assets.

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


The Fund	19

NOTES TO FINANCIAL STATEMENTS (continued)

under authority of federal laws are also sources of authoritative GAAP for SEC registrants. The fund’s financial statements are prepared in accordance with GAAP, which may require the use of management estimates and assumptions.Actual results could differ from those estimates.

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

(a) Portfolio valuation: The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (i.e. the exit price). GAAP establishes a fair value hierarchy that prioritizes the inputs of valuation techniques used to measure fair value.This hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).

Additionally, GAAP provides guidance on determining whether the volume and activity in a market has decreased significantly and whether such a decrease in activity results in transactions that are not orderly. GAAP requires enhanced disclosures around valuation inputs and techniques used during annual and interim periods.

Various inputs are used in determining the value of the fund’s investments relating to fair value measurements.These inputs are summarized in the three broad levels listed below:

Level 1—unadjusted quoted prices in active markets for identical investments.

Level 2—other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.).

Level 3—significant unobservable inputs (including the fund’s own assumptions in determining the fair value of investments).

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. Valuation techniques used to value the fund’s investments are as follows:

Investments in securities are valued at the last sales price on the securities exchange or national securities market on which such securities are primarily traded. Securities listed on the National Market System for which market quotations are available are valued at the official closing price or, if there is no official closing price that day, at the last sales price. Securities not listed on an exchange or the national securities market, or securities for which there were no transactions, are valued at the average of the most recent bid and asked prices, except for open short positions, where the asked price is used for valuation purposes. Bid price is used when no asked price is available. Registered investment companies that are not traded on an exchange are valued at their net asset value.All preceding securities are categorized within Level 1 of the fair value hierarchy.

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 American Depository Receipts and futures contracts. Utilizing these techniques may result in transfers between Level 1 and Level 2 of the fair value hierarchy.


The Fund	21

NOTES TO FINANCIAL STATEMENTS (continued)

investments such as: fundamental analytical data, the nature and duration of restrictions on disposition, an evaluation of the forces that influence the market in which the securities are purchased and sold, and public trading in similar securities of the issuer or comparable issuers. These securities are either categorized as Level 2 or 3 depending on the relevant inputs used.

For restricted securities where observable inputs are limited, assumptions about market activity and risk are used and are categorized within Level 3 of the fair value hierarchy.

The following is a summary of the inputs used as of December 31, 2011 in valuing the fund’s investments:


		Level 2—Other	Level 3—
	Level 1—	Significant	Significant
	Unadjusted	Observable	Unobservable
	Quoted Prices	Inputs	Inputs	Total
Assets ($)
Investments in Securities:
Equity Securities—
Domestic^†	28,346,418	—	—	28,346,418
Mutual Funds	259,237	—	—	259,237
† See Statement of Investments for additional detailed categorizations.

In May 2011, FASB issued Accounting Standards Update (ASU) No. 2011-04 “Amendments to Achieve Common FairValue Measurement and Disclosure Requirements in GAAP and International Financial Reporting Standards (“IFRS”)” (“ASU 2011-04”). ASU 2011-04 includes common requirements for measurement of and disclosure about fair value between GAAP and IFRS. ASU 2011-04 will require reporting entities to disclose the following information for fair value measurements categorized within Level 3 of the fair value hierarchy: quantitative information about the unobservable inputs used in the fair value measurement, the valuation processes used by the reporting entity and a narrative description of the sensitivity of the fair value measurement to changes in unobservable inputs and the interrelationships between those unobservable inputs. In addition, ASU 2011-04 will

require reporting entities to make disclosures about amounts and reasons for all transfers in and out of Level 1 and Level 2 fair value measurements.The new and revised disclosures are effective for interim and annual reporting periods beginning after December 15, 2011. At this time, management is evaluating the implications of ASU 2011-04 and its impact on the financial statements.

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

Pursuant to a securities lending agreement withThe Bank of NewYork Mellon, a subsidiary of BNY Mellon and an affiliate of Dreyfus, the fund may lend securities to qualified institutions. It is the fund’s policy that, at origination, all loans are secured by collateral of at least 102% of the value of U.S. securities loaned and 105% of the value of foreign securities loaned. Collateral equivalent to at least 100% of the market value of securities on loan is maintained at all times. Collateral is either in the form of cash, which can be invested in certain money market mutual funds managed by the Manager, U.S. Government and Agency securities or letters of credit.The fund is entitled to receive all income on securities loaned, in addition to income earned as a result of the lending transaction. Although each security loaned is fully collateralized, the fund bears the risk of delay in recovery of, or loss of rights in, the securities loaned should a borrower fail to return the securities in a timely manner. During the period ended December 31, 2011, The Bank of NewYork Mellon earned $237 from lending portfolio securities, pursuant to the securities lending agreement.

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


The Fund	23

NOTES TO FINANCIAL STATEMENTS (continued)

The fund may invest in shares of certain affiliated investment companies also advised or managed by Dreyfus. Investments in affiliated investment companies for the period ended December 31, 2011 were as follows:


Affiliated
Investment	Value				Value		Net
Company	12/31/2010	($)	Purchases ($)	Sales ($)	12/31/2011	($)	Assets (%)
Dreyfus
Institutional
Preferred
Plus Money
Market Fund	53,000		5,264,527	5,309,523	8,004		.0
Dreyfus
Institutional
Cash
Advantage
Fund^†	164,981		6,248,700	6,162,448	251,233		.9
Total	217,981		11,513,227	11,471,971	259,237		.9


†	On June 7, 2011, Dreyfus Institutional Cash Advantage Plus Fund was acquired by Dreyfus
	Institutional Cash Advantage Fund, resulting in a transfer of shares.

(d) Dividends to shareholders: Dividends are recorded on the ex-dividend date. Dividends from investment income—net and dividends from net realized capital gains, 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 gains can be offset by capital loss carryovers, it is the policy of the fund not to distribute such gains. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.

(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.

As of and during the period ended December 31, 2011, the fund did not have any liabilities for any uncertain tax positions.The fund recognizes interest and penalties, if any, related to uncertain tax positions as income tax expense in the Statement of Operations. During the period, the fund did not incur any interest or penalties.

Each of the tax years in the four-year period ended December 31, 2011 remains subject to examination by the Internal Revenue Service and state taxing authorities.

At December 31, 2011, the components of accumulated earnings on a tax basis were as follows: undistributed ordinary income $231,982, accumulated capital losses $4,541,784 and unrealized depreciation $237,010. In addition, the fund had $7,009 of capital losses realized after October 31, 2011, which were deferred for tax purposes to the first day of the following fiscal year.

Under the Regulated Investment Company Modernization Act of 2010 (the “2010 Act”), the fund will be permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 (“post-enactment losses”) for an unlimited period. Post-enactment capital loss carryovers will retain their character as either short-term or long-term capital losses rather than be considered short-term as they were under previous statute. However, the 2010 Act requires post-enactment losses to be utilized before the utilization of losses incurred in taxable years prior to the effective date of the 2010 Act (“pre-enactment losses”).As a result of this ordering rule, pre-enactment losses may be more likely to expire unused.

The accumulated capital loss carryover is available for federal income tax purposes to be applied against future net securities profits, if any, realized subsequent to December 31, 2011. If not applied, the carryover expires in fiscal 2017.

The tax character of distributions paid to shareholders during the fiscal periods ended December 31, 2011 and December 31, 2010, were as follows: ordinary income $328,047 and $481,397, respectively.

During the period ended December 31, 2011, as a result of permanent book to tax differences, primarily due to return of capital distributions, the fund decreased accumulated undistributed investment income-net by $898 and increased paid-in capital by the same amount. Net assets and net asset value per share were not affected by this reclassification.


The Fund	25

NOTES TO FINANCIAL STATEMENTS (continued)

NOTE 2—Bank Lines of Credit:

The fund participates with other Dreyfus-managed funds in a $225 million unsecured credit facility led by Citibank, N.A. and a $300 million unsecured credit facility provided by The Bank of New York Mellon (each, a “Facility”), each to be utilized primarily for temporary or emergency purposes, including the financing of redemptions. In connection therewith, the fund has agreed to pay its pro rata portion of commitment fees for each Facility. Interest is charged to the fund based on rates determined pursuant to the terms of the respective Facility at the time of borrowing. During the period ended December 31, 2011, the fund did not borrow under the Facilities.

NOTE 3—Management Fee and Other Transactions With Affiliates:

(a) Pursuant to a management agreement with the Manager, the management fee is computed at the annual rate of .75% of the value of the fund’s average daily net assets and is payable monthly.

