N-CSR 1 form-026.htm ANNUAL REPORT form-026
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 811-0523 
THE DREYFUS FUND INCORPORATED 
(Exact name of Registrant as specified in charter) 

c/o The Dreyfus Corporation 
200 Park Avenue 
New York, New York 10166 
(Address of principal executive offices) (Zip code) 
 
Mark N. Jacobs, Esq. 
200 Park Avenue 
New York, New York 10166 
(Name and address of agent for service) 
 
Registrant's telephone number, including area code: (212) 922-6000 

Date of fiscal year end:    12/31 
Date of reporting period:    12/31/06 

FORM N-CSR

Item 1. Reports to Stockholders.

The Dreyfus Fund 
Incorporated 

ANNUAL REPORT 
December 31, 2006 

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

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

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

The Fund

The Dreyfus Fund 
Incorporated 

A LETTER FROM THE CEO

Dear Shareholder:

We are pleased to present this annual report for The Dreyfus Fund Incorporated, covering the 12-month period from January 1, 2006, through December 31, 2006.

2006 proved to be a good year for the financial markets.Virtually all sectors and capitalization ranges of the U.S. equity markets generated strong returns, especially over the second half of the year.A number of positive factors contributed to the markets’ gains in 2006, including an expanding domestic economy, subdued inflation, stabilizing interest rates, rising productivity and robust corporate profits.

In our analysis, 2006 provided an excellent reminder of the need for a long-term investment perspective. Adopting too short a time frame proved costly for some investors last year, as chasing recent winners often meant buying the next month’s losers. Indeed, history shows that reacting to near-term developments with extreme shifts in strategy rarely is the right decision.We believe that a better course of action is to set a portfolio mix to meet future goals, while attempting to ignore short term market fluctuations in favor of a longer-term view.

For information about how the fund performed during the reporting period, as well as market perspectives, we have provided a Discussion of Fund Performance given by the fund’s portfolio manager.

Thank you for your continued confidence and support.We wish you good health and prosperity in 2007.

2

DISCUSSION OF FUND PERFORMANCE

Sean P. Fitzgibbon, Portfolio Manager

How did The Dreyfus Fund Incorporated perform relative to its benchmark?

For the 12-month period ended December 31, 2006, the fund produced a total return of 15.58% .1 In comparison, the Standard & Poor’s 500 Composite Stock Price Index (“S&P 500 Index”), the fund’s benchmark, provided a total return of 15.78% for the same period.2

The U.S. economy continued to grow throughout the reporting period, despite cooling housing markets and other developments that dampened the rate of economic growth. Most U.S. corporations posted better-than-expected revenue and earnings reports, driving stock prices higher, particularly during the second half of the year.The fund’s return was in line with the benchmark due to the fund’s full participation in the market’s rise, deriving notably strong returns from investments in the energy and health care sectors.

What is the fund’s investment approach?

The fund seeks long-term capital growth consistent with the preservation of capital. Current income is a secondary goal.To pursue these goals, the fund focuses on large-capitalization U.S. companies with strong positions in their industries and catalysts that can trigger a price increase. We use fundamental analysis to create a broadly diversified portfolio composed of a blend of growth stocks, value stocks and stocks that exhibit characteristics of both investment styles. We select stocks based on how shares are priced relative to the underlying company’s perceived intrinsic worth, the sustainability or growth of earnings or cash flow, and the company’s financial health.

What other factors influenced the fund’s performance?

Stocks rose erratically during the first four months of 2006, then slumped between May and July before advancing to new highs from August

The Fund 3

DISCUSSION OF FUND PERFORMANCE (continued)

through December. By the end of the year, every sector within the fund’s benchmark had participated to some degree in the market’s rise.

The fund’s performance roughly mirrored that of the overall market. Although performance slipped more sharply than the benchmark over the first half of the year, strong, broad-based gains closed the gap during the second half.The fund generated particularly strong returns in the energy sector. Top performers included major, integrated oil and gas firms, such as Exxon Mobil, Chevron and Petróleo Brasileiro, ADR, which proved well positioned to weather fluctuating commodity prices.Another notably strong performer, Marathon Oil, benefited from the strength of its refinery operations at a time of limited U.S. refining capacity.

The health care sector, one of the benchmark’s weaker components, proved to be one of the fund’s stronger areas. Two of the fund’s top health care holdings,Thermo Electron and Fisher Scientific, merged to form Thermo Fisher Scientific in a transaction that added to the value of both stocks. Drug developer Schering-Plough rose on the strength of good earnings reports, while biotechnology developer Celgene, which was sold during the reporting period, successfully brought a key product to market. In addition, an opportunistic purchase and eventual sale of shares in medical services provider UnitedHealth Group contributed positively to the fund’s relative performance.

The fund’s broad-based strength was reflected in the diversity of its other top-performing holdings.They ranged from technology companies, such as networking giant Cisco Systems, computer maker Hewlett-Packard and business software developer Oracle to brokerage firms, such as Goldman Sachs Group; entertainment producers, such as The Walt Disney Corp. and News Corp.; and lodging providers, such as Hilton Hotels.

While every sector represented in the benchmark contributed positively to the fund’s absolute returns, performance in some areas lagged their respective benchmark components.The fund’s weaker sectors on a relative basis included the technology area, where price competition

4

between semiconductor makers Intel and Advanced Micro Devices, which were sold during the reporting period, detracted from the fund’s returns. Underweighted positions in the telecommunications sector, one of the market’s stronger areas, undermined the fund’s relative performance, as did its exposure to Verizon Communications, one of the sector’s weaker names. Finally, returns compared to the benchmark suffered due to the fund’s position in Cendant, which was sold during the reporting period and which broke up into four separate companies but failed to unlock as much shareholder value as anticipated.

What is the fund’s current strategy?

The market’s current condition and outlook appear to be reasonably healthy, supported by reasonable stock valuations and expectations that the U.S. economy is headed for a “soft landing,” with interest rates likely to remain near current levels.The fund remains broadly diversified across industry groups, with mild emphasis on brokerage firms and other financial companies that, in our judgment, are poised to benefit from robust levels of capital markets activity. On the other hand, the fund holds modestly underweighted positions in several areas. In the consumer discretionary sector, we have reduced exposure to retailers in light of weakening consumer spending trends. We have continued to deemphasize the telecommunications sector, where we see high valuations and the prospect of weak capital spending. Finally, we have held slightly less exposure than the benchmark to the industrials area, where we have shifted assets away from companies we regard as highly cyclical and toward those with more diversified business mixes.

