Dreyfus Liquid Assets N-CSR Certified annual shareholder report (management investment company)

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- 2410 

Dreyfus Liquid Assets, Inc.
(Exact name of Registrant as specified in charter)

c/o The Dreyfus Corporation
200 Park Avenue
New York, New York 10166
(Address of principal executive offices) (Zip code)

Michael A. Rosenberg, Esq.
200 Park Avenue
New York, New York 10166
(Name and address of agent for service)

Registrant's telephone number, including area code:		(212) 922-6000
Date of fiscal year end:	12/31
Date of reporting period:	12/31/08

FORM N-CSR

Item 1.  Reports to Stockholders. 

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Available only to Dreyfus Liquid Assets, Inc., Class 1 shareholders

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	Understanding Your Fund’s Expenses
6	Comparing Your Fund’s Expenses
	With Those of Other Funds
7	Statement of Investments
11	Statement of Assets and Liabilities
12	Statement of Operations
13	Statement of Changes in Net Assets
14	Financial Highlights
16	Notes to Financial Statements
25	Report of Independent Registered
	Public Accounting Firm
26	Important Tax Information
27	Information About the Review and Approval
	of the Fund’s Management Agreement
31	Board Members Information
33	Officers of the Fund
	FOR MORE INFORMATION
	Back Cover

Dreyfus 

Liquid Assets, Inc. 

The Fund 

A LETTER FROM THE CEO

Dear Shareholder:

We are pleased to present this annual report for Dreyfus Liquid Assets, Inc., covering the 12-month period from January 1, 2008, through December 31, 2008.

2008 was the most difficult year in decades for the financial markets. A credit crunch that began in 2007 exploded in mid-2008 into a global financial crisis, resulting in the failures of major financial institutions, a deep and prolonged recession and lower investment values across a broad range of asset classes. Governments and regulators throughout the world moved aggressively to curtail the damage, implementing unprecedented reductions of short-term interest rates, massive injections of liquidity into the banking system, government bailouts of struggling companies and plans for massive economic stimulus programs. Money market funds were not immune to the downturn, and several U.S. money market funds were unable to maintain a stable net asset value. The federal government subsequently stepped in with a program for guaranteeing participating funds’ assets at stated levels, while others received financial support from their sponsors.

Although we expect the U.S. and global economies to remain weak until longstanding imbalances have worked their way out of the system, the financial markets currently appear to have priced in investors’ generally low expectations. In previous recessions, however, the markets have tended to anticipate economic improvement before it occurs, potentially leading to major rallies when few expected them. That’s why it makes sense to remain disciplined, maintain a long-term perspective and adopt a consistent asset allocation strategy that reflects one’s future goals and attitudes toward risk. As always, we urge you to consult with your financial advisor, who can recommend the course of action that is right for you.

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.

Jonathan R. Baum
Chief Executive Officer
The Dreyfus Corporation
January 15, 2009

2

DISCUSSION OF FUND PERFORMANCE

For the period of January 1, 2008, through December 31, 2008, as provided by Patricia A. Larkin, Senior Portfolio Manager

Fund and Market Performance Overview

For the 12-month period ended December 31, 2008, Dreyfus Liquid Assets’ Class 1 shares produced a yield of 2.55%, and its Class 2 shares produced a yield of 2.68%. Taking into account the effects of compounding, the fund’s Class 1 and Class 2 shares provided effective yields of 2.58% and 2.71%, respectively, for the same period.^1,2

Money market yields declined over the reporting period along with short-term interest rates in a weakening U.S. economy.The fund also was adversely affected by an intensifying global financial crisis, which produced turmoil in the commercial paper market.

The Fund’s Investment Approach

The fund seeks as high a level of current income as is consistent with the preservation of capital. To pursue this goal, the fund invests in a diversified portfolio of high-quality, short-term debt securities, including securities issued or guaranteed by the U.S. government or its agencies or instrumentalities, certificates of deposit, time deposits, bankers’ acceptances, and other short-term securities issued by U.S. banks and foreign branches of U.S. banks, repurchase agreements, including tri-party repurchase agreements, asset-backed securities, commercial paper and other short-term corporate obligations of U.S. issuers.

Normally,the fund invests at least 25% of its net assets in bank obligations.

Interest Rates Fell as U.S. Economy Struggled

Slumping U.S. housing markets, sluggish consumer spending and resurgent energy prices in late 2007 already had produced a weaker U.S. economy and the Federal Reserve Board (the “Fed”) had reduced short-term interest rates from 5.25% to 4.25% by the start of 2008.

The Fund 3

DISCUSSION OF FUND PERFORMANCE (continued)

Additional evidence of economic weakness mounted in January, including the first monthly job losses in more than four years. Despite aggressive easing by the Fed and an economic stimulus package from Congress, the credit crisis intensified in February as highly leveraged institutional investors de-levered their portfolios to raise cash. In March, the Fed participated in the rescue of investment bank Bear Stearns and made funds available to Wall Street firms in an unprecedented program allowing the use of mortgage-backed securities as collateral.