The Manager has contractually agreed, from September 1, 2011 until February 28, 2013, to waive receipt of its fees and/or assume the direct expenses of the fund so that the expenses of none of the classes (excluding Rule 12b-1 fees, shareholder services fees, taxes, interest expense, brokerage commissions, commitment fees on borrowings and extraordinary expenses) exceed .80% of the value of the fund’s average daily net assets.The reduction in management fees, pursuant to the undertaking, amounted to $24,722 during the period ended December 31, 2011.

(b) Under the Distribution Plan (the “Plan”) adopted pursuant to Rule 12b-1 under the Act, Service shares pay the Distributor for distributing their shares, for servicing and/or maintaining Service shares’ shareholder accounts and for advertising and marketing for Service shares.The Plan provides for payments to be made at an annual rate of .25% of the value of the Service shares’ average daily net assets.The Distributor may make

payments to Participating Insurance Companies and to brokers and dealers acting as principal underwriter for their variable insurance prod-ucts.The fees payable under the Plan are payable without regard to actual expenses incurred. During the period ended December 31, 2011, Service shares were charged $37,457 pursuant to the Plan.

The fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of the Manager, under a transfer agency agreement for providing personnel and facilities to perform transfer agency services for the fund. During the period ended December 31, 2011, the fund was charged $133 pursuant to the transfer agency agreement, which is included in Shareholder servicing costs in the Statement of Operations.

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

The fund compensates The Bank of New York Mellon under cash management agreements for performing cash management services related to fund subscriptions and redemptions. During the period ended December 31, 2011, the fund was charged $19 pursuant to the cash management agreements, which is included in Shareholder servicing costs in the Statement of Operations.These fees were partially offset by earnings credits of $1.

The fund also compensates The Bank of New York Mellon under a custody agreement for providing custodial services for the fund. During the period ended December 31, 2011, the fund was charged $13,753 pursuant to the custody agreement.

During the period ended December 31, 2011, the fund was charged $6,402 for services performed by the Chief Compliance Officer.


The Fund	27

NOTES TO FINANCIAL STATEMENTS (continued)

The components of “Due to The Dreyfus Corporation and affiliates” in the Statement of Assets and Liabilities consist of: management fees $17,999, Rule 12b-1 distribution plan fees $2,746, custodian fees $5,025, chief compliance officer fees $5,295 and transfer agency per account fees $20, which are offset against an expense reimbursement currently in effect in the amount of $12,913.

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

NOTE 4—Securities Transactions:

The aggregate amount of purchases and sales of investment securities, excluding short-term securities, during the period ended December 31, 2011, amounted to $26,884,338 and $30,783,141, respectively.

At December 31, 2011, the cost of investments for federal income tax purposes was $28,842,665; accordingly, accumulated net unrealized depreciation on investments was $237,010, consisting of $2,239,966 gross unrealized appreciation and $2,476,976 gross unrealized depreciation.

REPORT OF INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRM

Shareholders and Board of Trustees

Dreyfus Investment Portfolios, Core Value Portfolio

We have audited the accompanying statement of assets and liabilities, including the statement of investments, of Dreyfus Investment Portfolios, Core Value Portfolio (one of the series comprising Dreyfus Investment Portfolios) as of December 31, 2011, 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 the standards of the Public Company Accounting Oversight Board (United States).Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement.We were not engaged to perform an audit of the Fund’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion.An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of December 31, 2011 by correspondence with the custodian and others.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 Investment Portfolios, Core Value Portfolio at December 31, 2011, 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 U.S. generally accepted accounting principles.

New York, New York

February 10, 2012


The Fund	29

IMPORTANT TAX INFORMATION (Unaudited)

For federal tax purposes, the fund hereby designates 100% of the ordinary dividends paid during the fiscal year ended December 31, 2011 as qualifying for the corporate dividends received deduction. Shareholders will receive notification in early 2012 of the percentage applicable to the preparation of their 2011 income tax returns.

INFORMATION ABOUT THE RENEWAL OF THE

FUND’S MANAGEMENT AGREEMENT (Unaudited)

At a meeting of the fund’s Board of Trustees held on July 13 and 14, 2011, the Board considered the renewal of the fund’s Management Agreement pursuant to which Dreyfus provides the fund with investment advisory and administrative services (the “Agreement”). The Board members, none of whom are “interested persons” (as defined in the Investment Company Act of 1940, as amended) of the fund, were assisted in their review by independent legal counsel and met with counsel in executive session separate from representatives of Dreyfus. In considering the renewal of the Agreement, the Board considered all factors that it believed to be relevant, including those discussed below. The Board did not identify any one factor as dispositive, and each Board member may have attributed different weights to the factors considered.

Analysis of Nature, Extent, and Quality of Services Provided to the Fund.The Board members considered information previously provided to them in presentations from representatives of Dreyfus regarding the nature, extent, and quality of the services provided to funds in the Dreyfus fund complex, and representatives of Dreyfus confirmed that there had been no material changes in this information. Dreyfus provided the number of open accounts in the fund, the fund’s asset size and the allocation of fund assets among distribution channels. Dreyfus also had previously provided information regarding the diverse intermediary relationships and distribution channels of funds in the Dreyfus fund complex and Dreyfus’ corresponding need for broad, deep, and diverse resources to be able to provide ongoing shareholder services to each distribution channel, including the distribution channel(s) for the fund.

The Board members also considered research support available to, and portfolio management capabilities of, the fund’s portfolio management personnel and that Dreyfus also provides oversight of day-to-day fund operations, including fund accounting and administration and assistance in meeting legal and regulatory requirements.The Board members also considered Dreyfus’ extensive administrative, accounting, and compliance infrastructures.The Board also considered portfolio management’s brokerage policies and practices (including policies and practices regarding soft dollars) and the standards applied in seeking best execution.


The Fund	31

INFORMATION ABOUT THE RENEWAL OF THE FUND’S

MANAGEMENT AGREEMENT (Unaudited) (continued)

Comparative Analysis of the Fund’s Performance and Management Fee and Expense Ratio. The Board members reviewed reports prepared by Lipper, Inc. (“Lipper”), an independent provider of investment company data, which included information comparing (1) the fund’s performance with the performance of a group of comparable funds (the “Performance Group”) and with a broader group of funds (the “Performance Universe”), all for various periods ended May 31, 2011, and (2) the fund’s actual and contractual management fees and total expenses with those of a group of comparable funds (the “Expense Group”) and with a broader group of funds (the “Expense Universe”), the information for which was derived in part from fund financial statements available to Lipper as of December 31, 2010. Dreyfus previously had furnished the Board with a description of the methodology Lipper used to select the Performance Group and Performance Universe and the Expense Group and Expense Universe.

Dreyfus representatives stated that the usefulness of performance comparisons may be affected by a number of factors, including different investment limitations that may be applicable to the fund and comparison funds.The Board members discussed the results of the comparisons and noted that the fund’s total return performance was below the Performance Group and Performance Universe medians for the various periods, except for the one-year period when the fund’s performance was above the Performance Universe median. Dreyfus also provided a comparison of the fund’s calendar year total returns to the returns of the fund’s benchmark index.

The Board members also reviewed the range of actual and contractual management fees and total expenses of the Expense Group and Expense Universe funds and discussed the results of the comparisons.They noted that the fund’s contractual management fee was at the Expense Group median, and the fund’s actual management fee and total expenses were above the Expense Group and Expense Universe medians.

A representative of Dreyfus noted that Dreyfus has contractually agreed to waive receipt of its fees and/or assume the expenses of the fund, until February 29, 2012, so that annual direct fund operating expenses (excluding Rule 12b-1 fees, shareholder services fees, taxes, interest, brokerage commissions, acquired fund fees and extraordinary expenses) do not exceed 0.80% of the fund’s average daily net assets.

Representatives of Dreyfus reviewed with the Board members the management or investment advisory fees (1) paid by funds advised or administered by Dreyfus that are in the same Lipper category as the fund and (2) paid to Dreyfus or the Dreyfus-affiliated primary employer of the fund’s primary portfolio manager for advising any separate accounts and/or other types of client portfolios that are considered to have similar investment strategies and policies as the fund (the “Similar Clients”), and explained the nature of the Similar Clients.They discussed differences in fees paid and the relationship of the fees paid in light of any differences in the services provided and other relevant factors.The Board members considered the relevance of the fee information provided for the Similar Clients to evaluate the appropriateness and reasonableness of the fund’s management fee.

