BNY Mellon Opportunistic Municipal Securities Fund (DMBVX) 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- 4764
	Dreyfus Municipal Bond Opportunity Fund
	(Exact name of Registrant as specified in charter)
	c/o The Dreyfus Corporation 200 Park Avenue New York, New York 10166
	(Address of principal executive offices) (Zip code)
	Janette E. Farragher, Esq. 200 Park Avenue New York, New York 10166
	(Name and address of agent for service)
Registrant's telephone number, including area code:				(212) 922-6000
Date of fiscal year end:		4/30
Date of reporting period:		4/30/12

FORM N-CSR

Item 1.                        Reports to Stockholders.

2

Dreyfus Municipal 

Bond Opportunity Fund 

ANNUAL REPORT April 30, 2012

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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 Chairman and CEO
3	Discussion of Fund Performance
6	Fund Performance
8	Understanding Your Fund’s Expenses
8	Comparing Your Fund’s Expenses With Those of Other Funds
9	Statement of Investments
25	Statement of Assets and Liabilities
26	Statement of Operations
27	Statement of Changes in Net Assets
29	Financial Highlights
32	Notes to Financial Statements
43	Report of Independent Registered Public Accounting Firm
44	Important Tax Information
45	Information About the Renewal of the Fund’s Management Agreement
50	Board Members Information
52	Officers of the Fund
	FOR MORE INFORMATION
	Back Cover

Dreyfus Municipal
Bond Opportunity Fund

The Fund

A LETTER FROM THE CHAIRMAN AND CEO

Dear Shareholder:

We are pleased to present this annual report for Dreyfus Municipal Bond Opportunity Fund, covering the 12-month period from May 1, 2011, through April 30, 2012. For information about how the fund performed during the reporting period, as well as general market perspectives, we provide a Discussion of Fund Performance on the pages that follow.

Municipal bonds continued to benefit from positive supply-and-demand factors during the reporting period, enabling them to avoid some of the volatility affecting their taxable fixed-income counterparts.The supply of newly issued tax-exempt bonds remained muted when issuers responded to political pressure by reducing spending and borrowing, while demand remained robust from individual and institutional investors seeking competitive after-tax yields in a low interest-rate environment. Consequently, municipal bonds produced higher after-tax returns, on average, than most other fixed-income market sectors for the reporting period.

Our economic forecast calls for near-trend growth over the remainder of 2012, and we expect the United States to continue to post better economic data than most of the rest of the developed world. An aggressively accommodative monetary policy, pent-up demand in several industry groups and gradual improvement in housing prices appear likely to balance risks stemming from the ongoing European debt crisis and volatile energy prices. As always, we encourage you to talk with your financial adviser about how these developments may affect your investments.

Thank you for your continued confidence and support.

Jonathan R. Baum
Chairman and Chief Executive Officer
The Dreyfus Corporation
May 15, 2012

2

DISCUSSION OF FUND PERFORMANCE

For the period of May 1, 2011, through April 30, 2012, as provided by Daniel Rabasco and Mountaga Aw, Portfolio Managers

Fund and Market Performance Overview

For the 12-month period ended April 30, 2012, the Class A, Class C and Class Z shares of Dreyfus Municipal Bond Opportunity Fund produced total returns of 12.45%, 11.59% and 12.51%, respectively.¹ In comparison, the Barclays Municipal Bond Index, the fund’s benchmark index, achieved a total return of 11.36% for the same period.²

Falling long-term interest rates and favorable supply-and-demand factors fueled strong performance among municipal bonds over the reporting period.The fund produced higher returns than its benchmark, primarily due to overweighted exposure to revenue-backed bonds.

As a side note, Daniel Rabasco has served as a primary portfolio manager of the fund since February 2012.

The Fund’s Investment Approach

The fund seeks to maximize current income exempt from federal income tax to the extent consistent with the preservation of capital.To pursue its goal, the fund normally invests substantially all of its assets in municipal bonds that provide income exempt from federal income tax. The fund invests at least 70% of its assets in investment-grade municipal bonds or the unrated equivalent as determined by Dreyfus. The fund may invest up to 30% of its assets in municipal bonds rated below investment grade or the unrated equivalent as determined by Dreyfus. Under normal market conditions, the dollar-weighted average maturity of the fund’s portfolio is expected to exceed 10 years.

In managing the fund, we focus on identifying undervalued sectors and securities, and we minimize the use of interest-rate forecasting.We select municipal bonds using fundamental analysis to estimate the relative value of various sectors and securities, and to exploit pricing inefficiencies in the municipal bond market. In addition, we trade among the market’s various sectors — such as the pre-refunded, general obligation and revenue sectors — based on their apparent relative values. The fund generally will invest simultaneously in several of these sectors.

The Fund  3 

DISCUSSION OF FUND PERFORMANCE (continued)

Municipal Bonds Rallied as Economic Concerns Eased

The reporting period began amid deteriorating investor sentiment as U.S. economic data proved disappointing, and investors reacted cautiously to a contentious political debate regarding U.S. government spending and borrowing. In addition, Greece appeared headed for default on its sovereign debt, and the crisis threatened other European nations. These worries intensified over the summer of 2011, culminating in the downgrade of one agency’s credit-rating of long-term U.S. government debt. Investors responded by flocking to traditional safe havens, driving long-term interest rates lower.

Better macroeconomic news cheered investors in the fall, and they responded by reaching for higher levels of income from riskier market sectors and credit-rating tiers.As a result, lower rated municipal bonds that had been punished during the downturn led the market rebound, while higher quality bonds generally lagged market averages.Although stronger economic growth typically would support higher interest rates, longer term interest rates remained low due to Operation Twist, a stimulative program from the Federal Reserve Board (the “Fed”) involving massive purchases of long-term U.S.Treasury securities.

Positive supply-and-demand forces also buoyed municipal bond prices. New issuance volumes fell sharply in 2011 after a flood of new supply in late 2010, and political pressure subsequently led to austerity programs and reduced borrowing for capital projects. Meanwhile, demand remained robust from individual and institutional investors.

From a credit quality perspective, tax receipts for most states have trended upwards, and many have cut spending, helping to ease fiscal concerns.

Credit Selection Strategy Supported Relative Performance

Our credit selection strategy proved effective in identifying undervalued areas of the market. Overweighted exposure to revenue-backed bonds, and an underweighted position in general obligation bonds, buoyed relative performance when investors reached for higher yields. More specifically, the fund benefited from securities that we deemed to be attractively valued, such as those with credit ratings toward the lower end of the investment-grade spectrum, which gained value as investor sentiment improved. The fund also benefited from a relatively long average duration, which enabled it to participate more fully in market

4

rallies. We generally focused on bonds with maturities in the 15- to 20-year range, which provided most of the yield of longer term securities but with less volatility.

On the other hand, the fund’s relative performance was undermined to a degree by overweighted exposure to escrowed bonds and bonds issued on behalf of municipal water facilities.

Prepared for a Changing Market Environment

We have been encouraged by recently improved data, but the U.S. economy remains vulnerable to unexpected shocks and uncertainty regarding Fed policy. In addition, higher yielding bonds have become more richly valued after recent rallies. Consequently, we have placed greater emphasis on high-quality bonds backed by revenues from essential municipal services, and we intend to reduce the fund’s sensitivity to interest-rate risks by trimming its holdings of bonds with early redemption provisions that could be exercised over the next several years. In our judgment, these are prudent strategies as economic conditions continue to evolve.

May 15, 2012

Bond funds are subject generally to interest rate, credit, liquidity and market risks, to varying degrees, all of which are more fully described in the fund’s prospectus. Generally, all other factors being equal, bond prices are inversely related to interest-rate changes, and rate increases can cause price declines.

1	Total return includes reinvestment of dividends and any capital gains paid, and does not take into
	consideration the maximum initial sales charge in the case of Class A shares or the applicable
	contingent deferred sales charges imposed on redemptions in the case of Class C shares. Had these
	charges been reflected, returns would have been lower. Class Z is not subject to any initial or
	deferred sales charge. Past performance is no guarantee of future results. Share price, yield and
	investment return fluctuate such that upon redemption, fund shares may be worth more or less
	than their original cost. Income may be subject to state and local taxes, and some income may be
	subject to the federal alternative minimum tax (AMT) for certain investors. Capital gains, if any,
	are taxable. Return figures provided reflect the absorption of certain fund expenses by The Dreyfus
	Corporation pursuant to an agreement in effect through February 29, 2012, at which time it was
	terminated. Had these expenses not been absorbed, the fund’s returns would have been lower.
2	SOURCE: LIPPER INC. — Reflects reinvestment of dividends and, where applicable, capital
	gain distributions.The Barclays Municipal Bond Index is a widely accepted, unmanaged total
	return performance benchmark for the long-term, investment-grade, tax-exempt bond market.
	Index returns do not reflect fees and expenses associated with operating a mutual fund. Investors
	cannot invest directly in any index.

The Fund  5 

FUND PERFORMANCE

† Source: Lipper Inc. 

Past performance is not predictive of future performance. 

The above graph compares a $10,000 investment made in each of the Class A and Class C shares of Dreyfus 

Municipal Bond Opportunity Fund on 4/30/02 to a $10,000 investment made in the Barclays Municipal Bond 

Index (the “Index”) on that date.All dividends and capital gain distributions are reinvested. 

The fund invests primarily in municipal securities and its performance shown in the line graph above takes into account 

the maximum initial sales charge on Class A shares and all other applicable fees and expenses for Class A and Class C 

shares. Performance for Class Z shares will vary from the performance of Class A and Class C shares shown above due 

to differences in charges and expenses.The Index, unlike the fund, is an unmanaged total return performance benchmark 

for the long-term, investment-grade, tax-exempt bond market, calculated by using municipal bonds selected to be 

representative of the municipal market overall.These factors can contribute to the Index potentially outperforming or 

underperforming the fund. Unlike a mutual fund, the Index is not subject to charges, fees and other expenses. Investors 

cannot invest directly in any index. Further information relating to fund performance, including expense reimbursements, 

if applicable, is contained in the Financial Highlights section of the prospectus and elsewhere in this report. 