January 16, 2007

1    Total return includes reinvestment of dividends and any capital gains paid. Past performance is no 
    guarantee of future results. Share price and investment return fluctuate such that upon redemption, 
    fund shares may be worth more or less than their original cost. 
2    SOURCE: LIPPER INC. — Reflects reinvestment of dividends and, where applicable, capital 
    gain distributions.The Standard & Poor’s 500 Composite Stock Price Index is a widely accepted, 
    unmanaged index of U.S. stock market performance. 

The Fund 5

FUND PERFORMANCE

Average Annual Total Returns as of    12/31/06         
 
    1 Year    5 Years    10 Years 
Fund    15.58%    5.12%    4.77% 
 
† 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 above graph compares a $10,000 investment made in The Dreyfus Fund Incorporated on 12/31/96 to a 
$10,000 investment made in the Standard & Poor’s 500 Composite Stock Price Index (the “Index”) on that date. All 
dividends and capital gain distributions are reinvested.             
The fund’s performance shown in the line graph takes into account all applicable fees and expenses.The Index is a widely 
accepted, unmanaged index of U.S. stock market performance, which does not take into account charges, fees and other 
expenses. Further information relating to fund performance, including expense reimbursements, if applicable, is contained 
in the Financial Highlights section of the prospectus and elsewhere in this report.         

6

UNDERSTANDING YOUR FUND’S EXPENSES (Unaudited)

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

Review your fund’s expenses

The table below shows the expenses you would have paid on a $1,000 investment in The Dreyfus Fund Incorporated from July 1, 2006 to December 31, 2006. It also shows how much a $1,000 investment would be worth at the close of the period, assuming actual returns and expenses.

Expenses and Value of a $1,000 Investment 
assuming actual returns for the six months ended December 31, 2006 
 
Expenses paid per $1,000 †    $ 3.98 
Ending value (after expenses)    $1,135.10 

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, 2006 
 
Expenses paid per $1,000 †    $ 3.77 
Ending value (after expenses)    $1,021.48 
 
† Expenses are equal to the fund’s annualized expense ratio of .74%, multiplied by the average account value over the 
period, multiplied by 184/365 (to reflect the one-half year period). 

The Fund 7

STATEMENT OF INVESTMENTS 
December 31, 2006 

Common Stocks—99.8%    Shares        Value ($) 
Consumer Discretionary—10.4%             
Fortune Brands    185,470        15,837,283 
Hilton Hotels    252,280        8,804,572 
McDonald’s    480,517        21,301,319 
News, Cl. A    621,670        13,353,471 
SK Equity Fund, LP (Units)    1.409    c    2,424,808 
Staples    753,600        20,121,120 
Target    315,160        17,979,878 
TJX Cos.    242,810        6,924,941 
Wal-Mart Stores    440,300        20,333,054 
Walt Disney    486,430        16,669,956 
Wyndham Worldwide    234,400    a    7,505,488 
            151,255,890 
Consumer Staples—9.4%             
Altria Group    438,210        37,607,182 
Cadbury Schweppes, ADR    263,970        11,332,232 
Clorox    221,240        14,192,546 
Dean Foods    342,190    a    14,467,793 
PepsiCo    227,410        14,224,495 
Procter & Gamble    505,195        32,468,883 
SUPERVALU    358,870        12,829,603 
            137,122,734 
Energy—10.9%             
Chevron    204,710        15,052,326 
Diamond Offshore Drilling    111,450        8,909,313 
ENI, ADR    204,260        13,742,613 
ENSCO International    303,200        15,178,192 
Exxon Mobil    342,210        26,223,552 
Halliburton    426,150        13,231,958 
Marathon Oil    160,290        14,826,825 
Occidental Petroleum    310,350        15,154,390 
Petroleo Brasileiro, ADR    121,020        12,463,850 
XTO Energy    499,620        23,507,121 
            158,290,140 
Financial—23.2%             
American International Group    409,890        29,372,717 
AmeriCredit    523,160    a    13,167,937 
Bank of America    681,562        36,388,595 

8

Common Stocks (continued)    Shares        Value ($) 
Financial (continued)             
Bank of New York    480,450        18,915,317 
Capital One Financial    222,150        17,065,563 
CapitalSource    462,260        12,624,321 
CIT Group    268,980        15,001,015 
Citigroup    593,370        33,050,709 
Countrywide Financial    352,290        14,954,710 
Fidelity National Title Group, Cl. A    421,902        10,075,020 
Freddie Mac    149,130        10,125,927 
Goldman Sachs Group    48,210        9,610,664 
JPMorgan Chase & Co.    446,910        21,585,753 
Lehman Brothers Holdings    87,050        6,800,346 
Merrill Lynch & Co.    329,090        30,638,279 
SLM    293,480        14,313,020 
St. Paul Travelers Cos.    156,050        8,378,325 
UnumProvident    485,130        10,081,001 
Wachovia    450,462        25,653,811 
            337,803,030 
Health Care—12.0%             
Abbott Laboratories    232,170        11,309,001 
AmerisourceBergen    156,940        7,056,022 
Amgen    308,670    a    21,085,248 
Baxter International    314,750        14,601,252 
Galen Partners II, LP (Units)    1.097    c    718,844 
Medtronic    351,040        18,784,150 
Pfizer    862,140        22,329,426 
Sanofi-Aventis, ADR    309,650        14,296,541 
Schering-Plough    970,550        22,943,802 
WellPoint    227,730    a    17,920,074 
Wyeth    219,870        11,195,780 
Zimmer Holdings    149,420    a    11,711,540 
            173,951,680 
Industrial—8.8%             
Eaton    223,280        16,777,259 
Emerson Electric    442,930        19,528,784 
General Electric    1,532,210        57,013,534 
L-3 Communications Holdings    94,000        7,687,320 
Tyco International    624,850        18,995,440 

The Fund 9

S T A T E M E N T O F I N V E S T M E N T S (continued)