After a brief market rally in the spring,reports of additional write-downs by major banks in June and greater-than-expected losses by mortgage agencies Fannie Mae and Freddie Mac in July sparked renewed volatility in the stock and bond markets.The bad news continued to mount in August, including another jump in the unemployment rate.

September ranked as one of the most challenging months in memory, as financial institutions found themselves unable to obtain short-term funding for their operations. In the ensuing tumult, the U.S. government effectively nationalized Fannie Mae, Freddie Mac and insurer AIG, Lehman Brothers filed for bankruptcy,Washington Mutual was seized by regulators and Merrill Lynch and Wachovia were sold to former rivals. The U.S.Treasury Department proposed and Congress passed the $700 billion Troubled Assets Relief Program (TARP) to shore up the nation’s banking system. It later was announced that U.S. GDP contracted by a –0.5% annualized rate in the third quarter.

Money Markets Suffered in the Financial Crisis

Money market funds were not immune to the financial crisis. The Lehman Brothers bankruptcy led to challenging liquidity conditions in the commercial paper market, and the fund’s exposure to Lehman Brothers notes threatened to force its net asset value below $1 per share. However,The Bank of New York Mellon Corporation entered into an agreement with the fund to support the value of its Lehman holdings, enabling it to maintain a steady share price. In addition, the U.S. government implemented the Temporary Guarantee Program specifically for money market funds to shore up investor confidence. Consequently, the commercial paper market began to stabilize, as evidenced by rising trading activity.

4

In October, the Fed and other central banks implemented an unprecedented, coordinated rate cut to combat spreading global economic weakness. Nonetheless, the economic downturn gained momentum, and retailers suffered through their worst holiday season in many years. Meanwhile, the National Bureau of Economic Research officially declared in November that the U.S. economy has been in a recession since late 2007, a pronouncement that appeared to be confirmed by more severe job losses and a rise in the unemployment rate to 7.20% in December, its highest level since 1993. The Fed followed up with additional reductions before year-end, and the target for the federal funds rate ended 2008 at between 0% and 0.25%, a record low.

Maintaining a Cautious Posture

For most of the year, we maintained the fund’s weighted average maturity in a position we considered longer than industry averages. September’s developments constrained our ability to find longer-dated instruments at reasonable prices, and we shifted the fund’s focus to overnight maturities.We subsequently have maintained the fund’s weighted average maturity in a range that is roughly in line with industry averages.

We currently expect reduced liquidity and tight credit to dampen economic growth well into 2009. Therefore, we intend to maintain the fund’s conservative credit posture and a focus on liquidity.

January 15, 2009

	An investment in the fund is not insured or guaranteed by the FDIC or any other government
	agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is
	possible to lose money by investing in the fund.
1	Effective yield is based upon dividends declared daily and reinvested monthly. Past performance is
	no guarantee of future results.Yields fluctuate.Yields provided for the fund’s Class 1 shares reflect
	the absorption of certain fund expenses by The Dreyfus Corporation pursuant to an undertaking
	which is voluntary and temporary, not contractual, and can be terminated at any time without
	notice. Had these expenses not been absorbed, the fund’s Class 1 shares yield would have been
	2.54%, and the effective yield would have been 2.57%.
2	Effective yield is based upon dividends declared daily and reinvested monthly. Past performance is
	no guarantee of future results.Yields fluctuate.Yields provided for the fund’s Class 2 shares reflect
	the absorption of certain fund expenses by The Dreyfus Corporation pursuant to an agreement in
	which shareholders will be given at least 90 days’ notice prior to the time such absorption may be
	terminated. Class 2 shares of the fund are available only to certain eligible financial institutions.
	Had these expenses not been absorbed, the fund’s Class 2 shares yield would have been 2.67%,
	and the effective yield would have been 2.70%.

The Fund 5

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 Dreyfus Liquid Assets, Inc. from July 1, 2008 to December 31, 2008. 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, 2008
	Class 1 Shares	Class 2 Shares
Expenses paid per $1,000†	$ 3.49	$ 2.78
Ending value (after expenses)	$1,009.90	$1,010.60

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, 2008
	Class 1 Shares	Class 2 Shares
Expenses paid per $1,000†	$ 3.51	$ 2.80
Ending value (after expenses)	$1,021.67	$1,022.37

† Expenses are equal to the fund’s annualized expense ratio of .69% for Class 1 shares, and .55% for Class 2 shares, multiplied by the average account value over the period, multiplied by 184/366 (to reflect the one-half year period).