6

Average Annual Total Returns as of 4/30/12
	Inception				From
	Date	1Year	5 Years	10 Years	Inception
Class A shares
with maximum sales charge (4.5%)	11/26/86	7.37%	3.10%	3.97%	—
without sales charge	11/26/86	12.45%	4.06%	4.45%	—
Class C shares
with applicable redemption charge †	7/13/95	10.59%	3.30%	3.69%	—
without redemption	7/13/95	11.59%	3.30%	3.69%	—
Class Z shares	10/14/04	12.51%	4.11%	—	4.27%
Barclays Municipal Bond Index	9/30/04	11.36%	5.60%	5.38%	5.11%††

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 maximum contingent deferred sales charge for Class C shares is 1% for shares redeemed within one year of the
	date of purchase.
††	The Index date is based on the life of Class Z shares. For comparative purposes, the value of the Index as of
	9/30/04 is used as the beginning value on 10/14/04 (the inception date for Class Z shares).

The Fund  7 

UNDERSTANDING YOUR FUND’S EXPENSES (Unaudited)

As a mutual fund investor, you pay ongoing expenses, such as management fees and other expenses. Using the information below, you can estimate how these expenses affect your investment and compare them with the expenses of other funds.You also may pay one-time transaction expenses, including sales charges (loads) 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 Municipal Bond Opportunity Fund from November 1, 2011 to April 30, 2012. 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 April 30, 2012

		Class A		Class C		Class Z
Expenses paid per $1,000†	$	4.46	$	8.29	$	4.20
Ending value (after expenses)	$	1,061.80	$	1,057.90	$	1,062.10

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 April 30, 2012 

		Class A		Class C		Class Z
Expenses paid per $1,000†	$	4.37	$	8.12	$	4.12
Ending value (after expenses)	$	1,020.54	$	1,016.81	$	1,020.79

† Expenses are equal to the fund’s annualized expense ratio of .87% for Class A, 1.62% for Class C and .82% for 

Class Z, multiplied by the average account value over the period, multiplied by 182/366 (to reflect the one-half 

year period). 

8

STATEMENT OF INVESTMENTS
April 30, 2012
Long-Term Municipal	Coupon	Maturity	Principal
Investments—99.0%	Rate (%)	Date	Amount ($)	Value ($)
Alabama—.6%
Jefferson County,
Limited Obligation
School Warrants	5.25	1/1/17	2,000,000	1,997,480
Jefferson County,
Limited Obligation
School Warrants	5.00	1/1/24	1,000,000	953,970
Arizona—3.9%
Glendale Western Loop 101 Public
Facilities Corporation, Third
Lien Excise Tax Revenue	7.00	7/1/33	5,000,000	5,438,100
Mohave County Industrial
Development Authority,
Correctional Facilities
Contract Revenue (Mohave
Prison, LLC Expansion Project)	8.00	5/1/25	5,000,000	5,955,200
Phoenix Civic Improvement
Corporation, Junior Lien Water
System Revenue	5.00	7/1/17	3,405,000	4,089,473
Pima County Industrial Development
Authority, Education Revenue
(American Charter Schools
Foundation Project)	5.63	7/1/38	4,650,000	4,216,574
California—14.6%
Anaheim Public Financing
Authority, Revenue (City of
Anaheim Electric System
Distribution Facilities)	5.25	10/1/34	3,185,000	3,569,461
California,
GO (Insured; AMBAC)	6.00	2/1/18	2,245,000	2,779,624
California,
GO (Various Purpose)	5.25	10/1/20	2,300,000	2,762,415
California,
GO (Various Purpose)	5.75	4/1/31	7,725,000	8,967,412
California,
GO (Various Purpose)	6.50	4/1/33	5,000,000	6,101,750
California,
GO (Various Purpose)	6.00	11/1/35	3,000,000	3,520,320
California Health Facilities
Financing Authority, Revenue
(Providence Health and Services)	6.50	10/1/38	2,955,000	3,476,410

The Fund  9 

STATEMENT OF INVESTMENTS (continued)

Long-Term Municipal	Coupon	Maturity	Principal
Investments (continued)	Rate (%)	Date	Amount ($)		Value ($)
California (continued)
California Health Facilities
Financing Authority, Revenue
(Providence Health and
Services) (Prerefunded)	6.50	10/1/18	45,000	a	59,758
California State Public Works
Board, LR (Judicial Council of
California) (Various Judicial
Council Projects)	5.00	12/1/31	2,000,000		2,125,940
California State Public Works
Board, LR (Various
Capital Projects)	5.13	10/1/31	1,000,000		1,071,720
California Statewide Communities
Development Authority, Revenue		��
(Sutter Health)	5.50	8/15/26	2,670,000		3,141,442
Chula Vista,
IDR (San Diego Gas and
Electric Company)	5.88	2/15/34	2,000,000		2,310,000
Golden State Tobacco
Securitization Corporation,
Tobacco Settlement
Asset-Backed Bonds	4.50	6/1/27	1,585,000		1,356,744
Golden State Tobacco
Securitization Corporation,
Tobacco Settlement Asset-Backed
Bonds (Prerefunded)	7.88	6/1/13	2,170,000	a	2,346,421
Golden State Tobacco
Securitization Corporation,
Tobacco Settlement
Asset-Backed Bonds
(Prerefunded)	7.90	6/1/13	1,920,000	a	2,076,595
Lincoln Community Facilities
District Number 2003-1,
Special Tax Bonds (Lincoln
Crossing Project) (Prerefunded)	6.00	9/1/13	3,145,000	a	3,437,139
Los Angeles Harbor Department,
Revenue	5.25	8/1/25	5,000,000		5,851,750
Los Angeles Unified School
District, GO	5.00	7/1/18	7,210,000		8,724,677
Sacramento County,
Airport System Senior Revenue	5.25	7/1/26	5,000,000		5,575,450

10

Long-Term Municipal	Coupon	Maturity	Principal
Investments (continued)	Rate (%)	Date	Amount ($)	Value ($)
California (continued)
Sacramento County,
Airport System
Senior Revenue	5.50	7/1/29	1,500,000	1,668,165
San Bernardino Community College
District, GO	6.25	8/1/33	2,000,000	2,366,080
Colorado—1.7%
Colorado Housing and Finance
Authority, Single Family
Program Senior and Subordinate
Bonds (Collateralized; FHA)	7.15	10/1/30	25,000	25,466
Colorado Housing and Finance
Authority, Single Family
Program Senior and Subordinate
Bonds (Collateralized; FHA)	6.60	8/1/32	1,315,000	1,413,980
E-470 Public Highway Authority,
Senior Revenue	5.38	9/1/26	1,000,000	1,059,490
Metro Wastewater
Reclamation District, Sewer
Improvement Revenue	5.00	4/1/17	1,925,000	2,308,056
University of Colorado Regents,
University Enterprise Revenue	5.75	6/1/28	1,000,000	1,236,540
University of Colorado Regents,
University Enterprise Revenue	5.25	6/1/36	2,065,000	2,376,216
Connecticut—.7%
Connecticut Development Authority,
Water Facilities Revenue
(Aquarion Water Company of
Connecticut Project)	5.50	4/1/21	3,000,000	3,381,450
Delaware—.6%
Delaware,
GO	5.00	10/1/16	2,500,000	2,970,000
District of Columbia—.5%
Metropolitan Washington
Airports Authority, Airport
System Revenue	5.00	10/1/27	2,425,000	2,650,282
Florida—5.3%
Broward County,
Port Facilities Revenue	5.00	9/1/22	3,285,000	3,601,707

The Fund  11 

STATEMENT OF INVESTMENTS (continued)

Long-Term Municipal	Coupon	Maturity	Principal
Investments (continued)	Rate (%)	Date	Amount ($)		Value ($)
Florida (continued)
Broward County Housing Finance
Authority, MFHR (Pembroke
Villas Project) (Insured; Assured
Guaranty Municipal Corp.)	5.55	1/1/23	925,000		926,073
Citizens Property Insurance
Corporation, Coastal Account
Senior Secured Revenue	5.00	6/1/20	3,000,000		3,422,820
Citizens Property Insurance
Corporation, High-Risk Account
Senior Secured Revenue	5.50	6/1/17	2,340,000		2,699,120
Florida State Board of Education,
Public Education Capital
Outlay Bonds	5.00	6/1/21	2,500,000		3,128,275
Miami-Dade County,
Water and Sewer
System Revenue	5.00	10/1/28	2,350,000		2,657,192
Orange County Housing Finance
Authority, MFHR (Seminole
Pointe Apartments)	5.75	12/1/23	2,580,000		2,580,206
Orlando Utilities Commission,
Utility System Revenue	5.00	10/1/19	2,325,000		2,864,586
Palm Bay,
Educational Facilities Revenue
(Patriot Charter School Project)	7.00	7/1/36	215,000	b	58,048
Palm Bay,
Utility System Improvement
Revenue (Insured; National
Public Finance Guarantee Corp.)	0.00	10/1/20	1,845,000	c	1,317,164
Port of Palm Beach District,
Revenue (Insured; XLCA)	0.00	9/1/23	1,000,000	c	494,480
Saint Johns County Industrial
Development Authority, Revenue
(Presbyterian Retirement
Communities Project)	5.88	8/1/40	1,000,000		1,068,590
Winter Park,
Water and Sewer Revenue
(Insured; AMBAC) (Prerefunded)	5.38	12/1/12	1,730,000	a	1,782,540
Georgia—4.6%
Atlanta,
Airport General Revenue	5.00	1/1/27	3,000,000		3,248,640