Analysis of Profitability and Economies of Scale. Dreyfus’ representatives reviewed the expenses allocated and profit received by Dreyfus and the resulting profitability percentage for managing the fund, and the method used to determine the expenses and profit. The Board concluded that the profitability results were not unreasonable, given the services rendered and service levels provided by Dreyfus.The Board previously had been provided with information prepared by an independent consulting firm regarding Dreyfus’ approach to allocating costs to, and determining the profitability of, individual funds and the entire Dreyfus fund complex. The consulting firm also had analyzed where any economies of scale might emerge in connection with the management of a fund.


The Fund	33

INFORMATION ABOUT THE RENEWAL OF THE FUND’S

MANAGEMENT AGREEMENT (Unaudited) (continued)

The Board’s counsel stated that the Board members should consider the profitability analysis (1) as part of their evaluation of whether the fees under the Agreement bear a reasonable relationship to the mix of services provided by Dreyfus, including the nature, extent and quality of such services, and (2) in light of the relevant circumstances for the fund and the extent to which economies of scale would be realized if the fund grows and whether fee levels reflect these economies of scale for the benefit of fund shareholders.They also noted that, as a result of shared and allocated costs among funds in the Dreyfus fund complex, the extent of economies of scale could depend substantially on the level of assets in the complex as a whole, so that increases and decreases in complex-wide assets can affect potential economies of scale in a manner that is disproportionate to, or even in the opposite direction from, changes in the fund’s asset level.The Board members also considered potential benefits to Dreyfus from acting as investment adviser and noted the soft dollar arrangements in effect for trading the fund’s investments.

At the conclusion of these discussions, the Board agreed that it had been furnished with sufficient information to make an informed business decision with respect to the renewal of the Agreement. Based on the discussions and considerations as described above, the Board concluded and determined as follows.

The Board concluded that the nature, extent and quality of the services provided by Dreyfus are adequate and appropriate.
The Board agreed to closely monitor performance and deter- mined to approve renewal of the fund’s Agreement only through February 29, 2012.
The Board concluded that the fee paid to Dreyfus was reasonable in light of the considerations described above.

The Board determined that the economies of scale which may accrue to Dreyfus and its affiliates in connection with the management of the fund had been adequately considered by Dreyfus in connection with the fee rate charged to the fund pursuant to the Agreement and that, to the extent in the future it were determined that material economies of scale had not been shared with the fund, the Board would seek to have those economies of scale shared with the fund.

The Board members considered these conclusions and determinations, along with information received on a routine and regular basis throughout the year. In addition, it should be noted that the Board’s consideration of the contractual fee arrangements for this fund had the benefit of a number of years of reviews of prior or similar agreements during which lengthy discussions took place between the Board members and Dreyfus representatives. Certain aspects of the arrangements may receive greater scrutiny in some years than in others, and the Board members’ conclusions may be based, in part, on their consideration of the same or similar arrangements in prior years. The Board members determined that renewal of the Agreement through February 29, 2012 was in the best interests of the fund and its shareholders.


The Fund	35

BOARD MEMBERS INFORMATION (Unaudited)

Joseph S. DiMartino (68)

Chairman of the Board (1998)

Principal Occupation During Past 5Years:

• Corporate Director and Trustee

Other Public Company Board Memberships During Past 5Years:

• CBIZ (formerly, Century Business Services, Inc.), a provider of outsourcing functions for small

and medium size companies, Director (1997-present)

• Sunair Services Corporation, a provider of certain outdoor-related services to homes and

businesses, Director (2005-2009)

• The Newark Group, a provider of a national market of paper recovery facilities, paperboard

mills and paperboard converting plants, Director (2000-2010)

No. of Portfolios for which Board Member Serves: 164

———————

Clifford L. Alexander, Jr. (78)

Board Member (1998)

Principal Occupation During Past 5Years:

• President of Alexander & Associates, Inc., a management consulting firm (January 1981-present)

No. of Portfolios for which Board Member Serves: 45

———————

David W. Burke (75)

Board Member (2003)

Principal Occupation During Past 5Years:

• Corporate Director and Trustee

No. of Portfolios for which Board Member Serves: 81

Whitney I. Gerard (77)

Board Member (2003)

Principal Occupation During Past 5Years:

• Partner of Chadbourne & Parke LLP

No. of Portfolios for which Board Member Serves: 25

———————

George L. Perry (77)

Board Member (2003)

Principal Occupation During Past 5Years:

• Economist and Senior Fellow at Brookings Institution

No. of Portfolios for which Board Member Serves: 25

———————

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

Lucy Wilson Benson, Emeritus Board Member
Arthur A. Hartman, Emeritus Board Member


The Fund	37

OFFICERS OF THE FUND (Unaudited)

BRADLEY J. SKAPYAK, President since January 2010.

Chief Operating Officer and a director of the Manager since June 2009. From April 2003 to June 2009, Mr. Skapyak was the head of the Investment Accounting and Support Department of the Manager. He is an officer of 75 investment companies (comprised of 163 portfolios) managed by the Manager. He is 53 years old and has been an employee of the Manager since February 1988.

JANETTE E. FARRAGHER, Vice President and Secretary since December 2011.

Assistant General Counsel of BNY Mellon, and an officer of 76 investment companies (comprised of 189 portfolios) managed by the Manager. She is 49 years old and has been an employee of the Manager since February 1984.

KIESHA ASTWOOD, Vice President and Assistant Secretary since January 2010.

Counsel of BNY Mellon, and an officer of 76 investment companies (comprised of 189 portfolios) managed by the Manager. She is 38 years old and has been an employee of the Manager since July 1995.

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

Senior Counsel of BNY Mellon and Secretary of the Manager, and an officer of 76 investment companies (comprised of 189 portfolios) managed by the Manager. He is 45 years old and has been an employee of the Manager since December 1996.

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

Senior Counsel of BNY Mellon, and an officer of 76 investment companies (comprised of 189 portfolios) managed by the Manager. She is 56 years old and has been an employee of the Manager since October 1988.

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

Senior Counsel of BNY Mellon, and an officer of 76 investment companies (comprised of 189 portfolios) managed by the Manager. He is 50 years old and has been an employee of the Manager since June 2000.

KATHLEEN DENICHOLAS, Vice President and Assistant Secretary since January 2010.

Managing Counsel of BNY Mellon, and an officer of 76 investment companies (comprised of 189 portfolios) managed by the Manager. She is 37 years old and has been an employee of the Manager since February 2001.

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

Senior Managing Counsel of BNY Mellon, and an officer of 76 investment companies (comprised of 189 portfolios) managed by the Manager. He is 48 years old and has been an employee of the Manager since February 1991.

M. CRISTINA MEISER, Vice President and Assistant Secretary since January 2010.

Senior Counsel of BNY Mellon, and an officer of 76 investment companies (comprised of 189 portfolios) managed by the Manager. She is 41 years old and has been an employee of the Manager since August 2001.

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

Managing Counsel of BNY Mellon, and an officer of 76 investment companies (comprised of 189 portfolios) managed by the Manager. He is 59 years old and has been an employee of the Manager since May 1986.

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

Senior Managing Counsel of BNY Mellon, and an officer of 76 investment companies (comprised of 189 portfolios) managed by the Manager. He is 46 years old and has been an employee of the Manager since October 1990.

JAMES WINDELS, Treasurer since November 2001.

Director – Mutual Fund Accounting of the Manager, and an officer of 76 investment companies (comprised of 189 portfolios) managed by the Manager. He is 53 years old and has been an employee of the Manager since April 1985.

RICHARD CASSARO, Assistant Treasurer since January 2008.

Senior Accounting Manager – Money Market and Municipal Bond Funds of the Manager, and an officer of 76 investment companies (comprised of 189 portfolios) managed by the Manager. He is 52 years old and has been an employee of the Manager since September 1982.

GAVIN C. REILLY, Assistant Treasurer since December 2005.

Tax Manager of the Investment Accounting and Support Department of the Manager, and an officer of 76 investment companies (comprised of 189 portfolios) managed by the Manager. He is 43 years old and has been an employee of the Manager since April 1991.

ROBERT S. ROBOL, Assistant Treasurer since August 2005.

Senior Accounting Manager – Fixed Income Funds of the Manager, and an officer of 76 investment companies (comprised of 189 portfolios) managed by the Manager. He is 47 years old and has been an employee of the Manager since October 1988.

ROBERT SALVIOLO, Assistant Treasurer since July 2007.

Senior Accounting Manager – Equity Funds of the Manager, and an officer of 76 investment companies (comprised of 189 portfolios) managed by the Manager. He is 44 years old and has been an employee of the Manager since June 1989.