Common Stocks (continued)    Shares    Value ($) 
Industrial (continued)         
United Technologies    117,690    7,357,979 
        127,360,316 
Information Technology—17.4%         
Accenture, Cl. A    236,060    8,717,696 
Apple Computer    186,710 a    15,840,476 
Autodesk    202,210 a    8,181,417 
Broadcom, Cl. A    240,810 a    7,780,571 
Cisco Systems    1,106,713 a    30,246,466 
Google, Cl. A    41,830 a    19,261,878 
Hewlett-Packard    607,720    25,031,987 
International Business Machines    239,300    23,247,995 
Microchip Technology    329,840    10,785,768 
Microsoft    842,710    25,163,321 
Motorola    748,710    15,393,478 
National Semiconductor    423,880    9,622,076 
Oracle    805,300 a    13,802,842 
Seagate Technology    319,190    8,458,535 
Texas Instruments    567,530    16,344,864 
Thermo Fisher Scientific    325,170 a    14,726,949 
        252,606,319 
Materials—2.6%         
Air Products & Chemicals    207,520    14,584,506 
Barrick Gold    313,280    9,617,696 
Rio Tinto, ADR    63,430    13,478,241 
        37,680,443 
Telecommunication Services—1.8%     
QUALCOMM    284,270    10,742,563 
Verizon Communications    436,250    16,245,950 
        26,988,513 
Utilities—3.3%         
Consolidated Edison    165,910    7,975,294 
Dominion Resources/VA    113,210    9,491,526 
Sempra Energy    394,940    22,132,438 
Southern    243,990    8,993,471 
        48,592,729 
Total Common Stocks         
(cost $1,158,239,658)        1,451,651,794 

10

Other Investment—.1%        Shares    Value ($) 
Registered Investment Company;             
Dreyfus Institutional Preferred             
Plus Money Market Fund                 
(cost $949,000)            949,000 b    949,000 
 
Total Investments (cost $1,159,188,658)        99.9%    1,452,600,794 
 
Cash and Receivables (Net)        .1%    1,297,609 
 
Net Assets            100.0%    1,453,898,403 
 
ADR—American Depository Receipts             
a    Non-income producing security.             
b    Investment in affiliated money market mutual fund.             
c    Securities restricted as to public resale. Investment in restricted securities with aggregated market value assets of 
    $3,143,652 representing .2% of net assets (see below).             
 
 
 
                Net     
        Acquisition    Purchase    Assets     
Issuer    Date    Price ($) †    (%)    Valuation ($) †† 
Galen Partners II, LP (Units)    5/6/94-1/3/97    655,560    .1    655,560 per unit 
SK Equity Fund, LP (Units)    3/8/95-9/18/96    350,768    .1 1,720,606 per unit 
 
†    Average cost per unit.                 
††    The valuation of these securities has been determined in good faith under the direction of the Board of Directors. 
 
 
 
 
Portfolio Summary (Unaudited) †††             
 
        Value (%)            Value (%) 
Financial    23.2    Industrial        8.8 
Information Technology    17.4    Utilities        3.3 
Health Care    12.0    Materials        2.6 
Energy    10.9    Telecommunication Services    1.8 
Consumer Discretionary    10.4    Money Market Investment    .1 
Consumer Staples    9.4            99.9 
 
†††    Based on net assets.                 
See notes to financial statements.                 

The Fund 11

STATEMENT OF ASSETS AND LIABILITIES 
December 31, 2006 

    Cost    Value 
Assets ($):         
Investments in securities—See Statement of Investments:     
Unaffiliated issuers    1,158,239,658    1,451,651,794 
Affiliated issuers    949,000    949,000 
Cash        24,705 
Receivable for investment securities sold    11,854,599 
Dividends and interest receivable    1,815,223 
Receivable for shares of Common Stock subscribed    21,078 
Prepaid expenses        34,606 
        1,466,351,005 
Liabilities ($):         
Due to The Dreyfus Corporation and affiliates—Note 3(a)    903,659 
Payable for investment securities purchased    10,691,943 
Payable for shares of Common Stock redeemed    668,173 
Interest payable        4,829 
Accrued expenses        183,998 
        12,452,602 
Net Assets ($)        1,453,898,403 
Composition of Net Assets ($):     
Paid-in capital        1,126,236,027 
Accumulated undistributed investment—net    3,333,280 
Accumulated net realized gain (loss) on investments    30,916,960 
Accumulated net unrealized appreciation     
(depreciation) on investments    293,412,136 
Net Assets ($)        1,453,898,403 
Shares Outstanding         
(500 million shares of $1 par value shares of Common Stock authorized)    138,788,140 
Net Asset Value, offering and redemption price per share ($)    10.48 

See notes to financial statements.

12

STATEMENT OF OPERATIONS 
Year Ended December 31, 2006 

Investment Income ($):     
Income:     
Cash dividends (net of $309,154 foreign taxes withheld at source): 
Unaffiliated issuers    28,798,812 
Affiliated issuers    493,192 
Income from securities lending    122,791 
Total Income    29,414,795 
Expenses:     
Management fee—Note 3(a)    9,174,663 
Shareholder servicing costs—Note 3(a)    877,006 
Custodian fees—Note 3(a)    91,080 
Prospectus and shareholders’ reports    65,473 
Auditing fees    37,267 
Legal fees    34,449 
Directors’ fees and expenses—Note 3(b)    31,517 
Registration fees    24,569 
Loan commitment fees—Note 2    11,984 
Interest expense—Note 2    8,077 
Miscellaneous    14,561 
Total Expenses    10,370,646 
Less—reduction in custody fees due to     
earnings credits—Note 1(b)    (137) 
Net Expenses    10,370,509 
Investment Income—Net    19,044,286 
Realized and Unrealized Gain (Loss) on Investments—Note 4 ($): 
Net realized gain (loss) on investments    170,636,320 
Net unrealized appreciation (depreciation) on investments    16,553,377 
Net Realized and Unrealized Gain (Loss) on Investments    187,189,697 
Net Increase in Net Assets Resulting from Operations    206,233,983 

See notes to financial statements.