12

Long-Term Municipal	Coupon	Maturity	Principal
Investments (continued)	Rate (%)	Date	Amount ($)	Value ($)
Georgia (continued)
Atlanta,
Water and Wastewater Revenue	6.00	11/1/26	3,550,000	4,247,575
DeKalb County Hospital Authority,
RAC (DeKalb Medical
Center, Inc. Project)	6.00	9/1/30	4,250,000	4,693,402
Gwinnett County School District,
GO Sales Tax Bonds	4.00	10/1/16	2,875,000	3,279,742
Municipal Electric Authority of
Georgia, Revenue (Project One
Subordinated Bonds)	5.00	1/1/20	6,290,000	7,568,317
Hawaii—.2%
Hawaii Department of Budget and
Finance, Special Purpose
Revenue (Hawai’i Pacific
Health Obligated Group)	5.63	7/1/30	1,000,000	1,087,890
Illinois—5.9%
Chicago,
General Airport Third Lien
Revenue (Chicago O’Hare
International Airport)
(Insured; National Public
Finance Guarantee Corp.)	5.25	1/1/17	3,500,000	4,088,840
Chicago Board of Education,
Unlimited Tax GO
(Dedicated Revenues)	5.25	12/1/25	10,000,000	11,257,700
Illinois Development Finance
Authority, Revenue (Community
Rehabilitation Providers
Facilities Acquisition Program)	8.25	8/1/12	216,484	169,425
Illinois Finance Authority,
Revenue (The Carle Foundation)	5.00	8/15/18	2,500,000	2,799,700
Metropolitan Pier and Exposition
Authority, Dedicated State Tax
Revenue (McCormick Place
Expansion Project) (Insured;
National Public Finance
Guarantee Corp.)	5.50	6/15/23	5,000,000	5,076,400
Railsplitter Tobacco Settlement
Authority, Tobacco
Settlement Revenue	5.50	6/1/23	1,750,000	2,003,488

The Fund  13 

STATEMENT OF INVESTMENTS (continued)

Long-Term Municipal	Coupon	Maturity	Principal
Investments (continued)	Rate (%)	Date	Amount ($)	Value ($)
Illinois (continued)
Railsplitter Tobacco Settlement
Authority, Tobacco
Settlement Revenue	6.00	6/1/28	3,975,000	4,518,701
Indiana—.4%
Indiana Finance Authority,
First Lien Wastewater Utility
Revenue (CWA Authority Project)	5.25	10/1/25	1,500,000	1,782,570
Kansas—.3%
Kansas Development Finance
Authority, Revenue (Lifespace
Communities, Inc.)	5.00	5/15/30	1,500,000	1,565,025
Kentucky—3.1%
Mount Sterling,
LR (Kentucky League of Cities
Funding Trust Program)	6.10	3/1/18	5,500,000	6,213,625
Ohio County,
PCR (Big Rivers Electric
Corporation Project)	6.00	7/15/31	2,500,000	2,680,675
Pendleton County,
Multi-County LR (Kentucky
Association of Counties
Leasing Trust Program)	6.40	3/1/19	6,000,000	6,815,460
Louisiana—.4%
Louisiana Local Government
Environmental Facilities and
Community Development
Authority, Revenue (Westlake
Chemical Corporation Projects)	6.75	11/1/32	2,000,000	2,206,040
Maine—.5%
Maine Health and Higher
Educational Facilities Authority,
Revenue (MaineGeneral
Medical Center Issue)	7.50	7/1/32	2,000,000	2,388,380
Maryland—4.1%
Howard County,
Consolidated Public
Improvement Project GO	5.00	8/15/17	2,500,000	3,036,850
Maryland,
GO (State and Local
Facilities Loan)	5.00	8/1/20	2,500,000	3,100,500

14

Long-Term Municipal	Coupon	Maturity	Principal
Investments (continued)	Rate (%)	Date	Amount ($)	Value ($)
Maryland (continued)
Maryland Transportation Authority,
Airport Parking Revenue
(Baltimore/Washington
International Thurgood
Marshall Airport Projects)	5.00	3/1/18	6,200,000	7,164,844
Montgomery County,
Consolidated Public
Improvement GO	5.00	7/1/21	1,500,000	1,842,975
Prince George’s County,
Consolidated Public
Improvement GO	5.00	9/15/23	4,655,000	5,842,863
Massachusetts—3.0%
Massachusetts Department of
Transportation, Metropolitan
Highway System Senior Revenue	5.00	1/1/27	5,000,000	5,548,350
Massachusetts Development Finance
Agency, Revenue (Tufts Medical
Center Issue)	6.25	1/1/27	2,250,000	2,581,245
Massachusetts Industrial Finance
Agency, Water Treatment Revenue
(Massachusetts-American
Hingham Project)	6.95	12/1/35	2,450,000	2,451,519
Massachusetts School Building
Authority, Senior Dedicated
Sales Tax Revenue	5.00	10/15/35	1,750,000	1,992,287
Massachusetts Water Resources
Authority, General Revenue	5.00	8/1/42	2,500,000	2,817,150
Michigan—7.5%
Detroit,
Sewage Disposal System Senior
Lien Revenue (Insured; Assured
Guaranty Municipal Corp.)	7.00	7/1/27	3,000,000	3,642,450
Kent Hospital Finance Authority,
Revenue (Spectrum
Health System)	5.50	11/15/25	2,500,000	2,932,500
Lansing Board of Water and Light,
Utility System Revenue	5.50	7/1/41	2,500,000	2,894,475
Michigan Municipal Bond Authority,
State Clean Water Revolving
Fund Revenue	5.00	10/1/23	6,340,000	7,381,599

The Fund  15 

STATEMENT OF INVESTMENTS (continued)

Long-Term Municipal	Coupon	Maturity	Principal
Investments (continued)	Rate (%)	Date	Amount ($)		Value ($)
Michigan (continued)
Michigan Strategic Fund,
LOR (State of Michigan Cadillac
Place Office Building Project)	5.00	10/15/17	2,590,000		2,964,928
Michigan Strategic Fund,��
SWDR (Genesee Power
Station Project)	7.50	1/1/21	6,225,000		6,085,000
Pontiac Tax Increment Finance
Authority, Tax Increment
Revenue (Development Area
Number 3) (Prerefunded)	6.25	6/1/12	2,640,000	a	2,680,181
Pontiac Tax Increment Finance
Authority, Tax Increment
Revenue (Development Area
Number 3) (Prerefunded)	6.25	6/1/12	610,000	a	619,107
Romulus Economic Development
Corporation, Limited
Obligation EDR (Romulus HIR
Limited Partnership Project)
(Insured; ITT Lyndon Property
Insurance Company)	7.00	11/1/15	5,000,000		6,068,300
Wayne County Airport Authority,
Airport Revenue (Detroit
Metropolitan Wayne
County Airport)	5.00	12/1/18	2,500,000		2,785,525
Missouri—.9%
Curators of the University of
Missouri, System
Facilities Revenue	5.00	11/1/19	2,500,000		3,127,975
Missouri Development Finance
Board, Infrastructure
Facilities Revenue (Branson
Landing Project) (Prerefunded)	5.38	12/1/12	1,370,000	a	1,411,073
Nevada—.2%
Clark County,
Passenger Facility Charge
Revenue (Las Vegas-McCarran
International Airport)	5.00	7/1/30	1,000,000		1,077,410

16

Long-Term Municipal	Coupon	Maturity	Principal
Investments (continued)	Rate (%)	Date	Amount ($)		Value ($)
New Jersey—2.9%
New Jersey Transportation
Trust Fund Authority
(Transportation System)	5.25	12/15/19	3,000,000		3,679,380
New Jersey Transportation
Trust Fund Authority
(Transportation System)	5.50	6/15/31	1,250,000		1,448,550
Tobacco Settlement Financing
Corporation of New Jersey,
Tobacco Settlement
Asset-Backed Bonds	4.50	6/1/23	2,000,000		1,897,640
Tobacco Settlement Financing
Corporation of New Jersey,
Tobacco Settlement
Asset-Backed Bonds	4.63	6/1/26	2,640,000		2,388,962
Tobacco Settlement Financing
Corporation of New Jersey,
Tobacco Settlement Asset-Backed
Bonds (Prerefunded)	7.00	6/1/13	5,135,000	a	5,505,285
New Mexico—1.0%
Jicarilla Apache Nation,
Revenue	5.50	9/1/23	5,000,000		5,219,900
New York—11.6%
Austin Trust
(Port Authority of New York
and New Jersey, Consolidated
Bonds, 151st Series)	6.00	9/15/28	9,690,000	d,e	11,474,510
Long Island Power Authority,
Electric System General Revenue	6.00	5/1/33	5,000,000		5,904,750
Metropolitan Transportation
Authority, Dedicated Tax
Fund Revenue	5.00	11/15/32	1,850,000		2,116,196
Metropolitan Transportation
Authority, Transportation
Revenue	5.25	11/15/28	2,500,000		2,849,275
New York City,
GO	5.00	10/1/36	5,000,000		5,590,900

The Fund  17 

STATEMENT OF INVESTMENTS (continued)