ROBERT SVAGNA, Assistant Treasurer since December 2002.

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

Chief Compliance Officer of the Manager and The Dreyfus Family of Funds (76 investment companies, comprised of 189 portfolios). From November 2001 through March 2004, Mr. Connolly was first Vice-President, Mutual Fund Servicing for Mellon Global Securities Services. In that capacity, Mr. Connolly was responsible for managing Mellon’s Custody, Fund Accounting and Fund Administration services to third-party mutual fund clients. He is 54 years old and has served in various capacities with the Manager since 1980, including manager of the firm’s Fund Accounting Department from 1997 through October 2001.

STEPHEN J. STOREN, Anti-Money Laundering Compliance Officer since May 2011.

Chief Compliance Officer of the Distributor, and the Anti-Money Laundering Compliance Officer of 72 investment companies (comprised of 185 portfolios) managed by the Manager. He is 57 years old and has been an employee of the Distributor since October 1999.


The Fund	39

NOTES

For More Information


Telephone 1-800-554-4611 or 1-516-338-3300
Mail	The Dreyfus Family of Funds, 144 Glenn Curtiss Boulevard, Uniondale, NY 11556-0144
	Attn: Investments Division

The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (“SEC”) for the first and third quarters of each fiscal year on Form N-Q. The fund’s Forms N-Q are available on the SEC’s website at http://www.sec.gov and may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.

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

Dreyfus

Investment Portfolios,

MidCap Stock Portfolio

ANNUAL REPORT December 31, 2011

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

	Contents
	THE FUND
2	A Letter from the Chairman and CEO
3	Discussion of Fund Performance
6	Fund Performance
8	Understanding Your Fund’s Expenses
8	Comparing Your Fund’s Expenses With Those of Other Funds
9	Statement of Investments
14	Statement of Assets and Liabilities
15	Statement of Operations
16	Statement of Changes in Net Assets
18	Financial Highlights
20	Notes to Financial Statements
30	Report of Independent Registered Public Accounting Firm
31	Important Tax Information
32	Information About the Renewal of the Fund’s Management Agreement
37	Board Members Information
39	Officers of the Fund
	FOR MORE INFORMATION
	Back Cover

Dreyfus Investment Portfolios,
MidCap Stock Portfolio

The Fund

A LETTER FROM THE CHAIRMAN AND CEO

Dear Shareholder:

We present to you this annual report for Dreyfus Investment Portfolios, MidCap Stock Portfolio, covering the 12-month period from January 1, 2011, through December 31, 2011. For information about how the fund performed during the reporting period, as well as general market perspectives, we provide a Discussion of Fund Performance on the pages that follow.

The generally mild returns produced by the U.S. stock market in 2011 belie the pronounced volatility affecting equities over much of the year. Day-to-day market movements were often tumultuous, driven by macroeconomic developments ranging from catastrophic natural disasters in Japan to an unprecedented downgrade of long-term U.S. debt securities and the resurgence of a sovereign debt crisis in Europe. Still, U.S. corporations achieved record-setting profits, on average, even as market valuations dropped below historical norms.A fundamentals-based investment approach proved relatively ineffective in a market fueled mainly by emotion, causing most active portfolio managers to lag market averages.

Thank you for your continued confidence and support.

Jonathan R. Baum
Chairman and Chief Executive Officer
The Dreyfus Corporation
January 17, 2012

DISCUSSION OF FUND PERFORMANCE

For the period of January 1, 2011, through December 31, 2011, as provided by Patrick Slattery, Portfolio Manager

Fund and Market Performance Overview

For the 12-month period ended December 31, 2011, Dreyfus Investment Portfolios, MidCap Stock Portfolio’s Initial shares produced a total return of 0.40%, and its Service shares produced a total return of 0.20%.¹In comparison, the fund’s benchmark, the Standard & Poor’s MidCap 400 Index (the “S&P 400 Index”), produced a total return of –1.73% for the same period.²

A variety of macroeconomic disappointments weighed on equity markets during much of 2011, but rallies in the first and fourth quarters enabled midcap stocks to post only a mild loss. The fund’s relatively strong performance compared to its benchmark was driven primarily by strong stock selections in the health care, information technology and materials sectors.

The Fund’s Investment Approach

The fund seeks investment results that are greater than the total return performance of publicly traded common stocks of medium-size domestic companies in the aggregate, as represented by the S&P 400 Index.To pursue this goal, the fund normally invests at least 80% of its assets in stocks of midsize companies.The fund invests in growth and value stocks, which are chosen through a disciplined investment process that combines computer modeling techniques, fundamental analysis and risk management. Consistency of returns compared to the S&P 400 Index is a primary goal of the investment process.

Economic Uncertainty Triggered Market Volatility

During the opening months of 2011, broad confidence in U.S. economic growth overcame investors’ concerns regarding a series of unsettling global developments, which included unprecedented political unrest in the Middle East, natural and nuclear disasters in Japan and the growing sovereign debt crisis in Europe. By the spring, however, investor confidence came under increasing pressure with European financial


The Fund	3

DISCUSSION OF FUND PERFORMANCE (continued)

instability intensifying, emerging-markets growth slowing and the U.S. economy showing signs of renewed weakness. Negative market trends were exacerbated by the downgrading of long-term U.S. government debt by a major credit-rating agency. Consequently the S&P 400 Index declined sharply over the summer.

By October, market conditions began to show signs of improvement, bolstered by better U.S. economic data, reductions in the unemployment rate and some positive developments in the global economy. While market volatility remained high during the last quarter of the year, U.S. equities regained much of the ground they had lost earlier. However, returns for midcap stocks proved weaker than those of their larger-cap counterparts.

Quality Factors Buoyed the Fund’s Performance

For the year as a whole, the quantitative modeling factors at the heart of the fund’s stock selection process tended to enhance returns relative to the benchmark. Quality-related factors, such as earnings quality, made the greatest positive contribution to relative performance. Behavioral factors, such as earnings agreement, also played a role in the fund’s comparatively good returns, especially during the latter half of the year. Positive results attributable to these two groups of factors significantly outweighed the negative role played by value-related factors.

Individual Stock Selections Produced Positive Returns

Individual investments in the health care sector provided the fund’s most robust returns relative to the benchmark. Health plan provider Humana advanced after reporting better-than-expected earnings and issuing its first dividend in eighteen years. Two other holdings, drug developer Cephalon and medical device maker Kinetic Concepts, received attractive buyout offers at premiums to their stock prices at the time.

Several information technology holdings delivered strong relative returns as well, led by services provider Fair Isaac, a recent addition to the fund’s portfolio, which climbed sharply in early November after reporting better-than-expected quarterly earnings and raising guidance for future business prospects. Other top technology holdings included Internet services company IAC/InterActiveCorp, which announced strong financial results, and systems consultant SRA International, which was acquired on favorable terms for investors. In the materials sector,

specialty chemicals maker NewMarket reported strong earnings and twice increased its dividend payout, driving the stock higher throughout the year.

Of course, not all the fund’s holdings generated favorable results. Notable disappointments included vehicle maker Oshkosh and technology infrastructure and services provider Computer Sciences, both of which were hurt by cutbacks in government spending. Telephone & Data Systems, a diversified telecommunications company, struggled with heavier competition from wireless service providers. Coal producer Arch Coal experienced production and delivery problems, and funded its acquisition of a competitor by issuing more stock, thereby diluting the value of existing shareholders’ interests.

Finding Opportunities Created by Volatility

While the high levels of market volatility that prevailed throughout 2011 were unsettling for many investors, we believe that the turbulent environment created opportunities in many sectors of the market. Our quantitative investment approach, with its broad range of modeling factors, is designed to identify such opportunities across market sectors and investment style strategies.

January 17, 2012


	Please note, the position in any security highlighted with italicized typeface was sold during the
	reporting period.
	Equity funds are subject generally to market, market sector, market liquidity, issuer and investment
	style risks, among other factors, to varying degrees, all of which are more fully described in the
	fund’s prospectus.
	Stocks of midcap companies often experience sharper price fluctuations than stocks of
	large-cap companies.
	The fund is only available as a funding vehicle under variable life insurance policies or variable
	annuity contracts issued by insurance companies. Individuals may not purchase shares of the fund
	directly.A variable annuity is an insurance contract issued by an insurance company that enables
	investors to accumulate assets on a tax-deferred basis for retirement or other long-term goals.
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.The fund’s performance does not
	reflect the deduction of additional charges and expenses imposed in connection with investing in
	variable insurance contracts, which will reduce returns.
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.
	Investors cannot invest directly in an index.