The Fund 13

STATEMENT OF CHANGES IN NET ASSETS

    Year Ended December 31, 
    2006    2005 
Operations ($):         
Investment income—net    19,044,286    16,046,454 
Net realized gain (loss) on investments    170,636,320    117,199,072 
Net unrealized appreciation         
(depreciation) on investments    16,553,377    (62,624,307) 
Net Increase (Decrease) in Net Assets         
Resulting from Operations    206,233,983    70,621,219 
Dividends to Shareholders from ($):         
Investment income—net    (18,402,073)    (15,285,754) 
Net realized gain on investments    (157,453,675)    (53,090,699) 
Total Dividends    (175,855,748)    (68,376,453) 
Capital Stock Transactions ($):         
Net proceeds from shares sold    8,593,911    15,329,331 
Dividends reinvested    152,316,619    59,027,167 
Cost of shares redeemed    (148,741,030)    (168,854,828) 
Increase (Decrease) in Net Assets         
from Capital Stock Transactions    12,169,500    (94,498,330) 
Total Increase (Decrease) in Net Assets    42,547,735    (92,253,564) 
Net Assets ($):         
Beginning of Period    1,411,350,668    1,503,604,232 
End of Period    1,453,898,403    1,411,350,668 
Undistributed investment income—net    4,537,689    3,895,476 
Capital Share Transactions (Shares):         
Shares sold    808,651    1,507,908 
Shares issued for dividends reinvested    14,564,638    5,719,974 
Shares redeemed    (13,934,097)    (16,575,577) 
Net Increase (Decrease) in Shares Outstanding    1,439,192    (9,347,695) 

See notes to financial statements.

14

FINANCIAL HIGHLIGHTS

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

        Year Ended December 31,     
    2006    2005    2004    2003    2002 
Per Share Data ($):                     
Net asset value, beginning of period    10.28    10.25    9.56    7.72    9.99 
Investment Operations:                     
Investment income—net a    .14    .11    .11    .08    .06 
Net realized and unrealized                     
gain (loss) on investments    1.43    .43    .69    1.83    (2.27) 
Total from Investment Operations    1.57    .54    .80    1.91    (2.21) 
Distributions:                     
Dividends from                     
investment income—net    (.14)    (.11)    (.11)    (.07)    (.06) 
Dividends from net realized                     
gain on investments    (1.23)    (.40)    —    —    — 
Total Distributions    (1.37)    (.51)    (.11)    (.07)    (.06) 
Net asset value, end of period    10.48    10.28    10.25    9.56    7.72 
Total Return (%)    15.58    5.28    8.46    24.94    (22.15) 
Ratios/Supplemental Data (%):                     
Ratio of total expenses                     
to average net assets    .74    .74    .75    .77    .76 
Ratio of net investment income                     
to average net assets    1.35    1.13    1.18    .91    .68 
Portfolio Turnover Rate    54.66    58.50    66.66    55.14    49.46 
Net Assets, end of period                     
($ x 1,000)    1,453,898    1,411,351    1,503,604    1,517,129    1,316,897 
 
a Based on average shares outstanding at each month end.                 
See notes to financial statements.                     

The Fund 15

NOTES TO FINANCIAL STATEMENTS

NOTE 1—Significant Accounting Policies:

The Dreyfus Fund Incorporated (the “fund”) is registered under the Investment Company Act of 1940, as amended (the “Act”), as a diversified open-end management investment company.The fund’s investment objective is to provide investors with long-term capital growth consistent with the preservation of capital. The Dreyfus Corporation (the “Manager” or “Dreyfus”) serves as the fund’s investment adviser. The Manager is a wholly-owned subsidiary of Mellon Financial Corporation (“Mellon Financial”). Dreyfus Service Corporation, (the “Distributor”), a wholly-owned subsidiary of the Manager, is the distributor of the fund’s shares, which are sold to the public without a sales charge.

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

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

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

(a) Portfolio valuation: Investments in securities are valued at the last sales price on the securities exchange or national securities market on which such securities are primarily traded. Securities listed on the

16

National Market System for which market quotations are available are valued at the official closing price or, if there is no official closing price that day, at the last sales price. Securities not listed on an exchange or the national securities market, or securities for which there were no transactions, are valued at the average of the most recent bid and asked prices, except for open short positions, where the asked price is used for valuation purposes. Bid price is used when no asked price is available. Registered open-ended investment companies that are not traded on an exchange are valued at their net asset value.When market quotations or official closing prices are not readily available, or are determined not to reflect accurately fair value, such as when the value of a security has been significantly affected by events after the close of the exchange or market on which the security is principally traded (for example, a foreign exchange or market), but before the fund calculates its net asset value, the fund may value these investments at fair value as determined in accordance with the procedures approved by the Board of Directors. Fair valuing of securities may be determined with the assistance of a pricing service using calculations based on indices of domestic securities and other appropriate indicators, such as prices of relevant ADR’s and futures contracts. For other securities that are fair valued by the Board of Directors,certain factors may be considered such as:fundamental analytical data, the nature and duration of restrictions on disposition, an evaluation of the forces that influence the market in which the securities are purchased and sold and public trading in similar securities of the issuer or comparable issuers. Investments denominated in foreign currencies are translated to U.S. dollars at the prevailing rates of exchange. Forward currency exchange contracts are valued at the forward rate. Financial futures are valued at the last sales price.

On September 20, 2006, the Financial Accounting Standards Board (FASB) released Statement of Financial Accounting Standards No. 157 “Fair Value Measurements” (“FAS 157”). FAS 157 establishes an authoritative definition of fair value, sets out a framework for measuring fair value, and requires additional disclosures about fair-value measurements. The application of FAS 157 is required for fiscal years beginning after

The Fund 17

NOTES TO FINANCIAL STATEMENTS (continued)

November 15, 2007 and interim periods within those fiscal years. Management does not believe that the application of this standard will have a material impact on the financial statements of the fund.

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

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

Pursuant to a securities lending agreement with Mellon Bank, N.A., an affiliate of the Manager, 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. It is the fund’s policy that collateral equivalent to at least 100% of the market value of securities on loan is maintained at all times. Cash collateral is invested in certain money market mutual funds managed by the Manager. 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.