Long-Term Municipal	Coupon	Maturity	Principal
Investments (continued)	Rate (%)	Date	Amount ($)	Value ($)
New York (continued)
New York City Health and Hospital
Corporation, GO	5.00	2/15/18	5,265,000	6,206,277
New York City Municipal Water
Finance Authority, Water and
Sewer System Second General
Resolution Revenue	5.00	6/15/34	5,000,000	5,671,200
New York City Transitional Finance
Authority, Future Tax Secured
Subordinate Revenue	5.00	2/1/24	3,000,000	3,586,470
New York Liberty Development
Corporation, Liberty Revenue
(4 World Trade Center Project)	5.00	11/15/31	1,000,000	1,106,660
New York State Dormitory
Authority, Revenue (Orange
Regional Medical Center
Obligated Group)	6.25	12/1/37	5,000,000	5,263,750
New York State Dormitory
Authority, Revenue (State
University Educational Facilities)	7.50	5/15/13	2,500,000	2,686,625
New York State Dormitory
Authority, State Personal
Income Tax Revenue
(General Purpose)	5.00	8/15/18	5,000,000	6,123,550
North Carolina—.2%
North Carolina Eastern Municipal
Power Agency, Power
System Revenue	7.00	1/1/13	765,000	790,046
Ohio—.6%
Cleveland-Cuyahoga County Port
Authority, Senior Special
Assessment/Tax Increment
Revenue (University Heights—
Public Parking Garage Project)	7.35	12/1/31	3,000,000	3,045,210
Oklahoma—.9%
Oklahoma Municipal Power
Authority, Power Supply
System Revenue	6.00	1/1/38	4,000,000	4,550,760
Pennsylvania—2.8%
Allegheny County Port Authority,
Special Transportation Revenue	5.25	3/1/23	2,715,000	3,212,334

18

Long-Term Municipal	Coupon	Maturity	Principal
Investments (continued)	Rate (%)	Date	Amount ($)	Value ($)
Pennsylvania (continued)
Harrisburg Authority,
University Revenue (The
Harrisburg University of
Science and Technology Project)	6.00	9/1/36	850,000	693,668
Pennsylvania Higher Educational
Facilities Authority, Revenue
(University of Pennsylvania
Health System)	6.00	8/15/26	5,000,000	5,828,700
Philadelphia School District,
GO	5.25	9/1/23	4,000,000	4,618,440
South Carolina—1.7%
Columbia,
Waterworks and Sewer
System Revenue	5.00	2/1/36	2,500,000	2,807,550
South Carolina Public Service
Authority, Revenue Obligations	5.50	1/1/38	5,000,000	5,639,100
Tennessee—1.1%
Johnson City Health and
Educational Facilities Board, HR
(Mountain States Health Alliance)	6.00	7/1/38	2,435,000	2,698,881
Metropolitan Government of
Nashville and Davidson County,
Subordinate Lien Water and
Sewer Revenue	5.00	7/1/17	2,500,000	2,960,975
Texas—7.5%
Houston,
Airport System Subordinate
Lien Revenue	5.00	7/1/17	2,500,000	2,897,300
Midlothian Independent School
District, Unlimited Tax School
Building Bonds (Permament
School Fund Guarantee Program)	5.00	2/15/40	2,500,000	2,786,575
North Texas Tollway Authority,
First Tier System Revenue
(Insured; Assured Guaranty
Municipal Corp.)	5.75	1/1/40	11,850,000	13,046,495
North Texas Tollway Authority,
Second Tier System Revenue	5.75	1/1/38	5,510,000	5,955,318
San Antonio,
Water System Revenue	5.00	5/15/36	3,945,000	4,419,662

The Fund  19 

STATEMENT OF INVESTMENTS (continued)

Long-Term Municipal	Coupon	Maturity	Principal
Investments (continued)	Rate (%)	Date	Amount ($)	Value ($)
Texas (continued)
Texas Turnpike Authority,
Central Texas Turnpike System
Revenue (Insured; AMBAC)	5.75	8/15/38	2,875,000	2,905,303
University of Texas System
Board of Regents, Financing
System Revenue	5.00	8/15/17	5,000,000	6,044,900
Virginia—1.7%
Henrico County,
Public Improvement GO	5.00	7/15/17	2,845,000	3,450,103
Virginia Housing Development
Authority, Commonwealth
Mortgage Revenue	6.25	7/1/31	3,470,000	3,904,999
Virginia Small Business Financing
Authority, Senior Lien Revenue
(Elizabeth River Crossing
Opco, LLC Project)	6.00	1/1/37	1,250,000	1,362,137
Washington—2.8%
Chelan County Public Utility
District Number 1,
Consolidated System Revenue	5.00	7/1/17	2,180,000	2,528,190
Energy Northwest,
Electric Revenue (Project 3)	5.00	7/1/18	5,000,000	6,104,900
Washington,
GO (Various Purpose)	5.00	7/1/16	2,500,000	2,937,000
Washington,
Motor Vehicle Fuel Tax GO
(State Road 520 Corridor
Program—Toll Revenue)	5.00	6/1/33	2,255,000	2,550,946
West Virginia—1.1%
West Virginia University Board of
Governors, University
Improvement Revenue (West
Virginia University Projects)	5.00	10/1/36	5,000,000	5,663,750

20

Long-Term Municipal	Coupon	Maturity	Principal
Investments (continued)	Rate (%)	Date	Amount ($)		Value ($)
Wisconsin—1.8%
Wisconsin,
GO	4.00	5/1/15	2,500,000		2,757,225
Wisconsin Health and Educational
Facilities Authority, Revenue
(Aurora Health Care, Inc.)	5.50	4/15/29	2,200,000		2,441,186
Wisconsin Health and Educational
Facilities Authority, Revenue
(Aurora Health Care, Inc.)	6.40	4/15/33	4,000,000		4,095,920
U.S. Related—2.3%
Puerto Rico Commonwealth,
Public Improvement GO	6.00	7/1/28	1,000,000		1,097,040
Puerto Rico Infrastructure
Financing Authority, Special
Tax Revenue (Insured; AMBAC)	5.50	7/1/26	3,000,000		3,345,000
Puerto Rico Sales Tax Financing
Corporation, Sales Tax Revenue
(First Subordinate Series)	6.00	8/1/39	1,500,000		1,717,500
Puerto Rico Sales Tax Financing
Corporation, Sales Tax Revenue
(First Subordinate Series)	6.00	8/1/42	5,000,000		5,649,000
Total Long-Term Municipal Investments
(cost $462,373,385)					500,929,045
Short-Term Municipal
Investments—2.5%
California—.3%
California,
GO Notes
(Kindergarten-University)
(LOC: California State Teachers
Retirement System and
Citibank NA)	0.23	5/1/12	1,400,000	f	1,400,000

The Fund  21 

STATEMENT OF INVESTMENTS (continued)

Short-Term Municipal	Coupon	Maturity	Principal
Investments (continued)	Rate (%)	Date	Amount ($)			Value ($)
New York—2.2%
New York City,
GO Notes (LOC; JPMorgan
Chase Bank)	0.23	5/1/12	3,600,000		f	3,600,000
New York City,
GO Notes (LOC; JPMorgan
Chase Bank)	0.23	5/1/12	2,800,000		f	2,800,000
New York City,
GO Notes (LOC; JPMorgan
Chase Bank)	0.23	5/1/12	1,900,000		f	1,900,000
New York City,
GO Notes (LOC; JPMorgan
Chase Bank)	0.23	5/1/12	2,700,000		f	2,700,000
Total Short-Term Municipal Investments
(cost $12,400,000)						12,400,000
Total Investments (cost $474,773,385)			101.5	%		513,329,045
Liabilities, Less Cash and Receivables			(1.5	%)		(7,433,006)
Net Assets			100.0	%		505,896,039

a These securities are prerefunded; the date shown represents the prerefunded date. Bonds which are prerefunded are 

collateralized by U.S. Government securities which are held in escrow and are used to pay principal and interest on 

the municipal issue and to retire the bonds in full at the earliest refunding date. 

b Non-income producing—security in default. 

c Security issued with a zero coupon. Income is recognized through the accretion of discount. 

d Collateral for floating rate borrowings. 

e Security exempt from registration under Rule 144A of the Securities Act of 1933.This security may be resold in 

transactions exempt from registration, normally to qualified institutional buyers.At April 30, 2012, this security was 

valued at $11,474,510 or 2.3% of net assets. 

f Variable rate demand note—rate shown is the interest rate in effect at April 30, 2012. Maturity date represents the 

next demand date, or the ultimate maturity date if earlier. 

22

Summary of Abbreviations
ABAG	Association of Bay Area	ACA	American Capital Access
	Governments
AGC	ACE Guaranty Corporation	AGIC	Asset Guaranty Insurance Company
AMBAC	American Municipal Bond	ARRN	Adjustable Rate
	Assurance Corporation		Receipt Notes
BAN	Bond Anticipation Notes	BPA	Bond Purchase Agreement
CIFG	CDC Ixis Financial Guaranty	COP	Certificate of Participation
CP	Commercial Paper	DRIVERS	Derivative Inverse
			Tax-Exempt Receipts
EDR	Economic Development	EIR	Environmental Improvement
	Revenue		Revenue
FGIC	Financial Guaranty	FHA	Federal Housing
	Insurance Company		Administration
FHLB	Federal Home	FHLMC	Federal Home Loan Mortgage
	Loan Bank		Corporation
FNMA	Federal National	GAN	Grant Anticipation Notes
	Mortgage Association
GIC	Guaranteed Investment	GNMA	Government National Mortgage
	Contract		Association
GO	General Obligation	HR	Hospital Revenue
IDB	Industrial Development Board	IDC	Industrial Development Corporation
IDR	Industrial Development	LIFERS	Long Inverse Floating
	Revenue		Exempt Receipts
LOC	Letter of Credit	LOR	Limited Obligation Revenue
LR	Lease Revenue	MERLOTS	Municipal Exempt Receipt
			Liquidity Option Tender
MFHR	Multi-Family Housing Revenue	MFMR	Multi-Family Mortgage Revenue
PCR	Pollution Control Revenue	PILOT	Payment in Lieu of Taxes
P-FLOATS	Puttable Floating Option	PUTTERS	Puttable Tax-Exempt Receipts
	Tax-Exempt Receipts
RAC	Revenue Anticipation Certificates	RAN	Revenue Anticipation Notes
RAW	Revenue Anticipation Warrants	ROCS	Reset Options Certificates
RRR	Resources Recovery Revenue	SAAN	State Aid Anticipation Notes
SBPA	Standby Bond Purchase Agreement	SFHR	Single Family Housing Revenue
SFMR	Single Family Mortgage Revenue	SONYMA	State of New York Mortgage Agency
SPEARS	Short Puttable Exempt	SWDR	Solid Waste Disposal Revenue
	Adjustable Receipts
TAN	Tax Anticipation Notes	TAW	Tax Anticipation Warrants
TRAN	Tax and Revenue Anticipation Notes	XLCA	XL Capital Assurance