6

STATEMENT OF INVESTMENTS 

December 31, 2008 

	Principal
Negotiable Bank Certificates of Deposit—6.7%	Amount ($)	Value ($)
Bank of America N.A.
1.85%, 2/23/09	200,000,000	200,000,000
Compass Bank
3.14%, 1/16/09	175,000,000 a	175,000,718
Total Negotiable Bank Certificates of Deposit
(cost $375,000,718)		375,000,718
Commercial Paper—74.3%
Abbey National North America LLC
0.03%, 1/2/09	150,000,000	149,999,875
ABN-AMRO North America Finance Inc.
2.00%—2.31%, 3/5/09—3/11/09	250,000,000	249,035,917
Allied Irish Banks N.A. Inc.
2.16%—3.10%, 1/20/09—3/13/09	250,000,000 a	249,071,458
Atlantis One Funding Corp.
1.51%—2.52%, 1/30/09—2/13/09	275,000,000 a	274,468,403
Barclays Financial LLC
3.10%, 1/20/09	250,000,000	249,597,570
BNP Paribas Finance Inc.
1.34%, 3/16/09	150,000,000	149,588,375
CAFCO LLC
1.58%, 1/22/09	200,000,000 a	199,815,667
Calyon NA Inc.
2.50%, 3/5/09	200,000,000	199,132,000
Cancara Asset Securitisation Ltd.
1.10%—2.21%, 2/9/09—3/11/09	210,000,000 a	209,426,625
CHARTA LLC
1.56%, 2/18/09	100,000,000 a	99,793,333
CIESCO LLC
1.58%, 1/22/09	100,000,000 a	99,907,833
Commerzbank U.S. Finance Inc.
3.09%, 1/20/09	25,000,000	24,959,889
Edison Asset Securitization LLC
3.38%, 1/21/09	100,000,000 a	99,813,889

The Fund 7

STATEMENT OF INVESTMENTS (continued)

	Principal
Commercial Paper (continued)	Amount ($)	Value ($)
Fairway Finance Company LLC
1.63%, 2/13/09	229,000,000 a	228,556,885
General Electric Capital Corp.
2.52%, 2/3/09	250,000,000	249,427,083
Gotham Funding Corp.
0.75%—1.76%, 2/13/09—3/4/09	275,708,000 a	275,118,197
Govco Inc.
1.61%, 2/23/09	100,000,000 a	99,764,444
JPMorgan Chase Funding
1.71%, 3/3/09	250,000,000 a	249,279,861
LMA Americas LLC
2.06%, 2/19/09	50,000,000 a	49,860,486
Matchpoint Master Trust
1.85%, 1/5/09	100,000,000 a	99,979,444
Prudential Funding LLC
0.04%, 1/2/09	112,000,000	111,999,876
Societe Generale N.A. Inc.
1.39%, 3/17/09	225,000,000	224,348,438
Thames Asset Global Securitization No. 1 Inc.
0.50%—4.09%, 1/14/09—1/23/09	104,770,000 a	104,692,954
UBS Finance Delaware LLC
0.01%, 1/2/09	200,000,000	199,999,944
Working Capital Management Co. L.P.
3.43%, 1/23/09	25,000,000 a	24,948,056
Total Commercial Paper
(cost $4,172,586,502)		4,172,586,502
Corporate Notes—4.9%
Lehman Brothers Holdings Inc.
0.00%, 3/27/09	100,000,000 b,c	9,750,000

8

	Principal
Corporate Notes (continued)	Amount ($)	Value ($)
Morgan Stanley
2.06%, 1/6/09	150,000,000 d	150,000,000
Wachovia Bank, N.A.
1.54%, 3/23/09	113,000,000 d	112,898,960
Total Corporate Notes
(cost $362,898,960)		272,648,960
Promissory Note—3.1%
Goldman Sachs Group Inc.
0.18%, 1/2/09
(cost $175,000,000)	175,000,000 e	175,000,000
Time Deposits—3.0%
Compass Bank (Grand Cayman)
0.03%, 1/2/09	80,000,000	80,000,000
Marshall & Ilsley Bank Milwaukee, WI (Grand Cayman)
0.02%, 1/2/09	87,000,000	87,000,000
Total Time Deposits
(cost $167,000,000)		167,000,000
Repurchase Agreement—5.3%
Goldman, Sachs & Co.
0.002%, dated 12/31/08, due 1/2/09 in
the amount of $300,000,033 (fully
collateralized by $238,910,200
U.S. Treasury Bills, due 2/5/09, value
$238,905,422 and $64,655,200
U.S. Treasury Notes, 4%, due 9/30/09,
value $67,094,633) (cost $300,000,000)	300,000,000	300,000,000

The Fund 9

STATEMENT OF INVESTMENTS (continued)

	Principal
Other—1.2%	Amount ($)	Value ($)
Capital Support Agreement
(cost $0)	0 b	64,864,818
Total Investments (cost $5,552,486,180)	98.5%	5,527,100,998
Cash and Receivables (Net)	1.5%	83,807,898
Net Assets	100.0%	5,610,908,896

a Securities exempt from registration under Rule 144A of the Securities Act of 1933.These securities may be resold in 

   transactions exempt from registration, normally to qualified institutional buyers. At December 31, 2008, these 

   securities amounted to $2,539,498,253 or 45.3% of net assets. 

b The Bank of NewYork Mellon Corporation (BNY Mellon) has entered into a Capital Support Agreement with the 

   fund, which provides that BNY Mellon, at no cost to the fund, will contribute capital to the fund up to 100% of the 

   amortized cost of the security to the extent that the fund maintains a net asset value of $.995 on the sale, final 

   liquidation or other final payment of the security. 

c Issuer filed for bankruptcy. 

d Variable rate security—interest rate subject to periodic change. 

e This note was acquired for investment, and not with the intent to distribute or sell. Securities restricted as to public 

   resale.This security was acquired on 5/15/06 at a cost of $175,000,000. At December 31, 2008, the aggregate 

   value of this security is $175,000,000 representing 3.1% of net assets and is valued at cost. 