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

(d) Dividends to shareholders: Dividends are recorded on the ex-dividend date. Dividends from investment income-net are declared and paid on a quarterly basis. Dividends from net realized capital gain,

18

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

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

On July 13, 2006, the FASB released FASB Interpretation No. 48 “Accounting for Uncertainty in Income Taxes” (FIN 48). FIN 48 provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. FIN 48 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the fund’s tax returns to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority.Tax positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax benefit or expense in the current year. Adoption of FIN 48 is required for fiscal years beginning after December 15, 2006 and is to be applied to all open tax years as of the effective date. Management does not believe that the application of this standard will have a material impact on the financial statements of the fund.

At December 31, 2006, the components of accumulated earnings on a tax basis were as follows: undistributed ordinary income $8,270,693, undistributed capital gains $28,029,724 and unrealized appreciation $291,361,959.

The Fund 19

  NOTES TO FINANCIAL STATEMENTS (continued)

The tax character of distributions paid to shareholders during the fiscal periods ended December 31, 2006 and December 31, 2005 were as follows: ordinary income $39,987,141 and $15,285,754 and long-term capital gains $135,868,607 and $53,090,699, respectively.

During the period ended December 31, 2006, as a result of permanent book to tax differences, primarily due to the tax treatment for limited partnerships, the fund decreased accumulated undistributed investment income-net by $1,204,409 and increased net realized gain (loss) on investments by the same amount. Net assets were not affected by this reclassification.

NOTE 2—Bank Line of Credit:

The fund participates with other Dreyfus-managed funds in a $350 million redemption credit facility (the “Facility”) to be utilized for temporary or emergency purposes, including the financing of redemptions. In connection therewith, the fund has agreed to pay commitment fees on its pro rata portion of the Facility. Interest is charged to the fund based on prevailing market rates in effect at the time of borrowing.

The average daily amount of borrowings outstanding under the Facility during the period ended December 31, 2006 was approximately $144,000, with a related weighted average annualized interest rate of 5.61% .

NOTE 3—Management Fee and Other Transactions With Affiliates:

(a) Pursuant to a management agreement (the “Agreement”) with the Manager, the management fee is payable monthly, based on the following annual percentages of the value of the fund’s average daily net assets: .65% of the first $1.5 billion; .625% of the next $500 million; .60% of the next $500 million; and .55% over $2.5 billion.

The Agreement provides for an expense reimbursement from the Manager should the fund’s aggregate expenses, exclusive of taxes and brokerage commissions, exceed 1% of the value of the fund’s average daily net assets for any full year.No expense reimbursement was required pursuant to the Agreement for the period ended December 31, 2006.

20

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, 2006, the fund was charged $579,552 pursuant to the transfer agency agreement.

The fund compensates Mellon Bank, N.A., an affiliate of the Manager, under a custody agreement to provide custodial services for the fund. During the period ended December 31, 2006, the fund was charged $91,080 pursuant to the custody agreement.

During the period ended December 31, 2006, the fund was charged $4,204 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 $791,572, chief compliance officer fees $2,044, custodian fees $16,980 and transfer agency per account fees $93,063.

(b) 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.

(c) Pursuant to an exemptive order from the SEC, the fund may invest its available cash balances in affiliated money market mutual funds. Management fees of the underlying money market mutual funds have been waived by the Manager.

NOTE 4—Securities Transactions:

The aggregate amount of purchases and sales of investment securities, excluding short-term securities, during the period ended December 31, 2006, amounted to $768,202,843 and $909,224,424, respectively.

At December 31, 2006, the cost of investments for federal income tax purposes was $1,161,238,835; accordingly, accumulated net unrealized appreciation on investments was $291,361,959, consisting of $301,445,114 gross unrealized appreciation and $10,083,155 gross unrealized depreciation.

The Fund 21

REPORT OF INDEPENDENT REGISTERED 
PUBLIC ACCOUNTING FIRM 

Shareholders and Board of Trustees of 
The Dreyfus Fund Incorporated 

We have audited the accompanying statement of assets and liabilities of The Dreyfus Fund Incorporated, including the statements of investments and financial futures as of December 31, 2006, 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, 2006 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 The Dreyfus Fund Incorporated at December 31, 2006, 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 15, 2007 

22

IMPORTANT TAX INFORMATION (Unaudited)

For federal tax purposes, the fund hereby designates $.0793 per share as a long-term capital gain distribution and $.0577 per share as a short-term capital gain distribution of the $.1851 per share paid on June 30, 2006, and also designates $.9830 per share as a long-term capital gain distribution and $.1100 per share as a short-term capital gain distribution of the $1.1250 per share paid on December 19, 2006.The fund also hereby designates 74.75% of the ordinary dividends paid during the fiscal year ended December 31, 2006 as qualifying for the corporate dividends received deduction. For the fiscal year ended December 31, 2006, certain dividends paid by the fund may be subject to a maximum tax rate of 15%, as provided for by the Jobs and Growth tax Relief Reconciliation Act of 2003. Of the distributions paid during the fiscal year, $36,297,730 represents the maximum amount that may be considered qualified dividend income. Shareholders will receive notification in January 2007 of the percentage applicable to the preparation of their 2006 income tax returns.

The Fund 23

INFORMATION ABOUT THE REVIEW AND APPROVAL 
OF THE FUND’S MANAGEMENT AGREEMENT (Unaudited) 

At a meeting of the fund’s Board of Directors held on July 11 and 12, 2006,the Board considered the re-approval for an annual period (through August 31, 2007) of the fund’s Management Agreement with Dreyfus, pursuant to which Dreyfus provides the fund with investment advisory and administrative services. 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.

Analysis of Nature, Extent and Quality of Services Provided to the Fund. The Board members received a presentation from representatives of Dreyfus regarding services provided to the fund and other funds in the Dreyfus fund complex, and discussed the nature, extent and quality of the services provided to the fund pursuant to its Management Agreement. Dreyfus’ representatives reviewed the fund’s distribution of accounts and the relationships Dreyfus has with various intermediaries and the different needs of each. Dreyfus’ representatives noted distribution channels for the fund as well as the diversity of distribution among the 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 those of the fund. Dreyfus also provided the number of accounts investing in the fund, as well as the fund’s asset size.

The Board members also considered Dreyfus’ research and portfolio management capabilities 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 infrastructure.