The Fund  23 

STATEMENT OF INVESTMENTS (continued)

Summary of Combined Ratings (Unaudited)
Fitch	or	Moody’s	or	Standard & Poor’s	Value (%)†
AAA		Aaa		AAA	16.3
AA		Aa		AA	36.7
A		A		A	28.7
BBB		Baa		BBB	8.5
BB		Ba		BB	1.4
B		B		B	2.8
F1		MIG1/P1		SP1/A1	.6
Not Ratedg		Not Ratedg		Not Ratedg	5.0
					100.0

† Based on total investments. 

g Securities which, while not rated by Fitch, Moody’s and Standard & Poor’s, have been determined by the Manager to 

be of comparable quality to those rated securities in which the fund may invest. 

See notes to financial statements.

24

STATEMENT OF ASSETS AND LIABILITIES 

April 30, 2012 

		Cost	Value
Assets ($):
Investments in securities—See Statement of Investments		474,773,385	513,329,045
Cash			3,366,630
Interest receivable			6,784,216
Receivable for shares of Beneficial Interest subscribed			68,445
Prepaid expenses			27,376
			523,575,712
Liabilities ($):
Due to The Dreyfus Corporation and affiliates—Note 3(c)			384,827
Payable for investment securities purchased			11,783,955
Payable for floating rate notes issued—Note 4			4,845,000
Payable for shares of Beneficial Interest redeemed			571,088
Interest and expense payable related
to floating rate notes issued—Note 4			6,722
Accrued expenses			88,081
			17,679,673
Net Assets ($)			505,896,039
Composition of Net Assets ($):
Paid-in capital			504,136,197
Accumulated net realized gain (loss) on investments			(36,795,818)
Accumulated net unrealized appreciation
(depreciation) on investments			38,555,660
Net Assets ($)			505,896,039
Net Asset Value Per Share
	Class A	Class C	Class Z
Net Assets ($)	239,859,497	13,954,929	252,081,613
Shares Outstanding	18,719,466	1,086,471	19,672,621
Net Asset Value Per Share ($)	12.81	12.84	12.81
See notes to financial statements.

The Fund  25 

STATEMENT OF OPERATIONS
Year Ended April 30, 2012
Investment Income ($):
Interest Income	24,121,309
Expenses:
Management fee—Note 3(a)	2,721,479
Shareholder servicing costs—Note 3(c)	1,454,030
Distribution fees—Note 3(b)	104,351
Professional fees	93,137
Registration fees	57,653
Interest and expense related to floating rate notes issued—Note 4	43,876
Custodian fees—Note 3(c)	43,501
Prospectus and shareholders’ reports	31,634
Trustees’ fees and expenses—Note 3(d)	30,964
Loan commitment fees—Note 2	6,904
Miscellaneous	48,336
Total Expenses	4,635,865
Less—reduction in management fee due to undertaking—Note 3(a)	(247,158)
Less—reduction in fees due to earnings credits—Note 3(c)	(400)
Net Expenses	4,388,307
Investment Income—Net	19,733,002
Realized and Unrealized Gain (Loss) on Investments—Note 4 ($):
Net realized gain (loss) on investments	12,015,713
Net unrealized appreciation (depreciation) on investments	26,484,652
Net Realized and Unrealized Gain (Loss) on Investments	38,500,365
Net Increase in Net Assets Resulting from Operations	58,233,367
See notes to financial statements.

26

STATEMENT OF CHANGES IN NET ASSETS

		Year Ended April 30,
	2012a	2011
Operations ($):
Investment income—net	19,733,002	22,994,871
Net realized gain (loss) on investments	12,015,713	(7,322,753)
Net unrealized appreciation
(depreciation) on investments	26,484,652	(14,631,334)
Net Increase (Decrease) in Net Assets
Resulting from Operations	58,233,367	1,040,784
Dividends to Shareholders from ($):
Investment income—net:
Class A Shares	(9,305,877)	(11,034,091)
Class B Shares	(20,036)	(57,110)
Class C Shares	(432,566)	(522,738)
Class Z Shares	(9,823,657)	(11,160,219)
Total Dividends	(19,582,136)	(22,774,158)
Beneficial Interest Transactions ($):
Net proceeds from shares sold:
Class A Shares	12,674,888	8,556,488
Class B Shares	162,750	47,459
Class C Shares	1,504,474	2,004,588
Class Z Shares	6,921,528	6,579,395
Dividends reinvested:
Class A Shares	6,600,723	7,776,863
Class B Shares	14,891	42,482
Class C Shares	281,279	319,429
Class Z Shares	7,297,662	8,254,115
Cost of shares redeemed:
Class A Shares	(29,495,384)	(42,556,090)
Class B Shares	(1,232,053)	(1,184,828)
Class C Shares	(1,627,193)	(4,420,276)
Class Z Shares	(20,371,121)	(28,280,405)
Increase (Decrease) in Net Assets from
Beneficial Interest Transactions	(17,267,556)	(42,860,780)
Total Increase (Decrease) in Net Assets	21,383,675	(64,594,154)
Net Assets ($):
Beginning of Period	484,512,364	549,106,518
End of Period	505,896,039	484,512,364

The Fund  27 

STATEMENT OF CHANGES IN NET ASSETS (continued)

		Year Ended April 30,
	2012a	2011
Capital Share Transactions:
Class Ab
Shares sold	1,019,158	711,573
Shares issued for dividends reinvested	531,701	638,911
Shares redeemed	(2,385,727)	(3,530,667)
Net Increase (Decrease) in Shares Outstanding	(834,868)	(2,180,183)
Class Bb
Shares sold	13,064	3,809
Shares issued for dividends reinvested	1,211	3,470
Shares redeemed	(98,670)	(97,167)
Net Increase (Decrease) in Shares Outstanding	(84,395)	(89,888)
Class C
Shares sold	121,443	162,532
Shares issued for dividends reinvested	22,595	26,153
Shares redeemed	(131,119)	(366,054)
Net Increase (Decrease) in Shares Outstanding	12,919	(177,369)
Class Z
Shares sold	554,644	535,652
Shares issued for dividends reinvested	587,938	678,507
Shares redeemed	(1,649,629)	(2,346,573)
Net Increase (Decrease) in Shares Outstanding	(507,047)	(1,132,414)

a Effective as of the close of business on March 13, 2012, the fund no longer offers Class B shares. 

b During the period ended April 30, 2012, 29,619 Class B shares representing $369,815 were automatically 

converted to 29,642 Class A shares and during the period ended April 30, 2011, 22,072 Class B shares 

representing $266,691 were automatically converted to 22,089 Class A shares. 

See notes to financial statements.

28

FINANCIAL HIGHLIGHTS

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

		Year Ended April 30,
Class A Shares	2012	2011	2010	2009	2008
Per Share Data ($):
Net asset value, beginning of period	11.85	12.35	11.65	12.56	13.10
Investment Operations:
Investment income—neta	.49	.53	.55	.57	.57
Net realized and unrealized
gain (loss) on investments	.96	(.50)	.70	(.91)	(.54)
Total from Investment Operations	1.45	.03	1.25	(.34)	.03
Distributions:
Dividends from investment income—net	(.49)	(.53)	(.55)	(.57)	(.57)
Net asset value, end of period	12.81	11.85	12.35	11.65	12.56
Total Return (%)b	12.45	.20	10.91	(2.64)	.28
Ratios/Supplemental Data (%):
Ratio of total expenses
to average net assets	.94	.94	.93	1.00	1.17
Ratio of net expenses
to average net assets	.89	.94	.93	.99	1.17
Ratio of interest and expense related
to floating rate notes issued
to average net assets	.01	.01	.01	.07	.23
Ratio of net investment income
to average net assets	3.98	4.38	4.57	4.85	4.49
Portfolio Turnover Rate	40.38	21.95	22.61	56.67	77.20
Net Assets, end of period ($ x 1,000)	239,859	231,671	268,406	269,846	300,982

a	Based on average shares outstanding at each month end.
b	Exclusive of sales charge.

See notes to financial statements.

The Fund  29 

FINANCIAL HIGHLIGHTS (continued)

		Year Ended April 30,
Class C Shares	2012	2011	2010	2009	2008
Per Share Data ($):
Net asset value, beginning of period	11.88	12.37	11.66	12.58	13.12
Investment Operations:
Investment income—neta	.40	.44	.46	.49	.47
Net realized and unrealized
gain (loss) on investments	.96	(.49)	.71	(.93)	(.53)
Total from Investment Operations	1.36	(.05)	1.17	(.44)	(.06)
Distributions:
Dividends from investment income—net	(.40)	(.44)	(.46)	(.48)	(.48)
Net asset value, end of period	12.84	11.88	12.37	11.66	12.58
Total Return (%)b	11.59	(.46)	10.15	(3.42)	(.46)
Ratios/Supplemental Data (%):
Ratio of total expenses
to average net assets	1.69	1.69	1.69	1.76	1.91
Ratio of net expenses
to average net assets	1.63	1.69	1.69	1.75	1.91
Ratio of interest and expense related
to floating rate notes issued
to average net assets	.01	.01	.01	.07	.23
Ratio of net investment income
to average net assets	3.23	3.61	3.80	4.12	3.74
Portfolio Turnover Rate	40.38	21.95	22.61	56.67	77.20
Net Assets, end of period ($ x 1,000)	13,955	12,750	15,476	14,702	12,586

a	Based on average shares outstanding at each month end.
b	Exclusive of sales charge.