The Fund	5

FUND PERFORMANCE


Average Annual Total Returns as of 12/31/11
	1Year	5 Years	10 Years
Initial shares	0.40%	0.90%	4.96%
Service shares	0.20%	0.78%	4.81%
Standard & Poor’s MidCap 400 Index	–1.73%	3.32%	7.04%

† Source: Lipper Inc.

Past performance is not predictive of future performance.The fund’s performance shown in the graph and table does not

reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.

The fund’s performance does not reflect the deduction of additional charges and expenses imposed in connection

with investing in variable insurance contracts which will reduce returns.

The above graph compares a $10,000 investment made in Initial and Service shares of Dreyfus Investment Portfolios,

MidCap Stock Portfolio on 12/31/01 to a $10,000 investment made in the Standard & Poor’s MidCap 400 Index

(the “Index”) on that date.

The fund’s Initial shares are not subject to a Rule 12b-1 fee.The fund’s Service shares are subject to a 0.25% annual Rule 12b-1 fee.All dividends and capital gain distributions are reinvested.

The fund’s performance shown in the line graph above takes into account all applicable fund fees and expenses (after any expense reimbursements).The Index is a widely accepted, unmanaged total return index measuring the performance of the midsize company segment of the U.S. stock market. Unlike a mutual fund, the Index is not subject to charges, fees and other expenses. Investors cannot invest directly in any index. Further information relating to fund performance, including expense reimbursements, if applicable, is contained in the Financial Highlights section of the prospectus and elsewhere in this report.


The Fund	7

UNDERSTANDING YOUR FUND’S EXPENSES (Unaudited)

Review your fund’s expenses

The table below shows the expenses you would have paid on a $1,000 investment in Dreyfus Investment Portfolios, MidCap Stock Portfolio from July 1, 2011 to December 31, 2011. It also shows how much a $1,000 investment would be worth at the close of the period, assuming actual returns and expenses.

Expenses and Value of a $1,000 Investment
assuming actual returns for the six months ended December 31, 2011


	Initial Shares	Service Shares
Expenses paid per $1,000^†	$4.27	$5.47
Ending value (after expenses)	$922.90	$922.10

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

Using the SEC’s method to compare expenses

Expenses and Value of a $1,000 Investment
assuming a hypothetical 5% annualized return for the six months ended December 31, 2011


	Initial Shares	Service Shares
Expenses paid per $1,000^†	$4.48	$5.75
Ending value (after expenses)	$1,020.77	$1,019.51

† Expenses are equal to the fund’s annualized expense ratio of .88% for Initial shares and 1.13% for Service shares,

multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).

STATEMENT OF INVESTMENTS

December 31, 2011


Common Stocks—99.2%	Shares	Value ($)
Consumer Discretionary—14.6%
Aaron’s	67,400	1,798,232
American Greetings, Cl. A	35,300^a	441,603
ANN	20,900^b	517,902
Bob Evans Farms	56,400^a	1,891,656
Brinker International	77,750	2,080,590
Cheesecake Factory	47,700^a,b	1,399,995
Chico’s FAS	56,100	624,954
Dillard’s, Cl. A	14,900^a	668,712
GameStop, Cl. A	32,900^a,b	793,877
ITT Educational Services	26,500^a,b	1,507,585
O’Reilly Automotive	13,500^b	1,079,325
Penn National Gaming	18,100^b	689,067
PetSmart	37,400	1,918,246
RadioShack	46,000^a	446,660
Scholastic	36,400^a	1,090,908
Sotheby’s	30,100	858,753
TRW Automotive Holdings	10,000^b	326,000
Tupperware Brands	13,700	766,789
Valassis Communications	16,200^a,b	311,526
Weight Watchers International	16,900^a	929,669
Williams-Sonoma		138,600
Wynn Resorts	2,100	232,029
		20,512,678
Consumer Staples—5.5%
Church & Dwight	64,000	2,928,640
Coca-Cola Enterprises	68,200	1,758,196
Constellation Brands, Cl. A	87,300^b	1,804,491
Smithfield Foods	48,300^b	1,172,724
Tootsie Roll Industries	2,100^a	49,707
		7,713,758
Energy—5.9%
Helix Energy Solutions Group	79,700^b	1,259,260
HollyFrontier	41,000	959,400
Oceaneering International	13,500	622,755
Plains Exploration & Production	46,100^b	1,692,792


The Fund	9

STATEMENT OF INVESTMENTS (continued)


Common Stocks (continued)	Shares	Value ($)
Energy (continued)
Superior Energy Services	47,600^a,b	1,353,744
Tesoro	35,700^b	833,952
Valero Energy	70,400	1,481,920
		8,203,823
Financial—17.4%
American Financial Group	49,275	1,817,755
Cathay General Bancorp	77,600	1,158,568
Comerica	13,300	343,140
Cousins Properties	28,600^c	183,326
Discover Financial Services	24,200	580,800
Equity One	6,100^c	103,578
Highwoods Properties	19,200^a,c	569,664
Hospitality Properties Trust	64,500^c	1,482,210
Huntington Bancshares	35,900	197,091
KeyCorp	206,000	1,584,140
Liberty Property Trust	34,700^a,c	1,071,536
Lincoln National	17,800	345,676
Macerich	6,247^c	316,098
Mack-Cali Realty	74,300^c	1,983,067
Protective Life	35,500	800,880
Rayonier	59,350^c	2,648,791
Reinsurance Group of America	24,600	1,285,350
SEI Investments	98,400	1,707,240
SL Green Realty	21,000^a,c	1,399,440
StanCorp Financial Group	28,400^a	1,043,700
SVB Financial Group	6,000^b	286,140
Waddell & Reed Financial, Cl. A	49,100	1,216,207
Webster Financial	103,900^a	2,118,521
Weingarten Realty Investors	3,200^c	69,824
Zions Bancorporation	8,900	144,892
		24,457,634
Health Care—12.3%
Agilent Technologies	29,100^b	1,016,463
AMERIGROUP	9,100^b	537,628
Charles River Laboratories International	30,600^b	836,298
Covance	41,100^b	1,879,092


Common Stocks (continued)	Shares	Value ($)
Health Care (continued)
Health Net	27,400^b	833,508
Hill-Rom Holdings	50,200	1,691,238
Humana	13,000	1,138,930
IDEXX Laboratories	20,800^a,b	1,600,768
LifePoint Hospitals	11,800^b	438,370
Medicis Pharmaceutical, Cl. A	10,200	339,150
Myriad Genetics	4,300^b	90,042
ResMed	89,400^b	2,270,760
Techne	28,400	1,938,584
Thoratec	33,300^b	1,117,548
United Therapeutics	33,300^b	1,573,425
		17,301,804
Industrial—14.0%
AGCO	27,000^b	1,160,190
Alaska Air Group	35,000^b	2,628,150
Alliant Techsystems	25,100	1,434,716
Copart	7,572^b	362,623
Corrections Corp. of America	94,100^b	1,916,817
Gardner Denver	28,700	2,211,622
KBR	21,200	590,844
Kennametal	55,600	2,030,512
Korn/Ferry International	12,000^b	204,720
Nordson	40,400	1,663,672
Pitney Bowes	84,100^a	1,559,214
Timken	40,400	1,563,884
URS	46,500^b	1,633,080
WABCO Holdings	15,500^b	672,700
		19,632,744
Information Technology—15.6%
ACI Worldwide	39,800^a,b	1,139,872
Arrow Electronics	22,300^b	834,243
BMC Software	17,600^b	576,928
CA	86,500	1,748,597
Cadence Design Systems	66,200^b	688,480
Dolby Laboratories, Cl. A	19,200^b	585,792
DST Systems	40,244	1,831,907


The Fund	11

STATEMENT OF INVESTMENTS (continued)