Comparative Analysis of the Fund’s Performance and Management Fee and Expense Ratio. The Board members reviewed the fund’s performance and placed significant emphasis on comparisons to a group of

24

retail, no-load, large-cap core funds (the “Performance Group”) and to a larger universe of funds, consisting of all large-cap core funds (the “Performance Universe”) selected and provided by Lipper, Inc., an independent provider of investment company data.The Board was provided with a description of the methodology Lipper used to select the Performance Group and Performance Universe, as well as the Expense Group and Expense Universe (discussed below).The Board noted that the fund’s portfolio managers have been managing the fund since May 2005.The Board members discussed the results of the comparisons and noted that the fund’s total return performance for periods ended May 31, 2006 was at the Performance Group median and above the Performance Universe median for the one-year period (including the period for which the portfolio managers have been managing the fund’s portfolio). The Board noted that the fund’s performance was below the Performance Group median for the other periods, one basis point below the Performance Universe median for the three-year period, above the Performance Universe median for the two- and five-year periods, and below the Performance Universe median for the other periods. The Dreyfus representatives also presented the Board with a comparison of the fund’s calendar year total returns to the returns of its benchmark index and noted that the fund’s performance was higher than the benchmark return in 2005.

The Board members also discussed the fund’s management fee and expense ratio and reviewed the range of management fees and expense ratios of a comparable group of funds (the “Expense Group”) and a broader group of funds (the “Expense Universe”), each selected and provided by Lipper.The Board members noted that the fund’s management fee was higher than the Expense Group median and at the Expense Universe median, and that the fund’s expense ratio was lower than the Expense Group and Expense Universe medians.

Representatives of Dreyfus reviewed with the Board members the advisory fees paid by mutual funds managed by Dreyfus or its affiliates

The Fund 25

INFORMATION ABOUT THE REVIEW AND APPROVAL OF THE 
FUND’S MANAGEMENT AGREEMENT (Unaudited) (continued) 

with similar investment objectives, policies and strategies, and included within the fund’s Lipper category (the “Similar Funds”), and by other accounts managed by Dreyfus or its affiliates with similar investment objectives, policies and strategies as the fund (the “Similar Accounts”). Dreyfus’ representatives explained the nature of the Similar Accounts and the differences, from Dreyfus’ perspective, in providing services to such Similar Accounts as compared to managing and providing services to the fund. The Board analyzed differences in fees paid to Dreyfus and discussed the relationship of the fees paid in light of the services provided.The Board members considered the relevance of the fee information provided for the Similar Funds and the Similar Accounts to evaluate the appropriateness and reasonableness of the fund’s management fee. The Board acknowledged that the difference in fees paid by the Similar Accounts seemed to be consistent with the services provided.

Analysis of Profitability and Economies of Scale. Dreyfus’ representatives reviewed the dollar amount of expenses allocated and profit received by Dreyfus and the method used to determine such expenses and profit.The Board considered information, previously provided and discussed, prepared by an independent consulting firm regarding Dreyfus’ approach to allocating costs to, and determining the profitability of, individual funds and the entire Dreyfus mutual fund complex.The Board members also considered that the methodology had also been reviewed by an independent registered public accounting firm which, like the consultant, found the methodology to be reasonable. The consulting firm also analyzed where any economies of scale might emerge in connection with the management of the fund.The Board members evaluated the profitability analysis 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

26

investors. The Board members also considered potential benefits to Dreyfus from acting as investment adviser and noted the soft dollar arrangements with respect to trading the fund’s investments.

It was noted that the Board members should consider Dreyfus’ profitability with respect to the fund as part of their evaluation of whether the fees under the Management Agreement bear a reasonable relationship to the mix of services provided by Dreyfus, including the nature, extent and quality of such services and that a discussion of economies of scale is predicated on increasing assets and that, if a fund’s assets had been decreasing, the possibility that Dreyfus may have realized any economies of scale would be less. It also was noted that the profitability percentage for managing the fund was within ranges determined by appropriate court cases to be reasonable given the services rendered and generally superior service levels provided by Dreyfus.

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 continuation of the fund’s Management Agreement. Based on the discussions and considerations as described above, the Board made the following conclusions and determinations.

  • The Board concluded that the nature, extent and quality of the ser- vices provided by Dreyfus are adequate and appropriate.
  • The Board generally was satisfied with the fund’s more recent perfor- mance, including the periods since the current portfolio managers began managing the fund’s portfolio.
  • The Board concluded that the fee paid by the fund to Dreyfus was reasonable in light of the services provided, comparative perfor- mance, expense and advisory fee information, costs of the services provided and profits to be realized and benefits derived or to be derived by Dreyfus from its relationship with the fund.

The Fund 27

INFORMATION ABOUT THE REVIEW AND APPROVAL OF THE 
FUND’S MANAGEMENT AGREEMENT (Unaudited) (continued) 

  • 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 management fee rate charged to the fund 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, and, without any one factor being dispositive, the Board determined that re-approval of the fund’s Management Agreement was in the best interests of the fund and its shareholders.

28

BOARD MEMBERS INFORMATION (Unaudited)

Joseph S. DiMartino (63) 
Chairman of the Board (1995) 

Principal Occupation During Past 5 Years: 
• Corporate Director and Trustee 

Other Board Memberships and Affiliations:

  • The Muscular Dystrophy Association, Director
  • Century Business Services, Inc., a provider of outsourcing functions for small and medium size companies, Director
  • The Newark Group, a provider of a national market of paper recovery facilities, paperboard mills and paperboard converting plants, Director
  • Sunair Services Corporation, engaging in the design, manufacture and sale of high frequency systems for long-range voice and data communications, as well as providing certain outdoor-related services to homes and businesses, Director

No. of Portfolios for which Board Member Serves: 190

———————

Clifford L. Alexander, Jr. (73) 
Board Member (2003) 

Principal Occupation During Past 5 Years:

  • President of Alexander & Associates, Inc., a management consulting firm ( January 1981-present)
  • Chairman of the Board of Moody’s Corporation (October 2000-October 2003)

Other Board Memberships and Affiliations:

• Mutual of America Life Insurance Company, Director

No. of Portfolios for which Board Member Serves: 67

———————

Lucy Wilson Benson (79) 
Board Member (1981) 