See notes to financial statements.

30

		Year Ended April 30,
Class Z Shares	2012	2011	2010	2009	2008
Per Share Data ($):
Net asset value, beginning of period	11.85	12.34	11.65	12.56	13.10
Investment Operations:
Investment income—neta	.50	.54	.56	.58	.58
Net realized and unrealized
gain (loss) on investments	.96	(.50)	.69	(.91)	(.54)
Total from Investment Operations	1.46	.04	1.25	(.33)	.04
Distributions:
Dividends from investment income—net	(.50)	(.53)	(.56)	(.58)	(.58)
Net asset value, end of period	12.81	11.85	12.34	11.65	12.56
Total Return (%)	12.51	.34	10.87	(2.59)	.33
Ratios/Supplemental Data (%):
Ratio of total expenses
to average net assets	.89	.88	.88	.94	1.08
Ratio of net expenses
to average net assets	.84	.88	.88	.94	1.08
Ratio of interest and expense related
to floating rate notes issued
to average net assets	.01	.01	.01	.07	.23
Ratio of net investment income
to average net assets	4.03	4.44	4.62	4.90	4.53
Portfolio Turnover Rate	40.38	21.95	22.61	56.67	77.20
Net Assets, end of period ($ x 1,000)	252,082	239,092	263,072	247,849	284,168
a Based on average shares outstanding at each month end.
See notes to financial statements.

The Fund  31 

NOTES TO FINANCIAL STATEMENTS

NOTE 1—Significant Accounting Policies:

Dreyfus Municipal Bond Opportunity Fund (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 maximize current income exempt from federal income tax to the extent 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.

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 an unlimited number of $.001 par value shares of Beneficial Interest in each of the following classes of shares: Class A, Class C and Class Z. Class A shares are subject to a sales charge imposed at the time of purchase. Class C shares are subject to a contingent deferred sales charge (“CDSC”) imposed on Class C shares redeemed within one year of purchase. Class Z shares are sold at net asset value per share generally only to shareholders of the fund who received Class Z shares in exchange for their shares of a Dreyfus-managed fund as a result of the reorganization of such Dreyfus-managed fund, and who continue to maintain accounts with the fund at the time of purchase. Class Z shares generally are not available for new accounts. Class B shares were subject to a CDSC imposed on Class B share redemptions made within six years of purchase and automatically converted to Class A shares after six years.The fund no longer offers Class B shares. Effective March 13, 2012, all outstanding Class B shares were automatically converted to Class A shares. Other differences between the classes include the services offered to and the expenses borne by each class, the allocation of certain transfer agency costs and certain voting rights. Income, expenses (other than expenses attributable to a

32

specific class), and realized and unrealized gains or losses on investments are allocated to each class of shares based on its relative net assets.

The Financial Accounting Standards Board (“FASB”) Accounting Standards Codification is the exclusive reference of authoritative U.S. generally accepted accounting principles (“GAAP”) recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) under authority of federal laws are also sources of authoritative GAAP for SEC registrants. The fund’s financial statements are prepared in accordance with GAAP, which may require the use of management estimates and assumptions.Actual results could differ from those estimates.

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

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

The Fund  33 

NOTES TO FINANCIAL STATEMENTS (continued)

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

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

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

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

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

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

Investments in securities are valued each business day by an independent pricing service (the “Service”) approved by the Board of Trustees. Investments for which quoted bid prices are readily available and are representative of the bid side of the market in the judgment of the Service are valued at the mean between the quoted bid prices (as obtained by the Service from dealers in such securities) and asked prices (as calculated by the Service based upon its evaluation of the market for such securities). Other investments (which constitute a majority of the portfolio securities) are carried at fair value as determined by the Service, based on methods which include consideration of: yields or prices of municipal securities of comparable quality, coupon, maturity and type; indications as to values from dealers; and general market con-ditions.All of the preceding securities are categorized within Level 2 of the fair value hierarchy.

34

The Service’s procedures are reviewed by Dreyfus under the general supervision of the Board of Trustees.

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, but before the fund calculates its net asset value, the fund may value these investments at fair value as determined in accordance with the procedures approved by the Board of Trustees. Certain factors may be considered when fair valuing investments such as: fundamental analytical data, the nature and duration of restrictions on disposition, an evaluation of the forces that influence the market in which the securities are purchased and sold, and public trading in similar securities of the issuer or comparable issuers. These securities are either categorized as Level 2 or 3 depending on the relevant inputs used.

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

The following is a summary of the inputs used as of April 30, 2012 in valuing the fund’s investments:

		Level 2—Other	Level 3—
	Level 1—	Significant	Significant
	Unadjusted	Observable	Unobservable
	Quoted Prices	Inputs	Inputs	Total
Assets ($)
Investments in Securities:
Municipal Bonds	—	513,270,997	58,048	513,329,045

The Fund  35 

NOTES TO FINANCIAL STATEMENTS (continued)

The following is a reconciliation of Level 3 assets for which significant unobservable inputs were used to determine fair value:

	Municipal Bonds ($)
Balance as of 4/30/2011	—
Realized gain (loss)	—
Change in unrealized appreciation (depreciation)	(6,452)
Purchases	—
Sales	—
Transfers into Level 3†	64,500
Transfers out of Level 3	—
Balance as of 4/30/2012	58,048
The amount of total gains (losses) for the period
included in earnings attributable to the change in
unrealized gains (losses) relating to investments
still held at 4/30/2012	(49,076)

† Transfers into Level 3 represent the value at the date of transfer.The transfer into Level 3 for the 

current period was due to the lack of observable inputs following the issuer’s default. 

In May 2011, FASB issued Accounting Standards Update (“ASU”) No. 2011-04 “Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in GAAP and International Financial Reporting Standards (“IFRS”)” (“ASU 2011-04”). ASU 2011-04 includes common requirements for measurement of and disclosure about fair value between GAAP and IFRS. ASU 2011-04 will require reporting entities to disclose the following information for fair value measurements categorized within Level 3 of the fair value hierarchy: quantitative information about the unobservable inputs used in the fair value measurement, the valuation processes used by the reporting entity and a narrative description of the sensitivity of the fair value measurement to changes in unobservable inputs and the interrelationships between those unobservable inputs. In addition, ASU 2011-04 will require reporting entities to make disclosures about amounts and reasons for all transfers in and out of Level 1 and Level 2 fair value measurements.The new and revised disclosures are effective for interim and annual reporting periods beginning after December 15, 2011. At

36

this time, management is evaluating the implications of ASU 2011-04 and its impact on the financial statements.

(b) Securities transactions and investment income: Securities transactions are recorded on a trade date basis. Realized gains and losses from securities transactions are recorded on the identified cost basis. Interest income, adjusted for accretion of discount and amortization of premium on investments, is earned from settlement date and recognized on the accrual basis. Securities purchased or sold on a when-issued or delayed-delivery basis may be settled a month or more after the trade date.

(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. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.

(d) Federal income taxes: It is the policy of the fund to continue to qualify as a regulated investment company, which can distribute tax exempt dividends, by complying with the applicable provisions of the Code, and to make distributions of income and net realized capital gain sufficient to relieve it from substantially all federal income and excise taxes.

As of and during the period ended April 30, 2012, the fund did not have any liabilities for any uncertain tax positions.The fund recognizes interest and penalties, if any, related to uncertain tax positions as income tax expense in the Statement of Operations. During the period, the fund did not incur any interest or penalties.

The Fund  37 

NOTES TO FINANCIAL STATEMENTS (continued)

Each of the tax years in the four-year period ended April 30, 2012 remains subject to examination by the Internal Revenue Service and state taxing authorities.

At April 30, 2012, the components of accumulated earnings on a tax basis were as follows: undistributed tax exempt income $428,887, undistributed ordinary income $260,085, accumulated capital losses $36,909,340 and unrealized appreciation $38,409,097.

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

The accumulated capital loss carryover is available for federal income tax purposes to be applied against future net realized capital gains, if any, realized subsequent to April 30, 2012. If not applied, $723,059 of the carryover expires in fiscal 2016, $12,209,003 expires in fiscal 2017, $20,082,904 expires in fiscal 2018 and $3,894,374 expires in fiscal 2019.

The tax character of distributions paid to shareholders during the fiscal periods ended April 30, 2012 and April 30, 2011 were as follows: tax exempt income $19,582,136 and $22,770,304 and ordinary income $0 and $3,854, respectively.

During the period ended April 30, 2012, as a result of permanent book to tax differences, primarily due to the tax treatment for amortization adjustments, the fund decreased accumulated undistributed investment income-net by $150,866, increased accumulated net realized gain (loss) on investments by $99,171 and increased paid-in capital by $51,695. Net assets and net asset value per share were not affected by this reclassification.

38

NOTE 2—Bank Lines of Credit:

The fund participates with other Dreyfus-managed funds in a $225 million unsecured credit facility led by Citibank, N.A. and a $300 million unsecured credit facility provided by The Bank of New York Mellon, a subsidiary of BNY Mellon and an affiliate of Dreyfus (each, a “Facility”), each to be utilized primarily for temporary or emergency purposes, including the financing of redemptions. In connection therewith, the fund has agreed to pay its pro rata portion of commitment fees for each Facility. Interest is charged to the fund based on rates determined pursuant to the terms of the respective Facility at the time of borrowing. During the period ended April 30, 2012, the fund did not borrow under the Facilities.