Portfolio Summary (Unaudited)†
	Value (%)		Value (%)
Banking	64.2	Insurance	2.0
Asset-Backed/Multi-Seller Programs	14.5	Other	1.2
Brokerage Firms	6.0	Foreign/Governmental	.9
Repurchase Agreement	5.3
Finance	4.4		98.5

† Based on net assets. 

See notes to financial statements. 

10

STATEMENT OF ASSETS AND LIABILITIES 

December 31, 2008 

	Cost	Value
Assets ($):
Investments in securities—See Statement of
Investments—Note 1(b)	5,552,486,180	5,462,236,180
Capital Support Agreement—Note 1(e)		64,864,818
Cash		84,689,175
Interest receivable		3,370,789
Prepaid expenses		1,350,569
		5,616,511,531
Liabilities ($):
Due to The Dreyfus Corporation and affiliates—Note 2(b)		2,269,393
Payable for shares of Common Stock redeemed		3,008,397
Accrued expenses		324,845
		5,602,635
Net Assets ($)		5,610,908,896
Composition of Net Assets ($):
Paid-in capital		5,636,275,474
Accumulated net realized gain (loss) on investments		18,604
Accumulated net unrealized appreciation
(depreciation) on investments		(25,385,182)
Net Assets ($)		5,610,908,896
Net Asset Value Per Share
	Class 1 Shares	Class 2 Shares
Net Assets ($)	1,617,316,065	3,993,592,831
Shares Outstanding	1,625,100,236	4,012,688,055
Net Asset Value Per Share ($)	1.00	1.00

See notes to financial statements. 

The Fund 11

STATEMENT OF OPERATIONS 

Year Ended December 31, 2008 

Investment Income ($):
Interest Income	190,182,200
Expenses:
Management fee—Note 2(a)	27,402,017
Shareholder servicing costs—Note 2(b)	5,353,316
Treasury insurance expense—Note 1(f)	983,018
Prospectus and shareholders’ reports	426,380
Registration fees	307,743
Custodian fees—Note 2(b)	191,622
Professional fees	90,853
Directors’ fees and expenses—Note 2(c)	27,140
Miscellaneous	74,562
Total Expenses	34,856,651
Less—waiver of fees due to undertaking—Note 2(a)	(762,850)
Less—reduction in fees due to earnings credits—Note 1(b)	(127,406)
Net Expenses	33,966,395
Investment Income—Net	156,215,805
Realized and Unrealized Gain (Loss) on Investments—Note 1(b) ($):
Net realized gain (loss) on investments	65,096
Net unrealized appreciation (depreciation) on investments	(25,385,182)
Net Realized and Unrealized Gain (Loss) on investments	(25,320,086)
Net Increase in Net Assets Resulting from Operations	130,895,719

See notes to financial statements.

12

STATEMENT OF CHANGES IN NET ASSETS

	Year Ended December 31,
	2008	2007
Operations ($):
Investment income—net	156,215,805	254,571,390
Net realized gain on investments	65,096	20,222
Net unrealized appreciation
(depreciation) on investments	(25,385,182)	—
Net Increase (Decrease) in Net Assets
Resulting from Operations	130,895,719	254,591,612
Dividends to Shareholders from ($):
Investment income—net:
Class 1 Shares	(45,662,176)	(83,804,494)
Class 2 Shares	(110,553,629)	(170,766,896)
Total Dividends	(156,215,805)	(254,571,390)
Capital Stock Transactions ($1.00 per share):
Net proceeds from shares sold:
Class 1 Shares	940,433,459	1,061,243,413
Class 2 Shares	4,938,516,577	4,313,752,707
Dividends reinvested:
Class 1 Shares	44,260,031	81,447,344
Class 2 Shares	4,462,687	7,039,371
Cost of shares redeemed:
Class 1 Shares	(1,159,325,248)	(1,160,478,846)
Class 2 Shares	(4,961,252,933)	(3,769,203,136)
Increase (Decrease) in Net Assets
from Capital Stock Transactions	(192,905,427)	533,800,853
Total Increase (Decrease) in Net Assets	(218,225,513)	533,821,075
Net Assets ($):
Beginning of Period	5,829,134,409	5,295,313,334
End of Period	5,610,908,896	5,829,134,409

The Fund 13

See notes to financial statements.