Common Stocks (continued)	Shares	Value ($)
Information Technology (continued)
FactSet Research Systems	9,800^a	855,344
Fair Isaac	58,500	2,096,640
Fairchild Semiconductor International	60,800^b	732,032
IAC/InterActiveCorp	39,000^a	1,661,400
Lender Processing Services	23,600	355,652
LSI	118,400^b	704,480
Plantronics	56,800	2,024,352
QLogic	96,100^b	1,441,500
Synopsys	62,200^b	1,691,840
Tech Data	40,500^b	2,001,105
Vishay Intertechnology	102,800^b	924,172
		21,894,336
Materials—6.1%
CF Industries Holdings	3,500	507,430
Domtar	27,200	2,174,912
Kronos Worldwide	30,000	541,200
Minerals Technologies	35,300	1,995,509
NewMarket	9,820^a	1,945,440
Sealed Air	50,000	860,500
Steel Dynamics	34,600	454,990
		8,479,981
Telecommunication Services—1.2%
Telephone & Data Systems	66,200	1,713,918
Utilities—6.6%
Cleco	39,300	1,497,330
Great Plains Energy	113,600	2,474,208
Hawaiian Electric Industries	72,500^a	1,919,800
NV Energy	34,700	567,345
Questar	126,600	2,514,276
Wisconsin Energy	6,800	237,728
		9,210,687
Total Common Stocks
(cost $135,515,144)		139,121,363


Other Investment—.7%	Shares	Value ($)
Registered Investment Company;
Dreyfus Institutional Preferred
Plus Money Market Fund
(cost $1,024,565)	1,024,565^d	1,024,565

Investment of Cash Collateral
for Securities Loaned—10.8%
Registered Investment Company;
Dreyfus Institutional Cash Advantage Fund
(cost $15,146,438)	15,146,438^d	15,146,438

Total Investments (cost $151,686,147)	110.7%	155,292,366
Liabilities, Less Cash and Receivables	(10.7%)	(15,054,840)
Net Assets	100.0%	140,237,526

a Security, or portion thereof, on loan.At December 31, 2011, the value of the fund’s securities on loan was

$14,673,232 and the value of the collateral held by the fund was $15,146,438.

b Non-income producing security.

c Investment in real estate investment trust.

d Investment in affiliated money market mutual fund.


Portfolio Summary (Unaudited)^†

	Value (%)		Value (%)
Financial	17.4	Utilities	6.6
Information Technology	15.6	Materials	6.1
Consumer Discretionary	14.6	Energy	5.9
Industrial	14.0	Consumer Staples	5.5
Health Care	12.3	Telecommunication Services	1.2
Money Market Investments	11.5		110.7

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


The Fund	13

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2011


	Cost	Value
Assets ($):
Investments in securities—See Statement of Investments (including
securities on loan, valued at $14,673,232)—Note 1(b):
Unaffiliated issuers	135,515,144	139,121,363
Affiliated issuers	16,171,003	16,171,003
Cash		418,895
Dividends and securities lending income receivable		107,528
Receivable for shares of Beneficial Interest subscribed		25,861
Prepaid expenses		2,133
		155,846,783
Liabilities ($):
Due to The Dreyfus Corporation and affiliates—Note 3(b)		106,369
Liability for securities on loan—Note 1(b)		15,146,438
Payable for shares of Beneficial Interest redeemed		301,231
Accrued expenses		55,219
		15,609,257
Net Assets ($)		140,237,526
Composition of Net Assets ($):
Paid-in capital		172,548,894
Accumulated undistributed investment income—net		632,663
Accumulated net realized gain (loss) on investments		(36,550,250)
Accumulated net unrealized appreciation
(depreciation) on investments		3,606,219
Net Assets ($)		140,237,526


Net Asset Value Per Share
	Initial Shares	Service Shares
Net Assets ($)	123,187,118	17,050,408
Shares Outstanding	9,358,905	1,297,886
Net Asset Value Per Share ($)	13.16	13.14

See notes to financial statements.

STATEMENT OF OPERATIONS

Year Ended December 31, 2011


Investment Income ($):
Income:
Cash dividends:
Unaffiliated issuers	1,982,159
Affiliated issuers	816
Income from securities lending—Note 1(b)	45,450
Total Income	2,028,425
Expenses:
Management fee—Note 3(a)	1,177,048
Professional fees	70,437
Prospectus and shareholders’ reports	49,359
Distribution fees—Note 3(b)	45,816
Custodian fees—Note 3(b)	18,411
Shareholder servicing costs—Note 3(b)	10,407
Trustees’ fees and expenses—Note 3(c)	4,272
Loan commitment fees—Note 2	2,727
Miscellaneous	16,081
Total Expenses	1,394,558
Less—reduction in fees due to earnings credits—Note 3(b)	(4)
Net Expenses	1,394,554
Investment Income—Net	633,871
Realized and Unrealized Gain (Loss) on Investments—Note 4 ($):
Net realized gain (loss) on investments	21,917,984
Net unrealized appreciation (depreciation) on investments	(21,388,110)
Net Realized and Unrealized Gain (Loss) on Investments	529,874
Net Increase in Net Assets Resulting from Operations	1,163,745

See notes to financial statements.


The Fund	15

STATEMENT OF CHANGES IN NET ASSETS


	Year Ended December 31,
	2011	2010
Operations ($):
Investment income—net	633,871	793,366
Net realized gain (loss) on investments	21,917,984	17,733,437
Net unrealized appreciation
(depreciation) on investments	(21,388,110)	18,149,709
Net Increase (Decrease) in Net Assets
Resulting from Operations	1,163,745	36,676,512
Dividends to Shareholders from ($):
Investment income—net:
Initial Shares	(723,203)	(1,351,353)
Service Shares	(69,975)	(158,748)
Total Dividends	(793,178)	(1,510,101)
Beneficial Interest Transactions ($):
Net proceeds from shares sold:
Initial Shares	8,855,532	11,148,281
Service Shares	2,487,648	3,623,506
Dividends reinvested:
Initial Shares	723,203	1,351,353
Service Shares	69,975	158,748
Cost of shares redeemed:
Initial Shares	(33,901,325)	(28,547,371)
Service Shares	(5,108,937)	(4,212,318)
Increase (Decrease) in Net Assets from
Beneficial Interest Transactions	(26,873,904)	(16,477,801)
Total Increase (Decrease) in Net Assets	(26,503,337)	18,688,610
Net Assets ($):
Beginning of Period	166,740,863	148,052,253
End of Period	140,237,526	166,740,863
Undistributed investment income—net	632,663	791,970


	Year Ended December 31,
	2011	2010
Capital Share Transactions:
Initial Shares
Shares sold	669,033	968,273
Shares issued for dividends reinvested	50,858	115,896
Shares redeemed	(2,534,215)	(2,528,129)
Net Increase (Decrease) in Shares Outstanding	(1,814,324)	(1,443,960)
Service Shares
Shares sold	183,958	305,583
Shares issued for dividends reinvested	4,921	13,603
Shares redeemed	(379,066)	(369,298)
Net Increase (Decrease) in Shares Outstanding	(190,187)	(50,112)

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. The fund’s total returns do not reflect expenses associated with variable annuity or insurance contracts.These figures have been derived from the fund’s financial statements.


		Year Ended December 31,
Initial Shares	2011	2010	2009	2008	2007
Per Share Data ($):
Net asset value, beginning of period	13.17	10.46	7.85	15.52	17.39
Investment Operations:
Investment income—net^a	.06	.06	.11	.09	.12
Net realized and unrealized
gain (loss) on investments	.00^b	2.76	2.62	(5.63)	.19
Total from Investment Operations	.06	2.82	2.73	(5.54)	.31
Distributions:
Dividends from investment income—net	(.07)	(.11)	(.12)	(.12)	(.07)
Dividends from net realized
gain on investments	—	—	—	(2.01)	(2.11)
Total Distributions	(.07)	(.11)	(.12)	(2.13)	(2.18)
Net asset value, end of period	13.16	13.17	10.46	7.85	15.52
Total Return (%)	.40	27.10	35.51	(40.42)	1.50
Ratios/Supplemental Data (%):
Ratio of total expenses
to average net assets	.86	.84	.84	.82	.80
Ratio of net expenses
to average net assets	.86	.84	.84	.81	.80
Ratio of net investment income
to average net assets	.43	.54	1.22	.76	.73
Portfolio Turnover Rate	81.48	79.28	75.42	86.74	116.83
Net Assets, end of period ($ x 1,000)	123,187	147,155	131,962	125,701	277,602


a	Based on average shares outstanding at each month end.
b	Amount represents less than $.01 per share.

See notes to financial statements.