Principal Occupation During Past 5 Years: 
• President of Benson and Associates, consultants to business and government (1980-present) 

Other Board Memberships and Affiliations:

  • The International Executive Services Corps., Director Emeritus
  • Citizens Network for Foreign Affairs,Vice Chairperson
  • Council on Foreign Relations, Member
  • Lafayette College Board of Trustees,Trustee Emeritus
  • Atlantic Council of the U.S., Director

No. of Portfolios for which Board Member Serves: 35

The Fund 29

BOARD MEMBERS INFORMATION (Unaudited) (continued)

David W. Burke (70) 
Board Member (1994) 

Principal Occupation During Past 5 Years: 
• Corporate Director and Trustee 

Other Board Memberships and Affiliations:

  • John F. Kennedy Library Foundation, Director
  • U.S.S. Constitution Museum, Director

No. of Portfolios for which Board Member Serves: 81

———————

Whitney I. Gerard (72) 
Board Member (1973) 

Principal Occupation During Past 5 Years: 
• Partner of Chadbourne & Parke LLP 

No. of Portfolios for which Board Member Serves: 33

———————

George L. Perry (72) 
Board Member (1989) 

Principal Occupation During Past 5 Years: 
• Economist and Senior Fellow at Brookings Institution 

No. of Portfolios for which Board Member Serves: 33

———————

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

Arthur A. Hartman, Emeritus Board Member

30

OFFICERS OF THE FUND (Unaudited)

J. DAVID OFFICER, President since 
December 2006. 

Chief Operating Officer,Vice Chairman and a director of the Manager, and an officer of 90 investment companies (comprised of 190 portfolios) managed by the Manager. He is 58 years old and has been an employee of the Manager since April 1, 1998.

MARK N. JACOBS, Vice President since 
March 2000. 

Executive Vice President, Secretary and General Counsel of the Manager, and an officer of 91 investment companies (comprised of 206 portfolios) managed by the Manager. He is 60 years old and has been an employee of the Manager since June 1977.

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

Associate General Counsel of the Manager, and an officer of 91 investment companies (comprised of 206 portfolios) managed by the Manager. He is 46 years old and has been an employee of the Manager since October 1991.

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

Associate General Counsel and Assistant Secretary of the Manager, and an officer of 91 investment companies (comprised of 206 portfolios) managed by the Manager. He is 40 years old and has been an employee of the Manager since December 1996.

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

Associate General Counsel of the Manager, and an officer of 91 investment companies (comprised of 206 portfolios) managed by the Manager. She is 51 years old and has been an employee of the Manager since October 1988.

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

Associate General Counsel of the Manager, and an officer of 91 investment companies (comprised of 206 portfolios) managed by the Manager. He is 45 years old and has been an employee of the Manager since June 2000.

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

Associate General Counsel of the Manager, and an officer of 91 investment companies (comprised of 206 portfolios) managed by the Manager. She is 44 years old and has been an employee of the Manager since February 1984.

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

Associate General Counsel of the Manager, and an officer of 91 investment companies (comprised of 206 portfolios) managed by the Manager. He is 43 years old and has been an employee of the Manager since February 1991.

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

Associate General Counsel of the Manager, and an officer of 91 investment companies (comprised of 206 portfolios) managed by the Manager. He is 54 years old and has been an employee of the Manager since May 1986.

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

Associate General Counsel of the Manager, and an officer of 91 investment companies (comprised of 206 portfolios) managed by the Manager. He is 41 years old and has been an employee of the Manager since October 1990.

The Fund 31

OFFICERS OF THE FUND (Unaudited) (continued)

JAMES WINDELS, Treasurer since 
November 2001. 

Director – Mutual Fund Accounting of the Manager, and an officer of 91 investment companies (comprised of 206 portfolios) managed by the Manager. He is 48 years old and has been an employee of the Manager since April 1985.

ERIK D. NAVILOFF, Assistant Treasurer 
since August 2005. 

Senior Accounting Manager – Taxable Fixed Income Funds of the Manager, and an officer of 91 investment companies (comprised of 206 portfolios) managed by the Manager. He is 38 years old and has been an employee of the Manager since November 1992.

ROBERT ROBOL, Assistant Treasurer 
since August 2005. 

Senior Accounting Manager – Money Market and Municipal Bond Funds of the Manager, and an officer of 91 investment companies (comprised of 206 portfolios) managed by the Manager. He is 42 years old and has been an employee of the Manager since October 1988.

ROBERT SVAGNA, Assistant Treasurer 
since December 2002. 

Senior Accounting Manager – Equity Funds of the Manager, and an officer of 91 investment companies (comprised of 206 portfolios) managed by the Manager. He is 39 years old and has been an employee of the Manager since November 1990.

GAVIN C. REILLY, Assistant Treasurer 
since December 2005. 

Tax Manager of the Investment Accounting and Support Department of the Manager, and an officer of 91 investment companies (comprised of 206 portfolios) managed by the Manager. He is 38 years old and has been an employee of the Manager since April 1991.

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

Chief Compliance Officer of the Manager and The Dreyfus Family of Funds (91 investment companies, comprised of 206 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 49 years old and has served in various capacities with the Manager since 1980, including manager of the firm’s Fund Accounting Department from 1997 through October 2001.

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

Vice President and Anti-Money Laundering Compliance Officer of the Distributor, and the Anti-Money Laundering Compliance Officer of 87 investment companies (comprised of 202 portfolios) managed by the Manager. He is 36 years old and has been an employee of the Distributor since October 1998.

32

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

Telephone 1-800-645-6561 
Mail The Dreyfus Family of Funds, 144 Glenn Curtiss Boulevard, Uniondale, NY 11556-0144 
E-mail Send your request to info@dreyfus.com 
Internet Information can be viewed online or downloaded at: http://www.dreyfus.com 

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

A description of the policies and procedures that the fund uses to determine how to vote proxies relating to portfolio securities, and information regarding how the fund voted these proxies for the 12-month period ended June 30, 2006, is available at http://www.dreyfus.com and on the SEC’s website at http://www.sec.gov. The description of the policies and procedures is also available without charge, upon request, by calling 1-800-645-6561.