FINANCIAL HIGHLIGHTS

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

		Year Ended December 31,
Class 1 Shares	2008	2007	2006	2005	2004
Per Share Data ($):
Net asset value,
beginning of period	1.00	1.00	1.00	1.00	1.00
Investment Operations:
Investment income—net	.026	.047	.044	.026	.007
Distributions:
Dividends from
investment income—net	(.026)	(.047)	(.044)	(.026)	(.007)
Net asset value, end of period	1.00	1.00	1.00	1.00	1.00
Total Return (%)	2.58	4.76	4.45	2.62	.72
Ratios/Supplemental Data (%):
Ratio of total expenses
to average net assets	.68	.67	.69	.71	.70
Ratio of net expenses
to average net assets	.67	.67a	.69a	.70	.70
Ratio of net investment income
to average net assets	2.59	4.66	4.37	2.32	.71
Net Assets, end of period
($ x 1,000)	1,617,316	1,798,630	1,816,411	1,794,075	4,823,521

a Expense waivers and/or reimbursements amounted to less than .01%. 

See notes to financial statements. 

14

		Year Ended December 31,
Class 2 Shares	2008	2007	2006	2005a
Share Data ($):
Net asset value, beginning of period	1.00	1.00	1.00	1.00
Investment Operations:
Investment income—net	.027	.048	.045	.022
Distributions:
Dividends from investment income—net	(.027)	(.048)	(.045)	(.022)
Net asset value, end of period	1.00	1.00	1.00	1.00
Total Return (%)	2.72	4.87	4.61	3.07b
Ratios/Supplemental Data (%):
Ratio of total expenses to average net assets	.55	.56	.55	.57b
Ratio of net expenses to average net assets	.54	.55	.55c	.55b
Ratio of net investment income
to average net assets	2.69	4.77	4.54	3.05b
Net Assets, end of period ($ x 1,000)	3,993,593	4,030,504	3,478,902	2,726,352

a	From April 18, 2005 (commencement of initial offering) to December 31, 2005.
b	Annualized.
c	Expense waivers and/or reimbursements amounted to less than .01%.
See notes to financial statements.

The Fund 15

NOTES TO FINANCIAL STATEMENTS

NOTE 1—Significant Accounting Policies:

Dreyfus Liquid Assets, Inc. (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 as high a level of current income as is consistent with the preservation of capital. 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.

Effective July 1, 2008, BNY Mellon reorganized and consolidated a number of its banking and trust company subsidiaries.As a result of the reorganization, any services previously provided to the fund by Mellon Bank, N.A. or Mellon Trust of New England, N.A. are now provided by The Bank of NewYork Mellon (formerly,The Bank of NewYork).

MBSC Securities Corporation (the “Distributor”), a wholly-owned subsidiary of the Manager, is the distributor of the fund’s shares. The fund is authorized to issue 30 billion shares of $.001 par value of Common Stock.The fund currently offers two classes of shares: Class 1 (23.5 billion shares authorized, and Class 2 (6.5 billion shares authorized). Class 1 and Class 2 shares are identical except for the services offered to and the expenses borne by each class, the allocation of certain transfer agency costs, and certain voting rights. Class 2 shares are offered only to certain eligible financial institutions. 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.

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

The fund’s financial statements are prepared in accordance with U.S. generally accepted accounting principles, which may require the use

16

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 amortized cost (other than those securities covered by a Capital Support Agreement, as described in Note 1(e) below, which are carried at market value based upon valuations provided by an independent pricing service approved by the Board of Directors) in accordance with Rule 2a-7 of the Act, which has been determined by the fund’s Board of Directors to represent the fair value of the fund’s investments.

The fund adopted 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.

Various inputs are used in determining the value of the fund’s investments relating to FAS 157.These inputs are summarized in the three broad levels listed below.

Level 1—quoted prices in active markets for identical securities. 

Level 2—other significant observable inputs (including quoted 

prices for similar securities, 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. For example, money market securities are valued using amortized cost, in accordance with rules under the Act. Generally, amortized cost

The Fund 17

NOTES TO FINANCIAL STATEMENTS (continued)

approximates the current fair value of a security, but since the value is not obtained from a quoted price in an active market, such securities are reflected as Level 2.

The following is a summary of the inputs used as of December 31, 2008 in valuing the fund’s investments carried at fair value:

	Investments in
Valuation Inputs	Securities ($)
Level 1—Quoted Prices	0
Level 2—Other Significant Observable Inputs	5,462,236,180
Level 3—Significant Unobservable Inputs	0
Total	5,462,236,180

(b) Securities transactions and investment income: Securities transactions are recorded on a trade date basis. Interest income, adjusted for accretion of discount and amortization of premium on investments, is earned from settlement date and is recognized on the accrual basis. Realized gains and losses from securities transactions are recorded on the identified cost basis. Cost of investments represents amortized cost.

In March 2008, the Financial Accounting Standards Board (“FASB”) released Statement of Financial Accounting Standards No. 161, “Disclosures about Derivative Instruments and Hedging Activities” (“FAS 161”). FAS 161 requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative agreements.The application of FAS 161 is required for fiscal years and interim periods beginning after November 15, 2008. At this time, management is evaluating the implications of FAS 161 and its impact on the financial statements and the accompanying notes has not yet been determined.