NOTE 3—Management Fee and Other Transactions With Affiliates:

(a) Pursuant to a management agreement with the Manager, the management fee is computed at the annual rate of .55% of the value of the fund’s average daily net assets and is payable monthly.

The Manager had agreed, from May 1, 2011 through February 29, 2012, to waive receipt of a portion of the fund’s management fee, in the amount of .10% of the value of the fund’s average daily net assets. The reduction in management fee, pursuant to the undertaking, amounted to $247,158 during the period ended April 30, 2012.

During the period ended April 30, 2012, the Distributor retained $9,480 from commissions earned on sales of the fund’s Class A shares and $1,629 and $452 from CDSCs on redemptions of the fund’s Class B and Class C shares, respectively.

(b) Under the Distribution Plan (the “Plan”) adopted pursuant to Rule 12b-1 under the Act, Class B shares paid and Class C shares pay the Distributor for distributing their shares at an annual rate of .50% of the value of the average daily net assets of Class B shares and .75% of the value of the average daily net assets of Class C shares. During

The Fund  39 

NOTES TO FINANCIAL STATEMENTS (continued)

the period ended April 30, 2012, Class B and Class C shares were charged $3,008 and $101,343, respectively, pursuant to the Plan.

(c) Under the Shareholder Services Plan, Class A and Class C shares pay and Class B shares paid the Distributor at an annual rate of .25% of the value of the average daily net assets of Class A, Class B and Class C shares and Class Z shares pay the Distributer at an annual rate of .20% of the value of the average daily net assets of Class Z shares, for the provision of certain services.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. The Distributor may make payments to Service Agents (a securities dealer, financial institution or other industry professional) in respect of these services.The Distributor determines the amounts to be paid to Service Agents. During the period ended April 30, 2012, Class A, Class B, Class C and Class Z shares were charged $588,326, $1,500, $33,781 and $490,743, respectively, 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 April 30, 2012, the fund was charged $200,469 pursuant to the transfer agency agreement, which is included in Shareholder servicing costs in the Statement of Operations.

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

The fund compensates The Bank of New York Mellon under a cash management agreement for performing cash management services related to fund subscriptions and redemptions. During the period

40

ended April 30, 2012, the fund was charged $16,543 pursuant to the cash management agreement, which is included in Shareholder servicing costs in the Statement of Operations.These fees were partially offset by earnings credits of $400.

The fund also compensates The Bank of New York Mellon under a custody agreement for providing custodial services for the fund. During the period ended April 30, 2012, the fund was charged $43,501 pursuant to the custody agreement.

During the period ended April 30, 2012, the fund was charged $6,687 for services performed by the Chief Compliance Officer and his staff.

The components of “Due to The Dreyfus Corporation and affiliates” in the Statement of Assets and Liabilities consist of: management fees $226,755, Rule 12b-1 distribution plan fees $8,567, shareholder services plan fees $92,812, custodian fees $14,807, chief compliance officer fees $2,122 and transfer agency per account fees $39,764.

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

NOTE 4—Securities Transactions:

The aggregate amount of purchases and sales of investment securities, excluding short-term securities, during the period ended April 30, 2012, amounted to $196,433,277 and $210,848,970, respectively.

Inverse Floater Securities: The fund participates in secondary inverse floater structures in which fixed-rate, tax-exempt municipal bonds are transferred to a trust.The trust subsequently issues two or more variable rate securities that are collateralized by the cash flows of the fixed-rate, tax-exempt municipal bonds. One or more of these variable rate securities pays interest based on a short-term floating rate set by a remarketing agent at predetermined intervals.A residual interest tax-exempt security

The Fund  41 

NOTES TO FINANCIAL STATEMENTS (continued)

is also created by the trust, which is transferred to the fund, and is paid interest based on the remaining cash flow of the trust, after payment of interest on the other securities and various expenses of the trust.

The fund accounts for the transfer of bonds to the trust as secured borrowings, with the securities transferred remaining in the fund’s investments, and the related floating rate certificate securities reflected as fund liabilities in the Statement of Assets and Liabilities.

The average amount of borrowings outstanding under the inverse floater structure during the period ended April 30, 2012, was approximately $4,845,000, with a related weighted average annualized interest rate of .91%.

At April 30, 2012, the cost of investments for federal income tax purposes was $470,074,948; accordingly, accumulated net unrealized appreciation on investments was $38,409,097, consisting of $39,130,332 gross unrealized appreciation and $721,235 gross unrealized depreciation.

42

REPORT OF INDEPENDENT REGISTERED 

PUBLIC ACCOUNTING FIRM 

Shareholders and Board of Trustees Dreyfus Municipal Bond Opportunity Fund

We have audited the accompanying statement of assets and liabilities of Dreyfus Municipal Bond Opportunity Fund, including the statement of investments, as of April 30, 2012, 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 five years in the period then ended. 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 April 30, 2012 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 Municipal Bond Opportunity Fund at April 30, 2012, 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 five years in the period then ended, in conformity with U.S. generally accepted accounting principles.

New York, New York 

June 28, 2012 

The Fund  43 

IMPORTANT TAX INFORMATION (Unaudited)

In accordance with federal tax law, the fund hereby reports all the dividends paid from investment income-net during its fiscal year ended April 30, 2012 as “exempt-interest dividends” (not generally subject to regular federal income tax).

Where required by federal tax law rules, shareholders will receive notification of their portion of the fund’s taxable ordinary dividends (if any), capital gains distributions (if any) and tax-exempt dividends paid for the 2012 calendar year on Form 1099-DIV which will be mailed in early 2013.

44

INFORMATION ABOUT THE RENEWAL OF THE 

FUND’S MANAGEMENT AGREEMENT (Unaudited) 

At a meeting of the fund’s Board of Trustees held on February 7, 2012, the Board considered the renewal of the fund’s Management Agreement pursuant to which Dreyfus provides the fund with investment advisory and administrative services (the “Agreement”). The Board members, none of whom are “interested persons” (as defined in the Investment Company Act of 1940, as amended) of the fund, were assisted in their review by independent legal counsel and met with counsel in executive session separate from Dreyfus representatives. In considering the renewal of the Agreement, the Board considered all factors that it believed to be relevant, including those discussed below.The Board did not identify any one factor as dispositive, and each Board member may have attributed different weights to the factors considered.

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

The Board also considered research support available to, and portfolio management capabilities of, the fund’s portfolio management personnel and that Dreyfus also provides oversight of day-to-day fund operations, including fund accounting and administration and assistance in meeting legal and regulatory requirements.The Board also considered Dreyfus’ extensive administrative, accounting, and compliance infrastructures.

The Fund  45 

INFORMATION ABOUT THE RENEWAL OF THE FUND’S 

MANAGEMENT AGREEMENT (Unaudited) (continued) 

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

Dreyfus representatives stated that the usefulness of performance comparisons may be affected by a number of factors, including different investment limitations that may be applicable to the fund and comparison funds. The Board discussed the results of the comparisons and noted that the fund’s total return performance was at or below the Performance Group and Performance Universe medians for the various periods, except for the one-year period when the fund’s performance was above the Performance Universe median.The Board also noted that the fund’s yield performance was above the Performance Group medians for eight of the ten one-year periods ended December 31st and above the Performance Universe medians for all of the ten one-year periods ended December 31st. Dreyfus also provided a comparison of the fund’s calendar year total returns to the returns of the fund’s Lipper category average, noting that the fund outperformed its Lipper category average in six of the past ten calendar years, including 2011. Dreyfus representatives noted that the fund’s performance improved significantly in the short term and that the fund improved quartile performance for total return for the one-year period when compared to both the Performance Group and the Performance

46

Universe. Dreyfus representatives discussed with the Board the reasons for the underperformance of the fund’s total return compared to the Performance Group and Performance Universe medians for the various periods and the steps taken to improve performance, including the appointment of new primary portfolio managers effective May 2011 and February 2012.

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

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

Analysis of Profitability and Economies of Scale. Dreyfus’ representatives reviewed the expenses allocated and profit received by Dreyfus and the resulting profitability percentage for managing the fund, and the method used to determine the expenses and profit. The Board concluded that the profitability results were not unreasonable, given the services rendered and service levels provided by Dreyfus. The Board previously had been provided with information prepared by an independent consulting firm regarding Dreyfus’ approach to allocating

The Fund  47 

INFORMATION ABOUT THE RENEWAL OF THE FUND’S 

MANAGEMENT AGREEMENT (Unaudited) (continued) 

costs to, and determining the profitability of, individual funds and the entire Dreyfus fund complex. The consulting firm also had analyzed where any economies of scale might emerge in connection with the management of a fund.

The Board’s counsel stated that the Board should consider the profitability analysis (1) as part of their evaluation of whether the fees under the Agreement bear a reasonable relationship to the mix of services provided by Dreyfus, including the nature, extent and quality of such services, and (2) in light of the relevant circumstances for the fund and the extent to which economies of scale would be realized if the fund grows and whether fee levels reflect these economies of scale for the benefit of fund shareholders. Dreyfus representatives noted that a discussion of economies of scale is predicated on a fund having achieved a substantial size with increasing assets and that, if a fund’s assets had been stable or decreasing, the possibility that Dreyfus may have realized any economies of scale would be less. Dreyfus representatives also noted that, as a result of shared and allocated costs among funds in the Dreyfus fund complex, the extent of economies of scale could depend substantially on the level of assets in the complex as a whole, so that increases and decreases in complex-wide assets can affect potential economies of scale in a manner that is disproportionate to, or even in the opposite direction from, changes in the fund’s asset level.The Board also considered potential benefits to Dreyfus from acting as investment adviser and noted that there were no soft dollar arrangements in effect for trading the fund’s investments.