© 2007 Dreyfus Service Corporation

Item 2. Code of Ethics.

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

Item 3. Audit Committee Financial Expert.

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

Item 4. Principal Accountant Fees and Services

(a) Audit Fees. The aggregate fees billed for each of the last two fiscal years (the "Reporting Periods") for professional services rendered by the Registrant's principal accountant (the "Auditor") for the audit of the Registrant's annual financial statements, or services that are normally provided by the Auditor in connection with the statutory and regulatory filings or engagements for the Reporting Periods, were $36,081 in 2005 and $37,796 in 2006.

(b) Audit-Related Fees. The aggregate fees billed in the Reporting Periods for assurance and related services by the Auditor that are reasonably related to the performance of the audit of the Registrant's financial statements and are not reported under paragraph (a) of this Item 4 were $4,725 in 2005 and $5,122 in 2006. These services consisted of security counts required by Rule 17f-2 under the Investment Company Act of 1940, as amended.

The aggregate fees billed in the Reporting Periods for non-audit assurance and related services by the Auditor to the Registrant's investment adviser (not including any sub-investment adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the Registrant ("Service Affiliates"), that were reasonably related to the performance of the annual audit of the Service Affiliate, which required pre-approval by the Audit Committee were $0 in 2005 and $0 in 2006.

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

(c) Tax Fees. The aggregate fees billed in the Reporting Periods for professional services rendered by the Auditor for tax compliance, tax advice and tax planning ("Tax Services") were $3,445 in 2005 and $4,356 in 2006. These services consisted of (i) review or preparation of U.S. federal, state, local and excise tax returns; (ii) U.S. federal, state and local tax planning, advice and assistance regarding statutory, regulatory or

administrative developments, (iii) tax advice regarding tax qualification matters and/or treatment of various financial instruments held or proposed to be acquired or held, and (iv) determination of Passive Foreign Investment Companies (as applicable).

The aggregate fees billed in the Reporting Periods for Tax Services by the Auditor to Service Affiliates which required pre-approval by the Audit Committee were $0 in 2005 and $0 in 2006.

(d) All Other Fees. The aggregate fees billed in the Reporting Periods for products and services provided by the Auditor, other than the services reported in paragraphs (a) through (c) of this Item, were $2,228 in 2005 and $2,439 in 2006. These services consisted of a review of the Registrant's anti-money laundering program.

The aggregate fees billed in the Reporting Periods for Non-Audit Services by the Auditor to Service Affiliates, other than the services reported in paragraphs (b) through (c) of this Item, which required pre-approval by the Audit Committee were $0 in 2005 and $0 in 2006.

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

Non-Audit Fees. The aggregate non-audit fees billed by the Auditor for services rendered to the Registrant, and rendered to Service Affiliates, for the Reporting Periods were $758,091 in 2005 and $383,726 in 2006.

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

Item 5.    Audit Committee of Listed Registrants. 
    Not applicable. [CLOSED-END FUNDS ONLY] 
Item 6.    Schedule of Investments. 
    Not applicable. 
Item 7.    Disclosure of Proxy Voting Policies and Procedures for Closed-End Management 
    Investment Companies. 
    Not applicable. [CLOSED-END FUNDS ONLY] 
Item 8.    Portfolio Managers of Closed-End Management Investment Companies. 
    Not applicable. [CLOSED-END FUNDS ONLY, beginning with reports for periods ended 
    on and after December 31, 2005] 
Item 9.    Purchases of Equity Securities by Closed-End Management Investment Companies and 
    Affiliated Purchasers. 
    Not applicable. [CLOSED-END FUNDS ONLY] 
Item 10.    Submission of Matters to a Vote of Security Holders. 

The Registrant has a Nominating Committee (the "Committee"), which is responsible for selecting and nominating persons for election or appointment by the Registrant's Board as Board members. The Committee has adopted a Nominating Committee Charter (the "Charter"). Pursuant to the Charter, the Committee will consider recommendations for nominees from shareholders submitted to the Secretary of the Registrant, c/o The Dreyfus Corporation Legal Department, 200 Park Avenue, 8th Floor East, New York, New York 10166. A nomination submission must include information regarding the recommended nominee as specified in the Charter. This information includes all information relating to a recommended nominee that is required to be disclosed in solicitations or proxy statements for the election of Board members, as well as information sufficient to evaluate the factors to be considered by the Committee, including character and integrity, business and professional experience, and whether the person has the ability to apply sound and independent business judgment and would act in the interests of the Registrant and its shareholders.

Nomination submissions are required to be accompanied by a written consent of the individual to stand for election if nominated by the Board and to serve if elected by the shareholders, and such additional information must be provided regarding the recommended nominee as reasonably requested by the Committee.

Item 11. Controls and Procedures.

(a) The Registrant's principal executive and principal financial officers have concluded, based on their evaluation of the Registrant's disclosure controls and procedures as of a date within 90 days of the filing date of this report, that the Registrant's disclosure controls and procedures are reasonably designed to ensure that information required to be disclosed by the Registrant on Form N-CSR is recorded, processed, summarized and reported within the required time periods and that information required to be disclosed by the Registrant in the reports that it files or submits on Form N-CSR is accumulated and communicated to the Registrant's management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

(b) There were no changes to the Registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Registrant's internal control over financial reporting.

Item 12. Exhibits.

(a)(1)    Code of ethics referred to in Item 2. 
(a)(2)    Certifications of principal executive and principal financial officers as required by Rule 30a-2(a) 
under the Investment Company Act of 1940. 
(a)(3)    Not applicable. 
(b)    Certification of principal executive and principal financial officers as required by Rule 30a-2(b) 
under the Investment Company Act of 1940. 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

THE DREYFUS FUND INCORPORATED

Date: February 27, 2007

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

    EXHIBIT INDEX 
(a)(1)    Code of ethics referred to in Item 2. 
(a)(2)    Certifications of principal executive and principal financial officers as required by Rule 30a 
2(a) under the Investment Company Act of 1940. (EX-99.CERT) 
(b)    Certification of principal executive and principal financial officers as required by Rule 30a- 
2(b) under the Investment Company Act of 1940. (EX-99.906CERT) 

Exhibit (a)(1)