The fund has arrangements with the custodian and cash management banks whereby the fund may receive earnings credits when positive cash

18

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 may enter into repurchase agreements with financial institutions, deemed to be creditworthy by the Manager, subject to the seller’s agreement to repurchase and the fund’s agreement to resell such securities at a mutually agreed upon price. Securities purchased subject to repurchase agreements are deposited with the fund’s custodian and, pursuant to the terms of the repurchase agreement, must have an aggregate market value greater than or equal to the repurchase price plus accrued interest at all times. If the value of the underlying securities falls below the value of the repurchase price plus accrued interest, the fund will require the seller to deposit additional collateral by the next business day. If the request for additional collateral is not met, or the seller defaults on its repurchase obligation, the fund maintains the right to sell the underlying securities at market value and may claim any resulting loss against the seller.

(c) Dividends to shareholders: It is the policy of the fund to declare dividends daily from investment income-net. Such dividends are paid monthly. Dividends from net realized capital 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.

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

The Fund 19

NOTES TO FINANCIAL STATEMENTS (continued)

As of and during the period ended December 31, 2008, the fund did not have any liabilities for any unrecognized tax positions. The fund recognizes interest and penalties, if any, related to unrecognized 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, 2008 remains subject to examination by the Internal Revenue Service and state taxing authorities.

At December 31, 2008, the components of accumulated earnings on a tax basis were substantially the same as for financial reporting purposes.

The tax character of distributions paid to shareholders during the fiscal periods ended December 31, 2008 and December 31, 2007 were all ordinary income.

At December 31, 2008, the cost of investment for federal income tax purposes was $5,552,486,180; accordingly, accumulated net unrealized depreciation on investments was $25,385,182, consisting of $64,864,818 gross unrealized appreciation and $90,250,000 gross unrealized depreciation.

(e) Capital Support Agreement: The fund holds notes (the “Notes”) issued by Lehman Brothers Holdings, Inc. (“Lehman”). In order to mitigate the negative impact of holding these securities in light of the bankruptcy of Lehman on September 16, 2008, the fund entered into a Capital Support Agreement (the “Agreement”) with BNY Mellon, the parent company of the fund’s adviser. Pursuant to the Agreement, BNY Mellon has agreed to provide capital support to the fund, subject to a maximum amount of $100 million (the “Maximum Capital Support Payment”), if any of the following events result in the fund’s net asset value falling below $0.9950:

(i)      Any final sale or other final liquidation of the Notes by the fund for cash in an amount, after deduction of costs, which is less than the amortized cost value of the Notes as of the date such sale or liquidation is consummated;

20

(ii)	Receipt by the fund of final payment on the Notes in cash in an amount less than the amortized cost value of the Notes less costs in respect thereof, as of the date such final payment is received; and
(iii)	The date upon which a court of competent jurisdiction over the matter discharges Lehman from liability in respect of the Notes, and such discharge results in the receipt of aggregate payments on the Notes in an amount less than the amortized cost value of the Notes, less costs in respect thereof, as of the date such final payment is received.

The obligations of BNY Mellon to provide capital support shall terminate upon the earliest to occur of (i) the repayment in full of the Notes, (ii) BNY Mellon making payments equal to the Maximum Capital Support Payment, (iii) the date on which the fund no longer holds any Notes, (iv) the mutual agreement of the fund and BNY Mellon to terminate the Agreement and (v) 5:00 p.m. Eastern Time on the date which is 364 days from the date of the Agreement unless BNY Mellon elects in writing to extend the term of the Agreement.

(f) Treasury’s Temporary Guarantee Program: The fund has entered into a Guarantee Agreement with the United States Department of the Treasury (the “Treasury”) to participate in the Treasury’s Temporary Guarantee Program for Money Market Funds (the “Program”).

Under the Program, the Treasury guarantees the share price of shares of the fund held by shareholders as of September 19, 2008 at $1.00 per share if the fund’s net asset value per share falls below $0.995 (a “Guarantee Event”) and the fund liquidates. Recovery under the Program is subject to certain conditions and limitations.

Fund shares acquired by investors after September 19, 2008 that increase the number of fund shares the investor held at the close of business on September 19, 2008 are not eligible for protection under the Program. In addition, fund shares acquired by investors who did not hold fund shares at the close of business on September 19, 2008 are not eligible for protection under the Program.

The Fund 21

NOTES TO FINANCIAL STATEMENTS (continued)

The Program, which was originally set to expire on December 18, 2008, has been extended by the Treasury until April 30, 2009, after which the Secretary of theTreasury will review the need for, and terms of, the Program. Participation in the initial term and the extended period of the Program required a payment to the Treasury in the amount of .015% and .022%, respectively, of the fund’s shares outstanding as of September 19, 2008 (valued at $1.00 per share).