		Year Ended December 31,
Service Shares	2011	2010	2009	2008	2007
Per Share Data ($):
Net asset value, beginning of period	13.16	10.46	7.82	15.45	17.31
Investment Operations:
Investment income—net^a	.02	.05	.10	.08	.09
Net realized and unrealized
gain (loss) on investments	.01	2.76	2.63	(5.60)	.21
Total from Investment Operations	.03	2.81	2.73	(5.52)	.30
Distributions:
Dividends from investment income—net	(.05)	(.11)	(.09)	(.10)	(.05)
Dividends from net realized
gain on investments	—	—	—	(2.01)	(2.11)
Total Distributions	(.05)	(.11)	(.09)	(2.11)	(2.16)
Net asset value, end of period	13.14	13.16	10.46	7.82	15.45
Total Return (%)	.20	26.94	35.33	(40.44)	1.39
Ratios/Supplemental Data (%):
Ratio of total expenses
to average net assets	1.11	1.09	1.09	1.06	1.05
Ratio of net expenses
to average net assets	1.11	.97	.90	.90	.90
Ratio of net investment income
to average net assets	.18	.40	1.16	.62	.58
Portfolio Turnover Rate	81.48	79.28	75.42	86.74	116.83
Net Assets, end of period ($ x 1,000)	17,050	19,586	16,090	13,881	39,009
a Based on average shares outstanding at each month end.
See notes to financial statements.


The Fund	19

NOTES TO FINANCIAL STATEMENTS

NOTE 1—Significant Accounting Policies:

Dreyfus Investment Portfolios (the “Company”) is registered under the Investment Company Act of 1940, as amended (the “Act”), as an open-end management investment company, operating as a series company currently offering four series, including the MidCap Stock Portfolio (the “fund”). The fund is only offered to separate accounts established by insurance companies to fund variable annuity contracts and variable life insurance policies.The fund is a diversified series.The fund’s investment objective is to seek investment results that are greater than the total return performance of publicly traded common stocks of medium-size domestic companies in the aggregate, as represented by the Standard & Poor’s MidCap 400 Index. The Dreyfus Corporation (the “Manager” or “Dreyfus”), a wholly-owned subsidiary ofThe Bank of NewYork Mellon Corporation (“BNY Mellon”), serves as the fund’s investment adviser.

MBSC Securities 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 is authorized to issue an unlimited number of $.001 par value shares of Beneficial Interest in each of the following classes of shares: Initial and Service. Each class of shares has identical rights and privileges, except with respect to the distribution plan, the expenses borne by each class, the allocation of certain transfer agency costs and certain voting rights. Income, expenses (other than expenses attributable to a specific class), and realized and unrealized gains or losses on investments are allocated to each class of shares based on its relative net assets.

Various inputs are used in determining the value of the fund’s investments relating to fair value measurements.These inputs are summarized in the three broad levels listed below:

Level 1—unadjusted quoted prices in active markets for identical investments.

Level 2—other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.).

Level 3—significant unobservable inputs (including the fund’s own assumptions in determining the fair value of investments).


The Fund	21

NOTES TO FINANCIAL STATEMENTS (continued)

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. Valuation techniques used to value the fund’s investments are as follows:

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 Board of Trustees. Certain factors may be considered when fair valuing investments such as: fundamental analytical data, the nature and dura-

tion of restrictions on disposition, an evaluation of the forces that influence the market in which the securities are purchased and sold, and public trading in similar securities of the issuer or comparable issuers. These securities are either categorized as Level 2 or 3 depending on the relevant inputs used.

For restricted securities where observable inputs are limited, assumptions about market activity and risk are used and are categorized within Level 3 of the fair value hierarchy.

The following is a summary of the inputs used as of December 31, 2011 in valuing the fund’s investments:


		Level 2—Other	Level 3—
	Level 1—	Significant	Significant
	Unadjusted	Observable	Unobservable
	Quoted Prices	Inputs	Inputs	Total
Assets ($)
Investments in Securities:
Equity Securities—
Domestic^†	139,121,363	—	—	139,121,363
Mutual Funds	16,171,003	—	—	16,171,003
† See Statement of Investments for additional detailed categorizations.

In May 2011, FASB issued Accounting Standards Update (“ASU”) No. 2011-04 “Amendments to Achieve Common FairValue Measurement and Disclosure Requirements in GAAP and International Financial Reporting Standards (“IFRS”)” (“ASU 2011-04”). ASU 2011-04 includes common requirements for measurement of and disclosure about fair value between GAAP and IFRS. ASU 2011-04 will require reporting entities to disclose the following information for fair value measurements categorized within Level 3 of the fair value hierarchy: quantitative information about the unobservable inputs used in the fair value measurement, the valuation processes used by the reporting entity and a narrative description of the sensitivity of the fair value measurement to changes in unobservable inputs and the interrelationships between those unobservable inputs. In addition, ASU 2011-04 will


The Fund	23

NOTES TO FINANCIAL STATEMENTS (continued)

Pursuant to a securities lending agreement with The Bank of New York Mellon, a subsidiary of BNY Mellon and an affiliate of Dreyfus, the fund may lend securities to qualified institutions. It is the fund’s policy that, at origination, all loans are secured by collateral of at least 102% of the value of U.S. securities loaned and 105% of the value of foreign securities loaned. Collateral equivalent to at least 100% of the market value of securities on loan is maintained at all times. Collateral is either in the form of cash, which can be invested in certain money market mutual funds managed by the Manager, U.S. Government and Agency securities or letters of credit.The fund is entitled to receive all income on securities loaned, in addition to income earned as a result of the lending transaction. Although each security loaned is fully collateralized, the fund bears the risk of delay in recovery of, or loss of rights in, the securities loaned should a borrower fail to return the securities in a timely manner. During the period ended December 31, 2011, The Bank of New York Mellon earned $19,478 from lending portfolio securities, pursuant to the securities lending agreement.

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


Affiliated
Investment	Value				Value		Net
Company	12/31/2010	($)	Purchases ($)	Sales ($)	12/31/2011	($)	Assets (%)
Dreyfus
Institutional
Preferred
Plus Money
Market Fund	912,000		25,360,907	25,248,342	1,024,565		.7
Dreyfus
Institutional
Cash
Advantage
Fund	2,072,631		207,026,915	193,953,108	15,146,438		10.8
Total	2,984,631		232,387,822	219,201,450	16,171,003		11.5

(d) Dividends to shareholders: Dividends are recorded on the ex-dividend date. Dividends from investment income-net and dividends from net realized capital gains, 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 gains can be offset by capital loss carryovers, it is the policy of the fund not to distribute such gains. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.

As of and during the period ended December 31, 2011, the fund did not have any liabilities for any uncertain tax positions.The fund recog-


The Fund	25

NOTES TO FINANCIAL STATEMENTS (continued)

nizes interest and penalties, if any, related to uncertain tax positions as income tax expense in the Statement of Operations. During the period, the fund did not incur any interest or penalties.

Each of the tax years in the four-year period ended December 31, 2011 remains subject to examination by the Internal Revenue Service and state taxing authorities.

At December 31, 2011, the components of accumulated earnings on a tax basis were as follows: undistributed ordinary income $632,663, accumulated capital losses $35,442,133 and unrealized appreciation $3,563,425. In addition, the fund had $1,065,323 of capital losses realized after October 31, 2011, which were deferred for tax purposes to the first day of the following fiscal year.

Under the Regulated Investment Company Modernization Act of 2010 (the “2010 Act”), the fund will be permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 (“post-enactment losses”) for an unlimited period. Post-enactment capital loss carryovers will retain their character as either short-term or long-term capital losses rather than be considered short-term as they were under previous statute. However, the 2010 Act requires post-enactment losses to be utilized before the utilization of losses incurred in taxable years prior to the effective date of the 2010 Act (“pre-enactment losses”). As a result of this ordering rule, pre-enactment losses may be more likely to expire unused.

The tax character of distributions paid to shareholders during the fiscal periods ended December 31, 2011 and December 31, 2010 were as follows: ordinary income $793,178 and $1,510,101, respectively.

NOTE 2—Bank Lines of Credit:

NOTE 3—Management Fee and Other Transactions With Affiliates:

(a) Pursuant to a management agreement with the Manager, the management fee is computed at the annual rate of .75% of the value of the fund’s average daily net assets and is payable monthly.

(b) Under the Distribution Plan (the “Plan”) adopted pursuant to Rule 12b-1 under the Act, Service shares pay the Distributor for distributing its shares, for servicing and/or maintaining Service shares’ shareholder accounts and for advertising and marketing for Service shares.The Plan provides for payments to be made at an annual rate of .25% of the value of the Service shares’ average daily net assets.The Distributor may make payments to participating insurance companies and to brokers and dealers acting as principal underwriter for their variable insurance products. The fees payable under the Plan are payable without regard to actual expenses incurred. During the period ended December 31, 2011, Service shares were charged $45,816 pursuant to the Plan.