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

• The Board concluded that the nature, extent and quality of the services provided by Dreyfus are adequate and appropriate.

48

• The Board agreed to continue to closely monitor performance and to renew the Agreement for the remainder of its annual effective term through September 5, 2012.

• The Board concluded that the fee paid to Dreyfus was reasonable in light of the considerations described above.

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

The Board considered these conclusions and determinations, along with information received on a routine and regular basis throughout the year. In addition, it should be noted that the Board’s consideration of the contractual fee arrangements for this fund had the benefit of a number of years of reviews of prior or similar agreements during which lengthy discussions took place between the Board and Dreyfus representatives. Certain aspects of the arrangements may receive greater scrutiny in some years than in others, and the Board’s conclusions may be based, in part, on their consideration of the same or similar arrangements in prior years. The Board determined that renewal of the Agreement through September 5, 2012 was in the best interests of the fund and its shareholders.

The Fund  49 

BOARD MEMBERS INFORMATION (Unaudited)

Joseph S. DiMartino (68) 

Chairman of the Board (1995) 

Principal Occupation During Past 5Years: 

• Corporate Director and Trustee 

Other Public Company Board Memberships During Past 5Years: 

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

and medium size companies, Director (1997-present) 

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

businesses, Director (2005-2009) 

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

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

No. of Portfolios for which Board Member Serves: 157 

——————— 

Clifford L. Alexander, Jr. (78) 

Board Member (1988) 

Principal Occupation During Past 5Years: 

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

No. of Portfolios for which Board Member Serves: 42 

——————— 

David W. Burke (76) 

Board Member (2007) 

Principal Occupation During Past 5Years: 

• Corporate Director and Trustee 

No. of Portfolios for which Board Member Serves: 74 

——————— 

Peggy C. Davis (69) 

Board Member (1990) 

Principal Occupation During Past 5Years: 

• Shad Professor of Law, New York University School of Law 

• Writer and teacher in the fields of evidence, constitutional theory, family law, social sciences 

and the law, legal process and professional methodology and training 

No. of Portfolios for which Board Member Serves: 50 

50

Diane Dunst (72) 

Board Member (2007) 

Principal Occupation During Past 5Years: 

• President of Huntting House Antiques 

No. of Portfolios for which Board Member Serves: 17 

——————— 

Ernest Kafka (79) 

Board Member (1988) 

Principal Occupation During Past 5Years: 

• Physician engaged in private practice specializing in the psychoanalysis of adults and 

adolescents (1962-present) 

• Instructor,The New York Psychoanalytic Institute (1981-present) 

No. of Portfolios for which Board Member Serves: 17 

——————— 

Nathan Leventhal (69) 

Board Member (1989) 

Principal Occupation During Past 5Years: 

• Commissioner, NYC Planning Commission (March 2007-November 2011) 

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

Other Public Company Board Memberships During Past 5Years: 

• Movado Group, Inc., Director (2003-present) 

No. of Portfolios for which Board Member Serves: 40 

——————— 

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

Jay I. Meltzer, Emeritus Board Member
Daniel Rose, Emeritus Board Member
Warren B. Rudman, Emeritus Board Member
Sander Vanocur, Emeritus Board Member

The Fund  51 

OFFICERS OF THE FUND (Unaudited)

BRADLEY J. SKAPYAK, President since January 2010.

Chief Operating Officer and a director of the Manager since June 2009. From April 2003 to June 2009, Mr. Skapyak was the head of the Investment Accounting and Support Department of the Manager. He is an officer of 72 investment companies (comprised of 156 portfolios) managed by the Manager. He is 53 years old and has been an employee of the Manager since February 1988.

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

Assistant General Counsel of BNY Mellon, and an officer of 73 investment companies (comprised of 183 portfolios) managed by the Manager. She is 49 years old and has been an employee of the Manager since February 1984.

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

Counsel of BNY Mellon, and an officer of 73 investment companies (comprised of 183 portfolios) managed by the Manager. She is 39 years old and has been an employee of the Manager since July 1995.

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

Senior Counsel of BNY Mellon and Secretary of the Manager, and an officer of 73 investment companies (comprised of 183 portfolios) managed by the Manager. He is 45 years old and has been an employee of the Manager since December 1996.

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

Senior Counsel of BNY Mellon, and an officer of 73 investment companies (comprised of 183 portfolios) managed by the Manager. She is 56 years old and has been an employee of the Manager since October 1988.

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

Senior Counsel of BNY Mellon, and an officer of 73 investment companies (comprised of 183 portfolios) managed by the Manager. He is 50 years old and has been an employee of the Manager since June 2000.

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

Managing Counsel of BNY Mellon, and an officer of 73 investment companies (comprised of 183 portfolios) managed by the Manager. She is 37 years old and has been an employee of the Manager since February 2001.

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

Senior Managing Counsel of BNY Mellon, and an officer of 73 investment companies (comprised of 183 portfolios) managed by the Manager. He is 48 years old and has been an employee of the Manager since February 1991.

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

Senior Counsel of BNY Mellon, and an officer of 73 investment companies (comprised of 183 portfolios) managed by the Manager. She is 42 years old and has been an employee of the Manager since August 2001.

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

Managing Counsel of BNY Mellon, and an officer of 73 investment companies (comprised of 183 portfolios) managed by the Manager. He is 60 years old and has been an employee of the Manager since May 1986.

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

Senior Managing Counsel of BNY Mellon, and an officer of 73 investment companies (comprised of 183 portfolios) managed by the Manager. He is 46 years old and has been an employee of the Manager since October 1990.

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JAMES WINDELS, Treasurer since November 2001.

Director – Mutual Fund Accounting of the Manager, and an officer of 73 investment companies (comprised of 183 portfolios) managed by the Manager. He is 53 years old and has been an employee of the Manager since April 1985.

RICHARD CASSARO, Assistant Treasurer since January 2008.

Senior Accounting Manager – Money Market and Municipal Bond Funds of the Manager, and an officer of 73 investment companies (comprised of 183 portfolios) managed by the Manager. He is 53 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 73 investment companies (comprised of 183 portfolios) managed by the Manager. He is 43 years old and has been an employee of the Manager since April 1991.

ROBERT S. ROBOL, Assistant Treasurer since August 2005.

Senior Accounting Manager – Fixed Income Funds of the Manager, and an officer of 73 investment companies (comprised of 183 portfolios) managed by the Manager. He is 48 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 73 investment companies (comprised of 183 portfolios) managed by the Manager. He is 45 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 73 investment companies (comprised of 183 portfolios) managed by the Manager. He is 45 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 (73 investment companies, comprised of 183 portfolios). From November 2001 through March 2004, Mr. Connolly was first Vice-President, Mutual Fund Servicing for Mellon Global Securities Services. In that capacity, Mr. Connolly was responsible for managing Mellon’s Custody, Fund Accounting and Fund Administration services to third-party mutual fund clients. He is 54 years old and has served in various capacities with the Manager since 1980, including manager of the firm’s Fund Accounting Department from 1997 through October 2001.

MATTHEW D. CONNOLLY, Anti-Money Laundering Compliance Officer since April 2012.

Anti-Money Laundering Compliance Officer of the Distributor. From March 2010 to September 2011, Global Head, KYC Reviews and Director, UBS Investment Bank; until March 2010,AML Compliance Officer and Senior Vice President, Citi Global Wealth Management. He is an officer of 69 investment companies (comprised of 179 portfolios) managed by the Manager. He is 39 years old and has been an employee of the Distributor since October 2011.

The Fund  53 

For More Information

Telephone Call your financial representative or 1-800-DREYFUS

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

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

Information regarding how the fund voted proxies relating to portfolio securities for the most recent 12-month period ended June 30 is available on the SEC’s website at http://www.sec.gov and without charge, upon request, by calling 1-800-DREYFUS.

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").  Mr. 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 $30,312 in 2011 and $31,401 in 2012.

(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 $6,000 in 2011 and $12,000 in 2012. These services consisted of one or more of the following: (i) agreed upon procedures related to compliance with Internal Revenue Code section 817(h); (ii) security counts required by Rule 17f-2 under the Investment Company Act of 1940, as amended; (iii) advisory services as to the accounting or disclosure treatment of Registrant transactions or events; and (iv) advisory services to the accounting or disclosure treatment of the actual or potential impact to the Registrant of final or proposed rules, standards or interpretations by the Securities and Exchange Commission, the Financial Accounting Standards Boards or other regulatory or standard-setting bodies.

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 2011 and $0 in 2012.

(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 $3,822 in 2011 and $2,933 in 2012.  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; and (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 2011 and $0 in 2012.

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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 $183 in 2011 and $900 in 2012.  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 2011 and $0 in 2012.

(e)(1) 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. The pre-approved services in the Policy can include pre-approved audit services, pre-approved audit-related services, pre-approved tax services and pre-approved all other services.  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.

(e)(2) Note: None of the services described in paragraphs (b) through (d) of this Item 4 were approved by the Audit Committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.

(f) None of the hours expended on the principal accountant's engagement to audit the registrant's financial statements for the most recent fiscal year were attributed to work performed by persons other than the principal account's full-time, permanent employees.

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 $21,309,173 in 2011 and $34,153,310 in 2012.

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.

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Not applicable.  [CLOSED-END FUNDS ONLY]

Item 10.          Submission of Matters to a Vote of Security Holders.

There have been no material changes to the procedures applicable to Item 10.

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 Municipal Bond Opportunity Fund

By: /s/ Bradley J. Skapyak
Bradley J. Skapyak, President
Date:	June 26, 2012
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/ Bradley J. Skapyak
Bradley J. Skapyak, President
Date:	June 26, 2012
By: /s/ James Windels
James Windels, Treasurer
Date:	June 26, 2012

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)