NOTE 2—Management Fee and Other Transactions with Affiliates:

(a) Pursuant to a management agreement (“Agreement”) with the Manager, the management fee is based on the value of the fund’s average daily net assets and is computed at the following annual rates: .50% of the first $1.5 billion; .48% of the next $500 million; .47% of the next $500 million; and .45% over $2.5 billion. The fee is payable monthly. The agreement provides that if in any full fiscal year the aggregate expenses, exclusive of taxes, brokerage fees, interest on borrowings and extraordinary expenses, exceed 1% of the value of the funds average net assets, the Manager will refund to the fund, or bear, the excess over 1%. The Manager has contractually agreed to waive receipt of its fees and/or assume the expenses of the fund’s Class 1 shares, until December 31, 2008, so that annual fund operating expenses for Class 1 shares, exclusive of certain expenses as described above,do not exceed .70%.The Manager has undertaken to waive its fees and or assume the expenses of the fund’s Class 2 shares, so that the expenses for Class 2 shares, exclusive of certain expenses as described above, does not exceed .55%.The Manager may terminate this undertaking upon at least 90 days prior notice to investors. The waiver of fees, pursuant to the undertaking, amounted to $762,850 during the period ended December 31, 2008.

The Manager has undertaken to reimburse expenses in the event that current yields drop below a certain level.This undertaking is voluntary

22

and not contractual and may be terminated at any time. During the period ended December 31, 2008, there was no expense reimbursement pursuant to the undertaking.

(b) Under the Shareholder Services Plan, Class 1 and Class 2 shares reimburse the Distributor an amount not to exceed an annual rate of .25% of the value of the fund’s average daily net assets for certain allocated expenses of providing personal services and/or maintaining shareholder accounts.The services provided may include personal services relating to shareholder accounts, such as answering shareholder inquiries regarding the fund and providing reports and other information, and services related to the maintenance of shareholder accounts. During the period ended December 31, 2008, Class 1 shares were charged $1,656,941 and Class 2 shares were charged $1,577,468 pursuant to the Shareholder Services 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, 2008, the fund was charged $1,482,202 pursuant to the transfer agency agreement.

The fund compensates The Bank of New York Mellon, a subsidiary of BNY Mellon and an affiliate of Dreyfus, under a cash management agreement for performing cash management services related to fund subscriptions and redemptions. During the period ended December 31, 2008, the fund was charged $122,699 pursuant to the cash management agreement.

The fund compensates The Bank of New York Mellon under a custody agreement for providing custodial services for the fund. During the period ended December 31, 2008, the fund was charged $191,622 pursuant to the custody agreement.

The Fund 23

NOTES TO FINANCIAL STATEMENTS (continued)

During the period ended December 31, 2008, the fund was charged $5,403 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 $2,251,671, custodian fees $64,000, chief compliance officer fees $1,197 and transfer agency per account fees $266,035, which are offset against an expense reimbursement currently in effect in the amount of $313,510.

(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.

24

REPORT OF INDEPENDENT REGISTERED 

       PUBLIC ACCOUNTING FIRM 

Shareholders and Board of Directors
Dreyfus Liquid Assets, Inc.

We have audited the accompanying statement of assets and liabilities of Dreyfus Liquid Assets, Inc., including the statement of investments, as of December 31, 2008, 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 periods 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, 2008 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 Liquid Assets, Inc. at December 31, 2008, 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 periods, in conformity with U.S. generally accepted accounting principles.

New York, New York
February 24, 2009

The Fund 25

IMPORTANT TAX INFORMATION (Unaudited)

For federal tax purposes the fund hereby designates 99.06% of ordinary income dividends paid during the fiscal year ended December 31, 2008 as qualifying “interest related dividends”.

26

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 16 and 17, 2008, the Board considered the re-approval for an annual period (through August 31, 2009) 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 the 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 shareholder accounts 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 performance of the fund’s Class 1 shares and comparisons to a group of retail no-load money market funds (the “Performance Group”) and to a

The Fund 27

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

larger universe of funds, consisting of all retail money market 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 members discussed the results of the comparisons and noted that the fund’s total return performance was above the Performance Universe median for all periods ended May 31, 2008, and variously was above, at or below the Performance Group medians for all periods; the Board noted that, while the fund’s total return performance was below the median of the Performance Group for four of the six periods ended May 31, 2008, the fund’s performance was in close proximity to the Performance Group median in each period.

The Board members also discussed the fund’s management fee and expense ratio and reviewed the range of management fees and expense ratios as compared to 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 and Expense Universe medians and that the fund’s Class 1 share expense ratio was higher 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 with similar investment objectives, policies and strategies, and included within the fund’s Lipper category (the “Similar Funds”) and stated that there were no other accounts managed by Dreyfus or its affiliates with similar investment objectives, policies and strategies as the fund. The Board members considered the relevance of the fee information provided for the Similar Funds to evaluate the appropriateness and reasonableness of the fund’s management fee.

28

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 investors.The Board members also considered potential benefits to Dreyfus from acting as investment adviser and noted that there were no 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.