The Fund	27

NOTES TO FINANCIAL STATEMENTS (continued)

The fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of the Manager under a transfer agency agreement for providing personnel and facilities to perform transfer agency services for the fund. During the period ended December 31, 2011, the fund was charged $922 pursuant to the transfer agency agreement, which is included in Shareholder servicing costs in the Statement of Operations.

The fund compensatesThe Bank of NewYork Mellon under cash management agreements for performing cash management services related to fund subscriptions and redemptions. During the period ended December 31, 2011, the fund was charged $116 pursuant to the cash management agreements, which is included in Shareholder servicing costs in the Statement of Operations.These fees were partially offset by earnings credits of $4.

During the period ended December 31, 2011, the fund was charged $6,402 for services performed by the Chief Compliance Officer.

The components of “Due to The Dreyfus Corporation and affiliates” in the Statement of Assets and Liabilities consist of: management fees $89,116, Rule 12b-1 distribution plan fees $3,513, custodian fees $8,255, chief compliance officer fees $5,295 and transfer agency per account fees $190.

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

NOTE 4—Securities Transactions:

The aggregate amount of purchases and sales of investment securities, excluding short-term securities, during the period ended December 31, 2011, amounted to $128,498,485 and $155,801,597, respectively.

At December 31, 2010, the cost of investments for federal income tax purposes was $151,728,941; accordingly, accumulated net unrealized appreciation on investments was $3,563,425, consisting of $13,282,263 gross unrealized appreciation and $9,718,838 gross unrealized depreciation.


The Fund	29

REPORT OF INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRM

Shareholders and Board of Trustees

Dreyfus Investment Portfolios, MidCap Stock Portfolio

We have audited the accompanying statement of assets and liabilities, including the statement of investments, of Dreyfus Investment Portfolios, MidCap Stock Portfolio (one of the series comprising Dreyfus Investment Portfolios) as of December 31, 2011, 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.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Dreyfus Investment Portfolios, MidCap Stock Portfolio at December 31, 2011, 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 U.S. generally accepted accounting principles.

New York, New York
February 10, 2012

IMPORTANT TAX INFORMATION (Unaudited)


The Fund	31

INFORMATION ABOUT THE RENEWAL OF THE

FUND’S MANAGEMENT AGREEMENT (Unaudited)

Dreyfus representatives stated that the usefulness of performance comparisons may be affected by a number of factors, including different investment limitations that may be applicable to the fund and comparison funds.The Board members discussed the results of the comparisons and noted that the fund’s total return performance was variously above, at and below the Performance Group and Performance Universe medians. Dreyfus also provided a comparison of the fund’s calendar year total returns to the returns of the fund’s benchmark index.

The Board members also reviewed the range of actual and contractual management fees and total expenses of the Expense Group and Expense Universe funds and discussed the results of the comparisons. They noted that the fund’s contractual management fee was at the Expense Group median, the fund’s actual management fee was at the Expense Group median and above the Expense Universe median and the fund’s total expenses were at the Expense Group median and below the Expense Universe median.


The Fund	33

INFORMATION ABOUT THE RENEWAL OF THE FUND’S

MANAGEMENT AGREEMENT (Unaudited) (continued)

Representatives of Dreyfus reviewed with the Board members the management or investment advisory fees (1) paid by funds advised or administered by Dreyfus that are in the same Lipper category as the fund and (2) paid to Dreyfus or the Dreyfus-affiliated primary employer of the fund’s primary portfolio manager for advising any separate accounts and/or other types of client portfolios that are considered to have similar investment strategies and policies as the fund (the “Similar Clients”), and explained the nature of the Similar Clients. They discussed differences in fees paid and the relationship of the fees paid in light of any differences in the services provided and other relevant factors.The Board members considered the relevance of the fee information provided for the Similar Clients to evaluate the appropriateness and reasonableness of the fund’s management fee.

Analysis of Profitability and Economies of Scale. Dreyfus’ representatives reviewed the expenses allocated and profit received by Dreyfus and the resulting profitability percentage for managing the fund, and the method used to determine the expenses and profit. The Board concluded that the profitability results were not unreasonable, given the services rendered and service levels provided by Dreyfus. The Board previously had been provided with information prepared by an independent consulting firm regarding Dreyfus’ approach to allocating costs to, and determining the profitability of, individual funds and the entire Dreyfus fund complex. The consulting firm also had analyzed where any economies of scale might emerge in connection with the management of a fund.

and the extent to which economies of scale would be realized if the fund grows and whether fee levels reflect these economies of scale for the benefit of fund shareholders.They also noted that, as a result of shared and allocated costs among funds in the Dreyfus fund complex, the extent of economies of scale could depend substantially on the level of assets in the complex as a whole, so that increases and decreases in complex-wide assets can affect potential economies of scale in a manner that is disproportionate to, or even in the opposite direction from, changes in the fund’s asset level.The Board members also considered potential benefits to Dreyfus from acting as investment adviser and noted the soft dollar arrangements in effect for trading the fund’s investments.

The Board concluded that the nature, extent and quality of the services provided by Dreyfus are adequate and appropriate.
The Board generally was satisfied with the fund’s improved performance.
The Board concluded that the fee paid to Dreyfus was reasonable in light of the considerations described above.
The Board determined that the economies of scale which may accrue to Dreyfus and its affiliates in connection with the management of the fund had been adequately considered by Dreyfus in connection with the fee rate charged to the fund pursuant to the Agreement and that, to the extent in the future it were determined that material economies of scale had not been shared with the fund, the Board would seek to have those economies of scale shared with the fund.


The Fund	35

INFORMATION ABOUT THE RENEWAL OF THE FUND’S

MANAGEMENT AGREEMENT (Unaudited) (continued)

The Board members considered these conclusions and determinations, along with information received on a routine and regular basis throughout the year. In addition, it should be noted that the Board’s consideration of the contractual fee arrangements for this fund had the benefit of a number of years of reviews of prior or similar agreements during which lengthy discussions took place between the Board members and Dreyfus representatives. Certain aspects of the arrangements may receive greater scrutiny in some years than in others, and the Board members’ conclusions may be based, in part, on their consideration of the same or similar arrangements in prior years. The Board members determined that renewal of the Agreement was in the best interests of the fund and its shareholders.

BOARD MEMBERS INFORMATION (Unaudited)

Joseph S. DiMartino (68)

Chairman of the Board (1998)

Principal Occupation During Past 5Years:

• Corporate Director and Trustee

Other Public Company Board Memberships During Past 5Years:

• CBIZ (formerly, Century Business Services, Inc.), a provider of outsourcing functions for small

and medium size companies, Director (1997-present)

• Sunair Services Corporation, a provider of certain outdoor-related services to homes and

businesses, Director (2005-2009)

• The Newark Group, a provider of a national market of paper recovery facilities, paperboard

mills and paperboard converting plants, Director (2000-2010)

No. of Portfolios for which Board Member Serves: 164

———————

Clifford L. Alexander, Jr. (78)

Board Member (1998)

Principal Occupation During Past 5Years:

• President of Alexander & Associates, Inc., a management consulting firm (January 1981-present)

No. of Portfolios for which Board Member Serves: 45

———————

David W. Burke (75)

Board Member (2003)

Principal Occupation During Past 5Years:

• Corporate Director and Trustee

No. of Portfolios for which Board Member Serves: 81

———————

Whitney I. Gerard (77)

Board Member (2003)

Principal Occupation During Past 5Years:

• Partner of Chadbourne & Parke LLP

No. of Portfolios for which Board Member Serves: 25


The Fund	37

BOARD MEMBERS INFORMATION (Unaudited) (continued)

Nathan Leventhal (68)

Board Member (2009)

Principal Occupation During Past 5Years:

• Commissioner, NYC Planning Commission (March 2007-present)

• Chairman of the Avery-Fisher Artist Program (November 1997-present)

Other Public Company Board Memberships During Past 5Years:

• Movado Group, Inc., Director

No. of Portfolios for which Board Member Serves: 43

———————

George L. Perry (77)

Board Member (2003)

Principal Occupation During Past 5Years:

• Economist and Senior Fellow at Brookings Institution

No. of Portfolios for which Board Member Serves: 25

———————

Benaree Pratt Wiley (65)

Board Member (2009)

Principal Occupation During Past 5Years:

• Principal,TheWiley Group, a firm specializing in strategy and business development (2005-present)

Other Public Company Board Memberships During Past 5Years:

• CBIZ (formerly, Century Business Services, Inc.), a provider of outsourcing functions for small

and medium size companies, Director (2008-present)

No. of Portfolios for which Board Member Serves: 66

———————

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