The Fund 29

INFORMATION ABOUT THE REVIEW AND APPROVAL OF THE 

       FUND’S MANAGEMENT AGREEMENT (Unaudited) (continued) 

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 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 performance.
• 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 management fee information, including 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 Board determined that the economies of scale which may accrue to Dreyfus and its affiliates in connection with the manage- ment 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 Management Agreement was in the best interests of the fund and its shareholders.

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 77 investment companies (comprised of 180 portfolios) managed by the Manager. He is 60 years old and has been an employee of the Manager since April 1998.

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

Chief Investment Officer,Vice Chair and a director of the Manager, and an officer of 77 investment companies (comprised of 180 portfolios) managed by the Manager. Mr. Maisano also is an officer and/or Board member of certain other investment management subsidiaries of The Bank of New York Mellon Corporation, each of which is an affiliate of the Manager. He is 61 years old and has been an employee of the Manager since November 2006. Prior to joining the Manager, Mr. Maisano served as Chairman and Chief Executive Officer of EACM Advisors, an affiliate of the Manager, since August 2004, and served as Chief Executive Officer of Evaluation Associates, a leading institutional investment consulting firm, from 1988 until 2004.

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

Assistant General Counsel of BNY Mellon, and an officer of 78 investment companies (comprised of 201 portfolios) managed by the Manager. He is 48 years old and has been an employee of the Manager since October 1991.

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

Senior Counsel of BNY Mellon and Secretary of the Manager, and an officer of 78 investment companies (comprised of 201 portfolios) managed by the Manager. He is 42 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 78 investment companies (comprised of 201 portfolios) managed by the Manager. She is 53 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 78 investment companies (comprised of 201 portfolios) managed by the Manager. He is 47 years old and has been an employee of the Manager since June 2000.

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

Assistant General Counsel of BNY Mellon, and an officer of 78 investment companies (comprised of 201 portfolios) managed by the Manager. She is 46 years old and has been an employee of the Manager since February 1984.

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

Managing Counsel of BNY Mellon, and an officer of 78 investment companies (comprised of 201 portfolios) managed by the Manager. He is 45 years old and has been an employee of the Manager since February 1991.

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

Managing Counsel of BNY Mellon, and an officer of 78 investment companies (comprised of 201 portfolios) managed by the Manager. He is 56 years old and has been an employee of the Manager since May 1986.

The Fund 33

OFFICERS OF THE FUND (Unaudited) (continued)

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

Managing Counsel of BNY Mellon, and an officer of 78 investment companies (comprised of 201 portfolios) managed by the Manager. He is 43 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 78 investment companies (comprised of 201 portfolios) managed by the Manager. He is 49 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 78 investment companies (comprised of 201 portfolios) managed by the Manager. He is 49 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 78 investment companies (comprised of 201 portfolios) managed by the Manager. He is 40 years old and has been an employee of the Manager since April 1991.

ROBERT ROBOL, Assistant Treasurer since August 2003.

Senior Accounting Manager – Fixed Income Funds of the Manager, and an officer of 78 investment companies (comprised of 201 portfolios) managed by the Manager. He is 44 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 78 investment companies (comprised of 201 portfolios) managed by the Manager. He is 41 years old and has been an employee of the Manager since June 1989.

ROBERT SVAGNA, Assistant Treasurer since August 2005.

Senior Accounting Manager – Equity Funds of the Manager, and an officer of 78 investment companies (comprised of 201 portfolios) managed by the Manager. He is 41 years old and has been an employee of the Manager since November 1990.

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

Chief Compliance Officer of the Manager and The Dreyfus Family of Funds (78 investment companies, comprised of 201 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 51 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 74 investment companies (comprised of 197 portfolios) managed by the Manager. He is 38 years old and has been an employee of the Distributor since October 1998.

34

NOTES

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 $41,969 in 2007 and $43,227 in 2008.

(b) Audit-Related Fees. The aggregate fees billed in the Reporting Periods for assurance and related services by the Auditor that are reasonably related to the performance of the audit of the Registrant's financial statements and are not reported under paragraph (a) of this Item 4 were $0 in 2007 and $10,398 in 2008.

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 2007 and $0 in 2008.

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 $ 3,311 in 2007 and $2,757 in 2008. 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. 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 2007 and $0 in 2008.

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(d) All Other Fees. The aggregate fees billed in the Reporting Periods for products and services provided by the Auditor, other than the services reported in paragraphs (a) through (c) of this Item, were $0 in 2007 and $2,234 in 2008. [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 2007 and $0 in 2008.

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 $1,889,332 in 2007 and $12,561,320 in 2008.

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.	Investments.
(a)	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,

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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.

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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.

Dreyfus Liquid Assets, Inc.

By:	/s/ J. David Officer
	J. David Officer,
	President
Date:	February 23, 2009

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

By:	/s/ J. David Officer
	J. David Officer,
	President
Date:	February 23, 2009

By:	/s/ James Windels
	James Windels,
	Treasurer
Date:	February 23, 2009

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)

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